The United Kingdom introduced the Global Anti-Corruption Sanctions Regulations 2021 on April 26, 2021. (the Regulations). The Sanctions and Anti-Money Laundering Act of 2018 establishes a new Global Anti-Corruption Sanctions Regime to fight serious corruption (SAMLA). Persons involved in "extreme corruption" around the world, described as "bribery" or "misappropriation of property," maybe named as sanctions targets under the Regulations. The following are comprehensive definitions of these terms:
- Bribery is described as providing financial or other advantages to a foreign public official in the form of financial or other facilities.
- Misappropriation of assets occurs when a strange public official illegally turns or allocates property assigned to them in their official capacity.
The Regulations enable the UK government to appoint individuals as asset-freeze targets, implement entry limits, or both for those who:
- Work for assets or financial instruments that belong to are governed by or are run by a specific individual.
- The asset-freeze sanctions prohibit making "funds" or "economic capital" available to or for the benefit of identified individuals, either directly or indirectly.
- Purposefully take actions that circumvent or "enable or facilitate" asset freeze offenses.
Becoming A Designated Individual Under the Regulations
The Regulations establish a set of requirements for deciding whether an individual is "involved" in serious corruption, including whether they are responsible for or participate in serious crime within the Regulations' framework. Moreover, under the Regulations, an individual can become a designated person if they:
- Facilitate or aid in the commission of severe corruption.
- Make a financial profit or get some other advantage from extreme corruption.
- Hide or disguise severe crime or any benefit or proceeds from such corruption or make it easier to hide or camouflage serious corruption or any gain or benefit from such corruption.
- Failing to carry out their duty to investigate and prosecute serious wrongdoing, whether expressly or impliedly.
Interfere with any law enforcement or legal procedure in connection with serious corruption by using intimidation, violence, or physical force.
The Foreign Commonwealth & Development Office, like the Global Human Rights Sanctions Regulations, has published a strategy paper with a non-exhaustive list of reasons that the UK government considers while seeking classification, including:
- Priorities of the UK government's anti-corruption policy: Loss to countries outside the UK and the UK's national security and economic concerns are among these goals.
- The corruption's scope, essence, and impact: The UK government, for example, should determine whether: The behavior is structural, the behavior is institutional and/or sophisticated, the financial importance of the profit obtained is essential in comparison to the local context, and the behavior entails foreign parties destabilizing the countries involved.
- The rank, relations, and actions of the "applicant": The UK government should recognize the individual's place in an organization's hierarchy, as well as whether that person has specific ties to the UK, and whether that person will be adversely affected by the Regulations' movement or financial restrictions
- International collective action: UK management should consider whether international partners have implemented sanctions and whether any action taken by the UK will enhance the designation's efficacy in fighting the corruption in question.
- Retaliation risk: The UK government should consider whether a classification may have any unintended consequences, such as retaliation or physical or emotional damage to journalists, civil society organizations, or informants.
What Are the Implications?
The Regulations are the next step in the United Kingdom's efforts to establish an independent sanctions regime after Brexit. They draw on the Global Human Rights Sanctions Regulations published last year. The Regulations further show that the UK government is committed to defending good governance in terms of law and fostering free societies — both of which are threatened by significant corruption, as noted in the explanatory memorandum.
To fight extreme corruption, the government is prepared to use a range of techniques. The prospect of penalties, including asset freeze controls under the Regulations as part of the UK's wider anti-corruption agenda, will be an effective deterrent, complementing other legislation such as the UK Bribery Act 2010.
Businesses subject to UK sanctions must try to pursue precaution when transacting with designated individuals, particularly those newly appointed individuals targeted by the Regulations. Firms with a corporate strategy of not doing business with people subject to foreign and national sanctions policies should change their policies and practices to match the new regime. Failure to do so would also definitely result in financial and legal implications.