As of 23.00 GMT on 31st December 2020, the UK no longer implements EU sanctions, but instead UK sanctions. The UK Sanctions and Anti-Money Laundering Act 2018 is now the legislation used to impose, lift, amend, and update sanctions and anti-money laundering (AML) regimes in the UK: these include financial sanctions, immigration sanctions, trade sanctions, aircraft sanctions, shipping sanctions, and money laundering regulations.
Additionally, the UK imposes financial sanctions through the Counter Terrorism Act 2008 and the Anti-Terrorism, Crime and Security Act 2001.
Complying with UK sanctions
OFSI maintains two lists of individuals and entities subject to financial sanctions:
- The ‘consolidated list’
This is a list of all asset freeze targets listed under UK autonomous financial sanctions legislation and UN sanctions. For companies that need to comply with UK sanctions regulations, it is imperative to note that there are already differences between entities listed in the EU sanctions regulations and entities listed in the UK sanctions regulations. 113 entities on EU sanctions regulations have not been designated in the UK so are no longer subject to an asset freeze / travel ban in the UK. The fact that the EU and UK sanctions lists have diverged is important. At any point the UK could impose sanctions on entities that are not sanctioned on EU lists, meaning UK companies should be vigilant and have responsive sanctions solutions to comply with such changes. - List of entities subject to capital markets restrictions
OFSI maintains a separate list of entities subject to specific capital market restrictions. These entities are not contained on the consolidated list, and can be found here. The entities concerned are solely Russian.
It is worth noting that, as per Section 2.2.3. of the OFSI UK Financial Sanctions General Guidance for financial sanctions under the Sanctions and Anti-Money Laundering Act 2018, the Home Office list of proscribed terrorist groups is not included in the consolidated list. UK entities that need to comply with UK sanctions need to ensure parties they interact with are appropriately screened against the aforementioned lists.
Further, new application forms must now be used for obtaining UK licences in relation to sanctions.
Applicability
UK financial sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world. This means that:
- All individuals and legal entities within the UK’s territory must comply with UK financial sanctions;
- All UK nationals and legal entities established under UK law, including their branches, must comply with UK financial sanctions, irrespective of where their activities take place.
The ‘Blocking’ Regulations
On 19th November 2020 the UK published guidance called ‘Protection of Trading Interests (retained blocking regulation)’. The EU’s ‘Blocking’ Regulation 2271/96 prohibits compliance with certain US sanctions relating to Iran and Cuba. US sanctions have extraterritorial reach meaning they can affect non-US persons, and the blocking regulation makes it illegal for protected persons to comply with the regulation. The UK guidance explains that the UK has retained this regulation and explains that the Secretary of State for International Trade, instead of the European Commission, will now administer requests for compliance with U.S. sanctions. This means at the point in writing there are no changes made to blocking regulations by Brexit from a compliance standpoint, other than the fact that requests made on the matter are now submitted to the UK Secretary of State for International Trade.
Support with UK Sanctions Compliance
For support with compliance with national and international sanctions, please contact our Regulatory Risk team members:
- Stacey Winters is a Partner in Deloitte’s Risk Advisory Practice
- Julia Bell is a Director in Deloitte’s Risk Advisory Practice
Key contacts:
Stacey Winters
Stacey Winters leads our Aerospace and Defence sector in the UK. Serving our most prominent Aerospace and Defence clients, Stacey has years of experience in supporting both commercial Aerospace and Defence programmes around the world. Her subject matter expertise is focused on regulatory risk and compliance, with a particular focus on export controls, including the US ITAR. Functionally, Stacey leads our Global Export Control and Sanctions practice, and has over 17 years’ experience in standing up compliance programmes for complex organisations with diverse global compliance obligations. Her experience spans organisational and functional design, programme development and management, automation, risk assessments, audits, and investigations, and Government liaison. Stacey also has global responsibility for our Risk Advisory services across the Aerospace and Defence sector. Stacey works with a number of our clients across industries, particularly in the field of sanctions compliance, and has recently supported a number of companies assessing the potential risks and opportunities presented by the lifting of EU sanctions against Iran. Her sanctions experience has focused on EU and US sanctions against Russia, Iran and the US trade embargo on Cuba. Stacey has worked across the media, telecommunications and energy sectors to help clients assess risk and implement effective internal controls when working with these jurisdictions. Stacey is on the editorial board of World ECR and an active member of various trade associations in the UK and the US. In 2008, Stacey was awarded Professional Woman of the Future by the Woman of the Future Awards and Real Business magazine and was named one of the UK’s “35 Women Under 35” by Management Today. She is an advocate for gender equality and enjoys her role as a mentor to inspiring young women. Stacey earned a B.A degree with Honors in Export Management and European Languages from Napier University, Edinburgh, Scotland. Stacey is mother of two boys and an active supporter for breast cancer research charities.
Julia Bell
Julia leads Deloitte’s Global Export Controls & Sanctions team in London. She has led compliance-enhancing projects for a number of years in a variety of industries, including financial services, consumer products, oil and gas, aerospace & defence, manufacturing and the technology, media and telecommunications industries. She is a specialist in US, EU, UK, French, German and other EU Member State military, dual-use and sanctions regulations. Julia has a thorough understanding of the export control challenges faced by companies involved in international trade activities. More broadly, Julia supports her clients in developing integrated compliance programmes to manage their regulatory compliance requirements (including export controls, ABAC and data privacy), with a focus on lean business requirements to manage regulatory obligations. Julia has also been involved in the development of a number of different technology solutions to manage export compliance requirements, and has supported clients to develop and implement their digital strategies for effective compliance management.
