Magnitsky Sanctions in the UK: What About Due Process?

Magnitsky Sanctions in the UK: What About Due Process?

Magnitsky sanctions are a novel way to deal with people who are said to have breached fundamental human rights. But do these powers make sense, and can we be confident they will be operated fairly?

An undeniable cause

It’s perhaps in the nature of Magnitsky sanctions that few people are likely to be interested in the rights of those on the receiving end. The story of Sergey Magnitsky himself, tortured and killed in a Russian prison after investigating allegations of corruption, has prompted these provisions precisely because the need to bring those responsible to justice is undeniable, not just in his case, but others like it. But how do we define ‘Magnitsky-type’ cases, and are sanctions the right way of dealing with them?

What has Parliament enacted?

What is a ‘Magnitsky case’?

Legislators in the UK tackled the first question in 2017 when adding a new section 241A to the Proceeds of Crime Act 2002 (POCA). They defined a ‘gross human rights violation or abuse’ in quite specific terms, essentially equating it with torture (defined as ‘conduct that involves the intentional infliction of severe pain or suffering on another person’) or ’inhuman or degrading treatment’ (words borrowed from article 3 of the European Convention on Human Rights (ECHR)), by or with involvement from a public official, of a person who had sought to (and because they had sought to) expose public-sector crime or to promote human rights.

Conduct ‘connected with’ a human rights violation

As for the second question, that amendment to POCA enabled the freezing and recovery of assets that represented the proceeds of such a violation or abuse, or of conduct ‘connected with’ it, defined as acting as an agent for another in connection with such conduct, or as directing, sponsoring or profiting from, or ‘materially assisting’, such activities. (‘Materially assisting’, in turn, included providing goods and services in support of the activities, or otherwise providing any ‘financial or technological support’ for them.) Despite the breadth of that ‘connected’ concept, the real prospects of targeting assets of this nature seemed, and still seems, quite limited.

The enabling Act: ‘gross violations’ and ‘respect for human rights’

The link between these concepts and sanctions came in the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), which lumped together these two types of activity (the violation or abuse, on the one hand, and the conduct ‘connected with’ it, on the other) under the definition of a ‘gross violation of human rights’. It also included, within the list of purposes for which a minister could create a sanctions regime, those that they considered would ‘provide accountability for or be a deterrent to’ such violations, or ‘otherwise promote (i) compliance with international human rights law, or (ii) respect for human rights’.

What are the Regulations for?

‘Democracy, the rule of law, and good governance’

This was the provision that was popularly understood to have enabled ‘Magnitsky sanctions’ in the UK. But when the government introduced the Global Human Rights Sanctions Regulations 2020, they were also said (in the Explanatory Memorandum to Parliament, as required by SAMLA) to have another of the statutory aims in mind, to ‘promote respect for democracy, the rule of law, and good governance’. So already the sands have shifted somewhat, with a subject matter that goes well beyond the original core issue of political torture, in a number of different ways.

A broader purpose

This may help to explain why the stated purposes of the Regulations are rather broader than might have been expected, namely ‘to deter, and provide accountability for’ activities and omissions, by a state or non-state actor, ‘which, if carried out by or on behalf of a State within the territory of that State, would amount to a serious violation by that State of an individual’s (a) right to life, (b) right not to be subjected to torture or cruel, inhuman or degrading treatment or punishment, or (c) right to be free from slavery, not to be held in servitude or required to perform forced or compulsory labour’ (words borrowed, this time, from articles 2, 3, and 4 of the ECHR).

Breaches by non-state actors

Pausing for a moment here, this is really rather a strange to way to go about defining the purposes of a law, particularly one that not only interferes with property rights, but creates criminal prohibitions. The rights in the ECHR are rights as against a state, and they are not easily translated into activities or omissions of a private party. What does it mean to say a private individual has breached another individual’s right to life, or their right not to be tortured, or not to be enslaved? Is it the same as saying that he has committed criminal offences, and if so, which ones? What does the word ‘serious’ add?

