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.

US to introduce new sanctions on Syria

At the end of last week, US Treasury Secretary Steven Mnuchin announced that the US will impose new sanctions on the Syrian government, aimed at preventing its use of chemical weapons.  Mnuchin said that the administration viewed sanctions as “a very important tool”, and that the new sanctions would be introduced in the “near future”. G7 foreign ministers are currently meeting in Italy, where they will discuss imposing new sanctions on Syrian and Russian military officers (see previous blog).

UK Foreign Secretary to discuss new Russia sanctions with G7 ministers

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”.

EU annuls listing of Alkarim on Syria sanctions

The General Court of the EU has annulled a listing of Alkarim for Trade and Industry LLC, a Syrian firm involved in trading lubricants and base oils, from the EU’s sanctions on Syria.  Alkarim remains listed for reasons given in subsequent listings that it did not challenge.

The challenged reasons for Alkarim’s listing were “Parent company of Pangates with operational control of it. As such it is providing support to and benefiting from the Syrian regime. It is also associated with listed Syrian oil company Sytrol”. See Case T-35/15 Alkarim for Trade and Industry LLC v Council [2017]. The Council said these reasons showed that Alkarim benefited from and supported the regime, and was associated with a listed entity, Sytrol.

The Court found that the Council had not provided sufficient evidence to support its assertions that Alkarim was the parent company of Pangates, a listed firm, and that it was associated with Sytrol, or that it was associated with the Syrian regime. The judgment contains comments about the circumstances in which applicants can rely on evidence submitted late. The Council was ordered to pay Alkarim’s costs.

Japan renews its sanctions on North Korea

Japan has decided to renew its unilateral sanctions on North Korea for a further 2 years.  The sanctions ban all trade between Japan and North Korea, and ban North Korean ships from docking at Japanese ports. The EU expanded the scope of its sanctions on North Korea earlier this week (see previous blog).

Canadian parliamentary committee recommends human rights sanctions

A parliamentary committee in Canada has recommended that the Canadian government follow the US, UK, and several other countries in imposing sanctions on people involved in gross human rights violations (see previous blog) as an amendment to the Special Economic Measures Act.  This report is part of the current review of that Act and the Freeing Assets of Corrupt Foreign Officials Act (see previous blog). One example is the “Magnitsky” sanctions named after Russian lawyer Sergei Magnitsky, whose death in Russian custody in 2009 prompted the US to introduce the first sanctions of this kind.  The US Congress recently approved expanding the scope of those measures to have effect worldwide.  A link to the Canadian House of Commons Report is here.

OFAC de-lists 2 for no longer being associated with PacNet

OFAC has removed 2 people from its SDN List for no longer being associated with the Canadian company PacNet, which was designated in September last year for alleged money laundering offences (see previous blog).  Siobhan Hanrahan and Donna MacBain, from Ireland and the UK respectively, were said by a Treasury spokesman to be “no longer employed” by PacNet, and therefore they no longer meet the criteria for designation.  The Treasury de-listed 2 other Irish citizens who had been listed for their association with PacNet, Brian Weekes and Estelle Snyman, in February. The details are here.