Draft Sanctions (Damages Cap) Regulations 2022

Debate between Jesse Norman and Stephen Doughty

Tuesday 18th October 2022 General Committees

[Jesse Norman]

I am very grateful to both hon. Gentlemen who have spoken. Let us be clear that there has been a very broad sense of unanimity across the House on the issue. We very much welcome that support and the scrutiny offered by the Opposition parties, which can only make the legislation better and keep Government properly on our toes.

Let me start by thanking the hon. Member for Argyll and Bute who pointed out the importance of closing loopholes—he is absolutely right about that. As the hon. Member for Cardiff South and Penarth said on behalf of the official Opposition, there has been a constant process of introducing measures and then infilling, in response to a dynamic and evolving situation, precisely to address those loopholes. The regulations we are talking about in relation to Russia and Belarus apply to conduct by UK persons including not just anyone in the UK but UK nationals outside the UK and businesses incorporated or constituted under the law of any part of the UK. Of course, it is Government policy for those measures also to be given effect in overseas territories and Crown dependencies. As the hon. Member for Argyll and Bute will he aware, a lot of work has been done in relation to Companies House to track asset movements and give the enforcement authorities extra powers and speed to crack down on some of the loopholes he mentioned.

The hon. Gentleman said that the regulations are not before time, but if I may say so, I think that is incorrect. The Government brought forward this legislation before the summer recess, and the present cap that we are discussing will apply to all proceedings brought from 4 March. There has been a staggering level of sanctions introduction over the past few months, and I could show him four or five pages of specific measures that we have introduced. Those are targeted at a large number of individuals.

The hon. Member for Cardiff South and Penarth was absolutely right to ask about the question whether this was just about Russia. Of course not; he is absolutely right—it applies across the board. But even in relation to Russia we are talking about sanctioning more than 1,200 individuals and more than 120 entities. As my remarks about Elvira Nabiullina made clear, we are continuing to push down on designations in order to pick up people who have emerged as significant actors, or who are otherwise culpable and complicit in this dreadful invasion.

I am very grateful to the hon. Gentleman for his comments on behalf of the official Opposition. He is absolutely right that the recent use of unmanned drones is abhorrent and he will know that the Government and their allies are doing everything they can to support Ukraine militarily and in the field. I thank him for the questions he raised to which I responded in respect of the previous debate conducted by my colleague, the Minister for Europe. Of course, as the hon. Gentleman understands, I cannot comment, however one would like to, on specific entities, but the points he raised are absolutely well taken. His energy in pressing them is a constant source of active encouragement and support for the work we are doing and that which we have in hand.

The hon. Gentleman asked whether the Government will look at wider measures in relation to SLAPP suits. He is absolutely right to target that question, and of course we are reviewing the matter very closely. He also asked about the question of legal architecture. He will understand that the measures we have brought in are moving towards quite a calibrated restraint on the use of legal services for commercial purposes by oligarchs and other designated persons. But it is important to preserve access to rights legal advice, because however individuals might dislike the fact, it has always been our way in this country for hundreds of years that people are allowed to have, subject to law, their day in court, and proper representation. The cap seeks to limit the effects of that, but the principle is clear.

[Stephen Doughty]

I spoke about the scope of individuals to take legal action across the EU against their designation. Can he tell me, or write to me, about the numbers involved who have attempted to take action against the UK Government for being sanctioned? That would give us an idea of the scale of attempts to undermine the sanctions regime.

[Jesse Norman]

If I may, I will discuss and consider with officials whether we can properly respond, or whether, for reasons he will understand, that information has to be retained for present purposes. I can assure him that we are not seeing a large amount of litigation at the moment, but there obviously is the potential, and that is why it is prudent to introduce a cap. As I have said, that cap is backdated. I take the point that he has raised, and let me consider it with my officials.

Unless there are any other questions, I commend the regulations to the Committee.

Question put and agreed to.

Sanctions

Debate between Jesse Norman and Stephen Doughty

Thursday 22nd September 2022 Commons Chamber

[Jesse Norman]

I thank all hon. Members who have spoken in this very interesting debate. It is a testament to the intense interest and passion that the Russian invasion of Ukraine has raised in this House that, even on topics as apparently technical as this one, we could have such a vigorous and energetic debate.

Let me pick up as many as I can of the points that have been raised. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) spoke truly about how highly effective sanctions have been so far, as evidenced by the Treasury Committee. I would say that it is more like turning off a light, but the danger is that the dimmer switch may be activated the other way. That is one thing that we are constantly dealing with. I will say a little about it more generally, partly in response to the shadow Minister, the hon. Member for Cardiff South and Penarth (Stephen Doughty), because this is an evolving situation.

My hon. Friend the Member for Thirsk and Malton mentioned Bill Browder, a very interesting and brilliant man whom I have met. The idea about opening books is a very interesting one. We have a lot of interesting ideas in this House; one of the strengths of the open parliamentary debate that makes our system so much stronger than the Russian alternative is that we are willing rapidly to evolve our response to public opinion and to such suggestions, for which I thank my hon. Friend.

My hon. Friend also made a point about crypto that I think was right. It is important to say that crypto-assets are treated in exactly the same way as any financial asset. We therefore expect these measures to be as widely respected by entities, even if enforcement proves to require further work.

[Stephen Doughty]

I have just received notice that on 11 October we will be debating another set of amending regulations on sanctions—not only against Russia, but against a whole bunch of regimes—to deal with the very fact that crypto-assets are not treated in the same way as other financial assets for the purposes of sanctions. In fact, there appear to be a whole series of loopholes that the Government are only getting around to dealing with on 11 October. We really need to move a lot faster. We need to be up to speed with what is actually happening and with how people are using these markets.

[Jesse Norman]

If I may say so, I do not think that it is possible to move faster than having a debate within two days—in fact, a day and a half—of Parliament’s resumption after the interval following the unfortunate passing of Her late Majesty the Queen. The rules apply. As a further rebuttal to the shadow Minister’s point, my reply to the suggestion that something can somehow be made perfect, as though it were set in stone forever, is “Of course not.” This is a rapidly evolving situation.

My hon. Friend the Member for Isle of Wight (Bob Seely) talked about lawfare. He is exactly right that some very well-heeled and well-resourced individuals are using all their resources, as corporates and as individuals, to try to thwart us. That is why the response must continue to evolve, and it will.

On the point raised by the hon. Member for Tiverton and Honiton (Richard Foord), the Office of Financial Sanctions Implementation in the Treasury has more than doubled in this financial year. The response that is being made is being taken very seriously, and there is a continuous effort to build sanctions capability across Government.

I take the point that the hon. Gentleman made about advice for the higher education sector. I can also tell him that a very effective team in the Department for International Trade is helping businesses in this country to deal with this issue, which, again, we take extremely seriously.

My hon. Friend the Member for Isle of Wight, when referring to lawfare, mentioned Freshfields. I was sorry to hear the name mentioned, given the respect in which that firm is held across the country. I wish it were not true, if it is—I hope it is not—but it was interesting that my hon. Friend mentioned it.