UK Trends and Developments Contributed by: Roger Gherson, Thomas Cattee, Lisa Uttley and Amalia Gherson, Gherson Solicitors
ously suspect you may be sanctioned, however, may be interpreted as sanctions circumvention after the fact, with penalties that can be extreme (including imprisonment). The truth of the matter is that substantial Russian investors in the UK and Europe have been effec - tively deprived of their assets. Sanctions, purported to be temporary measures, have, in practice, proven permanent in all but a few cases over the last four years. Crucially, the sanctions regimes are not crimi - nal processes and the rules of evidence required for their imposition are therefore set at a very low level. Newspaper articles, which are taken at face value, as well as existing or historic business interests in the sanctioned country, are a sufficient basis on which to have an individual sanctioned. The reason for emphasising this to advisors is that, most regrettably, the protections for individual rights and property in the UK and Europe which it took the Second World War to codify (such as the 1950 Euro - pean Convention on Human Rights) have been signifi - cantly undermined following the conflicts of the last few years. Moreover, once the conflicts are over, it is far from a foregone conclusion that those rights will automatically be restored. The sanctioning of thou - sands of individuals at the stroke of a pen, without considered evidence and without any effective execu - tive accountability or judicial oversight, does not offer any long-term security for the protection of wealth. This is precisely why advisors who are weighing up their clients’ jurisdictional options need to have diver - sification very much at the forefront of their minds. Reputation Reputation is attributable to the country of choice and it has been outlined above how the current sanctions regimes have severely damaged the reputations of Europe and the UK. The European economies (includ - ing the UK) are all gradually moving towards a war footing and it is inevitable that for some, conscription and military service will be reintroduced. This must also be a consideration. Individual reputation is also becoming a problem. Russian businessmen who were once welcomed with open arms in the UK and Europe and even courted
by politicians, bankers and lawyers, became persona non grata overnight on 24 February 2022. Russians across the UK and Europe were turned into pariahs: their assets were frozen, travel bans were imposed and their children thrown out of private school, whilst the lawyers, bankers and accountants who had built their careers and reputations on servicing them turned their backs on them with no notice. The justification was that these individuals were sup - porting Russia’s war economy and the UK needed to put pressure on the Russian Government to stop the hostilities. We are now four years down the road and it is evident that the sanctioning of these individuals has not stopped the conflict. Yet, a legal system that took hundreds of years to create a matrix of protec - tions has been severely undermined. No matter what reputation a person has today, it can be destroyed tomorrow by the stroke of a politician’s pen based on an old tabloid article and a historic or current busi - ness in the sanctioned country. The net result is that individual reputations have been ruined and people’s life’s work destroyed completely and irrevocably. Even unsanctioned individuals have often been tar - geted by banks, with their accounts being frozen or closed. It would also seem that sanctioned individuals can be defamed in the UK at will, because the legis - lation in place effectively forbids a court challenge: lawyers are not permitted to be remunerated for their work and any licence application for payment of their professional fees is likely to be refused. It should be noted that the European system is more respectful of this particular right. UK and European nationals with business relation - ships in Russia, on the other hand, have also been targeted and forced to disinvest, leading similarly to the destruction of what in many cases would have been decades of work. Again – diversification must remain a priority – because if reputation is damaged or destroyed, the prospect of economic survival may be severely impacted. Mobility Mobility is as essential a concern as diversification. Second passports may be advisable in theory, but specialist advice should be taken depending on the
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