Countering Russian Aggression and Tackling Illicit Finance

Amanda Milling Excerpts

Wednesday 23rd February 2022 Commons Chamber

[The Minister for Asia and the Middle East (Amanda Milling)]

I thank the right hon. Member for Tottenham (Mr Lammy) for securing this timely debate and join him in expressing our united support for the people of Ukraine and their territorial integrity. We have seen events unfolding that none of us thought we would ever witness again.

We have unreservedly condemned this outrageous and unjustified act. This action is inconsistent with the United Nations charter and a clear breach of international law. It demonstrates flagrant disregard for Russia’s commitments under the Minsk agreement and represents a further attack on Ukraine’s sovereignty and territorial integrity. We continue to call on Russia to observe its obligations under article 2(4) of the United Nations charter to

“refrain…from the threat or use of force against the territorial integrity or political independence of any state”.

We reiterate our unshakeable commitment to the sovereignty, territorial integrity and independence of Ukraine. We insist that the Russian Federation immediately returns to compliance with its obligations under the United Nations charter and its commitments under the Helsinki Final Act and the 1994 Budapest memorandum. We demand that the Russian Federation immediately withdraws all its military forces from the territory of Ukraine, unconditionally and without exception. We also insist that the Russian Federation allows and facilitates the safe and unobstructed access of humanitarian assistance by international agencies for those in need in Ukraine. Yesterday, the Prime Minister announced, here in the House, the UK’s response to this action.

[Hywel Williams (Arfon) (PC)]

I agree with the Minister’s fine words, but two weeks ago, the Prime Minister told the House, on Ukraine, that the UK’s role was “to lead the West”. In the meantime, Germany has put Nord Stream 2 on hold indefinitely. Today, the European Union has sanctioned Duma deputies, the Russian Defence Minister and the Russian air force and Black sea fleet commanders, and it has brought in asset freezes and sanctioned 23 individuals, five banks and an internet troll factory. The USA has also extended sanctions. Is the UK actually leading the west?

[Amanda Milling]

I thank the hon. Gentleman for his intervention. I would say that we absolutely are leading, with our allies. I will come on to the package of measures and some of the points that have been raised, as well as what we will go on to do.

The UK is one of the largest and most open economies, and London is one of the world’s most attractive destinations for overseas investments. Those factors not only make the UK attractive for legitimate business, but expose the UK to illicit finance and money laundering risks. We are well aware that individuals with links to the Russian state may seek to further their reputation and influence in the UK through strategic investments. We continue to look in close detail at the nature of those relationships. We examine the intentions of those individuals; professional enablers, individuals or entities who facilitate corrupt elites; and what that money can be and is being used for in the UK.

Money obtained through corruption or criminality is not welcome in the UK or in our Crown dependencies and overseas territories. The Government are at the forefront of tackling illicit finance, combating the threat from source to destination, including those linked to Russia.

[Mike Amesbury (Weaver Vale) (Lab)]

Does the Minister share the concerns of our security services that Putin and Russian individuals who happen to be Tory donors could have undue influence in this House or the other place?

[Amanda Milling]

We are conscious of all influences from different states. I will come on to some of the measures that the Government have taken to combat illicit finance and some measures that we will take forward.

[Emma Hardy]

I believe that there are Ministers and Government Members who are frustrated at the lack of progress that the Government are making in tackling money laundering and fraud, which brings me back to the question of why. The Government have the majority that they need, they control the timetable and they have been in power for more than a decade, so why is there a lack of progress on the issue of Companies House? Our Treasury Committee report again talked about the slow pace and the lack of progress. What else does the Minister need for us to make progress on this issue, when we in the Opposition are offering an open door and saying, “We will support it.”?

[Amanda Milling]

I am very grateful to the hon. Lady for her intervention. I will set out the steps that the Government have taken and come on to—[Interruption.] Let us start with the actions that we have taken and then look at what we will do.

First, we have announced significant new investments. In the 2021 spending review settlement, £42 million was announced for economic crime reforms and £63 million for Companies House reform. In addition, the introduction of the economic crime levy will raise an estimated £100 million a year from 2023-24 to fund new economic crime initiatives.

Secondly, we are strengthening our law enforcement powers. The Criminal Finances Act 2017 introduced new powers to combat dirty money in the UK. It allowed for the proactive investigation of assets owned by suspected criminals and corrupt public figures.

Thirdly, we are developing new tools to target illegitimate wealth. [Interruption.] I will come back to these points. In April last year, the UK launched the global anti-corruption sanctions regime, which allows the Government to impose asset freezes and travel bans on those involved in serious corruption around the world. That is a strong personal deterrent and has been used so far to sanction 27 individuals in 10 different countries.

