The UK government imposed sanctions on a British Sikh businessman and a group linked to him in the first use of its new Domestic Counter Terrorism Regime, meant to stop the flow of money to the pro-Khalistan militant group Babbar Khalsa.

Gurpreet Singh Rehal, who is connected with the Panjab Warriors sports investment firm, faced an asset freeze and a director disqualification after he was suspected of having links to organisations involved in terrorism in India, the UK Treasury said on Thursday.

The Treasury said it believes Rehal took part in the activities of Babbar Khalsa and Babbar Akali Lehar, including promoting and encouraging these groups, recruiting for them, giving them financial services, and helping their operations, which allegedly involved buying weapons and other military equipment.

"This landmark action shows we are prepared to use every tool at our disposal to choke off funding for terrorism – wherever it occurs and whoever is responsible. The UK stands firmly with peaceful communities against those who promote violence and hatred," Lucy Rigby, UK's economic secretary, as cited by PTI.

"We will not stand by while terrorists exploit Britain's financial system," she added.

The sanctions prevent all UK individuals and entities from dealing with any funds or assets linked to Rehal or Babbar Akali Lehar and from offering them any financial services or support.

The restrictions also extend to any organisations they own or control unless allowed by an HM Treasury licence or another approved exemption.

"Rehal is also subject to director disqualification sanctions which prohibit him from acting as a director of a company or directly or indirectly taking part in or being concerned in the promotion, formation or management of a company," the Treasury said, as cited by PTI.

The sanctions placed on Rehal also cover organisations linked to him, including Saving Punjab, Whitehawk Consultations Ltd, and the unincorporated group or association Loha Designs.

This action taken this week came after close coordination between the Treasury and law enforcement and showed what the UK government described as its commitment to national security and to supporting communities impacted by terrorism.

Under the Counter Terrorism Regulations of 2019, HM Treasury can freeze assets and impose restrictions on individuals and entities suspected of involvement in terrorism, a move aimed at stopping terrorist funding and keeping the UK financial system safe from misuse.

Breaching these sanctions can lead to penalties of up to seven years in prison on indictment or civil fines of up to one million pounds or fifty per cent of the breach value whichever is higher.

The Treasury said Babbar Khalsa, which also uses the name Babbar Khalsa International, is a banned terrorist organisation and its assessment identifies Babbar Akali Lehar as an involved person under these regulations.

"Babbar Khalsa (which also uses the name Babbar Khalsa International) is a proscribed terrorist organisation. HM Treasury assesses Babbar Akali Lehar to be an “involved person” under the regulations,” said the UK government.