On 2 February 2017, the House of Lords published a report following an inquiry in relation to the legality of EU sanctions. The purpose of the inquiry was to better understand why EU sanctions are being struck down by EU courts, and to investigate whether improvements could be made to the sanctions listing process.
A number of areas of concern were explored, including:
- the standard of proof for the adoption of listings;
- the re-listing of individuals or companies; and
- the UK’s alignment with the EU (from a sanctions perspective) in the context of Brexit.
The EU sanctions regime currently targets approximately 35 countries, regimes and terrorist organisations. Sanctions are designed to impose a range of restrictive and punitive measures against countries, individuals and entities with the aim of restoring and maintaining peace and security.
However, in doing so, sanctions must respect human rights and fundamental freedoms. In particular, appropriate processes must be adhered to and sanctioned persons must have an effective remedy to challenge the sanctions imposed upon them.
The EU’s landmark decision in Kadi II has set out a test for the standard of proof for EU sanctions listings: there has to be a sufficiently solid factual basis to substantiate the reason for the listing. The House of Lords, however, noted in its report that this test did not provide an agreed formula for the standard of proof and that, as a result, there is no uniform application of the test at EU level. In this regard, the report recognised the need for such an agreed formula and recommended that the Council codify the standard of proof it applies when it adopts sanctions listings to bring much-needed transparency to the process.
The House of Lords also requested that re-listing of individuals and companies by providing different reasons for such re-listing should be less prevalent in circumstances where such persons have previously succeeded in having their original listings struck down by EU courts for lack of evidence. The general problem highlighted by the House of Lords is that, where the General Court has de-listed persons, in numerous cases the same individual or company was already re-listed before the judgment came into effect. This has given rise to a perception of injustice, as persons felt no effective remedy to sanctions listing was available to them. The House of Lords noted that, had the listings been better substantiated in the first place, there would have been less need for re-listing after a successful challenge. As such, a codified standard of proof has been recommended, in order to ensure that the above scenario arises less frequently going forward.
The time taken for the Council to respond to communication from individuals and companies subject to listings was also touched upon as one of the principal causes of frustration among those subject to sanctions. The House of Lords recommended that the Council should urgently reduce the time taken to respond to correspondence from targeted persons. A lack of written standards and methodology was noted and a recommendation was made for the establishment of an Ombudsperson for EU sanctions. The House of Lords stated that an Ombudsperson should have a sanctions-related role similar to that of the UN Ombudsperson for the Al Qaida Sanctions Committee. The establishment of such an institution should improve the fairness of the listing procedures.
The House of Lords noted that, to date, the UK has had a fundamental role in the shaping of EU sanctions policy, leading in the efforts to impose restrictive measures against regimes such as Russia, Syria and North Korea. The UK has also been the largest contributor of intelligence and legal expertise and helped improve the EU sanctions listing process in recent years. The House of Lords report recommended that the UK should align itself with EU sanctions post-Brexit and that national legislation to achieve this must be put in place.
The sanctions listing process has improved in the last few years and the UK has led the efforts to achieve this. Although sanctions lawyers have welcomed the House of Lords’ report’s recommendations, it demonstrates that there is much more to be done to make the process fairer. Implementation of these recommendations would go a long way in facilitating the transparency and efficiency of the process as well as removing the perception of injustice and lack of effective remedies to unsubstantiated listings.
In the context of Brexit, the UK’s continuing involvement in shaping EU sanctions policy and its alignment with the EU sanctions regime would benefit both negotiating parties as well as the international community as a whole. Harmonisation of sanctions usually results in the restrictive measures having a greater impact globally, by limiting the jurisdictional loopholes and mounting pressures against rogue regimes, governments and individuals.
As such, the UK should ensure that it continues to be aligned with the EU sanctions regime and that it has a seat at the table whenever the imposition of new sanctions is proposed. Ensuring the UK’s continuing influence on EU sanctions policy may be difficult to achieve politically, however, the UK’s negotiating position in this respect is arguably strengthened by the fact that it can - as it has to date - provided invaluable intelligence and legal expertise.