New UK regulations permit lawyers to advise Russians on complying with sanctions

The standard restriction is expressed in Regulation 54C of the Russia (Sanctions) (EU Exit) Regulations 2019, prohibiting a legal or natural person from 'providing, directly or indirectly, accounting, advertising, architectural, auditing, business and management consulting, engineering, IT consultancy and design, and public relations services to a person connected with Russia', even if that person is not designated for sanctions. Regulation 54D includes a corresponding measure specific to legal advisory services, subject to exceptions and licences, where the advisor knows that the effect of the advice is to facilitate any sanctioned activity being carried out.

However, on 6 September 2024 the UK parliament enacted the 2024 Regulations to make it clear that the provision of legal advisory services, which may otherwise be restricted by regulation 54D, is 'permitted on or in connection with compliance with global sanctions, Russian counter-sanctions and global criminal law'. The amendment also clarifies that legal advisory services are permitted in relation to the application of punitive measures, as well as in relation to compliance with UK statutory or regulatory obligations. 'Punitive measures' mean any sanction applied by any country, including Russia, in retaliation for a person engaging in conduct that would attract penalties under the law of that country if the person were subject to its jurisdiction.

The amendment provides clarity in relation to the knowledge a person must have before the prohibition on the provision of certain legal advisory services applies. It will allow legitimate provision of legal advisory services on non-UK sanctions compliance under certain circumstances, putting beyond doubt the fact that legal advice in relation to compliance with global sanctions and criminal legislation is permitted.

As a result, the government has revoked the Legal Advisory Services General Trade Licence, which was previously issued to facilitate licensing of certain legal services. The guidance on Russia sanctions and providing professional and business services to a person connected with Russia has been updated to reflect the changes. The new regulations also apply in the Crown Dependencies with immediate effect.

Sources

• Global Sanctions
• UK government
• UK parliament
• STEP International News 9 September 2024: CJEU clarifies exemptions from ban on legal services to Russians