Sanctions

James Cleverly Excerpts

Tuesday 22nd February 2022 Commons Chamber

[The Minister for Europe and North America (James Cleverly)]

I beg to move,

That the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 123), dated 10 February 2022, a copy of which was laid before this House on 10 February, be approved.

The statutory instrument before us was laid on Thursday 10 February under the powers provided by the Sanctions and Anti-Money Laundering Act 2018—the sanctions Act. We laid the instrument to strengthen our response to the grave situation we see in Ukraine.

My right hon. Friend the Prime Minister has set out today the implications of Russia’s actions, and he has also set out our initial response via the sanctions regime. Russia’s actions are threatening innocent people in Ukraine, violating its sovereignty and undermining its security and stability, as well as the security and stability of Europe. President Putin must be halted in those ambitions, and we will use every lever under our control to that end. We will continue to work with our allies and partners to force him to halt the path of aggression.

We are acting in four ways. First, we are providing direct support to Ukraine, and in our view this is a moral duty. We have already sent defensive weapons to Ukraine, and we have trained over 22,000 troops through Operation Orbital. We are considering what further acts of support we can provide, including through our new trilateral partnership with Poland and Ukraine. We are also providing economic support. Last week, my right hon. Friend the Foreign Secretary announced that we will be increasing our support to Ukraine by £100 million. We are working closely with partners to ensure that we can quickly provide emergency humanitarian assistance if that is needed. Sadly, we could see a large-scale loss of life, a large-scale displacement of people and the destruction of vital civilian infrastructure, including schools and hospitals, so it is vital that the humanitarian response is ready to go, and we will continue to lead on this effort.

Secondly, we are providing political support to Ukraine, and we are working diplomatically to condemn Russia’s aggression at every level.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I am grateful that the Minister has emphasised the need for humanitarian support very early in this debate, because we are dealing with punitive actions. The Prime Minister himself said in his statement that, in a worst-case scenario, 44 million people could get pulled into a very aggressive war, which would mean a refugee crisis. What specific support are the British Government and their partners offering to provide to the neighbouring countries that would have to deal with the displacement of such individuals leaving Ukraine?

[James Cleverly]

I am unable to give specifics at this point, but we are liaising closely—I have spoken to our ambassadors in neighbouring countries, and the Foreign Secretary has been holding regular conversations with her opposite numbers in the region and beyond—and we are ready to respond with what could be a range of options depending on whether we, as the international community, are successful or otherwise in deterring further incursions into Ukraine.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

May I follow up the question that was well posed by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) earlier? On the package of sanctions announced today, what specifically is that designed to deter, and what is the ultimatum that is being sent to the Russian Government today?

[James Cleverly]

I will come to more details of the sanctions package and what we hope to achieve with it, but ultimately we are looking to prevent further territorial encroachment and aggression into Ukraine, and to get Russian troops to withdraw back to Russia, to de-escalate and to move away from the Ukrainian border. As I will say later in my speech, if the House gives me the opportunity to progress, we are working and co-ordinating closely with our international partners in our sanctions response to ensure maximum effectiveness.

[Layla Moran (Oxford West and Abingdon) (LD)]

I am grateful to the Minister for giving way, because this point is very relevant. I do not mean to put him on the spot—I have the advantage of looking at what the news has just said—but Putin has just now recognised the whole of the Donbas as independent, going beyond the ceasefire line and into the territory now held by the Ukrainian Government. Therefore, what we have announced is already out of date. I appreciate that the Minister may need to confer, but are the sanctions in these regulations appropriate? What is the trigger point for an escalation of sanctions? It was very clear that this House was not satisfied with what was brought forward earlier today.

[James Cleverly]

The instrument that we are discussing is a framework that allows us to deploy a range of measures. As I will say later in my speech, we are also giving ourselves further legislative vehicles through which we can impose punitive sanctions on Russia.

[Mr Toby Perkins (Chesterfield) (Lab)]

Everything we have heard today has suggested that the Government have started from the point of saying, “Here’s some sanctions. We know you’re going to do more. And when you do more, we’re going to do more.” The message coming from this place could not be much feebler. I appreciate what the Minister has said about the conversations that he is having with partners across the west. Will he ensure that they know that the resolute opinion of this House is that the sanctions that have happened so far are only a start, and that much stronger action needs to come for the sake of Ukraine and for the sake of President Putin getting that message?

