Global Anti-Corruption Sanctions Regulations 2021

James Duddridge Excerpts

Tuesday 25th May 2021 General Committees

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

I beg to move,

That the Committee has considered the Global Anti-Corruption Sanctions Regulations 2021 (S.I. 2021, No. 488).

It is a pleasure to serve under your chairmanship, Ms Fovargue. On 26 April, the Government laid the Global Anti-Corruption Sanctions Regulations 2021, under the powers in the Sanctions and Anti-Money Laundering Act 2018. Corruption is one of the key drivers in undermining human rights, democracy, development and the rule of law around the world. It also undermines global prosperity, which reduces taxation that could have gone to fund public services. Corruption also undermines our national security and fuels conflict, and serious and organised crime.

The new sanctions regime is a significant step forward in the UK’s leadership in combatting corruption. It will enable us to impose asset freezes and travel bans on individuals and organisations involved in corruption around the world, and will help to prevent people from using the United Kingdom as a haven for dirty money. It covers all forms of corruption, bribery and misappropriation across the globe. The regulations also enable us to target those who facilitate, profit from, conceal, transfer or launder the proceeds of serious corruption. These sanctions will not only affect those named but should send a clear message to those around the world that corruption is unacceptable. The UK will not tolerate it and we will not receive the proceeds of corruption coming into our country.

As with all UK sanctions, we adhere to rigorous due process to ensure that the rights of individuals are respected. This means that those designated under the sanctions regime will be able to request that a Minister review the decision, and if they are still in disagreement, they will also be able to apply to challenge the decision in a court of law here in the United Kingdom.

The Government have made immediate use of this tool, and on 26 April we sanctioned 22 individuals from six countries for their involvement in serious corruption. All the names are published online in the UK’s sanction list for these regulations, and each designation is underpinned by evidence, as required by the 2018 Act. They include 14 individuals who were involved in the diversion of $230 million of Russian state property through a fraudulent tax refund scheme uncovered by the auditor Sergei Magnitsky, which was one of the largest frauds in Russian history. We will also impose sanctions on Ajay Gupta, Atul Gupta and Rajesh Gupta, along with Salim Essa, who were involved in long-standing corruption cases in the South African economy. We have also designated a Sudanese businessman and individuals across Latin America, in particular those involved in misappropriation of funds and soliciting bribes to fund major trafficking organisations.

The steps that we have taken to expand our sanctions framework will cover corruption as well as human rights and will give the UK powers similar to those in the so-called Magnitsky framework in the US and Canada. They will enable us to work even more closely in a co-ordinated way with likeminded partners. I therefore commend the regulations to the Committee.

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[James Duddridge]

I thank the hon. Lady for her support for the regulations and her detailed querying. I do not think there will be any need for me to write back: while her questions are probing, they will be relatively simple for me to deal with today.

The hon. Lady started by thanking the FCDO officials working on sanctions. I will pass on those thanks when I head back to the office; this is a very complex arena. However, I must disagree with her on some of the underlying themes. Global transparency has got better in the UK, not worse. To put a number on that, in 2010 we were 20th out of 108 countries on Transparency International’s corruption perceptions index. The 2020 figure, the one most recently available, puts us at 11th.

The idea that anyone can turn up and buy a house with a suitcase of cash is just not true. If the hon. Lady has any evidence for that whatsoever, she should bring it forward. If anyone were to do that, estate agents would be bound by money-laundering and KYC—know your customer—regulations to declare it. In fact, I think they would even have to declare if that was offered, without it actually happening.

I welcome the hon. Lady’s praise of the late Magnitsky and of Bill Browder, who holds our feet to the fire. I note her points about the NCA, the Home Office and resource. I will certainly pass those on to the Home Secretary when I meet tomorrow, but I see that work very clearly in the African continent. I have not had the privilege to travel to Colombia to see the NCA’s work, but it is internationally as well renowned.

We will work closely with our US and Canadian colleagues. In fact, the legislation was drafted to enable us to do that, and some of the announcements on 26 April were made in co-ordination with our US counterparts. We will also be able to complement the EU’s sanctions, so that we can move at the same pace as another nation, or collection of nations, on our own, or in any other form of consortium we so chose.

On the anti-corruption tsar, I was indeed a Minister under David Cameron, and I work closely with my hon. Friend the Member for Weston-super-Mare (John Penrose) and speak to him frequently about these issues, so we are very joined up at both ministerial and non-ministerial level.

[Catherine West]

Does the Minister agree that the anti-corruption tsar is not as high profile as before and that there is no formal reporting mechanism? Perhaps that is something the Minister could take back to think through. If we are to have an anti-corruption tsar, surely that individual should have a reporting function, an opportunity for parliamentary debate or some kind of profile within Parliament.

[James Duddridge]

I totally disagree with the hon. Lady in one part and agree with her in another. The anti-corruption tsar has immense influence and an immense voice. He is very loudly heard, and in many ways is uncomfortably loudly heard for a Government with other priorities. She makes a broader point about the role within Parliament. As a member of the Executive primarily, rather than as a parliamentarian principally, I will not comment on that, but she can no doubt raise the issue with him.

The hon. Lady referred to the Foreign Affairs Committee—or the equivalent in the US. We want to engage more with Parliament. There will be regular reporting on people who have been designated. In my experience, Parliament does not tend to have a problem with anyone we designate; the issue is with additional people. The mechanism for that is not fully formalised. It could be via the Foreign Affairs Committee—the Chair and his Committee have never been shy in coming forward with ideas—but it could equally be done more privately, because as she also alluded to, sometimes these things are best done privately. We do not want to give people notice that they might be sanctioned, because then they can move assets overseas.

The hon. Lady asserted that I perhaps wrote my speech before the situation in Belarus applied. She is absolutely right, but I can assure her that we are used to sanctioning Belarus. Following the rigged elections, 99 people were sanctioned. When we left the European Union we carried forward sanctions related to Belarus, and we already have an arms embargo in place on Belarus for anything that could be used to suppress the people of Belarus.

The hon. Lady mentioned the hon. Member for Wigan, who wrote to the Foreign Secretary this morning. Very rudely, he did not copy me in, so I am not aware of the details of that letter, but I note that the hon. Lady referenced an individual. She will appreciate why, even if I was fully aware of that individual, I would not be able to comment, because of the issue of assets moving elsewhere out of the country.

I thank the hon. Lady for this debate. I think I have answered all questions; I therefore commend the regulations to the Committee.

Question put and agreed to.