UK Law and Practice Contributed by: John Binns, BCL Solicitors LLP
1. Trends and Overview 1.1 Sanctions Market
in connection with financial sanctions (which now apply, for instance, to letting agents and art market participants); • to expand the availability of strict-liability monetary penalties (which previously applied only to breach - es of financial sanctions) to cover, in addition, breaches of trade and transport sanctions; and • to impose (on most existing DPs) director disquali - fication sanctions, which prevent them from acting in the UK as a director (whether formally or other - wise) of a company or similar entity. A new regime to tackle those involved in illegal immi - gration (including those facilitating arrivals of asy - lum seekers from France on “small boats”) has been announced, but with regulations (including clarity on, among other things, the scope of alleged involvement that would merit designation) still awaited at the time of writing. Broader Developments in UK Sanctions In addition to that: • Eugene Shvidler has appealed to the Supreme Court against the FCDO’s decision to maintain his listing, following a ministerial review (the judgment in this appeal is awaited at the time of writing); • OFSI has continued its use of the monetary penalty regime, notably including a penalty of GBP465,000 against the UK entity that ran the Moscow office of Herbert Smith Freehills, and released “threat assessments” to provide guidance on the specific sanctions risks to various sectors (to whom report - ing obligations apply); and • civil penalties have also been imposed by other regulators for sanctions-related failures, notably including a GBP29 million fine on Starling, a chal - lenger bank, by the Financial Conduct Authority. 1.3 Key Industries The impact of UK sanctions has been felt in various sectors; however, the financial services industry has undoubtedly been the most affected. Various profes - sional sectors, including accountants, lawyers, and trustees, have been affected by the bans imposed as part of the UK’s response to Russia’s actions in Ukraine.
The UK’s sanctions sector continues to expand expo - nentially, principally as a result of measures taken in response to Russia’s continuing actions in Ukraine. Delays caused by under-resourcing in criminal enforcement have contributed to the UK’s sanctions enforcement landscape remaining relatively quiet, although this is beginning to change, with increased activity in both criminal prosecution and monetary penalties. 1.2 Key Trends Expanded Use and Provisions of the UK’s Sanctions Regimes The last 12 months or so have seen significant amend - ments to the UK’s Russia sanctions regulations and to the lists of designated persons (DPs) under them, which have been designed: • to lessen the restrictions applied to the government and economy of Syria, in recognition of the change of regime there; • to continue increasing the restrictions on the gov - ernment and economy of Russia, in the context of its ongoing hostile actions in Ukraine; • to de-list (albeit, at the time of writing, in numbers that remain stubbornly low, and notably lower than the equivalent regimes in the EU and else - where) individuals and entities that (in the view of the FCDO) should no longer be listed, for instance because of their conspicuous denunciation of the Russia regime or withdrawal from relevant busi - nesses; • to continue listing, under the ‘Magnitsky’ human rights sanctions regime, allegedly violent settlers in Israel, as well as (at the time of writing) a small number of targeted members of the Israeli govern - ment itself, based on public pronouncements, the UK government considers to be unacceptable; • to continue and expand the use of anti-corruption sanctions (the second of the two sets of regula - tions attributed to the ‘Magnitsky’ legacy) in the context of high-profile overseas corruption allega - tions; • to clarify and expand the scope of financial sanc - tions prohibitions, and of reporting requirements
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