Brexit: Bilateral Relations with European Union Member States

Lord Anderson of Swansea Excerpts

Wednesday 20th March 2019 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, it is important and I agree with the noble Baroness that relationships matter. Of course, not just in the context of the EU but in any relationship, the ability to pick up the phone and talk to a counterpart in any country is essential to extending our strength of diplomacy. In the context of the European Union, I shall give three examples. The noble Baroness mentioned Germany: we announced a UK-Germany strategic dialogue in April 2018, which will be at Foreign Minister level. We have also agreed a joint compact on global responsibility and a joint vision statement on defence, in October 2018, between the MoD and the German defence department. We also had a successful UK-French summit in January 2018, a successful UK-Poland intergovernmental consultation in December 2018 and let us not forget that, above other things, we have also had two recent state visits, one from the Netherlands and one from Spain. Our diplomatic efforts and our efforts at extending through other connections, including party mechanisms, all make us well placed to continue to strengthen our work together.

[Lord Anderson of Swansea (Lab)]

My Lords, does the Minister agree that to limit the damage, if Brexit were to take place, we need to identify, examine, exploit and strengthen all existing relationships? That means not just diplomatically through our embassies and consulates, but that the parliamentary dimension should be examined. That includes the international parliamentary institutions like the Council of Europe and the all-party groups in this Parliament, which should be allowed to strengthen their relationships with their opposite numbers in the European Union.

[Lord Ahmad of Wimbledon]

I agree with the noble Lord about the Council of Europe, which remains an important body that we will continue to be part of. As Minister for the United Nations, I can say that we engage at the Security Council in that context. I recently attended a meeting of Foreign Ministers in Brussels called by the Belgian Foreign Minister which included Poland, Germany, ourselves and EU Commissioner Federica Mogherini. We talked about how we as five countries can work collectively within the context of the Security Council on European issues. Indeed, recent examples such as ensuring that the Iranian nuclear deal stays on the table show the strength of European unity. That goes beyond just working through what we have done so far with the European Union as a body.

Nord Stream 2 Pipeline

Lord Anderson of Swansea Excerpts

Thursday 28th February 2019 Lords Chamber

[Lord Ahmad of Wimbledon]

I agree with the noble Lord, as I agree with my noble friend. It is quite clear from the UK’s perspective. We are so against this project for the very reasons the noble Lord articulates.

[Lord Anderson of Swansea (Lab)]

My Lords, part of the problem is that former Chancellor Schröder is one of the chief lobbyists for this project. Does the Minister not see this in the context of the wishes of Putin’s Russia to undermine the economy of Ukraine, just as we now see in the Kerch Strait?

[Lord Ahmad of Wimbledon]

I agree with the noble Lord. There would be an impact if Nord Stream 2 goes ahead—current gas supplies run through Ukraine to Slovakia, and then pass back to Ukraine because of the nature of the relationship between Russia and Ukraine—as Ukraine’s economy would lose out because transit fees currently form about 3% of its GDP. I agree with the sentiments being expressed. The points that have been raised are points that we raise with the European Commission and our European partners.

China: Uighur Muslims

Lord Anderson of Swansea Excerpts

Wednesday 19th December 2018 Lords Chamber

[Lord Ahmad of Wimbledon]

My Lords, I am grateful to the noble Lord for raising this issue. When we talk of religious persecution and the rights of different minority communities around the world, the plight of the Uighur Muslim is often forgotten. I have certainly been aware of this. The noble Lord will know that we raised this issue in a deliberate, focused way during the universal periodic review with the specific reference to the plight of the Uighur Muslims. To answer his question directly, that has resulted in strong support at an international level, not just among Muslim leaders, but in other states, ensuring that we raise the bar on raising this issue consistently with the Chinese authorities. Indeed, as I said earlier, our diplomats have recently returned from the region. The reports they provided are quite challenging and even quite horrific in certain respects, with people being asked to remove any sign that they are of a particular faith.

[Lord Anderson of Swansea (Lab)]

My Lords, the United Nations estimates that there are over 1 million people—mostly Uighur Muslims, including Kazakhs and others—in these resettlement camps. We are a member of the UN Human Rights Council; China has been a member for six years and this expires in October of next year. It is good that we have raised this issue, but what support have we received from others on the Human Rights Council, and what response has there been from China?

[Lord Ahmad of Wimbledon]

My Lords, it would be fair to say that at this stage the response from China on the concerns raised has been quite limited. However, this is an issue that has come to the fore and has now been raised at an international level, where perhaps it had not previously got the focus it deserves. Let me assure the noble Lord and your Lordships’ House that this remains a key priority on our human rights agenda. Specifically, we have been talking to partners at the Security Council, we raised this directly and bilaterally with the Chinese authorities and my right honourable friend the Foreign Secretary raised this in his direct talks with the Foreign Minister of China.

