6.Sanctions are a tool of foreign policy, and aim “to coerce a change in behaviour, to constrain behaviour, or to communicate a clear political message to other countries or persons”. The EU describes them as: “an essential tool of the EU’s Common Foreign and Security Policy … used by the EU as part of an integrated and comprehensive policy approach, involving political dialogue, complementary efforts and the use of other instruments at its disposal”.
7.Dr Erica Moret, Senior Researcher and Chair of the Geneva International Sanctions Network, Graduate Institute of International and Development Studies, described sanctions as a “useful middle ground between war and words”; they are “a policy instrument that can put pressure on targeted entities short of military action”.
8.“Sanctions have become a central tool of national security”, according to Mr David Mortlock, Partner, Willkie Farr & Gallagher LLP, and Mr Richard Nephew, Adjunct Professor and Senior Research Scholar, Center on Global Energy Policy, Columbia University. While acknowledging that questions are often raised about the effectiveness of sanctions, Mr Ross Denton, Partner, Baker and McKenzie LLP, told us that “in certain industries they are very effective”. For example:
“They have changed the nature of business in Russia, they have changed the way in which certain businesses operate, and they have changed the way in which Russia wants to do business with the West.”
9.The different types of sanctions—arms embargoes; asset freezes; visa or travel bans; and other sectoral restrictions—are described in Box 1 below.
Arms embargoes normally cover the sale, supply and transport of military goods. In EU regimes, these must be included in the EU’s Common Military List. Related technical and financial assistance is usually also included in the ban. The export of equipment used for internal repression, and dual-use goods (that can be used for both civil and military purposes) may also be prohibited.
Asset freezes concern funds and economic resources owned or controlled by targeted individuals or companies. Funds, such as cash, cheques, bank deposits, stocks and shares may not be accessed, moved or sold, and other tangible or intangible assets—including real estate—cannot be sold or rented.
Asset freezes also include a ban on providing resources to targeted individuals or companies. In effect, business transactions with targeted individuals or companies cannot be carried out.
Visa or travel bans
Individuals targeted by a travel ban are denied entry to the sanctioning country at its external borders. If visas are required for entering the country, they will not be granted to people subject to such restrictions on admission. EU measures do not oblige an EU Member State to refuse entry to its own nationals.
Other sectoral restrictions
Sectoral restrictions include, for example, prohibitions on certain kinds of financial transactions or certain types of trade.
10.Sir John Sawers GCMG, Chairman, Macro Advisory Partners and Former Chief of the Secret Intelligence Service (MI6), told us that sanctions regimes had become increasingly specific: effective regimes were “as targeted as possible on the decision-makers and the leadership of the regimes that are the target of sanctions”, and “focus on vulnerabilities rather than being broad-brush sanctions that affect the people as a whole”. He said that in the last two decades, “the most effective sanctions we have seen have been financial sanctions”. In this regard, the UK could be a significant actor, given its role as an international financial centre.
11.The UK currently implements four different types of sanctions regimes.
12.First, the UK implements sanctions derived from the UN, through Resolutions of the Security Council under Chapter VII of the UN Charter. These are mostly asset freezes, and applied by all UN members. EU Member States adopt UN sanctions via the EU’s CFSP as a bloc, but the obligation, under international law, is on the individual country to implement these sanctions.
13.Second, the UK implements sanctions derived from the EU under Article 215 of the Lisbon Treaty. These regimes fall into two parts:
(a)Regimes which build on a UN sanctions regime, applying stricter or additional measures (for example regimes on Iran, Libya and the Democratic People’s Republic of Korea); and
(b)Autonomous EU sanctions regimes, which are separate to any action by the UN (such as regimes on Syria, Russia and Burma).
14.EU sanctions regimes include asset freezes, travel restrictions, arms embargoes and can also include broader sectoral restrictions (as set out in Box 1). EU sanctions apply:
“within the jurisdiction (territory) of the EU; to EU nationals in any location; to companies and organisations incorporated under the law of a Member State—including branches of EU companies in third countries; on board of aircrafts or vessels under Member States’ jurisdiction”.
