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Global Human Rights Sanctions Regulations 2020

Volume 813: debated on Thursday 24 June 2021

Question for Short Debate

Asked by

To ask Her Majesty’s Government what assessment they have made of the effectiveness of the Magnitsky-style sanctions issued under the Global Human Rights Sanctions Regulations 2020.

My Lords, I warmly thank all those noble Lords taking part in today’s debate.

The passage into law of the Global Human Rights Sanctions Regulations 2020, usually referred to as the Magnitsky Act, was welcomed by all parties. It was a bold affirmation of the values that we hold in common with other democracies that have enacted similar legislation. At a time of intensified geopolitical contest between democracy and authoritarianism, the Magnitsky Act underlines our readiness to sanction powerful figures in authoritarian regimes who abuse state power in pursuit of personal enrichment.

However, the credibility of such sanctions depends crucially on our willingness to apply them without fear or favour, whenever and wherever gross abuses of state power occur. If Magnitsky sanctions were perceived beyond our shores as penalties that we confined to Russian oligarchs, Chinese intelligence officers and Burmese generals, they would soon lose their power to deter unacceptable behaviours in the wider world. So I should like to take the opportunity today to draw noble Lords’ attention to an example of where our failure to contemplate imposing Magnitsky sanctions could render us vulnerable to the charge of double standards. The case that I will describe, on which I have corresponded with Ministers for eight years, arises not from a hostile state but from one with which this country enjoys cordial relations: Dubai in the United Arab Emirates, which I have visited many times.

Mr Ryan Cornelius is a British national. He has had his assets seized in state-enabled corruption. He has been tortured and imprisoned after a grossly flawed legal process. Ryan is a British businessman. In Saudi Arabia, he built the largest precision tunnelling company in the Middle East from scratch. From Bahrain, where he settled in the late 1990s, he went on to launch a range of ambitious construction ventures across the region. One of them, undertaken with several partners, was a major residential and leisure complex in a prime location in Dubai called the Plantation.

When the global financial crisis struck in late 2007, the investment company that was funding most of Ryan’s ventures told him that its line of credit from the Dubai Islamic Bank had been called in abruptly. The investment company was able to negotiate a restructuring agreement to repay its loan, which totalled some $500 million, over three years. However, the Dubai Islamic Bank made it a condition of signing that Ryan should stand as a guarantor of the agreement and pledge his business and personal assets as collateral. Ryan had little choice but to agree, but in any case his assets were comfortably worth more than the loan. The Plantation alone had recently been valued at over $1 billion by two leading international assessors.

Shortly after the agreement was signed, Dubai Islamic Bank’s chairman was removed and replaced by the man who remains its chairman today, Mr Mohammed al-Shaibani. Mr Shaibani is also chief executive of the ruler’s court, a position that gives him direct oversight of every arm of government, including the security police and the financial audit department. Mr Shaibani is also chairman of Nakheel, Dubai’s largest property developer.

In May 2008, the repayment of the loan was proceeding ahead of schedule when Ryan was arrested at Dubai airport. He had a hood placed over his head, his hands were bound with zip ties and he was taken to a windowless room at Dubai police headquarters. After a hostile interrogation, he was given a statement in Arabic that he could not read, and told that if he signed it then he would be free to return to Bahrain. Instead, he was taken to a cell and held in solitary confinement for over six weeks.

Ryan’s partners were also arrested and held in solitary confinement. While he was there and unable to communicate with the outside world, Dubai Islamic Bank served 15 days’ notice of foreclosure and then took possession of the Plantation. Over the following months, his other businesses were either seized or forced into liquidation, and over the following years his personal assets were seized one by one, including, finally, his London home, leaving his wife and family homeless.

Ryan and his fellow defendants were held for two years before being brought to trial for fraud and money laundering. No translator was provided, and Ryan was unable to follow proceedings, but the judge announced at the end of the trial that he was unable to convict the defendants on the basis of the evidence presented. Ryan was not released, although by then he had been held for longer than the maximum sentence he would have received for a fraud conviction. A second trial was held in front of a new judge with different charges.

The prosecutor now charged that the unpaid balance of Dubai Islamic Bank’s loan amounted to theft from the state: a charge which required the bank to be reclassified as a state entity. The collateral that it had seized, including the Plantation, was dismissed as worthless. The new judge duly convicted Ryan and the other defendants and sentenced them to 10 years in prison. The judge also ordered them to pay $500 million to Dubai Islamic Bank and an additional fine of $500 million. Dubai Islamic Bank’s published accounts show no trace of the loss alleged by the prosecution. In a letter to the Central Bank of the UAE, in September 2008, Dubai Islamic Bank confirmed that the seized collateral exceeded the value of its loan.

