Sanctions after Shvidler: a narrowing path for legal challenge

Full article can be accessed here: Solicitors Journal — Sanctions after Shvidler: a narrowing path for legal challenge.

The Supreme Court's judgment in Shvidler v Secretary of State for Foreign, Commonwealth and Development Affairs [2025] UKSC 30, handed down on 29 July 2025, has materially raised the bar for challenging UK sanctions designations. The Court confirmed that the government is not required to demonstrate that any individual designation will itself shift Russian policy — only that it makes a plausible contribution to the cumulative effect of the regime as a whole. Courts will not second-guess the executive on whether pressure is being exerted on Russia, even where that pressure operates in ways that are impossible to measure or prove.

The judgment also confirmed that ministers are entitled to a wide margin of appreciation at every stage of the Bank Mellat proportionality analysis — not only on the question of legitimate aim — precisely because these cases engage foreign policy and national security. The Court found that the objective of limiting and deterring Russian aggression in Ukraine is among the most vital aims the UK government has been called upon to pursue, and that finding carries weight through every subsequent limb of the proportionality assessment.

One avenue that remains open, and that practitioners should pursue from the outset of any instruction, concerns the OFSI licensing regime. The majority treated the availability of OFSI licences as a structural safeguard — a “safety valve” — that reinforced its fair balance conclusion. Where a designated person can demonstrate that the licensing system has in practice failed to enable them to meet basic needs, fund legal representation or conduct essential transactions, that evidence directly undermines the fair balance on which the majority relied.

A further point that deserves attention is the extraterritorial reach of UK designations. By operation of SAMLA and the 2019 Regulations, prohibitions on a designated British citizen apply to their assets worldwide, not merely to UK-situated property. This is a materially different position from that of a non-British national and must be understood before any litigation or review strategy is devised.

Finally, Lord Leggatt's dissenting judgment (which found the government's evidence for rational connection to amount to no more than “armchair theories” and the restrictions on Mr Shvidler to be unjust and disproportionate) provides practitioners with a forensic framework for challenging the quality of the government's evidence in future cases, even though it did not command a majority. Beyond the courtroom, the judgment is also a reminder that demonstrating genuine behavioural change remains the most direct route to delisting, given that behaviour change is the stated purpose of the regime.