Periodic review of certain designations

Sanctions and Anti-Money Laundering Bill [Lords] – in a Public Bill Committee at 12:30 pm on 1st March 2018.

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Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs) 12:30 pm, 1st March 2018

I beg to move amendment 32, in clause 21, page 18, line 34, leave out “3 years” and insert “12 months”.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Conservative, Chesham and Amersham

With this it will be convenient to discuss the following:

Amendment 33, in clause 21, page 18, line 36, leave out “3 years” and insert “12 months”.

Amendment 34, in clause 25, page 20, line 14, leave out “3 years” and insert “12 months”.

Amendment 35, in clause 25, page 20, line 16, leave out “3 years” and insert “12 months”.

Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs)

The purpose of these amendments is to increase the frequency of the periodic review of designations from every three years to every year. I owe this idea to the hon. Member for Glasgow Central, who suggested it on Second Reading. I thought that she might table amendments but that I had better do so in case she did not. It was a very sensible suggestion, and I am sure she wishes to explain why it is a good idea.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Cities), Shadow SNP Spokesperson (Treasury)

I thank the hon. Member for Bishop Auckland for tabling these amendments—she was just a little swifter getting them in than I was.

I spoke about this issue on Second Reading. First, there is an important point about consistency: the EU has a 12-month review period for its sanctions, and we ought to make the Bill consistent with that. There seems to be no reason why we should want to leave it as long as three years to review sanctions, particularly given that situations can change rapidly and that we should hope that sanctions take effect in a shorter period than three years. We are trying to promote good behaviour and resolution, and we should hope to achieve that within three years, making the three-year period redundant in some cases.

It makes sense to maintain consistency and allow constant review by keeping the review period to 12 months. If things take longer than that, it makes sense to look at them within 12 months to ensure that the Government’s foreign policy objectives are making progress and that things are actually happening. If they are not, perhaps they ought to be reviewed. A 12-month period would give us a good deal more flexibility and accountability. It certainly seems logical to me, and I very much hope the Government accept the amendments.

Photo of Alan Duncan Alan Duncan Minister of State

I rather sense this will forever be known as the bobble hat amendment.

Photo of Alan Duncan Alan Duncan Minister of State

I certainly am.

Reviews are crucial to maintaining effective sanctions regimes, and sanctions should not remain in place where there is no longer a reason for them to do so. Clause 21 requires the Government to conduct a comprehensive re-examination of each designation decision at least every three years. That is one of a number of safeguards that the Bill provides for designated persons. The amendments would oblige the Government to re-examine each designation annually.

I agree completely that sanctions designations need to be based on solid, legally robust evidence. The UK has pushed hard for that in the EU—that is widely recognised, including, for example, in the House of Lords European Union Committee’s recent report, “The legality of EU sanctions”—and we are committed to maintaining those high standards. I recognise that the EU generally reviews its sanctions regimes annually. However, as noted during the passage of the Bill in the other place, EU reviews are relatively light touch. Designated persons are invited by the Council to present new information, and member states are able to make observations, but they are under no obligation to engage. In contrast, the triennial review envisaged in the Bill would be a comprehensive re-examination of each and every designation.

The Bill as drafted includes a robust package of procedural safeguards, including a number of amendments introduced in the other place. The combined package would provide a higher level of protection for designated persons—at least as strong as current EU standards, if not better. The Government would review all sanctions regulations annually and present the results in a written report to Parliament. If the report concluded that there were no longer good reasons for maintaining a UK sanctions regime, we would lift it. Any changes made to the equivalent sanctions regimes of the EU or other international partners would be examined closely as part of the annual review.

Alongside this annual review of the regulations, the Bill requires the Government to put in place a dynamic process to reassess designations on request. The triennial review is not the only opportunity; a designated person can request a reassessment of their designation at any time, and can request a further reassessment where a significant matter has not previously been considered by the Minister. I take the point that a designated person who has requested a reassessment, challenged it in court and failed to establish any unlawfulness will not have a further review until a significant new matter arises or until the triennial review. However, there will be no need for a further review if the lawfulness of the designation has been established and nothing has changed since. If there are new arguments to be tested or if the passage of time has changed the situation, a further reassessment can be requested. If not, there will be no need for one.