The seizure of the Plantation, the imprisonment and the imposition of unrepayable financial sanctions is a typical criminal corporate raid, which cloaks thuggery in a veneer of judicial process to seize assets and force the victim into a hopeless position. State officials were the initiators, enablers and beneficiaries of the raid. This was corruption of the highest order.

Ryan served his 10 years in full, denied the statutory 25% reduction for good behaviour. But instead of being released in 2018, he and his former business partner were taken without notice to a judge’s office and informed that Dubai Islamic Bank had asked for their sentence to be extended by a further 20 years. It did so under a law which was enacted after their imprisonment and well after the alleged offence. That additional sentence of 20 years offends every basic principle of the rule of law. That sentence is itself unlawful and an affront to justice.

Ryan sought to appeal the new sentence but was told that he did not have the right to issue power of attorney to a lawyer. He decided to represent himself. On the day scheduled for the appeal hearing, Ryan was told that his name was not on the passenger list for the prison bus to the court. The judge then dismissed his appeal on the grounds that Ryan had not bothered to attend.

Ryan is now 67 years old. He will be 85 when his new sentence is complete. Two years ago, he tested positive for tuberculosis after a prisoner in an adjacent cell collapsed with the disease. It took 18 months before the prison authorities allowed him to receive medication. Ryan’s health has deteriorated alarmingly. A recently released fellow inmate testifies that he is kept in freezing conditions, with no bedding and subject to constant sleep deprivation. These conditions are cruel, degrading and inhuman; they amount to torture.

The powerful man keeping him in prison is no stranger to this country. In his High Court judgment of December 2019, Sir Andrew McFarlane found that Mohammed Al Shaibani had been present when the ruler’s daughter, Princess Shamsa, was abducted from the streets of Cambridge, drugged and taken to France against her will. Princess Latifa, another daughter whose bid for freedom ended in recapture, provided detailed audio testimony to a human rights organisation that she was threatened and coerced by Mohammed Shaibani on numerous occasions to make false statements to the British courts.

The extent of Shaibani’s personal determination to keep Ryan in captivity was made brutally clear by his response to a ruling by the Bahrain courts last year. Dubai Islamic Bank had launched civil proceedings in Bahrain against Ryan and his former business partner a year after their arrest to seize any residual assets there. The trial dragged on for 11 years, involved the appointment of numerous court experts and culminated in the Bahrain Chamber for Dispute Resolution. The verdict by a panel of three judges found last year that Ryan and his ex-partner owed no money to Dubai Islamic Bank and that collateral and payments made to the bank exceeded their loan by over $70 million. The chamber’s website states that its judgments are final and unappealable. It is clear from private testimony that Mohammed Shaibani intervened personally with the Bahrain authorities following publication of the verdict. Four months later, after a brief hearing, a judgment deemed unappealable was reversed.

Mr Shaibani has numerous other victims beyond Ryan, including his former business partner, and there are doubtless numerous Shaibanis in many jurisdictions. Failure to act on our part will confirm to them that they can continue to destroy lives, as Ryan’s has been destroyed, with impunity. This will only make life more hazardous for the British nationals on whose efforts overseas this country’s future prosperity depends.

My Lords, I congratulate the noble Lord, Lord Clement-Jones, on his initiative and on raising that rather alarming case. Perhaps it is a little early after one year, but it is surely right to review the operation of the regulations. I shall make three brief points in my three minutes.

First, I would welcome comment from the Government on the effectiveness of consultation between allies and the exchanges of information relating to the listing of individuals, on the extent to which the Government are prepared to listen to non-governmental organisations with expertise in this area, and on whether they are satisfied with the transparency of proceedings. Clearly, there is merit in examining, after one year, what is happening; there is merit, too, in yet again congratulating Bill Browder on the remarkable campaigns that he has led in the US, in Canada, in the Baltic countries and in the European Union and other international organisations —I am glad that Bill is on our side. I accept that lists need not be identical, but there is surely merit in co-ordination.

Secondly, I am puzzled by the fact that no serious Iranian officials have been listed. Surely there is a strong case for listing, for example, the individual responsible for shooting down the Ukrainian airliner or the individuals responsible for putting down the demonstrations in Iran in 2019. Is this for prudential reasons? Perhaps that is the only explanation that can be given for the Government’s approach to the Dubai individual mentioned by the noble Lord, Lord Clement-Jones.

My third observation is this: what does “effectiveness” mean in this context? How can it be measured, for example, in respect of individuals? In most cases, asset freezes and visa bans would not impact directly on the individuals who were responsible for torture. I think, for example, of the case of Sergei Magnitsky himself; one is concerned with listing not the individuals who carried out the torture in prison but those individuals further up the chain who were responsible for his treatment. It is unlikely that the small fry would have assets in the UK or would want to visit the UK. In my judgment, it is important to pass a clear message that these people are not welcome in the UK and other friendly countries and cannot salt their money away in our financial institutions.

