Sanctions and Anti-Money Laundering Bill (HL Bill 69)

A

BILL

TO

Make provision enabling sanctions to be imposed where appropriate for the
purposes of compliance with United Nations obligations or other international
obligations or for the purposes of furthering the prevention of terrorism or for
the purposes of national security or international peace and security or for the
purposes of furthering foreign policy objectives; to make provision for the
purposes of the detection, investigation and prevention of money laundering
and terrorist financing and for the purposes of implementing Standards
published by the Financial Action Task Force relating to combating threats to
the integrity of the international financial system; and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 Sanctions regulations

CHAPTER 1 Power to make sanctions regulations

5Power to make sanctions regulations

1 Power to make sanctions regulations

(1) An appropriate Minister may make sanctions regulations where that Minister
considers that it is appropriate to make the regulations—

(a) 10for the purposes of compliance with a UN obligation,

(b) for the purposes of compliance with any other international obligation,
or

(c) for a purpose within subsection (2).

Sanctions and Anti-Money Laundering BillPage 2

(2) A purpose is within this subsection if the appropriate Minister making the
regulations considers that carrying out that purpose would—

(a) further the prevention of terrorism, in the United Kingdom or
elsewhere,

(b) 5be in the interests of national security,

(c) be in the interests of international peace and security, or

(d) further a foreign policy objective of the government of the United
Kingdom.

(3) Regulations under this section must state the purpose (or purposes) of the
10regulations, and any purpose stated must be—

(a) compliance with a UN obligation, or other international obligation,
specified in the regulations, or

(b) a particular purpose that is within subsection (2).

(4) In this section “sanctions regulations” means regulations which do one or more
15of the following—

(a) impose financial sanctions (see section 2);

(b) impose immigration sanctions (see section 3);

(c) impose trade sanctions (see section 4 and Schedule 1);

(d) impose aircraft sanctions (see section 5);

(e) 20impose shipping sanctions (see section 6);

(f) impose sanctions within section 7 (other sanctions for purposes of UN
obligations);

(g) make supplemental provision in connection with any provision of the
regulations or other regulations made under this section.

(5) 25In this section “supplemental provision” includes any provision authorised by
any other provision of this Act to be made by regulations under this section
(see in particular sections 8 to 17 and section 44).

(6) In this Act—

  • UN obligation” means an obligation that the United Kingdom has by
    30virtue of a UN Security Council Resolution;

  • UN Security Council Resolution” means a resolution adopted by the
    Security Council of the United Nations;

  • “international obligation” means an obligation of the United Kingdom
    created or arising by or under any international agreement.

(7) 35For the purposes of any provision of this Act which refers to an “appropriate
Minister”, the following are appropriate Ministers—

(a) the Secretary of State;

(b) the Treasury.

(8) None of paragraphs (a) to (d) of subsection (2) is to be taken to limit the
40meaning of any other of those paragraphs.

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Types of sanction

2 Financial sanctions

(1) For the purposes of section 1(4)(a) regulations “impose financial sanctions” if
they impose prohibitions or requirements for one or more of the following
5purposes—

(a) freezing funds or economic resources owned, held or controlled by
designated persons (see section 8);

(b) preventing financial services from being provided to, or for the benefit
of—

(i) 10designated persons,

(ii) persons connected with a prescribed country, or

(iii) a prescribed description of persons connected with a prescribed
country;

(c) preventing financial services from being procured from, or for the
15benefit of—

(i) designated persons,

(ii) persons connected with a prescribed country, or

(iii) a prescribed description of persons connected with a prescribed
country;

(d) 20preventing funds or economic resources from being made available to,
or for the benefit of—

(i) designated persons,

(ii) persons connected with a prescribed country, or

(iii) a prescribed description of persons connected with a prescribed
25country;

(e) preventing funds or economic resources from being received from—

(i) designated persons,

(ii) persons connected with a prescribed country, or

(iii) a prescribed description of persons connected with a prescribed
30country;

(f) preventing financial services from being provided, where the services
relate to financial products, or financial products of a prescribed
description, issued by designated persons;

(g) preventing persons from owning, controlling or having a prescribed
35interest in persons (other than individuals) which are—

(i) designated persons,

(ii) connected with a prescribed country, or

(iii) of a prescribed description and connected with a prescribed
country.

