Ukraine and sanctions
Deputy McDonald and Deputy Murphy raised Russia’s invasion of Ukraine, urged stronger sanctions and warned about loopholes in Irish financial structures. The Taoiseach condemned the invasion, outlined EU sanctions and assured Members Ireland would help enforce compliance and prevent evasion.
Ar dtús, ba mhaith liom mo dhlúthpháirtíocht, agus dlúthpháirtíocht Shinn Féin, a léiriú le muintir na hÚcráine. Ba mhaith liom ár dtacaíocht a léiriú leo. Ní féidir le éinne a bhfuil meas acu ar an saoirse ach breathnú le huafás ar ghníomhartha na Rúise san Úcráin. Cáinimid na gníomhartha sin go hiomlán.
I reiterate on my own behalf and that of my party our total and unwavering solidarity with the people of Ukraine at this deeply distressing and traumatic time for their country. We once again condemn unreservedly the actions of the Russian Government in violating Ukraine's sovereignty and internationally recognised borders, its attacks against Ukrainian people, property and infrastructure, and its initiation of a humanitarian crisis in Ukraine. The invasion of Ukraine and the military assault we have witnessed are a criminal affront to the civilised world and a threat to the peace and security of people everywhere.
The Irish people have been appalled at the heartbreaking scenes of civilians being killed, being injured and fleeing their homes for their lives. Communities across our country are now actively working to assist in the humanitarian response. I believe I speak for all Deputies in the Dáil when I say we are united in our condemnation of the actions of the Russian President, Vladimir Putin. Any attempt by Putin or his regime to justify his actions as a response to NATO are without foundation and are merely a means of distraction from his own culpability. It is his military aggression that is bringing death and destruction to Ukraine.
The international community has an obligation through diplomacy, support for Ukraine and strong sanctions against the Russian Federation to bring about a peaceful resolution to stop this horrific war and to see all Russian forces leave Ukraine. Ireland must be a voice for peace, justice and freedom in the world.
Will the Taoiseach agree with me that Ireland, more than most, understands the impact of occupation and imperialist aggression, that we deeply value the principles of national sovereignty and the right of all people to self-determination, that Ireland also understands the importance and difficulty in finding peace through dialogue and diplomacy and that our status as a neutral state, with no colonial baggage and an independent foreign policy, has allowed us to play a valuable and honourable role in peacekeeping and conflict resolution around the world and in the battle against nuclear proliferation? Now, as a member of the United Nations Security Council, we must do everything we can to end this unjust war and force complete Russian military withdrawal.
Will the Taoiseach outline how he intends to intensify sanctions in order to ensure a Russian withdrawal and the right of Ukraine to a peaceful future as a sovereign independent state? I ask him to update the Dáil on the efforts of the Government, as a member of the UN Security Council, to ensure an urgent response to what is a rapidly deteriorating humanitarian crisis in Ukraine.
Comment on this
I thank the Deputy for raising this very grave issue. No one in this House or anywhere else should be under any illusions about the seriousness of the situation Europe and the world faces right now, this afternoon. Vladimir Putin, who is a bully and a thug, has unleashed an unprovoked and unjustifiable war on the people of Ukraine, committing war crimes in the process, as we are witnessing. As President Zelenskyy said most movingly to the European Parliament this morning, every day now in Ukraine is someone's last day. I was very struck both by the contribution he made there and, indeed, to the European Heads of State last Thursday at the European Council, when he said to us it might be the last day he would speak to us because he is number one on the list, along with his family.
