The amendments in Regulation No. 4 are technical in nature and service numerous aspects of the UK’s Russia sanctions programme. In contrast the amendments in Regulation No. 5 extend coverage of current UK sanctions so that the regime closely aligns with EU/G7 measures (for EU measures please refer to its 12^th Package on Russia, see our earlier blog here).

As regards the enhancements, the amendments introduce prohibitions on the following key areas:

• The import and acquisition of diamonds and diamond jewellery from Russia
• The import and acquisition of metals from Russia
• The provision of certain services in relation to luxury goods

The amendments also make certain clarificatory changes to UK sanctions on payment processing, including the application of sanctions on the processing of payments by UK institutions in currencies other than Sterling.

Finally, the changes introduce two new licensing grounds: firstly, the UK competent authorities may now issue licences to authorise “relevant transfers” for the purposes of divesting from investment held by  UK persons in Russia; secondly, licences may be issued entitling a UK person to acquire interests from designated persons provided any consideration due to the designated person is placed in a frozen account.

The No. 4 Regulations are effective from 15 December 2023 and amend the 2019 Regulations.

As relevant to the description above, they introduce changes to payment processing prohibitions, definitions of certain products, trade in luxury goods, and exceptions. New prohibitions on trade in certain metals are established, and reporting obligations are introduced for relevant firms and designated persons. The introduction of new licensing grounds is catered for, as indicated above, as well as further penalties for breaches. Regulation 22 details various changes to prohibitions on critical-industry goods, defence and security goods, luxury goods, and expands the exceptions from the prohibitions on G7 dependency and further goods in case of emergencies.

The No. 5 Regulations are effective from 1 January 2024 and amend the 2019 Regulations. These regulations prohibit the import, acquisition, supply, and delivery of diamonds and diamond jewellery from Russia. Certain exceptions, offences and investigatory powers are additionally introduced or enhanced.

The 2019 Regulations, including ongoing amendments, are fully extended to the UK Overseas Territories by virtue of the Russia (Sanctions) (Overseas Territories) 2020, as such the amendments above nominally apply in UKOTs including the British Virgin Islands, the Cayman Islands and Bermuda. However, it is also expected that further amendments will be made, in due course, to tailor the amendments more suitably to the circumstances of the UKOTs. These amendments would be through changes to the 2020 Order.

The Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2023 can be found here.

The Russia (Sanctions) (EU Exit) (Amendment) (No. 5) Regulations 2023 can be found here.