Sanctions Implementation and Enforcement

Lord Purvis of Tweed Excerpts

Thursday 15th May 2025 Lords Chamber

[Lord Callanan (Con)]

My Lords, let me first thank the noble Baroness for repeating the Statement and say that we on these Benches welcome measures to bear down on Putin’s regime and undermine his ability to wage this barbaric, illegal invasion of Ukraine. The refusal of Putin to attend today’s talks in Turkey is yet another sign that Russia really is not interested in peace. Putin could end the war today, but he has refused time and again to consider an end to the violence he has inflicted on the maligned people of Ukraine.

The toll we have exacted on Russia and its war-making capacity is something that I am proud of, and it stems directly from the sanctions regime that we formed when in government and that the current Government, to their credit, have continued. Working with allies, we imposed the largest and most severe set of sanctions that Russia had ever seen. We sanctioned around 2,000 individuals, companies and groups. None of us should be in doubt that the economic pressure that we and allies have been exerting means that Russia can no longer afford to sustain the cost of this illegal invasion. Russia’s interest rates are at levels not seen for decades; welfare payments are being cut; and, as the noble Baroness said, our collective sanctions have stripped Putin of $450 billion of benefits since February 2022—money that Russia could otherwise have spent on that war in Ukraine.

We on these Benches broadly welcome today’s Statement from the Government, which is part of an effort to better co-ordinate the sanctions regime in place against Russia. It is vital that the current Government do all they can to crack down on those who violate this regime, and we must remain firm in our resolve to stop the flow of resources into Russia and utilise assets in a way that supports the fight against Russia. However, some questions remain over the current sanctions regime and what more we can do with it to oppose Putin and this vile invasion. First, will the Minister confirm whether her department is currently looking into wider secondary sanctions against Russia? What kind of engagement are the Government having with countries whose economies are being used to cheat the international sanctions response, and what measures are the Government considering to stop this? Those countries include some with which we have just done trade deals.

Can the Minister update the House on the Government’s internal deadline for getting the proceeds from the sale of Chelsea Football Club? Can she update us on the Foreign Secretary’s engagement with trustees, the Government of Portugal and the European Commission on this issue? The sums we are talking about are in excess of £2 billion—a substantial amount of money, which we could unlock to support those in need in Ukraine. It is important that the Government do all they can to work at pace on this issue.

I hope that, in considering the outcome of this review, the Government will also give thought to how they communicate the purpose of the sanctions regime. Activity that violates the regime supports a murderous, brutal dictatorship. People should be left in no doubt that this regime is more than an expression of support for Ukraine; it is one of the primary weapons we have to oppose Putin and, as we have seen, it can exact substantial damage on the Russian war effort. What practical steps are the Government taking to keep UK-based businesses well informed of changes to sanctions legislation and its purpose?

There has been much coverage and discussion in recent weeks of initiatives to secure peace. That is welcome, but we must not be blinded by the headlines which hail “coalitions of the willing” and multilateral intent. For all these words, which are welcome in principle, we cannot forget that the reality of the situation for people in Ukraine remains unchanged. Ukrainians are still fighting on the front line, facing airstrikes on their towns, villages and cities and suffering death, horrendous loss and injury. We on these Benches continue to urge the Government in the strongest possible terms to leverage Britain’s influence in every way that they can to help ensure that peace is secured on terms acceptable to Ukraine. It is right that Ukraine must decide its own future. It is incumbent on us, as one of its closest allies, to support it in this desire.

[Lord Purvis of Tweed (LD)]

My Lords, I am impressed by the Minister’s efficiency. She replied positively to me on Monday when I asked for an opportunity to have a wider discussion on sanctions enforcement; I did not quite appreciate that she would deliver that three days later. It is very impressive indeed.

I have had the opportunity of debating every sanction that the previous Administration and this one have put in place since the establishment of the post-Brexit regime. These Benches have supported them at each step, but we have made the case that the sanctions tool should be used more impactfully, especially on occasions where we do not believe the sanctions go far enough, such as on the repressive actions of the Georgian regime, as referenced in the Statement, and individuals within it. On Israel and Gaza, we have repeatedly called for a widening of sanctions against those within the Netanyahu Administration, who are inflicting and facilitating the infliction of a great humanitarian crisis in Gaza and the West Bank.

I made it my mission to see the Wagner Group proscribed and was very grateful when the previous Government did it. However, our sanctions should be chasing after Russia and, for any organisation sanctioned or proscribed by the UK, there will have to be continued action.

Overall, we welcome the Statement and the review, which I had the opportunity to look at online. Fundamentally, I think it found that there was nothing wrong, but there were a number of areas where it wanted to go ahead. There was a curious line saying that the fundamental principle was

“to secure international agreement across all 193 UN Member States”

for sanctions. That is rather impossible when we are sanctioning quite a chunk of them. There was also a wee bit of Whitehall verbiage: we are to expect an invigorated toolkit of

“capabilities, capacity, powers, and actionable intelligence to take robust enforcement”

and

“user-friendly guidance to a new enforcement strategy”.

I look forward to them. No doubt we will debate what that means when we get them.

We are promised an early settlement scheme. This is an area that has raised a slight alarm signal with me. How will this interact with what the review has said about the need to increase deterrence? It is not necessary to have deterrence if we have an early settlement scheme for those who are breaching financial sanctions. If not today, perhaps the Minister might be able to say more at a later date.

