Maritime Guidance Financial sanctions guidance for entities and individuals operating within the maritime shipping sector

July 2020

The Maritime Sector tonnage, operate from management offices in The UK is renowned across the globe for its the UK. This includes the International Group leadership in the maritime shipping industry. of P&I Clubs, the trade association for the Historically, shipping has been vital to the industry which is based in . development of the UK, which continues to move 95% of all its imports and exports by This guidance is produced by the Office of sea.1 The maritime sector contributes over Financial Sanctions Implementation (OFSI), £14bn to the UK economy each year, part of HM , the authority for the supporting an estimated 186,000 jobs. implementation of financial sanctions in the UK. The UK also operates the largest share of global maritime insurance, with around a It provides financial sanctions guidance for entities and individuals which operate in, or third of the total market. This is more than the with, the maritime shipping sector, especially United States, Japan, Germany and France. those involved in areas that may be subject to 13 of the major international P&I Clubs, who UK financial sanctions restrictions, including insure around 90% of world merchant the handling of goods.

1 Maritime Annual Report 2017-18 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/725560/maritime-annual-report-2017-2018.pdf and “The economic contribution of the UK Maritime Sector- a report for Maritime UK” by CEBR https://www.maritimeuk.org/media- centre/publications/state-maritime-nation-report-2019/.

1 This should be considered supplementary to, Sanctions are imposed by the United Nations and not a replacement for, OFSI’s general (UN), European Union (EU), UK and other guidance document. Further sources of jurisdictions such as the US, Canada, Japan information which may prove helpful are and Australia. In addition to UK sanctions, the listed at the end of this document. UK implements EU and UN sanctions. They This guidance does not represent legal advice. commonly include arms embargoes, trade If you are unsure about your obligations in a sanctions, travel bans and financial sanctions. given case, you should consider seeking The Foreign and Commonwealth Office (FCO) has overall responsibility for the UK’s policy on independent legal advice. sanctions. OFSI leads on the implementation What are financial sanctions? and enforcement of financial sanctions Financial sanctions help the UK meet its applicable in the UK. HM Treasury can also foreign policy and national security aims, as currently make counter-terrorism sanctions well as protecting the integrity of its financial designations under the Terrorist Asset- Freezing etc. Act 2010 (TAFA), freezing orders system. Sanctions are used to respond to a under the Anti-Terrorism, Crime and Security range of threats, from terrorism and nuclear Act 2001 (ATCSA) and issue directions under proliferation to internal repression and human the Counter-Terrorism Act (2008). rights. Effective implementation and enforcement of sanctions is an essential tool Financial sanctions specifically relate to restrictions on funds and economic resources2 in these endeavours. that are owned, held, controlled or made Specifically, financial sanctions are generally available to, or for the benefit of, designated imposed to: persons or entities. This can be either directly or indirectly. A number of vessels and • Coerce a regime, or individuals within a companies appear on the consolidated list of regime, into changing their behaviour financial sanctions targets. However, a vessel, (or aspects of it) by increasing the cost firm or individual that is owned or controlled on them to such an extent that they directly or indirectly by a designated entity is decide to cease the offending also captured under financial sanctions behaviour regulations. More information on this can be found in Chapter 4 of OFSI’s general guidance • Constrain a target by denying them document. You may wish to consider other access to key resources needed to non-financial sanctions prohibitions which continue their offending behaviour, may apply to sanctioned vessels. including the financing of terrorism or nuclear proliferation Illicit and suspicious shipping practices • Signal disapproval, stigmatising and According to reports from the International potentially isolating a regime or Maritime Organisation, and the UN Panel of individual, or as a way of sending Experts (UN POE) of the UN Security Council broader political messages nationally or Sanctions Committee on North Korea internationally published in 2019,3 a variety of tactics are deployed to confuse or conceal the identities • Protect the value of assets that have of vessels, cargo, routes and ports. While the been misappropriated from a country practices detailed in these reports relate to until these assets can be repatriated Democratic People's Republic of Korea (DPRK), they are indicative of approaches that could

