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(This note is not part of the Regulations)
These Regulations are made under the Sanctions and Anti-Money Laundering Act 2018 (c. 13). They make miscellaneous amendments to most of the existing sanctions regulations.
They clarify that the prohibitions on the making available of funds or economic resources to any person for the benefit of a designated person extend to legal persons owned or controlled by that designated person (see, for example, regulation 2(2) and (3); see also regulation 9(2) and (3) for the counter-terrorism context).
They amend provisions relating to the notification requirements for licensing, to provide that written notice must be given to the licence applicant when a licence which authorises acts by a particular person is issued, varied, revoked or suspended (see, for example, regulation 2(6)).
They make a minor amendment to the duty on relevant firms to report a breach of certain sanctions. This makes clear that the duty is not simply to report a suspected offence but a suspected breach of sanctions or licensing requirements (see, for example, regulation (2)(7)(a)).
They require persons to provide annual reporting to the Treasury on funds or economic resources that they know or have reasonable cause to suspect they hold for a designated person (see, for example, regulation 2(7)(b)).
They add four types of firm to the list of “relevant firms” who are subject to relevant reporting obligations: high value dealers, art market participants, insolvency practitioners and letting agents (see, for example, regulation 2(9)).
They clarify for the purposes of the licensing of financial sanctions’ prohibitions and relevant exceptions for financial sanctions that a designated person includes a person who is owned or controlled by them (see, for example, regulation 2(4) and 2(12)(a)).
They make a minor clarification to the power given to public authorities to share information with the Treasury, to link this to the relevant sanctions regulations (see, for example, regulation 2(10).
For non-UN designated persons, they add a new exception for the purposes of financial sanctions to allow certain payments a designated person is required to make to certain authorities such as the Financial Conduct Authority and the Commissioners for HM Revenue and Customs (see, for example, regulation 2(5)); and an associated reporting obligation (regulation 2(8)). In the case of the Russia (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/855) (“the Russia Regulations”), they introduce an equivalent exception in relation to the prohibition on processing certain payments in regulation 17A of those Regulations (see regulation 15(7)).
For non-UN designated persons, the Regulations also change the scope of the licensing purposes, to enable the Treasury to license a wider class of case related to the implementation of judicial decisions (see regulation 2(12)(b)); and to introduce a bespoke purpose to enable licensing for certain insolvency positions (see regulation 2(12)(c)).
The Regulations amend the Democratic People’s Republic of Korea (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/411) to move the existing land prohibitions from Part 4 (Finance) to Part 6 (Trade) (see regulation 3(4) to (6)). The competent enforcement authorities for those prohibitions in that regime are the Department for Business and Trade (civil) and His Majesty’s Revenue and Customs (criminal).
The Regulations make some additional amendments to the Russia Regulations.
They clarify for the purposes of the trust services prohibition in regulation 18C of the Russia Regulations that acting as a nominee shareholder where that involves a trust or similar arrangement is to be considered a prohibited trust service (see regulation 15(4)).
They make minor amendments to clarify the reporting requirements that apply to the funds or economic resources of persons to whom financial services must not be provided by virtue of regulation 18A of the Russia Regulations (see regulation 15(10)(b)).
They create new civil monetary penalty powers for the Treasury in respect of prohibitions in the Russia Regulations relating to land located in non-government controlled Ukrainian territory or in Russia (see regulation 15(15))
The Regulations also amend the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (S.I. 2024/948) to include land prohibitions contained within the Russia Regulations in the definition of “excluded trade sanctions regulations”. These will be enforced by the Treasury.
A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sectors is foreseen.
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