Our latest update on the sanctions response to the conflict in Ukraine summarises the new internet-related restrictions introduced by the UK, and provides a round-up of certain other recent UK and EU developments.
UK – new sanctions legislation
The Russia (Sanctions) (EU Exit) (Amendment) (No. 9) Regulations 2022 (the “Amending Regulations”) were published on 27 April, and came into force on 29 April. They amend the UK’s principal Russia sanctions legislation, the Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”).
The Amending Regulations introduce new restrictions on the provision of certain internet services to or for the benefit of designated persons (meaning persons designated for the purposes of this provision, and not necessarily all designated persons subject to an asset freeze). The specific restrictions are as follows:
- A person who provides a social media service must take reasonable steps to prevent content that is generated directly on the service, or uploaded or shared on the service, being encountered by a user of the service in the UK.
- A person who provides an internet access service must take reasonable steps to prevent a user of the service in the UK from accessing an internet service provided by a designated person.
- A person who provides an app store must take reasonable steps to prevent a user of that store from downloading or otherwise accessing an internet service provided by a designated person.
Failure to comply with any of the above requirements is an offence.
The Amending Regulations also introduce powers for OFCOM in relation to these restrictions, including the power to: (i) request information and documents for the purposes of monitoring compliance, and (ii) impose civil monetary penalties of up to £1 million for breach.
The UK’s statutory Russia guidance was updated on 29 April to refer to the Amending Regulations and confirms that designations for the purposes of these new measues will be made by the Secretary of State and published on the UK sanctions list. At the time of writing, no updates had been made to the list since the new designation powers came into force. The statutory guidance also notes that companies providing the above internet services should “check whether an entity has been designated by the UK Government for this purpose and take the necessary action to ensure compliance with the prohibitions”.
UK announces additional trade sanctions – not yet in force
On 21 April, the UK government announced further trade sanctions against Russia, comprising an import ban on “silver, wood products and high-end products from Russia including caviar” and a 35% increase on certain products from Russia and Belarus, including diamonds and rubber. The list of goods subject to additional duties can be found here.
Legislation enacting these measures has not yet been introduced.
UK – new designations
On 21 April, OFSI announced the addition of 26 individuals and entities to the Russia asset freeze list. According to the press release accompanying the designations, these include key leaders in the Russian army, other individuals actively supporting the invasion of Ukraine and a series of individuals and entities linked to Russia’s military and defence capabilities who have already been designated by international partners.
UK updates listing reasons
On 26 April the Office of Financial Sanctions Implementation (“OFSI”) announced the amendment of 195 entries on the UK asset freeze list. Those amendments were made to update the “statement of reasons” for the relevant listings which had originally been made under the new “urgent procedure”. As described in more detail in our recent briefing on the changes introduced by the Economic Crime (Transparency and Enforcement) Act 2022, the urgent procedure allows the UK to designate individuals and entities who have already been designated under sanctions imposed by certain other jurisdictions. However, listings made under the urgent procedure must be “recertified” after a set period, requiring the UK government to confirm that it has reasonable grounds to suspect that the person meets the criteria for designation under the relevant UK sanctions legislation (in this case, the Russia Regulations).
These updated listings represent the first wave of recertifications since the urgent procedure was introduced in March.
UK – general licences (“GLs”)
OFSI published a new GL – GL INT/2002/1679676 – on 27 April to permit actions which would otherwise contravene the asset freezes imposed by the Russia Regulations and the UK’s global anti-corruption sanctions regime for the purposes of asset recovery and other related activities. These include activities such as compliance with court orders and forfeiture notices, and actions to give effect to negotiated settlement or deferred prosecution agreement with a law enforcement agency. The GL is of indefinite duration and persons wishing to rely on it must comply with certain reporting and record-keeping requirements, as summarised in the publication notice.
On 21 April, OFSI published a GL in relation to Gazprombank (GL INT/2022/1630477) which permits contractual payments to Gazprombank and its subsidiaries for the purpose of making gas available for use in the EU, and related activities including the opening and closing of bank accounts. Persons relying upon the GL must keep records for a minimum of six years. The GL expires on 31 May 2022.
EU – publication of further Commission FAQs