BCL partner John Binns's corporate crime analysis for ‘R (Youssef) v Secretary of State for Foreign, Commonwealth and Development Affairs' has been published by Lexis PSL.
Here's an extract from the article:
“Corporate Crime analysis: The Supreme Court, in R (Youssef) v Secretary of State for Foreign, Commonwealth and Development Affairs, has rejected a challenge to the UK's regime for implementing United Nations (UN) financial sanctions, on the basis that it offered no opportunity to obtain a de-listing in UK courts. It did this despite two previous rulings, one by the Supreme Court itself and one by the Court of Justice of the European Union (CJEU) in Luxembourg, which struck down similar regimes on the same basis. The change suggests a watering-down of human rights protections, both in the case law of the European Convention on Human Rights (the ECHR) at Strasbourg, including to respect due process rights under Article 6, and in the UK's post-Brexit framework for sanctions. Written by John Binns, partner at BCL, and member of the PSL Corporate Crime Consulting Editorial Board. John has acted in the EU and UK courts for people listed under financial sanctions.
R (Youssef) v Secretary of State for Foreign, Commonwealth and Development Affairs [2021] EWHC 3188 (Admin)
What are the practical implications of this case?
As a first major sign of how the courts will police our new domestic framework for sanctions, the judgment in Youssef frankly does not bode well at all. Indeed, as the framework of SAMLA 2018 is far from the only example of post-Brexit actions by Parliament where the role of the Supreme Court will be crucial, as part of a broader picture it suggests the court is prepared to be surprisingly supine. It is a salutary reminder that fundamental rights, which so often fall to be protected by some of the world's least popular people, are more fragile than we often think, and should not be taken for granted.
What was the background?
At heart, the case is about the decisions of the UK's three branches of government about how to balance human rights protections and international obligations, as well as a reminder of the supremacy of Parliament. The starting point is that the UK, as a UN member state, is obliged to comply with UN resolutions. Previously, Parliament sought to do this via the United Nations Act 1946 (the 1946 Act), by which it empowered the Crown to make Orders in Council. Later, it gave direct effect, via the European Communities Act 1972 (ECA 1972), to EU Regulations that imposed sanctions. Meanwhile, of course, the UK's obligations under the ECHR have become part of domestic law, strengthening the courts' powers to interpret primary and secondary legislation, in the Human Rights Act 1998 (HRA 1998).
In the wake of 9/11, the EU (via a Regulation, having direct effect in Member States) and the UK (via an Order in Council) imposed financial sanctions regimes in 2002 on people associated with Al-Qaida. Hany Youssef, a UK resident, was listed in 2005 by the UN, and consequently under the UK Order, then a subsequent one in 2006. These measures not only froze his assets, but also made it an offence for others to provide him with economic resources.
Importantly, neither regime allowed listings to be challenged in the courts, which prompted the CJEU in Kadi v European Commission (Kadi I) and the Supreme Court in Ahmed [2010] 2 AC 534 to rule that they breached due process rights. The fact that the regimes followed the UN's lead was not (then) enough to exempt them from scrutiny, or from being quashed if they were arbitrary or unfair.
With the Orders made under the 1946 Act struck down, the ECA ensured that the EU's 2002 Regulation was now a domestic challenge-proof basis for Mr Youssef's listing in the UK. Nevertheless, he was then able to bring challenges in UK courts (against the UK's role in supporting the listing), the CJEU (on its substantive merits), and to the UN Ombudsperson established for that purpose (similarly). On the facts, however, he never ultimately managed to remove the listing. Indeed, the Ombudsperson produced a report in 2014 that confirmed there was evidence to support a suspicion that he did support Al-Qaida.
Two things have changed since Kadi and Ahmed established a route for Mr Youssef and others to challenge UN listings. One is ECHR case law, specifically Al-Dulimi v Switzerland (2016), which now requires a balance to be struck between the due process rights in Article 6 and the reasonable requirements of international sanctions regimes. The other is Brexit, which prompted the UK Parliament to enact the Sanctions and Money Laundering Act 2018 (SAMLA 2018), as a new statutory basis for sanctions regimes. Several of these took effect, via 2019 regulations, at the end of the Brexit transition period on 31 December 2020, including some designed to replace the EU Regulation as a means of enforcing the UN's Al-Qaida listings in the UK.”
This article was first published by Lexis®PSL on 03 December 2021. You can read the full version on their website.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
