Lloyd Hatton

I believe that proper resourcing of OFSI is essential. Similarly, other bodies and authorities that fight economic crime must be properly resourced so that they can do their job properly. Three further changes are needed to ensure that there are effective instruments for challenging human rights abuses. First, to free sanctioned assets, we need to be able to identify their ownership. If we cannot follow ownership of assets through corporate and trust structures, which are often complex and involve secretive offshore havens, many of our designations will inevitably seep through the cracks and our enforcement will turn into nothing more than a game of whack-a-mole. Ensuring that we can follow the money is therefore a priority and that must include the UK’s overseas territories and Crown dependencies. The Office of Financial Sanctions Implementation found that since February 2022, over a quarter of all suspected sanctions breaches were made using intermediary jurisdictions, including the British Virgin Islands and Guernsey. That is deeply concerning, as the very jurisdictions that are enabling sanctions evasion are dragging their feet on important corporate transparency measures that would help us to follow the money in their backyards. Transparency at home and abroad is essential if sanctions are to be enforced effectively. That means ending all tolerance of secrecy in our overseas territories and Crown dependencies, which we all know have provided shelter for dirty money for far too long. Secondly, we must strengthen the policing of sanctions evasion with a clear focus on networks and professional enablers. Reports from the Office of Financial Sanctions Implementation have found that it is almost certain that lawyers, estate agents and associated property service firms based right here in the UK have helped clients to evade and avoid asset freezes, seemingly undermining our efforts from within. Some companies and enablers with a high risk appetite are willing to provide services to sanctioned high net worth individuals, allowing them to maintain their property empire and sidestep sanctions altogether. Infamously, the oligarch and former owner of Chelsea FC, one Roman Abramovich, was reportedly able to transfer his extensive property empire and a fleet of super-yachts, helicopters and jets to his children just weeks before being sanctioned here in the UK. Despite the vast scale of sanctions evasion, enforcement by authorities in the UK in response to violations has been too weak in recent years. The Office of Financial Sanctions Implementation has imposed just three fines for violations of the UK’s Russia sanctions regime in the past year, totalling a measly £622,750. That is an utterly damning figure and shows that we are bringing a water pistol to a knife fight when it comes to enforcing our sanctions measures. Worse still, OFSI has not imposed any fines at all for breaches of Magnitsky-style sanctions. I know that the Government are planning to scale up our capability to target the professional enabler network. In the recently published anti-corruption strategy, which I wholeheartedly welcome, Ministers were right to commit to expanding the use of sanctions against professional enablers. Given the UK’s world-leading role as a professional services provider, such a measure is essential if we are to begin to impose serious constraints on sanctioned individuals. A professional services ban, for example, would be an effective way to start to tackle kleptocrats and human rights abusers. Many of those individuals might not own an asset in the UK or even plan to travel here, but they rely on UK-based professional services, such as a legal firm and a bank. That simple measure would block wrongdoers from enjoying access to our large professional services sector in the UK. Finally, I remain concerned that there is a real lack of publicly available data about enforcement capacity, actions and impact, which will undermine Parliament’s ability to scrutinise sanctions enforcement and better understand whether they are working. Without a credible public picture of what is actually frozen, how can Parliament judge the effectiveness of sanctions and whether enablers may simply be assuming that enforcement in the UK is patchy at best? I ask Ministers to look closely and carefully at these proposals to improve data transparency, strengthen our ability to identify ownership and boost the policing of the enablers of sanctions evasion. Magnitsky-style sanctions remain one of the most useful tools at the Government’s disposal to hold perpetrators of serious human rights abuses and corruption to account. The effective use of these sanctions sends a clear message that the UK will not act as a safe haven for dirty money belonging to kleptocrats or human rights abusers. However, the effectiveness of sanctions depends not on their existence alone, but on the political will to use them fully, consistently and credibly. At a time when, unfortunately, the United States sometimes appears reluctant to deploy these tools with the necessary resolve, the United Kingdom has a clear responsibility to step forward and work with a broad coalition of allies and partners to effectively deploy Magnitsky-style sanctions. I know that the Government, and almost all Members of the House, are serious about defending human rights, tackling corruption and upholding the rules-based international order, but to achieve that we must ensure that Magnitsky-style sanctions are not only a symbolic gesture, but sharp, effective instruments used to hold bad actors to account and speak truth to power. As has already been said, in an age of global uncertainty, with rogue states and corrupt individuals wishing to operate with impunity, that is exactly the type of leadership that this moment demands.