Since leaving the European Union, Britain has pursued an independent sanctions policy. Over the past five years, the UK has formed a legislative framework on the issue of restrictive measures and the practice of their application. Since the beginning of the Russian operation in Ukraine in 2022, sanctions against Russia have been a priority in British politics. Simultaneously with its NATO allies and other partners, the United Kingdom has imposed a number of financial, trade, visa, and other restrictions on Russia. Formal sanctions are combined with informal boycotts run by businesses. The scale of the new sanctions is unprecedented. They are fraught with significant damage both for Russia and for Britain itself.

In the Russian and foreign publications, there are already a number of studies of the UK’s sanctions policy after Brexit. Mention should be made of the reports of the Royal United Services Institute (RUSI) [Chase et al., 2019, 2020], other foreign researchers [Moret and Pothier, 2018], and the works of domestic authors [for example, Glandin and Panov, 2019; Khesin, 2019; Godovanyuk, 2018]. In addition, a number of studies have been prepared that give an idea of the foreign policy context of the current British sanctions policy [Ananyeva et al., 2021, Ananyeva and Godovanyuk, 2021]. However, there are many gaps in the available literature, which leave a number of research questions unanswered: what is the specificity of the institutional design of the current UK sanctions policy. What are the main trends in their use? What are the features of the sanctions against Russia? These questions constitute the research problem of the proposed article.

The following hypotheses have been put forward. First, the British policy of sanctions is characterized by a specific institutional design, one of the features of which is the concentration of mechanisms in one basic legislative act and the relatively high level of autonomy of the executive branch. At the same time, the UK uses universal sanctions instruments comparable to those in the US and the EU. Second, Britain uses sanctions quite actively. It applies sanctions less frequently than the US or the EU but more often than China and Russia. Third, Russia is becoming a priority for the UK both in terms of the number of sanctions imposed and the variety of methods used.

The first hypothesis is tested based on an analysis of the basic legal acts governing the UK’s sanctions policy. The second hypothesis is tested based on the Sanctions Events Database (SED) of the Russian International Affairs Council (RIAC) [Timofeev, 2021]. The database reflects the precedents for the use of restrictive measures by the key initiating countries, including Britain. The third hypothesis is studied based on the new legal documents for Russia and the SED.

By sanctions we mean restrictive measures imposed by the initiating country or a group of countries against the target country or a group of target companies in order to achieve political goals [Timofeev, 2018]. The key goals include forcing the target country to change its political course, causing damage, limiting its economic and military potential, and sending political signals [Giumelli, 2016]. Sanctions may include asset freezes and bans on transactions with individuals and entities (blocking sanctions), restrictions on certain sectors of the target economy (sectoral sanctions), export and import controls (trade sanctions), restrictions on freedom of movement and transport (visa sanctions, bans on the use of air and sea space), and investment restrictions.

Many of the measures mentioned are targeted or “smart” sanctions, i.e., directed at individuals rather than the country as a whole. The smart sanctions paradigm has dominated the practice of the key initiating countries for the past two decades [Drezner, 2015]. However, in some cases, targeted sanctions have had serious effects on the economies of target countries [Douhan, 2020]. In other words, despite being formally directed against individuals, they affected the target country as a whole. The sanctions against Russia, which have been in place since February 2022, have become a sign of a paradigm shift. Smart sanctions have been replaced by a sanctions “tsunami” or “carpet bombing of the economy,” in which the widest range of tools is applied simultaneously in an extremely short period of time [Timofeev, 2022]. The paradigm shift is common to both Britain and its NATO allies.

A distinction should also be made between multilateral and unilateral restrictive measures. The former include those restrictions that are introduced by a decision of the UN Security Council and are implemented by member countries [Jazairi, 2015]. The latter are introduced by the initiating countries bypassing the decisions of the UN Security Council and are based on their own legislation.

