The Burma/Myanmar (Financial Restrictions) Regulations 2009

PART 1 Preliminary and general

Citation, commencement and application

1.—(1) These Regulations may be cited as the Burma/Myanmar (Financial Restrictions) Regulations 2009 and come into force on 18th June 2009.

(2) An offence may be committed under these Regulations by any person in the United Kingdom or by any person elsewhere who is—

(a) a British citizen;

(b) a British overseas territories citizen who acquired his or her citizenship from a connection with Gibraltar;

(c) a British subject under Part 4 of the British Nationality Act 1981(1) with the right of abode in the United Kingdom; or

(d) a body incorporated or constituted under the law of any part of the United Kingdom.

Interpretation

2.—(1) In these Regulations—

“the 2000 Act” means the Financial Services and Markets Act 2000(2);

“body corporate” includes a Scottish partnership;

“designated enterprise” has the meaning given by regulation 11;

“designated person” has the meaning given by regulation 3;

“document” includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include references to producing a copy of the information in legible form;

“the EC Regulation” means Council Regulation (EC) No. 194/2008 of 25th February 2008 renewing and strengthening the restrictive measures in respect of Burma/Myanmar and repealing Regulation (EC) No. 817/2006 as amended from time to time;

“economic resources” means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but may be used to obtain funds, goods or services;

“funds” means financial assets and benefits of every kind, including but not limited to—

(a)

cash, cheques, claims on money, drafts, money orders and other payment instruments;

(b)

deposits with financial institutions or other entities, balances on accounts, debts and debt obligations;

(c)

publicly and privately traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivatives contracts;

(d)

interest, dividends or other income on or value accruing from or generated by assets;

(e)

credit, rights of set-off, guarantees, performance bonds or other financial commitments;

(f)

letters of credit, bills of lading, bills of sale;

(g)

documents providing evidence of an interest in funds or financial resources;

“officer”, in relation to a body corporate, means—

(a)

in relation to a Scottish partnership, a partner; and

(b)

in relation to any other body corporate, a director, manager, secretary or other similar officer of the body corporate or any person who has purported to act in any such capacity;

“relevant institution” means—

(a)

a person who has permission under Part 4 of the 2000 Act (permission to carry on regulated activities); and

(b)

an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to the 2000 Act (EEA passport rights)(3) which has permission under paragraph 15 of that Schedule(4) as a result of qualifying for authorisation under paragraph 12 of that Schedule to accept deposits.

(2) The definition of “relevant institution” in paragraph (1) must be read with—

(a) section 22 of the 2000 Act (the classes of activity and categories of investment);

(b) any relevant order under that section(5); and

(c) Schedule 2 to that Act (regulated activities).

PART 2 Designated persons

Designated persons

3.  For the purposes of these Regulations a person is a designated person if—

(a) listed in Annex VI of the EC Regulation; or

(b) identified in a direction given by the Treasury under regulation 4(1).

Treasury’s power to designate persons

4.—(1) Where the Treasury have reasonable grounds for suspecting that a person is a person listed in Annex VI of the EC Regulation, the Treasury may give a direction that such person is designated for the purposes of these Regulations.

(2) The Treasury may vary or revoke any such direction at any time.

Publicising directions

5.—(1) Where the Treasury give a direction under regulation 4(1) they must—

(a) give written notice to the person identified in the direction; and

(b) publicise the direction generally.

(2) Where the Treasury vary or revoke a direction given under regulation 4(1) they must—

(a) give written notice of the variation or revocation to the person identified in the direction; and

(b) take such further steps as they consider appropriate to publicise the variation or revocation.

PART 3 Prohibitions and licences

Freezing funds and economic resources of designated persons

6.—(1) A person (including the designated person) must not deal with funds or economic resources owned, held or controlled by a designated person unless authorised by a licence granted under regulation 10.

(2) In paragraph (1), “deal with” means—

(a) in respect of funds—

(i) use, alter, move, allow access to or transfer;

(ii) deal with in any other way that would result in any change in volume, amount, location, ownership, possession, character or destination;

(iii) make any other change that would enable use, including portfolio management; and

(b) in respect of economic resources, exchange or use in exchange for funds, goods or services.

(3) A person who contravenes the prohibition in paragraph (1) is guilty of an offence.

(4) In proceedings for an offence under this regulation, it is a defence for a person to show that they did not know, and had no reasonable cause to suspect, that the funds or economic resources were owned, held or controlled by a designated person.

Making funds and economic resources available to designated persons

7.—(1) A person must not make funds or economic resources available, directly or indirectly, to or for the benefit of a designated person unless authorised by a licence granted under regulation 10.

(2) A person who contravenes the prohibition in paragraph (1) is guilty of an offence.

(3) In proceedings for an offence under this regulation, it is a defence for a person to show that they did not know and had no reasonable cause to suspect funds or economic resources were being made available, directly or indirectly, to or for the benefit of a designated person.

