06-07-2019

Part 1: Sanctions regulations

Chapter 1: Power to make sanctions regulations

Section 1: Power to make sanctions regulations

22.Section 1 gives effect to the core purpose of this part of the Act. It enables an appropriate Minister to make regulations imposing sanctions. An ‘appropriate Minister’ is defined as the Secretary of State or the Treasury. This power enables the UK to continue to comply with its international obligations and to use sanctions to meet foreign policy and national security objectives after exiting the EU.

23.Regulations may only be made where the appropriate Minister considers it appropriate for the following purposes:

a.complying with a United Nations obligation;

b.complying with any other international obligation (which could include obligations arising from UK membership of other international organisations, for example the Organisation for Security and Co-operation in Europe (OSCE), as well as other international treaties or agreements); or

c.for purposes which:

i.further the prevention of terrorism in the UK or elsewhere;

ii.are in the interests of national security;

iii.are in the interests of international peace and security;

iv.promote the resolution of armed conflicts or the protection of civilians in conflict zones;

v.provide accountability for, or be a deterrent to, gross violations of human rights, or otherwise promote compliance with international human rights law or respect for human rights;

vi.promote compliance with international humanitarian law;

vii.contribute to multilateral efforts to prevent the spread and use of weapons and materials of mass destruction;

viii.promote respect for democracy, the rule of law and good governance; or

ix.further a foreign policy objective.

24.All sanctions regulations made by the appropriate Minister must set out the purpose for which they are made (subsection (3)). There are additional requirements for regulations made for a purpose which is not compliance with a UN or other international obligation, and these additional requirements are detailed in section 2.

25.In subsection (5) the different types of sanctions are laid out. These different types of sanctions are subsequently set out and explained in sections 3 to 8 of the Act. The Parliamentary procedures applying to sanctions regulations depends on their content (see section 55).

Section 2: Additional requirements for regulations for a purpose within section 1(2)

26.This section imposes additional requirements for sanctions regulations which are not made for the purpose of compliance with a UN or other international obligation. The appropriate Minister must have determined that there are good reasons to pursue the purpose of the regulations, and must have determined that the imposition of sanctions is a reasonable course of action for that purpose.

27.When making regulations to which this section applies, the appropriate Minister must lay before Parliament, at the same time that the regulations (or draft regulations) are laid, a report which addresses the requirements detailed in this section. The Minister does not have to disclose anything which might damage national security or international relations.

Section 3: Financial sanctions

28.Section 3 sets out the types of financial sanctions that can be imposed. Subsection (1)(a) enables the government to subject a designated person to an asset freeze. Asset-freezing means that it is generally prohibited to deal with the frozen funds or economic resources, belonging to or owned, held or controlled by a designated person. This would limit a designated person’s ability to deal with any economic resource or funds they currently own, hold, or control. The terms "funds", "economic resources" and "freeze" are defined in section 60 of the Act.

29.Subsections (1)(b) and (c) contain wide powers enabling the government to prevent financial services from being provided to, or being procured from, prescribed persons (including designated persons). This enables the government to impose wider financial restrictions, including prohibitions on access to finance and capital markets. This could include, but is not limited to, prohibiting the supply of financial services to certain markets, or sections of markets, or preventing the transfer of funds to a country, region or sector. An example of this is the sectoral measures currently in place aimed at limiting access to EU capital markets for Russian State-owned financial institutions. The term "financial services" is defined in section 61.

30.Subsection (1)(d) enables the government to prohibit funds and economic resources being made available to, or for the benefit of, prescribed persons (including designated persons). This provision also forms part of an asset freeze. "Financial products" are also defined in section 61.

31.Subsections (1)(g) and (2) enable the government to place restrictions on owning, controlling or having a prescribed interest in, or commencing or maintaining commercial relationships with, prescribed persons (including designated persons). These powers enable the government to put in place the wide range of sanctions currently implemented via EU legislation.

32.Subsection (3) provides that the powers in subsection (1) include the ability to prohibit funds, economic resources or financial services being made available, received, procured or provided, either directly or indirectly to, from, or by a designated person.

33.Subsections (4) to (6) deal with terms used in the section.

Section 4: Immigration sanctions

34.Section 4 provides for travel bans. Those who are subject to travel bans would be "excluded persons" within the meaning of section 8B of the Immigration Act 1971. Section 8B of the Immigration Act 1971 provides that an excluded person must be refused leave to enter or leave to remain in the UK, any leave the person holds is cancelled, and any exemption from immigration control no longer applies.

