Wagner Group: Sanctions Regime

(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on reports that the UK Government assisted Wagner Group head Yevgeny Prigozhin in circumventing the UK sanctions regime.

The war in Ukraine, as we all agree, is a barbaric, illegal incursion into a sovereign nation by another. It has resulted in tens of thousands of deaths, mass displacement and an ongoing humanitarian catastrophe.

We will always stand up for our friends and allies, and we are proud to have led the world’s response, in partnership with our allies, in supporting Ukraine in its fight against Putin’s aggression. We will deliver tanks to roll back any Russian advance, we continue providing aid to help Ukrainians as they defend their homeland, and we have unveiled the most stringent sanctions on any country at any time in our history. We want to use economic sanctions to starve Putin’s war machine and put direct pressure on every individual involved in the decision to go to war and continue to make war on Ukraine.

In response to the question that has been asked today, I should say that it is a long-standing custom that the Government do not comment publicly on individual cases. It would not be appropriate to break that custom, even in a case as serious as this one, in which there is obviously public interest. However, I want to outline the general approach taken to date by the Treasury’s Office of Financial Sanctions Implementation in cases in which persons designated under sanctions seek licences for legal fees, and how that has been followed, and the strong constitutional reasons for that.

Within the sanctions regime broadly, because everyone has a right to legal representation, it is possible for frozen assets to be used to pay for that legal representation. OFSI grants licences to allow sanctioned people to cover their own legal fees, provided that the costs are reasonable. To be absolutely clear, decisions on the issuance of licences for legal fees are largely taken by OFSI officials in line with standard practice. The principles and guidance for assessing these applications are long-standing and have been published for a number of years. Applications are assessed solely on a costs basis.

I think the whole House will be shocked at the evasiveness that we have just seen from the Minister, given the seriousness of this case.

For years, the Labour party has been calling for the Government to clean up the London laundromat effectively and stop London homes being used as bitcoins for kleptocrats. For months, the Opposition have stood shoulder to shoulder with the Foreign Office in co-ordinating sanctions against Putin and his inner circle. But yesterday we found out that the Treasury, which was then under the leadership of the current Prime Minister, issued special licences that allowed Yevgeny Prigozhin to circumvent sanctions issued before Putin’s illegal invasion of Ukraine.

The Government appear to have granted a waiver for a warlord that enabled him to launch a legal attack on a British journalist. This is a perfect example of a SLAPP—a strategic lawsuit against public participation, designed to silence critics through financial intimidation.

Prigozhin is one of the most dangerous and notorious members of Putin’s inner circle. The Wagner Group, which he leads, is responsible for appalling atrocities in Ukraine and around the world. If the now Prime Minister’s Treasury had any hand in alleviating pressure on Prigozhin, I am sure every hon. Member would agree that that would be absolutely unconscionable. I ask the Minister to answer these questions for the benefit of the whole House. Did a Minister authorise the granting of a licence or exemption to Prigozhin? When did Ministers become aware of this incident and what actions have they taken? Will the Minister commit today to an independent investigation of this controversy? Will he commit to urgently review the law regarding SLAPP suits so that oligarchs and warmongers cannot bully and harass journalists and critics? When will the Government introduce restrictions on the provision of legal services to Russia, as the European Union already has?

I am grateful to the right hon. Gentleman: he takes us back to when I stood opposite him in our Ministry of Justice days.

I am not being evasive: I am standing in front of the House of Commons to answer the question. The right hon. Gentleman mentioned the Prime Minister, and he is right that my right hon. Friend was Chancellor of the Exchequer at the time. I shall explain the process. I am not going to comment on the individual case, but without prejudice to it and talking about the general situation that pertains to how OFSI considers such cases, there is a delegated framework whereby decisions on legal fees for persons designated under all the sanctions regimes are routinely taken by senior civil servants. I want to be clear on that. We are not aware of any case of legal fee decisions under any of the sanctions regimes being taken by a Minister. I want to be clear with the House on that.