My Lords, none of us has much time to say a great deal, but since I suspect that we are largely in agreement, across all parties and none, that the Magnitsky sanctions—in this jurisdiction now wrapped up in the Global Human Rights Sanctions Regulations—are a good thing, that may not matter.

I congratulate the noble Lord, Lord Clement-Jones, on drawing the case that he mentioned to our attention and on opening this debate so powerfully. It is important that the United Kingdom, no matter what our internal political differences and economic troubles may be, must never avoid imposing sanctions on individuals and Governments on grounds of mere expedience. The noble Lord, Lord Anderson, was right to mention Iran and the other matters that he drew to our attention.

I accept that any British Government’s foreign policy, which guides our Ministers, diplomats and international negotiators and thus affects the conduct of diplomacy, will need to anticipate and react to events outside our control. Whereas the conduct of government may be different in different countries, the need to abide by acceptable standards of conduct that do not ignore the rule of law or internationally accepted human rights cannot be compromised, must always be respected and is a universal requirement.

The torture of political prisoners in large, powerful countries, for example, needs to be responded to just as much as torture carried out in economically and militarily weak countries. The fact that we do or could sell more goods or services to a large country than a small one, while a superficially attractive reason and justifiable as realistic and nationally self-interested, to say and do nothing about the appalling behaviour of a large country’s leaders is, in the end, counterproductive and as morally acceptable as it would have been 200 years ago to prolong the slave trade.

Human rights abusers tend to be kleptocrats who thrive on the pain, suffering and stolen assets of the less powerful or politically inconvenient. If they use their ill-gotten gains and the laundered proceeds of crime to fill bank accounts or buy property here, we should recover those assets, tell the world that we have done so and return them to the victims of those crimes.

With these regulations, we now have the means to deter human rights abuses; it is Parliament’s job to ensure that this and any successor Government have the will to do so. I congratulate the Government on what they have done so far, but there is, in my view, a great deal more yet to do.

Like all noble Lords and everyone concerned to do something about human rights violations and corruption, I strongly support the Magnitsky-style sanctions. Rather than simply condemning wrongdoing with words, they bring home to perpetrators the consequence of their actions. They also have the advantage that a whole population does not have to suffer, and they allow for the necessary political relationships to continue, even with odious regimes. But how effective have these sanctions been? This is why the Motion in the name of the noble Lord, Lord Clement-Jones, is so welcome.

I recognise that the legislation on these sanctions is relatively recent and that sanctions take some time to really have an effect, but I very much hope that the Minister will be able to provide some indication of their effectiveness. It is difficult to find out from other sources what their impact has been and whether they are indeed having any real effect. Obviously, we hope that, first, those guilty of human rights abuses or gross corruption will desist from any more criminal activity. We also hope that such sanctions will prove a deterrent to other potential abusers of rights or those engaged in corrupt financial practices. These are the real goals; indeed, they are the justifying purpose of such sanctions in the first place.

I recognise that answering the question of the effectiveness of sanctions in relation to those two purposes is obviously very difficult. However, it may be that the Minister is able at least to indicate how the sanctions are working in practice: has the freezing of bank accounts, for example, been effective in the sense that it has been done in a way that has stopped the person finding a way of transferring much of the money out of the account just before it was closed? Criminals have an army of people trying to find a way around any legislation that hampers their activities. Regarding the refusal of travel visas, I wonder how many people listed for sanctions have tried to enter the UK and have been turned back or have applied for visas and been refused them.

I believe that particular attention needs to be paid to tax havens, where so much laundered money ends up. Those in such havens are only too anxious not to disturb the status quo from which so much money is made. It would be good to know how co-operative tax havens have been in the implementation of the sanctions.

Similarly, in relation to Saudi Arabia and those responsible for the death of Jamal Khashoggi, we cannot expect much co-operation from the Governments of Russia, Myanmar and North Korea, but we have a right to expect full co-operation with an important trading partner like Saudi Arabia. Is this forthcoming?

My Lords, I too agree that there are occasions when these Magnitsky sanctions may be the best available option to us. However, the increased use of such sanctions is a worrying sign that the organs of international arbitration such as the UN or the ICJ may be losing their effectiveness. These were the very institutions established in response to the tit-for-tat foreign policy that defined the 19th and early 20th centuries, with all their resulting catastrophes.

Our Government are a big advocate of the concept of “Global Britain”, an ambiguous phrase that sometimes means leading as a force for good in the world but at other times is simply a declaration that Britain is open for international business. My concern is that these conflicting visions of global Britain are sometimes mutually exclusive, and that when dealing with human rights abuses there may be a tendency to take the route of least domestic economic disruption.

