Sanctions and export control | UK Regulatory Outlook July 2024

Office of Financial Sanctions Implementation

New guidance

The Office of Financial Sanctions Implementation (OFSI) updated its list of frequently asked questions on financial sanctions related to Russia with further guidance on:

• when a person can provide professional and business services when operating on or managing a trust; and
• what happens when an asset freeze is in place and, in particular, how the trust services sanctions interact.

OFSI has also amended section 9.6 of its financial sanctions guidance for Russia in relation to the circumstances under which a licence may be issued under the trust services restrictions.

General licences

General licence INT/2024/4881897: authorises UK designated persons and their representatives to make permitted payments (including tax, duty, national insurance contributions, penalties or interest) to the revenue authorities. The general licence takes effect from 1 July 2024 and is of indefinite duration.

Updated guidance on director disqualification sanctions

The UK government published the Sanctions (EU Exit) (Miscellaneous Amendments and Revocations) Regulations 2024 which came into force 16 May 2024 and amends a number of UK sanctions regimes, among other things, it has introduced director disqualification sanctions.

To reflect this new development, OFSI has updated its statutory guidance on the Global Human Rights Sanctions Regulations 2020 and Global Anti-Corruption Sanctions Regulations 2021 with information on the prohibitions and requirements imposed by the regulations, as well as best practice for complying with the provisions. The guidance should be read alongside more detailed sanctions guidance published by departments including the Home Office and HM Treasury.

Judge considers meaning of 'control' in Russia regulations

Article 7 of the Russia (Sanctions) (EU Exit) Regulations 2019 defines ownership and control by a designated person as either owning more than 50% of the shares in a company or "it is reasonable, having regard to all the circumstances, to expect that [the designated person] would (if [the designated person] chose to) be able, in most cases or in significant respects, by whatever means and whether directly or indirectly, to achieve the result that affairs of the [claimant company] are conducted in accordance with [the designated person's] wishes".

There has been conflicting case law on whether that means the designated person would be able to achieve that, if wanted, or whether it means existing influence needs to be established. The most recent case on the point, Hellard & Ors v OJSC Rossiysky Kredit Bank & Ors, followed the latter approach.

The judge also found that this view accorded with the (non-binding) guidance issued by OFSI in November 2023, following the Boris Mints judgment (as discussed in our Insight).