15.Mr Matthew Findlay, Deputy Head, International Organisations Department, Foreign and Commonwealth Office (FCO), explained that where sanctions relate to areas of EU competence, such as trade, Member States “cannot act in a way that is divergent from EU law”. In addition, the ‘duty of sincere co-operation’—Article 4(3) of the Lisbon Treaty, which states that “the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties”—requires Member States to co-operate on foreign policy. This limits the extent to which Member States can act alone (for example applying additional sanctions, above those agreed by the EU): “It is … politically unusual to break ranks.”
16.Third, the UK implements sanctions derived from the UK’s existing autonomous powers, under the Terrorist Asset-Freezing etc. Act 2010 (TAFA). Autonomous UK powers under TAFA are currently limited to counterterrorist asset freezing and to elements of restrictions against weapons of mass destruction and proliferation.
17.Fourth, the UK implements two arms embargoes relating to Armenia and Azerbaijan through the OSCE.
18.Mr Paul Williams, Director, Multilateral Policy, FCO, calculated that, as of September 2017, around 17% of the UK’s sanctions measures were derived from the UN, around 25% were UN measures built on by the EU, and around 51% were EU autonomous sanctions.
19.Ms Maya Lester QC, Barrister, Brick Court Chambers, said that UN and EU regimes “broadly do the same thing”: both can pursue a range of aims—such as “compliance with human rights and the rule of law, specific foreign policy goals such as trying to persuade a state to change its policy in a certain area, sometimes supporting a new fledgling democracy, counterterrorism, counterproliferation, and so on”.
20.She said that the design of UN and EU regimes also “does not particularly differ”; both can either target specific individuals and entities or have a broader, sectoral application. Mr Denton told us that both UN and EU regimes
“have moved away from simply having freezes on individuals or regimes into having very sophisticated measures, such as fund transfer controls or restrictions on particular categories of product. Probably the two most highly developed regimes have been those in respect of Iran—of course, since the Joint Comprehensive Plan of Action (JCPOA) that has changed—and Russia, in relation to which we have a very sophisticated regime.”
21.Once agreed, the UK’s implementation of UN and other multilateral sanctions regimes largely relies on the requirements set out in the European Communities Act 1972.
22.Certain types of EU sanctions, such as arms embargoes and travel bans, are implemented directly by Member State governments, and such measures require only a Decision by the Council, which is directly binding on those governments. In the UK, this is through the European Communities Act 1972, which gives effect in national law to directly effective EU law. By contrast, economic measures—such as asset freezes and export bans—affect wider EU legal principles on free movement, and require additional implementing legislation in the form of a Council Regulation, which is then directly binding on individuals and companies in the EU. The Regulation sets out the precise scope of the measures decided upon by the Council and the means of their implementation.
23.Businesses trading with entities which are subject to sanctions regimes play a significant role in applying the restrictive measures. Dr Francesco Giumelli, Assistant Professor in International Relations, University of Groningen, told us that “many sanctions are written in such a way that we are delegating powers to businesses to make decisions that we cannot make because we do not know what happens on the ground”. A Government could instruct a company to freeze the bank account of a designated individual and people either directly or indirectly related to them, but “we do not list them because we do not know who they are. We hope that the banks, companies and traders dealing with them will somehow see something and will share it with us.”
24.All our witnesses agreed that the most effective regimes are those applied by multiple countries. Dr Giumelli told us: “There is no way in which you can have effective sanctions on the ground unless you have wide co-ordination.” The Rt Hon Sir Alan Duncan MP, Minister for Europe and the Americas, FCO, explained: “The thing about sanctions is that they work best when people work together.”
25.Our witnesses advanced two reasons for this. First, explained Dr Mikael Eriksson, Researcher, Swedish Defense Research Agency, “the more interstate co-operation to enforce a sanctions regime, the stronger the signalling effect is likely to be” towards the targeted entity. Mr Tom Keatinge, Director, Centre for Financial Crime & Security Studies, Royal United Services Institute, cited the sanctions against Iran’s nuclear programme, which were co-ordinated between the EU and the US, and which had shown that “sanctions are most effective when they are designed collaboratively and applied in concert with multilateral political support”. Mr Findlay agreed that “greater alignment gives you greater strategic impact”.
26.Second, Sir John Sawers said that to be effective, sanctions regimes must “embrace the main economic partners of the target country”. On that basis:
“The European Union is the largest economic bloc and the largest trading power in the world. Alongside the European Union are the United States and China as the other major trading, economic powers in the world. If sanctions regimes are going to be effective, you need at least two and possibly three of those blocs.”
