Russian Assets: Seizure

Bob Seely Excerpts

Tuesday 14th March 2023 Commons Chamber

[Sir Iain Duncan Smith]

Yes, of course. It is a disgusting organisation led by a disgusting individual carrying out disgusting atrocities in Russia. It is also using slave labour in some of these mines. Of course the Wagner Group must be proscribed, as should the Islamic Revolutionary Guard Corps and other such organisations. We should be at the forefront of this, not lagging behind.

The Government’s general belief is that seizing these central bank reserves would violate Russia’s sovereign immunity and would therefore be a breach of international law. If we think about it, Putin has redefined international crime and is now hiding behind international law. It is time for us to come together to make the modifications. That is the key.

[Bob Seely (Isle of Wight) (Con)]

I thank my right hon. Friend for securing this important debate. Does he agree that there may be something to learn from the Iraq war? Iraqi assets under Saddam Hussein’s rule were used— there was a formal legal process under which people could apply for those assets to rebuild infrastructure that had been damaged in Kuwait and elsewhere. I wonder whether the Government, when they answer the debate today, would say whether they are considering a similar process—a formal legal process under which Russian assets could be used to finance construction work in Ukraine.

[Sir Iain Duncan Smith]

I would happily welcome that. It is a very good idea.

Ultimately, the war Putin initiated on Ukraine must now be punished in a variety of ways. It is unwarranted aggression against another country, and it therefore changes how international law should be applied. We should readjust and redefine international law to the new reality that Putin’s invasion has brought about. The old order is now broken, and we need to redefine it to make sure that the lesson for any other oligarch, future leader or demagogue is that they can never again hide behind these rules.

Although international law is always evolving, we need to recognise the exceptional nature of Russia’s aggression and conduct in Ukraine, as that is critical to what we do next. Russia’s aggression and invasion are breaches of the most fundamental principles of international law and order. Russia is aware of this breach but has not stopped its conduct, and it continues to threaten international security and peace. That unprecedented conduct creates a need for all Governments in the west to amend their laws together to deter other states. These amendments should use specific and limited criteria to preserve sovereign immunity in all cases. It is possible to do both without hiding behind the idea that sovereign immunity is an absolute that cannot be breached. Putin has breached it, and in future that should be the rule.

The Economic Crime and Corporate Transparency Bill could and should be strengthened to enable the seizure of undisclosed assets—that is the key. We already have a vehicle. It is wholly possible to make that difference, and to make it quite quickly. I say to my right hon. Friend the Minister that I hope she will give that serious consideration, as it is really important.

As we know, sanctions evasion is already an offence. Embedding a new “disclosure or lose it” principle would go a long way to ensuring that sanctioned oligarchs are no longer able to conceal their dirty money here with impunity. That would help us to clean up what became a bad reputation for the City of London, whereby much of that ill-gotten money was hiding here, in one of the leading nations of the free world, and we did little or nothing to stop that.

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[Sir Iain Duncan Smith]

I agree with the right hon. Gentleman; this is beginning to sound like one of those “golden visas”. It was golden in description, but dirty and leaden in reality, and I think this is where we are again. We are going to find us all in agreement—

[Bob Seely]

Is the problem we have not shown, for example, in Abramovich’s allegedly shifting about £7 billion of assets out of the country the day before? What he did was perfectly legal, because I believe this was shifted to the United Arab Emirates or somewhere else in the middle east and his lawyers knew about it. In the United States, there is now talk about going after the law firms and the accountancy firms that help the oligarchs and that have helped these individuals to move their money around just before they have been sanctioned or to find ways around sanctions. Does my right hon. Friend agree that one way here is to go after these middlemen and women? We have not done that, but the problem is that what these people are doing is not necessarily illegal —they are shifting the money before it can be sanctioned, and money is a movable asset, unlike a house in Belgrave Square.

[Sir Iain Duncan Smith]

I agree. These individuals, Abramovich and others, may want this to be done, but somebody has to do it for them, and my hon. Friend is absolutely right to follow the chain down, because we have to capture all the individuals down the chain, not just the one at the top. That is the key, because without those, this does not happen. He rightly says that, to avoid the sanctions, three weeks before the war began Abramovich was busy restructuring radically his assets. I believe that my hon. Friend is right to say that between £4 billion and £7 billion was squirreled away as a result, and we were not able to do anything about it. But we should have been ahead of the game on that one.

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[Bob Seely]

rose—

[Liam Byrne]

I will say a word about each of those things after I have given way to the hon. Gentleman.

[Bob Seely]

Does the right hon. Gentleman have a preferred option? Although it will be legally possible to seize Russian state assets—that has arguably been done before, so there is precedent—is he concerned about the seizure of private assets? I am tempted to say that those are legal. They are seized assets from a dirty period of Russian history, so I think one could say that they are not illegal, but how legal they are is another matter. If we are seizing oligarchs’ assets, how can we do so legally without setting a more tricky precedent?

[Liam Byrne]

I will come to that now. There are three things that we will need to do. It is not just about private wealth; it is about public wealth—the assets of the Russian central bank. We know that $300 billion was held abroad. We know where about $30 billion of it is, and that money has been frozen. To seize that money, we will need to do a couple of things.

First, we will need to bring the world together at the United Nations to pass a resolution that revokes the doctrine of immunity for central banks when there has been a clear violation of the United Nations charter. I am under no illusions; we will not get 100%, but by getting a significant number of nations to sign up to that resolution, we begin to change the parameters of international law. That means that domestic law, when we move it, will be in a much safer legal space. Indeed, many international lawyers would say that seizing those assets is a legitimate countermeasure, but if there is a UN resolution, we have begun to change the concept of what is protected by immunity—such as central bank assets—and what is not.

Secondly, we then have to ensure that we do not fall foul of the European convention on human rights, particularly the first protocol, which enshrines the right to the enjoyment of assets. We have to ensure that there is no way that the Russian Government can be considered a victim. The safest way we can do that is to move quickly, as President Zelensky has proposed, to begin prosecuting Russia for the crime of aggression. If we have a UN resolution that has begun to revoke the concept of immunity in the case of aggression, and a tribunal that is prosecuting Russia for the crime of aggression, we will have begun to change fundamentally the context of international law.

[Bob Seely]

I know that the right hon. Gentleman is about the most expert person here when it comes to the workings of the international financial institutions and so on. Does he expect or think that we will be able to seize oligarch assets as part of that process? If so, do we have any idea how we will proceed down that route, or are we looking only at Russian state assets? At some point, all the oligarchs close to Putin will get their billions back.

[Liam Byrne]

I think that we can use the same tactics to seize private and public assets, but I am conscious that we have to change the context and parameters of international law first. That is how we maximise the safety of domestic legislation, which has to be the third step. We in this House are lucky that my hon. Friend the Member for Rhondda has set out precisely how to do that in his ten-minute rule Bill.

Crucially, we need to ensure that the State Immunity Act 1978, which gives immunity to central banks, is revoked or at least conditioned in a way that allow laws to be presented here so that we in Parliament can order the seizure, forfeiture and repurposing of assets.

My final point is a little more short term, meaning now. If we are to maximise the assets that we seize and repurpose for the reconstruction of Ukraine, we have to get serious about sanctions enforcement. Right now, frankly, we are not. There will be a lot more money available if we stop the nonsense that is going on in the dark at the moment. The truth is that sanctions enforcement in this country today is the proverbial riddle wrapped in a mystery inside an enigma.

As the right hon. Member for Chingford and Woodford Green said, we have been told that as of October 2022, £18.4 billion-worth of Russian assets have been frozen in this country. We then learned from the scandal exposed by openDemocracy that the Treasury has been issuing licences like confetti, even to warlords such as Prigozhin, the head of the Wagner Group—in his case, to fly English lawyers to St Petersburg to prosecute an English journalist in an English court in order to silence him because he was writing the stories that triggered the sanctions against Prigozhin in the first place. What a nonsense!

As I began to dig into this, much worse was revealed. In the last Office of Financial Sanctions Implementation report, it was revealed that the Treasury is no longer issuing licences to individuals one by one to authorise specific expenditure; it is now issuing general licences that authorise an entire category of spending. In fact, 33 general licences were issued last year, so I naturally asked what the value of those general licences totalled. I was told on 15 February in a parliamentary answer:

“The Office of Financial Sanctions Implementation (OFSI) does not disclose data from specific licences it has granted under UK sanctions regimes.”

When the Exchequer Secretary to the Treasury came to the House on 25 January, we asked him whether, if he cannot tell us what the total value of the licences is, he could at least tell us what the licences were issued for. He said he could not tell us that because

“there is a delegated framework”

and that these decisions

“are routinely taken by senior civil servants.”—[Official Report, 25 January 2023; Vol. 726, c. 1014.]

I then asked what this delegated framework was and whether we in this House might have a look at it. I first tried a parliamentary question. The answer came back on 8 February:

“There are currently no plans to publish the delegation framework.”

I then had to try a freedom of information request, and I have it here in my hand. It came back to me on 9 March, and it says:

“we can confirm that HM Treasury does hold information within the scope of your request.

The information we have identified…we believe may engage the exemption provided for by section 35(1)(a)—formulation or development of Government policy.”

We now have a situation where Ministers are saying that it is the civil servants’ job, and the civil servants are saying that it is advice to Ministers. For that reason, we cannot get to what this delegated framework looks like.

I then asked whether they could at least tell us how many people we have busted for sanctions evasion. The Office of Financial Sanctions Implementation confessed that there were 147 reports of a breach last year, but when I asked the Minister for Security how many criminal investigations had resulted from that, he said that he could not answer

“For reasons of operational security”.

I went back to the Office of Financial Sanctions Implementation report to double-check, and of 147 reports of a breach, there have been a grand total of two monetary fines, both to fintech companies.

So there we have it: £18 billion frozen and licences issued like confetti in a secret regime that Ministers say is down to civil servants and civil servants say is actually advice to Ministers. Despite this flagrant abuse—and we know the scale of it, because the Financial Times told us that $250 million has been laundered by the Wagner Group—we have just two fines that total £86,000. Well, £86,000 in fines is not going to do much to help us rebuild Ukraine. I ask the Minister on the Front Bench to explain to us how she is going to do an awful lot better than that.

Sanctions enforcement in this country stinks to high heaven, and what concerns me most is the culture of secrecy around it. Many of us in this House have been around long enough to know that such a culture is never a recipe for good public policy. We in this House have to be realistic about the scale of finance that is needed; maximise the use of our Bretton Woods institutions; and move internationally and domestically, together with our allies, to change the parameters of international law and maximise the safety and security of domestic legislation that we pass here. But let us move now to send a clear signal from the UK—the home of the rule of law—that this is not going to be a safe haven for sanctions evasion. We are going to send that clear message by getting tough, and getting tough now.

War in Ukraine: Illicit Finance

Bob Seely Excerpts

Thursday 17th November 2022 Westminster Hall

[Bob Seely (Isle of Wight) (Con)]

I beg to move,

That this House has considered the Second Report of the Foreign Affairs Committee, The cost of complacency: illicit finance and the war in Ukraine, HC 168, and the Government response, HC 688.

It is a pleasure to serve under your chairmanship, Mr Efford. In speaking to the report today, I will outline a series of points made by the Committee in this report and in its 2018 “Moscow’s Gold” report. I will also talk about SLAPPs—strategic lawsuits against public participation —and the case for more action on lawfare.

