2019 No. 573

Exiting The European Union
Sanctions

The Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019

Made

Laid before Parliament

Coming into force in accordance with regulation 1(2)

The Secretary of State1, in exercise of the powers conferred by sections 1(1)(a) and (c) and (3), 3(1)(a), (b)(i) and (d)(i), 4, 5, 9(2)(a), 10(2)(a) and (c), (3) and (4), 11(2) to (9), 15(2)(a) and (b), (3), (4)(b), (5) and (6), 16, 17(2) to (9), 19, 20, 21(1), 54(1) and (2)(a), 56(1) and 62(4) and (5) of, and paragraphs 2(a)(i), 4(a)(i), 5(a)(i), 6(a)(i), 10(a)(i), 11(a)(i), 13(a), (g), (k), (m), (w), 14(a), 20, 21 and 27 of Schedule 1 to, the Sanctions and Anti-Money Laundering Act 20182, and having decided, upon consideration of the matters set out in section 2(2) and 56(1) of that Act, that it is appropriate to do so, makes the following Regulations:

PART 1General

Citation and commencement1

1

These Regulations may be cited as the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019.

2

These Regulations come into force in accordance with regulations made by the Secretary of State under section 56 of the Act.

Interpretation2

In these Regulations—

  • “the Act” means the Sanctions and Anti-Money Laundering Act 2018;

  • “arrangement” includes any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable (but see paragraph 12 of the Schedule to these Regulations for meaning of that term in that Schedule);

  • CEMA” means the Customs and Excise Management Act 19793;

  • “the Commissioners” means the Commissioners for Her Majesty’s Revenue and Customs;

  • “conduct” includes acts and omissions;

  • “document” includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include producing a copy of the information in legible form;

  • “the EU autonomous ISIL (Da’esh) and Al-Qaida) Regulation” means Council Regulation (EU) 2016/1686 of 20 September 2016 imposing additional restrictive measures directed against ISIL (Da’esh) and Al-Qaeda and natural and legal persons, entities or bodies associated with them, as it has effect in EU law;

  • “resolution 1373” means resolution 1373 (2001) adopted by the Security Council on 28 September 2001;

  • “Treasury licence” means a licence under regulation 31(1);

  • “United Kingdom person” has the same meaning as in section 21 of the Act.

Application of prohibitions and requirements outside the United Kingdom3

1

A United Kingdom person may contravene a relevant prohibition by conduct wholly or partly outside the United Kingdom.

2

Any person may contravene a relevant prohibition by conduct in the territorial sea.

3

In this regulation a “relevant prohibition” means any prohibition imposed by—

a

regulation 9(2) (confidential information),

b

Part 3 (finance),

c

Part 5 (trade), or

d

a condition of a Treasury licence.

4

A United Kingdom person may comply, or fail to comply, with a relevant requirement by conduct wholly or partly outside the United Kingdom.

5

Any person may comply, or fail to comply, with a relevant requirement by conduct in the territorial sea.

6

In this regulation a “relevant requirement” means any requirement imposed—

a

by or under Part 7 (information and records), or by reason of a request made under a power conferred by that Part, or

b

by a condition of a Treasury licence.

7

Nothing in this regulation is to be taken to prevent a relevant prohibition or a relevant requirement from applying to conduct (by any person) in the United Kingdom.

Purposes4

1

The regulations contained in this instrument that are made under section 1 of the Act have the following purposes—

a

compliance with the relevant UN obligations, and

b

the additional purpose of furthering the prevention of terrorism4 in the United Kingdom or elsewhere, otherwise than by compliance with the relevant UN obligations.

2

In this regulation, “the relevant UN obligations” means the obligations the United Kingdom has by virtue of paragraphs 1 and 2 of resolution 1373.

PART 2Designation of persons

Power to designate persons5

1

The Secretary of State may designate persons5 by name, for the purposes of any of the following—

a

regulations 11 to 15 (asset freeze etc.);

b

regulation 17 (immigration);

c

regulations 19 to 26 (trade).

2

The Secretary of State may designate different persons for the purposes of different provisions mentioned in paragraph (1).

Criteria for designating a person6

1

The Secretary of State may not designate a person under regulation 5 unless the Secretary of State—

a

has reasonable grounds to suspect that that person is an involved person, and

b

considers that the designation of that person is appropriate, having regard to—

i

the purposes stated in regulation 4, and

ii

the likely significant effects of the designation on that person (as they appear to the Secretary of State to be on the basis of the information that the Secretary of State has).

2

In this regulation an “involved person” means a person who—

a

is or has been involved in terrorist activity,

b

is owned or controlled directly or indirectly (within the meaning of regulation 7) by a person who is or has been so involved,

c

is acting on behalf of or at the direction of a person who is or has been so involved, or

d

is a member of, or associated with, a person who is or has been so involved.

3

Any reference in this regulation to being involved in terrorist activity includes being so involved in whatever way and wherever any actions constituting the involvement take place, and in particular includes—

a

being responsible for, engaging in, or providing support for, the commission, preparation or instigation of acts of terrorism,

b

providing financial services, or making available funds or economic resources, for the purposes of terrorism,

c

facilitating, promoting or encouraging terrorism,

d

providing or receiving training for the purposes of terrorism,

e

travelling or attempting to travel from or into the relevant territory for the purposes of terrorism,

f

carrying out recruitment activities for a person who is involved in terrorism,

g

being involved in the sale, supply or transfer of arms or material related to arms to a person who is involved in terrorism,

h

engaging in trade of whatever description with a person who is involved in terrorism;

i

being responsible for, engaging in, being complicit in, providing support for, or promoting, the abduction, enslavement, forced marriage or rape of, or sexual violence against, persons outside the relevant territory on behalf of, or in the name of, a person who is involved in terrorism;

j

supporting or assisting any person who is known or believed by the person concerned to be involved in any activity as mentioned in paragraphs (a) to (i); or

k

is involved in assisting the contravention or circumvention of any relevant provision.

4

In this regulation “recruitment activities” means—

a

soliciting another person to—

i

become a member of a person, other than an individual, involved in terrorism, or

ii

participate in any act by, in conjunction with, in the name of, on behalf of or in support of a person involved in terrorism;

b

soliciting or otherwise procuring funds for the purpose of financing the travel of a person solicited as mentioned in sub-paragraph (a);

c

organising, providing support for or otherwise facilitating the travel of a person solicited as mentioned in sub-paragraph (a).

5

In this regulation—

  • being “associated with” a person includes pledging allegiance in whatever way to that person;

  • “promoting or encouraging” terrorism includes a reference to a person who promotes or encourages terrorism within the meaning of section 3 of the Terrorism Act 20006;

  • “relevant provision” means—

    1. a

      any provision of Part 3 (finance) or Part 5 (trade);

    2. b

      any provision of the law of a country other than the United Kingdom made for purposes corresponding to a purpose of any provision of Part 3 or Part 5;

  • “relevant territory” means the United Kingdom and the territory of the Member States of the European Union.

6

Nothing in any sub-paragraph of paragraph (3) is to be taken to limit the meaning of any of the other sub-paragraphs of that paragraph.

Meaning of “owned or controlled directly or indirectly”7

1

A person who is not an individual (“C”) is “owned or controlled directly or indirectly” by another person (“P”) if either of the following two conditions is met (or both are met).

2

The first condition is that P—

a

holds directly or indirectly more than 50% of the shares in C,

b

holds directly or indirectly more than 50% of the voting rights in C, or

c

holds the right directly or indirectly to appoint or remove a majority of the board of directors of C.

3

The Schedule to these Regulations contains provision applying for the purpose of interpreting paragraph (2).

4

The second condition is that it is reasonable, having regard to all the circumstances, to expect that P would (if P chose to) be able, in most cases or in significant respects, by whatever means and, whether directly or indirectly, to achieve the result that affairs of C are conducted in accordance with P’s wishes.

Notification and publicity where designation power used8

1

Paragraph (2) applies where the Secretary of State—

a

has made a designation under regulation 5, or

b

has by virtue of section 22 of the Act varied or revoked a designation made under that regulation.

2

The Secretary of State—

a

must without delay take such steps as are reasonably practicable to inform the designated person of the designation, variation or revocation, and

b

must take steps to publicise the designation, variation or revocation.

3

The information given under paragraph (2)(a) where a designation is made must include a statement of reasons.

4

In this regulation a “statement of reasons”, in relation to a designation, means a brief statement of the matters that the Secretary of State knows, or has reasonable grounds to suspect, in relation to the designated person which have led the Secretary of State to make the designation.

5

Matters that would otherwise be required by paragraph (4) to be included in a statement of reasons may be excluded from it where the Secretary of State considers that they should be excluded—

a

in the interests of national security or international relations,

b

for reasons connected with the prevention or detection of serious crime in the United Kingdom or elsewhere, or

c

in the interests of justice.

