Sanctions Implementation and Enforcement
Debate between Nusrat Ghani and Stephen Doughty(3 weeks, 1 day ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
With permission, Madam Deputy Speaker, I will make a statement on the cross-Government review of sanctions implementation and enforcement. I promised to update the House on this issue at the earliest opportunity, and I am glad to have the chance to do so today. For those Members who want to get into the full details, they are being published on gov.uk.
Sanctions are a powerful tool in our armoury, and a vital foreign policy and national security tool. They are used to deter and disrupt threats and malign behaviour, and to demonstrate our values. Our sanctions support UK interests, protect our citizens, and defend international peace and security. Maximising economic pressure on Russia is key to securing a just and lasting peace in Ukraine, as we debated in the House yesterday. As I said then, the UK has sanctioned over 2,400 targets under our Russia regime, and international sanctions have deprived Putin of $450 billion dollars since the invasion began—an amount of money that would have allowed him to prosecute this terrible war for many more years. Since July 2024, this Government have introduced over 500 new sanctions designations against individuals, entities and ships. Just last Friday, the Prime Minister announced a major package of sanctions to target the decrepit and dangerous shadow fleet carrying Russian oil. This is the largest package of sanctions against the shadow fleet, with 110 targets. According to some estimates, sanctions have crippled 200 ships—almost half of Putin’s entire fleet.
President Zelensky is serious about peace, agreeing in principle to a full, unconditional, and immediate ceasefire. His readiness for that peace is demonstrated by his being in Türkiye. Meanwhile, Putin has dodged and delayed, all the while raining down terror on Ukraine. If Putin does not engage seriously on peace, the UK and our allies will have no choice but to ramp up the economic pressure even further, forcing him to the table.
Alongside taking measures against Russia, we are using designations to uphold human rights and promote democracy around the world. Just last month, we targeted pro-Kremlin operatives responsible for destabilising Moldova, and we sanctioned corrupt officials in Georgia and Guatemala for undermining democracy and the rule of law. We will not stop there. We will continue to expose malign activity wherever we find it, using the full range of sanctions tools at our disposal to shape the world for the better. Sanctions play a crucial part in the Foreign Secretary’s mission to tackle corruption and dirty money, which is vital to protect the UK from criminals and safeguard our democracy. In January, the Foreign Secretary announced our new world-first legislation to use sanctions to crack down on those fuelling irregular migration.
This Government are committed not only to using sanctions effectively, but—this is the main focus of the statement—to ensuring that they are enforced rigorously. That means punishing serious breaches with large fines or criminal prosecutions. In opposition, we recognised that there was a need for greater focus on sanctions enforcement. Since we came to office, we have been working across Government on this, as well as liaising with law enforcement partners and industry. In October, we launched the office of trade sanctions implementation, which has new civil enforcement powers to crack down on those seeking to soften the blow of our sanctions. At the same time, we introduced civil powers for the Department for Transport to enforce transport sanctions.
We have reinforced the office of financial sanctions implementation in His Majesty’s Treasury—known as OFSI for short—and the multi-agency Joint Maritime Security Centre, enabling them better to tackle evasion and develop new tools targeting the Russian shadow fleet, including in the English channel. The investments and improvements that we have made are already paying off. Last month, OFSI imposed a penalty of £465,000 on a major law firm’s subsidiary for breaches of sanctions linked to Russia’s invasion of Ukraine. We also saw the UK’s first successful prosecution under the Russia financial sanctions regulations, thanks to excellent work by the National Crime Agency. I commend it and its teams for the incredible work that they have done. I expect to see more enforcement action in the coming year—I obviously cannot go into the details of that in the House, but we should be assured that our teams are working effectively in a range of agencies and across Government.
Funding from the economic deterrence initiative has been critical to strengthening our capabilities and maintaining the UK’s reputation among its allies. That initiative is bolstering sanctions work in the overseas territories and Crown dependencies. For example, in the British Virgin Islands, it has enabled the NCA to support enforcement and combat potential circumvention. Excellent work has been going on in that regard, and we hosted OTs and CDs at Lancaster House just a few months ago, to collaborate and ensure that we are improving capability across those territories.
I turn to the enforcement review. I am determined to go after those who try to evade our sanctions. In October, I launched a cross-ministerial review to look at how we can improve UK sanctions implementation and enforcement. A strong sanctions regime is crucial for achieving our foreign policy goals and, in turn, building a secure and prosperous UK. This forward-leaning review had three goals: first, to make it easier to comply with our sanctions, which will help businesses to support us in our shared goals; secondly, to increase the deterrent effect of enforcement and make it clear that avoiding sanctions does not pay; and, thirdly, to enhance our ability to take robust action against those seeking to evade our measures. We are publishing the report on the conclusions today, and I am glad of this opportunity to set out how we will ensure that the UK’s approach continues to set a gold standard.
