Russia (Sanctions) (EU Exit) (Amendment) Regulations 2026

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2026.

My Lords, these regulations amend the Russia (Sanctions) (EU Exit) Regulations 2019. This instrument was laid on 19 May under powers in the Sanctions and Anti-Money Laundering Act 2018. The measures in this instrument, subject to the “made affirmative” parliamentary procedure, entered into force on 20 May.

Since coming to power, this Government have been clear that Russia must not be allowed to succeed in its illegal war and have been steadfast behind Ukraine. Russia represents not just the obvious threat to Ukraine but a threat to the UK and our allies. As part of that, the UK has sanctioned more than 3,300 individuals and entities under the Russia sanctions regime, with over 1,300 sanctioned under this Government. Just last month, we introduced a new package that sanctioned 18 individuals and entities under the UK’s Russia sanctions regulations. This included cryptocurrency exchanges active in Russia and entities and individuals we suspect are linked to the UK-sanctioned A7 network, which has embedded itself in the Kyrgyz financial sector. This marks a further step in the UK’s sustained effort to erode Russia’s ability to fund its illegal full-scale invasion, ramping up pressure on Putin’s war chest.

Last month, Russia slashed its economic growth forecast for 2026 from 1.3% to just 0.4%. Russia’s Deputy Prime Minister ascribed this downgrade to the impact of sanctions, among other factors, and Vladimir Putin admitted that Russian GDP contracted by 1.8% in January and February, with a decline in areas critical to the war effort, including industrial production.

My Lords, I am grateful to be able to contribute to this debate. I should say that I welcome these regulations. After all, they introduce a number of new sanctions into the Russia sanctions regime, which aims to encourage the Russian Government to cease their invasion of Ukraine—a noble aim. My concern, however, is about not so much the regulations themselves but the licences that were put in place on the same day to help mitigate some of the impact in the UK. It is to that end that I want, if I may, to ask the Minister a few questions.

First, I ask for clarity on the overall strategy between the pressure of the sanctions and the flexibility introduced by the licences. The Government have set out that these measures are intended to increase pressure on Russian energy resources and revenues while temporary licences are used to manage the market disruption. Can the Minister set out how the Government will evaluate the effectiveness of that balance in practice? What indicators will they use to demonstrate that that pressure on Russia is being materially sustained despite the use of these flexibilities? The Government have also stated that these measures will reduce Russia’s energy revenues. Can the Minister provide an estimate, even at a high level, of the anticipated scale of that impact once the measures are fully operational?

I also ask for clarity on the end state of the licensing approach. The licensing framework is described as a temporary and phased implementation mechanism. Can the Minister clarify the intended end state of the policy? She mentioned an end time but not necessarily the specific market conditions under which the Government expect the prohibitions to operate and fall without licences.

On the review process and accountability, given that the licences are subject to ongoing review, can the Minister elaborate on the governance of that process? Who takes decisions on continuation or revocation? What evidential thresholds are applied? How frequently are reviews undertaken in practice? Will the outcomes of those reviews be systematically communicated to Parliament?

My Lords, I declare my interest as the chief engineer working for AtkinsRéalis. It is wonderful to be back in your Lordships’ House after a fairly brief hiatus, and it is very good to see the Government bringing this legislation forward.

I shall focus my remarks on new Chapter 4KA, to which the Minister referred and which concerns uranium and the nuclear fuel supply chain. I have been working on this for several years with other noble Lords across both this Government and the previous one, so it is really good to see this action being taken on nuclear fuel imports. Of course, the Government were very quick to sanction and take action on hydrocarbons, but, on nuclear fuel, we have been in a similar position in that Russia has dominated that market. For example, some 50% of the world’s uranium conversion capability was undertaken by Russia, so there has been a bit of a gap there in terms of our focus on energy. We have brought the focus on to hydrocarbons, but nuclear fuels have been affected; that is now fixed by this legislation.

I will come on to our own supply chains in a minute, but I have an initial question for the Minister. Sizewell B is the nuclear power plant currently impacted in terms of Russian material. I would like to clarify whether the measures in this statutory instrument will, in effect, stop that route for Russian material going to Sizewell B through the existing contracts with a Russian supplier. I would be grateful if the Minister could let me know about that.

More broadly, there is a fantastic opportunity here, because a range of companies want to invest in the UK and in our domestic fuel supply chains. This statutory instrument provides certainty for investing businesses. We have had a number of fairly high-level commitments from Governments over the years, but having it written down in legislation gives a route to getting more investment into the UK. This is important legislation from that perspective, and we are seeing investment coming in. Westinghouse, Urenco and Framatome all have plans in this area. However, there are a number of gaps to be filled. When we look at the nuclear industry in general, the recent focus on reactor technology has been brilliant, and we have had good decisions on small modular reactors and Sizewell C, but alongside that there needs to be a focus on ensuring that as much of the supply chain as possible is located within the UK so that we maximise the economic benefit.

We in the UK have historic strengths in getting end-to-end nuclear fuel supply chains together, so there is a possibility of a real win here in building up our own supply chains, seizing all the export opportunities for the nuclear industry and using the locations of those plants and investments as a spur to regional growth. I welcome the legislation, but will the Minister say how the Government are going to seize the opportunity enabled by it to bring forward additional end-to-end fuel services in the UK, with all the attendant export opportunities and skilled jobs, and use it as a tool to regenerate the regions?

