On 6 July 2020, the UK Government announced the introduction of a “Global Human Rights” sanctions regime (the “GHR Sanctions”). The regime marks the first time the UK Government has imposed sanctions measures independently from the European Union and the first time it has exercised its ability to impose sanctions directly in response to human rights violations. However, the new measures do not necessarily indicate the UK’s future policy direction, and after Brexit the UK sanctions regime will look broadly similar to that of the EU.
The new GHR Sanctions regime
In May 2018, the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”) entered into law, which provided for the UK Government’s sanctions powers following the UK’s withdrawal from the European Union. As noted in our previous blogpost, SAMLA included the ability for the UK Government to impose sanctions where the relevant Minister considers they would provide accountability for or to be a deterrent to gross violations of human rights, or to otherwise promote human rights.
The GHR Sanctions are introduced under this authority and implemented via secondary legislation, the Global Human Rights Sanctions Regulations 2020. Under this regime, the UK Government has so far designated Russian nationals involved in the death of Sergei Magnitsky, Saudi nationals involved in the death of Jamal Khashoggi, Myanmar military generals involved in persecution of the Rohingya and organisations involved in North Korean labour camps.
The GHR Sanctions regime was likely introduced following political pressure on the UK Government to follow suit with a robust sanctions framework to combat human rights abuses (by comparison, the United States human rights-related restrictive measures have been in place since the introduction of the Magnitsky Act in 2012).
As a result of the GHR Sanctions, it is now prohibited for persons in the UK and UK nationals and entities located overseas to:
- deal with funds or economic resources owned, held or controlled by a designated person; or
- make funds or economic resources available to or for the benefit for a designated person.
The designated persons are also prohibited from entering the United Kingdom.
The asset freeze also applies to any entity “owned or controlled” by a designated person. For these purposes “owned or controlled” means:
- where a designated person directly or indirectly holds 50% of the shares or voting rights in an entity or can appoint a majority of board of directors; or
- where it is reasonable to expect that the designated person would be able to achieve the result that the affairs of the entity are conducted in accordance with the designated person’s wishes.
The measures are similar to existing EU sanctions with effect in the United Kingdom, however, there are points of detail and interpretation where there may prove to be divergence. The EU has a body of guidance and case-law relating to its sanctions which will not necessarily be applicable to the UK regime in the future. For instance, the equivalent to the concept of “ownership or control” under EU law is similar, but the Council of the EU has published guidance which states that the making available of funds or economic resources to a non-designated person owned or controlled by a designated person will be considered as making them available to the designated person, unless it can be reasonably determined that the funds or economic resources will not be used by or for the benefit of the designated person. The UK Government has not published further guidance or detail on this topic yet (but may do so in the future).
Is UK and EU Sanctions Policy Diverging?
The European Union has not imposed any “Magnitsky-style” sanctions in response to human rights violations to date, although the proposal has been made by EU foreign ministers in the past (see here, for example). In that sense, the GHR Sanctions may be viewed as the first significant post-Brexit policy departure.
In addition, it is possible that following Brexit, the UK may begin to collaborate more closely with other countries (such as the United States or Canada) with respect to sanctions. The GHR Sanctions might prove to be a harbinger in that respect.
However, the GHR Sanctions do not provide significant clarity on the future direction of the UK Government’s approach. Indeed, the UK Government has indicated on various occasions that its policy will track that of the EU for the time being, and other than the GHR Sanctions, has taken no practical steps to forge its own path.