What’s this about?
The UK sanctions regime on Russian individuals and entities under the UK sanctions regime with regard to the war in Ukraine has continued to develop; for more about how the UK sanctions regime works see the What is the UK sanctions regime? section of our article here https://www.corderycompliance.com/add65uksanctions/.
This article sets out in brief the latest developments.
What are the most recent substantive and other developments concerning UK sanctions on Russia?
The most recent sanctions developments include the following:
- The Office of Financial Sanctions Implementation (OFSI) published new guidance on 9 February 2023 which sets out the implications of new sanctions in ransomware cases. The guidance responds to the evolving threat of cybercrime, which the UK government seeks to disrupt through the use of financial sanctions. The guidance states that making or facilitating a ransomware payment risks exposing those involved to civil or criminal penalties where such payments are made to designated persons. The guidance sets out the risks in making ransomware payments in those circumstances, together with advice for engaging with the government and aggravating and mitigating factors the government will consider with a view to criminal enforcement action relating to financial sanctions breaches (for the guidance see here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1135587/Ransomware___Sanctions_guidance__Feb_2023_.pdf and here https://www.gov.uk/government/publications/financial-sanctions-faqs#full-publication-update-history);
- Under a Financial Sanctions Notice of 9 February 2023, one entry was corrected on the consolidated list of asset freeze targets, bringing the entry in line with the UK Sanctions List;
- On 8 February 2023 the Foreign, Commonwealth & Development Office announced a new round of sanctions, including entities providing military equipment such as drones for Russia’s invasion of Ukraine, as well as individuals and one entity connected to Kremlin financial networks (for more see here https://www.gov.uk/government/news/new-sanctions-target-putins-war-machine-and-financial-networks-as-uk-accelerates-economic-pressure-on-russia);
- Under a Financial Sanctions Notice of 8 February 2023, fifteen entries were amended to the consolidated list of asset freeze targets and are now subject to an asset freeze; and,
- The OFSI provided an update on 3 February 2023 on the oil price cap for refined products. The prohibition on UK ships and services involved in the maritime transportation of Russian oil came into force on 5 December 2022 with the intention to extend this prohibition to Russian oil products on 5 February 2023. The OFSI has advised that industry can comply with the price cap by abiding by the relevant part of a 3-tier attestation model and the record-keeping and reporting requirements listed in the updated guidance and General Licences (for more see here https://ofsi.blog.gov.uk/2023/02/02/oil-price-cap-update-refined-products/).
With regard to sanctions in general, organisations should consider doing the following:
- Undertaking a rigorous due diligence screening against individuals and entities on sanctions lists;
- Checking whether any accounts are maintained or any funds or economic resources are held for sanctioned persons and entities;
- Freezing sanctioned accounts, and other funds or economic resources and any funds which are owned or controlled by sanctioned persons and entities, and refraining from dealing with the funds or assets or making them available (directly or indirectly) to sanctioned persons (unless licenses have been granted);
- Reporting any findings to the regulator and co-operating with any investigations that the regulator may undertake;
- Doing a contracts clauses check on relevant contracts to ensure that provisions concerning warranties, force majeure, termination, and, liability are all up to scratch as regards sanctions;
- Updating policies, procedures and risk assessments – be prepared to deal with sanctions breaches;
- Where possible and of use (either as an alternative or a complement to contract breach risk), considering obtaining insurance (export credit, political risk, and, trade disruption) against sanctions risks; and,
- Training staff on sanctions issues.
We last wrote about sanctions here: https://www.corderycompliance.com/uk-sanctions-russia-recent-dev-01-23-23/ and our other articles about sanctions can be found here: https://www.corderycompliance.com/category/sanctions/.
We spoke at an event about Russian sanctions, where we focused on sanctions policies & due diligence/screening issues https://www.corderycompliance.com/rbcc-dit-russia-uk-02-dec/.
We have also written about the UK Economic Crime (Transparency & Enforcement) Act 2022 here https://www.corderycompliance.com/uk-ecte-act-sanctions-russia-belarus/.
For UK official guidance about the UK sanctions on Russian see here https://www.gov.uk/government/collections/uk-sanctions-on-russia, and the UK sanctions list can be found here https://www.gov.uk/government/publications/the-uk-sanctions-list.
The UK Sanctions and Anti-Money Laundering Act 2018 can be found here https://www.legislation.gov.uk/ukpga/2018/13/contents/enacted.
For more information please contact André Bywater or Jonathan Armstrong who are lawyers with Cordery in London where their focus is on compliance issues.
|Jonathan Armstrong, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH
|André Bywater, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH
|Office: +44 (0)207 075 1784
|Office: +44 (0)207 075 1785