Magnitsky can even play into this tendency, allowing us to feel that we have acted morally without incurring any costs and often failing to improve the situation. For example, I am not aware of any evidence that the sanctions placed on Chinese officials linked to Uighur human rights abuses have improved the situation in Xinjiang province. Our annual £80 billion total trade with China remains undisrupted. Harsher sanctions were placed on Belarus for the forced landing of a flight and subsequent arrest of a journalist—compared to China’s systematic programme of sterilisation, detention and re-education of the Muslim Uighurs. It is not insignificant that Belarus accounts for less than 0.1% of UK trade, compared to 6.8% for China. Is it not time for the Government to be honest and admit that the pursuit of global trade and investment opportunities can sometimes clash with their obligation to protect human rights? In other words, when it comes to global Britain, the Government cannot have their cake and eat it too.

Magnitsky sanctions will remain a useful tool, but I believe that they should be used selectively. If they are to be really effective, we need to work with allies continually, monitoring the effectiveness of these sanctions and ensuring that they are both based on transparent and objective criteria and applied absolutely thoroughly, not simply when it suits our economic interests. At the same time, the Government must do all they can to reboot the ICJ and support international law, backed up by all sanctions available to us.

My Lords, I too thank the noble Lord, Lord Clement-Jones, for securing this helpful debate.

I accept that this human rights sanctions regime marks a major positive step in our ability to identify and punish human rights violators. Along with the more powerful US Global Magnitsky Act, it amounts to an ability to cut off those targeted from two of the most important financial systems in the world. Dominic Raab rightly described it as having the potential to prevent human rights violators from being

“able to launder … blood money in this country”.—[Official Report, Commons, 6/7/20; col. 663.]

It is the role of your Lordships’ House continually to remind the Government of this potential and to point out where, against that ambition, more needs to be done.

I agree with the advocacy of other noble Lords, particularly my noble friend Lord Collins of Highbury, who argue that obvious human rights violators from Xinjiang, Myanmar and Belarus, for example, should be added to the list of those punished by these sanctions. Otherwise, human rights violators will be able to launder blood money in this country.

However, my main point is that these measures are less effective than they could be in respect of those targeted by them already. They were announced on 6 July 2020. Within days, parliamentarians and anti-corruption campaigners, drawing on research by openDemocracy, were warning that their full potential would be impeded by known and unaddressed deficiencies in the existing anti-money laundering regulations on which they rely.

Data from openDemocracy revealed that the UK’s AML systems were insufficient to prevent financial crime in the UK, and have enabled around 400,000 companies to evade declaring their “persons of significant control” and thus concealing their ownership structures. Those involved in illicit activities can structure their companies to take advantage of the 25% PSC ownership threshold to avoid declaring their interest at all. At the same time, others rely on a reported lack of enforcement of the requirement to disclose their PSCs.

So, while the Magnitsky laws are a useful power in the fight against human rights abuses, if the system that supports them allows beneficial owners to maintain their anonymity, the sanctions in many cases will be of no effect. An upgrade of the UK’s AML regime to ensure transparency and to prevent those engaged in illicit activities from exploiting this weakness in the UK’s system is required and long overdue.

I am aware that a review of anti-money laundering legislation is being carried out as part of the Economic Crime Plan 2019-2022. Specifically, actions 42, 43 and 44 of the plan are about transparency of ownership. To what extent will those actions address these specific criticisms? My sense is that they will not. Was this a deliberate omission, and if so, are the Government content to allow the problems identified to persist?

My Lords, I thank the noble Lord, Lord Clement-Jones, for securing this important debate and for raising the shocking case that he outlined. I also pay tribute to Sergei Magnitsky, who was murdered in a squalid Russian prison cell 12 years ago. He was a brave and incorruptible accountant and lawyer who was targeted and eventually killed because he exposed a huge tax fraud involving senior Russian government officials. He had been hired on behalf of the human rights campaigner William—or Bill—Browder, to whom I pay tribute for leading a campaign that has resulted in Magnitsky legislation being passed in countries around the world.

There is no doubt that London is one of the main destinations for money looted in Russia and elsewhere. According to a 2016 report by the House of Commons Home Affairs Committee, £100 billion is laundered through the UK’s banks each year. Four years ago, I introduced in the Commons a Bill to introduce Magnitsky sanctions in the UK, and I am very pleased that the Government, led by the Foreign Secretary on this issue, have taken action since. However, today I will raise two shocking incidents.

The first is Lukashenko bringing down a passenger plane to kidnap a leading opposition journalist, Roman Protasevich, and the second is the poisoning and arrest of Alexei Navalny in Russia. Both of these incidents caused shock and outrage when they happened and everybody demanded some type of reaction, but here we are, months later, and the shock and outrage has diminished to indifference. In looking at what we could do, it has become clear to me and many others that Magnitsky sanctions are a tool that work but only when they are applied to the right people. In the cases of both Lukashenko and Putin, Magnitsky sanctions need to be applied to those who have provided financial support to these regimes. Before he returned to Russia, Alexei Navalny published a list of people he thought should be sanctioned if anything were to happen to him, and I ask the Minister today to set out what assessment the Government have made of that.