[Chris Bryant]

I am delighted that we have Magnitsky sanctions; I campaigned for them for 12 years—as did many other Members, including the hon. Member for Isle of Wight (Bob Seely), who is on the Government Benches—so it is a great thing that they are there. However, when the Minister talks about Companies House reform, the legislation is there. It is ready and waiting. The most disgraceful thing that I have ever heard is a Companies House official telling a Committee of this House, “I’m really sorry. We sometimes just daren’t take things forward because we know that Russian oligarchs have much deeper pockets than we do.” The truth is that our integrity as a country is being bought. We have to change that.

[Amanda Milling]

I am grateful to the hon. Gentleman for his intervention. I will talk about what we want to crack down on, but, as he will recognise, such things need to be legally robust.

To go back to the examples that I was giving before that intervention, the UK is a world leader in corporate transparency. It is the first country in the G20 to implement a central public register of company beneficial owners, showing who ultimately owns and controls UK companies. However, we are determined to go further to crack down on dirty money and financial exploitation, and we are enhancing the already strong regulation, supervision and legislative powers that are at our disposal.

[Dame Margaret Hodge]

More in sorrow than in anger, I raise the issue of Russian money and its role within the Conservative party. Fedotov, Temerko, Chernukhin, Mikheev, Knaster and New Century Media are all Russians or Russian companies who have close links to the Conservative party and have given money to Conservative MPs, Conservative constituencies or the Conservative central office. The figure I have is greater than the one that Labour Front Benchers have been using; I think it has been at least £3.6 million over the past decade.

I urge the Minister—I really do say this more in sorrow than in anger—to go back to her colleagues, sort this out and get that money out. I would not give it back to Russia; I would give it to organisations such as Transparency International, which does a fantastic job helping us to fight corruption. Until the Conservative party does so, it will have no credibility at all in the argument on fighting corruption.

[Amanda Milling]

Let me be clear. The Conservative party does not accept foreign donations—after all, they are illegal. All donations to the party are received in good faith, after appropriate due diligence, from permissible sources. Donations are properly and transparently declared to the Electoral Commission and published by it, and they comply fully with the law.

[Chris Bryant]

Will the Minister give way?

[Amanda Milling]

Let me just finish this point. There are people of Russian origin in this country who are British citizens. Many are critics of Putin, and it is completely wrong and discriminatory to tar them with the same brush.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am sorry that the Minister has to defend the indefensible. Will she confirm to the House today whether the vetting of Mohamed Amersi’s donation surfaced the news that he made $4 million in a business deal with a man who was President Putin’s telecoms minister? Did the vetting cover that—yes or no?

[Amanda Milling]

As I say, donations to the Conservative party are received in good faith. They receive appropriate due diligence, are from permissible sources, are properly and transparently declared to and published by the Electoral Commission, and comply with the law.

[Several hon. Members rose—]

[Amanda Milling]

I will make progress, because I want to turn to sovereign debt. If Russia stages any further invasion into Ukraine, we will not hesitate to implement a comprehensive and unprecedented package of sanctions in close co-ordination with our allies around the world.

[Rushanara Ali]

On that point, will the Minister give way?

[Amanda Milling]

May I make a little progress? I have been quite generous, to be fair.

The package will include measures to stop the Kremlin’s access to UK financial markets for sovereign debt. That means that the Russian Government will be unable to access UK services to raise capital through the issuing and trading of sovereign debt.

To pick up on the point about Nord Stream 2, we welcome Chancellor Scholz’s strong response to Russia’s egregious actions: Germany’s decision to suspend Nord Stream 2. We in Europe must now wean ourselves off dependence on Putin’s oil and gas. For example, in 2020 less than 3% of the UK’s total gas supply came from Russia.

Many hon. Members have mentioned the economic crime Bill. We are committed to bringing it forward.

[Stewart Hosie (Dundee East) (SNP)]

The Minister says we need to wean ourselves off Russian gas. That is eminently sensible, but I have a slightly wider question: do we need to wean ourselves off Russia more generally? Let me put it this way: does the Minister think it right in any circumstances that Tony Blair went to see then acting President Putin in 2000 or that David Cameron went to Moscow in 2011, almost to beg for Russian investment and placings and listings on the stock exchange? Surely we have made mistakes over a long period that have to do with political reputation as much as with the practicalities of gas supply.

[Amanda Milling]

The point that I want to make is about where we are today and where we have been for the past few days, weeks and months. Let us be honest: the build-up of troops on the border of Ukraine has been happening over some time.

We are committed to bringing forward the economic crime Bill. It will establish a new public register of beneficial ownership of overseas companies and other entities that own or want to buy UK property. It will ensure that individuals and entities can no longer hide in the shadows. It will also include reforms to Companies House that will bear down on the thousands of UK companies and other corporate structures used as vehicles for facilitating international money laundering, including from Russia.