The point about SLAPPs is really important. I was at the Ministry of Justice when it was a live issue. It was first raised in a Backbench Business Committee debate by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), in conjunction with the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), and I responded to that debate for the Ministry of Justice. Let me set out what we are doing. We have been clear as a Government that SLAPPs represent a clear abuse of the legal system, as they rely on threatening tactics to silence free speech advocates who act in the public interest. That is why it is often called lawfare. We ran a call for evidence on strategic lawsuits against public participation and libel reform from March to May 2022 in light of reports that Russia and its allies might be funding litigation against free speech in the UK. We published our response to the call for evidence on 20 July 2022, having closely analysed 120 responses from media, legal and civil society professionals, and we are committed to tackling SLAPPs.

I understand that the decision was made by civil servants. Will my hon. Friend commit to considering whether we need to introduce ministerial oversight and how quickly that should be done? It is gravely concerning that no civil servant thought that this might need political oversight or some sort of political intervention. Will my hon. Friend also consider the proscription of the Wagner Group, which is a state terrorist organisation responsible for war crimes around the world?

Finally, I have been disappointed by the Government’s response to my multiple written questions about the Wagner Group and the new centre it has set up in Serbia—it is an enormous installation. We are seeing heinous activities in the Balkans, especially around the illegal Republika Srpska day that took place. So my asks are introducing ministerial oversight; looking at the Wagner group in Serbia and putting pressure on the Serbian Government; and finally proscribing that organisation.

My hon. Friend the Chair of the Foreign Affairs Committee speaks with great expertise on these matters. She makes some points that are for other Departments to consider, but I will ensure that they are fed back. On the point about the specific process in relation to OFSI, I will not comment on the individual case, but there is a general point about seeking clarification. I can confirm that we will undertake an internal review to see how such cases are considered in the future, and we will say more on that in due course.

I call the Scottish National party spokesman.

Despite the Minister’s gymnastics on this issue, it is clear that there are still serious and systemic links between the UK Government and Russian political elites. In 2021 the operations, tactics and human rights abuses of the Wagner Group were well known, and the EU and the UK imposed sanctions on Yevgeny Prigozhin, as the Wagner Group leader, for that reason. These revelations present a serious and immoral disregard for human rights obligations and due process at the heart of the Minister’s Government, and all this took place on the current Prime Minister’s watch, as he was Chancellor at the time.

Will the Minister tell us what advice, legal or otherwise, prompted the Treasury to make Prigozhin’s activities possible? It is not beyond his capability—legal or otherwise—to tell us who made the decision to override that. What actions will his Government now take to ensure, as a result of these revelations, that the Prime Minister’s promised

“integrity, professionalism and accountability at every level”

will be followed through?

I think that the hon. Gentleman submitted a similarly worded urgent question this morning, and obviously I respect that point, but there are no gymnastics here; I am merely setting out the position.

The hon. Gentleman asked about legal advice and so on. Within the sanctions regime broadly, because we are a country with the rule of law and everyone has a right to legal representation, it is possible for frozen assets to be used to pay for that legal representation. This is about sanctioned individuals. The Office of Financial Sanctions Implementation grants licences to allow sanctioned people to cover their own legal fees provided that the costs are reasonable. I should make it clear that decisions on the issuance of licences for legal fees are not, and should not be, political, and are largely taken by officials in line with standard practice. As I said a few moments ago, we are not aware of a case relating to legal fees under any of the sanctions regimes in which a Minister took the decision.

I welcome the Minister’s assertion that there is to be a review of this approach, but I ask him to make it quick. Even the Treasury’s press release today indicates a level of misunderstanding on the part of the officials, claiming a fundamental or absolute right to legal representation. Of course you have a right to representation if you are defending yourself in court, but there is no fundamental right to use legal representation to destroy someone else and shut down free speech.

As my right hon. Friend knows, I responded to his Backbench Business debate. He has been incredibly consistent in calling for actions on these points, and I respect that very much. However, I do think that the right to legal representation is a fundamental tenet of our democracy, which can mean—I am not commenting on the specific case—that individuals whom we find distasteful have a right to legal representation. Let us not forget that even at the Nuremberg trials, people who had committed the most heinous crimes in the history of the western world were legally represented.

I have to say that I had never seen such a case of lack of professionalism, lack of integrity and lack of accountability as this one. It absolutely astounded me: I thought it was unbelievable.

Let me say to the Minister that in terms of the way in which such matters are decided, this is not an isolated case. Petr Aven, for instance, has been given a licence, and according to the press it is thought that he will be able to spend up to £600,000 a year on so-called household expenses which include buying and selling Bentley cars and other luxuries. That is just outrageous. By the time the sanctions stop, the resources—the sanctioned assets—will have disappeared.