The Belarusian opposition have also made it very clear that a group of financiers should likewise be sanctioned for their involvement and support for the regime. The opposition has named Mikhail Gutseriev as one of the regime’s key financiers, yet he has not been sanctioned by the UK despite the fact that he is on the EU sanctions list, and the European Union is usually much more timid than we are in these situations. This omission is also a huge missed opportunity because Gutseriev has significant property holdings here in the UK. Can the Minister set out today what assessment the Government have made of the case for sanctioning him?

My Lords, I agree with the principle of Magnitsky sanctions but have concerns about the implementation. Why? First, we need to remember the vast difference between war crimes and human rights. The European Convention on Human Rights, upon which the British Human Rights Act is based, is wholly inappropriate for application in combat and battlefield conditions. The law that should operate in such circumstances is the law of armed conflict, otherwise known as international humanitarian law.

Secondly, on the evidence, I listened with care to the noble Lord introducing the debate today, and it was a classic case of reliable evidence from known sources over a long time. However, that is not always the case. My understanding of the basic tenet of criminal law—I am not a lawyer—is that you have to know the identity of your accuser, the explicit detail of the evidence and the source of that evidence. That was relayed today, but that has not always been the case.

Thirdly, on imposing sanctions, I looked at some research work that has been done—there is a fair amount of it. The indication is that somewhere between 5% and, at the most, 30% of sanctions result in a desired change, so they have to be seen as a tool of last resort, one to be used when all other tools in the diplomatic toolbox have proved ineffective. I question whether sanctions should ever be used against democracies. Moreover, they are far more likely to affect ordinary citizens than any leader or any other individual being targeted. At a time when we in this country are talking about global Britain and look forward to forging new partnerships in the backdrop of Brexit, we should not rely on sanctions as a tool.

Finally, we should make sure that our own stable is clean. Three years ago, I read the report—and I have it here—from the UK Parliament’s Intelligence and Security Committee, published in June 2018, entitled Detainee Mistreatment and Rendition: 2001-2010. Frankly, I am shocked and appalled that my country should not only condone torture and extensive mistreatment of prisoners but actually in certain cases instigate it. To me as a senior politician with 47 years in Parliament, whatever the threats may be, such practices are totally unacceptable.

My Lords, I declare an interest as the director of the International Bar Association’s Human Rights Institute, which has advocated strongly for the use of targeted sanctions in appropriate cases. A key piece of our work in recent years has been the administration of a programme on media freedom around the world. It is supported by UNESCO, was led into existence by the United Kingdom and Canada, and now has 47 countries pledged in support. Last year, we produced a report on targeted sanctions, and I recommend it to all noble Lords; it is available through the International Bar Association website. The report is from a high-level panel of lawyers from around the world, chaired by our own former President of the Supreme Court, the noble and learned Lord, Lord Neuberger. The report is a product of their work, but it was drafted and the key work was done by Amal Clooney, a distinguished international lawyer.

There are a number of things that I would suggest we have to urge on our Government at this point in time, to strengthen and make more effective a regime that was brought into existence by the UK. Our Government should ensure that sanctions should be applied to non-state actors, including companies. States should ensure that sanctions can be applied to secondary participants; that is part of the Magnitsky regime. But it has to be recognised that some people can be complicit in abuses, even if they are not the direct abusers or those who ordered the abuse; those who are complicit can often be the funders, financiers, and people who do business with people like Lukashenko in Belarus. It defies my understanding why someone like Mr Gutseriev, who lives in Belgravia and is a sort of expat Russian who supports the Belarus regime financially and whose son does business with Lukashenko’s son, is not on our list—he should be on our list, as he is on the European Union’s list for targeted sanctions.

The third thing that I would urge on the Government in reviewing their use of sanctions is that it should be able to be applied to our own nationals. Some people acquire passports and are here, but they are complicit and involved in terrible abuses of human rights internationally.

States should provide a role for an expert committee—that was one of the recommendations that we made. There should be an expert committee independent of the executive branch of government in determining targets for sanctions—it could include retired judges. It is important that there is more transparency and that we can understand what the criteria are for the targeted sanctions.

We would also advise that a co-ordination committee should be established between key partners such as the United States, Canada and the European Union. Quite often, we seem to be targeting different people. For example, Carrie Lam is not being targeted by us—and look what has just happened in Hong Kong—yet she is targeted by the United States.

Yes, I am just going to draw to a close.

We must be concerned about what happens to journalists, and we should be prepared to sanction those who are interfering with media freedom, which is happening in too many parts of the world, where they close down the internet or go after editors and journalists. Our country should make a commitment to protecting them through targeted sanctions.

