On December 7, 2020, the European Union (EU) adopted Council Decision (CFSP) 2020/1999 and Regulation (EU) 2020/1998 (EU Global Human Rights sanctions regime), which provide a legal basis in EU law for the EU and its Member States to impose sanctions on individuals and entities, including on state actors, responsible for human right violations committed anywhere in the world.
Unlike the United States and the United Kingdom, the EU previously lacked a legal framework to impose non-country-based sanctions against actors deemed responsible for human rights violations. This new regime will not replace country-based sanctions addressing human rights violations but will allow the EU to adopt sanctions against identified individuals or entities without targeting a country specifically.
The new EU Global Human Rights sanctions regime allows for the imposition of sanctions for a wide range of human rights violations, including genocide, crimes against humanity, serious human rights violations or abuses (including torture, slavery, extrajudicial executions and killings, forced disappearances, and arbitrary arrests or detentions), and other human rights violations or abuses (including human trafficking, sexual and gender-based violence, and violations or abuses of certain fundamental rights). The list does not extend to corruption (unlike the U.S. Global Magnitsky Act).
Similar to other EU sanctions regimes, the EU Global Human Rights sanctions regime allows the EU to impose travel bans and asset freezes. Accordingly, all funds and economic resources belonging to, owned, held by, or controlled by any designated natural or legal person, entity, or body may be frozen. Persons subject to EU jurisdiction may also be prohibited from, directly or indirectly, making available funds or economic resources to the designated persons or entities and to entities that are owned or controlled by designated persons or entities.
So far, the EU has not designated any individuals or entities under this new framework. The Council of the EU, acting upon a proposal from an EU Member State or from the High Representative of the EU for Foreign Affairs and Security Policy, will be responsible for creating and maintaining the sanctions list. Any designations will need to be approved by all 27 EU Member States.
The EU’s Global Human Rights sanctions regime is part of the EU Action Plan on Human Rights and Democracy (2020-2024), which inter alia aims to streamline EU decision-making on human rights and democracy issues to address accountability gaps and the erosion of the rule of law. Another initiative proposed in the context of this action plan is the Human Rights Due Diligence legislation. Under this initiative, the EU aims to impose requirements on companies to prevent human rights abuses and environmental harm in their operations abroad and in their supply chains.
UK Global Human Rights Sanctions Regime
As part of the UK post-Brexit sanctions regime, the UK already last August adopted its own UK Global Human Rights Sanctions Regulations 2020, allowing the UK to respond to human rights abuses and violations as they arise around the world. Under this regime, the UK has already imposed asset freezes on 65 individuals and three entities from countries including Belarus, Gambia, Myanmar, North Korea, Pakistan, Russia, Saudi Arabia, and Venezuela.
Even though the EU and UK frameworks are similar, the human rights violations covered by the UK regime seem more limited in scope (i.e., activities that amount to a serious violation of an individual’s right to life, right not to be subject to torture or cruel, inhumane, or degrading treatment or punishment, and the right to be free from slavery).
Compliance implications of the new EU and UK regimes
The new EU and UK human rights sanctions regimes underline, once more, the importance of due diligence and screening of third parties to ensure that companies do not deal with designated individuals and entities (including entities owned or controlled by a designated entity or individual). In particular, companies should make sure that due diligence and screening cover all third parties, regardless of where they are located in the world, as opposed to third parties located in a country specifically targeted by the EU or UK sanctions regime.
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