Queen’s Speech announces UK International Sanctions Bill

Prime Minister Theresa May announced today that a new international sanctions bill will form part of the UK’s legislative programme “geared towards making a success of Brexit”, to allow the UK “to continue to comply with our international obligations”.

The Queen’s Speech (link here) included the International Sanctions Bill among the new Brexit-related draft legislation, which will “support our role as a permanent member of the UN Security Council and a leading player on the world stage, by establishing a new sovereign UK framework to implement international sanctions on a multilateral or unilateral basis. The Bill will return decision-making powers on non-UN sanctions to the UK, and enable the UK’s continued compliance with international law after the UK’s exit from the EU. The UK Government has issued a consultation document about the content of this new sanctions bill (see previous blog).

UK implements UN CAR listing

The UK has added Hissene Abdoulaye to its consolidated list of Central African Republic sanctions targets so he is now subject to an asset freeze.  He was added to the UN’s sanctions last month (see previous blog).  He has not yet been added to the EU’s CAR sanctions list implementing UN listings. HM Treasury’s notice is here.

UK financial services industry group revises sanctions guidance

The UK’s Joint Money Laundering Steering Group (JMLSG), a non-governmental organisation whose aim is to promote good practice in countering money laundering, is consulting on proposed revisions to its anti-money laundering and terrorism financing guidance. The revisions account for the establishment of OFSI, and make a number of other changes to the guidance covering the range of UK sanctions powers, including exemptions, licencing regimes, and the rules on providing insurance.

The consultation documents are available here, and JMLSG invites comments by 26 May 2017.

Chatham House paper on sanctions problems for UK NGOs

Chatham House has published a paper investigating the impact of banking restrictions and sanctions on UK-based NGOs.  The paper highlights the “challenging…and deteriorating” problem for NGOs and others involved in humanitarian aid of legal transfers of funds being blocked by banks wary of breaching sanctions. The report deals in particular with NGOs near areas where non-state armed groups are facing increasing restrictions on access to the financial system, including delayed transfers, freezing of funds and closure of bank accounts. It encourages banks and NGOs to cultivate relationships and for the UK Government to “take ownership of this challenge, providing guidance and clear messaging where ambiguity exists as regards sanctions and counterterrorism legislation…”

The UK government’s previous Independent Reviewer of Terrorism Legislation David Anderson QC drew attention to this problem in several of his reports (see previous blog) and the Center for a New American Security discussed this problem in the USA in its paper published in 2016 (see previous blog).

Government response to Lords’ report on legality of sanctions

The UK government has responded to a report and recommendations by the House of Lords’ EU Justice Committee on the legality of EU sanctions (see previous blog).  In its response the Government accepted:

  • That the EU courts have been right to annul listings where the EU has been unable to adduce evidence supporting them, and states that the UK “has been seeking to improve the robustness of sanctions listings” in particular by providing open source evidence, and only agrees to a listing if it is satisfied that the evidence available satisfies a “reasonable grounds to suspect” test, which the Government considers to be the appropriate test.
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  • The concern that it takes the EU institutions too long to respond to correspondence from listed people and entities, and agreed that there should be an expedited correspondence procedure in cases of mistaken identities.

The Government disagreed with:

  • The suggestion that the practice of re-listing people who have had their listings annulled by the EU courts makes those judgments inconsequential, and states that the EU would not re-list without good reason.
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  • The Committee’s call for open-source evidence packages substantiating sanctions listings to be provided to the scrutiny committees as a routine aspect of scrutiny due to confidentiality and diplomatic concerns.
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  • The suggestion that an EU Ombudsperson be created akin to the UN AQ Committee Ombudsperson.

The response also criticises the EU Court’s closed material procedure (see previous blog), but the Government’s recent White Paper plans to introduce UK closed material procedures in the UK post Brexit (on which see previous blog).

UK Government consultation on sanctions legislation post-Brexit

As foreshadowed on this blog (link here), the Foreign & Commonwealth Office in the UK Government has published a white paper consulting on the legal powers it will need to be able to continue imposing and implementing sanctions once the UK leaves the EU.  Its focus is on the legal powers necessary to operate UK sanctions and not on the shape of UK sanctions policy in the future or other policy issues.   Comments on the questions for consultation should be sent to the FCO by 23 June 2017 (details on the consultation paper).  The House of Lords External Affairs Committee has postponed its inquiry into UK post-Brexit sanctions policy (see previous blog) in light of this white paper, updates will be published when available.

House of Commons report on Russia sanctions and Brexit

The House of Commons Foreign Affairs Committee has published a report on the UK’s relations with Russia (link to the report here) which addresses sanctions on Russia.

The report notes that the UK is one of the strongest western supporters of sanctions on Russia, that “recent developments in both the EU and US have put the future of the sanctions regime in doubt”, and that “its withdrawal from the EU might add weight to the voices of those inside the bloc who would like to see the sanctions eased or lifted”.  It states therefore that:

“if the UK is determined to maintain a principled stance in relation to the sanctions on Russia, this may require uncomfortable conversations with close allies. The withdrawal of the existing sanctions should be linked to Russia’s compliance with its obligations towards Ukraine, and should not be offered in exchange for Russian cooperation in other areas… The challenge in this approach is that the practical effect of economic sanctions on Russian decision-making is doubtful. It looks as though it will be increasingly difficult to sustain a united western position on sanctions, not least if they becoming a bargaining point during Brexit negotiations”.

The committee calls on the international community to remain unified and that the FCO should continue to work closely with the EU to maintain support for Ukraine, whether through sanctions or otherwise. It notes that it is difficult to measure the impact of the sanctions on Russia’s economy, and heard from a number of witnesses who suggested that the sanctions may be cementing support for President Putin. It supported the introduction of “Magnitsky-style” sanctions against those responsible for gross human rights abuses in Russia, noting that “Russia’s actions demonstrating compliance with the rule of international law in Ukraine could be linked to the gradual removal of sanctions”.  The report states that people associated with the Putin regime and responsible for human rights violations use British financial and legal services and have other links with the UK, and suggests introducing sanctions along the lines set out in the Criminal Finances Bill (which would allow the UK to seize the UK-held property of targeted people).

The Committee called on the FCO to clarify by March 2018 “how the UK will impose sanctions post-Brexit, explain whether Brexit would entail changes from the current sanctions regime and analyse the costs and benefits of the possible models for future UK-administered sanctions”.  As noted in our previous blog, the UK government is to introduce a Bill on post-Brexit sanctions policy soon, and there is a House of Lords inquiry (blog here) on post-Brexit UK sanctions policy.

G7 rejects UK’s call for new sanctions on Russia and Syria

G7 foreign ministers have rejected UK Foreign Secretary Boris Johnson’s call for sanctions on Syrian and Russian military figures responsible for coordinating Syrian military efforts (see previous blog). Italian foreign minister Angelino Alfano said that there was no consensus for imposing the new sanctions, and the group concluded that an investigation into the attack was necessary before taking any such action.