He noted that sometimes a country can be “especially loud or shrill in arguing for a particular” regime to be imposed, but that this “does not mean that it necessarily has that level of influence on the outcome”. For example, in the case of sanctions on North Korea, the US has “no business or commercial links”, while China is North Korea’s main trade partner.
27.Mr Williams summarised the position as follows: “The wider the scope that you can cover in implementing sanctions the better, to try to coerce the change in behaviour that you are looking for.” Sir John Sawers explained that there was, therefore, “not much point in one country applying sanctions”. He cited the example of independent UK sanctions on Russia following the murder of Alexander Litvinenko in 2006. Under the Anti-Terrorism, Crime and Security Act 2001, the UK imposed an asset freeze on Andrey Lugovoy and Dmitri Kovtun, who were named as responsible in the official report into his death. Sir John Sawers noted that, “while the sanctions we took may have made us feel a bit better, they did not have any impact on the Russian leadership. That was partly because it was just us taking them.”
28.Mr Williams said that the UK “would always prefer to do sanctions through the United Nations, because sanctions done through the UN are binding on all the UN member states—193 countries”. He noted, however, that “it is not always possible to go through the UN”. For example, sanctions on Russia and Syria have not been possible, given Russia’s opposition and its status as a permanent member of the UN Security Council. For this reason, “we regularly go further within the EU, or the EU does its own autonomous regimes”.
29.Our witnesses outlined a range of advantages the UK currently derives from participation in an EU sanctions regime. First, a number of witnesses emphasised the leading role that the UK plays in the formulation of EU restrictive measures (discussed further in Chapter 3). Mr Denton said the UK “can use its resources to influence other EU Member States and to guide them in a similar direction to that of the UK”. This means that, in the words of Dr Benjamin Kienzle, Lecturer, Defence Studies, King’s College London, the UK is able to use the EU as a “convenient power multiplier”, to pursue its desired foreign policy objectives. Dr Kienzle gave the example of Iran: UN sanctions were supplemented by EU sanctions—in particular an oil embargo—which contributed to Iran’s agreement to the JCPOA. This “helped to solve one of the UK’s key issues on its foreign policy agenda”. Similarly, in evidence to the External Affairs Sub-Committee in April 2017, Dr Karen Smith, Professor of International Relations and Director of the European Foreign Policy Unit, London School of Economics and Political Science, highlighted sanctions on Russia and Syria as “examples of how the EU framework has helped the UK”.
30.Second, as has already been established, an important feature of sanctions is the signal they send to their target. Dr Moret told us collective EU sanctions had the advantage of demonstrating a “greater show of unity”. She continued: “Working in unison to condemn a specific breach of international law … can send a powerful message”. In evidence to the External Affairs Sub-Committee in July, the Rt Hon Lord Hague of Richmond gave us an example: “Twenty-eight countries left to their own devices would not have had identical sanctions, or brought Iran to the negotiating table. The ability to do that is very important”.
31.Third, Ms Lester said that EU sanctions proposed or supported by the UK “have … legal effect across all Member States of the EU rather than only in the UK”; the UK was thereby benefiting from what Mr Keatinge called the EU’s “economic heft”. UK Finance was of the view that “EU harmonization” had “heightened the impact of sanctions on designated entities and individuals no matter where in the EU these designated parties are located or access finance services”. Mr Williams agreed: working within an EU regime provided a greater reach for sanctions than a stand-alone UK regime.
32.Fourth, Ms Lester told us that “uniformity of approach and consistency in having one [EU] regime to deal with” had “enormous” advantages for “businesses, NGOs, individuals and other organisations”. She highlighted the value to such entities of only having to apply once for an authorisation (a licence exception to a sanctions regime) for it to be valid across all Member States.
33.Fifth, being part of a common EU sanctions regime—and bound by the ‘duty of sincere co-operation’—helped Member States to co-ordinate implementation, and prevented one state from deriving commercial benefit at the expense of another. For example, Dr Clara Portela, Assistant Professor of Political Science, Singapore Management University, told us that members of the then European Economic Community had taken advantage of UK sanctions on Uganda (imposed in 1972, prior to the UK joining the bloc), by intensifying their own trade in response to opportunities created by the withdrawal of British firms; in contrast, the UK sanctions regime on Zimbabwe in 2002 “was quickly adopted by the entire EU, which sustained it for over a decade”.
