On August 20, 2024, the UK Office of Financial Sanctions Implementation and the Foreign, Commonwealth & Development Office updated their Ownership and Control: Public Officials and Control Guidance. The guidance applies to all sanctions regimes, including the Russia (Sanctions) (EU Exit) Regulations 2019. The update provides and overview of the criteria used by OFSI to determine if an entity is owned or controlled by a designated person and, therefore, subject to financial sanctions restrictions, including asset freezes. The guidance also indicates that individuals and entities found to be controlled by a designated person will be designated in their own right where possible. In addition, public officials are not generally considered to have control over the public bodies that they lead, and sanctions measures targeting public officials are not intended to prohibit routine transactions such as the payment of taxes, fees, and import duties, with public bodies.
According to the guidance, there is also no presumption that a private entity is subject to the control of a designated public official unless there is evidence to suggest that the official exercises control over the entity under UK sanctions regulations. The guidance also specifically confirmed that, for the purposes of regulation 7(4) of the Russia (Sanctions) (EU Exit) Regulations 2019, there is no presumption by the UK government that President Putin exercises “indirect or de facto control” over every entity in the Russian economy solely because he is Russia’s President.
Ownership and Control: Public Officials and Control guidance (updated August 20, 2024)