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Economic Sanctions: (EAC Report)

My Lords, I, too, thank the committee for this excellent report. I regret that, probably due to their other commitments, only three members of the committee felt able to contribute to this debate, because the topic deserves broad review. The essential feature of sanctions and international politics these days, following the UN charter and to which our country must significantly contribute, is the use of sanctions to reduce or resolve threats to international peace and security. In exercising a sensible critique of sanctions policy and its implementation, that objective must not be forgotten. Article 41 of the United Nations charter states: "““The Security Council may decide what measures not involving the use of armed force are to be employed””—" and I emphasise this— "““to give effect to its decisions””." It is more than a question of moral disapproval and more than a reaction in international law and politics: it is the desire to achieve a more peaceful world. Therefore, sanctions as an alternative to armed force are a very considerable part of the plan to preserve international peace. It is therefore important to emphasise that sanctions should never be treated as a self-contained and sufficient method of pressure for change. The success of sanctions will depend on how they are related to, and wherever possible incorporated with, a policy of offering economic incentives to a country that you want to change, but only if they change: a policy of diplomatic pressure, public or private, spasmodic or continuous; and, in particular, the willingness always to engage in political negotiation. This package of international action will give sanctions a better chance of success. If we are to employ sanctions, then I endorse the Government's simple analysis that they must have objectives and a clear scope and there must be an effective exit strategy. It is important, is it not, in view of history, not to confuse sanctions with a concept of comprehensive sanctions such as will damage a country and its peoples in a serious way? Such a sanctions regime has historically been rare. It is therefore conceptually wrong and intellectually unhelpful to look at sanctions from that standpoint only. Rather, if we want to impose a means of reducing threats to international peace and security and we do not want to cause humanitarian damage to peoples, we should examine what else we can do. The current jargon is ““targeted sanctions””. I welcome and endorse them. Efficiently and properly applied, they have an effect—perhaps not a dramatic effect—with less collateral damage. What are they? They include arms embargoes on a country such as Burma, even if other countries will sell arms to it; travel restrictions on the elites and key personnel of the countries in question when they want to travel abroad; diplomatic restrictions; and, above all, financial attack. The rapidity with which people at the UN, in Europe and in our country have to consider the introduction of sanctions before they are tabled for general debate requires that there should be a system to make them particularly effective. At the United Nations, as I understand it, our Government are seeking a more coherent and better organised monitoring system. They want continued improvement in the United Nations sanctions committee. They want Europe, through the Union, to have its effect in sanctions—but what about us nationally? That is what I want to concentrate on. As the noble Lord, Lord Hannay, says, although sanctions are essentially a UN weapon these days, there may be circumstances in which we require a clear, independent thinking about sanctions. In paragraphs 98 and 99 of this excellent report, that was the request of the committee: let there be a competent system. I have two suggestions. The first is to form a sanctions group in this country which is not measured and shaped by ministerial obligations but rather is a collection of efficient and intelligent people with the following objectives. It should establish, first, what is our national sanctions policy; secondly, how do we best identify targets of people and things to chase; and, thirdly, how do we best monitor and control for the future. It should, fourthly, introduce and use experts in economy, finance and international financial transactions and, lastly, seek to ensure that what is produced is going to operate as a fair system in matters such as listing and delisting. I make the suggestion from practical experience, which I shall mention in two regards. There is a case in which I am involved but can comment on because it has been publicly reported as to its facts but not the merits. Last year, I was arguing about the impact of Iranian sanctions on a legal process in this country. It transpired that the policy came from the Foreign Office, the restrictions came from a combination of Treasury and the then trade department’s civil servants, and, other than the published regulations with their criminal penalties, there was no available statement on how to understand and apply those sanctions policies to Iran. I thought that that was inadequate. It was really saying, ““We have decided on it. There is the policy. We have created the criminal offences and that is it””. That simply did not represent to me a sufficient ongoing analysis of what was involved. The second suggestion is a more determined approach in the financial sector, which is what I am concentrating on. If we look at the Security Council resolutions involving Iran and nuclear development, we find that the controls on finance relate to listed people and state or non-state entities, "““engaged in, directly associated with or providing support for””" the purposes, or involving others who are acting on their directions or under their control. That is an extremely broad basis for imposing an order for the freezing of assets. It affects not only the individuals and those mostly connected with them; if you freeze the assets, that affects banks, which have to participate to obey the sanctions order. That is determined stuff and the Government's response states that it produced $94 million from anti-terrorist operations in that field. Much more could be achieved in the quality, if not the quantity of sanctions by targeting the elites of foreign countries or non-state entities as to their assets and finances.