Sanctions Policy and Implementation

Tom Tugendhat Excerpts
Thursday 3rd October 2019

(4 years, 5 months ago)

Westminster Hall
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Tom Tugendhat Portrait Tom Tugendhat (Tonbridge and Malling) (Con)
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I beg to move,

That this House has considered sanctions policy and implementation.

It is a pleasure to see you in the Chair, Mr Davies. Sadly, I will not be following your example with a 12-hour peroration; I will limit myself to merely five.

I am very pleased to move this motion on a subject about which the Select Committee on Foreign Affairs, which I am privileged to chair, has felt strongly for several years, because sanctions are one of the tools that defend the commercial frontline of the United Kingdom. This debate is an opportunity for me, and I hope others, to speak about the country’s sanctions policy. In June, the Committee published our first report on sanctions, and last month we received the Government’s response. On behalf of my colleagues, I thank everyone who submitted evidence, particularly those who appeared in person.

We focused on sanctions policy because it increasingly matters. Two thirds of the UK’s sanctions are currently agreed and implemented at European Union level, so we need a coherent and robust sanctions policy ready for when we leave the organisation. However, Brexit is far from being the only reason for urgency. An effective sanctions policy is an important part of something much more fundamental to communities across our country. It is not just a crucial part of UK foreign policy and national security and the rules-based international system, although of course it is part of all of those; it is a rampart that defends public confidence in open and honest markets. It is, in many ways, a defence of the capitalist system on which we have built our prosperity and economy for so many years. That matters because confidence in that system is key to our future prosperity, but that confidence is in short supply.

Two years ago, Matthew Elliott and James Kanagasooriam wrote an excellent report, “Public opinion in the post-Brexit era”, based on polling by Populus. They found a growing tendency among people of all ages—not just the young—to label capitalism as greedy or corrupt. We all know about the problems in some markets that explain why people think of the word “greedy”, but I am interested in why they think capitalism is corrupt. The answer, I think, lies in people’s growing awareness of how a tiny number of people have made staggeringly large sums of money, and of how those oligarchs use bankers, lawyers, accountants and company formation agents in this country to protect their ill-gotten wealth. Last year, the compelling BBC series “McMafia”, based on a book that Misha Glenny wrote a decade ago, did a superb job of dramatising how they have done so.

If there was any residual complacency about this country’s role in international corruption, Oliver Bullough’s book “Moneyland”, which was published only a few months later, dispelled it. His extraordinary tome is an essential read for anyone who wishes to understand how international finance can corrupt even us—even here, in one of the most law-abiding societies in the world. Oliver Bullough set out the three-step cycle that oligarchs follow—steal, hide, spend—and described the role that middlemen in this country play in parts two and three of that process. It is nothing to be proud of, but it means that our sanctions policy can have real bite.

Our sanctions policy can be a real tool of foreign influence. The reliance of many oligarchs on London as a place to launder and spend the money that they have stolen creates an opportunity for us to carve out a role as the champion of a more moral capitalism. From arts, to education, to property, we all know that this country has sometimes been too tolerant of those who would do us harm using our schools, our galleries and our buildings that house them. Well-aimed sanctions will help us to tackle the dangerous, corrosive perception that all capitalism is corrupt by making less easy the lives of those whose wealth derives from theft and violence.

Evidence that we took during our “Moscow’s Gold” inquiry last year reinforced that point. We heard how the En+ Group was listed on the London stock exchange at a time when the sanctions regime in the UK was not equipped to prevent that, even though the company was linked to sanctioned organisations in Russia. As part of that inquiry, we invited Linklaters to give evidence. It is a highly reputable law firm that conducts half of the deals in Russia—or so it says—and acted for En+ during the listing. We invited it to give evidence not on any specific client, which of course it could not do, but on the nature of doing business in the legal wild west that is modern Moscow. It declined to do so. I will leave others to judge what that says about its willingness to offer evidence to the British people. I welcome the Government’s confirmation that they will explore ways to block listings on the London stock exchange on national security grounds.

