The Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024

Amendment of the Venezuela (Sanctions) (EU Exit) Regulations 2019

2.—(1) The Venezuela (Sanctions) (EU Exit) Regulations 2019(1) are amended as follows.

(2) In regulation 13 (making funds available for benefit of designated person), after paragraph (3) insert—

“(3A) The reference in paragraph (1) to making funds available to any person for the benefit of a designated person includes making funds available for the benefit of a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person (and references to designated person in paragraph (4) are to be read accordingly).”.

(3) In regulation 15 (making economic resources available for benefit of designated person), after paragraph (3) insert—

“(3A) The reference in paragraph (1) to making economic resources available to any person for the benefit of a designated person includes making economic resources available for the benefit of a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person (and references to designated person in paragraph (4) are to be read accordingly).”.

(4)  In regulation 33 (finance: exceptions from prohibitions), after paragraph (8) insert—

“(9) For the purposes of paragraphs (1)(b), (5) and (6) and the definition of “frozen account” in paragraph (7), references to a designated person are to be read as including a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

(10) When determining for the purposes of paragraph (5) when a person (“C”) who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person (“D”) became a designated person, C is to be treated as having become a designated person at the same time as D.”.

(5)  After regulation 33 insert—

“Finance: exception from prohibitions for required payments

33ZA.— (1) This regulation applies to required payments within the meaning of paragraph (2).

(2) A required payment is a payment which—

(a) a designated person is required to make under or by virtue of any enactment to—

(i) the registrar of companies,

(ii) the Commissioners,

(iii) the Welsh Revenue Authority,

(iv) Revenue Scotland,

(v) the Financial Conduct Authority,

(vi) the Secretary of State,

(vii) the Welsh Ministers,

(viii) the Department of Finance in Northern Ireland, or

(ix) a local authority, and

(b) is not an excluded payment.

(3) The prohibitions in regulations 11 (asset-freeze in relation to designated persons) and 13 (making funds available for benefit of designated person) are not contravened by a person making a required payment.

(4) Where a required payment is made by a person other than a designated person, the prohibition in regulation 11 is not contravened by the designated person making a reimbursement payment to that person.

(5) The reference in paragraph (3) to a person making a required payment includes a designated person, but only where they are making a required payment on their own behalf.

(6) The following payments are to be treated as payments which a designated person is required to make under or by virtue of an enactment for the purposes of this regulation, where made by a designated person on their own behalf or by a person, other than a designated person, on behalf of a designated person—

(a) a payment to the Financial Conduct Authority of a levy imposed by the scheme manager of the Financial Services Compensation Scheme by virtue of section 213 of the Financial Services and Markets Act 2000 (the compensation scheme)(2);

(b) a payment to the Financial Conduct Authority which is collected by that Authority on behalf of the Financial Reporting Council Limited(3).

(7) For the purposes of this regulation, references to a designated person are to be read as including a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

(8) In this regulation—

“BID levy” means a levy that is imposed on those persons who are, in respect of particular business improvement district proposals, entitled to vote in accordance with section 39(3) of the Planning etc. (Scotland) Act 2006 (entitlement to vote in ballot)(4);

“business improvement district” has the meaning given in section 33 of the Planning etc. (Scotland) Act 2006 (arrangements with respect to business improvement districts);

“designated person” has the same meaning as it has in Part 3 (Finance);

“enactment” has the meaning given in section 54(6) of the Act (regulations: general)(5);

“excluded payment” means, in relation to—

(a)

the registrar of companies, a payment of fees for—

(i)

the incorporation of a firm;

(ii)

the restoration of a firm to a register which is administered by the registrar;

(b)

the Financial Conduct Authority, a payment of fees for—

(i)

an application for permission from, authorisation by, registration with or recognition from the Financial Conduct Authority which relates to the carrying on of any activity falling within any function of the Financial Conduct Authority;

(ii)

an application for a variation of such permission, authorisation, registration or recognition;

(iii)

an application for listing or for eligibility for listing;

(iv)

an application for review or approval of a document relating to listing;

(v)

an application for approval as a sponsor or primary information provider;

(vi)

an application for review or approval of—

(aa)

a document under the prospectus rules or the prospectus regulation;

(bb)

listing particulars under section 79 of the Financial Services and Markets Act 2000 (listing particulars and other documents)(6) or supplementary listing particulars under section 81 of that Act (supplementary listing particulars)(7);

