I again thank both noble Lords for their interest and support for these measures. I will seek to answer all the questions raised. I will ensure that future letters go to both Front Benches; I apologise to the noble Lord for missing him out in that exchange.
Gold is a sanctionable trade. Sometimes it is harder to detect, but it is certainly an element of trade that is within the sanctions regime.
I cannot give the noble Lord a breakdown of the sectors that create the 74%. I do not know why there is a discrepancy with the letter he received from my colleague Anne-Marie Trevelyan, but I will look into it. My understanding is that there has been a 96% reduction in trade from Russia and a 74% reduction in trade in the other direction. That will have caused hardship to some legitimate businesses, and we respect that, but this is an international incident which requires the strongest possible response, and our sanctions regime has had to take this decision.
I will write to both noble Lords about the buying of frozen assets and what impact that could have if those assets were then released, say, to Ukraine, to help pay
for the war. We want to make sure that we are not diminishing the amount that that country should get to pay for the damage that has been done to it.
The G7 has repeatedly underscored that Russia’s obligations under international law are clear: it must pay for the damage it has caused to Ukraine. How we ensure that Russia does so is the subject of active and urgent discussions with G7 partners. Leaders have tasked the relevant G7 Ministers to report back on progress by the two-year mark of Russia’s invasion at the end of February. The UK remains fully committed to working with allies to pursue all lawful routes through which Russian assets can be used to support Ukraine.
While these G7 discussions continue, we have taken a number of steps domestically. We were the first to introduce legislation explicitly enabling us to keep sanctions in place until Russia pays for the damage it has caused; we have announced a route by which sanctioned individuals who want to do the right thing can donate frozen funds for Ukraine’s reconstruction; we introduced new powers to compel sanctioned individuals and entities to disclose assets they hold in the UK; and we are stepping up efforts to use funds from the sale of Chelsea Football Club to support humanitarian causes in Ukraine.
The noble Lord referred to the EU’s proposal to use the profits being incurred by funds trapped in Euroclear to support Ukraine. We are looking closely at that, but this situation is unique to the EU’s institutions. We and other G7 partners fully support the EU’s efforts but we do not believe that we can replicate them within our system. However, we are looking at any opportunities to increase the pressure. As I say, the EU’s proposal is unique to its institutions and we want to ensure that we use our frozen assets regime as effectively as possible.
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Through a separate annual frozen asset review process, £21.6 billion of assets were reported frozen due to UK financial sanctions regulations, across all sanction regimes, as of 30 September 2022. This £21.6 billion is a marked increase on the frozen asset review 2021 figure of £12.4 billion, provided in the OFSI annual report. This included £7.9 billion reported under the Russia sanctions regime, an increase from £44.5 million in 2021.
We want to make our position on overseas territories absolutely clear. They are self-governing jurisdictions, responsible for their own financial services regulation. There should be no safe havens for illicit funds and the OTs are committed to meeting the highest standards in tackling illicit finance, including those set by the Financial Action Task Force. UK and OT senior officials met the British Virgin Islands between 12 and 14 September 2023 as part of a ministerial-level annual dialogue on tackling illicit finance. The OTs already share confidential information on company beneficial ownerships with UK law enforcement bodies via exchange-of-notes arrangements.
I will finish by setting out what has happened recently. Over the last few months, Ukraine has pushed significant parts of the Black Sea fleet out of Crimea and opened up export routes that do not depend on Russia. This has assisted its economy. Russia remains
internationally isolated: in the last few weeks, it has failed to get elected on to the Human Rights Council—it would have been a hideous result if it had been. It has failed to get on to the International Court of Justice, the executive board of UNESCO, the council of the International Maritime Organization and the executive council of the Organisation for the Prohibition of Chemical Weapons, and rightly so.
Since February 2022, total military, humanitarian and economic support has been more than £3.9 billion; we have given £4.7 billion in non-military support to Ukraine. With our allies, we are providing the military and economic capabilities that Ukraine requires, including winter support. We are maintaining pressure on Russia’s ability to wage its war of aggression, including through sanctions, and supporting Ukraine to export its goods, including grain. This includes ensuring that the maritime corridor it has established is secure against Russian attacks and commercially viable. We have helped to develop a private sector insurance facility for shipping, using the corridor, and are working with allies to support our military-industrial complexes to provide the sustainable support that Ukraine needs.
In Kyiv this month, the Prime Minister announced a further £8 million to fortify and rebuild Ukraine’s energy infrastructure and a number of events are coming up where further international collaboration on this can be achieved. For example, at the UK-hosted European Political Community in the spring and at NATO’s 75th anniversary summit in Washington in July, we want to make sure of this continued level of support. The programme we are debating can be seen in the context of that wide international support.
The noble Lord, Lord Collins, talked about public registers. I will write to him on that because I want to make sure we get that absolutely right. I have said what we are doing with BVI but there are other issues relating to that.
In terms of other countries’ trade with Russia—not just its neighbours—we monitor that and use our status in various diplomatic organisations, not least the UN, to ensure that we are putting pressure, with our allies, on other countries not to liberalise their trade with that country. In doing so, we show our support for the Russian people but our condemnation of the Russian regime, which is stealing money from its people and putting them in danger, not least on the front line in Ukraine and through its horrendous human rights abuses.