Stacy Keen: UK lawyers cleared to advise on Russia sanctions
The UK government has granted a general licence to enable lawyers to provide legal advice to non-UK individuals and businesses in relation to their compliance with international sanctions on Russia, without breaching UK sanctions regulations themselves, writes Scottish lawyer Stacy Keen.
UK Russian sanctions regulations prohibit UK persons and overseas persons when in the UK — including those working in-house at organisations — from providing legal advisory services to non-UK persons in relation to, or in connection with, any activity that is prohibited under the UK’s financial and trade sanctions on Russia, if the activity in question was done by a UK person or taking place in the UK.
The ban is not restricted to legal advice to the Russian government or entities and is wide enough to apply to lawyers and other persons who provide legal advice, for example, to export control and compliance professionals.
The regulations contain exceptions, including one which enables the provision of legal advice to non-UK individuals and businesses on whether an act, or proposed act, complies with the UK Russian regulations. However, the exception does not extend to advice to non-UK persons as to whether acts or proposed acts comply with other sanctions regimes that may be relevant, for example the EU or US Russian sanctions in place — raising the risk that UK lawyers would be unable to provide holistic advice without committing a criminal offence.
In response to concerns raised by the legal industry, the government has now moved to issue a general trade licence which permits UK persons to give otherwise prohibited legal advice to non-UK individuals and businesses subject to particular exclusions, conditions and requirements.
The licence enables the provision of advice on whether an act or a proposed act complies with, or could trigger punitive measures in relation to, restrictive measures, including sanctions, export and import controls on or concerning Russia or the non-government controlled Ukrainian territory, imposed by any jurisdiction.
The licence also enables the provision of legal advice in relation to the discharge of or compliance with UK statutory or regulatory obligations. However, legal service providers wishing to take advantage of the new licence will be subject to registration and record-keeping obligations.
To use the licence, providers of legal advisory services will need to register with SPIRE, the UK’s export licensing system, within 30 days of giving the otherwise prohibited advice. They will also need to maintain a record of instances where the general licence is used. A failure to do so is a criminal offence.
The government has not prescribed a format for maintaining records, but a log would be a sensible step. A person authorised by the secretary of state or HMRC may enter premises to inspect compliance with record keeping requirements and licence conditions. Records must be retained for four calendar years from the end of the calendar year in which the record was created.
Nothing in the requirements relating to maintaining records or inspections, obligates a legal adviser to disclose privileged information. Those acting under the general licence need to balance satisfying an authorised person that the terms of the licence have been complied with, and ensuring privilege is not inadvertently breached.
- Stacy Keen is a partner at Pinsent Masons in Glasgow.