New Amendment to the Sanctions Law
On 11 September 2023, the Assistant Minister for External Relations (the "Assistant Minister"), acting on behalf of the Minister for External Relations (the "Minister"), made the Sanctions and Asset-Freezing (Amendment of Law and Order No. 2) (Jersey) Order 2023 (the "Amendment Order").
The Amendment Order will come into force on 18 September 2023.
The Amendment Order will amend the Sanctions and Asset-Freezing (Jersey) Law 2019 (the "Sanctions Law") and the Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2021 (the "Sanctions Order") to update the definitions of the terms "owned", "held", "controlled", "directly" and "indirectly" in the Sanctions Law and provide for the automatic effect in Jersey of all UK general licences made under the Russia (Sanctions) (EU Exit) Regulations 2019 (the "Russia Regulations") or the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (the "Belarus Regulations").
Amendments to the Sanctions Law
Article 1 of the Amendment Order amends Article 2A of SAFL which defines what is meant by the terms "owned", "held", "controlled", "directly" and "indirectly" for the purposes of SAFL.
Article 2A(4) to (8) of SAFL defines when a person who is not an individual ("C") is owned, held or controlled directly or indirectly by another person ("P"), namely when one or more of 3 conditions is satisfied.
The first condition is that P is the holding body, or beneficial owner, of C.
The second condition is that P directly or indirectly holds more than 50% of the shares in C or more than 50% of the voting rights in C, or that P holds the right directly or indirectly to appoint or remove a majority of the board of directors of C.
The third condition is that it is reasonable to expect that P can secure, in most cases or in significant respects, that the affairs of C are conducted in accordance with P's wishes.
The Amendment Order removes the first condition from SAFL.
The reason this condition is being removed from SAFL is to clarify that the provisions of an asset-freeze, as implemented under SAFL, are not intended to capture all cases of beneficial ownership, however small, and only apply to designated persons and their assets where they own, directly or indirectly, over 50% of the asset, hold more than 50% of the voting rights in the asset, or satisfy the final condition through their ability to control the affairs of the asset (NB: no legal ownership is required to meet this condition).
Further, the Amendment Order ensures that the provisions in SAFL are aligned with the equivalent provisions in the UK Sanctions and Anti-Money Laundering Act 2018 ("SAMLA").
Amendments to the Sanctions Order
Articles 3 to 6 of the Amendment Order amend the Sanctions Order to provide for the automatic effect in Jersey of all UK general licences made under the Russia (Sanctions) (EU Exit) Regulations 2019 (the "Russia Regulations") or the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (the "Belarus Regulations").
Previously, the only UK general licences that had automatic effect in Jersey were general licences made under the Russia Regulations that did not relate solely to asset-freeze provisions in the UK Russia Regulations, and only in relation to an act which would otherwise be an offence under Article 4 of the Sanctions Order (that is, an offence under a provision which is not an asset-freeze provision). However, the Amendment Order amends the Sanctions Order to implement all UK general licences made under the Russia Regulations or the Belarus Regulations in Jersey and to give automatic effect to new UK general licences made under the same regimes.
The changes allow Jersey persons to rely on a UK general licence made under these regimes without having to apply to the Minister for a Jersey specific licence or wait for the Minister to issue a Jersey general licence.
However, you should be cautious when seeking to rely on a UK general licence and we recommend that you consider seeking legal advice before doing so. Many provisions and terms used in these licences are drafted for a UK-specific context (e.g. referring to UK legislation) and the equivalence provisions contained in the Sanctions Order may not be sufficient in all circumstances.
Further information
Additional guidance on sanctions can be found on both the Government of Jersey and Jersey Financial Services Commission websites.
If you have any queries about this notice, please contact sanctions@gov.je.
gov.je