Global Human Rights Sanctions Regulations 2020

Lord Clement-Jones Excerpts

Thursday 24th June 2021 Grand Committee

Asked by

[Lord Clement-Jones]

To ask Her Majesty’s Government what assessment they have made of the effectiveness of the Magnitsky-style sanctions issued under the Global Human Rights Sanctions Regulations 2020.

[Lord Clement-Jones (LD)]

My Lords, I warmly thank all those noble Lords taking part in today’s debate.

The passage into law of the Global Human Rights Sanctions Regulations 2020, usually referred to as the Magnitsky Act, was welcomed by all parties. It was a bold affirmation of the values that we hold in common with other democracies that have enacted similar legislation. At a time of intensified geopolitical contest between democracy and authoritarianism, the Magnitsky Act underlines our readiness to sanction powerful figures in authoritarian regimes who abuse state power in pursuit of personal enrichment.

However, the credibility of such sanctions depends crucially on our willingness to apply them without fear or favour, whenever and wherever gross abuses of state power occur. If Magnitsky sanctions were perceived beyond our shores as penalties that we confined to Russian oligarchs, Chinese intelligence officers and Burmese generals, they would soon lose their power to deter unacceptable behaviours in the wider world. So I should like to take the opportunity today to draw noble Lords’ attention to an example of where our failure to contemplate imposing Magnitsky sanctions could render us vulnerable to the charge of double standards. The case that I will describe, on which I have corresponded with Ministers for eight years, arises not from a hostile state but from one with which this country enjoys cordial relations: Dubai in the United Arab Emirates, which I have visited many times.

Mr Ryan Cornelius is a British national. He has had his assets seized in state-enabled corruption. He has been tortured and imprisoned after a grossly flawed legal process. Ryan is a British businessman. In Saudi Arabia, he built the largest precision tunnelling company in the Middle East from scratch. From Bahrain, where he settled in the late 1990s, he went on to launch a range of ambitious construction ventures across the region. One of them, undertaken with several partners, was a major residential and leisure complex in a prime location in Dubai called the Plantation.

When the global financial crisis struck in late 2007, the investment company that was funding most of Ryan’s ventures told him that its line of credit from the Dubai Islamic Bank had been called in abruptly. The investment company was able to negotiate a restructuring agreement to repay its loan, which totalled some $500 million, over three years. However, the Dubai Islamic Bank made it a condition of signing that Ryan should stand as a guarantor of the agreement and pledge his business and personal assets as collateral. Ryan had little choice but to agree, but in any case his assets were comfortably worth more than the loan. The Plantation alone had recently been valued at over $1 billion by two leading international assessors.

Shortly after the agreement was signed, Dubai Islamic Bank’s chairman was removed and replaced by the man who remains its chairman today, Mr Mohammed al-Shaibani. Mr Shaibani is also chief executive of the ruler’s court, a position that gives him direct oversight of every arm of government, including the security police and the financial audit department. Mr Shaibani is also chairman of Nakheel, Dubai’s largest property developer.

In May 2008, the repayment of the loan was proceeding ahead of schedule when Ryan was arrested at Dubai airport. He had a hood placed over his head, his hands were bound with zip ties and he was taken to a windowless room at Dubai police headquarters. After a hostile interrogation, he was given a statement in Arabic that he could not read, and told that if he signed it then he would be free to return to Bahrain. Instead, he was taken to a cell and held in solitary confinement for over six weeks.

Ryan’s partners were also arrested and held in solitary confinement. While he was there and unable to communicate with the outside world, Dubai Islamic Bank served 15 days’ notice of foreclosure and then took possession of the Plantation. Over the following months, his other businesses were either seized or forced into liquidation, and over the following years his personal assets were seized one by one, including, finally, his London home, leaving his wife and family homeless.

Ryan and his fellow defendants were held for two years before being brought to trial for fraud and money laundering. No translator was provided, and Ryan was unable to follow proceedings, but the judge announced at the end of the trial that he was unable to convict the defendants on the basis of the evidence presented. Ryan was not released, although by then he had been held for longer than the maximum sentence he would have received for a fraud conviction. A second trial was held in front of a new judge with different charges.

