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Khan v Secretary of State for Foreign, Commonwealth and Development Affairs
Factual and Procedural Background
The Appellant, a British citizen residing in the United Kingdom with responsibility for her family and children, was designated under the Russia (Sanctions) (EU Exit) Regulations 2019 ("the 2019 Regulations") on 21 April 2022. The designation was based on her association with her husband, who was already designated under the UK sanctions regime for supporting the Government of Russia. The Appellant challenged the decision of the Secretary of State for Foreign, Commonwealth and Development Affairs ("the Secretary of State") to maintain her designation following a review on 28 February 2023, pursuant to section 38(2) of the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"). Permission to appeal was granted on three grounds, with a fourth ground adjourned for consideration at the substantive hearing. The case involves confidential material, redacted as necessary for fairness.
The designation imposes an asset freeze and transport sanctions, severely restricting the Appellant's ability to use her assets, including for basic necessities, although a licensing scheme operated by the Office of Financial Sanctions Implementation ("OFSI") exists to mitigate some effects. The Appellant applied for revocation of her designation in November 2022, but the decision to maintain designation was upheld in February 2023. The Appellant contends that the designation is unlawful and disproportionate, particularly given the impact on her and her children's lives.
Legal Issues Presented
- Whether the Secretary of State was required under the Padfield principle to consider if the designation of the Appellant was likely to further the statutory purpose of the 2019 Regulations.
- Whether regulation 6(2)(d) of the 2019 Regulations, which allows designation based on association with a designated person, is compatible with Article 8 and Article 1 of the First Protocol (A1P1) of the European Convention on Human Rights ("ECHR").
- Whether the designation of the Appellant constituted a disproportionate interference with her and her children's rights under Article 8 and A1P1 ECHR.
- Whether the scheme of court review under section 38(2) of SAMLA is compatible with the right of access to a court under Article 6 ECHR and procedural obligations under Article 8.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 | Discretionary powers must be exercised to further the objects and policy of the empowering legislation, not for extraneous purposes. | The Court rejected the Appellant's claim that the Secretary of State was required to consider the likelihood of designation furthering the statutory purpose, clarifying that Padfield concerns purpose, not efficacy. |
| Bank Mellat v HM Treasury (No 2) [2013] UKSC 39; [2014] AC 700 | Four-part proportionality test under the Human Rights Act 1998 (HRA): importance of objective, rational connection, less intrusive means, and fair balance. | The Court applied the Bank Mellat proportionality framework to assess the designation's compatibility with Convention rights, concluding the designation was proportionate. |
| R (Bridges) v Chief Constable of South Wales Police [2020] EWCA Civ 1058; [2020] 1 WLR 5037 | Quality of law requires clarity, foreseeability, and safeguards against overbroad discretion. | The Court distinguished the present sanctions regime from Bridges, finding the sanctions regime sufficiently clear and foreseeable to meet the quality of law standard. |
| Christian Institute v Lord Advocate [2016] UKSC 51 | High hurdle for declaring legislation incompatible with Convention rights on proportionality grounds ("ab ante" challenge). | The Court held that the legislation is not inherently disproportionate; proportionality must be assessed on the facts of individual cases. |
| R (Ahmed and Others) v HM Treasury [2010] UKSC 2; [2010] 2 AC 534 | Requirement for fair procedure and effective judicial remedy in sanctions regimes. | The Court distinguished Ahmed, finding the SAMLA regime includes procedural fairness and access to judicial review, unlike the regime in Ahmed. |
| R (Youssef) v Secretary of State for Foreign, Commonwealth and Development Affairs [2021] EWHC 3188 (Admin); [2022] 1 WLR 2454 | Interpretation of procedural fairness and judicial review in sanctions contexts. | The Court agreed with the reasoning in Youssef, rejecting the Appellant’s challenge to the adequacy of judicial review under SAMLA. |
| Director of Public Prosecutions v Ziegler [2021] UKSC 23; [2022] AC 408 | Degree of respect to be accorded to executive decisions in human rights proportionality assessments. | The Court acknowledged that courts must give appropriate weight to executive judgments, particularly in matters involving foreign relations and national security. |
| H (H) v Deputy Prosecutor of the Italian Republic, Genoa [2012] UKSC 25; [2013] 1 AC 338 | Best interests of the child as a primary consideration in decisions affecting children. | The Court found the Judge had properly considered the best interests of the Appellant's children as a primary, though not paramount, consideration in the proportionality assessment. |
| Polish Judicial Authority v Celinski (Practice Note) [2015] EWHC 1274 (Admin); [2016] 1 WLR 551 | Standard of appellate review on proportionality assessments. | The Court applied the principle that appellate courts should not lightly interfere with first instance proportionality findings unless the decision was wrong. |
Court's Reasoning and Analysis
The Court undertook a detailed legal analysis structured around the statutory framework of SAMLA, the 2019 Regulations, and the applicable human rights principles under the European Convention on Human Rights.
Regarding the Padfield principle, the Court clarified that the Secretary of State's discretion must be exercised to further the statutory purpose, but there is no requirement to consider whether the designation is likely to achieve that purpose. The Court distinguished purpose from efficacy, noting that rationality challenges address efficacy.
On the compatibility of regulation 6(2)(d) with Convention rights, the Court found the legislative scheme sufficiently clear, foreseeable, and constrained to meet the quality of law requirement. It rejected arguments that the discretion to designate based on association was arbitrary or overbroad, emphasizing the detailed definitions in the Regulations and statutory safeguards such as the requirement for reasonable suspicion and the availability of administrative review and judicial challenge.
The Court applied the Bank Mellat proportionality test, assessing whether the designation was a justified interference with the Appellant's rights. It found a rational connection between the designation and the statutory objectives, supported by evidence explaining the role of designations of associates in increasing pressure on involved persons and preventing circumvention of sanctions.
The Court acknowledged the severe impact of designation on the Appellant and her family but concluded that the Secretary of State struck a fair balance between individual rights and the public interest in the sanctions regime. It rejected criticisms that the High Court failed to independently assess proportionality, finding that the High Court's approach was consistent with binding authority and that the appellate Court's own proportionality assessment confirmed the correctness of the result.
The Court also considered the operation of the OFSI licensing scheme, which mitigates some effects of designation by permitting expenditure on basic needs and other matters. While recognizing delays and difficulties in practice, the Court found that by the date of the challenged decision, the Appellant had obtained relevant licences, and that any deficiencies in the licensing regime did not render the designation unlawful. The Court emphasized the importance of a functioning licensing system but did not find a material legal defect in this case.
Finally, on the right of access to court, the Court distinguished the present regime from that considered in Ahmed, finding that SAMLA provides procedural fairness and effective judicial remedies. The Court held that the judicial review principles applied under section 38(2) of SAMLA, including the Court’s own proportionality assessment, satisfy the requirements of Article 6 ECHR.
Holding and Implications
The appeal is dismissed.
The Court upheld the decision to maintain the Appellant's designation under the 2019 Regulations. It confirmed the legality and proportionality of the designation, including the compatibility of the relevant regulatory provisions with Convention rights. The decision affirms the application of established public law and human rights principles in the context of sanctions designations and clarifies the scope of judicial review under SAMLA.
The Court acknowledged the severe personal impact of designation and the importance of the licensing scheme but found no legal basis to overturn the designation in this case. No new precedent was established beyond the application and clarification of existing principles. The decision underscores the balance between individual rights and national security/foreign policy interests inherent in sanctions regimes.
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