It is difficult to comprehend. A week ago, it would have been unimaginable to see what we are witnessing now: a 40-mile-long convoy of Russian troops and heavy military equipment grinding their way towards Kyiv, where children and their families take shelter in the underground. Just hours ago, Liberty Square in Kharkiv was devastated by a missile strike. As President Zelenskyy said, it is a city where there are up to 20 universities and the area is frequented by thousands of young students in the full expression of freedom of choice, expression and so forth. Residential neighbourhoods in cities all over Ukraine, where ordinary, decent people were going about their normal lives, are today facing barrages of illegal cluster munitions, which we, well over a decade ago, worked as a country to ban in an international treaty. Caithimid deireadh a chur leis an gcogadh seo. Caithfidh Vladimir Putin deireadh a chur leis an bhforéigean agus leis na hionsaithe uafásacha ar leanaí na hÚcráine agus ar theaghlaigh éagsúla ar fud na hÚcráine because what we are witnessing is scarcely believable but it is very real for the people of Ukraine.
Our response, I agree, must, therefore, be unprecedented and it has been unprecedented. Over the past ten years, and certainly since 2014, I have been arguing and debating in this House about the consistent violation of Ukraine's territorial integrity by Russia. Now it has reached an appalling stage in terms of an all-out assault on Ukraine and the Ukrainian people and territory. Before leaving for Brussels last week for the emergency European Council, I said I wanted to see the most comprehensive and widest set of sanctions deployed by the European Union. That has happened in respect of the sanctions that have now been put in place by the EU, along with the United States, Canada, the United Kingdom, Japan and others. I have been very heartened by the unprecedented commitment to humanitarian care and support for Ukrainians. I believe the European Union genuinely has responded with absolute solidarity with Ukraine and with absolute speed in its response in terms of the unprecedented scale of sanctions that have been deployed, in particular, the sanctions against the Central Bank of Russia in terms of it not being in a position to access its European and foreign reserves, Russian banks being locked out of the SWIFT mechanism, the listing of key individuals who are part of the coterie of leadership around Vladimir Putin and much more in terms of the industrial base of Russia.
It is an extraordinary package of sanctions that people did not believe would happen. Ireland did not hesitate to facilitate the deployment of the European peace facility and €500 million to assist people in Ukraine, Ireland's support being in terms of non-lethal weapons.
The biggest challenge facing the country is that we must be very, very generous in the refugee crisis that will undoubtedly flow as a result of this war. It will be beyond anything we have comprehended before. I have said to my colleagues in government and the Departments that we must put to one side what we might have considered to be the norms in responding in a humanitarian way to the plight of the Ukrainian people. The Secretary General of my Department is convening with other Secretaries General and Government Ministers to make sure we scale up the response in the context of the humanitarian crisis that is unfolding before our eyes.
Comment on this
Nobody is under any illusion but that Vladimir Putin and the Russian Federation are the aggressors in this scenario and they have brazenly breached international law. They have launched an all-out offensive against a sovereign people and they have, as the Taoiseach has correctly said, committed war crimes on the watch of the international community. We need to see an intensification of this package of sanctions. Vladimir Putin, and all others who might choose to violate international law and brutalise people, need to understand that the international community can and will put our foot down. I support the Taoiseach’s call for generosity towards those fleeing war and conflict. We must extend the most generous of Irish receptions to those people and families. I want to go back to the economic sanctions and to invite the Taoiseach to set out how we might deepen them, not least in respect of the Russian banking system and the SWIFT system.
Comment on this
We have witnessed the severest form of sanction of the Russian banking system, particularly in the Central Bank of Russia being denied access and being frozen out of accessing its reserves, which is unprecedented. Furthermore, financial transactions with many Russian banks and companies have been prohibited. That means it is very difficult for Russia to sell exports and to buy imports on international markets, which will be significant. European Union banks are prohibited from accepting deposits over a certain amount from Russian individuals and, as I said, the European assets of the Central Bank of Russia have been frozen, restricting its ability to prop up the value of the Russian rouble. Many Russian banks are excluded from the SWIFT payment network and that will hamper Russia’s ability to trade with the outside world, particularly the major global economies. The sanctions are already having an effect, with the Russian rouble crashing to record lows on foreign exchange markets. Russian purchasing power in international markets has also dropped and inflation in Russia is likely to rise significantly. The Central Bank of Russia has been forced to hike interest rates from 9% to 20% to prop up the currency. Interest rates at these levels, if sustained, will severely damage the Russian economy. Russia’s stockmarkets are shut and there are signs of increased stress in the Russian banking system, with media reports of long queues at ATMs. Some analysts have predicted that the stress on the system could lead to a run on Russian banks.
