Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022

Kevin Brennan Excerpts

Monday 23rd January 2023 General Committees

[The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)]

I beg to move,

That the Committee has considered the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 (SI, 2022, No.1331).

The instrument before us was laid on 15 December 2022 under powers provided by the Sanctions and Anti-Money Laundering Act 2018 and makes amendments to the Russia (Sanctions) (EU Exit) Regulations 2019. The instrument has been considered and not reported by the Joint Committee on Statutory Instruments.

With these amendments, the UK continues to put immense pressure on Putin and Russia, alongside our international partners. These new trade measures will further extend the largest and most severe package of economic sanctions that Russia has ever faced. I will begin by outlining the measures introduced through the instrument.

First, the SI tightens existing regulations on investments, loans, securities and money market instruments to further close off indirect finance and constrain the availability of international capital to Russia. Importantly, the measure now prohibits new investments in Russia through third countries.

Secondly, the legislation introduces new restrictions on the provision of trust services to persons connected with Russia. That will particularly affect high-net-worth individuals who use trust services to manage their assets. Through the instrument, the Government have suspended the Bank of England’s duty to recognise resolution action in respect of persons designated under the UK’s Russia sanctions regime—the process by which the failure of financial institutions is managed—stemming a potential income stream for Putin’s war machine. This amendment also prohibits the export of further goods across a range of sectors, including oil production and mining equipment, electronics and chemicals, and advanced materials and camouflage gear.

Finally, the instrument introduces additional prohibitions on the provision of professional services to persons connected with Russia. That encompasses advertising, architecture, audit, engineering, and IT consultancy and design services.

[Kevin Brennan (Cardiff West) (Lab)]

It has been interesting to read the instrument. Does it affect UK citizens who hold shares in companies that are operating in Russia and their ability to win dividends from those shares?

--- Later in debate ---

[Kevin Brennan]

I associate myself with everything that my constituency neighbour, my hon. Friend the Member for Cardiff South and Penarth, said about Russia, our support for the Government in their strong and robust response to Russia’s invasion of Ukraine, and what the Minister said on that subject.

The reason for my question—I am prepared to be contradicted on this if I am wrong—is that, the last time I checked, some operations were still being undertaken in Russia by companies such as Infosys. There is nothing personal about that point—in my view, this would apply to anybody who has shares—but it comes close to the Government in one respect. As we know, the Prime Minister’s spouse has a stake of 0.91% in that company—worth £691 million—and derives a very large amount of income from the dividends from the company. There is nothing wrong with that in and of itself. However, if companies continue to operate in Russia and profits are being generated through those operations, and individuals in the United Kingdom are earning income from dividends in relation to their shareholdings in companies that are operating in Russia, that is a matter of public interest, whoever holds them—let alone if that income benefits the Prime Minister’s family’s resources.

Let me ask the Minister this question: is there anything in the statutory instrument that we are debating—I know that it has already come into force, so our debate is fairly academic, as is often the case on these occasions—that would regulate the ability of UK residents and citizens to earn income through dividends on shares held in companies that continue to operate in Russia, despite our very robust and correct response to Russia’s aggression in Ukraine? If so, should not those individuals divest themselves of any shares that bring them income, because that is income earned off the backs and the suffering of the people of Ukraine? Is there anything in this statutory instrument that has any impact on income being earned from shareholdings held in companies operating in Russia?