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:
- Under a Financial Sanctions Notice of 28 December 2022 one entry was amended to the consolidated list and is still subject to an asset freeze. One entry has been corrected and is still subject to an asset freeze;
- The Office of Financial Sanctions Implementation issued a General Licence (GL) which allows for a seven day wind down period in respect to financial prohibitions set out under various UK sanctions regulations. The GL takes effect on 16 December 2022 and expires on 22 December 2022;
- Under a Financial Sanctions Notice of 16 December 2022 one entry to the consolidated list was amended and is still subject to an asset freeze;
- Under a Financial Sanctions Notice of 16 December 2022 16 entries were added to the consolidated list and are subject to an asset freeze. One entry was amended and is still subject to an asset freeze;
- On 14 December 2022 the Foreign, Commonwealth & Development Office (FCDO) announced a new package of sixteen sanctions targeting twelve senior Russian commanders, including Major General Robert Baranov, for their involvement in the Russian military and following Russia’s strikes on Ukrainian civilian infrastructure. The FCDO also said that Iranian businessmen and officials involved in the production and/or supply of military drones used to carry out these attacks are also included in the designations (see here for the official UK government press release: https://www.gov.uk/government/news/new-uk-sanctions-target-senior-russian-commanders-following-strikes-on-ukrainian-civilian-infrastructure);
- The Office of Financial Sanctions Implementation issued various General Licences (GL) concerning oil. One GL concerns an oil price cap, allowing a person to supply or deliver Russian oil by ship from a place in Russia to a third country or from one third country to another third country and allow a service provider to provide relevant services to any person (whether or not a UK person) relating to the supply or delivery of Russian oil by ship from a place in Russia to a third country or from one third country to another third country. Another GL concerns wind-down, allowing a person to supply or deliver Russian oil by ship from a place in Russia to a third country or from one third country to another third country and allow a service provider to provide relevant services to any person supplying or delivering Russian oil by ship from a place in Russia to a third country or from one third country to another third country. Another GL allows a person to supply or deliver Russian oil by ship from a place in Russia to a third country or from one third country to another third country provided that the unit price of the Russian oil concerned is at or below the price cap. The GLs came into effect on 5 December 2022 and are of indefinite duration;
- Under a Financial Sanctions Notice of 30 November 2022 22 entries were amended to the consolidated list and are now subject to an asset freeze;
- The Office of Financial Sanctions Implementation issued a General Licence (GL) to allow designated individuals or entities to make permitted payments from a frozen UK bank account to (UK) OFGEM regulated firms to provide gas or electricity to properties in the UK. The GL took effect on 19 November 2022 and expires on 16 April 2023;
- On 11 November 2022 the Office of Financial Sanctions Implementation published its annual review for the April 2021 to August 2022 period. The review found that the UK and its allies have sanctioned more than 1,200 individuals and more than 120 entities, with the UK alone having frozen and reported £18.39bn of Russian assets, which is around £6bn more than held across all other UK sanctions regimes. The review has also highlighted the impact of these sanctions, as Russian GDP is predicted to decline by up to 6.2% in 2022 and decline a further 2.3% in 2023, 60% of Russia’s foreign reserves have been immobilised, its exports have plummeted and imports of critical goods have dropped by 68% from sanctioning countries (see here for the official UK government press release: https://www.gov.uk/government/news/uk-sanctions-on-russia-top-18-billion-for-the-first-time);
- Under a Financial Sanctions Notice of 11 November 2022 one entry was amended to the consolidated list and is still subject to an asset freeze;
- A General Licence (GL) was issued concerning transactions related to agricultural commodities including the provision of insurance and other services. This GL took effect from 4 November 2022;
- A General Licence (GL) was issued that allows UK legal firms or UK Counsel who have provided legal advice to a person designated under either the Russian or Belarusian regime to receive payment from that designated person without having to wait for an Office of Financial Sanctions Implementation specific licence. This GL took effect on 28 October 2022 and expires on 27 April 2023; and,
- Under a Financial Sanctions Notice of 20 October 2022 four entries were added to the consolidated list and are now subject to an asset freeze.
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-1-3/ 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|