Why the post-Brexit UK sanctions regime is facing criticism

The UK’s post-Brexit sanctions regime has raised significant concerns regarding due process and evidential standards before designated individuals and entities are subject to potentially devastating consequences. 

As will be argued, this is contrary to fundamental principles in UK law. Indeed, the UK Sanctions Regime, introduced in April 2021, has in fact undermined due process in the UK. 

Specifically, the UK Sanctions Regime allows the Foreign Secretary and their officials to apply the full force of the financial sanctions regime to individuals whom they claim they have reasonable grounds to suspect of being involved in serious corruption – however indirectly – while denying them the same means to challenge such a serious accusation as would have been available in the criminal jurisdiction. 

For under the UK Sanctions Regime, individuals can be subject to far-reaching consequences with little judicial oversight or ability to challenge the evidence and designation decisions. 

Unlike in relation to other UK asset freezing measures, where an applicant for a restraint or freezing order has high duties of disclosure and where a judge must be satisfied that an order should be granted, in the UK Sanctions Regime cases the freezing of assets and all the associated adverse effects can be affected by the whim of the Foreign Secretary and his officials. 

Further, there is no court involvement at the designation stage, and nowhere near the same level of open disclosure and scrutiny of such decisions, let alone the imposition on the government of any sort of burden of proof

With this in mind, this article explores the legal underpinnings of the UK Sanctions Regime, highlights the procedural and evidential deficiencies, and considers how current practices conflict with fundamental rights protected under domestic and international law.

Introduction to Sanctions

Sanctions are without doubt incredibly powerful tools in any government’s foreign policy arsenal, enabling the freezing of assets, imposition of travel bans, and trade restrictions. 

However, while effective in pursuing geopolitical goals, sanctions also impose severe constraints and consequences on individual rights. 

In the UK, the domestic legal framework for sanctions post-Brexit is established by the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018). 

The Legal Framework

Prior to Brexit, the UK implemented EU sanctions law, which was subject to the oversight of the Court of Justice of the European Union (CJEU). This system afforded designated persons certain due process rights, including the right to be informed of the reasons for designation, to make representations, and to challenge listings before an independent court.

Following Brexit, the UK adopted SAMLA 2018, which grants ministers broad powers to impose sanctions for purposes such as promoting national security or complying with international obligations (SAMLA 2018, s.1). Designations are made on the basis that the minister has "reasonable grounds to suspect" involvement in proscribed activities and considers designation "appropriate" (SAMLA 2018, s.11).

Due Process Deficits

Lack of Prior Notice and Effective Hearing

However, there are clear deficiencies. Primarily, designations are made without prior notice, denying individuals any chance to make representations before sanctions take effect. This ex-parte approach is justified on several grounds but is problematic when applied routinely. 

Indeed, the European court of Human Rights (ECtHR) has underscored the importance of adversarial proceedings and equality of arms, even in sensitive contexts.

Ministerial Discretion and Evidentiary Threshold

The presumption of innocence and burden of proof in English Law goes back hundreds of years, finding its origins in “Christian theology wherein convicting an innocent person was regarded as a mortal sin”. In Woolmington v DPP, Visount Sankey famously summarised the importance of the doctrine: 'Throughout the web of the English Criminal Law one golden thread is always to be seen, that it is the duty of the prosecution to prove the prisoner's guilt…’ 

This “golden thread” of the presumption of innocence, appears to be broken when it comes to sanctions designation decisions, when an individual can be publicly labelled as “corrupt” with little persuasive evidence and certainly evidence falling well short of proof “beyond reasonable doubt” following a contested trial.

Indeed, SAMLA provides minimal guidance on evidentiary standards. The threshold for designation — “reasonable grounds to suspect” — is significantly lower than in criminal or civil liability contexts. However, the consequences for individuals can be equally severe. Moreover, ministers retain wide discretion to sanction without a duty to disclose underlying evidence, limiting transparency and increasing the risk of arbitrary action.

Limited and Opaque Judicial Review

Although designated individuals may apply to the High Court to challenge their listing under SAMLA s.38, the court’s role is limited to reviewing the legality, not the merits, of the designation. 

In contrast, if mounted in criminal, proceeds of crime, or civil recovery proceedings, the making of such allegations could be properly challenged in court, in open proceedings. Not so under the Regulations, when designation can only be challenged after the event, and only on the grounds of irrationality, and only once an entirely pointless appeal to the government department itself has been rejected. 

Moreover, challenges are often hampered by the government’s reliance on closed material procedures (CMPs) under the Justice and Security Act 2013, which can deny applicants full access to the case against them.

Human Rights Implications

The UK remains bound by the European Convention on Human Rights (ECHR), which protects:

• Article 6 ECHR: Right to a fair trial, including access to a court and the right to adversarial proceedings.
• Article 1, Protocol 1 ECHR: Protection of property, which sanctions directly interfere with.

The ECtHR has found that asset freezes and travel bans constitute serious interferences with these rights and must be subject to robust procedural safeguards.

Comparative Analysis

European Union

The CJEU has shown a willingness to annul EU Council designations where adequate reasoning is not provided or due process is not followed.

United States

Although OFAC designations under U.S. law have also been criticized for due process gaps, the U.S. system provides some limited redress via the delisting petition process under 31 C.F.R. § 501.807 and judicial review in federal courts.

In our view, the UK regime is comparatively deficient, offering fewer procedural protections than either system.

Adverse effects of designation

Designation under the UK sanctions regime has the practical impact of an in individual being publicly named as a criminal, having assets frozen and travel restrictions imposed. Even assets held outside the UK are likely to be impacted, as the individual faces difficulty in accessing global financial markets and products.

Being designated as “corrupt” also has profound implications for ongoing business, family relationships, and family life. 

As such, we strongly recommend the following for reform:

Reform Recommendations

• Enhanced Notice Requirements: Mandate the government to provide a statement of reasons and summary of evidence upon designation.
• Higher Evidentiary Thresholds: Amend SAMLA to introduce a “balance of probabilities” or similar test for designation decisions.
• Independent Review Mechanism: Establish a statutory review panel or ombudsperson to assess designations.
• Mandatory Periodic Reviews: Introduce automatic court oversight at fixed intervals to reassess the necessity of continued designation.

Conclusion

The UK Sanctions Regime has removed key procedural safeguards, including those previously available under EU law, exposing individuals and entities to potentially arbitrary state action without adequate recourse. 

The combination of opaque ministerial discretion, limited judicial review, and exclusionary procedures falls short of the UK’s common law traditions and human rights obligations. 

Reform is urgently required to restore balance and credibility to the UK Sanctions Regime.