Our London-based team of sanctions solicitors is committed to delivering top-tier legal advice and comprehensive legal solutions to address the challenges of sanctions law.
Our expertise in Sanctions Law
- Sanctions Designation and de-listing
- Sanctions Exemptions and Licenses
- Sanctions Compliance
- Russia Sanctions
What are Sanctions?
International economic sanctions are politically motivated restrictive economic measures that target various states, entities or individuals, limiting their economic interests and/or rights. Economic sanctions can be unilateral (taken by one state) or multilateral (taken by a group of States or by an international/supranational organization) in nature. Typical examples are: trade embargoes; asset-freezing measures or investment restrictions.
Primary & Secondary Sanctions
Sanctions come in two forms: primary sanctions; and secondary sanctions. Primary sanctions are imposed on nationals residing in a sanctioned country. They prohibit a sanctioning country’s nationals and entities from engaging in any sort of trading activity with an entity that is the subject of the sanctions.
For example, following Russia’s annexation of Crimea, the US government prohibited, among other things, new investment in Crimea by US Individuals. Likewise, UK nationals would be prevented by the Russia (Sanctions) (EU Exit) Regulations 2019 from providing services, funds, economic resources of any kind to a sanctioned individual or entity in Russia.
Secondary sanctions are applicable to entities that are not nationals or residents of a sanctioning or sanctioned country. They prevent third parties from engaging in economic activities with the target entity.
For example, the sanctions imposed by the US against Iran, which provide global financial institutions with a choice to either halt transactions with Iranian banks or lose access to the US financial system.
This measure effectively bars the sanctioned party from doing business with customers and suppliers in the US and/or UK, as it prevents access to the currency. In the case of the US, this is particularly severe, as the U.S. dollar is not only involved in 60% of foreign exchange deals, but is also the primary currency in which important commodities such as oil and precious metals are typically bought and sold. It can have a devastating impact on other forms of trade, such as the manufacture of airplanes, as much of the software for building airplanes is manufactured by US manufacturers, even the parts for example.
Sanctions in the United Kingdom
The background to the current UK regime is the scheme of sanctions was introduced by the United Nations and continued by the European Union. Initially the UK gave effect to the UN Resolutions, but as a result of challenges (specifically the case of Ahmed v HM Treasury 2010), the UK then implemented the UN resolutions through EU Regulations starting with Council Resolution 81/2002. That Regulation was adopted to implement UN Resolution 1390 and it used the same language to identify what was to be frozen: “funds and economic resources” which has remained the standard wording across EU sanctions regulations.
The current sanctions regime against Russia has its roots in the EU Council Regulation 269/2014 in response to the Russian invasion of Crimea. Article 2 provides the core principles:
“1. All funds and economic resources belonging to, owned, held or controlled by any natural persons or natural or legal persons, entities or bodies associated with them as listed in Annex I shall be frozen.
2.No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural persons or natural or legal persons, entities or bodies associated with them listed in Annex I.”
Following Brexit, the UK needed a new sanctions regime to implement the UN sanctions and impose its own regime. This was contained in the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018) and the Russia (Sanctions) (EU Exit) Regulations 2019 (Regulations) which came fully into force on 31 December 2020. Under section (1) of SAMLA 2018, an appropriate Minister may make sanctions regulations where that Minister considers that it is appropriate to make the regulations:
“(a)for the purposes of compliance with a UN obligation,
(b) for the purposes of compliance with any other international obligation, or
(c) for the purpose within subsection (2).
Subsection 2 then sets out a wide range of circumstances under which the Minister may impose sanctions, but at subsection 3 it provides that the Regulations must be in accordance with a UN obligation. Subsection 8 explains what that obligation means.
If you have been designated on a prescribed sanctions list or require legal advice regarding trading in a country subject to UK, EU, US, or UN sanctions, our specialist London-based solicitors and lawyers can provide expert, commercially astute legal advice and representation.
Consequences of failing to comply with Sanctions
Any person who contravenes these prohibitions commits an offence. Under section 146(1) and (1A) of the Policing and Crime Act 2017, the Treasury has the power to impose a monetary penalty on the offender. It is a strict liability offence because there is no requirement that the offender must have known or suspected that the was in breach of the prohibition.
OFSI publish a list of penalties imposed, which can also include monetary penalties of either 50% of the value of any given transaction, or a fine of up to £1 million. A link to OFSI’s published penalties can be found here
The UK courts have handed down several judgments on the meaning of SAMLA and the Russia Regulations, which you can read about on our News page.
Can I be removed from a sanctions list?
Our team has a robust track record of advising and representing designated people who have been added to a sanctions list and have discovered that their bank accounts and assets have been frozen. The method of challenging being named a designated person depends on the source of the sanction list, namely the UN Security Council, the Council of the European Union, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, or the UK government.
In conjunction with our network of trusted partner law firms around the world, our business crime solicitors will work tenaciously and quickly to remove your name from a sanctions list and lift any freezing orders made against you and/or your business interests.
What happens if my assets are frozen?
If you discover your assets have been frozen neither you nor anyone else will be permitted to:
- Use, access, sell, or dispose of the frozen property and/or assets.
- Provide money or economic resources, directly or indirectly, to you and/or the entity/s affected by the sanctions.
- Participate in endeavours that sidestep the sanctions to make funds available and/or use, access, sell, or dispose of the frozen property and/or assets.
Financial sanctions are extremely serious and in most cases, the affected person or entity only discovers sanctions have been applied when they find they can no longer access their bank accounts or deal with their business interests.
If this happens to you you must get in touch with us immediately so we can quickly establish what sanctions have been employed and swiftly apply to the relevant court or government body to have the sanctions mitigated or lifted.
International Sanctions Expertise
We have a team of highly-qualified, multi-lingual corporate crime and commercial solicitors and counsel. Our lawyers have connections in multiple jurisdictions, including the UK, USA, Russia, Kazakhstan, Iran, Turkey, and South Africa. We have successfully advised clients on:
- Challenging sanctions.
- Getting removed from designated lists.
- Lifting injunctions and freezing orders against assets and bank accounts.
- Penalties for breaching sanctions when trading with affected countries.
- Conducting risk assessments concerning the possible impact international sanctions may have on your business.
- Obtaining an OFSI licence for continuing business dealings with a sanctions target.
Contact our Sanctions Solicitors in London
We focus on niche practice areas, international legal knowledge, and the sheer intelligence and commitment of our team. Eldwick Law is one of the few firms in the UK that have the expertise and contacts required to successfully challenge sanctions designations.