Review by Appropriate Minister

The 2018 Act introduces a strictly controlled ministerial review mechanism. The Act prevents designated persons from immediately challenging section 1 regulations before the courts, by way of judicial review. Rather, they must first request either variation or revocation of the designation from the appropriate Minister (at the Treasury or Secretary of State level). Only after that initial stage may a designated person seek judicial review of a sanctions-related decision; see Chapter 9 of this Guide. Thus, those who are subject to financial sanctions can challenge their listing, but financial sanctions will remain in place while the challenge or request is being considered.

Anti-Money Laundering

Anti-money Laundering Powers in the UK Post-Brexit 13.01 Overview of the Amendments Made by the 2018 Act 13.01 Pre-Brexit AML Regime under EU Law 13.05 The Impact of the 2018 Act on AML in the UK 13.12 The Core AML Power:...

Trade Sanctions

In the UK, trade sanctions should be distinguished from arms embargoes. The latter comprise a ban on the export of military arms and related material, e.g. ammunition, weapons, and other military goods. Thus, embargoes relate to all goods and technologies on a ‘UK military list’. Certain similar goods though not listed may also require a licence either under ‘military end-use controls’ or ‘weapons of mass destruction’ end-use controls.

Immigration Sanctions

Section 4 of the 2018 Act provides for travel bans post-Brexit. Individuals subject to travel bans are classified as ‘excluded persons’ within the meaning of section 8B of the Immigration Act 1971 (IA 1971). The banning mechanism is that section 8B IA 1971 provides that such an excluded person must be refused leave to enter or leave to remain in the UK. Any leave that this person already holds is cancelled, and any exemption from immigration control ceases to have effect.

Aircraft and Shipping

The core power to impose aircraft sanctions is found in section 1(5)(d) of the 2018 Act. Aircraft caught by the 2018 Act include drones and space-ships, but they must be civilian not military. Section 6(9) refers. Foreign police helicopters and aircraft could be subject to sanctions. Further, there is a broad definition of the geography of the UK for the purposes of this part of the Act, to include its territorial sea (section 6(8)).

Introduction

Without the Sanctions and Anti-Money Laundering Act 2018 (‘the 2018 Act’), the UK would not meet its international obligations post Brexit. Further, the 2018 Act gives the UK the means to take a different course from the EU on sanctions policy. Early signs are that the UK is determined to diverge, at least in respect of freezing the assets of Russian citizens, amongst others, whom the UK holds responsible for human rights abuses.

Licences and Exemptions

In the sanctions context, a ‘licence’ is a written authorization from the Office of Financial Sanctions Implementation (OFSI) permitting an otherwise prohibited act. By contrast, an ‘exception’ to a prohibition applies automatically in certain defined circumstances as set out in the regulations and does not require a licence from OFSI.

Power to Make, Amend, and Suspend Sanctions

The potential scope of UK sanctions has been considerably broadened by the 2018 Act. HM Government can now impose sanctions regulations considered ‘appropriate’ for a diverse range of purposes. These include those made to comply with a UN obligation or any other international obligation, for the prevention of terrorism, in the interests of national or international peace and security or, most broadly of all, to further a UK foreign policy objective. Further, the Magnitsky amendment was a late change to the Act, allowing the UK to impose sanctions on people who commit gross human rights violations. The scope of the UK sanctions regime is therefore wider post-Brexit, given UK sanctions will not effectively need approval by the twenty-seven other EU Member States in the future.

Court Review of Decisions

Prior to the 2018 Act, most sanctions in force in the UK derived from EU law, including sanctions decided at UN level but implemented by EU regulations. Prior to Brexit, UK courts frequently took the view that the correct venue for challenging sanctions was therefore elsewhere, e.g. the EU Courts.

Designated Persons and Designation Powers

At the heart of the 2018 Act, is the process by which UK Ministers can designate who is subject to targeted financial sanctions post-Brexit. OFSI at HM Treasury maintains two publicly available lists of those subject to financial sanctions. The first is a list of all the targets of asset-freezing sanctions. This is a list comprised of the names of designated persons. A second list sets out restrictions on access to capital markets, and is focused on Russian subjects, following actions to destabilize Ukraine.