The Misappropriation (Sanctions) (EU Exit) Regulations 2020

Explanatory Note

(This note is not part of the Regulations)

These Regulations are made under the Sanctions and Anti-Money Laundering Act 2018 (c.13) to establish a sanctions regime for the purpose of deterring and providing accountability for the misappropriation of State funds from a country outside the United Kingdom.

This instruments revokes a number of geographically specific regimes that were introduced by the EU in relation to misappropriation of State assets, namely: Council Regulation (EU) No 101/2011 of 4 February 2011 concerning Tunisia; Council Regulation (EU) No 270/2011 of 21 March 2011 concerning Egypt; and Council Regulation (EU) No 208/2014 of 5 March 2014 concerning Ukraine. It also revokes the corresponding implementing UK regulations.

The Regulations confer a power on the Secretary of State to designate persons who are, or have been, involved in the misappropriation of State funds from a country outside the United Kingdom. Designated persons may be excluded from the United Kingdom and may be made subject to financial sanctions, including having their funds or economic resources frozen.

The Regulations provide for certain exceptions to this sanctions regime, in particular in relation to financial sanctions (for example to allow for frozen accounts to be credited with interest or other earnings) and also acts done for the purpose of national security or the prevention of serious crime. The Regulations also confer powers on the Treasury to issue licences in respect of activities that would otherwise be prohibited under the financial sanctions imposed by these Regulations. Schedule 2 to these Regulations sets out the purposes for which the Treasury may issue such licences to particular persons.

The Regulations make it a criminal offence to contravene, or circumvent, any of the prohibitions in these Regulations and prescribe the mode of trial and penalties that apply to such offences. The Regulations prescribe powers for the provision and sharing of information to enable the effective implementation and enforcement of the sanctions regime.

Council Regulation (EU) No 101/2011 of 4 February 2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Tunisia; Council Regulation (EU) No 270/2011 of 21 March 2011 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Egypt; and Council Regulation (EU) No 208/2014 of 5 March 2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, are revoked by these Regulations. The Tunisia (Asset-Freezing) Regulations 2011; the Egypt (Asset-Freezing) Regulations 2011; and the Ukraine (European Union Financial Sanctions) Regulations 2014, are also revoked.

An Impact Assessment has not been produced for these Regulations. The instrument is intended to deliver similar policy effect to the existing EU sanctions regimes following the United Kingdom's withdrawal from the European Union. An impact assessment was, however, produced for the Sanctions and Anti-Money Laundering Act 2018 and can be found at:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653271/Sanctions_and_Anti-Money_Laundering_Bill_Impact_Assessment_18102017.pdf.