The Office of Financial Sanctions Implementation is in charge of running the system in the United Kingdom (OFSI). The government has decided to take these steps in order to accomplish particular goals related to national security and foreign policy.
In recent decades, there have been a number of modifications made to the system, which is supported by a number of different pieces of legislation. The Solicitors Regulation Authority (SRA) has already produced guidance for businesses in order to ensure that those businesses fully comprehend the obligations that are placed upon them.
The government has recently introduced amendments that will prohibit the provision of trust services to individuals with ties to Russia (unless such services were supplied immediately prior to the regulations taking effect) or to a person who has been specifically designated. On December 16, 2022, a new set of regulations known as the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations came into effect.
"Strengthening the financial sanctions framework is an important component of the government's reaction to war in Europe, and legal firms have to to play a critical role to play," said Paul Philip, Chief Executive of the Solicitors Regulation Authority (SRA). The sanctions regime is applicable to any and all companies that offer legal services; it is not limited to only the companies that are covered by the legislation for the prevention of money laundering. Because this is such a complicated and rapidly developing situation, we felt it necessary to issue the first version of our recommendations one month ago. Firms would do well to sign up for alerts from OFSI in order to keep themselves up to speed. In addition, firms would do well to conduct necessary checks on clients and potential clients.
The following are examples of "trust services" as defined by the amendment:
the establishment of a trust or an arrangement of a comparable kind
the assignment of a registered office, business address, correspondence address, or administrative address to a trust or other arrangement of a comparable nature
the operation or management of a trust or similar arrangement acting or arranging for another person to act as trustee of a trust or similar arrangement, where "trustee" in relation to an arrangement similar to a trust means a person who holds a position equivalent or similar to that of a trustee of a trust the operation or management of a trust or similar arrangement acting or arranging for another person to act as trustee of a trust or similar arrangement
The definition of what it means for a person to have a "connection with Russia" can be found in rule 19(A)2. In general, a person is considered to have ties to Russia if they regularly reside in Russia or are present there. This connection can also be established through other means. If a person or entity other than an individual is formed or created under Russian law, or if it has its abode in Russia, then that entity or person is connected with Russia.
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