Nigeria: Intercommunal Violence

Lord Anderson of Swansea Excerpts

Tuesday 18th December 2018 Lords Chamber

[Lord Ahmad of Wimbledon]

I assure my noble friend that we will continue to work with European partners and, as he rightly articulated, with other members of the Commonwealth. He will know that my right honourable friend the Prime Minister recently visited Nigeria, as did His Royal Highness the Prince of Wales. These visits were also intended to strengthen the support we are giving to the Nigerian authorities and Government in addressing the violence which has gripped the country for far too long. In terms of military support, we have been engaging directly in assisting with the training of up to 30,000 members of the Nigerian security forces.

[Lord Anderson of Swansea (Lab)]

My Lords, the Minister mentioned the underlying causes, as well as helping on the security side. Does he agree that one underlying cause of friction is the alarming increase in Nigeria’s population? What help are we giving the Nigerian Government with family spacing and women’s reproductive health?

[Lord Ahmad of Wimbledon]

The noble Lord is right to raise that issue. There are many underlying reasons for the conflict in Nigeria but its population growth and the challenges that that poses to the country’s public services, wealth and economy are well known. I assure him that we are working through a series of initiatives with the Department for International Development to provide support in health and education to address some of the challenges caused by the country’s population growth.

Ukraine

Lord Anderson of Swansea Excerpts

Monday 17th December 2018 Grand Committee

[Lord Anderson of Swansea (Lab)]

My Lords, I congratulate the noble Viscount on his initiative on Ukraine, which regretfully has largely slipped from our headlines because of Brexit. I have three points.

First, however hard Ukraine strives to be a proud, sovereign and independent country, secure within its borders, that yearning is thwarted by the Russian Government. Russia annexed Crimea after a series of lies and salami tactics in 2014 and has since maltreated Crimean Tatars. In May, Russia illegally built a bridge from Crimea to its territory, preventing large vessels reaching Ukraine’s industrial ports on the Sea of Azov. On 25 November Russia fired on and took control of three Ukrainian naval vessels and their crews. It appears Russia is attempting to throttle the economy of Ukraine. In the Donbass, occupied by so-called Russian volunteers, they held fake elections last November.

These actions may be seen in the context of other aggressive acts, such as the invasion of Georgia in 2008 and the continued occupation of South Ossetia and Abkhazia. The West did nothing, and a frozen conflict has emerged. Other actions include Russia’s role in Syria, the shooting down of the Malaysian airliner, the poisoning by GRU agents in Salisbury, cyberwarfare and the attempt to destabilise western democracies by interfering in elections.

How do we respond? Condemnation and calls for restraint are not enough and a military response is clearly out of the question, but Russia must pay a price. Sanctions are in place but are a blunt instrument, although they do have some effect on the Russian economy. Some call for the suspension of work on the Nord Stream 2 pipeline, one of whose objects is to bypass Ukraine.

I concede that it is easier to impose sanctions than to withdraw them. There is a serious danger of current sanctions unravelling. I note recent remarks by Salvini, the Deputy Prime Minister of Italy, who in October vowed in Russia to do his best to bring an end to sanctions. The Hungarian Foreign Minister spoke in September to the Russia Today broadcaster against automatically prolonging sanctions. Even Sigmar Gabriel, the Social Democratic former Foreign Minister of Germany, last month suggested lifting economic sanctions if a ceasefire holds in Ukraine. President Trump personally is very wobbly on the issue. In short, there appears little prospect of intensifying sanctions as business interests prevail, particularly if our weight is no longer felt in the EU after Brexit. How seriously do the Government view the danger of giving Putin a victory by withdrawing or reducing sanctions?

Secondly, is there any evidence that Russia is seeking a compromise over Ukraine? Some will argue with great reluctance that, realistically, Ukraine may ultimately have to accept the loss of Crimea and that all we in the West can do is to continue raising human rights concerns. Is there any positive movement in sight over the Donbass, where Russia has no historical claims? Neither side is honouring the February 2015 Minsk 2 accord. Any deal must involve local elections and a degree of local autonomy, with the consequent danger of continued Russian interference. In September 2017, President Putin expressed a willingness in principle to discuss UN involvement in the Donbass. Is this possibility still live, in the Government’s view?

Thirdly, how should we respond to the needs and aspirations of Ukraine? Even if full membership of the EU and NATO is out of the question, surely ways to increase its association should be found. I welcome the range of UK policies in place on strengthening government, including helping to combat corruption, and improving military capabilities. Do the Government envisage increasing resources to Ukraine?

Overall, step by step, Russia is increasing pressure to test the will of the West. It is right that we have given increased assurances to the Baltic states, which feel vulnerable. Our clear message to Russia is: you will pay a price economically and politically for your policies of aggression and destabilisation in Ukraine. Hitherto thou shalt come, and no further.

