How will Brexit affect economic sanctions?

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Maya Lester QC

The House of Commons Foreign Affairs Committee made a statement the day after the EU referendum urging the Foreign and Commonwealth Office (“FCO”) to “be equipped to reassert its leading role in foreign policy-making so that Britain can take its place on the world stage”. One important issue for the FCO will be how it approaches economic sanctions.  While the UK remains in the EU, its only unilateral sanctions regime is its terrorist asset freezing powers (the Terrorist Asset-Freezing Act 2010).  For all other sanctions regimes, the UK implements and enforces sanctions imposed by the United Nations Security Council and the EU.  What will happen if the UK withdraws from the EU? The following is likely to be the case:

  • The UK will continue to have its own domestic sanctions powers in relation to terrorist asset freezing (on which the latest HM Treasury report is here and the latest of a series of reports by the Independent Review of Terrorism Legislation, David Anderson QC, is here).
  • When it is no longer a Member State of the EU, the UK will no longer be required to give effect to and enforce EU sanctions legislation. The UK will presumably no longer be part of the EU sanctions decision making machinery, in particular the RELEX working party in the Council of Ministers that deals with EU Common Foreign and Security Policy.
  • United Nations sanctions must continue to be implemented in the UK. These are sanctions regimes imposed by the UN Security Council, which the EU implements as a bloc of nations but which impose obligations on each individual UN member state.
  • On the enforcement side, the UK has a new office of financial sanctions enforcement (“OFSI”) which opened earlier this year (see this blog for details).  And the Policing and Crime Bill, if passed into legislation, will increase the available sentences and penalties for civil and criminal sanctions violations in the UK.
  • The FCO is the policy decision-maker in the UK (HM Treasury, OFSI and the National Crime Agency are the enforcement bodies). The FCO’s policy choices will presumably principally concern the UK’s approach to EU sanctions regimes. The UK could follow the EU (eg Switzerland generally follows EU sanctions, with some differences) and/or increase its own autonomous sanctions powers. Its decisions will in principle be subject to judicial review in UK courts (there have been some attempts to JR UK decisions in relation to proposing EU listings on targeted sanctions (eg this case), but no final substantive judgments).
  • The Iran nuclear / sanctions-lifting deal, the Joint Comprehensive Plan of Action, whose first anniversary was yesterday (14 July), will be remain in place, since the UK is a signatory in addition to the EU.  Details here.