With the passage of the Russia Sanctions Bill, the Government last night paved the way for sanctions against Russian entities and individuals and so the net has begun to close in on oligarchs with New Zealand connections.
At least one billionaire Aleksander Abramov, the owner of the $50 million Helena Bay Lodge, has already retained a law firm to represent him.
National Foreign Affairs spokesperson Gerry Brownlee last night appeared to allude to him during the debate on the Sanctions Bill when he said that the list of Russians to be sanctioned published by the Ministry of Foreign Affairs and Trade (MFAT) did not include 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 of Foreign Affairs could tell the House has it made an assessment at this stage that says that particular gentleman is not connected to the regime of Vladimir Putin?”
Foreign Affairs Minister Nanaia Mahuta said the passage of the Bill would enable MFAT to gather together information.
“While there has been a lot of speculation, certainly in public and as a result through media channels, as to certain individuals, what the bill provides is a legal basis upon which MFAT fact can undertake its role to be able to identify persons, their assets, any entities they may have an interest in to be covered by a sanction,” she said.
The Bill went through all its stages under urgency last night and was approved unanimously by all parties in the House.
It gives the Government-wide powers to sanction individuals and entities connected to Russia.
A note from MFAT accompanying the Bill said it would give New Zealand the tools to legally assist and cooperate in bringing the aggression (in Ukraine) to an end.
“This includes establishing a framework to permit sanctions to be imposed and enforced on persons, assets or services that are responsible for, or are associated with, actions which undermine the sovereignty or territorial integrity of Ukraine, or that of economic or strategic relevance to Russia,” it says.
It is the phrase that would allow activities to be sanctioned that are “of economic or strategic relevance to Russia” that would seem to be able to be applied to Abramov through his 19.3 per cent shareholding in the Russian steel company, Evraz.
A note to shareholders in the company prepared in January this year for a general meeting called in London to consider a capital restructuring of the company warned that sanctions against it were a risk factor.
The note said that though Evraz was not currently subject to any sanctions, future imposition of sanctions could materially or adversely affect the economic environment in Russia, “including the business, financial condition, results of operations and prospects of the Evraz Group.”
It said the current United States executive order implementing sectoral sanctions also permitted sanctions to be applied against companies in the metals and mining sectors.
Last night’s Bill would make it relatively easy for New Zealand to follow any extension of sanctions from the US, and it will carry tough penalties.
It makes it an offence to breach a sanction or to provide false information and offences against it will be punishable by prison terms of up to seven years and fines of $100,000 or, for an entity, fines of $1 million.
Mahuta told the House sanctions would be able to be applied not just to Russians but also to people and entities in countries such as Belarus, which were aiding the invasion of Ukraine.
She said the first tranche of sanctions would align New Zealand with partners to prevent assets from being moved here.
“This will include more extensive travel bans, sanctions on Russian banks and potential asset freezes based on discussions with international partners,” she said.
“There will be further phases as we build a bigger picture of assets and New Zealand.”
Brownlee supported the Bill and took particular delight in reminding the House that he had proposed an autonomous sanctions Bill last year, which the Government had opposed but had now handsomely borrowed from for its own Bill last night.
“I wish that we had had standing legislation that would allow us to be in a position of having gone to that position two weeks ago when, with respect to the Government, they were saying that we didn’t need that, that there were other methods that could be used,” he said.
“The Prime Minister, as little as a week and a half ago, was insisting on that.
“But I do respect the fact that Nanaia Mahuta has engaged with other countries’ foreign Ministers and has come home to New Zealand and said, “Right, we need to do this.” That is a mark, I think, of leadership, and I acknowledge her for that.”
However, Brownlee was critical of the fact that the Government had not expelled the Russian Embassy.
“Why are those diplomats still here?” he asked.
“If you look at the diplomats that are here, those people are direct servants of Vladimir Putin and his regime. For them to make any statement outside of total commitment to the actions that are currently being taken in the Ukraine is unthinkable.
“It is odd that the Russian ambassador continues to sit here in Wellington, clearly very, very supportive of what Vladimir Putin’s regime is doing in the Ukraine, and yet doesn’t himself appear on any of the sanctions lists that we’ve seen so far.
“And so they should not be here. They should have been asked to remove themselves.”
Brownlee said that New Zealand had no problem expelling Fijian diplomats in 2009 after increasing tensions with Frank Bainimarama’s military Government.
Mahuta said that it was not possible to undertake extensive consultation on the Bill, but she said she was able to seek advice from some groups.
“We deliberately ensured that we were contacting the New Zealand Law Society, the Privacy Commission, and the New Zealand Bankers’ Association on aspects of the bill because we understood how important it was to get their soundings,” she said.
It was one of those rare nights in Parliament where all MPs united to support a piece of legislation. The speeches were without acrimony, and most were constructive.
Mahuta has confirmed that she wants to pick up Brownlee’s Autonomous Sanctions Bill and use that as the base for a new Bill, which would be able to be used for any situation where sanctions might be thought appropriate.
One obvious candidate would be Israel, where Amnesty International and a group of US legislators are calling for sanctions on some companies associated with the country’s activities in Palestine.
But for the meantime, MFAT has to go on a hunt for Russians and entities within New Zealand who might be directly or indirectly aiding the invasion of Ukraine.
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