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[Lord Anderson of Swansea]

Is there a prospect of the sanctions being intensified or will they inevitably unravel when they come to a potential rollover?

[Lord Ahmad of Wimbledon]

My Lords, at the start of my contribution I mentioned the Statement that the Prime Minister made that the sanctions would be rolled over and strengthened, particularly with the continued collaboration of our European partners.

Several questions were asked about UK assistance and I will seek to cover some of them in the time that remains. I assure noble Lords that more progress has been made in the past four years than in the previous 23 years combined, notably in reforming the energy and banking sectors. Crucially, progress has been achieved in tackling corruption through the procurement of electronic systems, building anti-corruption institutions and launching an electronic income declaration system for officials. The UK Government hosted the Ukraine reform conference in July 2017. Indeed, it was one of my first acts when I joined the Foreign Office. I recall visiting Ukraine in 2014 as a Communities and Local Government Minister to help it on local governance methods.

The noble Lord, Lord Collins, raised the impact on the economy of east Ukraine. The consequences of recent Russian actions have been quite severe, particularly on trade through the Kerch Strait. Cities situated on the Sea of Azov have seen the economic throughput in their ports reduced in the past nine months, Mariupol by 43% and Berdyansk by 30%.

My noble friend Lord Bowness, among others, raised the £35 million of UK assistance to Ukraine. This continues, including £8.7 million in DfID humanitarian funding and £40 million through the Conflict, Stability and Security Fund, as the noble Lord, Lord Collins, acknowledged. I assure the noble Baroness, Lady Smith, that our wide-ranging programmes include technical assistance and have had a positive impact on the business climate. Headline achievements include the establishment of an intellectual property rights court, more professional management of public finances and support for small and medium-sized enterprises, a point I know will resonate with all noble Lords. I will highlight two projects that have made a real difference to people in the conflict-affected communities: a mine clearance project, and our support for valuable work to raise awareness and improve the response to sexual and gender-based violence in Ukraine.

My noble friend Lord Bowness also asked about the role of the OSCE special monitoring mission. The UK makes one of the largest personnel contributions to the mission, and I assure him that we will continue to support the continuation of its vital mission in discussions at the OSCE. My noble friend Lord Risby asked about sending NATO troops to Romania and Bulgaria. In the interests of time, I will write to him on that.

The noble Lord, Lord Wallace, raised the issue of stepping back from the Normandy process. France and Germany are of course leading this process, as he knows, but I assure him that we continue to support their efforts to make progress on the Minsk agreements.

In conclusion, in terms of souls lost and lives fractured, potential thwarted and hope dimmed, Ukraine continues to pay a heavy price for daring to exercise its sovereign rights to look to the West. The Ukrainian people are suffering an illegal, immoral and unjust punishment meted out by a neighbour that uses external force to mask geopolitical and economic insecurities, and to unite its own population. Russia’s illegal and aggressive strategy not only threatens Ukraine but is a clear challenge to the rules-based international system and to the will of the international community. In thanking the noble Viscount, Lord Waverley, for initiating this debate, I assure all noble Lords that the UK Government remain committed and will continue to work collaboratively and collectively to ensure that the resolve of the international community remains undiminished, and that we will continue to work bilaterally with the Ukrainian Government for a better future for all Ukrainians.

Intermediate-Range Nuclear Forces Treaty

Lord Anderson of Swansea Excerpts

Wednesday 24th October 2018 Lords Chamber

[Lord Ahmad of Wimbledon]

The noble Lord raises an important point about the renewal of that treaty. I assure him that we are working across NATO to ensure not only that the principles of that treaty are sustained but that the peace that we have seen on the continent through the de-escalation and reduction of weapons of all kinds—both nuclear and others—is not just sustained but maintained. There is a concern that I have already alluded to. In recent years we have seen Russia’s non-compliance and concerns about its technology-enabled development of new capabilities. It is right that NATO stands firm against this and we will continue to work very closely with NATO allies including—importantly—the United States.

[Lord Anderson of Swansea (Lab)]

My Lords, the Minister appears to have conceded that this was yet another surprise unilateral announcement by the President, without consultation with allies. But the President was right in one respect: things have moved on since this bilateral treaty. China is outside the treaty. Are there any prospects at all of engaging China in any form of treaty similar to the INF?

[Lord Ahmad of Wimbledon]

The noble Lord talks again about the concerns of the United States, which are about not just China but North Korea and other countries that are not subject to such bilateral agreements and are therefore outside the remit of such a treaty. It is important to recognise that, in the world we live in today, there is a real need to acknowledge that different alliances need to be strengthened and that some countries are developing certain technologies in this area. The important task is to ensure that our dialogue, along with our partners, is sustained not just with Russia but elsewhere. Indeed, we are encouraged—certainly when it came to the discussions between the United States and North Korea—by the agreements that have been reached on the de-escalation of various capabilities in that region of Asia.

Violent Extremism

Lord Anderson of Swansea Excerpts

Thursday 28th June 2018 Grand Committee

[Lord Anderson of Swansea (Lab)]

My Lords, I confess to being wary of the practice of certain commercial groups that provide secretarial help for busy parliamentarians, with a view to ensuring that the resulting report contains conclusions and recommendations that accord with their interests and image. This report is decisively not in that category. The British Council strives successfully to promote the public interest by soft power initiatives, and has an excellent track record in MENA. I therefore congratulate my fellow parliamentarians who produced this valuable report, which is both a helpful source of information and a stimulus to all who work in the field.

All our European partners wrestle with the same problem of addressing young people. President Macron’s initiative, announced yesterday, on national service for 16 year-olds in France, may be seen in the same context. The starting point is surely that there is no simple or short-term answer to violent extremism, and it is useful not just to examine the message and the messenger but to go upstream and look at the overall environment—and, yes, to examine the effectiveness of these initiatives.

The choice of Morocco and Tunisia to examine is interesting: both emerged positively from the Arab spring—almost alone, save Jordan—with reformist Governments and relatively democratic constitutions. It is puzzling, however, that both Morocco and Tunisia send a disproportionate number of recruits to Daesh in Iraq and Syria and to terrorist groups in Europe. I was saddened to read in the report that, in spite of so many positive factors, the majority of young people interviewed in Morocco wanted to leave their country for better opportunities, and not to return to contribute to their country’s future.

I make a few observations on the report, in a constructive spirit. Others have covered the same ground as this report with broadly similar conclusions. I think particularly of the five UNDP reports on Arab human development published between 2002 and 2009, which are still valid, particularly on the role of women. The group might also have consulted our parliamentary colleague, Liam Byrne MP, who has written persuasively on the subject.

The authors might also have asked why some countries, or parts of countries, are more prone to violent extremism. It cannot just be a booming youth population, since the whole of Nigeria would then suffer, not just the north. It cannot just be socioeconomic problems, as in many ways Zimbabwe, for example, fares less well than MENA countries but does not have the same extremism. This suggests a religious link, which, perhaps because of the sensitivities involved, the authors chose to exclude from their remit. Surely we need trusted, local religious leaders on board. I note that Morocco, for example, has set up a centre for training moderate local imams.

Much of the same ground has already been covered by international organisations. The authors acknowledge the 2016 UN plan of action, but not the work of the European Union and the Council of Europe. There must surely be an exchange of best practice and a co-ordination of efforts across civil society to prevent an insular approach to this problem. In March this year, after publication of the report, a relevant major symposium was hosted by Birmingham University and that initiative is worth examining. Investment in human rights, the rule of law and democracy are among the soft power tools with which the British Council has already made a positive impact, together with the work of the arts, sport and technical and language training.

Finally, young people need to be listened to if they are to be valued. The upstream work set out in the report is wholly relevant to our national interest. If we do not go to them, they will come to us, including in destructive ways.

Palestinian Territories

Lord Anderson of Swansea Excerpts

Thursday 7th June 2018 Lords Chamber

[Lord Anderson of Swansea (Lab)]

My Lords, as the noble Lord, Lord Luce, said, all political problems are capable of settlement, however intractable, as we have seen in Northern Ireland and South Africa. Looking at the Israel-Palestine problem I am reminded of the old Polish question, what is the difference between an optimist and a pessimist? A pessimist says, “Things cannot get any worse” and an optimist says, “Oh yes they can”. It is so easy to despair of any settlement, looking at the current problems, the continued Israeli control of much of the West Bank, the expansion of settlements, the building of new settlements, the division in the Palestinian leadership which allows Israel to say that there is no negotiating partner, the emigration of many young Palestinians who see no future for them in Palestine, and the threats of a further intifada because of the deep frustrations. All this at a time when Israel has the most right-wing Government in its history and when the US has abandoned any aspiration to be a mediator—as it was, of course, when President Clinton devoted such energy to a settlement and when Secretary Kerry criss-crossed the two areas so frequently.

Then there is Gaza, mired in deep social division, vacated by Prime Minister Sharon only to allow the firing of rockets into Israel. Hamas now admits that 50 of the 60 people killed on 14 May were actually members of that organisation, which plays into the Israeli narrative of their over-reaction.

Then there is the population explosion in Gaza, which is not frequently mentioned. In 1947 there were 250,000 people in Gaza. There are now more than 2 million in that small area. Yet international donors and the UN refuse to do anything serious about family spacing and tackling that population problem, which can lead only to further frustration and extremism.