We have to be in for the long haul, which is a phrase that was used consistently last Thursday evening. Vladimir Putin has fundamentally altered the multilateral rules-based order that characterised international behaviours since the end of the Cold War.
It is that fundamental and will cause reflection all over the world and within Europe in terms of how we respond to that and how we endeavour to restore some stability to the multilateral rules-based order to which we subscribe as a country.
Comment on this
What we are witnessing in Ukraine is a rapidly unfolding human rights and humanitarian disaster. Yesterday, the Russians used cluster bombs in a densely-populated civilian neighbourhood of Kharkiv. This kind of indiscriminate attack is clearly designed to maximise civilian casualties. I know the Taoiseach will agree with me that this is the definition of a war crime. Today, a military convoy extends for 60 km and inches its way closer to Kyiv. It is clear Kyiv will soon be under siege with massive invading armies surrounding the city. The people of Kyiv, who are watching this on satellite images as a convoy approaches must be experiencing unimaginable fear.
Ireland is a neutral country but, as has been said before and as I will say again, this does not mean we are neutral on the invasion of Ukraine, which is a sovereign country and nor does it mean we cannot act. I welcome the Government's lifting of visa restrictions and donation of humanitarian relief which have been announced in recent days. However, we have been slow to act against the Russians in the past.
It has long been reported, including by John Mooney, that the Russian Embassy in Dublin is being used as a base for espionage operations across Europe. This was confirmed when the Government used legislation to block a proposed expansion of the embassy, on security grounds in 2020. Yesterday, the Minister, Deputy Coveney, suggested that Russian diplomats or some operatives who are in Ireland and may not be diplomats could be expelled in coming days. Will the Taoiseach confirm to the House whether this means that the Government has identified spies among the Russian Embassy staff who are about to be expelled?
The economic sanctions announced by the EU over the weekend are wide ranging and significant and must be welcomed. However, Colm Keena, in The Irish Times, has reported how one Russian company, subjected to previous sanctions in 2014, was able to bypass them and access Western capital markets using a company registered in Ireland. We know that tens of billions in Russian money has been funnelled through Ireland using financial services operations in the International Financial Services Centre, IFSC, and entities called limited partnerships.
One of the attractions of limited partnerships is that there is no requirement to disclose publicly by whom they are really owned. If the ownership of these entities is shrouded in mystery, how can Ireland ensure sanctions will be properly applied? Will the Taoiseach confirm what the Government intends to do to close any loopholes and ensure there is no place for dirty money to hide in this country?
Hundreds of thousands of civilians have already fled Ukraine and the number of refugees could soon reach the millions. Will the Taoiseach outline the practical steps Ireland will take to ensure refugees can easily get from Poland and other eastern European countries to Ireland and to safety?
Comment on this
I agree with the sentiments expressed by the Deputy on the appalling attack and war being raged against the Ukrainian people by Vladimir Putin and the Russian leadership. I have no doubt that the vast majority of Russian people do not support this war.
In terms of the diplomatic issue, first, anything we do should be in consort with our European partners. European strength and unity of purpose are very important in respect of responding to Russia. That has been a hallmark, so far, of the European Union's response, working with the United States, Canada, the United Kingdom and other countries that hold up democratic and universal principles of sovereignty, territorial integrity and freedom of speech and movement. Those are fundamental values. We share those values with other countries. Those countries are uniting in opposing what the Russian leadership is doing.
In respect of the ambassadorial issue and diplomatic channels, no country is proposing the expulsion of any ambassador so far.
