Statutory guidance

Counter-Terrorism International sanctions: guidance

Published 3 May 2019

As required by section 43 of the Sanctions and Anti-Money Laundering Act 2018 (‘the Sanctions Act’), the Secretary of State for Foreign, Commonwealth and Development Affairs has provided this guidance to assist in the implementation of, and compliance with, the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019 (the ‘Regulations’), as amended from time to time.

The following instruments have made amendments to this instrument. If a consolidated version is not yet available on legislation.gov.uk, these instruments should be read alongside the original instrument:

• the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2019
• the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2020
• the Sanctions (EU Exit) (Miscellaneous Amendments) (No.3) Regulations 2020

As required by the Sanctions Act, this document contains guidance on the prohibitions and requirements imposed by the Regulations. It additionally provides guidance on best practice for complying with the prohibitions and requirements; the enforcement of them; and circumstances where they do not apply.

This document is intended to be read alongside more detailed sanctions guidance published by departments including the Department for International Trade (DIT), Home Office and HM Treasury, through the Office of Financial Sanctions Implementation (OFSI). This document contains links to those key sources of sanctions guidance, which will be regularly maintained and updated on GOV.UK. It is designed to give an overview of the prohibitions and requirements in the Regulations and, where appropriate, direct readers to further detailed guidance. This document is current on the date of publication.

1. Prohibitions and requirements imposed by the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019

The Regulations impose financial, trade and immigration sanctions for the purpose of giving effect to the United Kingdom’s obligations under United Nations Security Council Resolution 1373 (2001) (‘UNSCR 1373’); and the additional statutory purpose set out in the Regulations.

In order to achieve the stated purposes, the Regulations impose a number of prohibitions and requirements. In order to enforce these, the Regulations establish penalties and offences, which are set out in detail in the corresponding report under Section 18 of the Sanctions Act in relation to criminal offences.

The prohibitions and requirements imposed by the Regulations apply within the territory of the United Kingdom (UK) (including Northern Ireland) and in relation to the conduct of all UK persons wherever they are in the world. UK persons includes British nationals, as well as all bodies incorporated or constituted under the law of any part of the UK. Accordingly, the prohibitions and requirements imposed by the Regulations apply to all companies established in any part of the UK, and they also apply to branches of UK companies operating overseas.

The maritime enforcement powers contained in Part 9 of the Regulations apply in relation to British ships in international or foreign waters, ships without nationality in international waters and foreign ships in international waters.

It is prohibited to intentionally participate in any activities if you know that the object or effect of them is directly or indirectly to circumvent the prohibitions imposed by the Regulations or to enable or facilitate the contravention of those prohibitions.

If you are unclear about any aspect of the Regulations, in particular about whether action you are considering taking could contravene the Regulations, you are advised to seek independent legal advice.

Prohibitions and requirements for the financial, trade and immigration sanctions contained in the Regulations are set out below.

1.1 Designation of persons

The Regulations provide that the Secretary of State may designate persons for the purposes of financial and/or immigration and/or trade sanctions if they are, or have been, involved in terrorist activity (as defined in regulation 6).

The UK Sanctions List lists the people designated under the Regulations, and details of the sanctions in respect of which they have been designated.

1.2 Financial sanctions

Asset freeze and making available provisions

The Regulations impose financial sanctions through a targeted asset freeze on designated persons and prohibitions on making funds or economic resources available. This involves the freezing of funds and economic resources (non-monetary assets, such as property or vehicles) of designated persons and ensuring that funds and economic resources are not made available to or for the benefit of designated persons, either directly or indirectly.

More information on financial sanctions can be found in the OFSI guidance.

OFSI is the authority responsible for implementing the UK’s financial sanctions on behalf of HM Treasury. OFSI helps to ensure that financial sanctions are properly understood, implemented and enforced in the United Kingdom. Further information on how OFSI implements financial sanctions can be found on the OFSI pages of GOV.UK.