UK SANCTIONS POLICY: INSTITUTIONAL DESIGN

The UK sanctions policy is governed by the Sanctions and Anti-Money Laundering Act 2018 (SAMLA).Footnote 1 It defines the types of restrictive measures, the purposes of their application, the powers of the executive and legislative authorities, the procedure for using sanctions, and reporting on their implementation. We note that the law covers both the sanctions that Britain must use in pursuance of UN Security Council resolutions, and the so-called optional (discretionary) sanctions, which are related to unilateral measures. The law also introduces an intermediate category of sanctions, aimed at implementing other international agreements not covered by UN Security Council resolutions. (art. 1. SAMLA).

The appropriate ministers, which include state secretaries, have the authority to impose sanctions. The Treasury also has such powers. The types of restrictive measures include financial, visa, trade, transport (air and sea), and other measures, including those necessary for the implementation of restrictive measures of the UN Security Council. Sanctions are introduced in the form of regulations that reflect the regime of restrictions in relation to a particular country or functional problem. When introducing a new regulation, the relevant minister must submit to Parliament a report on the motives for imposing sanctions. Article 30 obliges the relevant minister to report annually on each regulation to Parliament. Moreover, a number of regulations require approval by the Parliament. These include those regulations that do not provide for the implementation of UN Security Council resolutions, i.e., unilateral measures. Article 55 of SAMLA provides for the approval of such regulations by both houses of Parliament within 28 days. In particular, regulations on sanctions against Russia and Belarus passed through the Parliament.

The design of the UK’s sanctions policy is characterized by greater executive autonomy compared to the US and EU. In the United States, the president has broad powers to impose sanctions, governed by the 1977 International Emergency Economic Powers Act (IEEPA).Footnote 2 He can apply sanctions very quickly by his executive decrees. It also transfers the relevant powers to the level of individual departments, which supplement the sanctions with their bylaws (directives, licenses, etc.) [Timofeev, 2022]. However, since the 1970s, Congress has made unsuccessful attempts to limit the powers of the president in a number of ways. For example, a whole web of laws has been formed on Iranian issues [Hanauer, 2020], which limited the maneuverability of the executive branch. Each law may imply separate types of executive reporting; i.e., they are less standardized than the UK mechanism. In the European Union, the procedure for imposing sanctions is more complicated, although it is quite efficient [Giumelli et al., 2020; Timofeev, 2021]. The unanimous support of draft decisions and regulations by all members of the EU Council is required. However, discrepancies are very rare. Thus, in 2020, Cyprus blocked the decision on sanctions against Belarusian officials, in order to draw attention to its concerns about Turkey’s actions in the Eastern Mediterranean.Footnote 3 In the end, the Belarusian package was nevertheless accepted.

The instruments of restrictive measures themselves are universal. Britain applies a freeze on the assets of individual individuals and legal entities, sectoral sanctions, export controls, import bans, etc. Similar measures are used by the US, the EU, and many others. Britain borrowed from its allies the so-called rule of 50%. It implies that financial sanctions apply both to the persons named in the sanctions lists and to their subsidiaries or assets under control, provided that the ownership interest is equal to or exceeds 50%.Footnote 4

The sanctions policy is shared among several key departments: the Ministry of Foreign Affairs, the Treasury, and the Ministry of International Trade. The Foreign Ministry makes key political decisions on sanctions. In particular, the Ministry develops draft regulations and amendments to them. The Treasury administers the application of financial sanctions. It includes the Office of Financial Sanctions Implementation (OFSI). The Ministry of Foreign Trade administers import and export restrictions. The Export Control Joint Unit (ECJU) operates within its structure. Such a structure is reminiscent of the American mechanism, where the key departments are also the Ministry of Finance, the Ministry of Trade and the State Department. Other departments may be involved in the policy of sanctions. For example, in British law, transport sanctions are singled out in a separate category. Accordingly, the Ministry of Transport is involved in their implementation.