In “Moscow’s Gold”, we advocated a Magnitsky Act, which many in the House will have heard of. It is named after Sergei Magnitsky, a tax adviser who was tortured to death in Russia. The law would enable the Government to impose sanctions on human rights abusers around the world. The measures were all included in the Sanctions and Anti-Money Laundering Bill, which has now become law, but there was uncertainty as to whether sanctions could be implemented before Brexit and the end of any transition period. I am pleased to see that the Government have established that there is no obstacle to doing so, and I very much welcome the Minister’s acknowledgement of that.

Many of our allies have already implemented the measure. It is not just targeted at Russia, despite the name; it is targeted at human rights abusers around the world. A Magnitsky Act would enable us to join our allies and send a powerful signal that we support the victims of human rights abuse around the world and will not profit from their abusers’ theft and murder.

As our latest report on sanctions shows, there is much else still to be done. Witnesses repeatedly told us that the Government’s approach to sanctions is fragmented and incoherent. The Foreign and Commonwealth Office makes the policy, which a variety of other Departments then implement. Departments interpret sanctions policy inconsistently and, sadly, too often with very little guidance. It does not help that sanctions and anti-money laundering policies are separate. As the then Minister of State, my right hon. Friend the Member for Rutland and Melton (Sir Alan Duncan), put it when giving evidence to our Committee, financial crime

“is not quite our patch.”

To bring more coherence to the sanctions policy of the United Kingdom, we recommended that the Government establish a senior responsible officer for policy and its delivery. While multiple senior responsible officers overseeing sanctions policy exist within the Foreign Office, Brexit offers a perfect opportunity, as the Government note, to create one who can span the whole of Whitehall. We also recommended that this person should be accountable to the National Security Council, which should in turn designate sanctions strategy as an urgent priority. We have therefore called for a review this year by the National Security Council to ensure that the resources that it needs to make sanctions a priority are in place. To be effective, the review should explore how the UK can explore its heft in financial services and address exactly how we should engage with our international partners and influence their decision making in the years ahead.

This report was the second one we have published in this Parliament on the connection between finance and foreign policy. In “Moscow’s Gold”, we showed how Russia is using our financial markets to subvert the international rules-based system. What is more, the cynicism that that generates undermines our own faith in the order that has kept us safe.

We are looking at more work, however. One area that we are beginning to investigate is the nature of autocratic engagement with democracies such as ours. Although the focus, so far, has been on Russia, we could list many other countries. We could certainly look at some of the ways in which China uses its state assets to influence markets around the world. The United States is also considering that, so we will be working on it together.

Our new report shows that the Government have much to do if they are to make sanctions an effective weapon and not cede the initiative to others in the field. In a world where financiers have become foot soldiers in foreign policy, we need to wake up and recognise that our international financial markets are the frontline. They can be used against us, but they also give us a home advantage. In a world where the rule of law is threatened, the pursuit of dirty money is now a vital part of foreign policy.

That fight starts on our doorstep. There is no room for complacency; we need to hurry. The UK is on the frontline of financial crime. Our people deserve a better defence and they deserve to have the weapons to achieve it. We need to make sure that our commercial fortifications are as strong as our physical ones. We need a Royal Navy for the financial markets.

--- Later in debate ---
Andrew Murrison Portrait The Minister for the Middle East and North Africa (Dr Andrew Murrison)
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It is a pleasure to serve under your chairmanship, Mr Davies. I shall do what I can to expand my speech to fit the time available. I congratulate my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) on introducing this subject for debate today. I am sorry there are not more people here to debate the matter. It is, as the hon. Member for Glenrothes (Peter Grant), who speaks for the Scottish National party, says, an important matter and such a debate would ordinarily be attended by a significant number of colleagues wishing to contribute—but these are not normal times, are they?

The speech made by my hon. Friend the Member for Tonbridge and Malling was magisterial; he hit the nail on the head, and I will do my best to cover the issues he has raised. I also congratulate him and his Committee on their report of 5 June. As the ex-Chairman of a Select Committee myself, I know a little about drafting Select Committee reports. I understand full well that the main thing is to get the title right, and his report’s title certainly shoots from the hip: “Fragmented and incoherent: the UK’s sanctions policy”. I do not think we need to read much further, although I did, last night. I read it in great depth and detail to know where the Foreign Affairs Committee is coming from. Since the report, a lot has happened and I hope in my remarks to be able to persuade my hon. Friend of that.

