On March 14, 2023, the High Court of Justice ruled against an application for review by LLC Synesis, a technology company headquartered in Minsk, Belarus. The company was designated by the European Union and the United States in December 2020, and later by the United Kingdom following the country’s exit from the European Union. The UK designation was issued pursuant to the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (2019 SI No 600). LLC Synesis sought ministerial review of the designation; the review was refused, and the company applied to the High Court under section 38 of the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”) to set aside the decision of the Secretary of State for Foreign Commonwealth and Development Affairs.
Synesis was designated on the grounds that “Kipod” technology supplied by its subsidiary LLC 24×7 Panoptes to the Republic of Belarus was incorporated into video surveillance systems used by the Belarus Ministry of Internal Affairs in the suppression of civil society and the violation of human rights. In its formal application for Ministerial review pursuant to section 23(1)(b) of SAMLA, submitted in January 2022, Synesis made three claims:
- Use of the Kipod system did not contribute to relevant activity under regulation 6 of the 2019 Regulations, and did not satisfy the requirements of section 11(2) of SAMLA, which prohibits the designation of a person by name unless the responsible Minister has reasonable grounds to suspect that the person is involved in, has been involved in, or is acting on behalf of a person or association that is involved in, an activity specified according to the regulations.
- The evidence concerning human rights violations and the repression of civil society did not refer specifically to Synesis.
- If the second claim is accepted, and there are no grounds to claim that Synesis is an involved person, then the Secretary’s basis for designating the company was incorrect and was founded on “vague, unsubstantiated and incorrect assertions.”
The court addressed these claims, first by focusing on the wording of SAMLA and the relevant regulations, which permit designation of a person who has been involved in a relevant activity, and which allow a person to be designated if there is a reasonable suspicion that its goods or technology could contribute to proscribed activity. The court then pointed to the Secretary’s response to Synesis’ application for review, which describes the use of Synesis technology resulting in the detention and torture of a civil society activist, and offers various items of evidence supporting that conclusion.
The court then examined, and rejected, the three grounds for review put forward by Synesis, which were: (i) that the Secretary of State for Foreign Commonwealth and Development Affairs did not apply the correct test when denying ministerial review of the designation, and acted irrationally in concluding that there were reasonable grounds to suspect that Synesis was involved in activities proscribed by the statute; (ii) that the Secretary’s decision to designate Synesis was ultra vires, either because neither SAMLA nor the 2019 Regulations confer the power to do so, or because the designation frustrates the purpose of those provisions, and; (iii) that the designation is disproportionate and is not rationally connected to a legitimate aim.
The court distinguished between the statutory threshold — “reasonable grounds to suspect” — and the standard of review to be applied, explaining that the word “reasonable” is key to the threshold, whilst well established legal principles govern the standard of review. In terms of meeting the statutory threshold, the court noted that the decision maker is not limited to evidence that would be admissible in a court of law, but may also consider allegations and even hearsay. Moreover, there is no defined standard of proof attached to “reasonable grounds to suspect” in the context of SAMLA. Finding that the Secretary’s action was rational and based on reasonable grounds, the court held that the second and third grounds for review must also fail: if the Secretary’s decision was based on reasonable grounds and not ultra vires, it follows that the purpose of the legislation is not frustrated, and the decision is neither disproportionate nor illegitimate.
The court therefore dismissed Synesis’ SAMLA section 38 application for review.