The Economic Crime (Transparency and Enforcement) Act 2022 has brought about changes to the sanctions regime in the UK. This blog aims to provide a comprehensive overview of these changes, their implications, and how they affect individuals and entities.
Sanctions are powerful tools used by governments and international authorities to manage the behaviour of countries or individuals, restrict access to resources, protect assets, and express disapproval of certain actions.
In his recent session, The Economic Crime (Transparency and Enforcement) Act 2022, Edward Rands explained how the Act amends the Sanctions and Anti-Money Laundering Act of 2018 in several ways.
Firstly, it expands the range of persons and entities who can be targeted by sanctions, making it easier for the UK government to impose sanctions without having to start from scratch in each case.
Secondly, the Act facilitates the UK government's ability to align with sanctions imposed by other authorities. If another country imposes sanctions, it is now easier for the UK government to apply those as well within the context of UK law. This includes designations by name or group, and the procedures for introducing sanctions have been strengthened.
The Act also introduces two main procedures for imposing sanctions: a standard procedure and an urgent one. The latter is used when the UK government concludes that swift action is needed, such as in the case of the Russian invasion of Ukraine.
To keep track of who is affected by these sanctions, several lists are published, including the consolidated list and an additional list detailing capital market restrictions imposed due to Russian actions in Ukraine. These lists are freely accessible and are updated constantly, especially in light of recent events.
The Act has wide-ranging implications. Anyone situated within UK territory, regardless of their origin, must comply with UK sanctions. Similarly, any UK national or UK incorporated entity, no matter where they are situated in the world, must comply. Penalties for breaching financial sanctions can be severe, with fines reaching up to 50% of the funds involved or a million pounds.
The Economic Crime (Transparency and Enforcement) Act 2022 has expanded the scope of who can be targeted, streamlined the process of imposing sanctions, and increased the penalties for non-compliance. As such, it is crucial for individuals and entities to stay informed about these changes and ensure they are in compliance with the new regulations.
To watch the full session by Edward Rands, just click here. In the session, Edward covers the above as well as:
- Sanctions: The widening of the range of persons upon whom it is possible for the Government to impose sanctions, including the designation of individuals by name or by group, and the availability of "standard" and "urgent" procedures for imposition;
- Penalties for breaches of sanctions: The introduction of a "strict liability" test for determining the applicability of penalties for sanctions breaches;
- Register of Overseas Entities: The new requirement for entities incorporated overseas owning property in the UK to identify their beneficial owners and place details on a public register;
- Extension of the Unexplained Wealth Order regime: The widening of the circumstances in which an Unexplained Wealth Order can be made, and the range of property to which orders can be applied; and
- Practical considerations for accountants: A look at the ways in which the changes might affect clients and the action which accountants need to take.
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.