Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2023

Vicky Ford Excerpts

Monday 10th July 2023 General Committees

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

It is a pleasure to serve with you in the Chair, Mr Stringer. I thank the Minister for outlining the changes to the UK’s sanctions regime that are set out in today’s regulations. We will not seek to divide the Committee, but I have a series of questions for the Minister.

Over the weekend, we passed another grim threshold. It has now been more than 500 days since this phase of Russia’s appalling, illegal and heinous war of aggression against Ukraine began. We remain in awe of the endurance and persistence that the people and armed forces of Ukraine—the whole of Ukrainian society—continue to exhibit in the face of Russia’s brutal and relentless campaign.

I reiterate that Labour Members—indeed, I hope I speak for all members of the Committee—will continue to stand together with Ukraine for as long as the war takes and during the period of recovery and reconstruction that will follow. We also continue to support the Government in the steps they are taking to aid Ukraine, bringing a halt to Russia’s war machine and holding the regime in the Kremlin to account. The Minister clearly set out the very substantial costs of reconstruction and rebuilding that will be required, even if the war were to end today, but we are likely to see those costs continuing to escalate significantly, particularly when it comes to the removal of landmines and unexploded ordnance and when we see the terrible damage done to the Kakhovka dam and elsewhere.

We support these measures in total and, as I said, we will not seek to divide the Committee. Providing a clear legislative basis for keeping Russian assets frozen until compensation is paid to Ukraine is essential. As the regulations set out, we must move beyond encouraging Russia to cease its actions—as was attempted initially through previous sanctions regimes—to taking a much tougher position and holding it to account more fully by retaining relevant assets until compensation is delivered to Ukraine to account for all the destruction wrought by Putin and his regime.

Although we welcome these steps, and I note the comments of the Minister, it is nevertheless disappointing that there does not yet appear to be any movement towards fully seizing and repurposing frozen Russian state assets to supporting Ukraine’s recovery. As you will recall, Mr Stringer, we passed a motion unanimously in the House last week that would require the Government to introduce a Bill within 90 days to do that. I hope that the Minister can say a bit about where the Government are getting to on that and whether they propose to bring forward measures, particularly given that we have seen encouraging signs from the United States, Canada and, indeed, the European Union. [Interruption.] I will happily give way—

[Vicky Ford (Chelmsford) (Con)]

indicated dissent.

[Stephen Doughty]

Oh, I thought the right hon. Member for Chelmsford was indicating that she wanted to intervene.

I hope that the Minister will explain what steps the Government are taking and how much she expects there to be the voluntarist approach that she outlined. It would be a wonderful world if some of these people were to see the light of day and actually provide resources. What assessment has she made of that, and have the Government received any indications that some of those who are frozen will seek to do this voluntarily? We will have to move much harder.

I have a couple of further questions, given that the regulations relate to the sources of funding for the the pursuance of the war—the Minister said she wanted to ensure that those were choked off—as well as to shipping, ports and other maritime matters. I want to raise the issue of the transportation, refining and importation of oil and gas products that originate in Russia. The current sanctions regime, which the regulations amend, stipulates that once Russian crude oil is transported to a third country and refined into a product such as diesel or jet fuel, that product is no longer considered of Russian origin. It can therefore be transported, shipped and imported if it is kept below the set price cap. Is it therefore possible that Russian oil, in refined form, is ending up in the United Kingdom? What assessment have the Minister and the Government made of that risk?

Given that the regulations are about ensuring that Russia pays for damage that it has done in Ukraine, what is the impact in Ukraine of allowing and enabling the continued flow of Russian oil and gas products elsewhere through third parties, providing revenues that could fuel its war machine? If it is getting the money in from elsewhere and using it to fund the war, and we are not yet able to seize the assets—although we are hoping that, voluntarily, some of them may give them up—that seems to be a stark contradiction. Is the Minister aware of any UK companies involved in the shipping or facilitation of those products?

What assessment has been made pertaining to the enforcement of the price cap? I understand that a series of enforcement measures will be taken in relation to the shipping aspects of the sanctions regime. Is the Foreign, Commonwealth and Development Office maintaining records of attestations of when the price cap has been breached, and if that has been done, by which companies or organisations? If the Minister does not have that information to hand, perhaps she can write to the Committee with those answers. I hope that she will provide a clear list of whether we are aware of any breaches of the price cap and answer the question about the wider risk that oil coming from Russia is ending up in the UK or with our allies, fuelling the Russian war machine.

The Minister talked about the enforcement of sanctions. I remain concerned that we are yet to see the level of enforcement, fines and actions taken by some of our allies. We have a strong sanctions regime, but that must come with enforcement. Otherwise, there will not be the deterrent effect and we will see people continuing to try to evade it. I hope the Minister can say whether she has assessed the number of enforcement actions taken, how they compare with those of our allies and whether we are really providing resources to the enforcement side of things—obviously in the Treasury and elsewhere—to ensure that we take the toughest position possible. We can get all of this right, extend it geographically and put a long-term lock on that commitment until Russia pays reparations, but if we are not doing anything in the meantime and people are evading sanctions, that will be a huge problem. I hope that the Minister will answer some of those questions.

The Government can continue to rely on the support of the Opposition in making it untenable for Russia to continue to wage its illegal war and in ensuring that it pays for the damage it has done to Ukraine and the suffering it has caused.

[Vicky Ford]

I want to make three points. First, it is extremely good to be in this Committee, making these decisions. This is Russia’s illegal war, and it should pay for the damages it has caused. Making sure that assets have been frozen and can stay in the deep freeze until Russia pays for the damage is the right thing to do. I am glad that the Minister is still working with other international partners on whether we can go further and use some of the funds now.

Secondly, to make a minor point, I think there are two small typos. We need a comma between “Kherson” and “Luhansk” in regulation 3(b), and a comma between “Donetsk” and “Kherson” in regulation 6—just to ensure that we refer to them correctly.

Thirdly, the use of sanctions and frozen assets has had a positive impact on reducing Russia’s ability to pay for its war. I urge my great and right hon. Friend the Minister, when she goes back to the Foreign Office, to make officials look harder at whether we can do what has been done in the Ukraine war in other situations. In particular, I am thinking about the warlords in Sudan. I believe—as do many Sudan watchers—that more action on freezing assets and sanctioning individuals could make a dramatic difference. I am not expecting an answer on that from her, but I am asking her to take another look.