Russian Assets: Seizure

Baroness Hodge of Barking Excerpts

Tuesday 14th March 2023 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab)]

I join the right hon. Gentleman in welcoming the Ukrainian MPs who are with us today. A letter has been sent by 45 Ukrainian MPs to our Prime Minister urging him to do precisely what we want, which is not to freeze assets but to seize them. Given that support from the Ukrainian Parliament, does he not agree that there is now an urgent need for the Government to be bold and to act?

[Sir Iain Duncan Smith]

I do agree with the right hon. Lady. We have a lot of Russian assets that are currently frozen, while Ukraine is screaming out for money and support to help all those devastated areas. We can bring the two together, and that is what today’s debate is all about.

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[Sir Iain Duncan Smith]

I absolutely agree with the hon. Lady.

I want to talk about what Russian state assets are frozen and what could be frozen. It is important to note that, in Congress right now, they are already discussing this—I spoke to someone there just 24 hours ago—and in Canada, they are seriously talking about it. European Parliaments are also discussing the matter. This is a moment for us to give a lead on this and help to shape the nature of it, as we have a conference coming up shortly and I wonder whether that might be the place to lead on this matter.

According to the Bank of Russia’s own 2021 annual report, £26 billion of Russian state reserves are in the United Kingdom and, on a wider level, western Governments have now frozen some $350 billion of Russian central bank reserves in response to the invasion. There is yet more that they could do. The combined value of frozen UK properties belonging to Russian oligarchs is at least £2 billion. Funds frozen under the UK sanctions regime are passive, and that is the problem. Those funds would enable us to finance the rebuilding of Ukraine and to show Russian dirty money the door. This is the key: we send the message and we help with reparations. Several countries, including Canada, as I said earlier, and the EU are already on to this process and I urge our Government to help to give a lead on this.

[Dame Margaret Hodge]

May I draw the right hon. Gentleman’s attention to the fact that the Canadians have gone even further? My understanding is that they have already started taking action by pursuing the forfeiture of US$26 million from Roman Abramovich’s holding in Granite Capital Holdings Ltd. If Canada can do it, surely we can, too.

[Sir Iain Duncan Smith]

I agree with the right hon. Lady. If countries do this individually, it will allow terrible regimes to dodge their money around from one financial centre to another, as some will not have done it. This has to be done in one go by all the developed world’s major centres, otherwise it will end up with disputes and problems. I applaud Canada for starting, but we need the City of London, New York, Zurich and all the other major centres to be serious about making sure this cannot happen and these assets will always be seized.

I can tell the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), that we understand the underlying problem, but my point is that the issues are not insuperable.

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[Sir Iain Duncan Smith]

I agree. These individuals, Abramovich and others, may want this to be done, but somebody has to do it for them, and my hon. Friend is absolutely right to follow the chain down, because we have to capture all the individuals down the chain, not just the one at the top. That is the key, because without those, this does not happen. He rightly says that, to avoid the sanctions, three weeks before the war began Abramovich was busy restructuring radically his assets. I believe that my hon. Friend is right to say that between £4 billion and £7 billion was squirreled away as a result, and we were not able to do anything about it. But we should have been ahead of the game on that one.

[Dame Margaret Hodge]

The right hon. Gentleman is making an excellent contribution. I want to say one thing: I do not think the Government are using their current powers as effectively as they could on this issue. Under section 11 of the Sanctions and Anti-Money Laundering Act 2018, the powers can be used against somebody “associated with” the person sanctioned. If that is the case and I have read the legislation right, does he agree that the Government could have stopped Abramovich giving all this to his young children and could have sanctioned them because they were associated with Abramovich himself?