2 See definitions in Annex 1. 3 UN Security Council, S/2019/171 https://www.undocs.org/S/2019/171, 5 March 2019 and UN Security Council, S/2019/691 https://www.undocs.org/S/2019/691, 30 August 2019

2 be used by anyone seeking to breach Cyber activity sanctions. Cyberattacks have been used to illegally force Individuals and entities with exposure to the the transfer of funds from financial maritime shipping sector should be aware of institutions and cryptocurrency exchanges to the non-exhaustive list of illicit practices below circumvent financial sanctions and have also and ensure compliance and due diligence included attacks from cyber focussed military procedures take account of them. units tasked with generating income for the regime it reports to. Reports of these activities

is discussed in the UN POE report 171 from Ship-to-ship transfers 2019 and specifically explores the connection A ship-to-ship (STS) transfer is the transfer of between cybercrime and maritime through cargo between vessels positioned alongside cases such as “Marine Chain”. Further each other at sea, either in anchor or information on can be found in paragraphs underway. There are some legitimate uses for 28-30 and 109-115 of the UN POE report. STS transfers as they provide flexibility for cargo owners and the method is becoming Cryptoassets increasingly popular. However, the very nature of STS transfers means the origin and nature Statutory definitions of “funds” and of cargo can be concealed. STS is used to “economic resources” are wide and are facilitate the illicit transfer of coal, crude oil explained in Annex I of this document. It and petroleum products to evade sanctions. should be noted that cryptoassets are covered by these definitions and are therefore caught

by UK financial sanctions restrictions. As with Automatic Identification Systems (AIS) cyberactivity above, any transaction AIS is a tracking system installed on vessels undertaken in the maritime sphere with a UK which broadcasts its location and details. It nexus where “funds” or “economic resources” also displays the location and details of nearby are exchanged, including exchanges using vessels. AIS is used by maritime authorities cryptoassets in full or in part, appropriate due across the globe to track and monitor vessel diligence should be undertaken. movement, supplementing radar, and is a primary method of collision avoidance for vessels. Financial system abuse There are legitimate reasons for AIS to be accounts are often established with the turned off or go dark. This could include (but primary purpose of engaging in and is not limited to) passage through waters at concealing illicit activities. These can be used high risk of piracy, or when weather interferes as fronts to conduct transactions in violation with satellite connectivity. However, AIS is of sanctions and facilitating illicit shipping often intentionally disabled by vessels that practices. seek to obfuscate their whereabouts, and is often practised by vessels seeking to conduct False documentation illicit trade. A commonly used approach to sanctions Vessels conducting ship-to-ship transfers will circumvention is the falsifying of also typically switch off their AIS to evade documentation which should accompany detection if they are conducting illicit trade, maritime transactions. These include bills of and there have also been recorded attempts lading, invoices and insurance paperwork, to to manipulate the data transmitted via AIS. name a few. By providing falsified documentation, the aim is to seek to obscure the origin of a vessel, its goods, its destination

and even the legitimacy of the vessel itself.

3 Concealment regime. Most financial sanctions regulations Those seeking to evade sanctions will often include an obligation that funds and employ tactics that physically conceal illicit economic resources which are owned, held or cargo onboard a vessel. This is done both controlled by designated entities or individuals during active inspection and as a must be frozen. Additionally, most financial precautionary measure if unscheduled sanctions regulations state that making funds inspections are carried out by relevant port or and economic resources available to, or for maritime authorities. the benefit of, these entities or individuals, directly or indirectly, is prohibited in the absence of a licence. If you are looking to deal How does this breach financial sanctions? with an entity or individual designated under financial sanctions, you will need to approach The practices described above are not OFSI with information about your proposed necessarily in themselves breaches of financial dealings and the relevant grounds for sanctions regulations in all cases. However, it licensing. OFSI will then consider whether a is likely that transactions relating to or licence can be issued. behaviours underpinning these practices, are.