Our report finds that the UK sanctions response to the war, while ambitious, was initially limited by a lack of resourcing, and the new beneficial owners register still contains loopholes that put some individuals under the threshold for having to declare beneficial ownership. That is against the public interest. The report, which I strongly endorse—I encourage folks to read it should they have time—proposes a number of reforms, including new transatlantic sanctions partnerships, so that London and New York can work more closely together, and the appropriate resourcing of enforcement agencies. Both reports, and the Intelligence and Security Committee, note the lack of funding for the National Crime Agency and other serious crime organisations in the country and that some of them are threatened by the lawyers of oligarchs—potential bad actors. We believe that to be very strongly against our national interest.

In my opinion, and I think also in the opinion of the Committee and many people engaged with this issue, including the right hon. Member for Barking (Dame Margaret Hodge) and other hon. Members, the UK and its offshore territories have for too long turned a blind eye to the transfer and concealment of illicit or semi-licit—if that is a word—wealth, and have granted a number of high-risk individuals political and judicial protections that they do not deserve.

We have built a significant industry catering to the needs of some really quite unsavoury characters. To date, vast sums of both illicit and licit finance have been recycled through the UK’s bespoke package of the financial services industry, legal services, public relations services, private eyes, estate agents, luxury assets, concierge services, visa and citizenship routes and the private education system.

Transparency International and various other bodies have estimated that the amount of wealth, criminal or otherwise, that has flowed from the former Soviet Union via corrupt German and Scandinavian banks, via UK shell companies, to tax havens—sadly, very often the UK—is probably between £500 billion and £1 trillion. That is one of the greatest flows, probably the greatest flow, of illicit wealth in the history of humanity. The fact that we in London are a core part of that flow is frankly pretty shameful.

I was discussing the issue with the great Bill Browder the other day. One of the problems is that this is not just Colombian drug cartel money; this is money that has come from deeply corrupt, but potentially legal deals. For example, an executive at one of the big state gas or oil firms at some points in the 1990s could, if they had the connections, buy an oilfield or a gasfield equivalent to the North sea, for $100,000.

By borrowing that money off organised crime or other areas, that person would effectively become a billionaire overnight, by the sometimes legal, sometimes not, but deeply unethical transfer of state assets—the privatisation of state assets using organised crime as muscle and bureaucratic connections to facilitate it. That is what has happened in the former Soviet Union—in not only Russia, but also Ukraine back in the day, especially under Yanukovych and others, and Kazakhstan. Clearly, that has enriched a small number of people in the United Kingdom, but I do not believe it has been good for the United Kingdom as a whole. It is not good for our reputation and for London as a service industry—although it is undoubtedly true that it has very considerably enriched a small number of people.

In 2018, the Foreign Affairs Committee published an excellent report under the previous Chairman, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), called “Moscow’s Gold: Russian Corruption in the UK”. That report detailed that, despite the Government’s crackdown on Russian activity in the wake of the Skripal poisoning, back before the Ukraine war, business simply continued as usual for most of Putin’s allies in the United Kingdom.

One of the depressing things for me is that I was saying this before I was an MP, so nobody was listening, and have said it as an MP—and still nobody really listened. In 2007, back in the Munich conference speech, Putin declared a new cold war against the west. We have studiously done our best to turn a blind eye because it was too difficult for western states to get their heads around the fact that, in President Putin, we had an aggressive rival who did not accept the international system, would openly challenge it and would fight wars on his borders to secure what he thought were his vital interests—we can debate that or not. After his speech the invasion of Georgia happened, and then in 2014 there was the invasion of Ukraine through proxy groups that confused some people, but should not have done.

Before, during and after those events we have had a wave of assassinations, imprisonments and arrests. I met with Alexei Navalny’s chief of staff. Navalny now may be the most high profile political prisoner in the world; he is in a detention camp in permanent solitary confinement. That is the price for challenging President Putin. Last night, I was chatting to Marina Litvinenko, the wonderful wife of Alexander Litvinenko, who was murdered in Piccadilly back in 2006—he died of radiation poisoning. The problem is that we repeatedly turned a blind eye. Our love of Russian money flowing through the financial and legal systems clouded our moral judgment. That has enabled Putin’s regime. We need to learn from those errors and mistakes.

What is the scale of the problem today? From 2008 to 2015, there were no state checks on tier 1 golden visas. At least eight individuals now sanctioned, or under investigation, are thought to have obtained citizenship through those means. They are citizens like you or me, Mr Efford. How can that be right or in the national interest? The National Crime Agency estimates that money laundering costs the UK £100 billion annually. Serious or organised crime is estimated to have a price tag of £37 billion.

Russians accused of corruption or having close links to the Putin regime have bought at least £1.5 billion worth of property in Great Britain according to Transparency International—that is a vast amount of property. One of the reasons why so many people are struggling with their mortgages is that there are vastly inflated prices for property in London and the south-east. That is in part because it is seen as an easy way to launder money: to pay over the odds for property and then to sell. Even if it is then sold at a loss of 10% or 20%, these people have laundered—legalised—a vast amount of corrupt and criminal, or semi-corrupt and semi-criminal, money.

That £1.5 billion is part of nearly £5.5 billion worth of property in the UK that has been purchased through offshore shell companies. That problem happened under new Labour and the coalition with the Liberal Democrats. What on earth is this country doing allowing offshore shell companies to be vehicles to buy property? It is just wrong. It is wrong that so many people close to Putin own so much property in this country. It is wrong that so many offshore vehicles have been used. What on earth are we doing allowing that to happen, and what on earth are we going to do to stop it? I would love the Minister to reassure us, rather than just saying that we are concerned about it.

[Neil Coyle (Bermondsey and Old Southwark) (Ind)]

The hon. Gentleman is making an excellent speech and I congratulate him. I want to be clear that this is not just an issue about Russia. In my constituency and elsewhere, the red princes and princesses of communist China are buying up property and inflating prices. We should not just focus on Russia when we talk about illicit finance.

[Bob Seely]

I thank the hon. Member for his very sensible point. There is absolutely a wider issue. As well as shell companies, there are vast developments on the south side of the river, around the US embassy, where entire blocks are being bought up as investment options rather than being used to provide housing for Londoners. That is shocking, especially because we have a housing shortage. There is a wider argument on reform of our housing in the UK for giving options first to allow ordinary folks to be buying it, rather than—as much as we love them—Hong Kong, Chinese or Indonesian investors to block buy endless numbers of flat and rent them out or never have them occupied.

I was going to talk a bit about the Azerbaijani laundromat. Between 2012 and 2014, about £3 billion went through UK shell companies as part of the so-called Azerbaijani laundromat; funding was dispersed from Azerbaijani officials to various outlets in this country. As well as that, London’s open economic environment has been a key centre for raising finance for companies or individuals over whom there are now very considerable question marks.

In 2017, En+ was floated on the London stock exchange, raising £1.5 billion from international investors in an initial public offering. We now know—well, we knew at the time—that En+ was very closely associated with Oleg Deripaska, despite his ownership of companies linked to supplying Russian military materials and sanctioned Russian shareholders. He himself is now sanctioned, I believe. En+ and Oleg Deripaska were part of a considerable lobbying effort by a former Member of the House of Lords—a former Conservative Minister, as much as it shames me to say it—to separate Deripaska from En+ in frankly pretty questionable circumstances.

Shortly after the Skripal poisoning, Russia continued to sell Russian sovereign debt in London, facilitated by the sanctioned Russian bank VTB. While our financial services provide anonymity to those who wish to invest, many UK legal firms have sought to further silence those who question the origin of investments.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

My hon. Friend is making a very powerful case. I agree with everything he has to say. On sanctions, he will know, not least from the talk he did yesterday afternoon with a group of Ukrainians, that there is a big call in Ukraine at the moment to turn the freezing sanctions into confiscation sanctions, and to use the money we are holding, which would presumably otherwise be given back to the oligarchs, for the reconstruction of Ukraine. Would my hon. Friend comment on that?

[Bob Seely]

I would love to; we were debating that yesterday at the Henry Jackson Society with Bill Browder and a number of other people. My hon. Friend is welcome to correct me on this, but I think Canada has prepared an Act to enable that frozen money effectively to be given to the Ukrainian authorities or set up in some kind of international fund to help reconstruction in Ukraine.

[Mr Djanogly]

The Act is quite straightforward. By way of clarification, it takes the existing sanctions legislation, including the Canadian Magnitsky law, and latches on to that the ability to change freezing orders into confiscation orders. It is a relatively simple way of going about what could be a very complicated process.

[Bob Seely]

Indeed. If it is effective, I look forward to working with my hon. Friend, and potentially other Members, to see how we can bring in such a law in the UK, so that we move from freezing money to taking money and using it for a more moral purpose.

[Fleur Anderson (Putney) (Lab)]

The hon. Member is making a powerful speech. I am pleased to see this report and the recommendations in it. I have been talking to Ukrainian MPs since the visit that he and I made to Kyiv. One of the biggest issues they have raised is about not just having sanctions but having a sanctions regime that ratchets up internationally. The sanctions partnership is absolutely essential.

Just now in the House, the Prime Minister was congratulating the work done already on sanctions, but we cannot stop there. We need to move on. The ramping up of sanctions and the seizing—not just freezing—of assets are absolutely being called for by Ukrainian politicians and people.

To put into context the sums the hon. Gentleman has been referring to, right now there is a $38 billion budget gap for the running of Ukraine and billions also need to be paid back in reparations. This solution is much needed and would restore the reputation of London as a financial centre, not a money laundering centre.

[Bob Seely]

That was a brief question!

[Clive Efford (in the Chair)]

I think it was a speech.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Bob Seely]

I give way again.

[Jim Shannon]

I congratulate the hon. Gentleman on bringing forward this debate; I will speak for a wee minute in support of him. My understanding is that in earlier questions in the Chamber, the Government indicated that they were prepared to look at—I am not sure they committed themselves entirely—not just seizing the goods belonging to Russian oligarchs, but using that money for a purpose. The purpose we all asked for in the Chamber that day was for the money to be given to Ukraine. Would there not be some poetic justice if Russian money was used to directly help the Ukrainians?

[Bob Seely]

The hon. Gentleman makes a very good point. One of the things we were discussing yesterday was quite how that could happen. The initiative is being led by Bill Browder, who has championed the cause of Sergei Magnitsky ever since he was tortured and murdered 13 years ago yesterday. Ten years ago—a decade ago this month—the late, great John McCain brought in the first Magnitsky laws in the United States, and everyone else across the globe, or at least 35 nations, has followed suit.

The person dealing with this issue in Ukraine is a very powerful Ukrainian politician called Kira Rudik, who was also with us yesterday. She is in London today. She is trying to get a global coalition to do just what we have been discussing. I hope that we will soon have a draft law here that we can send to Government, debate and put down in some form to say, “These are the next steps.”

I pay tribute to Kyle Parker, too, who was also in the discussions we had yesterday. He is great man. A senior congressional staffer—these people have much more power in the US than they tend to in the UK—he wrote the Magnitsky Act and worked with Congressmen and Senators to get it through both Houses in the US system. We should be doing the same here.

Strategic lawsuits against public participation, or SLAPPs—it is a bit of a mouthful—are effectively the abuse of law by the rich to intimidate journalists, campaigners and others. SLAPPs are absolutely part and parcel of this system. Imagine the great caravan of wealth that flowed from the former Soviet Union to the tax havens of the Caribbean. It needed facilitators, which were the financial services companies, some of which are corrupt German and Scandinavian banks. I think their names are out there: Deutsche Bank, in Estonia, I think, and one or two others.

