Export Control (Amendment) (No. 2) Order 2011

Baroness Falkner of Margravine Excerpts

Tuesday 29th March 2011 Grand Committee

[Baroness Falkner of Margravine]

My Lords, I start by welcoming the noble Lord, Lord Green of Hurstpierpoint, to these important but less dramatic moments. I understand that his debut was in Questions in the Chamber the other day and I am very sorry to have missed that. I also welcome him in his capacity to that very fine and sensitive line that exists between business, trade and foreign policy with its ethical umbrella that we attempt to live up to in our dealings with all of these matters.

This order has its origins in the United Nations Security Council Resolution 1970 and is subsequently reinforced through Resolution 1973 as well as EU directives to comply with the new sanctions regime in Libya. There was a time in the 1970s and 1980s when economic sanctions were seen as the poor cousins of military sanctions that were deemed to be the only thing that really worked. I am delighted to say that such is the power of capital and capital flows in a globalised world that they are now an essential element of what we see as specific and targeted mechanisms, designed not to impose real hardship on mass populations but rather to prevent specific named individuals, their friends and their businesses from carrying out illegal acts in support of reprehensible objectives.

In pledging our support for these measures, I have a few questions that I hope the Minister will be able to answer. Some might go slightly wider than his brief but I will put them on the record in any event. The first relates to the activities of the Libyan Investment Authority and its assets held by UK banks. Is the Minister confident that we now have clarity on the value of these and of our banks’ co-operation with the sanctions regime? On a related point, have the assets of those running the Libyan Investment Authority, such as Mr Mustafa Zarti, been frozen in the UK? We know that other countries such as Austria have moved to freeze them and we also know that the Sanctions Committee of the United Nations formed under Resolution 1970 is moving to publish a new and updated list. I hope that these named individuals who are extremely close to the Gaddafi family will find that they cannot usurp the assets of their fellow citizens in that manner. Are we also clear that Libya’s stakes in other UK companies are subject to being frozen, including the subsidiaries of those companies if the companies are designated for such purposes? Finally, Libya appears to hold the Middle East’s fourth largest gold reserves. Can the Minister tell us if HM Treasury is in discussion with its partners in other jurisdictions to ensure that Libyan gold cannot be sold on the international gold markets until such time as UNSCR 1970 and 1973 are complied with? Apart from those points, we are delighted to support these smart sanctions and hope that they will have the effect that they are intended to in the longer term.

[Lord Young of Norwood Green]

My Lords, I also welcome the noble Lord, Lord Green. I was not there on the previous occasion. I must admit that I did not expect to be involved in the Libyan situation, but one never knows what happens in these circumstances. The noble Lord answered most of the questions I had. The question of why we did not include coins as well as notes in the first one was satisfactorily answered when he pointed out that there was a first contract for £900 million and then another in relation to the coin contract.

Can the noble Lord say whether he thinks there will be an impact on these businesses? I do not question the need to do this—I agree with the noble Baroness, Lady Falkner, that this is a smart sanction and, indeed, a necessary one, although I concur with the further points that she made. The noble Lord also gave a general indication which answered a question I wanted to pose as to what happens to the seized assets. I saw a figure of up to £2 billion worth of seized assets and he indicated generally that they would be kept until such time as they could be transferred. Will he expand a bit on that? Other than that, I also welcome this legislation.