Government bolsters Russian sanctions but MPs warn of third country loopholes

The Government has announced it is tightening sanctions on Russia in ongoing support for Ukraine , but MPs warned that restrictions are being circumvented through third countries, specifically India.

As of July 2024, the UK has designated over 2,000 individuals and entities under the Russia Regulations, over 1,700 of which have been sanctioned since Russia’s invasion of Ukraine.

The move includes action to sanction 17 Russian vessels, including 15 in Russia’s “Shadow Fleet”, as well as expanding the basis on which the Foreign Secretary can designate groups or individuals for supporting the Russian government.

This instrument provides the basis for those sanctions and has enhanced the UK’s ability to respond to Russia’s increasingly desperate and reckless attempt to undermine ours and our partners’ sanctions

The instrument also introduces additional powers for the specification of ships, responding to the growing risk posed by malign Russian maritime activity.

Foreign Office minister Hamish Falconer told MPs the UK’s commitment to Ukraine is “ironclad”, and the sanctions regime is “a crucial tool to weaken Russia’s ability to attack Ukraine”.

He said: “Targeted sanctions against oil tankers have had a material and immediate impact. UK sanctioned tankers have been left idling, knocked out of the Russian oil trade, and, for the most part, unable to load new cargoes.

“This instrument provides the basis for those sanctions and has enhanced the UK’s ability to respond to Russia’s increasingly desperate and reckless attempt to undermine ours and our partners’ sanctions.”

Mr Falconer said the changes would expand Britain’s powers “to target those who provide financial or material support to Russia’s war machine”.

He said: “This could include, for example, foreign financial institutions that facilitate significant transactions on behalf of or in support of Russia’s military industrial base.”

He added: “The amendment provides a ship may be specified by the Secretary of State where there are reasonable grounds to suspect that the ship is, has been or is likely to be used for any activity whose object or effect is to destabilise Ukraine or undermine or threaten the territorial integrity, sovereignty or independence of Ukraine, or to obtain a benefit from or support the Government of Russia.

“This includes where a ship is involved in carrying dual use or military goods, oil or oil products that originated in Russia, or any other goods or technology that could contribute to destabilising Ukraine.”

Whilst the Government may have changed, the commitment across this House to support Ukraine and starve the Russian war machine remains absolutely resolute

Mr Falconer further stated: “This enables us to target the ship as well as the individuals or entities involved with the ship. We found through the previous regime that the ship itself is the sharpest area of vulnerability.”

Shadow foreign office minister Alicia Kearns welcomed the strengthening of the UK’s sanctions on Russia, saying it showed “continuity of purpose”.

She told the Commons: “Whilst the Government may have changed, the commitment across this House to support Ukraine and starve the Russian war machine remains absolutely resolute.”

She added: “It demonstrates that no matter how deep Russia sinks into the shadows, the UK and our partners will identify and act against Russian assets and their war machines.”

However, Liberal Democrat defence spokesman Richard Foord highlighted that Russia is circumventing EU sanctions through third countries such as India, and said the Government should think about how it can “throttle the Russian economy”.

He told MPs that the oil trade between India and Russia has almost doubled to 65 billion dollars (£49.6 billion) in 2023.

He said: “India imported very little crude oil before the invasion of Ukraine, and is now the number two importer of Russian oil after China.

“It’s alleged that India has been refining Russian crude and re-exporting it to European nations that are otherwise seen as subject to and complying with our sanctions regime.”

DUP MP for Strangford Jim Shannon also raised India as the country “who seems to have been breaking most of the rules” and asked the minister what discussions had been had to ensure India was not contravening sanctions rules on behalf of Russia.

Mr Falconer clarified that the Government would “not hesitate to take action against anyone supplying and funding Putin’s war mission.”

On India specifically, Mr Falconer said: “We regularly raise Russia’s actions in Ukraine with India, we did so most-recently during a conversation between the Foreign Secretary and the Indian foreign minister.

“We highlight the importance of tackling the shadow fleet, and India is a key partner. We’re committed to working together across a whole range of issues, and we underline to them how unreliable an energy partner Russia would be.”

MPs also agreed to amend separate regulations related to sanctions in Syria, in an effort to support humanitarian aid in the Middle East.

Whitehall has a previously agreed framework to impose financial, trade and immigration sanctions, which the Foreign Office has said aims to encourage the Bashar Al-Assad regime to stop “actions, policies or activities which repress the civilian population in Syria”.

The new rules agreed on Monday add exceptions to this framework, including for “UK funded persons” and UN organisations “involved in their delivery of humanitarian assistance activities”, and sets out a requirement for workers using the humanitarian exception to tell the Treasury on an annual basis.

Mr Falconer said: “This extension will enable more organisations to benefit from the humanitarian exception.”

He added the document would offer “greater assurance to both humanitarian organisations and their financial providers, reducing delays in payments”.