The system also needed attack dogs to protect the flow of that vast caravan of sometimes criminal wealth, and those were the legal firms. Those lawyers effectively built a business model of legalised intimidation whereby journalists and campaigners can be threatened. If someone in the Soviet Union, or Russia post the collapse of the Soviet Union, wanted to stop a journalist from trying to investigate them, they would ultimately just kill them. In the UK and the west, that is more difficult—not impossible, but it is more difficult to kill people and get away with it.

People are not physically destroyed in this country; instead, the legal system is used to financially destroy them. That has sadly happened to a number of people, including Charlotte Leslie, a former colleague of ours, and the wonderful journalist Catherine Belton. Various campaign groups have also been targeted. Most recently, Chatham House has been a target. Sadly, I understand it has given in to threats and is having to rewrite some of its reports.

This business model was set up to service the needs of the aggressive rich and powerful, including organised criminals and oligarchs, who did not want their affairs investigated. The three methods were the abuse of libel law, the abuse of privacy law—the right to privacy, meaning no one else can look into someone’s affairs—and data protection. The aim in all the cases was to mount up such staggering costs that even a technical victory would destroy the opponent, render them bankrupt or destroy their reputation. If they were a journalist, the aim was to make a newspaper or publishing house invest hundreds of thousands of pounds in defending them against the vast sums that oligarchs were willing to throw at them to make their lives difficult.

A slightly different case is that of the Maltese corruption journalist Daphne Caruana Galizia. It was a great privilege to recently meet her son, who works in the UK media. At the time she was murdered, she was facing 47 libel lawsuits, almost all of which were from UK law firms. That is staggering: before she was physically destroyed, she was being psychologically and financially destroyed.

I have discussed Catherine Belton and the costs of SLAPPs. My final point is that it is extraordinary that, as Spotlight on Corruption and Global Integrity have found, law firms in the UK currently face almost zero risk of criminal prosecution for money laundering, and there is a very limited prospect of their facing any meaningful fines. I was told privately that a number of UK law firms support that criminal money-laundering activity. Yet almost nothing is done, and almost nothing is investigated.

What are the solutions? First, close the loopholes in Companies House. I know that the Government have made strides on that, but there is more to be done. The right hon. Member for Barking is working with a number of Members on both sides of the House to tighten up the regulations. If the Government could be sympathetic, we would be grateful. Secondly, the UK’s economic crime enforcement system remains under-resourced. It needs to be better resourced, so that we can fight the bad guys and girls better.

Thirdly, we need to better supervise the so-called professional enablers, so that they cannot effectively operate outside money laundering regulations. Fourthly, as we tighten up regulations here, we need to expand our UK regulations to British overseas territories. It is absolute nonsense that criminal and organised crime and tax havens benefit people in the Caribbean.

We very much welcome the Ministry of Justice’s response to the call for evidence on SLAPPs and its proposals for legislative reform. The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) and I—and perhaps others—will present a Bill on SLAPPs, so that a Bill is ready when the Government want to introduce one; we love saving Government time, and increasing the productivity of Government and politicians. We will provide a model for SLAPPs law. It will ensure that SLAPPs are disposed of more quickly in court, that the costs of being attacked by SLAPPs are kept to a minimum, and that the costs for SLAPP filers are higher, which will potentially deter further SLAPPs. There are other measures, but I will not go into them now.

In summary, as a result of the UK’s economic permissiveness, we have for too long become a safe haven for kleptocrats. That has to end. The situation is getting better, but it is a shame that it took a major war in eastern Europe for things to change dramatically. We take pride in the openness and transparency of speech, and in the UK’s open economic system. However, that freedom of speech and open economic system must be better protected. A laissez-faire, criminalised free-for-all is not an open economic system; it is a corruption of that system. We need to clamp down on the sources of illicit finance coming through the UK. I urge the Government to continue reforming Companies House, to resource our enforcement bodies, and to read and take in the many excellent recommendations in the Foreign Affairs Committee’s report.

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[Bob Seely]

I thank everyone for taking part in the debate and I thank you, Mr Efford, for chairing.

Question put and agreed to.

Resolved,

That this House has considered the Second Report of the Foreign Affairs Committee, The cost of complacency: illicit finance and the war in Ukraine, HC 168, and the Government response, HC 688.

Missile Incident in Poland

Bob Seely Excerpts

Wednesday 16th November 2022 Commons Chamber

[James Cleverly]

The hon. Lady makes an important point. Her words echo those of the Prime Minister and mine on the international stage. What we have seen, through Vladimir Putin’s attempt to use energy supply to blackmail countries that are supporting Ukraine in its self-defence, is a warning that we have to wean ourselves off hydrocarbons—particularly those through which we are reliant on autocratic states such as Russia.

That incentivises us to work at renewable energy generation and storage here in the UK, and to work with our international friends and partners to wean the world off hydrocarbons, which is exactly what my right hon. Friend the Prime Minister and I did when we went to Sharm El Sheikh for COP27. It is one of the points that he is discussing with the membership of the G20 in Indonesia at the moment. We have been at the forefront of many of the green energy generation technologies. We are absolutely committed to making sure that we help the Ukrainians to defend themselves in the here and now, and that we all defend each other through a greener and more sustainable energy mix in future.

[Bob Seely (Isle of Wight) (Con)]

In this unfortunate incident, two facts seem to be clear. First, the strategy of the Russians is to hold a military line across the south and the east and to destroy Ukraine’s civilian infrastructure; we probably agree on that. I understand fully the great work the Government are doing, which is generally fantastic, and the fact that we are the largest donor in Europe by some distance. However, there is a simple fact that we cannot get around. The Ukrainians have been saying for months that they do not have the air defence equipment to protect the cities and the infrastructure and the water supplies and the electricity and their own troops. Despite the fantastic work that the Secretary of State and his team are doing, the Ukrainians do not have enough air defence kit, and this is becoming critical to the survival of the Ukrainian state and its people’s morale in the coming months.

[James Cleverly]

My hon. and gallant Friend, who has made a career, both in uniform and out, of analysing these things, is absolutely right in his assessment of the immediate tactics that the Russians are endeavouring to use. By extension, he is also right about the need to help the Ukrainians with their air defence systems. I am assured by my right hon. and gallant Friend the Minister for Armed Forces that exactly that issue will be discussed at Ramstein, at military-to-military level and at Foreign Minister-to-Foreign Minister level. The equipment and the integration of that equipment are key, and will remain an absolute priority for us.

Sanctions

Bob Seely Excerpts

Thursday 22nd September 2022 Commons Chamber

[Jesse Norman]

The instruments before us were laid between 14 and 20 July under powers provided by the Sanctions and Anti-Money Laundering Act 2018. They make amendments to the Russia (Sanctions) (EU Exit) Regulations 2019.

As the last debate demonstrated, this House stands absolutely resolute in its opposition to the illegal and aggressive invasion of Ukraine by Russia. In co-ordination with our allies, the United Kingdom continues to play a leading role in introducing the largest and most severe economic sanctions package that Russia has ever faced. The measures that we are debating are designed to isolate Russia’s economy still further and target key industries that support President Putin’s illegal war in Ukraine. The measures are somewhat technical, so I hope that the House will forgive me if I go through them in a little detail.

The No. 11 regulations ban the export of goods and technologies related to the defence, security and maritime sectors. They also prohibit the export of jet fuel, maritime goods and technologies, certain energy-related goods, and sterling and European Union banknotes. In addition, they ban the import of goods such as fertiliser, metals, chemicals and wood, depriving Russia of a key export market. Together, those markets were worth some £585 million last year.

The Joint Committee on Statutory Instruments concluded that three provisions in the Russia (Sanctions) (EU Exit) (Amendment) (No. 10) Regulations 2022 would not be inside the powers conferred by the Sanctions Act. His Majesty’s Government have resolved that by revoking the 10th amendment and replacing it with the 11th. I thank the Joint Committee on Statutory Instruments for its continued engagement as we introduce further secondary legislation rapidly in response to this abhorrent war.

The No. 12 regulations place fresh restrictions on investments and services in Russia. They are designed to hit revenue streams of critical important to the Russian economy. The new measures prohibit persons from being involved directly or indirectly in acquiring land and entities with a place of business in Russia, in establishing joint ventures with persons and entities connected with Russia, and in opening representative offices or establishing branches or subsidiaries in Russia. The measures also restrict the provision of investment services related to these activities. There are some exceptions to the provisions to prevent overlap with existing regulations as well as licensing and enforcement powers.

[Bob Seely (Isle of Wight) (Con)]

My right hon. Friend is talking about services. Will His Majesty’s Government take further action to prevent Russian state entities such as Gazprom and VTB Bank, and the legal firms that support them in this country, from continuing to use the UK courts? I have written to the Secretary of State for Justice about the matter, because there is a long list of cases that the Russian state and Russian proxy entities are taking in the UK courts, and that money ends up back in the coffers of the Russian Government.

[Jesse Norman]

I am extremely grateful to my hon. Friend for his question, and the House recognises his great expertise in this area. He will understand that I am not going to comment on the future sanctions policy of this Government, but he can take it as read that we are looking extremely closely not just at ways of further extending this escalating programme of sanctions that has elaborated itself over the last few months, but at closing some of the loopholes. If he wishes, I will make certain that my officials have sight of the letter he has written and will write to him on the matter specifically.

I turn to the No. 13 regulations, which widen the definition of scope of activities for which a person can be designated. His Majesty’s Government have expanded the definition of destabilising, undermining or threatening Ukraine and supporting or obtaining a benefit from the Russian regime. This brings into scope many individuals and entities in the Russian Government, its agencies and its armed forces. The regulations make minor amendments to the definitions of being involved in, obtaining a benefit from or supporting the Government of Russia. These have the effect of broadening the interpretation of being associated with a designated person to include immediate family members who may, and often do, hold assets on their behalf. The regulations also provide an exception from trade sanctions for humanitarian assistance actively delivered in non-Government controlled areas of the Donetsk and Luhansk oblasts. Finally, they expand the definition of ownership in relation to ships and aircraft, and they correct errors and omissions in previous regulations.

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[Bob Seely (Isle of Wight) (Con)]

I will make a few brief points to the Minister and raise some specifics, as my hon. Friend the Member for Dewsbury (Mark Eastwood) did. It is quite clear that Russia is now actively trying to get round sanctions on an industrial scale. We are seeing that in its use of tech and microchips, in the potential sale of raw steel products to third parties, which then get re-exported back into Europe, and, as I am sure the Minister will know, in the passing of assets to wives, kids, families and in-laws of various types.

Along with the hon. Member for Cardiff South and Penarth (Stephen Doughty), I was also in Kyiv as part of that delegation and was likewise a guest of Yalta European Strategy—obviously I will declare that in due course. When we met folks in Kyiv there was a sense of urgency that, as well as all the great stuff we are doing, we need to be helping them to shut down Russia’s ability to maintain a multibillion-dollar monthly war effort. Therefore, the sanctions regime is absolutely vital in achieving that. When it comes to the specifics of the oligarchs, what they wanted was that money going back to Ukraine in war reparations.

On specific elements, I mentioned this point in my intervention, but I would just like to build on it for a couple of minutes. In UK courts, Russian state parties are still bringing cases. Is that right? If successful, the winnings from those cases go back via Russian proxies to the Russian state, where they are used to continue to fund the illegal invasion of Ukraine. As I said, I wrote to the Secretary of State for Justice, and another 10 Members of Parliament from both sides of the House have co-signed the letter. The 12th amendment to the Russia (Sanctions) (EU Exit) Regulations 2019 has already established that it is a criminal offence to knowingly provide the Russian state and other entities with funds or economic resources. I am asking for the Government to consider whether that provision can be applied to the legal winnings from ongoing litigation in UK courts.

