UK Will Have More Licensing Powers After Brexit, but Broad Sanctions Changes Unlikely, Lawyer Says

If the United Kingdom leaves the European Union on a “hard Brexit,” the U.K. will likely make use of more flexible licensing powers, publish more sanctions guidance and may quickly impose its own set of sanctions on human rights violations, said Maya Lester, a U.K.-based sanctions lawyer, during a KPMG webinar on July 25.

Lester said the U.K.’s Office of Financial Sanctions Implementation will have much “more flexible licensing powers … for granting exceptions authorizations to certain sanctions measures like asset freezes.” The new powers would come from the U.K.’s own sanctions law that it would enact upon Brexit, which differs from the “fairly restrictive” EU licensing policy, Lester said.

The U.K. will also start publishing more sanctions guidance for its various regimes, Lester said, as evidenced by the country’s recent publication of guidance for potential sanctions on Burundi, the Republic of Guinea and others (see 1907240027).

Lastly, the U.K. might impose sanctions for “gross violations of human rights or serious corruption” under the Global Magnitsky Act, “possibly even before a no-deal Brexit,” Lester said. “That’s certainly something that's being debated."

But while a hard Brexit would give the U.K. more flexibility under its sanctions regime, the government is not expected to enact broad policy changes, Lester said. “There is no policy change envisioned at the moment, at least in the short term,” she said. “Their goal so far has been to carry on being able to implement and apply U.N. and EU sanctions.” Lester said many U.K. officials view multilateral support for their sanctions as very important and do not want to jeopardize coordination with other countries by immediately imposing a large number of new unilateral measures. “I don’t think the government is straining at the bit to exercise new powers to do something completely different,” she said.

Lester also said it was “a little unfair” that the U.K.’s House of Commons Foreign Affairs Committee published a report in June criticizing the U.K.’s sanctions plans, which said they lacked a clear strategy and were “fragmented and incoherent” (see 1906120062). Lester pointed to the fact that the U.K. just named a new prime minister and a new foreign secretary and need more time to put together a strategy. “Personally, I think that's a little unfair because they have been getting the legal powers ready,” Lester said. “I think to criticize the government for not knowing yet what they will do in regard to individual regimes is perhaps a bit premature.”