This is the first post in a series which considers the future of the United Kingdom's sanctions policy following its withdrawal from the European Union. In this post, we consider the status of UK sanctions policy following the passage of the Withdrawal Agreement in UK Parliament.
HM Treasury's Office for Financial Sanctions Implementation (OFSI) has recently issued guidance updated guidance on financial sanctions following the withdrawal of the United Kingdom from the European Union on 31 January 2020.
The key points that you will need to be aware of are:
- The Withdrawal Agreement between the European Union and the UK provides for a 'transition period' from 31 January 2020 until 31 December 2020.
- EU sanctions will continue to apply in the UK until 11pm on 31 December 2020. UN and EU sanctions will continue to be implemented in the UK through EU law during this time.
- The UK can bring into force new autonomous sanctions regimes during the transition period through regulations made under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA). SAMLA provides the legal framework by which the UK can impose, update and lift sanctions.
- At the end of the transition period, the United Kingdom will be free to alter the extent to which current EU sanctions program are applicable in the United Kingdom.
- A number of regulations have been enacted under SAMLA which mirror sanctions measures currently in force in the UK under EU Regulations and merely give them an independent statutory footing under UK law. These regulations will not come into force fully until 1 January 2021.
Whilst UK and EU officials have repeatedly stated that they intend to coordinate as much as possible on sanctions policy, there are already signs of potential divergence which may require companies doing business in the UK to adjust their sanctions compliance practices.
For example, the UK government has already given signs that it is willing to enact its own autonomous sanctions. The UK Foreign Office has signalled it will utilise the new SAMLA powers post-Brexit to introduce 'Magnitsky-style' designations of those suspected of human rights violations and corruption. SAMLA will allow UK to act more quickly than the EU to introduce such designations, which requires bloc-wide consensus for such designations to be made.
In our next post, we will consider some areas of potential divergence between the EU and UK going forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.