The Nicaragua (Sanctions) (EU Exit) Regulations 2020

Made: 18th June 2020

Laid before Parliament: 22nd June 2020

Coming into force in accordance with regulation 1(2)

The Secretary of State , in exercise of the powers conferred by sections 1(1)(c) and (3)(b), 3(1)(a) and (d)(i), 4, 9(2)(a), 10(2)(a) and (c), (3) and (4), 11, 15(2)(a) and (b), (3), (4)(b), (5) and (6), 16, 17(2) to (5) and (8), 21(1), 54(1) and (2), 56 and 62(4) and (5) of the Sanctions and Anti-Money Laundering Act 2018 , and having decided, upon consideration of the matters set out in sections 2(2) and 56(1) of that Act, that it is appropriate to do so, makes the following Regulations:

PART 1 — General

Citation and commencement

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• (1) These Regulations may be cited as the Nicaragua (Sanctions) (EU Exit) Regulations 2020.

• (2) These Regulations come into force in accordance with regulations made under section 56 of the Act.

Interpretation

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In these Regulations—

• “the Act” means the Sanctions and Anti-Money Laundering Act 2018;

• “arrangement” includes any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable (but see paragraph 12 of Schedule 1 for the meaning of that term in that Schedule);

• “conduct” includes acts and omissions;

• “director disqualification licence” means a licence under regulation 20A;

• “document” includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include producing a copy of the information in legible form;

• “the EU Nicaragua Regulation” means Council Regulation (EU) 2019/1716 of 14 October 2019 concerning restrictive measures in view of the situation in Nicaragua , as it has effect in EU law;

• “serious human rights violation or abuse” means a serious violation or abuse of any of the human rights specified in regulation 4(c);

• “Treasury licence” means a licence under regulation 20(1);

• “United Kingdom person” has the same meaning as in section 21 of the Act.

Application of prohibitions and requirements outside the United Kingdom

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• (1) A United Kingdom person may contravene a relevant prohibition by conduct wholly or partly outside the United Kingdom.

• (2) Any person may contravene a relevant prohibition by conduct in the territorial sea.

• (3) In this regulation, a “relevant prohibition” means any prohibition imposed by—

• (a) regulation 9(2) (confidential information),

• (b) Part 3 (Finance), or

• (c) a condition of a Treasury licence.

• (4) A United Kingdom person may comply, or fail to comply, with a relevant requirement by conduct wholly or partly outside the United Kingdom.

• (5) Any person may comply, or fail to comply, with a relevant requirement by conduct in the territorial sea.

• (6) In this regulation a “relevant requirement” means any requirement imposed—

• (a) by or under Part 6 (Information and records), or by reason of a request made under a power conferred by that Part, or

• (b) by a condition of a Treasury licence.

• (7) Nothing in this regulation is to be taken to prevent a relevant prohibition or a relevant requirement from applying to conduct (by any person) in the United Kingdom.

Purposes

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The purposes of the regulations contained in this instrument that are made under section 1 of the Act are to encourage the Government of Nicaragua to—

• (a) respect democratic principles and institutions, the separation of powers and the rule of law in Nicaragua;

• (b) refrain from actions, policies and activities which repress civil society in Nicaragua;

• (c) comply with international human rights law and to respect human rights, including in particular to—

• (i) respect the right to life of persons in Nicaragua;

• (ii) respect the right of persons not to be subjected to torture or cruel, inhuman or degrading treatment or punishment in Nicaragua, including inhuman and degrading conditions in prisons;

• (iii) respect the right to liberty and security, including refraining from arbitrary arrest and detention of persons in Nicaragua;

• (iv) afford persons in Nicaragua charged with criminal offences the right to a fair trial;

• (v) afford journalists, human rights defenders and other persons in Nicaragua the right to freedom of expression, association and peaceful assembly;

• (vi) secure the human rights of persons in Nicaragua without discrimination, including on the basis of a person's sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.

PART 2 — Designation of persons

Power to designate persons

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• (1) The Secretary of State may designate persons by name in accordance with regulation 5A (conditions for the designation of persons by name) for the purposes of any of the following—

• (a) regulations 11 to 15 (asset-freeze etc.);

• (aa) regulation 16A (director disqualification sanctions).

• (b) regulation 17 (immigration).

• (2) The Secretary of State may designate different persons for the purposes of different provisions mentioned in paragraph (1).

