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My Lords, these regulations amend the Russia (Sanctions) (EU Exit) Regulations 2019. This instrument was laid on 19 May under powers in the Sanctions and Anti-Money Laundering Act 2018. The measures in this instrument, subject to the “made affirmative” parliamentary procedure, entered into force on 20 May.
Since coming to power, this Government have been clear that Russia must not be allowed to succeed in its illegal war and have been steadfast behind Ukraine. Russia represents not just the obvious threat to Ukraine but a threat to the UK and our allies. As part of that, the UK has sanctioned more than 3,300 individuals and entities under the Russia sanctions regime, with over 1,300 sanctioned under this Government. Just last month, we introduced a new package that sanctioned 18 individuals and entities under the UK’s Russia sanctions regulations. This included cryptocurrency exchanges active in Russia and entities and individuals we suspect are linked to the UK-sanctioned A7 network, which has embedded itself in the Kyrgyz financial sector. This marks a further step in the UK’s sustained effort to erode Russia’s ability to fund its illegal full-scale invasion, ramping up pressure on Putin’s war chest.
Last month, Russia slashed its economic growth forecast for 2026 from 1.3% to just 0.4%. Russia’s Deputy Prime Minister ascribed this downgrade to the impact of sanctions, among other factors, and Vladimir Putin admitted that Russian GDP contracted by 1.8% in January and February, with a decline in areas critical to the war effort, including industrial production.
To phase the implementation of these measures, we issued two targeted licences intended as a temporary measure. The licences are subject to ongoing review, with fortnightly checkpoints, and may be amended, suspended or revoked as appropriate. The first licence is for the new LNG maritime services ban. This temporarily authorises spot market trade from Russian LNG projects Sakhalin-2 and Yamal until 1 January 2027. The second licence applies to the refined oil import ban and authorises imports of diesel and jet fuel refined in third countries from Russian crude oil.
The process of review involves continually assessing the impact of the licence on energy supply, market conditions and other relevant considerations against our overarching objective of ramping up pressure on Russia through our sanctions regime and, in light of this assessment, determining what steps are appropriate at each review point. As part of that review process, the Government have now set a clear end date for the refined oil licence of 1 January 2027. This is in line with the liquefied natural gas maritime services ban spot licence. While markets remain tight and sensitive, we recognise the need to give certainty to industry on the limited timeframe in which the licence may be used and to provide a clear, time-limited exit pathway.
I will now turn to each measure within this instrument in more detail. I want to be clear that this is a strong enhancement of our Russia sanctions regime. To reiterate what the Prime Minister and Minister for Trade said on 20 May, we have not lifted or eased sanctions; our sanctions are stronger now than they were a month ago. This legislation is sanctioning previously unsanctioned goods and services. The package includes multiple measures targeting Russia’s energy sector.
First, we have imposed further export restrictions that fall into the following four categories: items sanctioned by the EU, including certain types of industrial chemicals, metals and machinery that have potential battlefield use; goods recommended for sanctions by the Government of Ukraine, including additional forms of metals and articles of carbon fibre that are frequently used in the manufacture of drones; a more expansive list of individual chemicals and chemical precursors that may be used in riot-control agents that have been found on the battlefield or goods for internal repression; and, lastly, goods related to emerging technologies, such as quantum, semiconductor and engineering biology technologies, including new goods and those not already clearly subject to existing sanctions, to reduce the risk of circumvention.
Secondly, the legislation bans the import into the UK of oil products refined in third countries that have been made from Russian crude oil. It also introduces a new maritime services ban on Russian liquefied natural gas, restricting Russia’s access to the UK’s world-leading maritime services. Certain existing long-term contracts are exempt from these prohibitions until the end of the year, in line with the EU’s LNG measure. It also bans the import of uranium that is consigned from or originates in Russia and restricts UK involvement in the global trade of Russian uranium. Exceptions are in place to mitigate risks to energy security in third countries, including to the supply of uranium to operational nuclear installations.
The legislation also introduces a prohibition on providing construction services to persons connected with Russia. This prohibition will complement the other restrictions that we have in place on architecture and engineering, ensuring that UK construction businesses cannot support infrastructure and building projects that benefit Russia.
In addition, we have expanded the criteria for specifying ships to include ships carrying liquefied natural gas that originated in Russia and ships carrying coal and coal products that originated in Russia. The aim of this is to make it easier to sanction ships for a wider range of activity. We have also strengthened the trade and shipping sanctions that can be applied to specified ships by introducing additional prohibitions. The new trade sanctions enable the Government to prohibit persons from providing and procuring certain maritime and financial services in relation to specified ships. Additional shipping sanctions prohibit persons from operating or chartering specified ships and require the UK ship registrar, who maintains the UK Ship Register—part of the Maritime and Coastguard Agency—to refuse to register specified ships.
Lastly, the legislation will close a gap by prohibiting the acquisition and purported acquisition of a detained transport asset from, or for the benefit of, a designated person or person connected with Russia. This instrument amends the enforcement provisions of the 2019 Russia regulations, as well as the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, to provide the enforcement of the new prohibitions introduced by these regulations.
To conclude, this is a wide-ranging, impactful package that shows that this Government take seriously our commitment to supporting Ukraine and targeting Russia to combat Putin’s attempts to prolong this barbaric war. Our sanctions, alongside those of our allies, have hit Putin hard. We will not let up and will continue to go further. I am grateful for the constructive and ongoing engagement with Parliament, especially the noble Lord, Lord Purvis, on the issue of licensing, as well as for the strong, unified support for sanctions on Russia and steadfast backing for Ukraine. The Government welcome noble Lords’ shared determination to maximise pressure on Putin’s war machine and recognise the concerns that they have raised. I beg to move.