The looming end of the Brexit transition period will have practical implications for the UK’s financial sanctions regimes. This is because financial sanctions that apply in the UK today are derived from EU regulations. These will cease to apply after 31 December 2020.

With the hefty £37.8 million fine imposed on Commerzbank AG’s London branch last month (and an accompanying strong deterrent message for the market more generally), the UK Financial Conduct Authority (FCA) have signalled their intention to continue to come down hard on firms’ breaches of anti-money laundering obligations.

Within three days of announcing the first-ever sanctions implemented under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"), the UK Government has announced further SAMLA-based sanctions. On 9 July 2020, the Somalia (Sanctions) (EU Exit) Regulations 2020 ("Somalia Regulations") were put in place to facilitate the continuation of a sanctions regime targeting Somalia on the exit of the European Union at 11pm on 31 December 2020.

In the wake of the ongoing Brexit process, the UK Government has today (6 July) signalled its intention to use unilateral financial sanctions to target foreign nationals alleged to be involved in human rights abuses. The UK Office of Financial Sanctions (“OFSI”) announced targeted sanctions against 47 foreign nationals in furtherance of that intention.