UK Sanctions Updates: Key Points

The UK updated all of its financial sanctions regimes, including the one on Russia, with the introduction of the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 on November 14, 2024. These modifications aim to improve the UK sanctions framework’s clarity, enforcement, and compliance. Significant changes consist of:

Increased reporting requirements

• Financial penalty reporting is now mandatory for high-value dealers, art market players, bankruptcy practitioners, and letting agencies.
• Businesses must report not just alleged offences but also suspected breaches.

New standards for UK citizens

• All UK citizens with assets connected to designated people (DPs) must now provide OFSI with yearly reports listing all their assets.

Updates on licensing and exceptions

• Create a needed payment exception and a new insolvency licensing purpose.
• Modifications to existing licensing requirements and court rulings.

Increased authority to enforce

• Civil monetary penalties were created for violations of land prohibitions relating to Russia.
• Definitions of designated persons have been clarified, and companies owned or managed by DPs are now prohibited.

Other noteworthy modifications

• Amendments to the sanctions system against Russia make it clear that using trust instruments to act as a nominee shareholder is forbidden and falls under the prohibition of trust services.
• Treasury reporting requirements have been updated to define their purview about sanction-related duties.
• Changes to the reporting requirements for specific individuals are forbidden under Russian regulations.

Timeline for UK implementation

• Most of the modifications will go into effect on December 5, 2024.
• Beginning on May 14, 2025, high-value dealers, art market players, letting agencies, and bankruptcy practitioners will have reporting requirements; additional engagement is planned.

Important note on Overseas Territories:

We are monitoring developments and anticipate that the aforementioned reforms will soon be incorporated into the laws of the UK Overseas Territories (UKOTs), which include the British Virgin Islands, Cayman Islands, and Bermuda. Businesses that operate in the UKOTs should be aware of these developments and, if necessary, consider complying with them nonetheless.

New guidelines

To reflect these developments, OFSI updated its advice guidelines, which now include modifications for industries such as letting agents, insolvency practitioners, and participants in the art market. To guarantee compliance, be updated by looking over the most recent resources.

Here is a link to the Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024.

Please contact us immediately at GERAI LTD with any questions.