35.Travel bans are used to restrict the movement of designated persons and those associated with regimes or groups, including terrorist groups, whose behaviour is considered unacceptable by the international community. Currently, section 8B of the Immigration Act 1971 provides for an international travel ban made either by the UN Security Council or the EU to be enforceable by the UK. Unless an exemption applies, a person who is subject to a travel ban is prevented from entering the UK.

36.The Act (see Schedule 3) amends section 8B of the Immigration Act 1971 to accommodate UK autonomous sanctions regimes, as well as making provision for retained EU travel bans after the UK has left the EU.

Section 5: Trade sanctions

37.Trade sanctions are used to prevent a variety of activities relating to target countries, specific sectors within those countries, or designated persons. They cover the export, import, movement and transfer of goods and technology, and the provision and procurement of services. They also cover investment and company ownership. Section 5 links to Schedule 1 which sets out the types of trade sanctions that can be imposed and their effect.

Section 6: Aircraft sanctions

38.Section 6 enables the government to impose prohibitions or requirements in relation to aircraft. These powers would, for example, permit the Secretary of State to make directions controlling the movement of the aircraft within the UK and the airspace over the UK. Directions could also require a disqualified aircraft to remain in the UK once landed or, if in flight, to not overfly the UK or to leave UK airspace. Such directions can be given by the Secretary of State to the Civil Aviation Authority (CAA), to a licensee who is providing air traffic services, or to an airport operator in relation to a disqualified aircraft. These bodies will also have the authority to direct aircraft operators or pilots in command of disqualified aircraft for the same purposes.

39.Disqualified aircraft are aircraft which are registered in, or originate from, a prescribed (sanctioned) country, as well as aircraft which are owned, chartered or operated by designated persons or persons connected with a prescribed country.

40.Aircraft sanctions will allow the government to control the movement of disqualified aircraft in line with its existing sanctions obligations. For example, there is currently a prohibition against aircraft operated by North Korea or aircraft originating from North Korea from overflying the UK. Aircraft sanctions will also enable relevant UK permits to be denied to such aircraft which would prevent them from using UK airports.

41.This section also allows regulations to be made which would prevent UK persons registering an aircraft in a prescribed country which is subject to sanctions. Regulations may also make it an offence to own, charter or operate an aircraft which is registered in a prescribed country. Directions can also be given to a British-controlled aircraft, preventing the aircraft from overflying or landing in a prescribed country.

42.This section also provides the power for the Secretary of State prevent the registration of aircraft and a power to direct the CAA to remove an aircraft from the UK aircraft register where it has been identified that a designated person holds an interest in that aircraft or where an aircraft has been chartered by demise to a designated person.

Section 7: Shipping sanctions

43.Section 7 contains powers to control the movement of disqualified, designated or specified ships to prevent such ships from entering UK waters or, if they have already done so, to require such ships to leave or to be detained whilst enforcement action is taken.

44.Disqualified ships are those which are registered in, fly the flag of, or originate from a prescribed (sanctioned) country. They can also be ships which are owned (wholly or partially), controlled, chartered, operated or crewed (wholly or partially) by designated persons, or persons connected with a prescribed country. A designated ship is one which has been designated by the UN. A specified ship is one which has been specified by the appropriate Minister. Provisions relating to specifying ships are set out at section 14.

45.The Secretary of State may give directions to the master or pilot of a ship, or direct the relevant harbour authority to give such a direction. These directions can include, but are not limited to, directing a ship to leave the UK, to go to a specified harbour or not to enter the UK.

46.This section allows ships to be refused registration on the UK Ship Register on the basis that a designated person or persons connected with a prescribed country hold an interest in them, or because it has been specified by an appropriate Minister. If a vessel is already on the UK Ship Register, this section provides it to be removed if those circumstances arise.

47.The Secretary of State can also issue directions to a British ship anywhere in the world, in order to prevent it from entering a country in which relevant sanctions are in force.

Section 8: Other sanctions for the purposes of UN obligations

48.This section enables Ministers to put in place other forms of sanctions not specifically mentioned in sections 3 to 7 but which are required in order to comply with UN obligations. This would enable the UK to continue to uphold its international law obligations in the event that the UN requires the imposition of a sanction that is not otherwise contained within sections 3 to 7. It therefore future-proofs the Act against the development of new types of sanctions by the UN Security Council.

