Upon leaving the European Union, the UK adopted an autonomous sanctions regime under the umbrella of the Sanctions and Money Laundering Act [2018] (“SAMLA”) in conjunction with other legislation including the Anti-Terrorism, Crime and Security Act [2001], arming the UK government with a malleable tool to freeze funds, block investment and impose trade restrictions on particular goods or services.
Prior to the UK’s departure, EU regulations formed the backbone of the UK’s approach to sanctioning individuals and entities. The new regime transposes many EU characteristics but provides the Office of Financial Sanctions Implementation and the Foreign, Commonwealth & Development Office’s Sanctions Unit with greater flexibility to categorise sanctions and move in step with foreign policy considerations.
The UK’s new approach is designed to give policy makers an effective arsenal to isolate individuals and impede businesses from operating as usual if they are suspected of engaging in financial malpractice or facilitating human rights abuses. Regimes are delineated into thematic groups, such as the global human rights sanctions regime, announced in July 2020, some five months before the EU’s equivalent system, and geographic collections, including the Russia sanctions regime, which aims to encourage Russia to cease actions destabilising Ukraine. While the majority of those affected by pre-existing EU sanctions have also found themselves implicated in the UK’s new regime, 113 entities and individuals were deliberately removed from the designated list. This was part of a concerted effort to imbue UK sanctions with specificity and finesse.
Although the regime is now autonomous, the fact remains that sanctions are best implemented collaboratively, leaning on the collective weight of the US, the EU and the UK, both in terms of financial clout and soft power projection, to curtain the freedom to travel and the freedom to deploy funds without restrictions. This has been the case in the wake of the military coup in Myanmar, with the US and the UK, followed shortly by the EU, imposing sanctions on a selection of Myanmar’s top military brass. However, divergent geopolitical agendas, especially in connection with Russia, will impact the effectiveness of coordinated sanctions in the future.
From a corporate perspective, companies must take care to ensure that they are aware of the various sanctions regimes in operation as they may differ significantly from one jurisdiction to another. Importantly, the UK regulations under SAMLA contain specific guidance on how assets and economic resources under the majority ownership of a designated person are to be treated, but also provide clarity for circumstances where funds or resources are held by a person who is in turn controlled, directly or indirectly, by the designated person. This could have profound ramifications for third party funding and for compliance more broadly.
However, there is scope under the new regime for the broad application of licences, allowing an individual or entity to navigate the restrictions imposed on them in exceptional circumstances and for those affected to challenge their designation by way of variation or revocation.
Gherson has significant expertise in challenging EU sanctions and has an experienced team of white-collar solicitors who can assist with guiding an individual or entity through the process of making an application to vary or revoke the imposition of sanctions at the UK level.
In addition, aided by experience gained through working at a prosecuting authority, the white-collar team can advise on making a self-report to the applicable authorities, and provide specialist advice in this regard. Further, the white-collar team have specific experience and expertise in negotiating deferred prosecution agreements (“DPA”) which are potentially available, with the agreement of the prosecution and under the supervision of a Judge, for any sanctions breaches.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2021