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Sanctions and/or civil recovery for gross human rights violations

Speed read: Two recent pieces of UK legislation provide powers to be used against the perpetrators of gross human rights violations and their accomplices. The first piece of legislation amended the civil recovery powers under the Proceeds of Crime Act 2002, pursuant to which enforcement authorities can recover unlawfully obtained property in the High Court. The second power is found in the new Sanctions and Anti-Money Laundering Act 2018 – wholesale legislation prompted by Brexit. This Bulletin considers the nature of the powers involved.

Introduction

Much of the UK’s Sanctions and Anti-Money Laundering Act 2018 (‘SAMLA’) came into force on 22 November 2018,[1] including the Government’s new power to impose financial or other sanctions (e.g. immigration or trade) in order to “provide accountability for or be a deterrent to gross violations of human rights, or otherwise promote - (i) compliance with international human rights law, or (ii) respect for human rights.”[2]  

This is one of several purposes for which the Government may deploy sanctions in future, independently of the existing UN and/or (for the time being) EU regimes.

The reference to “accountability for or be a deterrent to gross human rights violations” was inserted at a late stage during SAMLA’s progress through Parliament.[3] This added to various specified sanctions purposes already in the Bill including: to promote the resolution of armed conflicts or the protection of civilians in conflict zones; to promote compliance with international humanitarian and human rights law; to prevent the proliferation of weapons of mass destruction; and to promote democracy, human rights, the rule of law and good governance.

Why the additional purpose referring to “gross human rights violations”? Earlier in the Parliamentary debates the Government even contended that any reference to “gross human rights violations” was unnecessary because such conduct was already caught by existing language in the Bill (e.g. broader references to human rights and/or foreign policy objectives). Between readings, however, the political context changed dramatically following the poisoning incident in Salisbury on 4 March 2018. Clamour for more explicit language consequently held sway. The Government modified its position and added the language referring to “gross human rights violations”.

These statutory powers to target sanctions against human rights abusers are sometimes referred to as the UK’s “Magnitsky Act”; and since SAMLA became law, a view has been expressed that setting out such “Magnitsky-style purposes” expressly in the legislation “may encourage governments to use sanctions powers in that way.”[4]

The definition of gross human rights violations

Section 1(7) SAMLA specifies that “gross violation of human rights” refers to “conduct which – (a) constitutes, or (b) is connected with, the commission of a gross human rights abuse or violation” which is “to be determined in accordance with section 241A [of the Proceeds of Crime Act 2002 (‘POCA’)].”

Section 241A POCA was a product of the Criminal Finances Act 2017 which, among other things, amended the civil recovery provisions in Part 5 of POCA to include what was referred to during those earlier Parliamentary debates as the UK’s “Magnitsky Amendment”.

Section 13 of the Criminal Finances Act 2017 amended the definition of “unlawful conduct” in POCA so as to include “gross human rights abuses or violations” and expanded potential liability to include conduct “connected with” those violations. It defined gross violations of human rights based on three carefully crafted conditions.

  • First, the conduct must involve the torture or cruel, inhuman or degrading treatment or punishment of a person who sought to either (a) expose illegal activities involving public officials, or (b) “obtain, exercise, defend or promote human rights and fundamental freedoms.”
  • Secondly, the conduct must have been carried out in consequence of the person having sought to either expose such illegality, or obtain, exercise, defend or promote human rights.
  • Thirdly, the conduct must have been carried out by a public official or person acting in, or purported performance of, an official capacity. Alternatively, it may be committed by another person acting with the consent or acquiescence of a public official or person acting in an official capacity, where such consent or acquiescence occurred in the performance or purported performance of official duties.

These three conditions impose some limits to the extended civil recovery powers: they proscribe particular conduct, against particular persons, by particular persons. Indeed, this definition of “gross violations of human rights”, in particular the restriction to torture or cruel, inhuman or degrading treatment or punishment, is arguably narrower than the usage to which the phrase is often put in international human rights law.

Notwithstanding those limitations, there is inherent potential for stretch in the statutory language so that conduct only tangentially related to the acts of torture etc might be caught. For instance, abhorrent conduct in consequence of the mere “exercise” or promotion of human rights offers a broad basis for possible action; and the inclusion of conduct that is “connected with” the human rights violations also has significant reach.

One further indication of the potentially broad reach of the new legislation is that section 241A(5) POCA targets persons acting as an agent, directing, sponsoring, profiting from or materially assisting the human rights violation(s). According to section 241A(8) POCA, the provision of goods, services, financial or technological support are expressly stated to amount to material assistance. Such definitions in section 241A provide for expansive grounds for civil recovery claims and, it would appear, for future sanctions or asset freezes to be initiated by the Government.

How will the new powers be used?

In relation to sanctions, a Minister will be able to designate and sanction persons if s/he has “reasonable grounds to suspect that that person” is involved or associated with activities and considers that it is “appropriate” to sanction the person.[5] This is an extensive power, in relation to which legal challenges seem to be inevitable despite the presence of certain due process provisions, such as a requirement to notify the designated person, the possibility of review, and the requirement for measures to be “appropriate” (a new standard). These are loosely defined concepts which seem destined for contentious debate before the courts. SAMLA further specifies in section 38 that the Court’s review of a Minister’s decision is limited to the usual judicial review grounds; and section 39 limits any damages award to situations where either “the tort of negligence was committed” or the decision to list a person was made in bad faith.

In relation to civil recovery, although the definition of unlawful conduct has been expanded in the way described above, it remains the case that property only becomes recoverable if it was “obtained through” the unlawful conduct, meaning that it was obtained “by or in return for the conduct”.[6] This requires more than simply pointing to a human rights abuser with lots of assets; but the extent of the connection between the property in question and violations of human rights would have to be decided on the facts of particular cases.

Clearly we must wait to see whether the new powers will be used, either individually or in tandem. The SAMLA power is more wide-ranging in that it could exclude persons entirely from the UK’s financial system and freeze significant sums. It is the more powerful, if blunter, tool. However, the civil recovery powers should not be discounted entirely. Rather than simply freeze assets, they offer the potential to recover permanently those gains gotten in the most egregious of circumstances.

* Bright Line Law was involved in drafting the Magnitsky Amendment contained in section 13 of the Criminal Finances Act 2017. See here for further information.

[1] SAMLA 2018 (Commencement No 1) Regulations 2018.

[2] SAMLA 2018, section 1(2)(f).

[3] It was inserted during the Bill’s Third Reading before the House of Commons: Sanctions and Anti-Money Laundering Bill, Amendment 33, 24 April 2018.

[4] B. Smith and J. Dawson, House of Commons Briefing Paper, Magnitsky legislation, 16 July 2018, p. 18.

[5] In Youssef v Secretary of State for Foreign and Commonwealth Affairs [2016] UKSC 3, the Supreme Court unanimously rejected a challenge to such a standard of proof in the context of asset freezes said to be linked to terrorist activity; although Lord Carnwath, in writing the only judgment, stated (at para. 48) that he found the issue “more troubling than (seemingly) did the courts below”).

[6] POCA 2002, sections 242 and 304.

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The views expressed in this article represent those of the author and not Bright Line Law.

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