(c)

the Secretary of State or the Welsh Ministers, a payment that a designated person is required to make under or by virtue of an enactment other than a payment under or by virtue of Part 3 of the Local Government Finance Act 1988 (non-domestic rating)(8);

(d)

the Department of Finance in Northern Ireland, a payment that a designated person is required to make under or by virtue of an enactment other than a payment under or by virtue of Part 2 of the Rates (Northern Ireland) Order 1977 (rating)(9);

(e)

a local authority, a payment that a designated person is required to make under or by virtue of an enactment other than a payment under or by virtue of—

(i)

Part 1 of the Local Government (Scotland) Act 1975 (finance)(10);

(ii)

Part 3 of the Local Government Finance Act 1988(11);

(iii)

Parts 1 (council tax: England and Wales) and 2 (council tax: Scotland) of the Local Government Finance Act 1992(12);

(iv)

Part 4 of the Local Government Act 2003 (business improvement districts)(13);

(v)

Part 9 of the Planning etc. (Scotland) Act 2006 (business improvement districts);

(vi)

the Business Rate Supplements Act 2009(14);

(vii)

the Business Improvement Districts Act (Northern Ireland) 2013(15);

“firm” has the meaning given in section 1173(1) of the Companies Act 2006 (minor definitions)(16);

“listing” means being included in the official list maintained by the Financial Conduct Authority in accordance with Part 6 of the Financial Services and Markets Act 2000 (official listing);

“local authority” means—

(a)

in relation to England—

(i)

a district council;

(ii)

a county council for any area for which there is no district council;

(iii)

a London borough council;

(iv)

the Common Council of the City of London in its capacity as a local authority;

(v)

the Council of the Isles of Scilly;

(b)

in relation to Wales, a county council or a county borough council;

(c)

in relation to Scotland, a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 (constitution of councils)(17) or a person appointed by such a council for the purposes of the administration, collection and recovery of a BID levy;

(d)

in relation to Northern Ireland, a district council;

“primary information provider” has the meaning given in section 89P(2) of the Financial Services and Markets Act 2000 (primary information providers)(18);

“prospectus regulation” means Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC(19);

“prospectus rules” has the meaning given in section 73A(4) of the Financial Services and Markets Act 2000 (part 6 rules)(20);

“registrar of companies” has the meaning given in section 1060 of the Companies Act 2006 (the registrar);

“reimbursement payment” means a repayment from the designated person to the person who made a required payment which is of the same amount as that required payment;

“scheme manager” has the meaning given in section 212 of the Financial Services and Markets Act 2000 (the scheme manager)(21);

“sponsor” has the meaning given in section 88(2) of the Financial Services and Markets Act 2000 (sponsors)(22).”.

(6) In regulation 37(6) (licences: general provisions)—

(a) after “A person who” insert “, on the application of a person (“P”),”;

(b) for “issues, varies, revokes or suspends” substitute “issues”;

(c) after “particular person” insert “, or varies, revokes or suspends that licence,”;

(d) for “that person” substitute “P”.

(7) In regulation 41 (finance: reporting obligations)—

(a) in paragraph (1)(a)(ii), for “committed an offence” substitute “breached a prohibition or failed to comply with an obligation”;

(b) after paragraph (4) insert—

“(4A) Where a person (“P”) knows, or has reasonable cause to suspect, that P holds funds or economic resources owned, held or controlled by a designated person, P must by no later than 30th November in each calendar year provide a report to the Treasury as to the nature and amount or quantity of those funds or economic resources held by P as of 30th September in that calendar year.

(4B) Where a report has been provided further to paragraph (4A) but as of 30th September in the following calendar year P no longer holds funds or economic resources owned, held or controlled by the designated person, P must by no later than 30th November in that calendar year report this to the Treasury.

(4C) For the purposes of paragraphs (4A) and (4B), funds or economic resources are to be treated as owned, held or controlled by a designated person if they are owned, held or controlled by a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.”;

(c) after paragraph (6) insert—

“(6A) A person commits an offence if that person, without reasonable excuse, fails to comply with a requirement in paragraph (4A) or (4B).”.

(8)  After regulation 41 insert—

“Finance: reporting obligations for required payments

41A.— (1) A designated person must inform the Treasury without delay if they make a required payment.

(2) A person who makes a required payment on behalf of a designated person must inform the Treasury without delay that they have made the required payment.

(3) A person must inform the Treasury without delay if they receive a reimbursement payment.

