Following the referendum of 23 June 2016, British citizens have expressed their vote to leave the European Union (“EU”) (the so called Brexit). Even though the referendum has only a consultative value, the British Government committed itself to initiate the procedure envisaged by Article 50 of the Treaty on European Union (“TEU”), which establishes a two-year timeframe for negotiations between the withdrawing state and the EU.

It is opinion of the House of Commons Foreign Affairs Committee (“Committee”) that, among the consequences of the withdraw procedure, there will be implications for the future of UK’s foreign policy, including sanctions regimes. While the decision to withdraw from the EU will not change the formal status of the UK until the reaching of a withdrawal agreement, the Committee has invited the government and the Foreign & Commonwealth Office (FCO) to “open up new opportunities for the UK to redefine its international role”.

The Committee suggested the adoption of a ‘policy mirroring’ approach, continuing to align itself to EU sanctions regimes – a method currently used by some non-EU countries such as Switzerland and Norway – or increasing its own autonomous sanctions powers, granting more authority to its national enforcement agencies, such as the Office of Financial Sanctions Implementations (OFSI).

In the meantime, the UK’s obligations to the EU’s sanctions regimes remain unchanged. Its autonomous measures regarding terrorist asset freezing will continue to apply, as well as the restrictions imposed through the Security Council of the United Nations. The Joint Comprehensive Plan of Action signed with Iran will remain untouched.

It is believed that the European sanctions policy, weakened by the Brexit, could lead to a need to employ other, more expensive and complicated forms of diplomacy, coercion and pressure. In addition, it is also likely that Russia may strengthen its position, as it would benefit from a fragmented and weaker Europe.