Sections 9 and 10: "Designated persons" and Designation powers: general

49.Sections 9 to 13 deal with the designation of persons for the purpose of sanctions. These provisions would enable persons to be individually subjected to sanctions measures such as asset freezes (see section 3). There are around 2,000 designated persons under existing sanctions regimes implemented by the UK. Examples include individuals involved in providing support to the Syrian regime or those assisting in the nuclear, ballistic and weapons of mass destruction programmes in North Korea.

50.Section 9 introduces the term "designated persons". Persons can be designated by an appropriate Minister either by name (see section 11) or description (see section 12). There is a separate procedure for the designation of those named in UN Security Council resolutions (see section 13). "Persons" can be companies and other entities that have legal personality as well as associations or groups of persons.

51.Section 10 enables Ministers to set out in regulations how designation powers are to be exercised, including requirements for notification and publicity. Regulations must place an obligation on the appropriate Minister to take such steps as are reasonably practicable to inform designated persons of their designation, though there is no need for a designated person to be notified in advance of any designation coming into effect. The regulations may also make provision about public notification of designations.

52.These designation provisions should be considered alongside provisions in Chapter 2, which require Ministers to undertake regular reviews of sanctions and give designated persons the right to reassessment, and Chapter 4, which enable designated persons to have access to the courts.

53.The government intends to publish the details of UK designated persons on an administrative list which will be kept up to date and made available on its website 1. This is consistent with the approach taken at the moment by HM Treasury’s Office of Financial Sanctions Implementation (OFSI), which already publishes a consolidated list of financial sanctions targets 2.

Section 11: Designation of a person by name under a designation power

54.This section places restrictions on the ability of an appropriate Minister to designate a person by name. These restrictions must be set out in sanctions regulations.

55.The Minister can only designate a person where the Minister has reasonable grounds to suspect the person is involved in, or connected to, an activity set out in the regulations for a particular sanctions regime ("an involved person") and considers that it is appropriate to designate that person. The Minister must have regard to the purpose of the sanctions regime as set out in the regulations and to the likely significant effects of the designation on the person, as far as known.

56.When a person has been designated by name, the notification required by section 10 must include a brief statement of reasons. The Minister does not have to disclose anything which might damage national security or international relations, the prevention or detection of serious crime, or the interests of justice.

57.An "involved person" could include an individual, group or organisation involved in an activity, or a person controlled by them, someone acting on their behalf, or an associated person.

Section 12: Designation of persons by description under a designation power

58.This section is similar to section 11 but provides for circumstances where an appropriate Minister designates persons by description rather than by name. This power can only be exercised when it is not practicable for the Minister to identify by name all the persons falling within the description, and the description is sufficiently precise that a reasonable person would know whether any person falls within it. In addition, the same restrictions apply as to designations under section 11.

Section 13: Persons named by or under UN Security Council Resolutions

59.This section provides for designation where the UK has an obligation under international law to designate persons who are named on a UN list. In these cases the regulations made under the Act must provide that the persons named on a UN list are designated persons. Subsections (2) and (3) enables the regulations to refer to the UN list without having to replicate that list in UK regulations.

Section 14: "Specified ships"

60.This section enables an appropriate Minister to specify a ship that will be subject to sanctions, when authorised to do so by the regulations.

61.The Minister can only specify a ship where they have reasonable grounds to suspect that a ship is involved in an activity specified in the regulations, and where they consider it is appropriate for that ship to be specified, having regard to the purpose of the regime as set out in the regulations. Sanctions against individual vessels have been used against, for example, vessels known to be involved in the smuggling of Libyan oil or owned by a company implicated in breaching the arms embargo relating to North Korea.

62.As is the case for designations, a consolidated list of specified ships will be maintained on gov.uk.

Section 15: Exceptions and licences

63.This section enables Ministers to disapply the effect of sanctions in particular circumstances.

64.Subsection (2)(a) enables regulations to provide for exceptions to any prohibition or requirement imposed by regulations. Examples of where an exception may be used are:

a.to enable interest or other earnings on accounts to accrue, provided that any such interest, other earnings and payments will also be frozen;

b.to enable financial or credit institutions in the UK to credit frozen accounts where they receive funds transferred to the account of a sanctioned person, entity or body, provided that any credits to such accounts will also be frozen;

c.to enable the export of, and associated technical assistance for, equipment used by peacekeeping missions.

