December 19, 2022

UK amends Russia-related sanctions to expand financial and trade restrictions; issues related general license

The United Kingdom has adopted the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations (“Amendment 17”) to expand the restrictions imposed upon Russia in an effort to encourage Russia to end its destabilizing actions in Ukraine.  The expanded restrictions, which were presented to Parliament on December 15, 2022, went into effect on December 16, 2022.

Amendment 17 broadens the scope of existing financial sanctions and trade sanctions.  Financial sanctions were expanded with the addition of trust services to the list of services that UK individuals and entities are prohibited from providing to persons connected to Russia or for the benefit of a person connection with Russia.  Amendment 17 also closed loopholes for existing restrictions on securities and money market instruments (Regulation 16) and credit and loan arrangements (Regulation 17).  The amendment also suspended the Bank of England’s duty under Banking Act 2009 to make a decision regarding the notification of third-country resolution actions concerning designated persons or the entities that they own or control.

Trade sanctions were also expanded to include prohibitions on the export of critical goods such as camouflage, oil production and mining equipment, while five additional chemicals were added to the list of products prohibited for being defense and security goods and defense and security technology.  Amendment 17 also specifically prohibits several new trade-related services, including auditing, advertising, architectural, engineering, information technology, consultancy, and design services. 
Amendment 17 also provides limited exceptions and licenses to allow for wind down operations with Russian firms and groups and accommodations for certain service agreements and transactions initiated prior to December 16, 2022.  

In light of the adoption of Amendment 17, HM Treasury’s Office of Financial Sanctions Implementation also issued General license INT/2022/2448692 under Regulation 64 of the Russia (Sanction)(EU Exit) Regulations 2019 to authorize a 7-day wind down period with respect to the financial prohibitions in Regulation 16 (securities), Regulation 17 (loans), and Regulation 18B (investments in relation to Russia). GL INT/2022/2448692 is effective from December 16, 2022 through December 22, 2022.  Persons who choose to utilize this general license are required to keep accurate, complete and readable records of permitted transactions for a minimum of 6 years, and the records must be shared with OFSI upon request.

The Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 | Explanatory Memorandum | Impact Assessment | General License – INT/2022/2448692