Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020

Debate between Lord Anderson of Swansea and Baroness Kramer

Tuesday 11th February 2020 Grand Committee

[Baroness Kramer (LD)]

My Lords, I believe that on balance it is necessary to renew the order, simply because not to renew it would send the wrong message, but I agree with many of the comments made by the noble Lord, Lord Anderson. I spoke on this issue back in 2018—I will not repeat the whole of that speech, as that would be to test the patience of the Committee. I used that opportunity to pay tribute to Marina Litvinenko, who fought so hard against the Home Secretary of the day for the public inquiry that should have come almost automatically but did not. The reality is that, because of the many delays, Andrey Lugovoy and Dmitri Kovtun had years in which to move out any assets that they had in the UK or within the scope of the UK. From the moment that the order was established, it was unlikely that it would have any personal impact on them, but at least it sent some sort of message.

At the time, I asked the Minister of the day to be sure that all assets were encompassed by the various definitions, including crypto-assets, and I received an assurance that they were. Is there an ongoing mechanism to make sure that, as new financial mechanisms develop, they are covered and automatically caught by the order? That would be a useful discipline to have in these instances.

I was also concerned to know to what extent these two individuals would be able to make use of Crown dependencies and overseas territories, many of which do not have a public register that would enable any civil society person to identify whether they were making use of financial services capabilities in those locations. Without that, the UK or the enforcement arm, presumably the Metropolitan Police, would need to initiate an investigation into assets in the names of the two individuals and into any shell companies that they might be involved in or any other kind of entities that were making use of those Crown dependencies and overseas territories. I am not sure how active that process is and whether we are serious about making sure that these two individuals are at least excluded from UK-related financial capacity.

I also asked about property ownership. As the Minister will be aware, we have public registers of beneficial owners, but not yet in the case of property, although I believe that that process is in train. I very much hope that he can assure me that the necessary monitoring is in place to ensure that neither of those individuals, or the shell companies that they use, has managed to get around the system by using the loophole of the absence of beneficial ownership.

[Lord Anderson of Swansea]

Surely the argument put forward by the noble Baroness would have some merit if one had any suspicion that those two individuals had any form of asset—be it property or finance—or any possibility of obtaining a loan, given their lack of creditworthiness.

[Baroness Kramer]

I think it is understood that those two individuals at some point had assets in the UK. Hence my frustration that the long delay and the public inquiry meant that they had every opportunity to remove those assets. We cannot guarantee that they used them, but they certainly had the opportunity. I fear that, with the way that various shell companies work, it is not as simple as looking at one individual’s creditworthiness: there are many other ways. I assume that these two people, within their own context, are considered to be very successful individuals who are not short of the ready, and therefore have the opportunity through various mechanisms to exploit financial services. If the order is to mean anything, there must be some enforcement capability to it, and I am inquiring whether there is.

I noticed that the debate that we had in 2018 was in February, towards the end of the month. To reinforce the point of the noble Lord, Lord Anderson, that this is not really a deterrent of any sort, the attack on the Skripals happened on 4 March that year, days later. That says everything about the weakness of the deterrent effect. It would be incumbent on the Treasury to rewrite its note in the light of the Salisbury poisonings. We need to pay great respect in understanding the suffering not only of the Skripals but of Dawn Sturgess, who died as a consequence.

I also wondered—I ought to know the answer to this but do not, so I am simply inquiring—whether the same orders now apply to the two individuals identified as being involved in the Skripal poisonings, Colonel Anatoliy Chepiga and Dr Alexander Mishkin, both of the GRU. If this is a principle, it ought at least to be more broadly applied. I very much agree with the noble Lord, Lord Anderson, that we need to implement the legislation passed in both Houses.

A more robust response to the poisoning of Litvinenko and the attempted poisoning of Skripal is fundamentally necessary. Will we wait for a third or fourth poisoning before we start looking at more senior figures within the Russian establishment? Clearly, all the people we have mentioned who face freezing orders were under orders from far more senior people. It is a great weakness in our position not to have recognised that much more clearly and to have considered whether, if we believe that constraining people from using UK financial services has an impact on their behaviour, making that work up the chain will be a lot more useful than simply applying it to the individuals who we have been able to identify but who are, frankly, in every case, pretty small fry.