Understanding UK sanctions

This guide will outline the UK sanctions post-brexit regulations and inform you of what you need to know to ensure you are complying with the renewed sanction laws.

Sanctions in the UK fall under the authority of several different departments. The Foreign & Commonwealth Office (FCO) is responsible for negotiating international sanctions and has overall responsibility for the UK’s policy on sanctions and embargoes. Meanwhile, HM Treasury (HMT) is the entity responsible for making designations under UK domestic financial sanctions and for the implementation and enforcement of all financial sanctions in the UK (through its subordinate agency, the Office of Financial Sanctions Implementation).

In addition, the Department of Business, Innovation and Skills implements some trade sanctions and embargoes.

UK sanctions can consist of a variety of punitive measures, but most common are financial sanctions, import/export and travel bans, and embargoes.

The UK follows international procedures to implement international sanctions.

First, the UN imposes sanctions through Security Council Resolutions. The EU then takes a Common Position and, where appropriate, will introduce an EU regulation that is directly applicable to member states. Lastly, where necessary, the UK introduces or amends secondary licensing and enforcement legislation.

Due to the UK officially having left the EU on 31 January 2020, the Withdrawal Agreement dictates that EU sanctions will apply to the UK only until 11pm on 31 December 2020, as the UK and the EU goes through a transition period.

The UK sanctions regime will fall under the Sanctions and Anti-Money Laundering Act 2018 after the deadline set out by the Withdrawal Agreement.

Types of UK sanctions

• Arms embargoes: these ban either exporting or importing military arms between the UK and a sanctioned country. Arms embargoes apply to items on the UK Military List and certain other items that fall under Military End-Use Control. The Export Control Organisation (ECO), part of the Department for Business, Innovation and Skills, is responsible for regulating the goods covered by an arms embargo, as well as for administering exemption licenses.
• Import bans: under certain circumstances, HMT allows UK firms to export certain goods to a sanctioned country but will not allow goods that were manufactured there to be imported to the UK. For example, the UK currently bans imports from Syria and, until recently, banned those from Iran.
• Export bans: HMT is authorised to ban firms and individuals from exporting goods to a sanctioned country. If a firm or individual violates the sanction without being granted a special license, they can face severe penalties.
• Financial sanctions: a financial sanction can consist of various penalties, including the prohibition of transferring funds to certain countries and the freezing of accounts and assets. There are also specific financial sanctions that may prohibit individuals from providing financial support or services for citizens of a sanctioned country.

Generally speaking, it is a criminal offence to have any kind of financial dealings with a sanctioned person or entity, whether their status is known to you or you have reasonable cause to suspect.

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Post-Brexit human rights UK sanctions

The UK Sanctions and Money Laundering Act (2018) allows the UK to impose autonomous sanctions and advance its own foreign policy goals post-Brexit. 

Accordingly, the Act includes specific provisions for sanctions that punish human rights violations around the world, allowing the UK government to target individuals, organizations, and regimes (rather than countries) that violate international laws. The new sanctions are intended to help the UK address the unlawful killing of journalists, media workers and campaigners, along with human rights abuses that are motivated by religion or belief.

The post-Brexit human rights sanctions reflect similar “Magnitsky-style” regimes — named after Russian lawyer, Sergei Magnitsky, who died from mistreatment in prison after revealing tax-fraud by officials — implemented by other Western countries. Introduced in 2012, the United States’ original Magnitsky Act enabled the US to target the individuals responsible for Magnitsky’s death while the subsequent Global Magnitsky Act (2016) allowed it to impose sanctions against human rights abusers anywhere in the world.  

Announced on 6 July 2020, the first wave of UK human rights sanctions targets the following 49 organizations and individuals: 

• 25 Russian nationals involved in the death of Sergei Magnitsky.
• 20 Saudi nationals involved in the death of journalist Jamal Khashoggi.
• 2 Myanmar military generals involved in the systematic violence against the Rohingya people. 
• 2 organizations involved in torture, murder and forced labor in North Korean gulags. 

The UK has established a special unit to consider the implementation of future sanctions. The proposed targets of UK sanctions will have to meet a set of stringent legal tests in order to ensure that the sanctions are implemented effectively.

Consequences for sanctions breach in the UK

• Individual: Although the penalties can vary depending on the nature of the UK sanctions breach, a general guideline is that individuals found guilty of a sanctions breach can face imprisonment for up to 7 years and/or unlimited fine.
• Corporate entities: A fine either 50% of the total breach value, or up to £1 million (whichever is greatest). If a sanctions breach was committed with the consent of any given individual, that individual can face imprisonment and/or fine alongside the corporation.
• Trading: Goods that are subject to sanctions and embargoes but is traded without a specific license approving of the trade could be seized. A fine and/or imprisonment could follow through on those involved in such trade.

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