The Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2024

Alicia Kearns Excerpts

Wednesday 16th October 2024 General Committees

[Alicia Kearns (Rutland and Stamford) (Con)]

It is a pleasure to serve once again under your chairmanship, Mr Betts. I thank the Minister for her remarks. I shall keep my own brief, because the Conservative party supports these regulations and the technical and clarificatory amendments that they seek to make to the existing Russia sanctions regime.

As I am sure the Committee is aware, asset freezes are a cornerstone of our sanctions regime and of the Russia one in particular. The Conservative Government rightly targeted asset freezes at oligarchs and the circle of people closest to the Kremlin, stopping their significant and valuable assets being sent back to Russia and ultimately undermining Putin’s ability to prosecute his barbaric, renewed illegal invasion of Ukraine. I acknowledge —and am grateful, too—the fact that the Minister recognised that the UK took an innovative approach and that we were the first country to put in place such a sanctions regime with the new freedoms that we had to be able to pursue that.

According to the Office of Financial Sanctions Implementation, about £20 billion-worth of assets have been frozen since February 2022, following the renewed illegal invasion. Regulation of legal advisory services is a crucial buttress for ensuring that those asset freezes work and that the system in general is watertight. It is right that we should continue to ensure that our sanctions package and accompanying regulations, including those regarding legal advisory services, are as effective as possible.

What is also important, however, is that the guidance to the legal profession is as clear as possible, and that the changes are communicated effectively. It continues to be an issue that some parts of the legal profession seek to provide opportunities to support those who are sanctioned. Therefore, we must be clear, so that we can prosecute those who breach the sanctions.

The Government must use the Russia sanctions regime to its fullest extent, because we must constrain Putin’s war machine by targeting not just individuals, but entities and businesses helping to fuel it. I was pleased that we established OFSI, which is a vital part of the process, but it is of concern that OFSI has yet to fine any individual or entity for sanctions evasion. I understand the complexities in issuing fines, but I would be grateful if the Minister expanded on how the Government intend to ensure that those who breach our sanctions face the proper consequences, and on what scrutiny is being placed on OFSI, because there is a gap in how Parliament can scrutinise that individual body.

As the Minister will know, the Conservative Government sanctioned a number of companies in China which had been feeding supplies to Russia’s military-industrial complex. We should be targeting entities actively helping to prop up Putin’s war wherever they are in the world. I am concerned that we have yet to see a statement from the Foreign Office following recent significant reports about Chinese support to Russia or the even more recent reports that more than half of all weapons used against Ukraine come from North Korea. I have raised both those issues formally with the Foreign Office.

Finally, the Conservative Government were a leading advocate of immobilised Russian assets being used to support Ukraine and ensuring that the Russian state pays for the destruction it has caused. When we look back in history, we must be very clear that this was Putin’s war and his renewed illegal invasion—he is responsible and he must lose. We are talking about a significant sum of money, and it is vital that the Labour Government continue that work and push our allies to coalesce around the most ambitious support solution to achieve those important aims. That money must help not just with the defence of Ukraine, but in the rebuilding of Ukraine and the delivery of compensation to all those who have lost so much.

[The Chair]

The motion is open to debate, and the sitting can last up to an hour and a half.

--- Later in debate ---

[Peter Fortune (Bromley and Biggin Hill) (Con)]

Apologies if I get the procedure wrong—it is the first time I have done this. I align myself with the comments of my right hon. Friend—

[Alicia Kearns]

Just honourable.

[Peter Fortune]

One day. I have a quick question for the Minister on the consultation. I appreciate that there is no formal consultation required, but the paper says that there has been informal consultation with stakeholders. Can the Minister tell us who those stakeholders are?

[Anneliese Dodds]

I am very grateful for the helpful contributions we have heard. I am particularly grateful for the support of the hon. Members for Rutland and Stamford and for Bicester and Woodstock, as well as for the question about clarifying the consultation. I will come on to all those points in a moment.

The new UK Government are absolutely determined to use every mechanism we can to ensure that UK sanctions will disrupt Russia’s illegal invasion of Ukraine and the pursuit of its illegal war. We are determined to continuously refine our sanctions, so that we are applying effective pressure on Russia, both domestically and internationally.

