Financial Crime World

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Breaking News: Two Legal Fees Caps Can Now Be Combined for Designated Persons

In a significant development, the UK’s Office of Financial Sanctions Implementation (OFSI) has announced that two legal fees caps can now be combined for designated persons, subject to meeting certain licence terms.

Simplifying the Process

The new policy aims to simplify and streamline the process for firms providing legal services to designated individuals. Under the previous regime, firms were required to obtain separate licences for each fee cap. However, this change will allow firms to combine both pre-designation and post-designation fees under a single licence.

Reporting Requirements Remain Unchanged

The reporting requirements for designated persons remain unchanged. Firms must still report any funds or economic resources held on behalf of the Central Bank of Russia, Russian Ministry of Finance, or Russian National Wealth Fund to OFSI. Designated persons are also required to disclose their UK assets (or worldwide assets if they are UK persons) subject to a bespoke penalty threshold.

SRA Guidance and Reporting Obligations

The Solicitors Regulation Authority (SRA) has published guidance on complying with sanctions, including financial sanctions, anti-money laundering, strategic litigation against public participation (SLAPPs), and continuing to act for clients. The SRA is also conducting spot checks on firms to assess compliance with the financial sanctions regime.

Indicators of Sanctions Evasion Risk

The UK Financial Intelligence Unit has introduced a suspicious activity reports (SARs) glossary code, XXSNEXX, for reporting activities linked to sanctioned Russian entities. The Economic Crime (Transparency and Enforcement) Act has removed the knowledge test from breach offences, making it easier to detect and report sanctions evasion.

Resources and Support

For firms seeking guidance on complying with UK sanctions, OFSI’s frequently asked questions (FAQs) provide technical information on UK sanctions. The Foreign, Commonwealth and Development Office (FCDO) resources are also available for firms providing legal services to designated individuals.

Contact Information

If you have any questions or need further guidance, please contact: