The UK has adopted The Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 . See here for explanatory memorandum accompanying this legislation.
Updated guidance on Russia Sanctions has been published in order to reflect the changes introduced by the latest legislation.
The new legislation introduces and expands on current trade and financial sanctions and comes into force on Friday, 16 December 2022.
Trade sanctions
- Prohibits the direct and indirect provision of the following additional business services to a person connected with Russia: auditing services; advertising services; architectural services; engineering services; and IT consultancy and design services.
The legislation provides for further clarification and definitions of the various prohibited business services and includes a number of different exemptions depending on the specific business service involved. Unlike the business services prohibitions introduced by the US, the EU and a number of other G7 economies, there is no UK exemption for services provided to the subsidiaries of UK parent companies. This is instead a licensing ground.
- Expands the current prohibitions on the export, supply and delivery, and making available of additional products (as well as related technical assistance, financial services and funds, and brokering services), caught by the critical-industry goods and critical-industry technology schedule. This measure includes prohibitions on camouflage, oil production and mining equipment.
- Expands the current prohibitions on the export, supply and delivery, and making available of additional products (as well as related technical assistance, financial services and funds, and brokering services), caught by the defence and security goods and defence and security technology schedule. This measure includes prohibitions in relation to five additional chemicals.
- Notably, the package does not contain a previously-announced ban on the provision of transactional legal advisory services to Russia, which is anticipated in the near future.
Financial sanctions:
- Prohibits the provision of services related to trusts or similar arrangements to, or for the benefit, of persons designated for the purposes of this measure; and on providing new services related to trusts or similar arrangements to, or for the benefit of, persons connected with Russia.
- Suspends the Bank of England’s duty under the Banking Act 2009 to make a decision in respect of a notification of third-country resolution action in respect of designated persons or persons owned or controlled by designated persons. Resolution is the process by which regulatory authorities manage the orderly failure of financial institutions.
- Amends existing restrictions on dealing with securities or money market instruments and loans and credit arrangements to persons connected with Russia to close certain loopholes.
Limited exceptions and licensing grounds are in place in relation to these measures. They include statutory licensing for the provision of trust services, and exceptions related to pre-existing service contracts.
The UK has also introduced General Licence INT/2022/2448692 which allows for a 7 day wind down period in respect to financial prohibitions in Regulations 16, 17 and 18B of the Russia Regulations with respect to securities, loans and investments in Russia. The General Licence takes effect from 00:01 on 16 December 2022 and expires at 23:59 on 22 December 2022.