OFSI was rightly mentioned by the hon. Member for Rutland and Stamford; it is working at pace and we are determined to ensure that it is effective. Although we did not talk about it in this debate, and I will not go into detail, the hon. Member will have seen that the Prime Minister has been active on the question of ensuring compliance with sanctions regimes. That was a core element of what he set out to the European political community, when that meeting took place over the summer. It is a priority for the UK, both domestically, in terms of ensuring that our own regime is watertight, and multilaterally, working with partners on the aim of disrupting Putin’s war effort.

Of course, the work does not stop here. It is a continuous process of renewal to ensure that we have it right and to make it harder for entities to circumvent sanctions. In response to the question posed by the hon. Member for Bicester and Woodstock—my county colleague—the measures are precisely intended to ensure compliance. That is the entire point of their introduction. If there is a lack of clarity or overlapping legal regimes, that is the kind of situation where loopholes could be exploited. Instead, the measures are clarifying the situation, so that it can work effectively and there is compliance.

On consultation, that was with those engaged in the financial and legal sectors. Above all, we are working hard to ensure that it is an effective regime. I am strongly of the view that those working in those sectors want to ensure that there is legal clarity, and that the UK sanctions regime is held to. We need to ensure that is the case across the board, as I was saying to the hon. Member for Bromley and Biggin Hill. This SI ensures that, and the consultation was with key figures in the industries that are engaged on those matters.

We continue to be committed to making sure our use of sanctions is modern, effective and joined up with other countries, although our regimes are subtly different, which in this case reflects the different legal systems in the UK, the EU and the US. We want to make sure we are keeping pressure on Russia.

The hon. Member for Rutland and Stamford raised the issue of China. The Foreign Secretary has spoken quite a lot about the need for a joined-up UK approach to China generally. It is a priority for the new Government to make progress on that. We have not had a coherent approach previously; we think we need one. We are very clear that any evidence of Chinese companies providing military support to Russia would be damaging to China’s international reputation, given its strongly avowed position on not being involved in the conflict. We will not hesitate to take action against anyone who supplies and funds Putin’s war machine. We are very clear on that.

[Alicia Kearns]

The Foreign Secretary is in China this week, so I hope that he can reassure us when he returns next week that he has raised that issue directly with his Chinese counterparts during that visit. It would be unacceptable for him not to do so, given that it has been more than two months since concrete evidence came out proving that China was enabling Russia in that way. Equally, on North Korea, we have an ambassador here in London who should be being called in to answer questions on how over half of the weapons maiming and murdering Ukrainians are coming from North Korea. Can the right hon. Lady show me that the Foreign Secretary will be able to confirm, when he returns next week, that he has raised that very specific and deeply concerning issue directly?

[Anneliese Dodds]

The new Foreign Secretary is absolutely committed to ensuring that the House is updated on all aspects of his activities. I know the hon. Lady has seen that thus far, he has been extremely responsive, and I am sure that will be the case on these issues, as on all others. He has been incredibly active—his feet have barely touched the ground—yet he has been in the Commons quite a bit to make sure the Commons remain updated.

[Alicia Kearns]

My question was not about whether he will update the House, but about whether he will raise the issue directly in Beijing, because he has the opportunity to put to Wang Yi, or indeed Xi Jinping, that they should not be providing weapons to Russia. I would like reassurance that that is on his agenda while he is there. Of course, I would then expect him to update the House, but the issue is what he does while he is in China this week.

[Anneliese Dodds]

The Foreign Secretary has been very clear indeed about his role and his leadership in relation to the conflict in Ukraine—there is no question about that. He has been very clear on it. However, the hon. Lady has followed these issues for some time, and would surely understand that the precise content of discussions between global leaders is not something that I, as a Minister, would seek to pre-empt. I would not have expected to do so in opposition either. That is something that is determined by the global leaders themselves.

To conclude, I again thank Committee members for their very insightful contributions. It has been a brief debate, but I hope that those for whom this is their first experience of such a Committee will see many more—I am sure they will enjoy every single one. I am grateful for the continued cross-party support for strong, impactful and effective sanctions in relation to Russia’s war efforts.