Sanctions: Russia

Debate between Hamish Falconer and Jim Shannon

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.