1. Introduction
- As of 1:00 p.m. BST July 6, 2020, the
GHR Regulation came into force, representing the introduction of
the U.K.'s long awaited GHR Regime.
- The GHR Regime is the first
standalone U.K. sanctions regime to be in current operation under
the Sanctions and Anti-Money Laundering Act 2018. Various other
U.K. sanctions regimes will take effect in the U.K. at the end of
the transition period (currently scheduled for December 31,
2020).
- Under the GHR Regime, 47 individuals
of Russian, Saudi Arabian and Myanmar/Burmese nationality, and two
North Korean entities, are subject to financial sanctions and/or
travel bans. Further designations are expected to follow, possibly
including those engaged in China's recent conduct in Hong
Kong.
- The GHR Regulation marks a departure from the U.K.'s collective imposition of sanctions as a member of the European Union, in particular, as, post-Brexit, the U.K. will no longer be held back by the EU's requirement for unanimity amongst member states before designations are made. The EU has yet to introduce a global sanctions regime to specifically address human rights violations.
2. Background
In September 2019, U.K. Foreign Secretary Dominic Raab announced the government's intention to introduce unilateral post-Brexit ‘Magnitsky' style sanctions for individuals deemed responsible for serious human rights abuses. So-called Magnitsky sanctions refer to the U.S. regime introduced to target officials responsible for the death of Russian tax lawyer Sergei Magnitsky, who died from mistreatment in a Russian prison in 2009, after revealing large-scale tax fraud. Similar regimes targeting human rights abusers exist in certain other countries, including Canada and Australia.
3. GHR Regulation
(a) Current Designations
The framework for designating human rights offenders (the
“GHR Regime”) is intended to target individuals and
organizations from all over the world that are involved in serious
human rights violations or abuses. The designations announced on
July 6 pursuant to the Global
Human Rights Sanctions Regulations 2020 (the “GHR
Regulation”) include:
- Twenty-five individuals of Russian
nationality involved in the detention and mistreatment of Sergei
Magnitsky before his death in November 2009, encapsulating several
investigators, heads of detention centers/medical wards and court
officials who together facilitated the mistreatment and denial of
medical care to Sergei Magnitsky. All individuals are of Russian
nationality, however, some were born in other countries
(Uzbekistan, Azerbaijan).
- Twenty individuals of Saudi Arabian
nationality who were involved in orchestrating or carrying out the
unlawful killing of Jamal Khashoggi at the Saudi Consulate in
Istanbul on October 2, 2018, and the concealment of evidence
thereafter.
- Two members of the Myanmar military
forces responsible for leading Tatmadaw troops and the human rights
violations committed by the Tatmadaw against the
Rohingya population in Rakhine state.
- Two North Korean state security ministries linked to the commission of human rights violations against prisoners (i.e., murder, torture, enslavement, forced labor).
(b) The Nature of the Sanctions in Place and Criteria for
Designation
The GHR Regulation imposes (i) financial sanctions, in the form of an asset-freeze and a prohibition on making funds or economic resources available, directly or indirectly, to or for the benefit of designated persons, and (ii) a travel ban targeting designated persons.
Under the GHR Regulation, the Secretary of State is empowered to designate a person for the purpose of the financial sanctions and/or travel ban where there are reasonable grounds for suspecting they are an “involved person” (IP) in relation to certain human rights violations or abuses. The designation of such persons is intended to deter, and provide accountability for, such activities. The government clarifies in its Explanatory Memorandum that designations could apply to both state and non-state actors.
An IP is a person who is or has been involved in activities
which, had they been carried out by or on behalf of a state within
the territory of that state, would amount to a serious violation by
that state of certain human rights. These rights include an
individual's: (i) right to life, (ii) right not to be
subjected to torture or cruel, inhuman or degrading treatment or
punishment, and/or (iii) right to be free from slavery, not to be
held in servitude or required to perform forced or compulsory
labor. A person will be involved in an activity under (i) to (iii)
if they:
- Are responsible for or engage in such
an activity.
- Facilitate, incite, promote or
provide support for such conduct.
- Conceal evidence of such
conduct.
- Provide financial services, or make
available funds, economic resources, goods or technology that could
contribute to such conduct, or to a person who is responsible for
or engages in such conduct.
- Profit financially or obtains any
other benefit from such conduct.
- Are responsible for the investigation
or prosecution of such conduct and intentionally or recklessly
fails to fulfil that responsibility.
- Contravene, or assist with the contravention of, the GHR Regulation.1
An IP also includes those owned or controlled, directly or indirectly, as well as those acting on behalf of or at the direction of, or being a member or being associated with, persons involved in activities (i) to (iii) above.2 The U.K.'s conditions for assessing ownership or control should also be considered against Schedule 1 to the GHR Regulation, which includes the U.K.'s comprehensive Post-Brexit rules for interpreting ownership or control that diverge from the assessment of ownership and/or control under the EU's sanctions. In particular, a less than 50 percent shareholding of an IP in an entity can, under certain circumstances, subject that entity to the same prohibitions as apply to the IP.
4. Potential China Designations
On July 2, U.K. Foreign Secretary Dominic Raab, during a House of Commons discussion on the new Hong Kong National Security legislation, stated that the forthcoming sanctions designations may include Chinese officials involved in this recent conduct in Hong Kong. As Chinese officials were not included in the designations published on July 6, we expect further designations of such individuals could follow shortly.
5. Takeaways
- With the U.K. no longer required to
obtain EU-wide consensus to sanctions designations post-Brexit, the
GHR Regime demonstrates that designations will be imposed more
swiftly by the U.K. in response to political developments going
forward.
- The introduction of an autonomous
sanctions regime is also likely to signal the U.K.'s
intention to adopt a more independent sanctions policy post-Brexit,
rather than being strictly tied to what the EU does or has done
before it.
- The Secretary of State has broad
powers to impose sanctions designations under the GHR Regulations.
There appears to be a considerable likelihood these will be
utilized in the coming weeks to designate Chinese officials under
the GHR Regime.
Originally published by Akin Gump, July 2020
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