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The Sanctions Act 2024


Emma Shilling, SolutionsHub, The Sanctions Act 2024

The Sanctions Act 2024 (“The Act”) is a specific law designed to enforce UK sanctions legislation in the Isle of Man.  It was passed by Tynwald on 16 April 202 and received the Royal approval on the same day. It acts as a legal framework for applying these sanctions within the jurisdiction. The Act outlines the powers, procedures, and penalties involved in enforcing UK sanctions regulations, as well as addressing matters related to compliance and enforcement. It also includes procedures to align certain parts of the Terrorism and Other Crime (Financial Restrictions) Act 2014 with equivalent UK law. This article explores the key measures of The Act and their implications for regulatory compliance and financial integrity in the Isle of Man.


Implementation of UK Sanctions Procedures

 

The Act grants the Treasury (The Isle of Man Government Department, responsible for financial and regulatory matters, including sanctions enforcement), to adapt UK sanctions procedures into Manx law. This ensures consistency and effectiveness in addressing threats to national security. This includes incorporating UK sanctions into the Isle of Man's laws, monitoring activities, designating individuals or entities subject to sanctions, issuing licenses, and reporting to UK authorities. ​ It aims to prevent terrorism financing, weapons proliferation, and other illicit activities.

 

The Act also deals with enforcing UK sanctions related to ships in Manx waters, including inspecting ships, detaining vessels, imposing restrictions on their movements, or taking any other necessary measures to ensure compliance with UK sanctions. The purpose of these powers is to prevent sanctioned individuals, entities, or goods from entering or leaving the Isle of Man through maritime routes and to enforce the sanctions regime effectively.

 

Implementation of UK Blocking Procedures

 

The Act enables UK blocking procedures in Manx law, allowing the UK government to intervene in transactions or actions threatening national security or strategic interests. The Treasury can create regulations to ensure their effective implementation.

 

Civil Penalties for Breaches of Financial Sanctions

 

The Act introduces a mechanism for imposing monetary penalties on individuals or entities that breach UK financial sanctions procedures. ​ The Treasury is authorized to apply these penalties if it finds, with reasonable certainty, that a regulation or requirement has not been met under a UK financial sanctions law applicable in the Isle of Man. When determining a breach or failure, the focus is on the actions taken or not taken, rather than the persons mindset. Before imposing penalties, the Treasury inform involved parties, who can then make appeals. Clear explanations are provided about why the penalty was imposed, how much it is, and how to appeal this is to ensure everyone understands. The Treasury also offers guidance on penalties and publishes reports on enforcement, enhancing accountability and transparency.

 

The amount of the monetary penalty is determined by the Treasury but is subject to a maximum limit known as the "permitted maximum." ​ The permitted maximum varies depending on the circumstances of the case. ​ In cases where the breach or failure relates to particular funds or economic resources, and it is possible to estimate their value, the permitted maximum is the greater of £1,000,000 or 50% of the estimated value of the funds or economic resources. ​ This provision ensures that penalties are proportionate to the severity of the breach. In other cases where the value of the funds or economic resources cannot be estimated, the permitted maximum is £1,000,000. ​ This fixed amount serves as a cap for penalties in such situations. By imposing fines, the Act aims to ensure that individuals and entities follow UK financial sanctions regulations, promoting international security and stability.

 

Amendments to Existing Legislation

 

Changes to the Terrorism and Other Crime (Financial Restrictions) Act 2014 include changes to definitions, replacing terms, and adding or removing certain sections. Notable updates include redefining "owned or controlled directly or indirectly" and clarifying the meaning of "owned, held or controlled" concerning funds or economic resources. Additionally, there are modifications related to directions, freezing orders, and designations. These amendments are intended to improve and clarify the Act's procedures.

 

Miscellaneous Provisions

 

The Act incorporates additional measures aimed at enhancing the implementation and enforcement of sanctions. These measures cover several key areas, including:

 

  • Regulatory Flexibility the Act allows for flexible regulations to be created as needed, to include supplemental, incidental, consequential, transitional, or saving provisions as necessary ensuring effective enforcement.

  • Right of Appeal: Individuals have the right to appeal Treasury decisions related to regulations to the High Court, offering a process for review and potential resolution.

  • Data Protection:  The Act includes measures to ensure compliance with data protection laws, safeguarding individuals' privacy rights.

  • Implied Powers: Section 87(2) of the Interpretation Act 2015 provides implied powers essential for creating public documents under the act to ensure regulations have legal authority and are properly implemented.

  • Amendments to Statutory Documents: Regulations outlined in Section 4(1) of the Act have the authority to modify or abolish measures in statutory documents concerning sanctions, ensuring alignment with other laws.

  • Protection for Acts Done in Compliance: Individuals or entities acting in good faith and compliance with regulations are protected from civil proceedings.

  • Crown Application: This allows regulations under the Act to apply to the government and its entities without making the Crown criminally liable:

 

In summry, these additional measures in the Act help strengthen the sanctions system, ensuring fairness, transparency, and individual rights are upheld while protecting national security interests.

 

The Act significantly improves the enforcement of UK sanctions in the Isle of Man, providing a strong framework to combat financial crimes and ensure compliance with international sanctions. By aligning certain procedures with UK law, collaboration is strengthened between the Isle of Man and the UK in enforcing sanctions. The Act enables the Treasury the power to enforce UK sanctions and adjust regulations as needed. It introduces civil penalties for breaches of financial sanctions to deter non-compliance. Additionally, it ensures fair procedures and protections for individuals and businesses facing fines, while safeguarding personal data and providing legal protection for those following the Act's legislation. Overall, the Act strengthens the Isle of Man's ability to enforce UK sanctions, contributing to global efforts against financial crimes and terrorism financing.

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