Financial Sanctions Unit
Encyclopedia
The Financial Sanctions Unit (official webpage) of the Bank of England
administers financial sanctions in the United Kingdom
on behalf of HM Treasury
. It has been in operation since before 1993 when it applied sanctions against the Government of Libya
. 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.
Aside from the Al-Qaida and the Taliban regimes, there are sanctions regimes against persons associated with Belarus
, Burma, Democratic Republic of the Congo
, the former Yugoslavia
, Iraq
, Ivory Coast, Lebanon
, Syria
, Liberia
, Sudan
and Zimbabwe
. Previous regimes, which have been lifted, involved Angola
, Haiti
and Libya
.
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
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 committee.
The main instrument for administering the financial sanctions is the publication of a 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.
also has powers to freeze the bank accounts of organizations that are registered charities that it suspects are connected with terrorism.
. 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
, and so is not thought to require further approval.
The Chancellor of the Exchequer
, Gordon Brown
, 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 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.
on the basis that the measures infringe fundamental principles of Community law (such as European Convention on Human Rights
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:
Since the order gives HM Treasury the right to grant licenses which create exemptions to any imposed regime.
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
administers financial sanctions in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
on behalf of HM Treasury
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
. It has been in operation since before 1993 when it applied sanctions against the Government of Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
. 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.
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 Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...
, Burma, Democratic Republic of the Congo
Democratic Republic of the Congo
The Democratic Republic of the Congo is a state located in Central Africa. It is the second largest country in Africa by area and the eleventh largest in the world...
, the former Yugoslavia
Yugoslavia
Yugoslavia refers to three political entities that existed successively on the western part of the Balkans during most of the 20th century....
, Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
, Ivory Coast, Lebanon
Lebanon
Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...
, Syria
Syria
Syria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the West, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest....
, Liberia
Liberia
Liberia , officially the Republic of Liberia, is a country in West Africa. It is bordered by Sierra Leone on the west, Guinea on the north and Côte d'Ivoire on the east. Liberia's coastline is composed of mostly mangrove forests while the more sparsely populated inland consists of forests that open...
, Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
and Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
. Previous regimes, which have been lifted, involved Angola
Angola
Angola, officially the Republic of Angola , is a country in south-central Africa bordered by Namibia on the south, the Democratic Republic of the Congo on the north, and Zambia on the east; its west coast is on the Atlantic Ocean with Luanda as its capital city...
, Haiti
Haiti
Haiti , officially the Republic of Haiti , is a Caribbean country. It occupies the western, smaller portion of the island of Hispaniola, in the Greater Antillean archipelago, which it shares with the Dominican Republic. Ayiti was the indigenous Taíno or Amerindian name for the island...
and Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
.
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
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
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 committee.
The main instrument for administering the financial sanctions is the publication of a 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 CommissionCharity Commission
The Charity Commission for England and Wales is the non-ministerial government department that regulates registered charities in England and Wales....
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 on the basis of an earlier Act of ParliamentAct of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
. 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
United Nations Act 1946
The United Nations Act 1946 was passed by the Parliament of the United Kingdom as a means of putting the job of implementing the resolutions of the United Nations Security Council in the hands of the government rather than Parliament...
, and so is not thought to require further approval.
The Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
, Gordon Brown
Gordon Brown
James Gordon Brown is a British Labour Party politician who was the Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 until 2010. He previously served as Chancellor of the Exchequer in the Labour Government from 1997 to 2007...
, 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
2006 transatlantic aircraft plot
The 2006 transatlantic aircraft plot was a terrorist plot to detonate liquid explosives carried on board at least 10 airliners travelling from the United Kingdom to the United States and Canada...
"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 InstanceCourt of First Instance
The General Court is a jurisdictional instance of the Court of Justice of the European Union. From its inception on 1 January 1989 to 30 November 2009, it was known as the Court of First Instance .-Competence:...
on the basis that the measures infringe fundamental principles of Community law (such as European Convention on Human Rights
European Convention on Human Rights
The Convention for the Protection of Human Rights and Fundamental Freedoms is an international treaty to protect human rights and fundamental freedoms in Europe. Drafted in 1950 by the then newly formed Council of Europe, the convention entered into force on 3 September 1953...
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[s] 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 GroupLibyan Islamic Fighting GroupLibyan Islamic Movement formerly known as The Libyan Islamic Fighting Group also known as Al-Jama’a al-Islamiyyah al-Muqatilah bi-Libya is a group active in Libya which played a key role in deposing Colonel Muammar Gaddafi's regime, allying itself with the National Transitional Council.However...
- 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 plot2006 transatlantic aircraft plotThe 2006 transatlantic aircraft plot was a terrorist plot to detonate liquid explosives carried on board at least 10 airliners travelling from the United Kingdom to the United States and Canada...
- 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."