Indeed. One has to take credit where one can in this business, and I am pleased to say that my hon. Friend is right to take some of the credit for moving the narrative along. More particularly, I am pleased to see that the work in the Foreign and Commonwealth Office, which also involves others, as I will come on to, has been proceeding apace. I am comfortable that we are in a good position to deal with some of those things in a timely manner at the point of our departure on 31 October.
As a non-lawyer, it is sometimes challenging and tricky to get my head around some of the complexities of the issue. The worst thing that we could do would be to create bad law that would be challengeable, because it would cost the British taxpayer many millions of pounds to defend the UK Government against people with very deep pockets. The last thing that my constituents want is for large sums of their cash to be disbursed to some of those individuals in damages. It is absolutely right that, across Government, we work hard to make sure that the legislation is in place and the statutory instruments are prepared in such a way as to minimise the chance of the UK Government being challenged by lawyers.
The sanctions regime that we are discussing derives from the so-called Magnitsky powers provided for in the Sanctions and Anti-Money Laundering Act. Clearly, all those here gathered are intensely interested in that legislation and its secondary legislation. Establishing a national human rights sanctions regime will show the United Kingdom’s commitment to human rights worldwide and will be an important plank in our post-Brexit foreign policy. It will allow the United Kingdom to impose travel bans and asset freezes, and it will ensure that people who abuse human rights anywhere in the
world will not be able to travel here or invest in our economy. The Government will publish the names of those subject to those sanctions.
To impose a sanctions regime for human rights, we have drafted a statutory instrument to ensure the associated processes and structures are in place to implement and manage it. It is important that we set it up correctly, and I am absolutely focused on ensuring that those processes and structures are as legally robust and watertight as they can be. That has perhaps accounted for some of the delay that was remarked on in the report, in which the frustration of Select Committee members was palpable. I hope that my hon. Friend the Chair of the Select Committee understands the reasons for that. There is a need to replicate EU sanctions following Brexit and work has been going on in the past few months with legal draftsmen to ensure that the subsequent regime, particularly in relation to the Magnitsky clause that was introduced by the 2018 Act, is robust and will hold water against what is likely to be a hostile response from some of those designated under the legislation.
Hon. Members will be pleased to know that we are working closely with key partners, such as the US and Canada, which already have specific human rights sanctions regimes, to co-ordinate our efforts and to ensure that the sanctions that we impose have maximum effect. The Government are absolutely committed to tackling illicit finance, corruption and money laundering. We do not want dirty money here; money launderers are not welcome in the UK. We are actively implementing our anti-corruption strategy, led by the Prime Minister’s anti-corruption champion, my hon. Friend the Member for Weston-super-Mare (John Penrose). The National Security Council has met twice to discuss the issue, and the Government are consulting on reforms to Companies House and on introducing legislation to require foreign companies that own or purchase property in the UK to provide beneficial ownership information.
We have new and exciting tools to tackle illicit finance, such as unexplained wealth orders and account freezing orders, which were introduced under the Criminal Finances Act 2017. Those have been used to isolate millions of pounds across hundreds of bank accounts. Consequently, and as a direct result of all that work, the Financial Action Task Force found in 2018 that the United Kingdom had the strongest anti-money laundering regime of more than 60 countries assessed to date. I think we should all be proud of that, but there is no complacency. In July 2019, we published an economic crime plan in conjunction with the private sector. The plan outlines the public and private sectors’ collective ambition to combat economic crime and sets out a series of actions that both sectors will undertake to enhance the United Kingdom’s economic crime response. The plan was the first output from the economic crime strategic board, which the Chancellor and the Home Secretary co-chair. We are also actively looking at the possibility of introducing a power to block a listing on the London stock exchange on national security grounds. The work is well under way.
Although the issues are primarily the responsibility of the Home Office and the Treasury, the FCO plays a part as well. It leads the international delivery of the Home Office serious and organised crime strategy, supporting the overseas territories and Crown dependencies in tackling illicit finance and co-ordinating with the
Department for International Development, Her Majesty’s Treasury and other Departments to deliver a global anti-corruption programme. It is important to understand the central role of the Foreign and Commonwealth Office. Ministers within the FCO are signed up to jointery and the idea that if we are to deal with all the issues that we have been discussing this afternoon, we need a cross-Government response.
