Sanctions Notice - Brexit (2)

UPDATE ON CHANGES RELATING TO BREXIT

This Notice follows on from an earlier Notice issued in relation to the changes to the implementation of sanctions resulting from Brexit.

The UK has now introduced its own sanctions regimes that repeal and replace EU sanctions regimes. The UK completed the drafting of its sanctions regimes earlier this week and they came into force at 11pm on 31st December 2020.  Corresponding changes have therefore been made to the legal framework for implementing sanctions measures in the Bailiwick that came into force at the same time.

Overview

The Policy & Resources Committee has made the Sanctions (Implementation of UK Regimes) (Bailiwick of Guernsey) (Brexit) Regulations, 2020 (the 2020 regulations). A copy of the 2020 regulations can be found here. Their overarching effect is to change the Bailiwick’s sanctions framework from one that implements targeted financial sanctions and other measures under EU sanctions regimes to one that implements those measures under UK sanctions regimes. The UK regimes also implement UN regimes, including for example those that relate to terrorist financing and the financing of the proliferation of weapons of mass destruction.

This is largely a technical change, as the UK sanctions regimes broadly replicate the EU sanctions regimes that they replace. However, it is important to be aware that there are some differences, both as to the scope of the UK sanctions regimes themselves and as to the persons that are designated under those regimes.

The 2020 regulations

The 2020 regulations have been made under the regulation –making powers in the Sanctions (Bailiwick of Guernsey) Law, 2018 and the European Union (Brexit) (Bailiwick of Guernsey) Law, 2018. They give effect within the Bailiwick to all of the sanctions regimes that have been made by the UK under the Sanctions and Anti-Money Laundering Act, 2018 as a result of Brexit and which came into force at 11pm on 31st December 2020. The 2020 regulations make a number of modifications to the UK regimes to facilitate domestic implementation, for example by specifying that references to a licensing authority within the UK should be read as a licensing authority within the Bailiwick.

The 2020 regulations also repeal the domestic Ordinances that have been enacted to give effect to corresponding EU regimes within the Bailiwick. In addition, they repeal and replace regulations that have been made to give effect to the UK’s autonomous sanctions regime relating to global human rights. As this regime did not emanate from the EU it is not affected by Brexit, but it has been dealt with under the 2020 regulations in the same way as all other UK regimes, so as to bring all UK regimes within a single enactment for ease of reference going forward.

MEASURES WHICH SHOULD BE TAKEN

Now that the UK regimes are all in force, changes are being made to the States of Guernsey website to reflect the new framework and are expected to be finalised shortly. In the meantime, information can be found in the following places:

UK Sanctions List
https://www.gov.uk/government/publications/the-uk-sanctions-list

OFSI Consolidated Lists of Financial Sanctions Targets
https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets

OFSI has also published a ‘bridging document’ to aid organisations in screening the new list. More information on this is available here:
https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets/bridging-document

Businesses must refrain from taking any action that would breach a UK sanctions regime and in particular must treat any funds, other assets or economic resources

• directly or indirectly belonging to, owned, held or controlled by a listed person, whether wholly or jointly, or
• derived from any funds or economic resources directly or indirectly belonging to, owned, held or controlled by them, whether wholly or jointly, or
• belonging to individuals or entities acting on their behalf or at their direction, whether wholly or jointly

as frozen with immediate effect if this is not already the case. Businesses must report any findings to the Policy & Resources Committee immediately. They must also ensure that they have taken all other steps that may be required in order to comply with the reporting obligations at section 14 of the Sanctions Law or under a specific UK sanctions regime.

Businesses must also refrain from making any funds or economic resources available directly or indirectly, wholly or jointly, to or for the benefit of

• any designated person, entity or body
• any entity directly or indirectly owned or controlled by a designated person, entity or body, whether wholly or jointly
• any individuals or entities acting on behalf or at the direction of a designated person, entity or body, whether wholly or jointly

other than in respect of transactions that come within a permitted derogation as determined by the Policy & Resources Committee, or in accordance with a licence issued by the Policy & Resources Committee, as the case may be.

The information referred to above is required by the Policy & Resources Committee in the exercise of its powers under section 15 of the Sanctions Law.

Further information on the effect of asset freezes and related issues including licences is available on the States of Guernsey website at http://www.gov.gg/sanctions