Sanctions

Stephen Doughty Excerpts

Wednesday 19th July 2023 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I thank the Minister for setting out the measures we are debating. As the House rises for recess later this week, I am pleased we are able to meet before that, not only to debate new and welcome sanctions measures, but to reiterate our unwavering commitment to and solidarity with Ukraine, its people and its sovereignty. The NATO Vilnius summit last week underscored the strength of feeling across our diplomatic and military alliances that we must stand with Ukraine in all measures—economic, military, humanitarian and diplomatic—until this war is won and provide the guarantees that it needs.

I am also pleased that the House had the opportunity last week to explore and debate the Foreign Affairs Committee’s report on illicit finance, the Government’s response, the need to crack down on dirty Russian money within our economy and the serious problems we have had with London as a location for that and the whole ecosystem that has facilitated it over many years. On these measures, I want to make it clear, as I have on many occasions, that we will support the Government where we think they have got things right on sanctions and we will not seek to divide this House on this measure.

However, I do have some questions for the Minister. More than 500 days into this conflict, it should not be potentially lawful for a UK legal services provider to support commercial activities that advance Russian state interests and the interests of those who support the egregious and barbaric war in Ukraine, just because said activity does not have a sufficiently tangible connection to the UK, due to the territorial application of the Russia (Sanctions) (EU Exit) Regulations 2019. It must be the case that no UK person, or person in the UK, can provide legal advisory services to an activity that would be prohibited under our regime.

I hope the Minister can say why it has taken so long to bring forward this measure. I accept that the sanctions regime is a constantly evolving feast, and we have had this debate many times, but that is obviously a significant potential risk, so I hope she can explain what has happened with the timing.

I welcome the Minister’s clarification regarding a general licence and the discussions that will be had. I know that other right hon. and hon. Members have expressed, and will express, concerns about the ability to access legal advice for positive purposes, if I may put it that way. On the other hand, I have some questions regarding licences and exemptions that have been granted in the past, including for access to legal services, and the ministerial oversight of those.

One particular case was in January this year, when it came to light that the Treasury had issued special licences that allowed Prigozhin, the leader of the brutal Wagner Group, exemptions and licences to acquire legal support—in fact, I believe it was flown to him in Russia at the time—to sue his critics here in the UK. That is obviously completely unacceptable. I hope that the Minister can explain, given the questions that I and others have asked about that, what role Ministers are now taking in the issuing of exemptions and licences.

The Minister will be involved in developing the general licence that she talked about for legitimate purposes, but at the other end of the spectrum there are an awfully large number of licences that have been granted. Perhaps she could write to me and to the House with a full list of licences and exemptions that have been granted and for what purposes, and clarify whether Ministers, particularly in her Department, now have oversight of those, or whether that is just being done by officials. These are significant matters and we do not want to see anything sneak through that is going to facilitate or aid Russian activities.

I would also like the Minister to explain how the Office of Financial Sanctions Implementation is monitoring the utility of the various exemptions issued under the sanctions regime, and whether they are enhancing the regime or potentially, in some instances—I hope this is not the case—undermining it. The OFSI should be undertaking constant reflection on and refinement of the regime and ensuring that, while we have the strongest text for the sanctions, their actual application is being done in the most effective way to tackle the aggressor in this case.

While I am on the subject of exemptions and loopholes, in the last Committee debate that we had on such measures the Minister committed to write to me regarding some serious concerns I raised about third countries being used to avoid our sanctions regimes in a number of product areas. That would be interesting in terms of the services sector and the legal services we are referring to in this debate, but it also applies to a number of goods. I hope she can write to me before the recess with answers to those questions, because they are significant.

As the House is about to rise for recess, I reiterate the position of the official Opposition, the Labour party, to work with the Government in support of Ukraine, its security, its prosperity and its future, and to co-operate on measures against Russia and those who would aid and abet Putin’s regime. We must continue to do that and to see that Russia and all those who support Putin lose. Our sanctions regimes and the way they are applied are crucial to that. We must never again allow London to be part of an ecosystem of lawyers, accountants, company formation agents and others who have facilitated the very people behind the Russian regime and are ultimately aiding and abetting Putin.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Justice Committee.

--- Later in debate ---

[Anne-Marie Trevelyan]

I thank all hon. Members who have made contributions this afternoon. I will do my best to address the questions they have raised, and as ever, where I do not have the information to hand, I will ensure that I write to them.

This latest measure reflects the reality that legal advisory services can play a fundamental role in facilitating border trade and investment, and that by restricting those services, we will further constrain the Russian economy and Putin’s war chest. While we have worked to ensure that Russia cannot access our legal expertise in relation to certain commercial activities, we have not hindered work, but have helped to provide judicial rights and access to justice. We have also not hampered legal advice that facilitates compliance with our sanctions network and framework, and we are working to ensure that advice in relation to compliance with the sanctions laws of our international partners is also permitted.

I absolutely commit to write to the hon. Member for Cardiff South and Penarth (Stephen Doughty) about the questions he has raised, including his important point about third-party circumvention risks. Discussions and work are ongoing with a number of colleagues; I have been talking with colleagues internationally about how we tackle those risks and find tools to address the enforcement challenge they present.

As ever, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) has brought his wisdom to the debate about this important piece of legislation. I will ensure that he and the Law Society are able to discuss their concerns about the detail of the general licence in the very near future, conscious—as a number of colleagues have said—of the timeframe over which we are keen to move it forward. He made the important point that access to legal advice should be taken early to reduce the risk of error or breach. We must ensure that the general licence will work in practice, providing the right support while constraining those who wish to abuse the system.

I put on record that the continued leadership of my hon. Friend the Member for Henley (John Howell) at the Council of Europe is hugely welcomed and appreciated by all Members across the House. I thank him for his offer of support and for sharing the expertise that sits in the Council of Europe. As we continue to work in what is a complex and, sadly, ever-changing and ever-developing environment, we continue to get ahead of those who wish to abuse the system.

[Stephen Doughty]

It was good to hear the Minister confirm again that she is going to work on the issues that have been raised about the general licence. However, can she say whether Ministers such as herself are actively involved in the issuing of all licences and exemptions in relation to our sanctions regime, or is it still just being done by officials without ministerial sign-off?

[Anne-Marie Trevelyan]

Obviously, the hon. Member would not expect me to discuss the detail of matters that are live and ongoing. However, we work as a team and across Government: while it is the Foreign, Commonwealth and Development Office that holds the pen, and it is me at the Dispatch Box today, the legislation, work, management and enforcement issues are covered across Whitehall. We all work together very closely on those issues, and as I say, it is a live and continually changing environment as we keep track of what we are trying to achieve. One part of that, of course, is ensuring that enforcement can be monitored. The commitment of £50 million following the integrated review refresh was an important part of that and it will help us build even stronger enforcement tools to ensure we make the most effective use of the sanctions we bring in.

This, Madam Deputy Speaker, is the latest edition of our package of sanctions. We will continue to use sanctions to keep up the pressure until Putin ends his horrific, senseless war and Ukraine is allowed its territories back to live peacefully once again.