Frozen Russian Assets: Ukraine

Joe Powell Excerpts
Monday 6th January 2025

(3 days, 23 hours ago)

Commons Chamber
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Joe Powell Portrait Joe Powell (Kensington and Bayswater) (Lab)
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I, too, thank the hon. Member for Tunbridge Wells (Mike Martin) for securing this important debate.

This issue matters deeply to my constituents. Kensington and Bayswater is home to a thriving Ukrainian community and is a hub for Ukrainian institutions, from the embassy and the consulate to the social club and the school. But in Kensington, regrettably, we are also at the epicentre of Britain’s historical addiction to corrupt, kleptocrat wealth—we are in close competition with my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) in that regard. In the wake of Putin’s full-scale invasion of Ukraine in February 2022, I co-founded the Kensington Against Dirty Money campaign, alongside local community campaigners, to expose the vast sums of illicit capital hidden in luxury property in our community. As has been said, that dirty money undermines democracy both at home and abroad, and for too long kleptocrats have been able to sidestep the rules and hoard illicit wealth through opaque corporate structures.

Helen Maguire Portrait Helen Maguire (Epsom and Ewell) (LD)
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I thank my hon. Friend the Member for Tunbridge Wells (Mike Martin) so much for securing this debate. Does the hon. Member agree that if the west fails to act decisively in seizing Russian assets, that simply signals to authoritarian regimes worldwide that aggression and the violation of international law come with little consequence, which will destabilise the global order and increase the likelihood of future conflicts?

Joe Powell Portrait Joe Powell
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The hon. Member is absolutely right. There are things the UK can do to be the trailblazer and there are things we need to do in partnership with our international partners, and shortly I will move on to how I think we can do more on the assets specifically.

I also want to take the opportunity to welcome the personal and relentless campaign by the Foreign Secretary and the Minister in relation to sanctions, including the recent action on the shadow fleet. However, in order for those measures to be fully effective, we must ensure that sanctions cannot be evaded, and there are still loopholes that need to be closed. My hon. Friend the Minister will know that I have been following closely the progress of our overseas territories and Crown dependencies in finally following the will of Parliament by establishing public registers of company ownership, allowing us to follow the money and detect where sanctions evasion may be taking place, for example in places such as the British Virgin Islands. It also means that we need to consider incorporating trust-owned property into our registers of overseas entities, ensuring that trusts cannot be used to conceal property that could be subject to sanctions.

As we have said, our residents deserve better than living in these communities hollowed out by wealth and built on corruption, where my constituents are suffering at the sharp end of London’s housing crisis. In the next-door constituency of my hon. Friend the Member for Chelsea and Fulham (Ben Coleman) there is the case of Chelsea football club. Over two years ago, Roman Abramovich was forced to sell the club, with approximately £2.5 billion pledged to humanitarian programmes for victims of the war, yet not a single penny of that money has been spent. Those Chelsea funds amount to five times the UK’s total humanitarian assistance to Ukraine since 2022, and they remain stuck in an escrow account. That is a travesty, given that releasing those funds would not cost the British taxpayer a penny. It would save countless lives, at a time when 15 million people require urgent assistance in eastern Ukraine alone and humanitarian agencies face a shortfall of £1.3 billion.

I welcome the UK’s leadership in the G7 on securing the additional $50 billion of support to Ukraine using the profits from the holdings of immobilised Russian sovereign assets, with over £2 billion coming from the UK’s share. We have led on sanctions, we have led on freezing assets and we have led on mobilising the interest on assets, and now I believe it is time for the UK to lead a coalition of willing nations to take decisive action to seize those sovereign assets in full.

Cameron Thomas Portrait Cameron Thomas (Tewkesbury) (LD)
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I invite the hon. Member to recognise that there is an international precedent for the seizure of Russian assets. Back in 1990, following the Iraqi invasion of Kuwait, the US, the UK and France transferred Iraqi assets to Kuwait to directly correspond with reparations to Kuwait. Does he agree that should be the case with Russian assets?

Joe Powell Portrait Joe Powell
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I agree. The moral and legal rationale for seizing these assets is clear. The total cost of Russia’s destruction of Ukraine has already far exceeded the total frozen state assets. It is inconceivable that Russia will ever pay for the irreparable harm it has caused Ukraine. Seizing these assets would not only increase Ukraine’s capacity to resist further destruction but help its leaders rebuild the country. It would be a downpayment on the reparations Russia will almost certainly be legally liable for, and will make it face the full consequences of its actions now.

Britain’s leadership on Ukraine—from military support to Homes for Ukraine to sanctions—has been exemplary and cross-party, but there is always more to do, so I ask the Minister to address my points about making our sanctions more effective by tackling evasion, closing the loopholes in our property register, releasing the Chelsea funds, and mobilising the international coalition to seize Russian state assets, so that we can support our friends on the frontline in Ukraine right now.

Caroline Nokes Portrait Madam Deputy Speaker (Caroline Nokes)
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That brings us to the Front-Bench contributors, starting with James MacCleary.