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In the course of your 9 September evidence session with Foreign and Commonwealth (FCO) and Business Innovation and Skills (BIS) officials, it was agreed that they would write to you to answer two further questions. I am writing to you on behalf of the FCO and BIS.
Question: Witnesses have informed us that when dealing with Russia the EU must practise what it preaches and uphold a rules based system. How does the UK Government intend to support the Commission’s efforts to combat corruption and its efforts to create a more balanced and open energy market within the EU?
In Ukraine, combating corruption was one of the earliest demands of the Maidan protesters and was a key part of the manifesto under which President Poroshenko was elected. The UK has worked with Ukraine and the Commission since February to help combat corruption and asset recovery. We hosted the Ukraine Asset Recovery Forum in London on 29 and 30 April in order to help recover assets stolen by the former Ukrainian regime. We are now planning £0.5m investment in supporting ongoing asset recovery investigations. On 21 August, the UK launched a two year £4.3 million programme to provide rapid technical assistance to the Ukrainian Government. This will be led by DfID through the British Embassy in Kyiv.
The UK continues to work to address corruption in Russia through global frameworks and forums such as the Organisation for Economic Co-operation and Development (OECD). In April 2012, Russia became a signatory to the OECD Anti-Bribery Convention and the Working Group on Bribery continues to encourage Russia to address serious, fundamental, concerns about its implementation of the Convention.
The UK Government is supporting the Commission to create a more balanced and open energy market by pressing for full and effective implementation of the Third Energy Package in all Member States and swift adoption of the gas and electricity network codes which will minimise barriers to cross-border trading and facilitate market integration.
Does the UK government support the Commission’s efforts to suspend the South Stream project until there is full compliance with EU legislation?
The UK strongly supports the Commission’s stance that South Stream should fully comply fully with EU law; all existing Intergovernmental Agreements with South Stream countries should be renegotiated to reflect Third Energy Package requirements, including third party access; and all existing contracts that have so far been tendered should be renegotiated. We believe the South Stream is damaging from an economic and foreign policy viewpoint and could be used to threaten Ukraine both economically and politically. Its completion will neither increase European energy diversity nor lessen the dependence of the EU on Russian energy, which is proving to be of key importance to the EU at a time when Russia has shown it cannot be considered a trusted partner, and at a time when Poland recently reported reduced supplies from Russia.
Question: Is there a role for the EU and Member States to hold Russia to her international commitments in multilateral institutions such as the Council of Europe, OECD, WTO and international finance institutions?
There certainly is a role for the EU and its Member States to play through international institutions such as the Organisation for Economic Co-operation and Development (OECD) and World Trade Organisation (WTO), both of which provide fora and mechanisms to promote global economic well-being through transparency and fairness It is right that we should work through these bodies to encourage Russia to behave as a responsible member of the international community and adhere to the principles and rules of the institutions – particularly where membership is based on the principles of these shared values and interests.
On 12 March 2014, following actions taken by the Russian Federation to illegally annex Crimea, the OECD, at the request of its members including the UK, postponed activities related to Russia’s accession to the OECD. Cooperation continues with Russia in this body at technical working level to take forward much needed reform, but Russia is no longer given a political voice in the group.
Russia became the 156th member of the WTO on 22 August 2012. Since then, the EU has filed a number of disputes against Russia’s non adherence to its WTO obligations. This year alone, the EU has filed a dispute against Russian import restrictions on pork products and Russia’s anti-dumping duties on light commercial vehicles. We consider Russia’s recent year-long import ban on food products from the EU members and other states to be unjustified and completely inconsistent with the principles of its WTO obligations. We, alongside our partners in the EU, will continue to review what steps might be taken in the WTO framework to address this.
It is also worth mentioning the OSCE as it remains the most appropriate vehicle to support a permanent ceasefire in eastern Ukraine, and have encouraged other international organisations including EU and NATO to work in close coordination with them. Following the Minsk Agreement of 5 September, the OSCE Special Monitoring Mission (SMM) issued a plan to expand to its full mandated capacity of 500 monitors. The UK has already provided £1.8m to the original budget, and 15 monitors, and we are now looking at increasing our contribution.
What does the UK Government intend to do?
We are continuing to look at where pressure can be applied to Russia to meet the international commitments it has freely signed up to. As was stated during the evidence session, Russia cannot be allowed to flaunt the international order and change borders by force with impunity. We will not recognise the illegal Russian annexation of Crimea and will continue to support Ukraine, both in bringing about a fair and just resolution to the Moscow conceived crisis in the east, and in terms of the country’s future development and prosperity.
I am copying this letter to Sir William Cash MP, Chairman of the House of Commons European Scrutiny Committee, the Clerks of both European Union Committees, Les Saunders at the Cabinet Office, Jonathan Worgan and Faisal Moosa, FCO Departmental Scrutiny Co-ordinators and Victoria Butt, FCO Select Committee Liaison Officer.
THE RT HON DAVID LIDINGTON MP
03 October 2014