Market-based reforms to the UK economic sanctions regime
Think tank: Adam Smith Institute
Author(s): Professor David Collins
August 9, 2024
This report from UK think tank the Adam Smith Institute looks at market-based reforms to the UK’s economic sanctions regime.
The UK’s current sanctions regime is dysfunctional, as exemplified by the failure to place meaningful pressure on Russia to abandon its invasion of Ukraine. The intent of these sanctions was to damage the Russian economy by preventing funds from the West being used to finance the Russian war effort in Ukraine.
It is a source of continued dismay that the UK sanctions regime is simultaneously not strong enough to discourage investments in sanctioned countries (and thereby discourage belligerent behaviour) yet sufficiently strong to discourage investment in the sanctioning countries. A strict enforcement regime, through the Office of Financial Sanctions Implementation (OFSI), should remain that maintains the power and authority of sanctions, while achieving the correct incentives to maintain access to the UK’s liberal, open market economy for those wishing to relinquish residency in other nations.
Such a change to the sanctions regime would place the UK at the forefront of global sanctions regimes in offering a solution to transfers of assets while not taking a geopolitically irresponsible stance of neutrality on pressing global issues, such as the peace and security of its allies.
Alignment with EU and US sanctions regimes, the latter of which has been the most effective in terms of its strategic aims, remains a key obligation in Westminster
