UK updates its trust services sanctions against Russia – BVI and Bermuda General Licences issued
On 21 March 2023, the UK Office of Financial Sanctions Implementation (OFSI) issued General Licence INT/2023/2589788 (General Licence) under Regulation 64 of the Russia (Sanctions) (EU Exit) Regulations 2019, further sharpening sanctions to close off UK trust service providers from providing trust services to designated persons.
Under the General Licence, individuals are allowed to wind down their provision of trust services to a designated person within 90 calendar days from the date of designation for the purposes of Regulation 18C. For instance, if a person is designated on 21 March 2023, the permission to wind down the provision of trust services will end at 23:59 on 18 June 2023. Those who use the General Licence must report to OFSI within 30 calendar days of undertaking any activity under it. Those who use the General Licence must report to OFSI within 30 calendar days of undertaking any activity under it. The report must include details of the trust services provided, as well as other relevant information. Evidence should be provided where applicable, and the report can be submitted using a designated form, here.
Individuals intending to use the General Licence should also refer to OFSI’s general guidance for financial sanctions under the Sanctions and Anti-Money Laundering Act 2018, here.
The revised Russia general guidance from OFSI provides clarification on how the trust services sanctions interact with other existing sanctions, such as those on professional and business services. Additionally, it confirms that all professional and business service sanctions remain in effect even when trust services are authorised, except where a licence or applicable exception allows the professional or business service to be permitted.
Like all UK sanctions measures, the trust services prohibitions also apply across the UK’s Crown Dependencies and Overseas Territories (OTs), with HM Treasury and Foreign, Commonwealth & Development Office (FCDO) supporting on their effective implementation. To ensure that this new measure can be implemented effectively in the OTs, an Order in Council was issued. OTs can issue General Licences with the consent of the Foreign Secretary and a number of OTs may want to mirror OFSI’s General Licence.
Furthermore, on 21 March 2023 the FCDO updated the UK Sanctions List. All persons currently designated under the Russia regime (total of 1,730 entries) have been amended on the Consolidated List and are now subject to trust services sanctions. The “Other Information” field for all entries has been amended to provide details of further financial restrictions, and the date trust services sanctions were imposed. All entries remain subject to an asset freeze and no further changes have been made to the Consolidated List. Further details can be found in the notice here.
On 21 March 2023, the BVI Governor issued General Licence No. 02 on wind down of trust services provided to designated persons, following the UK mandates under the Russia (Sanctions) (Overseas Territories) (Amendment) Order 2023 that is in force as of 9 March 2023 and the OFSI’s General Licence. BVI’s General Licence No. 02 can be found here.
Additionally, Bermuda’s Financial Sanctions Implementation Unit (FSIU) issued General Licence 2023/03GL under Regulation 64 of the Russia (Sanctions) (EU Exit) Regulations 2019 as extended by the Russia (Sanctions) (Overseas Territories) Order 2020. General Licence 2023/03GL, permits persons to undertake activity necessary to terminate an arrangement to provide trust services between them and a Designated Person, provided that the terms of the general licence are met. Bermuda’s General Licence can be found here.
Our recent blog post on the Russia (Sanctions) (Overseas Territories) (Amendment) Order 2023 can be found here.
Our previous blog post on the UK’s trust and trustee restrictions under the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022, can be found here.
Our ongoing blog post on the various packages of UK sanctions on Russia can be found here.