34.Sixth, Ms Lester said that being part of an EU-wide regime somewhat reduced the prospect of “countersanctions” by the target country: “It is easier if you are a third country to retaliate against one country—as Russia has done in a number of instances recently, for example in its food and agricultural measures and its measures against Turkey—than it is across the bloc”.
35.Seventh, an EU-wide sanctions regime allowed Member States to combine their resources, information and expertise in designing sanctions. This is discussed further in Chapter 3.
36.Dr Moret told us that the “advantages of the UK’s EU membership have been widespread and disadvantages have been minimal”. Other witnesses, though, identified some disadvantages to participation. First, Mr Keatinge said that “the UK’s hands are somewhat tied by consensus”, when formulating sanctions regimes with 27 other Member States. On the one hand, Dr Moret, Ms Lester and Mr Findlay told us that securing agreement among 28 countries could result in a dilution of sanctions measures that the UK would like to impose. Dr Portela noted that this was a challenge in all multilateral regimes. Dr Kienzle noted that, on the other hand, there was an element of quid pro quo: other Member States “may expect the UK to implement sanctions that are not necessarily a UK priority in return for their support for EU sanctions that are in the UK’s national interest”. Mr Keatinge added that EU regimes could also require “sacrifices” by the UK, such as restrictions affecting the UK financial services industry.
37.Sir John Sawers said that this was inevitable: “You are bound to have a negotiation and a balance as to the right extent of those sanctions, how deep they should go and how the sanctions regime should be designed.” He gave us the example of sanctions on apartheid-era South Africa: “The UK had closer economic ties with South Africa in the 1980s than most other countries, so we were at the lower end of the spectrum on sanctions, wanting to limit the impact on the economic links”. Mr Mortlock and Mr Nephew described this as “a curious balancing posture” by the EU, of “distributed pain”.
38.Second, Dr Giumelli and Mr Williams told us that building consensus between the EU Member States could take time, which could slow the development of a new regime—although Dr Giumelli noted that sometimes individual states were also unable to move fast.
39.Third, witnesses said that that being part of an EU-wide regime somewhat reduced the UK’s autonomy in some aspects of implementation (a Member State responsibility). The FCO explained that the EU was responsible for the publication of “guidance on some matters of interpretation of the EU Regulations”, and that “Regulations and guidance are generally agreed by all EU 28 Member States, with the Commission sometimes publishing supplementary guidance under its own authority”. Another issue was licencing—the provision by the competent authority of exemptions to sanctions, for example for humanitarian purposes. Mr Giles Thomson, Deputy Director, Sanctions and Illicit Finance, HM Treasury, said that “a relatively constrained set of licensing powers” was available to the UK as a Member State; UK Finance described the current EU licencing approach as “narrow” and with “significant pitfalls”.
40.The Coalition Government (2010–2015) in its Review of the Balance of Competences between the United Kingdom and the European Union—Foreign Policy (August 2013) weighed the advantages and disadvantages of a common sanctions regime, and concluded: “There is … no other alliance through which the UK could achieve the same or better results, given the economic weight of the EU”.
41.Mr Mortlock and Mr Nephew told us that the EU’s use of sanctions had increased over the past 20 years. It “has pursued sanctions as a means of projecting power and influencing foreign behavior”. Dr Moret agreed that “the EU’s use of autonomous sanctions has proliferated … [it] has grown threefold in the past 30 years”. The EU had also expanded into new areas—such as the protection of territorial integrity and combating cyber-attacks.
42.The sanctions regimes implemented by EU Member States are shown in Figure 1. A full list of the regimes is in Appendix 3.
44.The EU’s sanctions regimes have a significant impact where agreement cannot be reached at the UN, or agreed UN measures are limited in scope. This reflects the significance of the EU as an economic bloc, and the signalling power of 28 Member States acting in concert.
45.Financial sanctions can be particularly effective in applying pressure to targeted entities. The role of the City of London as an international financial centre heightens the value of participation by the UK in collective sanctions regimes, at both UN and EU level.
