The UK Government has reaffirmed its commitment to punishing Russia for its illegal invasion of Ukraine and preventing individuals connected to the Putin regime from benefiting from Western services.
In line with this, the UK, along with its international allies, has introduced new measures to prevent Russia from accessing UK trust services.
Enforcement agencies have uncovered evidence of UK-based trust and company service providers offering their services to enable individuals to reduce the impact of sanctions if they become subject to them.
This has led to the introduction of the strongest sanctions regime ever in the UK.
To further tighten these sanctions, the UK government has now prohibited UK trust service providers from providing trust services to designated persons. This includes the creation of a trust or similar arrangement, the provision of registered office, business or administrative addresses, the operation or management of a trust, and acting or arranging for another person to act as a trustee. Since 16th December 2022, it has been prohibited to provide trust services to anyone connected with Russia, unless those services were already being provided prior to that date.
On 21st March 2023, the 1730 persons designated under Regulation 11 (asset freeze) were also designated under Regulation 18C (trust services), making it prohibited to provide trust services to or for the benefit of these persons, unless permitted by a licence or an applicable exception. To support trust service providers in winding down their services in relation to designated persons, OFSI has issued General Licence INT/2023/2589788 that allows 90 calendar days to wind down those services.
The trust services prohibitions apply across the UK’s Crown Dependencies and Overseas Territories, with HM Treasury and FCDO supporting on their effective implementation. OFSI’s updated Russia guidance provides clarity on how the trust services sanctions interact with other existing sanctions, such as sanctions on professional and business services. The guidance confirms that all sanctions on professional and business services continue to apply even when trust services are permitted, unless permitted by a licence or an applicable exception.
Contacts
If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact info@act.london or your usual A.C.T. contact.