Sanctions: Russia

Hamish Falconer Excerpts

Monday 9th September 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Hamish Falconer)]

I beg to move,

That the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2024, (SI, 2024, No. 834), dated 29 July 2024, a copy of which was laid before this House on 30 July, be approved.

The instrument, which amends the Russia (Sanctions) (EU Exit) Regulations 2019, was laid before Parliament on 30 July using powers provided by the Sanctions and Anti-Money Laundering Act 2018, and entered into force on 31 July. For clarity, the instrument was first laid on 24 May under the previous Government. This Government support the aims of the instrument, so we revoked and re-laid it to provide additional time post election for the required parliamentary scrutiny. There are no amendments to the policy in relation to Russia sanctions, and the substance of the instrument remains the same.

The United Kingdom’s commitment to Ukraine is iron-clad. In July, the UK contributed £40 million to NATO’s comprehensive assistance package for Ukraine, which ensures that Ukraine will access vital assistance for counter-drone technology, de-mining of reclaimed land, and the medical rehabilitation of injured Ukrainian personnel. Ukraine has placed new orders for ammunition worth £300 million through the international fund for Ukraine, which is administered by the UK.

Sanctions, too, are a crucial tool to weaken Russia’s ability to attack Ukraine. In July, the UK hosted the European Political Community at Blenheim Palace, where more than 40 countries signed a call to action to tackle Russia’s so-called shadow fleet: a fleet of ageing oil tankers, which use deceptive shipping practices and substandard insurance to attempt to undermine sanctions on Russian oil. At the event, the UK spearheaded action against the shadow fleet when we sanctioned 11 oil tankers. Through this action, we continue to demonstrate the UK’s steadfast commitment to Ukraine and underline our leading role in eroding Russian oil revenues.

Targeted sanctions against oil tankers have had a material and immediate impact. UK sanctioned tankers have been left idling, knocked out of the Russian oil trade and for the most part unable to load new cargoes. The instrument provides the basis for those sanctions, and has enhanced the UK’s ability to respond to Russia’s increasingly desperate and reckless attempts to undermine our and our partners’ sanctions.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister, welcome him to his place, and wish him well in his role.

I have been sanctioned by China and Russia, along with many others in this House—it is almost a badge of courage—but that is not the issue. My understanding of today’s sanctions is that businesses and those who have super yachts will be impacted directly, but that is all that the instrument means. If that is the case, will the Minister ensure that our sanctions have enough teeth to bite, and to be painful?

[Hamish Falconer]

I thank the hon. Member. If he allows me, I will go a little further into the introductory remarks, which I hope will specify why this afternoon’s measures will provide greater teeth. I hope that will answer his concerns, but if it does not, I will return to him.

The instrument, as well as increasing the effect on shipping, also broadens the designation criteria under the Russia regime. It expands our powers to target those who provide financial or material support to Russia’s war machine. That could include, for example, foreign financial institutions that facilitate significant transactions on behalf, or in support, of Russia’s military industrial base. That is in line with steps taken by partners and the G7’s commitment to curtailing Russia’s use of the international financial system to further its war in Ukraine.

Let me turn now to the measure about which the hon. Member for Strangford (Jim Shannon) asked. The instrument adds new relevant activities to the existing power in the Russia sanctions regime under regulation 57F—“specification of ships”—to provide the criteria to sanction individuals’ ships. The amendment provides that a ship may be specified by the Secretary of State where there are reasonable grounds to suspect that it is, has been or is likely to be used for any activity whose object or effect is to destabilise Ukraine, to undermine or threaten the territorial integrity, sovereignty or independence of Ukraine, or to obtain a benefit from, or support, the Government of Russia. That includes where a ship is involved in carrying dual-use or military goods, oil or oil products that originate in Russia, or any other goods or technology that could contribute to destabilising Ukraine or to undermining or threatening the territorial integrity, sovereignty or independence of Ukraine.

Where a ship is specified under regulation 57F, it will be subject to measures in regulations 57A to 57E—the shipping sanctions. Where those sanctions apply, a specified ship is prohibited from entering a port in the UK, may be given a movement or a port entry direction, and can be detained or refused permission to register on the UK ship register—or, indeed, have its existing registration terminated. Additionally, UK persons and persons in the UK cannot provide funds and financial services, including maritime insurance, or brokering services, in relation to specified ships that are transporting certain oil and oil products, and cannot use specified ships to supply or deliver Russian oil and oil products, regardless of the price of the oil on board.

Once again, the UK has already specified ships using that enhanced power. The previous Government specified six vessels on 13 June. In July, this Government specified 11 vessels that were operating as part of Russia’s shadow fleet. That fleet attempts to undercut our sanctions, undermines the maritime rules-based order, and presents an environmental and maritime security threat to coastal states.

This statutory instrument also amends regulation 6 of the Russia sanctions regime. That regulation provides the criteria for the designation of individuals or entities for the purpose of an asset freeze and other relevant measures. Specifically, the instrument adds additional activities for which a person may be designated, including where individuals or entities provide financial services or make available funds, economic resources, goods or technology to persons involved in obtaining a benefit from, or supporting, the Government of Russia. In practice, that widens the set of actors and enablers that can be targeted for providing financial and material support to Russia and its war machine as Putin continues to prosecute his illegal war in Ukraine.