We know that the vast majority of businesses agree with our sanctions and are keen to work with us to make sure that they are enforced. To simplify compliance, we have launched a new email alert system to keep UK businesses updated on designations, legislation, licences, and other related topics. We are also making our guidance clearer and easier to access, providing further clarity to UK industry on ownership and control, and introducing a single sanctions list for all designated persons. We will also assess the benefits of creating a single reporting point for suspected breaches. To give our sanctions extra bite and deter evasion, we will publish a new enforcement strategy, making clear the consequences of non-compliance. We will look at new options to accelerate civil penalties for financial sanctions breaches, including via an early settlement scheme, and we are dedicated to strengthening our enforcement tools and ensuring that we have the necessary powers, capabilities, and intelligence.
We have already taken action. Last month, we introduced measures to prevent designated individuals from holding director roles in the UK, protecting our brilliant British businesses. The Department for Business and Trade is updating laws to protect workers who report breaches of financial, transport and certain trade sanctions, giving them crucial whistleblower protections. Those actions, taken together and at pace, will further improve our world-class sanctions regime, allowing the UK to project strength and promote the rule of law across the world.
But we are not satisfied with just those measures. We are committed to exploring other areas, so that we can go even further and deeper to improve enforcement. A number of those areas will take longer to scope; I will be able to update the House on them in due course. We will explore options for more effective join-up on intelligence, including the merits of a new joint sanctions intelligence function. We will consider the introduction of sanctions end-use licensing controls for exports with a high risk of sanctions diversion.
We will continue to support the British overseas territories and Crown dependencies in enhancing their enforcement capabilities, and will explore enhancing transport powers to target specific aircraft with sectoral sanctions. As appropriate, we will update Parliament when additional outcomes have been scoped, including those that require new or amended legislation. We have brought forward a number of pieces of sanctions legislation recently; in addition, we expanded our Russia regime this week into a range of areas, and varied our Syria regime in the light of changed circumstances there.
Let me conclude by reiterating this Government’s commitment to strengthening the implementation and enforcement of UK sanctions. As we deliver the actions set out in the review, we will continue to engage across Departments and with industry, wider stakeholders and international partners to maximise the effectiveness of our work. I commend this statement to the House.
Stephen Doughty
I thank the shadow Minister for her broad welcome for this work. I will do my best to answer as many of her questions as I can.
The shadow Minister asked me about the overall review. As I said, it is being published now and she can peruse that when she can; I encourage other hon. Members to look at that as well. We welcome feedback and suggestions on it. To summarise a couple of the key themes, we recognise that different sectors are at different levels of maturity with sanctions, and that Government communications and engagement need to reflect that. Some areas need more assistance; there is a lot of will, but they need support. Some of the measures can be very technical and we want to ensure that businesses can comply. Direct engagement between Government and industry is important, as that has the highest impact on compliance.
We need to bring together our efforts so that they are understood. A range of different agencies are doing important and distinct work, but that needs to be understood by the layperson. We need to improve our guidance and ensure we bridge any gaps in unclear regulations. We need to ensure that people understand the consequences of breaching sanctions, as well as the options. If they voluntarily disclose measures, as a number of businesses and others have done, there are ways forward.
The shadow Minister asked me about intelligence and co-operation with other countries, which is crucial. We will explore how that intelligence function works, but I can assure her that there is already a huge amount of co-operation between us and key partners, including in the United States, the EU and elsewhere. Cross-Government co-operation is also important. Our officials work incredibly hard and I pay tribute to the incredible team in the sanctions unit at the Foreign, Commonwealth and Development Office, and in other Departments, because they do remarkable work.
The shadow Minister asked specifically about co-operation with the EU. It is important that we co-operate with the EU on sanctions, as we do already. That is being considered, along with a range of measures, as we approach the important summit next week. I assure her that our sanctions policy remains our own, but we can often have maximum effect when we work in co-ordination with others. The EU is progressing its own packages against Russia and others.
On third country circumvention, I have paid particular attention to that issue; indeed, I had meetings just this morning to raise concerns on that specific issue with a partner country. Such meetings are a feature of pretty much every week, and we are bearing down on all the routes that might support measures that undermine our sanctions. On the sale of Chelsea football club, we are determined to see the proceeds reach humanitarian causes in Ukraine as soon as possible, and we are doing everything we can to bring that about quickly, but this is a complex legal issue. The UK is working with international partners, has engaged with Abramovich’s team and is exploring all options to ensure that the proceeds reach vulnerable people in Ukraine who are most in need.
