UK High Court upholds sanctions designation in landmark case: LLC Synesis v FCDO
In a significant legal development, the UK High Court recently ruled in LLC Synesis v Secretary of State for Foreign Commonwealth and Development Affairs [2023] EWHC 541 (Admin) on the first challenge brought under section 38 of the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), which provides for the right for a decision to be set aside. The case involved a technology company from Belarus that sought to overturn a sanctions designation imposed by the Secretary of State for Foreign, Commonwealth and Development Affairs.
The key highlights from the judgment are:
Background: The Claimant, LLC Synesis, was established in 2007 in Minsk, Belarus. Under the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 it was designated due to its software products' alleged involvement in enhancing human rights violations and civil society repression by the Belarussian Ministry of Internal Affairs.
Primary Ground of Challenge: The Claimant argued that the decision to impose sanctions was irrational.
Court's findings: Mr Justice Jay dismissed the application and provided important clarifications on the matter. The Court differentiated the statutory threshold, being a reasonable ground to suspect that the Claimant is an involved person, from the applicable standard of review by the Court.
The Court emphasised that the decision-maker is not confined to solely providing evidence admissible in a court of law. As such, “allegations”, “multiple hearsay” and “intelligence” can be considered. Furthermore, the "reasonable grounds to suspect" criterion does not require a specific standard of proof. In turn, it involves assessing available information, drawing inferences, and acquiring a good-faith state of mind.
The Court clarified that its role is not to substitute the decision-maker but to assess whether the decision lacked evidence or was irrational. The Court acknowledged the broad "margin of appreciation" afforded to the decision-maker, particularly when expert judgments are involved in government policy sectors.
Application of Principles: Based on the above principles, the Court found that the Claimant's arguments did not demonstrate a Wednesbury error, falling considerably short of the required threshold. Furthermore, any arguments related to vires and proportionality were rejected by the Court as they were deemed as largely dependent on the irrationality ground.
Implications: This ground-breaking judgment highlights the limited scope for judicial review in sanctions designation cases under SAMLA. The ruling underscores the decision-maker's discretion and the importance of expert judgments in government policy. It sets a significant precedent for future challenges brought under the SAMLA.
For a more detailed analysis of the case, you can access the full judgment here.