Externally, the situation for the Palestinians has worsened recently due to a number of factors, such as the turmoil in the region and the fact that Arab Governments appear to have lost interest in the Palestinian cause and make common cause with Israel against Shia Iran. Israel now speaks from a position of enormous strength. Surely there is no better time to seek peace before the demographic problems for Israel mount and the threat from Hezbollah makes frontiers less relevant because of its great arsenal of rocketry.

Prime Minister Netanyahu parrots the possibility of a two-state solution—at least, he has until recently—while his settlements policy makes it impossible, creating facts. Clearly, there is no plan or vision with the objective of reaching any port; the objective is merely to keep the ship afloat, to manage the situation. The Palestinians are led by old men, imprisoned by the past and unwilling to modernise. Abbas plays to the gallery by implying that Jews were partly responsible for the Holocaust and is content to foster hostility towards Israel via the textbooks. There is a policy of illusion, not realism, as shown by the demand for the right of return, which would be the end of Israel. It is unreal, it is nostalgia. Until new leadership can take over, the problems will continue.

Alas, the only way forward is through the micropolicies mentioned by the noble Lord, Lord Luce: that is, by building bridges; by exchanging universities; and through technical expertise, including the greening of the desert. All this is possible and is being done in preparation for what, I hope, will ultimately be a settlement. Blessed indeed are the peacemakers but they are all too few in this tragic situation.

Sanctions and Anti-Money Laundering Bill [HL]

Lord Anderson of Swansea Excerpts

Ping Pong (Hansard): House of Lords
Monday 21st May 2018 Lords Chamber

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, the abuse of human rights was an issue of significant concern to both your Lordships’ House and the other place, as was made clear by many people who spoke at various stages of the Bill. The Government fully recognise why noble Lords and Members of the other place wished to reference gross human rights abuses explicitly, particularly in reference to the abhorrent case of Sergei Magnitsky. In her speech to the other House on 14 March, the Prime Minister made clear the Government’s intention to bring forward a “Magnitsky amendment” to the Bill. As a result, the Government worked closely and constructively with all sides of the other House to table these amendments, which have captured the maximum possible consensus in this area.

Commons Amendment 1 puts gross human rights abuses in the Bill as a purpose for which sanctions may be imposed. Commons Amendment 5 links the existing definition of a,

“gross violation of human rights”,

to the definition in the Proceeds of Crime Act 2002, and so ensures that it includes the torture of a person,

“by a public official, or a person acting in an official capacity”,

where the tortured person has sought to,

“expose illegal activity carried out by a public official”,

or to defend,

“human rights and fundamental freedoms”.

This makes it clear that all gross human rights abuses or violations are explicitly captured within the Bill. Commons Amendments 2, 3, 6, 7, 8, 14, 15, 19 and 20 are consequential on the changes to Clause 1.

Amendment 17 requires reports to be made about the use of the power to make sanctions regulations. Reports must identify regulations that have been made for human rights purposes. They must also specify any recommendations made by a parliamentary committee about the use of that power in relation to gross human rights violations, and include the Government’s response to any recommendations. It is right and proper that scrutiny of the regulations is carried out by Parliament.

Commons Amendment 16 was tabled in recognition of the concerns, raised by both the Independent Reviewer of Terrorism Legislation and the Joint Committee on Human Rights, that the repeal of Part 1 of the Terrorist Asset-Freezing etc. Act 2010—TAFA—would remove the independent reviewer’s oversight of the UK’s counter-terrorism asset freezes. I can assure all noble Lords that there was never any intention by the Government to remove independent oversight of the UK’s counter- terrorism asset-freezing regulations made under this Bill. That is why a carefully drafted government amendment was tabled in the other place to replicate effectively the scope of the independent oversight currently provided under TAFA. This ensures that there will be no removal or narrowing of the oversight of counterterrorism asset freezes as a result of the Bill.

The amendment also makes the Government’s commitment to this clear by imposing a duty to appoint an independent reviewer. The duty applies to any part of sanctions regulations that imposes asset freezes that are not made for a purpose that implements international obligations in this area but would further the prevention of terrorism. This is consistent with the scope of the independent oversight provided for under TAFA, thereby ensuring there is no removal or narrowing of the oversight of counterterrorism asset freezes as a result of the Bill.

I put it on record again that the Government are committed to promoting and strengthening universal human rights, and holding to account states and individuals responsible for the most serious violations. We will continue to do this after we leave the European Union and we intend that the powers in the Bill should allow us to be part of a global network of like-minded jurisdictions, working together to tackle those who commit gross human rights violations. We will continue to work with international partners to this end. I beg to move.

[Lord Anderson of Swansea (Lab)]

My Lords, it is good to turn to a period of calm after the clash and clamour of Brexit. I congratulate the Government on responding to the pressures in this House and the other place, and on taking a stand that I hope will be followed by other countries where appropriate. The current amendments relate to sanctions on the perpetrators of human rights abuses, wherever committed, and against individuals rather than states. They are therefore smart sanctions and I congratulate Sir Alan Duncan in the other place and those who have worked together. The Minister stressed that it was an all-party group and I believe the amendments in the other place were signed by all parties. This is therefore very important.

I congratulate also Bill Browder, who has worked tirelessly following the murder in custody of Sergei Magnitsky. These amendments are made in the context of the poisoning of Sergei and Yulia Skripal in Salisbury and the murder of Magnitsky in Russia in 2009, but they are clearly not limited to Russia. They are much broader and universal, just as the Magnitsky Act of 2012 in the US was, in 2016, broadened to include perpetrators of gross human rights abuses wherever committed. As the Prime Minister has said:

“There is no place for these people—or their money—in our country”.

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I repeat that the measures called for are not the ideal ones to address anti-money laundering. We certainly need to include all non-local companies and to have verification, and our arrangements lack that. Public registers are rather cheap political playing to the gallery, saying “Aren’t we wonderful to have done this?”, ignoring the fact that what we have established in the UK does not work properly. I hope the Government will think again and find a sensible and reasonable way to implement this legislation but that, if necessary, it will be put to judicial review.

[Lord Anderson of Swansea]

My Lords, the use by Russia of dirty money was highlighted in the report today of the Foreign Affairs Committee in respect of counterterrorism and so on. It is clear that although the two Members who have just spoken did so with great passion and knowledge, they failed to take on board the actual figures. Global Witness says that at the moment there is £34 billion of Russian money in the overseas territories, £30 billion of which is in the BVI. Why does the Russian money go there? Is it suggested that all that money is clean? Noble Lords will recall that when the noble Lord, Lord Faulks, and I among others were pointing out areas of property investment in London, we said there are several streets in the Royal Borough of Kensington and Chelsea, which we both know well, where the lights never go on at night because money—

[Lord Flight]

My Lords, does the noble Lord, Lord Anderson, have the figure for black Russian assets in the UK? I imagine that there is substantially more than £30 billion.

[Lord Anderson of Swansea]

My Lords, with the public register of beneficial ownership it should be possible to obtain those figures. It would be absurd if money that fled from the London property market went to the overseas territories and sought a haven there. Anyway, the figures that are given—I am very happy be told that the they are incorrect—are that £34 billion of Russian money is currently in the overseas territories, £30 billion of which is in the BVI, and there has been over £100 billion over the past decade. Surely a proportion of that at the very least is dirty money, and the question must therefore be posed: are we prepared to countenance dirty money finding a haven in the overseas territories? That is what is suggested.

We have to respond very sensitively. Of course there will be an economic impact, and that will only be exacerbated by the impact of the hurricane, particularly in the BVI. Because of the UK’s responsibility to these overseas territories, we will have to bear at least part of the cost, but surely we should not countenance the position that I have mentioned. If the Minister has figures other than this £34 billion, I am very happy to hear them, and if he suggests that none of that is dirty money then I will be happy to hear his view, but surely it is in everyone’s interest that dirty money be pursued wherever it is and that there be a publicly accessible register.

At the same time, the economic impact should be recognised, along with the possible damage to the constitutional position. If those countries wish to go independent, so be it. Fairly recently there was a report on the contingent liabilities to the British taxpayer of the overseas territories. I wonder where the balance would lie, if a number of these countries went independent, regarding the amount currently spent by the British taxpayer. I am happy with that, but the question must remain: if these figures are correct, and if it must be that a portion of that sum is dirty, are we prepared to allow that to continue?

[Lord Northbrook (Con)]

My Lords, is the noble Lord, Lord Anderson, aware that none of the overseas territories is on the EU blacklist of non-co-operative tax jurisdictions as of December last year?

[Lord Anderson of Swansea]

That may well be the case, but I pose the question again. There is this £34 billion of Russian money. We know that the oligarchs look for areas where they can usefully hide their assets. Are we prepared to continue to allow that?

[Lord Neuberger of Abbotsbury (CB)]

My Lords, I strongly support the amendment of the noble Lord, Lord Naseby. The clause which he seeks to remove from the Bill is a classic example of a proposal which may seem right to many people—for the reasons given so clearly by the noble Lord, Lord Anderson of Swansea—but, after proper consideration can be seen to be very wrong.

Unlike most countries, our constitutional arrangements are based on conventions and mutual respect rather than pieces of paper, and we break those conventions and trample on that mutual respect at our peril. As the 2012 White Paper on the territories recognised, the UK’s legislative power over the territories is in practice and by convention limited to,

“external affairs, defence, internal security (including the police) and the appointment, discipline and removal of public officers”—

and, I would add, compliance with the UK’s international obligations. Accordingly, the proposal would run contrary to the established distribution of powers—quite apart from the points made about the constitution of some of the territories.