For example, turning off AIS or carrying out ship-to-ship transfers does not mean that in Democratic People’s Republic of Korea every instance a breach of financial sanctions (DPRK) has occurred. It does, however, raise suspicion DPRK is subject to significant sanctions that the ship(s) might be carrying out illicit measures imposed by the UN and EU. They activity and breaching sanctions regulations – are aimed at countering the proliferation of particularly where this includes use of a weapons of mass destruction (WMD) and designated port. ballistic missiles. These are imposed to prevent Specific regions may present a high risk with persons4 from obtaining goods, funds and respect to financial sanctions compliance. Due services which could contribute to DPRK’s diligence should be carried out as part of a nuclear, other WMD related and ballistic risk-based approach. When dealing with such missile programmes. It aims to restrict the regions, or when passing through or near ability of DPRK to continue prohibited waters where non-compliant actors are programmes, promoting the abandonment by known to operate, enhanced due diligence DPRK of banned programmes and the should be considered. In addition, under the decommissioning of DPRK’s prohibited UN ISIL (Da’esh) and Al-Qaida regime and weapons. It also aims to promote peace, other thematic regimes that are not country security and stability on the Korean peninsula. specific, individuals and groups across the Some persons under the DPRK sanctions world are designated. regime are known to use ‘shell’ or ‘front’ High-profile sanctions regimes include those companies to disguise the ultimate in place for the DPRK, Iran, Libya and Syria destination of goods, funds and/or services. which are described below. Please refer to You need to ensure you are not engaging in OFSI’s website prohibited activity with those who are subject https://www.gov.uk/government/collections/fi to sanctions, including through these nancial-sanctions-regime-specific- company structures. For further information consolidated-lists-and-releases for a list of all on ownership and control please refer to current sanctions regimes. Chapter 4 of OFSI’s general guidance document on GOV.UK. You should refer to the relevant sanctions regulations in order to determine what This sanctions regime is wide ranging and restrictions apply in relation to any given includes sectoral financial sanctions, as well as targeted asset freezes and travel bans, and

4 In this guidance, the term person includes (in addition to an individual and a body of persons corporate or unincorporated) any organisation and any association or combination of persons.

4 restrictive measures relating to trade and discuss any proposed activities in DPRK with transport. You must not make funds or relevant financial and other institution(s) economic resources directly or indirectly beforehand. Where you are unsure of your available to, or for the benefit of, a obligations, OFSI also recommends that you designated person and you must freeze any seek independent legal advice. funds or economic resources owned, held or The 2020 report to the Security Council by the controlled by a designated person, whether UN POE on DPRK can be found here: directly or indirectly. https://undocs.org/en/S/2020/151. There are also a number of other restrictions, including restrictions on: Iran • taking an ownership interest in activities or assets in DPRK or in persons incorporated in On 16 January 2016 the International Atomic DPRK (among others) Energy Agency (IAEA) verified that Iran had implemented the nuclear-related measures • establishing new joint ventures under the Joint Comprehensive Plan of Action • the sale or purchase of bonds (JCPoA) and as a result, received extensive sanctions relief. This included the lifting of • DPRK credit and financial institutions measures relating to banking, shipping, (branches, subsidiaries and representative energy, and some nuclear related offices) designations. In particular, the relief included • financial relationships the removal of blanket prohibitions upon • transfers of funds to/from DPRK financial transfers to, and from, Iran (including the requirements for prior • financial support for trade notification and authorisation). Consequently, • investment and commercial activities the requirement to seek prior authorisation for, or notify HM Treasury of, transfers of • bank accounts for DPRK diplomats and funds sent to or received from Iran, is diplomatic missions therefore no longer applicable. Payments to a • leasing or, otherwise making available, real designated person remain unlawful in the property absence of a licence from OFSI. • vessels (including, among others, insuring or However, while the JCPoA led to the EU lifting chartering a DPRK flagged vessel, and the majority of sanctions in relation to Iran, facilitating or engaging in certain ship-to-ship several Iranian individuals and entities remain transfers to or from any DPRK flagged vessel) designated by the EU and UN, for example for The above list is not exhaustive and does not proliferation, human rights and terrorism give full details of what the restrictions are in concerns. In addition to freezing assets of each case. The applicable sanctions these individuals, there remain in place EU regulations for the DPRK should be consulted and UN restrictions on trade in several goods, for a complete picture of the relevant including arms, as well as associated services. restrictions. Please ensure that you have reviewed the relevant prohibitions still in place on Iran. OFSI can authorise some transactions in certain circumstances under specific grounds There have been persons subject to counter- set out in the relevant regulations for this proliferation measures who have used ‘shell’ regime. Please review the latest legislation or ‘front’ companies to disguise the ultimate https://www.gov.uk/government/collections/fi destination of goods, funds and services. For nancial-sanctions-regime-specific- further information on ownership and control consolidated-lists-and-releases before please refer to Chapter 4 of OFSI’s general contacting OFSI. guidance on GOV.UK. Given the complexities and risks involved in The UK remains committed to the JCPoA. DPRK-related activity, OFSI recommends you