6

The steps taken under paragraph (2)(b) must—

a

unless one or more of the restricted publicity conditions is met, be steps to publicise generally—

i

the designation, variation or revocation, and

ii

in the case of a designation, the statement of reasons;

b

if one or more of those conditions is met, be steps to inform only such persons as the Secretary of State considers appropriate of the designation, variation or revocation and (in the case of a designation) of the contents of the statement of reasons.

7

The “restricted publicity conditions” are as follows—

a

the designation is of a person believed by the Secretary of State to be an individual under the age of 18;

b

the Secretary of State considers that disclosure of the designation, variation or revocation should be restricted—

i

in the interests of national security or international relations,

ii

for reasons connected with the prevention or detection of serious crime in the United Kingdom or elsewhere, or

iii

in the interests of justice.

8

Paragraph (9) applies if—

a

when a designation is made, one or more of the restricted publicity conditions is met, but

b

at any time when the designation has effect, it becomes the case that none of the restricted publicity conditions is met.

9

The Secretary of State must—

a

take such steps as are reasonably practicable to inform the designated person that none of the restricted publicity conditions is now met, and

b

take steps to publicise generally the designation and the statement of reasons relating to it.

Confidential information in certain cases where designation power used9

1

Where the Secretary of State in accordance with regulation 8(6)(b) informs only certain persons of a designation, variation or revocation and (in the case of a designation) of the contents of the statement of reasons, the Secretary of State may specify that any of that information is to be treated as confidential.

2

A person (“P”) who—

a

is provided with information that is to be treated as confidential in accordance with paragraph (1), or

b

obtains such information,

must not, subject to paragraph (3), disclose it if P knows, or has reasonable cause to suspect, that the information is to be treated as confidential.

3

The prohibition in paragraph (2) does not apply to any disclosure made by P with lawful authority.

4

For this purpose information is disclosed with lawful authority only if and to the extent that—

a

the disclosure is by, or is authorised by, the Secretary of State,

b

the disclosure is by or with the consent of the person who is or was the subject of the designation,

c

the disclosure is necessary to give effect to a requirement imposed under or by virtue of these Regulations or any other enactment, or

d

the disclosure is required, under rules of court, tribunal rules or a court or tribunal order, for the purposes of legal proceedings of any description.

5

This regulation does not prevent the disclosure of information that is already, or has previously been, available to the public from other sources.

6

A person who contravenes the prohibition in paragraph (2) commits an offence.

7

The High Court (in Scotland, the Court of Session) may, on the application of—

a

the person who is the subject of the information, or

b

the Secretary of State,

grant an injunction (in Scotland, an interdict) to prevent a breach of the prohibition in paragraph (2).

8

In paragraph (4)(c), “enactment” has the meaning given by section 54(6) of the Act.

PART 3Finance

Meaning of “designated person” in Part 310

In this Part a “designated person” means a person who is designated under regulation 5 for the purposes of regulations 11 to 15 (asset freeze etc.).

Asset-freeze in relation to designated persons11

1

A person (“P”) must not deal with funds or economic resources owned, held or controlled by a designated person if P knows, or has reasonable cause to suspect, that P is dealing with such funds or economic resources.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes the prohibition in paragraph (1) commits an offence.

4

For the purposes of paragraph (1) a person “deals with” funds if the person—

a

uses, alters, moves, transfers or allows access to the funds,

b

deals with the funds in any other way that would result in any change in volume, amount, location, ownership, possession, character or destination, or

c

makes any other change, including portfolio management, that would enable use of the funds.

5

For the purposes of paragraph (1) a person “deals with” economic resources if the person—

a

exchanges the economic resources for funds, goods or services, or

b

uses the economic resources in exchange for funds, goods or services (whether by pledging them as security or otherwise).

6

The reference in paragraph (1) to funds or economic resources that are “owned, held or controlled” by a person includes, in particular, a reference to—

a

funds or economic resources in which the person has any legal or equitable interest, regardless of whether the interest is held jointly with any other person and regardless of whether any other person holds an interest in the funds or economic resources;

b

any tangible property (other than real property), or bearer security, that is comprised in funds or economic resources and is in the possession of the person.

7

For the purposes of paragraph (1), funds or economic resources are to be treated as owned, held or controlled by a designated person if they are owned, held or controlled by a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

8

For the avoidance of doubt, the reference in paragraph (1) to a designated person includes P if P is a designated person.

Making funds or financial services available to designated persons12

1

A person (“P”) must not make funds or financial services available directly or indirectly to a designated person if P knows, or has reasonable cause to suspect, that P is making the funds or financial services so available.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes the prohibition in paragraph (1) commits an offence.

4

The reference in paragraph (1) to making funds or financial services available indirectly to a designated person includes, in particular, a reference to making them available to a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

Making funds or financial services available for the benefit of designated persons13

1

A person (“P”) must not make funds or financial services available to any person for the benefit of a designated person if P knows, or has reasonable cause to suspect, that P is making the funds or financial services so available.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes the prohibition in paragraph (1) commits an offence.

4

For the purposes of this regulation—

a

funds are made available for the benefit of a designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit, and

b

“financial benefit” includes the discharge (or partial discharge) of a financial obligation for which the designated person is wholly or partly responsible.

Making economic resources available to designated persons14

1

A person (“P”) must not make economic resources available directly or indirectly to a designated person if P knows, or has reasonable cause to suspect—

a

that P is making the economic resources so available, and

b

that the designated person would be likely to exchange the economic resources for, or use them in exchange for, funds, goods or services.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes the prohibition in paragraph (1) commits an offence.

4

The reference in paragraph (1) to making economic resources available indirectly to a designated person includes, in particular, a reference to making them available to a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

Making economic resources available for the benefit of designated persons15

1

A person (“P”) must not make economic resources available to any person for the benefit of a designated person if P knows, or has reasonable cause to suspect, that P is making the economic resources so available.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes the prohibition in paragraph (1) commits an offence.

4

For the purposes of paragraph (1)—

a

economic resources are made available for the benefit of a designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit, and

b

“financial benefit” includes the discharge (or partial discharge) of a financial obligation for which the designated person is wholly or partly responsible.

Circumventing etc. prohibitions16

1

A person must not intentionally participate in activities knowing that the object or effect of them is, whether directly or indirectly—

a

to circumvent any of the prohibitions in regulations 11 to 15, or

b

to enable or facilitate the contravention of any such prohibition.

2

A person who contravenes a prohibition in paragraph (1) commits an offence.

PART 4Immigration

Immigration17

A person who is designated under regulation 5 for the purposes of this regulation is an excluded person for the purposes of section 8B of the Immigration Act 19717.

PART 5Trade

Definitions (Trade)18

1

Paragraphs 32 and 36 of Schedule 1 to the Act (trade sanctions) apply for the purpose of interpreting expressions in this Part.

2

In this Part any reference to the United Kingdom includes a reference to the territorial sea.

3

In this Part—

  • “brokering service” means any service to secure, or otherwise in relation to, an arrangement, including (but not limited to)—

    1. a

      the selection or introduction of persons as parties or potential parties to the arrangement,

    2. b

      the negotiation of an arrangement,

    3. c

      the facilitation of anything that enables an arrangement to be entered into, and

    4. d

      the provision of any assistance that in any way promotes or facilitates an arrangement;

  • “designated person” means a person who is designated under regulation 5 for the purposes of regulations 19 to 26;

  • “military goods” means—

    1. a

      any thing for the time being specified in Schedule 2 to the Export Control Order 20088, other than any thing which is military technology, and

    2. b

      any tangible storage medium on which military technology is recorded or from which it can be derived;

  • “military technology” means any thing for the time being specified in Schedule 2 to the Export Control Order 2008 which is described as software or technology;

    except in regulation 26, “technical assistance”, in relation to goods or technology, means—

    1. a

      technical support relating to the repair, development, production, assembly, testing, use or maintenance of the goods or technology, or

    2. b

      any other technical service relating to the goods or technology;

  • “technology” and “transfer” have the meanings given by paragraph 37 of Schedule 1 to the Act.

Export of military goods19

1

The export of military goods to, or for the benefit of, a designated person is prohibited.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

Supply and delivery of military goods20

1

A person must not directly or indirectly supply or deliver military goods from a third country to, or for the benefit of, a designated person.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes a prohibition in paragraph (1) commits an offence, but it is a defence for a person charged with that offence (“P”) to show that P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the goods were supplied or delivered was a designated person.

4

In this regulation “third country” means a country that is not the United Kingdom or the Isle of Man.

Making military goods and military technology available21

1

A person must not directly or indirectly make military goods or military technology available to, or for the benefit of, a designated person.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes a prohibition in paragraph (1) commits an offence, but it is a defence for a person charged with that offence (“P”) to show that P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the goods or technology were made available was a designated person.

Transfer of military technology22

1

A person must not transfer military technology to, or for the benefit of, a designated person.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes a prohibition in paragraph (1) commits an offence, but it is a defence for a person charged with that offence (“P”) to show that P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the technology was transferred was a designated person.

Technical assistance relating to military goods and military technology23

1

A person must not directly or indirectly provide technical assistance relating to military goods or military technology to, or for the benefit of, a designated person.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes a prohibition in paragraph (1) commits an offence, but it is a defence for a person charged with that offence (“P”) to show that P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the technical assistance was provided was a designated person.

Financial services and funds relating to military goods and military technology24

1

A person must not directly or indirectly provide financial services to, or for the benefit of, a designated person in pursuance of or in connection with an arrangement whose object or effect is—

a

the export of military goods,

b

the direct or indirect supply or delivery of military goods,

c

directly or indirectly making military goods or military technology available to a person,

d

the transfer of military technology, or

e

the direct or indirect provision of technical assistance relating to military goods or military technology.

2

A person must not directly or indirectly make funds available to, or for the benefit of, a designated person in pursuance of or in connection with an arrangement mentioned in paragraph (1).

3

A person must not directly or indirectly provide financial services or funds in pursuance of or in connection with an arrangement whose object or effect is—

a

the export of military goods to, or for the benefit of, a designated person;

b

the direct or indirect supply or delivery of military goods to, or for the benefit of, a designated person;

c

directly or indirectly making military goods or military technology available to, or for the benefit of, a designated person;

d

the transfer of military technology to, or for the benefit of, a designated person; or

e

the direct or indirect provision of technical assistance relating to military goods or military technology to, or for the benefit of, a designated person.

4

Paragraphs (1) to (3) are subject to Part 6 (exceptions and licences).

5

A person who contravenes a prohibition in any of paragraphs (1) to (3) commits an offence but—

a

it is a defence for a person charged with the offence of contravening paragraph (1) (“P”) to show that P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the financial services were provided was a designated person;

b

it is a defence for a person charged with the offence of contravening paragraph (2) (“P”) to show that P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the funds were made available was a designated person;

c

it is a defence for a person charged with the offence of contravening paragraph (3) to show that the person did not know and had no reasonable cause to suspect that the financial services or funds (as the case may be) were provided in pursuance of or in connection with an arrangement mentioned in that paragraph.

Brokering services: non-UK activity relating to military goods and military technology25

1

A person must not directly or indirectly provide brokering services in relation to an arrangement (“arrangement A”) whose object or effect is—

a

the direct or indirect supply or delivery of military goods from a third country to, of for the benefit of, a designated person;

b

directly or indirectly making military goods available in a third country for direct or indirect supply or delivery to, or for the benefit of, a designated person;

c

directly or indirectly making military technology available in a third country for transfer to, or for the benefit of, a designated person;

d

the transfer of military technology from a place in a third country to, or for the benefit of, a designated person;

e

the direct or indirect provision, in a non-UK country, of technical assistance relating to military goods or military technology to, or for the benefit of, a designated person;

f

the direct or indirect provision, in a non-UK country, of financial services—

i

to, or for the benefit of, a designated person where arrangement A, or any other arrangement in connection with which arrangement A is entered into, is an arrangement mentioned in regulation 24(1); or

ii

where arrangement A, or any other arrangement in connection with which arrangement A is entered into, is an arrangement mentioned in regulation 24(3);

g

directly or indirectly making funds available in a non-UK country to, or for the benefit of, a designated person where arrangement A, or any other arrangement in connection with which arrangement A is entered into, is an arrangement mentioned in regulation 24(1); or

h

the direct or indirect provision of funds from a non-UK country, where arrangement A, or any other arrangement in connection with which arrangement A is entered into, is an arrangement mentioned in regulation 24(3);

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes a prohibition in paragraph (1) commits an offence, but it is a defence for a person charged with that offence to show that the person did not know and had no reasonable cause to suspect that the brokering services were provided in relation to an arrangement mentioned in that paragraph.

4

In this regulation—

  • “non-UK country” means—

    1. a

      for the purposes of paragraph (1)(a) and (b), a country that is not the United Kingdom or the Isle of Man;

    2. b

      for the purposes of any other provision of paragraph (1), a country that is not the United Kingdom.

Enabling or facilitating conduct of armed hostilities26

1

A person must not directly or indirectly provide to, or for the benefit of, a designated person—

a

technical assistance,

b

financial services or funds, or

c

brokering services in relation to an arrangement whose object or effect is to provide, in a non-UK country, technical assistance, financial services or funds,

where such provision enables or facilitates the conduct of armed hostilities.

2

Paragraph (1) is subject to Part 6 (exceptions and licences).

3

A person who contravenes the prohibition in paragraph (1) commits an offence, but it is a defence for a person charged with that offence (“P”) to show that—

a

P did not know and had no reasonable cause to suspect that the person to whom, or for whose benefit, the technical assistance, financial services or funds or brokering services were provided was a designated person;

b

P did not know and had no reasonable cause to suspect that the provision as mentioned in paragraph (1) would enable or facilitate the conduct of armed hostilities.

4

In this regulation—

  • “non-UK country” means a country that is not the United Kingdom.

  • “technical assistance” means the provision of technical support or any other technical service.

5

Nothing in this regulation is to be taken to limit the meaning of any of the prohibitions contained in regulations 23 to 25.

Circumventing etc. prohibitions27

1

A person must not intentionally participate in activities knowing that the object or effect of them is, whether directly or indirectly—

a

to circumvent any of the prohibitions in this Part, or

b

to enable or facilitate the contravention of any such prohibition.

2

A person who contravenes a prohibition in paragraph (1) commits an offence.

Defences28

1

Paragraph (2) applies where a person relies on a defence in this Part.

2

If evidence is adduced which is sufficient to raise an issue with respect to the defence, the court must assume that the defence is satisfied unless the prosecution proves beyond reasonable doubt that it is not.

PART 6Exceptions and licences

Finance: exceptions from prohibitions29

1

The prohibition in regulation 11 (asset-freeze in relation to designated persons) is not contravened by an independent person (“P”) transferring to another person a legal or equitable interest in funds or economic resources where, immediately before the transfer, the interest—

a

is held by P, and

b

is not held jointly with the designated person.

2

In paragraph (1) “independent person” means a person who—

a

is not the designated person, and

b

is not owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

3

The prohibitions in regulations 11 to 13 (asset-freeze in relation to, and making funds available to or for the benefit of, designated persons) are not contravened by a relevant institution crediting a frozen account with interest or other earnings due on the account.

4

The prohibitions in regulations 12 and 13 (making funds available to, or for the benefit of, designated persons) are not contravened by a relevant institution crediting a frozen account where it receives funds transferred to that institution for crediting to that account.

5

The prohibitions in regulations 12 and 13 are not contravened by the transfer of funds to a relevant institution for crediting to an account held or controlled (directly or indirectly) by a designated person, where those funds are transferred in discharge (or partial discharge) of an obligation which arose before the date on which the person became a designated person.

6

The prohibitions in regulations 11 to 13 are not contravened in relation to a designated person (“P”) by a transfer of funds from account A to account B, where—

a

account A is with a relevant institution which carries on an excluded activity within the meaning of section 142D of the Financial Services and Markets Act 20009,

b

account B is with a ring-fenced body within the meaning of section 142A of the Financial Services and Markets Act 200010, and

c

accounts A and B are held or controlled (directly or indirectly) by P.

7

The prohibition in regulation 13 is not contravened by the making of a payment which—

a

is a benefit under or by virtue of an enactment relating to social security (irrespective of the name or nature of the benefit), and

b

is made to a person who is not a designated person,

whether or not the payment is made in respect of a designated person.

8

In this regulation—

  • “designated person” has the same meaning as it has in Part 3 (finance);

  • “frozen account” means an account with a relevant institution which is held or controlled (directly or indirectly) by a designated person;

  • “relevant institution” means a person that has permission under Part 4A of the Financial Services and Markets Act 200011 (permission to carry on regulated activity).

9

The definition of “relevant institution” in paragraph (7) is to be read with section 22 of the Financial Services and Markets Act 200012, any relevant order under that section13 and Schedule 2 to that Act14.

Exception for acts done for purposes of national security or prevention of serious crime30

1

Where an act would, in the absence of this paragraph, be prohibited by the prohibition in regulation 9(2) (confidentiality) any prohibition in Part 3 (finance) or 5 (trade), that prohibition does not apply to the act if the act is one which a responsible officer has determined would be in the interests of—

a

national security, or

b

the prevention or detection of serious crime in the United Kingdom or elsewhere.

2

Where, in the absence of this paragraph, a thing would be required to be done under or by virtue of a provision of Part 7 (information and records) or Part 9 (maritime enforcement), that requirement does not apply if a responsible officer has determined that not doing the thing in question would be in the interests of—

a

national security, or

b

the prevention or detection of serious crime in the United Kingdom or elsewhere.

3

In this regulation “responsible officer” means a person in the service of the Crown or holding office under the Crown, acting in the course of that person’s duty.

4

Nothing in this regulation affects the application of a prohibition or requirement in a case where it would be incompatible with a UN obligation for the prohibition or requirement not to apply.

Treasury licences31

1

The prohibitions in regulations 11 to 15 (asset-freeze etc.) do not apply to anything done under the authority of a licence issued by the Treasury under this paragraph.

2

A licence under paragraph (1)—

a

must specify the acts authorised by it;

b

may be general or may authorise acts by a particular person or persons of a particular description;

c

may—

i

contain conditions;

ii

be of indefinite duration or a defined duration.

3

Where the Treasury issue a licence under paragraph (1) the Treasury may vary, revoke or suspend it at any time.

4

Where the Treasury issue, vary, revoke or suspend a licence under paragraph (1) which authorises acts by a particular person the Treasury must give written notice to that person of the issue, variation, revocation or suspension of the licence.

5

Where the Treasury issue, vary, revoke or suspend a general licence or a licence which authorises acts by persons of a particular description under paragraph (1) the Treasury must take such steps as considered appropriate to publicise the issue, variation, revocation or suspension of the licence.

Finance: licensing offences32

1

A person (“P”) commits an offence if P knowingly or recklessly—

a

provides information that is false in a material respect, or

b

provides or produces a document that is not what it purports to be,

for the purpose of obtaining a Treasury licence (whether for P or anyone else).

2

A person who purports to act under the authority of a Treasury licence but who fails to comply with any condition of the licence commits an offence.

Section 8B(1) to (3) of Immigration Act 1971: directions33

1

The Secretary of State may direct that, in relation to any person within regulation 17 whose name is specified, or who is of a specified description, section 8B(1) and (2) of the Immigration Act 1971, or section 8B(3) of that Act, have effect subject to specified exceptions.

2

A direction may contain conditions.

3

A direction must be of a defined duration (and that duration may be expressed in any way, including, for example, being expressed in a way such that the direction ceases to have effect on, or within a specified period after, the occurrence of a specified event).

4

The Secretary of State may vary, revoke or suspend a direction under this regulation at any time.

5

On the issue, variation, revocation or suspension of a direction, the Secretary of State may take such steps as the Secretary of State considers appropriate to publicise the issue, variation, revocation or suspension of the direction.

6

In this regulation “specified” means specified in a direction.

PART 7Information and records

Finance: reporting obligations34

1

A relevant firm must inform the Treasury as soon as practicable if—

a

it knows, or has reasonable cause to suspect, that a person—

i

is a designated person, or

ii

has committed an offence under any provision of Part 3 (finance) or regulation 32 (finance: licensing offences), and

b

the information or other matter on which the knowledge or cause for suspicion is based came to it in the course of carrying on its business.

2

Where a relevant firm informs the Treasury under paragraph (1), it must state—

a

the information or other matter on which the knowledge or suspicion is based, and

b

any information it holds about the person by which the person can be identified.

3

Paragraph (4) applies if—

a

a relevant firm informs the Treasury under paragraph (1) that it knows, or has reasonable cause to suspect, that a person is a designated person, and

b

that person is a customer of the relevant firm.

4

The relevant firm must also state the nature and amount or quantity of any funds or economic resources held by it for the customer at the time when it first had the knowledge or suspicion.

5

A relevant institution must inform the Treasury without delay if that institution—

a

credits a frozen account in accordance with regulation 29(4) (finance: exceptions from prohibitions), or

b

transfers funds from a frozen account in accordance with regulation 34(6).

6

A person who fails to comply with a requirement in paragraph (1), (2) or (4) commits an offence.

7

In this regulation—

  • “designated person” has the same meaning as it has in Part 3 (finance);

  • “frozen account” has the same meaning as it has in regulation 29;

  • “relevant firm” is to be read in accordance with regulation 35;

  • “relevant institution” has the same meaning as it has in regulation 29.

“Relevant firm”35

1

The following are relevant firms for the purposes of regulation 34—

a

a person that has permission under Part 4A of the Financial Services and Markets Act 2000 (permission to carry on regulated activity);

b

an undertaking that by way of business—

i

operates a currency exchange office,

ii

transmits money (or any representation of monetary value) by any means, or

iii

cashes cheques that are made payable to customers;

c

a firm or sole practitioner that is—

i

a statutory auditor within the meaning of Part 42 of the Companies Act 2006 (statutory auditors)15, or

ii

a local auditor within the meaning of section 4(1) of the Local Audit and Accountability Act 2014 (general requirements for audit)16;

d

a firm or sole practitioner that provides to other persons, by way of business—

i

accountancy services,

ii

legal or notarial services,

iii

advice about tax affairs, or

iv

trust or company services within the meaning of paragraph (2);

e

a firm or sole practitioner that carries out, or whose employees carry out, estate agency work;

f

the holder of a casino operating licence within the meaning given by section 65(2)(a) of the Gambling Act 2005 (nature of a licence)17;

g

a person engaged in the business of making, supplying, selling (including selling by auction) or exchanging—

i

articles made from gold, silver, platinum or palladium, or

ii

precious stones or pearls.

2

In paragraph (1) “trust or company services” means any of the following services—

a

forming companies or other legal persons;

b

acting, or arranging for another person to act—

i

as a director or secretary of a company,

ii

as a partner of a partnership, or

iii

in a similar capacity in relation to other legal persons;

c

providing a registered office, business address, correspondence or administrative address or other related services for a company, partnership or any other legal person or arrangement;

d

acting, or arranging for another person to act, as—

i

a trustee of an express trust or similar legal arrangement, or

ii

a nominee shareholder for a person.

3

In paragraph (1)—

  • “estate agency work” is to be read in accordance with section 1 of the Estate Agents Act 197918, but as if references in that section to disposing of or acquiring an interest in land included (despite anything in section 2 of that Act) references to disposing of or acquiring an estate or interest in land outside the United Kingdom where that estate or interest is capable of being owned or held as a separate interest;

  • “firm” means any entity that, whether or not a legal person, is not an individual, and includes a body corporate and a partnership or other unincorporated body.

4

Paragraph (1)(a) and (b) is to be read with section 22 of the Financial Services and Markets Act 2000, any relevant order under that section and Schedule 2 to that Act

5

For the purposes of regulation 34(1), information or another matter comes to a relevant firm “in the course of carrying on its business” if the information or other matter comes to the firm—

a

in the case of a relevant firm within paragraph (1)(a), in the course of carrying on an activity in respect of which the permission mentioned in that provision is required;

b

in the case of a relevant firm within paragraph (1)(c)(i), in the course of carrying out statutory audit work within the meaning of section 1210 of the Companies Act 2006 (meaning of “statutory auditor”)19;

c

in the case of a relevant firm within paragraph (1)(c)(ii), in the course of carrying out an audit required by the Local Audit and Accountability Act 2014;

d

in the case of a relevant firm within paragraph (1)(f), in the course of carrying on an activity in respect of which the licence mentioned in that provision is required;

e

in the case of a relevant firm within any other provision of paragraph (1), in the course of carrying on an activity mentioned in that provision.

Finance: powers to request information36

1

The Treasury may request a designated person to provide information about—

a

funds or economic resources owned, held or controlled by or on the behalf of the designated person, or

b

any disposal of such funds or economic resources.

2

The Treasury may request a designated person to provide such information as the Treasury may reasonably require about expenditure—

a

by the designated person, or

b

for the benefit of the designated person.

3

For the purposes of paragraph (2), expenditure for the benefit of a designated person includes expenditure on the discharge (or partial discharge) of a financial obligation for which the designated person is wholly or partly responsible.

4

The power in paragraph (1) or (2) is exercisable only where the Treasury believe that it is necessary for the purpose of monitoring compliance with or detecting evasion of any provision of Part 3 (Finance).

5

The Treasury may request a person acting under a Treasury licence to provide information about—

a

funds or economic resources dealt with under the licence, or

b

funds, economic resources or financial services made available under the licence.

6

The Treasury may request a person to provide information within paragraph (7) if the Treasury believe that the person may be able to provide the information.

7

Information within this paragraph is such information as the Treasury may reasonably require for the purpose of—

a

establishing for the purposes of any provision of Part 3—

i

the nature and amount or quantity of any funds or economic resources owned, held or controlled by or on the behalf of a designated person,

ii

the nature and amount or quantity of any funds, economic resources or financial services made available directly or indirectly to, or for the benefit of, a designated person, or

iii

the nature of any financial transactions entered into by a designated person;

b

monitoring compliance with or detecting evasion of—

i

any provision of Part 3,

ii

regulation 34 (finance: reporting obligations), or

iii

any condition of a Treasury licence;

c

detecting or obtaining evidence of the commission of an offence under Part 3 or regulation 32 (finance: licensing offences) or 34 (finance: reporting obligations).

8

The Treasury may specify the way in which, and the period within which, information is to be provided.

9

If no such period is specified, the information which has been requested must be provided within a reasonable time.

10

A request may include a continuing obligation to keep the Treasury informed as circumstances change, or on such regular basis as the Treasury may specify.

11

Information requested under this regulation may relate to any period of time during which a person is, or was, a designated person.

12

Information requested by virtue of paragraph (1)(b), (2) or (7)(a)(iii) may relate to any period before a person became a designated person (as well as, or instead of, any subsequent period).

13

Expressions used in this regulation have the same meaning as they have in Part 3.

Finance: production of documents37

1

A request under regulation 36 may include a request to produce specified documents or documents of a specified description.

2

Where the Treasury request that documents be produced, the Treasury may—

a

take copies of or extracts from any document so produced,

b

request any person producing a document to give an explanation of it, and

c

where that person is a body corporate, partnership or unincorporated body other than a partnership, request any person who is—

i

in the case of a partnership, a present or past partner or employee of the partnership, or

ii

in any other case, a present or past officer or employee of the body concerned,

to give such an explanation.

3

Where the Treasury request a designated person or a person acting under a Treasury licence to produce documents, that person must—

a

take reasonable steps to obtain the documents (if they are not already in the person’s possession or control);

b

keep the documents under the person’s possession or control (except for the purpose of providing them to the Treasury or as the Treasury may otherwise permit).

4

In this regulation “designated person” has the same meaning as it has in Part 3 (finance).

Finance: information offences38

1

A person commits an offence, if that person—

a

without reasonable excuse, refuses or fails within the time and in the manner specified (or, if no time has been specified, within a reasonable time) to comply with any request under regulation 36 (finance: powers to request information);

b

knowingly or recklessly gives any information, or produces any document, which is false in a material particular in response to such a request;

c

with intent to evade any provision of regulation 36 (finance: powers to request information) or 37 (finance: production of documents), destroys, mutilates, defaces, conceals or removes any document;

d

otherwise intentionally obstructs the Treasury in the exercise of their powers under regulation 36 or 37.

2

Where a person is convicted of an offence under this regulation, the court may make an order requiring that person, within such period as may be specified in the order, to comply with the request.

Trade: application of information powers in CEMA39

1

Section 77A of CEMA20 applies in relation to a person carrying on a relevant activity as it applies in relation to a person concerned in the importation or exportation of goods but as if—

a

in subsection (1), the reference to a person concerned in the importation or exportation of goods for which for that purpose an entry is required by regulation 5 of the Customs Controls on Importation of Goods Regulations 199121 or an entry or specification is required by or under CEMA were to a person carrying on a relevant activity;

b

any other reference to importation or exportation were to a relevant activity;

c

any other reference to goods were to the goods, technology, services or funds to which the relevant activity relates.

2

For the purposes of paragraph (1), a “relevant activity” means an activity which constitutes a contravention of—

a

any prohibition in Part 5 (trade) except the prohibition in regulation 19(1)(export of military goods), or

b

the prohibition in regulation 27 (circumventing etc. prohibitions).

Disclosure of information40

1

The Secretary of State, the Treasury or the Commissioners may, in accordance with this regulation, disclose—

a

any information obtained under or by virtue of Part 6 (exceptions and licences), this Part or Part 9 (maritime enforcement), or

b

any information held in connection with—

i

anything done under or by virtue of Part 2 (designation of persons), Part 3 (finance), Part 5 (trade), or

ii

any exception or licence under Part 6 or anything done in accordance with such an exception or under the authority of such a licence.

2

Information referred to in paragraph (1) may be disclosed for, or in connection with, any of the following purposes—

a

the exercise of functions under these Regulations;

b

any purpose stated in regulation 4;

c

facilitating, monitoring or ensuring compliance with these Regulations;

d

taking any action with a view to instituting, or otherwise for the purposes of, any proceedings in the United Kingdom—

i

for an offence under any provision of these Regulations,

ii

for an offence under CEMA in connection with the prohibition mentioned in regulation 19(1) (export of military goods), or

iii

in relation to a monetary penalty under section 146 of the Policing and Crime Act 2017 (breach of financial sanctions legislation)22;

e

taking any action with a view to instituting, or otherwise for the purposes of, any proceedings in any of the Channel Islands, the Isle of Man, or any British overseas territory, for an offence—

i

under a provision in any such jurisdiction that is similar to a provision of these Regulations, or

ii

in connection with a prohibition in any such jurisdiction that is similar to a prohibition referred to in sub-paragraph (d)(ii);

f

compliance with an international obligation23;

g

facilitating the exercise by an authority outside the United Kingdom or by an international organisation of functions which correspond to functions under these Regulations.

3

Information referred to in paragraph (1) may be disclosed to the following persons—

a

a police officer;

b

any person holding or acting in any office under or in the service of—

i

the Crown in right of the Government of the United Kingdom,

ii

the Crown in right of the Scottish Government, the Northern Ireland Executive or the Welsh Government,

iii

the States of Jersey, Guernsey or Alderney or the Chief Pleas of Sark,

iv

the Government of the Isle of Man, or

v

the Government of any British overseas territory;

c

any law officer of the Crown for Jersey, Guernsey or the Isle of Man;

d

the Scottish Legal Aid Board;

e

the Financial Conduct Authority, the Prudential Regulation Authority, the Bank of England, the Jersey Financial Services Commission, the Guernsey Financial Services Commission or the Isle of Man Financial Services Authority;

f

any other regulatory body (whether or not in the United Kingdom);

g

any organ of the United Nations;

h

the Council of the European Union, the European Commission or the European External Action Service;

i

the Government of any country;

j

any other person where the Secretary of State, the Treasury or the Commissioners (as the case may be) considers that it is appropriate to disclose the information.

4

Information referred to in paragraph (1) may be disclosed to any person with the consent of a person who, in their own right, is entitled to the information.

5

In paragraph (4) “in their own right” means not merely in the capacity as a servant or agent of another person.

6

In paragraph (1)(b)—

a

references to information include information obtained at a time when any provision of these Regulations is not in force, and

b

references to a licence under Part 6 include—

i

a licence which is treated as if it were a licence which had been issued under that Part, and

ii

a licence which is deemed to have been issued under that Part.

Part 7: supplementary41

1

A disclosure of information under regulation 40 does not breach any restriction on such disclosure imposed by statute or otherwise.

2

But nothing in that regulation authorises a disclosure that—

a

contravenes the data protection legislation, or

b

is prohibited by an of Parts 1 to 7 or Chapter 1 of Part 9 of the Investigatory Powers Act 201624.

3

Nothing in this Part is to be read as requiring a person who has acted or is acting as counsel or solicitor for any person to disclose any privileged information in their possession in that capacity.

4

Regulation 40 does not limit the circumstances in which information may be disclosed apart from that regulation.

5

Nothing in this Part limits any conditions which may be contained in a Treasury licence.

6

In this regulation—

  • “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act)25;

  • “privileged information” means information with respect to which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.

PART 8Enforcement

Penalties for offences42

1

A person who commits an offence under any provision of Part 3 (finance) or regulation 32 (finance: licensing offences), is liable—

a

on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or a fine (or both);

b

on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);

c

on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both);

d

on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine (or both).

2

A person who commits an offence under any provision of Part 5 (trade) is liable—

a

on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or a fine (or both);

b

on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);

c

on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both);

d

on conviction on indictment, to imprisonment for a term not exceeding 10 years or a fine (or both).

3

A person who commits an offence under regulation 9(6) (confidentiality) is liable—

a

on summary conviction in England and Wales, to imprisonment for a term not exceeding 12 months or a fine (or both);

b

on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both);

c

on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both);

d

on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).

4

A person who commits an offence under regulation 34(6) or 38 (information offences in connection with Part 3) is liable—

a

on summary conviction in England and Wales, to imprisonment for a term not exceeding 6 months or a fine (or both);

b

on summary conviction in Scotland, to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale (or both);

c

on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale (or both).

5

In relation to an offence committed before section 154(1) of the Criminal Justice Act 200326 comes into force the reference in each of paragraphs (1)(a), 2(a) and 3(a) to 12 months is to be read as a reference to 6 months.

Liability of officers of bodies corporate etc.43

1

Where an offence under these Regulations , committed by a body corporate—

a

is committed with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, or

b

is attributable to any neglect on the part of any such person,

that person as well as the body corporate is guilty of the offence and is liable to be proceeded against and punished accordingly.

2

In paragraph (1) “director”, in relation to a body corporate whose affairs are managed by its members, means a member of the body corporate.

3

Paragraph (1) also applies in relation to a body that is not a body corporate, with the substitution for the reference to a director of the body of a reference—

a

in the case of a partnership, to a partner;

b

in the case of an unincorporated body other than a partnership—

i

where the body’s affairs are managed by its members, to a member of the body;

ii

in any other case, to a member of the governing body.

4

Section 171(4) of CEMA (which is a provision similar to this regulation) does not apply to any offence under these Regulations to which that provision would, in the absence of this paragraph, apply.

Jurisdiction to try offences44

1

Where an offence under regulation 9(6) (confidentiality), Part 3 (finance), regulation 32 (finance: licensing offences) or regulation 34(6) or 38(1) (information offences in connection with Part 3) is committed in the United Kingdom—

a

proceedings for the offence may be taken at any place in the United Kingdom, and

b

the offence may for all incidental purposes be treated as having been committed at any such place.

2

Where an offence under these Regulations is committed outside the United Kingdom—

a

proceedings for the offence may be taken at any place in the United Kingdom, and

b

the offence may for all incidental purposes be treated as having been committed at any such place.

3

In the application of paragraph (2) to Scotland, any such proceedings against a person may be taken—

a

in any sheriff court district in which the person is apprehended or is in custody, or

b

in such sheriff court district as the Lord Advocate may determine.

4

In paragraph (3) “sheriff court district” is to be read in accordance with the Criminal Procedure (Scotland) Act 1995 (see section 307(1) of that Act)27.

Procedure for offences by unincorporated bodies45

1

Paragraphs (2) and (3) apply if it is alleged that an offence under these Regulations has been committed by an unincorporated body (as opposed to by a member of the body).

2

Proceedings in England and Wales or Northern Ireland for such an offence must be brought against the body in its own name.

3

For the purposes of proceedings, for such an offence brought against an unincorporated body—

a

rules of court relating to the service of documents have effect as if the body were a body corporate;

b

the following provisions apply as they apply in relation to a body corporate—

i

section 33 of the Criminal Justice Act 192528 and Schedule 3 to the Magistrates’ Courts Act 198029;

ii

section 18 of the Criminal Justice Act (Northern Ireland) 194530 and Article 166 of, and Schedule 4 to, the Magistrates’ Courts (Northern Ireland) Order 198131.

4

A fine imposed on an unincorporated body on its conviction of an offence under these Regulations is to be paid out of the funds of the body.

Time limit for proceedings for summary offences46

1

Proceedings for an offence under these Regulations which is triable only summarily may be brought within the period of 12 months beginning with the date on which evidence sufficient in the opinion of the prosecutor to justify the proceedings comes to the prosecutor’s knowledge.

2

But such proceedings may not be brought by virtue of paragraph (1) more than 3 years after the commission of the offence.

3

A certificate signed by the prosecutor as to the date on which the evidence in question came to the prosecutor’s knowledge is conclusive evidence of the date on which it did so; and a certificate to that effect and purporting to be so signed is to be treated as being so signed unless the contrary is proved.

4

In relation to proceedings in Scotland—

a

section 136(3) of the Criminal Procedure (Scotland) Act 1995 (date of commencement of summary proceedings) applies for the purposes of this regulation as it applies for the purposes of that section, and

b

references in this regulation to the prosecutor are to be treated as references to the Lord Advocate.

Trade enforcement: application of CEMA47

1

Where the Commissioners investigate or propose to investigate any matter with a view to determining—

a

whether there are grounds for believing that a relevant offence has been committed, or

b

whether a person should be prosecuted for such an offence,

the matter is to be treated as an assigned matter.

2

In paragraph (1) “assigned matter” has the meaning given by section 1(1) of CEMA32.

3

In this regulation a “relevant offence” means an offence under Part 5 (trade),

4

Section 138 of CEMA33 (arrest of persons) applies to a person who has committed, or whom there are reasonable grounds to suspect of having committed, a relevant offence as it applies to a person who has committed, or whom there are reasonable grounds to suspect of having committed, an offence for which the person is liable to be arrested under the customs and excise Acts34, but as if—

a

any reference to an offence under, or for which a person is liable to be arrested under, the customs and excise Acts were to a relevant offence;

b

in subsection (2), the reference to any person so liable were to a person who has committed, or whom there are reasonable grounds to suspect of having committed, a relevant offence.

5

The provisions of CEMA mentioned in paragraph (6) apply in relation to proceedings for a relevant offence as they apply in relation to proceedings for an offence under the customs and excise Acts, but as if—

a

any reference to the customs and excise Acts were to any of the provisions mentioned in paragraph (3);

b

in section 145(6), the reference to an offence for which a person is liable to be arrested under the customs and excise Acts were to a relevant offence;

c

in section 151, the reference to any penalty imposed under the customs and excise Acts were to any penalty imposed under these Regulations in relation to a relevant offence;

d

in section 154(2)—

i

the reference to proceedings relating to customs or excise were to proceedings under any of the provisions mentioned in paragraph (3), and

ii

the reference to the place from which any goods have been brought included a reference to the place to which goods have been exported, supplied or delivered or the place to or from which technology has been transferred.

6

The provisions of CEMA are sections 145, 146, 147, 148(1), 150, 151, 152, 154 and 15535 (legal proceedings).

Trade offences in CEMA: modification of penalty48

1

Paragraph (2) applies where a person is guilty of an offence under section 68(2) of CEMA in connection with the prohibition mentioned in regulation 19(1) (export of military goods).

2

Where this paragraph applies, the reference to 7 years in section 68(3)(b) of CEMA36 is to be read as a reference to 10 years.

3

Paragraph (4) applies where a person is guilty of an offence under section 170(2) of CEMA in connection with the prohibition mentioned in regulation 19(1).

4

Where this paragraph applies, the reference to 7 years in section 170(3)(b) of CEMA37 is to be read as a reference to 10 years.

Application of Chapter 1 of Part 2 of Serious Organised Crime and Police Act 200549

Chapter 1 of Part 2 of the Serious Organised Crime and Police Act 2005 (investigatory powers)38 applies to any offence under Part 3 (finance) and regulation 32 (finance: licensing offences).

Monetary penalties50

The following provisions are to be regarded as not being financial sanctions legislation for the purposes of Part 8 of the Policing and Crime Act 201739

a

regulation 21(1) (making military goods and military technology available);

b

regulation 22(1) (transfer of military technology);

c

regulation 24(1) and (2) (financial services and funds relating to military goods and military technology);

d

regulation 25(1)(f)(i) and (g) (brokering services relating to financial services and funds relating to military goods and military technology)

e

regulation 26 (enabling or facilitating conduct of armed hostilites).

PART 9Maritime enforcement

Exercise of maritime enforcement powers51

1

A maritime enforcement officer may, for a purpose mentioned in paragraph (2) or (3), exercise any of the maritime enforcement powers in relation to—

a

a British ship in foreign waters or international waters,

b

a ship without nationality in international waters, or

c

a foreign ship in international waters,

and a ship within sub-paragraph (a), (b) or (c) is referred to in this Part as “a relevant ship”.

2

The maritime enforcement powers may be exercised for the purpose of enforcing any of the following—

a

the prohibition in regulation 19(1) (export of military goods);

b

the prohibition in regulation 20(1) (supply and delivery of military goods);

c

a prohibition in regulation 21(1) (making military goods and military technology available);

d

a prohibition in regulation 22(1) (transfer of military technology);

3

The maritime enforcement powers may also be exercised in relation to a relevant ship for the purpose of—

a

investigating the suspected carriage of relevant goods on the ship, or

b

preventing the continued carriage on the ship of goods suspected to be relevant goods.

4

In this Part, “the maritime enforcement powers” are the powers conferred by regulations 53 and 54.

5

This regulation is subject to regulation 55 (restrictions on exercise of maritime enforcement powers).

Maritime enforcement officers52

1

The following persons are “maritime enforcement officers” for the purposes of this Part—

a

a commissioned officer of any of Her Majesty’s ships;

b

a member of the Ministry of Defence Police (within the meaning of section 1 of the Ministry of Defence Police Act 198740);

c

a constable—

i

who is a member of a police force in England and Wales,

ii

within the meaning of section 99 of the Police and Fire Reform (Scotland) Act 201241, or

iii

who is a member of the Police Service of Northern Ireland or the Police Service of Northern Ireland Reserve;

d

a special constable—

i

appointed under section 27 of the Police Act 199642,

ii

appointed under section 9 of the Police and Fire Reform (Scotland) Act 2012, or

iii

in Northern Ireland, appointed by virtue of provision incorporating section 79 of the Harbours, Docks, and Piers Clauses Act 184743;

e

a constable who is a member of the British Transport Police Force;

f

a port constable, within the meaning of section 7 of the Marine Navigation Act 201344, or a person appointed to act as a constable under provision made by virtue of section 16 of the Harbours Act 196445;

g

a designated customs official within the meaning of Part 1 of the Borders, Citizenship and Immigration Act 2009 (see section 14(6) of that Act)46;

h

a designated NCA officer who is authorised by the Director General of the National Crime Agency (whether generally or specifically) to exercise the powers of a maritime enforcement officer under this Part.

2

In this regulation, “a designated NCA officer” means a National Crime Agency officer who is either or both of the following—

a

an officer designated under section 10 of the Crime and Courts Act 2013 as having the powers and privileges of a constable;

b

an officer designated under that section as having the powers of a general customs official.

Power to stop, board, search etc.53

1

This regulation applies if a maritime enforcement officer has reasonable grounds to suspect that a relevant ship is carrying prohibited goods or relevant goods.

2

The officer may—

a

stop the ship;

b

board the ship;

c

for the purpose of exercising a power conferred by paragraph (3) or regulation 54, require the ship to be taken to, and remain in, a port or anchorage in the United Kingdom or any other country willing to receive it.

3

Where the officer boards a ship by virtue of this regulation, the officer may—

a

stop any person found on the ship and search that person for—

i

prohibited goods or relevant goods, or

ii

any thing that might be used to cause physical injury or damage to property or to endanger the safety of any ship;

b

search the ship, or any thing found on the ship (including cargo) for prohibited goods or relevant goods.

4

The officer may—

a

require a person found on a ship boarded by virtue of this regulation to provide information or produce documents;

b

inspect and copy such information or documents.

5

The officer may exercise a power conferred by paragraph (3)(a)(i) or (b) only to the extent reasonably required for the purpose of discovering prohibited goods or relevant goods.

6

The officer may exercise the power conferred by paragraph (3)(a)(ii) in relation to a person only where the officer has reasonable grounds to believe that the person might use a thing to cause physical injury or damage to property or to endanger the safety of any ship.

7

The officer may use reasonable force, if necessary, in the exercise of any power conferred by this regulation.

Seizure power54

1

This regulation applies if a maritime enforcement officer is lawfully on a relevant ship (whether in exercise of the powers conferred by regulation 53 or otherwise).

2

The officer may seize any of the following which are found on the ship, in any thing found on the ship, or on any person found on the ship—

a

goods which the officer has reasonable grounds to suspect are prohibited goods or relevant goods, or

b

things within regulation 53(3)(a)(ii).

3

The officer may use reasonable force, if necessary, in the exercise of any power conferred by this regulation.

Restrictions on exercise of maritime enforcement powers55

1

The authority of the Secretary of State is required before any maritime enforcement power is exercised in reliance on regulation 51 in relation to—

a

a British ship in foreign waters, or

b

a foreign ship in international waters.

2

In relation to a British ship in foreign waters other than the sea and other waters within the seaward limits of the territorial sea adjacent to any relevant British possession, the Secretary of State may give authority under paragraph (1) only if the State in whose waters the power would be exercised consents to the exercise of the power.

3

In relation to a foreign ship in international waters, the Secretary of State may give authority under paragraph (1) only if—

a

the home state has requested the assistance of the United Kingdom for a purpose mentioned in regulation 51(2) or (3),

b

the home state has authorised the United Kingdom to act for such a purpose, or

c

the United Nations Convention on the Law of the Sea 198247 or a UN Security Council Resolution otherwise permits the exercise of the power in relation to the ship.

Interpretation of Part 956

1

Subject to paragraph (2), any expression used in this Part and in section 19 or 20 of the Act has the same meaning in this Part as it has in section 19 or (as the case may be) section 20 of the Act.

2

For the purpose of interpreting any reference to “prohibited goods” or “relevant goods” in this Part, any reference in section 19 or 20 of the Act to a “relevant prohibition or requirement” is to be read as a reference to any prohibition specified in regulation 51(2)(a) to (d).

PART 10Supplementary and final provision

Notices57

1

This regulation applies in relation to a notice required by regulation 31 (treasury licences) to be given to a person.

2

The notice may be given to an individual—

a

by delivering it to the individual,

b

by sending it to the individual by post addressed to the individual at his or her usual or last-known place of residence or business, or

c

by leaving it for the individual at that place.

3

The notice may be given to a person other than an individual—

a

by sending it by post to the proper officer of the body at its principal office, or

b

by addressing it to the proper officer of the body and leaving it at that office.

4

The notice may be given to the person by other means, including by electronic means, with the person’s consent.

5

In this regulation, the reference in paragraph (3) to a “principal office”—

a

in relation to a registered company, is to be read as a reference to the company’s registered office;

b

in relation to a body incorporated or constituted under the law of a country other than the United Kingdom, includes a reference to the body’s principal office in the United Kingdom (if any).

6

In this regulation—

  • “proper officer”—

    1. a

      in relation to a body other than a partnership, means the secretary or other executive officer charged with the conduct of the body’s general affairs; and

    2. b

      in relation to a partnership, means a partner or a person who has the control or management of the partnership business;

  • “registered company” means a company registered under the enactments relating to companies for the time being in force in the United Kingdom.

Trade: overlapping offences58

A person is not to be taken to commit an offence under the Export Control Order 2008 if the person would, in the absence of this regulation, commit an offence under both—

a

article 34 of that Order, and

b

any provision of Part 5 (trade).

Revocation of the ISIL (Da’esh) and Al-Qaida (Asset-Freezing) Regulations 201159

The ISIL (Da’esh) and Al-Qaida (Asset-Freezing) Regulations 201148 are revoked.

Other revocations60

1

Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism is revoked.

2

Council Implementing Regulation (EU) 2019/24 of 8 January 2019 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, and repealing Implementing Regulation (EU) 2018/1071 is revoked.

3

Council Regulation (EU) 2016/1686 of 20 September 2016 imposing additional restrictive measures directed against ISIL (Da’esh) and Al-Qaeda and natural and legal persons, entities or bodies associated with them is revoked.

Transitional provision: Treasury licences61

1

Paragraphs (2) to (4) apply to a licence which—

a

was granted, or deemed to be granted, by the Treasury under—

i

section 17 of the Terrorist Asset-Freezing Act etc. 201049, or

ii

under regulation 950 of the 2011 Regulations in respect of persons named in Annex 1 to the EU autonomous ISIL (Da’esh) and Al-Qaida) Regulation;

b

was in effect immediately before the relevant date, and

c

authorises conduct which would (on and after the relevant date, and in the absence of paragraphs (2) to (4)) be prohibited under Part 3 (finance),

and such a licence is referred to in this regulation as “an existing financial sanctions licence”.

2

An existing financial sanctions licence which authorises an act which would otherwise be prohibited has effect on and after the relevant date as if it had been issued by the Treasury under regulation 31(1) (treasury licences).

3

Any reference in an existing financial sanctions licence to the Terrorist Asset-Freezing etc. Act 2010 or the 2011 Regulations is to be treated on or after the relevant date as a reference to these Regulations.

4

Any reference in an existing financial sanctions licence to a prohibition in—

a

the Terrorist Asset-Freezing etc. Act 2010,

b

the 2011 Regulations,

c

the EU autonomous ISIL (Da’esh) and Al-Qaida) Regulation, or

d

EU Regulation 2580/2001,

is to be treated on and after the relevant date as a reference to the corresponding prohibition in Part 3.

5

Paragraph (6) applies where—

a

an application for a licence, or for the variation of a licence—

i

under the Terrorist Asset-Freezing etc. Act 2010, or

ii

under the 2011 Regulations in respect of persons named in Annex 1 to the EU autonomous ISIL (Da’esh) and Al-Qaida) Regulation,

was made before the relevant date;

b

the application is for the authorisation of conduct which would (on or after the relevant date) be prohibited under Part 3, and

c

a decision to grant or refuse the application has not been made before that date.

6

The application is to be treated on or after the relevant date as an application for a licence, or for the variation of a licence (as the case may be), under regulation 31 (treasury licences).

7

In this regulation—

  • EU Regulation 2580/2001” means Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, as it has effect in EU law;

  • “the 2011 Regulations” means the ISIL (Da’esh) and Al-Qaida (Asset-Freezing) Regulations 201151;

  • “the relevant date” means—

    1. a

      where regulations under section 56 of the Act provide that Part 3 comes into force at a specified time on a day, that time on that day;

    2. b

      otherwise, the date on which Part 3 comes into force.

Transitional provision: prior obligations62

1

Where—

a

a person was—

i

designated by the Treasury for the purposes of Part 1 of the Terrorist Asset-Freezing etc. Act 2010 immediately before the relevant date,

ii

named in Annex 1 of the EU autonomous ISIL (Da’esh) and Al-Qaida Regulation immediately before the relevant date, or

iii

named on the list provided for in Article 2(3) of EU Regulation 2580/200152 immediately before the relevant date; and

b

the person is a designated person immediately before the relevant date,

any reference in a provision in regulation 29(5) (finance: exception from prohibitions) to the date on which a person became a designated person is to be read as a reference to the original listing date.

