Financial sanctions
Sanctions are used as a foreign policy tool as part of a broader political and diplomatic strategy to achieve a desired outcome from a target country or regime. They are usually agreed and co-ordinated at an international level by the United Nations ("UN") Security Council and the European Union ("EU"). They may include travel, arms, financial and trade restrictions against the individuals and entities who are subject to the restrictions, and in some cases against broad sectors within a jurisdiction, for example, the EU financial restrictions that were put in place against Iranian banks.
	The primary aim of all UN sanctions, as set out in Chapter VII of the UN Charter, is to implement decisions by its Security Council for the maintenance of international peace and security. The EU imposes sanctions to further its Common Foreign and Security Policy objectives.
	Sanctions may be imposed on an individual or entity ('the target') to:
	(a) Coerce the target into changing its behaviour, by increasing the cost on them to such an extent that they decide the offending behaviour is no longer optimal;
	(b) Constrain the target, by trying to deny them access to key resources needed to continue their offending behaviour;
	(c) Signal disapproval of the target as a way of stigmatising and potentially isolating them, or as a way of sending broader political messages to international or domestic constituencies.
	Sanctions in recent years have been imposed on targets in Iran to bring about a change in their nuclear programme, in Egypt and other Arab Spring countries to secure suspected misappropriated assets during democratic transition and in Ukraine and Russia to signal disapproval of infringement of Ukraine’s sovereignty and territorial integrity.
	Financial sanctions usually include prohibiting the transfer of funds and assets, directly or indirectly, to a sanctioned individual or entity, and a requirement to freeze their funds and assets. Other financial sanctions may also prohibit the provision of insurance and reinsurance, financial services, or financing for either specific sectors or target entities.
	The UK currently has 27 international financial sanctions regimes in force including the sanctions regime targeting ISIL (Daesh) and Al-Qaida. Domestically, the UK also implements terrorist financing restrictions through the Terrorist Asset Freezing etc. Act 2010 ("TAFA"). A full list of financial sanctions regimes can be found online at HMT’s financial sanctions page.
	When sanctions are imposed by the UN or the EU, the UK acts on its international obligations to give effect to the sanctions in UK law. UN sanctions are implemented by the EU and once implemented through EU regulations, they take direct effect in the UK.