The Office of Financial Sanctions Implementation (OFSI) (part of HM Treasury in the UK) is consulting on its draft guidance on monetary penalties for breaches of financial sanctions. This is in the context of new civil powers in the Policing and Crime Act 2017. The guidance sets out how OFSI will assess whether to impose monetary penalties and how those penalties will be calculated, the appeals process etc..
President Obama has lifted a prohibition on providing government to government assistance to the Myanmar government, in a Presidential Determination. This also ends the ban on granting visas to government officials from Burma, and the requirement that the US vote in international financial institutions against providing assistance or loans to Burma.
The Obama administration has been steadily lifting US sanctions on Burma/Myanmar, in response to its “substantial advances to promote democracy…the release of many political prisoners, and greater enjoyment of human rights” (see previous blog). Sanctions imposed by the US Congress, relating to arms and military cooperation, remain in force.
South Korea and Japan have announced that they are imposing new unilateral sanctions on North Korea, in response to its recent nuclear and ballistic missile tests. Their announcements follow the UN Security Council’s decision to impose new sanctions on North Korea last week (see previous blog).
South Korea has said that it will blacklist a number of new senior North Korean officials, and ban foreign missile and nuclear experts from entering North Korea from the South when their visits are deemed to be a threat to South Korea’s national interests. Japan announced that it will impose asset freezes on more people and entities connected to North Korea’s nuclear and missile programmes and ban the entry of all ships that have docked at ports in North Korea.
The General Court annulled the original targeted sanctions on the Export Development Bank of Iran and Bank Refah Kargaran in September 2013. They had been listed in July 2010 on the grounds that they had helped designated entities to circumvent sanctions (Bank Refah Karagan was said to have helped Bank Melli Iran to do so), and in the case of the Export Development Bank that it had provided financial services to companies associated with nuclear proliferation.
The EU re-listed them after the banks won their annulment actions (as it frequently does), changing the criterion it relied on from helping a designated person to evade sanctions to providing “support for the Government of Iran”. The new allegation in November 2013 against the Export Development Bank is that it is “a state-owned enterprise providing financial support to the Iranian government”, and against Bank Refah is that it is an “entity providing financial support to the Iranian Government. It is 94% owned by the [OSS], which is itself controlled by the Iranian government, and provides banking services to government ministries”.
The EU Court has upheld both re-listings in judgments linked to here (Export Development Bank of Iran & Bank Refah Kargaran) on the grounds that the Council had demonstrated (on the new criterion) that the banks provide financial support of a sufficiently important kind to the Government of Iran to justify their designation. As in past cases, there was no need for the Council to show that the financial support was itself directly related to Iran’s nuclear programme, but rather that it was “quantitatively or qualitatively” significant.
MPs in the UK are set to vote on the introduction of unilateral sanctions against human rights violators, under similar provisions as are in force in the US under the Magnitsky Act (see previous blog).
If passed, the “Magnitsky Amendment” would empower the UK government and private parties to apply to the UK High Court for the UK assets of people involved in or profiting from human rights abuses around the world to be frozen. At present, the US Congress is also considering extending the Magnitsky Act, which currently applies only to Russian citizens, to encompass human rights violators globally.
OFAC has imposed sanctions on 7 people and 16 entities for their alleged ties to the North Korean government or its nuclear and weapons programmes, and identified 16 aircraft as blocked property of a designated entity (details here). In the US Treasury’s press release, Acting Under Secretary for Terrorism and Financial Intelligence Adam Szubin said that the sanctions “aim to cut the flow of financial resources to North Korea” and target people and entities “operating in key industries that support North Korea’s illicit activities”.
The US Senate has followed the House of Representatives in voting to extend the President’s authority to impose sanctions on Iran for 10 years (see previous blog). The White House has said that President Obama will sign the legislation. This does not disturb the Secretary of State’s authority to lift sanctions as provided for in the JCPOA. Iran has said this is a violation of the nuclear deal (see previous blog).
David Anderson QC, the UK independent reviewer of terrorism legislation, has published his report on the operation of the Terrorism Acts in 2015 (link here). The sections on proscribed organisations are relevant to this blog but the report covers wide-ranging interesting material on the Terrorism Acts.
The report says 3 new organisations have been proscribed since 2015 after the usual “perfunctory debate” (which David Anderson makes suggestions to improve).
David Anderson reiterates his repeated criticisms of the deproscription process for proscribed organisations, in particular that the continued proscription of groups which do not or no longer satisfy the statutory test that they are currently concerned in terrorism is contrary to the rule of law (see previous blog). He again proposes that proscription orders should automatically lapse after a period of time and only be renewed if there is sufficient evidence (as with terrorist asset-freezing) or that the statutory test is amended.
The report notes that organisations without the financial means to challenge their listings may remain proscribed long after they no longer satisfy the test for proscription, which includes some of the “up to 14” currently proscribed organisations in respect of which the Home Office has accepted that the test is not satisfied. Given that the only route is to make a deproscription application, David Anderson makes recommendations as to how those should be handled (prompt responses, full reasons, deproscription if the test is not met, the Government being prepared to defend its case if the case goes to POAC), none of which were followed in the ISYF case (see previous blog). He repeats the critical comments of the Court of Appeal on decision-making in this area, and comments: “the Home Office ignores the measured criticism of senior judges at its peril”.