UK Law and Practice Contributed by: John Binns, BCL Solicitors LLP
Uses of UK Sanctions Sanctions regulations can impose various restrictions, including: • financial sanctions (asset freezes and prohibitions on making funds or economic resources available to DPs or their companies, or for a DP’s benefit); • restrictions on the provision of certain financial products and services (including trust services); • director disqualification sanctions (preventing DPs from acting as directors of UK companies); • immigration sanctions (travel bans); and • trade sanctions (restricting the provision of goods and services). 1.4.2 Scope of Sanctions Prohibitions under sanctions regulations apply to eve - ryone (businesses and individuals) in the UK, as well as extraterritorially to “UK persons” (a term defined to include all UK citizens and all companies incorporated in the UK). Equivalent regulations apply in the UK’s Crown Dependencies (Jersey, Guernsey and the Isle of Man) and Overseas Territories (including the British Virgin Islands and the Cayman Islands). These prohibitions similarly apply to extraterritoriality, with the effect, for example, that a BVI or Jersey bank, corporation or trustee is bound by the equivalent of UK sanctions in all their actions around the world. 1.4.3 Domestic and/or Supranational Measures Following the UK’s exit from the EU, sanctions imposed as a result of international obligations are, in practice, limited to those imposed by the UN, while the rest are imposed at a domestic level. An urgent procedure allows short-term designations purely on the basis that the person has been designated in one or more specified jurisdictions (including the EU and the US). 2. Overview of Regulatory Field 2.1 Primary Regulators The primary regulators for sanctions activity in the UK are:
• the Office for Financial Sanctions Implementation (OFSI), which issues guidance, makes licensing decisions, and imposes monetary penalties in con - nection with financial sanctions; • the National Crime Agency (NCA), which conducts criminal investigations into breaches of sanctions; • the Crown Prosecution Service (CPS), which brings prosecutions in criminal cases; • HM Revenue and Customs (HMRC), which deals with the enforcement of trade sanctions; • the Export Control Joint Unit (ECJU), which deals with licensing decisions in connection with trade sanctions relating to goods and ancillary services; • the Office for Trade Sanctions Implementation (OTSI), the equivalent of OFSI for trade sanctions (dealing, among other things, with most licences relating to services); • the Insolvency Service (IS), which deals with enforcement and licensing in connection with director disqualification sanctions; • the Department of Transport (DoT), which deals with aircraft and shipping sanctions; and • industry regulators, such as the Financial Conduct Authority (FCA), which regulates the financial sec - tor generally (including in connection with sanc - tions). 2.2 Enforcement 2.2.1 Enforcement Responsibilities A Public-Private Partnership The enforcement of sanctions in the UK is a complex landscape, with the state agencies responsible for criminal investigation and prosecution sitting at the top of, in effect, a vast public-private partnership. In order to have an impact on DPs, and in many cases the broader impact on the target country’s economy, the UK effectively relies on compliance measures by countless UK businesses aimed at ceasing engage - ment with, or freezing the assets of, their own custom - ers (and/or turning away potential customers). The Role of Regulated Firms Many of these businesses are regulated in some way, most notably the financial sector, whose sanc - tions compliance procedures are policed (along with many other aspects) by the Financial Conduct Author - ity. Professional bodies also play their part, notably
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