Sanctions in the spotlight: Treasury Committee inquiry
This switch has been a long time in the planning, with the Sanctions and Anti-Money Laundering Act (SAMLA) being passed in 2018 and a lot of time and effort being spent on drafting secondary legislation which will take effect the moment the transition agreement expires. What does this mean in practice?
The new sanctions regime will not be a mirror image of its predecessor. Whilst the government’s aim is to deliver substantially the same policy effects as the EU sanctions, there will be changes and it is vitally important that anybody affected checks the position under the new regime.
Going forward, there will now be a power to issue general licences. In respect of the financial sanctions regime in particular, OFSI has indicated that such licences are not intended to replace the current specific licence regime it operates, but rather as a means by which it can respond flexibly to unforeseeable circumstances, technical implementation issues or where the Treasury (of which OFSI forms part) determines that a general licence is a better way of underpinning the purpose of the particular sanctions regime.
Sanctions breaches will continue to be enforced as before. The maximum penalty for a breach of financial sanctions remains at seven years imprisonment and the National Crime Agency will continue to take the lead on criminal investigations. OFSI’s powers to impose financial penalties are unchanged. So far as trade sanctions are concerned, the cap of two years imprisonment for those offences created under powers derived from the European Communities Act 1973 will disappear, and there will now be a consistent maximum penalty of ten years imprisonment for breaches of the main trade sanctions prohibitions. HMRC will continue to be the lead enforcement agency in such cases.
The last few years have seen the government place increasing importance on sanctions and sanctions enforcement: it increased the maximum penalty for breaches of financial sanctions from two years to seven; it set up OFSI as a new financial sanctions regulator, with powers to impose penalties which it has shown itself willing increasingly to use; and it introduced so-called Magnitsky sanctions into our law targeting human rights abusers. The trend is clear, and we can expect to see increasing use of powers to impose sanctions backed up by active enforcement.
Alun Milford is a partner in the Criminal Litigation team and specialises in serious or complex financial crime, proceeds of crime litigation and corporate investigations. He has particular knowledge and experience of issues surrounding corporate crime and deferred prosecution agreements. He joined Kingsley Napley from the public sector where, over a twenty-six year career as a government lawyer and public prosecutor, he worked in a wide variety of roles including General Counsel at the Serious Fraud Office, the Crown Prosecution Services’ Head of Organised Crime, its Head of Proceeds of Crime and Revenue and Customs Prosecutions Office’s Head of Asset Forfeiture Division.
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