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Government Update | Global Anti-Corruption Sanctions Regulations 2021 | Rosenblatt’s Financial Crime Team

30th April 2021

The UK has imposed sanctions on 22 people accused of serious corruption in Russia, South Africa and four other nations following the introduction of a new government tool to help fight corruption activities globally.

Government Update | Rosenblatt’s Financial Crime Team

Individuals across Russia, South Africa, Saudi Arabia and Latin America were targeted with asset freezes and travel bans on Monday 26 April in the first wave of sanctions under the new Global Anti-Corruption Sanctions Regulations 2021.

Fourteen of those sanctioned were involved in one of the largest tax frauds in recent Russian history, involving approximately $230m US dollars, as exposed by the late lawyer Sergei Magnitsky. Other individuals subject to sanctions were brothers Atul, Ajay and Rajesh Gupta and a South African associate called Salim Essa. The Foreign Office announced that these brothers “were at the heart of a long-running process of corruption in South Africa which caused significant damage to its economy.” Ashraf Seed Ahmed Hussein Ali, a Sudanese businessman widely known as Al Cardinal was also the subject of a travel ban and asset freeze. The UK issued further sanctions on three other individuals accused of serious corruption in Honduras, Nicaragua and Guatemala, including facilitating bribes to support a major drug trafficking cartel.

This new regime allows the UK to subject foreign officials involved in corruption and human rights abuses to asset freezes and visa bans. These anti-corruption sanctions imposed in co-ordination with the US compliment a set of measures targeting human rights abuses that the UK introduced last year.

In a statement to Parliament on Monday, Britain’s Foreign Secretary Dominic Raab acknowledged the UK can be a “honey pot” for corrupt individuals seeking to “launder their dirty money.” In a written statement to parliament, he added the Global Anti-Corruption Sanctions Regulations 2021 would “ensure that the UK is not a safe haven for those involved in serious corruption, including those who profit from it”.

The Foreign Office highlighted that more than 2% of global GDP is lost to corruption each year, and that corruption increases the costs of doing business for individual companies by as much as 10%.

Labour have welcomed the government’s announcement, but said law enforcement need the resources to support investigations, with Lisa Nandy the party’s foreign affairs spokeswoman noting the current rate of prosecutions for economic crime is “woefully low”.

The United States have also commended the UK’s new sanctions policy, with Anthony Blinken, the Secretary of State tweeting, “together, along with other allies and partners who seek to promote our shared values with similar tools, we will ensure corrupt actors will not have access to our financial systems.”

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