Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2023

Debate between Baroness Lawlor and Lord Collins of Highbury

Wednesday 19th July 2023 Grand Committee

[Baroness Lawlor (Con)]

I am grateful to my noble friend the Minister for discussing the proposed statutory instrument so thoroughly. I want to follow the noble Lord, Lord Purvis of Tweed, in what he picked up from the Law Society’s briefing. It is certainly the case, as the statutory instrument is framed, that a lawyer who works for an international firm but may be based in New York cannot advise an international client on EU or US law in respect of, say, divesting from activities in Russia. It is really quite important to know how he can be compliant with the law. I note the intention to have general guidance but will it be such that there will be a lack of clarity and a concern that overseas clients consulting UK lawyers will not be able to get advice at the same time about where the law stands in respect of US and EU law?

[Lord Collins of Highbury (Lab)]

My Lords, one of the issues we need to address is that Russia is highly dependent on western countries for legal expertise. As a country, we previously exported £56 million in legal services to Russian businesses every year, so it is important that we address this issue.

I also welcome the fact that we can use this debate to reiterate our cross-party support for these measures to show our unwavering commitment to and solidarity with Ukraine, its people and its sovereignty. Following last night’s Statement repeat on NATO’s Vilnius summit, I underscored the strength of feeling across our diplomatic and military alliance that we must stand with Ukraine until the war is won. It is vital that Parliament speaks with one voice.

The Opposition fully support the steps that the Government are taking to further strengthen our sanctions regime, prevent evasion and ensure that the Kremlin’s capacity to conduct this war is undermined. I stress that we recognise that this statutory instrument is common sense and prudent. It clearly should not be permissible that, more than 500 days into this conflict, it would be potentially lawful for a UK legal services provider to support commercial activities that advanced Russian interests because said activity did not have a sufficiently tangible connection to the UK, due to the territorial application of the 2019 regulations.

I hope the Minister can tell us what assessment the Government have made of how effective the 2019 regulations were and how we discovered any potential loopholes that people could get through. This leads on to my major point about this: can the Minister account for the delay in addressing these issues from the application of the regulations in 2019? If this loophole has been exploited, why has it taken us so long to address it?

I have read the Law Society’s letter and I appreciate the Minister’s response. I welcome the fact that the law officers and other departments are meeting with the Law Society but, to echo the point from the noble Lord, Lord Purvis, I am keen to support the Government in strengthening these sanctions. I do not want to see any further escape routes for people. It is important that we hear the Minister’s view on how effective these new regulations will be at imposing the sort of sanctions that we believe are necessary to limit Russia’s ability to wage war.

I know that the Minister has heard me say before that it is one thing to adopt particular regulations on sanctions, but how we resource them and how we are satisfied that they can be implemented and monitored is another. Can he tell us how the Office of Financial Sanctions Implementation is resourced? Will it be able to police these regulations? If our sanctions regime truly is a work in progress, we must be capable of reflection and improvement. If exemptions are causing more issues, we need to know about them; the assessment must be based on that.

There is one other question I will briefly raise, which is that the regulations provide exceptions when the Act relates to diplomatic missions or consular posts. Can the Minister give me a practical example of that? I am not sure I understand the purpose of it.

I have addressed the point about the Law Society. Of course, this was also raised with the Secondary Legislation Scrutiny Committee, which expressed the view that this issue needs to be addressed. The committee was approached by an international law firm.

I conclude by saying that we once again fully support the Government’s actions. We want to see the Russian regime sanctioned. The news I have just seen on the BBC website about not only breaking the agreement but bombing the very facilities that could feed Africa is absolutely atrocious. The sooner we bring this regime to account, the better. We fully support the Government in their actions.