The practice of coercive measures of a criminal or administrative nature against violators of UK sanctions regimes in Britain after Brexit is only developing. It has borrowed a number of American approaches. For example, in the process of administrative prosecution, an important mitigating circumstance is the voluntary disclosure of violations, which gives a discount on a fine of up to 50%. The classification of violations is similar. In the United States, there are egregious and nonegregious violations;Footnote 5 in Britain, serious and extremely serious violations.Footnote 6 However, the number of investigations is still incomparable. OFSI has investigated six violations since 2019,Footnote 7 while OFAC, a specialized office of the US Treasury, 63.Footnote 8 This difference can be explained by the fact that many OFAC investigations concern violations that occurred several years before the decision to issue a fine, while in the case of OFSI, there was no such leeway due to the fact that the British sanctions policy started comparatively recently. In the future, we can expect fewer penalties in the UK compared to the US also due to the lower transaction density in the British financial system compared to the US. The ECJU also has its own policy of punitive measures for the violation of export control regulations.Footnote 9 There are also parallels here with the work of the US Bureau of Industry and Security of the Department of Commerce. In both the UK and the US, there are criminal penalties for violating sanctions regimes. In both countries, intent and deliberate schemes to circumvent sanctions are important grounds for prosecution. A similar practice exists in individual EU countries, for example, in Germany.

SANCTIONED EVENTS: BRITAIN AND OTHER INITIATORS

The RIAC’s SED shows an increase in Britain’s sanctions activity. It concerns a variety of events, ranging from the application of restrictive measures against individuals, to their mitigation or cancellation. In 2020, the database recorded 58 events, of which 34 were negative (imposition of sanctions, their expansion, etc.). Among the negative events, only four were directly related to Russia. In 2021, 83 events were noted, of which 48 were negative. There were only three event directly aimed at Russia. At the beginning of 2022, there was a sharp increase in the number of sanctions events. In the first three months, there were 67 events, which was more than in the whole of 2020. Of these, 35 events were negative. Twenty-three events were related to Russia.

For comparison, in the EU (excluding actions taken against individual member states and partner countries), 110 events were recorded in 2020, of which 60 were negative. Among the latter, 14 were in relation to Russia. In 2021, these figures were 137, 70, and 9, respectively. In the first quarter of 2022, they were 45, 31, and 17.

There were 440 events across the US in 2020, of which 300 were negative, including 17 events related to Russia. In 2021, there were 488, 302, and 31 cases, and in the first quarter of 2022, 104, 72, and 29 events.

The presented data show that a significant increase in sanctions events related to Russia has become common for the US, EU, and Britain. The peculiarity of the United Kingdom is both the increase in the number of events in general and the faster expansion of Russia-related events. Significant growth is recorded in the first quarter of 2022 in relation to the Russia’s special military operation in Ukraine. In Britain, this growth is most noticeable.

For comparison, China in 2020 is characterized by only 11 events, of which 9 were negative. Of these, six were directed against the United States, and three were the creation of new sanctions mechanisms. In 2021, 20 events were noted in the SED, of which 15 were negative. The range of target countries has increased significantly. This was explained by the fact that China imposed retaliatory sanctions on the restrictions of Western countries in relation to human rights and other topics. Thus, six actions were directed against the United States, two against Britain, and one each against Belgium, the EU, Canada, and Lithuania. In 2022, only one event has been observed so far: sanctions against three US defense companies. However, only formally declared measures are reflected in the SED. While China may well combine them with informal restrictive measures.

Russia initiated 17 events in 2020, of which nine were negative. The initiators of restrictive measures against Russia fell under sanctions, and measures were also taken against “undesirable organizations.” There were 28 such events in 2021, of which 21 were designated as “negative.” Restrictions were imposed against the United States, Britain, Canada, the Czech Republic, Ukraine, Poland, the Netherlands, and Germany. In the first quarter of 2022, 14 events were noted, 12 of which were negative. All of them were introduced against the initiators of sanctions against Russia itself.

