UK Introduces New Global Anti-Corruption Sanctions Regime

• Published date: 25 May 2021
• Subject Matter: Government, Public Sector, Criminal Law, Human Rights, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Morrison & Foerster LLP
• Author: Mr Gareth Rees, Hayley Ichilcik, Pietro Grassi and Matthew Rodin

The Regulations: An Overview

On 26 April 2021, the UK's first sanctions under the Global Anti-Corruption Sanctions Regulations 2021 (SI 2021/488) ("the Regulations") came into force. The Regulations are made under the Sanctions and Anti-Money Laundering Act 2018 and combine with UK Global Human Rights regime introduced in July 2020. The sanctions are designed to capture individuals or entities profiting from bribery and misappropriation of state funds from any country outside the UK, as well as colluding with terrorists and drug trafficking.

Individuals and entities designated under the regime are included on the consolidated UK sanctions list. They are prevented from entering the UK, opening UK bank accounts, or doing business with UK businesses. Any assets that they already hold in the UK are also frozen. Those designated under the Regulations have the right to request that a minister reviews the decision and can also apply to challenge their designation in the UK courts.

The restrictions have initially targeted 22 individuals:

• Several individuals involved in serious corruption in Latin America, such as facilitating bribes to support major drug trafficking organisations.
• Fourteen individuals involved in in the diversion of $230 million of Russian state property through a fraudulent tax refund scheme uncovered by Sergei Magnitsky in 2009.
• Three individuals in South Africa for their roles in serious corruption, which caused significant damage to the country's economy.
• A South Sudanese businessman for his involvement in the misappropriation of significant amounts of state assets.

A shift in approach

The Regulations are an indication of the UK's tougher stance regarding sanctions. This is the second set of autonomous UK sanctions that have been introduced since the UK left the EU, following the entry into force of the global human rights sanctions regime in July 2020. Since then, the UK has imposed sanctions on 78 individuals and entities involved in serious human rights violations around the world. The UK Foreign Secretary's statement to Parliament placed significant emphasis on enhancing the UK's anti-corruption profile as "a global leader in tackling corruption and illicit finance." ¹

Alignment with the United States

The sanctions regime gives UK authorities an additional tool in their arsenal, which, along with legislation such as the UK Bribery Act 2010 ("UKBA") and the Proceeds of Crime Act 2002 ("POCA"), can be used to combat extraterritorial...