Sanctions Notice - Legislative Amendments

Please be advised that the UK has recently enacted the Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024 (the UK regulations) which make a number of amendments to most of the existing sanctions regulations that have been implemented in the Bailiwick. The principal effect of these amendments in the Bailiwick is as follows: 

• Clarification that the prohibitions on the making available of funds or economic resources to any person for the benefit of a designated person extend to legal persons owned or controlled by that designated person; 
• Clarification that, for the purposes of the licensing of financial sanctions prohibitions and relevant exceptions for financial sanctions, a designated person includes a person who is owned or controlled by them;
• The introduction of a new exemption (for non-UN designated persons) to allow payments that a designated person is required to make to certain authorities such as the Guernsey Registry or the Guernsey Financial Services Commission;
• The extension of the scope of licensing purposes (for non-UN designated persons), to enable the Policy & Resources Committee to license a wider class of case related to the implementation of judicial decisions and to introduce a bespoke purpose to enable licensing for certain insolvency positions;
• With effect from 15 May 2025, the application of reporting obligations to art dealers and letting agents (see the OFSI guidance in the next section - there will also be targeted outreach to these sectors by the Policy & Resources Committee before the obligations come into force);
• Clarification that the prohibition on the provision of trust services under the Russia regulations applies to acting as a nominee shareholder where that involves a trust or similar arrangement.

It should be noted that, while the UK regulations introduce a requirement for annual reporting on funds or economic resources that businesses know or have reasonable cause to suspect they hold for a designated person, this requirement has been expressly disapplied in the Bailiwick by an amendment to the Sanctions (Implementation of UK Regimes) (Bailiwick of Guernsey) (Brexit) Regulations, 2020 (the 2020 regulations).

It should also be noted that the UK regulations introduce a reporting obligation for insolvency practitioners and for high value dealing (i.e. trading in goods that involves cash transactions of €10,000 or more). Corresponding reporting obligations already exist under the Bailiwick legal framework, except that the definition of high value dealing is subject to a threshold of £7,500. The Bailiwick framework has therefore been amended to raise the threshold to €10,000, in order to align with the UK position. This has been done by amending the definition of relevant institution in the Terrorist Asset Freezing (Bailiwick of Guernsey) Law, 2011, which has been incorporated by reference into the Sanctions (Bailiwick of Guernsey) Law, 2018 (the Sanctions Law).

Amendments have also been made to the Sanctions Law and to the 2020 regulations which give effect to director disqualification sanctions measures that have been recently introduced in the UK. To date the UK has not designated anybody under these measures.

OFSI Guidance

Please be advised that OFSI have recently published a number of guidance and advisory documents in the areas of counter-terrorism sanctions, financial sanctions licensing, the implementation of the Office of Trade Sanctions (OTSI), Northern Korean IT workers, the Oil Price Cap, high value dealers and art market participants, and Russian export control and sanctions circumvention. These can be found via the links below:

Counter-Terrorism sanctions: guidance - GOV.UK

Financial sanctions licensing - GOV.UK

Implementation of OTSI - GOV.UK

OFSI_Advisory_on_North_Korean_IT_Workers.pdf

Oil Price Cap (OPC) Advisory: Evasion Linked to Product Origin Manipulation Through Fabricated and Falsified Certificates of Origin (CO) - GOV.UK

Financial sanctions guidance for High Value Dealers & Art Market Participants - GOV.UK

Countering Russian sanctions evasion - guidance for exporters - GOV.UK

G7_Updated_Guidance_for_Industry_Preventing_Russian_Export_Control_and_Sanctions_Evasion.pdf

UK Maritime Services Ban and Oil Price Cap Industry Guidance - GOV.UK

Whilst none of the information contained within these documents is binding in the Bailiwick, the Bailiwick authorities apply it as a matter of practice so businesses should take steps to familiarise themselves with the contents.

Changes to the States of Guernsey Website

Please note that two changes have been made to the information about licences on the States of Guernsey website.

The first is a revision to the guidance on licence applications which makes it clear that, where a licence is issued, this should not be taken as an implied permission to carry out any related activity that is outside the scope of the licence.

The second is a revision to the licence application template which concerns the reasonableness of payments for fees and charges.

What Businesses Must Do

Businesses must familiarise themselves with the legislation and guidance referred to above, and make sure that they have all necessary systems in place to enable them to comply with their obligations.