Sanctions, embargoes, and restrictions: Part I

D Rosen We live in a very dangerous world, where chaos and destruction bring misery and decay to millions of people. Within a country’s armoury, there exist tools other than military action, to express repugnance and abject disagreement to the way things are done in certain countries or areas, by individuals, businesses, and other associations.

Home » Commercial litigation » Sanctions, embargoes, and restrictions: Part I

D Rosen

We live in a very dangerous world, where chaos and destruction bring misery and decay to millions of people.
Within a country’s armoury, there exist tools other than military action, to express repugnance and abject disagreement to the way things are done in certain countries or areas, by individuals, businesses, and other associations.

In the United Kingdom alone, there exists a list just in excess of 200 pages placing sanctions, embargoes, and restrictions (SERs), on doing business with individuals, businesses, and other organisations.

Such SERs currently span as a non-exhaustive list, the following countries:
Afghanistan, Belarus, Central African republic, Democratic Republic of the Congo, Egypt, Iran, Iraq, Ivory Coast, Liberia, Libya, North Korea, Republic of Guinea, Somalia, South Sudan, Syria, Tunisia, Ukraine, Yemen, and Zimbabwe.

The list can be found at https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets/consolidated-list-of-targets

The Department of Business, Innovation, and Skills, and Expert Control Organisation first published a business and enterprise guidance note on 3rd August 2015, with regular updates.

What are they?

Sanctions and embargoes are political trade restrictions put in place largely by the United Nations, the European Union, and the United States of America, to maintain or restore international peace and security.

A later blogpost will address the USA’s anti-corruption and anti-bribery mechanisms, with reference to the United States Foreign Corrupt Practices Act, and the ‘Resource Guide to the US Foreign Corrupt Practices Act’ issued by the Criminal Division of the US Department of Justice and the Enforcement Division of the US Securities and Exchange Commission.

What they do?

Such SERs exist to further the aims and objectives of the Common Foreign and Security Policy.

Why they have been imposed, and what they aim to achieve, is set out in each and every individual SER.

The general principle, is to change the behaviour of the target country’s regimes, individuals or groups, which will improve the situation in any given country or region.

Are they legal?

No SER can be applied without in turn ensuring the procedure to put it into effect in the first instance, followed international procedure.

What measures can be put in place?

The most frequently applied measures are:
•    embargoes on exporting or supplying arms and associated technical assistance, training and financing
•    a ban on exporting equipment that might be used for internal repression
•    financial sanctions on individuals in government, government bodies and associated companies, or terrorist groups and individuals associated with those groups
•    travel bans on named individuals
•    bans on imports of raw materials or goods from the sanctions target

The Foreign and Commonwealth Office has overall responsibility to put into practice SERs.

What Law governs such SERs?

The obvious Acts of Parliament that apply are the Terrorism Act 2000, and the Bribery Act. There are several other Laws which may also apply in order to impose the SERs.

What if SERs are breached?

Breaching SERs is likely to be a criminal offence which carries with it punishment by way of a fine, and/or imprisonment, together with possible orders for destruction, delivery up, confiscation, etc…

What to do if you are in breach of a SER?

Self-reporting breaches of financial sanctions are to be encouraged. To do so, will not give you a ‘get out jail card’, but it may mitigate your circumstances.

Can breaches be appealed?

Yes. They can.

Can SERs be lifted?

Yes. With financial sanctions, one can apply to Her Majesty’s Treasury for a license or authorisation to release funds frozen from accounts, or to make funds, economic resources, or financial services available.

The Courts may also consider an appeal.

Professor David Rosen is a solicitor-advocate, partner and head of litigation at Darlingtons Solicitors LLP. He is a member of the Society of Legal Scholars, the Royal United Services Institute, and the Association of Certified Fraud Examiners. He is an associate Professor of Law at Brunel University where he regularly lectures on fraud and corruption amongst other topics.

Commercial litigation • David Rosen

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