I thank the Minister for introducing this statutory instrument. Yesterday, we debated other sanctions and focused particularly on Russia. Of course, around the time of that debate, 28 unmanned drones reaped further unnecessary destruction in the capital, Kyiv. A young couple, who were expecting their first child in a matter of months, were among those killed by the senseless barbarity that is driving Putin’s war effort. I know that such crimes will strengthen the resolve not only of the people and Government of Ukraine but that of our Government, this House and all Members of Parliament to ensure that we continue to support Ukraine.
Before I cover the substance of this SI, last night the Minister kindly promised to let me have sight of a letter to my honourable friend Stephen Doughty that answered several of his questions, which I had repeated. By the time I got back to my office, I had received it; I thank the Minister. I specifically raised the issue of mixers, which scramble the origins of crypto transactions to make them virtually untraceable. I asked why two of those mixers—Tornado and Blender—are not on our sanctions list, despite being targeted by the United States. Short of the letter saying that it would be wrong of the Minister to speculate about the targets of future sanctions, there was no mention of them. I will keep repeating the point I have made before: if we do not act in concert with our allies, such as the United States, these mixers will have the capacity to funnel billions to Putin and his cronies. I hope the Minister can reassure us tonight that the Government will act on this.
I turn now to the substance of today’s SIs. It is absolutely right to disincentivise oligarchs and other designated persons from pursuing the Government through the courts by capping the damages that they could receive if they prove that they were sanctioned in bad faith. For far too long, oligarchs from Russia and beyond have acted with complete impunity, their wealth a symbol of global failure to tackle the illicit finance channels which span our economy, politics and society.
Last month, it was revealed that at least 21 Russian businessmen were engaged in legal proceedings across the European Union to overturn sanctions against them, according to filings at the European Court of Justice. I absolutely agree with the noble Lord that today’s action is a welcome step in constraining their ability to tie up these designations in legal showdowns and limit our ability to act. Given that they operate within the parameters of the ECHR, Labour welcomes these changes.
However, it makes no sense to make these changes without acting against illicit Russian finance, which still pollutes the City of London. Labour welcomed the economic crime Act, but the measures it sets out are only the beginning in addressing the chronic problem of dirty money. Minimising what an oligarch can glean from a protracted legal battle is one thing but driving illicit finance out of our institutions is another matter entirely.
As I have repeatedly stated in the Chamber, we must reform Companies House, with new powers to verify information and remove corporate entities from the register once rules are broken. It is vital to ensure that our enforcement bodies are funded for the long term and are no longer outgunned by the seemingly endless resources of oligarchs that we are up against. Spotlight on Corruption highlighted that money laundering prosecutions have dropped by 35% over the last five years. The United Kingdom is by far the most frequent country of origin of SLAPPs—strategic lawsuits against public participation, also known as intimidation lawsuits—with 31% of these cases originating in the UK, according to the Anti-SLAPP Coalition.
The existing budget for economic crime law enforcement is £400 million, with only £100 million of that coming from the Treasury. Given that this is supposed to be a priority of the Government, that amount seems entirely inadequate. I hope the Minister can reassure us that we will build capacity to tackle these oligarchs.
Before I conclude, I have a couple of questions. The cap on damages appears to apply to any proceedings after 4 March. Does the Minister know how many proceedings this will apply to? When the then Minister of State at the Home Office, the noble Baroness, Lady Williams, introduced the relevant sections of the economic crime Act, she said that the cap on damages would limit the oligarchs’ claims, but it is not clear what will have been paid out before the cap comes into effect. Is there information on that amount? Can the Minister tell us exactly how the Government concluded that £10,000 is an appropriate level for a cap?
With these comments, I reiterate that we are strongly supportive of the Government’s actions, and we certainly support the adoption of this SI.