Designation criteria

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• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) For the purposes of regulation 5A (conditions for the designation of persons by name) an “involved person” means a person who—

• (a) is or has been involved in—

• (i) the commission of a serious human rights violation or abuse in Nicaragua,

• (ii) the repression of civil society or democratic opposition in Nicaragua, or

• (iii) other actions, policies or activities which undermine democracy or the rule of law in Nicaragua,

• (b) is owned or controlled directly or indirectly (within the meaning of regulation 7) by a person who is or has been so involved,

• (c) is acting on behalf of or at the direction of a person who is or has been so involved, or

• (d) is a member of, or associated with, a person who is or has been so involved.

• (3) Any reference in this regulation to being involved in an activity set out in paragraph (2)(a) above includes being so involved in whatever way and wherever any actions constituting the involvement take place, and in particular includes—

• (a) being responsible for, engaging in, providing support for, or promoting any such activity;

• (b) providing financial services, or making available funds or economic resources, that could contribute to any such activity;

• (c) being involved in the supply to Nicaragua of goods or technology which could contribute to any such activity, or in providing financial services relating to such supply;

• (d) being involved in assisting the contravention or circumvention of any relevant provision.

• (4) In this regulation “relevant provision” means—

• (a) any provision of Part 3 (Finance);

• (b) any provision of the law of a country other than the United Kingdom made for purposes corresponding to a purpose of any provision of Part 3.

• (5) Nothing in any sub-paragraph of paragraph (3) is to be taken to limit the meaning of any of the other sub-paragraphs of that paragraph.

Meaning of “owned or controlled directly or indirectly”

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• (1) A person who is not an individual (“C”) is “owned or controlled directly or indirectly” by another person (“P”) if either of the following two conditions is met (or both are met).

• (2) The first condition is that P—

• (a) holds directly or indirectly more than 50% of the shares in C,

• (b) holds directly or indirectly more than 50% of the voting rights in C, or

• (c) holds the right directly or indirectly to appoint or remove a majority of the board of directors of C.

• (3) Schedule 1 contains provision applying for the purpose of interpreting paragraph (2).

• (4) The second condition is that it is reasonable, having regard to all the circumstances, to expect that P would (if P chose to) be able, in most cases or in significant respects, by whatever means and whether directly or indirectly, to achieve the result that affairs of C are conducted in accordance with P's wishes.

Notification and publicity where designation power used

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• (1) Paragraph (2) applies where the Secretary of State—

• (a) has made a designation under regulation 5 (power to designate persons), or

• (b) has by virtue of section 22 of the Act varied or revoked a designation made under that regulation.

• (2) The Secretary of State—

• (a) must without delay take such steps as are reasonably practicable to inform the designated person of the designation, variation or revocation, and

• (b) must take steps to publicise the designation, variation or revocation.

• (3) The information given under paragraph (2)(a)—

• (a) where the Secretary of State designates a person under the standard procedure, must include a statement of reasons;

• (b) where the Secretary of State designates a person under the urgent procedure, must include a statement—

• (i) that the designation is made under the urgent procedure,

• (ii) identifying the relevant provision by reference to which the Secretary of State considers that condition B is met in relation to the person, and

• (iii) setting out why the Secretary of State considers that condition C is met.

• (3A) Where the Secretary of State designates a person under the urgent procedure, the Secretary of State must, after the end of the period mentioned in paragraph (7) of regulation 5A (conditions for the designation of persons by name) or, if the Secretary of State has made a certification under paragraph (7)(b) of that regulation, the period mentioned in paragraph (8) of that regulation, but otherwise without delay—

• (a) in a case where the person ceases to be a designated person, take such steps as are reasonably practicable to inform the person that they have ceased to be a designated person, or

• (b) in any other case, take such steps as are reasonably practicable to give the person a statement of reasons.

• (4) In this regulation, a “statement of reasons” means a brief statement of the matters that the Secretary of State knows, or has reasonable grounds to suspect, in relation to the person—

• (a) in the case of a designation under the standard procedure, which have led the Secretary of State to make the designation, and

• (b) in the case of a designation under the urgent procedure, as a result of which the person does not cease to be a designated person at the end of the period mentioned in regulation 5A(7) or (8) (as the case may be).

• (5) Matters that would otherwise be required by paragraph (4) to be included in a statement of reasons may be excluded from it where the Secretary of State considers that they should be excluded—

• (a) in the interests of national security or international relations,

• (b) for reasons connected with the prevention or detection of serious crime in the United Kingdom or elsewhere, or

• (c) in the interests of justice.

• (6) The steps taken under paragraph (2)(b) must—

• (a) unless one or more of the restricted publicity conditions is met, be steps to publicise generally—

• (i) the designation, variation or revocation, and

• (ii) in the case of a designation, the statement of reasons;

• (b) if one or more of those conditions is met, be steps to inform only such persons as the Secretary of State considers appropriate of the designation, variation or revocation and (in the case of a designation) of the contents of the statement of reasons.