I note the concerns about senior responsible officers for sanctions, and I read the remarks in the report very carefully. If we had a senior official responsible for this piece of work, which runs like a vein through the whole of Government business, I would be concerned about their being isolated. Although the proposal is that such an individual should report to the NSC, my worry—it is a concern that I have more generally with the machinery of government—is that we would be taking important bits of Government policy outside implementing Departments and making Departments respond in a sort of silo format to the NSC. Before too long, we would find that the NSC was responsible for a raft of bits of Government policy, and Departments were in some way isolated and frozen out. The Departments are expected to implement all of this and they have the experts and the expertise to deal with it, and I am vaguely uncomfortable with such a proposal.
In defence of the current position—all issues around the machinery of Government are of course kept under review and are always subject to change and modification—the national security strategy and implementation groups, with which my hon. Friend the Member for Tonbridge and Malling will be familiar, are headed up at director general level and report directly into the NSC. I know that Russia is a particular concern of the Foreign Affairs Committee, for example, and the one on Russia is influential in securing that cross-Government response to the challenges posed by that particular malign actor. My sense is that such a mechanism serves Government well and is the best fit right now, but as with anything in this space, it is always subject to constant review and reappraisal.
The remarks made in the report are important in informing the general debate on how we do this. I hope that the Chairman of the Select Committee, and others, will understand the rationale for perhaps resisting, at this juncture, the solution proposed in the report. Perhaps it is something we may come back to at a future date.
The Foreign Office is intent on supporting the United Kingdom’s effort to strengthen international standards in general. You will be interested to reflect, Mr Davies, on the fact that in spring at the Open Government Partnership summit in Ottawa the Prime Minister’s anti-corruption champion, my hon. Friend the Member for Weston-super-Mare, launched a global leadership group to drive international efforts to strengthen international beneficial ownership transparency. The United Kingdom is an active member of the G20 anti-corruption working group and will be strongly represented at the conference of states parties to the UN convention against corruption in Abu Dhabi in December. As the Foreign Affairs Committee has identified, sanctions are a powerful foreign policy tool and form part of the overall approach to protecting the United Kingdom from threats from overseas and to delivering our foreign policy. Dirty money should not be in the United Kingdom, and we should be using domestic law
enforcement tools and international co-operation to send a clear signal that we do not tolerate illicit finance in any form, not simply for moral or legalistic reasons.
Part of the power of the United Kingdom in terms of financial services is the reputation that we have for upholding the rule of law—and in particular for dealing with anything to do with illegality, corruption or things that transgress our rules and norms. That is much of the power of the City of London and, indeed, other financial centres such as Edinburgh, and it must continue. Unless we take these matters seriously we shall find that the reputation of the United Kingdom falls away in that respect, and we will all suffer as a consequence. There is therefore a strong financial imperative to ensure that our sanctions regime is as robust as it can be.
The United Kingdom is a global leader on sanctions, as I hope my remarks have explained. It is a major contributor to the development of international sanctions policy. I am very proud that when Ministers go to institutions such as the UN General Assembly we can be seen to be in a leadership position in respect of much of the debate. We can already draw on more sanctions expertise and resources within Government than any other European partner, and maintaining that capacity will be a priority after we leave the EU. We have increased the number of officials working on sanctions across Whitehall and intend to maintain those numbers beyond Brexit. The United Kingdom has one of the world’s largest and most open economies, and London is one of the world’s most attractive destinations for foreign investors. That means that the sanctions we impose will really bite.
The Foreign Office’s primary objective is to ensure that we can continue to use sanctions as an effective foreign policy tool to tackle some of the most serious threats to our national security and moral values and to drive forward our foreign policy. That is why our focus over the last two years has been to safeguard existing sanctions in the United Kingdom post-Brexit and why we will have a new global human rights sanctions regime.
To conclude—I have filled the time available as best I could—sanctions will remain a key part of the United Kingdom’s approach to a wide range of foreign policy priorities after we leave the EU. The importance that we attach to sanctions is reflected in the huge effort put into our preparations for Brexit and the additional resourcing that we have put in place across the FCO network. As I am sure hon. Members can understand, it was right for the Government to prioritise the work to ensure that existing sanctions would continue to apply in the event that we leave the EU without a deal. However, I hope that they will equally understand that in the past few months we have put an enormous amount of work into determining the future relationship, and that they are content with the general approach. I am grateful for all the recommendations outlined in the Foreign Affairs Committee’s report of 5 June and our response to it, since when a great deal has been done. I am by no means complacent about the task ahead, but I hope that the Committee will accept that we are on track.
Once we are outside the EU, we will continue to work in concert with others and will have the opportunity to implement our own autonomous sanctions, including on human rights, to combat threats, protect our norms
and protect our values. We will continue to demonstrate through our actions that the UK is and will remain a global sanctions leader.
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