New Treasury Committee inquiry launch: are the UK’s financial sanctions on Russia working?

In the week following the second anniversary of Russia’s illegal invasion of Ukraine, the Treasury Committee is launching a new inquiry into whether the UK’s programme of economic sanctions is having the desired effect - to hamper Putin’s ability to fund Russia’s armed forces.  

The Committee will be looking closely at the work of HM Treasury’s Office of Financial Sanctions Implementation (OFSI), which has been set the remit of ensuring financial sanctions are properly understood, implemented and enforced in the United Kingdom.    

MPs will be seeking to understand the extent to which it is possible to seize frozen Russian assets, including the legal constraints of such action and the global context required to do so effectively.  

Other areas Members will seek to probe include whether sanctions should be broadened to include any entities buying Russian oil and gas and how different UK economic sectors, such as maritime and insurance, are performing when it comes to the relevant sanctions.  

Commenting on the new inquiry, Harriett Baldwin MP, Chair of the Treasury Select Committee, said:  

“Two years on from Putin’s abhorrent invasion of Ukraine, Russia is still ploughing tens of billions into its defence budget which poses the question – are the West’s financial sanctions having the desired effect?  

“We must not let up in our efforts to plug every possible gap which Putin and his cronies exploit to get around our sanctions. Our committee is aiming to identify any areas within the UK’s purview which we feel could be improved so that, as a country, we can be confident we’re doing our bit to deal a fatal blow to the Kremlin war chest.” 

Terms of reference 

The Committee invites written submissions by Thursday 28 March. These should focus on any of the below questions: 

Draft Terms of Reference - Are the UK’s Russian financial sanctions working? 

In March 2022, the Committee published its report: Defeating Putin: the development, implementation and impact of economic sanctions on Russia (Link: Russia: effective economic sanctions (parliament.uk)) 

The Committee would like to take further evidence on the UK’s financial sanctions on Russia, and would welcome written evidence on the following areas:  

1. Whether financial sanctions instituted by the UK on Russia, are complete and effective in terms of the entities that have been designated, and the entities which have to comply with the rules? 

2. Whether assets frozen as part of the UK’s financial sanctions on Russia should be confiscated, and whether there are legal precedents for such a move? 

3. Whether financial sanctions imposed by the UK should be widened to include those who purchase Russian oil and gas? 

4. The effectiveness of the work of the Office of Financial Sanctions Implementation (OFSI).  

Evidence would be welcome on, but does not need to be limited to:  

a. Guidance provided by OFSI 

b. OFSI’s licensing regime 

c. The resources available to OFSI 

d. Enforcement work by OFSI 

e. OFSI’s implementation and enforcement of the oil price cap 

f. OFSI’s international cooperation 

g. OFSI’s work in the insurance sector 

h. OFSI’s work in the maritime sector 

5. The effectiveness of the system of designation of financial sanctions, in that it relates to the implementation of financial sanctions, and the relationship between the designation and implementation of financial sanctions. 

6. The implementation of financial sanctions against Russia by each part of the financial sector (including the insurance sector), and the maritime sector.  

7. The mitigation of any unintended consequences of financial sanctions. 

ENDS 

Notes to editors: 

·       The inquiry page will appear here at 0001. 

·       The page for submitting written evidence will appear here.