Not only that, it would do so in a most inappropriate way. There has been no consultation with the democratically elected Governments of any of the territories about the legislation. There has been no investigation of the effectiveness of this law in relation to any of the territories. There has been no inquiry as to the economic and social consequences of the legislation on any of the territories. That is in circumstances where, to go back to what the White Paper said, the UK Government aim,

“to work with Territories to strengthen good governance arrangements, public financial management and economic planning”,

to work with the territories.

I regret to say that the proposed law appears to be old-style colonialism at its worst: damaging legislation which has no cost for the legislating country but which will cause hardship to the victim countries, and does so not merely without representation but without consultation or full investigation. But it gets worse. The law is imposed in circumstances in which it is indisputable that the BVI, Cayman and Bermuda comply with all current international transparency and taxation requirements, such as those laid down by the OECD. This was recognised by the very full and generally rather critical December 2017 EU Muscovici report, which identifies which countries are unco-operative by hiding assets, and so on, and it does not include any of the territories.

[Lord Neuberger of Abbotsbury]

I believe that is the case, yes. I was going on to say that in many respects it appears that all three territories which I mentioned have a regulatory regime which in many respects is stricter than that of this country.

On top of all this, this proposal imposes a financially damaging regime on at least three territories in the Caribbean area with significant financial service industries for which the UK has responsibility, while not doing so for the Crown dependencies with substantial financial service industries closer to home: Jersey, Guernsey and the Isle of Man, for example. That adds discriminatory insult to unconstitutional and unfair injury. Let me make it clear to the Crown dependencies that I say this to oppose the proposed law applying to the territories, not to support it applying to the dependencies.

Finally, what will happen if this unfair and unjustified law is brought into force, apart from leading to a real sense of grievance and of being let down on the part of small states which it is our duty to protect? It will do no good. If there is the hot money to which the noble Lord, Lord Anderson of Swansea, referred, it will quickly move away from the BVI, Cayman and Bermuda to places which do not have respected democratic Governments and independent and respected courts, where the Judicial Committee of the Privy Council, which I had the honour to chair for five years, has no power. In effect, it will not be upholding the rule of law, it will be undermining it.

It will be only when we have universal acceptance of such regulation that, I respectfully suggest, it will be appropriate to impose it on these territories.

[Lord Anderson of Swansea]

With respect, is that not avoiding the question in an Augustinian way: make me good, but not yet, not until everybody else is good?

[Lord Neuberger of Abbotsbury]

So we have to sacrifice other people many miles away who have no say in it for the purpose of feeling good and leading the way? That seems to me, if I may say so, a very selfish attitude to take. It is simply inappropriate for us to do this for other countries.

Brexit: Sanctions Policy (European Union Committee Report)

Lord Anderson of Swansea Excerpts

Thursday 3rd May 2018 Lords Chamber

[Lord Anderson of Swansea (Lab)]

My Lords, I join in congratulating the noble Baroness and her committee and welcome what is a highly timely report—timely not only in the sense that the EU Committee is carrying out a whole series of reports via its sub-committees on the implications of leaving the European Union, but also with respect to our policy on Russia. We go back to the death by a Russian agent of Litvinenko and that agent now being in the Duma in Russia. We think of the invasion of Georgia in 2008, and the fact that Russia and its minions still occupy South Ossetia and Abkhazia. We think of other actions, such as the recent tragedy in Salisbury, and of course Ukraine, including Crimea. The only problem about Crimea is that it is claimed as a maxim of diplomacy that we follow the road sign that says, “Do not enter box unless your exit is clear”. If we make sanctions on Russia wholly contingent on Russia’s leaving the Crimea, that, alas, will never happen, and there is therefore no obvious exit in terms of sanctions if we follow that route. Russia seems to be permanently in the Crimea, and there comes a point, after Salisbury and the chemical bombing by its ally Assad, when Russia must learn the lesson of behaving properly in international affairs and must also learn that there is conduct that will not be accepted and for which it will have to pay a price.

Sanctions, as was said in the committee report, are a most useful soft power tool, short of war. Some dismiss sanctions as gesture politics and, of course, they are not always effective and do not always hit the right targets. Iran and North Korea have been mentioned. I was fairly involved in the 1980s as the opposition spokesman on Africa, with the history of the anti-apartheid struggle. There is no doubt that, at that time, the sports boycott had a significant effect on public opinion on South Africa, and private sanctions by the financial community—illustrated by the effect of the 1986 failure of Chase Manhattan to roll over loans—had a major effect on the South African economy.

