UK Sanctions

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On November 3, 2022, a sixteenth amendment to the UK’s Russia sanctions regime was laid before parliament.  The Russia (Sanctions) (EU Exit) (Amendment) (No. 16) Regulations 2022 (“Amendment 16”) introduces a ban on UK ships and services such as insurance, brokerage and shipping facilitating the maritime transport of Russian crude oil from December 5, 2022.  A General Licence is expected to be published shortly that lays the basis for an oil price cap exception, which will allow continued access to services provided that Russian crude oil is purchased at or below the price cap.  The level of the price cap will be set by the price cap coalition of the G7 and Australia in due course.  Amendment 16 brings forward the implementation date for the import bans relating to Russian oil and oil products discussed in our previous blog post (here) from December 31, 2022 to December 5.  Amendment 16 also introduces a comparable ban on refined oil products, which will come into effect on February 5, 2023.…

Continue Reading New UK Russia Sanctions Legislation Bans the Maritime Transport of Russian Oil

On October 28, 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. 15) Regulations 2022 (“Amendment 15”) include an expansion of the ban on loan and credit arrangements and the items covered by existing trade restrictions on oil refining, revenue generating, G7 dependency and further goods and technology.  Amendment 15 also introduces an import ban on liquefied natural gas (“LNG”) and the creation of new trade prohibitions on gold jewellery, certain processed gold and the export of so-called “Russia’s vulnerable goods.”  All of the new measures will enter into force on October 29, 2022, with the exception of the provisions relating to the import of LNG, which will enter into force on January 1, 2023.
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Continue Reading New UK Russia Sanctions Legislation Amends Loan and Credit Restrictions; Expands the Range of Items Targeted by Existing Trade Prohibitions; and Introduces New Trade Prohibitions on Liquefied Natural Gas, Items Critical to the Functioning of Russia’s Economy and Certain Gold Items

On September 27, 2022, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) announced that a monetary penalty of £30,000 was imposed on April 26, 2022 against Hong Kong International Wine and Spirits Competition Ltd. (“HKIWSC”) for breaches of the Ukraine (European Union Financial Sanctions) (No. 2) Regulations 2014 (the “UK Regulations”) and Council Regulation (EU) No. 269/2014 (Ukraine Misappropriation and Human Rights) (the “EU Regulations”).  HKIWSC is a UK registered company.

According to OFSI’s penalty report, HKIWSC received three payments and 78 wine bottles from State Unitary Enterprise of the ‘Republic of Crimea’ Production-Agrarian Union (“Massandra”), a designated entity since July 25, 2014, for entry into competitions between September 2017 and August 2020.  The total cumulative value of the payments and wine bottles received by HKIWSC was estimated at £3,919.62.  Additionally, HKIWSC made publicity – considered an intangible economic resource – available to a UK designated person.

The HKIWSC case represents the eighth 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 and interpretation of the scope of asset freeze sanctions can be discerned from the HKIWSC case.…

Continue Reading OFSI Imposes Eighth Monetary Penalty on Hong Kong International Wine and Spirits Competition Ltd.

On September 30, 2022, the UK Foreign Secretary, James Cleverly, announced new services and goods export bans targeting vulnerable sectors of the Russian economy in response to President Putin’s announcement of the annexation of the Ukrainian regions of Donetsk, Luhansk, Kherson and Zaporizhzhia following sham referendums.  The imposition of an asset freeze also was announced on the Governor of the Central Bank of the Russian Federation (CBR), alongside measures to suspend the process by which actions taken to manage the orderly failure of Russian banks are recognized under the laws of the United Kingdom.  The announcements were made in tandem with the UK’s international partners.
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Continue Reading UK Announces Further Russia Sanctions with Expanded Services Ban; New Export Ban on Goods; Asset Freeze Measures; and Measures Relating to the Failure of Sanctioned Russian Banks

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