5 Libya • civilian government and public Libya is currently subject to sanctions put in infrastructure place by the UN and the EU, originating in UN • banking sector operations etc Resolution 1970 (2011) and as subsequently There are several other derogations which amended. may be relevant to your business. Please The Libya sanctions regime imposes restrictive review the latest legislation before contacting measures (including asset freezes) on OFSI. individuals and entities who have been The Libya sanctions regime prohibits financial designated by the UN Security Council, the transactions relating to illicitly exported Libyan Libya Sanctions Committee or the EU Council. petroleum aboard vessels designated by the The current criteria for UN designations UN. Petroleum includes crude oil and refined include that a person engages in or provides petroleum products in this context. The support for acts that threaten the peace, prohibition of financial transactions in this stability or security of Libya, or obstruct or context includes the prohibition of the undermine the successful completion of its purchasing or the sale of the petroleum, its political transition. Persons may also be use as credit or taking out transport insurance designated for violating the provisions of in respect of it. resolution 1970 (2011) and its subsequent amendments, including the arms embargo, or However, this does not include the assisting others in doing so. acceptance of any port fees for the entry into port of a designated vessel (where the entry to Asset freezing activity also helps prevent the port is exceptionally permitted because it Libyan state funds which are suspected to is necessary for an inspection, in the case of have been misappropriated during the former an emergency or where the vessel is returning regime of Muammar Qadhafi from being used to Libya). to further threaten the peace, stability or political transition of Libya. All designated individuals and entities listed in Syria the EU Regulation are subject to a full asset The EU’s Syria sanctions regime provides for freeze, except for two entities listed in Annex restrictive measures (including asset freezes) VI – the Libyan Investment Authority (LIA) and to be imposed on those identified as: the Libyan African Investment Portfolio (LAIP). • All funds and economic resources belonging leading businesspeople operating in Syria to – or owned, held or controlled by – these • members of Assad or Makhlouf families entities, and located outside Libya on 16 • Syria Government ministers after May September 2011, are subject to an asset 2011 freeze. However, under the terms of the EU • members of Syria armed forces of the Regulation, there is no prohibition on making rank colonel or higher after May 2011 new funds or economic resources available to • members of Syria security and intelligence these entities. services in post after May 2011 Under specific grounds set out in the relevant • members of regime-affiliated militias; and regulations for this regime, OFSI can authorise persons operating in the chemical some transactions in certain circumstances. weapon proliferation sector These include, in relation to transactions with the LIA and the LAIP, licensing grounds There are several financial restrictions relating to: including in relation to: • humanitarian assistance activities • making funds or economic resources • provision of fuel etc for civil uses directly or indirectly available to • hydrocarbons designated persons