(4) For the purposes of this regulation, references to a designated person are to be read as including a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

(5) In this regulation—

“designated person” has the meaning given in regulation 33ZA(8) (finance: exception from prohibitions for required payments);

“reimbursement payment” has the meaning given in regulation 33ZA(8);

“required payment” has the meaning given in regulation 33ZA(2).”.

(9) In regulation 42 (“relevant firm”)—

(a) after paragraph (1)(i) insert—

“(j) a high value dealer;

(k) an art market participant;

(l) an insolvency practitioner;

(m) a firm or sole practitioner (“P”) that carries out, or whose employees carry out, letting agency work.”;

(b) after paragraph (3C) insert—

“(3D) In paragraph (1), a “high value dealer” means a firm or sole trader that by way of business trades in goods (including an auctioneer dealing in goods), when the firm or sole trader makes or receives, in respect of any transaction, a payment or payments in cash of at least 10,000 euros in total, whether the transaction is executed in a single operation or in several operations which appear to be linked.

(3E) In paragraph (1), an “art market participant” means, subject to paragraph (3F), a firm or sole practitioner that is registered or required to register with the Commissioners as an art market participant under regulation 56(5) and (6) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (requirement to be registered)(23).

(3F) A firm or sole practitioner is not an art market participant for the purposes of paragraph (3E) in relation to the sale or storage of a work of art which is created by, or is attributable to, a member of the firm or the sole practitioner.

(3G) For the purposes of this regulation, “work of art” means anything which, in accordance with section 21(6) to (6B) of the Value Added Tax Act 1994 (value of imported goods)(24), is a work of art for the purposes of section 21(5)(a) of that Act.

(3H) In paragraph (1), an “insolvency practitioner” means a firm or individual who acts as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986 (meaning of “act as insolvency practitioner”)(25) or Article 3 of the Insolvency (Northern Ireland) Order 1989 (“act as insolvency practitioner”)(26).

(3I) In paragraph (1), “letting agency work” means work—

(a) consisting of things done in response to instructions received from—

(i) a person (a “prospective landlord”) seeking to find another person to whom to let land for a term of a month or more, or

(ii) a person (a “prospective tenant”) seeking to find land to rent for a term of a month or more, and

(b) done—

(i) in relation to a prospective landlord, from the point that the prospective landlord instructs P, or

(ii) otherwise in the course of concluding an agreement for the letting of land for a term of a month or more.

(3J) For the purposes of paragraph (3I)—

“land” includes part of a building and part of any other structure;

“letting agency work” does not include the things listed in paragraph (3K) when done by, or by employees of, a firm or sole practitioner if neither the firm or sole practitioner, nor any of their employees, does anything else within paragraph (3I).

(3K) Those things are—

(a) publishing advertisements or disseminating information;

(b) providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord;

(c) providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other;

(d) the provision of legal or notarial services by a barrister, advocate, solicitor or other legal representative communications with whom may be the subject of a claim to professional privilege or, in Scotland, protected from disclosure in legal proceedings on grounds of confidentiality of communications.”;

(c) after paragraph (5)(d) insert—

“(da) in the case of a relevant firm within paragraph (1)(k)—

(i) in the course of trading, or acting as an intermediary in the sale or purchase of, works of art when the value of the transaction, or a series of linked transactions, amounts to 10,000 euros or more, or

(ii) in the course of storing works of art where the value of the works of art so stored for a person amounts to 10,000 euros or more;”.

(10) In regulation 49A (finance: disclosure to the Treasury), in paragraph (1), for “sanctions” substitute “any sanctions regulations(27) contained in these Regulations”.

(11) In regulation 74 (transitional provisions: prior obligations), in paragraph (2)(b), for “paragraphs 6(b)(i) and” substitute “paragraph”.

(12) In Schedule 4 (Treasury licences: purposes)—

(a) in paragraph 1 (interpretation)—

(i) the existing text becomes sub-paragraph (1);

(ii) in sub-paragraph (1), at the appropriate place insert—

““frozen account” has the meaning given in regulation 33(7);”;

(iii) after sub-paragraph (1) insert—

“(2) For the purposes of this Schedule, references to a designated person are to be read as including a person (“C”) who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person (“P”).

(3) When determining for the purposes of paragraph 9 when C became a designated person, C is to be treated as having become a designated person at the same time as P.”;

(b) for paragraph 6 (pre-existing judicial decisions etc) substitute—

“Judicial decisions etc.

