In March 2022, a year after Russia’s invasion of Ukraine, the Treasury Committee published a report regarding the development, implementation and impact of economic sanctions on Russia (the 2022 Report).  In brief, the 2022 Report found that:

  1. Economic sanctions are a critical weapon in resisting Russia’s war against Ukraine.
  2. Despite its own production of oil and gas, the UK would still be economically impacted by its sanctioning of Russian oil and gas production.
  3. The UK government must increase its efforts to boost business confidence given the cost to the UK economy of imposing these economic sanctions on Russia.

The UK’s sanctions framework has continued to evolve, with businesses left to navigate the increasing complexity of implementing effective compliance procedures amidst conflicting sanctions regimes, Court decisions and the threat of a rise in enforcement actions.

One year following the 2022 Report, the spotlight is not just on private businesses, but also the efficacy of the UK sanctions themselves: shortly after the publication of the UK government’s first ever “sanctions strategy” document, last week, the Treasury Committee launched a new inquiry to evaluate whether the UK’s economic sanctions regime against Russia is having the desired effect of impeding Russia’s war efforts against Ukraine (the Inquiry).  The Inquiry seeks to build upon and address the findings of the 2022 Report by seeking written submissions on:

  1. Whether financial sanctions imposed by the UK on Russia are complete and effective as regards (a) designated entities; and (b) entities which have to comply with the rules set out by the UK.
  2. Whether assets which have been frozen as part of the UK’s economic sanctions on Russia should be confiscated and if there are legal precedents for such action.
  3. Whether financial sanctions imposed by the UK should be widened to include buyers of Russian oil and gas (both individuals and companies).
  4. The effectiveness of the work of the Office of Financial Sanctions Implementation (OFSI) (including in terms of matters such as its guidance and licensing regime, as well as its enforcement work).
  5. The effectiveness of the system of designation of financial sanctions and the relationship between the designation and implementation of financial sanctions.
  6. How the financial sector and the maritime sector implement financial sanctions against Russia.
  7. The mitigation of any unintended consequences of financial sanctions.

The submissions should have regard to OFSI’s guidance, resourcing and licensing regime.  The deadline to make submissions is 28 March 2024.  Alongside the Inquiry, on 4 March 2024, the Foreign, Commonwealth and Development Office published a Post-Legislative Scrutiny Memorandum, which includes a preliminary assessment of the provisions and implementation of the Sanctions and Anti-Money Laundering Act 2018.