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 looks in brief at the latest developments.
What are the most recent substantive developments concerning UK sanctions on Russia?
The most recent substantive sanctions developments include the following, which focuses on licences:
- Under a new General Licence persons designated under the UK sanctions regime may make payments to UK insurers for insurance premiums and broker commissions relating to the provision of building and engineering insurance cover provided to UK properties. This licence also permits UK insurers to make return payments to UK designated persons into a frozen bank account. This licence is of indefinite duration;
- A General Licence was extended for a period of two months to allow for the winding down of positions involving Rosbank or any entity controlled by Rosbank. This licence is set to expire on 30 September 2022;
- Under a new General Licence persons may make use of the retail banking services of any credit or financial institution (designated under Regulation 5 of the Russia Regulations) to make or receive payments that are exclusively for the purpose of winding down business operations in Russia provided that no payments are otherwise made to any designated person or entity designated. This licence is set to expire on 5 November 2022;
- A new General Licence allows payments to be made to sanctioned banks or their subsidiaries for the purposes of making energy available for use in Mongolia. This licence is set to expire on 14 August 2023;
- A General Licence which allows UK designated persons to make payments to UK insurers for insurance premiums and broker commissions relating to the provision of building and engineering insurance cover provided to UK properties, was amended to include three new eligible insurance types. This licence is for an indefinite duration;
- A new General Licence allows a Crown Servant, Contractor, Family Member or Visiting Family Member to carry out activities in their personal capacity in Russia which would otherwise be prohibited (under certain regulations concerning Russia);
- A General Licence was updated to include VTBC Asset Management International Limited Guernsey, VTB Bank (Europe) SE (VTBE) and any entity owned or controlled by VTBE incorporated in Germany in the General Licence. This licence is set to expire on 3 April 2023; and,
- A new General licence allows for the payments of bank fees and service charges from frozen accounts. This licence is for an indefinite duration.
With regard to sanctions in general, organisations should consider doing the following:
- Undertake a rigorous due diligence screening against individuals and entities on sanctions lists;
- Check whether any accounts are maintained or any funds or economic resources are held for sanctioned persons and entities;
- Freeze 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);
- Report any findings to the regulator and co-operating with any investigations that the regulator may undertake;
- Do 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;
- Update 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,
- Train staff on sanctions issues.
We report about sanctions issues 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|