Dark Money Investigations: News

Ministers responsible for controversial sanction waivers, new rules say

MP asks ‘what are ministers trying to hide?’, as government refuses to publish original sanctions guidance

Jim Fitzpatrick square
Jim Fitzpatrick
18 April 2023, 8.00am
The government has updated its rules on waiving sanctions after openDemocracy revealed it aided Russian warlord Yevgeny Prigozhin

Alex Segre / Sipa US / Alamy Stock Photo

New rules for issuing licences for sanctioned individuals to pursue legal action in the UK reveal that ministers should take decisions in controversial cases – not civil servants, as the government previously claimed.

The rules were updated at the end of March following an internal review conducted after openDemocracy reported that the government had granted special permission for sanctioned Russian warlord Yevgeny Prigozhin to sue a British journalist who exposed his crimes.

But the government has refused to publish the rules that applied when that decision was taken, prompting Labour MP Liam Byrne to ask: “What are ministers trying to hide?”

Speaking to openDemocracy, Byrne added that the extent of the new rules raised questions over whether “the UK sanctions waivers regime was basically out of control”.

Help us uncover the truth about Covid-19

The Covid-19 public inquiry is a historic chance to find out what really happened.

Sanctions are designed to stop certain individuals from doing business in the UK and often include a travel ban. But lawyers acting on behalf of those who have been sanctioned can apply to a Treasury department – the Office of Financial Sanctions Implementation (OFSI) – for a licence to allow payment for legal cases.

Prigozhin, the boss of Russian mercenary army Wagner, which has been responsible for much of the slaughter in Ukraine, was sanctioned by the UK in 2020 over Wagner’s activities in Libya. But in 2021 his London lawyers were given licences to receive payment from him and fly business class to St Petersburg to plan his legal attack on journalist Eliot Higgins, of investigative website Bellingcat.

Responding to an urgent parliamentary question from Labour shadow foreign secretary David Lammy on openDemocracy’s findings, Exchequer secretary James Cartlidge suggested that decisions at OFSI had been taken by civil servants, not ministers, under a “delegated framework”.

But under the new rules, it seems ministers should take decisions in such cases.

The rules state that OFSI officials should use the framework “to determine whether a decision is contentious, and therefore should be taken by a minister.” Among the criteria listed where ministers should take the decision are:

  • Whether it is likely (55% risk or higher) that the decision to grant or refuse a licence will attract significant adverse media or parliamentary comment.
  • Whether it is likely (55% risk or higher) that the decision to grant or refuse a licence will attract significant adverse international comment, such as by international organisations, other countries, governments or opposition groups whose views the UK would respect.
  • Where licensing the payment would run the risk of not being consistent with the UK's current foreign policy objectives.
  • Whether it is likely (55% risk or higher) that the decision to grant or refuse a licence will attract significant adverse comment by campaigning, human rights or expatriate groups whose views the UK would respect.
  • Whether there are significant risks of potential reputational damage as a result of granting or refusing a licence. This could include, amongst other things: why the Designated Person is sanctioned, and whether any recent activity on their behalf would increase the reputational risk of the decision.
  • Whether granting a licence application could raise wider public policy concerns.

Byrne, a member of Westminster’s Foreign Affairs Committee, said the new framework “rings some very loud alarm bells about whether the UK sanctions waivers regime was basically out of control”.

“Not one, but six of the new criteria would have triggered a minister intervening in the Prigozhin scandal. So one has to ask: what the hell was going on?” he told openDemocracy.

There should be a clearer focus on the disproportionate level of harm that might be caused to the defendant in such cases

Susan Coughtrie, the Foreign Policy Centre

But despite multiple attempts by Byrne to obtain the rules that applied at the time of the Prigozhin case, the government has released only the updated guidance and not the original policy. Byrne described this as “an affront to Parliamentary scrutiny”.

He added: “It simply begs one big question: what are ministers trying to hide? If the framework was fine, then why are ministers going to such lengths to keep it secret? We know that there’s now in principle no barrier to publishing a framework. So was the framework used to give a green light to Prigozhin’s legal costs?

“We are frankly completely in the dark. The minister insisted that the old sanctions waiver regime was not out of ministerial control. But frankly they have yet to prove they had anything resembling a grip.”

Byrne is planning to raise the issue in Parliament again this week.

While Prigozhin’s legal case against Eliot Higgins ultimately collapsed in March last year, after Russia’s invasion of Ukraine, Higgins was left with legal costs of £100,000 and no means of recovering the money from the warlord.

Today, Higgins welcomed the new guidelines as “better than nothing” but said “they seem more focused on the government’s reputation being protected than a complete assessment process”.

The notorious case taken by Prigozhin against Higgins has been recognised as a prime example of a SLAPP (strategic lawsuit against public participation). The government has reiterated its intention to introduce legislation to reform the law to prevent SLAPP cases, but no date for the legislation has been set.

As well as the new rules, the government has also stated that future applications by sanctioned individuals for licences to take defamation or similar cases will likely be turned down.

One of the leaders of the campaign for SLAPP reform, Susan Coughtrie of the Foreign Policy Centre, said the changes are welcome but that it is notable that the focus is largely on reputational or economic harm to the UK, rather than the public interest.

“There should be a clearer focus on the potential level of impact to the free flow of information in the public interest, as well as the disproportionate level of harm that might be caused to the defendant in such cases,” she said.

Why should you care about freedom of information?

From coronation budgets to secretive government units, journalists have used the Freedom of Information Act to expose corruption and incompetence in high places. Tony Blair regrets ever giving us this right. Today's UK government is giving fewer and fewer transparency responses, and doing it more slowly. But would better transparency give us better government? And how can we get it?

Join our experts for a free live discussion at 5pm UK time on 15 June.

Hear from:

Claire Miller Data journalism and FOI expert
Martin Rosenbaum Author of ‘Freedom of Information: A Practical Guidebook’; former BBC political journalist
Jenna Corderoy Investigative reporter at openDemocracy and visiting lecturer at City University, London
Chair: Ramzy Alwakeel Head of news at openDemocracy

We’ve got a newsletter for everyone

Whatever you’re interested in, there’s a free openDemocracy newsletter for you.

Had enough of ‘alternative facts’? openDemocracy is different Join the conversation: get our weekly email


We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram WhatsApp yourData