Russia Sanctions Bill

I seek leave for all parts to be taken as one debate.

There’s no objection.

Members, the House is in committee on the Russia Sanctions Bill. I remind members that they are able to participate remotely. If you’re on the Zoom and you want to take a call, please type “call” into the chat. You should also use the chat if you want to raise a point of order. If we receive new tabled amendments, I’ll advise members so they can refresh the House papers page to see the new amendments. Finally, it would be helpful for members to ask multiple questions, if they have them, of the member in charge during their call.

The question is that Parts 1 to 4 stand part.

Look, my question relates initially to Part 2, which is “Sanctions”, which is the most important part. I just wonder if the Minister might be able to expand a little bit more on clause 8(1): “The Minister may recommend that regulations be made under section 9 only if the Minister is satisfied that the regulations are appropriate to respond to threats to the sovereignty or territorial integrity of Ukraine or another country.” How broad is that?

The second question I have, since we’re asking—are we doing that, Mr Chair? Are we asking them all in sequence so we can get a more expedited process?

CHAIRPERSON (Ian McKelvie): That would be the best option.

My second question relates to the issue of sanctions being brought against countries that assist Russia in their efforts to overthrow the Ukraine. We already know that Belarus is one of those countries. That’s clearly in sights and will be subject to sanction, but what would be the bounds of that?

We’re seeing at the moment the Russian economy collapse, we’re seeing the rouble fall through the floor, and we’re seeing, now, sanctions against the import of oil products—fossil fuels, effectively—out of Russia via the US. That, I’m sure, is going to be quickly followed by others. You’ve seen the European Union today move to substantially reduce their dependence on Russia with a whole pull-out period of about two years. If that is replaced by someone else, does that trigger the sanctions regime?

So those are the two questions I’ve got at this point. There may be another after Mr Shaw speaks.

Thank you, Mr Chair. My question to the Minister of Foreign Affairs is around a couple of things. First of all, in relation to something I was mentioning in the second reading speech around the possibility of a post-enactment review, I do want to recognise that the Minister, after consulting with Golriz Ghahraman on behalf of the Green Party, has brought in a full review at two years, and we greatly appreciate that. As with any bill that’s passed under urgency, of course, though, there may be things in it that actually trip us up in the very near term, in the immediate period, where we actually want to be really effective with this, and I wonder if she might support a post-enactment review at select committee just to kind of give it a good working over and to just see if there is anything in here which could cause us trouble within the two-year time period, and particularly over the course of the coming days and weeks as the situation in Ukraine unfolds. So there’s that.

The other one that I wanted to test whether she was open to is whether regulations might come back through the House in a manner similar to how the COVID regulations have done.

The third—which I canvassed right at the very beginning, of course—is that I wanted to test her support for Supplementary Order Paper 138 in the name of Golriz Ghahraman, which is to include, after clause 8(3) on page 7, after line 22: “Resolutions of United Nations General Assembly (4) The Minister must also have regard to relevant resolutions of the United Nations General Assembly.” The reason, as I mentioned in the second reading, for that is that we want to reinforce the parts of the multilateral system that are working and that specifically in this particular case have condemned the Russian aggression in Ukraine in the strongest possible way, rather than just the bit that isn’t working, which is the Security Council in this case.

So I just wanted to ask the Minister for a response around those.

I’ll try to keep these brief as I’m conscious of time. The first is to ask the Minister or, through her, her officials where the place of family members comes in. The bill is quite clear about individual persons, as I’ve read it. What about their family members, because, obviously, the transfer of assets and so forth can apply to them. So, just to be clear: whether or not family members of those sanctioned—so Vladimir’s family or families, for example, or Lavrov’s and others—are included. That’s the first question.

The second—and I think it’s been intimated around the whole place—is Belarus. I; it’s maybe just a statement from my side that they’re explicitly guilty in this space and, in some ways, require an explicit statement. It’s in Part 2, and it’s more to give me some certainty. There seems to be an absence around cyber-incursions. It’s very clear from the sanctions bill around almost the physical attacks on territory and so forth, which trigger the sanctions. Can the Minister give us some surety that if cyber-warfare was deployed, including against New Zealand, this piece of legislation would enable us to move forward?

