Review by appropriate Minister of regulations under section 1

Part of Sanctions and Anti-Money Laundering Bill [Lords] – in a Public Bill Committee at 2:00 pm on 1 March 2018.

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Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs) 2:00, 1 March 2018

Of course, sanctions also have an impact on British commercial and economic interests, and on British commercial and economic actors. I will give the Committee a couple of examples of that.

In a more recent example, from 2014, we decided to impose sanctions against Russia after the intervention in Ukraine and the annexation of Crimea. One of the things that the sanctions covered was technology for oil and gas, which is obviously a very big sector in the Russian economy. SMD, a specialist engineering firm in Newcastle, makes sophisticated robots that operate on the seabed, doing the job of deep-sea divers. Those robots were banned and the chief executive of SMD—Andrew Hodgson, who I have met—highlighted the damage to his business. He said:

“Imagine we’re a 500 employee business and 20% of your business doesn’t exist, that’s 100 jobs and obviously we’ve been working hard on the technology”,

which is very modern technology. Normally, the company would have exported £20 million worth of equipment, but that business was lost, straight away. Another reason for considering the impact of sanctions on British citizens and the cost to the British economy is the possibility of counter-sanctions imposed by the person or country we are sanctioning. Russia retaliated by banning imports of agricultural and other produce from both the European Union and the United States, including mackerel from Scotland. That was not great for Scottish fishermen.

Nissan was also extremely badly affected, because the effect of the sanctions on Russia was that the rouble plummeted. Nissan had been paid for its car exports in roubles and was not hedged sufficiently to deal with a big drop in the rouble. It halted all the orders because it could not afford to take the loss, which was significant, although not as bad as if it had sold the cars at a loss.

We are pleased that the Government inserted clause 27 and that they are taking a consensual approach to the Bill—