The fallout of the crisis in Ukraine has reverberated across the world in terms of the significantly increased sanctions from many countries.
On 12 June 2022 a red alert was issued by the NECC, a branch of the National Crime Agency, of the common techniques used by sanctioned individuals to circumvent sanctions including but not limited to:
- Sanctioned individuals transferring beneficial ownership of a company or lowering their ownership below 50% and passing said shareholding to non-sanctioned family members or business partners who will act as a front.
- Movement of high-end assets such as property from sanctioned individuals to non-sanctioned family members or business partners.
- Using holding companies which are offshore and/or are historically linked to the former Soviet Union.
This red alert also issued guidance onto how to prevent becoming embroiled with sanctioned individuals, including:
- undertaking thorough background checks if there is any suspicion that a party in a transaction is or is linked to a sanctioned individual. If in doubt always seek guidance from OFSI.
- assessing complex corporate structures carefully to determine who the true beneficial owner is ; and
- where presented with documents suggesting a recent change of ownership of a company or property, thoroughly investigating the situation to see if a sanctioned individual is involved.
As a result of this and the numerous additions to the UK sanctions list in February and March 2022, we have been advising on sanctions including on:
- contractual relationships with a sanctioned person and whether clients can cease dealings in order to avoid breaching sanctions rules
- whether there are certain steps to be taken which would allow clients to comply with their obligations without breaching the sanctions rules
- the potential sale of a business what they need to watch out for to ensure that their purchaser is not connected with, or using funds from a sanctioned person, which could lead to a breach of sanctions by the client.
For advice relating to sanctions or money laundering please contact Anil Rajani or Ben Siskind.
Please also see our half year review of our predictions for litigation in 2022: Recent developments in fraud
We at RBG Holdings/Rosenblatt support and encourage free/independent thinking in relation to issues which are sometimes considered to be controversial subject matters. However, the views and opinions of the authors of articles published on our website/s do not necessarily reflect the opinions, views, practices, and policies of RBG Holdings/Rosenblatt.