6.   To enable the implementation or satisfaction (in whole or in part) of a judicial, administrative or arbitral decision or lien which is enforceable in the United Kingdom (the “judicial decision”), provided that—

(a) where funds or economic resources are made available to a designated person, they are credited to a frozen account or otherwise frozen by virtue of regulation 11;

(b) where funds or economic resources are made available by a person (including a designated person) to a designated person to enable the implementation or satisfaction of the judicial decision, no other designated person benefits, directly or indirectly.”;

(c) after paragraph 9 (prior obligations) insert—

“Insolvency

10.— (1) To enable anything to be done in connection with—

(a) any insolvency and restructuring proceedings relating to an insolvent person,

(b) any other relevant proceedings relating to a person other than an individual, or

(c) proceedings under the insolvency law of a country other than the United Kingdom that correspond to the proceedings in paragraph (a) or (b),

provided that any payments made directly or indirectly to a designated person are credited to a frozen account.

(2) In this paragraph—

“enactment” has the meaning given in section 54(6) of the Act;

“insolvency and restructuring proceedings” includes—

(a)

the regimes and proceedings set out in Parts A1 to 6 of the Insolvency Act 1986(28), Parts 1A to 7 of the Insolvency (Northern Ireland) Order 1989(29) and so much of Part 1 of that Order as applies for the purposes of those Parts, but excluding—

(i)

proceedings under Chapter 3 of Part 4 (members’ voluntary winding up) of the Insolvency Act 1986, and

(ii)

proceedings under Chapter 3 of Part 5 (members’ voluntary winding up) of the Insolvency (Northern Ireland) Order 1989;

(b)

arrangements and reconstructions under Part 26 of the Companies Act 2006 (arrangements and reconstructions: general);

(c)

arrangements and reconstructions for companies in financial difficulty under Part 26A of the Companies Act 2006 (arrangements and reconstructions: companies in financial difficulty)(30);

(d)

the proceedings and arrangements set out in the Bankruptcy (Scotland) Act 2016(31);

“insolvent person” means a person (“P”), other than an individual, where—

(a)

P is unable to pay its debts as they fall due, or

(b)

the value of P’s assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities;

“other relevant proceedings” means—

(a)

the regimes and proceedings set out in—

(i)

sections 367 and 377A to 377J of, or Schedule 19C to, the Financial Services and Markets Act 2000 (winding up, write-down orders, etc)(32);

(ii)

the Insurers (Reorganisation and Winding Up) (Lloyd’s) Regulations 2005(33);

(iii)

Parts 1 to 3 of the Banking Act 2009(34) (including Parts 2 and 3 as applied to building societies(35) by section 90C of the Building Societies Act 1986 (application of bank insolvency and administration legislation to building societies)(36);

(iv)

the Investment Bank Special Administration Regulations 2011(37);

(v)

Part 6 of the Financial Services (Banking Reform) Act 2013 (special administration for operators of certain infrastructure systems)(38);

(vi)

the Payment and Electronic Money Institution Insolvency Regulations 2021(39);

(vii)

Schedule 11 to the Financial Services and Markets Act 2023 (central counterparties)(40);

(b)

proceedings under any other special administration regime;

“special administration regime” means provision made by an enactment for an insolvency procedure that—

(a)

is similar or corresponds to the ordinary administration procedure provided for by Schedule B1 to the Insolvency Act 1986 (administration)(41) or Schedule B1 to the Insolvency (Northern Ireland) Order 1989 (administration)(42), and

(b)

provides for the administrator to have one or more special objectives instead of or in addition to the objectives of ordinary administration.”.

(1)

S.I. 2019/135, amended by the Sentencing Act 2020, Schedule 24, paragraph 446(1); and by S.I. 2020/590, 2020/951, 2022/500, 2022/818, 2023/149, 2024/643.

(2)

2000 c. 8; section 213 was amended by the Banking Act 2009 (c. 1), section 170(2); by the Financial Services Act 2012 (c. 21), Schedule 10, paragraph 3; by the Financial Services Act 2021 (c. 22), Schedule 8, paragraph 7; and by S.I. 2017/701, 2018/1149 and 2022/466.

(3)

A company registered in England and Wales with number 02486368.

(4)

2006 asp 17.

(5)

2018 c. 13; section 54(6)(e) was amended by S.I. 2023/1424.

(6)

Section 79 was amended by the Financial Services Act 2012, section 16(2) and (3)(a); and by S.I. 2005/1433 and 2024/105.

(7)

Section 81 was amended by the Financial Services Act 2012, section 16(2) and (3)(a).

(8)

1988 c. 41.

(9)

S.I. 1977/2157 (N.I. 28). Section 1(4) of the Departments Act (Northern Ireland) 2016 (c. 5) renamed the Department of Finance and Personnel (as referenced in the 1977 Order) the Department of Finance.

(10)

1975 c. 30.

(11)

1988 c. 41.

(12)

1992 c. 14.

(13)

2003 c. 26.

(14)

2009 c. 7.

(15)

2013 c. 5 (N.I.).

(16)

2006 c. 46.

(17)

1994 c. 39; section 2 was amended by paragraph 232(1) of Schedule 22 to the Environment Act 1995 (c. 25).

(18)

Section 89P was inserted by the Financial Services Act 2012, section 19(1).

(19)

EUR 2017/1129. Regulation (EU) 2017/1129 is revoked by section 1(1) of the Financial Services and Markets Act 2023 (c. 29) (not yet fully in force).

(20)

Section 73A was inserted by S.I. 2005/381; subsection (4) was added by S.I. 2005/1433 and is repealed by S.I. 2024/105 (not yet fully in force).

(21)

Section 212 was amended by the Financial Services Act 2012, Schedule 10, paragraph 2, the Financial Services (Banking Reform) Act 2013 (c. 33), section 16, and the Financial Services and Markets Act 2023, section 62(2).

(22)

Section 88 was amended by the Financial Services Act 2012, section 16(2) and (3)(f).

(23)

S.I. 2017/692; relevant amending instruments are S.I. 2019/1511 and 2020/991.

(24)

1994 c. 23; section 21(6) was originally inserted by the Finance Act 1995 (c. 4); subsections (6) to (6B) were inserted by section 12(2) of the Finance Act 1999 (c. 16).

(25)

1986 c. 45; section 388 was amended by the Bankruptcy (Scotland) Act 1993 (c. 6), section 11(1); by the Insolvency Act 2000 (c. 39), section 4(2); by the Deregulation Act 2015 (c. 20), Schedule 6, paragraph 2(11)(f); by the Corporate Insolvency and Governance Act 2020 (c. 12), Schedule 3, paragraph 21; and by S.I. 1994/2421, 2002/1240, 2002/2708, 2009/1941, 2016/1034 and 2019/146.

(26)

S.I. 1989/2405 (N.I. 19). Article 3 was amended by the Insolvency (Amendment) Act (Northern Ireland) 2016 (c. 2) (N.I.), Schedule 4; by the Corporate Insolvency and Governance Act 2020 (c. 12), Schedule 7, paragraph 4; by S.R. 1995/225, 2002/334 and 2003/550; by S.I. 2002/3152 (N.I. 6); and by S.I. 2009/1941 and 2019/146.

(27)

“Sanctions regulations” has the meaning given in section 1(5) of the Sanctions and Anti-Money Laundering Act 2018; section 1(5) was amended by the Economic Crime and Corporate Transparency Act 2023, section 35(2).

(28)

1986 c. 45; Part A1 was inserted by the Corporate Insolvency and Governance Act 2020, section 1(1).

(29)

S.I. 1989/2405 (N.I. 19); Part 1A was inserted by the Corporate Insolvency and Governance Act 2020, section 4(1).

(30)

Part 26A was inserted by the Corporate Insolvency and Governance Act 2020, Schedule 9, paragraph 1.

(31)

2016 asp 21.

(32)

2000 c. 8; section 367 was amended by the Financial Services Act 2012, Schedule 14, paragraph 14; by the Financial Services and Markets Act 2023 (c. 29), section 1(1), Schedule 1, Part 4 (to be appointed); and by S.I. 2015/575. Sections 377A to 377J were inserted by the Financial Services and Markets Act 2023, Schedule 12, paragraph 1(4). Schedule 19C was inserted by the Financial Services and Markets Act 2023, Schedule 13, paragraph 1(3).

(33)

S.I. 2005/1998.

(34)

2009 c. 1.

(35)

A “building society” is defined in section 119(1) of the Building Societies Act 1986 (c. 53).

(36)

1986 c. 53. Section 90C was inserted by S.I. 2009/805.

(37)

S.I. 2011/245.

(38)

2013 c. 33.

(39)

S.I. 2021/716.

(40)

2023 c. 29.

(41)

Schedule B1 was inserted by the Enterprise Act 2002 (c. 40), Schedule 16.

(42)

Schedule B1 was inserted by S.I. 2005/1455 (N.I. 10).