I apologise that the Minister for Europe and the Americas, my right hon. Friend the Member for Tamworth (Christopher Pincher), is not in the Chamber today; he is the Minister with responsibility for sanctions, but he is abroad on duty. I have dealt with sanctions a fair amount because of my geographic portfolio, so I hope I am reasonably well placed to comment on some of the issues contained within the report and the more general questions. I enjoyed the remarks made by my hon. Friend the Member for Tonbridge and Malling about capitalism in general. We could have such a debate for many hours, but this is not the place—you would probably call me to order, Mr Davies, if I attempted to do that. However, I sympathise with the general thrust of what my hon. Friend said. I am reminded the remarks made about a decade ago by Peter Mandelson, now Lord Mandelson, about being “intensely relaxed” about people getting “filthy rich”. I did not particularly like that at the time, not because I object to people becoming wealthy if they have the talents and the attributes to do so, but because I objected to the word “filthy”, which probably touches on the thought processes that will have gone through the minds of members of my hon. Friend’s Committee when they drafted their report on dirty money from Russia.

It is clearly not the case that this country does not want people to invest here. London and, indeed, Edinburgh rely heavily on inward investment and financial transactions. However, this country has a reputation for standards—that is part of the UK’s attractiveness as a source for foreign investment—and that depends on sufficient, adequate and proper regulation and the rule of law. In anticipation of Brexit, we will need to think about that when transposing into our domestic law the European Union’s rules and regulations, and when we consider what we will do next. Clearly—I will come on to this—we need to be alongside others. Today’s contributors made the point well that this is so much more effective if we work with others. We also need to consider what the UK will need to do unilaterally. There are advantages, I would say, in our soon to be autonomous status and in being able to do things more rapidly. That has to be counted as one of the advantages of Brexit after 31 October. I would certainly anticipate that being the case in relation to sanctions, but I absolutely accept the added value in acting multilaterally in that particular space. There is very good evidence to suggest that that is the best way to approach sanctions in the main.

Sanctions are a key tool for the pursuit of our foreign policy and national security objectives. They play a central role in supporting our efforts on priority issues, including tackling human rights abuses, which formed the substance of a great deal of what the Chair of the Foreign Affairs Committee touched on. They are central to countering terrorism, to the non-proliferation of chemical weapons and to upholding the rules-based international system.

This country has consistently played a leading role in the use of sanctions at the United Nations and the EU, to support our foreign policy objectives on Russia for its actions in Ukraine, and on Iran and the Democratic People’s Republic of Korea to slow or halt nuclear proliferation. In the last year alone, we have led the way in the adoption of sanctions against challenging individuals, from hate preachers to Syrian businessmen intent on funding the murderous Assad regime. We also led efforts to establish the first EU chemical weapons sanctions regime, and secured travel bans and asset freezes against individuals and leadership in the Russian intelligence service responsible for the use of chemical weapons on the streets of Salisbury last year. That is an issue about which I feel particularly strongly, since my constituency abuts that of Salisbury. I am very pleased that Messrs Chepiga and Mishkin have fallen foul of that particular sanctions operation. You will remember, Mr Davies, that they were the gentlemen who professed to show a particular interest in English ecclesiastical architecture but who were clearly part of the GRU. Fortunately, we have been able to apply sanctions to them. It is those sorts of individuals, and the entities they work for, that any future sanctions regime would seek to act against.

In total we implement 37 UN and EU sanctions regimes, and almost 2,000 individuals and entities are prevented from travelling to, or investing in, the United Kingdom as a result. The Government’s focus over the past two years has rightly been on preparing for Brexit. The Sanctions and Anti-Money Laundering Act received Royal Assent in May 2018, and since then we have laid 24 statutory instruments, mostly in order to transfer EU and UN sanctions regimes into domestic law from the point that the United Kingdom will no longer be bound by the EU.

We have reviewed about 1,000 individual EU sanctions designations to consider whether they satisfy United Kingdom legal thresholds. We have also set up the necessary processes to allow us to publish on gov.uk the names of those sanctioned under United Kingdom sanctions. The scope of that task was unprecedented, and as such we prioritised the work accordingly to ensure the continued application of existing sanctions after Brexit. I am sure that right hon. and hon. Members will understand that, first and foremost, our focus with this and every other Brexit-related piece of work across Government is on having to transpose into UK domestic arrangements 40 years’ worth of EU norms, values, rules and regulations. That has been the principal focus across Government, and I think that most people will understand how important that is.

