Russian trust services are prohibited by financial sanctions

The Office of Financial Sanctions Implementation is in charge of running the UK system (OFSI). To accomplish particular foreign policy or national security goals, the government imposes the measures.

In recent years, the regime—which is supported by a number of pieces of legislation—has undergone a number of adjustments. To ensure that businesses are aware of their responsibilities, the Solicitors Regulation Authority (SRA) has already produced guidance.

With the recent modifications, the government has made it illegal to offer trust services to anyone with ties to Russia, unless such services were already rendered shortly before the restrictions went into effect, or to a specific individual. The 16th of December 2022 marked the start of the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022.

SRA Chief Executive Paul Philip stated: "The government's reaction to the war in Europe includes strengthening the financial sanctions framework, and law firms have a crucial role to play in this effort. All law firms, not simply those that fall within the purview of the anti-money laundering rules, are subject to the sanctions regime. We released our preliminary advice last month since this is a complicated and rapidly evolving topic. To stay informed and do the necessary background checks on clients and potential clients, businesses would do well to sign up for OFSI notifications.

"Trust services," as defined by the amendment, are:

setting up a trust or other comparable arrangement

a trust or other similar arrangement's provision of a registered office, business address, correspondence address, or administrative address

the administration or operation of a trust or similar arrangement, including acting as trustee or making arrangements for another person to do so, where "trustee" refers to a role that is similar to or identical to that of a trustee in a trust.

According to regulation 19(A)2, a person is regarded as having "connections with Russia." In general, someone is regarded as having ties to Russia if they regularly reside there or are there. If a company is incorporated/constituted under Russian legislation or has its domicile in Russia, it is said to be tied to Russia.