Along with the 10 other signatories, I am asking the Government to prevent Russian state entities, such as Gazprom and VTB Bank, from using the legal system to effectively conduct a form of lawfare against Ukraine. As people may know, tackling the amoral offering of services to highly dubious characters has been quite close to my heart. It is less revolting than some of the intimidation of journalists and campaigners, but now, because of the situation with the war, it should come under the scope of Government action.

We are asking specifically for the following: the introduction of further sanctions against British law firms and banks which do not comply with existing sanctions regimes, and an amendment to hold managing partners accountable for their work should they be violating sanctions; the direct prohibition for UK-based law firms to represent entities controlled by the Government of the Russian Federation, including the Bank of Russia and entities in which the Russian state has a significant or controlling interest; and, thirdly, for His Majesty’s Treasury and the Ministry of Justice to address and tell us what they are going to do about ongoing litigation cases, of which there are at least half a dozen in English and Welsh courts, to ensure the Russian Federation is not evading the sanctions regime and is not profiting from winning those court cases. I have a list of about eight big law firms, including Freshfields Bruckhaus Deringer, VTB Bank Europe, PCB Byrne, Steptoe & Johnson and a number of Russian state entities. They are in the letter that, in the last few minutes, I have pinged to the Minister. I would be most grateful if the Government could give a considered response to those three points, but also to the current litigations as they go through the UK courts.

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[Jesse Norman]

If I may say so, I do not think that it is possible to move faster than having a debate within two days—in fact, a day and a half—of Parliament’s resumption after the interval following the unfortunate passing of Her late Majesty the Queen. The rules apply. As a further rebuttal to the shadow Minister’s point, my reply to the suggestion that something can somehow be made perfect, as though it were set in stone forever, is “Of course not.” This is a rapidly evolving situation.

My hon. Friend the Member for Isle of Wight (Bob Seely) talked about lawfare. He is exactly right that some very well-heeled and well-resourced individuals are using all their resources, as corporates and as individuals, to try to thwart us. That is why the response must continue to evolve, and it will.

On the point raised by the hon. Member for Tiverton and Honiton (Richard Foord), the Office of Financial Sanctions Implementation in the Treasury has more than doubled in this financial year. The response that is being made is being taken very seriously, and there is a continuous effort to build sanctions capability across Government.

I take the point that the hon. Gentleman made about advice for the higher education sector. I can also tell him that a very effective team in the Department for International Trade is helping businesses in this country to deal with this issue, which, again, we take extremely seriously.

My hon. Friend the Member for Isle of Wight, when referring to lawfare, mentioned Freshfields. I was sorry to hear the name mentioned, given the respect in which that firm is held across the country. I wish it were not true, if it is—I hope it is not—but it was interesting that my hon. Friend mentioned it.

[Bob Seely]

Will the Minister give way?

[Jesse Norman]

I would rather not, because I have not much time, but let me just say this. My hon. Friend talked about the extension of designation, and this makes the point about the evolving nature of the threat. It is important to get the sanctions in quickly, but as the response evolves, so we must evolve it, and that is what we have done. Being associated with a designated person now includes obtaining financial benefit or other material benefit, or being an immediate family member, which means a wife, a husband, a civil partner, a parent or step-parent, a child or stepchild, a sibling or step-sibling, a niece or nephew, an aunt or uncle, or a grandparent or a grandchild. That is an example of the response evolving as my hon. Friend would have wished.

The hon. Member for Stirling (Alyn Smith) rightly drew attention to the slippery nature of what we are dealing with. I have been highlighting that in my speech. He talked about the danger of laundering energy. There are technically difficult questions to address about how that is to be characterised, especially when, as it were, forms of energy are changed.

The hon. Gentleman talked about proper tracking through the overseas territories. He will be aware that these rules apply in the overseas territories by Order in Council, in the same way that we would apply them here. I think he erred slightly in talking about the legitimacy of sanctions in part depending on the assets seized; the legitimacy of sanctions lies in the fact that we are fighting an aggressive nation that is seeking to overturn our way of life and the foundations of liberal democracy, and I do not think any further legitimacy is required for that to be a worthwhile thing for us to do.

My hon. Friend the Member for Dewsbury (Mark Eastwood) raised the important issue of Alunet, in his constituency. I thank him for doing so, and I thank him for writing to me in advance with the details. I understand the sense of those at Alunet of the loss that they appear to have incurred, and also the concern that they are feeling. I will be writing to my hon. Friend specifically about that issue.

Let me now come to the questions raised by the hon. Member for Cardiff South and Penarth. He asked why so many changes and amendments were needed. It is, of course, because the first instinct in a war situation is to get sanctions on the books as quickly as possible. We know that they have been effective because the Treasury Committee has reminded us of that, and we have plenty of other evidence that it is the case. As I have said, however, as the situation evolves so we need to evolve the response, and as the concerns about the humanitarian impact and unfairness evolve, the sanctions picture inevitably becomes not merely more widespread and more expensive, but more complex—and it is right that that should be so.

The hon. Gentleman mentioned a letter that he had written. Obviously the process has been disturbed by the abeyance of Government and the funeral of Her Majesty, but I will ensure that that letter is sent. He also talked about resourcing. I have referred to the increase in the size of OFSI, and that is matched by the seriousness with which this issue is taken across Government. The hon. Gentleman raised a series of other, more technical issues, and I shall be happy to write to him about those in more detail.

I invite the House to support these motions.

Question put and agreed to.

Resolved,

That the Russia (Sanctions) (EU Exit) (Amendment) (No. 11) Regulations 2022 (SI, 2022, No. 792), a copy of which was laid before this House on 14 July, be approved.

Resolved,

That the Russia (Sanctions) (EU Exit) (Amendment) (No. 12) Regulations 2022 (SI, 2022, No. 801), dated 14 July 2022, a copy of which was laid before this House on 18 July, be approved.—(Jesse Norman.)

That the Russia (Sanctions) (EU Exit) (Amendment) (No. 13) Regulations 2022 (SI, 2022, No. 814), dated 14 July 2022, a copy of which was laid before this House on 18 July, be approved.— (Jesse Norman.)

Exiting the European Union (Sanctions)

Resolved,

That the Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 (SI, 2022, No. 850), dated 18 July 2022, a copy of which was laid before this House on 20 July, be approved.— (Jesse Norman.)

Ukraine

Bob Seely Excerpts

Tuesday 26th April 2022 Commons Chamber

[The Secretary of State for Foreign, Commonwealth and Development Affairs (Elizabeth Truss)]

I beg to move,

That this House has considered the situation in Ukraine.

Putin’s unprovoked, illegal war has now entered its third month. Russian forces failed in their initial war aims—they failed to take Kyiv and they have suffered heavy losses—but Ukraine now faces a renewed offensive in the east and south, and we are seeing appalling atrocities in Mariupol, Odesa and beyond. We must double down in our response.

So far, Putin’s planning has been riddled with misconceptions and miscalculations. He was wrong about Ukraine’s strength and determination. We must prove him wrong again in his expectations of our stamina and commitment. Our aim remains clear: Putin must lose in Ukraine and we will do everything that we can to ensure that.

We know that Putin’s ambitions do not stop at Ukraine. I am in constant contact with allies and partners to urge more action. I made the case to NATO and G7 Foreign Ministers earlier this month and in every exchange I have had with my counterparts around the world. Since those meetings, we have seen action in three areas.

First, we are stepping up our lethal aid. The UK has led this effort. We have supplied 6,000 anti-tank weapons and 120 armoured fighting vehicles, as well as ammunition and other weapons. We are helping other countries to deliver equipment by providing logistics support. We are also backfilling third countries’ stocks—for example, by offering to deploy British Challenger 2 tanks to Poland.

We are training Ukrainian troops to use the new equipment, and our allies are stepping up too. For too long there was a false distinction between defensive and offensive weapons. It became an excuse for some to drag their feet. That time has now passed. NATO allies are clear that we are delivering heavy weapons to Ukraine. That is what the Ukrainians need to halt the latest Russian initiative and regain control of their territory.

[Bob Seely (Isle of Wight) (Con)]

I thank the Foreign Secretary for the work that she and many other senior Ministers are doing. Does she recognise that one of the key conversations now is about the move to NATO-calibre 155 mm artillery, so that we can match the 152 mm that is being used in the east and the south against cities such as Kharkiv, Odesa and Mykolaiv?

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[Bob Seely]

rose—

[Dr Lewis]

I suspect my hon. Friend is going to make a constructive suggestion in that respect.

[Bob Seely]

On that point, targeted missiles of the kind we have seen launched at tanks at short range are an answer, but the argument in favour of moving to NATO calibre 155 is that, all things considered—of course shells come in different specifications—it offers slightly longer range. By using longer range, the Ukrainians can stay out of Russian 152 range and target them with their 155s, potentially forcing a change in Russian tactics. There is benefit in moving to NATO calibre as well as in directed missiles.

[Dr Lewis]

I do not dispute that at all, but we must remember that Russian artillery has Ukrainian cities to aim at, whereas Ukrainian artillery would only be aiming, presumably, at Russian artillery. That may be the best answer there can be, but I would have thought that some of the more modern, smarter systems such as suicide drones might be a more effective response.

That leads to my final point. When people say, “What does victory look like?”, it is not so much a question of victory over Putin as of showing Putin that, unless he desists from this, he will end up much worse off than if he gives up. What has happened so far is that his troops have paid a price that has not shown commensurate gains—his aircraft similarly, his tanks similarly and his ships similarly—so all he has left is this method of artillery. We want the Russians to think that every time they fire an artillery round, their artillery piece is going to be destroyed. We have a very capable Defence Minister doing the wind-up—I am delighted to see him nodding—and that is my one point that I wish to see addressed, because if we can show Goliath that all his weapons are useless and that we can supply the slingshots, perhaps Goliath will decide that it is better to stay away from the battlefield.

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[Stewart Malcolm McDonald (Glasgow South) (SNP)]

It is a pleasure to follow the hon. Member for East Surrey (Claire Coutinho). Much of what she said was, of course, right. There were parts of it with which I did not agree, and we may return to those later, but what she said about the generosity of the public was entirely correct. That is reflected from Surrey to the south side of Glasgow, as Members would expect and, indeed, as my hon. Friend the Member for Glasgow Central (Alison Thewliss)—who is sitting beside me—knows.

Let me start with where I think the Government have got it right. I think they have got it especially right in terms of military support. We hear from President Zelensky that “weapons, weapons, weapons” are what will help him and his people to win this war, and Ukraine winning the war is actually what matters. It is fair to say that the Government have been leading on that front, and the hon. Member for East Surrey can indeed take some pride in the fact that that is recognised by the President and the Government of Ukraine. The official Opposition—together with me, as my party’s defence spokesperson, my hon. Friend the Member for Stirling (Alyn Smith) as our foreign affairs spokesperson, and indeed the First Minister of Scotland—have been on the same page, along with our leader here at Westminster, my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford). Weapons, weapons, weapons are what will help Ukraine to defeat Russia on its territory.

There is a growing mood in Ukraine, a wish not just to push back against the aggression that we have seen from the current wave of the conflict. I have noticed a couple of references to the war having started in February this year, but of course it did not; it started in 2014.

