UK Law and Practice Contributed by: John Binns, BCL Solicitors LLP
2.4 Reporting Obligations on Relevant Firms
While commonly referred to as an imposition of strict liability for sanctions breaches, this is not entirely accurate. Criminal liability remains unchanged, and monetary penalties for circumvention still require an
“Relevant firms” are required to inform OFSI as soon as possible if they know or have reasonable cause to suspect that any person: • is a DP; or • has breached a prohibition or failed to comply with a requirement under the provisions of the sanctions regulations. Legal advisers are not required to report if this would breach legal professional privilege (LPP). Relevant firms for this purpose include: • banks and other providers of financial services; • auditors, accountants and tax advisers; • lawyers and notaries; • trust and corporate service providers; • estate agents; • casinos; • crypto-asset exchange providers and custodian wallet providers; • high-value dealers; • art market participants; • insolvency practitioners; and • letting agents. Obligations of DPs on the Russia List DPs themselves (on the Russia list) are now also sub - ject to obligations to report their assets to OFSI. If the DP is a “UK person” (which includes UK citizens and UK-incorporated companies), this extends to all funds and economic resources owned, held or controlled anywhere in the world. Otherwise, it extends only to funds and economic resources owned, held or con - trolled in the UK. In practice, many DPs will also have obligations under the equivalent regimes in the UK’s Crown Dependen - cies (Jersey, Guernsey and the Isle of Man) and/or Overseas Territories (which include the BVI and the Cayman Islands).
intentional act. 2.3 Licensing 2.3.1 Derogation
Licences can be granted for acts that would other - wise breach sanctions regulations, either on a general basis (applying to anyone involved in described acts) or to specific individuals or entities. Where these are specific and relate to financial sanctions, licences are granted by OFSI and must be covered by one or more of a set of grounds listed in annexes to the regulations. For financial sanctions generally, these grounds include: • to enable the basic needs of a designated person (or their dependants) to be met; • to enable the payment of reasonable legal fees and related expenses; • to enable the payment of reasonable fees or ser - vice charges for the routine holding or maintenance of frozen funds or economic resources; • to enable DPs to satisfy prior obligations (arising before they were designated); • to assist in insolvency or restructuring proceed - ings; and • to cover extraordinary expenses or to address extraordinary situations. OFSI can also grant licences for the provision of trust services, while licences for the provision of other ser - vices (that would breach trade sanctions) and various goods are dealt with respectively by OTSI and by the Export Control Joint Unit (ECJU), part of the Depart - ment of International Trade. 2.3.2 Provision of Legal Services OFSI has granted a sequence of general licences for the payment of legal fees for or on behalf of desig - nated persons. These permit anyone to pay the fees of a DP (or an entity they own or control), subject to vari - ous thresholds (on rates, overall fees and expenses) and reporting requirements.
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