Global Britain: The Future of UK Sanctions Policy

12 November 2018

Sanctions under scrutiny

The House of Commons Foreign Affairs committee has launched an inquiry into the future of UK sanctions policy to “explore and evaluate” different options for the UK’s approach to sanctions policy after leaving the EU.

In launching the inquiry the committee underlines that “Sanctions are an essential instrument of foreign policy, enabling the Government to penalise rogue regimes and human rights abusers around the world, and to combat the influence of so-called dirty money here in the UK.”

The committee has invited submissions that address the following issues:

  • The effectiveness of sanctions as an instrument of foreign policy, including examples of both successful and unsuccessful use of sanctions to influence the behaviour of foreign actors;
  • The advantages and disadvantages of the EU’s approach to the use of sanctions, both generally and in specific cases (such as Russia);
  • How the USA sets and uses sanctions as an instrument of foreign policy, and the advantages and disadvantages of its approach particularly where that differs from the EU;
  • How the UK might best make use of the Magnitsky powers included in the Sanctions and Anti-Money Laundering Act 2018;
  • The extent to which the UK should seek to align with the EU in sanctions policy post-Brexit, versus areas in which it may wish to diverge or seek stronger sanctions;
  • The use of sanctions alongside other tools designed to combat dirty money, such as unexplained wealth orders.
  • The FCO’s record in:
    • Identifying individuals, companies and regimes that should be sanctioned;
    • Linking specific sanctions recommendations to broader foreign policy goals; and,
    • Working with other departments, agencies and the private sector to share intelligence and implement sanctions effectively.

No Deal Brexit?

This is a timely inquiry as the Government has recently issued a paper relating to sanctions policy in the event of a “No Deal” Brexit. This is one of a series of technical papers which provides information to allow, we are told, businesses and citizens to understand what they would need to do in advance of a “no deal” scenario and allow them to make “informed plans and preparations”. 

Interestingly, sanctions policy is one of the first areas where the Government has taken steps to introduce primary legislation to prepare for the UK’s future outside of the European Union with the Sanctions and Anti-Money Laundering Act (“Sanctions Act”).  This Act was enacted on the 23 May 2018 and will provide the legal basis for the UK to impose, update and lift sanctions after leaving the EU.

The recent Serious and Organised Crime strategy confirms that Government is working to “operationalise” the Sanctions Act for when the UK leaves the EU. The Government will make decisions on the use of sanctions in the future where appropriate, as part of the UK’s wider foreign policy and national security toolkit.

Have your say on sanctions policy

It is clear that sanctions policy post-Brexit, both as an instrument of foreign policy and in relation to tackling illicit finance, is a Government and parliamentary priority. Indeed the committee’s inquiry follows an earlier one by the House of Lords EU External Affairs Committee “Brexit: Sanction policy” (see my related blog on UK Sanctions after Brexit), as well as a House of Commons Treasury Committee inquiry into Economic Crime which included anti-money laundering, counter-terrorist financing and sanctions regimes (See my related blog on Sanctions in the Spotlight).

Advisors to those subject to the sanctions regime or adversely affected by it may wish to comment on the impact of the current and post Brexit regime on individuals, firms and the wider economy. 

The deadline for written submissions is 14 December 2018.

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