My Lords, I, too, thank the noble Lord, Lord Clement-Jones, for leading this debate, because the Magnitsky sanctions are an incredibly important tool for democracies, and the story he told about Ryan is heartbreaking. I do hope that Mohammed Shaibani faces penalties of some sort at some point. The penalties are a deterrent but, for the deterrent to work, they must be applied without fear or favour. That is where I think the sanctions perhaps fall down. The right reverend Prelate the Bishop of St Albans was absolutely right to say that sanctions have shortcomings, but they are a tool that we can use to show just how much we care about human rights and issues of democracy.

The issue that I should like to raise with the Minister is that of how Hong Kong has abused the pro-democracy newspaper, the last one existing, Apple Daily. The Government froze its assets and it has had to close. It was interesting that the people of Hong Kong massively supported the newspaper. It normally prints 80,000 copies; on the day that it closed, it had to print 1 million to keep up with demand. That is how much the people of Hong Kong wanted it to survive.

The Government closed it because, they said, it had gone against the national security Act. It came into force in 2020, but the Government said that it had printed some stories back in 2019 which were illegal. When the Government brought in the national security Act, they said that it would not be retrospective, but here, apparently, it is. I would argue that the Government have committed an illegal act, and it is time for sanctions against Hong Kong.

What plans do the Government have to start implementing sanctions more widely, including over Hong Kong? What are the problems with placing such sanctions on every human rights abuser? I really do not want to hear that it is politics, because that is not a good answer. What is the process? How quickly can the Government impose sanctions after a human rights abuser has been identified? Quite honestly, if we do not make a stand in some of these cases, we look out of step with our allies and other democracies. It is time that we were a little braver about this and actually believed in democracy.

My Lords, I, too, thank the noble Lord, Lord Clement-Jones.

Why have London-based companies not been prosecuted for aiding and abetting corruption by former South African President Zuma and his corrupt business cronies the Gupta brothers, Ajay, Atul and Rajesh? Why have UK and US sanctions against the Gupta brothers and Salim Essa not yet yielded results? I first asked the Chancellor in September 2017 to take action, so why have HSBC, Standard Chartered and Baroda—all global banks based in London and functioning under UK laws and regulations—still not been prosecuted for facilitating gigantic money laundering by the Zuma family and the Gupta brothers?

As Paul Holden from Shadow World Investigations demonstrated to the commission of inquiry into state capture under Deputy Chief Justice Zondo, millions went via British banks and into the vast laundromat operated by Altaf Khanani, now under investigation by the US for laundering money for global drug cartels and terrorist groups. A recent University of Stellenbosch study indicates that South Africa lost 1.5 trillion rand—£750 million—in the five years between 2014 and 2019 in looting and money laundering, which, for a relatively small economy emerging from decades of apartheid, is a massive cross to bear.

The Gupta family are reported to be either in Dubai, where they appear to reside, or in India, where they often visit. The Dubai financial district styles itself as a 1960s/1970s-type Swiss-bank-secrecy jurisdiction, so why do the UK and US Governments tolerate such blatant money laundering by the Dubai authorities, supposedly allies? Further, it appears that the UAE does not extradite its own citizens. It may well be that the Gupta brothers and their family have attained UAE citizenship, either by buying property or by some similar mechanism. The South African authorities have secured an extradition treaty with Dubai and the UAE but are now struggling to get the Dubai authorities to comply with the spirit of it.

Why does India not extradite the Gupta brothers, given that the South African authorities have now put two of the brothers and their wives on the Interpol list? While one of the brothers, Ajay, is still said to be an Indian citizen, the second brother, Atul, took South African citizenship and presumably gave up his Indian citizenship in the process. Why have the Indian authorities been invisible in dealing with the money laundering at the Bank of Baroda branch in Johannesburg, and why they have not taken strong regulatory action to demonstrate to all Indian banks that they will not tolerate such lax money laundering standards by their banks in their overseas operations? And why has Hong Kong not taken action over the many Gupta money laundering transactions that went through it?

While the US and the UK have listed the Gupta family assets and are able to freeze them if deposited in US or UK banks, will the Minister ensure that this listing applies to assets held in non-US or non-UK banks in the UAE or India, or to arresting any members of the Gupta family were they to be on US or UK territory? I have written today to the Chancellor requesting action and urged that he meet South Africa’s Finance Minister to progress all this.

My Lords, the Global Human Rights Sanctions Regulations have full support across the House, as we have heard today, and I add my tribute to the work of Bill Browder. However, in the debate on those regulations when we were considering them, I warned that the powers alone are not enough and that:

“They must be used correctly, be applied to the correct individuals and form part of a wider foreign policy that stands for human rights”,—[Official Report, 29/7/20; col. 329.]

a point emphasised by the right reverend Prelate. I too welcome the recent announcement of sanctions on those responsible for the continued suppression of democracy and human rights in Belarus, and I welcome the fact that the EU, the US and Canada are imposing their own sanctions in parallel.

