Sanctions

Layla Moran Excerpts

Tuesday 1st March 2022 Commons Chamber

[Stephen Doughty]

I completely agree about the need for effectiveness. A point has been made today about the slow pace of the designation of some individuals and entities. The Government have rightly talked about moving in lockstep with our allies, particularly in the EU, yet we still seem to be off pace in naming individuals—we seem to be moving more slowly. Some of the individuals that we have mentioned have already been sanctioned by the US and others for years or do not have significant assets in the UK. We need to ensure that our measures are meaningful, immediate, effective, deep and robust, and that individuals are not now sweeping their money and assets out of the UK.

[Layla Moran (Oxford West and Abingdon) (LD)]

What I found a bit disappointing about the Minister’s speech was its tone. We are all on the same side and trying to help, but there is still a question: why are we lagging behind? Is it that the legislation needs strengthening—I hope the Minister can see that across the House we are willing to work weekends to do that with the Government—or is it something else? He has not adequately explained why we still have not sanctioned individuals who are named by other jurisdictions.

[Stephen Doughty]

The hon. Lady makes an important point. The Minister can be assured of our co-operation in getting these measures through quickly. He has already heard some suggestions for ways in which we might name individuals more quickly; I hope we will hear back from him about them.

We believe that we need to go further to widen financial and banking sectoral measures beyond Sberbank. My second question is about whether the Minister can explain why measures on corresponding banks have not been applied to all Russian financial institutions today, rather than just to Sberbank. Indeed, we understand that the measures have been expanded to include sovereign debt. The Opposition have called for that to apply to UK subsidiaries of entities as well. Will the Minister confirm the position?

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[Bob Seely (Isle of Wight) (Con)]

It is a privilege to follow the right hon. Member for Barking (Dame Margaret Hodge). I will talk a little about enablers, but it might be helpful to talk a little about oligarchs as well, and I will try, just from my own experiences, having lived in Ukraine and having tried to keep abreast of what was happening in the Soviet Union when I lived there and since, to talk also about the role of oligarchs in Russian hybrid war. I will talk a little about the statutory instruments and give them some context, if that will be helpful.

I think it is pretty depressing that it has taken a major war in Europe for us to take economic crime seriously. We have been waiting on this Bill since 2018, and there is no excuse why it has not been on the statute book for 20 years, frankly. Previous Conservative Governments have failed—I am delighted that this Government are doing the right thing; I am not criticising this one—previous coalition Governments have failed and, frankly, previous Labour Governments have failed. I just do not understand how we have got ourselves into the mess we are in now.

Obviously I am going to support these regulations, the Economic Crime (Transparency and Enforcement) Bill and whatever else the Government put up, but I stress to them that this is the beginning of a cleaning up of our legal system and finance system—this is not an end, but a start. We do not know how much money has flowed through our country using offshore accounts or Companies House. Our banks were not responsible for this corrupt flow of wealth—some of the worst in history. It was the Danish, German and Swedish banks that were responsible for that, but it is UK companies that they used.

I also say to the Minister that, as well as the Economic Crime (Transparency and Enforcement) Bill, we need a foreign lobbying Bill and amendments to libel law and data protection law. We need to do more on SLAPPs—strategic lawsuits against public participation—where aggressive lawyers seek to intimidate campaigning groups, journalists and the like. We also need an espionage Bill.

We must toughen up the Solicitors Regulation Authority. I am told by whistleblowers working for the big companies that they do not do proper client checks and that “know your client” checks are non-existent for some of them. Some actually have a list of people that they specifically do not do those checks on because they know that they are inherently corrupt and inherently criminal. What on earth has happened to some of the major legal firms in this country that means that they specifically avoid “know your client” checks because they know that they will have to turn that client down if they do because those clients are corrupt, criminal or linked to organised crime? I am afraid to say that that is pretty shocking.

I note that some oligarchs are now distancing themselves from President Putin. Fridman, Deripaska and Abramovich have all come out with rather woolly statements in the last couple of days. I am sorry, but I don’t buy it.

[Layla Moran]

Does the hon. Gentleman not find that it rather sticks in the throat that Mr Abramovich has been going around saying that he is an envoy of peace and claiming that he is somehow brokering peace between Ukraine and Russia, given his former involvement in the matter?

[Bob Seely]

The hon. Lady brings me to a point about how oligarchs work. To go back to Ukraine, somebody such as Dmitry Firtash, who is now wanted by the Americans, was set up by Gazprom and Putin. He was given sweetheart deals to import vast amounts of cheap energy into Ukraine. The vast profits that he garnered from those sweetheart deals gave him a good life but, more importantly, he funnelled that money into buying up chunks of east Ukrainian industry, effectively as a front for the FSB, the former KGB. Critically, he also used it to purchase politicians and to fund the pro-Russian political parties in eastern Ukraine.

When it comes to oligarchs, therefore, it is important to understand that we are talking about an economic model within hybrid war. Of all the tools of hybrid war, if hon. Members read the Russian characteristics of war, they will see that the first characteristic of the Russian military doctrine is that there is an integrated military and non-military strategy. So they have their troops, paramilitaries, front organisations or assassins, but with that they have the politics, economics, culture, religion and even sport—sport matters very much.

When it comes to oligarchs, we are talking about not just obscenely rich people who are mates with somebody, but a structure of control and power, whether that is in eastern Ukraine or in the United Kingdom, primarily to facilitate vast money flows to tax havens or to intimidate and silence the western media into not reporting on those people. There are a series of outcomes to that, so I thank the hon. Lady for the intervention.