65.Subsection (2)(b) provides that persons may take any actions which would otherwise breach the prohibitions in the regulations, if they do so under authority of a licence granted by an appropriate Minister. Licensing grounds for sanctions may include:

a.payments to satisfy the essential needs and/or payments necessary for basic expenses of natural or legal persons, entities or bodies, such as food, rent, and energy;

b.payment for insurance;

c.payment of reasonable professional fees and the reimbursement of reasonable and necessary incurred expenses associated with the provision of legal services;

d.payment of fees or service charges for routine holding or maintenance of frozen funds or economic resources;

e.payments required in extraordinary situations or for extraordinary expenses;

f.payments required by a court order;

g.payment due under contracts, agreements or obligations that were concluded or arose before the date on which the natural or legal person, entity or body referred to in the asset freeze was sanctioned;

h.payment necessary to ensure human safety, environmental protection or evacuations, or for the verification and destruction of chemical weapons;

i.payment intended to be used for official purposes of a diplomatic mission, consular post or international organisation;

j.export of goods or transfer of technology for humanitarian purposes; or

k.brokering, technical assistance, and other services provided for humanitarian purposes.

66.Subsection (3) deals with the contents, scope and duration of licences issued by an appropriate Minister. A licence must specify the acts it authorises. It may be general, or granted to a category of persons or to a particular person. It may be subject to conditions. It may be of indefinite duration, or subject to an expiry date. A general licence may authorise multiple parties to undertake specific activities, for example certain types of transactions relating to humanitarian aid. A licence may be varied or revoked, and any such changes will be communicated to any affected designated person or their authorised representative.

67.This section also provides a power to make exceptions to a travel ban either for an individual or for a group of individuals. This provides the flexibility to disapply the effects of a travel ban on a case-by-case basis, for example to allow an individual to travel to attend an international conference convened by an intergovernmental organisation. This can be done either in the regulation itself or by a direction of the appropriate Minister at a later date.

68.Subsection (6) clarifies that exceptions to the prohibitions and requirements in any regulations to be made may be made to support activity carried out for the purposes of national security or the prevention or detection of serious crime.

Section 16: Information

69.This section intends to help the government ensure that sanctions work effectively, by requiring people to report relevant information, by enabling the government to collect information, and by authorising the sharing of information.

70.These powers enable the government to monitor compliance with the regulations and obtain evidence if it believes that the regulations have been contravened or circumvented.

71.In relation to financial sanctions, the powers are intended to be used to require people to report cases where they become aware or have reasonable grounds to suspect they are dealing with a designated person or a designated person has committed an offence. The government’s intention is that the regulations will set out what information these persons must report.

72.This provision enables the UK to replicate the wide scope of the existing reporting requirement under directly-applicable EU law.

73.In relation to financial sanctions, for example, the regulations will give the government powers to request information from a designated person on the funds or economic resources they hold, own or control or that someone else does on their behalf, and how those funds are disposed of. The government may request information on expenditure by or on behalf of the designated person. The government can use these powers when it thinks it is necessary for the purposes of monitoring compliance or detecting evasion of the regulations.

74.The regulations could also require registers or records to be maintained, and allow the government to request from any person in or resident in the UK any information that the government may reasonably require to assess compliance with licences.

75.The regulations under this section could also allow the government to disclose information received on the basis of these provisions. This includes disclosure to police officers, office holders of the Crown in the UK government or devolved administrations, regulatory bodies in the UK and international partners.

Section 17: Enforcement

76.This section makes provision for the enforcement of sanctions.

77.Subsection (3) enables sanctions regulations to set out the powers and duties of any person who is to enforce the regulations.

78.Subsections (4) and (5) enable sanctions regulations to create criminal offences, and set sentences of up to 10 years imprisonment following conviction on indictment.

79.Subsection (6) enables regulations to apply, with or without modification, provisions of the Customs and Excise Management Act 1979 for the purposes of enforcement. Subsection (8) enables the regulations to specify that investigatory powers in Chapter 1 of Part 2 of the Serious Organised Crime and Police Act 2005 can be used to investigate breaches of sanctions.