After we leave the EU, however, we will have our own independent sanctions powers and will be able to consider exactly how we use sanctions as part of our broader foreign policy. Once we are outside the EU, we will have the opportunity to deploy sanctions more swiftly and decisively in support of our national interest. In the event of an international crisis, we will no longer have to wait for consensus among 28 members of the EU, but will be able to act in our national capacity. The sanctions Act and the supporting secondary legislation give us the freedom to decide national sanctions as we see fit, aligning with our key priorities, notwithstanding my remarks about acting together.

Sanctions are most effective when jointly enforced by many nations. That is why we fully intend to continue to drive co-ordination on sanctions with our key partners, EU members and other close allies such as the US or Canada, and through the G7. Indeed, in the 5 June report, the importance of working together is underscored several times, notably by authorities such as Professor Paul Cardwell and RUSI, who were quite clear that sanctions are most effective when they are applied multilaterally—a point that was well made by the SNP spokesperson, the hon. Member for Glenrothes.

We will continue to use our permanent seat on the UN Security Council to ensure co-ordinated and effective action on UN sanctions; indeed, that was one of the issues that was discussed around the bazaars last week at the UN General Assembly, from which—by force of circumstance, sadly—Ministers were untimely ripp’d. Nevertheless, it is clearly an important part of the toolbox that multinational forums such as the United Nations are exercised about. They are right to be, and it is very often at those forums that such measures are most effectively exercised. We will continue to make sure that that is the case with the European Union and with others.

The United Kingdom wants a supportive and constructive relationship with the EU as constitutional equals going forward, and as friends and partners we want to face the challenges that lie ahead together. Although we will exercise the power to impose sanctions independently, that will not prevent the United Kingdom from co-ordinating with the European Union. The outcome will be that we enjoy both freedom of manoeuvre and the option of working alongside the EU on sanctions where our objectives align.

In answer to a point raised by the Opposition spokesperson, the hon. Member for Birmingham, Perry Barr (Mr Mahmood), however, we cannot set out in detail how the UK and the EU will co-operate on sanctions in future until the terms of the United Kingdom’s departure from the EU are clear. I am sorry that I cannot be any more specific, but he will understand that these things are all evolving all the time. With respect to the future relationship, it would be very difficult to be more prescriptive about what the future will look like, not least because the United Kingdom is only one party to the arrangements going forward. That is a matter that will have to be determined, but it seems to me that of all the things to determine in the future relationship, such issues are perhaps among the lower-hanging fruit.

The United Kingdom’s impact in multilateral settings has ensured that sanctions play a part in confronting and combating a range of hostile state activities. It has also ensured that those sanctions have wide applicability beyond the United Kingdom’s jurisdiction. We led the debate on maintaining and strengthening multilateral sanctions against Russia for its illegal annexation of Crimea and for its destabilising actions in eastern Ukraine. The United Kingdom also fully supports new sanctions in response to Russian elections in Crimea and Sevastopol, the construction of the Kerch bridge, the illegitimate elections in the Donbass, and Russia’s attack on Ukrainian vessels in the Black sea. National sanctions will also allow us to continue to constrain the ability of those who wish to do us harm, to encourage changes in behaviour from malign actors, and to send a clear signal about the role of global Britain as a moral anchor in the world today.

Let me turn to the Magnitsky powers, which were the principal focus of the remarks of the Chairman of the Select Committee. As he knows, preparatory work is under way to implement a new independent human rights sanctions regime as soon as practicable after we leave the European Union. That work has proceeded apace since March—from around the time that he delivered his report. It was probably reasonable for the Select Committee to comment at that time about its concern that not enough planning had been done for the subsequent sanctions regime, but I assure him that a great deal has happened since then.

Tom Tugendhat Portrait Tom Tugendhat
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Our report had the desired effect.