(2) 40For the purposes of section 1(4)(a) regulations also “impose financial
sanctions” if they impose prohibitions or requirements for the purpose of
preventing persons from entering into, or continuing to be a party to,
arrangements for commercial purposes, or for prescribed commercial
purposes, with—

(a) 45designated persons,

(b) persons connected with a prescribed country, or

(c) a prescribed description of persons connected with a prescribed
country.

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(3) In subsection (1) any reference to funds, economic resources or financial
services being made available, received or provided is to their being made
available, received or provided (as the case may be) directly or indirectly.

(4) In subsection (2) “arrangements” includes any agreement, understanding,
5scheme, transaction or series of transactions (whether or not legally
enforceable).

(5) Sections 48 and 49 contain definitions for the purposes of this Act of—

  • “economic resources”,

  • “financial products”,

  • 10“financial services”,

  • “freeze”, and

  • “funds”.

(6) Section 50 makes provision about the meaning of —

(a) funds or economic resources being “owned, held or controlled” or
15“made available” (see subsection (2) of that section),

(b) a person “owning” or “controlling” another person (see subsection (3)
of that section), and

(c) a person being “connected with” a country (see subsection (4) of that
section).

3 20Immigration sanctions

(1) For the purposes of section 1(4)(b) regulations “impose immigration sanctions”
if they provide for designated persons (see section 8) to be excluded persons
for the purposes of section 8B of the Immigration Act 1971.

(2) As to the effect of such provision, see section 8B of the Immigration Act 1971
25(as amended by paragraph 1 of Schedule 3 to this Act).

4 Trade sanctions

(1) For the purposes of section 1(4)(c) regulations “impose trade sanctions” if they
impose prohibitions or requirements for one or more of the purposes
mentioned in Part 1 of Schedule 1.

(2) 30Part 2 of that Schedule makes further provision in connection with regulations
which impose trade sanctions.

5 Aircraft sanctions

(1) For the purposes of section 1(4)(d) regulations “impose aircraft sanctions” if
they impose prohibitions or requirements for one or more of the following
35purposes—

(a) detaining disqualified aircraft (see subsection (6)) within the United
Kingdom, or controlling the movement of disqualified aircraft within
the United Kingdom and the airspace over the United Kingdom;

(b) ensuring that disqualified aircraft—

(i) 40do not overfly the United Kingdom, or

(ii) leave the airspace over the United Kingdom;

(c) preventing persons from owning, chartering or operating aircraft
registered in a prescribed country;

Sanctions and Anti-Money Laundering BillPage 5

(d) preventing aircraft from being registered in a prescribed country;

(e) preventing the registration of—

(i) aircraft in which a designated person (see section 8) holds a
prescribed interest (or designated persons, taken together, hold
5a prescribed interest), or

(ii) aircraft chartered by demise to designated persons.

(2) For the purposes of section 1(4)(d) regulations also “impose aircraft sanctions”
if they authorise directions within subsection (3), (4) or (5).

(3) Directions are within this subsection if they are given for a purpose mentioned
10in subsection (1)(a) or (b) and either—

(a) they are given by the Secretary of State to—

(i) the CAA,

(ii) a person who holds a licence under Chapter 1 of Part 1 of the
Transport Act 2000 (air traffic services), or

(iii) 15an airport operator, or

(b) they are given to the operator or pilot in command of a disqualified
aircraft by—

(i) the Secretary of State, or

(ii) a person mentioned in paragraph (a)(i), (ii) or (iii).

(4) 20Directions are within this subsection if they are given by the Secretary of State
to the CAA for the purpose of terminating the registration of any aircraft
mentioned in subsection (1)(e).

(5) Directions are within this subsection if they are given by the Secretary of State
to the operator or pilot in command of a British-controlled aircraft for the
25purpose of preventing the aircraft from—

(a) overflying a prescribed country, or

(b) landing in a prescribed country.

(6) In this section “disqualified aircraft” means aircraft—

(a) owned, chartered or operated by—

(i) 30designated persons,

(ii) persons connected with a prescribed country, or

(iii) a prescribed description of persons connected with a prescribed
country,

(b) registered in a prescribed country, or

(c) 35originating from a prescribed country.

(7) Provision authorising directions by virtue of subsection (2) may include
provision—

(a) as to the effect of any such directions so far as they are inconsistent with
requirements or permissions under any other enactment;

(b) 40requiring a person not to disclose any such directions if the Secretary of
State notifies the person to that effect.