However, why have we been slow to mirror the sanctions of the US in relation to China? Here I pay tribute to my noble friend Lady Kennedy, whom China has attempted to silence but she continues to stand up for human rights. There is overwhelming evidence of human rights violations taking place in Xinjiang, yet the Government have not been prepared to extend sanctions to all those responsible. Labour called on the Government to apply sanctions to the Myanmar military following the brutal human rights violations in September 2020, yet there was no action until after the February 2021 coup. Time and again, the Government have been too slow to act and not nearly comprehensive enough in the application of sanctions, a point made by the noble Lord, Lord Clement-Jones, in his introduction. Are we going to see further sanctions applied to Xinjiang officials? Why were sanctions against Myanmar officials delayed for so long?

There must be a broader strategy to stand up for human rights whenever they are under threat, and that means more than sanctions. For a start, the Government must strengthen the Modern Slavery Act and clamp down on reporting loopholes. I have raised this issue with the noble Lord, Lord Ahmad, on numerous occasions. The Foreign Secretary announced these changes nearly six months ago, and one would have hoped to have seen them by now. Can the Minister tell us today when the long-promised amendments to the Modern Slavery Act will be introduced? We need to ensure that the Government take action against hostile business owners so that they no longer have an escape route from the reporting mechanisms of the Modern Slavery Act.

My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling this debate and all noble Lords for their insightful contributions. I will try to address all the points raised, but if I cannot I will write to noble Lords and place copies in the Library.

On 6 July 2020, the Government established the global human rights sanctions regime by laying regulations in Parliament under the Sanctions and Anti-Money Laundering Act 2018. This sanctions regime gave the UK a powerful new tool to hold to account those involved in serious human rights violations or abuses. The regime is not intended to target individual countries, but allows for sanctions to be imposed on individuals and entities involved in serious human rights violations or abuses around the world.

The global human rights sanctions regime reinforces the UK’s role as a force for good and defender of the rules-based international system. It complements and enhances the UK’s global leadership of the promotion and protection of human rights around the world. It also enable the Government to use asset freezes and travel bans against those involved in serious human rights violations and abuses. The measures can also be applied to those who facilitate, incite, promote or support perpetrators of human rights violations or abuses. This includes those who profit or benefit from the violations or abuses. The human rights included within scope of the regime are: the right to life; the right to not be subjected to torture or cruel, inhuman or degrading treatment or punishment; and the right to be free from slavery, nor be held in servitude, nor be required to perform forced or compulsory labour.

Since we launched our global human rights sanctions just under a year ago, we have designated nearly 80 people. This includes designations for those involved in some of the most notorious human rights violations in recent years mentioned by noble Lords, including in Belarus, Myanmar, China, Russia and North Korea. The designations that we have put in place demonstrate that the UK will use these sanctions to stand up for human rights, including in support of the rights of those from minority groups.

On 22 March, the Foreign Secretary sanctioned four Chinese Government officials, and the public security bureau of the Xinjiang Production and Construction Corporation, for their role in the serious human rights violations that have taken place—and persist—against Uighur Muslims in Xinjiang, as mentioned by noble Lords. These measures were taken alongside the US, Canada and the EU, sending the clearest possible signal that the international community is united in its condemnation of China’s human rights violations in Xinjiang and on the need for Beijing to end its discriminatory and oppressive practices in the region.

Just this Monday, the UK, along with the EU, US and Canada, imposed sanctions against individuals from across the Belarusian regime, in response to the detention of Roman Protasevich and Sofia Sapega, following the unlawful diversion of the Ryanair flight last month, and for the continued suppression of democracy and human rights in Belarus. Although these designations were imposed under our Belarus regime rather than our global human rights regime, noble Lords will see that protecting human rights is a central issue in these new sanctions.

We are debating the effectiveness of the global human rights regime. As mentioned by noble Lords—including the noble Lord, Lord Anderson, and the noble and right reverend Lord, Lord Harries of Pentregarth—this regime came into action last July, so it is less than a year old. One must bear in mind that sanctions are a long-term policy tool, and their full impacts and effects become clear only with time.

The noble Lord, Lord Browne of Ladyton, spoke of the wider policy approach, but this is part of a wider policy approach and will be most effective in conjunction with other policy interventions, and with the support of our international partners—as mentioned by other noble Lords, our partners in the US, Canada and the EU. I note that Australia is also looking at Magnitsky regulations as we speak.

That said, our global human rights sanctions regime has drawn attention to some of the most critical situations in the world. It has established a deterrent to those who might commit human rights violations and abuses. It has helped to build a coalition of key allies—which is really important—calling for improvements in human rights around the world. It has focused attention on China’s policies in Xinjiang and raised a reputational cost for those looking to benefit from China’s activities there. It has also sent a strong message in response to events in Belarus. These signals will be heard not just by those immediately designated but by perpetrators and victims of human rights violations and abuses around the world.

It is also important to regularly review our sanctions to ensure that they are still fit for purpose. As required by Section 30 of the Sanctions and Anti-Money Laundering Act 2018, the Government will report annually to Parliament on all sanctions regulations and whether the regulations remain appropriate for the purposes stated within. In addition, as raised by other noble Lords, we will conduct periodic reviews of autonomous sanctions designations every three years under the sanctions Act.

I will come to the questions raised by noble Lords. The noble Lord, Lord Clement-Jones, raised issues relating to Ryan Cornelius, and I know that the noble Lord has had a number of meetings with responsible Ministers from the other place. As noble Lords will be aware, the Foreign, Commonwealth and Development Office continues to be in contact with Mr Ryan Cornelius and his family to provide consular assistance. Consular officials have raised Mr Cornelius’s health concerns with the local authority and continue to ensure that he receives appropriate medical treatment.

The noble Lord, Lord Anderson, was asking about how we make decisions on who to sanction. All decisions must be taken in accordance with the designation criteria set out in the regulations. We have published a policy note setting out factors likely to be relevant to designation decisions. We also, as the noble Lord asked, consult with NGOs. We have published an information note aimed at NGOs and civil society organisations to support dialogue with the Government. As set out in the information note for NGOs, we need the following information. What is the activity that justifies the application of sanctions? Who is the person? How and to what extent is the person involved in that activity?

The noble Lord, Lord Austin, raised the issue of Navalny and Belarus and was asking why we have not sanctioned those involved in Navalny’s detention. We have called on Russia to fully declare its Novichok programme to the OPCW and to conduct a thorough investigation into Mr Navalny’s poisoners. The UK applied sanctions last October to six individuals and an entity involved in his poisoning. We continue to work with our international partners to hold Russia to account, and we will continue to consider designations guided by the purpose of the regime and based on the evidence.

The noble Lord, Lord Browne of Ladyton, brought up the subject of economic crime. Her Majesty’s Government are committed to combating illicit finance. We have strengthened our response through the landmark plan published in July 2019, which brought together government, law enforcement and the private sector to deliver a whole-system response to economic crime. A key pillar is the money laundering regulations of 2017, which regulate and supervise all businesses most at risk of enabling money laundering—including financial institutions.

The noble Lords, Lord Anderson and Lord Browne of Ladyton, asked how Her Majesty’s Government will monitor and evaluate sanctions regimes. Her Majesty’s Government will report to Parliament annually, as I said earlier, and as required by Section 30 and 32 of the sanctions Act. We will report annually to Parliament on all sanctions regulations.

The noble Lord, Lord Austin, and the noble Baroness, Lady Kennedy of The Shaws, mentioned two individuals: Mr Gutseriev and Mr Oleksin. We have already imposed over 100 designations in response to the fraudulent elections and subsequent human rights violations in Belarus. We will continue to keep all evidence and potential listings under review guided by the objectives of the UK sanctions regime. However, it is not appropriate at the moment to speculate on who may be designated, as to do so could reduce the impact of those designations.

The noble Lord, Lord Hain, brought up the subject of the Gupta family and South Africa. As he is very much aware, Ajay, Atul and Rajesh Gupta and their associate, Salim Essa, were at the heart of a long-running process of corruption in South Africa, which caused significant damage to its economy. We sanctioned these individuals under the global anti-corruption sanctions regime. While the imposition of sanctions is at the discretion of the Secretary of State, Her Majesty’s Government cannot advise operationally independent agencies on which cases to take on.

The noble Baroness, Lady Kennedy of The Shaws, mentioned the media—I will have to go through this quite quickly. We launched a media freedom campaign in November 2018 and, as part of the campaign, the FCO helped to launch the Media Freedom Coalition and the Global Media Defence Fund.

The noble Baroness also mentioned the high-level panel of legal experts. The sanctions regime meets a number of the recommendations set out in their report, including the ability to respond to serious human rights abuses and violations globally. It can apply to non-state actors, including companies, and to secondary participants; it is not limited to officials.

The noble Baroness, Lady Jones, brought up the subject of Hong Kong. The Government have taken clear and decisive actions in extending our existing arms embargo on mainland China to include Hong Kong, suspending the extradition treaty with Hong Kong and creating a new visa route for British nationals (overseas). We have raised this matter with our international partners at the UN Human Rights Council and at the recent G7 summit. We will continue to engage and co-ordinate actions with our international partners as befits our historic commitment to the people of Hong Kong.

I have not answered all questions, but I will write to noble Lords on those that I have not answered.

To ensure our sanctions have maximum effect in the future, when setting out new sanctions we are likely to consider cases where we can co-operate and co-ordinate with our international partners and where our action is most likely to have a positive impact on the underlying situation. This is because, in practice, targeted sanctions are most effective when they are backed by co-ordinated, collective action.

Sitting suspended.