80.Subsection (9) enables regulations to specify whether the civil monetary penalty regime in Part 8 of Policing and Crime Act 2017 applies where prohibitions are breached. That Act created powers to impose monetary penalties for financial sanctions offences and brings financial sanctions offences into the scope of Deferred Prosecution Agreements (under the Crime and Courts Act 2013) and Serious Crime Prevention Orders (under the Serious Crime Act 2007). Consequential amendments made in Schedule 3 preserve these powers for breaches of financial sanctions and bring other breaches of sanctions offences within the scope of Deferred Prosecution Agreements and Serious Crime Prevention Orders (as explained below in relation to Schedule 3). Provision under this subsection will clearly identify which sanctions are financial sanctions that, when breached, may attract a civil monetary penalty. The government does not intend to impose civil monetary penalties in respect of breaches of trade sanctions.

Section 18: Report in respect of offences in regulations

81.This section requires that where regulations made under section 1 include criminal offences, a report identifying the offences, and giving the Minister's good reasons for creating them and for setting any terms of imprisonment that apply to them, must be laid before Parliament.

Section 19: Enforcement: goods etc on ships

82.This section allows regulations made under section 1 to provide for powers to stop and search a ship outside the UK, and to seize goods (including technology) found on the ship. The powers are exercisable for the purpose of enforcing prohibitions in sanctions regulations relating to the goods or technology.

Section 20: Goods etc on ships: non-UK conduct

83.This section allows regulations under section 1 to provide for powers to stop and search a ship outside the UK and to seize goods or technology found on the ship. The powers are exercisable for the purpose of seizing goods where there has been conduct (or suspected conduct) which would be a contravention of a prohibition in sanctions regulations relating to the goods or technology, but for the fact that the conduct falls outside the territorial scope defined in section 21.

Section 21: Extra-territorial application

84.This section refers to the scope of regulations made under section 1 of the Act. It confirms that prohibitions or requirements can be imposed on any person in the UK (including UK territorial waters), or on any UK person anywhere in the world. A UK person is defined as including either a UK national or a body, for example a company, which is incorporated or constituted in the UK.

85.The section also allows for Her Majesty, by Order in Council, to extend the effect of sanctions on UK persons to bodies incorporated or constituted under the law of any of the Channel Islands, the Isle of Man, and any of the British Overseas Territories, as if they were UK persons.

Chapter 2: Review by appropriate Minister

Section 22: Power to vary or revoke designation made under regulations

86.This section enables the appropriate Minister who made a designation to revoke or vary that designation.

87.Revoking a designation would mean that the designated person in question would no longer be subject to the restrictions set out in the relevant sanctions regulations. Varying a designation would allow the Minister to adjust a designation to match any change in the situation, for example updating the information used to identify an individual as new information comes to light.

88.This section allows the appropriate Minister to vary or revoke a designation at their discretion. However, it also obliges Ministers to use this power to revoke a designation where the required conditions of the relevant designation power are not met in respect of the designation. This might be as a result of actions taken by persons to seek reassessment of their designation, or the government’s own review of designations, as set out below.

Section 23: Right to request variation or revocation of designation

89.This section gives those who have been designated by an appropriate Minister under a sanctions regime the right to ask the government to revoke or vary their designation, for example where a person believes he has been misidentified, or considers the designation does not meet the required evidentiary threshold. This is an administrative challenge which leads to a reassessment of a designation, and is designed to allow access to quick redress. This section does not apply to designations that are made as a result of a UN obligation – separate provision is made for this in section 25 which is explained below.

90.The appropriate Minister will have a duty to consider these requests as soon as reasonably practicable (as specified in section 33). The Minister may take the decision to use the power to vary or revoke a decision, or may choose to take no action so that the designation remains in force. Designated persons need to follow this procedure before bringing any challenge in the courts (as specified in section 38).

91.Once a request has been reassessed, the government will not be required to consider further requests from the same person unless that person can show that there is a significant matter that the government had not previously been aware of. This restriction is to guard against vexatious repetition of requests.

Section 24: Periodic review of certain designations

92.This section requires the government to reconsider every designation which is in force within a time period that is no more than three years since either the regime was established, or the last review. The section permits reviews to be carried out against a shorter time frame if desired. This ensures that the information against all designated persons is regularly reviewed, and that sanctions are not maintained in perpetuity by default. In practice, this would require a reassessment of the evidence used to designate a person.