2

In this regulation—

  • “designated person” has the same meaning as it has in Part 3 (Finance);

  • “original listing date” means the earliest of—

    1. a

      the date on which the person was designated by the Treasury for the purposes of Part 1 of the Terrorist Asset-Freezing etc. Act 2010;

    2. b

      the date on which the person was designated by Treasury under any Order mentioned in section 1(2) of the Terrorist Asset-Freezing (Temporary Provisions) Act 201053;

    3. c

      the date on which the person was named in Annex 1 to the EU autonomous ISIL (Da’esh) and Al-Qaida Regulation; and

    4. d

      the date on which the person was named on the list provided for in Article 2(3) of EU Regulation 2580/2001;

  • EU Regulation 2580/2001” means Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, as it has effect in EU law;

  • “the relevant date” means—

    1. a

      where regulations under section 56 of the Act provide that Part 3 comes into force at a specified time on a day, that time on that day;

    2. b

      otherwise, the date on which Part 3 comes into force.

Alan DuncanMinister of StateForeign and Commonwealth Office

SCHEDULERules for interpretation of regulation 7(2)

Regulation 7(3)

Application of Schedule1

1

The rules set out in the following paragraphs of this Schedule apply for the purpose of interpreting regulation 7(2).

2

They also apply for the purpose of interpreting this Schedule.

Joint interests2

If two or more persons each hold a share or right jointly, each of them is treated as holding that share or right.

Joint arrangements3

1

If shares or rights held by a person and shares or rights held by another person are the subject of a joint arrangement between those persons, each of them is treated as holding the combined shares or rights of both of them.

2

A “joint arrangement” is an arrangement between the holders of shares or rights that they will exercise all or substantially all the rights conferred by their respective shares or rights jointly in a way that is pre-determined by the arrangement.

3

“Arrangement” has the meaning given by paragraph 12.

Calculating shareholdings4

1

In relation to a person who has a share capital, a reference to holding “more than 50% of the shares” in that person is to holding shares comprised in the issued share capital of that person of a nominal value exceeding (in aggregate) 50% of that share capital.

2

In relation to a person who does not have a share capital—

a

a reference to holding shares in that person is to holding a right or rights to share in the capital or, as the case may be, profits of that person;

b

a reference to holding “more than 50% of the shares” in that person is to holding a right or rights to share in more than 50% of the capital or, as the case may be, profits of that person.

Voting rights

5

1

A reference to the voting rights in a person is to the rights conferred on shareholders in respect of their shares (or, in the case of a person not having a share capital, on members) to vote at general meetings of the person on all or substantially all matters.

2

In relation to a person that does not have general meetings at which matters are decided by the exercise of voting rights—

a

a reference to holding voting rights in the person is to be read as a reference to holding rights in relation to the person that are equivalent to those of a person entitled to exercise voting rights in a company;

b

a reference to holding “more than 50% of the voting rights” in the person is to be read as a reference to holding the right under the constitution of the person to block changes to the overall policy of the person or to the terms of its constitution.

6

In applying regulation 7(2) and this Schedule, the voting rights in a person are to be reduced by any rights held by the person itself.

Rights to appoint or remove members of the board

7

A reference to the right to appoint or remove a majority of the board of directors of a person is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all or substantially all matters.

8

A reference to a board of directors, in the case of a person who does not have such a board, is to be read as a reference to the equivalent management body of that person.

Shares or rights held “indirectly”9

1

A person holds a share “indirectly” if the person has a majority stake in another person and that other person—

a

holds the share in question, or

b

is part of a chain of persons—

i

each of whom (other than the last) has a majority stake in the person immediately below it in the chain, and

ii

the last of whom holds the share.

2

A person holds a right “indirectly” if the person has a majority stake in another person and that other person—

a

holds that right, or

b

is part of a chain of persons—

i

each of whom (other than the last) has a majority stake in the person immediately below it in the chain, and

ii

the last of whom holds that right.

3

For these purposes, a person (“A”) has a “majority stake” in another person (“B”) if—

a

A holds a majority of the voting rights in B,

b

A is a member of B and has the right to appoint or remove a majority of the board of directors of B,

c

A is a member of B and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in B, or

d

A has the right to exercise, or actually exercises, dominant influence or control over B.

4

In the application of this paragraph to the right to appoint or remove a majority of the board of directors, a person (“A”) is to be treated as having the right to appoint a director if—

a

any person’s appointment as director follows necessarily from that person’s appointment as director of A, or

b

the directorship is held by A itself.

Shares held by nominees10

A share held by a person as nominee for another is to be treated as held by the other (and not by the nominee).

Rights treated as held by person who controls their exercise

11

1

Where a person controls a right, the right is to be treated as held by that person (and not by the person who in fact holds the right, unless that person also controls it).

2

A person “controls” a right if, by virtue of any arrangement between that person and others, the right is exercisable only—

a

by that person,

b

in accordance with that person’s directions or instructions, or

c

with that person’s consent or concurrence.

12

“Arrangement” includes—

a

any scheme, agreement or understanding, whether or not it is legally enforceable, and

b

any convention, custom or practice of any kind.

Rights exercisable only in certain circumstances etc.13

1

Rights that are exercisable only in certain circumstances are to be taken into account only—

a

when the circumstances have arisen, and for so long as they continue to obtain, or

b

when the circumstances are within the control of the person having the rights.

2

But rights that are exercisable by an administrator or by creditors while a person is subject to relevant insolvency proceedings are not to be taken into account while the person is subject to those proceedings.

3

“Relevant insolvency proceedings” means—

a

administration within the meaning of the Insolvency Act 198654,

b

administration within the meaning of the Insolvency (Northern Ireland) Order 198955, or

c

proceedings under the insolvency law of another country during which a person’s assets and affairs are subject to the control or supervision of a third party or creditor.

4

Rights that are normally exercisable but are temporarily incapable of exercise are to continue to be taken into account.

Rights attached to shares held by way of security14

Rights attached to shares held by way of security provided by a person are to be treated for the purposes of this Schedule as held by that person—

a

where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with that person’s instructions, and

b

where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in that person’s interests.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations are made under the Sanctions and Anti-Money Laundering Act 2018 (c.13) to establish a sanctions regime to further the prevention of terrorism in the United Kingdom and elsewhere and to implement the United Kingdom’s international obligations under resolution 1373 (2001) adopted by the Security Council of the United Nations on 28th September 2001 (“resolution 1373”).

Following the UK’s withdrawal from the European Union, these Regulations replace two EU sanctions regimes in respect of terrorism. One of the EU regimes is the regime adopted on the basis of Common Position 2001/931/CFSP and implemented by Regulation (EC) No 2580/2001. This was implemented in the UK through the Terrorist Asset-Freezing etc. Act 2010 (“TAFA”). TAFA also implemented the United Kingdom’s obligations under resolution 1373. The other regime is the EU’s autonomous regime in respect of ISIL (Da’esh) and Al-Qaida which was implemented by Council Regulation (EU) Regulation 2016/1686.

The Regulations confer a power on the Secretary of State to designate persons who are, or have been involved in terrorism, wheresoever the involvement took place. Designated persons may be excluded from the United Kingdom, may be made subject to financial sanctions, including having their funds and/or economic resources frozen, and may be subject to trade restrictions on military goods and military technology and associated services.

The Regulations provide for certain exceptions to this sanctions regime, in particular in relation to financial sanctions (for example to allow for frozen accounts to be credited with interest or other earnings) and also for acts done for the purpose of national security or the prevention of serious crime. The Regulations also confer powers on the Treasury to issue licenses in respect of activities that would otherwise by prohibited under the financial sanctions imposed.

These Regulations make it a criminal offence to contravene, or circumvent, any of the prohibitions in these Regulations and prescribe the mode of trial and penalties that apply to such offences. The Regulations also confer powers on specified maritime enforcement officers to stop and search ships in international and foreign waters for the purpose of enforcing specified trade sanctions and to seize goods found on board ships which are being, or have been, dealt with in contravention, or deemed contravention, of those prohibitions. The Regulations prescribe powers for the provision and sharing of information to enable the effective implementation and enforcement of this sanctions regime.

These Regulations revoke certain existing EU regulations and UK legislation, these are: Council Regulation (EC) No 2580/2001 of 27 December 2001 (concerning specific restrictive measures against certain persons with a view to combating terrorism), Council Implementing Regulation (EU) 2019/24 of 8 January 2019 (implementing Council Regulation (EC) No. 2580/2001); Council Regulation (EU) No 2016/1686 of 20 September 2016 (concerning additional restrictive measures against ISIL (Da’esh) and Al-Qaeda); and the ISIL (Da’esh) and Al-Qaida (Asset-Freezing) Regulations 2011 (S.I. 2011/2742).

An Impact Assessment has not been produced for these Regulations, as they are intended to ensure existing sanctions remain in place following the United Kingdom’s withdrawal from the European Union. These Regulations are intended to deliver substantially the same policy effects as the existing European Union sanctions. An Impact Assessment was, however, produced for the Sanctions and Anti-Money Laundering Act 2018 and can be found at:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653271/Sanctions_and_Anti-Money_Laundering_Bill_Impact_Assessment_18102017.pdf.