China and Russia do not apply sanctions as actively as Western countries: for Russia and China, it is often a question of retaliatory measures to restrictions imposed on them. In Russia’s case, the number of sanctions events increased in the first quarter of 2022, which is obviously related to a similar increase in sanctions pressure from the West.

BRITISH SANCTIONS AGAINST RUSSIA

The 2019 Russia Regulation can be considered the key legal mechanism for British sanctions against Russia.Footnote 10 Its aim was to “stimulate Russia to abandon actions to destabilize Ukraine,” including the problem of Crimea and Donbass. Until 2022, the regulation generally reproduced the structure of the EU sanctions. In particular, it recorded visa and blocking sanctions (a freezing of assets and a ban on the provision of economic resources) against persons responsible, according to the British authorities, for the destabilization of Ukraine. The list of persons was reflected in the corresponding appendix. Art. 6, pt. 2 of the regulation clearly defines the definition of these “persons involved.” They include those who are controlled by these individuals or act on their behalf. In particular, the regulation sets the rule of 50% (Article 7). The regulation also replicated the sectoral sanctions. Among them is a ban on lending to the Russian financial, energy, and military-industrial companies named in the appendix, as well as their subsidiaries (the 50% rule also applies here). In relation to the energy sector, the sale or resale of goods and services for oil production on the continental shelf, in the Arctic, as well as in deep water drilling projects, was prohibited. The trade blockade of Crimea was also prescribed here, the export of defense products, technologies and dual-use goods to Russia was prohibited.

Along with the Ukrainian package, other regimes were used against Russia. In particular, blocking sanctions were used against Russian citizens in response to the alleged use of the Novichok nerve agent in 2018 and 2020. (Skripal case and Navalny case.) The blocking sanctions were carried out in accordance with the 2019 Chemical Weapons Sanctions Regulations.Footnote 11 Currently, the list of blocked persons on it includes 17 Russian citizens and the State Research Institute of Organic Chemistry and Technology. In addition to the Russians, there are five citizens and one institution from Syria on the list.Footnote 12 Blocking sanctions have also been used under the 2020 Cyber Crime Sanctions Regulation.Footnote 13 The lists include 14 individuals and three legal entities. In addition to the Russians, the regulation was used in relation to two Chinese citizens, one organization each from the North Korea, China, and Turkey.Footnote 14 The Russians were blocked under the rules of global sanctions in response to the violation of human rights in 2020.Footnote 15 Here they coexist with citizens of the Republic of Belarus, China, Saudi Arabia, and other countries (total 75 individuals and 6 legal entities).Footnote 16 Fourteen Russian citizens are also on the list under the 2021 Anti-Corruption Sanctions Regulations,Footnote 17 together with citizens of Sudan, Iraq, South Africa, India, etc., in total 27 persons.Footnote 18 However, the application of these regulations can be considered peripheral. They were more of a political signal and, unlike the Ukrainian package, did not affect Russian companies or sectors of the economy.

The Russian special operation in Ukraine has become an occasion for a radical strengthening of the UK’s sanctions policy. Two weeks before the operation, in response to the maneuvers of the Russian army in the southwest, the British Foreign Office amended the 2019 sanctions against Russia regulation.Footnote 19 This meant that blocking sanctions could applied not only in relation to a person who directly or indirectly participated in the events around Ukraine but also any person directly or indirectly related to the Russian government or working in strategic sectors of the Russian economy in the interests of the Russian government. The sectors include the chemical industry, construction, the military-industrial complex, electronics, energy, mining, the financial sector, communications and digital technologies, and transport. Prior to the start of the Russian operation, the regulations were not applied.

