My Lords, I have been in Ukraine in the winter, and that, combined with the indiscriminate barbarity of the Putin regime towards the people of Ukraine in what will be a very punishing season, means that we need to redouble our efforts to make sure that there is no impunity for the Russian regime. We therefore support these sanctions and, as the Minister knows, we have, from these Benches, been consistent supporters. However, with the news that was reported just last week by the Financial Times that Russia’s gross domestic product has fallen by only 4%—far less than had been anticipated—does the Minister agree that we need to consider further areas where there can be damage to the regime’s economy and how it operates it?
Notwithstanding the information that the Minister has provided in the past regarding the impact of these sanctions, the impact on the Russian economy is less than we had anticipated. One of the reasons for that is that Russia has been able to circumvent some of the sanctions, with trade increasing in energy especially. It is therefore welcome that there has been a shift of tone in the G20 from India and China, in addition to the other G20 countries, regarding their position on the Putin regime. Could the Minister outline areas where there are discussions on expanding the type of financial instruments that could be inflicted on the regime? If the Russian economy is falling by only 4%, which is only 1.5% more than the UK economy is anticipated to fall in this coming year, then this is not likely to bring about significant change in the type of aggression that Russia is waging on the people of Ukraine.
The Minister said that these regulations have been developed in co-ordination with our allies, but they come into effect after the EU sanctions. The Government themselves state that these have been brought forward
“to further align with the EU’s existing prohibitions
on
“oil refining technology and manufacturing products”.
On the expansion of the list of revenue-generating goods, which the Minister outlined, the Explanatory Memorandum says:
“The aim of this measure is to align with the EU to include two Russian product groups”.
Although we support the regulations, why has there been a delay in the UK bringing forward measures when they have already been put in place by the EU? If they are developed in co-ordination, surely it would be better to implement at the same time as our allies.
Have the Government assessed the effect of the prohibition on the import of gold with regard to trade with our allies in the Gulf? I have seen at first hand, on a visit to Africa, the illicit trade in gold, which is funnelled through our Gulf allies and then makes its way to Russia. What action are we taking with our allies and trading partners on the gold trade in the Gulf?
Could the Minister explain a minor point that is curious to me? Although we support the measures on those importing and acquiring gold jewellery that originates in Russia, the Explanatory Memorandum has, in brackets,
“(with an exception for personal use, which will also apply to the export of gold jewellery)”.
I cannot afford much gold jewellery but I think that quite a lot of gold jewellery is for personal use, so why are we putting in place measures to prohibit gold jewellery with an exception for “personal use”? That does not make much sense to me, so if the Minister could explain it, I would be grateful.
On the No. 16 regulations, I very much support prohibitions on the supply and delivery of certain ships, notwithstanding the very valid question asked of the Minister regarding circumventing these prohibitions. We also welcome the shift in tone from our friends in Delhi. But what further work is being done regarding the rupee-rouble swap arrangements for India’s purchasing of oil? I have raised this with the Minister on a number of occasions. He knows that there have been ways in which Russia has profited out of the sanctions on energy and oil. Can the Minister outline clearly that Russia is not profiting from our allies through its purchasing arrangements? What discussions are we having with India in particular regarding its purchase of Russian oil?
3.30 pm
I move to the Government’s enforcement. As the Minister said, and as was reported by the Office of Financial Sanctions Implementation and the Treasury, assets worth £18 billion have been frozen, which is welcome. I read the annual review and what struck me was that the frozen assets of the Russian regime and individuals connected with it have grown from £44.5 million in September 2021 to more than £18 billion now. If any evidence was needed about how exposed London was to kleptocratic finance, this is surely it. How much of that is now actively being considered for seizure? We have £18 billion frozen at the same time as we are taking away the budget for developing countries to pay for the Ukrainian resettlement scheme at home. Would it not be better that we use seized money from the Russian regime to pay for the resettlement of
Ukrainian refugees, rather than taking that money from developing nations, which is the Government’s policy?
Finally, will the Minister explain why, although the OFSI has reported that it has received 236 reports about those in the UK breaching sanctions, only two monetary penalties have been issued? How many warning letters have been issued? Why have there been so many breach reports but so few prosecutions? Ultimately we are to wait for the Economic Crime and Corporate Transparency Bill, which is slowly progressing through Parliament. When are we likely to see it in this House? When will we get an update on the resources for Companies House and others to make sure we can start seizing some of those assets and putting them to good use?