Sanctions

Debate between Stephen Doughty and Liam Byrne

Tuesday 1st March 2022 Commons Chamber

[Stephen Doughty]

I completely agree with the hon. Gentleman, especially in connection with the measures relating to SLAPP suits that we debated recently in the House. This is a crucial point. There is a whole infrastructure here, a whole systemic problem. What saddens me is that many of these measures were set out so clearly by, for instance, the Foreign Affairs Committee and in the Russia report, but were not introduced. I hope that the Government will now bring forward measures in all these areas. The measures do not, of course, apply only to Russia; they apply to other regimes that are doing heinous things.

Sixthly, we support wider sectoral measures, to cover insurance and reinsurance, for example, preventing UK firms from underwriting transactions with Russian entities or activity in Russia. I understand that the sanctions we are discussing today will apply to insurance and reinsurance as it applies to the specific transactions covered by these sanctions, but will the Minister tell us whether the Government are considering a wider prohibition on the provision of insurance and reinsurance services more generally to Russia and those engaging with the regime, not least given the key role that the UK plays in the international insurance market?

Seventhly, we have heard the point rightly made by one of the Minister’s own colleagues, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), about Scottish limited partnerships. May we have some urgent answers on that?

My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) raised a point about the use of assets. My understanding is that these sanctions would, for example, prevent service companies from servicing a large mansion somewhere in London in respect of, say, cleaning or facilities. Of course, the individual would still be able to make use of the asset.

[Liam Byrne]

My hon. Friend is right. There is a secondary question that the Minister needs to clear up: if a Russian oligarch has a mortgage on a mansion, is the bank that holds the mortgage legally entitled to take debt repayments or not?

[Stephen Doughty]

My right hon. Friend makes a crucial point. My understanding, which the Minister can clarify if necessary, is that it does apply to financial transactions including mortgages and remortgaging, but we need to understand this because we need to truly freeze the use of these assets and not allow loopholes.

As always, I must ask how these measures will apply to the British overseas territories and Crown dependencies. Will they be effective immediately in those territories or will we, or they, have to pass additional measures? We do not want a lag effect of days in those jurisdictions. I also want to ask about resourcing. I pay tribute to the officials in the FCDO sanctions unit, who are working on these matters at speed, but can I get an assurance from the Minister that their resourcing is being rapidly scaled up so that we can move swiftly, robustly and in a legally sound way? What consideration is being given to alternative routes for naming some of the individuals?

These are highly complex sanctions measures, especially in relation to the dual use of goods, and a major Government effort will be vital to ensure that there is detailed understanding across the private sector so that we can support their implementation, not least given the severe penalties outlined in the instrument and our desire for the measures to be implemented immediately and effectively. Will the Office of Financial Sanctions Implementation issue urgent and clear new guidance on these measures? Similarly, will additional resources be provided to the export control joint unit to support compliance and enforcement? If we want the toughest measures, we will also need the toughest enforcement, but unfortunately many of the agencies have been lagging behind the US. They do excellent work, but they have not had the resources they need.

There are multiple reports today that troops from Belarus might have been entering Ukraine. They are unconfirmed at this stage, but we know that attacks have been conducted from the territory of Belarus. We have all previously called for wider sanctions against Belarus, and indeed the EU has laid out such sanctions. Will these measures be effective against Belarusian entities and individuals? As has been said, sanctions are important but they alone will not deal with the wider problems of illicit finance and the UK’s role as a hub for corrupt, Russia-linked money. This is a matter not just of individuals but of fixing a broken system in which poor governance, weak enforcement and a lack of transparency have allowed the UK to be a haven for ill-gotten gains. We have to take action across the board.

There is a range of additional measures, and the Minister has hinted that we might see measures relating to shipping. Again, we want to understand that these will apply globally, in the light of our overseas territories and Crown dependencies. Can he tell us when he expects additional SIs and designations to be laid? We want to work with him in co-operation, but we need to have that information in order to understand when these things are coming.

Finally, today is St David’s day, the national day of my home—Wales. I have previously spoken in this place of the strong historic ties between Ukraine and not only my home city of Cardiff but the whole of Wales. I am hugely proud of the demonstrations of support and solidarity that we have seen across Wales, including in Cardiff, as well as across the UK, and I am delighted to report that the Welsh First Minister has in the last hour announced direct support from Wales of £4 million for humanitarian and medical needs. Wales stands ready to welcome Ukrainians fleeing the conflict, just as we have done for Afghans and so many other people across the globe throughout history. I hope that a strong message goes out from this House and from across the United Kingdom that we will unite to impose the strongest measures and provide the strongest support we can to the Ukrainian people in these dark days.