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.
- 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.
- 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.
- 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).
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.
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 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.
UK Foreign Secretary Boris Johnson has said that G7 foreign ministers, meeting this week, would discuss the possibility of imposing further sanctions on some of the Syrian and Russian military figures responsible for co-ordinating Syrian military efforts. Speaking on his arrival in Italy for the talks, Johnson added that Russia has a choice to stick with the Assad regime or “to work with the rest of the world…to find a political solution for Syria”.
The UK’s Foreign Secretary, Boris Johnson, said during a Parliamentary debate on Ukraine that the UK government will publish a White Paper, followed by a Bill, on how the UK “will continue to take part in sanctions jointly” with the EU following Brexit. He added that “the UK leads the way in imposing sanctions on the Russians for their actions in Ukraine, and will continue to insist on those”.
Following the introduction of monetary penalties for financial sanctions breaches on 1 April 2017 (see previous blog), HM Treasury’s Office of Financial Sanctions Implementation (OFSI) has published guidance on the new provisions, and has responded to the consultation (see blog here). OFSI now has the power to impose penalties of up to £1million or 50% of the value of the breach, whichever is higher. The guidance and consultation response are here:
The form to report suspected sanctions breaches is here.
On 1 April 2017, Part 8 of the Policing and Crime Act 2017 came into force, which gives HM Treasury in the UK a number of new sanctions enforcement powers. In particular:
- HM Treasury is now able to impose civil monetary penalties (fines) for breaches of financial sanctions and for information breaches. The maximum is £1 million or 50% of the estimated value of the funds or economic resources, whichever is greater;
- New UN financial sanctions listings have direct effect in the UK;
- The maximum penalty for financial sanctions breaches has been increased from 2 to 7 years;
- Financial Sanctions have been brought into the scope of Deferred Prosecution Agreements and Serious Crime Prevention Orders.
We previously blogged on the consultation by OFSI (part of HM Treasury) on its draft guidance here. The draft guidance and consultation document are here.