Russia (Sanctions) (EU Exit) (Amendment) (No. 7) Regulations 2022 Russia (Sanctions) (EU Exit) (Amendment) (No. 8) Regulations 2022

Debate between Stephen Doughty and John Baron

Monday 25th April 2022 General Committees

[Stephen Doughty]

From the beginning, Labour has wholeheartedly supported the Government in their efforts to sanction the Putin regime for the illegal, unprovoked and murderous attack on Ukraine and its people. That remains true, as we continue to bear witness to acts of heinous aggression and atrocities on a daily basis. The scenes that we have seen in recent days of mass graves, the reports of the atrocities committed north of Kyiv and in Mariupol, and, of course, the indiscriminate and brutal attacks on civilians in Odesa mean that we must act resolutely and in a unified way across the House. We must, therefore, as the Minister said, do all we can, alongside our allies and partners, to bring the Russian economy and its war machine grinding to a halt.

We must seek to match the courage shown by our friends in Ukraine with action. The way to do that is to implement the broadest and deepest regime of sanctions ever levelled at President Putin and those around him. The Government can be assured that, on expanding, deepening and broadening sanctions, they can continue to count on the official Opposition’s support. We will not seek to divide the Committee today.

However, I have a series of questions and concerns. The last time I stood opposite the Minister, when we debated the previous set of sanctions, I made it clear that we could not afford a sanctions gap. Although passing the economic crime Act will hopefully speed up bringing forward and imposing measures, I fear that we are still lagging behind what we could do. In the Minister’s response, will he set out the FCDO’s assessment of the total value of what has been frozen or impacted under the existing sanctions regime to date to give us an idea of the scope and scale of what we have done so far?

We are now at the stage where we need answers to essential questions. Where are we? What has the impact been? How much further do we need to go? The Government should be forthright with those figures here and, indeed, with the wider public, not least given the impact on their lives through energy prices, as well as the impact on many of our allies, some of whom are being hurt much more severely than us as a direct result of the sanctions. We are all united, but we need to understand the impact of the sanctions, that they are working and why they are necessary. As I said, we welcome the regulations and will not divide the Committee, but we have some significant questions.

On the No. 7 regulations, extending the existing sanctions relating to Crimea to the so-called people’s republics in the Donbas is integral to making sure that our sanctions target Russia’s economy effectively and dismantle the capacity to continue waging war. The occupation of non-Government controlled Ukrainian territory cannot become an economic enabler for Putin’s regime, and the Government are right to recognise that and to introduce these measures.

However, Putin took the illegal step of recognising the so-called republics in Donetsk and Luhansk over two months ago, and the shadow Foreign Secretary, my right hon. Friend the Member for Tottenham (Mr Lammy), called for specific measures to address these concerns on 22 February, yet they are being brought into effect only now. The Minister has given some reasons for the delay, but I hope he can say a little more about why we did not take this fairly obvious step more quickly. We need to be proactive and not just to react to things, particularly when what Putin was going to do could have been easily predicted, and given that these areas were invaded illegally as far back as 2014. We do not need to see further evidence of the brutality of the Putin regime or its willingness to break international law to justify introducing the very harshest of sanctions.

Similarly, the Opposition welcome the measures in the No. 8 regulations, particularly on a whole range of critical dual-use technologies, energy technologies, iron and steel products, and the luxury goods that the Minister referenced. As we have argued, limiting Russia’s exporting capability and denying oligarchs their luxuries are critical, but we must make sure that President Putin feels every wall closing in on himself and on those who continue to sustain his regime. Again, however, the shadow Foreign Secretary wrote to the Foreign Secretary on 27 February calling specifically for a luxury goods ban and the widening of export and trade controls. The Secretary of State for International Trade announced those measures on 15 March, but they are being implemented only now. There is a danger that the Government are spending time bringing these measures forward, when the people of Ukraine, who are suffering the brunt of this murderous war, do not have time. We are still plugging loopholes and papering over cracks that, frankly, should not exist.

The explanatory notes mention that the regulations have to correct a number of defects. The Minister said that regulations are being prepared at speed, but I have to ask some fundamental questions about resourcing. It is clear that officials are working hard, and I certainly do not want to undermine in any way the work they are doing, but I have asked a number of times for clarity on the resourcing of the FCDO sanctions unit and the implementation units. The latest figures I could find show that just 40 to 49 staff were working in the sanctions unit in December 2021. Has that now been expanded, and have additional resources been brought in so that we do not have to go back and retrospectively correct mistakes, and so that we can move much more quickly? I will make some points about the Office of Financial Sanctions Implementation in due course, but we have to have the necessary drafting and advisory resources in the FCDO, as well as the necessary advisory resources for those who will have to implement these sanctions. We cannot have a game of catch-up all the time, and the Government have the Opposition’s support in bringing that to an end, but we have to act with conviction and speed.

I want to ask some specific questions about the instruments. Given that they relate to extending existing financial sanctions, what has been done to ensure that those linked to Putin’s regime are not able to transfer through proxies assets that would have been sanctioned? We have raised that issue regularly, not least because earlier this month the Financial Times reported that oligarch Alexei Mordashov had swiftly transferred billions of dollars of stock holdings out of his name, and Alisher Usmanov is reported to be avoiding sanctions through a variety of offshore companies and business associates. Until the Government get a proper grip on the use of proxies, with robust legislation to ensure enforcement, we will be issuing sanctions with one hand tied behind our backs. Could the Minister say what he will do about that issue?

[Mr John Baron (Basildon and Billericay) (Con)]

Looking at the panoply of powers available to the Government, does the hon. Gentleman agree that we need to do a lot more to ensure that our economic crime agencies are properly resourced? I know that it is a slightly different thing, but there is a connection, because those who bust sanctions need to be reprimanded. However, at the moment we are not funding our economic crime agencies sufficiently, and perhaps we should consider copying the American model, which has a much higher success rate, by sharing the proceeds of their initiatives.