Exceptions

8.—(1) It is not an offence under regulation 6 or 7 to credit a frozen account with—

(a) interest or other earnings on that account; or

(b) payments due under contracts, agreements or obligations that were concluded or arose before the first date on which the account became subject to the provisions of Regulation (EC) No. 1081/2000(6), Regulation (EC) No. 798/2004(7), Regulation (EC) No. 817/2006(8) or the EC Regulation.

(2) It is not an offence under regulation 7 for a relevant institution to credit a frozen account where it receives funds transferred to the account by a third party.

(3) For the avoidance of doubt, regulation 6 applies to any funds credited to a frozen account in accordance with this regulation.

(4) In this regulation—

“frozen account” means an account with a relevant institution which is held or controlled by a designated person;

“third party” means a person other than the account-holder or the relevant institution with which the account is maintained.

Circumvention

9.  Any person who participates, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to—

(a) circumvent a prohibition in regulation 6(1) or 7(1), or

(b) enable or facilitate the commission of an offence under regulation 6 or 7,

is guilty of an offence.

Licences

10.—(1) The Treasury may grant a licence to disapply the prohibition in regulation 6(1) or 7(1) in relation to the acts specified in the licence.

(2) A licence may be—

(a) general or granted to a particular person or to a category of persons;

(b) subject to conditions;

(c) of indefinite duration or subject to an expiry date.

(3) The Treasury may vary or revoke a licence at any time.

(4) The Treasury, where they grant, vary or revoke a licence, must—

(a) in the case of a licence granted to a particular person, give written notice of the licence, variation or revocation to that person; and

(b) in the case of a general licence or a licence granted to a category of persons, take such steps as the Treasury consider appropriate to publicise the licence, variation or revocation

(5) Any person who, for the purpose of obtaining a licence, knowingly or recklessly makes any statement or furnishes any document or information which is false in a material particular is guilty of an offence.

(6) Any person who has done any act under the authority of a licence and who fails to comply with any conditions attaching to that licence is guilty of an offence.

PART 4 Designated enterprises

Designated enterprises

11.  For the purposes of these Regulations a person is a designated enterprise if—

(a) listed in Annex V or Annex VII of the EC Regulation; or

(b) identified in a direction given by the Treasury under regulation 12(1).

Treasury’s power to designate enterprises

12.—(1) Where the Treasury have reasonable grounds for suspecting that a person is a person listed in Annex V or Annex VII of the EC Regulation, the Treasury may give a direction that such person is designated for the purposes of these Regulations.

(2) The Treasury may vary or revoke any such direction at any time.

(3) The provisions of regulation 5 apply to any direction given by the Treasury under paragraph (1) as they apply to a direction given under regulation 4(1).

PART 5 Prohibitions concerning designated enterprises

Prohibition against financing designated enterprises

13.—(1) A person must not finance a designated enterprise.

(2) In this regulation, “finance” means—

(a) grant any loan or credit to a designated enterprise;

(b) acquire bonds, certificates of deposit, warrants or debentures issued by a designated enterprise being a person listed in Annex VII of the EC Regulation or a person whom the Treasury have reasonable grounds for suspecting of being such a person; or

(c) acquire or increase a participation or shareholding, including shares and securities of a participating nature, in a designated enterprise.

(3) A person who contravenes the prohibition in paragraph (1) is guilty of an offence.

(4) In proceedings for an offence under this regulation, it is a defence for a person to show that they did not know and had no reasonable cause to suspect that the body being financed was a designated enterprise.

Prohibition against creating a joint venture

14.—(1) A person must not create a joint venture with—

(a) a designated enterprise;

(b) a subsidiary enterprise of a designated enterprise; or

(c) a person under the control of a designated enterprise.

(2) A person who contravenes the prohibition in paragraph (1) is guilty of an offence.

(3) In proceedings for an offence under this regulation, it is a defence for a person to show that they did not know and had no reasonable cause to suspect that the joint venture was being created with a body falling within sub-paragraph (a), (b) or (c) of paragraph (1).

Exceptions

15.—(1) Subject to paragraph (2), a person is not guilty of an offence under regulation 13 if the financing of the designated enterprise takes place pursuant to an obligation, contract or agreement which arose or was concluded before the date on which the enterprise was first designated as indicated in Annex V or Annex VII of the EC Regulation.

(2) Paragraph (1) does not apply where the financing of a designated enterprise consists of—

(a) an increase in a participation or shareholding in the enterprise unless the person informs the Treasury of their intention to undertake such an increase before it takes place; or

(b) the acquisition of a participation or shareholding in a designated enterprise.

Trade contracts

16.  The prohibition in regulation 13(1) does not apply to—

(a) the execution of trade contracts for the supply of goods or services on usual commercial payment conditions; and

(b) any supplementary agreements connected with the execution of such contracts.

