Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022

For your Lordships’ information, I say that the G7 will meet later today to discuss the severe co-ordinated sanctions we will be imposing on Russia. Ukraine, of course, is not a NATO country, but we will help it with self-defence. We are talking with other leaders to co-ordinate our response, as well as our response when it comes to sanctions. The solidarity of NATO is clear. We stand together. That is why the UK and other NATO states have been moving troops to our NATO allies. We will continue to support the legitimate Government of Ukraine and, importantly, the people of Ukraine in their self-defence against this attack by Vladimir Putin. We will use every lever under our control in pursuit of that end.

The legislation follows the “made affirmative” procedure set out in Section 55(3) of the Sanctions and Anti-Money Laundering Act 2018. The statutory instrument amends the Russia (Sanctions) (EU Exit) Regulations 2019. It allows the Government to impose sanctions on a much broader range of individuals and businesses who are or have been involved in

“obtaining a benefit from or supporting the Government of Russia”.

These include those that, first, carry on business as Russian Government-affiliated entities; secondly, carry on business of economic significance to the Government of Russia; thirdly, carry on business in a sector of strategic significance to the Government of Russia; and, fourthly, businesses that own or control, or act as a director, trustee or equivalent of, one of these entities.

It is very clear from the events of last night that Russian aggression against Ukraine is part of a long-term strategy. If we give ground now, or we try to accommodate illegitimate Russian demands, Russia’s strategy of aggression—we fear—will not end here. Who will be next? Russia, if we were to give way, would be emboldened. President Putin’s focus would simply move on to the next target. What is being done is an attempt to turn back the clock to years gone by, and perhaps a mythical past, to rebuild the Russian sphere of influence. We must be absolutely firm in our response.

As my right honourable friend the Prime Minister will set out in more detail to the nation later this afternoon, what we do today will shape European security for many years to come. Together, we must rise to this moment, and we must stand united with Ukraine and with the people of Ukraine. In the Revolution of Dignity, it was the Ukrainians who risked their lives to choose freedom; they fought for democracy. I am determined that we will continue to support them in that choice which they made for themselves. I therefore commend the regulations to the House and would also share once again that it is our intention, as I said at the start, to go much further.

Amendment to the Motion

Yet, so far, we have sanctioned only five banks and three Russian billionaires. We must extend to at least the European Union’s 27—and beyond, I hope.

The Minister has indicated in a letter to us all that the Government are planning to introduce legislation to prevent the Russian Government from raising finance. This needs to be done urgently. I ask the Minister: can he confirm that this legislation will be brought before both Houses of Parliament at a very early opportunity, so that it is not allowed to drag on?

We should also introduce export controls on Russia, stopping shipments to Russia of microchips, computers, consumer electronics, telecommunications equipment and other items made anywhere in the world if they were produced using US, UK or EU technology. Most importantly of all, we must disconnect Russia from SWIFT. Russia is heavily reliant on SWIFT due to its multibillion exports of hydrocarbons denominated in US dollars. The cut-off would terminate all international transactions, trigger currency volatility and cause massive capital outflows. In my view, and the view of people far more expert than me, it would probably be the most effective action we could take—yet it has not even been mentioned by the Government so far.

We should also sanction luxury property in the United Kingdom.

Putin needs to know that we are going to take these strong actions and take them now to stop him in his tracks and prevent any further aggression and the inevitable bloodshed that will result. I move this amendment.

We need to put into position a suite of powers that will then allow us to do what we need to do, so as we debate these sanctions, we should not kid ourselves that we are having an impact on Putin or any of his acolytes today, but we may have in the future. Interestingly, today, before the Prime Minister makes the Statement to the House of Commons, it is being reported that he is promising massive sanctions designed—and this is the interesting phrase—“in time” to hobble the Russian economy. Why do we not already have the ability to change the way in which Companies House practises and its ability to pour out shell companies that people can use to hide their assets? Why do we not have anti-money laundering legislation that is used in an impactful way to prevent the sort of stuff that is going on? Why do we not already recognise that we have people in the City of London who make a significant living out of facilitating all of that sort of behaviour, and they do it openly, with nameplates on the door that tell people that that is what they are doing?

It is important that the Government recognise that what we are doing here is legislating for potential, but it is not potential that will be impactful, although it may, for a couple of days, affect the sentiments of the stock exchange.

However, we now have to be firm because, as the peaceful solution has not worked, it cannot be said that no consequences flow from what has happened. So, clearly, we not only have to have sanctions, but if we are going to have sanctions that work, they have to be agreed among the larger players in Europe. That, frankly, means that we have to do what has been suggested about the overseas territories and we also have to stand up and be quite firm with Hungary and Austria because countries that are making large profits out of Russia have to realise that they are either in a European solidarity pact or on the other side. They cannot be on both sides at once.