My Lords, I welcome the noble Lord, Lord Ravensdale, back from his brief sabbatical; his contributions will continue to be welcome. I also welcome the questions from the noble Lord, Lord Lancaster, many of which have been playing on my mind over the past couple of weeks, and which I will refer to a little later.

On Friday, the Russian war on Ukraine became longer than the First World War. Today, it is likely that 1,000 Russians will be killed or wounded in the prosecution of that aggression. Also today, the first negotiating cluster opens between the EU and Ukraine, signalling a prospect of a much more prosperous and secure future with Ukraine in the European Union. What will assist this future is no lifting of economic and trade pressure on Russia. It is why tackling the Russian oil and energy sector—which is controlled by those close to, or who are financial backers of, President Putin—remains critical, and why these measures should be supported.

Russia has, frustratingly, managed to exploit some resistance to act over the past few years, especially on secondary sanctions, and has too easily circumvented the sanctions that have been put in place. In March 2022, more than four years ago, in the Chamber I asked the previous Government to target the rouble/rupee swap that allows Russia to continue to trade in oil products by allowing countries to trade and refine and then sell on. I raised this eight subsequent times—five times during the period when the noble Lord, Lord Callanan, was an Energy Minister in the previous Government. When I challenged the noble Lord, Lord Ahmad, in the Foreign Office, I always got the slight impression that the FCDO would probably have liked to have acted, but the Energy department and the Treasury were more reticent. Because of this and because I have pressed on this issue for so long and so consistently, I was genuinely delighted to see the tranche of sanctions we are considering today.

My Lords, Russia’s illegal war in Ukraine is an indefensible act of aggression. The previous Government were both steadfast and consistent in their support for Ukraine and their opposition to the invasion and I am grateful that the current Government have continued that policy. With the support of the noble Lord, Lord Purvis, whose comments I agree with, that makes all three major parties in the UK united in this endeavour, although we sometimes have differences on points of detail. It is in that context that I support the Government’s policy of tough sanctions against the Russian state and individuals linked to the Russian war machine. We will always welcome that approach and support the Government in this.

These sanctions are the right step and we must continue to keep them under review to ensure that they are appropriately tough and have the proper effect of putting pressure on Putin to bring an end to the invasion, just when it looks as though Ukraine could be making some progress, as the noble Lord, Lord Purvis, said; I hope that is the case. Like him, I take this opportunity to pay tribute to the brave men and women of the Royal Marines, the RAF and the Royal Navy, as well as the NCA officers, for their skilful seizure this weekend of the Russian shadow fleet vessel, “Smyrtos”. The Government are right to have taken this action. Russia’s shadow fleet should not be permitted to operate with impunity. The permission for this action was originally announced more than three months ago, and many of us have been wondering why the announcement was made then but nothing happened. It is estimated that 200 to 300 tankers have gone through the English Channel since then, without being apprehended. It is nice to see that one has now been stopped. Can the Minister update the Committee on whether further actions will be permitted? What will happen to other tankers that are apparently on their way towards the channel at the moment? I believe that some have turned back.

My Lords, I am grateful that we have come as close to a broad consensus as we ever normally achieve and I thank all noble Lords who have taken part for their constructive contributions. The measures introduced by this instrument show how the UK continues to use its powers to apply further pressure on Putin to help secure an enduring peace and that we remain fully behind Ukraine. At the same time, the instrument is just one part of a broader cross-government effort on sanctions.

The noble Lord, Lord Lancaster, asked a number of questions on how we evaluate the scale of the impact. We keep a very close eye on what is happening in Russia and on the impact of our sanctions. When we need to, we are prepared to go further. I have described our aims, and we will continue to pursue them until we see an end to the war.

I appreciate the noble Lord’s point that when these things are announced, there are the issues of sanctions and of licences, which are slightly separate. Perhaps it would be helpful to present these in a way that enables noble Lords to examine them as a single package. I will take away that constructive suggestion.

The noble Lord, Lord Ravensdale, asked about uranium supply chains and Sizewell B in particular. We work with the sector to make sure that it gets what it needs. I support what he said about trying to make sure that the UK can benefit to the maximum extent from this, and we will continue to do that.

To the noble Lord, Lord Purvis, I commend the intervention—

On Sizewell B, I wonder whether the Minister can write to me with more specifics about the supply chain and whether that which currently supplies Sizewell B will come to an end as a result of the legislation. I would appreciate that specific commitment.

I cannot tell the noble Lord today, but I am happy to write to him. My understanding is that the global supply is secure and that the industry gets what it needs without having to use Russian product. I do not know specifically about Sizewell B, but I will write to him and get him the information he requested.

It is good that we can work together and have these conversations. I am glad that the noble Lord, Lord Purvis, is able to speak with me and my honourable friend Minister Doughty on these issues and that we can come to a better place. The outcome proves that when this House does its job well, it does a good job of improving legislation, and it certainly has in this case.

The licences will be regularly reviewed. They can be amended, suspended or revoked. Businesses need to declare when they are using one of these licences. I do not have the exact number, but it is very small at the moment and I do not anticipate that changing.

The noble Lord, Lord Callanan, asked whether we could bring the end date forward. In theory, we could. Nobody wants to see the current situation last any longer than is absolutely necessary, but it is important, in order to see sanctions adhered to and implemented, that we give some clarity and certainty.