My Lords, this instrument, which is subject to the affirmative procedure, was laid before Parliament in draft on 20 July 2022, under Section 55(5) of the
Sanctions and Anti-Money Laundering Act 2018—the sanctions Act. It will be made once it is approved by both Houses.
The instrument represents further action to strengthen the UK’s sanctions regime in response to Vladimir Putin’s illegal and abhorrent war against the people of Ukraine. Since the invasion, the UK has worked with international partners to deliver an unprecedented package of sanctions against Putin’s regime and his allies who are complicit in its brutality.
As noble Lords will be aware, the Economic Crime (Transparency and Enforcement) Act 2022 proceeded quickly through Parliament following Russia’s invasion and received Royal Assent on 15 March. That Act amended the sanctions Act to reform how sanctions are imposed and reviewed and how challenges to them are dealt with. Those amendments received cross-party support, including across the Benches in this House.
The economic crime Act created a power for the Government to set a limit on the amount of damages that a court can award for designations made in bad faith. In exercise of that power, the instrument before us introduces a cap of £10,000. This cap will apply to any proceedings challenging the Government’s use of designation powers under the sanctions Act or to the specification of a ship issued on or after 4 March 2022. It will minimise the risks to His Majesty’s Government of spurious or vexatious litigation from deep-pocketed oligarchs, as we continue to ratchet up the pressure on Putin. It is right and proper that the Government protect public funds in this way.
To be clear, this will not affect the right of a designated person to challenge their designation in a court or, if appropriate, have the designation lifted. Furthermore, the courts will have the power to disapply the damages cap to avoid any potential breaches of human rights, where necessary, in individual cases. But the cap will send a strong signal that Putin’s oligarchs and kleptocrats cannot draw on the public purse in this country to boost their coffers, that this Government will not be distracted from the task in hand by endless litigation and that we will not be knocked off course by the risk of damages claims. Noble Lords should make no mistake: this is not about protecting the Government from acting in bad faith. It is about sending a clear message to friends of Putin who are tempted to bring claims without merit.
To conclude, the UK Government will not hesitate in bringing forward further sanctions to target those who participate in or facilitate Putin’s illegal war of choice. On 26 September, the UK announced further sanctions targeting those responsible for Putin’s sham referenda. They included four Russian Government officials, four further oligarchs, 55 state board executives, and 29 individuals and organisations working for illegitimate proxy groups in Donetsk, Luhansk and Zaporizhzhia. On 30 September, the Foreign Secretary announced a new set of sanctions that further limited Russia’s access to the foreign services on which it depends.
Taken alongside previous action, the UK is now preventing Russian access to advertising, architectural, auditing, engineering and IT consultancy services, as well as various commercial legal services. The announcement included a new ban on the export of nearly 700 goods
that are crucial to Russia’s industrial and technological capabilities. It also included new sanctions on Elvira Nabiullina—with apologies for the pronunciation—the governor of the Central Bank of the Russian Federation, who has been instrumental in managing the Russian economy throughout the war and in the rouble being imposed on Ukrainian territories that have been seized by Russia.
I trust that the Committee will support this instrument, which strengthens the UK’s ability to sanction those responsible for Putin’s illegal and brutal war. I beg to move.