1.3 Trade sanctions

The Regulations impose trade sanctions in relation to designated persons. The trade sanctions include prohibitions relating to:

• military goods and military technology (as specified in Schedule 2 to the Export Control Order 2008)
• the provision of technical assistance, financial services or funds and associated brokering services where such provision enables or facilitates the conduct of armed hostilities

Further detail on these trade prohibitions, including key terminology used, is explained below. Please have regard to the relevant legislation which contains full definitions of terms used herein.

Export of goods

The concept of ‘export’ is set out in customs legislation, but is further detailed in Paragraph 32 of Schedule 1 to the Sanctions Act, which clarifies that “export” means export from the UK, but does not capture where goods are removed to the Isle of Man from the UK.

The export prohibition in the Regulations covers export to a designated person as well as exports for the benefit of a designated person. This means that, even if the immediate consignee is not a designated person, the prohibition may still apply. Exporters should check the ultimate end use of goods and contact the Export Control Joint Unit (ECJU) if they know or think the items may be used for the benefit of a designated person.

Supply and delivery of goods

Supply and delivery prohibitions in the Regulations prohibit a person from directly or indirectly supplying or delivering goods from a third country to, or for the benefit of, a designated person. Regulation 20(4) specifies that for the purposes of this regulation a third country is a country that is not the UK or the Isle of Man.

Making goods and technology available

Prohibitions in the Regulations on making goods or technology available (e.g. through a sale) include directly or indirectly making them available to, or for the benefit of, a designated person.

Transfer of technology

Prohibitions in the Regulations on the transfer of technology include transfer to, or for the benefit of, a designated person.

The term ‘transfer’ is defined in Paragraph 37 of Schedule 1 to the Sanctions Act, which states that it ‘means a transfer by any means (or combination of means), including oral communication and that transfer of goods on which the technology is recorded or from which it can be derived, other than the export of such goods.’

Where military technology is contained within a good, it would be classified as a military good under the accompanying goods-related provisions. This includes information contained on USB memory devices, laptops, tablets and the like.

Technical assistance

The term technical assistance in relation to goods or technology is defined in regulation 18, which states that it means:

• technical support relating to the repair, development, production, assembly, testing, use or maintenance of the goods or technology, or
• any other technical service relating to the goods or technology

Prohibitions apply where the technical assistance relates to certain specified (military) goods or technology.

The prohibitions apply to the direct or indirect provision of such technical assistance to, or for the benefit of, a designated person.

This means that, even if the person to whom you are providing the relevant technical assistance is not a designated person, the prohibition may still apply if the technical assistance is for the benefit of a designated person. Therefore, if you are providing technical assistance you should check the ultimate end use of the military goods or military technology to which the technical assistance relates and contact ECJU if you know or think the goods or technology may be used by or for the benefit of a designated person.

Financial services and funds related to goods and technology

‘Financial services’ refer to any services of a financial nature in many different forms including insurance and banking. Financial services include payment and money transmission services. The full definition of ‘financial services’ can be found in Section 61 of the Sanctions Act.

‘Funds’ means financial assets and benefits of every kind, including cash, securities and interest. The full definition of ‘funds’ can be found in Section 60 of the Sanctions Act.

Trade sanctions prohibitions on the provision of financial services and funds apply where they relate to certain specified goods or technology.

The prohibitions in the Regulations apply to the direct or indirect provision of financial services, and the direct or indirect making available of funds to, or for the benefit of, a designated person in pursuance of or in connection with an arrangement set out in the Regulations. This captures arrangements where the object or effect falls into one of the prohibitions, for example the export of goods or direct or indirect supply or delivery of goods.

These prohibitions also prohibit the direct or indirect provision of financial services or funds in pursuance of or connection with specific arrangements as set out in regulation 24(3).

Brokering services

The definition of ‘brokering services’ is set out in regulation 18, which states that it means any service to secure, or otherwise in relation to, an arrangement, including (but not limited to):

• the selection or introduction of persons as parties or potential parties to the arrangement
• the negotiation of the arrangement
• the facilitation of anything that enables the arrangement to be entered into, and
• the provision of any assistance that in any way promotes or facilitates the arrangement

The Regulations prohibit the direct or indirect provision of brokering services where they relate to specific arrangements. Those arrangements are set out in regulation 25.

Other service provisions

Certain other services are prohibited in the Regulations. These include the direct or indirect provision of services where such provision enables or facilitates the conduct of armed hostilities.

As set out in regulation 26, the direct or indirect provision of the following services to, or for the benefit of, a designated person is prohibited where such provision enables or facilitates the conduct of armed hostilities: 

a) technical assistance

b) financial services or funds, or 

c) brokering services in relation to an arrangement whose object or effect is to provide, in a non-UK country any of the services mentioned in paragraphs (a) - (b)

DIT contact details

The Department for International Trade (DIT) has overall responsibility for trade sanctions. For general guidance on export controls and trade sanctions, contact the Export Control Joint Unit:

email: exportcontrol.help@trade.gov.uk or tradesanctions@trade.gov.uk

helpline: +44 (0)20 7215 4594

For general guidance on import controls and trade sanctions contact the Import Controls team:

email: importcontrols@trade.gov.uk

1.4 Immigration sanctions

The effect of the Regulations is to impose a travel ban on persons who are designated by the Secretary of State for the purposes of being made subject to immigration sanctions under the Sanctions Act. Such persons are excluded persons for the purposes of section 8B of the Immigration Act 1971.

Designated individuals will be refused leave to enter or remain in the UK. Any applications they make for a visa to travel to the UK, including for transit purposes, will be refused. Any foreign national who is subject to a travel ban under the Regulations, and who is currently in the UK, will have their permission to stay in the UK cancelled and steps will be taken to remove them from the UK.

If you are the subject of an immigration sanction and try to travel to the UK, carriers are required to deny you boarding.

Further information on how the Home Office deals with those who are subject to a travel ban can be found on the Home Office pages of GOV.UK.

1.5 Information and record keeping

For the purpose of the financial sanctions contained in the Regulations, Part 7 of the Regulations places obligations on relevant firms (the definition of which is set out in the Regulations) to report information to HM Treasury about known or suspected designated persons or about persons who may have committed an offence under specified provisions of the Regulations.

It also grants powers to HM Treasury to request information from, amongst others, a designated person, including powers to request the production of documents. It also establishes offences for failing to comply with these requests (including for providing false information).

If you have obligations or responsibilities under Part 7 of the Regulations, it is important that you familiarise yourself with them. If you are unclear of your obligations or responsibilities, you are advised to seek independent legal advice.

2. How will these sanctions measures be enforced?

The Regulations make it a criminal offence to contravene the trade and financial sanctions, as well as to enable or facilitate a contravention of, or to circumvent, any of the prohibitions in the Regulations. They also prescribe the mode of trial and penalties that apply to such offences. In some cases, offences related to contraventions of prohibitions in the Regulations are contained within other legislation, such as the Customs and Excise Management Act 1979 (CEMA).

In addition to the below, further details on offences and penalties can be found in the corresponding report under section 18 of the Sanctions Act.

2.1 Financial sanctions

Breaches of financial sanctions are a serious criminal offence. Any breach of the main financial prohibitions in the Regulations is an offence that is triable either way and carries a maximum sentence on indictment of 7 years’ imprisonment or a fine (or both).

Offences under regulations 34(6) or 38 (information offences in connection with financial sanctions under the Regulations) are summary offences only and carry a maximum sentence of 6 months’ imprisonment or a fine (which in Scotland or Northern Ireland may not exceed level 5 on the standard scale) or both.

OFSI is responsible for monitoring compliance with financial sanctions and for assessing suspected breaches. It also has the power to impose monetary penalties for breaches of financial sanctions and to refer cases to law enforcement agencies for investigation and potential prosecution.

OFSI works with other parts of government, supervisory bodies and regulators to consider all cases reported to it, sharing relevant information accordingly.

