Brexit: Sanctions Policy (European Union Committee Report)

Lord Ahmad of Wimbledon Excerpts

Thursday 3rd May 2018 Lords Chamber

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, I thank all noble Lords who have participated in this important debate, particularly my noble friend Lady Verma for tabling it. I pay tribute to her long-standing commitment to these issues. That is not just in her capacity as chair of the EU External Affairs Sub-Committee as, on a personal note, I assure your Lordships that, over the different roles of my ministerial career, if my noble friend has had something to tell me I know about it very quickly. I appreciate her candid and honest advice at all times.

I thank all noble Lords for their expert insight into the debate. When I stand up to respond to a debate on any respect of the European Union I am reminded of the words of my noble friend Lord Howard on my introduction to this House back in 2011. He said, “Tariq, I have not been in this House that long myself, but one piece of advice I can offer you is, before you say anything about a subject, bear in mind that someone around you has probably written a book about it”. That applies to the debates we have on the European Union. I am delighted to thank all members of the sub-committee for the report and their contributions today and to respond on behalf of the Government. The phrase “flesh on the bones” has been used a number of times and I hope I can provide some build-up beyond the structure we have talked about thus far.

In response to this wide-ranging debate, I will set out where the sanctions fit within our vision of a post-Brexit foreign policy and explain how we see our future sanctions policy operating. I was delighted to learn that the noble Lord, Lord Collins, has been paying such attention to my right honourable friend the Prime Minister’s speeches. I will pass that comment on to her at the earliest opportunity. It is very welcome; I know him well. He also mentioned the sanctions Bill and said that on a number of occasions I had said that of course it was subject to negotiations. He will also remember that through the passage of the Bill in this House I consistently said that the Government were listening. I hope that reflects the sentiments of the other place as well. Indeed, my colleague Sir Alan Duncan has been quoted on a number of occasions.

I assure noble Lords that as we leave the European Union we intend to pursue an independent and ambitious global foreign policy—one focused on security, prosperity and influence for the whole United Kingdom, by actively promoting and defending our interests and values. My noble friends Lady Verma and Lord Risby both talked about the values. I assure all noble Lords that we take our international responsibilities seriously and will remain an authoritative and influential player on global issues. The noble Lord, Lord Horam, among others, listed some of the areas in which the United Kingdom continues to be an important influence. Indeed, yesterday we were pleased to host at the Foreign Office and the IMO the hierarchy of the United Nations, which reflects the positive nature of the engagement we have with that organisation. Indeed, Secretary-General Guterres was complimentary and positive about the UK’s continued contributions on the world stage. When you include NATO, the G7, the G20, the OSCE and the Commonwealth—I cannot miss an opportunity to mention the Commonwealth—you see the global influence of the UK.

A point that is often raised about British foreign policy is our assets—our places on the ground, our diplomatic posts. I am sure your Lordships followed the announcements that my right honourable friend the Foreign Secretary made during CHOGM. One alluded to the opening of nine new diplomatic posts across the Commonwealth family. The noble Lord, Lord Jay, talked about how we may be the fifth or sixth-largest economy. Sometimes in our friendly rivalry with our French friends we ask who has the most posts; I believe that on the last count we are now one ahead but I am sure that our French friends are watching that closely. But as noble Lords have acknowledged, we are a major country economically, diplomatically and on issues of defence.

Several noble Lords referred to the City of London as a part of our soft power. I believe that my noble friend Lord Horam referred to the importance of the City of London as a financial centre. As someone who spent 20 years in it before joining the Government, I assure your Lordships that it is important that we keep the global nature of the City of London open.

On the issues concerning the Foreign Office itself, the 2015 spending review protected the FCO’s budget for this year and, as I said, we continue to open new posts. Let me also assure noble Lords that we are working to develop and strengthen our bilateral relationships with our key partners, both in Europe and globally, to maintain and expand our international influence. The noble Lord, Lord Jay, talked about the importance of France and I am sure that he observed with real positivity the exchanges that we had during the Anglo-French summit. Of course, that summit covered a range of issues: not just security and defence but important issues such as technology, the challenges across cybersecurity and development. That shows the importance of our European Union partners, but not just in the context of the European Union. Poland is another country with which we have recently had a very positive, high-level exchange. This demonstrates the importance of the bilateral relationships between the United Kingdom and those respective countries.