Andrew Murrison Portrait Dr Murrison
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Indeed. One has to take credit where one can in this business, and I am pleased to say that my hon. Friend is right to take some of the credit for moving the narrative along. More particularly, I am pleased to see that the work in the Foreign and Commonwealth Office, which also involves others, as I will come on to, has been proceeding apace. I am comfortable that we are in a good position to deal with some of those things in a timely manner at the point of our departure on 31 October.

As a non-lawyer, it is sometimes challenging and tricky to get my head around some of the complexities of the issue. The worst thing that we could do would be to create bad law that would be challengeable, because it would cost the British taxpayer many millions of pounds to defend the UK Government against people with very deep pockets. The last thing that my constituents want is for large sums of their cash to be disbursed to some of those individuals in damages. It is absolutely right that, across Government, we work hard to make sure that the legislation is in place and the statutory instruments are prepared in such a way as to minimise the chance of the UK Government being challenged by lawyers.

The sanctions regime that we are discussing derives from the so-called Magnitsky powers provided for in the Sanctions and Anti-Money Laundering Act. Clearly, all those here gathered are intensely interested in that legislation and its secondary legislation. Establishing a national human rights sanctions regime will show the United Kingdom’s commitment to human rights worldwide and will be an important plank in our post-Brexit foreign policy. It will allow the United Kingdom to impose travel bans and asset freezes, and it will ensure that people who abuse human rights anywhere in the world will not be able to travel here or invest in our economy. The Government will publish the names of those subject to those sanctions.

To impose a sanctions regime for human rights, we have drafted a statutory instrument to ensure the associated processes and structures are in place to implement and manage it. It is important that we set it up correctly, and I am absolutely focused on ensuring that those processes and structures are as legally robust and watertight as they can be. That has perhaps accounted for some of the delay that was remarked on in the report, in which the frustration of Select Committee members was palpable. I hope that my hon. Friend the Chair of the Select Committee understands the reasons for that. There is a need to replicate EU sanctions following Brexit and work has been going on in the past few months with legal draftsmen to ensure that the subsequent regime, particularly in relation to the Magnitsky clause that was introduced by the 2018 Act, is robust and will hold water against what is likely to be a hostile response from some of those designated under the legislation.

Hon. Members will be pleased to know that we are working closely with key partners, such as the US and Canada, which already have specific human rights sanctions regimes, to co-ordinate our efforts and to ensure that the sanctions that we impose have maximum effect. The Government are absolutely committed to tackling illicit finance, corruption and money laundering. We do not want dirty money here; money launderers are not welcome in the UK. We are actively implementing our anti-corruption strategy, led by the Prime Minister’s anti-corruption champion, my hon. Friend the Member for Weston-super-Mare (John Penrose). The National Security Council has met twice to discuss the issue, and the Government are consulting on reforms to Companies House and on introducing legislation to require foreign companies that own or purchase property in the UK to provide beneficial ownership information.

We have new and exciting tools to tackle illicit finance, such as unexplained wealth orders and account freezing orders, which were introduced under the Criminal Finances Act 2017. Those have been used to isolate millions of pounds across hundreds of bank accounts. Consequently, and as a direct result of all that work, the Financial Action Task Force found in 2018 that the United Kingdom had the strongest anti-money laundering regime of more than 60 countries assessed to date. I think we should all be proud of that, but there is no complacency. In July 2019, we published an economic crime plan in conjunction with the private sector. The plan outlines the public and private sectors’ collective ambition to combat economic crime and sets out a series of actions that both sectors will undertake to enhance the United Kingdom’s economic crime response. The plan was the first output from the economic crime strategic board, which the Chancellor and the Home Secretary co-chair. We are also actively looking at the possibility of introducing a power to block a listing on the London stock exchange on national security grounds. The work is well under way.

Although the issues are primarily the responsibility of the Home Office and the Treasury, the FCO plays a part as well. It leads the international delivery of the Home Office serious and organised crime strategy, supporting the overseas territories and Crown dependencies in tackling illicit finance and co-ordinating with the Department for International Development, Her Majesty’s Treasury and other Departments to deliver a global anti-corruption programme. It is important to understand the central role of the Foreign and Commonwealth Office. Ministers within the FCO are signed up to jointery and the idea that if we are to deal with all the issues that we have been discussing this afternoon, we need a cross-Government response.

