UK Russia sanctions: Public Officials and Control guidance from HM Treasury

On 17 November 2023 HM Treasury published guidance on Ownership and Control: Public Officials and Control guidance. The guidance sets out that the Foreign, Commonwealth and Development Office  does not generally consider designated public officials to exercise control over a public body in which they hold a leadership function, such that the affairs of that public body should be considered to be conducted in accordance with the wishes of that individual. However, if there was sufficient evidence to demonstrate that the designated individual exercises control over the public body within the meaning of the relevant regulations, then the relevant legal test under UK sanctions regulations may be met.

The guidance follows on from a notable decision of the UK Court of Appeal Mints & Ors v PJSC National Bank Trust & Anor [2023] EWCA Civ 1132 which was handed down 6 October 2023. Please click here for our recent news item on the judgment. Please also see the recent UK High court case of 15 November 2023 Litasco SA Claimant, Der Mond Oil and Gas Africa SA and Locafrique Holding SA. There the High court judge appears to create a test that distinguishes between actually existing control and prospective control, stating his belief that the better interpretation of Regulation 7(4) is that it is concerned with an existing influence of a designated person over a relevant affair of the company …. not a state of affairs which a designated person is in a position to bring about. Were matters otherwise, it would follow that President Putin was arguably in control, for Regulation 7(4) purposes of companies of whose existence he was wholly ignorant, and whose affairs were conducted on a routine basis without any thought of him.

Readers can also listen to a recent (20^th Nov 2023) interesting webinar on the subject entitled “Webinar with UK government on sanctions ownership/control”. The webinar was hosted by UK firm Peters & Peters and the UK deputy director of sanctions David Drake and deputy director in OFSI Beth Davis spoke on the topic.

Acknowledgement that any links to BAILII website (above) are free.

This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.