As the Prime Minister set out in her Munich speech in February, the United Kingdom continues to seek a deep and special partnership with the EU, so that we can continue to co-operate on security and foreign policy and go further to meet new threats. We saw that solidarity in the strength of the response after the nerve agent attack in Salisbury, and saw how important this co-operation continues to be. Yes, this co-operation must extend within the context of the European Union but also go beyond it, as it does now, because we know that the wider the range of countries implementing a sanctions regime, the more effective that regime will be. This was a point made by many noble Lords during the debate. I assure your Lordships that we will work hard to get the broadest possible agreement for any measures we propose, starting with our position as a permanent member of the UN Security Council.

After we leave the European Union, I can assure the House that our approach will be one of co-operation. Sanctions will continue to be, by their nature, a multilateral tool and we will continue to seek to impose them in co-ordination with others. If I may turn to working directly with the European Union and a point raised by my noble friend Lady Verma in her introductory remarks, until we leave the EU we remain committed to our rights and responsibilities as an EU member state. This includes continuing our proactive approach on sanctions, in pursuit of our security and foreign policy objectives.

I can also assure noble Lords that, after we leave, we will continue to work with our EU partners to maintain our collective peace and security. As noble Lords have all acknowledged, sanctions will be a powerful tool in that effort. As my right honourable friend the Foreign Secretary told the House of Commons at the Second Reading of the Sanctions and Anti-Money Laundering Bill, he hopes that we will “act in tandem” with the EU on sanctions, where possible, because we,

“will always confront the same threats and defend the same values”.—[Official Report, Commons, 20/2/18; col. 78.]

If I may turn to the specific questions, first, my noble friend Lady Verma and the noble Lord, Lord Jay, raised the option of aligning with sanctions regimes agreed by the EU 27. This would be along the lines of, or in a similar fashion to, the likes of Norway or Switzerland, which implement UN sanctions and have the powers to implement autonomous national sanctions. We understand that Norway and Switzerland rarely, if ever, implement unilateral sanctions and instead choose to align with EU sanctions, with limited input on decisions. As such, we are not seeking this option as part of our future relationship with the EU. We have been clear that when we leave the European Union, we will seek to impose our own autonomous sanctions.

As the Foreign Secretary told the House of Commons at Second Reading of the Bill, we will be able to concert our measures with the EU if there is a shared position, but by leaving the European Union we will be able to act independently or alongside other allies if there is no agreement within the European Union. The sanctions Bill will give us the powers to do so. This differing framework means that in the long term, any co-ordination with the EU on sanctions would be political, rather than the legal alignment we have now.

Given our independent foreign policy and our sanctions expertise, it would be inappropriate in the long run for us to adopt EU sanctions automatically, without any input into decisions or the flexibility to choose our own approach. I assure noble Lords that as part of our future relationship we are seeking an arrangement that appropriately reflects this.

Turning to some of the specific questions, my noble friend asked about aspirations for sanctions co-operation after Brexit and the model of sanctions co-operation based on two-way exchange, and my noble friend Lord Risby and the noble Lord, Lord Kerr, referred to the proposal for a UK-EU political forum. My noble friend Lady Verma asked for a detailed explanation of the Government’s aspirations for sanctions after Brexit. I assure my noble friend that, as we have said before, including in our reply to the committee’s report, we envisage a model of UK-EU sanctions co-operation based on two-way exchanges of analysis and information. This is still our vision. When we look at some of our international security co-operations, the Five Eyes co-operation comes to mind immediately. It demonstrates how like-minded countries acting on common values can come together to act in the common shared security interest.

Given our shared interests and values, the importance of multilateralism in this area, and the UK’s expertise, it is in both the UK’s and the EU’s interests to be able to discuss sanctions in the future. Any mechanism to do so should respect both the EU’s decision-making autonomy and the UK’s sovereignty, and, through the exchange of analysis and information, will allow us to combine our efforts on sanctions to the greatest effect.

