UK Sanctions

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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

On July 21, 2022, further amendments to the UK’s Russia sanctions regime were laid before parliament.  The new measures introduced under the Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 (“Amendment 14”) include the coal, oil and gold import bans and ban on the provision of professional and business services previously announced by the UK government.  Amendment 14 also introduces trade restrictions targeting a significant number of new “G7 dependency and further” goods and expands existing restrictions with respect to energy-related goods and services.
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Continue Reading UK Introduces Long Awaited Russia Sanctions Legislation Banning Coal, Oil and Gold Imports, and the Provision of Professional and Business Services to Russia and Further Expands Trade Restrictions

On July 18, 2022, further amendments to the UK’s Russia sanctions regime came into force in response to Russia’s invasion of Ukraine.  The new measures introduced under the Russia (Sanctions) (EU Exit) (Amendment) (No. 13) Regulations 2022 (“Amendment 13”) include an expansion of the designation criteria pursuant to which individuals and entities can be made subject to UK asset freeze sanctions and the introduction of a new trade sanctions exception for humanitarian assistance activity in non-government controlled areas of the Donetsk and Luhansk oblasts.  Amendment 13 also expands certain definitions in relation to the interpretation of the concept of “ownership” of ships and aircraft subject to UK sanctions measures.

On July 19, 2022, new financial sanctions measures also came into force targeting certain new investment activities in relation to Russia.  The measures, made pursuant to the Russia (Sanctions) (EU Exit) (Amendment) (No. 12) Regulations 2022 (“Amendment 12”), include restrictions on the acquisition of any ownership interest in land in Russia and in entities connected with – or having a place of business in – Russia, as well as a prohibition on the establishment of commercial arrangements such as branches in Russia and joint ventures with persons connected with Russia.  Investment services directly related to those activities also are prohibited by Amendment 12.…

Continue Reading UK Expands Powers of Designation Under Russia Sanctions Regime; Prohibits Additional Types of New Investment in Russia and Introduces New Trade Sanctions Exception for Humanitarian Assistance

The National Economic Crime Centre (NECC), a multi-agency unit in the National Crime Agency (NCA), and HM Treasury’s Office of Financial Sanctions Implementation (OFSI) have published a “red alert” on financial sanctions evasion typologies by Russian elites and enablers (Red Alert) that synthesizes information from a range of UK law enforcement agencies as well as industry to identify common techniques designated persons and their enablers are suspected to be using to evade financial sanctions.

The Red Alert provides a series of sanctions evasion indicators identified from real world case studies.  It also sets out recommendations as to the level and type of due diligence that companies should perform on higher risk transactions and counterparties.  The stated purpose of the Red Alert is to combat and disrupt financial sanctions evasion by complementing the private sector’s existing knowledge of these issues and facilitating preventative action in the form of enhanced business processes and procedures to identify and mitigate the significant exposure that many sectors of industry have to sanctions evasion following the unparalleled volume of sanctions designations introduced since the start of the Russian invasion of Ukraine.

In practical terms, the Red Alert offers a timely reminder of the challenges companies can face in effectively identifying and mitigating the sanctions risks posed by higher risk transactions and counterparties and underscores the importance of companies undertaking robust due diligence that is calibrated to address appropriately the sanctions risks, including sanctions evasion risks, posed by such transactions and business relationships.  In particular, companies should carefully consider whether their existing sanctions compliance processes take into consideration the sanctions evasion warning flags and due diligence recommendations outlined in the Red Alert.…

Continue Reading UK “Red Alert” on Russian Financial Sanctions Evasion Offers a Timely Reminder of the Importance of Risk-Based Due Diligence

On 5 July 2022, the UK Government introduced a further round of financial, trade and transport sanctions against Belarus in response to its continuing support of Russia’s invasion of Ukraine.  The new sanctions measures were implemented pursuant to The Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022 (“Amended Regulations”), which extends a range of sanctions measures previously introduced against Russia to Belarus.
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Continue Reading UK Introduces Further Economic Sanctions Against Belarus Including Financial, Trade & Transport Sanctions

On 29 June 2022, HM Treasury’s Office of Financial Sanctions Implementation (OFSI) announced that a monetary penalty of £15,000 was imposed on 19 May 2022 against Tracerco Limited (Tracerco) for breaches of The Syria (European Union Financial Sanctions) Regulations 2012 (the UK Regulations).  Tracerco is a UK registered company based in the UAE and a subsidiary of Johnson Matthey, also a UK company.

