Professional and business services to a person connected with Russia

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Guidance on the Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022

The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) regulations 2022 amend the Russia (Sanctions) (EU Exit) Regulations 2019 (‘the Russia Regulations’) and came into force on 21 July 2022. Regulation 54C of the Russia Regulations prohibits a legal or natural person from providing, directly or indirectly, accounting, business and management consulting, and public relations services to a ‘person connected with Russia’. These services (‘covered services’) are defined in regulation 54B, while a ‘person connected with Russia’ is defined in regulation 21. The prohibitions in regulation 54C are subject to exceptions and licences.

This document sets out guidance on applying for licences. It also considers what information to include in the cover letter of licence applications related to the prohibitions in regulation 54C of the Russia Regulations.

This document is a practical guide for professionals and businesses potentially affected by the regulations. However, it does not constitute legal advice. Any party in doubt about its legal position should take independent legal advice.

Applying for a licence

All applications for trade sanctions licences should be made through SPIRE, the Export Control Joint Unit ( ECJU’s) online export licencing system.

Once you have registered on SPIRE, you are required to submit an application for a Standard Individual Export Licence ( SIEL). You should attach a cover letter to your application stating the applicable regulations.

When submitting your application on the SPIRE system you will be asked to list the recipient of the services in the system as an End User. If there is more than one recipient of the services, then they can be listed as Ultimate End Users. For any other interested parties involved in the application, they can be listed as ‘other third parties’.

Some questions on the SPIRE form may not be applicable – in these cases, you may answer N/A, but the cover letter should provide any necessary explanation. If any information is required, the ECJU can ask further questions on SPIRE after the application has been submitted. An End-User Undertaking Form ( EUU) is not required for licence applications related to professional and business services sanctions.

The ECJU aim to provide a decision on 70% of SIEL applications within 20 working days, and 99% within 60 working days, following receipt of all necessary documentation (and not including time taken to provide further information requested by ECJU). If possible, a decision will be provided in advance of this timetable. You should not assume that a licence will be granted or engage in any prohibited activities pending the outcome of an application.

Cover Letter

The cover letter to your application should state the regulations (e.g. reg.54C of the Russia Sanctions Regulations) that you determine are applicable to you/your business.

The letter should include information on:

• the activities you wish to carry out

• how the proposed activities fall within scope of the definition of the prohibited services

• supporting evidence explaining why a licence should be granted, including details of the licensing grounds being relied upon

• any other relevant documentation

The letter should also explain how the activities to be carried out would be consistent with the aims of the sanctions regime. This should include information on how you would ensure compliance with other sanctions where relevant (such as those related to goods, financial services, or designated persons).

Under regulation 65, licences may be issued for certain trade activities that would otherwise be prohibited by the Russia Regulations. For some prohibitions there are some specific activities that the Department for International Trade (DIT) considers are likely to be consistent with the aims of the sanctions. These are set out in the Russia Sanctions Statutory Guidance.

With respect to the prohibitions in regulation 54C, these include (but not limited to) the following:

• a licence may be granted for services required by non-Russian business customers in order to divest from Russia, or to wind down other business operations in Russia

• a licence may be granted for services to a person connected with Russia by a UK parent company or UK subsidiary of that parent company

For applications related to these licensing grounds, it may be helpful to also include in the application the information suggested below. This list is non-exhaustive and you should include whatever you deem relevant to your individual case. Further information specific to each individual case may also be requested by the licensing authority.

A licence may be granted for services required by non-Russian business customers in order to divest from Russia, or to wind down other business operations in Russia.

For these applications, it may be helpful to include:

• details on the service provider(s) and the recipient(s) of the services and the relationship between these parties

• the time required to complete the divestment/wind down and the overall form the divestment/wind down will take (e.g. sale to a third party or management buy-out)

• an outline of the proposed plan on how divestment/wind down will be achieved. This could include the information below

• the step-by-step process, including key milestones

• what sanctioned services will need to be provided, at which stages in the process will the sanctioned services be provided and for what purpose

• what operations or assets (tangible and/or intangible) are being divested/wound down

• how these operations or assets will be divested/wound down, including details regarding any potential sale or transfer of assets and the business activities and transactions required to complete the divestment/wind down process

• who may benefit from the divestment or wind down

A licence may be granted for services to a person connected with Russia by a UK parent company or UK subsidiary of that parent company.

For these applications, it may be helpful to include:

• details on the service provider(s) and the recipient(s) of the services

• the relationship between the service provider(s) and recipient(s)

• the ownership and control structures of the service provider(s) and recipient(s), and any other relevant parties involved in the corporate relationship.

• what sanctioned services will need to be provided and for what reason

• how the continued provision of such services is consistent with the aims of the sanctions and the impact/implications if the services could not be provided

• the activities being carried out by the Russian entities, including why such activities are consistent with the aims of the sanctions (e.g. the types of goods being produced/sold and/or the types of services being provided by the Russian entities)

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