New UK sanctions rules to halt libel cases following Prigozhin case

The UK government is tightening its sanctions regime after openDemocracy revealed that it waived its own rules to allow a Russian warlord to sue a British journalist.

Yevgeny Prigozhin, whose mercenary Wagner army has been responsible for much of the bloodshed in Ukraine, was sanctioned by the UK in 2020 over Wagner’s activities in Africa.

Sanctions are supposed to restrict travel and all business with the individual targeted.

But in January openDemocracy revealed that Prigozhin had still been able to obtain special licences from the government to sue journalist Eliot Higgins of investigative website Bellingcat, who had exposed his crimes, for libel.

Prigozhin even secured permission, through a little-known Treasury department called the Office of Financial Sanctions Implementation (OFSI), to pay his London lawyers directly and fly them business class to St Petersburg to consult face-to-face.

The case provoked a political storm and led Exchequer secretary James Cartlidge to promise an “internal review” of the licensing process.

Today, in a written statement to Parliament, Cartlidge outlined changes made as a result of that review. These will mean libel and similar cases will no longer be presumed eligible for licences granted to lawyers working for sanctioned individuals.

Cartlidge told Parliament that “OFSI will, in future, take a presumption that legal fees relating to defamation and similar cases will be rejected”.

The change, preventing sanctioned individuals from bringing defamation and similar cases in the UK, will also apply to a new ‘General Licence’. The licence has removed the need for lawyers working for sanctioned Russian and Belarussian individuals to seek permission for each new piece of work for an existing client.

This is welcome news, but individuals sanctioned by the UK should never have been granted licences to misuse our libel courtsSusan Coughtrie, the director of the foreign policy centre

Cartlidge also suggested that there would be a new policy to define when officials, or ministers, could take decisions on licences.

He said: “To strengthen the decision-making framework for specific licence applications in these and other cases, the government has further updated the delegation framework under which decisions are taken by OFSI rather than ministers.

“This framework will support and reinforce scrutiny of licensing decisions by making clear when it is appropriate for ministers to take these decisions personally, or where officials can take these decisions.”

The changes were welcomed by Pat McFadden, Labour's shadow chief secretary to the Treasury, though he said: “It is truly scandalous that oligarchs were using sanctioned funds to threaten British journalists and campaigners under the Conservatives’ watch.”

McFadden added: “While this belated change is welcome, it has only happened because of brave reporters and Labour shadow ministers pressing home the fact that the Treasury had been asleep at the wheel in letting through exemptions for Putin’s violent henchmen.

“Labour is committed to supporting the Ukrainian people in their resistance to Putin’s invasion and would not allow sanctioned individuals to try and silence their critics through our legal system.”

Susan Coughtrie, the director of The Foreign Policy Centre and a leading campaigner against abusive lawsuits known as SLAPPs (strategic lawsuits against public participation) also celebrated the decision.

She said: “This is very welcome news, but individuals sanctioned by the UK government should never have been granted licences to misuse our libel courts to harass a journalist in the first place.”

Coughtrie added that the government “must now urgently follow through” with its promised legislation to tackle the problem of SLAPPs.