UK introduces human rights-related sanctions under post-Brexit sanctions framework

The post below was first published on our FSR and Corporate Crime blog

On 6 July 2020, the United Kingdom introduced unilateral sanctions against 49 individuals and entities from Saudi Arabia, Russia, Myanmar and North Korea accused of involvement in several high profile human rights violations and abuses.The Global Human Rights Sanctions Regulations 2020 (the “Sanctions Regulations”), made pursuant to the Sanctions and Anti-Money Laundering Act 2018 ( “SAMLA”), are specifically tailored to address human rights abuses and mark the first time that the UK has imposed sanctions for human rights violations and abuses independently of either the United Nations or the European Union (“EU”) sanctions regimes. The Sanctions Regulations are the first regulations to come into force under SAMLA (although regulations in respect of other country-specific sanctions regimes have been laid but have not commenced, pending the end of the Brexit transition period).

The Sanctions Regulations came into force with immediate effect on 6 July and introduce a ‘Magnitsky-style’ sanctions regime, similar to those in place in jurisdictions such as the United States and Canada. The Sanctions Regulations impose an asset freeze, prohibiting UK persons from dealing with funds or economic resources owned, held or controlled by a designated person, or directly or indirectly making funds or economic resources available to or for the benefit of a designated person. Designated persons are now also prohibited from entering the UK.

SAMLA gives the government broad discretionary powers to impose a wide range of sanctions by way of secondary legislation. This allows the government additional flexibility that is not present in the current EU sanctions regime, creating opportunities for the UK to align its sanctions regime with those of other international partners, particularly the US. Whilst this is in some respects welcome, businesses will be alive to the risk of increased compliance burdens if the UK regime diverges from the EU over time (although this risk will be limited in respect of the Sanctions Regulations, since compliance will involve, in the traditional way, screening against asset freeze lists) (Our previous briefing which explores key aspects of SAMLA is available here).

Click here for our full briefing in which we consider the context to, and restrictions imposed by, the Sanctions Regulations, together with information on the implications for the UK’s post-Brexit sanctions environment and practical next steps for clients in further detail.