New Russian Sanctions Framework for the UK

Last week we have seen the introduction of New Russian sanctions measures continuing to be introduced. Some of the restrictions have come into immediate effect, whilst others have forward reaching implementation dates.

The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 (the “Amending Regulations”) came into force on 21 July, and amended the UK’s principal Russia sanctions legislation, the Russia (Sanctions) (EU Exit) Regulations 2019 (the “UK Regulations”).

The new/Amending Regulations add a number of new prohibitions to the UK’s current sanctions regime, including in the following areas:

Restrictions relating to “G7 dependency and further goods” from 21 July 2022;

The new Schedule 3E to the Amending Regulations introduce restrictions in respect of a number of goods (Schedule 3 goods). The list of goods is quite wide in scope, and includes manufacturing plants, chemicals, machinery and components which may be used in multiple industries and sectors.

The Explanatory Memorandum to Schedule 3E states: “these goods have been identified as items of significant importance to the Russian economy and goods for which Russia particularly depends on the UK and G7 partners. By prohibiting Russian access to certain critical intermediate and vulnerable goods that power its economy, in particular the manufacturing sector, the UK will further isolate Russia’s economy and key industries that directly or indirectly support the war in Ukraine. The list of goods is wide-ranging and includes chemicals, materials, machinery goods and electrical appliances”.

Restrictions on the import of Russian oil from 31 December 2022;

The Amending Regulations state, that from 31 December 2022, it will be prohibited to:

  • import oil and oil products consigned from or originating in Russia,
  • directly or indirectly acquire such products which originated in or are located in Russia, with the intention of those goods entering the UK, and
  • supply or deliver oil and oil products from a place in Russia to the UK.

The Amending Regulations also contain related restrictions on technical assistance, financial services and brokering services. The full list of prohibitions is contained in Schedule 3F of the Regulations.

Restrictions on the import of Russian gold from 21 July 2022;

The new sanctions measures prohibit the import of gold which originates from Russia (and if exported from Russia on or after 21 July 2022), the acquisition of gold which originated in, or is located in, Russia with the intention of the gold entering the UK, and the supply or delivery of gold from a place in Russia or from a third country to the UK. The items subject to gold restrictions are listed in Schedule 3G.

Restrictions in relation to technical assistance, financial services and brokering services are also introduced.

Restrictions on the import of Russian coal from 10 August 2022;

In a similar way to the oil and gold restriction, the Amending Regulations prohibit the import of coal and coal products consigned from or originating in Russia, along with the acquisition, supply, and delivery of these products to the UK. The Amending Regulations also contain related restrictions on technical assistance, financial services and brokering services.

The list of relevant coal products is set out in Schedule 3H.

The provision of professional and business services from 21 July 2022;

The Amending Regulations also issue a prohibition on the provision of these services to a person connected with Russia:

(For these purposes a person connected with Russia is

(a) an individual who is, or an association or combination of individuals who are, ordinarily resident in Russia,

(b) an individual who is, or an association or combination of individuals who are, located in Russia,

 (c) a person, other than an individual, which is incorporated or constituted under the law of Russia, or

(d) a person, other than an individual, which is domiciled in Russia).

  • Accounting services, including:
    • accounting review services (i.e. review of annual and interim financial statements);
    • compilation of financial statement services;
    • other accounting services such as attestations, validation, preparation services of pro forma statements; and
    • bookkeeping services;
  • Business and management consulting services, meaning;
    • advisory, guidance and operation assistance services provided for business policy and strategy and the overall planning, structuring and control of an organisation.
    • management auditing, market management, human resources, production management and project management consulting;
  • Public relations services, relating to improving the image of clients and their relationship with the general public and other institutions.

Anti-Financial Crime Support – How can Complyport Help?

Our experienced Financial Crime and Forensics team led by Martin Schofield—one of the world’s leading specialists in the field—brings a wealth of experience to every project we are engaged in. Our highly experienced financial crime professionals and forensic experts, in subjects such as anti-money laundering, counter terrorist financing, anti-bribery and corruption and fraud and regularly help our clients navigate the complexities of the financial crime and money laundering environment. Services offered by Complyport include:

  • Financial crime health checks and audits,
  • Implementation of financial crime, AML, CTF, ABC, Fraud and market abuse controls and frameworks,
  • Ongoing advice on financial crime, AML, CTF, market abuse and fraud prevention,
  • Authoring/reviewing financial crime policies,
  • Outsourced MLRO support
  • Outsourced KYC and CDD support,
  • Assistance in identifying Politically Exposed Persons (PEPs),
  • Assistance in navigating international sanctions,
  • Support with preventing market abuse and insider dealing,
  • Expert Witness in Financial Crime cases
  • Forensics and Investigations
  • Design and/or delivery of online or face to face financial crime training

If this article has raised any questions, or you think your firm may require assistance, please contact either Martin Schofield via martin.schofield@complyport.co.uk or Jan Hagen via jan.hagen@complyport.co.uk to book in a free consultation.

About Complyport

Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.

Complyport advises and assists firms to become authorised and to comply with the rules and requirements of regulators on an ongoing basis. Our vision is to be there for our clients every step of the way, helping them change, grow, and excel through expertise, insight, and innovation, and in so doing to become our clients’ most valued supplier and trusted advisor.

We have successfully assisted over 1000 firms to become authorised with the FCA and EU and are providing regulatory support to over 600 regulated firms on an ongoing basis globally. With presence in the UK and EU, as well as via our Associates Network, Complyport can assist firms across multiple jurisdictions.

Complyport’s multidisciplinary consultants possess deep expertise in their field, having acted in FCA skilled person reviews, as expert witnesses in legal cases and as expert investigators for firms or their legal advisers.

Day to day, we conduct audits and reviews of a firm’s products, processes, policies, and procedures to identify scope for business, to determine the impact of regulatory developments and to verify compliance with local regulations. Our clients tell us we live our values; we are driven, agile and collaborative.

Facebook
Twitter
LinkedIn
COntact us for assistance

Please fill our free consultation form and a member of our team will get in contact with you.