Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2024

Baroness Chapman of Darlington Excerpts

Monday 21st October 2024 Grand Committee

Moved by

[Baroness Chapman of Darlington]

That the Grand Committee do consider the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2024.

Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)]

My Lords, these regulations amend the Russia (Sanctions) (EU Exit) Regulations 2019. This instrument was laid on 5 September under powers in the Sanctions and Anti-Money Laundering Act 2018, and the measures in it entered into force on 6 September as “made affirmative” measures.

In recent years, the UK has transformed its use of sanctions. We have deployed them in innovative and impactful ways, including in our response to Russia’s invasion of Ukraine. This includes our prohibitions on the legal sector. We take a rigorous approach that is carefully targeted to deter and disrupt malign behaviour, as well as to demonstrate our defence of international norms.

In June 2023, a prohibition on legal advisory services, Regulation 54D, was introduced to prevent UK lawyers providing their services to those seeking to continue trading with Russia in goods or services that the UK had sanctioned. This was a unique prohibition that sought to prevent access to our world-renowned legal services market while retaining and upholding the UK values of access to justice and representational advice. Once introduced, it became clear that the sanction had the unintended effect of preventing the legitimate provision of advice on non-UK sanctions compliance, for instance in advising companies on compliance with US or EU sanctions on Russia. A general licence was therefore rapidly implemented in August 2023 as a temporary fix to enable UK lawyers to continue to provide this advice.

This instrument provides the permanent solution and clarifies in legislation the kinds of legal advice that the Government intend UK lawyers to be able to continue to provide. For example, it ensures that advice can be given on compliance with non-UK sanctions, on Russian counter-sanctions and on global criminal law. Receiving this advice is paramount to the functioning of an effective international sanctions response to Russia.

In amending this legislation, a full and thorough review was undertaken, including engaging with esteemed stakeholders in the legal and financial sectors. This engagement has assured us that this amendment will ensure greater clarity for the sector and continue to support our robust and unwavering commitment to cutting off access to our world-leading legal sector from those wishing to advance the interests of Russia.

The review also highlighted a number of other areas for improvement, which have been reflected in this instrument. They include amending Regulation 54D to align more closely with the way the existing circumvention regulations work, creating greater parity between legal advisory services that can be provided to a UK person and a non-UK person. The amendment clarifies expressly that Regulation 54D covers activity outside the UK, meaning that it more clearly operates alongside the existing circumvention regulations and avoids overlapping offences.

We have worked with the sector to ensure that the language in the instrument is as clear as possible regarding the provision of its services. By ensuring that legal advice can continue to be provided for the purposes of non-UK sanctions compliance, we enhance the effectiveness of the sanctions that the UK and our allies have placed on Russia and intensify the pressure on Putin. As well as ensuring that advice can be given on compliance with non-UK sanctions and on Russian countersanctions, we have ensured that advice can continue to be provided on compliance with global criminal law. By protecting the fundamental right to legal representation, we continue to distinguish ourselves from Putin’s oppressive regime.

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[Lord Callanan (Con)]

My Lords, I too can be brief. These are of course updates and clarifications of sanctions introduced by the previous Government. We were grateful for the support of the Opposition then and, on behalf of the Opposition now, I offer my full support for the changes that the Minister announced. It is important that we maintain the principle of unity across the parties in support of these sanctions and of Ukraine, taking action wherever possible to restrict Russia and its activities across the world. We need to be mindful of the big role that the City of London plays across the world in legal, financial and professional services. Some UK companies are undoubtedly involved in helping the Russians to circumvent these sanctions. We fully support the strictest clampdown on these activities. We should be very proud of these industries, but they should be used for right, not for helping Russia in this regard.

Following the noble Lord, Lord Purvis, I offer my support for the letter from Sir Iain Duncan Smith to the Foreign Secretary. We support these sanctions but ask the Government to look again at what more can be done to clamp down on the shadow fleet of tankers that Russia is using to spread its oil and gas around the world. As the noble Lord said, I do not expect the Minister to reply now to a letter that was sent only today and probably has not been received yet, but I hope that the Government can bear this in mind and can possibly give us an answer on Friday. We fully support these sanctions.

[Baroness Chapman of Darlington (Lab)]

My Lords, I am grateful for the support of the noble Lords, Lord Purvis and Lord Callanan. I thank the noble Lord, Lord Purvis, in particular, for his ongoing—I will put it that way—interest in this issue. I very much welcome the comments of the noble Lord, Lord Callanan, on how vital it is that we keep our unity on these issues intact as we move forward. I am grateful and pleased that this is what we have seen today.

On the specific issue about the natural gas tankers, I am grateful to both noble Lords for their forbearance, as I do not have a full response on this today. The insurance is a complex issue. I will endeavour to get a fuller response by Friday. That is not a guarantee but, if I cannot get it by Friday, we will make sure that there is a response to the letter from Mr Duncan Smith.

I will do what I believe is called a pivot, to liquified natural gas more generally. I point out—because it is quite interesting and helpful, although it does not address the issue of insurance head-on—that Novatek, Russia’s largest producer of LNG, suspended production at its flagship Arctic project in April 2024 because of sanctions and a shortage of specialist tankers. This project is critical to Russia’s ambition to triple LNG production by the end of the decade, so we are taking measures that are having some effect on LNG. However, I will come back to noble Lords on the wider issue of insurance.

Motion agreed.