Sanctions Policy and Implementation

Khalid Mahmood Excerpts

Thursday 3rd October 2019 Westminster Hall

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

It is always a pleasure, Mr Davies, to serve under your stewardship.

I thank my friend the Chair of the Foreign Affairs Committee, the hon. Member for Tonbridge and Malling (Tom Tugendhat), for raising this important issue. Since he has been the Chair of that Select Committee, he has been studious and worked very hard. Even through the so-called Prorogation, I know that he was here most of the time—I have come in and he has been here. When the Prorogation was deemed illegal, he was one of the first people in the Chamber. I congratulate him on the effort and the energy that he has brought to his work; being a Select Committee Chair is really hard work, particularly in the Foreign Affairs Committee, which has a hugely important function. I am pleased that he heads that Committee, and he does so excellently.

The UK adopts sanctions primarily through the UN and the EU, and two thirds of its sanctions regime has been driven through the European Union. Leaving the European Union will thus bring about a seismic shift in how the UK adopts, imposes and implements economic and financial sanctions. For this reason, Parliament passed the Sanctions and Anti-Money Laundering Act 2018, which provides the legal foundation for an autonomous UK sanctions policy. Since the Act became law in May 2018, the Government’s activity on sanctions has been focused on ensuring that the UK will be legally able to maintain existing EU sanctions under UK law, even in a no-deal Brexit scenario.

As the Chair of the Foreign Affairs Committee said, the Committee conducted an inquiry. It is important that we understand the issue of sanctions and how and where we deem them fit to apply to specific countries. Part of the sanctions framework is the use of a Magnitsky Act, which I will come to later. Both types of legislation should be applied together, as individuals are coming through international loopholes as well as using national mechanisms. We need to be able to address the individuals who have been placed under sanctions by the United Nations or the European Union, or will be placed under sanctions by us. As he quite rightly says, such people interfere with the normal wellbeing of our financial economy; they distort it. It is important for us to understand and deal with the effects on financial institutions. The hon. Gentleman has clearly explained Magnitsky powers and it is important to recognise these issues. Sergei Magnitsky was a Russian lawyer; for his efforts, he was tortured by the Russians.

As we place financial sanctions and travel sanctions on certain individuals, we must understand how such powers work and how they should operate. The hon. Gentleman also pointed out the problem of people being able to circumvent the sanctions policies that we might apply, and how they might be able to do that. The report recommends the appointment of an officer to monitor the situation, which I think is much needed, because, at the moment, we do not really think about the process of how to apply sanctions and we need to do so in a joined-up way. We need a senior responsible officer bringing the laws together and addressing the issues—considering how people use their immigration status or their financial wealth, from which country they are operating and what secondary operations are related. There must also be a clear trail examining the input into our finances; such individuals distort our finances and make it difficult for the people of the United Kingdom who are trying to behave properly to have a proper regime around what they are doing. We must look at and deal with that situation. We need to take a serious cross-Whitehall approach, as the hon. Gentleman recommends. If we do not, how we deal with sanctions and money laundering will remain fragmented.

It is also important to look at what the Labour party wants to do. Sanctions can certainly be an effective and useful tool for achieving policy objectives. For example, they can apply pressure on states and individuals that are carrying out human rights violations to alter policies and behaviour. I mention that in reference to Myanmar; the hon. Gentleman mentioned Russia. I would also add India’s current situation—I declare an interest, as I am a Kashmiri. There are issues going on there and it is important for us to be able to look at that and see how those policies affect a nation that is bringing people into subjugation. As the hon. Gentleman will understand, we have to look at where human rights and civil liberties are being abused day in, day out. We cannot allow abusers to engage in international markets via financial circumvention.

