UK Anti-Corruption Sanctions: A Year in Review

UK Anti-Corruption Sanctions: A Year in Review

As the UK’s anti-corruption sanctions programme marks its first anniversary, how has the UK Government used its powers, and what should it do better?

Introduced on 26 April 2021, the UK’s Global Anti-Corruption Sanctions Regulations (“GACS”) has provided the UK Government with an important new tool for tackling the most egregious corrupt practices committed around the world. The GACS regime allows the UK Foreign Secretary to sanction individuals and entities for their involvement in bribery or misappropriation of state assets. They are commonly referred to as a type of “Magnitsky” sanctions.

As the former UK Foreign Secretary, Dominic Raab, recognised when introducing the regime, anti-corruption sanctions can be a powerful tool to hold the corrupt to account and prevent the UK from being a haven for kleptocrats.

REDRESS and the UK Anti-Corruption Coalition (UKACC) have published a review of the first year of the UK anti-corruption sanctions, outlining how the UK Government has used it powers and identifying key areas for improvement. You can read the report here, and the Financial Times‘ coverage here.

As the report highlights, over the past year:

The UK has sanctioned 27 corrupt actors, 14 of whom have been involved in corruption in Russia.
The effectiveness of the UK’s approach has been undermined by a number of limitations, including the absence of a strategic approach, insufficient coordination with its allies, including the US, and a lack of implementation and enforcement.
There has also been a marked stagnation in the use of anti-corruption sanctions since the current Foreign Secretary’s appointment in September 2021. Between September 2021 and February 2022, no actors have been sanctioned under the UK’s GACS regime. The UK has currently sanctioned less than 10% of individuals designated for corruption under the US’s Global Magnitsky sanctions regime.

If anti-corruption sanctions are to be effective as a tool to tackle illicit finance, uphold human rights and promote open societies, they must be used ambitiously, consistently, and appropriately. The UK Government should also recognise, as the US has, the benefits of a holistic approach to anti-corruption enforcement. Sanctions should be used alongside other enforcement measures: this includes asset recovery mechanisms which would facilitate the repatriation of ill-gotten gains to the true victims of corruption.

REDRESS and UKACC make the following recommendations to the UK Government:

Adopt a more strategic and considered approach to sanctions, ensuring that they are used to disable corrupt networks by taking action against those at the leading, central players, in addition to enablers, family members (where appropriate), and other associated individuals and entities.
Work with key partner jurisdictions, including the US and EU, to share information and impose coordinated sanctions where appropriate and make such sanctions as effective as possible.
Ensure robust oversight of the use of sanctions, particularly in light of the amendments introduced under the Economic Crime (Transparency and Enforcement) Act 2022, which widened the Government’s sanctions powers and removed regular review and reporting requirements. This could be achieved through a Parliamentary committee and/or an independent expert panel.
Substantially increase the resources available to the Foreign, Commonwealth & Development Office (“FCDO”) Sanctions Unit and the Office of Financial Sanctions Implementation (“OFSI”) to increase capacity for sanctions designations and support more effective enforcement of sanctions and asset freezing.
Improve transparency and oversight of the GACS regime through regular public reporting of data on the usage and effectiveness of sanctions, including a breakdown of assets frozen, the number of fines imposed for breaches, details of any enforcement actions taken, and the resources available to the FDCO Sanctions Unit and OFSI.
Review how the sanctions regime can work in tandem with the asset recovery regimes more effectively to ensure assets are confiscated as well as frozen, including by reviewing the policy guidance note under the GACS sanctions regime in relation to when sanctions will be used where UK law enforcement has jurisdiction.

Further information

This analysis forms part of REDRESS’s wider programme of work on using targeted sanctions to prevent and provide accountability for human rights abuses and corruption. REDRESS (i) builds evidence to ensure perpetrators are sanctioned; (ii) supports global civil society in engaging with UK sanctions mechanisms; and (iii) conducts policy analysis to promote the effective use of sanctions. For more information, please contact Charlie Loudon, International Legal Adviser ([email protected], @CharlieLoudon) and Megan Smith, Legal Officer ([email protected]).

Photo by Matthew Henry on Unsplash.