Why the UK’s Anti-Corruption Sanctions are Necessary
Updated: Apr 20, 2022
Anti-corruption campaign groups such as Spotlight on Corruption and Transparency International have argued that without explicit coverage of serious corruption, the UK’s sanctions regime has been largely ineffective in tackling money laundering and other financial crimes. Corruption, they argue, and the ability to hide assets and create another life in a ‘safe haven’ such as the UK, sustains the financial and political power of kleptocrats and their supporters, hiding their ill gotten gains from their countries’ enforcement agencies.
The UK’s National Crime Agency (NCA) estimates that as much as £100 billion illegally flows through the UK every year, as criminals, money launderers and human rights abusers purchase luxury flats, spend their ill gotten gains in Harrods, and send their children to British boarding schools. So far, criminal law has failed to hold powerful kleptocrats with access to a passport, foreign banks, and lawyers to account.
In April, the UK government launched an anti-corruption sanctions regime:
“Corruption has an immensely corrosive effect on the rule of law, on trust in institutions. It slows development, it drains the wealth of poorer nations. It keeps their people trapped in poverty. It poisons the well of democracy around the world. Whistleblowers and those who seek to expose corruption are targeted. Some have paid the ultimate price with their lives, including of course Sergei Magnitsky himself – the inspiration for our Human Rights Sanctions regime. But his courage was not in vain. The framework of sanctions that we are launching today, shared by some of our partners around the world, flows directly from his decision to take a brave stance against injustice.” - The Rt Hon Dominic Raab MP
Sanctions are penalties levied against a country or individual citizens of another country. They are intended to damage the financial interests of the target, and deprive them of assets or access to other financial resources.The goal of each sanction is to force a change in behavior. Since July last year, the UK government has applied its new sanctions powers against human rights abusers, with 78 individuals and 6 organisations having their assets frozen.
The efficacy of corruption sanctions is clear: those sanctioned are unable to access stolen funds they have moved to the UK, and unable to visit the luxury flats and homes they have purchased with their ill-gotten gains. However, it is important to also recognise the role of sanctions where criminal charges have failed.
The first benefit of sanctions is that they can be applied against those who may not be liable under criminal law. The sum of actions across different states may not constitute corruption in any one state, but together would be considered corruption. The state-by-state nature of criminal law means that in this instance, sanctions are the only way to hold these corrupt individuals to account. Unlike criminal law, it is also easy for the UK to take multilateral action with other countries who have similar sanctions regimes, such as the US and Canada.
Alongside this, the burden of proof for sanctions is lower than that required for a criminal case to be brought. While it may not be possible to demonstrate beyond reasonable doubt that an individual has been involved in corruption (the standard required by criminal law), either due to the obscure nature of corruption, or the ability of the accused to spend significant amounts of money fighting these cases in court, sanctions require it to be shown that a person is guilty on the balance of probabilities.
The process for levying corruption sanctions also presents an opportunity for civil society to take on a role in sharing relevant information with UK law enforcement on highly corrupt politicians and businesspeople. Unlike with criminal charges, the UK government is able to “crowdsource” information on corrupt individuals from civil society groups. This approach makes the most of the expertise of groups with extensive experience in anti-corruption investigations and campaigns in the effort to end the UK’s status as a sanctuary for dirty money.
James Somerville - Senior Content Editor, International Lawyers Project