Sanction Checks in the UK

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What is a Sanction Check?

Sanction Checks and Embargoes in the UK

The United Nations sometimes places sanctions and embargoes against target countries, organisations, and individuals, this requires companies to enforce sanction checks. It does this to restore international peace and security, which is why its Security Council implements such changes. Individual nations can also place sanctions and embargoes themselves. Theyre also known as political trade restrictions.The EU may also impose and uphold sanctions and embargoes as part of its Common Foreign and Security Policy (CFSP) objectives. The Organisation for Security and Co-operation in Europe can impose national arms embargoes.

Why impose sanction checks?

The aim of sanctions and embargoes is to alter the target country, individual, or group regimes to improve the situation in the region. All UN and EU sanctions feature information on why the sanctions were put in place and what the aim is.The end objective of a sanction can vary according to the situation in that country. For example, the UK may place an arms and raw material embargo on a country with the aim of restoring peace there. It could do this because it aware that continuing trade would support financing weapons used to derail peace processes. Some embargoes may be issued to prevent weapons from falling into the hands of terrorist organisations. Or, they could be promoted to encourage the target nation government to change the way it acts towards its citizens.

Types of sanction checks and embargoes

When a sanction or embargo is set, the UK follows international procedure to put it in place in British law. The UN Security Council imposes sanctions through Security Council Resolutions. The EU will then adopt a common position and introduce EU regulations to EU member states. In some cases, the UK may need to introduce or amend legislation rather than just engage in administrative action.The most common sanctions and embargoes include:

  • Embargoes on exporting or supplying arms and associated technical assistance, training and financing.
  • A ban on supplying equipment that could be used to repress the population.
  • Financial sanctions on individuals in government, government bodies and associated companies, or terrorist groups and individuals associated with those groups
  • Financial sanctions on government officials, government bodies, associated companies, terrorist groups, and persons associated with terrorist groups.
  • Travel bans on named individuals.
  • Banning imports of raw materials or goods from a target nation.

Other measures may be applied according to individual circumstances.

Targeting sanctions

All sanctions and embargo regimes are targeted. A Ëœtargeted restriction is focused on individual people or organisations. This can include a specific restriction against a country regime. Some sanctions may focus on a specific industry. For example, importing petrol from a particular country.

Putting sanctions and embargoes into practice

The Foreign & Commonwealth Office (FCO) has overall responsibility for the UK policy on sanctions and embargoes.

Arms embargoes

These embargoes are generally imposed by the UN or EU on Ëœarms and related material (such as military ammunition, weapons and goods). The UK typically interprets this as covering all goods and technologies on the UK Military List. Goods that are not specifically listed might also need a licence under the Military End-Use Control. Controls on the supply of military items between another third country and the sanctions target (trafficking and brokering) also apply.The UN or EU usually imposes embargoes on weapons, arms, and related materials. When the UK receives such embargoes, they interpret them to mean any goods or technologies featured on the UK Military List. Anything that isnt on this list may require a license under the Military End-Use Control. This can extend to the supply of military items between a third-party country that brokers with the target.Specific sanctions are imposed on dual-use goods, which can include petrochemicals or telecoms items. The key regulator for exporting and trading in controlled strategic goods (military and dual-use) and also the administration of licensable goods subject to arms embargoes is the Export Control Organisation (ECO). The ECO forms part of the Department for Business, Innovation and Skills (BIS).

Import licensing

In some cases a sanction may include an import ban.

Financial sanctions

Financing sanctions can vary. Some are quite clear, such as not transferring funds to a sanctioned country or freezing the asset of the target country government. Others may apply to specific individuals, entities, and governments either resident in the UK or abroad. Other sanctions include not performing financial services for the target country or party, including insurance and banking services.It is a criminal offence to breach a financial sanction, without an appropriate licence or authorisation from the Office of Financial Sanctions Implementation. Her Majesty Treasury (HM Treasury), through the Office of Financial Sanctions Implementation is responsible for:

  • Implementing and administrating financial sanctions in the UK.
  • Generating licenses for exemption to financial sanctions.
  • Domestic designations under the Terrorist Asset-Freezing etc. Act 2010
  • Directions given under Schedule 7 to the Counter-Terrorism Act 2008

Travel bans

The UK Border Agency is responsible for travel bans.

Exporting without a licence

Exporting strategic or controlled goods without a license is a criminal offence. Such licenses must be gained from the Export Control Organisation (ECO) of the Department for Business, Innovation, and Skills. Some goods are subject to outright bans.It is vital that individual traders and brokers check that their goods can be exported or traded to a destination. Missing or incorrect licenses may result in seizure, delays, fines, penalties, or imprisonment.Legislation changes rapidly, which means exporters and traders working in controlled sectors have a responsibility to keep up with the law. If you work in a sector such as defence manufacturing, you need to subscribe to update notices from relevant government departments. This may include the ECO, Import Licensing Branch, or HM Treasury. If you or your business are impacted by sanctions you should seek your own legal advice.

Strategic export control and arms embargoes

Secondary legislation introduced under the Export Control Act 2002 provides licensing and enforcement powers to the Department for Business, Innovation and Skills (BIS) in relation to sanctions and embargoes on military and dual-use items.

Brief overview of export controls

The ECO is tasked with processing applications for licenses to export strategic goods, software, and technology from the UK. This goes further than including just military products. It also covers dual-use items such as chemicals, lasers, high-powered computers, cryptographic items, and much more.The key to determining if your export or trade deal is licensable depends on four key factors:

  • The type of item being exported “ is it on the UK Strategic Export Control Lists?
  • The destination youre trading with “ is it subject to trade embargoes?
  • End-use of the items, especially dual-use items.
  • Other licensable trade or export activities

Banned goods

Some goods are outright illegal, which includes anti-personnel landmines, laser weapons, or large volumes of nuclear material or nuclear weapons and technologies reaching non-recognised nuclear weapon states. It illegal to import or export any item that could be used for capital punishment.

Export responsibilities

Individual exporters must check that their goods can be exported or traded to their end destination. Missing and incorrect licenses may result in fines, seizures, penalties, delays, or imprisonment.

Complying with financial sanction checks

Financial sanction checks in force in the UK may apply to individuals, entities and governments, who may be resident in the UK or abroad. Failure to comply with financial sanctions is a criminal offence. HM Treasury treats all breaches of financial sanctions seriously, and expects you to fully comply with all current and future financial sanctions.Be aware that financial sanctions in force in the UK can apply to governments, entities, and individuals. All of these can be resident in the UK or abroad. Not complying with these sanctions constitutes criminal activity. HM Treasury takes all such breaches seriously and expects full compliance with both current and future sanctions.

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