Global Anti-Corruption Sanctions

Lord Collins of Highbury Excerpts

Tuesday 27th April 2021 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, the Opposition warmly welcome the announcement. Corruption costs the global economy billions each year and hands power and influence to the undeserving and dishonest. It must be confronted by a united front of willing national Governments and multilateral institutions. I am pleased that these regulations have now been laid, following the sustained calls by many noble Lords on these and other Benches across the House.

I hope that this legislation marks a turning point for the Government in relation to taking corruption seriously, but for these regulations to be meaningful they must properly resource and support those tasked with investigating and enforcing against corrupt individuals. On this issue, can the Minister confirm what steps the Government will take to provide agencies such as the National Crime Agency with any additional resources that they may need? Given the need for the sanctions to target most effectively those for whom they are designed, can the Minister confirm whether the Government will allow Parliament to put forward names to be considered for designation?

There can be no ignoring the fact that, if the Government are truly determined to tackle global corruption, they must begin at home by adhering to rules and transparency. For a start, when will the Government come clean and publish the long-delayed list of ministerial interests? We must also face up to the fact that while the FCDO sanctions Russian individuals—I welcome the corruption designations contained in the report—MPs continue to accept donations from Russian sources. Of course, as I have repeatedly stated in this House, the Government failed to implement the Russia report recommendations.

One specific point that I ask the Minister to explain is the report in the Times on why Conservative MPs have accepted funding from Aquind, an energy company apparently controlled by Viktor Fedotov. Bob Seely, a Tory member of the Foreign Affairs Committee, told the Times:

“For something as important as this—supplying a large chunk of the UK’s energy needs—it is uncomfortable and somewhat bizarre that elements of its ownership are opaque.”


Of course, its main project—the interconnector project—is subject to a planning application worth £1.2 billion. I hope that there is no link between those two things. Of course, this is why there is absolutely a need for greater transparency.

Turning to the regulations themselves, I am sure the whole House will hope that this statutory framework helps the Government to isolate and deter corrupt individuals, but I would appreciate clarification on a number of areas. I know that the Minister had attempted to conduct a briefing with Members of the House; I hope that he will able to do that at some point in the future. However, first, he will be aware that, under the penalties listed in Part 7, those convicted of contravening these regulations will face up to only 12 months imprisonment or a fine, even in the most severe circumstances. Does the Minister think that this is a sufficient deterrent?

Secondly, the House may recall that I have previously called on the Government to allow greater parliamentary scrutiny of sanctions and designations. As part of these regulations there are many exemptions, which mean that the Government do not have to publish details of individual sanctions. Can the Minister explain what circumstances these refer to, and can he guarantee that this will not be used to avoid parliamentary scrutiny?

Finally, given that the regulations do not include any specific reference to military officials under the definition of “foreign public official”, can the Minister confirm that this legislation will allow sanctions against those who use their role in the armed forces for corrupt purposes?

[Baroness Northover (LD)]

My Lords, I too thank the Minister for bringing us this Statement. I welcome the introduction of this new sanctions regime and pay tribute to the extraordinary courage of Sergei Magnitsky, after whom these sanctions are named. I also pay tribute to Bill Browder, who is not resting until liberal democracies put these into place, whatever the clear risks to himself.

As the Statement says, corruption has an extremely “corrosive effect”. It undermines development and traps the poorest in poverty; we have all seen extensive evidence of that. I am glad to see sanctions on the 14 individuals involved in the tax fraud in Russia that Magnitsky uncovered. Surely, though, we need to sanction those at the very highest levels in Russia, who have raided its economy to create their extraordinary wealth while most Russians live in poverty. I am pleased to see the sanctions on the Guptas in South Africa, and I am sure that the noble Lord, Lord Hain, will be very pleased—he has fought a doughty campaign against them.

It is clearly vital that we work with others if these sanctions are to be most effective. We had been working on this area with our EU partners before we left the EU, so I ask: what progress is being made in this regard given our departure and, therefore, the reduction of our influence within our continent?

The Statement notes that the UK is a leading “financial centre”, and we certainly hope that this will continue, but that means that there is a risk of money laundering here. Last year, Transparency International said that it had identified more than £5 billion of property in the UK bought with suspicious money, one-fifth of which came from Russia; in its view, half of all the money laundered out of Russia is laundered through the United Kingdom. What of the Russia report and political donations, as the noble Lord, Lord Collins, has just mentioned? Much more clearly needs to be done here.

The Statement notes the UK’s public register of “beneficial owners”, but does not address the situation in the overseas territories or the Crown dependencies. Can the Minister comment on the vital need for progress here? Efforts will also need to be made to ensure that cryptocurrencies are not a new route to hide corruption—could he comment on this? Does he agree that it would make sense if the Government set up an independent commission to consider where and against whom sanctions should be used? This would be less likely to be swayed by the political considerations of any Government and to be fair, effective and transparent.

Talking of transparency, the Government need to make much progress themselves in relation to donations and influence. The Statement notes the importance of the National Crime Agency’s international corruption unit and its predecessors, and that the NCA has, over the last 15 years, stopped £1 billion from going astray. Although I am glad to hear that, does the Minister agree that this is a paltry sum when we consider the funds washing around corruptly?

I am not overly impressed by the International Anti-Corruption Coordination Centre in London, which has helped to freeze only about £300 million of suspected corrupt assets worldwide. In 2017 alone, the then head of the Angolan sovereign wealth fund channelled £500 million through London, which was intercepted and returned to Angola, with the head being held to account. These figures therefore indicate that we are simply scratching the surface. The UK Anti-Corruption Coalition, whose work in this area is hugely to be welcomed, is surely right when it says that the Government must ensure that corruption and human rights sanctions regimes are “properly resourced”, including by providing significant additional resources in this area.

This brings me to my last point. I trust that the Minister is aware—I am sure he is—that ODA funding has gone into supporting such work. Can he tell us whether it will be affected by the ODA cuts? The Statement says that the department “continues to provide funding”, but does not say if this will now be reduced. The integrated review has been undermined by the actions of the Government, particularly through their cuts to ODA. Are we in the same situation here? We clearly need to beef up enforcement agencies, not cut them back. Which are the Government doing?