As one of the world’s biggest economic and military powers, the UK has a legal and some would say moral obligation to ensure its ability to implement and support UN sanctions remains strong. Without the introduction of new legislation, Brexit could have resulted in the British Government being unable to fulfil its international obligations after exiting the European Union. Therefore, the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018) was passed to allow the UK to impose economic and other sanctions, and money laundering and terrorist financing regulations once it left the EU at 11pm on 31 December 2020.

SAMLA 2018 has two purposes:

  1. To enable the UK to create its own sanctions framework whereby it can issue its own sanctions rather than adopting EU or UN models, and
  2. Make provision for the purposes of the detection, investigation, and prevention of money laundering and terrorist financing, and to implement standards published by the Financial Action Task Force(FATF) rather than adopting EU directives.

Let’s look at each part of the Act in detail.

Part 1 – Sanctions

Section 1 of the Act confers broad powers on the Secretary of State and the Treasury to impose sanctions regulations that are considered appropriate for compliance with a UN obligation, for compliance with any other international obligation, or for a purpose that would:

  • Prevent terrorist acts in the UK or elsewhere
  • Be in the interests of national security
  • Further the interests of global peace and security
  • Assist a UK government foreign policy goal
  • Promote the end of a war or protect civilians caught up in a conflict zone
  • Discourage gross abuses of human rights, promote compliance with international human rights law or international humanitarian law
  • Contribute to mutual international endeavours to thwart the spread and use of weapons and materials of mass destruction
  • Foster respect for democracy and the rule of law

The threshold required to impose sanctions is lower under SAMLA 2018 than EU regulations as the former allows for the imposition of sanctions in situations where it is deemed ‘appropriate’, whereas the latter allows sanctions to be imposed only when it is necessary.

The types of sanctions available include:

  • Financial sanctions
  • Trade sanctions
  • Immigration sanctions
  • Aircraft sanctions
  • Shipping sanctions
  • Sanctions to aid the meeting of UN obligations


Designation by description

The Secretary of State or the UN can designate any person or organisation they feel should be the target of sanctions. In practice, designated persons tend to be in powerful positions and/or have substantial wealth.

Controversially, SAMLA 2018 allows for the designation of persons by “description” as well as by name. To exercise this power, the following conditions must be met:

  • Given the description specified, a reasonable person could establish whether the designated person fell within it.
  • At the time of designation, the Minister could not practically have named every individual who fell within the description.
  • The Minister had reasonable grounds to suspect:
    • that where the specified description is members of a particular organisation, that the organisation is an “involved person”; or
    • in the case of any other specified description, that any person falling within that description would necessarily be “an involved person”.


Can I challenge a sanction made under the Sanctions and anti-Money Laundering Act 2018?

SAMLA 2018 allows certain people to challenge designations.

Section 23 (1) provides:

At any time while a relevant designation has effect, the designated person may—

(a) request the Minister to vary the designation, or

(b) request the Minister to revoke the designation.

There is a Sanctions Review Request Form for designated persons and UN listed persons. However, it is essential to have expert legal advice and representation as sanctions are notoriously difficult to overturn or modify. UN sanctions being subject to criticism regarding poor safeguards for decades. Not only can people languish on the UN blacklist for years, but even death is also no guarantee your name will be removed as pointed out by the Chairman of the 1267 Committee (a body tasked with monitoring Afghanistan sanctions) in 2010.

“It’s not easy to get dead people off the list. We have to have convincing proof that they are really dead and also we have to have information on what happened to their assets, and this in many cases takes some time, but this is work that will have to continue.”

Part Two – Anti-money laundering regulations

The second part of Sanctions and Anti-Money Laundering Act covers anti-money laundering and terrorist financing. Rather than impose new obligations, it allows the British Government to demand, through enacting further regulations, that people engaging in relevant business to take applicable steps, including:

  • Identifying and assessing risks relating to money laundering, terrorist financing, or other threats to the integrity of the international financial system.
  • Having policies, controls, and procedures in place.
  • Taking prescribed measures concerning their customers, for example, conducting due diligence in the form of identity and source of funds checks.

Part two of SAMLA 2018 also addresses concerns over the transparency of ownership of foreign companies, something that is once again in the headlines following the recent Pandora Papers leak which reveal the offshore financial assets of dozens of current and former world leaders and hundreds of politicians across the globe. SAMLA 2018 requires the Secretary of State to publish regular reports on the progress made in creating a register of beneficial owners of overseas entities.

There is also provision for the Government to increase penalties for the breach of any prohibition or requirements under SAMLA 2018.


Concluding comments

Even as it was passing through Parliament, Sanctions and Anti-Money Laundering Act 2018 proved controversial, with the House of Lords labelling it “bonanza of regulations” and a “constitutional car crash.” In placing considerable power in the hands of the British Government, there are concerns around human rights breaches and the certainty of several sections. What is clear is that SAMLA 2018 represents a considerable change in what is now possible in terms of widening sanction and anti-money laundering laws.

If you are facing an investigation or prosecution for money laundering or want to challenge a sanction, our Criminal Law Solicitors can help. You can reach us through our contact page here.