Strengthening legislation to implement financial sanctions
Published 15 March 2023
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Who is likely to be affected
Individuals and organisations that are listed as a Designated Person (DP) subject to financial sanctions and entities that are owned or controlled by them that have a UK tax footprint.
General description of the measure
This measure clarifies HMRC’s functions regarding payment obligations in relation to DPs. In doing so, it will withhold payments and repayments from DPs subject to financial sanctions and entities that are either owned or controlled by them, that have a UK tax footprint.
Policy objective
HMRC withholds payments and repayments to DPs subject to financial sanctions, and entities that are either owned or controlled by them, that have a UK tax footprint.
Background to the measure
In 2018 the Sanctions and Anti-Money Laundering Act (SAMLA) received Royal Ascent. SAMLA provides the UK Government with the powers to make regulations imposing sanctions, including financial sanctions. Prior to SAMLA, sanctions were mostly dealt with through EU law.
Detailed proposal
Operative date
The measure affects payment functions that have not been discharged before 15 March 2023.
Current law
Regulations made under SAMLA imposing financial sanctions (financial sanctions regulations) include prohibitions on the making available of funds or economic resources to DPs. HMRC has statutory payment obligations in relation to its functions which interact with those financial sanctions regulations.
Proposed revisions
HMRCs payment functions in respect of DPs are being clarified.
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure will impact on a small number of DPs subject to financial sanctions who have a UK tax footprint.
Aside from DPs this measure will have no impact.
This measure is not expected to impact on family formation, stability or breakdown.
This measure is expected, only where it applies, to negatively affect relevant individuals experience of dealing with HMRC.
Equalities impacts
It is not expected that there will be adverse effects on any group sharing protected characteristics.
Impact on business including civil society organisations
This measure will impact on a small number of businesses that are owned or controlled by DPs subject to financial sanctions that have a UK tax footprint.
Although businesses under active sanction will be impacted financially, this measure is not expected to result in any one-off or continuing administration costs.
It is not expected to have an impact on civil society organisations.
This measure is expected, only where it applies, to negatively affect relevant businesses’ experience of dealing with HMRC.
Operational impact (£m) (HMRC or other)
Staff costs to support this measure is estimated at £3.98m. There may be IT impacts which are being assessed.
Other impacts
Monitoring and evaluation
This measure will be kept under review.
Further advice
If you have any questions about this change, please contact the Financial Sanctions Team at financialsanctions@hmrc.gov.uk