I note the concerns about senior responsible officers for sanctions, and I read the remarks in the report very carefully. If we had a senior official responsible for this piece of work, which runs like a vein through the whole of Government business, I would be concerned about their being isolated. Although the proposal is that such an individual should report to the NSC, my worry—it is a concern that I have more generally with the machinery of government—is that we would be taking important bits of Government policy outside implementing Departments and making Departments respond in a sort of silo format to the NSC. Before too long, we would find that the NSC was responsible for a raft of bits of Government policy, and Departments were in some way isolated and frozen out. The Departments are expected to implement all of this and they have the experts and the expertise to deal with it, and I am vaguely uncomfortable with such a proposal.

In defence of the current position—all issues around the machinery of government are of course kept under review and are always subject to change and modification—the national security strategy and implementation groups, with which my hon. Friend the Member for Tonbridge and Malling will be familiar, are headed up at director general level and report directly into the NSC. I know that Russia is a particular concern of the Foreign Affairs Committee, for example, and the one on Russia is influential in securing that cross-Government response to the challenges posed by that particular malign actor. My sense is that such a mechanism serves Government well and is the best fit right now, but as with anything in this space, it is always subject to constant review and reappraisal.

The remarks made in the report are important in informing the general debate on how we do this. I hope that the Chairman of the Select Committee, and others, will understand the rationale for perhaps resisting, at this juncture, the solution proposed in the report. Perhaps it is something we may come back to at a future date.

The Foreign Office is intent on supporting the United Kingdom’s effort to strengthen international standards in general. You will be interested to reflect, Mr Davies, on the fact that in spring at the Open Government Partnership summit in Ottawa the Prime Minister’s anti-corruption champion, my hon. Friend the Member for Weston-super-Mare, launched a global leadership group to drive international efforts to strengthen international beneficial ownership transparency. The United Kingdom is an active member of the G20 anti-corruption working group and will be strongly represented at the conference of states parties to the UN convention against corruption in Abu Dhabi in December. As the Foreign Affairs Committee has identified, sanctions are a powerful foreign policy tool and form part of the overall approach to protecting the United Kingdom from threats from overseas and to delivering our foreign policy. Dirty money should not be in the United Kingdom, and we should be using domestic law enforcement tools and international co-operation to send a clear signal that we do not tolerate illicit finance in any form, not simply for moral or legalistic reasons.

Part of the power of the United Kingdom in terms of financial services is the reputation that we have for upholding the rule of law—and in particular for dealing with anything to do with illegality, corruption or things that transgress our rules and norms. That is much of the power of the City of London and, indeed, other financial centres such as Edinburgh, and it must continue. Unless we take these matters seriously we shall find that the reputation of the United Kingdom falls away in that respect, and we will all suffer as a consequence. There is therefore a strong financial imperative to ensure that our sanctions regime is as robust as it can be.

The United Kingdom is a global leader on sanctions, as I hope my remarks have explained. It is a major contributor to the development of international sanctions policy. I am very proud that when Ministers go to institutions such as the UN General Assembly we can be seen to be in a leadership position in respect of much of the debate. We can already draw on more sanctions expertise and resources within Government than any other European partner, and maintaining that capacity will be a priority after we leave the EU. We have increased the number of officials working on sanctions across Whitehall and intend to maintain those numbers beyond Brexit. The United Kingdom has one of the world’s largest and most open economies, and London is one of the world’s most attractive destinations for foreign investors. That means that the sanctions we impose will really bite.

The Foreign Office’s primary objective is to ensure that we can continue to use sanctions as an effective foreign policy tool to tackle some of the most serious threats to our national security and moral values and to drive forward our foreign policy. That is why our focus over the last two years has been to safeguard existing sanctions in the United Kingdom post-Brexit and why we will have a new global human rights sanctions regime.

To conclude—I have filled the time available as best I could—sanctions will remain a key part of the United Kingdom’s approach to a wide range of foreign policy priorities after we leave the EU. The importance that we attach to sanctions is reflected in the huge effort put into our preparations for Brexit and the additional resourcing that we have put in place across the FCO network. As I am sure hon. Members can understand, it was right for the Government to prioritise the work to ensure that existing sanctions would continue to apply in the event that we leave the EU without a deal. However, I hope that they will equally understand that in the past few months we have put an enormous amount of work into determining the future relationship, and that they are content with the general approach. I am grateful for all the recommendations outlined in the Foreign Affairs Committee’s report of 5 June and our response to it, since when a great deal has been done. I am by no means complacent about the task ahead, but I hope that the Committee will accept that we are on track.

