The UK Government last week published its response to the public consultation on the proposal for a domestic system for imposing sanctions after Britain has left the EU. We previously blogged about a new Sanctions Bill.
We don’t know much of the detail yet but here are the top four things to be aware of now.
1.Residual powers after Brexit won’t be enough
Currently the UK enforces over 30 sanctions regimes around the world, targeting countries as well as individuals and organisations.
Like other EU Member States the UK tends to adopt UN and EU sanctions, primarily through EU legislation. Britain’s withdrawal from the EU would mean new legal powers would be needed for updating, enforcing and lifting sanctions. It looks like the Sanctions Bill would provide the UK Government with broad primary powers that could then be relied upon when tabling secondary legislation setting out the practicalities of a sanctions regime.
2.Wider powers planned for stopping suspected terrorists from accessing funds
In terms of sanctions enforcement, the UK Government is proposing a new power to seize assets.
3.Wider scope of reporting obligations
The proposed powers in the Sanctions Bill would include reporting obligations upon anyone who becomes aware of or suspects a breach of financial sanctions. There would be a requirement to report if they know or suspect that a current customer (or, significantly, any customer in the previous five years) is a sanctioned person or has committed an offence under the sanctions legislation.
4.UK sanctions policy may diverge from EU / UN / USA regimes
The main objectives of the Sanctions Bill are to allow the post-Brexit UK flexibility in deciding when and how to impose its own sanctions regime.
The UK Government states that it does recognise, however, that sanctions require broad application to be an effective “and we will continue to work closely with allies and partners to this end.”
One of those allies and partners is the US, whose Congress last week passed laws with new and wide-ranging sanctions against Russia, North Korea and Iran. The strengthened sanctions are intended to target a number of Russian sectors. They have been widely drafted and may have far reaching consequences.