Sanctions and Anti-Money Laundering Bill [HL]

Viscount Waverley Excerpts

2nd reading (Hansard): House of Lords
Wednesday 1st November 2017 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I offer my support to government objectives at this stage of the Bill, because continuity of current arrangements is clearly an imperative. I have, however, listened carefully to the concerns of noble Lords, and I hope that the Government are on message. We have heard from the Minister that flexibility would allow Ministers to add differing components. That is helpful. He mentioned transport, trade and immigration. However, any mechanism to specifically place more emphasis on removing corruption from the world stage, alongside that on money laundering, would be propitious for inclusion in future sanctionable objectives. The noble Lord, Lord McNally, touched on that point twice in his remarks.

Defining corruption can be a nebulous challenge, but it often extends to poor governance. It is essential to exert pressure to improve governance where needed, particularly in relation to the recipients of UK aid funds.

The use of sanctions for economic or regime change purposes, or targeted sanctions on individuals for human rights abuses—a mechanism short of more drastic measures—is on the increase. Understanding how best to measure those sanctions against their intended purpose and ensure that the unintended do not suffer disproportionally, and when expedient how to allow leaders on the receiving end to save face, are all challenges. The need is sometimes to allow or provide an assured exit route for those facing international justice or a route back to a state of peace and reconciliation for conflicted peoples.

I would welcome a global review of sanction processes at a convenient time in the future. Knowing when and how to instigate sanctions as a tool of policy does not require multilateral-level consideration by a body such as the United Nations. More effectively, it should be introduced by smaller and more coherent regional or economic groupings, such as the G7 and European Union members. Regional fora to discuss and implement sanctions have the benefit of speedier action without as much compromise on principles compared with the UN. Many crises require more timely responses while UN bodies conduct their reviews and investigations. On another note, regional groupings carry more weight in terms of “who is in the right”, as typically those in regional groupings are neighbours. For example, African Union sanctions on African states could carry more moral weight, as it is not seen as a group of western nations punishing a poor African state. I took note of this general theme when listening to the vehement remarks made recently in your Lordships’ House by his excellency the President of Namibia.

The underpinning of sanctions as a transatlantic set of initiatives is fundamental. This might serve also as a brake on occasional future excesses by the United States.

We must all be in step. If in step, what should be done about the effects of extraterritorial components unilaterally instigated by others—for example, the US Helms-Burton legislation, a United States federal law which strengthens the United States embargo against Cuba? Whether it be Cuba or elsewhere, it is often western banks and companies—notwithstanding the desperate tale outlined by the noble Lord, Lord Hain, who is not in his place—which, against their individual corporate interests and without consultation, shoulder the burden.

However, the overall balance must be got right. We are headed possibly towards a differing geopolitical and geo-economic world. Care needs to be exercised for sanctions not to become a “them and us” circumstance. Some suggest possible future axes of those to the East standing between themselves and the ideals of the West are in the making.

While a clear set of objectives exist we should be mindful of states not being boxed into a corner or blind alley with little or no exit strategy. Any possible reciprocal sanctions programmes might have dramatic and untoward long-term adverse repercussions. If sanctions become a wedge between differing ideals, certain eastern economic powers might decide they are more in kilter with those in the East than the West. Presumed groupings and informal alliances are much more variable than we might think. So, sanctions achieving their end, and not beyond, are crucial.

I was struck recently by a comment from a UK Foreign Minister that encapsulates one aspect of the challenges. He noted that we live,

“not in a world where isolation works”.

Iran: Future of the Joint Comprehensive Plan of Action

Viscount Waverley Excerpts

Monday 16th October 2017 Lords Chamber

[Lord Ahmad of Wimbledon]

My noble friend raises an important point. We have been consistent in our approach to this deal and to international agreements. The way in which my right honourable friend the Prime Minister acted on Friday and the co-operation that we continue to demonstrate with our European partners adds to the strength of having a unified approach to issues on which we agree. That certainly reflects the situation with this agreement.

[Viscount Waverley (CB)]

My Lords, the Minister’s remarks are welcome. However, speaking frankly, how prudent is it to depart from treaty terms? It is to be hoped that Congress will see sense. President Trump entered into a diatribe towards Iran, during which he announced his instruction that US agencies should investigate. Would it not have been more satisfactory for the President to have asked his agencies first, rather than putting the cart before the horse?

[Lord Ahmad of Wimbledon]

My Lords, that is very much a question for the US Administration.

Middle East (IRC Report)

Viscount Waverley Excerpts

Tuesday 4th July 2017 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I declare that I am associated with a major Middle Eastern entity, although naturally the views I express are mine alone.

I offer congratulations to the noble Lord, Lord Howell, and his team on their many thought-provoking assessments. As the title of the main report indicates, the region under consideration is primarily the Middle East, although extending to north Africa and the Levant. Defining a region can be elusive. I would always classify the Levant as being in the Middle East and wonder why there is not more consideration of Israel’s contribution within the Middle East. I remember well a conversation with Crown Prince Hassan in Amman when we discussed the role of Israel in the Arab world, as applicable then as now. Regional tensions might be reduced if Israel focused more on the Arab world rather than Europe or the United States and, conversely, if the Arab world was more accepting of Israel, although I accept that positive moves are afoot. The common thread of extremism and terrorism, cyber or otherwise, has to be tackled.

North Africa, included in the report under the banner of MENA, has a different dynamic from that of the Middle East. MENA, as it impacts north Africa—expedient geography to the Foreign Office, Brussels and the OECD, with their development initiatives on governance and competitiveness—is of course very much of the world of Islam, but with differing politics and trade issues. It is a pity, but in the circumstances understandable, that the committee was unable to visit Riyadh and Tehran—two Middle East linchpins. It is preferable always to test the broader world view from within rather than solely as perceived from London. Both offer a world of opportunity for the United Kingdom. All commentators inform me that the UK is lagging behind in connecting with Iran. The signing of a $5 billion contract with Total is testament to that. I see the inability of the Iranian embassy to open a bank account in London as a detriment. I ask the Minister: are there any developments in that regard and what is holding back the ability to do so?

Iran’s significant historical and current influence, the unresolved Israel-Palestinian situation and the recent Gulf rifts with Qatar exacerbate old and new regional tensions. Multiple crises define the MENA region. One also should not be blind to Afghanistan; the effects of the refugee exodus reaching directly into Europe, Italy in particular; and the bilateral tussle between Morocco and Algeria over Sahara. Matters are compounded on the one hand by an apparent withdrawal by the United States, while still defending its national interest combating ISIS and al-Qaeda, and on the other hand by Russia and its interests becoming increasingly centre-stage, with support for Syria and nuclear activities in Iran. Co-operation generally between these state actors needs to be established. Events have the potential to get out of hand.

The Middle East requires vital stabilisation. Trust and confidence-building measures are urgently required. Yet throughout the Arab world, with all its turmoil, Arabs, barring extremists, are intrinsically a peaceful people; to raise one’s voice is considered very much a non-Arab trait. Undeniable contributors to a more settled region would be a greater role for women in society and state affairs; a strengthened civil society; and, I suggest with respect to regional elders, a move to a younger leadership pattern, currently in the offing in Saudi Arabia, together with the acceptance of social media as a practical reality. Of course I recognise that these issues are anathema to many but they are none the less unavoidable for tomorrow’s leaders. There is much to reflect upon.

The report’s emphasis is more on political and security issues than trade. Given the importance of trade to a post-Brexit United Kingdom, perhaps I might offer one or two pointers. The unintended consequences of low oil prices and political instability are giving great cause for concern to UK trade with the Middle East. Trade figures show that the low oil prices are affecting spending plans, with countries now urgently seeking new models for financing future plans. The UK leads in this area and it is where we can help. On the positive side, wealthier GCC countries have adequate financial buffers to insulate them from the current volatility in the price of oil and other global factors, where non-oil sector growth is supported by high government expenditures on infrastructure, including public transportation, housing, healthcare and aviation. A real effort is taking place to diversify economies away from oil and gas. A good example of this is the Abu Dhabi Economic Vision 2030 and Kuwait’s recently announced five-year plan, while in Egypt, where a more challenging market exists, the economic and political outlook should improve with enhanced security conditions, reduced fuel subsidies, tax-system reform and the Suez Canal expansion project.

