Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020.

My Lords, first, I would like to draw noble Lords’ attention to the fact that the Secondary Legislation Scrutiny Committee described this order as an “instrument of interest” in its third report of 30 January. The order was laid before the House on 17 January under the “made affirmative” procedure and came into force on 19 January. It maintains a freeze of any funds or assets that the two individuals hold in the United Kingdom or with any United Kingdom-incorporated entities, denying them access to the UK financial system and prohibiting UK persons from making funds available to them.

The order was made because in 2016 an independent inquiry, chaired by Sir Robert Owen, concluded that Mr Alexander Litvinenko was deliberately poisoned in 2006 by Lugovoy and Kovtun through the use of polonium-210. The inquiry also concluded that there was a “strong probability” that Mr Litvinenko, an ex-KGB and ex-FSB officer and critic of the Russian Government, was murdered on the order of the FSB—the Russian domestic secret service—and furthermore that the killing was “probably approved” by then head of the FSB, Nikolai Patrushev, and by the Russian President, Vladimir Putin.

As part of its response to the gravity of these findings, the Treasury imposed an asset freeze in January 2016 on Lugovoy and Kovtun by making a freezing order under the Anti-terrorism, Crime and Security Act 2001. A second order was imposed in January 2018 which expired at the end of 18 January this year. The order that I am commending to the House was therefore put in place to ensure there was no gap in the freezing measures that have been enforced against Andrey Lugovoy and Dmitri Kovtun since 2016.

Under Section 8 of the Act, the duration of a freezing order is limited to two years. Since 2018, as required by Section 7 of the Act, the Treasury has kept the order under review. In May 2019 the Treasury reviewed the facts of the case against the relevant statutory criteria and concluded that the criteria continued to be met in respect of both individuals.

Prior to the expiry of the 2018 order, the Treasury again reviewed the facts of the case and decided to make a new order to maintain the asset freeze against these two individuals. The Treasury believes that making a new order is an appropriate and proportionate measure to take. The relevant conditions required to be met, as set out at Section 4 of the Act, are still being met. In this case, these are that

“the Treasury reasonably believe that … action constituting a threat to the life or property of one or more nationals of the United Kingdom or residents of the United Kingdom has been or is likely to be taken”

by a person or persons resident in a country or territory outside the UK.

The freezing order is one of a limited number of measures available to the UK authorities to act directly against Lugovoy and Kovtun. We continue to believe that it acts as a deterrent and a signal that the Government will not tolerate hostile acts on British soil and will take firm steps to defend our national security and rule of law. The new order maintains a robust approach on Russia, in line with our Russia strategy, and maintains unity of approach with the United States, which also sanctions these two individuals. Continued close co-ordination is a vital part of our joint effort in countering the Russian threat.

My Lords, I hear the noble Earl, but I hope he will understand that I am not wholly convinced by the case he has deployed for continuing the order in respect of the two Russians. Indeed, I question whether it serves any useful purpose. We are dealing with a freezing order in respect of those two people, prohibiting persons from making funds available for their benefit. In my judgment, it is unlikely that the pair are dreading the result of this debate.

I ask three key questions. My first question is: why now? The short answer is of course that this is the second order made against the two men following the Owen report in January 2016. The order has expired and must now be renewed. The question must arise: at what point will this two-year cycle end? What criteria did the Treasury use in looking at the case for its continuation? Are we to anticipate that this two-year continuation will go on ad infinitum?

The Government have clearly put much effort into the order’s renewal, as shown by the timetable I just mentioned and some of the many committees that have looked into it. The instrument was made on 17 January. It was laid before both Houses. A Motion to approve has been made. It has been before several similar committees. There are also the English votes for English laws certification, the Secondary Legislation Scrutiny Committee, the Joint Committee on Statutory Instruments, the Delegated Legislation Committee and so forth. It is a pretty formidable series of consideration. I wonder whether it smacks a little of a job creation exercise and whether the Treasury is doing its job properly in asking whether there is value for money in what we are doing. For example, before or after the order made on 19 January, was any effort made—if we consider this so important—to persuade other countries to follow suit in respect of these two Russian gentlemen?