Let me also say to the Minister that this issue of individual confidentiality does not play here. The Foreign Office publishes a list of the names of the individuals concerned. I therefore think that we have the right to know what went wrong in this particular case, and that the Minister should report to Parliament. I welcome the fact that a review of the OFSI regime is taking place, but that too should be reported to Parliament.

Finally, may I ask the Minister for a commitment that the legal fees general licence will not be rolled over beyond its expiration date of 27 April 2023?

I have previously answered an urgent question, tabled by the right hon. Lady, on a matter relating to dividends in Russia, and—again—I respect her consistency in respect of a range of points that relate to this issue in one way or another. However, as she knows, I cannot go into the details of the specific case that she has mentioned. There are all kinds of reasons for that, and I think it important that we preserve it. I may be wrong, but I suspect that it would continue under any future Government, because there is very good reason for it. That is why we talk about the sanctions regime in aggregate rather than discussing individual confidential cases.

If we take the overview, we see that this country is doing everything possible. Our position on Ukraine is that we are not directly deploying our armed forces into the theatre, so we have to use every other lever at our disposal, including sanctioning more than 1,200 individuals and 120 entities and freezing assets worth £18 billion. It is a very ambitious sanctions regime, and we should be proud of what we are doing as a country to support Ukraine. We have played a key role in helping it to withstand the Russian invasion, although of course we recognise there is more to do.

I am not going to talk about any individual case. I know that the Government are doing very good work on the Economic Crime and Corporate Transparency Bill and the Bill of Rights, and—certainly on this side of the House—we all support that and recognise its importance.

I want to talk specifically about the SLAPPs primary legislation and where it will be. If it is to be in the Bill of Rights—as has now been indicated to me—rather than being a separate law, that may limit the scope of what we can do about SLAPPs. It may not cover all the stuff that is needed to cover the SLAPPs and the lawyers who engage in this practice, the SLAPPers. We need separate primary legislation, a SLAPPs Bill like the ten-minute rule Bill that I introduced yesterday. A gold-standard, best-practice SLAPPs Bill has been written for me, which the Government can take on or allow me to introduce. It covers a little bit of privilege, it covers the private investigator market, and it is broad enough to cover all the abusive SLAPP practices that will not be covered in the Bill of Rights. Will the Government please consider this course of action, as the most sensible course to ensure freedom of speech and a free media ?

My hon. Friend speaks with huge passion about these matters. Only yesterday, as he said, he presented a ten-minute rule Bill relating to this issue. He will appreciate that there are issues relating to parliamentary time, and that this is above my pay grade. I feel very strongly that we have done as much as we can on SLAPPs, but we want to go further, because we need legislation. I said at the end of the Backbench Business debate—my hon. Friend, of course, spoke in it—that I had heard what was said, and that we would now act. The Ministry of Justice took that forward; we had the call for evidence, and we have responded to it. At present, however, our position is, I am afraid, that we will commit ourselves to primary legislation as soon as parliamentary time allows. I cannot say more than that at this moment, but I am aware of how strongly my hon. Friend feels about the issue.

I am sorry, but this is so complacent, and the Government have been systematically complacent about the issue of sanctioning individuals for the last three years. The Foreign Office was not prepared: it did not have a proper sanctions regime in place. We are sectioning only 20% of the people who have been sanctioned by the United States of America, although I have no idea why. Then we allow people to sidestep sanctioning. What the Minister is saying today is basically endorsing what the Treasury did in relation to this particular case, which gives a green light to those people to do it again and again and again. Alisher Usmanov, for instance, is sidestepping sanctioning by a completely different process.

It is time the Government decided as a whole that we are going to do this, and we are going to do it properly. I actually think that we should listen much more to our Back Benchers, because the whole House is united around this and the Government are too complacent.

The hon. Gentleman is wrong to say that I am endorsing any particular action. I have made it very clear that I am not commenting on a specific case. What I have said relates to the general regime that pertains, and is without prejudice in respect of any specific case. The hon. Gentleman also said that we were not prepared. He may not be aware of Operation Orbital, but we have been training Ukrainian soldiers since 2015: 22,000 Ukrainian soldiers.

We are talking about sanctions.