Sanctions after Brexit – why UK businesses will face a greater compliance burden

White & Case LLP

The Sanctions and Anti-Money Laundering Act, which received royal assent on 23 May 2018, creates a framework for the UK's sanctions and anti-money laundering regimes post-Brexit. Although the Act does not give full details of these regimes, it suggests that sanctions compliance requirements for UK companies are likely to increase significantly post-Brexit.

In particular, the prospect of sanctions being applied to persons identified by description (rather than by name) will force many UK businesses to enhance their sanctions screening processes, and the UK's sanctions reporting requirements will dramatically expand to apply to all individuals and companies, with failure to comply being a criminal offence. UK businesses should consider what changes to their systems and controls may be needed ahead of the Act coming into force next year.

Why is the Act needed and what does it do?

Currently, most UK sanctions and anti-money laundering (AML) measures originate from the EU acts. In the case of sanctions, these often implement United Nations sanctions, but also feature unilateral EU measures. The UK implements these measures via the European Communities Act 1972, which will be repealed as part of Brexit. The EU (Withdrawal) Bill will copy existing measures into UK law post-Brexit (with some adaptations to reflect the fact that the UK is not an EU Member State), but will not allow those measures to be updated or new measures to be introduced.

The Act enables the UK to do this. The main provisions will take effect at a date to be determined, expected to be the date of the UK's formal exit from the EU. It gives the Government broad powers to introduce sanctions and AML measures through Ministerial regulations, allowing the UK to develop its own sanctions and AML regimes post-Brexit. The main features of the Act are set out below.

Public registers of beneficial ownership in the UK's overseas territories

The Act requires each UK overseas territory – including the offshore financial centres of the Cayman Islands, Bermuda and the BVI – to establish a publicly accessible register of beneficial ownership of companies registered in its jurisdiction. Any territory that fails to do so by 31 December 2020 will have a register imposed by the Government.1

Increased sanctions powers

The Act gives the Government wider powers to impose various types of sanctions. These include financial sanctions, immigration sanctions, trade sanctions, as well as aircraft and shipping sanctions. Such sanctions can be imposed to comply with UN obligations, or if the Government considers that they would further a number of policy objectives, such as UK foreign policy, international peace and security, the resolution of armed conflicts, or support for human rights (as discussed below).

The expanded powers give the Government greater flexibility to impose sanctions, but increase the likelihood of longer-term divergence from the EU's sanctions regimes. The Foreign Secretary has emphasised that it is in the UK's and the EU's interests to cooperate on sanctions post-Brexit, and close cooperation is likely in the short term. Political considerations, including the willingness to align measures with other jurisdictions in order to increase pressure on foreign regimes, will determine how long this lasts and to what degree. Substantial divergence is likely to increase compliance costs for businesses that need to comply with both EU and UK sanctions.

Designating unnamed persons

A typical sanctions measure is the 'asset freeze', whereby the assets of certain designated persons are frozen, and it is prohibited to make available to them any funds or economic resources. Designated persons (both individuals and entities) are listed in a consolidated list by name and known identifying characteristics. The Act envisages that the asset freeze could also cover unnamed persons, identified only by their description. This might be done in situations where it is not practical to name all relevant persons individually. The description must be sufficiently precise that a reasonable person can know whether a particular person falls within it, and the Government intends to provide as much information as possible when this power is used, to make it easy to identify the relevant persons.

It is unclear how straightforward it will be in practice for businesses to identify customers and counterparties falling within a given description. Regardless of the information provided by the Government, businesses with limited information about customers or counterparties will find it difficult to assess whether they are covered. Businesses are likely to need significant enhancements to their due diligence and sanctions screening processes, given that they will no longer be able to rely on simply running the names of customers and counterparties against the consolidated lists of designated persons.

Expanded sanctions reporting requirements

Currently, UK sanctions reporting requirements only apply to certain professions and businesses (e.g. those in the financial sector, legal professionals, estate agents, dealers of precious metals or stones); failure to comply is a criminal offence. The EU extends reporting requirements to all natural and legal persons (primarily as regards the asset freeze), but currently this is not reflected in the UK regime, and businesses that fall outside the UK requirements are not always fully aware of the EU requirements.

Under the Act, all future UK sanctions may include broad reporting obligations. The Government has indicated that it plans to use the Act to extend the UK reporting requirements (and the related criminal offence) to all natural and legal persons. The Government believes the impact will be limited, because everyone should already be complying with the wider EU requirements. However, where in practice this is not the case (e.g. because businesses are not fully aware of the EU requirements), the expanded requirements are likely to impose an additional compliance burden on UK businesses, with those that fail to comply facing criminal penalties. Businesses will need to be confident that their systems and controls cover reporting potential breaches of sanctions and interactions with sanctioned persons.

Sanctions for human rights violations

A so-called 'Magnitsky clause' allows the UK to impose sanctions to punish or deter "gross violations of human rights". This is narrowly defined to mean torture (or other cruel, inhuman or degrading treatment), carried out or approved by public officials, of human rights activists or anyone seeking to expose illegal acts by public officials. Sanctions may also be imposed more generally to "promote compliance with international human rights law or respect for human rights". New powers set out in the Criminal Finances Act 2017 allow the authorities to seize assets linked to such conduct.

It remains to be seen how broadly 'respect for human rights' will be interpreted, although the decision to impose sanctions on that basis is likely to be subject to political considerations. The risk of negative business impacts from such sanctions may prompt more companies to carry out human rights due diligence throughout their value chain.

Limits on compensation for designated persons

Under the Act, someone who successfully contests their designation will not be entitled to compensation, unless the sanctions were imposed negligently or in bad faith. This may prove controversial. The Government's position is that this is a practical measure to ensure that sanctions can be imposed quickly, in situations where full information is not available (as is often the case), without incurring unacceptable financial risk to the taxpayer. However, it is questionable whether this restriction accords with human rights law (despite the Government's position that it does)2, and it may well be challenged in court.

Simultaneous application of EU and UK sanctions

New UK sanctions may apply to conduct by any persons in the UK or its territorial sea, or conduct elsewhere by UK nationals or bodies incorporated in the UK. Meanwhile, EU sanctions apply within the EU territory and airspace, on board aircraft and vessels under a Member State flag, to nationals of Member States and legal persons incorporated under the law of a Member State, and to any person, entity or body in respect of any business being done in whole or in part within the EU.

In practice, there will be many situations in which both UK and EU sanctions may apply – for example, where UK nationals or UK-incorporated bodies are operating within the EU. In such cases, businesses will need to ensure that their compliance policies and procedures are adapted to both regimes.


The broad picture coming out of the Act is one of increased Government powers and increased compliance requirements, particularly around sanctions. UK businesses have time to consider how the Act will affect their compliance measures, but are missing much of the necessary detail, given the Act's dependence on secondary legislation. It is hoped that the Government's promised guidance on complying with the Act will be published promptly and shed some light on the steps to take. In the meantime, businesses should consider whether there are compliance issues that can be addressed now (e.g. around sanctions reporting), to reduce the work required when the Act comes into force.

Click here to download PDF.

1 See our previous alert 'Transparency in the territories' for analysis of this measure.
2 For example, the European Convention on Human Rights includes rights to the protection of property and to an 'effective remedy' for any violation of rights, even if the violation is committed by government officials. The Human Rights Act 1998 makes these rights part of UK law. If a person is wrongly subject to sanctions that cost them millions of pounds and irreversibly ruin their business, they are unlikely to view mere quashing of the sanctions as adequate compensation.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© White & Case LLP | Attorney Advertising

Written by:

White & Case LLP

White & Case LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.