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The new OFSI General Licence (Legal fees)

Author: Syedur Rahman  1 May 2024
2 min read

Syed Rahman details the main points of the new legal services general licence.

The OFSI General Licence (Legal fees) has come into effect.

General Licence INT/2023/3744968 expired on 28th April and was replaced the following day by a new legal services general licence: General Licence INT/2024/4671884. 

OFSI (the Office of Financial Sanctions Implementation) has the power to issue General Licences for country sanctions regimes under regulations made under the Sanctions and Anti-Money Laundering Act 2018. It has now  issued Legal Services General Licence INT/2024/4671884 under Regulation 64 of the Russia (Sanctions) (EU Exit) Regulations 2019 (“the Russia Regulations”) and Regulation 32 of the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (“the Belarus Regulations”).

Changes

General Licence INT/2024/4671884 permits a UK legal firm or UK counsel who has provided legal advice to a person designated under either the Russia or Belarus regime to receive payment from that designated person (DP) without an OFSI specific licence, as long as the terms of this licence are met. 

The main changes introduced under the new licence are:

  • The professional legal fees and expenses caps now apply to each law firm instructed by the DP to cover all matters on which that law firm is instructed by that DP. This is a change from previous Legal Services General Licences, where the fee and expenses caps applied to each DP (meaning for all the DP’s legal work across all firms they instructed).
  • Part B of the General Licence now permits brief fees and refresher fees to be paid to counsel in the event these are fixed fees and not subject to hourly rates. These fees may now be included in the overall cap of £500,000 for professional legal fees. Under previous Legal Services General Licences, counsel fees were subject - under Part B - to a maximum hourly rate of £1,500.
  • The definition of counsel now includes a barrister who is regulated by the Bar Council of Northern Ireland and an advocate who is regulated by the Faculty of Advocates (in Scotland). Previous Legal Services General Licences defined counsel as a barrister who is regulated by the Bar Standards Board.

Requirements

The permissions in General Licence INT/2024/4671884 do not authorise any act which the person carrying out the act knows, or has reasonable grounds for suspecting, will result in funds or economic resources being dealt with or made available in breach of the Russia Regulations, the Belarus Regulations, or any other regulations made under the Sanctions and Anti-Money Laundering Act 2018, unless specifically permitted under this or other licences granted by HM Treasury. 

Any payments received under General Licence INT/2024/4671884 must be reported to HM Treasury within 14 days of the payment being received, along with the details and supporting evidence requested in Part A or Part B. Such details include the letter of engagement between the DP and the law firm or counsel and any other documents setting out the obligations and payments, including invoices.

A DP (or other person) must keep accurate, complete and readable records, on paper or electronically, of any activity purporting to have been permitted under this licence for a minimum of six years.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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