Publication
Australian Arbitration Week 2024
Australian Arbitration Week took place between 13 – 18 October 2024 in Brisbane.
United Kingdom | Publication | August 2022
On 4 May 2022, the UK Government announced a ban on services exports to Russia, and as at 21 July 2022 that ban is now in force by virtue of regulation 54C of The Russia (Sanctions) (EU Exit) Regulations 2019 (as amended by The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022) (the Regulations).
This briefing summarises the new prohibition, exemptions to the prohibition, Government Guidance on considerations for licensing, and the risk of interpretative challenges.
The Regulations amongst other things, prohibit the direct or indirect provision of the following services to any "person connected with Russia":
The new prohibitions apply to UK persons, which includes bodies incorporated or constituted under the law of any part of the UK, British citizens (including the Crown Dependencies) and British Overseas Territories citizens.
The Regulations provide certain exceptions to the new prohibitions, including any act done:
a) In satisfaction of an obligation:
i. In respect of the provision of professional and business services by a person (“P”) to a person connected with Russia where those services are provided in relation to the discharge or compliance with UK statutory or regulatory obligations, such obligations not arising under contract;
ii. Arising under a contract concluded before 20th July 2022, or an ancillary contract necessary for the satisfaction of such a contract, provided that:
aa) the act is carried out before the end of the period of one month beginning with the day on which this regulation comes into force;
bb) P has notified the Secretary of State no later than the day 10 working days before the day on which the act is carried out; [or]
b) That is necessary for the official purposes of a diplomatic mission or consular post in Russia, or of an international organisation enjoying immunities in accordance with international law.
Licences may also be issued for activities that would otherwise be prohibited by the Regulations. The Department for International Trade (DIT) has overall responsibility for trade sanctions licensing and the Secretary of State for International Trade is ultimately responsible for decisions to grant or refuse a trade sanctions licence in any individual case. Government Guidance (the Guidance1) suggests that the considerations for granting licences in a professional and business services context considered by DIT to be consistent with the aims of the sanctions are as follows:
The Guidance highlights that an applicant should not assume that a licence will be granted or engage in any activities prohibited by trade sanctions until a licence has been granted.
There is currently limited formal guidance as to how these provisions should be interpreted and applied in practice, although it seems evident from information published by the DIT that authorities will be taking a broad interpretation of the activities that may be considered prohibited. Companies with on-going activities that have a Russian touchpoint will need to work through the relevant facts and related legal documentation carefully, to determine how the prohibitions may apply to their services and specific structures that are currently in place. Companies seeking to conduct activity that would otherwise be prohibited after the end of the 1-month wind-down period (i.e. after 20 August 2022) will need to apply for a licence where available and ensure that such activity is not undertaken pending approval.
If you would like to discuss the new prohibitions or require assistance navigating some of these complex issues, please contact us.
Publication
Australian Arbitration Week took place between 13 – 18 October 2024 in Brisbane.
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