The Sanctions and Anti-Money Laundering Act 2018 (SAMLA) is the cornerstone of the UK’s independent sanctions and AML framework following its withdrawal from the European Union. Enacted in May 2018, SAMLA provides the legal foundation for the UK to implement, amend, and enforce sanctions regimes without relying on EU law. It also grants powers to update and enforce anti-money laundering and counter-terrorist financing regulations in line with evolving international standards.

The Act was introduced to ensure continuity and consistency in financial crime prevention as the UK re-established its legislative autonomy post-Brexit. It consolidates powers previously scattered across multiple EU directives, giving UK authorities the flexibility to respond swiftly to geopolitical, security, and financial threats.

Purpose And Legislative Authority

The purpose of SAMLA is twofold: to empower the UK government to implement sanctions independently and to strengthen its domestic AML and counter-terrorism financing framework. It provides a unified legal basis for both sanctioning regimes and the prevention of illicit finance, ensuring the UK remains compliant with international obligations, particularly those of the United Nations and the Financial Action Task Force (FATF).

Under SAMLA, Ministers have broad powers to introduce secondary legislation that defines how sanctions and AML rules are applied. This mechanism allows the UK to react quickly to emerging risks while maintaining democratic oversight through parliamentary scrutiny. The Act also preserves continuity with prior EU measures by enabling the UK to mirror, amend, or diverge from EU and UN sanctions lists as required.

Legal Powers Granted Under SAMLA

SAMLA grants the government authority to impose sanctions for a wide range of purposes, including national security, foreign policy, counterterrorism, and the protection of human rights. These powers extend to asset freezes, trade restrictions, travel bans, and prohibitions on providing certain financial services to designated individuals or entities.

The Act also enables the UK to introduce new AML and counter-terrorist financing regulations to ensure compliance with global standards. It establishes a framework through which the UK can adopt or update technical AML rules, aligning domestic policy with FATF recommendations and international expectations.

Structure And Key Provisions

The structure of SAMLA reflects its dual function: one part governs sanctions powers, while the other supports AML and counter-terrorist financing. Together, these provisions create a comprehensive tool for safeguarding the UK’s financial system from illicit activity.

SAMLA allows Ministers to issue new sanctions through statutory instruments, establishes procedures for reviewing designations, and confers investigatory powers on regulators. It also outlines enforcement mechanisms, enabling authorities to impose penalties and prosecute breaches of AML and sanctions regulations.

Sanctions Powers

Under SAMLA, Ministers can create specific sanctions regimes tailored to particular threats. These may include geographic regimes (e.g., Russia, Iran) or thematic regimes addressing issues such as human rights violations or terrorism financing.

The Act provides flexibility in defining sanctions’ scope, including who can be designated, what restrictions apply, and the processes for licensing exceptions. Each regime must be justified under one of SAMLA’s statutory purposes and is subject to periodic review by Parliament to ensure proportionality and compliance with human rights obligations.

Anti-Money Laundering And Counter-Terrorist Financing Powers

SAMLA also establishes the legal basis for the UK to maintain and evolve its AML and CTF regulations post-Brexit. It allows the Treasury to amend existing frameworks to reflect international developments, ensuring the UK remains aligned with FATF recommendations and other international norms.

These provisions empower regulators and law enforcement agencies to oversee financial institutions, enforce customer due diligence standards, and ensure effective suspicious activity reporting. They also reinforce the UK’s global commitment to preventing the flow of illicit funds through its financial system.

Supervisory Authority And Enforcement

SAMLA’s enforcement model assigns key supervisory roles to agencies including the Financial Conduct Authority (FCA), HM Treasury, and the Office of Financial Sanctions Implementation (OFSI). These bodies are responsible for monitoring compliance, investigating potential breaches, and imposing civil or criminal penalties.

This distributed approach ensures that supervision covers the full spectrum of financial and non-financial businesses, from major banks to law firms and professional service providers. It also allows for close coordination between the public and private sectors in detecting and reporting suspicious activity.

Role Of The Office Of Financial Sanctions Implementation (OFSI)

The OFSI, part of HM Treasury, plays a central role in enforcing sanctions imposed under SAMLA. It manages the UK Sanctions List, oversees asset freezes, and issues licenses where specific transactions are permitted under exemptions.

OFSI also provides guidance to the private sector, helping firms understand their obligations and implement effective sanctions screening processes. Its enforcement powers include imposing financial penalties and referring serious breaches for criminal prosecution.

Financial Conduct Authority (FCA) Oversight

The FCA ensures that regulated financial institutions maintain effective systems and controls to comply with both AML and sanctions obligations under SAMLA. It evaluates firms’ governance, customer due diligence, and screening processes, and has the power to issue penalties or remediation orders where deficiencies are found.

This oversight ensures that the Act’s provisions are enforced consistently across the UK financial sector and that institutions are held accountable for maintaining high compliance standards.

Post-Brexit Impact And Strategic Importance

Since the end of the Brexit transition period in December 2020, SAMLA has been the primary legislative foundation for the UK’s sanctions and AML regimes. It allows the UK to act swiftly and independently in response to international crises while maintaining alignment with global norms.

SAMLA has become especially significant amid global instability and geopolitical shifts. It enables the UK to design targeted sanctions against individuals or entities involved in corruption, human rights violations, or financial crime, reinforcing the country’s role as a global leader in AML enforcement.

Continuity With EU And UN Frameworks

While SAMLA grants the UK autonomy, it retains compatibility with EU and UN systems to facilitate coordinated international responses. The UK continues to implement many sanctions that mirror EU or UN measures, ensuring consistent alignment with allies while preserving national discretion to diverge when necessary.

This dual approach, independence with interoperability, reflects the UK’s commitment to multilateral cooperation in combating financial crime and preserving global security.

Evolution And Future Developments

SAMLA continues to evolve through secondary legislation and subsequent acts, including the Economic Crime (Transparency and Enforcement) Act 2022, which introduced new transparency measures such as the Register of Overseas Entities. These developments demonstrate how SAMLA serves as a flexible platform for expanding the UK’s financial crime prevention capabilities.

Future updates are expected to focus on crypto assets, beneficial ownership transparency, and enhanced coordination with global partners to combat sanctions evasion.

Strengthen Your Sanctions And AML Compliance Framework

Effective compliance with SAMLA requires robust screening, monitoring, and reporting capabilities. Financial institutions and corporates must ensure their systems can detect sanctions exposures, identify suspicious transactions, and respond promptly to regulatory changes.

Solutions such as Watchlist Management, Customer Screening, and Payment Screening can help firms meet SAMLA’s evolving requirements while maintaining efficiency and operational resilience.

Contact Us Today To Strengthen Your Sanctions And AML Compliance Framework