The committee recommended that the Government should propose a regular political forum with the EU to discuss and co-ordinate sanctions policy. My noble friends Lady Verma and Lord Horam asked me to comment on this specifically. A forum such as this is one way in which this close co-operation could be put into practice, but there is a range of forms this could take. I assure noble Lords, and my noble friends in particular, that we have now moved into the next phase of negotiations with the EU where we are discussing our future relationship on a wide range of issues, including foreign policy and sanctions. I am sure noble Lords will respect the fact that it would be inappropriate for me to go into too much detail at this point, as these are discussions that will be had with our European partners, but we are starting from a position where both sides have agreed close engagement through both formal and informal mechanisms.

My noble friend also asked about our intent. The European Council’s guidelines for our future relationship give us good reason to believe that the EU is also committed to progress on an arrangement of this kind. The guidelines state that there should be “strong EU-UK co-operation” in our security, defence and foreign policy and they foresee,

“appropriate dialogue, consultation, exchange of information, and cooperation mechanisms”.

This mutual agreement on the benefits of close co-operation is welcome and, during the upcoming negotiations, we will be working towards achieving this in practice.

Several noble Lords, including the noble Lords, Lord Taverne and Lord Anderson, spoke about loss of influence and expressed concern that our influence on sanctions will be diminished as we leave the EU. I disagree with this assessment. I have already alluded to the strength of the UK’s position in different fora and our representation in different international bodies but when it comes to sanctions, it is clearly in the interests of our international partners to continue to co-operate across jurisdictions, for the EU to co-operate with us and for us to co-operate with the EU.

With regard to the EU specifically, we know from its negotiating guidelines that I have just alluded to that it wants to maintain close links with us on foreign and security policy, of which sanctions remain an integral part.

[Lord Hunt of Chesterton (Lab)]

The Minister has talked a couple of times about maintaining a lead. The fact is that in leaving the EU we are seriously losing our position in some of these important high-technology defence matters; the Times yesterday was referring to the Galileo programme. These are very serious changes that are taking place. Is he really saying that we are going to be stronger as a result of our likely measures?

--- Later in debate ---

[Lord Ahmad of Wimbledon]

The noble Lord is right to raise the issue of technology. A direct response to that is that when you look at some of the issues, specifically on security, cyber security perhaps poses one of the biggest challenges that we are now confronting. The National Cyber Security Centre, which is just up the road in Victoria, again demonstrates UK expertise and insight.

I assure the noble Lord that in leaving the EU we have been able to further strengthen our work not only in the European context but internationally. Indeed, during the Commonwealth summit we announced an additional £15 million in support of cybersecurity assessments for various Commonwealth states. The noble Lord shakes his head but I do not agree with him. The position that we are setting out during the Brexit negotiations is one of co-operation and working together where our needs align with the EU, but at the same time looking at the broader world, the global challenges that we are facing and our position through the different international bodies that I have alluded to. On the question of technology, if the noble Lord has not yet visited the National Cyber Security Centre then perhaps he should, and he will see that it is a world-class outfit that again demonstrates British leadership on what I agree is an important issue.

I assure noble Lords that we have a long-established reputation for playing our part in developing strong, credible and lawful EU sanctions, and we have a range of assets that will continue to make us an attractive partner for the EU on sanctions policy. This includes the strong public and private sector expertise, with significant resources devoted to sanctions across government—again, I refer to the City of London—as well as a world-class legal system and well-respected think tanks. These are all important assets that we have.

As I mentioned earlier, our influence on international sanctions is not limited to our role at the EU. Roughly half the sanctions regimes currently in force contain UN Security Council measures. We are a permanent member of this important body and will continue to play a leading role in developing global sanctions. Given this, we believe we will remain one of the leading sanctions players after we leave the EU.

My noble friends Lady Verma and Lord Risby referred to the important issue of the implementation period. As I have said, we envisage close co-ordination with the EU on sanctions as part of our future relationship with the EU. The Prime Minister has already mentioned this specifically in her Munich speech. The details of the mechanisms to enable co-operation during the implementation period are still very much subject to negotiations but I assure noble Lords that we will seek a co-ordinated approach on sanctions before decisions are made.