Eight more amendments to the 2019 regulation have been passed since the start of the operation up to the present time. Amendment 2 clarified prohibitions on dealing with debt obligations, prohibitions on maintaining correspondent accounts in the UK, a number of key concepts, and exceptions to the sanctions regime.Footnote 20 Amendment 3 clarified restrictions on dual-use goods, military goods, and goods for “critical industrial sectors.” It also introduced exemptions for consumer electronics.Footnote 21 Amendment 4 set restrictions on access to British ports for ships flying the Russian flag or owned by Russian persons, as well as on the registration of such ships.Footnote 22 Amendment 5 defined financial sanctions against the assets of the Central Bank, the National Wealth Fund, the Ministry of Finance of Russia, and entities controlled by them.Footnote 23 Amendment 6 extended export controls to the aerospace industry and insurance services for this industry. It imposed restrictions on the access of Russian aircraft to Britain, prohibiting their landing, overflight in UK airspace of the country, and registration in the United Kingdom.Footnote 24 Amendment 7 expanded the criteria for blocking “persons involved.” They include, for example, blocking by the US, Canada, Australia and the EU. The maintenance of ships and aircraft belonging to blocked persons was banned.Footnote 25 Amendment 8 imposed a ban on the export of a number of “luxury goods” to Russia (previously, similar measures were taken by the US and the EU; they covered a wide range of goods, from cars and watches to pianos and high-end clothes). This amendment also banned the import of Russian steel and ferrous metallurgy products. The EU had also previously announced a similar decision. Restrictions on expert control were added: technologies and goods necessary for oil refining, quantum computers, and advanced materials fell under it.Footnote 26 In addition, a ban was announced on the import of silver, wood products, and other products, including caviar, as well as an increase in tariffs on rubber and diamonds.Footnote 27 Together with other members of the G7, Britain has abolished the most favored nation trade with Russia and Belarus.Footnote 28 Amendment 9 prohibited Internet service providers from providing access to social networks, services, and applications to Russian persons under sanctions.Footnote 29 A ban on providing Russians (regardless of whether they were on the sanctions lists) with consulting, accounting, or PR services was also announced.Footnote 30

Together with these amendments, the UK actively introduced blocking financial sanctions against Russian citizens and organizations. On February 22, three well-known entrepreneurs (Gennady Timchenko, Igor and Boris Rotenberg) and five banks (Bank Rossiya, Black Sea Development Bank, IS Bank, Genbank, and Promsvyazbank) were blocked. These measures could have been considered a loud warning, which was naturally ignored by Moscow. A new wave followed two days later. This time, large defense enterprises were blocked (United Shipbuilding Corporation, United Aircraft Corporation, Uralvagonzavod, Rostec, Tactical Missiles, and VTB Bank, one of the largest Russian financial institutions). Five Russian citizens were also added to the lists of blocked persons, including children of prominent statesmen holding various managerial positions. On February 25, the British authorities added Russian President Vladimir Putin and Foreign Minister Sergei Lavrov to the list of blocked persons. In itself, such a measure is rare. Usually, the initiators of sanctions prefer not to block top officials. However, this step was taken by other initiators, including the US and the EU. On February 28, transactions with the Central Bank, the National Wealth Fund, and the Russian Ministry of Finance were prohibited. On the same day, Otkritie Bank, Sovcombank, and Vnesheconombank were added to the lists of blocked entities. During March-May, blocking sanctions against Russian individuals were intensively expanded. They included the Russian Direct Investment Fund, Sogaz, Zelenodolsk Shipbuilding Plant, Rosneft Aero, Ural Bank for Reconstruction and Development, Alfa-Bank, Alrosa, Gazprombank, RusHydro, Rosselkhozbank, Russian Railways, Russian Venture Company, SMP Bank, Sovkoflot , Moscow Credit Bank, Sberbank, and Rossiya Segodnya media group. Among individuals, well-known businessmen and government officials such as Igor Shuvalov, Alisher Usmanov, Roman Abramovich, Igor Sechin, Andrei Kostin, Alexei Miller, Nikolai Tokarev, Dmitry Lebedev, German Gref, Dmitry Shugaev, Oleg Tinkov, Yuri Trutnev, Leonid Mikhelson, Tigran Khudaverdyan, and all members of the State Duma and the Federation Council who voted for the recognition of the sovereignty of the Lugansk and Donetsk People’s Republics were included in the sanctions list.Footnote 31