Section 25: Right of UN-named person to request review

93.Under this section a person who has been designated in order to comply with a UN designation may request that the appropriate Minister use their best endeavours to persuade the UN to remove them from the relevant UN instrument. The appropriate Minister must decide whether or not to comply with this request. Once a request has been made, further requests cannot be made unless there is a significant new matter (similar to the provision under section 23). This section reflects the fact that the UK is under a binding obligation in international law to designate the person, and the obligation persists until the designation is lifted by the UN itself.

Section 26: Power to revoke specification of ship made under regulations

94.This section enables the appropriate Minister who specified a ship to revoke that specification. It also requires the Minister who specified the ship, under the procedure mentioned in section 14, to revoke the specification when the Minister considers that the required conditions for specification are no longer met.

Section 27: Right to request revocation of specification of ship

95.Any person affected by a ship being specified for sanctions purposes (under section 14), may make a request to the appropriate Minister to revoke the specification. This is similar to the procedure for designated persons under section 23. When a request has been made under this section, a further request cannot be made unless it is based on a significant new matter that the Minister has not previously considered.

96.The appropriate Minister will have a duty to consider these requests as soon as reasonably practicable (as specified in section 33). The Minister may take the decision to use the power to revoke a decision, or they may choose to take no action so that the specification remains in force. Persons affected by the specification need to follow this procedure before bringing any challenge in the courts (as specified in section 38).

Section 28: Periodic review where ships are specified

97.This section requires the Minister who has specified a ship under section 14 to review the specification within three years from the date that the regime was established and within every three year period after the previous review. The Minister will have to assess whether the required conditions for specification continue to be met.

Section 29: UN-specified ship: right to request review

98.Where a ship has been specified for any purposes by a UN Security Council resolution, any persons affected by the specification may request the Secretary of State to use their best endeavours to secure that the ship ceases to be specified. The Secretary of State must decide whether to comply with this request or not. This section reflects the fact that the UK is under a binding obligation in international law to apply sanctions to UN specified ships, and the obligation persists until the specification is lifted by the UN itself.

99.When a request has been made under this section, further requests cannot be made unless they are based on a significant new matter that the appropriate Minister has not previously considered.

Section 30: Review by appropriate Minister of regulations under section 1

100.This section requires that, on an annual basis, the appropriate Minister must consider whether sanctions regulations are still appropriate for their specified purposes. For sanctions regulations which are made for a purpose other than compliance with UN obligations or other international obligations, the Minister must also consider whether there are good reasons to pursue that purpose and whether sanctions are a reasonable course of action for that purpose. This will help to ensure that each sanctions regime only remains in place for as long as it is serving a valid purpose and will help to prevent regimes remaining on the statute book after they are no longer required. This would be a high level political review of the overall regime, particularly focused on whether or not it is contributing to its intended purpose, and would not include a review of the evidence underpinning each designation. The appropriate minister who has carried out the review is required to lay before Parliament a written report outlining the conclusions of the review.

Section 31: Independent review of regulations with counter-terrorism purpose

101.This section requires the appointment of an independent reviewer to conduct reviews of sanctions regulations which impose asset freezes or similar financial sanctions, where the regulations are made for purposes relating to the prevention of terrorism and they have been referred to the independent reviewer by the Secretary of State or the Treasury for review. It is intended to replicate the role of the independent reviewer appointed under the Terrorist Asset Freezing etc Act 2010, which is abolished by the Act.

Section 32: Periodic reports on exercise of power to make regulations under section 1

102.This section requires annual reports to be made about the use of the power to make sanctions regulations. A report under this section must identify regulations made for the purpose of providing accountability for or being a deterrent to gross human rights violations. It must also specify any recommendations made by a Parliamentary Committee for the use of that power in relation to such violations, and include any government response.

Section 33: Procedure for requests and reviews

103.This section allows Ministers to set out, through regulations, the procedures applying to the review and reassessment mechanisms in the Act. The regulations must require decisions on reassessments to be taken as soon as is reasonably practicable.

Chapter 3: Temporary powers in relation to EU sanctions lists

Section 34: Temporary powers in relation to EU sanctions lists

104.Sections 34 and 35 contain temporary powers that apply for a two-year period. They enable certain changes to be made to any EU sanctions regimes that have been retained by the EU (Withdrawal) Act 2018 and have not been replaced by a UK sanctions regime contained in regulations made under section 1. These powers are aimed at ensuring that EU sanctions regimes can be updated for a short period after exit from the EU, until they are replaced by UK regimes, and are limited to enabling Ministers to add or remove names from lists of persons who are designated by virtue of their inclusion in a list attached to an EU instrument. These powers do not enable the substantive sanctions in retained EU law to be amended. Any such provision would require regulations under section 1. This power would be used alongside the powers in the EU (Withdrawal) Act 2018 to make retained EU law operable after the UK leaves the EU.