6 • sale or purchase of certain Syrian public or (ECJU)’s webpage and OFSI’s licensing page guaranteed bonds for more information. • establishment of new banking relationships Ownership and control • provision of certain insurance and re- insurance products If a person or entity is designated, their name • engagement or investment in the Syrian will be recorded on OFSI’s consolidated list of Financial Sanctions Targets in the UK (asset oil industry sectors of exploration, freezes and investment ban targets). An asset production or refining; and construction freeze and/or some financial services of new power plants for the production restrictions will apply to entities5 or individuals of electricity in Syria which are owned, held or controlled, directly There are further restrictions, including on: or indirectly, by a designated person. Those entities or individuals may not be designated • the import and/or export of certain goods in their own right, so their names may not from/to Syria (those which might be used appear on the consolidated list. However, for internal repression, jet fuel, luxury those entities and individuals are similarly goods, key equipment for the oil and gas subject to financial sanctions. industry, and telecommunications An entity is owned or controlled directly or monitoring and interception equipment) indirectly by another person in any of the • the import, export, or transfer of certain following circumstances: cultural property and precious metals • The person holds (directly or indirectly) • the import of arms, and crude oil and more than 50% of the shares or voting petroleum products rights in an entity • the delivery of Syrian denominated • The person has the right (directly or banknotes and coinage to the Central indirectly) to appoint or remove a majority Bank of Syria of the board of directors of the entity The above lists are not exhaustive and do not • It is reasonable to expect that the person give full details of what the restrictions are in would be able, in most cases or in each case. The relevant regulations should be significant respects, to ensure the affairs consulted for a complete picture of the of the entity are conducted in accordance relevant restrictions. with the person’s wishes. This could, for There are specific exemptions which apply to example, include appointing, solely by certain activities, which are set out in the exercising one's voting rights, a majority relevant regulations. For example, of the members of the administrative, organisations providing humanitarian management or supervisory bodies of an assistance to the civilian population in Syria entity, who have held office during the are exempt from the prohibitions relating to present and previous financial year; purchase and transfer of petroleum products (where these are purchased or transported for • Controlling alone, pursuant to an the sole purposes of providing humanitarian agreement with other shareholders in or relief in Syria or assistance to the civilian members of an entity, a majority of population) if they have received funds from shareholders' or members' voting rights in the UK Government, EU Commission or EU that entity Member States. Those who don’t receive such • Having the right to exercise a dominant public funds will need to apply for a licence. influence over an entity, pursuant to an Please visit the Export Control Joint Unit agreement entered into with that entity, or to a provision in its Memorandum or

5 Meaning a body of persons corporate or unincorporated, or any organisation or association or combination of persons

7 Articles of Association, where the law specific measures to be taken. OFSI can governing that entity permits its being provide guidance as to what measures may be subject to such agreement or provision helpful (set out below), but the onus is on the • Having the right to exercise a dominant organisation to ensure that it has put in place influence referred to in the point above, sufficient measures to ensure it does not breach financial sanctions. The following is without being the holder of that right general guidance regarding due diligence (including by means of a front company) measures which organisations operating in • The person having the ability to direct the maritime sector may wish to consider. another entity or individual in accordance with the person’s wishes. This can be First, companies conducting activity in, or around high-risk jurisdictions should seek to through any means, directly or indirectly. have a robust understanding of the sanctions For example, it is possible that a regulations in place, including the relevant designated person may have control or obligations. Companies should always seek use of another person’s bank accounts or independent legal advice where necessary and economic resources and may be using operate a risk-based approach conducting them to circumvent financial sanctions enhanced due diligence to understand: the If any of the above criteria are met, and the full range of activity, the persons involved in person who owns or controls the entity is also supply chains, etc. a designated person, then financial sanctions Industry may wish to consider any benefits in will also apply to that entity in its entirety AIS screening and the inclusion of ‘AIS switch (meaning these assets should also be frozen). off’ clauses in contracts. As already The prohibitions on making funds or mentioned, while AIS switch off does not economic resources available directly or necessarily confirm illicit shipping practices, it indirectly to a designated person, also prohibit may be one of several indicators for making them available to an entity who is consideration. Due diligence could be owned or controlled, directly or indirectly, by enhanced for example, through contacting the designated person. The UK Government vessels that have ‘gone dark’ by switching off will look to designate owned or controlled their AIS. This is to better understand the entities/individuals in their own right where cause of disconnection, noting such instances, possible. and reviewing for trends. This could be considered by ship owners, charterers, insurers, flag registries and port state control What does due diligence look like? entities. Illicit activity could occur across multiple Companies may have access to subscription- sectors involved in the maritime industry. based resources which allow for checks on Maritime insurance companies, charterers, ownership structures, vessel flag information, unions, classification societies, petroleum details of home ports and recently visited companies and refineries, customs and port ports. However, this information is also readily state controls, flag registries, and shipping available online and can be accessed freely, industry associations are all exposed to which helps companies with limited resources financial sanctions risk. to carry out a variety of checks to provide The risk is not only confined to these initial indicators of behaviour. Companies industries, as owing to the nature of the could look to also carry out checks with sector and its global reach, operators in this Companies House as part of their due area need to take a risk-based approach as to diligence processes. whether they decide to conduct business. Suspected fraudulent letters of credit, bills of Each organisation should assess its own risks lading, loans and other types of financial and put due diligence measures in place to instruments should always be checked with manage these risks. OFSI does not mandate the relevant institution for validity. Clauses