Circumvention

17.  Any person who participates, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to—

(a) circumvent the prohibition in regulation 13(1) or 14(1); or

(b) enable or facilitate the commission of an offence under regulation 13 or 14;

is guilty of an offence.

PART 6 Miscellaneous

Information gathering provisions

18.  The Schedule (which contains further provisions about information gathering) has effect.

Officers of a body corporate etc.

19.—(1) If an offence under these Regulations committed by a body corporate is shown—

(a) to have been committed with the consent or connivance of an officer of the body corporate; or

(b) to be attributable to any neglect on the officer’s part;

the officer as well as the body corporate is guilty of the offence.

(2) Paragraph (1) also applies to an institution which is not a body corporate, with the substitution for the reference to an officer of the body of a reference—

(a) in the case of a partnership, to a partner;

(b) in the case of an unincorporated body other than a partnership—

(i) where the body’s affairs are managed by its members, to a member of the body;

(ii) in any other case, to a member of the governing body.

Penalties

20.—(1) A person guilty of an offence under regulation 6, 7, 9, 10, 13, 14 or 17 or paragraph 4(b), (c) or (d) of the Schedule is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction—

(i) in England, Wales and Northern Ireland, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both; and

(ii) in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum or to both.

(2) A person guilty of an offence under paragraph 2(4) or 4(a) of the Schedule is liable on summary conviction to imprisonment for a term not exceeding three months or to a fine not exceeding level 5 on the standard scale or to both.

Proceedings

21.—(1) Proceedings against any person for an offence may be taken before the appropriate court in the United Kingdom having jurisdiction in the place where that person is for the time being.

(2) In England and Wales, summary proceedings for an offence may be tried by a magistrates’ court if any information is laid—

(a) before the end of 12 months from the date on which evidence sufficient in the opinion of the prosecutor to justify the proceedings came to the prosecutor’s knowledge, but

(b) not later than three years from the commission of the offence.

(3) In Scotland—

(a) summary proceedings for an offence may be commenced—

(i) before the end of 12 months from the date on which evidence sufficient in the Lord Advocate’s opinion to justify the proceedings came to the Lord Advocate’s knowledge; but

(ii) not later than three years from the commission of the offence; and

(b) section 136(3) of the Criminal Procedure (Scotland) Act 1995(9) (time limit for certain offences) applies for the purpose of this paragraph as it applies for the purpose of that section.

(4) In Northern Ireland, summary proceedings for an offence may be instituted—

(a) before the end of 12 months from the date on which evidence sufficient in the opinion of the prosecutor to justify the proceedings came to the prosecutor’s knowledge; but

(b) not later than three years from the commission of the offence.

(5) For the purpose of this regulation—

(a) a certificate signed by or on behalf of the prosecutor or the Lord Advocate as to the date on which such evidence as is referred to in paragraphs (2) to (4) came to the prosecutor’s or the Lord Advocate’s knowledge is conclusive evidence of that fact, and

(b) a certificate purporting to be so signed is presumed to be so signed unless the contrary is proved.

(6) In Scotland, where a constable reasonably believes that a person has committed or is committing an offence, the constable may arrest that person without a warrant.

(7) No proceedings for an offence, other than for a summary offence, may be instituted in England, Wales or Northern Ireland except with the consent of the Attorney General or, as the case may be, the Attorney General for Northern Ireland.

(8) Whether or not such consent has been given, paragraph (7) does not prevent—

(a) the arrest of any person in respect of an offence, or

(b) the remand in custody or on bail of any person charged with an offence.

(9) In this regulation, “offence” means an offence under these Regulations.

Notices

22.—(1) This regulation has effect in relation to any notice to be given to a person by the Treasury under regulation 5(1)(a) or (2)(a) or 10(4)(a).

(2) Any such notice may be given—

(a) by posting it to the person’s last known address; or

(b) where the person is a body corporate which has its registered or principal office in the United Kingdom, by posting it to that office.

(3) Where the Treasury do not have an address in the United Kingdom for a person, they must make arrangements for the notice to be given to the person at the first available opportunity.

The Crown

23.—(1) These Regulations bind the Crown, subject to the following provisions of this regulation.

(2) No contravention by the Crown of a provision of these Regulations makes the Crown criminally liable; but the High Court or in Scotland the Court of Session may, on the application of a person appearing to the Court to have an interest, declare unlawful any act or omission of the Crown which constitutes such a contravention.

(3) Nothing in this regulation affects Her Majesty in her private capacity; and this is to be construed as if section 38(3) of the Crown Proceedings Act 1947(10) (meaning of Her Majesty in her private capacity) were contained in these Regulations.

Revocation

24.  These Regulations revoke the Burma (Financial Sanctions) Regulations 2005(11), the Burma (Freezing of Funds) (Amendment) Regulations 2003(12) and the Burma (Freezing of Funds) Regulations 2000(13).

Dave Watts

Tony Cunningham

Two of the Lords Commissioners of Her Majesty’s Treasury

17th June 2009