Section 35: Directions under section 34: further provision

105.This section sets out the conditions for adding a person’s name to an EU sanctions list (except UN-named persons). The conditions reflect the conditions for designation of persons under sections 11 and 12. However, instead of having regard to the provisions in UK regulations, the Minister has to have regard to the purposes of the EU legislation (as set out in a set of regulations made under this section).

106.For a Minister to treat a person as if they had been added to an EU sanctions list, the Minister must consider it appropriate to do so, having regard to the purpose of the EU legislation and to the likely significant effects of the designation on the person, as far as known.

107.The Minister must inform the designated person of their designation as soon as reasonable practicable, including a statement of reasons for the designation, though there is no need for a designated person to be notified in advance of any designation coming into effect.

Section 36: Rights of person on EU sanctions list

108.This section enables persons who are designated under a retained EU sanctions list to make a request to be removed from that list. Where such a request is made it must be granted where the conditions of section 35(1) are not met, namely that the appropriate Minister does not have reasonable grounds to suspect the designated person is an "involved person" (see sections 35(2) and (3)), or does not consider it appropriate for the person to be designated. The decision must be made as soon as reasonably practicable after the appropriate Minister receives the necessary information to make the decision, and the person who made the request must be informed as soon as reasonably practicable after the decision is made.

Section 37: Rights of UN-named person on EU sanctions list

109.Where a person is on a retained EU sanctions list by virtue of a UN Security Council resolution, the procedure for seeking removal from that list reflects the procedure in section 25; namely, that they can only make a request to the appropriate Minister to use best endeavours to remove their name from the relevant UN list. This section reflects the fact that the UK is under a binding obligation in international law to designate the person, and the obligation persists until the designation is lifted by the UN itself.

Chapter 4: Court reviews

Section 38: Court review of decisions

110.This section ensures that those who do not agree with a decision made under Part 1 of the Act have a route to challenge a government decision in the courts. These decisions include:

a.an administrative reassessment of a UK designation, under section 23;

b.a UK government review of a UK designation, under section 24;

c.an administrative reassessment of a UN designation, under section 25;

d.an administrative reassessment of a retained EU designation, under section 36 or 37;

e.an administrative reassessment of a UK-specified ship, under section 27;

f.a UK government review of a UK-specified ship, under section 28; or

g.an administrative reassessment of a UN-specified ship, under section 29.

111.When considering an application brought under this section, the courts will apply the principles of judicial review.

112.If a designated person seeks a revocation or variation of their listing, they must apply for this through the mechanism provided for in the relevant sections above in the first instance, before they are able to access the redress through a legal challenge provided for in this section. This provision helps to ensure that quick redress is available to the designated person and seeks to minimise unnecessary litigation, on the part of both the designated person and the government. The same applies to reassessments in relation to specified ships.

Section 39: Court reviews: further provision

113.This section contains some additional provisions about how legal challenges are to be dealt with by the courts. It provides that where a court would otherwise have the power to award damages (for example, by virtue of the Senior Courts Act 1981 for England and Wales), it may not do so unless they consider that the use of the power under challenge amounts to committing the tort of negligence (or for Scotland, that there has been negligence), or there has been bad faith. This approach is comparable with the current law on awards of damages in sanctions cases within the EU. This section also confirms that legal challenges are to be dealt with under the provisions in section 38.

Section 40: Rules of court

114.This section sets out that that the closed material procedure provided for in the Counter Terrorism Act 2008 may be used in respect of legal challenges under this Act. This means that in such challenges, the government may apply to the court for sensitive material to be disclosed only to special advocates and the court, on the basis of this being in the public interest. This would enable the government to use sensitive information to support the imposition of sanctions on persons without the additional risks posed by more open disclosure of such material. This section also sets out how, on the first occasion that the Lord Chancellor makes rules of court (which set out the court’s procedure) about the use of the closed material procedure in relation to challenges under section 38, the Lord Chancellor must consult the relevant heads of the judiciary in England and Wales, and in Northern Ireland. In Scotland, the power to make rules of court resides in the Court of Session, and this section makes no provision in respect of those rules.

