As previously reported, the UK has expanded the scope of requirements to inform HM Treasury of sanctions breaches (see previous blog), and those new requirements came into force yesterday (8 August 2017).
The European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017 now apply to “certain businesses and professions” including “independent legal professionals”, law firms, auditors, casionos, dealers in precious metals or stones, tax advisors, trust or company service providers, accountants, estate agents and others, who will commit an offence if they do not inform HMT if they know or have reasonable cause to suspect that a person has committed a sanctions offence or is a person who is the subject of an asset freeze.
The explanatory memorandum is here, and updated guidance at pages 17-21 of OFSI’s guidance document here.
The Government has published its response to the consultation on the White Paper setting out the proposed legal framework for imposing sanctions in the UK post-Brexit (see previous blog). The White Paper is here. The key points in the Government’s response are as follows:
- The Government considers that “reasonable grounds to suspect” is the correct threshold to adopt for UK sanctions designations, which will “only be met if there is sufficiently solid evidence to enable the government to form a reasonable suspicion”.
- The Sanctions Bill will include separate provision for UN sanctions which the UK is obliged to implement under international law, and for terrorist sanctions.
- The Sanctions Bill will set out how sanctions will apply where there is a link with the UK; there will be “clear guidance” on the meaning of “UK nexus”.
- The Government will review future UK autonomous sanctions regimes every year, and every individual listing at least every 3 years.
- Designations will be subject to judicial review and requests for “administrative reassessment”.
- The Bill will enable the use of closed material procedures, plus unclassified statements of reasons for designation.
- There will not be provision for an independent reviewer or Ombudsperson, but the Government does “see a case for improving the way designations are agreed and reviewed at the UN level, building on the good work of the UN Ombudsperson for the ISIL / AQ Sanctions Committee”.
- The Bill will broaden the licensing powers available to OFSI, and create a power enabling general licences, for example, “to facilitate humanitarian aid to regions affected by sanctions”.
- The Government will issue guidance on “the content and implementation of sanctions”.
- The Government believes that obligations to report to ensure sanctions compliance should apply to all sectors in relation to financial sanctions. (See separate regulations and blog in relation to enhanced UK reporting obligations here).
- There will be new powers to seize and detain as well as freeze assets subject to an asset freeze which go beyond powers existing under the Proceeds of Crime Act 2002 and Criminal Finances Act 2017.
- The Government will “put limits” on the ability of designated persons to seek compensation for unlawful sanctions designations “in a way that is consistent with the Human Rights Act 1998”.
The Government has published its response to the final annual report on the operation of the Terrorism Acts by David Anderson QC (see previous blog) when he was independent reviewer of terrorism legislation.
David Anderson had repeated his criticisms of the deproscription process for proscribed organisations, in particular that the continued proscription of groups that 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 proposed 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 should be amended.
The Government’s response says it is not prepared to make these changes, that it is not convinced that regular reviews of proscription decisions would prevent injustice and would have practical and financial disadvantages. It will respect the statutory time limit for deproscription applications, not met in the case of the ISYF (see previous blog).
The UN has added 8 people and 2 entities to its sanctions against ISIL & AL-Qaida, by UN Security Council Resolution 2368. They are all listed for “participating in the financing, planning, facilitating, preparing, or perpetrating of acts or activities” involving ISIL.
The UK has implemented the listings, which will cease to apply in the UK on 20 August if the EU does not implement them. The UK’s notice is here.
On 8 August, new regulations will come into force in the UK which will expand requirements to inform HM Treasury of known or suspected sanctions breaches. Currently the requirements apply only to financial institutions, but the European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017 apply them to “certain businesses and professions” including “independent legal professionals”, law firms, accountants, estate agents and others. The businesses and professions included in the new regulations will commit an offence if they do not inform HMT if they know or have reasonable cause to suspect that a person has committed a sanctions offence or is a person who is the subject of an asset freeze.
The explanatory memorandum is here. The regulations have not been subject to consultation or parliamentary scrutiny or debate and have been passed by the negative resolution procedure without an impact assessment.
The UK’s Export Control Organisation has amended 4 more of its Open General Export Licences to reflect changes made to the Export Control Order 2008 (see previous blogs here and here). The changes add to the list of excluded goods under the licences, ratings ML8.a.40, and explosive co-crystals under ML8.a. The amended OGELs will come into force on 18 July 2017.
The details of the changes are here.
The UK’s Export Control Organisation has amended and republished the UK’s open general export licence for PCBs and components for military goods (link here). The main change to the open licence is that the schedule of goods covered has been extended to include component parts and complete knock-down kits of the components it already covers. These include unpopulated PCBs, vehicle parts such as brake disks, and aircraft parts such as windows.
The ECO’s notice is here.
The UK’s Export Control Organisation has published a notice stating that it has amended Schedule 2 of the Export Control Order 2008. The amendments include several changes to the definitions relating to airships, lasers, lighter-than-air vehicles, pyrotechnics, and software (see also sections ML1, ML8, and ML10 of Schedule 2 of the Order).
The changes primarily reflect amendments made to the EU Common Military List following agreements to amend controls in the Wassenaar Arrangement export control regime.