Brexit: Sanctions Policy (European Union Committee Report)

Baroness Verma Excerpts

Thursday 3rd May 2018 Lords Chamber

Moved by

[Baroness Verma]

That this House takes note of the Report from the European Union Committee, Brexit: sanctions policy (8th Report, HL Paper 50).

[Baroness Verma (Con)]

My Lords, I am grateful for the opportunity to debate the report Brexit: Sanctions Policy this afternoon—actually, it is still morning. In the run-up to the referendum on the UK’s membership of the EU, foreign policy issues were rarely discussed, but working in partnership with our European neighbours on foreign and security policy is of vital importance to the UK’s national interest. Sanctions—the subject of today’s debate—are a central tool of national security. The development of a new framework for engagement and co-ordination with the EU, and other international allies, on sanctions is an important and timely topic for consideration by this House. As the chair of the EU External Affairs Sub-Committee, I first extend my thanks to the members of the committee for their important contribution to this report. I also thank the secretariat to the committee, Eva George, Julia Ewert and Lauren Harvey, for their assistance with the inquiry and preparation of this report.

When we leave the EU, we will also leave its framework for designing and imposing sanctions, such as arms embargoes, asset freezes, visa and travel bans and other sectoral restrictions. EU sanctions regimes currently account for the majority—around three-quarters—of all the sanctions regimes that the UK implements. These measures are agreed unanimously by all 28 EU member states and applied across the bloc. Unilateral sanctions have only a limited effect. The impact of sanctions is increased considerably when implemented together with other like-minded nations. Multilateral sanctions both strengthen the signal delivered to a target state or entity and deliver the maximum possible economic impact. The events of recent weeks, from the provocations of Russia to the worsening situation in Syria, underline the vital importance of working in partnership with our international allies.

Our inquiry considered sanctions policy—the process of designing measures to achieve the UK’s foreign policy and national security goals. We did not consider in detail the new UK legal regime, as proposed in the Sanctions and Anti-Money Laundering Bill, being considered in the other place. We found that being part of the collective EU sanctions regime has helped the UK to achieve its foreign policy and national security goals. There have been some important examples in recent years. For example, EU sanctions on Iran played an important role in bringing that country to the negotiating table over its nuclear programme, and EU sanctions on Russia continue to demonstrate that the EU remains united in its condemnation of the annexation of Crimea and destabilisation of Ukraine. The UK has been hugely influential in the design of EU sanctions policy. It has benefited from being embedded within a formal structure for sanctions policy co-operation with the 27 other EU member states. The UK has enjoyed frequent informal interactions in the margins of those meetings.

We concluded that, although we will be leaving the EU, the common interests and threats facing the UK and the 27 other member states will not change fundamentally. We will therefore need to find ways to co-ordinate our sanctions policy with the EU as well as with other like-minded partners. One option would be to align with EU sanctions, an approach often taken by Norway or Switzerland. While that would preserve a united approach to sanctions between the EU and the UK, we would not have influence over the design of those sanctions or have any voting rights. We would simply be implementing EU restrictive measures.

A second option would be to seek to influence and engage with the EU sanctions regime from the outside—the approach taken by the US. We found that informal engagement with the EU on sanctions policy could of course be very valuable, but believe it would be no substitute for the formal influence and decision-shaping role that the UK currently enjoys as an EU member state. We proposed that, if the UK does not seek or is not able to secure participation in the common foreign and security policy after Brexit, the Government should propose a UK-EU political forum for regular discussion and the co-ordination of sanctions policy.

I am pleased that during the course of the inquiry, and in their response to the report, the Government acknowledged the value of international co-operation to the effective use of sanctions. However, their response did not specifically engage with the option of the UK aligning with sanctions regimes agreed by the 27 EU member states after Brexit. I invite the Minister to comment specifically on whether the UK is considering this option after we leave the EU and to give the Government’s assessment of it. If not, what do they see as a preferred option?

In evidence to the committee, the Government told us that they were confident that the UK would remain influential within EU 27 sanctions discussions. They stated their ambition of an unprecedented level of co-operation on sanctions policy with the EU after Brexit,

“beyond any arrangement the EU has now with other third countries”.

What would that arrangement look like, and what resources would be allocated to support it?

My noble friend will be aware of the concern expressed in our report that the Government could provide no detail on what such a “tailored arrangement” proposed for co-operation would involve. We are concerned that the goal of an unprecedented level of co-operation was an untested approach. Have talks on these issues begun and, if so, when will the Government provide evidence of such progress? In the Government’s formal response to the committee, there was no further indication of how this new partnership might be structured. We were left no clearer on the detail of the Government’s desired framework, nor on the proposals that they will be making to the EU as part of the negotiations.

I invite the Minister to explain in detail the Government’s aspirations for sanctions policy co-operation after Brexit, specifically including how a model of UK-EU sanctions co-operation based on two-way exchanges of analysis and information, as mentioned in their response to the committee, would operate in practice. I also invite him to comment specifically on the committee’s proposal that a UK-EU political forum for regular discussion and co-ordination of sanctions policy be established.

Finally, and more broadly, considering Article 122 of the draft agreement on the withdrawal of the UK from the EU, I invite the Minister to inform the House when he expects negotiations on the future of the UK-EU relationship in the area of common foreign and security policy to commence. Furthermore, I ask him to specify whether the Government will conclude an agreement on co-operation in this area that will apply during the transition period.

Sanctions policy is an important subset of our broader foreign policy. The UK’s influence on its international partners’ sanctions policy will depend on how far it is able to retain its authority and leadership on key foreign policy dossiers after Brexit. It is critical that the Government engage proactively and constructively with our EU partners in the forthcoming negotiations on foreign policy co-operation, recognising that the interests and threats we in the UK face are common to Europe as a whole and are best tackled together. All the evidence that provided the body of our report demonstrated the real and strong influence we carry as a collective body. Therefore, it is in our interest as a nation not to lose that voice. I beg to move.

--- Later in debate ---

[Baroness Verma]

My Lords, I thank all noble Lords for their very thoughtful and measured contributions. There was a common theme from across the House. I think we were expecting the response from the Minister that we got. While I appreciate that he tried very hard to respond to our questions, I was not really satisfied. I feel that we are still where we were—waiting for a response from the Government to see where we next journey once we exit the European Union and what that structure will look like. I hope that my noble friend will urge colleagues to take this on board. It is important that we do not fall out of the strongly influential position we hold or out of the great friendships with our European partners.

I remind my noble friend, who said that we will continue to build strong relationships with the Commonwealth and the UN, that we are members of those organisations already, as we are of the EU. I strongly hope that we can build better and closer relationships, particularly with the Commonwealth, but we need to make sure in building those relationships that we do not forget we have a relationship already in existence. This relationship works to make sure that countries not behaving in a way that is acceptable to all of us have sanctions put in place against them. That is often done by a very strong collective voice.

Our committee worked really hard to ensure that we were of assistance to the Government in looking at areas such as these, which have not have great debate but which are crucial not just for the City of London but for all of the UK and our partners in Europe. I hope very much that the Government will look very closely at what we are asking from this debate today. From across the House, there was a common theme—I do not think it was party political—which was our fear of not being able to be the great influencer at the table, and we urge the Government to take note.

I will also say to people who listen to debates in the House of Lords and comment on our suitability to be present, that this is why this House is so great. It looks at issues such as this in great detail to ensure that we have debates on crucial matters that impact not just on us here in the UK but on many people across the globe. On that note, I beg to move.

Motion agreed.