Sanctions tracker: recent UK sanctions developments

In this post, we bring you the latest round-up of UK sanctions news, including new legislation, new designations, and a Supreme Court decision on the ability to rely on force majeure following the imposition of sanctions.

New sanctions legislation

The UK government has recently published the Sanctions (EU Exit) (Miscellaneous Amendments and Revocations) Regulations 2024 (the “Regulations“) which, as the name suggests, make amendments to a number of UK sanctions regimes.

Of particular interest are the following updates:

• The Regulations introduce “director disqualification sanctions” into a number of UK regimes (Venezuela, Guinea-Bissau, Belarus, Zimbabwe, Chemical Weapons, Syria, Russia, Guinea, Cyber, Bosnia & Herzegovina, Nicaragua, Global Human Rights, Unauthorised drilling activities in the Eastern Mediterranean, Global Anti-Corruption, and Myanmar). The relevant provisions allow the designation of targets under specific “director disqualification sanctions”, with the result that those designated persons are disqualified from acting as a company director.
• The UK’s Burundi sanctions regime has been revoked.
• The Regulations also expand the UK’s sanctions imposed on Belarus by introducing restrictions on the import of aluminium originating in Belarus (see also the UK’s amended guidance on this topic), and the introduction of a new reporting obligation requiring persons designated under the Belarus regime to inform HM Treasury of the nature and value of funds/economic resources that they own, hold or control, and the location of such funds/economic resources. The Office of Financial Sanctions Implementation (“OFSI“) has updated its Russia financial sanctions guidance to confirm that the section dealing with the equivalent obligation in relation to reporting by Russian designated persons, also applies to this new Belarus-related reporting requirement. OFSI has also updated its guidance on reporting and its guidance on enforcement and monetary penalties to reflect this development.

Also in relation to guidance, OFSI has recently updated its general guidance on financial sanctions in relation to its approach to licensing, in particular as regards its approach to the “extraordinary expenses” and “extraordinary situation” licensing grounds.

New designations in respect of Russia-DPRK “arms for oil” trade

On 17 May, the UK announced four new asset freeze designations (three under the UK’s sanctions regime targeting the Democratic People’s Republic of Korea (“DPRK“), and one under the UK Russia regime) in response to “the joint malign efforts of Russia and the DPRK to circumvent sanctions on petroleum products, which help facilitate the DPRK’s unlawful military programmes”.

The UK has also recently announced the addition of a Russian senior leader of the cybercrime gang LockBit to its Cyber sanctions list.

Supreme Court considers MUR Shipping case

The Supreme Court has unanimously overturned the Court of Appeal’s decision that a shipowner was not entitled to rely on a force majeure clause in a shipping contract when its charterer’s parent company became subject to US sanctions. It found that, contrary to the Court of Appeal’s decision, the shipowner did not fail to use reasonable endeavours to overcome the resulting force majeure event.

Our litigation colleagues discuss the decision further here.