The Minister referred to the £465,000 penalty for Herbert Smith Freehills for making funds available for the benefit of a designated person without a licence. This is welcome, but it is only one of five penalties since 2023, with a total amount of just £485,000. Without that £465,000, there have been only £20,000 of penalties. Is this a lack of enforcement or a stunning level of adherence to the UK sanctions regimes?

I had the opportunity to look at the excellent OFSI threat assessment report, which goes into a little more detail about some of the context. I have a couple of questions, one of them linked to the point raised by the noble Lord, Lord Callanan.

We have a number of frozen assets within the UK. On Monday, we discussed new rounds of Syria sanctions. We have £157 million in frozen Syrian assets. Given what the Minister said on Monday and what President Trump has been saying about the new Syrian President, can the Minister write to me on the status of that amount, identifying the ultimate legal beneficial owner of the frozen assets? If it is the former Assad regime, or those linked to it, then presumably we should not be offering them back. Why have we not seized those assets, which can be used for the benefit of the Syrian people, who desperately need it?

On the Russian assets, we now have, as reported by OFSI, £25 billion. We on these Benches would like to see a draft Bill on what would be required under UK law to seize those assets. We do not need to wait on others, either in the G7 or elsewhere, or act at their slow pace. These assets have been frozen under UK legislation and the power to seize them will be under UK legislation, so if there need to be any changes to UK legislation, we should see what the context is, because obviously these Benches believe that Putin should not be rewarded by getting money back at the end of this process.

The threat assessment report also highlighted what it said was a growing number of enablers and enabling countries. It singled out some, including, at the highest level of growth, the UAE. What diplomatic tools are we using for those countries which we know are the source of enablers who circumvent UK financial sanctions? As OFSI said, that is growing.

The threat assessment report also says that there are almost certainly enablers using crypto assets to breach UK financial sanctions. Can the Minister write to me on the estimated scale of this? Have we the same approach to co-ordination with our allies to ensure that this is the case, given the very dubious means by which President Trump is using crypto assets, and the difficulty in understanding the source of the crypto assets?

On China, we believe our sanctions should go further with regard to those in the Chinese Government who restrict the rights of people in Hong Kong and, in particular, those here in the United Kingdom who are operating transnational repression. It is utterly unacceptable, and I will be pursuing this further in this Chamber.

Many of us had the great privilege today of meeting former President Tsai Ing-wen, when welcoming her to Parliament. She is the highest-level official of the Taiwanese Government—both current and previous Governments—who has ever visited the UK Parliament. I pay credit to the noble Baroness, Lady D’Souza, and others who have worked so hard and tirelessly over a number of years. The former President’s lecture to us was an inspiration, because it was about democrats fighting against repression, building up resilience and ensuring that they have support here in the United Kingdom. Our sanctions regime should help people such as her, with her great leadership, and it was a real privilege to have her in Parliament today.

[Baroness Chapman of Darlington (Lab)]

My Lords, I thank the noble Lord, Lord Purvis—yes, this Government like to deliver promptly. I similarly did not anticipate being back here discussing this Statement quite so soon, not least because I had it down at 6 pm in my diary, so I ran very fast in heels from the department.

I welcome the fact that noble Lords have encouraged us to go further, and I note the comments that were made on different sanctions, including on China and others. Obviously, we do not comment on future designations—we have rehearsed that line many times in this Chamber—but we do listen when noble Lords make these kinds of observations and encourage the Government. We take these things on board and listen to what is said, but we obviously do not comment ahead of time.

I take the point made by the noble Lord, Lord Purvis, on verbiage; that is entirely fair. We try our best with these things. I believe that what the report is saying is clear, but we should be open to improving specific language where we can.

I understand the point on early settlement. All I will say is that it is just an additional tool: sometimes it is appropriate, sometimes it is not. It is important that we use it only when it is the right thing to do, when it has the effect that we want and it is not a less impactful option. I understand the concern—it is legitimate to raise it—but it is important to have that as another way of tackling this issue.

We continue to look at the Syrian and Russian frozen assets. There is an issue around frozen assets, as we have explained many times. There are legal concerns as well as potential consequences for British assets in other parts of the world. We hear the argument, and we will continue to look at this.

On the point about enablers, we have regular and detailed engagement with partner countries, where appropriate. This is an important point, and the Government are mindful of making sure that we use our levers to address it.

I thank the noble Lord, Lord Callanan, for his welcome of this report, and I completely agree with every word he said about Putin, Ukraine and Russia. I am happy to acknowledge the work that the previous Government did on this. We are building on that, as he would want us to do.

I do not have anything new to say on the Chelsea Football Club issue; I wish I did. I wish we could get this resolved and get the money where it needs to be. We are continuing to work on this at every level, and I hope that we will be able to come back to the House with a different answer very soon.

The noble Lord, Lord Callanan, was absolutely right about communication with business and making sure that the rules and updates are as widely known as possible. Measures are suggested in the report that we will implement, including email alerts, and we will continue to work through the DBT and take other opportunities to make sure that that happens.

The noble Lord asked whether we will leverage our influence. The answer to that is absolutely yes. Generally, this work is ongoing. This is not something where you ever complete the task and say, “We’ve done all the work we’re ever going to do on sanctions, and we’ve got it completely right”. We are in competition with criminal gangs and with different ways of working, so we need to keep this evolving. We need to keep it under review, keep challenging ourselves and keep changing and innovating. I am grateful to the parties opposite for their support for that work.