In this post we provide a round-up of key recent UK sanctions developments, including the introduction of new sanctions legislation regarding the diamond industry, a new General Licence and the launch of an inquiry into the effectiveness of sanctions.

New sanctions legislation

The first amending regulations of 2024 have been published: the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2024 (the “Amending Regulations“), which came into force on 1 March. The Amending Regulations insert a new Chapter 4JC into the Russia (Sanctions) (EU Exit) Regulations 2019 relating to “relevant processed diamonds” (namely diamonds which originated in Russia and have been processed in a third country).

The Amending Regulations introduce a prohibition on the import of relevant processed diamonds on or after 1 March 2024 (in respect of diamonds of one carat or more) or 1 September 2024 (in respect of diamonds of 0.5 carats or more). The Amending Regulations also include prohibitions on associated technical assistance, financial services and brokering services.

A General Trade Licence has been issued in respect of relevant processed diamonds of one carat or more which have not been located in Russia at any time from 1 March 2024 (and where the underlying diamond processed to produce the relevant processed diamond has similarly been outside the jurisdiction).

New General Licence (“GL”)

The Office of Financial Sanctions Implementation (“OFSI“) has introduced a new GL (GL INT/2024/4398024) relating to the payment of court fees. The GL permits the payment into a bank account held by the Court Funds Office of monies owed to designated persons pursuant to a court order.

The GL requires certain payment details to be made available to HM Treasury within 14 days of any such payment being made and those relying on the GL should keep relevant records for a minimum of six years.

Treasury Committee inquiry

On 29 February, it was announced that the Treasury Committee was launching a new inquiry into whether the UK’s programme of economic sanctions is having the desired effect, namely “hamper[ing] Putin’s ability to fund Russia’s armed forces”. According to the press release, the inquiry will look closely at OFSI’s work, as well as seeking to understand the extent to which it is possible to seize frozen Russian assets, and considering whether sanctions should be broadened to include any entities buying Russian oil and gas.

The Treasury Committee is seeking written evidence in the following areas by 28 March 2024:

  • whether financial sanctions instituted by the UK on Russia are complete and effective in terms of the entities that have been designated, and the entities which have to comply with the rules;
  • whether assets frozen under sanctions should be confiscated, and whether there are legal precedents for this;
  • whether financial sanctions imposed by the UK should be widened to include those who purchase Russian oil and gas;
  • the effectiveness of OFSI, including but not limited to in respect of guidance, licensing, the resources available to OFSI, enforcement work, implementation and enforcement of the oil price cap, international cooperation, work in the insurance sector, and work in the maritime sector;
  • “the effectiveness of the system of designation of financial sanctions, in that it relates to the implementation of financial sanctions, and the relationship between the designation and implementation of financial sanctions”;
  • the implementation of financial sanctions against Russia by the financial sector (including insurance) and the maritime sector; and
  • the mitigation of any unintended consequences of financial sanctions.

 

Susannah Cogman
Susannah Cogman
Partner
+44 20 7466 2580
Elizabeth Head
Elizabeth Head
Of Counsel
+44 20 7466 6443