March 22, 2023

UK expands Russia-related prohibitions on trust services and issues general license

On March 21, 2023, the UK Office of Financial Sanctions Implementation expanded restrictions related to the provision of trust services, and issued a new general license under Regulation 64 of the Russia (Sanction) (EU Exit) Regulations 2019 (“the Russia Regulations”) to further restrict Russian efforts to access trust services in the UK.  According to OFSI, this action was taken in response to enforcement agency evidence suggesting that UK-based trust and company service providers have been offering trust services to persons who may be subject to sanctions in the future.  The UK emphasizes that Regulation 18C (trust services) of the Russia Regulations has prohibited the provision of trust services for the benefit of persons connected with Russia since December 16, 2022 – a prohibition that was also extended to the provision of trust services to persons designated under Regulation 18C.  As of March 21, 2023, any person that is currently designated under Regulation 11 (asset freeze) is now also designated under Regulation 18C (trust services), unless permitted by a license or another exception.

In an effort to enable trust service providers to wind down services with designated persons, OFSI adopted General License INT/2023/2589788.  This general license allows providers to engage in transactions that would otherwise be prohibited by Regulation 18C for a period of 90 days.  These permissions expire on June 18, 2023.  The general license has reporting and record keeping requirements that require all persons that use the license to report to OFSI, within 30 days, certain details regarding the trust, certain trust participants, and the value and type of any assets dealt with in the trust.

The expanded trust service prohibitions apply to UK’s Crown Dependencies and Overseas Territories (“OTs”).  In order to ensure that the new trust measures are implemented in OTs, OFSI has made an Order in Council to enable OTs, with the consent of the Foreign Secretary, to issue a general license that mirrors OFSI’s General License.

OFSI Blog | General License INT/2023/2589788 | General License INT/2023/2589788 – Publication Notice