The Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020

Citation, commencement, extent and application U.K.

1.—(1) This Order may be cited as the Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020 and shall come into force on 19th January 2020.

(2) Subject to paragraph (3) this Order extends to the United Kingdom.

(3) The prohibitions imposed by article 4 apply to the following persons—

(a) a person in the United Kingdom;

(b) any person elsewhere who is—

(i) a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen;

(ii) a person who under the British Nationality Act 1981 M1 is a British subject;

(iii) a British protected person within the meaning of that Act;

(iv) a body incorporated under the law of any part of the United Kingdom.

Commencement Information

I1 Art. 1 in force at 19.1.2020, see art. 1(1)

Marginal Citations

M1 1981 c.61.

Interpretation U.K.

2.—(1) In this Order—

“the 2000 Act” means the Financial Services and Markets Act 2000 M2 ;

“body corporate” includes a Scottish partnership and “a body incorporated under the law of any part of the United Kingdom” is to be interpreted accordingly;

“frozen funds” has the meaning in article 4(1);

“funds” means financial assets and economic benefits of any kind, including (but not limited to)—

(a)

gold, cash, cheques, claims on money, drafts, money orders and other payment instruments;

(b)

deposits with relevant institutions or other persons, balances on accounts, debts and debt obligations;

(c)

publicly and privately traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivative products;

(d)

interest, dividends or other income on or value accruing from or generated by assets;

(e)

credit, rights of set-off, guarantees, performance bonds or other financial commitments;

(f)

letters of credit, bills of lading, bills of sale; and

(g)

documents providing evidence of an interest in funds or financial resources.

(2) In this Order “relevant institution” means—

(a) a person who has permission under Part 4A of the 2000 Act M3 (permission to carry on regulated activities); F1 ...

F1 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The definition of “relevant institution” in paragraph (2) must be read with—

(a) section 22 M4 of the 2000 Act (regulated activities),

(b) any relevant order under that section M5 , and

(c) Schedule 2 M6 to the 2000 Act (regulated activities).

Textual Amendments

F1 Art. 2(2)(b) and word omitted (30.12.2020) by virtue of S.I. 2018/1149, Sch. para. 93(b) (as amended by The Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020 (S.I. 2020/36), arts. 1, 13 (with art. 1(3)); 2020 c. 1, Sch. 5 para. 1(1))

Commencement Information

I2 Art. 2 in force at 19.1.2020, see art. 1(1)

Marginal Citations

M2 2000 c.8.

M3 Part 4A was inserted by the Financial Services Act 2012(c.21), section 11(2) and amended by S.I. 2013/504, S.I. 2013/1773, S.I. 2013/1797, S.I. 2013/3115, S.I. 2015/486, S.I. 2015/575, S.I. 2015/910, S.I. 2015/1882, S.I. 2016/225, S.I. 2016/680, S.I. 2016/1239, S.I. 2017/701, S.I. 2017/1064, S.I. 2017/1212, S.I. 2018/135, S.I. 2018/546 and S.I. 2018/698.

M4 Section 22 was amended by the Financial Services Act 2012 (c.21), section 7(1); section 27(4) of the Financial Guidance and Claims Act 2018 (c.10); and S.I. 2018/135.

M5 S.I. 2001/544 as amended, most recently by S.I. 2019/1067 and prospectively amended by S.I. 2018/1403.

M6 Schedule 2 was amended by the Regulation of Financial Services (Land Transactions) Act 2005 (c.24), section 1, the Dormant Bank and Building Society Accounts Act 2008 (c.31), section 15, Schedule 2, paragraph 1, the Financial Services Act 2012 (c.21), section 7(2) to (5) and section 8, the Financial Guidance and Claims Act 2018 (c.10), section 27(1) and (13) and S.I. 2013/1881; it is prospectively amended by S.I. 2018/135.

Specified persons U.K.

3.—(1) The following are specified persons for the purposes of this Order (being persons believed by the Treasury to have taken action constituting a threat to the life of one or more nationals or residents of the United Kingdom)—

(a) Andrey Lugovoy; and

(b) Dmitri Kovtun.

(2) If a specified person makes a written request, the Treasury must as soon as is practicable, and in writing, give him the reason why he has been specified.

Commencement Information

I3 Art. 3 in force at 19.1.2020, see art. 1(1)

Freezing prohibitions U.K.

