What is the Sanctions & AML Act 2018?

Parliament8The Sanctions & Anti Money Laundering Act 2018 received royal assent on 23 May.  It is the first substantive piece of Brexit-related legislation to have been enacted, and sets up a whole new framework for United Kingdom sanctions.  It contains:

  1. New broad powers for the UK to make / suspend / revoke sanctions regimes, either to implement UN sanctions or for other purposes including the prevention of terrorism, international peace and security.  The regimes may consist of a broad range of measures (targeted and sectoral) including shipping, trade and aircraft restrictions as well as financial sanctions and travel restrictions.
  1. New powers for the UK to add and remove people / entities / organisations from targeted sanctions lists (‘designations’) where there are ‘reasonable grounds to suspect’ involvement (of defined kinds) in certain specified activities.  The ‘reasonable grounds to suspect’ threshold reflects the UK’s Government’s current standard when proposing designations to the EU or UN.  The EU has no published standard for its listings, although the European court has required there to be a ‘sufficiently solid factual basis’.  The new powers include the potential to list by ‘description’ where it isn’t possible to name someone.
  1. New ‘Magnitsky’ sanctions powers, to freeze and seize assets on grounds of gross human rights violations (an amendment made to the Bill in the aftermath of the Skripal poisoning).
  1. Due process requirements for designations including notifying designated people and entities, and automatic reviews of designations every 3 years (currently every year), and the need for proportionality. The Act requires designations to be ‘appropriate’, having regard to the purpose of the regulations, and ‘the likely significant effects of the designation on that person’. 
  1. New wider UK licensing powers.  At the moment the grounds on which the Office of Financial Sanctions Implementation (OFSI) may grant exceptions and licences to sanctions prohibitions in the UK are for the most part limited to the specific grounds set out in the relevant EU or UN regime. The Sanctions Act allows regulations that create exceptions to any prohibition, including general and specific licences, on far wider grounds (i.e. powers potentially more akin to US OFAC licences).
  1. New framework for UK court review.  Certain sanctions decisions (including UK designations) will be subject to judicial review in the UK courts, with new rules of court to follow.  Judicial review in the UK was previously limited because sanctions were imposed by the UN and EU rather than the UK.  New court review will include closed material procedures in some cases, and damages for cases of negligent decisionmaking.  Different remedies available for those listed on UN rather than EU lists (for legal reasons connected with the Kadi and Al Jedda cases).
  1. New UK terrorist asset freezing regime.  The Act repeals the Terrorist Asset Freezing Act 2010, the current regime for terrorist asset freezing in the UK.  This means the Act brings together terrorist asset freezing and other forms of sanctions into one piece of legislation.  The Sanctions Act makes it easier to freeze terrorist assets (on a ‘reasonable grounds to suspect’ threshold as opposed to ‘reasonable belief’ plus ‘necessity’).  There will still be an independent reviewer of terrorism designations (but not other sanctions designations).
  1. Powers to make UK regulations for enforcement and breach of sanctions, both civil and criminal, in relation to conduct in the UK or by UK nationals / incorporated bodies.
  1. Increased powers to require the provision and sharing of information and for search, entry and seizure.  And obligations on the Government to issue guidance about prohibitions and requirements and the report on use of sanctions powers.
  1. New registers of beneficial ownership in overseas territories to be published by 2020.

See the most recent World Export Control Review for a longer piece by Maya Lester QC which explains the context of the Act and its immediate / future implications and effect.

This entry was posted in United Kingdom by Maya Lester QC. Bookmark the permalink.

About Maya Lester QC

Maya Lester QC has a wide ranging practice in public law, European law, competition law, international law, human rights & civil liberties. She has a particular expertise in sanctions. As the most recent (2016) Chambers & Partners directory put it, she "owns the world of sanctions". She spent 2011-12 in New York at Columbia Law School lecturing and writing on sanctions. She represents and advises hundreds of companies and individuals before the European and English courts and has acted in most of the leading cases, including Kadi, Tay Za, Central Bank of Iran, NITC and IRISL.

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