The second question I pose is this: why are we here at all? Has anyone in the Treasury, for example, asked the basic question on behalf of law and on taxpayers’ behalf: is this expenditure worth while? Is it worth the effort of time and finance? I put this question to the noble Earl: is there a scintilla of evidence that the two men have any assets in the UK on to which the Treasury might latch? Is there any possible way in which any financial institution within this country’s jurisdiction is likely to offer any loans or any form of financial help to these two men, who are GRU operatives? Are they likely either to seek or be given any such help, given their lack of creditworthiness? Otherwise, surely this is a pointless exercise. As we know, Russia will not extradite any of its nationals, let alone those like these two gentlemen—that is, operatives of the Russian secret state engaged in a clandestine mission.

The only explanation offered in the Explanatory Memorandum is in paragraphs 6.2 and 7.3. Paragraph 6.2 states:

“The Treasury believe that this Order will be an effective deterrent to prevent similar activities being undertaken again.”

Paragraph 7.3 states that

“Parliament will not tolerate activities of this sort, and constitutes a deterrent to these persons and others from undertaking similar activities in the future.”

Do the Government seriously suggest that the GRU or the other elements of the Russian secret service will be deterred by an order of this sort? The facts clearly suggest otherwise.

I cite the Salisbury outrage, when the GRU sent two men in the hope of murdering Mr Skripal. In effect, they murdered an ordinary British citizen through their negligence in discarding that vial. Remember, those GRU agents purported to have an interest in medieval ecclesiastical architecture. They said that they thought that Salisbury cathedral was an appropriate place for them to visit in this country, so they visited it to continue their interest in such architecture. It was absolute nonsense. They came here with a firm purpose. There was clearly no deterrent in that case. It was Mr Putin who, in his press conferences and elsewhere, tried to laugh off—almost—the evidence, saying in effect that all traitors may well suffer the same fate. We also know that a number of Chechen opposition people have been killed in France in the same way. Where is this deterrent effect that the Treasury found so convincing? To be fair, in paragraph 12.1, the Treasury concedes that:

“The continued listing of these two names is likely to have negligible impact.”

The use of “negligible impact” probably overstates the effect.

So, why are we here? Could not someone in the Treasury have looked at the facts of the case and what happened afterwards and have said, “Look, stop. This order is no longer justified”? Are we going to consider the charade of extending these two years indefinitely?

Finally, I want to ask about the Magnitsky clauses in the 2018 Act. Why are they not now put into effect? The clauses relate to asset freezes and visa bans. Had they been in effect, they could have been used in this case. I accept that the Government say that an SI will be put down to bring forward the Magnitsky clauses. They argue that they were restrained by EU membership. That is nonsense on stilts. There is no such restraint by EU membership. If there were, why have the Baltic countries—also EU members—had Magnitsky clauses of this sort, on the same lines as legislation in Canada and the USA and that being considered in Australia? The EU did not in any way restrain this. The Government’s argument is wholly without merit. I pay tribute to all those who, on a cross-party basis, led by Andrew Mitchell MP, persuaded the Government, rather against their will, to put forward those Magnitsky clauses. The Government’s best argument is that they are doing this because they are doing it. I only wish that someone had the nous and courage to say, “Enough is enough. We should stop at this point”.

My Lords, I believe that on balance it is necessary to renew the order, simply because not to renew it would send the wrong message, but I agree with many of the comments made by the noble Lord, Lord Anderson. I spoke on this issue back in 2018—I will not repeat the whole of that speech, as that would be to test the patience of the Committee. I used that opportunity to pay tribute to Marina Litvinenko, who fought so hard against the Home Secretary of the day for the public inquiry that should have come almost automatically but did not. The reality is that, because of the many delays, Andrey Lugovoy and Dmitri Kovtun had years in which to move out any assets that they had in the UK or within the scope of the UK. From the moment that the order was established, it was unlikely that it would have any personal impact on them, but at least it sent some sort of message.

At the time, I asked the Minister of the day to be sure that all assets were encompassed by the various definitions, including crypto-assets, and I received an assurance that they were. Is there an ongoing mechanism to make sure that, as new financial mechanisms develop, they are covered and automatically caught by the order? That would be a useful discipline to have in these instances.

I was also concerned to know to what extent these two individuals would be able to make use of Crown dependencies and overseas territories, many of which do not have a public register that would enable any civil society person to identify whether they were making use of financial services capabilities in those locations. Without that, the UK or the enforcement arm, presumably the Metropolitan Police, would need to initiate an investigation into assets in the names of the two individuals and into any shell companies that they might be involved in or any other kind of entities that were making use of those Crown dependencies and overseas territories. I am not sure how active that process is and whether we are serious about making sure that these two individuals are at least excluded from UK-related financial capacity.