Anzhelika Khan v Secretary of State for Foreign, Commonwealth and Development Affairs

The Court of Appeal dismissed the appellant's challenge to the decision of 28 February 2023 maintaining her designation under the Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855), made pursuant to the Sanctions and Anti‑Money Laundering Act 2018 (SAMLA). Key legal principles applied were (i) Padfield requires that discretionary powers be exercised to further the statute's objects rather than for extraneous purposes, but does not require a decision‑maker to be satisfied that a particular designation is likely to achieve the statutory objective; (ii) the court must itself decide proportionality under the Human Rights Act 1998 (HRA) but give appropriate respect to executive judgments in areas such as foreign policy and national security (as explained in Dalston Projects Ltd v Secretary of State for Transport); and (iii) the statutory and regulatory framework (SAMLA and the 2019 Regulations) provides sufficient clarity and safeguards to meet the "in accordance with the law" requirement of Article 8 ECHR.

The court rejected grounds that (a) Padfield required a prediction that the individual designation would be likely to further the statutory purpose; (b) regulation 6(2)(d) (designation for being "associated with" an involved person) lacked legal quality or rational connection with the statutory objectives; and (c) the designation was disproportionate on the facts. The court noted serious practical problems with the licensing regime operated by OFSI but held those problems did not render the 28 February 2023 decision unlawful because relevant licences had been obtained by that date.

Background and parties: The appellant, a British citizen resident in the United Kingdom and the wife of a designated person, challenged the decision of 28 February 2023 by which an FCDO official decided to maintain her designation under the Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855). The designation originated on 21 April 2022. The respondent was the Secretary of State for Foreign, Commonwealth and Development Affairs. The claim in the High Court (Administrative Court) under section 38(2) of SAMLA was dismissed by Cockerill J ([2024] EWHC 361 (Admin)); permission to appeal was granted and the matter came to the Court of Appeal.

Nature of the claim / relief sought: The appellant sought to set aside the decision to maintain her designation. The grounds raised included alleged misapplication of the Padfield principle, incompatibility of regulation 6(2)(d) of the 2019 Regulations with Articles 8 and 1 of Protocol 1 (A1P1) ECHR, and that the maintenance decision was disproportionate. A further ground concerned access to court under Article 6 ECHR and whether section 38(2) SAMLA (judicial review principles) provided an effective remedy.

Procedural history: The appeal is from the Administrative Court (Cockerill J). Permission to appeal was granted (Falk LJ) on specified grounds; a fourth ground (access to court) was listed to be considered at the substantive hearing.

Issues before the Court: (i) Whether Padfield required the Secretary of State to consider whether designation of an individual was likely to further the statutory purposes of the 2019 Regulations; (ii) whether regulation 6(2)(d) (designation for being "associated with" an involved person) was insufficiently certain or otherwise incompatible with Article 8/A1P1; (iii) whether the decision to maintain designation was disproportionate taking account of Articles 8 and A1P1; (iv) whether the statutory review procedure under section 38(2) SAMLA provided effective access to court.

Court's reasoning:

• Padfield (purpose v efficacy): The court held the appellant misunderstood Padfield. Padfield requires exercise of statutory discretion to further the legislation's objects and not be for an extraneous purpose; it does not require the decision‑maker to be satisfied that a measure is likely to achieve the statutory aim. Concerns about efficacy are for rationality/proportionality review, not Padfield.
• Compatibility and legality of regulation 6(2)(d): The court concluded the statutory and regulatory framework (SAMLA and the 2019 Regulations), together with administrative safeguards (public statement of reasons, licensing regime, review and judicial challenge under section 38, Parliamentary reporting obligations), provided sufficient accessibility, foreseeability and safeguards to satisfy the requirement that interference be "in accordance with the law" under Article 8. It followed authorities such as In Re Gallagher, Bridges and Phillips were instructive.
• Rational connection and proportionality: Relying on Dalston Projects (this Court's guidance on proportionality review), the court held there was an objective rational connection between designating associates and the statutory objective of encouraging Russia to cease destabilising acts. The court then carried out its own proportionality assessment, giving appropriate respect to executive judgment in national security/foreign relations. On the facts, and having considered the impact on the appellant and her dependent children and the availability of the OFSI licensing regime, the designation was not disproportionate.
• Access to court: The court granted permission to advance the Article 6 challenge but rejected it. Section 38(2) SAMLA, read with the court's obligation under the HRA, provides an effective judicial determination of Convention rights; the court does not need to (and should not) conduct an unfettered merits review of all executive factual assessments.

Subsidiary findings and observations: The court emphasised serious shortcomings in the OFSI licensing process as it operated at the relevant time and noted the practical hardship of freezing that could leave UK‑resident designated persons unable to meet ordinary living expenses until licences were issued. The judges recorded that OFSI subsequently introduced a "Basic Needs" general licence (15 January 2025) and expressed the view that immediate provision for basic needs at designation would be desirable. However, those practical concerns did not render the February 2023 decision unlawful because the appellant had obtained licences by that date.

Appeal dismissed. The Court found no error in the High Court's decision: Padfield did not require a decision‑maker to be satisfied that an individual designation was likely to achieve the statutory objective; regulation 6(2)(d) is compatible with Article 8/A1P1 given the statutory framework and safeguards; and the proportionality assessment was properly conducted (the court carried out its own proportionality analysis in line with Dalston Projects and concluded the decision to maintain designation was not disproportionate). Concerns about OFSI's licensing delays were noted but did not invalidate the challenged decision because relevant licences had been obtained by the date of the decision under challenge.

Appeal from the High Court (Administrative Court), Cockerill J: [2024] EWHC 361 (Admin). Permission to appeal was granted by Falk LJ on 26 June 2024 on three grounds; a fourth ground (access to court) was considered at the substantive hearing.