Once we are outside the EU, we will continue to work in concert with others and will have the opportunity to implement our own autonomous sanctions, including on human rights, to combat threats, protect our norms and protect our values. We will continue to demonstrate through our actions that the UK is and will remain a global sanctions leader.

Tom Tugendhat Portrait Tom Tugendhat
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I am grateful for the Minister’s speech, which recognised not just many of the ideas that I raised but many of the ideas that the Foreign Affairs Committee has debated. That demonstrates that, despite having been Chair of another Committee, he was assiduous in following the work of ours, even before he became a Foreign Office Minister.

I am also grateful to my friend the hon. Member for Birmingham, Perry Barr (Mr Mahmood), who has been of invaluable support in many projects that I have done outside this place. His kind words supporting the Committee’s work and recognising the challenge that we all face, on whichever side of the House we sit, are extremely well received; I thank him for them.

The hon. Member for Glenrothes (Peter Grant) spoke extremely well on behalf not just of his party but of the House. He recognised many areas in which we all face similar challenges; one area that he did not mention, but could have, was the UK Government’s responsibility with respect to Scottish limited partnerships, on which he and his party have assiduously led the campaign. His speech reminded me that one reason why we are in this position in the UK is that we have the legacy of a very unusual political and economic system of absentee landlords that lends itself to foreign oligarchs in a way that many other economic systems do not.

I am particularly grateful to the Minister for speaking about the rule of law, because it is the economic underpinning of the United Kingdom. It is fundamental, and highlighting it is extremely important. That leads me on to an area that none of us mentioned, but that perhaps we should have—the challenges in places such as Hong Kong, where the human rights abuse of individual citizens could easily raise questions about Magnitsky implementations. It may also raise questions about the position of British judges on the Court of Final Appeal. After all, at what point is the defence of commercial justice reliant on civil justice? At what point does the undermining of civil rights in a territory undermine the ability of any judge affiliated to the UK—certainly a former UK High Court or Supreme Court judge—to deliver justice? At what point is that no longer possible? Maybe that is a question for another day.

The fundamental point is that the UK’s reliance on its economic markets is essential, as we know. We therefore need to look at whether the markets are not just open and fair but properly regulated with rules that are properly enforced. In the same way that the Minister’s ancestors on Her Majesty’s men of war—like their counterparts on Her Majesty’s frigates and destroyers today—implemented the rules of the sea and fought the evils of the slave trade and so many other forms of tyranny in the pirate wars from 1600 to about 1900, there is a place for a new red ensign to fly over our financial markets. Everyone should know that the people who put their money here and invest through London, Edinburgh or the UK’s markets, and the businesses that use those institutions, cannot be the human rights abusers, thieves and oligarchs who enrich themselves in places such as Moscow by raping and pillaging the people. They should know that because our markets have the best sanctions regimes to prevent any such crimes.

Khalid Mahmood Portrait Mr Mahmood
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I congratulate the Chairman of the Foreign Affairs Committee on mentioning the Navy’s fight against slave traders. It is very important to point that out, particularly now that we are in Black History Month.

Tom Tugendhat Portrait Tom Tugendhat
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I am grateful that the hon. Gentleman raises that issue. It is also worth mentioning that today is the anniversary of the death of Alan Henning; I do not know how many hon. Members remember him, but he was a taxi driver with a huge heart and enormous courage who took aid to Syria. His abusers probably enriched themselves in ways that we can only imagine. One very encouraging thing that the Foreign Office is doing—forgive me if it is not quite in the sanctions line—relates to the work of the British Museum in fighting the vile trade in historic artefacts. It is clearly connected to the sanctions issue, so I hope that the Foreign Office will pick it up, although the Committee did not cover it in our report.

I thank you for your chairmanship, Mr Davies, and all hon. Members present. I particularly thank the Clerks of the Foreign Affairs Committee, whose work has been exceptional, on this and many other subjects.

Question put and agreed to.

Resolved,

That this House has considered sanctions policy and implementation.