Financial Sanctions Unit
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The Financial Sanctions Unit of the Bank of England formerly administered financial sanctions in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
on behalf of
HM Treasury His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ...
. It was in operation since before 1993, when it applied sanctions against the Government of
Libya Libya (; ar, ليبيا, Lībiyā), officially the State of Libya ( ar, دولة ليبيا, Dawlat Lībiyā), is a country in the Maghreb region in North Africa. It is bordered by the Mediterranean Sea to the north, Egypt to the east, Suda ...
. More recently, since Libya became an ally of the United Kingdom, sanctions have been applied against those who allegedly fought against the Government of Libya at the time it was not an ally (see Incidents which have involved the Financial Sanctions Unit). Responsibility for the administration of Financial Sanctions in the UK transferred from the Bank of England to HM Treasury on 24 October 2007. In April 2016 HM Treasury set up the
Office of Financial Sanctions Implementation An office is a space where an organization's employees perform administrative work in order to support and realize objects and goals of the organization. The word "office" may also denote a position within an organization with specific du ...
, a new body whose mission is to "provide a high-quality service to the private sector, working closely with law enforcement to help ensure that financial sanctions are properly understood, implemented and enforced."


Regimes

Financial sanctions have established under a multitude of regimes, from UN Security Council Committee Established Pursuant to Resolution 1267 (1999) Concerning Al-Qaida and the Taliban and Associated Individuals and Entities, to EC Commission Regulations, to UK Government orders enforcing trade restrictions against activities in particular countries. Often these authorities overlap so that the same candidates for sanctions are listed from different sources. Aside from the Al-Qaida and the Taliban regimes, there are sanctions regimes against persons associated with
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,
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,
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, the former
Yugoslavia Yugoslavia (; sh-Latn-Cyrl, separator=" / ", Jugoslavija, Југославија ; sl, Jugoslavija ; mk, Југославија ;; rup, Iugoslavia; hu, Jugoszlávia; rue, label=Pannonian Rusyn, Югославия, translit=Juhoslavija ...
,
Iraq Iraq,; ku, عێراق, translit=Êraq officially the Republic of Iraq, '; ku, کۆماری عێراق, translit=Komarî Êraq is a country in Western Asia. It is bordered by Turkey to the north, Iran to the east, the Persian Gulf and K ...
, Ivory Coast,
Lebanon Lebanon ( , ar, لُبْنَان, translit=lubnān, ), officially the Republic of Lebanon () or the Lebanese Republic, is a country in Western Asia. It is located between Syria to Lebanon–Syria border, the north and east and Israel to Blue ...
, Syria, Liberia, Sudan and
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. Previous regimes, which have been lifted, involved
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, Haiti and
Libya Libya (; ar, ليبيا, Lībiyā), officially the State of Libya ( ar, دولة ليبيا, Dawlat Lībiyā), is a country in the Maghreb region in North Africa. It is bordered by the Mediterranean Sea to the north, Egypt to the east, Suda ...
. Many of these measures targeting terrorist organizations have been subsumed into the general provisions of an order which came into force on 12 October 2006, the day after it was laid before Parliament. The new order allows for
HM Treasury His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ...
to target anyone they suspect may be attempting to participate in the commissions of acts of terrorism, and anyone who works on their behalf. This includes by default all those identified by the
Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...
committee. The main instrument for administering the financial sanctions is the publication of
''Consolidated list of financial sanctions targets''
which can be used by banks and other financial institutions to scan their customer databases and discover financial assets controlled by those who are the targets of the sanctions.


Similar measures

The Charity Commission also has powers to freeze the bank accounts of organizations that are registered charities that it suspects are connected with terrorism.


Politics

Financial sanctions regimes are usually passed as
secondary legislation Primary legislation and secondary legislation (the latter also called delegated legislation or subordinate legislation) are two forms of law, created respectively by the legislative and executive branches of governments in representative democra ...
on the basis of an earlier
Act of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the Legislature, legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of ...
. There are statements made about the process in Parliament, but no sign of an official debate. The power to impose sanctions against suspects designated by the United Nations Security Council is derived from the
United Nations Act 1946 The United Nations Act 1946 (9 & 10 Geo. 6 c. 45) is an Act of the Parliament of the United Kingdom which enables His Majesty's Government to implement resolutions under Article 41 of the United Nations Charter as Orders in Council. Thus Parli ...
, and so is not thought to require further approval. The Chancellor of the Exchequer,
Gordon Brown James Gordon Brown (born 20 February 1951) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 to 2010. He previously served as Chancellor of the Exchequer in Tony B ...
, takes an interest in financial sanctions policy against terrorism, and has made it the subject of major speeches. On 12 October 2006, he announced the broadening of the law to allow for financial sanctions to apply without the need of a UN or EU mandate, and solely on the basis of secret intelligence. He called his department's handling of the 19 suspects involved in the
2006 transatlantic aircraft plot The 2006 transatlantic aircraft plot was a terrorist plot to detonate liquid explosives, carried aboard airliners travelling from the United Kingdom to the United States and Canada, disguised as soft drinks. The plot was discovered by British ...
"the most expeditious and most comprehensive asset freeze the Treasury has undertaken", and claims that "since September 11th almost 200 accounts have been frozen linked to over 100 organisations with suspected connections to Al Qaeda." These were handled as part of the previous regime, by designating those individuals as being connected with Al-Qaeda, without any evidence presented to the public beyond a press release.


Legal challenges

Several of the targeted people have brought their case before the
Court of First Instance A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accorda ...
on the basis that the measures infringe fundamental principles of Community law (such as
European Convention on Human Rights The European Convention on Human Rights (ECHR; formally the Convention for the Protection of Human Rights and Fundamental Freedoms) is an international convention to protect human rights and political freedoms in Europe. Drafted in 1950 by ...
which ensures the right of fair trial, and no punishment without law). On 12 July 2006, Faraj Hassan and Chafik Ayadi, both UK residents who had been listed under the regime since 2002, had their cases dismissed with the statement that:
...the Court... recognise that freezing of funds constitutes a particularly drastic measure, but adds that that measure does not prevent the individuals concerned from leading a satisfactory personal, family and social life, given the circumstances. In particular, they are not forbidden to carry on a trade or business activity, it being however understood that the receipt of income from that activity is regulated.
Since the order gives HM Treasury the right to grant licenses which create exemptions to any imposed regime.


Incidents which have involved the Financial Sanctions Unit

*
Libyan Islamic Fighting Group The Libyan Islamic Fighting Group (LIFG), also known as ''Al-Jama'a al-Islamiyyah al-Muqatilah bi-Libya'' ( ar, الجماعة الإسلامية المقاتلة بليبيا), was an armed Islamist group. Militants participated in the 2011 Lib ...
- Sanctions applied on 7 February 2006 against five Libyans residing in the UK on the basis of incidents that occurred in the 1990s. *
2006 transatlantic aircraft plot The 2006 transatlantic aircraft plot was a terrorist plot to detonate liquid explosives, carried aboard airliners travelling from the United Kingdom to the United States and Canada, disguised as soft drinks. The plot was discovered by British ...
- All 19 suspects became targets of financial sanctions at the time of their arrest, thus revealing their identities. The Chancellor of the Exchequer called it "the most expeditious and most comprehensive asset freeze the Treasury has undertaken."


References


External links

* {{Official website, http://www.bankofengland.co.uk/publications/financialsanctions/index.htm Bank of England