PART 3Finance
CHAPTER 2Other financial and investment restrictions
F2Investments in relation to Russia18B
1
A person (“P”) must not carry on an activity mentioned in paragraph (2) if P knows, or has reasonable cause to suspect, that P is carrying on such an activity.
2
The activities in this paragraph are—
a
directly acquiring any ownership interest in land located in Russia;
b
indirectly acquiring any ownership interest in land located in Russia for the purpose mentioned in paragraph (3);
c
directly acquiring any ownership interest in or control over a person, other than an individual, connected with Russia;
d
indirectly acquiring any ownership interest in or control over a person, other than an individual, connected with Russia for the purpose mentioned in paragraph (3);
e
directly or indirectly acquiring any ownership interest in or control over a relevant entity for the purpose mentioned in paragraph (3);
f
directly or indirectly establishing any joint venture with a person connected with Russia;
g
opening a representative office or establishing a branch or subsidiary located in Russia; or
h
providing investment services directly related to an activity referred to in sub-paragraphs (a) to (g).
3
The purpose mentioned in paragraph 2(b), (d) and (e) above is making funds or economic resources available—
a
directly or indirectly to a person connected with Russia; or
b
for the benefit of a person connected with Russia.
4
For the purposes of paragraph (3)—
a
economic resources are made available to a person connected with Russia only if that person would be likely to exchange the economic resources for, or use them in exchange for, funds, goods or services;
b
making funds or economic resources indirectly available to a person connected with Russia includes, in particular, a reference to making them available to a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by a person connected with Russia; and
c
funds or economic resources are made available for the benefit of a person connected with Russia only if that person thereby obtains, or is able to obtain, a significant financial benefit, and “financial benefit” includes the discharge (or partial discharge) of a financial obligation for which the person connected with Russia is wholly or partly responsible.
5
Paragraph (1) is subject to Part 7 (Exceptions and licences).
6
A person who contravenes a prohibition in paragraph (1) commits an offence.
7
In this regulation, the reference to a person (“P”) directly or indirectly acquiring any ownership interest in or control over a person or entity means—
a
P directly or indirectly acquiring any share in the person or entity;
b
P directly or indirectly acquiring any voting rights in the person or entity;
c
P directly or indirectly acquiring any right to appoint or remove a majority of the board of directors of the person or entity; or
d
P directly or indirectly acquiring any means of ensuring that the affairs of the person or entity are conducted in accordance with the wishes of P where it is reasonable, having regard to all of the circumstances, to expect that P would (if P chose to) in most cases or significant respects, by whatever means, be able to do so.
8
In this regulation—
“branch” means, in relation to a person other than an individual, a place of business which forms a legally dependent part of that person and which carries out all or some of the transactions inherent in the business of that person;
“investment services” has the same meaning as it has in regulation 16 (dealing with transferable securities or money-market instruments);
“relevant entity” means a person, other than an individual, which F1... is not a person connected with Russia.