On Syria, the shadow Minister knows that we updated the regime this week, and we remain with those sanctions against the Assad regime, but we have removed restrictions on others. We reserve the right to introduce new sanctions in future circumstances on any regime, but we will keep the situation there under close review and respond to the changing circumstances. We will judge the new Government by their actions.
On Iran, we announced on 14 April further sanctions to tackle the domestic threat posed by the Iranian regime by sanctioning the Iranian-backed, Sweden-based Foxtrot criminal network and its leader, Rawa Majid, for their role in attacks against targets across Europe. We took very firm action in relation to the supply of ballistic missiles to Russia for use in the illegal war in Ukraine. We remain determined that Iran must never develop a nuclear weapon, and we are committed to using all tools available to ensure that, including using the UN sanctions snapback mechanism if necessary.
Lastly, the shadow Minister asked about enforcement, how we are having an impact and what difference is being made. I have already given some examples, but another example is that in April, the National Crime Agency secured the first criminal convictions for the breaches of Russian sanctions. Dmitry Ovsyannikov was found guilty of circumventing sanctions regulations and money laundering after receiving £76,000 from his wife and a new Mercedes from his brother, who was also found guilty of circumventing sanctions regulations. They were sentenced to 40 months imprisonment and 15 months imprisonment suspended for 15 months respectively, so the right hon. Lady can be absolutely assured that all the appropriate authorities are acting.
These investigations are often complex and necessarily are not made public. I urge the House to bear with some of our excellent teams in different agencies as they seek to enforce on these regimes.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Foreign Affairs Committee.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Minister already knows my view that, as we develop our sanctions policy, Parliament should be more engaged so that we can have collective knowledge and all feed in to the best possible sanctions policy. We do not have enough of that at the moment, and there is more that we should do. One thing that Members would do is suggest more creative ways of using sanctions and more lateral thinking, but, in the end, it does not matter how creative or eye-catching a sanction is: if it is not enforced, it means nothing. My concern, and the concern of many, is that there are simply not enough investigations being done for breaches of sanctions, particularly against British companies. I have listened very carefully to the rapid way in which the Minister gave his statement and read carefully what is in it, but nothing in it says that more resources will be put into actually investigating potential breaches of sanctions. We can change rules and give more powers, but if there are not enough people actually kicking down doors—literally or otherwise —to ensure that companies are not breaching sanctions, we are frankly wasting a fantastic opportunity.
Stephen Doughty
My right hon. Friend is no stranger to these issues, and it has been a pleasure to engage with her on them in my conversations with her. I welcome the work of her Committee in that regard. I gently say that there has been a significant amount of parliamentary scrutiny of sanctions—including two occasions this week already, as the shadow Minister mentioned, as well as the course of our debate, FCDO oral questions and my statement today—but I am absolutely committed to engaging with parliamentarians. We have held a number of roundtables, and I hope to continue to do those on a regular basis. We welcome all advice and information from parliamentarians. It is often not possible to come back to the House, particularly on specific information and suggestions. My right hon. Friend will understand the importance of our not commenting on possible future designations, because doing so would lessen their impact.
My right hon. Friend rightly raises the challenge of the actual resources for enforcement. They are across a range of agencies and Departments and are subject to ongoing discussions in the spending review, but, having witnessed the work of a number of those organisations, I can assure her that they are doing some absolutely incredible work. I will give another example: in March, the office of financial sanctions implementation announced the imposition of a civil monetary penalty of £465,000 against HSF Moscow for breaching UK sanctions and publicised the lessons that industry can learn from that case. There is example after example, and I want to see more of them. I will continue to work with our enforcement agencies and others to ensure that is the case.
Stephen Doughty
My hon. Friend is absolutely right to raise this issue, which I have repeatedly raised with the leaders of the overseas territories and indeed with the Crown dependencies. We have seen robust action on sanctions, both in implementing sanctions and working with our authorities to ensure that we have the biggest enforcement effect. I have mentioned the recent meetings we had at Lancaster House with sanctions enforcement officials, as well as the specific example of BVI. The National Crime Agency has been working with the British Virgin Islands on a range of issues, and that work has been very productive, but my hon. Friend is absolutely right that transparency contributes to effective sanctions. I have repeated my expectation that OTs and CDs should introduce fully accessible public registers of beneficial ownership, but the OTs also agreed at last year’s Joint Ministerial Council to introduce legitimate interest access registers. We have seen real progress from a number of them, although some others are not quite there yet. My hon. Friend can be assured that I am not resting in raising serious concerns about this issue, and I will continue to do so over the weeks ahead.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Richard Foord, a member of the Select Committee.