[James Cleverly]

Earlier today my right hon. Friend the Prime Minister spoke in praise of the unanimity of voice that we experienced in the House, and I echo that. I give the hon. Gentleman, the hon. Member for Oxford West and Abingdon (Layla Moran) and other right hon. and hon. Members the absolute assurance that we regard these measures as the start of a range of sanctions that we can escalate in response to what Russia does. Our desire is to deter further aggression. We said right from the start, and in the intelligence that was declassified and put into the public domain, that we were highly concerned that an encroachment purely into the Donbas was not the ultimate limit of Putin’s aggressive ambitions, and that we would act to try to deter further aggression.

[Chris Bryant (Rhondda) (Lab)]

Will the Minister give way?

[James Cleverly]

I am going to make some progress.

I assure the House that we will use this and other sanctions legislation that we might bring forward to deter further actions and to encourage Russia to de-escalate.

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

I am very content with the leadership shown, but the point I want to understand more clearly is: is the idea to deter President Putin from doing more or to get President Putin to step back? I am not all together clear. The force of the sanctions is dictated by what we are trying to do, and I would love to hear what we are actually trying to do.

[James Cleverly]

My right hon. Friend makes a good point. Let me make it absolutely clear: our aim is to prevent further aggression, for Russian troops to withdraw from where they have advanced, and for them to move away from the Ukrainian border and remove that threat from the Ukrainian people. It is a series of events that I will explain further if the House gives me the opportunity.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

My right hon. Friend will know from his career in the Army that the principle of “clout, don’t dribble” is an important one to ensure that the opposition understands that we are serious. Does he agree that the ratchet could be misinterpreted as giving a free pass at an early stage, rather than drawing a clear line that needs not to be crossed?

[James Cleverly]

My hon. and gallant Friend makes a point I fully understand, and I can assure him the Government fully understand it too. The pace at which we ratchet up our sanctions response in conjunction with our international partners is very much to not just send a message, although sending a message is important, but to ensure the sanctions are meaningfully felt by the Russian leadership and those people around Vladimir Putin funding him and propping him up.

[Chris Bryant]

Will the Minister give way?

[James Cleverly]

I am going to make some progress. Trust me, I will give the hon. Gentleman an opportunity to intervene later.

We are providing political support to Ukraine. My right hon. Friend the Foreign Secretary is in close and regular contact with Ukrainian Foreign Minister Dmytro Kuleba and other friends and allies around the world, and I pay tribute to our ambassador, Melinda Simmons, and her team, who remain in Ukraine operating from the British embassy office in Lviv providing what support we can for British nationals still in the country.

Thirdly, we are leading on the strategic communications response to Russian actions. At every stage, working closely with our international partners, we have exposed President Putin’s plans, lies and false flags activities, and we have exposed them for what they are: a pretext for aggression and an attempt to justify what is in every respect unjustifiable. Last week I highlighted the falsehoods put forward by Vladimir Putin at the United Nations Security Council.

[Chris Bryant]

Will the Minister give way now?

[James Cleverly]

I will.

[Chris Bryant]

I am very grateful. One of the problems with the Government’s argument is that President Putin has already said the whole of the Donbas is now effectively to be either independent or part of Russia. Two thirds of that territory is currently held by Ukrainians and a third by separatists. That is an incursion already. It feels as if what we have announced today by way of sanctions is remarkably puny, yet it feels also as if we are not going to do anything more if the Russians just stick with this. Does the Minister not understand the anxiety there is, I think across the House?

[James Cleverly]

I have a huge amount of respect for the hon. Gentleman, as he knows—we speak when the cameras are not rolling—but I fear he is putting his prejudice ahead of the statement I am making, because were he to listen to the points I am making and allow me to get to the point in the speech where I am explicit about this, he would understand that the UK Government’s actions are not limited to what the Prime Minister has currently announced. He will hear that we are going to bring forward further legislation to further extend the measures available to us and that we are absolutely not ignoring the fact that there has already been Russian incursion into Ukraine, which we want to halt and reverse and then get those troops away from the Ukrainian border.

[Robert Jenrick (Newark) (Con)]

The Minister is being very generous in giving way. May I press him on this point? Many of us feel the package of sanctions announced today is comparatively modest. Is the Government strategy that further sanctions will come forward in the days ahead even if Vladimir Putin takes no further steps and acts of aggression against Ukraine, or is it that the further steps that are undoubtedly being planned by the Minister and colleagues within Government will come forward only should there be an additional ratchet in the level of aggression shown towards Ukraine?

[James Cleverly]

I thank my right hon. Friend for giving me the opportunity to make clear our position. If this has not become clear to the House, let me make it clear now: we intend to escalate these sanctions—to ratchet up these sanctions—in response to what has already happened in order to deter further aggression and in order to stimulate Putin to withdraw the troops from Ukraine, take them away from the border and send them back home to their families and barracks in other parts of Russia.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Will the Minister give way?

