The Office of Financial Sanction Implementation, part of HM Treasury, recently published guidance for financial sanctions involving Libya (Sanction) (EU Exit) Regulations 2020 (the Regulations) in an effort to promote compliance in the UK. The Regulations enable the UK to impose financial, trade aircraft, shipping and immigration sanctions to satisfy its obligation to comply with the sanctions regime set out in the United Nations Security Council resolution (UNSCR) of 1970 and subsequent UNSCRs. The Regulations also have the additional purpose of providing the UK with the ability to promote human rights, protect Libya’s peace and security, support Libya’s successful transition to a democratic, independent and united country, and prevent human trafficking and migrant smuggling in Libya. While different types sanctions may be imposed under the Regulations, the guidance only covers the financial sanctions regime.
The Regulations generally impose financial restrictions which include full asset freezes, partial asset freezes (which only apply to the Libyan Investment Authority (LIA) and the Libya Africa Investment Portfolio (LAIP) and certain subsidiaries), and prohibitions on certain financial transactions, such as financial transactions related to Libyan oil aboard UN-designated ships. The guidance provides a discussion on these restrictive measures as well as exceptions to these restrictions which automatically apply when certain circumstances are met without the need to obtain a license from OFSI. In situations where no exceptions apply, designated persons or stakeholders may apply for a license from OFSI if they are interested in dealing with funds or economic resources that are subject to a full or partial asset freeze. The guidance provides examples of certain circumstances in which an OFSI license can be requested.
The guidance also provides a general discussion on the OFSI consolidated lists and the UK Sanctions List, and defines certain terms that are commonly used in financial sanctions.