Our view is that it is important from a practical point of view in looking after our citizens either in Russia or Ukraine that we keep all channels open right now. We have a limited presence in the embassy in Moscow with six individuals all told. They have a fundamental function to look after Irish citizens in Russia and also to articulate our views and keep abreast of what is happening within that jurisdiction and different jurisdictions. I am very conscious of that.
While I understand fully the revulsion and anger towards how the Russian ambassador has spoken on this war, nonetheless, we have to keep cool heads, hold our nerve and keep the fundamentals in front of us all the time in terms of looking after Irish citizens, in particular.
On the IFSC, entities in the financial services sector in Ireland are within scope of the sanction measures agreed unanimously by the 27 EU member states. All natural and legal persons in the State are obliged to comply with the European Union sanctions. A breach of financial sanctions is a criminal offence. Accounts, funds or other assets must be frozen without delay so that they cannot be made available directly or indirectly to the sanctioned person, entity or body. The sanctions include a prohibition on the listing and provision of services on EU trading venues, including Euronext Dublin, which was formerly the Irish Stock Exchange, in relation to shares of Russian state-owned entities.
The Central Bank of Ireland has undertaken an initial review of any links between the approximately 3,000 Irish domiciled special purpose entities and Russian entities. Some 34 of these 3,000 entities have a Russian sponsor, meaning that they were established on behalf of a Russian company. The total assets of these special purpose entities is approximately €36 billion, largely comprised of loans to Russian companies. Of these 34 entities, three have been identified as being directly linked to individuals or financial institutions covered in the 23 February round of EU sanctions. Work is ongoing in respect of the subsequent sanction rounds.
With regard to authorised investment funds, the Central Bank has advised that total Russian assets held at 31 December 2021 are estimated at €11.4 billion or 0.3% of the total Irish fund assets of €3.8 trillion.
Comment on this
That 0.3% of the total Irish fund assets of €3.8 trillion is evenly split between equities and bonds.
Comment on this
I will finish for completeness and transparency. The Irish collective asset management vehicle, ICAV, unit trusts, common contractual funds and investment limited partnerships are subject to beneficial ownership registration requirements to enhance transparency and help combat money laundering activities. I can give the Deputy further details on this.
Comment on this
It is really important that we play our full part in those sanctions. With regard to the limited partnerships, it has been demonstrated that a Russian company previously subjected to the sanctions in 2014 was able to overcome them by having a registered company in Ireland.
It will be really important that if there are loopholes to be closed and legislation to be produced in that regard, it needs to be done as a matter of urgency. We do not want to look back in retrospect and see that there was a way around this. I am hopeful that the Taoiseach will give us an assurance that there will be comprehensive consideration of this.
I also asked the Taoiseach about the practical steps regarding people arriving into Eastern European countries across the border from Ukraine. What practical steps are there to make it easy to get from Poland and other Eastern European jurisdictions to Ireland for people who wish to make that journey?
Comment on this
We will do everything we can to ensure compliance with the sanctions. We have no interest - none, zero - in enabling any Russian oligarch or to be more specific anyone who is part the sanctions' list, either to evade or avoid being fully accountable to that sanctions regime. We have no interest as a country in protecting anybody in that regard. I have to be crystal clear about that. We will do and are doing whatever it takes, with the Central Bank, to facilitate full compliance with sanctions.
As I said, it is a criminal offence to endeavour to evade these sanctions or to facilitate the avoidance or evasion of these economic and financial sanctions.
This morning, we went further in the European Union. Justice and home affairs ministers will meet on Thursday to ratify this. Understandably, we are making very liberal plans for Ukrainian people who are fleeing Ukraine to come to this country and to any European country. They will be able to stay here under the temporary protection mechanism for quite a considerable length of time. They will have access to our social protection system, housing and the education system. This will involve a levelling up in terms of the humanitarian response in this country. We will work with countries closer to the border of Ukraine and on the border of Ukraine in respect of burden sharing across the European Union to contribute our fair share and to facilitate logistically transfers of people to Ireland where that would be required.