On May 21, 2024, the UK Department for Business & Trade’s Export Control Joint Unit (“ECJU”) published notice to exporters 2024/11 regarding its new guidance on the sale of oil tankers to countries other than the United Kingdom, Isle of Man, or Russia (“Third Countries”) under the Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”) (the “ECJU Guidance”).  The purpose of the ECJU Guidance is to provide information and tools to the maritime sector that will assist in the prevention of sanctions evasion in relation to the sale and brokering of second-hand vessels to Third Countries.  The ECJU Guidance underscores the continued efforts of UK sanctions agencies to clamp down on evasion of the UK’s Russia sanctions, as well the UK government’s recognition of the need to collaborate with the private sector to succeed in those efforts.Continue Reading UK Issues Guidance on Oil Tanker Sales to Third Countries under the Russia Sanctions Regime

This month has seen HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) roll out a new FAQ guidance format, as well as update a number of its existing guidance documents. In particular, OFSI has introduced changes to its enforcement and civil monetary penalties guidance, as well as to its general financial sanctions guidance in relation to the assessment of licence applications under the “extraordinary expenses” and “extraordinary situations” licensing grounds. Following the introduction of secondary legislation amending a number of UK sanctions regimes on May 15, 2024, corresponding changes also have been made to a range of OFSI guidance documents and other materials.   Continue Reading A Round-Up of Recent Changes to OFSI Financial Sanctions Guidance

On April 12, 2024, in a coordinated action the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) in the United States and the Foreign, Commonwealth, and Development Office, HM Treasury, and Department for Business and Trade (“DBT”) in the United Kingdom announced expanded sanctions targeting certain Russian metals, including limiting the use of in-scope metals on the two largest global metal exchanges and in over-the-counter derivatives trading by imposing new regulations on the activities of U.S. persons and persons subject to UK sanctions jurisdiction. The United States also added restrictions related to the importation of certain Russian metals produced after a certain date (but not items made from those metals).Continue Reading United States and United Kingdom Take Coordinated Action Against Russian Federation Metals

On April 2, 2024, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) published a blog post addressing financial sanctions compliance in the maritime sector.  Maritime businesses currently are a particular area of focus for UK sanctions regulators and law enforcement due to the direct and multi-faceted impact of the UK’s Russia financial, trade

On February 27, 2024, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) published a number of guidance documents on financial sanctions licensing addressing the process of applying for a licence, as well as the principles applied when making licensing decisions relating to designated individuals.  Publication of the guidance follows a recent court case in which OFSI’s decision to refuse certain licence applications in relation to a designated individual sanctioned under the UK’s Russia sanctions regime was unsuccessfully challenged.  The newly published guidance provides additional clarity regarding OFSI’s process for financial sanctions licensing, as well as the factors OFSI considers when exercising its decision-making powers in relation to certain specific licensing grounds.  OFSI does not intend for the new licensing guidance to replace any previous guidance on the financial sanctions licensing regime and it should be read alongside OFSI’s general financial sanctions guidance, regime-specific guidance, introduction to licensing, and reasonableness in licensing blog posts. Continue Reading OFSI Publishes Expanded Guidance on Financial Sanctions Licensing Process and Principles

The UK government introduced new reporting requirements under The Russia (Sanctions) (EU Exit) Regulations 2019 (“Russia Regulations”) in December 2023, with the goal of strengthening transparency in relation to assets frozen under the regime and assisting HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) to monitor compliance with, and detect evasion of, financial sanctions administered under the Russia regime.  The two new reporting measures are the immobilized assets reporting measure and the designated persons asset reporting measure.  On February 12, 2024, OFSI’s Director, Giles Thomson, published a new blog explaining the practical implications of these new measures.  OFSI also has updated its Russia sanctions guidance to include new FAQs addressing the implementation of the second new reporting obligation.Continue Reading OFSI Publishes Update on New Russia Sanctions Reporting Requirements

The UK’s National Economic Crime Centre (“NECC”) recently issued an amber alert concerning the sanctions evasion, money laundering, and trafficking in cultural property risks presented to UK industries linked to artwork storage facilities and the art storage sector (the “Amber Alert”).  The Amber Alert highlights that criminals are finding ways to utilize the art market to conduct illicit activity and includes case studies and key indicators that those operating within the art storage sector can use to detect such activity.  This development underscores the UK government’s continued commitment to cracking down on the evasion of sanctions (particularly under the Russia sanctions regime), as well as an increased focus on identifying and targeting more avenues for sanctions evasion so that counter measures can be implemented to thwart those efforts.  It also highlights the increasingly interconnected approach the UK government and law enforcement are adopting to address activity with potential touchpoints to a range of financial and other crimes. Continue Reading UK NECC Publishes Amber Alert on Sanctions Evasion in the Art Storage Sector

On December 11, 2023, the UK’s Department for Business & Trade (“DBT”) published a General Trade Licence of indefinite duration concerning measures related to third-country processed iron and steel, pursuant to The Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”) (the “GL”).  The GL has been introduced to provide additional clarity in key areas for traders navigating these sanctions.Continue Reading UK’s Department for Business & Trade Issues New General Trade Licence for Third-Country Processed Iron and Steel Measures

On December 6, 2023, the UK’s National Economic Crime Centre (“NECC”) issued a red alert concerning the export of high-risk goods that Russia is using on the battlefield in Ukraine.  The red alert outlines sanctions evasion red flags for the financial services, transportation, and logistics sectors, including features of suspicious transactions, customers, requested services, and items.  In addition, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) has designated 46 individuals and entities based in Russia, Belarus, China, Serbia, Turkey, the United Arab Emirates (“UAE”), and Uzbekistan suspected of supplying the Russian military with sanctioned goods and technology. 

On December 11, 2023, Industry and Economic Security Minister, Nusrat Ghani, also announced the creation of the Office of Trade Sanctions Implementation (“OTSI”), a new unit focused on the civil enforcement of UK trade sanctions that will launch in early 2024.  OTSI’s remit will include the investigation and enforcement of sanctions evasion.

These developments underscore the UK government’s continued commitment to cracking down on the evasion of sanctions (particularly under the Russia sanctions regimes), as well as an increased focus on using designation powers to target behavior outside the scope of UK sanctions enforcement jurisdiction that the UK government considers undesirable from a foreign policy perspective.Continue Reading UK Publishes Red Alert on Sanctions Evasion, Makes New Designations, and Announces the Creation of Trade Sanctions Civil Enforcement Body

On September 6, 2023, the Financial Conduct Authority (“FCA”), the UK regulator for financial services firms and markets, published a review of its assessment of sanctions systems and controls in place at financial services firms in the UK.  The review sought, in particular, to assess firms’ response to the rapid expansion in the size, scale, and complexity of sanctions following Russia’s invasion of Ukraine.  The FCA’s review considered sanctions compliance systems and controls at over 90 firms spanning various aspects of the financial services sector, including payments, retail banking, wholesale banking, wealth management, insurance, and electronic money.  The objective of the review was to assess the adequacy and effectiveness of firms’ systems and controls in addressing sanctions risks and their ability to respond promptly to changes in the UK’s sanctions regime.Continue Reading FCA Publishes Findings of its Assessment of UK Financial Services Firms’ Sanctions Systems and Controls