HANSARD
Russia (Sanctions) (EU Exit) (Amendment) (No. 11) Regulations 2022
- Motion to Approve
- 6:56 pm
- Moved by
- That the Regulations laid before the House on 14 July be approved.
- My Lords, I beg to move that the House considers the Russia (Sanctions) (EU Exit) (Amendment) (No. 11) Regulations 2022, and will also speak to the Russia (Sanctions) (EU Exit) (Amendment) (No. 12) Regulations 2022, the Russia (Sanctions) (EU Exit) (Amendment) (No. 13) Regulations 2022, and the Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022.The instruments before us were laid between 14 and 20 July, under powers provided by the Sanctions and Anti-Money Laundering Act 2018, and make amendments to the Russia (Sanctions) (EU Exit) Regulations 2019. In co-ordination with our allies, the United Kingdom continues to introduce the largest and most severe economic sanctions package that Russia has ever faced. Noble Lords will note that we continue to bring further pressure to bear on Mr Putin and his regime. Since these SIs were introduced, we have made further announcements on UK sanctions in response to Mr Putin’s illegal annexation of Ukrainian regions.On 26 September, the UK sanctioned 29 individuals and organisations related to the temporarily controlled territories of Donetsk, Luhansk and Zaporizhzhia, Russian Government officials, four additional oligarchs and 55 state board executives. On 30 September, the Foreign Secretary announced a new set of sanctions related to services on which Russia depends. Building on previous action, the UK will prevent Russian access to advertising services, architectural services, auditing services, engineering services, IT consultancy and transactional legal advisory services linked to certain commercial activity.The announcement also included a new ban on the export of nearly 700 goods that are crucial to Russia’s industrial and technological capabilities. The UK also sanctioned Elvira Nabiullina, the governor of the Central Bank of the Russian Federation. Nabiullina has been instrumental in the Russian economy throughout the Russian regime’s illegal war against Ukraine and in extending the rouble into the Ukrainian territories that are temporarily controlled by Russia. The measures we are debating today further isolate Russia’s economy and target key industries supporting Mr Putin’s illegal war in Ukraine.
- 7:00 pm
- I add one further point: the Joint Committee on Statutory Instruments observed that three provisions in the 10th amendment to the regulations went beyond the powers conferred by the sanctions Act. We resolved this by revoking the 10th amendment and replacing it with the 11th. I express my sincere thanks to the Joint Committee on Statutory Instruments for its continued engagement on these issues, as we introduce further secondary legislation at pace in response to Mr Putin’s abhorrent war. My thanks also go to the Opposition Benches—both the Labour and Liberal Democrat Benches—for their strong support during the process through Parliament of these SIs.
- I now turn to the No. 12 regulations, which place fresh restrictions on investments and services in Russia. This will hit revenue streams of critical importance to the Russian economy. The new measures prohibit persons from being involved, directly or indirectly, in the following: acquiring land and entities with a place of business in Russia; establishing joint ventures with persons and entities connected with Russia; and opening representative offices or establishing branches or subsidiaries in Russia. The measures also restrict the provision of investment services related to these activities. There are some exceptions to the provisions to prevent overlap with existing regulations as well as licensing and enforcement powers. This measure implements commitments made in the April G7 leaders’ statement to ban new investments in Russia. We have designed this measure to have a similar effect to the equivalent US investment prohibition. This goes further than the equivalent EU prohibition, which prohibits new investments in the Russian energy sector specifically.
- The No. 13 regulations widen the definition of scope of activities for which a person can now be designated. We have expanded our definition of destabilising, undermining or threatening Ukraine, and supporting or obtaining a benefit from the Russian regime. This brings into scope many individuals and entities in the Russian Government, their agencies and their armed forces.
- These regulations make minor amendments to the definition of
- “being involved in obtaining a benefit from or supporting the Government of Russia”.
- They broaden the interpretation of being “associated with” a designated person to include immediate family members, who often hold assets on their behalf. They also provide an exception from trade sanctions for humanitarian assistance activity delivered in non-government controlled areas of the Donetsk and Luhansk oblasts. Finally, they expand the definition of ownership in relation to ships and aircraft and correct errors and omissions in previous regulations.
- The fourth and final set is the No. 14 regulations, which introduce further trade sanctions. They prohibit the export, supply, delivery and making available of a comprehensive list of critical goods, energy-related goods and related ancillary services, for the supply of which Russia had relied on G7 nations. These goods had a combined market value to Russia of £365 million last year.
