Frozen Russian Assets: Ukraine

Iain Duncan Smith Excerpts

Monday 6th January 2025 Commons Chamber

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing the debate. I am sad that it has been reduced from three hours to an hour and a half, because it is an important debate, and I hope that the Minister has time to answer some of the questions.

In reality, we are in a peculiar position—I do not blame this Government, because the previous Government were in the same position—whereby we are, as the hon. Member for East Renfrewshire (Blair McDougall) just said, trapping ourselves in the same arguments that are meant to release us to get after those who have done egregious harm to others through an illegal invasion of another territory. That is clear, and it is why we should be permitted at this stage, where necessary, to seize those frozen assets—it is very simple. There is not time to go through all the legal arguments, but there are good reasons why we would be able to act in that way, and I would be happy to write to the Minister about them.

First, instead of claiming that international law prohibits us from doing those things, it is important to remember that the basis of international law is pretty fluid, because it is hugely influenced by the politics of the day—otherwise, we would still be trapped in what happened in 1950, even though things have moved on. That is another point: the British Government should not use those arguments against action; they should lead on making the necessary changes where possible.

My main point is that when it comes to freezing and sequestering assets, there is a good point at the end of it all. Hopefully, we will soon face an end to this war and the brutality, executions, murder and ghastly damage that Russia has inflicted on Ukraine. Ultimately there must be reparations by the country that invaded Ukraine, which is Russia. The trouble is we know very well that if we impose those reparations, Russia will never pay any of them, so the only hope we have is to seize state and oligarch assets and to say that they can be held in payment of the necessary reparations, and will be released as reparations are paid in accordance with what the UN says at the end of the war. That is one way of using frozen assets: seizing them and saying, “You will get these back, but only when you have stood up and done what you’ve been told to do after this aggressive war.”

If Members look carefully, they will see that we are already considering taking the money earned from assets in banks. That set of assets and their income cannot be separated. At the moment, we are talking of separating the income from the assets, as if there is some fundamental difference between who owns what. While the state has an asset banked, it also owns the money earned from it. We cannot just say that we might do one but not the other. If we seize what is earned, we should recognise that that allows us also to seize the asset that is earning that money in the bank. There is no reason why we should not pursue that, and I would be grateful if the Minister responded on that point in due course.

I do not believe that there is in international law any obligation or block on doing any of this. These arguments are being had at the moment in various court cases. By the way, we are not talking about the UK unilaterally seizing assets. Canada, which has already been mentioned, and the US have already passed legislation to give them permission to seize those assets—the Anglosphere is beginning to come together on this one. There is foot-dragging in Germany and France, and very much in Belgium. We know why: Belgium has a huge number of Russian assets and seems to be somewhat troubled by the idea of taking them over.

I say this in cross-party spirit. Surely now is the chance for the United Kingdom Government—my Government, because they were elected—to take the lead in arguing now for us to use these assets against future reparations and mend what has gone on so appallingly in Ukraine. I urge the Government to step up, take that lead and give the rest of the developed world the chance to get that money into the places where it can do the most good.

--- Later in debate ---

[Stephen Doughty]

We are all concerned to get Ukraine the support that it needs, and as quickly as possible. It is wrong to speculate on what the future Administration might choose to do. Let us remember that the package came through from the United States with strong bipartisan support, and much of the support to Ukraine even before the 2022 invasion came from the first Trump Administration. Let us be clear that there is support there and that there is unity across the Atlantic on support for Ukraine.

[Sir Iain Duncan Smith]

President Trump has already said that he will continue with the payments and support. May I ask a simple question? We know from the Financial Assistance to Ukraine Bill that recently passed through the House that using the profits of assets will help to bring up to $50 billion of support to Ukraine. A previous legal commitment has been broken, which could not have been done before without prior legislation; assets have never been separated from profits. The Minister does not have to answer the question now, but will he go back to the Foreign Office with a reminder that the assets are now left available for seizure?

[Stephen Doughty]

I thank the right hon. Gentleman for his comments and hope that he will write me the letter that he promised in the debate. I will read it with great interest. He is extremely well informed on these matters and he knows that I have taken a keen interest in them over some time. As I said, we will consider all lawful measures that we can possibly take to ensure that Ukraine gets the support it needs. I will listen closely to his advice and, indeed, that of many others. He would not expect me to comment on any legal advice or technical advice under consideration.

I am conscious of the time and the need to move to the next debate, but I genuinely want to thank all right hon. and hon. Members. Hugely important points were made. It is clear that there is unity in the House that we all want to get Ukraine the support that it needs, and to get that there as quickly as possible. I am convinced that we are doing everything we can on both sides of the equation—choking off Russia’s ability to fund its war machine on the war economics side, which was mentioned, as well as getting Ukraine the support that it needs. We will continue to do that.

Our support is ironclad, and we have made that clear to President Zelensky. I was with Foreign Minister Sybiha a number of times before Christmas, and he is absolutely clear that the UK’s support is critical and that it must continue. We are glad to give him confirmation of our resolute support.