I will cut down my speech because we all need to keep to a similar length of speaking time, but I will question the Minister. Three years after the referendum, little thought appears to have gone into the consideration of the UK’s strategy and policy approach to co-operation with EU sanctions. What progress has been made in the development of a plan for post-Brexit co-operation with the EU in terms of sanctions? If the Government claim to take seriously the actions of human rights abusers, why have no individuals accused of human rights abuses been sanctioned? Sixty-six individuals have been sanctioned by Lithuania and 49 by Estonia—both countries are EU members. Will the Government set out a clear position on whether the UK can independently sanction human rights abusers while it is still an EU member state? Does the Minister agree with the Foreign Affairs Committee report that the Government would benefit from having a senior civil servant who is accountable for sanctions policy implementation?

--- Later in debate ---

[Tom Tugendhat]

I am grateful for the Minister’s speech, which recognised not just many of the ideas that I raised but many of the ideas that the Foreign Affairs Committee has debated. That demonstrates that, despite having been Chair of another Committee, he was assiduous in following the work of ours, even before he became a Foreign Office Minister.

I am also grateful to my friend the hon. Member for Birmingham, Perry Barr (Mr Mahmood), who has been of invaluable support in many projects that I have done outside this place. His kind words supporting the Committee’s work and recognising the challenge that we all face, on whichever side of the House we sit, are extremely well received; I thank him for them.

The hon. Member for Glenrothes (Peter Grant) spoke extremely well on behalf not just of his party but of the House. He recognised many areas in which we all face similar challenges; one area that he did not mention, but could have, was the UK Government’s responsibility with respect to Scottish limited partnerships, on which he and his party have assiduously led the campaign. His speech reminded me that one reason why we are in this position in the UK is that we have the legacy of a very unusual political and economic system of absentee landlords that lends itself to foreign oligarchs in a way that many other economic systems do not.

I am particularly grateful to the Minister for speaking about the rule of law, because it is the economic underpinning of the United Kingdom. It is fundamental, and highlighting it is extremely important. That leads me on to an area that none of us mentioned, but that perhaps we should have—the challenges in places such as Hong Kong, where the human rights abuse of individual citizens could easily raise questions about Magnitsky implementations. It may also raise questions about the position of British judges on the Court of Final Appeal. After all, at what point is the defence of commercial justice reliant on civil justice? At what point does the undermining of civil rights in a territory undermine the ability of any judge affiliated to the UK—certainly a former UK High Court or Supreme Court judge—to deliver justice? At what point is that no longer possible? Maybe that is a question for another day.

The fundamental point is that the UK’s reliance on its economic markets is essential, as we know. We therefore need to look at whether the markets are not just open and fair but properly regulated with rules that are properly enforced. In the same way that the Minister’s ancestors on Her Majesty’s men of war—like their counterparts on Her Majesty’s frigates and destroyers today—implemented the rules of the sea and fought the evils of the slave trade and so many other forms of tyranny in the pirate wars from 1600 to about 1900, there is a place for a new red ensign to fly over our financial markets. Everyone should know that the people who put their money here and invest through London, Edinburgh or the UK’s markets, and the businesses that use those institutions, cannot be the human rights abusers, thieves and oligarchs who enrich themselves in places such as Moscow by raping and pillaging the people. They should know that because our markets have the best sanctions regimes to prevent any such crimes.

[Mr Mahmood]

I congratulate the Chairman of the Foreign Affairs Committee on mentioning the Navy’s fight against slave traders. It is very important to point that out, particularly now that we are in Black History Month.

[Tom Tugendhat]

I am grateful that the hon. Gentleman raises that issue. It is also worth mentioning that today is the anniversary of the death of Alan Henning; I do not know how many hon. Members remember him, but he was a taxi driver with a huge heart and enormous courage who took aid to Syria. His abusers probably enriched themselves in ways that we can only imagine. One very encouraging thing that the Foreign Office is doing—forgive me if it is not quite in the sanctions line—relates to the work of the British Museum in fighting the vile trade in historic artefacts. It is clearly connected to the sanctions issue, so I hope that the Foreign Office will pick it up, although the Committee did not cover it in our report.

I thank you for your chairmanship, Mr Davies, and all hon. Members present. I particularly thank the Clerks of the Foreign Affairs Committee, whose work has been exceptional, on this and many other subjects.

Question put and agreed to.

Resolved,

That this House has considered sanctions policy and implementation.