Sanctions are an economic weapon used by governments or intergovernmental organizations to punish individuals, private entities and countries for conduct deemed politically unacceptable. Sanctions work directly by restricting the activities of sanctioned individuals and entities.
They can also work indirectly, by imposing restrictions on how individuals and businesses may interact with a sanctioned party. Because violators can be liable for large monetary penalties and criminal prosecution, it is important for anyone engaging in cross-border transactions to proactively consider and address their potential sanctions exposure before a breach occurs.
Rahman Ravelli advises individuals, start-ups, joint ventures and corporates of various nationalities on compliance with British, American and European export controls and sanctions laws. We assess the impact of sanctions on our clients’ business activities and when necessary, we draft and submit licence applications on behalf of clients to obtain authorisation for otherwise prohibited activities.
We also represent clients who have made the decision to proactively self-report a sanctions violation or who have been accused of trade control breaches by the UK’s Office of Financial Sanctions Implementation (OFSI), the US Office of Foreign Assets Control (OFAC) the UK Export Control Joint Unit (ECJU) or European national competent authorities (NCAs). We have particular expertise in situations where there is a risk of criminal charges or where a criminal investigation has already started.
Because different countries’ trade control laws intersect and overlap, the same conduct can be simultaneously subject to differing (and even contradictory) restrictions from multiple jurisdictions.
Our experienced and qualified team, in conjunction with our network of trusted partner law firms around the world, is capable of helping clients with multinational operations navigate their way through the regularly-shifting thicket of international sanctions rules and regulations.
As with all our advisory services, our sanctions and export controls practice group strives to provide our clients with highly practical, targeted and cost-efficient advice.
Rahman Ravelli has an in-depth guide to sanctions that answers many questions relating to them.
Alongside the individuals and corporates seeking advice on their exposure to sanctions of different natures (UN, EU, OFSI) in relation to various jurisdictions, such as Iran, Myanmar or the Democratic Republic of Congo, Rahman Ravelli has seen a sharp increase in representative matters following Russia’s military activities in Ukraine in 2022.
These activities led to a raft of new legislation that sought to persuade Russia to cease actions that may destabilise Ukraine. Following the introduction of the Economic Crime (Transparency and Enforcement) Act 2022, the UK has tightened its grip on sanctions processes and strengthened the enforcement of sanctions-related offences.
Rahman Ravelli helps clients navigate the complex sanctions landscape, not only in the UK but also in the EU and US. We provide timely and targeted advice and representation to clients regarding their sanctions exposure to Russia.
Rahman Ravelli has helped clients navigate the complex legal landscape not only in the UK but also in the EU, US and Internationally. Some of our case work, listed below demonstrates our expertise and experience.
Financial sanctions are restrictions imposed by government authorities on dealings with specified individuals, entities, or countries for foreign policy, national security, or counter-terrorism purposes. In the UK, financial sanctions are administered by the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury. They can include asset freezes, restrictions on making funds available to designated persons, and prohibitions on providing financial services. UK sanctions regimes operate under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) and implementing regulations.
The UK government can designate individuals, companies, and other entities under various sanctions regimes. These include thematic regimes targeting human rights abusers, corruption, cyber threats, and weapons proliferation, as well as country-specific regimes (such as those relating to Russia, Iran, North Korea, and others). Designated persons are subject to asset freezes and prohibitions on dealing. Since Brexit, the UK has developed its own autonomous sanctions regime, which may differ from EU sanctions in certain respects.
Export controls restrict the export, transfer, or brokering of specific goods, software, and technology — particularly those with potential military, security, or weapons proliferation applications. In the UK, export controls are administered by the Export Control Joint Unit (ECJU), part of the Department for Business and Trade. Licences are required for controlled exports, and violations can result in criminal prosecution, substantial fines, and the loss of export licence privileges. Post-Brexit, the UK operates its own export control regime separately from the EU.
Breaching UK financial sanctions is a serious criminal offence. OFSI has civil enforcement powers — it can impose monetary penalties for breaches on a strict liability basis, meaning it does not need to prove that the person knew they were breaching sanctions (though knowledge or reasonable cause to suspect can increase the penalty). Criminal prosecution is reserved for the most serious cases, where the maximum sentence is seven years' imprisonment. OFSI has become increasingly active in enforcement, and fines for breach have risen substantially.
A General Licence is an authorisation issued by OFSI that permits specific activities that would otherwise be prohibited by sanctions — for example, paying reasonable legal expenses for a designated person or providing basic humanitarian assistance. Businesses that need to engage in activities that might otherwise constitute a sanctions breach can apply for a Specific Licence from OFSI, or may be able to rely on an existing General Licence. The terms of any licence must be strictly adhered to, and licence applications must be made with full transparency.
Businesses should implement a robust sanctions compliance programme that includes: screening customers, counterparties, and transactions against current sanctions lists; monitoring for changes to designations in real time; establishing clear internal escalation procedures for suspected sanctions issues; maintaining records of screening and compliance decisions; training staff in sanctions obligations; and conducting regular risk assessments. Given the speed at which designations can be made — particularly in the context of the Russia sanctions regime — maintaining up-to-date screening processes is essential.
Sanctions and AML obligations are closely related but distinct. The AML regime requires businesses to identify, assess, and mitigate the risk of being used for money laundering and terrorist financing. Sanctions compliance requires businesses to ensure they do not deal with designated persons or prohibited entities. Both regimes impose customer due diligence obligations, and failures in one area often indicate weaknesses in the other. OFSI and the FCA (for regulated firms) take a joined-up approach to enforcement where both sets of obligations are relevant.
The sanctions landscape is complex, rapidly changing, and subject to different rules in different jurisdictions — particularly given the divergence between UK, EU, and US sanctions regimes following Brexit. Export controls involve highly technical assessments of the nature and end-use of goods and technology. The consequences of non-compliance — including criminal prosecution and reputational damage — are severe. Specialist solicitors provide advice on compliance programme design, licensing applications, voluntary disclosure to OFSI, and representation in civil or criminal enforcement proceedings.
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