The prosecutor now charged that the unpaid balance of Dubai Islamic Bank’s loan amounted to theft from the state: a charge which required the bank to be reclassified as a state entity. The collateral that it had seized, including the Plantation, was dismissed as worthless. The new judge duly convicted Ryan and the other defendants and sentenced them to 10 years in prison. The judge also ordered them to pay $500 million to Dubai Islamic Bank and an additional fine of $500 million. Dubai Islamic Bank’s published accounts show no trace of the loss alleged by the prosecution. In a letter to the Central Bank of the UAE, in September 2008, Dubai Islamic Bank confirmed that the seized collateral exceeded the value of its loan.

The seizure of the Plantation, the imprisonment and the imposition of unrepayable financial sanctions is a typical criminal corporate raid, which cloaks thuggery in a veneer of judicial process to seize assets and force the victim into a hopeless position. State officials were the initiators, enablers and beneficiaries of the raid. This was corruption of the highest order.

Ryan served his 10 years in full, denied the statutory 25% reduction for good behaviour. But instead of being released in 2018, he and his former business partner were taken without notice to a judge’s office and informed that Dubai Islamic Bank had asked for their sentence to be extended by a further 20 years. It did so under a law which was enacted after their imprisonment and well after the alleged offence. That additional sentence of 20 years offends every basic principle of the rule of law. That sentence is itself unlawful and an affront to justice.

Ryan sought to appeal the new sentence but was told that he did not have the right to issue power of attorney to a lawyer. He decided to represent himself. On the day scheduled for the appeal hearing, Ryan was told that his name was not on the passenger list for the prison bus to the court. The judge then dismissed his appeal on the grounds that Ryan had not bothered to attend.

Ryan is now 67 years old. He will be 85 when his new sentence is complete. Two years ago, he tested positive for tuberculosis after a prisoner in an adjacent cell collapsed with the disease. It took 18 months before the prison authorities allowed him to receive medication. Ryan’s health has deteriorated alarmingly. A recently released fellow inmate testifies that he is kept in freezing conditions, with no bedding and subject to constant sleep deprivation. These conditions are cruel, degrading and inhuman; they amount to torture.

The powerful man keeping him in prison is no stranger to this country. In his High Court judgment of December 2019, Sir Andrew McFarlane found that Mohammed Al Shaibani had been present when the ruler’s daughter, Princess Shamsa, was abducted from the streets of Cambridge, drugged and taken to France against her will. Princess Latifa, another daughter whose bid for freedom ended in recapture, provided detailed audio testimony to a human rights organisation that she was threatened and coerced by Mohammed Shaibani on numerous occasions to make false statements to the British courts.

The extent of Shaibani’s personal determination to keep Ryan in captivity was made brutally clear by his response to a ruling by the Bahrain courts last year. Dubai Islamic Bank had launched civil proceedings in Bahrain against Ryan and his former business partner a year after their arrest to seize any residual assets there. The trial dragged on for 11 years, involved the appointment of numerous court experts and culminated in the Bahrain Chamber for Dispute Resolution. The verdict by a panel of three judges found last year that Ryan and his ex-partner owed no money to Dubai Islamic Bank and that collateral and payments made to the bank exceeded their loan by over $70 million. The chamber’s website states that its judgments are final and unappealable. It is clear from private testimony that Mohammed Shaibani intervened personally with the Bahrain authorities following publication of the verdict. Four months later, after a brief hearing, a judgment deemed unappealable was reversed.

Mr Shaibani has numerous other victims beyond Ryan, including his former business partner, and there are doubtless numerous Shaibanis in many jurisdictions. Failure to act on our part will confirm to them that they can continue to destroy lives, as Ryan’s has been destroyed, with impunity. This will only make life more hazardous for the British nationals on whose efforts overseas this country’s future prosperity depends.