UK government continues laser focus on Russia sanctions with new regulator
The success of the Office of Financial Sanctions (OFSI) on cracking down on sanctions breaches by companies has sparked the creation of a new body, due in early 2024. Similar to the operation of the OFSI, the new Office of Trade Sanctions Implementation will have investigatory powers, will be able to issue civil penalties for strict liability breaches, and refer cases for criminal prosecution.
Currently, the implementation of trade sanctions falls under the jurisdiction of the Export Control Joint Unit (ECJU), which undertakes enforcement action mainly around military and dual use items.
But with increasing focus on goods and items being illegally procured by Russia and found on the battlefield in Ukraine, there is additional need for enforcement action.
There are dozens and dozens of individual items listed on the Common High Priority List, which has been developed by the UK, US, EU and Japan. All these items are under sanction.
The list is divided into four Tiers, with tiers one and two containing particularly sensitive items – integrated circuits of the highest concern for Russian weapons systems, and additional electronic components.
- Tier 1: Integrated circuits (also referred to as microelectronics)
- Tier 2: Electronics components including communications modules and passive electronic components
- Tier 3A: Further electronic components used in Russian weapons systems, with a broader range of suppliers
- Tier 3B: Mechanical and other components utilised in Russian weapons systems
- Tier 4: Manufacturing, production and quality testing equipment of electric components, circuit boards and modules
The full list includes dozens of individual items such as diodes, television cameras and video recorders, ball bearings, lasers, and parts of aeroplanes. All of these items are under sanction.
They should be treated like handling stolen goods. Transporting, selling, buying, shipping or otherwise being connected to the supply of these goods to sanctioned entities is a criminal offence.
Since the Russian invasion of Ukraine in February 2022, all new investment into Russia has been prohibited, and over 1,900 entities and individuals with a combined net worth of over £140 billion have been sanctioned.
This represents a significant impact on bilateral Russia-UK trade, with over £20 billion of that now under the Russia sanctions regime.
Russia has been able to procure items under sanction through companies sending these to third countries. With more UK sanctions on individual trade goods expected, it’s vital for all parts of the supply chain to understand their role in upholding the UK sanctions regime.
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The field of economic sanctions has been growing increasingly complicated in recent years. As events in Russia, Iran, China and other countries grab global headlines, businesses are struggling to stay on top of changes. Our resources include a library of free guides, policy templates, on-demand webinars and blogs to help your organisation get to grips with the latest sanctions.
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All businesses are required to screen for sanctions compliance when conducting due diligence, but in particular, regulated entities should make sure everyone is up to speed on the new sanctions rules. Our courses will teach users to understand global sanctions regimes for different jurisdictions and how they affect your business. Users will learn how to apply processes for customer screening, to identify red flags and report them, and how to make sense of recent sanctions changes.