The instrument also consolidates powers under the Russia regulations to designate individuals or entities involved in the destabilisation of Ukraine. Specifically, the additional activities that the instrument adds to the designation criteria make possible the designation of persons who have owned or controlled entities involved in destabilising Ukraine, as well as individuals who work as directors or managers of such entities.

In the plainest language—because that was the language that the hon. Member for Strangford used—the instrument enables us to target the ship, as well as the individuals or entities involved with the ship. We found, through the previous regime, that the ship itself is the sharpest area of vulnerability, so the International Maritime Organisation number of the ship itself is where sanctions have greatest effect, and that is the effect that we are using today.

[Jim Shannon]

I understand; the Minister has laid out the system very simply. It applies to the EU, but we all know that those who seem to break most of the rules are India and other countries across the world that are out to buy Russian oil. If that is the case, what discussions have been had to ensure that India does not contravene what we are trying to do through these sanctions?

[Mr Speaker]

I say gently to the Minister that we have only an hour and a half for this debate. I know Members want to speak and I do not want to take any of that precious time away.

[Hamish Falconer]

I defer to your good guidance, Mr Speaker.

In conclusion, European security is a key focus of this Government. Supporting Ukraine remains vital to that end, and the UK is committed to doing so. I am sure that, when I come to answer hon. Members’ questions, I will have an opportunity to say a little more about how we work with our partners, including India, on these matters. We will work with international partners to ensure that the values of democracy, human rights and international law are maintained. This legislation and subsequent sanctions made under it show our commitment to Ukraine as it defends its freedom in the face of Russian aggression. British support remains iron-clad. I commend the regulations to the House.

[Mr Speaker]

I call the shadow Minister.

--- Later in debate ---

[Hamish Falconer]

I thank Members for their contributions to this debate. In particular, I thank the shadow Minister, the hon. Member for Rutland and Stamford (Alicia Kearns), for her kind words about my service in the Foreign Office. Indeed, I pay tribute to hers: she did fine work on Iraq and Syria, and I was glad to work with her. I look forward to working with all of this House on matters of national security.

I welcome the maiden speeches that were made. My hon. Friends the Members for Makerfield (Josh Simons) and for Macclesfield (Tim Roca) were both funny, which is useful when I am being so dour at the Dispatch Box. I noticed that the hon. Member for Great Yarmouth (Rupert Lowe) paid tribute to particular kinds of experience —military, business, and so on—but he did elide the diplomats. Given that there are many of them in the Box, I would like to say that he should take a look at the good work of the Foreign Office, because there are many hard-working officers who do their very best, and I am grateful to everybody in the House for recognising that.

If I may, I will come back to some of the points raised by the other parties. I regret that I may have to write to the hon. Member for Arbroath and Broughty Ferry (Stephen Gethins) about the specific Scottish issue.

[Stephen Gethins]

I am grateful to the Minister for saying he will respond to me in writing, which I accept, but I should also be clear—this was the mistake that previous Prime Ministers made—that Scottish limited partnerships are not a Scottish Parliament issue, but a Westminster reserved issue.

[Hamish Falconer]

I understand that, and I agree. I welcome the importance that the hon. Gentleman placed in his comments on working together. I also believe that, on many of these issues, we are better together.

Some important points were raised about our partners in India and China in relation to Russia. I say to the shadow Minister that any evidence of Chinese companies providing military support to Russia would be damaging to China’s international reputation, given its strong position on not being involved in the conflict. We will not hesitate to take action against anyone supplying and funding Putin’s war machine.

On India, which was raised by the hon. Member for Honiton and Sidmouth (Richard Foord), we regularly raise Russia’s actions in Ukraine with India. We did so most recently in a conversation between the Foreign Secretary and the Indian Foreign Minister. We highlight the importance of tackling the shadow fleet. India is a key partner, and we are committed to working together across a whole range of issues. We underline to them how unreliable an energy partner Russia would be.

The hon. Member for Rutland and Stamford raised the tragic forceful deportations of, we believe, almost 20,000 Ukrainian children, which is a matter of real concern to me and the rest of the ministerial team. As a member of the jointly led Canadian Ukrainian initiative, along with 28 other states, the UK is providing funding to support the rehabilitation of children.

My hon. Friend the Member for Glasgow South (Gordon McKee) made some kind comments. I am unsure whether they were for Minister Doughty or for me, but, as I am here, I will certainly accept them. He made important points about microchips and various other dual-use technologies on which we are taking action with others to try to address. In the interests of the House’s time, I will write to him to give further detail.

On the wider point about circumvention, I am grateful to the House for its support and recognise the widespread concern about other countries doing otherwise. We are sending senior officials to the United Arab Emirates, Kazakhstan, Uzbekistan, Kyrgyzstan, Georgia, Armenia, Turkey and Serbia to highlight circumvention risks and to offer technical support. We recognise that these issues are global in nature, so we have designated individuals in Belarus, China, Iran, Serbia, Slovakia, Switzerland, Turkey, the Emirates and Uzbekistan. I will no doubt have another opportunity to update the House on our work in this area in due course. I thank the House for its support and urge it to support the motion.

Question put and agreed to.

Resolved,

That the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2024, (SI, 2024, No. 834), dated 29 July 2024, a copy of which was laid before this House on 30 July, be approved.