8 within the letters of credit, loans and other consequences for failure to ensure types of financial instruments should also be compliance. assessed prior to agreement, as should the OFSI is responsible for monitoring compliance validity of insurance documents, bills of lading with financial sanctions applicable in the UK and cargo lists. and for assessing suspected breaches of the Any person which deals with funds or regulations. OFSI has powers under the economic resources owned, held or controlled Policing and Crime Act 2017 to impose by a designated person or those operating on monetary penalties of up to 50% of the value a DP’s behalf should immediately freeze the of the breach or up to £1 million, whichever is assets or funds and alert OFSI. Any person higher, for breaches of financial sanctions. which engages in prohibited activity in OFSI can also refer cases to law enforcement relation to transport or trade restrictions agencies for investigation and potential should immediately contact the Department prosecution. Breaches of financial sanctions for Transport and Department for are considered a serious criminal offence and International Trade respectively. are punishable by up to 7 years in prison on Ship captains should also be reminded to: indictment or up to 6 months for a summary offence in , or • report any potentially suspicious (12 months for a summary offence in behaviour to ). For exact penalties, please refer to https://mc.nato.int/nsc/operations/mercha the relevant legislation. nt-shipping-reporting/incident-reporting- Financial sanctions are part of a wider form, which may result in NATO sanctions framework targeting malign activity. interdiction. This is mandatory in certain As such, OFSI works with other parts of areas government, supervisory bodies and • use IMO GISIS to find basic vessel data regulators to consider all reported non- should they have any concerns compliance, and shares relevant information accordingly in line with the relevant sanctions For the EU, consideration should be given to and data protection legislation. information sharing initiatives such as the Maritime CISE and Maritime Surveillance OFSI’s approach to compliance and Network (part of the wider EU Maritime enforcement is detailed in Chapter 7 of its Security Strategy). EU and non-EU members general guidance document on GOV.UK. must also ensure that they are up to date with the relevant UN Security Council’s Panel of Implementation in Experts POE’s reporting requirements. Dependencies and British Overseas While the UK has left the EUEU sanctions Territories continue to apply in the UK during the transition period. Companies must comply with any applicable legislation in force, Powers to implement financial sanctions in whether that is EU legislation and the Crown Dependencies (CDs) are provided corresponding UK implementing legislation through local legislation. OFSI does not fulfil (during the transition period) or UK legislation the financial sanctions competent authority made under the Sanctions and Anti-Money function for the CDs. Laundering Act 2018 (Sanctions Act) (once in You may find the following links helpful when force). considering financial sanctions Enforcement action and penalties implementation matters relating to the CDs: Any person carrying out, or partaking in, business involving maritime shipping, should be aware of the risks posed and the

