Sanctions and export control | UK Regulatory Outlook March 2023

OFSI updates maritime services and oil price cap guidance

On 8 March 2023, the Office for Financial Sanctions (OFSI) updated its guidance on maritime services and the oil price cap exception.

The guidance now reflects the price cap on Russian refined oil products, and the introduction of the wind-down period for oil products loaded on ships before 5 February 2023. 

UK amends guidance on licensing for Russian sanctions

The UK's statutory guidance on Russian sanctions has been amended in relation to licences for various services (that is, accounting, advertising, architectural, auditing, business and management consulting, engineering, IT consultancy and design and public relations services to a person connected with Russia): a licence may now be granted "if it is necessary for ensuring critical energy supply to any country".

Update to OFSI enforcement guidance

On 16 March 2023, OFSI updated its Enforcement and Monetary Penalty guidance to include details on its approach to assessing breaches of financial sanctions where breaches involve an incorrect assessment of ownership and control of an entity.

Updated sanctions review request form

On 28 February 2023, the Foreign, Commonwealth and Development Office (FCDO) updated its sanctions review request form, for use by designated persons, UN listed persons, or persons acting on their behalf, to request a review of their designation or UN listing.

The form now specifies that the following information should also be submitted concurrently:

• proof of identity of the designated person;
• confirmation of your authority to act on behalf of the requester (where applicable); and
• evidence supporting the request.

Government announces £50m economic deterrence initiative

On 13 March 2023, the government announced the launch of a new UK Integrated Security Fund (UKISF), as part of the Integrated Review Refresh 2023, which updates the government's national security and international policies.

The UKISF will replace the existing Conflict, Stability and Security Fund (CSSF) and support the work of the new Economic Deterrence Initiative, which will tackle sanctions evasion across the UK's trade, transport and financial sanctions.

According to the government, £50 million in funding will be provided to improve the enforcement of the country's sanctions regime, in addition to working with the private sector to maximise the effect of sanctions against hostile actors.

Global Advisory issued by the REPO task force

The Russian Elites, Proxies and Oligarchs (REPO) task force, which is made up of representatives from many countries, including the UK, issued a global advisory on Russian sanctions evasion. The advisory identifies tactics such as the use of family members and close associates and the use of real estate as a vehicle to launder money.

Recommendations for regulated entities in the advisory include ensuring that their compliance programmes implement relevant anti-money laundering/combating the financing of terrorism (AML/CFT) laws and regulations and are regularly reviewed.

REPO members also reported that they had discovered trust arrangements that may have been designed to thwart sanctions enforcement.

Separately, on 21 March 2023, the FCDO announced that all persons designated under the Russian financial sanctions regime had also been designated for the purpose of trust services sanctions.