[James Cleverly]

I have got to make some progress, but I will give way again.

[Mr Djanogly]

I thank the Minister for kindly giving way. May I ask him to explain that point a little further? The items of sanction today were under the existing legislation, and what is being proposed today will enable further types of sanction. Obviously they will be worked on with foreign Governments, but will he also be looking at further sanctions from a UK perspective at the same time as looking at this with other countries?

--- Later in debate ---

[James Cleverly]

Yes. I am going to make progress, because some of the points raised in interventions will be covered in my speech. I do recognise the huge level of interest in the House from right hon. and hon. Members, and this will address a number of points raised.

Fourthly, we will use Britain’s economic and financial might to hit Russia’s economy hard. The new sanctions regime that the statutory instrument brings into place is a vital part of that, but it is not limited to that. The legislation follows the made affirmative procedure as set out in section 55(3) of the Sanctions and Anti-Money Laundering Act 2018. It amends the Russia (Sanctions) (EU Exit) Regulations 2019 and allows the Government to impose sanctions on a much broader range of individuals and businesses who are, or have been involved in

“obtaining a benefit from or supporting the Government of Russia”,

which includes those

“carrying on business as a Government of Russia-affiliated entity…carrying on business of economic significance to the Government of Russia…carrying on business in a sector of strategic significance to the Government of Russia”

and those who own, control or act as a director, trustee or equivalent of any of those entities. That is a huge scope of individuals and entities.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Last time I saw the Minister, he was about to enter the UN Security Council, and I thank him for how strongly he represented our country at that point.

Are the Government intending to release the Russia report on interference in UK democracy? Surely some of the names contained in it are exactly the people whom we should be sanctioning now. They previously interfered in our democracy and are clearly in hock to the Russian regime.

[James Cleverly]

As my right hon. Friend the Prime Minister said, we have brought forward measures that go further than the recommendations of that report. I will impose discipline on myself, even if the House is not going to impose discipline on itself, to stay focused on the statutory instrument.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

rose—

[James Cleverly]

At this rate of interventions, I do not think we will get there—

[Sir Iain Duncan Smith]

Before the Minister imposes his discipline, will he give way?

[James Cleverly]

I will give way first to the hon. Member for Glasgow South (Stewart Malcolm McDonald).

[Stewart Malcolm McDonald]

I am sure that what the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) would say is entirely agreeable, but can I ask the Minister specifically about what he just said about the statutory instrument? I am slightly concerned that the disinformation networks that Russia relies on—they are of strategic importance to it—including media outlets in this country, are not part of the package. Earlier the Prime Minister said, and admittedly it was correct, that whether RT can continue to broadcast is up to Ofcom, but surely we are all agreed that RT is not a normal news agency in any sense of the words as people understand them. How can we have a sanctions package that allows disinformation networks that are crucial to Russia to be dismantled in the UK?

[James Cleverly]

I share the hon. Member’s frustration about the level of disinformation put out through Russia Today. However, we should be very careful before we advocate that a Government should close down news channels that they disagree with. We have a well established and effective regulator, and I think the right thing to do is to rely on that regulator to do the job for which it was designed.

[Sir Iain Duncan Smith]

My right hon. Friend the Minister is making steady progress through his speech. I want to help him slightly, and I have a pen here in my right hand. There is one individual I have heard of before from my hon. Friend the Member for Isle of Wight (Bob Seely), who made a very good case. Will my right hon. Friend write the name of Vladislav Surkov into his statutory instrument? He is the right-hand man to Putin—I think my hon. Friend referred to him as Putin’s Rasputin—who has organised the separatist movement in the Donbas area and continues to do so. Will my right hon. Friend do that to ensure that at least one person responsible for what is going on is sanctioned? The pen is here; if he is able to do it, he can.

[James Cleverly]

I thank my right hon. Friend for his assistance. We are lucky that both officials in the Box and Hansard note takers in the Gallery have taken note of that individual. I remind the House that it is a long-standing convention that we do not discuss future targets of sanctions designation by name to prevent those sanctions potentially being less effective than they might otherwise be, but I can assure him and the House that that name has been noted.

[Chris Bryant]

Will the Minister give way?

[James Cleverly]

I will make progress.