4.—(1) The provisions of this article apply in relation to the following funds (“frozen funds”)—

(a) funds owned, held or controlled by Andrey Lugovoy; and

(b) funds owned, held or controlled by Dmitri Kovtun.

(2) A person must not make frozen funds available to or for the benefit of a specified person.

(3) A person must not make frozen funds available to a person at the direction or instruction of a specified person.

(4) A person must not deal with frozen funds.

(5) For the purposes of this article, making funds available to or for the benefit of a specified person includes—

(a) allowing a specified person to withdraw from an account;

(b) honouring a cheque payable to a specified person;

(c) crediting a specified person's account with interest;

(d) releasing documents of title (such as share certificates) held on behalf of a specified person;

(e) making available the proceeds of realisation of property belonging to a specified person; and

(f) making a payment to or for the benefit of a specified person.

(6) In this article “deal with” means—

(a) use, alter, move, allow access to or transfer;

(b) deal with in any other way that would result in any change in volume, amount, location, ownership, possession, character or destination; or

(c) make any other change that would enable use, including portfolio management.

Commencement Information

I4 Art. 4 in force at 19.1.2020, see art. 1(1)

Freezing prohibitions: offences U.K.

5.—(1) A person referred to in article 1(3) who fails to comply with a prohibition imposed by article 4 commits an offence.

(2) A person who engages in an activity knowing or intending that it will enable or facilitate the commission by another person of an offence under paragraph (1) commits an offence.

(3) It is a defence to the offences in this article for a person (“P”) to prove that P did not know and had no reason to suppose that—

(a) in relation to the prohibition in article 4(2), the person to whom or for whose benefit frozen funds were made available, or were to be made available;

(b) in relation to the prohibition in article 4(3), the person at the direction or instruction of whom frozen funds were made available, or were to be made available;

(c) in relation to the prohibition in article 4(4), the person who owned, held or controlled the frozen funds,

was a specified person.

Commencement Information

I5 Art. 5 in force at 19.1.2020, see art. 1(1)

Licensing U.K.

6.—(1) The Treasury may, by licence, authorise frozen funds to be made available.

(2) A licence may authorise a person to deal with frozen funds.

(3) The prohibitions in article 4 do not apply in respect of frozen funds made available or dealt with in accordance with a licence granted under this article.

(4) A licence may be—

(a) of indefinite duration or subject to an expiry date;

(b) subject to conditions;

(c) granted generally or to a person or persons named or described in the licence;

(d) granted in relation to frozen funds generally or to funds of a description specified in the licence.

(5) A licence may authorise funds to be made available—

(a) generally or for purposes specified in the licence;

(b) to or for the benefit of persons generally or a person or persons named or described in the licence.

(6) The Treasury may vary or revoke a licence at any time.

(7) The Treasury, where they grant, vary or revoke a licence, must—

(a) in the case of a licence granted to a particular person, give written notice of the licence, variation or revocation to that person, and

(b) in the case of a general licence or a licence granted to a category of persons, take such steps as the Treasury consider appropriate to publicise the licence, variation or revocation.

Commencement Information

I6 Art. 6 in force at 19.1.2020, see art. 1(1)

Licensing procedure and offences U.K.

7.—(1) A person applying for a licence must—

(a) apply in writing; and

(b) include such documentation and information that may be required for taking the relevant licensing decision.

(2) The Treasury—

(a) are not required to consider an application which is incomplete; but

(b) if an application is incomplete, must inform the applicant of the further documentation or information required.

(3) The Treasury may grant a licence without an application having been made.

(4) The Treasury may authorise a person to grant licences on their behalf.

(5) A person (“P”) who provides information, or produces a document, which P knows is false in a material particular with a view to obtaining a licence is guilty of an offence.

(6) A person who recklessly provides information, or produces a document, which is false in a material particular with a view to obtaining a licence is guilty of an offence.

Commencement Information

I7 Art. 7 in force at 19.1.2020, see art. 1(1)

Information U.K.

8.  The Schedule (which contains provisions concerning information and documents, and disclosure) has effect.

Commencement Information

I8 Art. 8 in force at 19.1.2020, see art. 1(1)

Penalties U.K.