Stephen Doughty
This Government have been clear that we will take every measure possible to crack down on irregular migration and those who facilitate the cruel trade in human beings, trafficking them across continents and countries. That is one of the reasons we are introducing the new regime. We will be bringing forward the legislation in due course, and at that time we will be able to discuss the exact details of the proposals; we aim to bring that forward as soon as possible so that we can start taking actions. That is just one of the measures we are taking, and I regularly engage with European and other partners to deal with the whole chain of smuggling gangs and illegal migration. That is exactly what the Prime Minister will be setting out in his visit to Albania.
Madam Deputy Speaker (Ms Nusrat Ghani)
The final question goes to the ever-patient Chris Vince.
Oral Answers to Questions
Debate between Nusrat Ghani and Stephen Doughty(2 months ago)
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Stephen Doughty
I have answered questions on that matter a number of times in this House. This Government will not scrimp on security. The base on Diego Garcia will be secured for ourselves and our allies. Protecting the British people and our allies is our No. 1 priority, and full details will be provided in due course.
Stephen Doughty
The Foreign Secretary has been discussing these important issues with the Health and Social Care Secretary. My hon. Friend is right to point out the important role of Gavi, as well as our role in that. The decisions will be set out in due course, but I hear what she and, indeed, other hon. and right hon. Members are saying on this important issue.
Stephen Doughty
I thank the hon. Member for pointing out the importance of those issues; he knows the UK has a strong record on them. Obviously, all decisions on future ODA spending will be discussed as part of the ongoing resource allocations in the spending review, but I note what he says.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the International Development Committee.
Bosnia and Herzegovina
Debate between Nusrat Ghani and Stephen Doughty(2 months ago)
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Stephen Doughty
I thank the shadow Foreign Secretary for her points. I am glad she raised Lord Peach because that allows me to put on the record again my tribute to him for all his excellent work as the High Representative; it was a genuine pleasure to work alongside him. I am also delighted that we now have Dame Karen Pierce, one of our most experienced diplomats, in the role. She is already playing a crucial role across the region. As I said, one of her very first visits was to Bosnia, because of the very issues that the shadow Foreign Secretary has outlined.
The right hon. Lady asks what we are doing. I have been very clear about the diplomatic efforts that we are taking across the region, working with partners and allies including the United States, the European Union and members of the Quint. We continue to work with partners and engage with regional partners, who are absolutely crucial to that stability. The Foreign Secretary met Croatian Foreign Minister Radman on 24 March, and I spoke to Serbian Foreign Minister Marko Djuric on 27 March, as part of a regular series of engagements that we have been having, including through the Berlin process. The right hon. Lady will be pleased to know that we will now be hosting the Berlin process and that preparations for the summit are being led by Dame Karen Pierce. I assure her that the Foreign Secretary and I have had extensive engagements with regional partners. I was out in Serbia and Montenegro just a few weeks ago, and I intend to visit the region again soon.
The right hon. Lady asked about the important role of NATO, alongside EUFOR. I have referred to EUFOR already. We continue to support Bosnia and Herzegovina’s aspirations for Euro-Atlantic integration, including NATO membership. Through joint training of UK and Bosnia and Herzegovina armed forces and our support for reforms, we are helping it strengthen capabilities and enable alignment with NATO standards. We are working to invest in and strengthen the capabilities of the Bosnia and Herzegovinian armed forces for peacekeeping operations. Countries that export security are also more secure themselves. We maintain offices at the NATO headquarters in Sarajevo.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Foreign Affairs Committee.
Emily Thornberry (Islington South and Finsbury) (Lab)
What we have seen from Russia—in Georgia, Moldova, Romania, the Baltic states and now playing out in the western Balkans—is nothing less than hybrid warfare. Democracies are working hard together to stand strong and support Ukraine, but does the Minister agree that we need to put more effort into working with our allies in support of eastern Europe and the western Balkans, which are very much on the frontline?
Stephen Doughty
My right hon. Friend, the Chair of the Select Committee, rightly raises Russia’s malign actions not only in relation to its illegal and barbarous war in Ukraine, but across the whole of Europe and globally. We continue to see a pattern of behaviour intended to hamper Euro-Atlantic aspirations, and exploit instability and division.
Recent attempts by Russia to divide the international community at the United Nations Security Council and in the OSCE have only further demonstrated the resoluteness of partners to work together to protect the territorial integrity of Bosnia and Herzegovina. My right hon. Friend’s work in the Committee on these issues is crucial. We are also working closely with our allies and the European Union on these matters, in relation to not just the Balkans but locations such as Moldova.