Elliot Letts

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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

On August 18, 2023, the UK High Court issued a judgment in the first sanctions designation challenge pursuant to the UK’s Russia sanctions regime under Section 38 of the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”).  The challenge was brought by Eugene Shvidler (“Mr. Shvidler”), a UK-US dual national businessman, following an unsuccessful ministerial review in which Mr. Shvidler sought to reverse his UK designation.  The High Court rejected the challenge on the grounds that the decision to maintain Mr. Shvidler’s designation was proportionate and non-discriminatory.  Mr. Justice Garnham’s judgment addressed both the threshold for a UK listing and the balance that must be struck between the rights of a designated person and the public interest when assessing a designation decision under Section 38 of SAMLA, points which will have broader relevance to future UK delisting cases.…

Continue Reading UK High Court Rejects First Delisting Challenge Under the UK’s Russia Sanctions Regime

On March 21, 2023, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) designated all individuals and entities that currently are subject to an asset freeze under the Russia (Sanctions) (EU Exit) Regulations 2019 (the “Regulations”) for the additional purpose of the trust services sanctions measures outlined in Regulation 18C(1) of the Regulations.  As a result, persons subject to UK sanctions jurisdiction are now prohibited from providing trust services to, or for the benefit of, those UK designated persons absent an available exception or licence.  OFSI also has issued a wind down General Licence and updated its Russia Sanctions Guidance (“OFSI Guidance”) to address the interaction between the asset freeze, trust services, and professional and business services prohibitions. 

In a blog post announcing the measure, OFSI indicated that the move represents a conscious effort close off perceived loopholes in the existing trust services prohibitions in response to intelligence from enforcement agencies suggesting that UK-based trust service providers have been offering their services to persons for the purpose of reducing the impact of sanctions in the event that they become subject to them.   …

Continue Reading UK Expands Designations of All Subject to Asset Freeze Sanctions Under the Russia Regime to Include a Ban on the Provision of Trust Services

On March 16, 2023, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) published an updated version of its Enforcement and Monetary Penalties for Breaches of Financial Sanctions Guidance (“OFSI Guidance”).  The OFSI Guidance outlines OFSI’s compliance and enforcement approach as well as providing an overview of the civil monetary penalty regime and how potential financial sanctions breaches are assessed.  The latest update to the OFSI Guidance sets out the framework within which OFSI will assess breaches of UK financial sanctions that flow from, or involve, an incorrect assessment of the ownership and control of an entity by a UK designated person. 

The publication of the updated OFSI Guidance follows repeated calls for clarity regarding the ownership and control test and OFSI’s enforcement stance in relation to it, particularly following the significant expansion of the Consolidated List in response to Russia’s invasion of Ukraine in February 2022 and the UK’s introduction of strict civil liability for financial sanctions breaches in June 2022.…

Continue Reading OFSI Updates Enforcement and Monetary Penalty Guidance to Address the Assessment of Ownership and Control

On February 7, 2023, the UK Department for International Trade (“DIT”) published an expanded version of its guidance on supplying professional and business services to a person connected with Russia (“DIT Guidance”), following a broadening of the types of services covered by the ban in December 2022.  The DIT Guidance sets out additional details regarding the services falling within the scope of these sanctions, enforcement, applicable exceptions, and the licence application process.  For more information on the ban on the supply of professional and business services, see our previous blog post (here).…

Continue Reading UK Expands Guidance on the Supply of Professional and Business Services to Persons Connected with Russia

On February 5, 2023, the UK ban imposed by Part 5, Chapter 4IA of The Russia (Sanctions) (EU Exit) Regulations 2019, as amended (“Russia Regulations”), on the maritime transportation of certain Russian oil products and related services came into effect.  Ahead of the measure coming into force, on February 4, 2023, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) published an updated version of its guidance on the UK Maritime Services Prohibition and Oil Price Cap (“OFSI Guidance”), which outlines how the oil products price cap will be implemented, OFSI’s approach to enforcement, and the requirements on involved persons.  OFSI also issued two new General Licences that establish the level of the oil products price cap and establish a wind-down period with respect to certain Russian oil products.…

Continue Reading UK Oil Price Cap for Russian Refined Oil Products Comes into Effect

On August 30, 2022, further amendments to the UK’s nine thematic and 29 geographic sanctions regulations came into effect, which expand financial sanctions reporting obligations to cryptoasset exchanges and custodian wallet providers.  The amendments, which were introduced under the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2022 and the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2022 (Amending Regulations), revise the definition of a “relevant firm” to which mandatory financial sanctions reporting obligations apply.
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Continue Reading New UK Sanctions Legislation Expands Mandatory Financial Sanctions Reporting Obligations to Include Crypto Providers

(This is a cross-post from Steptoe’s new Investigations and Enforcement Blog.)

In May 2020, the U.K. Financial Conduct Authority, the authority charged with regulating financial firms and maintaining the integrity of the financial markets in the United Kingdom, reported that whistleblowing reports to the Financial Conduct Authority on workplace culture issues in 2019 had…