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Amendments to the Sanctions and Anti-Money Laundering Bill

Posted on 24 January 2018 by James Watson and Tim Thompson

Amendments to the Sanctions and Anti-Money Laundering Bill

The Sanctions and Anti-Money Laundering Bill began its report stage in the House of Lords on 15 January 2018. Of the various amendments under consideration, two stand out as being of particular importance to the sanctions regime because they affect the government's powers.

The purpose of the sanctions

The bill originally provided that the appropriate minister may impose sanctions regulations in three circumstances:

  1. for the purposes of compliance with a UN obligation;
  2. for the purposes of compliance with any other international obligation, or
  3. for one of the discretionary purposes set out in the bill.

The first of the amendments of note relates to the discretionary purposes set out in the bill. The bill, as originally introduced, set out only four discretionary purposes for which sanctions could be imposed. These were:

  1. for furthering the prevention of terrorism, in the United Kingdom or 
    elsewhere;
  2. if the sanctions are in the interests of national security;
  3. if the sanctions are in the interests of international peace and security, or
  4. for furthering a foreign policy objective of the government of the United 
    Kingdom.

The amendment added four more discretionary purposes to this list. These additional discretionary purposes are:

  1. to promote the resolution of armed conflicts or the protection of civilians in conflict zones;
  2. to promote compliance with international humanitarian and human rights law;
  3. to contribute to multilateral efforts to prevent the spread and use of weapons and materials of mass destruction, or
  4. to promote respect for human rights, democracy, the rule of law and good governance.

The test for imposing sanctions

The second amendment of note introduces additional requirements where a minister is considering making sanctions regulations for one of the discretionary purposes. The bill as originally drafted gave the appropriate minister the power to make sanctions regulations where they  considered that it was appropriate for the purposes set out above. Whilst the power to make the regulations remains the same, i.e. one of whether it is appropriate, the amendment - which was proposed by the Foreign Office Minister, Lord Ahmad of Wimbledon and supported by Lord Pannick and Lord Judge - added a further test requiring that:

  1. The minister has considered whether there are good reasons to pursue the purpose, and
  2. The minister is satisfied that the imposition of sanctions is a reasonable course of action for that purpose.

When making regulations, the minister must also lay a report to Parliament explaining why they consider these tests to have been satisfied.

It is interesting to note that despite the addition of Parliamentary scrutiny over sanctions, the bill still includes a clause which will allow the appropriate minister to direct that names be added or removed from the sanctions list providing they are already contained within "retained EU sanctions law". This power does not seem to require the minister to provide Parliament with any report justifying the inclusion of this name. As a result, it will not have the same parliamentary oversight as is highlighted above but, in order to curtail this power, the bill provides that it will cease to apply after two years from the date on which the section creating it comes into force.

What does this mean for UK sanctions?

These amendments may initially seem uncontentious but if implemented, the first will result in a significant widening of the UK's power to make unilateral sanctions. The current legal framework is largely derived from EU sources, with the domestic regime being very limited in its scope. When the Sanctions and Anti-Money Laundering Bill comes into force the UK will, for the first time, have its own fully fledged and independent domestic sanctions legislation. This autonomy could result in the UK sanctions program diverging from the European one.

It is worth remembering that, in April 2017, following a chemical weapons attack on Syria, the UK and US were unable to push for new Russian sanctions because of resistance from Europe. Were the sanctions bill to become law in its current form, this scenario could fall within the discretionary purpose of "promoting the resolution of armed conflicts or the protection of civilians in conflict zones". The UK could, as a consequence, proceed alone.

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