17th March 2022
We reported in our earlier briefing on the corporate aspects of the Economic Crime (Transparency and Enforcement) Act 2022 (the Act) which was fast-tracked through Parliament following the Russian invasion of Ukraine. In this briefing, Walker Morris Regulatory & Compliance expert and Head of International Trade Andrew Northage summarises the regulatory aspects and what they mean for businesses.
As the government explained in its press release, the Act will mean that the government can move more quickly to impose sanctions against oligarchs already designated by the UK’s allies, as well as intensifying its sanctions enforcement. The key changes are:
As the government explained in its factsheet about the reforms, an unexplained wealth order (or UWO) is an investigatory order placed on a respondent whose assets appear disproportionate to their income to explain the origins of their wealth. The key changes are:
The introduction of a new strict liability test for breaching financial sanctions will concern businesses the most. While this change is not yet in force , it will significantly increase the likelihood of monetary penalties being imposed on a business that unwittingly deals with a designated entity or individual. It will be more important than ever to have robust controls, procedures and up-to-date staff training in place. Walker Morris will continue to monitor and report on developments.
Sanctions rules are complex, can affect a business in multiple jurisdictions, and are evolving at pace. Please contact Andrew if you require advice or assistance on sanctions compliance and associated issues, including training, contract review and supply chain audits; or if you have queries about any other aspect of the Act.
 The only provisions of the Act currently in force are those dealing with the imposition of the sanctions themselves. These provisions were acted on immediately with the UK sanctioning over 370 more individuals.