Some questions of principle

Fundamentally, too, why should it be the role of sanctions, rather than criminal law, to ‘deter, and provide accountability for’ such activities? Does ‘provide accountability’ imply that sanctions are intended as a punishment for people who have committed wrongdoing? Would ‘deterrence’ excuse sanctions against those who had not committed, or who had been punished for, or even acquitted of, a crime? And what it the relevance now of that phrase ‘gross violations of human rights’, cited in the Explanatory Memorandum as a potential purpose of the Regulations, and yet not mentioned in them?

Who can be a ‘designated person’?

Two criteria

Moving on to practical impacts, the Regulations enable a minister to designate persons who could be subject to various measures, including asset freezes and travel bans, if two criteria are fulfilled. The first is that the minister has reasonable grounds to suspect that they are an ‘involved person’, and the second is that he or she considers that the designation is ‘appropriate’, having regard to the stated purposes, and the likely significant effects of the designation on the person.

‘Involved persons’

What, then, is an ‘involved person’? The category is a lot broader than it sounds. The core category is a person who is or has been involved in activity described in the stated purposes, in the sense that he, she or it:

  • Is responsible for or engages in such an activity;
  • Facilitates, incites, promotes, or provides support for such an activity;
  • Conceals evidence of such an activity;
  • Provides financial services, or makes available funds, economic resources, goods or technology, knowing or having reasonable cause to suspect that they will or may contribute to such an activity;
  • Provides financial services, or makes available funds, economic resources, goods or technology, to a person mentioned in (a);
  • Profits financially or obtains any benefit from such an activity;
  • Is responsible for the investigation or prosecution of such an activity and intentionally or recklessly fails to fulfil that responsibility; or
  • Contravenes, or assists with the contravention of, the financial sanctions prohibitions.

An even broader category

Confusingly, this overlaps with (in (d) and (f)) the concept of conduct ‘connected with’ violations or abuses in POCA, as included in the concept of ‘gross violations’ in SAMLA, but the wording is different. As if that were not enough, an ‘involved person’ could also be anyone who is owned or controlled, directly or indirectly, by (a concept elaborated in a schedule to the Regulations), or is acting on behalf, or at the direction of, or is a member of, or ‘associated with’, anyone in that core category.

Does this go too far?

Is this what Parliament intended?

The potential categories of people who could be designated under these Regulations is surely broader than Parliament had in mind when it considered the provisions in SAMLA on ‘gross human rights violations’, or even the broader provisions on human rights, democracy, the rule of law, and good governance. Very broadly construed, their provisions could enable sanctions against (say) any person they ‘reasonably suspected’ of being ‘associated with’ someone who had committed a homicide abroad, subject only to the separate criterion of whether it would be ‘appropriate’ to do so. Unfortunately, though the Regulations required approval by both houses of Parliament, this was on a ‘take it or leave it’ basis, with no opportunity for detailed scrutiny or amendment.

The issue of due process

Is the breadth of these provisions a problem? From the perspective of the designated person, even the fact of being publicly named in this context, let alone any practical impact of travel bans, asset freezes, and the broader impact of financial sanctions (which ban others from providing them with ‘economic resources’), could be serious. Unlike criminal cases, there is no opportunity to be tried and acquitted of the activities they are said to have done. There is a process for requesting reviews, and for challenging ministers’ decisions in court, but it is a system very far removed from the principles of ‘innocent until proven guilty’, and ‘beyond reasonable doubt’ – ironically, principles we usually cherish as means of protecting human rights. The fact that the targets of such sanctions may not attract popular sympathy should not blind us to the risks of an unfair process.


About the author:

John Binns is a partner at BCL specialising in all aspects of business crime, with a particular interest in confiscation, civil recovery and money laundering under the Proceeds of Crime Act 2002 (“POCA”). His business crime experience includes representing suspects, defendants and witnesses in cases invoking allegations of bribery and corruption, fraud (including carbon credits, carousel/MTIC, land-banking, Ponzi and pyramid scheme frauds), insider trading, market abuse, price-fixing, sanctions-busting, and tax evasion. He has coordinated and undertaken corporate investigations and defended in cases brought by BEIS, the FCA, HMRC, NCA, OFT, SFO and others.