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Professional and business services for a person connected to Russia
The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 amend the Russia (Sanctions) (EU Exit) Regulations 2019 (‘the Russia Regulations’) and came into force on 21 July 2022. Regulation 54C of the Russia Regulations prohibits a legal or natural person from providing accounting, business and management consulting and public relations services directly or indirectly to a ‘Russia-connected person’. These services (‘covered services’) are defined in regulation 54B, while ‘Russia connected person’ is defined in regulation 21. Restrictions in regulation 54C are subject to exceptions and licences.
This document provides guidance on applying for a license. It also considers what information to include in cover letters of license applications regarding the restrictions in regulation 54C of the Russia Regulations.
For general information regarding licenses for trade restrictions, please refer to the Statutory Guidelines.
This document is a practical guide for professionals and businesses potentially affected by the regulations. However, it does not constitute legal advice. Any party in doubt as to its legal position should seek independent legal advice.
Applying for a licence
All applications for trade approval licenses must be made through SPIRE, the Export Control Joint Unit.ECJUOnline Export Licensing System.
If you do not have an account on SPIRE, you or your organization will need to register for one. You can contact tradesanctions@trade.gov.uk to give advance notice of your intention to register with SPIRE and the team can help resolve any queries.
Once you have registered with SPIRE, you need to submit an application for a standard individual export license (SIEL). You should attach a cover letter stating the applicable regulations with your application.
When submitting your application to the SPIRE system you will be asked to list the recipient of the services as an end user in the system. If there is more than one recipient of the Services, they may be listed as ultimate end users. For any other interested parties involved in the application, they may be listed as ‘Other Third Parties’.
Some questions on the SPIRE form may not apply – in these cases, you can answer N/A, but the cover letter should provide any necessary explanation. If any information is required, ECJU After submitting the application can ask more questions on SPIRE. End-User Undertaking Form (EUU) are not required for license applications relating to restrictions on professional and business services.
This ECJU Targeted at 70% for decision SIEL Within 20 working days and 99% within 60 working days, after receipt of all required documents (and not including time taken to provide additional information requested. ECJU). If possible, a decision will be given in advance of this schedule. You should not assume that a license will be granted or engage in any prohibited activities pending the outcome of the application.
the envelope
The cover letter on your application should state the regulations (eg reg.54C of the Russia Sanctions Regulations) that you decide apply to you/your business.
The letter should include information on:
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Activities you want to do
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How the proposed activities fall within the definition of prohibited services
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Supporting evidence explaining why the license should be granted, including details of the grounds relied upon for the licence.
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Any other relevant documents
The letter should also explain how the activities to be undertaken will be consistent with the objectives of the sanctions regime. This should include information on how to ensure compliance with other restrictions where relevant (such as relating to goods, financial services or designated persons).
Under Regulation 65, licenses may be issued for certain commercial activities that would otherwise be prohibited by Russian regulations. Some of the sanctions have specific activities that the Department for International Trade (DIT) considers likely to be consistent with the objectives of the sanctions. This Russia ban is set out in statutory guidelines.
In terms of restrictions in regulation 54C, these include (but are not limited to):
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Non-Russian business customers may be granted licenses for services necessary to divest from Russia or to terminate other business operations in Russia.
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The Services may be licensed to a person connected to Russia by a UK parent company or a UK subsidiary of that parent company.
For applications related to these licensing grounds, it may also be helpful to include the information suggested below in the application. This list is non-exhaustive and you should include whatever you feel is relevant to your individual case. Specific information relating to each individual case may also be requested by the licensing authority.
Licenses may be granted for services required by non-Russian business customers to divest from Russia or to terminate other business operations in Russia.
For these applications, it may be helpful to include:
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Service Provider(s) and Recipient(s) of Services and details of the relationship between these parties
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The time required to complete the divestment/wind down and the overall divestment/wind down will take (eg sale to third party or management buy-out)
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An outline of the proposed plan on how the divestment/wind down will be achieved. This may include the following information
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A step-by-step process including key milestones
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What approved services will need to be provided, at what stage in the process the approved services will be provided and for what purpose
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What operations or assets (tangible and/or intangible) are being divested.
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How these operations or assets will be divested/disposed of, including details of any potential sale or transfer of assets and business activities and transactions necessary to complete the divestment/wind down process.
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Who may benefit from divestment or cease
The Services may be licensed to a person connected to Russia by a UK parent company or a UK subsidiary of that parent company.
For these applications, it may be helpful to include:
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Details on Service Provider(s) and Recipient(s) of Services
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Relationship between service provider(s) and recipient(s).
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Ownership and control structures of service provider(s) and recipient(s) and any other related parties involved in the corporate relationship.
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What approved services will need to be provided and for what reasons
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How the continued provision of such services is consistent with the objectives of the sanctions and the impact/effects if the services cannot be provided
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Activities carried out by Russian entities, including why such activities are consistent with the objectives of the sanctions (e.g. types of goods produced/sold and/or types of services provided by Russian entities);
If you have any questions, please contact tradesanctions@trade.gov.uk
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