Thursday, 24 March 2022
Ceisteanna Eile - Other Questions
111. To ask the Minister for Foreign Affairs and Trade the number of officials, persons and companies from Russia or Belarus currently sanctioned by the Government in response to the invasion of Ukraine by Russia. [15159/22]
This question is to ask the Minister if he is in a position to give details of the sanctions, if not perhaps all of them, that Ireland has imposed on Russia in response to its invasion of Ukraine. I ask him to make a general statement on the matter, regarding what those sanctions might involve and what he thinks the likely impact and effect has been on Russia in that regard. Regarding the businesses in question, have they complied with the sanctions and what oversight is in place to ensure that there is compliance with these sanctions? I ask the Minister to make a statement on this matter.
I propose to take Questions Nos. 81, 111 and 123 together.
Ireland implements UN sanctions, as adopted by the UN Security Council, and EU sanctions, as adopted as part of the EU Common Foreign and Security Policy. Ireland does not adopt unilateral sanctions; the sanctions in force in Ireland in response to the Russian invasion of Ukraine are EU sanctions, agreed and adopted by all EU member states. Similar measures have also been adopted by the US, Canada, UK, Switzerland and other like-minded countries. This co-ordinated effort magnifies the impact of the sanctions, sending a message of unity beyond the economic impacts.
EU sanctions have been adopted on six occasions in response to the crisis in Ukraine: on 23, 25 and 28 February and on 1 to 2, 9 and 15 March. Together, these are the most extensive sanctions in the history of the EU. The aim is to incentivise President Putin to find a political solution to the conflict he has created and to reduce the funding and equipment Russia has available to continue its military campaign.
The sanctions have been adopted under two sanctions regimes in existence since the 2014 Russian annexation of Crimea, as well as under the existing sanctions regime in respect of the situation in Belarus. A new sanctions regime has also been created, imposing restrictive measures on the non-government-controlled areas of the Donetsk and Luhansk Oblasts in Ukraine. The sanctions are made up of sectoral measures, which target specific economic sectors, industries or broad areas, such as the media, and individual measures, which apply to named people and entities.
The sectoral sanctions introduced to date target the Russian financial, energy, technology and defence and transport sectors. Similar sanctions have also been introduced on Belarus, in view of the support it is giving to the Russian regime. Trade between the EU and the breakaway regions in Donetsk and Luhansk has been restricted. Restrictions have been introduced on the broadcasting of certain Russia state-owned media platforms in the EU, to try to limit disinformation. The financial sanctions on Russia are particularly wide-ranging, targeting 70% of the Russian banking system, as well as key State-owned companies. Among other things, they ban transactions with the Central Bank of Russia, restrict Russian access to the EU’s capital and financial markets and exclude certain Russian banks from the SWIFT messaging system.
The most recent measures were adopted on 15 March and expand financial, energy, and security and defence sectoral measures. In particular, the sanctions prohibit transactions with certain Russian state-owned companies, prevent the provision of credit-rating services to Russia and restrict the import of iron and steel products from Russia. Exports of a wide range of luxury goods from the EU to Russia are also now prohibited.
Extensive individual sanctions measures have also been introduced since 23 February. A total of 685 Russians and Belarusians have been added to the sanctions list, and are therefore now subject to asset freezes and travel bans. Those sanctioned include decision-makers such as President Putin, his defence minister, his foreign minister and the members of the Russian National Security Council, Russian parliamentarians who voted in favour of the invasion of Ukraine, oligarchs who financially or materially support the military operations or benefit from them, Russian and Belarusian military figures and propagandists responsible for spreading disinformation about the Russian invasion. Fourteen entities have also been added to the list and are subject to asset freezes. These include banks, insurance companies, a so-called “troll factory” responsible for spreading disinformation and companies in the aviation, shipbuilding, machine building and defence sectors.
These most recent measures mean that 862 people and 53 entities have been sanctioned for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine since the annexation of Crimea in 2014. Detailed information on all the sanctions adopted since this conflict began are available on my Department's website, including summaries of each of the new legal Acts adopted.
At the Foreign Affairs Council last Monday, 21 March, there was broad agreement on the need to maintain economic and political pressure through the adoption of a further sanctions package in the short term. EU member states have a range of views as to what this further package should focus on. Ireland would favour restrictions on energy imports from Russia to the EU, specifically of coal, gas and oil, but we recognise that many EU countries will need time to undertake energy transition measures to reduce their dependency on Russian oil and gas. Another key priority for all member states is the rapid and effective implementation of the substantial packages of sanctions already agreed. Ireland has asked the Commission to prepare a rapid impact assessment of the sanctions adopted so far, so that we have evidence of what measures are working most effectively and where we may need to plug gaps in future.
The Minister addressed my question in the last line there in respect of the impact of the sanctions. My question is really on the efficacy of the sanctions. How do we know what impact they are having? How long does the Minister think it will take for the report on those impacts to be returned? He referred to it being done at EU level. What is the ultimate purpose of the sanctions? I support them, but I would like more details on them. I listened to an interview carried on radio recently. It was on RTÉ and done by an American. He said some goods in the shops in Moscow are marginally dearer, but regarding the impacts of the sanctions on the ordinary citizen, it seems these sanctions are impacting on more westernised and western-minded Russians. Therefore, I wonder how long it will take for these sanctions to impact in a deep way. Are we talking about a matter of weeks or of months? When does the Minister expect to see a political return from the sanctions? My basic question is: when do they begin to squeeze?