Chapter 5: Miscellaneous

Section 41: Procedure for dealing with goods etc seized from ships

115.This section provides a power for the Secretary of State to make regulations setting out how goods seized from ships (see sections 19 and 20) are to be dealt with.

Section 42: Suspension of prohibitions and requirements

116.This section allows sanctions regulations, or specific restrictions within sanctions regulations, to be suspended for a period of time, during which they would remain on the statue book but not be binding within the UK. This allows flexibility in circumstances where sanctions might need to be temporarily lifted or altered, but where it might not be appropriate to revoke sanctions regulations completely. For example, if a state which was subject to sanctions had altered its behaviour and this warranted the sanctions being suspended to reward that behaviour, or in order to take agreed steps so that they could be lifted, an appropriate Minister could suspend the regulations but still retain the ability, should the state in question revert to its previous behaviour or fail to meet a specified condition, to apply the regulations again quickly.

Section 43: Guidance about regulations under section 1

117.The section imposes a duty on an appropriate Minister who makes sanctions regulations to issue guidance about those sanctions regulations. The guidance may include best practice for compliance with sanctions, details about enforcement, and details of relevant exceptions.

Section 44: Protection for acts done for purposes of compliance

118.This section ensures that a person who may have been liable to civil proceedings as a result of compliance with the regulations contained within the Act is not liable if they reasonably believe that they were acting in compliance with regulations in place at the time. It aims to protect people from any adverse results generated by compliance (for example, a breach of a contract to supply goods that are prohibited from export by sanctions).

Section 45: Revocation and amendment of regulations under section 1

119.This section makes provision for the revocation or amendment of regulations made under section 1. The regulations as amended must continue to be appropriate for their stated purpose. Unless they are made for the purposes of compliance with a UN or other international obligation, the Minister must also consider that there are good reasons to pursue the stated purpose of the regulations and that the imposition of sanctions is a reasonable course of action for that purpose. The section also enables references to UN obligations to be updated.

Section 46: Report where regulations for a purpose within section 1(2) are amended

120.This section mandates the appropriate Minister to lay before Parliament a report setting out the reasons referred to in section 45 above. The Minister does not have to disclose anything which might damage national security or international relations.

Section 47: Power to amend Part 1 so as to authorise additional sanctions

121.This section allows an appropriate Minister to amend Part 1 of the Act through regulations to add different types of sanctions not yet listed within Chapter 1 of the Act. It can only be used for types of sanctions that the UK is or has been under a UN or other international obligation to impose. It does not enable any modification to be made to the purposes for which sanctions can be made. This section future-proofs the Act against a changing sanctions landscape, by enabling new sanctions measures agreed internationally to be brought within the scope of the Act. The regulations must follow the draft affirmative procedure.

Section 48: Power to make provision relating to immigration appeals

122.The imposition of a travel ban on a designated person has consequences for their immigration status. Those who are in the UK will lose the right to remain here and may be subject to removal from the UK. As a result, they may claim asylum or humanitarian protection, or claim that removal will breach their human rights. Those who are outside the UK will be refused entry if they seek to travel here. They may claim that this breaches their human rights.

123.These "immigration claims" are usually decided by the Secretary of State for the Home Department. The making of an asylum claim also has further effects under the Immigration Acts, such as the ability to access financial support. A decision on an immigration claim by the Secretary of State for the Home Department can give rise to a right of appeal before the Immigration and Asylum Chamber of the First Tier Tribunal, a specialist tribunal with expertise in deciding such claims.

124.The Government recognises that the proper decision maker in respect of an immigration claim is the Secretary of State for the Home Department, and the proper venue for deciding an appeal related to an immigration claim is the Tribunal. However, there is an overlap between these immigration claims and claims that can be made under the review and challenge mechanisms in the Act.

125.This section gives a power to the Secretary of State to make regulations setting out the mechanisms by which the immigration consequences of sanctions will be considered. These regulations will ensure that immigration claims are sent to the Secretary of State for the Home Department for decision, and appeals against such decisions are made to the Tribunal for resolution. This will ensure that immigration consequences which engage the UK’s obligations under the European Convention on Human Rights and the Refugee Convention will continue to be dealt with by those parts of government and Her Majesty’s Courts and Tribunals Service that are best equipped to deal with them. Finally, the power enables any consequential amendments to legislation, including primary legislation, that such provisions require. Regulations made under this power will use the draft-affirmative procedure.