Last month we looked at the future of UK/EU sanctions alignment and what may happen once the transition period completes. This month Gloria Perez Torres from BDO looks at Magnitsky sanctions and what the proposed UK Global Human Rights sanctions programme may look like. Opinions expressed in this article are solely those of the author.

One of the most significant developments in the protection of human rights over the past few years has been Magnitsky-Style sanctions ? recognising sanctions as a tool to protect human rights and punish corruption. A number of countries have enacted or are considering Magnitsky-style laws allowing them to impose travel bans and asset freezes in order to punish and deter serious human rights violations, linked or not, to acts of significant corruption. In the UK, a Magnitsky-inspired GHR programme is expected this year in late spring or summer. In the meantime, using case studies mainly from Canada and the US, we can predict its likely scope. 

The Magnitsky Act ('the Act?) was first enacted in 2012 in the US, to sanction Russian officials believed to be responsible for the death of Sergei Magnitsky, a Russian attorney who in 2009 died in prison after exposing a $230 million corruption scandal connected to the Kremlin. The Act was amended in 2016 to allow further sanctions of foreign government officials implicated in human rights abuse anywhere in the world.

Global Implementation

Magnitsky sanctions are a key accountability tool for human rights abuse and corruption. They  allow flexibility to target persons or companies without punishing entire nations, as in the case of Iran or Cuba. Since enacting the Act, US enforcement action has increased, with individuals and entities across 24 countries designated. These include Saudi officials involved in the killing and dismemberment of Jamal Khashoggi in 2017, and the Myanmar military officials involved in the Rohingya genocide.

Seven countries have implemented Magnitsky legislation with variations from country to country, although all cover human rights abuses. For example, Lithuania and Latvia also cover money laundering. Interestingly, Lithuania's legislation also extends to individuals ?on the national list denied entry to EU European Free Trade Association (EFTA) and NATO member states?. Estonia allows sanctions ?when people are wrongly convicted for political motives?. The US, Canada, Lithuania and Latvia have all included corruption in their statutes. Canada's law has extended the definition of targeted persons to foreign public officials and their associates.

The UK Framework Expectation

In the UK, the need for Magnitsky sanctions has been debated since 2012, and led to the enactment of the Sanctions and anti-Money Laundering Act 2018 which provides a framework through which the UK can impose and manage sanctions following its departure from the EU.

The Act empowers ministers to introduce sanctions-based regulations through statutory instruments for ?discretionary purposes?, such as imposing Magnitsky-style designations to promote compliance with human rights laws. Article 2 of the Act allows sanctions ?for the purpose of providing accountability for, or be a deterrent to, gross violations of human rights, or otherwise promoting compliance with international human rights law, or respect for human rights?.

The UK already had provisions under the Proceeds of Crime Act (POCA) for the civil recovery of assets obtained through ?unlawful conduct?. The Criminal Finances Act 2017 (CFA 2017) introduced unexplained wealth orders and also expanded the definition of ?unlawful conduct? to cover conduct by a public official that constitutes gross human rights abuse or violations.  However, the UK government has not yet exercised its powers with respect to human rights sanctions.

When operational, we can expect the UK GHR Programme to mirror the US and Canadian regimes. The UK government has indicated that it will work closely with key allies on implementing its legislative framework given its special relationship with the US and Canada under the ?Five Eyes? agreement of 1946 (updated in May 1955 to include Australia, Canada and New Zealand). It is more likely that human rights abuse and corruption will be curbed if countries work together against perpetrators and are consistent in their approach and legal frameworks.

How the Programme can be effective

In seeking to be fully effective as a deterrent, the UK GHR sanctions programme will most likely apply to both individuals and legal entities, foreign or national. It will allow sanctions against subsidiary entities owned or controlled by a sanctioned party, or by anyone acting for or on their behalf, such as associates, facilitators and family members. The law should reference 'serious? not ?gross? human rights abuse and ?abuse? rather than ?violations? to ensure applicability to non-state actors. In addition, the class of victims  should not be restricted to provide accountability for those who target journalists and media freedom as recommended by the Independent High Level Panel of Legal Experts on Media Freedom report.  

The UK's GHR Sanctions? Programme must consider sanctions for human rights abuses and corrupted persons. The UN Human Rights Council Resolution 37/19 of 23 March 2018 called upon states to ensure their laws allow accountability for acts of torture and other cruel, inhuman or degrading treatment or punishment together with corruption crimes. Consistency is important as the effectiveness of sanctions depend on other countries ensuring they do not provide safe havens. Sanctions work better if they are multilateral and if countries work together.

The next blog by Agathe Duchiron from UK Finance will look at sanctions against Russia and the impact on Rosneft.