Source · Select Committees · Foreign Affairs Committee
Recommendation 16
16
Accepted
Paragraph: 29
We heard that banks operating in countries including Singapore and Thailand can be compelled by...
Conclusion
We heard that banks operating in countries including Singapore and Thailand can be compelled by UK regulators to enforce UK sanctions, as they conduct transactions in British pounds. This would cut off a key intermediary for the junta’s revenues, shutting down another line of income.
Government response summary AI-generated
The government explains that its sanctions regimes already apply extra-territorially to UK persons and entities through a 'UK Nexus', which prohibits dealing with sanctioned individuals' funds or economic resources, a longstanding approach to the extent of its sanctions.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
29
Government Response
Accepted
HM Government · verbatim extract
Accepted
Each of our sanctions regimes provides that, in accordance with section 21 of the Sanctions and Anti-Money Laundering Act 2018, the prohibitions and requirements imposed by sanctions regulations apply to persons in the UK, and extra-territorially to UK persons, i.e. UK nationals and bodies incorporated or constituted under the law of any part of the UK. UK nationals and companies, wherever they are in the world, are prevented from dealing with funds or economic resources in relation to anyone who is subject to an asset freeze. This is known as a ‘UK Nexus’. Such a nexus might be created by such things as a UK company working overseas, transactions using clearing services in the UK, actions by a local subsidiary of a UK company (depending on their governance structures), action taking place overseas but directed from within the UK, or financial products or insurance bought on UK markets but held or used overseas. These examples are not exhaustive or definitive. Whether there is a UK nexus or not depends on the facts of each particular case. This is a longstanding approach to the extent of our sanctions, and one which is in keeping with that of many of our international partners, including the EU. 17. We recommend that the UK seeks to ensure that relevant third country financial institutions and regulators support sanctions placed on Tatmadaw-linked businesses and individuals. (Paragraph 29) The UK has used both sanctions and a review of our trade and investment approach to ensure we are increasing pressure on Tatmadaw-linked businesses and individuals. We continue to engage with partners in the region to encourage responsible investment in Myanmar, and divestment from military-linked businesses and projects. The UK has no power to enforce sanctions extra-territorially where there is no UK nexus.
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