My noble friend asked, as did the noble Lord, Lord Taverne, about the issue of the UK/EU relationship on common foreign and security policy. At the March European Council the UK agreed arrangements with the EU for how common foreign and security policy would work during the implementation period. This included an agreement covering our future relationship on the CFSP, and the CSDP would come into effect during the implementation period. The UK hopes to begin discussions on our future relationship very soon.

I shall refer also to the sanctions Bill. When we leave the EU, we will of course need powers to design and implement the UK autonomous sanctions regime. The committee referred in its report to the framework contained in the Sanctions and Anti-Money Laundering Bill, which many noble Lords are familiar with; the noble Lord, Lord Collins, talked about that quite specifically. The report raised the concern that the Bill, along with the future economic arrangements between the UK and the EU, could limit the extent to which sanctions co-operation could be put into practice. As noble Lords will be aware, the Bill completed Report and Third Reading in the other place on Tuesday and will return to this House in due course for the consideration of amendments here. Changes have been made to it, and those amendments include making clear that sanctions regulations can be imposed for the purpose of preventing or providing accountability for gross human rights abuses, a point made very well by the noble Lord, Lord Anderson. As the Minister for Human Rights, let me assure him that that is an important addition and recognition which will allow the UK to act against those responsible for serious human rights abuses or violations worldwide. They also include important powers to enforce sanctions on board ships outside UK territorial waters, to strengthen our efforts to counter the transportation of dangerous and harmful goods and technology and the ability to create criminal offences for breaches of sanctions regulations, subject to statutory mechanisms controlling the use of that power.

As the Bill stands, we are confident that it will not limit appropriate co-ordination with international partners. It was drafted for flexibility. I again commend the positive way in which the Bill progressed through your Lordships’ House. It was drafted to ensure that we can continue to impose sanctions currently implemented through EU law, and that has been improved through the helpful scrutiny of both this House and the other place. If the key provisions of the Bill remain in their current form, we are confident that we can use this framework to co-ordinate effectively with our partners and remain a leader in responsible and smart sanctions policy.

The noble Lord, Lord Anderson, among others, mentioned the sanctions on Russia and the nature of Russia. As we have seen, they are having an effect on Russian policy. Many noble Lords, including my noble friend Lord Horam, mentioned Iran. Most of the financial and economic sanctions against Iran were indeed lifted following the International Atomic Energy Agency’s verification. There are now far fewer sanctions in place, easing previous restrictions on trade with Iran, and we are clear that the JCPOA is in the UK’s national security interest, that it is working and that we remain committed to it.

My noble friend Lord Tugendhat also raised the issue of the DPRK. Our latest sanctions on the DPRK build on the tough measures that the UN has passed over the past year. They target significant income streams used by the DPRK to fund both nuclear and ballistic missile programmes. I heard the sentiment of noble Lords across the House: with the challenges that we sometimes have on the world stage, there is a glimmer of hope through the recent meeting of the two Koreas. We hope that those talks, and those with America—the US—progress well.

My noble friend Lord Horam also mentioned transparency, and he was right to raise the issue of London property. Returning to the sanctions Bill, as he may recall, my noble friend Lord Faulks introduced an amendment and the Government gave a commitment to bring forward a Bill making provision for a UK register containing details of the overseas companies which own property in the UK. We anticipate doing so early in the next parliamentary Session and, as we committed, establishing that register by 2021.

To sum up, the Government are deeply grateful for the EU External Affairs Sub-Committee’s report and believe it to be a valuable tool and contribution to the important debate on the UK’s future relationship with the European Union and future foreign policy in general. We are confident that the UK will remain a leading international player on sanctions after we leave the European Union. Let me assure noble Lords that we will continue to work closely on this vital area with our partners in Europe and across the world to advance our foreign policy and national security interests.

Finally, the report has provided some very useful tools and points of discussion, which I assure your Lordships that the Government continue to consider very carefully. I am once again very grateful to all noble Lords who have contributed to this important debate and assure noble Lords that, as we work through the policy, particularly in this important area of sanctions, we have listened. It is important to get this right and, in this respect, I always welcome both the wisdom and, at times, the wit of your Lordships’ House in ensuring that the Government can work progressively and in co-operation to ensure that the sanctions policy and regime we have in place after we leave the European Union is one that works for everyone.