- This instrument also bans the import, acquisition, supply and delivery of Russian coal, entering into force on 10 August. This is on top of prohibitions on the import, acquisition, supply and delivery of Russian oil, which will come into force before the end of this year, and on the import of gold that directly or indirectly originates in Russia, which entered into force on 21 July. Ancillary products and services on coal, oil and gold exported from Russia are also prohibited. A further ban covers the provision of business and management consulting services, public relations and accounting services to persons connected with Russia.
- It is also worth noting that SIs 11 and 14 have been developed in alignment with the UK’s international partners, which I know is an important point for the noble Lords, Lord Collins and Lord Purvis. I assure them that we continue to work in concert with our allies to assess any potential gaps in our sanctions packages.
- These hard-hitting new measures continue to ratchet up the pressure on Russia. I assure noble Lords that we will continue to do so and to work with our allies until Mr Putin ends his illegal, unjustified attack and war on Ukraine. I welcome this opportunity to hear views on these regulations. I beg to move.
- My Lords, I hope the Minister will allow me briefly to mention the No. 11 regulations. I understand from what he said that they derive in part from discussions at the G7, and I presume that all G7 countries are in the process of putting similar ranges of sanctions in place in their own countries. Part 4 inserted by these very extensive regulations deals with chemicals and equipment—it is a very comprehensive list. Is this list the same as that being applied by other European countries? When I looked at it, I thought it might be derived from the former EU regulation on REACH, which is I think the biggest piece of legislation ever passed by the European Parliament. Are we co-operating on important measures such as this to have the effect that the Minister intends?
- My Lords, the Minister knows that these measures are supported by the Liberal Democrat Benches. As when we have debated previous sanctions, I am grateful for the Minister maintaining contact and keeping us informed. He knows of our strong support for measures which aim to ratchet up the pressure on Vladimir Putin and, as is included in these elements, the wider circle of his support.We would support moving beyond the regulations to include the United Russia party and wider elements of the Russian regime in this part of the sanctions regime. We support the Government in the extension on state entities but, as the Minister knows well enough, there has been considerable state capture of the Russian economy by the Putin regime over recent years. This means that we should include in our sanctions regime not just the political actors but, increasingly, those in the wider economy. Therefore, the banning of certain exports and the wider inclusion of some state entities is to be welcomed.I also welcome the work of officials on the impact assessments. They are useful tools to look at what the impact could be on the wider Russian economy. This leads to my first question. We have debated many sanctions but are yet to receive what I have asked for previously: an overall assessment of the net impact of the UK sanctions on the Russian economy and regime. I understand entirely that that document will be sensitive, but we must understand what the impact has been; otherwise, we cannot judge what could well be a situation where, in the long run, we want to move away from the sanctions regime. However, that is premature, as we want to increase the pressure.That leads to my second question, on implementation. I noted that we have seen the first prosecution in the UK of what is effectively sanctions-busting. Can the Minister indicate whether that is an isolated case or if he is aware of more areas where there are active prosecutions of UK citizens and residents who have been acting against the sanctions regime in the UK? We need to know that these sanctions are being actively policed and implemented. They are pointless unless they are implemented in full.
- My Lords, I too would like to start by reiterating the backing of the Opposition for the Government’s support for the people of Ukraine, and of course these sanctions are a vital element of that support. I am pleased to see such a wide range of issues being covered in today’s measures, which the noble Lord, Lord Purvis, has mentioned. We support these sanctions and measures, but it is only right that this House can scrutinise and understand whether the Government are properly resourcing them. It is one thing having the law; it is another thing to be able to ensure full compliance. I think a lot of my questions will echo those of the noble Lord, Lord Purvis, regarding that question.In the other place, the Minister Jesse Norman stressed —and I accept this—that“the first instinct in a war situation is to get sanctions on the books as quickly as possible.”I noticed what the noble Lord said regarding the Joint Committee, and of course we even had amendments to our Standing Orders to ensure that we could get these in place as quickly as possible. I reassure the Minister that the Opposition will do whatever they can to ensure speedy implementation and adoption of these sanctions.Jesse Norman also argued that the sanctions“have been effective because the Treasury Committee has reminded us of that, and we have plenty of other evidence that it is the case.”I would echo the point made by the noble Lord, Lord Purvis, that it would be good to have that assessment in a more political context so that we can properly understand it.