New sanctions reporting obligations in Anguilla, Bermuda, BVI and Cayman

On 7 November 2018, the Sanctions (Overseas Territories) (Amendment of Information Provisions) Order 2018 (the AIP Order) came into force. The AIP Order brings the rump of UK Overseas Territories into line with the equivalent regime under UK domestic legislation: financial institutions and professionals must now disclose any knowledge and suspicion of sanctions breaches and asset freezing measures imposed or face criminal penalty.

Why has the law changed?

The law was amended in order to bring the position on sanctions disclosures requirements in the UK Overseas Territories (UKOTs) into line with the position under UK domestic legislation. The UK domestic position was itself updated and enhanced on 8 August 2017 following the coming into force of the European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017.

Prior to the changes only limited categories of UKOT institutions were subject to disclosure requirements, everyone else was subject to a far looser obligation to provide “reasonable assistance” cooperating with the competent authorities in sanctions enforcement matters. This looser position broadly reflected the position taken under the EU Common Foreign and Security Policy (CFSP) which the UK is bound to implement in the UKOTs. The CFSP is the driving policy for the sanctions regimes in the EU, UK and UKOTs.

A copy of the AIP Order is available here.

Who is the change relevant to?

Prior to the passing of the AIP Order the only businesses expressly subject to mandatory disclosure requirements under UKOT sanctions regimes were banks and other similar credit institutions. Following the passing of the AIP Order this class of persons has been expanded to include “relevant businesses and professions” comprising:

  • trust and corporate services providers;
  • lawyers;
  • accountants;
  • auditors;
  • dealers in precious metals or stones;
  • real estate agents;
  • tax advisers; and
  • casinos.

What needs to be disclosed?

Under the amendments to the various sanctions regimes made by AIP Order all relevant businesses and professions must disclose any knowledge or suspicion in the event that:

  • a customer is subject to an asset freeze under one of the UKOT sanctions regime; or
  • an offence has been committed under one of those regimes.

Once a disclosure requirement has been identified it must be submitted to the competent authorities in the relevant UKOT.  The competent authorities typically comprise the Governor, the Ministry of Finance or the relevant financial intelligence unit, depending on the relevant sanctions regime in question.

Which sanctions regimes have been amended?

The AIP Order amendments apply to the following UKOT sanctions regimes:

  • Lebanon and Syria (UN measures, 2006); Tunisia (2011); Libya (2011); Egypt (2011); Belarus (2011), Iran (human rights, 2011); Iran (WMD-JCPOA, 2012); Syria (2012); Afghanistan (UN measures, 2012); Eritrea (2012); Zimbabwe (2012); Somalia (2012), DPR Korea (2012); Guinea-Bissau (2012); Guinea (Conakry, 2013); Ukraine (internal repression, 2014), Ukraine (sovereignty, 2014); Central African Republic (2014); South Sudan (2014); Sudan (2014); Yemen (2015); DR Congo (2015); Iraq (2015); Burundi (2015); ISIL and Al-Qaida (2016); Mali (2017); and Venezuela (2018).

Interestingly the sanctions regime on Russia, Crimea and Sevastopol (2015), which implements ‘sectoral’ sanctions on Russia and a blacklisting of Crimea and Sevastopol in the UKOTs has not been amended by the AIP Order. 

Note on Bermuda

Bermuda is not expressly included within the AIP Order further to UK-Bermudian constitutional arrangements that require Bermuda to implement the AIP Order domestically instead. Bermuda has done so under the Bermuda International Sanctions Amendment Regulations 2018. For completeness Gibraltar, being within the European Union, is also not legislated for under the AIP Order. References to UKOTs in this article should be read accordingly.

Next steps

In light of the extra obligations above it has never been more important for businesses and professionals in the UKOTs to fully understand the impact of the live sanctions regimes in existence. For many this will mean the imposition of sanctions compliance policies and training.

If you require any assistance in relation to sanctions reporting requirements, or measures required to ensure compliance, please feel free to reach out to your usual Harneys contact or any of the persons referred to in this note.