The third part is just some confidence around clause 8, around respecting the UN. I think it’s important that we do respect the UN—that’s clause 8(3). Just some confidence we’re not going to get mired in UN processes, and that “Oh well, they’re considering things. They’re still having a chat about it. We’ll wait.” I just want to know that we can still act relatively swiftly.

Finally, and it will be no surprise to her, because I’ve talked about it twice now so far: will she consider Magnitsky legislation in the future? Thank you.

Thank you, Mr Chair. No particular order, but thank you for the questions that have come through.

Firstly, in relation to the scope of the bill and the way in which other countries may well be considered, I would point the member to both clause 3 and clause 8(2)(a) and (b). Effectively, when we drafted the bill, it was intended to be quite wide in its intent, so Belarus was factored in when we drafted the bill because there was evidence of their support for the activities that were undertaken by the Putin regime. In terms of the broadness of the scope, there was also consideration that were the military incursion or invasion to extend to bordering countries of the Ukraine, perhaps we needed to provide scope for the inclusion of sanctions for those particular instances, as well.

All the points that Minister Shaw raises in relation to the regulations coming back to the House: I think in the fullness of a broader autonomous sanctions regime, that is the basis upon which I think that type of an approach would be very useful. Because this is very limited and targeted, having the regulations go through the Regulations Review Committee will, I think, be satisfactory, but that is also why I’ve pointed to the public register, because that is a way of showing transparency around what ultimately gets considered and approved, and then enforced.

On the issue of family members, I am advised that that is covered off in clause 10(2) of the legislation. There was always the thought that if evidenced, the ability to target Russian oligarchs is well placed, but in the event that perhaps family members and their activities by association needed to be considered, again, that was a matter that was factored into the drafting of the bill.

I take the point, again, around the post-enactment review after a two-year period. Look, I live with optimism, but to the extent that these sanctions will still need to be around in two years’ time, I suspect that the process that I’m undertaking in regards to a broader autonomous sanctions regime may well eclipse this particular legislation.

So let me come back to the last question that Mr Simon O’Connor raised, which is what is the approach in terms of the Magnitsky type of model. It’s my intention to steward through in the coming weeks—and it has always been a process for me—an approach to looking at our human rights tool kit and, within that context, where an autonomous sanctions regime would best fit. We would firmly locate human rights at the core of that approach, alongside the rest of the tool kit that New Zealand has available to it, but we would also modernise the way in which these sanctions can apply. The other key aspect to that approach is it would enable a fuller round of consultation and engagement, both with those who may be impacted but also from civil society, the legal fraternity, and the banking fraternity, in a more fulsome way. That will help develop that legislation.

I’m trying to recall the other aspects of the questions. They—

💬 Simon O’Connor: Cyber-security.

Cyber-security is covered off both in terms of clause 5, and if we go to clause 5—actually, read clause 3 and clause 5 in tandem—you will see that a service has been defined, and to the extent that we have “electronic service” and “communications service” there and, I guess, threaded through the range of other services, there is the aspect of cyber that is taken account of. Now, these are very complex issues, but I am assured that the breadth of the scope of those areas will enable us to deal with the issue of cyber. Now, I’m hopeful I covered off most of those questions.

On the issue of sanctions regarding oil, I’m not sure if I understood the question properly, and I apologise to the member if I have to ask you to repeat it. But, as we have already explained, we don’t source our oil from Russia. However, it is inevitable that there will be significant downstream impacts. The conversation—and I’ll relay it, I guess, in the spirit that I had heard some of the discussions around these types of sanctions applying and how it might recalibrate what is happening in Europe—is that it may well lead to a swifter recalibration of energy source use and actually moving towards a low-carbon type of opportunity, and that was very much within the European framing of conversations about the impact of sanctions regarding oil.

