Sanctions

Stewart Hosie Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

Will the Minister give way?

[James Cleverly]

I have to get on. These measures will curtail the ability of the Russian state, Russian companies and Russian individuals to raise funds on our markets and will further isolate Russian banks. We will keep ratcheting up the pressure, targeting more banks, more individuals and more companies that are significant to the Kremlin, to touch on the point made by a number of right hon. and hon. Members. Russia—rather, Vladimir Putin—has chosen a path of international isolation. The measures that the Prime Minister announced today demonstrate that it will bear a cost for doing so and, if it does not step back, these measures will only increase.

Russia’s aggression against Ukraine is part of a long- term strategy. We must not give ground now or try to accommodate the illegitimate concerns that Russia has put forward. Its strategy of aggression would not end. It would not stop at Ukraine. Instead, it would be emboldened. President Putin would simply focus on a new target, so we are absolutely resolute in our response. What we do now will shape European security for many years, and it will be viewed by other parts of the world and have an impact on security issues far more widely than in Europe. We must rise to the moment. We must stand shoulder to shoulder with the people of Ukraine in their desire to protect their homeland and to protect their freedom. We must, and we will, stand shoulder to shoulder with them, and I commend the regulations to the House.

--- Later in debate ---

[Stewart Hosie (Dundee East) (SNP)]

I am going to do something slightly unusual and speak about the statutory instrument, although I shall make some brief introductory remarks. I welcome the measures, as far as they go. I do not think they go far enough, but I think the Minister will have already picked up that message from around the House. I welcome what he said about working together and being in lockstep with our allies. The problem is that Gennady Timchenko, Igor Rotenberg and Boris Rotenberg were sanctioned by the United States in 2018. With the measures before the House today, we are not even playing catch-up with where we need to be.

I am frustrated, and there is a general frustration, because, notwithstanding what the Minister said today—that he may go further with sanctions on the basis of what Russia has already done—there is a perception that Russia has to do more and worse before we really ratchet up what we are planning to do. Either Russia has invaded the sovereign territory of an independent nation state or it has not. We do not need to see the tanks encircling Kyiv for tough action to be taken. Russia has already invaded and annexed parts of a sovereign state.

The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said—I think I caught him correctly—that perhaps $250 billion had been sloshed about outside Russia. I fear that does not come close to the mark. In 2017, the US National Bureau of Economic Research suggested that $800 billion had been stashed offshore since the collapse of the Soviet Union. Some people will have moved their money for good reasons. Some people will have been terrified—there will be fear. There will be crime involved and fraud and all sorts of things happening. However, a great deal of that money may well have been placed overseas, in the hands of trusted custodians and friendly overseas businesses—the modus operandi of the KGB prior to the collapse of the Soviet Union.

This is where I will ask the Minister a question about the instrument itself. When it comes to sanctioning individuals and to freezing cash or other assets that are at the beck and call of the Russian state, no matter whose name they appear to be held in, will this legislation actually do what is required? The explanatory notes suggests that an “involved person” now includes a person who is or has been involved in

“obtaining a benefit from or supporting the Government of Russia.”

Regulation 4 says:

“For the purposes of this regulation, being ‘involved in obtaining a benefit from or supporting the Government of Russia’ means”—

among other things—

“owning or controlling directly or indirectly…or working as a director (whether executive or non-executive), trustee, or equivalent, of…a person”.

The word “trustee” is interesting. Will this legislation allow the Government to freeze an asset if it is held in the name of an individual who appears to be completely clean, but who the Government have information to suggest is a Russian-trusted custodian of what is, for all intents and purposes, a Russian state asset?

Can we have clarity on this? I think that this goes back to the point that the right hon. Member for North Durham (Mr Jones) made earlier. Will this instrument actually allow the Government the tools that they need to freeze the assets that are required to be frozen to punish Russia for the invasion of Ukraine?