[Bob Seely]

The hon. Gentleman is making a good case about when the war started, but there is another good case for suggesting—given the hybrid, integrated approach to warfare that Russia has in its doctrine—that it started in about 2004 or 2005, after the orange revolution, although the violent and paramilitary aspects became more visible after 2014.

[Stewart Malcolm McDonald]

My fellow member of the Foreign Affairs Committee is most learned in these affairs, and I completely agree with everything that he has just said. What we will see, not just in Ukraine but around the western world, is an intensification of those other elements of the Russian warfare doctrine, such as cyber disinformation and the use of private military contractors.

Relationship with Russia and China

Bob Seely Excerpts

Thursday 24th February 2022 Commons Chamber

[Bob Seely (Isle of Wight) (Con)]

I beg to move,

That this House calls on the Government to develop separate but aligned cross-Government strategies for both Russia and China; and further calls on the Government to support the international order, working with allies across the globe to develop an approach to Russia and China that, whilst recognising their separate legitimate interests, ensures a robust defence of both UK interests and democratic values.

I will speak for 15 minutes, if I get that far, as I am mindful of others.

As of this morning, offensive war has once again broken out in eastern Europe, as Russian artillery and armour rain down on a peaceful neighbour. We have all seen the reports of columns moving from Crimea, of Kharkiv and Kyiv potentially being under threat and of bridges being blown up in Chernobyl as Ukrainians defend hearth and home.

This is arguably the first conventional war in Europe since 1945. The intentions of Vladimir Putin have long been clear: to control or destroy Ukraine, to shatter western unity, to build a new sphere of influence on the foundations of the USSR and to present the west as a decadent, mortal enemy of the Russian people and Russian identity. It is an agenda that is both febrile and dangerous, but sadly it is also very real. We have needed to understand it for some time, and we urgently need to get our heads around what is happening.

According to polling, the majority of Russians see war—and nuclear war—with the west as now more likely than not, which should be a sobering realisation for all of us. Russian state propaganda has prepared the population for conflict for years. The immediate news is clearly shocking, but I will still try to look more broadly, to talk about tactics rather than strategy and, where possible, to bring in China as much as Russia. People will forgive me if I do not always succeed.

Russia in the west and China in the east present differing but overlapping and increasingly significant threats. However imperfect our current global system, we have avoided major conflict, but that order is now under threat: in Ukraine today; potentially in Taiwan and the South China sea; and potentially in the Baltic and the Black sea in the weeks, months and years to come.

I lived and worked in Ukraine and the former USSR from 1990 to 1994, and I was fortunate enough to travel through the country for much of that time. I lived in Kyiv, but I well remember many of the places we are talking about now. I went down coal mines in Donbas, I visited Soviet dachas in Sevastopol, and in Moldova and Georgia I witnessed the first of the proxy wars engineered, probably, by the KGB. Many of my formative experiences as a young man were spent there, and I am deeply fond of the place and its people. What is happening pains me, because a KGB placeman will now pit Slavs against other Slavs to fulfil a fantasy about the Soviet Union and the world. The cold war was not a good world. It died 30 years ago and should remain dead. Tens of thousands are likely to die.

I would like to argue the following: the risk of direct conflict with Russia and China is growing and, in some senses, we are already in indirect conflict with both, in different ways—importantly, I am not directly comparing Russia and China. We are midway through a 20-year crisis with Russia that we are woefully ill-prepared for and have done our best to ignore. Frankly, this is now returning with a vengeance. We are at the beginning of a significant and potentially damaging change in our relationship with China—there may be greater opportunity there, but there may also be greater threat. Therefore, for the next 20 years the primary foreign policy goal for this country must be in old-school state relationships and the avoidance of direct conflict, and the establishment of working relationships with both, where we can, that are as productive as possible, while resolutely defending our values and our allies. I do not believe we are there yet by any means; and the coherence and integration of our foreign policy, and our policy in both cases, is not there.

Secondly, we need to understand the new world and the new styles of conflict being practised against us, and the new forms of covert and overt influence. Thirdly, as a result, we need to move to an era of “smart” containment, which is not only geographically based, but is a protection of our values, and of our IT property, our universities and law firms, and our City institutions and others. That includes things such as a national strategy council to complement the National Security Council, because frankly—the more I speak to people, the more I feel this—we need to relearn the arts of strategy and deterrence. We need to relearn how to use power properly—I believe we have forgotten that.

We also need to make provision for laws that we should have put in place years ago: a foreign lobbying Bill—my God, how many more scandals do we have to put up with before we realise we need one?; an updated espionage Bill; an economic crimes Bill; and changes to the libel and data protection rules to protect freedom of speech and to protect journalists from becoming peripheral victims of Russian oligarch intimidation to our freedom of speech.

[Chris Bryant (Rhondda) (Lab)]

I wish to add to this list, although I share in everything that the hon. Gentleman is saying. He is very intelligent and foresighted on these issues. Should we not also be looking at those who have dual nationality—Russian and UK, or Chinese and UK—reassessing and making them choose a nationality? Secondly, should we not be looking at everyone from China or from Russia who has a tier 1 visa and reassessing whether those should not be withdrawn?

[Bob Seely]

The hon. Gentleman make sensible points. I look forward to working with him on them and I thank him for his intervention.

Both the Russia and China leaderships see themselves as being in conflict or intense competition with the west. That may sound “hawkish”, but it is not designed to be so. It is designed to avoid conflict in the future by being clear about the times we live in. Let us face it: who of us today will claim that deterrence has worked in Europe? Let me remind the House that the best wars are not those that are won, but those that are unfought. Our greatest victory in world war three was that it did not take place, not that we destroyed our civilisation in order to destroy another.

In Russia, the security elites have believed for the past 20 years that they are in conflict with us—in a conflict of values and of information, with spheres of interest. President Putin alludes to a “western plot” that destroyed the Soviet Union and he sees “colour revolutions” in the same light. Security Council Secretary Nikolai Patrushev regularly warns that the west wants to destroy Russia because we fear it and are jealous of it. The Kremlin’s confrontational strategy to change the post-cold war order began with a reassessment of military art in the early 2000s, which was played out somewhat in national publications such as Voennaya Mysl, or Military Thought, and Voenno-promyshlennyi kur’er—or Military-Industrial Courier. The result of that debate was a strategy that has, in effect, aligned Russia’s two ways of war, the conventional and the non-conventional, and seen the west as a psychological, spiritual and physical threat. It is not fundamentally a military doctrine—the Gerasimov doctrine—as some people falsely claim; it is actually a strategic art, not simply a military one. These ideas have formed in Russia’s military and national security doctrines, written by those around Putin, where the west is the existential threat, spiritual and physical. Swedish academic Maria Engström has discovered that at its worst there is a disturbing narrative among Russian ideologues that links Russia’s nuclear arsenal and Russian Orthodoxy, known as “Atomic Orthodoxy”, as the “sword and shield” against the Antichrist—the US and NATO. We are the Antichrist. The sword and the shield are also the symbols of Putin’s old KGB and now the FSB. We made the mistake of dismissing fringe Russian philosophers as neo-fascist nutjobs in the 1990s. Given what has happened since, it is unwise that we do the same again. In China, party document No. 9 lays out quite clearly that the Communist party seeks a dominant position of its socialism over western capitalism. The language of win-win is for an external audience, for us. The language domestically is to win and to dominate, and again we should be under no illusion about that.

Whereas Russia is a declining power, China is rising one. They present different but related threats, and both, to a greater or lesser extent, use the tools of hybrid conflict. The principle behind this is not just war plus information ops; it is much more. It is to see state competition as Darwinian, with war as an extension of politics—as set out by von Clausewitz—and politics as an extension of conflict. The latter idea was peddled by German world war General Erich Ludendorff in his book, “The Total War”. China believes in something similar, as readers of “Unrestricted Warfare”, published in the late 1990s, will know. Our opponents are harsh, harsh realists. Their secret police disappear people. They are not liberal internationalists. Although they share legitimate interests, and we need to work on those legitimate interests, their mindset is different from ours.

Putin is a product of the KGB; an organisation involved in some of the greatest crimes in human history, but one that, unlike the SS, has never had to collectively accept responsibility. He is both deeply rational and highly irrational. Russian integrated strategic decision making is years ahead of the west. Its general staff is probably the last Prussian organisation on earth. This war has been planned for years. He knows that EU dependency on energy is worsening and he has built up tens of billions in reserves. I suspect he laughs at the ad hoc tactics of the west, where we ask, “Do we do a no-fly zone? Do we do this? Do we do that?” From him, this is, as Sun Tzu would say, “tactics before strategy”—it is “noise before defeat”.

Putin is also fuelled by a bitter and cold anger at the loss of the USSR—at the loss of Ukraine—which he cannot abide and refuses to accept. This is the third stage of the Ukrainian conflict. The first, between 2004 and 2014, involved economic and political tools. The second stage, between 2014 and 2022, involved those as well as paramilitary violence. In their hybrid tools, both Russia and China seek elite capture in this country. We know about Huawei and about the academics and the universities. Twice in this House I have heard the claim that Huawei is a private company. Anyone who knows anything about one-party states and about communism knows that that is an incredible and bad claim for a Minister, or for an official putting words into a Minister’s mouth, to be saying. Both countries use covert military force. Both use an intimidating conventional military presence. Both use culture. Both use covert control of the media.

So what is our response? First, it is to understand our adversaries and potential enemies, because they spent a great deal of time understanding us. We need to keep reaching out to their leaders, however futile that now is in the case of Russia, and to their people. We also need to have a conversation in our own house about how we clean up our own house—about the Bills we need to bring in, which I have mentioned: the foreign lobbying law; the data protection law; and the laws on economic crimes.

That is just a start. If Confucius Institutes wish to remain in this country, they must stop spying on Chinese students, and be willing to discuss Hong Kong and Tiananmen Square. If not, they should be shut down. Military dual-use work should be banned. Work for Chinese military universities should be banned. Recruiters for the Chinese secret agencies need to be exposed and prosecuted. Front organisations such as the Chinese Students and Scholars Association should be banned. [Interruption.] I am aware of the time, Mr Deputy Speaker. We need to become significantly less strategically dependent on industry and manufacturing from China, not least because of the environmental damage they do to our state. Globalisation has in many ways been a force for good, but we need to have a conversation with ourselves about whether offshoring so much of our industry is a good thing.

The military dividend—the peace dividend—is over. Spending 2% on defence is not acceptable. To put it crudely, we need a bigger Navy and a bigger Air Force. We need to rebuild our alliances throughout the world. If there is one thing unique about British strategic culture—one of the greatest things this country has done in 200 years, arguably more than any other—it is our ability to build alliances throughout the world. We need to be at the heart of the building of new alliances. Potentially, our second carrier should be part of the CANZUK—Canada, Australia, New Zealand and UK—fleet. Potentially, we should put a physical NATO base in the Suwalki gap between Kaliningrad on one side and Belarus on the other.

I could go on but I am mindful of the time, so let me sum up. There are two courses for humanity in the 21st century. The first is the western model of a law-governed society with politicians under the control of the people. It is incredibly imperfect, as we all know, but it is the best hope for mankind. The second is the new militarism of high-tech authoritarianism that is championed by Russia, and a little bit by China. It promises the data-inspired, artificial-intelligence control of populations. We need foresight, strategy and resolve to fight to defend our values and the future of humanity. We should not underestimate the scale of the task nor shy away from it. The defence of human freedom, wherever it is in the world—in Taiwan, Ukraine, the Baltic or the Black sea—is the struggle for our age.