However, trade finance for international trade remains a major challenge for economic recovery and development. For my part, I am engaged with two emerging initiatives. A new committee for Middle East trade—COMET—will work in an advisory role highlighting opportunities and challenges for members and government. COMET will provide a new approach in the UK by working with government and the private sector stimulating interest for British exporters where no UK advisory body exists. It is felt that the immediate future for UK trade should focus on British partnerships in medium-sized ventures, particularly those that support employment coupled to training, while keeping a watching brief on the high-value projects, most of which are long term. Key areas for growth range from legal and Sharia-compliant financial services to energy infrastructure, defence and security, educational and vocational training and healthcare. The key question is how the UK can best co-ordinate and mobilise its resources during these challenging times to ensure that British companies maintain their interest and do not turn away from these markets.

In addition, a meeting, lunch and gala dinner on 10 October under the banner of the global CEO club will take place in London. The royal families of various countries, together with industry leaders from throughout the region, are to attend. I have been asked to encourage the Prime Minister to address a strong guest list, and I wonder whether the Minister would consider this through his good offices. The purpose of the event is to introduce leaders in the region to partner with United Kingdom interests. There is much to play for.

Commonwealth Heads of Government Meeting

Viscount Waverley Excerpts

Thursday 6th April 2017 Lords Chamber

[Baroness Anelay of St Johns]

I am delighted that the noble Lord has raised this issue. We discussed it briefly outside the Chamber and I assure him that his views will be taken firmly into account.

[Viscount Waverley (CB)]

My Lords, would it not be plausible to make full use of the internet and to devise a website to allow for two-way exchanges of opinion among all parliamentarians around the whole of the Commonwealth?

[Baroness Anelay of St Johns]

I assure the noble Viscount that, as part of the programmes that we are putting forward and consulting widely on, it is our intention to make the best use we can of the internet and all it can deliver. In some areas around the world, of course, it is more difficult to get the broadband speed. However he is absolutely right that modern communication is important. After all, we have to think of the young age of most people across the Commonwealth.

Balfour Declaration

Viscount Waverley Excerpts

Monday 3rd April 2017 Lords Chamber

[Baroness Anelay of St Johns]

Yes, my Lords.

[Viscount Waverley (CB)]

My Lords, given the increasing vacuum from the United States and the concern expressed by Arab partners, is it now realised that Israel can become a strategic ally in the common cause of combating terrorism and Islamist extremism?

[Baroness Anelay of St Johns]

My Lords, I think it is incumbent on all those who believe in peace around the world to do exactly that, and I hope and expect that Israel would be part of that work.

Commonwealth

Viscount Waverley Excerpts

Thursday 16th March 2017 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I rise with nostalgia. My first endeavour as a new boy in your Lordships’ House was to table a Motion calling attention to the importance of the Commonwealth. I warmly encourage closer working relationships with the Commonwealth, noting that the UK enjoys reciprocally beneficial membership of this invaluable intergovernmental organisation of, as the Minister reminded us, more than 2 billion people in 52 countries spanning six continents.

The UK has received unstinting support over the decades—including in military conflicts, disaster relief and its role as a permanent member of the UN Security Council—from the Commonwealth family of nations. Our distinguished Commonwealth partner country, Malta—now president of the Council of the European Union—hosted the most recent Heads of Government meeting in 2015, exploring the theme of “The Commonwealth: Adding Global Value”. It was a timely and relevant theme for this leading Commonwealth country—ours—as we stake out the Brexit ground. We, too, must seek to add value globally.

When we joined the EEC in 1973, our formal bilateral trade, aid and investment relations with Commonwealth countries—the Commonwealth preferences scheme—ended. Picking up a theme of the Minister, subsequently, under the Lomé convention, the Cotonou agreement and the economic partnership agreements, Commonwealth trade was notionally with the EU but headed primarily for British markets.

Political hay has sometimes been made of punishment that the UK might receive because of our vote in the recent referendum. Will any such punishment extend to our Commonwealth partners? Thirty-six of them are small countries with small markets lacking the negotiating clout to fight their corner with the Commission. Will Malta and Cyprus, joint EU and Commonwealth members, help them to consolidate their position, or will they be hampered by their own small state status? It is possible—I put this thought in the minds of government negotiators—that we can create a Commonwealth free trade area compliant with WTO rules. However, that would require considerable political will and expertise to modify existing rules of other customs unions to which members may also belong.

