Sanctions are restrictive measures aimed at achieving foreign policy or national security aims. The UK implements and enforces sanctions imposed by the UN and pursuant to the UK’s own domestic sanctions regime. The UK has sought to carry across the policy objectives of the pre-Brexit EU sanctions regime into English law by virtue of the Sanctions and Anti-Money Laundering Act 2018 and the European Union (Withdrawal Act) 2018. However, although the policy objectives remain broadly the same, there are now interpretive differences between the two regimes, as well as differences in the lists of individuals, groups and entities that are subject to asset freezes.
As a member of the United Nations, the UK is required to implement sanction imposed by the UN Security Council. The UK implements all sanctions imposed by the UN Security Council under Chapter VII of the UN Charter. Section 1 of the Sanctions and Anti-Money Laundering Act 2018 grants the appropriate UK minister the power to make sanctions regulation in order to continue to comply with its international obligations.
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 UK sanctions regime does not include secondary sanctions. The UK has retained the effects of EC Council Regulation No 2271/96, known as the EU Blocking Statute. The UK Blocking Statute prohibits UK residents and companies from complying with certain extra-territorial US legislation, specifically in relation to Cuba and Iran, unless they are exceptionally authorized to do so by the Secretary of State for International Trade. The UK Blocking Statute also allows UK 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 UK.
For more on the US secondary sanction against Iran, see Sanctions Regime: Iran.
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 Joint Unit (ECJU)) 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.