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UK government outlines new sanctions strategy

Author: ICAEW Insights

Published: 11 Mar 2024

Two years on from the start of the war in Ukraine, the UK government has set out a sanctions strategy that strengthens its capability.

The UK government has revealed its current approach and priorities on sanctions, for the first time since it acquired autonomous sanctions powers under the Sanctions and Anti-Money Laundering Act 2018. 

The sanctions strategy, published on 22 February – two days before the two-year anniversary of the start of the war in Ukraine – explains how the UK has built its sanctions capability, the structures for collaboration across government, and the investment made to strengthen implementation and enforcement systems.

The government says sanctions against Russia are having a significant and demonstrable impact as export and energy revenues fall and foreign reserves remain immobilised, meaning Russia’s military is less able to procure modern capabilities. “Without the collective impact of sanctions, we estimate that Russia would have over $400bn more to fund its war machine – enough to fund the invasion for a further four years,” the strategy document says.

The strategy sets out a roadmap for making UK sanctions more effective. It includes a pledge to crack down on ways to get around sanctions, a focus on building international coalitions and taking co-ordinated action with allies and partners to maximise their impact. 

At the same time, it stresses the UK government’s commitment to reinforce sanctions implementation and enforcement, including by helping UK businesses to understand and comply with sanctions and by taking robust action on non-compliance. “We are cracking down on efforts to bypass our sanctions, including through closer cooperation with third countries and businesses,” it says. 

It complements broader UK efforts to clamp down on illicit finance and the environment that enables it, such as complex corporate structures used deliberately to obscure the ownership of assets. The government says it is working to improve transparency around beneficial ownership, including via the Economic Crime and Corporate Transparency Act 2023.

In the foreword, Foreign Secretary Lord Cameron said sanctions are a vital tool for pursuing the UK’s interests and protecting the country’s values. “In just a few years, Britain has built up its own formidable sanctions capability. 

“We implement measures agreed by the United Nations Security Council, but we also act alone or with smaller groups of countries when there is multilateral deadlock. We are already seeing this capability in action across the world – deterring human rights abuses, disrupting Russia’s war machine or demonstrating our opposition to corruption.”

Mike Miller, Economic Crime Manager at ICAEW, welcomes the streamlined communication from government around timescales and the purpose of sanctions introduced by the new strategy. 

“Several tranches of sanctions, announced after Russia’s invasion of Ukraine, were necessarily introduced and implemented in fairly rapid succession,” he says. “As such, there were some challenges around communication and engagement with UK businesses, which were making significant changes to comply with the new sanctions regime. We therefore welcome a more coordinated approach to sanctions implementation with clearer lines of communication from the government around the purpose and intended scale of sanctions.”

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