Testing the Limits: Expanding the Reach of UK Sanctions

In July, the UK Supreme Court ruled on twin appeals against sanctions imposed after Russia’s 2022 invasion of Ukraine. Unusual facts made these ‘test cases’ for UK sanctions: British-American billionaire Eugene Shvidler sought to have a freeze over his assets revoked while a company requested the release of a super-yacht from a London dock.

The court upheld the Foreign Office’s approach to sanctions, with four out of five justices finding the government’s actions ‘proportionate and lawful.’ The one dissenting judgment, from Lord Leggatt, gained attention for its principled and trenchant tone.

It also raised points of interest to sanctions watchers: 1) the harsher impact of sanctions on UK nationals; 2) the lack of clear principles and wide discretion in designations; 3) the ‘Orwellian’ use of sanctions to elicit public statements; 4) the peril of sanctions as show gestures; 5) the need for robust evidence.

Lord Leggatt’s observations, considered in turn below, provide a starting point for exploring unique features of UK sanctions policy and how these could be developed further.

Sanctioning UK Nationals

Lord Leggatt observed that ‘Mr Shvidler has been subjected to more severe sanctions solely because of being a British citizen.’ There are two noteworthy aspects to this: 1) the UK does not hesitate to sanction its own citizens; 2) UK nationals can extend the reach of British sanctions abroad.

Although most individuals listed in response to Russia’s invasion are Russian, successive UK governments have sanctioned some British citizens. Of roughly 1,800 people listed under the UK’s Russia sanctions, 23 are UK citizens (two with sole British nationality, 21 with multiple passports).

By comparison, of the over 2,500 individuals sanctioned by the EU over Ukraine and Russian hybrid activities, only 12 are EU nationals (with eight also holding other non-EU citizenships): one each from Cyprus, Croatia, Latvia and the Netherlands, two French, three Finns and three Germans. 16 EU countries have not sanctioned any of their citizens under any of the EU’s 36 sanctions regimes: Austria, Bulgaria, Czechia, Denmark, Greece, Hungary, Ireland, Italy, Lithuania, Luxembourg, Malta, Poland, Portugal, Slovakia, Slovenia and Spain are missing in action.

Global Reach of UK Sanctions

UK sanctions follow British citizens and entities around the globe. Thus, a British clerk working in a Dubai bank commits an offence when facilitating funds for a sanctioned person, whereas a non-British national abroad faces no such liability. This stems from the Sanctions and Anti-Money Laundering Act 2018, which applies UK sanctions extraterritorially to ‘UK persons’.

Guidance on what overseas conduct breaches sanctions remains vague, with a ‘not exhaustive’ list of examples. More scrutiny of UK entities abroad looks likely, after a February 2025 threat assessment by the Office of Financial Sanctions Implementation (OFSI) warned that violations ‘do not have to occur within UK borders’ for fines to be levied.

Beyond fines, more creative ways of exploiting UK connections overseas involve gathering information from expats. While US authorities have long collected information from US workers abroad (for example, in a 2023 UAE case), OFSI has started encouraging sanctions tip-offs from whistle-blowers only recently. (Unlike the US, no cash rewards funded from fines are on offer and OFSI disclaims using voluntary disclosures to recruit covert sources).

OFSI can also compel UK nationals to provide information on the assets of designated persons or suspected evasion cases, under penalty of fine or imprisonment. It is unknown whether compulsory disclosures have been sought from UK expats.

The Shvidler case is a reminder that UK sanctions propagate abroad through UK companies and businesspeople, but only as far as the government is willing to go.

Selecting Sanctions Targets

After a long litigation, it remains unclear why Shvidler was sanctioned, while others in similar situations were not. The government admitted that Shvidler was a ‘secondary’ target: his designation aimed to put pressure on a ‘primary’ target, his friend Roman Abramovich.

The ‘why me and not others?’ question is common among sanctioned individuals, but it also matters for policy effectiveness. Opposite conclusions were drawn on this in court: for the four-strong majority, sanctioning decisions are made on a ‘case-by-case basis’ in a ‘careful’ and ‘tailored’ way, while Lord Leggatt saw an ‘arbitrary’ procedure, with the Foreign Office enjoying ‘extremely broad designation powers’ without ‘any policy to guide designations.’

The Foreign Office may have since learned a trick or two. When the first irregular migration sanctions were introduced in July, an ‘information note for NGOs’ and a ‘factors relevant to … designations’ list were also published, detailing policy aims, exclusions and inviting designation proposals across 12 categories of targets through a submission template. This open UK approach contrasts with the EU’s closed-door consultations (known as ‘confessionals’).

