What’s this about?
The UK sanctions regime concerning Russian individuals and entities 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:
- On 30 June 2023 a new UK law restricting the provision of legal advisory services by UK lawyers to persons connected with Russian businesses on commercial activities such as trade deals entered into force. According to the UK’s Ministry of Justice this new law seeks to destabilise Russia’s dependence on the UK for legal expertise through disrupting its commercial activity supply chain, and build on existing sanctions placed on Russia concerning the ongoing conflict in Ukraine. This restriction on legal services is understood to not extend to legal representation for Russian nationals using UK legal expertise generally; see here for the new rules https://www.legislation.gov.uk/uksi/2023/713/made and here https://www.legislation.gov.uk/uksi/2023/713/contents/made;
- On 23 June 2023 the UK’s OFSI (the Office of Financial Sanctions Implementation) issued an official Notice where three entries on the consolidated list were amended – they are still subject to an asset freeze and trust services sanctions;
- On 20 June 2023 the UK government introduced new legislation that will allow it to maintain Russian sanctions until compensation is paid to Ukraine in order to enable the UK government to keep sanctions in place by amending the purposes of the UK’s Russia sanctions, which can now also be used for the express purpose of promoting the payment of compensation by Russia. A new voluntary route to allow sanctioned individuals to donate frozen funds to Ukraine’s reconstruction and recovery was also announced;
- On 8 June 2023 the UK’s Foreign, Development and Commonwealth Office (“FDCO”) announced further sanctions against Belarus: (a) as regards trade sanctions, the UK has banned the import of gold, cement, wood and rubber from Belarus and blocked exports of banknotes, machinery and materials that could be used to produce chemical and biological weapons from the UK to Belarus; and, (b) as regards online measures, the FCDO said that its “online measures provide the government with the ability to prevent designated Belarusian media companies from spreading propaganda in the UK”;
- On 31 May 2023 the UK’s OFSI issued an official Notice where two entries on the consolidated list were amended – they are still subject to an asset freeze;
- On 22 May 2023 the UK’s OFSI issued an official General Licence which permits a UK person who is owed funds or economic resources by a so-called “designated person”, under a contract that was signed before the “designated” person in question was designated, to receive payment, provided that the terms of General Licence INT/2023/3024200 are met. The value of the payments due under any such obligations may not exceed £200,000 (including VAT) and allow the designated person’s correspondent banks or financial institutions to transfer funds or economic resources in line with the permissions set out in the General Licence. The General Licence expires on 21 November 2023;
- On 22 May 2023 the UK’s OFSI issued an official Notice where three entries on the consolidated list were amended – they are still subject to an asset freeze;
- On 19 May 2023 the UK’s OFSI issued an official Notice where 86 entries were added to the consolidated list and are now subject to an asset freeze and trust services sanctions; three entries have also been removed and are no longer subject to an asset freeze;
- On 19 May 2023, the UK government announced a new wave of sanctions against Russia targeting businesses and individuals connected to Russia’s capacity to fund and wage the war;
- On 18 May 2023 the UK Prime Minister Rishi Sunak announced import bans on Russian diamonds and metal; and,
- On 16 May 2023 the UK’s OFSI issued an official Notice where one entry on the consolidated list was amended – they are still subject to an asset freeze.
With regard to sanctions in general, organisations should consider doing the following:
- Undertaking a rigorous and thorough 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 licences 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-russia-sanctions-0523-04/ 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 Jonathan Armstrong or André Bywater 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)207 347 2365|