According to OFSI’s penalty report, Tracerco made two payments to Syrian Arab Airlines (SAA) for an employee’s flights home between May 2017 and August 2018.  According to OFSI, the payments, which had a total value of £2,956.43, resulted in funds being made available for the benefit of a person designated under Council Regulation (EU) No 36/2012 (i.e., SAA).  Tracerco booked the flights through a UAE-based travel agency and then refunded the travel agency for the cost of the flights.

The Tracerco case represents the seventh use of OFSI’s civil monetary penalty powers since they were introduced under Part 8 of the Policing and Crime Act 2017 (PACA).  Several useful hints as to OFSI’s enforcement priorities can be discerned from the Tracerco case.…

Continue Reading UK Oil Services Company Becomes Seventh Company to Receive OFSI Monetary Penalty for Sanctions Breaches

On June 23, 2022, the UK government adopted its latest package of trade sanctions measures against Russia in response to its continued military aggression in Ukraine.  The new sanctions measures were implemented pursuant to The Russia (Sanctions) (EU Exit) (Amendment) (No. 10) Regulations 2022 (“Russia Regulations Amendment No. 10”), which introduce a tranche…

On June 15, 2022, the United Kingdom will introduce a strict civil liability standard for violations of UK financial sanctions committed after that date.  In anticipation of this important change to the enforcement powers of HM Treasury’s Office of Financial Sanctions Implementation (OFSI), the OFSI enforcement and monetary penalties for breaches of financial sanctions guidance (Monetary Penalties Guidance) has been updated and will take effect from June 15.  OFSI Director, Giles Thomson, also has outlined OFSI’s enforcement approach in light of these imminent changes in a blog post.

For more information on how these developments could impact your organization, contact the author of this post, Alexandra Melia, in Steptoe’s Economic Sanctions team in London.…

Continue Reading UK Updates Sanctions Enforcement Guidance in Readiness for Imminent Introduction of Strict Civil Liability for Financial Sanctions Breaches

Between April 18 and May 2, 2022, the US government continued to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia.  Most significantly, on April 21, President Biden issued a Proclamation prohibiting “Russian-affiliated vessels” from entering US ports.  Otherwise, the US government has focused on utilizing its existing authorities to impose further costs on Russia.

Over the last two weeks of April, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 40 individuals and entities including Transkapitalbank (TKB), re-issued an expanded set of Ukraine- / Russia- Sanctions Regulations (URSR), and issued several new or revised general licenses, including one relating to the provision of assistance by nongovernmental organizations, and 8 Frequently Asked Questions (FAQs).

Separately, the Commerce Department’s Bureau of Industry and Security (BIS) continues to be focused on restricting the Russian aviation sector, issuing a temporary denial order (TDO) on the Russian cargo aircraft carrier, Aviastar, for operating aircraft on flights into and out of Russia without the BIS authorization required under the Export Administration Regulations (EAR), and providing weekly updates to its list of commercial and private aircraft operated in potential violation of the EAR.…

Continue Reading April 18 – May 2, 2022 Russian Sanctions Update

Since March 14, 2022, the United Kingdom has continued to introduce and announce new sanctions measures in response to Russia’s invasion of Ukraine.  The new UK measures include sanctions enforcement powers under the Economic Crime (Transparency and Enforcement) Act 2022, the designation of hundreds of individuals and entities under the UK’s Russia and Belarus sanctions regimes, the introduction of new general licences, the introduction and announcement of new sanctions measures, and the revision of various guidance documents.
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Continue Reading A Summary of New UK Sanctions Enforcement Powers and Further Ukraine-related UK Sanctions on Russia and Belarus