I would hope, again, that these are all the things we have to have a serious conversation about. The scale of this war is so significant, and with the impact of the key resources that are exported out of Russia and, now, sanctions being placed on them, I would hope that several countries will use that as a significant motivation to accelerate towards a low-carbon economy so that we can see the shift very quickly. My worry, often, in this particular situation is that a lot of the investment will go towards military strengthening, and then we will see a backsliding on some of the undertakings that we just recently gave at COP26. These are the things that every country is balancing up as they, one, respond to the war but also try and think about how we as a community of countries still remain resilient in these very difficult times.

The last thing that I would like to just add by way of clarification of this approach to developing sanctions is it’s not intended to be one go at it. We will evolve our sanctions as events happen, as we’re gathering more intelligence, and as we’re observing what’s happening with our international partners. So while I take the point, for example, that our lists right now aren’t comprehensive, Australia has updated their sanctions list over this brief period of time and they will continue to do so, as will we once this legislation passes through.

The point of all of that is we have a more agile approach to developing sanctions. We have not, within primary legislation, defined the sanction; we’ve utilised the ability to determine our sanctions by regulation and in a way where with every regulation or every range of regulation, we can have thresholds that apply to that consideration as it gets passed to me for consent and to the Ministers for power to act. What that affords us as a country is for us to be in step, and you will have heard many of the presentations on this side of the House say that the whole approach that we’re taking to our sanctions framework is to be in step with events as they occur but also in step with responses of other international partners as they are making their determinations.

I’ll offer one insight. While I was up in Europe, the big conversation—and the invasion had not happened yet—was around what was the most swiftest way to send a message to Russia from the European Union, and, without a doubt, it was economic sanctions. Not all of the States across the European Union were of one mind about what they could do bilaterally in terms of Russia, but they were all of one mind that if they took a progressive approach to economic sanctions over a fairly successive and quick period of time, that in itself would start to bite down on Russia. I do think that we need to consider that our approach sits alongside other countries and their effort to send Russia a message.

Just reflecting on the comments the Minister has just offered the House, particularly on the nimbleness of the sanctions regime, you have the ability to go through lists etc. very, very quickly. If we look at the published list at the moment, it is very much a mirror of the US, Canada, Australia, and the United Kingdom, but for the name of one oligarch who does have assets here in New Zealand who has been the subject of some media speculation, I’m wondering if the Minister could tell the House: has the Ministry of Foreign Affairs and Trade (MFAT) made an assessment at this stage that says that particular gentleman is not connected to the regime of Vladimir Putin?

Secondly, would it be part of the assessment that’s made about Russians, their activities in New Zealand, and their assets in New Zealand, as to whether there was a repatriation of funding that was finding its way back to Russia at a time when the whole world is trying to stifle that economy? If they were repatriating money earned in New Zealand back to Russia in large volumes—I’m not talking about a family member sending some money to another family member; I’m talking about large-scale business activity—or if New Zealand was being used as a funnel for other entities around the world through one of those people, would that see a re-change or is that assessment part of what MFAT will be doing?

Yes, thank you for the question. Without going into the detail of particular individuals: once enacted, the law will enable the information-sharing and intelligence-gathering aspects of being able to determine who is covered by the sanction. While there has been a lot of speculation, certainly, in the public and potentially as a result through media channels as to certain individuals, what the bill provides is a legal basis upon which the Ministry of Foreign Affairs and Trade can undertake its role to be able to identify persons, their assets, and any entities that they may have an interest in to be covered by our sanctions.

The other element—and the member well knows this because it is a feature of his own previously drafted bill—is that the bill provides for assets to be frozen. So that will mean that once that determination and that threshold has been passed, that individual has been identified, and the full determination of their interests has been identified, then the sanction will cover those aspects that he speaks to.

The question is that Golriz Ghahraman’s amendment to clause 8 as set out on Supplementary Order Paper 138 be agreed to.

Madam Speaker, the committee has considered the Russia Sanctions Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading