Shearman & Sterling LLP | Financial Regulatory Developments Focus | UK Government's Guidance on Approach to Sanctions in a 'Hard Brexit' Scenario
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  • UK Government's Guidance on Approach to Sanctions in a 'Hard Brexit' Scenario
    10/12/2018
    The U.K. Foreign and Commonwealth Office has published guidance on the U.K. government's approach to implementing sanctions in the event that no deal is agreed between the EU and the U.K. on the U.K.'s exit from the EU. If there is no deal, the U.K. will leave the EU on March 29, 2019.

    The U.K. currently implements sanctions agreed by the UN Security Council, according to international law requirements, and the EU, as provided for in EU legislation and U.K. implementing legislation. In the event of a "hard Brexit," the U.K. would continue to implement sanctions agreed by the UN Security Council and would have the power to adopt other sanctions under the Sanctions and Anti-Money Laundering Act 2018. The FCO would publish the names of individuals and organizations subject to U.K. sanctions.

    If there is no Brexit deal, the FCO proposes that new U.K. legislation would be made under the Act to implement existing EU sanctions regimes. This new draft legislation is expected to be laid before Parliament before March 2019. If new legislation did not address an existing EU sanctions requirement, the requirement would be carried into U.K. law under the provisions of the European Union (Withdrawal) Act, which would avoid any gaps in the law. This means that anyone concerned with sanctions requirements would need to refer to both the new U.K. legislation and any retained EU laws to ascertain the relevant requirements. The FCO advises that it should not be assumed that the new U.K. legislation will exactly replicate the existing EU regime, in particular where a firm or individual currently benefits from an existing exemption. In addition, firms and individuals that need information about licenses and exemptions from sanctions should contact the Office for Financial Sanctions Implementation and the Export Control Joint Unit. In the event of a "hard Brexit," the FCO states that it will publish further guidance on sanctions.

    View the guidance

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