Russian Assets: Seizure

Siobhain McDonagh Excerpts

Tuesday 14th March 2023 Commons Chamber

[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.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I am sure the right hon. Member is also aware of allegations that a number of the people sanctioned have moved their money around into trusts to give to their children in order to avoid having their assets taken. Does he agree that the Economic Crime and Corporate Transparency Bill should be strengthened to require sanctioned individuals to disclose assets that were owned six months prior to their designation? That would prevent oligarchs such as Roman Abramovich from moving assets around and evading the sanctions.

[Sir Iain Duncan Smith]

I entirely agree. I was going to raise that point at the end of my speech, but never mind: this is a shared debate.

I fully back that proposal, which is one of the recommendations that we have to make so that the Government can jump ahead of this. Too often we have been slow and, in the six months that have elapsed, in some of those cases, people have shifted their money around into all sorts of areas. One particular individual—I was going to name him, but I will not do so now—has managed to buy flats through a Cyprus company. His name is not registered, but they own it and the money is lodged there. This sort of stuff is going on and we need to shut it down.

--- Later in debate ---

[Sir Iain Duncan Smith]

I am beginning to feel that I am making a collective speech, because the right hon. Lady’s point is down here in my notes. It is better made by her than me, but I fully agree with her as a result.

We could have got ahead of this—that is the point, as the example of Abramovich shows. Many others have drifted off, so the right hon. Lady is absolutely right: we needed to be quicker and more determined. Now, we have to sustain our determination to flush all this out while we have the opportunity. I always sense a little resistance. When we call it out, the Government say, “Ooh, we don’t know. We’ve got lots on our plate and we are doing lots of things,” but this is the time to act.

[Siobhain McDonagh]

The right hon. Gentleman was kind enough to participate in my Adjournment debate in Westminster Hall the other day. This is not just about oligarchs; it is about companies that are sanctions busting. I am aware of a Belarusian company that imports goods through Russia in order to undermine and take customers from a business in my constituency. Does he agree that, whether it is an oligarch or a business, the Office of Financial Sanctions Implementation and the Foreign Office should be adaptable and able to react to rogue actors, who will do everything possible to avoid the sanctions regime?

[Sir Iain Duncan Smith]

I must say, the hon. Lady’s debate was fascinating. She demonstrated that by our failure to follow this course, a UK company is essentially sanctioned because it is unable to get payment. The measures bounce back at us and honest, decent companies find themselves trapped by the failure to square the circle of the process and get everyone all along the chain. It was a brilliant debate, and I congratulate her on raising the subject on behalf of her constituents.

The Government should introduce new legislation to allow the seizure of already-frozen assets that are linked to criminality. The Russian Government have a huge amount of money of course, but many oligarchs are guilty of benefiting financially from war crimes and atrocities in Ukraine, so we should activate new legislation. Under such a mechanism, an enforcement authority such as the National Crime Agency could bring proceedings in a UK court to have property belonging to a sanctioned person involved in a gross violation of international human rights law or international humanitarian law confiscated without compensation, so that the frozen property can be used to fund reparations. That is the key.