There is both an economic and a moral imperative to address this issue during the impending Brexit negotiations and beyond. Media reports sometimes dismiss Commonwealth trade potential, yet intra-Commonwealth trade could reach US $1 trillion by 2020, as the Minister also reminded us.

Opportunities await us. Commonwealth target growth sectors are financial services, technology, infrastructure, healthcare, tourism and sustainability. We in the UK are leaders in each and every one of those fields. Consider the welcome impact we could have in ensuring greater access to green technologies across the Commonwealth, particularly in areas plagued by natural disasters and sea level rise attributable to climate change.

Our expertise in the field of education is well recognised, as are the financial, research and cultural contributions to our country of increased numbers of international students and faculty—in significant numbers, from Commonwealth countries. Not only can this sector be enhanced here at home, but there is also significant comparative advantage for exports of technology, expertise and institution-building skills.

There exists much scope for our SMEs to enter and thrive in those Commonwealth markets, with access and performance eased by harmonised legal, regulatory and language frameworks—a happy circumstance described as “the Commonwealth advantage”. Many SMEs have not exported to the EU in part because of bureaucratic burden. They could and should now seize every opportunity offered for trade within the Commonwealth. I welcome the inaugural Trade Ministers meeting and the recognition of the timely benefits of improved intra-Commonwealth trade, industry and investment. The secretariat and the CFTC are well placed to co-ordinate Commonwealth business requests centrally, while Her Majesty’s Government can officially support Commonwealth development finance initiatives, such as the trade finance facility, that dovetail with their own. That is mutually beneficial.

Why is it important to engage at this level? There is far more at stake here than just the trade numbers, attractive though they are. The Prime Minister of Malta, speaking to Heads of Government at the most recent CHOGM, reminded us of the Commonwealth’s youth who, just like ours, can easily become aggrieved by being out of the loop, alienated by lack of respect, a poor standard of living and unemployment—and as easily seduced by extremist propaganda. Prime Minister Muscat pointed out:

“Terrorists are more scared of well-educated girls and boys who manage to get a good job than they will ever be of any army”.


Look no further than to the heartrending affair in Nigeria’s north-east.

We therefore have a shared interest in seeking to improve education and job opportunities for our young at home and, importantly, across the Commonwealth. To do so would assist in reducing migration—irregular or otherwise—by mitigating the conditions propelling peoples to flee their home countries. In turn, perilous journeys to the European mainland could be reduced, far right policies would have less traction and people traffickers would be put out of business. That is a win-win situation, well within our grasp.

I conclude, as I did in 1994, with the wisdom of Mr Arnold Smith, the first Secretary-General of the Commonwealth, when he remarked:

“100 years from now, I suggest, historians will consider the Commonwealth the greatest of all Britain’s contributions to man’s social and political history”.


I trust that today, the message will travel Commonwealth-wide: your partner and friend is back.

Russia

Viscount Waverley Excerpts

Tuesday 31st January 2017 Lords Chamber

[Baroness Anelay of St Johns]

My Lords, on a previous occasion I have been able to make it clear that the Foreign and Commonwealth Office is already putting in place the opportunity to expand our network throughout the other member states of the European Union. Our bilateral relationships should therefore remain strong and develop to be even stronger as and when we leave the European Union.

[Viscount Waverley (CB)]

My Lords, would it be helpful if the Government, in the Security Council, resolved to endeavour to complete uncompleted Wilsonian principles as to when the right of self-determination supersedes that of territorial integrity, to remove all question of doubt?

[Baroness Anelay of St Johns]

My Lords, we can learn from history. We can certainly learn to engage with Russia and to engage even more closely with our allies in the United States, as I mentioned yesterday. Sometimes it seems at the moment that policy development is, in the polite phrase that I think I used, evolving and rather confusing. That makes it difficult to be able to give the noble Viscount a satisfactory answer at this particular moment.

