UK Authorities Tighten Grip on Sanctions Evasion with New Licensing Regime
To prevent the evasion of financial and trade sanctions, UK authorities have introduced new licensing regulations to ensure that individuals and businesses comply with restrictions in place.
Purpose of the New Regime
The purpose of these regulations is to prevent the misuse of frozen funds or economic resources by designated persons. Under this regime, individuals or representatives who are subject to asset freeze measures may apply for a licence from the Office of Financial Sanctions Implementation (OFSI) to use their frozen funds or economic resources.
Licensing Requirements
The regulations set out specific purposes for which OFSI may grant an individual licence, including:
- Basic needs
- Reasonable professional fees for legal services
- Extraordinary expenses
However, these requirements are subject to notification or approval from the UN Sanctions Committee, which may lengthen processing times or prevent licences from being issued in certain cases.
Trade Sanctions Licensing
The Department for Business and Trade (DBT) has taken responsibility for trade sanctions licensing. The Secretary of State for Business and Trade is ultimately responsible for decisions on granting or refusing licenses. Each application will be considered on a case-by-case basis to determine whether granting a licence would be consistent with the purposes of the sanctions regime and any UN or other relevant international law obligations.
Exceptions and Licensing Grounds
Licences may also be issued for certain trade activities that would otherwise be prohibited by the regulations, including:
- Supply, sale, or transfer of small arms, light weapons, or ammunition to specific entities in Haiti
- Certain goods transiting the UK, which are subject to control and may require a licence
In addition, transit control measures have been introduced for certain goods transiting the UK. The regulations also provide for directions in respect of immigration sanctions, including exemptions for travel ban purposes.
Guidance and Resources
Individuals seeking more information on exceptions and licensing grounds can find guidance on OFSI’s website. Details on licence applications and relevant forms can be found on GOV.UK. Those looking to export goods may need to submit an electronic export declaration to HMRC’s Customs Declaration Service or CHIEF based National Export System.
Important Notes
The UK authorities urge individuals not to assume that a licence will be granted and to refrain from engaging in any activities prohibited by trade sanctions until a licence has been issued.