I note that, in response to the noble Baroness, Lady Deech, on her Written Question of 13 March, the noble Lord, Lord Ahmad, replied that sanctions are indeed biting in Russia. I remind him of his reply: of the 3.7% decline in Russian GDP in 2015, Citibank estimates that 0.4% was due to the sanctions. Perhaps more importantly, it has made it more difficult for Russia to access western finance. As the noble Lord, Lord Horam, has just said, the role of the City of London is particularly important in this context. However desirable sanctions may be through the United Nations, the experience of the Russian veto in the UN Security Council on sanctions for Syria illustrates the limitations of that route. For us, by far the most useful institution is the European Union, where over 50% of the sanctions we impose are autonomous and where we in the UK have played a leading role. There is no doubt that the clout of a unified European Union response is powerful, both as a sword in bringing pressure on such countries and as a shield to protect EU member states against counter sanctions, if we were to carry out those sanctions on our own.

The possible isolation of the United Kingdom in this field would be neither attractive nor effective, so our aim must surely be to retain as much influence on EU policy as possible, even when we are outside the formal structures. The committee has looked at a whole variety of possibilities, the disadvantage being of course, on the evidence from Norway and Switzerland—in paragraphs 80 and 81 of the report—that, however closely we align ourselves and however inventive we are in respect of EU sanctions, we will be outside the club and thus following decisions over which we have no or very limited influence.

My first observation, therefore, is that any alternative to our current membership cannot be an improvement for us. I have seen a similar position in the EU sub-committee on which I have the privilege to serve—the judicial committee—both in terms of consumer protection, where any alternative is worse, according to those in the field, than the current relationship we have with the European Union, and also on the dispute resolution report that we have just published. What is clear is that this is an exercise in damage limitation for the United Kingdom. It is true, as the committee concludes, that there are several possible options which could be mutually beneficial, and who doubts that it is most important and mutually beneficial for us and the European Union that we work together? We have so much experience and so many resources, not least our intelligence resources, to bring to the table. But all other options are less desirable and make us weaker, and that is true over the field of foreign policy as a whole.

My second observation is that currently, our considerable expertise in the field is highly respected in the European Union and beyond, and its loss would weaken EU sanctions regimes. Not only that: our reduced weight in the debate would have a serious effect on the balance within the European Union. If we look, for example, at the EU sanctions against Russia, a number of countries, either because of geography or history, or more particularly because of their economic interests, are very wobbly on those sanctions. I think of Hungary, Austria—where both left and right are much weaker on Russia—to some extent the Czech Republic, certainly Cyprus, and certainly Italy in its current configuration, as it seeks a coalition. All these are reluctant partners in respect of sanctions against Russia, and the balance within the European Union will be substantially altered if our weight is taken from it. The loss of our influence is one reason why Russia belatedly intervened in the EU referendum, and we saw the allegations yesterday from the Conservative Member for the Isle of Wight about one Brexiteer tycoon who played a role on behalf of Russia in that referendum debate.

My next observation is far more positive: I turn to the question of sanctions against individuals for human rights violations. I commend and welcome the recent moves of the Government in this field. In the previous Parliament, the Government amended the Criminal Finances Act to allow our law enforcement agencies to recover from property in the UK the proceeds of human rights abuses, wherever in the world they are committed. This was the first part of the US Magnitsky Act; on the second part, on visa bans, the Government argued that adequate powers were available to exclude individuals whose presence was not conducive to the public good.

This week, in Tuesday’s debate on Report on the Sanctions and Anti-Money Laundering Bill, the Government went very much further. The result will be that sanctions can be made to prevent, or in response to, gross human rights abuse or violations. This is defined in a separate government amendment—I commend Sir Alan Duncan on his willingness to listen on this—to include the torture of a person by a public official or by a person in an official capacity, where the tortured person has sought to expose the illegal activity of a public official or to defend human rights or fundamental freedoms. This is a most welcome response to the Magnitsky case. Your Lordships may recall that Magnitsky, a Russian national, was an agent of Hermitage Capital Management who was tortured to death in a Russian prison. Subsequently, through an evidence trail, it became clear that Russian tax officials benefited financially from their misdeeds. The Russians took no action save to pursue Bill Browder, the head of Hermitage Capital Management, relentlessly, including at the moment in Cyprus.

Finally, there is a variety of relevant laws in force in this area in the US—the Magnitsky Act—Canada, Latvia and Lithuania. Relying on these precedents, and the precedent set by our own Government, I am producing a report to the Committee on Legal Affairs and Human Rights of the Parliamentary Assembly of the Council of Europe, which will encourage all members of wider European bodies to enact similar laws. The spreading of such precedence across the membership of the Council of Europe will be a memorial to Sergei Magnitsky himself and a tribute to Bill Browder, who has waged a most effective lobbying campaign to highlight the wrong done to Magnitsky and to seek an appropriate international response.