In response to President Putin’s decision last night to recognise sovereign regions of Ukraine as what he claimed—but we do not agree—to be independent states and to order troops into those areas, my right hon. Friend the Prime Minister today announced the initial set of sanctions that with immediate effect will freeze the assets of five Russian banks. Four of those banks are involved in bankrolling the Russian occupation. They include Bank Rossiya, which is particularly close to the Kremlin, the Black Sea bank for development and reconstruction, IS Bank and Genbank.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I am very grateful to the Minister for giving way; he is being very generous. I am interested to know the criteria we have applied in choosing those five banks, which are relatively small. He talked earlier about sanctions on entities of economic significance. The big banks in Russia are Sberbank and VTB. Why have we chosen five small banks, rather than the two largest ones?

[James Cleverly]

I would make the point that the sanctions regime set out today is the initial range of sanctions. We reserve the right to extend the individuals and entities that come under this sanctions package. I will make the point shortly that we do intend to extend the measures available to us.

[Robert Jenrick]

Will my right hon. Friend give way on that point?

[James Cleverly]

I have got to progress. I will be crucified otherwise.

In addition, over the forthcoming weeks, we will extend the territorial sanctions imposed in response to the Crimean incursion by Russia to territory occupied by Russian forces in what they claim to be the breakaway republics of Donetsk and Luhansk. No UK individual or business—no UK individual or business—will be able to deal with them until they are returned fully to Ukrainian control. We also intend to sanction the members of the Russian Duma and the Federation Council who voted for recognition of the independence of Donetsk and Luhansk, in flagrant violation of Ukraine’s territorial sovereignty.

[Chris Bryant]

I wholly support that if that is what the Government intend to do—

[James Cleverly]

Yes.

[Chris Bryant]

I know the Minister said that, but I am just trying to check whether he intends to do that under this proposed legislation. There is a legal argument that he cannot, not least because the statutory instrument lists what is considered to be a member of the Government of Russia and it does not include members of the Duma. However, in proposed new regulation 6(3)(a), I think the Minister is intending to include anyone who promotes a policy or action which destabilises Ukraine. It would just be helpful if he could explain that.

[James Cleverly]

The hon. Gentleman is right that there is a difference. Those in this House understand that there is a difference between a legislature and a Government. The sanctions regime under which those sanctions have been brought forward is an extension of the pre-existing sanctions regime we brought forward in response to the aggression going into Crimea, rather than this one.

We are also ready to introduce new legislation, putting in place new measures which will prevent the Russian state from issuing sovereign debt on the UK markets. They will curtail the ability of the Russian state and Russian companies to raise funds in UK markets and further isolate Russian banks—touching on the point raised by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—and their ability to operate not just in the UK, but internationally.

This will not end today.

[Nick Smith (Blaenau Gwent) (Lab)]

I thank the Minister for giving way. The Intelligence and Security Committee report is now nearly three years old. Will the Government please publish it this week?

[James Cleverly]

That is a very good question, but it has nothing to do with this SI.

Should Russia stage any further invasion into Ukraine, we will not hesitate to implement a comprehensive and unprecedented additional package of sanctions in close co-ordination with our allies around the world. That close co-ordination is important to ensure their maximum effectiveness.

[Stewart Hosie (Dundee East) (SNP)]

Will the Minister give way?

[James Cleverly]

I have to get on. These measures will curtail the ability of the Russian state, Russian companies and Russian individuals to raise funds on our markets and will further isolate Russian banks. We will keep ratcheting up the pressure, targeting more banks, more individuals and more companies that are significant to the Kremlin, to touch on the point made by a number of right hon. and hon. Members. Russia—rather, Vladimir Putin—has chosen a path of international isolation. The measures that the Prime Minister announced today demonstrate that it will bear a cost for doing so and, if it does not step back, these measures will only increase.

Russia’s aggression against Ukraine is part of a long- term strategy. We must not give ground now or try to accommodate the illegitimate concerns that Russia has put forward. Its strategy of aggression would not end. It would not stop at Ukraine. Instead, it would be emboldened. President Putin would simply focus on a new target, so we are absolutely resolute in our response. What we do now will shape European security for many years, and it will be viewed by other parts of the world and have an impact on security issues far more widely than in Europe. We must rise to the moment. We must stand shoulder to shoulder with the people of Ukraine in their desire to protect their homeland and to protect their freedom. We must, and we will, stand shoulder to shoulder with them, and I commend the regulations to the House.

--- Later in debate ---

[James Cleverly]

With the leave of the House, I will make a few concluding remarks and address some of the issues, queries and concerns that have been brought up by hon. and right hon. Members on both sides of the House. Those in the House who have been in government know that it is never a particularly fun experience at the Dispatch Box being questioned and criticised by both sides of the House.