I return to Abramovich, Fridman and Deripaska. If they were so keen to smarten up their act—they are clearly scared of what might happen—I would like to know why, as of only a few weeks ago, they and their London lawyers were all abusing data protection Acts or libel law to target and intimidate individuals, such as Chris Steele and Catherine Belton, HarperCollins and others. At the end of last year and even this year, they have continued to intimidate a free press. They were enabled, and I make the point that it is not only the oligarchs but their millionaire servant class of enablers who enable the billionaire class of oligarchs who enable the neo-fascism that we see in Europe.

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[Layla Moran (Oxford West and Abingdon) (LD)]

It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson). To pick up his point at a moment of reflection, we are all tired because yesterday we were here until late voting, but I walked into work this morning with a spring in my step because we have a democracy to walk into work for. We are here in this debate in defence of another democracy, and what a debate it has been. My goodness, would Russia not be a very different place if it allowed this level of discourse and challenge from both sides of the House and of the Government? That is what we are defending.

I wish to put on record my delight—I hope the whole House will join me in this—in congratulating the Servant of the People party, the party of Volodymyr Zelensky, which has become an associate member of the Alliance of Liberals and Democrats for Europe. It marks the first step—one of many, I am sure—to show that the entire reason why Putin has done this, to try to split us apart, is not working and quite the opposite is happening. The Liberal Democrats are therefore proud to call the Servant of the People party our sister party, and I am sure all hon. Members feel that way about that party and all parties in Ukraine.

In that spirit of cross-party co-operation, I welcome these measures on behalf of the Liberal Democrat party. It is right that we are targeting the Russian financial sector and the export of dual-use and critical-use goods. I ask again about the 30-day grace period. One of the benefits of speaking last is that I waited for those who are much more practised in such things—a former Chair of the Public Accounts Committee, and others—to explain to me, a relatively new Member, what I did not understand. But I still do not understand. If we are not going to publish the names, even quietly, and assuming they do not leak, and if we cannot say who we are sanctioning and who is on that designated list, I do not understand how we can distinguish between a company that is legitimately winding up its business, and one that is winding up its illicit goods to go somewhere else. How do we do that without divulging that list to someone? I would like some explanation for that.

[Mr Kevan Jones]

Does the hon. Lady think it strange that the Government are reluctant to name the individuals they are going to sanction? Our European partners are not only sanctioning individuals, but taking property off them and naming them publicly. Does she understand why the Government are reluctant to do that?

[Layla Moran]

I am so grateful for that intervention, and I absolutely do not understand. I intervened about that at the beginning of the debate. I have listened to the whole debate and am none the wiser, having listened to many sage Members also try to work it out. I think we are owed an explanation from the Minister. He went away for a bit but he has come back, I hope with an explanation. What is going on? We have the benefit of parliamentary privilege in this place. I will not pre-empt what Mr Speaker may or may not allow in future business of the House, but if we need to sit here and read out all the names, we have to do it. But it should not be up to us, and a lot of the names are ones that the Government already have. The information is there, and there is no reason we should be waiting.

Some of the new names on the EU sanction list include Mikhail Fridman, Alisher Usmanov, Petr Aven, Igor Sechin, and Nikolay Tokarev—they are there. There is now a joint taskforce for sharing information, which is good. Apparently it always existed, so I did not quite understand the announcement—perhaps it is being shared more. However, if we look at the number of people we have sanctioned recently, it is nine, one of whom is Putin, which we all know is just symbolic. We can go further.

I disagree with the right hon. Member for Newark (Robert Jenrick), who said that these measures will not do very much. They will do quite a lot, because we know that is how Putin manages his money. If we go after these people, we are going after him. That is how he operates. The broader point, which it is important to make, is that it feels as if, because of the tragedy unfolding before our eyes, the wool is being pulled from many people’s eyes. I fully congratulate Members across the House who have been raising these points over many years and indeed across many countries.

Our own reports have also warned about this, not least the Russia report, which states:

“This level of integration—in “Londongrad” in particular—means that any measures now being taken by the Government are not preventative but rather constitute damage limitation… The links of the Russian elite to the UK…provides access to UK companies and political figures and thereby a means for broad Russian influence in the UK. To a certain extent, this cannot be untangled.”

How did we get here? That was the question that the hon. Member for Isle of Wight (Bob Seely) posed in his excellent speech. I will posit an answer. I think it was greed, and not just from one political party; it was a collective greed, and a wilful naivety to what has been in front of us. All the signs were there, and there was a collective wilful naivety for the sake of rapid economic growth and actually some very laudable aims—trade, for example, being a tool of diplomacy. We want to support business and the City. All those things can be true at the same time, but there came a moment when some people sniffed a rat and they did not call the exterminator. That was many years ago.

I think it was the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) who described this as a cancer. As we know, removing a cancer is painful to the person who has it—it can even be dangerous—but the reason we do so is for the person’s medium and long-term health. We have to do this, so I end simply by urging the Minister not to shy away from the difficult questions, or from things that are not coming in the Economic Crime (Transparency and Enforcement) Bill and the overseas entities register, and to deal with some of the issues of lawfare, or at least put a framework in place in order to deal with them.

How can it be right, if transparency is the best disinfectant, that we do not allow our free press and media to investigate individuals and companies, because they are being consistently harassed? That is bad for democracy, so I hope to add my voice to all of those on the Back Benches in the debate. I urge the Minister, and the Government, to grasp this nettle, as painful as it may be. If he wants to go further and faster, the Liberal Democrats will support him.