We have increased checks on private flights, customs and freight travel under existing powers to prevent security threats to our people. On 17 February, the Home Secretary took decisive action to shut the tier 1 investor visa route to all new applicants of all nationalities, with immediate effect.

In response to the Russian invasion of Ukraine yesterday, we announced our first package of sanctions measures. With immediate effect, we froze the assets of five Russian banks. Four of those banks are involved in bankrolling the Russian occupation: Bank Rossiya, which is particularly close to the Kremlin; Black Sea Bank for Development and Reconstruction; IS Bank; and GenBank.

[Emma Hardy]

Will the Minister give way?

[Amanda Milling]

Sorry, but I will just make a little progress. [Interruption.] Just a moment—just hold fire for a second, if you do not mind.

The assets of one further bank—Promsvyazbank, the pivotal bank in propping up Russia’s defence sector—have also been frozen. We will also freeze the assets of, and impose travel bans on, three oligarchs: Timchenko, Russia’s sixth richest oligarch; and Boris and Igor Rotenberg, long-standing associates of the regime.

[Emma Hardy]

The Minister is being very generous in giving way. I am hearing that apparently No. 10 is telling the media that sanctions on the Duma members who voted are still being finalised because it needs evidence. What more evidence does it possibly need, considering that the EU has already announced that it is sanctioning 351 Members of the Duma?

[Amanda Milling]

The hon. Lady is very lucky to be looking at her mobile phone. I am not looking at my mobile phone; I am fairly focused on the debate in hand. [Interruption.] I am going to focus on the sanctions that we announced yesterday and the statutory instrument that the House approved.

To go back to my last point, no UK individual business will be able to deal with them until they have returned to Ukrainian control.

[Jonathan Edwards]

Will the Minister give way?

[Amanda Milling]

I will make progress, if the hon. Gentleman does not mind. I think I have been pretty generous so far.

Over the coming weeks, we will extend the territorial sanctions imposed on Crimea to territory occupied by Russian forces in the so-called breakaway republics of Donetsk and Luhansk. We will also sanction those Members of the Russian Duma and Federation Council who voted to recognise the independence of Donetsk and Luhansk, in flagrant violation of Ukraine’s territorial sovereignty.

This will not be the end. Yesterday’s announcement was just the start of our upward ratchet.

[Rushanara Ali]

The Minister has repeated the points made yesterday about sanctions against banks. Can she explain to the House what her Government will do to sanction the large state-owned banks? If we sanctioned Sberbank, VTB and Gazprombank, for example, as well the non-state owned Alfa bank, it would actually have a serious impact on the Russian Government. At the moment, we are neither here nor there.

[Amanda Milling]

I am not going to speculate on further sanctions. That is normal, standard Government policy, because to do so would undermine future sanctions. All I will say is that this will not be the end. Should Russia stage any further invasion into Ukraine, we will not hesitate to implement a comprehensive and unprecedented package of sanctions in close co-ordination with allies around the world.

[Wayne David (Caerphilly) (Lab)]

Will the Minister give way?

[Amanda Milling]

If the hon. Gentleman does not mind, I would like to make a little progress.

That package of sanctions will include measures to stop the Kremlin’s access to UK financial markets for sovereign debt, which means the Russian Government will be unable to access UK services to raise capital through the issuing and trading of sovereign debt. These measures will curtail the ability of the Russian state, and Russian companies, to raise funds on our markets, and will further isolate Russian banks’ ability to operate internationally. We will also introduce measures to limit Russia’s ability to trade internationally, and to degrade the development of its military industrial base for years to come. We will keep ratcheting up the pressure, targeting more banks, elites and companies that are of significance to the Kremlin.

[Jonathan Edwards]

rose—

[Wayne David]

rose—

[Amanda Milling]

I will give way to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), because he has been quite persistent.

[Jonathan Edwards]

I am grateful to the Minister. Is there not a danger that the UK has taken a peashooter to a bazooka contest? As we are targeting a few individuals and a few peripheral banks, the Kremlin can sit back and allow oil and gas prices to rise, which will hit every single household in the UK.

[Amanda Milling]

I thank the hon. Gentleman for his intervention, and also for his persistence. As I have said, this is the first tranche of measures, and we are prepared to go further.

In conclusion, as we have shown consistently in recent years, and in recent days, the UK takes the threat of international illicit finance, including that from Russia, extremely seriously. We have taken decisive action to demonstrate that corrupt elites and individuals who seek to exploit our financial systems to hide their illegitimate wealth are not welcome in the UK, and we can and will go further to ensure that the UK is safeguarded from these threats.

[Several hon. Members rose—]