UK announces new sanctions on professional services following annexations
On 30 September 2022, the UK announced further proposed Russian sanctions, in response to the Russian annexation of Ukrainian regions, Donetsk, Luhansk, Kherson, and Zaporizhzhia.
New services and goods export bans, targeted at vulnerable sectors of the Russian economy have been announced. The UK will prevent Russian access to:
- IT consultancy services
- Architectural services
- Engineering services
- Advertising services
- Transactional legal advisory services
- Auditing services
It was also stated that the export of almost 700 goods from the UK to Russia will be banned.
The UK will suspend the process by which actions taken to manage the orderly failure of Russian banks are recognised under the laws of the United Kingdom, in cases where the bank is a sanctioned entity.
Ban on transactional legal services and auditing
The UK government did raise the prospect earlier in May 2022, following the introduction of restrictions on accounting, management consulting and public relations services, that it would be keeping a watching brief on additional services to be restricted, chief among them transactional legal services.
As ever with announcements, we have at this time little concrete details as to what will be included in the restriction, and whether any exceptions will be provided. However the reference to “transactional” would imply that litigious or compliance related legal services may be outside of scope. All we can do at this stage is speculate.
As for auditing, it will be key to understand how this restriction will be implemented and whether it will in practice prevent companies subject to audit requirements from remaining in good standing under local law.
Sanctioning of the Governor of the Central Bank
Finally, Elvira Nabiullina, the Governor of the Central Bank of the Russian Federation has been sanctioned and is subject to an asset freeze and travel ban. In her role, Nabiullina has been focussed on for her role in steering the Russian economy through the war against Ukraine and extending the ruble into the Ukrainian territories occupied by Russia.
UK’s press release can be found here.