Financial sanctions and export controls are economic restrictions designed to promote foreign policy or national security objectives.
Often imposed suddenly in response to an unforeseeable event, sanctions and export controls can limit the provision of financial services, restrict access to financial markets, funds and economic resources and freeze assets.
Not only are the financial implications of sanctions and export controls often extremely serious, the ramifications of being found guilty of breaking the law in regard to either may be even more so.
Any individual found guilty of breaking UK sanctions law can face punishment of up to seven years imprisonment A corporate body which is convicted can be given an unlimited fine but alternatively could be subject to an administrative penalty of up £1 million or 50% of the amount involved (whichever is the greater). Breaches could also lead to other criminal allegations such as money laundering and terrorist financing.
The international nature of this area of law however means many such cases will attract the attention of overseas law enforcement agencies, most especially the US Department of Justice.
The UK has now implemented its own financial sanctions regime under the Sanctions and Anti-Money Laundering Act 2018 as well as through various parts of counter-terrorism legislation. It also implements measures applied by international organisations such as the UN via domestic law.
Breaches of these sanctions can be enforced by criminal prosecution but also by administrative penalties imposed by the Office of Financial Sanctions Implementation (OFSI).
Both the targets of sanctions and those associated with them through economic connections will require expert advice on compliance and risk of breaches as well as the interrelationship with other aspects of enforcement such as anti-money laundering and counter terrorism financing legislation.
Export controls are a set of restrictions that apply to certain categories of product manufactured in the UK. At the time of writing export controls apply to:
Other items may well require a licence for destination countries that are subject to trade embargoes or sanctions or if the goods are likely to be sent to an end-user for weapons of mass destruction.
UK export controls law is governed by the Export Control Act 2002 and the Export Control Order 2008. Breaching the restrictions can result in up to 10 years imprisonment.
Any person or organisation which does or may seek to trade in the above categories of product is advised to seek expert legal advice before doing so.
Hickman & Rose has significant experience of acting for clients in sanctions and export control-related matters. Our public domain work in this area includes: