The Sanctions and Anti-Money Laundering Act 2018

Sanctions are political trade restrictions and are used to protect national and international interests, peace and security. These include financial sanctions, trade sanctions, arms embargoes and sectoral sanctions. 

The UK's Sanctions regime has now been reviewed with the Sanctions and Anti-Money Laundering Act (SAMLA) 2018 having received Royal Assent on 23 May 2018.

SAMLA has created the framework for post-Brexit UK Sanctions, enabling the UK to impose economic, trade and immigration sanctions, and money laundering regulations, after its departure from the EU. The full Act can be found here, but note that the operative provisions of SAMLA are not yet in force. 

Whilst it has been stated that the intention is not to create substantive changes to the pre-Brexit regime, it is causing a bit of a stir. 

The Foreign Secretary, Boris Johnson, commented as follows: "Royal Assent for the Sanctions and Anti-Money Laundering Act is an important moment for the UK. It is the first of the bills which prepares for life after our exit from the EU to complete its passage through Parliament.

Thanks to this new law, once we have left the EU, we will have full control of our own sanctions policy again. That will give us the power to impose sanctions, including for human rights abuses.

Sanctions are a key foreign policy and national security tool for the UK, and the new legislation will allow the UK to act in line with our own priorities, as well as with our international partners.  It will also provide us with the power to amend and update anti-money laundering and counter-terrorist finance legislation, allowing the Government to keep pace with changing international standards and practices, and help to protect the UK from money laundering and terrorist financing……”

Among the changes, SAMLA introduces the ability for the UK to issue sanctions in response to gross human rights violations through the introduction of a so-called "Magnitsky clause", and seeks to reduce money laundering and tax avoidance in British Overseas Territories through the introduction of public registers of beneficial ownership.

There are, however, a number of concerns about the way in which the new powers are placed in the government’s hands, with broad powers being conferred on the Secretary of State and the Treasury to impose sanctions regulations considered "appropriate" for the purposes of compliance with UN or any other international obligation. This is a lower threshold and raises the likelihood of a more extensive use of the sanctions regimes. 

Other changes to Sanctions regime include the lack of regular review. Sanction regulations will now be subject to review every three years, rather than an annual review. Furthermore, SAMLA will prevent designated persons from challenging regulations before the Courts. They must instead request either a variation or revocation of the designation from the Secretary of State. 

Another controversial feature is that SAMLA allows designation by "description" as well as simply by name. This will undoubtedly create a difficulty for anyone trying to ensure compliance with the regime in identifying those meeting a description. 

In response to the enactment, The Russian Embassy has made the following comments: "SAMLA provides the British cabinet ministers with extraordinary powers to designate persons as sanctions targets without court's verdicts, based only on a minister's belief there is "a good reason" for that. As far as we know it caused many concerns in the UK itself that such powers might undermine democratic norms and principles"

In conclusion; the principles of the post-Brexit regime have been set out by SAMLA, but we expect political priorities will indeed define the way in which this operates in practice. 

Should you have any queries about matters raised in this article, please do not hesitate to contact email me: contact@crimelawyer.co.uk