In total, the UK list of blocked persons (Consolidated List of Financial Sanctions) as of May 2022 included 1255 individuals and 148 legal entities.Footnote 32 By comparison, the EU had blocked 1,110 individuals and 83 entities.Footnote 33 In the US, Executive Order 14024 alone blocked 826 individuals and entities. This legal mechanism is the key to blocking sanctions in relation to the military operation in Ukraine. Here we can add 232 persons who were blocked under the “Ukrainian dossier” since 2014 under other orders (13 660, 13 661, 13 662, etc.). This came to a total of 1058 persons. This number does not take into account those who were blocked in other areas: “election interference,” human rights, the conflict in Syria, etc.Footnote 34

In other words, the UK’s blocking sanctions largely coincide with similar measures taken by the US and the EU. The same can be said about export controls. Its rules have their own specifics in the UK case. For example, the UK does not maintain separate lists of individuals and entities that are subject to certain trade restrictions, while the US, EU and, for example, Japan do. However, the range of goods subject to export control generally coincides with other initiators, including electronics, dual-use goods, oil refining equipment, and luxury goods.

We can also talk about the similarity of plans for the further escalation of sanctions. The partial or complete refusal to import Russian fossil fuels plays an important role in them. The US has already completely banned its import.Footnote 35 The European Union has banned the supply of coal after August 2022.Footnote 36 Britain has not yet introduced formal bans, but has announced plans to phase out coal and oil from Russia by the end of 2022.Footnote 37 Such discrepancies can be considered temporary. In pushing out Russian raw materials, the initiators of sanctions are guided by their economic interests and the degree of dependence on Russian raw materials. The imposition of sanctions on them will be heterogeneous, but the course itself towards the rejection of raw materials from Russia is common for those initiating the sanctions.

Thus, we can talk about the application of almost the entire set of sanctions against Russia that are envisaged by British law. However, this does not mean that sanctions instruments have been exhausted. In the future, sanctions may be increased by expanding the list of blocked persons, the range of goods restricted by export controls and import bans, investment bans, etc. New qualitative changes are also possible. They include the confiscation of the property of Russian persons, which was previously frozen in the jurisdiction of Britain due to the imposition of blocking sanctions. This practice has been developed in US law. It is likely to be reflected in British legislation and law enforcement.

* * *

After leaving the EU, Britain relaunched the sanctions policy mechanisms on its own. The institutional design was finalized and the basic “Law on Sanctions and Combating Money Laundering” appeared. Based on it, regulations have been prepared that reflect the policy of sanctions in certain areas. Despite the specifics of institutions and legislation, there is a certain universality of the sanctions instruments used by the UK and its allies, primarily the US and the EU. They use similar instruments of blocking financial sanctions, trade restrictions, transport bans, etc. The parameters of coercive measures against violators of the sanctions regimes are also comparable. The database of sanctions events shows the UK’s fairly high activity level in applying sanctions. However, Russia’s place in the total share of British sanctions actions until 2022 was secondary: the number of such events was small. The sharp change in the political environment in February 2022 led to an explosive expansion of their sanctions policy, both quantitatively and qualitatively.

In general, there is a high degree of coordination of the sanctions policies being followed by London, Brussels, and Washington. They are characterized by comparable coverage of Russian individuals and legal entities with blocking sanctions, general areas of export control and import bans, and identical transport sanctions. There are also common strategic goals, including the displacement of Russian raw materials from its market. There are also individual discrepancies in the lists of blocked persons or certain bans. For example, the US and the EU, unlike Britain, have not yet banned consulting services to Russian individuals. Such discrepancies, however, are not fundamental. The sanctions policy against Russia against the backdrop of the Ukrainian crisis has used almost all possible tools. Their application has not been exhausted. As political contradictions deepen, we can expect an expansion of restrictive measures against Russia.