2 Foreign and Commonwealth Office, Sanctions and Anti-Money Laundering Bill [HL] Explanatory Notes, (18 October 2017), p 4: [accessed 12 December 2017]
3 Council of the European Union, ‘Sanctions: how and when the EU adopts restrictive measures’: [accessed 12 December 2017]
4 Written evidence from Dr Erica Moret ()
5 Written evidence from Dr Mikael Eriksson ()
6 Written evidence from David Mortlock and Richard Nephew ()
7 (Ross Denton)
8 Common Military List of the European Union adopted by the Council on 6 March 2017, (28 March 2017)
10 (Sir John Sawers), written evidence from Tom Keatinge () and (Sir Alan Duncan MP)
11 European External Action Service (EEAS), ‘Sanctions policy’: [accessed 12 December 2017]
13 The Lisbon Treaty, ‘Article 4’: [accessed 12 December 2017]
15 (Maya Lester)
16 (Paul Williams)
17 . The remaining 7% would be domestic sanctions and the arms embargoes on Armenia and Azerbaijan. Mr Williams told us that the total number of regimes in September 2017 was 35; for updated figures on UN and EU restrictive measures, please refer to Figure 1 and Appendix 3.
19 (Maya Lester)
20 . The JCPOA lifted nuclear-related sanctions on Iran. Signatories were Iran, China, France, Russia, United Kingdom, United States, Germany, and the European Union.
21 Foreign and Commonwealth Office, Sanctions and Anti-Money Laundering Bill [HL] Explanatory Notes, (18 October 2017), p 5: [accessed 12 December 2017]
22 European Union Committee, (11th Report, Session 2016–17, HL Paper 102)
26 Written evidence from Dr Mikael Eriksson ()
27 Written evidence from Tom Keatinge ()
33 HM Treasury, General Notice of Freezing Order (22 January 2016): [accessed 12 December 2017] and The Litvinenko Inquiry, Report into the death of Alexander Litvinenko (21 January 2016): [accessed 12 December 2017]
37 Written evidence from Dr Benjamin Kienzle (); Also see (Dr Clara Portela), written evidence from Dr Clara Portela () and (Ross Denton). We discussed this in our report, Europe in the world: Towards a more effective EU foreign and security strategy. European Union Committee, (8th Report, Session 2015–16, HL Paper 97)
38 Written evidence from Dr Benjamin Kienzle (); The Coalition Government’s Review of the Balance of Competences between the United Kingdom and the European Union—Foreign Policy (July 2013) cited Rem Korteweg, Centre for European Reform, that EU sanctions had “led to a virtual stop in Iranian oil exports, a fall in the local currency, and a depletion of Iranian foreign currency reserves”, which had resulted in Iran coming to the negotiating table. HM Government, Review of the Balance of Competences between the United Kingdom and the European Union—Foreign Policy (July 2013), p 49: [accessed 12 December 2017]
39 Oral evidence taken before the EU External Affairs Sub-Committee on 6 April 2017 (Session 2016–17), (Dr Karen Smith)
40 Written evidence from Dr Erica Moret ()
41 Oral evidence taken before the EU External Affairs Sub-Committee on 6 July 2017 (Session 2017–19),
42 Written evidence from Maya Lester ()
44 Written evidence from UK Finance (). It added that, “where EU efforts have been co-ordinated with those of other like minded countries, such as the US, Canada, Australia and Japan the global impact of such measures are far more influential”.
47 Written evidence from Dr Clara Portela ()
48 ; Also see written evidence from UK Finance ()
49 Written evidence from Dr Erica Moret ()
50 Written evidence from Dr Erica Moret ()
52 Written evidence from Dr Erica Moret (), Maya Lester () and (Matthew Findlay)
53 and written evidence from Dr Clara Portela ()
54 Written evidence from Dr Benjamin Kienzle ()
57 Written evidence from David Mortlock and Richard Nephew ()
58 (Dr Francesco Giumelli) and (Paul Williams)
59 Written evidence from the Foreign and Commonwealth Office ()
61 Written evidence from UK Finance ()
62 HM Government, Review of the Balance of Competences between the United Kingdom and the European Union—Foreign Policy (July 2013), p 48: [accessed 12 December 2017]
63 Written evidence from David Mortlock and Richard Nephew ()
64 Written evidence from Dr Erica Moret ()