Regulatory Outlook

Sanctions and export control | UK Regulatory Outlook September 2023

Published on 27th Sep 2023

Guidance on Russian iron and steel import ban | OFSI publishes guidance on disclosure enforcement powers | HM Treasury frozen assets review 2023 | FCA publishes guidance on identifying and assessing sanctions risks

Guidance on Russian iron and steel import ban

As previously reported, UK sanctions in relation to the import of Russian iron and steel products processed in third countries will come into force on 30 September 2023.

The Department for Business & Trade and the Department for International Trade have now published specific guidance on third country processed iron and steel of Russian origin to help businesses comply with the measure.

The guidance explains the scope of the ban and the supply chain evidence the business can provide to demonstrate compliance.

OFSI publishes guidance on disclosure enforcement powers

On 31 August 2023, the Office of Financial Sanctions Implementation (OFSI) updated section 10 of its Enforcement and Monetary Penalty Guidance to provide further details on how it assesses the severity of financial sanctions breaches.

The updated guidance provides clarification on the circumstances in which OFSI will make a disclosure notice rather than issue a monetary penalty, the timing of case summary publications, and the details which may be included in such a publication, which may include:

  • the identity of the designated person to whom the breach relates;
  • the summary of the facts of the case;
  • the aggregated value of the transactions involved in the breach;
  • compliance lessons OFSI wishes to highlight in the case; and
  • other information required to give a true understanding of the case and OFSI's considerations of it.

Please see our Insight for further information.

HM Treasury frozen assets review 2023

The deadline for HM Treasury's annual frozen assets review is 10 November 2023.

The frozen asset reporting exercise requires all persons holding or controlling funds or economic resources belonging to a designated person to complete the required reporting form. The report must include the value of all frozen assets as at close of business on 29 September 2023.

A reminder that the report must be made using the new frozen assets reporting template that was published by HM Treasury and OFSI on 8 September 2023. 

FCA publishes guidance on identifying and assessing sanctions risks

On 6 September 2023, the Financial Conduct Authority (FCA) published the key findings from its assessment of sanctions systems and controls in financial services firms.

The FCA identified examples of good practice and areas for improvement in five key areas.

Firms are now expected to consider the findings in order to evaluate their approach to identifying and assessing sanctions risks and to take action where appropriate.

Please see our Insight for further information.

DBT issues general trade licence for legal advisory services

On 11 August 2023, the Department for Business & Trade issued a general licence permitting the direct or indirect provision of legal advisory services in relation to Russian sanctions.

The general licence permits the provision of legal advice on whether a client's proposed activity was prohibited by sanctions issued from other jurisdictions by UK lawyers.

 OFSI's Russia sanctions guidance can be found here.

OFSI amends general guidance relating to rejected licence applications

OFSI amended its UK Financial Sanctions General Guidance in relation to options available following a rejected general licence application.

Section 6.12 on "Refusal of a licence" has been amended to remove the option to request a review of its decision from OFSI. As such, where applications for a licence is refused, only the following options remain:

  • re-applying with new or supplementary evidence or supporting arguments;
  • re-applying under a different derogation; or
  • challenging the decision in the courts.

* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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