(8) For the purposes of this section any reference to the United Kingdom includes
a reference to the territorial sea.

(9) In this section “aircraft”—

(a) 45subject to paragraph (b), includes—

(i) unmanned aircraft, and

Sanctions and Anti-Money Laundering BillPage 6

(ii) aircraft capable of spaceflight activities;

(b) does not include the naval, military or air-force aircraft of any country.

(10) In this section—

  • “airport” means the aggregate of the land, buildings and works
    5comprised in an aerodrome within the meaning of the Civil Aviation
    Act 1982 (see section 105(1) of that Act);

  • “airport operator”, in relation to an airport, means the person by whom
    the airport is managed;

  • “British-controlled aircraft” has the same meaning as in section 92 of the
    10Civil Aviation Act 1982;

  • “the CAA” means the Civil Aviation Authority;

  • “enactment” includes an enactment mentioned in any of paragraphs (a) to
    (d) of section 44(5);

  • “operator”, in relation to an aircraft, means the person having the
    15management of the aircraft, and cognate expressions are to be
    construed accordingly;

  • “pilot in command”, in relation to an aircraft, means the pilot designated
    by the operator as being in command and charged with the safe
    conduct of its flight, without being under the direction of any other
    20pilot in the aircraft;

  • “registration” means registration in the register of aircraft kept by the
    CAA.

6 Shipping sanctions

(1) For the purposes of section 1(4)(e) regulations “impose shipping sanctions” if
25they impose prohibitions or requirements for one or more of the following
purposes—

(a) detaining within the United Kingdom, or controlling the movement
within the United Kingdom of—

(i) disqualified ships (see subsection (8)), or

(ii) 30specified ships (see section 13);

(b) ensuring that disqualified ships or specified ships—

(i) do not enter the United Kingdom, or

(ii) leave the United Kingdom;

(c) preventing persons from owning, controlling, chartering or
35operating—

(i) ships registered in a prescribed country,

(ii) ships flying the flag of a prescribed country, or

(iii) specified ships;

(d) preventing ships from—

(i) 40being registered in a prescribed country, or

(ii) flying the flag of a prescribed country;

(e) preventing the registration of—

(i) ships in which a designated person (see section 8) holds a
prescribed interest (or designated persons, taken together, hold
45a prescribed interest),

(ii) ships in which persons connected with a prescribed country
hold a prescribed interest, or

(iii) specified ships.

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(2) For the purposes of section 1(4)(e) regulations also “impose shipping
sanctions” if they authorise directions within subsection (3), (4) or (5).

(3) Directions are within this subsection if they are given for a purpose mentioned
in subsection (1)(a) or (b) and either—

(a) 5they are given to a harbour authority by the Secretary of State, or

(b) they are given to the master or pilot of a disqualified ship or a specified
ship by—

(i) the Secretary of State, or

(ii) a harbour authority.

(4) 10Directions are within this subsection if they are given by the Secretary of State
to the Registrar for the purpose of terminating the registration of any ship
mentioned in subsection (1)(e).

(5) Directions are within this subsection if they are given by the Secretary of State
to the master or pilot of a British ship (see subsections (12) and (13)) for the
15purpose of preventing the ship from travelling to—

(a) the sea or other waters within the seaward limits of the territorial sea
adjacent to a prescribed country, or a particular place in that sea or
those waters, or

(b) harbours in a prescribed country.

(6) 20For the purposes of section 1(4)(e) regulations also “impose shipping
sanctions” if, for the purpose of the implementation of so much of a UN
Security Council Resolution as provides for the taking of measures in relation
to ships designated for purposes of that Resolution, they make provision—

(a) relating to such ships and corresponding to provision that may be
25made by virtue of subsection (1)(a), (b), (c) or (e),

(b) authorising directions corresponding to directions within subsection
(3) to be given in relation to, or to the master or pilot of, such a ship, or

(c) authorising directions corresponding to directions within subsection
(4) to be given in relation to such a ship.

(7) 30Provision made by virtue of subsection (6) may describe the ships to which it
relates by reference to the instrument in which the ships are designated,
including by reference to that instrument as varied or supplemented from time
to time.

(8) In this section “disqualified ships” means ships—

(a) 35owned, controlled, chartered, operated or crewed by—

(i) designated persons,

(ii) persons connected with a prescribed country, or

(iii) a prescribed description of persons connected with a prescribed
country,

(b) 40registered in a prescribed country,

(c) flying the flag of a prescribed country, or

(d) originating from a prescribed country.