9 Pitcairn, Henderson, Ducie and Oeno Islands British Overseas Territories St Helena, Ascension and Powers to implement financial sanctions in South Georgia and the South Sandwich the British Overseas Territories (OTs) are Islands generally provided by UK Orders in Council. The Sovereign Base Areas of Akrotiri and However, and are not Dhekelia in the Island of Cyprus generally covered by Overseas Territories sanctions Orders. Provision for implementation of sanctions measures (which apply to the UK) in Bermuda and Gibraltar is made through local legislation. Although, since the creation of OFSI, HM FCO Sanctions Act guidance Treasury has developed closer financial The Sanctions Act enables sanctions to sanctions implementation relationships with continue uninterrupted when the transition the OTs, OFSI does not fulfil the competent period ends and will provide a consolidated authority function for the OTs. Instead, the and autonomous framework for all UK Governor (or Chief Minister in Gibraltar) of a sanctions. Secondary legislation under the British Overseas Territory generally has the Sanctions Act, in the form of Statutory following powers: Instruments (SIs), has been and is being made • powers to grant, vary or revoke licences, and will transfer existing EU sanctions into UK subject to the UK Foreign Secretary’s law with substantially the same policy effect. The FCO has published statutory guidance and consent further information is available on its GOV.UK • power to authorise persons to exercise pages. various enforcement and evidence gathering powers • power to delegate his or her functions OFSI consolidated list • power to designate in certain OFSI’s consolidated list includes all designated circumstances for counter-terrorism persons subject to financial sanctions under purposes EU and UK legislation (including designations For queries relating to financial sanctions in a originally made at UN level). OFSI publishes British Overseas Territory you may wish to the consolidated list to help businesses and contact the Governor’s Office, Commissioner individuals comply with financial sanctions. or Chief Minister’s office in the relevant OFSI aims to update the consolidated list jurisdiction in the first instance: within 1 working day for all new UN listings coming into force in the UK, and within 3 working days for all other amendments. Bermuda Where the UK’s Linking Regulations6 have to British Antarctic Territory be updated, OFSI will add new listings to the consolidated list as soon as the update comes British Indian Ocean Territory into effect. Gibraltar

6 This refers to the United Nations and European Union Financial Sanctions (Linking) Regulations 2017. The purpose of these Regulations is to allow the UK to swiftly implement UN sanctions requirements.

10 Annex I Dealing with economic resources generally Funds generally means financial assets and means using the economic resources to benefits of every kind, including but not obtain funds, goods, or services in any way, limited to: including, but not limited to, by selling, hiring or mortgaging them. The everyday use by a • cash, cheques, claims on money, drafts, designated person of their own economic money orders and other payment resources for personal consumption is not instruments prohibited. • deposits with financial institutions or If funds or economic resources are made other entities, balances on accounts, available (directly or indirectly) to or for the debts and debt obligations benefit of a designated person and they • publicly and privately traded securities obtain, or can obtain, a ‘significant financial and debt instruments, including stocks benefit’, or for use in exchange for funds, and shares, certificates representing goods or services, this may constitute a securities, bonds, notes, warrants, criminal offence. debentures and derivatives contracts In this case, ‘financial benefit’ includes the • interest, dividends or other income on or discharge, in whole or in part, of a financial value accruing from or generated by obligation for which the designated person is assets wholly or partly responsible. • credit, right of set-off, guarantees, Goods generally means items, materials and performance bonds or other financial equipment. commitments

• letters of credit, bills of lading, bills of sale • documents showing evidence of an interest in funds or financial resources • any other instrument of export financing Economic resources generally mean assets of every kind – tangible or intangible, movable or immovable – which are not funds but may be used to obtain funds, goods or services. This includes but is not limited to:

• precious metals or stones • antiques

• vehicles • property Dealing with funds generally means moving, transferring, altering, using, accessing, or otherwise dealing with them in any way which would result in any change to their volume, amount, location, ownership, possession, character, destination or other change that would enable the funds to be used, including portfolio management.

11 Annex II Financial sanctions cross various jurisdictions and the responsibilities of other UK Government departments. You may find the following links useful:

Department for International Trade: https://www.gov.uk/government/organisation s/export-control-organisation : For more information on transport sanctions contact the Department for Transport on [email protected] Foreign and Commonwealth Office: https://www.gov.uk/government/collections/u k-sanctions-regimes-under-the-sanctions-act

Wider reading

EU Best Practices for the effective implementation of restrictive measures http://data.consilium.europa.eu/doc/documen t/ST-10254-2015-INIT/en/pdf US, Office of Foreign Assets Control (OFAC) Guidance: https://www.treasury.gov/resource- center/sanctions/Pages/default.aspx

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