Pour Encourager les Autres

The government argued that sanctioning Shvidler might ‘incentivise [him] and others in his position to speak out and oppose more robustly Russia’s invasion of Ukraine’. Lord Leggatt called this ‘Orwellian’: ‘it seeks to justify interference with property rights on the ground that such interference can be used to interfere with freedom of expression.’

While sanctions are widely understood as a tool for state-to-state signalling (‘to show disapproval or to defend international norms that are under threat’), they can shape narratives on the home front. They also convey private and targeted coercive messages.

Sanctions linked to the deliberate bombing of civilians and the abduction of 19,000 Ukrainian children have a narrative-shaping role: they highlight war crimes with the aim of reinforcing domestic and allied resolve, even though they may not reach Russian citizens.

Both the UK and the EU have sanctioned pro-Russia propagandists to shield domestic audiences from disinformation. Among those hit by an asset freeze and a social media ban in the UK is Graham Phillips, a British videoblogger from occupied Ukraine who ‘signed up to Russia’s propaganda war’: in Phillips’s sanctions appeal, the High Court found that ‘even if the claimant’s audience is entirely British that would not invalidate his designation.’

Sanctions operate not only between states but by applying coercive pressure on specific individuals: ‘the incentive effect relied upon by the Secretary of State is not . . . limited to public statements, but also extends to private action the effect of which may be to pressure the Government of Russia’ (as argued by the Foreign Office in the High Court).

Timing and presentation can be managed for impact: either by disguising a specific name in the midst of a large number of designations (‘not want[ing] to announce the claimant’s designation individually’) or arranging for media exposure (‘involving, potentially, an exclusive briefing to a newspaper’) in Phillips’s case. Additionally, UK sanctions allow for publicity-restricted sanctions: designations, variations or revocations are not published and remain confidential, when ‘in the interests of national security or international relations’.

Playing to the Gallery

Individual sanctions risk being used ‘not because there is any realistic prospect that the measures imposed will actually contribute to achieving the desired international aim, but for the purpose of signalling to a popular audience that the government is taking firm action’, the judge warned.

It couldn’t happen here? The trial was reminded that then foreign secretary Liz Truss referred to Shvidler as someone ‘complicit in the murder of innocent civilians,’ while transport secretary Grant Shapps described him as one of ‘Putin’s cronies . . . benefitting from Russia’s illegal action.’ Both comments were false and were not relied on by the government in defending the designation.

Armchair Theorising?

The dissent’s most quoted line concerns the Foreign Office’s ‘armchair theories’ to justify sanctions: ‘thinking of a plausible theory of how something could conceivably come about is not evidence.’

This passage is also likely to be the most misunderstood. Lord Leggatt was advancing a technical argument about how far courts should probe the government’s reasoning in foreign policy (perhaps piqued by ‘recycled stock arguments deployed in fundamentally different cases’).

That Lord Leggatt’s comments appeared aimed at the senior official who testified for the government was an unfortunate artefact of courtroom dynamics, whereas there is much that Foreign Office sanctions specialists and the dissenting judge agree on.

His concern that individual sanctions appear stuck in time echoes the Foreign Office’s wish for a clearer ‘theory of change’ linking sanctions to real-world policy shifts. His call for a ;transparent de-listing process mirrors what the latest sanctions review ;intimates. And his demand for a ‘body of experience or knowledge’ on sanction efficacy parallels official ambitions for measurable evidence connecting sanctions to behavioural change.

Sanctions Deserve Public Attention

Reading sanctions cases may seem a niche pursuit. But the recent Supreme Court ruling and a small number of High Court cases offer greater food for thought than the paltry parliamentary debates that accompany new or amended sanctions regulations.

While in 2022 sanctions against Russia were heroically put together by an understaffed sanctions taskforce, three years into the conflict, public understanding of sanctions would benefit from a wider reflection on what has worked, what has not, and future directions.

The first and last have been covered, to an extent, by a trickle of assessments on ‘the impact of sanctions on Russia’s war efforts’ and by a recent cross-government sanctions review. The second may have been done behind closed doors, but not in public.

It has been argued that in democratic societies, intelligence services need a licence to operate based on a general public understanding of what is done on citizens’ behalf (even though the operational details have to remain secret). The expansive use of Sanctions – straddling as they do the fields of national security and foreign policy – would benefit from a similar commitment.

© Andrea Marchesetti, 2025, published by RUSI with permission of the author.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.

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