Key updates to UK sanctions legislation: What you need to know
Expanded reporting obligations
- High-value dealers, art market participants, insolvency practitioners, and letting agencies are now subject to financial sanctions reporting.
- Firms must report suspected breaches, not just suspected offences.
New requirements for UK persons
- All UK persons holding assets tied to designated persons (DPs) must now submit annual reports to OFSI detailing these assets.
Licensing and exceptions updates
- Introduction of a new insolvency licensing purpose and a required payments exception.
- Adjustments to pre-existing licensing purposes and judicial decisions provisions.
Enhanced enforcement powers
- Civil monetary penalties introduced for breaches of Russia-related land prohibitions.
- Clarified definitions of designated persons, extending prohibitions to entities owned or controlled by DPs.
Other notable changes
- Amendments to Russia sanctions regime clarifying that acting as a nominee shareholder, when acting through trust instruments, falls within the trust services restrictions and is prohibited.
- Updated Treasury reporting provisions to refine their scope in sanction-related functions.
- Modifications to reporting requirements for certain prohibited persons under Russia regulations.
UK Implementation timeline
- Most changes will take effect on 5 December 2024.
- Reporting obligations for high-value dealers, art market participants, letting agents and insolvency practitioners will start from 14 May 2025, with further engagement planned.
Important note on Overseas Territories:
The changes above have not yet been implemented into the laws of the UK Overseas Territories (UKOTs, such as the British Virgin Islands, Cayman Islands and Bermuda) but we expect these changes to be made soon and we are monitoring developments. Firms operating in the UKOTs should take note of these developments and, where appropriate, consider compliance with them in any event.
Updated guidance
OFSI has revised its guidance documents, including updates for sectors like letting agents, insolvency practitioners, and art market participants, to reflect these changes. Stay informed by reviewing the latest resources to ensure compliance.
The Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024 can be accessed here.
For more detailed information, OFSI’s blog post can be found here.