[Several hon. Members rose—]

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[Sir Edward Leigh (Gainsborough) (Con)]

Thank you, Mr Deputy Speaker, for calling me in this debate. As much as anybody in the House of Commons, having been chairman of the all-party group on Russia and being married to someone who is half-Russian, I have sought to understand Russia and the mindset of its leaders. What I am going to say in no way amounts to my approval of what is going through the mind of Vladimir Putin; I heartily condemn what has happened this morning. However, in this country and in the west, we think of the relationship of Russia and Ukraine in a rather similar vein to how we thought of the relationship between Germany and Poland before the second world war. Russian nationalists such as Mr Putin have a completely different mindset.

In his speech a couple of days ago, Mr Putin said that the Soviet Union “created” Ukraine, and in a way that is partly true. What happened was that there was a brief upsurge of Ukrainian nationalism in 1918 and 1919, following the collapse of the tsarist empire, but Lenin quickly snuffed out Ukrainian independence and in effect made Ukraine a vassal state. When Putin says that Ukraine has always been part of Russia, in a sense he is right because, following the partitions of Poland in the 1770s and the 1790s, Ukraine was an integral part of Russia for nearly 200 years. When we look inside the mind of a Russian nationalist such as Mr Putin, we can see that he does not recognise Ukraine as an independent state.

I have heard a lot of criticism of the responses of our Government and of NATO generally, but I think that nothing we could have done differently would have changed that mindset or probably avoided what has happened today. I personally think that the response of western Governments and of NATO up to now has been right and proportionate. What we have avoided doing, and must continue to avoid doing, is playing to the victimhood mindset of many Russian nationalists. They believe that they were humiliated by the west following the fall of the Soviet Union, particularly by President Clinton. They believe that Secretary of State Baker gave a solemn promise that NATO would not expand eastwards. Whether or not that is right is not important; they believe it.

President Putin has claimed, completely wrongly, that we are trying to make a vassal state of Ukraine, and he has used the issue of NATO membership to justify his actions. We could not have said to an independent country such as Ukraine that it could never join NATO, but the reality is that NATO has never made any effort to actually move this application forward. Indeed, the German Chancellor said only in the last week that Ukraine’s membership of NATO was “not on the agenda”, so when Putin claims that we are trying to make Ukraine a vassal state, he is lying.

What do we do now? I know that what I am going to say may not be very popular with some, but I think we have to continue with the strategy we have pursued so far. The Government have been attacked for the so-called weakness of their sanctions, but the sanctions they imposed earlier this week were only part of the story. What I am sure we will hear tonight is much stricter sanctions that will really hurt the Russian state. People will say that this is weak and that there should be some warlike response, and people will say that we should have allowed Ukraine to keep nuclear weapons, that we should arm the Ukrainians and that Ukraine should join NATO, but this is the path to war.

It is sometimes difficult to speak of a path to peace, but if we escalate issues and go into a tit-for-tat situation, then war can result. At the height of the first world war, the German Chancellor, Bethmann Hollweg was asked how the war started, and he said that he had no idea how it started and no idea how it escalated.

[Bob Seely]

As ever, my right hon. Friend is making some very sensible points. I do not think NATO should be asking Ukraine for membership, which is a 20-year path, because it simply enrages Putin, and it gives him a chance to respond and to claim that NATO membership is imminent. However, there is a difference between NATO membership, which is a red rag to a bull, and ensuring that Ukraine is too bitter a pill for Russia to swallow. Arming and training an independent, separate or Finland-like Ukrainian army is different from getting into a position where we are in direct conflict with the Russians.

[Sir Edward Leigh]

Well, I suspect that is what we have done. However, the German state simply sending helmets or a field hospital to Ukraine or our sending a few anti-tank handheld missiles will make no difference at all. I am not criticising the Government: we have gone through the motions, but the fact is that nothing we could have done would have been sufficient to arm the Ukrainian state well enough to be able to resist Russian aggression.

I want to say to the Government that they have to pursue the path of peace, and I do not think we should decry sanctions. Putin has now moved into the dark side of history, but if we cut off Russia entirely from the rest of the world economically, we can make a difference. I am sure what is going to be announced tonight will start the process of proving that the west can be resolute and determined that we are not playing to Putin’s war game and have never sought to make Ukraine in any sense a vassal state of the west. There was no intention—this is a complete lie—that nuclear weapons or a dirty bomb could have been restored to Ukraine. The Government have to pursue the path of peace, impose the most rigorous economic sanctions and not escalate to war.

My last point is that the Government should not hold the Russian people responsible for this. Most Russian people I know, and Ukrainian people, are not interested in this warped view of history and sense of victimhood. All they want is to get on with their lives in peace. They just do not want war: they do not want war between Russia and Ukraine, and they do not want war between the west and Russia.

--- Later in debate ---

[Bob Seely]

I am delighted by what the Minister is saying. I have just received news that the Ukrainian embassy is putting out a list of medicines that it urgently needs. Will the Government take that list seriously and try to do something about it?

[Amanda Milling]

As I say, I will leave it to the Prime Minister to update the House on our response to what happened overnight.

Through NATO, we will ensure a united western response, combining our military, diplomatic and intelligence assets in support of collective security. We will uphold international rules and norms and hold Russia to account for breaches of them, working with our international partners as we did after the Salisbury attack. In the context of Ukraine, hon. Members will be aware that the UK is working intensively with allies to ensure that Russia’s actions are met with a united international response. We are doing so through NATO, the UN, the OSCE and our partners in the G7 and across Europe. We have engaged with the Russian Government at every level, but Putin has chosen the path of destruction over diplomacy.

The integrated review identifies Russia as representing

“the most acute direct threat to the UK”,

as well as predicting that it

“will be more active around the wider European neighbourhood”.

It makes a separate assessment of China, highlighting the

“scale…of China’s economy…population, technological advancement and…ambition to project its influence”.

It emphasises China’s increasing international assertiveness and scale as one of the most significant geopolitical shifts of the 2020s. Consequently, our approach to China aims to promote a positive economic relationship, but one that avoids strategic dependency and enables us to engage where possible to tackle global challenges. It also addresses the inescapable fact that China is an authoritarian state with a different set of values from the UK’s. We cannot let China undermine freedom and democracy. We will hold it to account for human rights violations, whether they are in Xinjiang or in Tibet, and for the erosions of rights and freedoms in Hong Kong.

The Government are clear that in areas of shared interest, the UK will preserve space for co-operation and continue to engage with China and Russia, which, like us, have permanent seats on the UN Security Council. As my right hon. Friend the Foreign Secretary set out in her Chatham House speech in December, we must be

“on the front foot with our friends across the free world, because the battle for economic influence is already in full flow.”

That requires a robust diplomatic framework that allows us to manage disagreements, defend our values and co-operate where our interests align, but let me repeat that we will not accept the campaign that Russia is waging to subvert its democratic neighbours.

As a P5 Member, China has a critical role to play. The UN Secretary General has said that Russia’s action

“conflicts directly with the principles of the Charter of the United Nations”.

Just as China refused to recognise the illegal annexation of Crimea in 2014, we would expect China to uphold the UN charter in the face of this latest violation of Ukraine’s sovereignty and territorial integrity.

The UK is determined to lead the way in defending democracy and freedom. We will continue to develop an international approach that defends UK interests and promotes our values, including with Russia and China. We will uphold the founding principles of international peace and security in the United Nations, which all three of our countries are duly bound to respect and protect.

--- Later in debate ---

[Bob Seely]

I just want to thank Members very much for taking part in the debate. This is a pretty miserable day for all of us who care about democracy in Europe, so let us hope for the best.

Question put and agreed to.

Resolved,

That this House calls on the Government to develop separate but aligned cross-Government strategies for both Russia and China; and further calls on the Government to support the international order, working with allies across the globe to develop an approach to Russia and China that, whilst recognising their separate legitimate interests, ensures a robust defence of both UK interests and democratic values.

Countering Russian Aggression and Tackling Illicit Finance

Bob Seely Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Danny Kruger (Devizes) (Con)]

I thank and congratulate the Opposition on bringing forward this debate. It is a very, very important and timely matter. I am impressed by the unanimity that has been shown across the House in response to what is happening in eastern Europe and by the support that has been given to the Government’s measures so far.

The shadow Foreign Secretary said earlier that the world is watching to see whether the west meets this test, and he is absolutely right. The Foreign Secretary said recently that there has been a decade of drift in regard to Russia, and, sadly, that is true as well, but that is no longer the case. I applaud the measures that have been announced: the clampdown on the activities of the oligarchs in the UK; the suspension of banking; and the restrictions on the Russian state and Russian companies from raising debt in London markets.

What more can and should be done? Yes, we must take resolute action to get illicit Russian money out of the City. I was powerfully struck by what the hon. Member for Wallasey (Dame Angela Eagle) said about Companies House. From my constituency work, I have become very conscious of the deficiencies of the system there and the ability that fraudsters have to establish companies. There is also a danger from a security perspective, so action must be taken, and I am sure that the Government are hearing that.

Many Members and commentators have suggested that Russian trading should be suspended through the SWIFT banking system. I defer to others on that, but I do just observe the potential economic turmoil that that would induce and recognise that it might be necessary for us to experience pain in this country, even at a time when our own economy is fragile and when the cost of living is going up. We recognise that, because of the decade of drift that the west has allowed to take place in Russia, there may be economic pain in consequence.

[Bob Seely (Isle of Wight) (Con)]

Does my hon. Friend agree that SWIFT is a messaging system between banks, so cutting off other Russian banks from the messaging system is not quite the nuclear option that people suggest it is, although it would complicate matters?

[Danny Kruger]

As I said, I defer to others on that, but I thank my hon. Friend for that information.

The same applies to the impact on wholesale gas prices, which will naturally ensue as European countries in particular restrict their imports of Russian gas. That is necessary. Thankfully, we are not dependent on Russian gas to the same extent as our friends in Europe. I commend Germany for its brave decision to suspend Nord Stream 2. I hope that that will become a permanent commitment.

The Opposition accuse us of not doing enough. Of course there can, should and will be more steps taken, but I invite them to consider what they would be saying if we had shot off every measure possible all in one go, without consultation and without collaboration with our partners. They would be accusing us, no doubt, of precipitate, hasty action and of lack of partnership with our allies. We would probably be accused of Brexit Britain little Englandism, impotent sabre rattling, and trying to distract attention from political problems at home. They would be making those accusations if we were shooting off every possible measure in the book. Actually what we are doing is taking deliberate action. We should not mistake a measured approach for a lack of resolution. On the contrary, this is a steady, deliberate ramping up of the sanctions that are necessary, in partnership with our allies. This is the responsible way to proceed. It is the way that this Government proceeded when the Russian state attacked people on the streets of this country in Salisbury in my county of Wiltshire. It was the right action to take. It took a little while to convene an international response to that, but it was the right one.

What can we do beyond finance? I applaud the military commitments that have been made in recent months, and particularly those in recent weeks, including: the increase in the military support that we give to Ukraine; our commitment of further troops to Estonia and Poland; the increase in our RAF presence in Cyprus; and the dispatch of warships to the eastern Mediterranean and the Black sea. Those are all the right measures to take. Putin said rather preposterously that Russia was being encircled by NATO. That now will come true because of what he has done. I commend the Government from before this crisis for their increased funding—£20 billion extra—to our armed forces, which includes investment in cyber and in all the grey zone defences that we need to counter the sort of threats that Russia poses. I agree with what my hon. Friend the Member for Basildon and Billericay (Mr Baron) said a few moments ago. I cannot believe that we do not also need an increase in the number of men and women in uniform able to act as a deterrent to the sort of aggression that we are seeing. As I said in my intervention on him, as a nation, we need to increase development spending, diplomatic spending and defence spending.

