1. On 14 November 2024 the UK Government laid the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 (the “UK Regulations”) which comes into force on 5 December 2024. The UK Regulations are made under the UK Sanctions and Anti-Money Laundering Act 2018 and make various amendments to existing UK sanctions regulations in order to enhance compliance, enforcement and clarity in the UK sanctions framework.
2. Through the provisions of the Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2021 (the “Sanctions Implementation Order”) which was made under the Sanctions and Asset Freezing (Jersey) Law 2019 (“SAFL”), several legislative changes will take effect automatically in Jersey when the UK Regulations come into force.
Updates to licencing provisions
3. The “judicial decision” licensing ground, which previously allowed payments out of frozen funds in satisfaction of pre-existing judicial decisions has been amended to cover payments to and from designated persons in satisfaction of a decision made either pre- or post-designation. This licensing ground requires any funds paid to a designated person to be credited to a frozen bank account or otherwise subject to the relevant asset freeze provisions.
4. A new “insolvency” licensing ground has been introduced. This licensing ground permits, under licence, various payments and other activity in relation to insolvency, restructuring and related proceedings, provided that any payments made directly or indirectly to a designated person are credited to a frozen UK bank account. For the insolvency and restructuring proceedings specifically, these must also relate to an insolvent person.
5. Additionally, the definition of designated person in Treasury licences schedules and exceptions provisions has been amended to confirm that this includes persons owned or controlled by named designated persons. These provisions and their definitions apply in Jersey under the implementation of the relevant UK Sanctions Regulations.
Update to exceptions provisions
6. A new exception has been introduced in respect of "required payments". From 5 December 2024, for non-UN designated persons only, it is permitted without a licence for various payments to be made from or on behalf of designated persons to certain UK public bodies. In Jersey this exception applies to the equivalent bodies; the JFSC, Revenue Jersey and Jersey parishes.
7. Persons who use the exception to make a payment that would otherwise be prohibited under Jersey sanctions legislation must report to the Minister under the terms of the exception.
8. On 5 December 2024 the UK will be revoking the following General Licences which currently permit such activity as will be permitted under the “required payments” exception:
i. Payments to the Financial Conduct Authority GL INT/2024/4836676;
ii. Payments to Revenue Authorities GL INT/2024/4881897;
iii. Payments to Companies House GL INT/2023/3626884; and
iv. Payments to Local Authorities GL INT/2023/3781228.
9. Subject to approval by the Minister for External Relations, an amended Jersey General Licence will be issued entitled Jersey General Licence - Payments to Revenue Authorities to facilitate payment to be received by accountants and similar service providers who may seek to rely on the “required payments” exception to process payments on behalf of designated persons to Revenue Jersey.
10. UK Guidance on exceptions and licencing is available online; however, those seeking to rely on any exceptions in implemented UK Sanctions Regulations should be particularly cautious; many of the provisions used are drafted for a specific UK-context (e.g. referring to UK legislation). We recommend that you consider taking legal advice before seeking to rely on them.
Trust services prohibitions – Russia regime
11. The UK Regulations amend Regulations 18C and 71 of the Russia (Sanctions) (EU Exit) Regulations 2019 (the “Russia Regulations”) to clarify that acting as a nominee shareholder, when that involves the use of a trust or similar arrangement, should be considered a prohibited trust service. Acting as a nominee shareholder is clarified as meaning undertaking the following activities as the legal owner of the shares:
i. exercising the voting rights of those shares in accordance with the wishes of the beneficial owner of those shares (“O”); or
ii. receiving dividends in respect of those shares held on behalf of O,
where the activities are undertaken in accordance with an arrangement with O that involves a trust or similar arrangement.
Reporting Obligations
12. The UK’s Office for Financial Sanctions Implementation has for some years requested that persons provide annual reporting to the Treasury on funds or economic resources that they know or have reasonable cause to suspect they hold for a designated person. This requirement is now codified in the relevant UK Sanctions Regulations.
13. This obligation under the UK Sanctions Regulations, to make an annual report on 30 November each year on funds held as of 31 September that year, will commence from November 2025. This requirement as it relates to equivalent reporting under SAFL is currently being considered by the Minister and updated Jersey guidance will be published in due course.
14. Additionally, the requirement under Regulation 70(1ZB) of the Russia Regulations in relation to the assets of “prohibited persons” (as listed in regulation 18A(2) of the Russia Regulations) has been modified to require annual reporting to be made by 30 November each year.
Additional Miscellaneous Amendments
15. There are various other changes made by the amendments to the UK Regulations, such as an expansion in the types of firms that are obliged to submit Sanctions Compliance Reports. However, these changes will not come into effect automatically in Jersey and will require amendments to Jersey sanctions legislation to implement. Further consideration is being given as to how these changes should be implemented in Jersey.
Further Information
16. UK guidance on financial sanctions is available online at Gov.UK
17. Further information on sanctions can be found on the Government of Jersey and Jersey Financial Services Commission (JFSC) websites.
18. A copy of the UK Regulations can be obtained on legislation.gov.uk.
19. The UK Sanctions List on GOV.UK
20. The UK Office of Financial Sanctions Implementation Consolidated List on GOV.UK
Enquiries
21. Non-media enquiries, sanctions compliance reporting, and licence applications should be emailed to the Financial Sanctions Implementation Unit at sanctions@gov.je.
gov.je