Ministers can instigate a reassessment at any time—for example, if the person concerned has been delisted by the EU. They will have every interest in initiating reassessments proactively, both in the interests of justice and to minimise the risk and cost of legal challenges— a compelling argument in many a ministerial decision. In any case, if the EU decided to revoke the designation of a person also designated in the UK, I would certainly want to reassess the corresponding UK designation.

The provisions will ensure that UK sanctions are under constant scrutiny and that the Government are obliged to respond swiftly to new information and challenges. The triennial review will provide a further backstop to ensure that each and every determination is considered afresh on a regular, predetermined cycle. This aligns with current practice in Australia and will put us ahead of countries such as the US and Canada, which have no such process at all. It will not prevent more frequent reviews; indeed, we have mechanisms in place that oblige us to carry out more frequent reviews where appropriate.

Requiring the Government to conduct such reviews every year would be extremely resource-intensive and—given the finite Government resources dedicated to sanctions—would take resources away from other important areas. It could also make litigation more complex.

Photo of Alan Duncan Alan Duncan Minister of State

I am on my last three words, but yes. The hon. Lady has got in under the wire.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Cities), Shadow SNP Spokesperson (Treasury)

I did not realise that the Minister had reached his last three words. He mentions resources and cost implications. Can he give us more specific detail?

Photo of Alan Duncan Alan Duncan Minister of State

If something has to happen three times as frequently, it will take up a lot more resource.

I hope that the arguments I have put to the Committee have convinced the hon. Lady that the compulsion to have a review every year is superfluous, given all the other layers and safeguards that exist in the Bill.

Photo of Jo Stevens Jo Stevens Labour, Cardiff Central

If the Minister cannot tell us what the triple cost is, can he tell us what this costs at the moment?

Photo of Alan Duncan Alan Duncan Minister of State

We do things as part of the EU, so it is not possible to segregate the cost in the way the hon. Lady asks. What we are doing is setting up an autonomous regime instead of being part of a collective regime.

I hope that the arguments that I have put to the Committee have persuaded the hon. Member for Bishop Auckland to withdraw her amendment.

Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs)

I think the Minister has noticed some scepticism towards the points he made. We will press the matter to a vote.

Question put, That the amendment be made.

The Committee divided:

Ayes 9, Noes 10.

Division number 6 Caledonian Pinewood Forest — Periodic review of certain designations

Aye: 9 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Question proposed, That the clause stand part of the Bill.

Photo of Alan Duncan Alan Duncan Minister of State

Reviews are crucial to maintaining effective sanctions regimes. Sanctions should not remain in place where there is no longer a reason for them to do so. This clause ensures best practice by requiring a comprehensive re-examination of every sanctions designation at least once every three years. The process will ensure that all sanctions designations are based on up-to-date information and that any that are not are revoked. There is nothing preventing a Minister from instigating a reassessment at any time, for example if new evidence comes to light. An individual is also able to challenge their designation, requiring a reassessment by the Minister—[Interruption.]

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Conservative, Chesham and Amersham

Order. Could the Whips have conversations outside the Committee room on this matter, please? I am trying to give them a break; it is warmer out there.

Photo of Alan Duncan Alan Duncan Minister of State

An individual is also able to challenge their designation, requiring a reassessment by the Minister and potentially further examination by a court.

The clause should be seen alongside other safeguards in the Bill, in particular clause 27, which requires the overall sanctions regime to be reviewed annually. In that review, the Minister must be assured that sanctions are appropriate for their purpose; that, apart from United Nations or other international obligations, there are still good reasons to pursue that purpose; and that proposing sanctions is a reasonable course of action for that purpose. The results of the review must be laid before Parliament. I make it clear that the only time a designated person will not be able to request a reassessment is when they have challenged their designation, it has been upheld either by a Minister or by the court, and there have been no significant changes.

The review provided by this clause is a provision that stands behind all the others. Therefore, combined with the other safeguards in the Bill, I believe that reviewing each individual listing at least every three years is appropriate. This is a backstop measure to ensure that each and every designation is reviewed afresh at least every three years.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clauses 22 to 26 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Mike Freer.)

Adjourned till this day at Two o’clock.