• (7) The “restricted publicity conditions” are as follows—

• (a) the designation is of a person believed by the Secretary of State to be an individual under the age of 18;

• (b) the Secretary of State considers that disclosure of the designation, variation or revocation should be restricted—

• (i) in the interests of national security or international relations,

• (ii) for reasons connected with the prevention or detection of serious crime in the United Kingdom or elsewhere, or

• (iii) in the interests of justice.

• (8) Paragraph (9) applies if—

• (a) when a designation is made, one or more of the restricted publicity conditions is met, but

• (b) at any time when the designation has effect, it becomes the case that none of the restricted publicity conditions is met.

• (9) The Secretary of State must—

• (a) take such steps as are reasonably practicable to inform the designated person that none of the restricted publicity conditions is now met, and

• (b) take steps to publicise generally the designation and the statement of reasons relating to it.

Confidential information in certain cases where designation power used

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• (1) Where the Secretary of State in accordance with regulation 8(6)(b) informs only certain persons of a designation, variation or revocation and (in the case of a designation) of the contents of the statement of reasons, the Secretary of State may specify that any of that information is to be treated as confidential.

• (2) A person (“P”) who—

• (a) is provided with information that is to be treated as confidential in accordance with paragraph (1), or

• (b) otherwise obtains such information,

must not, subject to paragraph (3), disclose it if P knows, or has reasonable cause to suspect, that the information is to be treated as confidential.

• (3) The prohibition in paragraph (2) does not apply to any disclosure made by P with lawful authority.

• (4) For this purpose information is disclosed with lawful authority only if and to the extent that—

• (a) the disclosure is by, or is authorised by, the Secretary of State,

• (b) the disclosure is by or with the consent of the person who is or was the subject of the designation,

• (c) the disclosure is necessary to give effect to a requirement imposed under or by virtue of these Regulations or any other enactment, or

• (d) the disclosure is required, under rules of court, tribunal rules or a court or tribunal order, for the purposes of legal proceedings of any description.

• (5) This regulation does not prevent the disclosure of information that is already, or has previously been, available to the public from other sources.

• (6) A person who contravenes the prohibition in paragraph (2) commits an offence.

• (7) The High Court (in Scotland, the Court of Session) may, on the application of—

• (a) the person who is the subject of the information, or

• (b) the Secretary of State,

grant an injunction (in Scotland, an interdict) to prevent a breach of the prohibition in paragraph (2).

• (8) In paragraph (4)(c), “enactment” has the meaning given by section 54(6) of the Act.

PART 3 — Finance

Meaning of “designated person” in Part 3

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In this Part a “designated person” means a person who is designated under regulation 5 (power to designate persons) for the purposes of regulations 11 to 15 (asset-freeze etc.).

Asset-freeze in relation to designated persons

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• (1) A person (“P”) must not deal with funds or economic resources owned, held or controlled by a designated person if P knows, or has reasonable cause to suspect, that P is dealing with such funds or economic resources.

• (2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

• (3) A person who contravenes the prohibition in paragraph (1) commits an offence.

• (4) For the purposes of paragraph (1), a person “deals with” funds if the person—

• (a) uses, alters, moves, transfers or allows access to the funds,

• (b) deals with the funds in any other way that would result in any change in volume, amount, location, ownership, possession, character or destination, or

• (c) makes any other change, including portfolio management, that would enable use of the funds.

• (5) For the purposes of paragraph (1), a person “deals with” economic resources if the person—

• (a) exchanges the economic resources for funds, goods or services, or

• (b) uses the economic resources in exchange for funds, goods or services (whether by pledging them as security or otherwise).

• (6) The reference in paragraph (1) to funds or economic resources that are “owned, held or controlled” by a person includes, in particular, a reference to—

• (a) funds or economic resources in which the person has any legal or equitable interest, regardless of whether the interest is held jointly with any other person and regardless of whether any other person holds an interest in the funds or economic resources;

• (b) any tangible property (other than real property), or bearer security, that is comprised in funds or economic resources and is in the possession of the person.

• (7) For the purposes of paragraph (1), funds or economic resources are to be treated as owned, held or controlled by a designated person if they are owned, held or controlled by a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

• (8) For the avoidance of doubt, the reference in paragraph (1) to a designated person includes P if P is a designated person.

Making funds available to designated persons

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• (1) A person (“P”) must not make funds available directly or indirectly to a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available.

• (2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

• (3) A person who contravenes the prohibition in paragraph (1) commits an offence.