9.—(1) A person guilty of an offence under article 5 is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 7 years or to a fine, or to both;

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding [F2 the general limit in a magistrates’ court] (or, in relation to offences committed before [F3 2nd May 2022], 6 months) or to a fine, or to both;

(ii) in Scotland, to imprisonment for a term not exceeding 12 months, or to a fine not exceeding the statutory maximum, or to both;

(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months, or to a fine not exceeding the statutory maximum, or to both.

(2) A person guilty of an offence under article 7 or under the Schedule is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine, or to both;

(b) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding [F4 the general limit in a magistrates’ court] (or, in relation to offences committed before [F5 2nd May 2022], 6 months) or to a fine, or to both;

(ii) in Scotland, to imprisonment for a term not exceeding 12 months, or to a fine not exceeding the statutory maximum, or to both;

(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months, or to a fine not exceeding the statutory maximum, or to both.

Textual Amendments

F2 Words in art. 9(1)(b)(i) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(2), Sch. Pt. 2

F3 Words in art. 9(1)(b)(i) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(2), Sch. Pt. 2

F4 Words in art. 9(2)(b)(i) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(2), Sch. Pt. 2

F5 Words in art. 9(2)(b)(i) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(2), Sch. Pt. 2

Commencement Information

I9 Art. 9 in force at 19.1.2020, see art. 1(1)

Offences: procedure U.K.

10.—(1) Proceedings for an offence under this Order are not to be instituted in England and Wales except by or with the consent of the Treasury or the Director of Public Prosecutions.

(2) Proceedings for an offence under this Order are not to be instituted in Northern Ireland except by or with the consent of the Treasury or the Director of Public Prosecutions for Northern Ireland.

(3) Despite anything in section 127(1) of the Magistrates' Courts Act 1980 M7 (information to be laid within 6 months of offence) an information relating to an offence under this Order which is triable by a magistrates' court in England and Wales may be so tried if it is laid at any time in the period of one year starting with the date of the commission of the offence.

(4) In Scotland summary proceedings for an offence under this Order may be commenced at any time in the period of one year starting with the date of the commission of the offence.

(5) In its application to an offence under this Order article 19(1)(a) of the Magistrates' Courts (Northern Ireland) Order 1981 M8 (time limit within which complaint charging offence must be made) is to have effect as if the reference to six months were a reference to twelve months.

Commencement Information

I10 Art. 10 in force at 19.1.2020, see art. 1(1)

Marginal Citations

M7 1980 c.43.

M8 S.I. 1981/1675 (N.I. 26).

Offences by bodies corporate etc. U.K.

11.—(1) If an offence under this Order—

(a) is committed by a body corporate, and

(b) is proved to have been committed with the consent or connivance of an officer, or to be attributable to any neglect on the officer's part,

the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2) For the purpose of paragraph (1) these are officers of a body corporate—

(a) a director, manager, secretary or other similar officer of the body;

(b) any person purporting to act in any such capacity;

(c) in the case of a Scottish partnership, a partner.

(3) If the affairs of a body corporate are managed by its members, paragraph (1) applies in relation to the acts and defaults of a member in connection with the member's functions of management as if the member were an officer of the body.

Commencement Information

I11 Art. 11 in force at 19.1.2020, see art. 1(1)

Notices U.K.

12.—(1) This article has effect in relation to any notice to be given to a person (“P”) by the Treasury under article 6.

(2) Any such notice may be given—

(a) by posting it to the last known address of P; or

(b) where P is a body corporate, by posting it to the registered or principal office of the body corporate.

(3) Where the Treasury do not have an address for P, they must make arrangements for the notice to be given to P at the first available opportunity.

Commencement Information

I12 Art. 12 in force at 19.1.2020, see art. 1(1)

Supplemental amendments U.K.

13.—(1) Part 3 of the Schedule to the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 M9 is amended as follows.

(2) In paragraph 93—

(a) for “Andrey Lugovoy and Dmitri Kovtun Freezing Order 2018” substitute “ Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020 ”;

(b) omit sub-paragraph (a).

(3) In the heading to paragraph 93 for “Andrey Lugovoy and Dmitri Kovtun Freezing Order 2018” substitute “ Andrey Lugovoy and Dmitri Kovtun Freezing Order 2020 ”.

Commencement Information

I13 Art. 13 in force at 19.1.2020, see art. 1(1)

Marginal Citations

M9 S.I. 2018/1149.

David Rutley

Mike Freer

Two of the Lords Commissioners of Her Majesty's Treasury