(9) Provision authorising directions by virtue of this section may include
provision as to the effect of any such directions so far as they are inconsistent
45with requirements under any other enactment.

(10) Provision made by virtue of this section may include provision as to the
meaning of any reference in the provision to a ship being “crewed” by persons.

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(11) In subsection (1) any reference to the United Kingdom includes a reference to
the territorial sea.

(12) In this section “British ship” means a ship which—

(a) is registered under Part 2 of the Merchant Shipping Act 1995,

(b) 5is a Government ship within the meaning of that Act,

(c) is registered under the law of a relevant British possession,

(d) is not registered under the law of a country outside the United
Kingdom but is wholly owned by persons each of whom has a United
Kingdom connection, or

(e) 10is registered under an Order in Council under section 1 of the
Hovercraft Act 1968.

(13) For the purposes of subsection (12)(d), a person has a “United Kingdom
connection” if the person is—

(a) a British citizen, a British overseas territories citizen or a British
15Overseas citizen,

(b) an individual who is habitually resident in the United Kingdom, or

(c) a body corporate which is established under the law of a part of the
United Kingdom and has its principal place of business in the United
Kingdom.

(14) 20In this section—

  • “enactment” includes an enactment mentioned in any of paragraphs (a) to
    (d) of section 44(5);

  • “harbour authority” has the same meaning as in the Merchant Shipping
    Act 1995 (see section 313(1) of that Act);

  • 25“master” includes every person (except a pilot) having command or
    charge of a ship and, in relation to a fishing vessel, means the skipper;

  • “pilot”, in relation to a ship, means any person not belonging to the ship
    who has the conduct of the ship;

  • “the Registrar” means the Registrar General of Shipping and Seamen or,
    30where functions of that person are being discharged by another person,
    that other person;

  • “registration” means registration in the register of British ships
    maintained by the Registrar;

  • “relevant British possession” means—

    (a)

    35any of the Channel Islands,

    (b)

    the Isle of Man, and

    (c)

    any British overseas territory;

  • “ship” includes every description of vessel (including a hovercraft) used
    in navigation, except the naval, military or air-force ships of any
    40country.

7 Other sanctions for purposes of UN obligations

(1) For the purposes of section 1(4)(f), regulations impose sanctions within this
section if they impose prohibitions or requirements, not otherwise authorised
by this Part, which the appropriate Minister making the regulations considers
45that it is appropriate to impose for the purposes of compliance with a UN
obligation.

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(2) The reference in subsection (1) to prohibitions or requirements includes
prohibitions or requirements imposed on or otherwise relating to designated
persons (see section 8).

Designation of persons

8 5“Designated persons”

(1) Subsection (2) applies for the purposes of sections 2 and 3, Schedule 1 and
sections 5 to 7.

(2) In each of those provisions, “designated persons” means—

(a) persons designated under any power contained in the regulations that
10authorises an appropriate Minister to designate persons for the
purposes of the regulations or of any provisions of the regulations, or

(b) persons who are designated persons under any provision included in
the regulations by virtue of section 12 (persons named by or under UN
Security Council Resolutions).

(3) 15In subsection (2) “the regulations” means the regulations mentioned in section
2, 3, 4(1), 5, 6 or 7 (as the case may be).

(4) As regards designation of persons by virtue of subsection (2)(a), see sections 9
to 11.

(5) In this Act “person” includes (in addition to an individual and a body of
20persons corporate or unincorporate) any organisation and any association or
combination of persons.

9 Designation powers: general

(1) In this Act a “designation power”, in relation to regulations under section 1,
means a power (contained in the regulations by virtue of section 8(2)(a)) for an
25appropriate Minister to designate persons for the purposes of the regulations
or of any provisions of the regulations.

(2) Regulations under section 1 which contain a designation power may make
provision about the way in which the power must or may be exercised,
including provision authorising the appropriate Minister to whom the power
30is granted—

(a) to designate a person by name;

(b) to provide that persons of a description specified by that Minister are
designated persons;

(c) to designate different persons for the purposes of different provisions
35of the regulations.

(3) Regulations under section 1 which contain a designation power may include
provision as to the steps to be taken as regards notification and publicity
where—

(a) a designation is made under the designation power, or

(b) 40a designation made under the power is varied or revoked (see section
18),

but the regulations need not require a person to be notified of an intention to
designate the person.