UK Weekly Sanctions Update - Week of April 29, 2024

In this weekly update, we summarise the most notable updates in the UK sanctions world. If you have any questions in respect of any of the developments set out below, please do not hesitate to contact a member of our London Global and Government Trade team listed above.

1. Russia Sanctions

• UK Government amends one entry on the UK sanctions list under the Russia regime: On May 5, 2024, the UK Government made a correction to the entry for Sarvar Ismailov under the Russia sanctions regime. This individual remains subject to an asset freeze and trust services sanctions and the entry now includes passport details. (Notice_Russia_030524.pdf (publishing.service.gov.uk)).
• HMRC updates notice to exporters reporting compound settlement offers to UK exporters: On May 1, 2024, the ECJU updated the notice to exporters 2024/08 to reflect that, between January and March 2024, HMRC issued settlement offers to seven UK companies, rather than the six that was originally reported in the notice.  These settlements were in relation to: a breach of licence conditions in relation to the export of military goods; the unlicensed exports of military goods controlled by The Export Control Order 2008; and the unlicenced exports of dual use goods controlled by Retained Regulation 428/2009.  HMRC has seen an increase over the last 12 months in the number of voluntary disclosures relating to: unlicenced exports; incorrect licence usage; and breach of licence conditions. (Notice to exporters 2024/08: breaches of strategic export compound settlement issued - GOV.UK (www.gov.uk)).
• HMRC updates notice to exporters reporting a compound settlement of over £1 million relating to export of goods in breach of Russia sanctions: On May 1, 2024, the ECJU updated Notice to Exporters 2024/07 to remove details of a compound settlement which was previously reported by the notice to have been issued in March 2024 worth £1,058,781.79 in relation to the export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019.  The details of the compound settlement provided in the original notice were incorrect.  The notice still contains information about the status of UK-Russia trade sanctions, goods and technology sanctions and the new Economic Deterrence Initiative.  (NTE 2024/07: Russian sanctions - GOV.UK (www.gov.uk)).
• UK Government updates guidance on Russian import sanctions: On April 30, 2024, the UK Government updated its guidance on the Russian iron and steel import ban, adding Norway as a partner country. At the same time, the UK also updated its monitoring and enforcement guidance on Russian diamonds and iron and steel inter alia encouraging all parts of the supply chain for third country processed imports to the UK to undertake the necessary due diligence to ensure that sanctions are not being circumvented directly or indirectly.  (NTI 2953: Russia import sanctions - GOV.UK (www.gov.uk); https://www.gov.uk/government/publications/notice-to-importers-2953-russia-import-sanctions/guidance-on-third-country-processed-iron-and-steel-measures)
• UK House of Lords debates Russia sanctions, seizure and secondary sanctions: On April 25, 2024, the UK House of Lords debated the potential review of sanctions against Russian individuals in light of President Putin’s re-election and the continuing war in Ukraine.  The House of Lords considered inter alia evidence that most Russian exports exceed the price cap, the potential need for more targeted action and the importance of tackling the circumvention of sanctions. (Sanctions: Russian Individuals - Hansard - UK Parliament).

2. ISIL (Da’esh) and Al-Qaida Sanctions

• UK Government amends one entry on the UK sanctions list under ISIL (Da’esh) and Al-Qaida regime: On April 29, 2024, the UK Government amended the entry for Sanaullah Ghafari under the ISIL (Da’esh) and Al-Qaida sanctions regime. This individual remains subject to an asset freeze and the entry now incorporates this individual’s passport details. (Notice_ISIL__Da_esh__and_Al-Qaida_290424.pdf (publishing.service.gov.uk)).

3. Human Rights Sanctions

• UK Government adds six entries to the UK sanctions list under the Global Human Rights regime: On May 3, 2024, the UK Government added four individuals and two entities to the UK sanctions list under the Global Human Rights regime.  The sanctioned individuals, Neria Ben Pazi, Noam Federman, Eden Levi and Elisha Yered, are believed to have been involved in threatening and perpetrating acts of aggression and violence against Palestinian individuals.  The sanctioned entities, Hilltop Youth and Lehava, are believed to have facilitated, incited, promoted and provided support for violence against Palestinians. (Notice_Global_Human_Rights_030524.pdf (publishing.service.gov.uk)).