Israel and Palestine

Viscount Waverley Excerpts

Thursday 13th October 2016 Lords Chamber

[Viscount Waverley (CB)]

My Lords, my remarks fit between those of the noble Lords, Lord Trimble and Lord Desai.

The Palestinian situation needs to be redefined, if it is to be resolved. The people of historic Palestine have been saddled with the most intense and long-standing stream of emotional and political support, more than any refugee community has received in modern times. Such support, however, has been deluding the Palestinian people and kept them from facing a painful reality—an impossible dream. Their country and homes in Palestine have been permanently lost. Others forced to accept the stark reality of permanent displacement have ultimately been able to move forward with their lives, because they were allowed to settle as full citizens in adopted countries. Not so Palestinians—more than often they are treated as second-class citizens, with little or no civil rights.

The Palestine tragedy has played into the hands of some with the displacement, the Nakba, becoming a cause célèbre for Arabs and Muslims without sufficient support in practical terms. The Israelis have understood all this, and so was created the Palestinian Authority, which has done little more than legitimise de facto Israeli occupation of the West Bank and Gaza. This illusion of return maintained by the Palestinian leadership has achieved the net result of perpetuating the misery for the Palestinian people, who have never given up the powerful emotion of hope. Some would say that this illusion of return has provided a powerful excuse to avoid integrating the Palestinian refugees as full citizens—the excuse being that the never-to-be-fulfilled dream of eventual return to Palestine, and being given citizenship, technically undermined their right of return to Palestine and so should be denied them.

This humiliation tears at the heart of all Palestinians, who care more vehemently about this than any issue in their lives. I combine my remarks on the impossibility of ownership of ancestral land with the critical need to have a legal identity—citizenship with full rights that would allow a person to operate productively in the modern world. This means having a passport and legal residency enabling them to live, work and travel, such as those of a citizen of any respected state.

Why might the time be arriving when Palestinians might consider the painful reality? The first generation, which lived through the Nakba, has now passed. Subsequent Palestinians have endured years of suffering, having grown up in refugee camps with minimal education, training or work opportunities. As things stand, there is no viable future for them or their children. What is required is a collective decision of the Palestinians, but only by those Palestinians who have no nationality, since they are the only ones paying the price. A referendum of all stateless Palestinians should take place on the single question of right of return and claims to Jerusalem in return for nationality and a homeland. Israel should proactively adopt and drive this catalyst for change. It holds the cards and is the only player with the hard power to effect change on the ground.

Rejectionists might resort to terrorism, but the Palestinian people who will have voted will have an enormous stake in its success. Their will would prevail in creating a foundation block in rebuilding a secure and prosperous Levant—failing which, a son of ISIS could become the future of the region. The sensitivity of return must be balanced with the prospect of life in dignity for their children and their children’s children.

Step forward King Abdullah. The time has arrived for the people to decide. Give them the hope they cherish. Let this become a defining moment, a time of partnership, allowing Israel to redefine its contribution to the Arab world.

European Union

Viscount Waverley Excerpts

Monday 4th July 2016 Lords Chamber

[Baroness Anelay of St Johns]

My Lords, last week the Leader of the House repeated the Prime Minister’s Statement, in which he said that,

“we have now got to look at all the detailed arrangements, and Parliament will clearly have a role in that in making sure that we find the best way forward”,

and that, as we move ahead towards leaving the EU, it will be important to,

“ensure that the interests of all parts of our United Kingdom are protected and advanced”.—[Official Report, Commons, 27/6/16; cols. 23-27.]

That still stands.

[Viscount Waverley (CB)]

My Lords, to what extent will the Ponsonby rule or its successor arrangements under the constitutional change brought in in 2010 be applicable to this process?

[Baroness Anelay of St Johns]

My Lords, that will be under consideration.

EU Foreign and Security Strategy (EUC Report)

Viscount Waverley Excerpts

Tuesday 7th June 2016 Lords Chamber

[Viscount Waverley (CB)]

My Lords, I too congratulate the committee. The key recommendations of the report are clear, pragmatic and sensible. I have little doubt that many of our partners would prefer the UK to continue to be a foreign policy and strategy leader of the pack and not an enforced go-it-alone wolf. While respecting the will of the people in the upcoming referendum, regionalism is the long-term future of the world. It is in the UK’s national interest to be a team player. Possibly next time consideration could be given to some key issues: the Palestinian question, for example, needs urgent closure, and the Iran-Saudi relationship remains ominous and an eye needs to be kept on it.

I endorse the need for urgent reassessment of EU foreign and security priorities, taking account of the risks facing and threatening the Union, together with resource availability. It makes sense that the new EU strategy arising from this should take a comprehensive view of EU foreign policy instruments—in particular, of how the Commission’s resources and instruments can support the Union’s foreign policy objectives.

It is right to recognise that the member states are the driving force in EU foreign policy. In this, however, the European External Action Service must play a more decisive and proactive co-ordinating role in improving cross-EU co-ordination and helping align Commission instruments with member state priorities. HMG should be considering how we increase the number of UK personnel in senior EEAS positions in order to influence the changes that we would like to see—a point made by many in this afternoon’s debate. The challenges will, of course, be considerable given the existing relative weakness of EU foreign and security policy co-ordination.

I note the proposal to establish ad-hoc groups to consider and agree rapid, decisive and ambitious action by member states, which could then become the wider EU position. It is my understanding that the EU has been using working groups on different areas of foreign and security policy for many years. It would be interesting to know how these ad-hoc groups will differ from these and how they might be constituted.

I have listened carefully to remarks this afternoon regarding Russia; it is a complex question. I believe that EU member states need to be more proactive in their approach towards Russia. The Russian temperament should be usefully understood. I remember well a senior committee gentleman, answerable to the Kremlin, who told me that he would travel with me anywhere in the world on one condition—that I pay respect to his opinion.

Apart from being seemingly disengaged, there has been too little forward strategic analysis of Russian policy and future actions towards, for example, Ukraine and the Middle East. While endorsing the proposed dual-track EU member state policy towards Russia, to which I would add those in its sphere such as central Asian and certain south Caucasus states and beyond, we need deeper analysis of the longer-term impact of sanctions on Russian government revenue and the Russian economy, especially given the separate impact of potential sustained low oil prices. The unintended consequences of the oil price are leaving a heavy mark on many producers, with social programmes being cut and rises in unemployment. These consequences could become grave and affect us adversely at home.

Definitions of areas of shared interest where there might be scope for EU-Russia co-operation and dialogue need to be thought through. Productive dialogue is certainly possible, but we need to respect Russia’s culture and its past 100-year history and, importantly, let it be known that its view is sought and will be treated with respect. Only in that way can we have an impact on Russia’s thinking and actions. While we may not always agree, Russia, above all, almost demands that respect.

Given EU disunity on Turkey’s potential long-term accession, an urgent overall review of the relationship with Turkey, from fundamentals, is required. Turkey is an important partner for the EU on a range of key issues including regional security, counter-terrorism and trade. There is possible scope for a twin-track approach, focusing on the one hand on implementing and maintaining the EU-Turkey refugee action plan, and, on the other, on how to arrest the erosion of Turkish democracy.

Syria is arguably the source of the biggest threat. In promoting a more central EU role in the resolution of the regional crisis, HMG should explain more clearly what they are doing to help alleviate the humanitarian crisis and their other actions in the area. In doing so, HMG should encourage other member states to refocus on increasing their assistance to the area, and indeed to security sector reform in Tunisia and Libya.

The report rightly points out the need for the EU to prioritise its help in our southern neighbourhood, based on key security threats. The challenges in north Africa will need much greater EU effort if some of the underlying causes are to be addressed. In specialised sectors such as this, we need to focus on developing a collective, agreed EU policy programme. It is worth underlining that the UK is ideally placed, given our experience in Africa and the Middle East—especially compared with other member states, with the exception of France—and the expectations arising from it.

It is right that improving EU-NATO co-operation and co-ordination should be central to the new strategy. This should ensure greater synergy between the two bodies while ensuring that the EU has no role in territorial defence—again, as said elsewhere today. That will in turn ensure minimal duplication and more effective use of valuable resources.

The challenges are huge. Many of the report’s proposals and recommendations are medium/long term. If the upcoming referendum result is indeed for the UK to remain, I hope that HMG will take a major lead in promoting a more strategic and targeted EU foreign and security policy and give departments of state the resources to do so.