Billions in Russian roubles are reportedly sloshing around the IFSC. Those funds are reportedly being used to circumvent sanctions. We have reports from thecurrency.newsabout €13 billion of domiciled money in the IFSC and from The Irish Times showing that €34 billion is held by opaque Russian-linked shell companies registered in the IFSC, while Colm Keena has done work concerning a network of bank accounts moving billions of euro from Russia to the west through the IFSC.
The question put to the Government since the start of this conflict has concerned what research it is undertaking to ensure that such activities can no longer happen. What are we doing to close that method of circumventing international sanctions against Russia?
There were many questions there and I will try to be as precise as I can in responding. Ireland and other EU member states have asked for, effectively, an impact assessment as we go in respect of these sanctions. This war, though, has only been going on for a month. The first three rounds of sanctions packages happened over five days. Normally, it takes months to put an impact assessment in place. Therefore, everything in this regard is happening in fast-forward, if you like.
I understand the European Commission is constantly working on a rolling assessment of how these sanctions are working and biting, the impact of them and so on. The EU has also been asked to consider mitigation measures for member states in terms of the impact of sanctions here. Of course, agreeing sanctions packages to effectively disrupt trade between Russia and the EU has a big impact on the EU too. These sanctions damage our own economies but are more than justifiable given the extent of the aggression and scale of human misery linked to what is happening in Ukraine.
This is why I believe sanctions will continue to get stronger to act as a deterrent to the continuation of this war. I hope they will work in parallel with very proactive interventions to try to bring about the basis for a ceasefire. I will answer the question on the IFSC at the next opportunity but it is not primarily my responsibility.
I thank the Minister and it clearly takes time. Everybody is interested in the background - the rationale rather than research - for particular sanctions rather than others. We must be guided by the fact that the last people we want to penalise are our own citizens and people in business here. We do not wish to affect consumers here who have felt an impact. What is the purpose or rationale for this? In other words, what is the endgame for sanctions? What are they designed to do? Is it, as the Minister implies, to bring Mr. Putin to the table? Is it to put such a squeeze on those who support him that they would be minded to tell him that he should bring an end to this? Is it that there would be such a negative economic impact on Russia over a period that its leadership would be minded to take a different course of action? What kind of timescale does the Minister envisage for the sanctions to have the desired outcome?
The IFSC is acting as a colander, allowing Russian money to percolate and therefore to circumvent sanctions. It is up to each individual country to implement and impose those sanctions, so will the Minister address that point? It is something of real significance and if it is happening, it means the IFSC is helping the Russian war effort.
Another way Ireland and the European Union is supporting the Russian war effort is by spending €500 million every single day on Russian oil and gas. The US and Britain have decided to target Russian oil and gas but there is an inability in the European Union to make proper decisions about this. The Minister mentioned Ireland does not adopt sanctions unilaterally but one of the problems in this country is we are continuously outsourcing elements of our foreign policy to the European Union. The Minister indicates we are stronger working together in making decisions with Europe, but if Europe will not make the bloody decision, how is it in any way stronger? It is still €500 million on a daily basis going from the European Union to Russia for oil and gas. That is at the same time we are giving money to Ukraine. It does not make sense.
When dealing with the question of money flowing through the IFSC, we are all committed to the idea that Russia's ability to fight a war should be hurt as much as possible in a financial sense. Will the Minister indicate the status of the list of companies still trading with Russia and which we who sit on the European Union affairs committee were told by the Ukrainian ambassador, H.E. Larysa Gerasko, was given to the Minister's Department? I get that it is far better that we act across Europe as opposed to unilaterally but at the same time, one of the requests was that we would cut off access of Russia and its proxies to seaports here as well.
It was an excellent question posed by Deputy Lahart on the purpose and efficacy of sanctions. Of course, the purpose of these sanctions must be to stop the war in Ukraine and bring Russia to the quite natural and obvious end, which is the negotiating table. Therefore, it is crucial that on a daily basis we analyse the impact of the decisions made and further decisions that could be made. We operate in partnership with the EU and as a member of the UN Security Council but, crucially, we must be guided by an independent Irish foreign policy that is based on our historic military neutrality. That means we can play a positive and constructive role in securing what the peoples of Ukraine and all over Europe are demanding, quite correctly, which is an end to the criminal Russian invasion of Ukraine.
We are being asked by the Ukrainian ambassador and the Ukrainian Government to make interventions and we are trying to do as much as we can to support the people of Ukraine who are under attack. We are also working as part of a collective effort within the EU and the broader international community to try to find a way of bringing this to an end. The Deputy is correct that there are advantages to Ireland's historical approach to military neutrality and non-alignment.
It is primarily a matter for the Department of Finance and the Central Bank of Ireland, along with other Departments. From my perspective, we have made commitments to EU sanctions and we must ensure they are fully implemented, including if that involves the IFSC.
With respect to Deputy Lahart's question, because of the pace of the issue there is a need to respond quickly. Normally, before the EU would impose sanctions on a country or another part of the world, there would be much assessment before making a decision. The judgment was made in this case by EU leaders that we needed to move far more quickly. The truth is there is an element of the unknown in terms of the impact of these sanctions both on Russia and the EU but because of the brutality of what we are seeing, we needed to act quickly to put in place a significant deterrent and make a very clear statement to the Kremlin that the EU would act quickly and together. It has done so. There was a miscalculation that the EU would not have the capacity to do what we have done.