Sanctions are restrictive measures aimed at achieving foreign policy or national security aims. The UK implements and enforces sanctions imposed by the UN, the EU, and pursuant to the UK’s own domestic sanctions regime.
The EU implements all sanctions imposed by the UN Security Council under Chapter VII of the UN Charter under the framework of the Common Foreign and Security Policy, as well as its own sanctions (EU autonomous sanctions). EU sanctions are implemented through EU regulations which have direct legal effect in EU member states, including the UK. The UK also implements EU sanctions into UK law through secondary legislation. As EU sanctions do not impose penalties (rather, individual Member States are responsible for their enforcement), the UK imposes penalties for breaches of EU sanctions through this secondary legislation.
The UK also has its own terrorist sanctions regime. Entities in the regulated sector are subject to the Anti-Terrorism, Crime and Security Act 2001, the Counter-Terrorism Act 2008, and the Terrorist Asset-Freezing etc. Act 2010.
Sanctions that relate to a specific country or terrorist group are known as “regimes” and can include a number of restrictive measures, such as restrictions on travel, arms embargoes, asset freezes, restrictions on certain financial markets and services, and other economic sanctions. These measures can apply to named individuals, entities or bodies, groups, sectors, or countries. In the UK, Her Majesty’s Treasury’s Office of Financial Sanctions Implementation (OFSI) maintains lists of individuals and entities subject to financial sanctions in order to help individuals and businesses comply with those sanctions.
Unlike the US, the EU/UK sanctions regime does not include secondary sanctions. In fact, EC Council Regulation No 2271/96, known as the Blocking Statute, prohibits EU residents and companies from complying with certain extra-territorial legislation listed in an Annex to the Blocking Statute, specifically in relation to Cuba and Iran, unless they are exceptionally authorized to do so by the European Commission. The Blocking Statute also allows EU residents and companies to recover damages arising from such legislation from the persons or entities causing them, and prevents any foreign court rulings based on the blocked legislation from having effect in the EU.
A number of UK government departments are responsible for overseeing sanctions.
- The Foreign & Commonwealth Office has overall responsibility for sanctions, which includes negotiating the content and scope of international regimes.
- OFSI was established by HM Treasury in March 2016. It is responsible for publishing guidance on financial sanctions, making designations under the UK sanctions regime, and implementing and administering the sanctions regime. OFSI can also impose monetary penalties for sanctions violations.
- Her Majesty’s Revenue & Customs (HMRC) is responsible for enforcing breaches of trade sanctions, and the Department for International Trade (acting through the Export Control Organisation) implements trade sanctions and embargoes.
- The Home Office implements travel bans.
- The National Crime Agency (NCA) investigates breaches of financial sanctions.
- The Financial Conduct Authority (FCA) ensures that regulated firms have in place adequate systems and controls to enable them to meet their financial sanctions obligations.
- The UK Export Control Joint Unit is responsible for overseeing the UK's system of export controls and licensing for military and dual-use items.
Breaching a financial sanction without prior authorization from OFSI is a criminal offense punishable by unlimited fines and/or up to seven years’ imprisonment. OFSI also has the power to impose significant civil monetary penalties.