[Liam Byrne]

Try sitting on this side.

[James Cleverly]

No.

The House may be surprised to hear that I have taken a huge amount of positivity from the exchanges today, because this House has once again spoken with such a commanding, concerted and collaborative voice in support of the territorial integrity, sovereignty and independence of Ukraine and in support of the Ukrainian people. More than that, this House has demanded of the Government that we go further with our sanctions—that they are harder and inflict greater economic pain on the individuals and entities in the Russian system who have done so much damage not just to the Russian people, but now also to the Ukrainian people. I am happy that is the tone of the House because I can confidently inform the House that it is demanding something of the Government that the Government are absolutely determined to do. It is pushing at an open door.

A number of questions have come up repeatedly, so I will address them.

[Bob Seely]

Will the Minister give way?

[James Cleverly]

I will rush on, because I was excessively generous earlier. The question was asked: will these sanctions be escalated only in response to further aggression? I can assure the House that these sanctions will be ratcheted up because of what has already happened, and not just in response to what might happen in the future. Our intention is to prevent even further invasion of Ukraine, to have those troops who are in Ukraine removed, and then to have them return to their home barracks once they are back in Russia. That is our ultimate aim, and the ratchet effect will be done to pursue that as a strategic aim.

There have been questions about asset flight. We are very conscious of this, and that is why we are not explicitly naming people or institutions that may be subject to future sanctions. It is also why it is very important that we work hand in hand with our international allies and friends, who are just as determined as we are to address this situation.

The shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), compared what we have announced today unfavourably with what our allies say they are going to announce. If I were to say that this sanctions package is as far as the Government are willing to go, that might be a legitimate criticism, but the point we have made is that, just as our friends and allies intend to go further, we intend to go further. I have given some suggestions about where that additional ratchet effect may be focused, but we reserve the right to explore whatever is necessary to dissuade further aggression and to force Vladimir Putin to withdraw the troops that have entered Ukraine.

Questions were asked about the application of this statutory instrument in the OTs. This SI does cover the OTs. Members asked whether individuals who may not be in direct managerial or ownership roles would be subject to these sanctions. This SI is worded specifically to be broad in scope. I think implicit in the question my hon. Friend the Member for Huntingdon (Mr Djanogly) asked was that it might even be too broad in scope, but I can assure the House that it was written specifically to be broad in scope so that the ownership maze often put in place to hide the beneficiary of ownership can be addressed.

There have been some questions about family members. A family member is caught within scope where they are acting for or deriving benefit from their relationship with the Russian Government. However, just being the relative of someone who may be subject to sanctions is not necessarily enough on its own. There need to be reasonable grounds, and we always act with reasonableness, although we do act with firmness.

In the debate, it has sometimes sounded as if the only Russians subjected to UK sanctions are the ones who were named by my right hon. Friend the Foreign Secretary this morning. It is worth reminding the House that 58 entities and 186 Russian individuals are currently subject to financial sanctions under the Russia regime, including the ones designated today. There are already limitations on the activities in the UK of SberBank, VTB bank, Gazprombank and others, and as I say, we will not speculate on where future sanction designations may land.

Across the House, my right hon. and hon. Friends—including my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and my hon. Friends the Members for Isle of Wight (Bob Seely) and for Tonbridge and Malling (Tom Tugendhat)—have called on us to do more, and their message was absolutely echoed, very effectively and eloquently, by the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), my shadow, the hon. Member for Cardiff South and Penarth (Stephen Doughty), and the hon. Members for Stirling (Alyn Smith) and for Oxford West and Abingdon (Layla Moran). I hear—the Government hear—exactly the points that they are making.

The hon. Member for North Durham (Mr Jones)—

[Mr Kevan Jones]

Right honourable.

[James Cleverly]

Right honourable. Exactly. It is appropriate to say that; apologies. The right hon. Member for North Durham made a point about what this framework enables us to do. This is the point we are making: this is legislation that enables us to apply sanctions very widely indeed and we will always do so in the way we believe to be most effective: that is, hand in hand with our friends and allies. We will repeat the message that the people of Ukraine have suffered enough. The aggression and intimidation must end. This will form part of our response to Vladimir Putin’s aggression. We will work towards a time when the people of Ukraine no longer live under the intimidation of Vladimir Putin, and indeed, as has been made clear by a number of Members around the House, the people of Russia can again enjoy a relationship with other countries around the world not tainted by the actions of this individual.

Question put and agreed to.

Resolved,

That the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 123), dated 10 February 2022, a copy of which was laid before this House on 10 February, be approved.