I had the honour of meeting some of the soldiers going out to service part of Operation CABRIT in Estonia last year when they were training on Salisbury plain in my constituency. I want to take this opportunity to press for those soldiers to be awarded a campaign medal in recognition of their activities to defend Europe and the west as part of Operation CABRIT. Under the current circumstances, it is extremely necessary and appropriate to recognise that they are not just undertaking a training exercise; they are actually defending Europe and defending the UK. I hope that we will see a medal for our troops who are serving in eastern Europe and that we will increase our armed forces in the years to come.

--- Later in debate ---

[Bob Seely (Isle of Wight) (Con)]

I will aim my remarks very much through you, Madam Deputy Speaker, but at the Minister. There has been a lot of smoke about events; it would be nice if he could give us some light on what will actually be happening.

I am slightly concerned that, broadly speaking, we still do not understand as much as we should about Russian hybrid conflict, about the economics, the military, the espionage, the lawfare, which some hon. Members have referred to, the finance and the propaganda. That is something we should be much more concerned about.

Some hon. Members have talked about Russian past form in this area; I lived in the Soviet Union and the post-Soviet states from 1990 to 1994, and arguably the first time that paramilitaries and front groups were used was in Transnistria in 1991 and the first Georgian war in Abkhazia and South Ossetia between 1991 and 1993. We saw there a simplified version of the much bigger thing we saw in 2014 in eastern Ukraine and the annexation of the Crimea. Arguably even before that, in the dying days of the Soviet Union, the Soviets played an imperial policing role, using similar front groups and violence, in Nagorno-Karabakh as well. This practice is not new and it is very much part of the playbook.

In Ukraine now, the frontline is the border; in Germany, the frontline is the gas pipelines and, as many people have pointed out, the frontline in the UK flows along the Thames to the City of London. There are a series of Bills that it would be useful for the Minister to discuss and for us all to be aware of.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

Does the hon. Gentleman agree that one way to stop that flow up the Thames is to abolish unincorporated associations, which are utilised not only by political parties but by Members of Parliament?

[Bob Seely]

I do not know enough about that, so I will have to respect the experts’ opinions, but the hon. Gentleman makes a potentially valid point.

I would like us to look at the economic crime Bill; most importantly, given that not enough people are talking about it, I suggest a foreign lobbying Bill. I also respectfully suggest amendments to data protection and libel laws. Many people have already talked about the economic crime Bill, but it is shocking that we have 2,000 UK-registered companies involved in laundering and corruption cases linked to Russia, involving £80 billion—staggering sums of money—and £1.5 billion of property owned by people close to Putin or involved in crime and corruption.

I understand that historically the City wanted a light touch, to be more competitive than New York, but on the back of that light touch we have taken in some very unsavoury kleptocrats and oligarchs, and the tide of dirty money is damaging us. Why on earth do we need a culture of shadowy offshore trusts in this country? In what way does it help? I know it enriches a few thousand people with fancy bonuses, but in what way does it help our national interests? It is great that the Home Secretary has stopped the golden visa scheme, but really that horse bolted a long time ago.

On foreign lobbying laws, the UK is an influence-peddler’s paradise. Oligarchs pay for the best PR and the best reputation-launderers, and they pay for senior politicians to navigate through the rules. I understand that some people are attacking the Conservatives in this regard. I do not support wrongdoing on any side, any more than I support Alex Salmond tarting himself around Russia Today. Does anyone wish to defend Peter Mandelson’s record—

[Martin Docherty-Hughes]

Will the hon. Gentleman give way?

[Bob Seely]

I will make some progress.

Does anyone here respect Peter Mandelson, or does anyone want to—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Gentleman must not directly criticise a Member of Parliament, and that includes peers. I would like him to change his remarks somewhat and make his point without reference to the peer he has just mentioned.

[Bob Seely]

Thank you, Madam Deputy Speaker. Would anyone like to defend the actions of various peers who have defended—

[Martin Docherty-Hughes]

Maybe we could ask the hon. Gentleman about the £5,000 donation he took from the Conservatives’ Patrons Club, which is an unincorporated association?

[Bob Seely]

I have a Patrons Club on the Isle of Wight. Their structure is legal. I am afraid I do not know more about it, but if the hon. Gentleman wants more information, I am sure I can find it. I find his remark tediously parochial and completely out of character with the serious nature of this debate, and more fool him for making it.

[Martin Docherty-Hughes]

rose—

[Bob Seely]

I shall make some progress and not take another intervention, thank you so much.

When we are talking about influence, we need to be talking about the influence that senior peers and former Prime Ministers may offer. These are not unsavoury characters in this country but they are doing some very unsavoury business working for people who know the value of reputation-laundering and of using the City and our legal culture. The Guardian takes these things very seriously, and yet on the Scott Trust for many years, and now on The Guardian’s board, we have Geraldine Proudler. According to Bill Browder, Geraldine Proudler was on the wrong side of the Magnitsky case. She gave legal advice to people involved in allegedly organised crime with a multi-million-pound fraud that was involved ultimately in the murder of Sergei Magnitsky. So again I ask Katharine Viner: if The Guardian is so keen to make sure that the Conservatives, and indeed Labour and the SNP, obey high standards in public life, why does Geraldine Proudler sit on the Scott Trust board and now the Guardian Foundation? These are serious questions for those on both sides of the House. I do not defend those peers who have gone to work for Deripaska and other people, but neither should Opposition Members defend those peers who do the wrong thing.

One of the most depressing things about the Intelligence and Security Committee report on Russia was the statement from the National Crime Agency that it felt that it was unable at times to take on certain potentially bad actors because those bad actors’ pockets were so deep. I am sorry, but if the NCA is saying that it is unable to uphold the law in this country because of the wealth of the bad people it wants to go after, we are knowingly participating in the undermining of the rule of law in this country, and that is an extraordinarily serious and bad thing to be happening.

We had a great debate on lawfare, and the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) have also talked about it. Some of the most sophisticated law firms in Britain are offering intimidation, kompromat and dirt-digging services to some of the most corrupt people on earth. When we talk about an economic crime Bill or a foreign lobbying Bill, can we also talk about amendments to data protection law and to libel law to ensure that we uphold freedom of speech and ensure that those journalists trying to do the right thing in trying to investigate bad actors are supported by the law and not hounded to financial ruin?

--- Later in debate ---

[Andy McDonald (Middlesbrough) (Lab)]

I want to make a few short remarks in favour of the motion and expressing my solidarity with our Ukrainian friends, who, as the Prime Minister rightly said,

“threaten no one and ask for nothing except to live in peace and freedom.”—[Official Report, 22 February 2022; Vol. 709, c. 175.]

Of course, that is the plight of so many across the globe who find their lands illegally occupied by their neighbours. I applaud our Front-Bench team for bringing this motion to the House, and I endorse entirely the remarks of my right hon. Friend the Member for Tottenham (Mr Lammy) in his excellent exposition on this Government’s failures to better regulate, control and monitor the influx of Russian oligarch moneys, among other things.

I have three brief points to make. First, the measures announced by the Prime Minister have been widely criticised as insufficient, and we heard from the hon. Member for Basildon and Billericay (Mr Baron) on that very point, so the criticism is well-founded and widespread. The current extent of the sanctions to three individuals and some banks—we have been told that they are not the major players—is hardly the punitive sanctions that we were led to believe would be imposed.

Time after time, we have seen some Government Members cuddling up to powerful Russians, many of whom have benefited from the break-up of state-owned industries in Russia to the detriment of the Russian people, and it is those Tory politicians who have had direct financial benefit. It seems more than a bit rich for the governing party of this country to talk about sanctioning the sorts of people who have been filling their party political coffers. We have heard mention of Alexander Temerko. It is true that not every Government Member has had funds from that individual, but I ask the vast legions who have had that benefit: what do they think he wants or expects of them?

Secondly, and worse still perhaps, we have just had the Elections Bill go through this House. One of the most dangerous provisions within it, as pointed out by Opposition Members, was the open door to political donations from overseas. This dual citizen route to influencing politics in our country will come back and bite the governing party for some considerable time to come. The Government should understand that there is great scepticism out in the country that they really mean it when they talk about being tough on Russian oligarch money or any other dodgy money coming into British politics.

Finally, I will finish on regulation and control. Undoubtedly, there needs to be a major overhaul of company law, which allows 761 companies to be registered above a takeaway in Somerset, with directors declaring themselves to be “Jesus Christ” or “Adolf Hitler”. Until recently, I though a slap was a form of physical violence, but it is also a SLAPP—strategic lawsuits against public participation. It is a type of litigation, or threat of litigation, that is used, as the name suggests, strategically by claimants against organisations and individuals, including NGOs, activists, academics, whistleblowers and journalists, to shut down free speech. We are not going to settle the appropriate mechanisms here and now, but as we cannot give into Putin, we cannot give into the bully boy tactics of oligarchs or anyone else who wants to abuse their power and wealth.

Perhaps the Government can give some thought to protecting investigative journalists, as raised by the hon. Member for Isle of Wight (Bob Seely), who have the courage to take on people, and to ensuring that agencies of the state are properly equipped and protected and have the capability and capacity to take on such people through unexplained wealth orders and other measures. We could all do with rereading the Treasury Committee’s report on economic crime. Certainly, the single enforcement body that it alludes to would go some way to providing the real teeth that are clearly necessary but sadly absent.

[Bob Seely]

On a point of order, Madam Deputy Speaker. In my speech, I was going to name another Member of the House of Lords—I will not do so—who has recently taken leave of the House of Lords to work for Russian interests but does not want to declare what he is doing. Because that person has taken leave, could one mention them in a speech—or despite them taking leave, is one still not allowed to mention them?

[Madam Deputy Speaker (Dame Eleanor Laing)]

I thank the hon. Gentleman for his point of order. My immediate answer, but I stand to be corrected if I am wrong, is that someone who has taken leave is still a Member of Parliament—a Member of the House of Lords—and must be treated as such in a debate here and not criticised directly by name. There are good reasons why we do things in this way. That is my answer to the hon. Gentleman.

Sanctions

Bob Seely Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Bob Seely (Isle of Wight) (Con)]

It is a privilege to follow the hon. Member for Rhondda (Chris Bryant). It is quite clear that deterrence has failed and he is right to say that we have been naive. I make no criticism of the Minister, but I do criticise the policy over the past 10 or 15 years. This is too little, too late. In 2007 Putin stood up at the Munich conference—this year’s has only just finished—and said that he no longer recognised the post-war settlement. That was very clear. The same year, he tore up Georgia, and five years later Ukraine. It has been clear for many years that he seeks to dismember Ukraine, shatter the unity of the west and build a new sphere of influence, encompassing the former Soviet Union, including Moldova and potentially the Baltic republics, and that he wishes to ensure that in the eyes of the Russian people, the west is an existential enemy: a physical enemy, but also an enemy in its values.

Again, I make no criticism of the Minister, whom I hold in very high regard—but doing everything in our control? No. Ratcheting up the pressure? Not really. Rising to the moment? I am sorry, but please. Last week, ITV’s “Peston” show explained that £1.5 billion of property in the UK has been bought by Russians accused of corruption or with Kremlin links, and nearly 30% of that is in Westminster. The Russians certainly have a sense of irony. There are 2,100 UK-registered companies involved in Russian laundering and corruption cases, involving a staggering £82 billion.