4. Global Anti-Corruption Sanctions

• UK Government adds three entries to the UK sanctions list under the Global Anti-Corruption regime: On April 30, 2024, the UK Government added three Ugandan politicians, Anita Annet Among, Mary Goretti Kitutu and Agnes Nandutu, to the UK sanctions list under the Global Anti-Corruption regime.  All three individuals are believed to have been involved in serious corruption whilst serving in public office.  (Notice_Global_Anti-Corruption_300424.pdf (publishing.service.gov.uk)).

5. Other Sanctions

• UK updates guidance for UK financial sanctions in relation to enforcement and monetary penalties: On May 2, 2024, OFSI updated its financial sanctions enforcement and monetary penalties guidance.  The main updates are to Chapter 3 of the guidance, which set out in more detail how OFSI assesses potential or actual breaches of UK sanctions.  The guidance now sets out a non-exhaustive list of five enforcement responses OFSI could take in respect of a breach of UK sanctions, namely: issue a warning; refer regulated professionals or bodies to their relevant professional body or regulator in order to improve their compliance with financial sanctions; publish information pertaining to a breach, even where no monetary penalty is imposed, if this is in the public interest; impose a monetary penalty; or refer the case to law enforcement agencies for criminal investigation and potential prosecution. (Financial sanctions enforcement and monetary penalties guidance - GOV.UK (www.gov.uk)).
• Isle of Man Government introduces legislation to give legal effect to UN and UK sanctions: On May 1, 2024, The Sanctions Act 2024 (the “Act”) came into operation in the Isle of Man.  The Act, together with the Sanctions (implementation of UK Sanctions) Regulations 2024, which came into force on May 2, 2024, provides the legislative framework for how the United Nations and UK sanctions are implemented in the Isle of Man.  (Sanctions Act 2024 (gov.im)).
• OFSI publishes Frequently Asked Questions (FAQs): On May 1, 2024, OFSI published 91 FAQs to provide additional guidance to market participants in respect of compliance with UK financial sanctions.  OFSI makes clear that FAQs should be considered supplementary to, and not a replacement for, OFSI’s primary guidance and do not represent legal advice.  At the same time, the Financial Sanctions Guidance for Russia has been updated to remove the FAQs that were previously incorporated therein. (UK Financial Sanctions FAQs - GOV.UK (www.gov.uk); https://ofsi.blog.gov.uk/2024/05/01/ofsi-launch-faqs/).
• UK issues notice to exporters with update on export control reforms between the AUKUS partner nations:  On May 1, 2024, the Export Control Joint Unit (ECJU) issued a notice detailing agreed actions of Australia, the UK and the US in relation to their trilateral defence partnership (AUKUS).  These actions include: AUKUS nations’ reform of export controls; the UK introducing a new AUKUS specific open general licence (AUKUS OGL); the addition of an excluded technology to the AUKUS OGL; and the instruction of a AUKUS nations’ Authorised Users list.  The ECJU has published a draft version of the AUKUS OGL, which it welcomes comments on up to July 1, 2024.  (NTE 2024/09: update on AUKUS - GOV.UK (www.gov.uk)).
• UK Government extends UK Israel & Occupied Territories general licence: On April 30, 2024, OFSI extended the expiry date of General Licence INT/2023/3749168, which aurthorises certain activities necessary to the provision of humanitarian assistance in relation to the conflict in Israel and the Occupied Territories from 15 May 2024 to 14 May 2025. (Gaza_Humanitarian_GL_Extension_30APR24.pdf (publishing.service.gov.uk)).
• Financial Conduct Authority (FCA) seeks feedback on consultation paper on changes to its financial crime guide: On April 25, 2024, the FCA published a consultation paper on changes to its financial crime guide, including extensive updates to its guidance on financial sanctions. The FCA is requesting comments on it by June 27, 2024.  Key changes include: an expectation for authorised firms to notify the FCA if their senior management are subject to sanctions; the requirement of firms to screen counterparties as well as customers and payments; and the requirement for firms to self-report on significant rule breaches. (CP24/9: Financial Crime Guide updates (fca.org.uk)).  (The response form can be found at: CP24/9 response form | FCA).