Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) (Amendment) (EU Exit) Regulations 2022

Baroness Northover Excerpts

Monday 5th December 2022 Grand Committee

As I said at the beginning, the proposed amendment is a technical fix; it does not change His Majesty’s Government’s approach to this issue. Ultimately, the blocking regulation has a single and non-contentious objective: to ensure that commercial decisions by UK persons are not subject to the extraterritorial laws of other countries which exceed the boundaries of the international law on jurisdiction. The instrument laid before this Committee ensures that the 1996 order, as amended, remains fit for purpose. I beg to move.

[Baroness Northover (LD)]

My Lords, I thank the Minister for that explanation, which I understand. There seems to be a theme in these SIs this afternoon. The Explanatory Memorandum explains that the change is needed to

“correct deficiencies arising from the UK’s withdrawal from the EU”

and to

“ensure consistency across the statute book”.

I must say that I smiled when I read this. Does it give the Minister pause for thought? As was referred to in the previous debate, who knows how many SIs would need to pass through Parliament to meet an arbitrary deadline for the removal of vast amounts of EU-derived legislation if we are dealing with this kind of problem this afternoon? What inconsistencies, deficiencies and unintended consequences does he think that would have while departments are also trying to get on with their primary purposes? My sympathies—as also expressed by the noble Lord, Lord Benyon—are with the officials having to pump these things out and deal with all the corrections, as we saw with the last group of statutory instruments and as we will see with the following ones.

However, since we are discussing this, I ask the Minister: do we remain totally in line with the EU in relation to sanctions, given that we know that sanctions applied by a number of jurisdictions are more effective than acting alone? The noble Lord, Lord Ahmad, readily agrees to and rightly emphasises that.

We know that, in relation to Cuba and Iran in particular, we are not always in alignment with the United States. That is one reason why we need this SI. We also know that sanctions applied to companies by the United States have a chilling effect far further and that even if the UK exempts companies from sanctions, which is appropriate, their concern about ending up in the US courts can mean that they nevertheless pay particular heed to the US sanctions. That is not really dealt with by this tinkering with the deficiency.

Can the Minister say what conversations are occurring in regard to Cuba, for example? There was a significant thawing of relations between Cuba and the United States in recent years, particularly since the end of Castro’s period. I am slightly surprised that we need to deal with some of the restrictions put in place in earlier years.

Can the Minister also update us in relation to Iran? That is another area where we have not always been in alignment with the United States. For example, we and the EU support the Iran nuclear deal that President Trump pulled out of. I wonder whether we are more aligned now as attempts are made to reinstate that nuclear deal, which was negotiated primarily by the noble Baroness, Lady Ashton, within the EU.

As I said, my sympathies are very much with the officials having to deal with this, but it is nothing by comparison with what the Government apparently wish to do over the next year. I would like the Minister to comment on that and I look forward to his general response.

[Lord Lennie (Lab)]

My Lords, I thank the noble Viscount, Lord Younger, for his characteristically thorough and detailed explanation of this regulation before the Committee. I gave notice to him that I would be brief, and I intend to keep to that.

As we have heard, this SI updates the cross-reference in Article 4(4) of the 1996 order to reflect the wording in Section 30(3) of the 2015 Act, as amended by the EUWA 2018, and remove the reference to the EU countermeasures regulation. That is the sexy bit of what I am going to say.

Obviously, this side of the Committee supports the regulations, but I have a couple of questions for the Minister, if he would care to speculate. First, what would the implications have been if this had not been fixed—can he speculate on that? Secondly, are any further changes expected or anticipated, especially given that the previous update to legislation seemed to have missed these specific updates which are now before the Committee? With that, I shall leave it to the Minister to consider briefly, and perhaps he can give us a response.