My central point is that I keep being told that Whitehall now understands the hybrid threats. I am sorry, but I do not buy that. I strongly believe that our leaders need much better to understand the Kremlin’s complex hybrid conflict, which spans politics, economics, propaganda, military force, espionage, culture and religion. In Ukraine now, the frontline is the border. In Germany, the frontline is the gas pipelines. In this country, the frontline flows, like the Thames, along to the City of London. It was great to see the Home Secretary announcing the end of the golden visa scheme, but come on—that horse bolted a long time ago.

These sanctions are good, but there needs to be a willingness to use them. Will the Minister tell us how many unexplained wealth orders have been used on Putin’s allies in the UK? The answer is zero. Building on everything that has been said today by the hon. Member for Rhondda and so many others, the Prime Minister has promised an economic crimes Bill. I am going to be a bit repetitive here, because it needs to be said again and again: where is the economic crimes Bill? Where is the reform to beneficial interests—true ownership for offshore properties? For heaven’s sake, is it really in our national interest to have tens of thousands of properties used and owned by offshore shell trusts, hiding organised crime or the world’s kleptocrats? If the Government understand hybrid conflict, what are they doing to deal with this threat?

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Member is making excellent points. I sat on the Joint Committee on the Draft Registration of Overseas Entities Bill, and this information was well known four years ago. Does he share my frustration that despite that, there has been so little by way of action to tackle the problem?

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[Bob Seely]

We are 15 years late. It should not take the gravest crisis since world war two for us to get our house in order; this is just good housekeeping that we should have done 20 years ago. I thank the hon. Member for making that point.

Where is the adoption of the recommendations of the Foreign Affairs Committee and ISC reports? One of the most chilling elements of the ISC report was our own National Crime Agency saying that it lacks the resources necessary to take on the oligarchs. We—our own people, the public good—are being silenced in our own country by UK lawyers in the pay of some of the richest and most malign human beings on earth. Where is the tightening of the rules at Companies House? I know we have all said this, but I want to say it again. Banks in Germany, Denmark and Sweden all laundered billions of pounds from Russia but they used UK shell companies to do so. Is it really in our national interest to have a system so open to corruption? If the Government understand hybrid conflict, what are they doing to deal with this threat?

This SI is strong and I support it, but how many foreign lobbying scandals will the UK have to endure before we realise that we need a foreign lobbying Bill, or as some have called it, a foreign agents registration Bill? The US has had one since 1938, the Australians since 2018. The only way we found out about Lord Barker’s work for Deripaska was through The New York Times. Lord Goldsmith, a former Labour Attorney General—I make no political point here—said recently:

“I am sorry to have to take leave of absence, but felt it was the only option open to me given the choice between that or revealing privileged and confidential information.”

I understand he is off to work for the Russians. He keeps his title, but by not sitting in the House of Lords he does not have to declare. In the US or Australia he would be filling out form after form, saying what he was doing; in this country, hasta la vista, he is off to work for the Russians—be it the Russian Government or major Russian institutions—and what do we know? As the Russians would say, “nichevo”— we know nothing. We need a foreign lobbying Bill, and if we were serious about dealing with the Russian problem we would have one.

Where, too, are the measures to stop libel and data protection laws being abused by unscrupulous lawyers? Barely two weeks ago we had a very good debate on lawfare in this country, and we talked about the need for action against SLAPPs—strategic lawsuits against public participation. As the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, that is when legal action is used to frighten, harass or intimidate the media or civil society groups. The Government understand hybrid conflict; what are they doing about this threat?

It takes brave authors to deal with the threats from Putin’s oligarchs, people like Catherine Belton and Tom Burgis, and brave publishers like Arabella Pike at HarperCollins, but others, including Cambridge University Press, have been scared away from publishing books about Putin and Russia because of the power of Putin’s cliques in this country. Is it really in our national interest to have a system in which some of the world’s most sophisticated law firms have reduced themselves to offering a one-stop shop of intimidation and dirt-digging to some of the most corrupt people on earth? I do not think any of these things are in our national interest. I think they need to be challenged.

We have all heard about the threat of Putin, and I agree. I feel very strongly that this threat has been obvious for at least a decade and certainly since Crimea. I wish we had taken action then. Yet again, we are doing too little too late. Rather than veering from complacency to panic and back again, being unable to decide if we want to damn authoritarian regimes or suck up to their money, we need a consistent policy that sets out in a robust and intelligent way what our values are and the need to protect our institutions and our values against this growing threat.

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[James Cleverly]

No.

The House may be surprised to hear that I have taken a huge amount of positivity from the exchanges today, because this House has once again spoken with such a commanding, concerted and collaborative voice in support of the territorial integrity, sovereignty and independence of Ukraine and in support of the Ukrainian people. More than that, this House has demanded of the Government that we go further with our sanctions—that they are harder and inflict greater economic pain on the individuals and entities in the Russian system who have done so much damage not just to the Russian people, but now also to the Ukrainian people. I am happy that is the tone of the House because I can confidently inform the House that it is demanding something of the Government that the Government are absolutely determined to do. It is pushing at an open door.

A number of questions have come up repeatedly, so I will address them.

[Bob Seely]

Will the Minister give way?

[James Cleverly]

I will rush on, because I was excessively generous earlier. The question was asked: will these sanctions be escalated only in response to further aggression? I can assure the House that these sanctions will be ratcheted up because of what has already happened, and not just in response to what might happen in the future. Our intention is to prevent even further invasion of Ukraine, to have those troops who are in Ukraine removed, and then to have them return to their home barracks once they are back in Russia. That is our ultimate aim, and the ratchet effect will be done to pursue that as a strategic aim.

There have been questions about asset flight. We are very conscious of this, and that is why we are not explicitly naming people or institutions that may be subject to future sanctions. It is also why it is very important that we work hand in hand with our international allies and friends, who are just as determined as we are to address this situation.

The shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), compared what we have announced today unfavourably with what our allies say they are going to announce. If I were to say that this sanctions package is as far as the Government are willing to go, that might be a legitimate criticism, but the point we have made is that, just as our friends and allies intend to go further, we intend to go further. I have given some suggestions about where that additional ratchet effect may be focused, but we reserve the right to explore whatever is necessary to dissuade further aggression and to force Vladimir Putin to withdraw the troops that have entered Ukraine.

Questions were asked about the application of this statutory instrument in the OTs. This SI does cover the OTs. Members asked whether individuals who may not be in direct managerial or ownership roles would be subject to these sanctions. This SI is worded specifically to be broad in scope. I think implicit in the question my hon. Friend the Member for Huntingdon (Mr Djanogly) asked was that it might even be too broad in scope, but I can assure the House that it was written specifically to be broad in scope so that the ownership maze often put in place to hide the beneficiary of ownership can be addressed.

There have been some questions about family members. A family member is caught within scope where they are acting for or deriving benefit from their relationship with the Russian Government. However, just being the relative of someone who may be subject to sanctions is not necessarily enough on its own. There need to be reasonable grounds, and we always act with reasonableness, although we do act with firmness.

In the debate, it has sometimes sounded as if the only Russians subjected to UK sanctions are the ones who were named by my right hon. Friend the Foreign Secretary this morning. It is worth reminding the House that 58 entities and 186 Russian individuals are currently subject to financial sanctions under the Russia regime, including the ones designated today. There are already limitations on the activities in the UK of SberBank, VTB bank, Gazprombank and others, and as I say, we will not speculate on where future sanction designations may land.

Across the House, my right hon. and hon. Friends—including my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and my hon. Friends the Members for Isle of Wight (Bob Seely) and for Tonbridge and Malling (Tom Tugendhat)—have called on us to do more, and their message was absolutely echoed, very effectively and eloquently, by the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), my shadow, the hon. Member for Cardiff South and Penarth (Stephen Doughty), and the hon. Members for Stirling (Alyn Smith) and for Oxford West and Abingdon (Layla Moran). I hear—the Government hear—exactly the points that they are making.

The hon. Member for North Durham (Mr Jones)—

Russia: Sanctions

Bob Seely Excerpts

Monday 31st January 2022 Commons Chamber

[Elizabeth Truss]

Let us be clear: it is the Russian regime that has amassed the tanks and troops on the Ukrainian border. It is the Russian regime that has escalated aggression, and not just towards Ukraine but through Belarus and in the western Balkans. It is the Russian regime that needs to step back before it ends up entering into what could be—I agree with the right hon. Gentleman on this point—a very serious quagmire, with appalling consequences for the people of both Ukraine and Russia. That is the point that I will make when I travel to Moscow in the next fortnight.

[Bob Seely (Isle of Wight) (Con)]

I thank the Secretary of State for her very robust approach. This is not a criticism of her, but we still lack a comprehensive and coherent approach to dealing with Russia’s hybrid war. Frankly, this is a decade too late—so there is no criticism of her—and it is clear that deterrence is not working. My question is on facilitators, which a few other people have mentioned. Does she understand how corrosive it is to have young UK service personnel—ordinary kids in uniform—in forward positions in the Baltics while in London a morally vacant and corrupted class of lawyers, bankers, reputation launderers and kompromat-style private investigators coin it, serving the needs of a parasitic, murderous oligarch class that is part of a neo-fascist regime that now threatens war in Europe? What are we doing about this corrupt facilitator class?

[Elizabeth Truss]

As I outlined earlier, we have taken action against illicit finance and corruption. We have established the National Cyber Security Centre and we are working hard to support Ukraine on the cyber-attacks it faces from the Russian regime, and I have announced today a sanctions regime that is by far the toughest we have ever had against Russia.

Russia

Bob Seely Excerpts

Thursday 6th January 2022 Commons Chamber

[Elizabeth Truss]

It is very important that we do not buy into the false narrative that Putin has been peddling that somehow there is a security threat. NATO has always been clear that it is a defensive alliance, responsible for defending the sovereignty and interests of its states, and Vladimir Putin is well aware of that. It is important that we do not buy into that false narrative. I do want to see progress made in talks, but that must be on the basis of freedom and democracy and of what Russia has committed to in the past. It simply has not fulfilled its commitments, whether those made in the Budapest agreement or the Minsk agreements. I see next week, when there will be a series of crucial meetings, as making sure that Russia is holding firm to the commitments that it has made.

[Bob Seely (Isle of Wight) (Con)]

It is great to hear a Foreign Secretary speaking with such clarity, so I thank my right hon. Friend. When it comes to our two allies, France and Germany, may I ask the following: is she worried that Germany’s appalling dependence on Russian energy undermines a clear and united western approach? When it comes to the Minsk and Normandy processes, is she worried that if we give in to Russia’s demand for a highly federalised Ukrainian state, that will allow Russia to carve up and collapse the Ukrainian state over time, and it will simply have been allowed to achieve its end slowly, rather than quickly?

[Elizabeth Truss]

My hon. Friend is absolutely right that Europe needs to reduce its strategic dependence on Russian gas. It is a broader issue about the dependence of freedom-loving democracies on economic support from autocracies, which then makes it very difficult to make the political progress that we need to make to challenge Russian aggression. I have been very clear about our position on Nord Stream 2. More broadly, we need to reduce dependence on Russian gas. On the discussions taking place in various formats, we cannot have a situation in which Russian aggression is rewarded in any way. It has no auspices over Ukrainian sovereignty and territorial integrity, and we are very clear on that. What we are working on, and what tomorrow’s meeting of Foreign Ministers is about, is making sure that we are co-ordinating our positions across NATO, and we are very clear on those red lines.