As advised previously in our client alert on the UK sanctions regime during the transition period, until the end of the transition period (31 December 2020), the UK is bound by existing EU sanctions decisions. It does, however, have the power to diverge from any new EU sanctions regime and to adopt more extensive measures of its own under the 2018 Act.
Although the UK has taken steps under the 2018 Act to set out its post-Brexit sanctions regime, to date these have largely sought to maintain and extend the position under the EU sanctions regime following the end of the transition period. The imposition of these new measures, however, marks the first divergence from the EU position.
The list of individuals subject to the asset freezes and travel restrictions will be announced by the UK foreign secretary, Dominic Raab, later today. The new restrictions will come into force immediately and will target individuals for alleged human rights abuses, with Saudi Arabian, Russian and North Korean individuals expected to be named.
As the UK starts to depart from the EU sanctions position, companies should ensure that their sanctions policies and procedures account for the UK’s own regime. This is particularly important for UK-domiciled entities, and for companies with UK-based counterparties, which use financial institutions acting from an office or branch in the UK, or which contract under the laws of England and Wales, or another UK jurisdiction. Steps to consider include reviewing sanctions clauses to check that they reference the UK sanctions regime appropriately as well as checking with screening service suppliers as to their coverage of UK sanctions lists.
Client Alert 2020-428