If you find out that a person or organisation you are dealing with is subject to the financial sanctions detailed in the Regulations, you must immediately:

• stop dealing with them
• freeze any assets you are holding for them
• inform OFSI as soon as possible by either emailing ofsi@hmtreasury.gov.uk or by calling their general enquiries line: +44 (0)20 7270 5454

More detailed information on OFSI’s approach to compliance and enforcement can be found in Chapter 7 of OFSI’s guidance.

2.2 Trade sanctions

Any breach of the trade sanctions prohibitions in the Regulations is triable either way and carries a maximum sentence on indictment of 10 years’ imprisonment or a fine (or both).

HM Revenue and Customs (HMRC) is responsible for enforcing the trade prohibitions and investigating suspected offences.

If you discover that you have breached any of the trade prohibitions, you should report the irregularity to HMRC (sometimes known as ‘voluntary disclosure’) as soon as possible. If the irregularity was found on an Export Control Joint Unit compliance audit, the compliance inspector will have informed HMRC and you are strongly advised to do the same. Guidance is available on how to make a voluntary disclosure.

3. Are there circumstances when I can get an authorisation or licence for a sanctioned activity?

Licensing and exception provisions are contained in Part 6 of the Regulations.

3.1 Exceptions

The Regulations set out exceptions to some of the sanctions prohibitions which apply within certain defined circumstances. An exception applies automatically, and does not require you to obtain a licence issued in accordance with the Regulations.

The Regulations establish exceptions relating to financial sanctions including for the crediting of a frozen account by a relevant institution (any such interest or other earnings will be frozen in accordance with the legislation underpinning the asset freeze). An exception also exists from the prohibition on making funds available to a designated person, when funds are transferred to a frozen account in discharge (or partial discharge) of an obligation which arose before the recipient became a designated person.

Regulation 29A establishes an exception to regulations 11 to 15 which provides that prohibitions are not contravened if conduct is authorised by a licence which is issued under the law of the Channel Islands, Isle of Man or any British Overseas Territory for the purpose of disapplying a prohibition in that jurisdiction which corresponds to the relevant prohibition.

The Regulations also include an exception in relation to any prohibition or requirement imposed by the Regulations for actions which a responsible officer has determined to be in the interests of national security, or the prevention or detection of serious crime in the UK or elsewhere.

If you are unsure whether an exception applies in your circumstances, you are advised to seek independent legal advice.

3.2 Licensing for financial sanctions

Where a person is designated for the purposes of the financial sanctions (asset freeze measures and making available provisions) contained in the Regulations, the designated person or a representative (on their behalf) may apply for a licence from OFSI to use their funds or economic resources (non-monetary assets, such as property or vehicles). Regulation 31 provides that the prohibitions in regulations 11 to 15 (asset freeze etc) do not apply to anything done under the authority of a licence issued by the Treasury under paragraph 1 of that regulation. This regime does not contain specific licensing grounds and instead contains a general power to issue licences. HM Treasury will exercise these powers according to the enabling legislation, taking into account any relevant law and the purpose of the regime.

Further information on exceptions and licensing grounds can be found in OFSI’s guidance.

Information on licence applications and the relevant form can be found on OFSI’s GOV.UK licensing webpage.

3.3 Trade sanctions

The Regulations do not contain a power to issue licences in respect of trade sanctions. If you are engaging in trade with a designated person you are advised to undertake due diligence to ensure that you are not breaching the prohibitions in the Regulations.

When you export goods, you may need to submit an electronic export declaration via the National Export System (NES), part of His Majesty’s Revenue and Customs’ (HMRC) Customs Handling of Import and Export Freight (CHIEF) system. Guidance is available on how to make an export declaration.

3.4 Directions in respect of immigration sanctions

If you are subject to immigration sanctions the Home Office may direct, on a case by case basis, that the sanction does not apply in particular circumstances, such as for travel to, or through, the UK for a UN sponsored meeting. You can check how to apply for a UK visa, and find further information about travelling to the UK on GOV.UK.

4. Further information

Sign up to receive Notices to Exporters for updates on trade sanctions.

To receive an email alerting you to any changes to the consolidated list of financial sanctions targets, you can subscribe to OFSI’s e-alert.