Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2022

Viscount Waverley Excerpts

Thursday 3rd March 2022 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I raise again with the Government the issue of cryptocurrencies. Effectively, Russians cannot now transfer roubles into dollars, euros and pounds sterling but they can transfer into cryptocurrency. The Minister will know that the Ukrainian Minister of Finance on Monday called on all the decentralised finance—the DeFi exchanges—to remove Russia from their schemes. Some, such as Coinbase, have done so, but others—Binance is the big one that comes to mind—have decided to sanction only the 100 names on the sanctions list and otherwise to allow free translation of roubles into cryptocurrency. We have heard from the Ukrainian Government that this is a serious mechanism for evading sanctions. Binance, which I mentioned, is registered in the Cayman Islands and therefore falls into the UK financial family. What more will the Minister do to prevent what may have looked like a loophole from becoming what is now growing into—a major escape hole?

[Viscount Waverley (CB)]

My Lords, these are dark days. I am delighted to follow and identify with the initial remarks of the noble and learned Lord, Lord Garnier, and the noble Lord, Lord Austin. Our hearts are with the brave people of Ukraine. The Russian people will suffer long-term hardship but nothing compared to that befalling the extraordinary people of Ukraine.

It is no fault of the Russian people that they have no understanding of the reality of why they are being fully penalised. It is quite astounding that, from my calls to Russia, their perception of what is going on in Ukraine borders, frankly, on the fanciful. Disinformation is rife. These measures are very necessary and the UK Government are doing exactly what they have to do. They have my full support.

[Lord Clarke of Nottingham (Con)]

My Lords, I fully support these sanctions and I congratulate the Government on the packages brought forward. I look forward with interest to the replies to be given to several of the detailed points raised about exactly how firmly they will be enforced.

I will look forward a little. The medium to long-term reality is that we are applying these sanctions against Russia, but Russia is almost certain in the end to achieve some degree of military success. A new reality will dawn, probably with a puppet Government in Ukraine, and the whole issue will start fading from international debate, from the media and so on. What are the Government’s plans for the medium term and, if necessary, the longer-term future in sustaining these sanctions and this level of pressure on the Russian regime?

In reality, there will be quite rapidly a tendency to put pressure on the Government to allow people to return to a new normality: to allow Russian companies to have access to the City of London again and to ease sanctions causing financial losses to lawyers, accountants and firms here. Is the Minister able to assure me that, as far as the British Government are concerned, we intend to retain this degree of sanctions until some satisfactory solution to the political problem is achieved, with a genuine agreement with a respectable Ukrainian Government who have proper regard to international law and national sovereignty? Will the British Government remain one of the more robust in the western lands? There will be considerable pressure to stop doing so much once we have, as it were, done our best to protect the Ukrainian regime during the conflict.

The sooner we start addressing that problem, the sooner we will start facing up to realistic problems that we must plan for. The Russians will undoubtedly, for example, try to ensure that the sanctions do quite a bit of damage to western economies, and will start trying to use their influence on the oil and energy markets to demonstrate that they can cause us some continuing loss unless we begin to lose interest—shall we say?—in the crisis that has so shocked the world. Are we determined to be one of those western countries that will seek to maintain the fullest force of sanctions we can unless and until a satisfactory solution is reached with the Russian regime?