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

Amendment of the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019

9.—(1) The Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019(1) are amended as follows.

(2) In regulation 13 (making funds or financial services available for the benefit of designated persons), after paragraph (3) insert—

“(3A) The reference in paragraph (1) to making funds or financial services available to any person for the benefit of a designated person includes making funds or financial services 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 the benefit of designated persons), 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 29 (finance: exceptions from prohibitions), after paragraph (9) insert—

“(10) For the purposes of paragraphs (1)(b), (5) and (6) and the definition of “frozen account” in paragraph (8), 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.

(11) 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 29 insert—

“Finance: exception from prohibitions for required payments

29ZA.— (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 or financial services available for the benefit of designated persons) 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);

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

(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;

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

“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;

“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 or supplementary listing particulars under section 81 of that Act;

(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;

(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;

(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;

(ii)

Part 3 of the Local Government Finance Act 1988;

(iii)

Parts 1 and 2 of the Local Government Finance Act 1992;

(iv)

Part 4 of the Local Government Act 2003;

(v)

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

(vi)

the Business Rate Supplements Act 2009;

(vii)

the Business Improvement Districts Act (Northern Ireland) 2013;

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

“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;

“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 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;

“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;

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

“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;

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

(6) In regulation 31B(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 34 (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 34 insert—

“Finance: reporting obligations for required payments

34A.— (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 29ZA(8) (finance: exception from prohibitions for required payments);

“reimbursement payment” has the meaning given in regulation 29ZA(8);

“required payment” has the meaning given in regulation 29ZA(2).”.

(9) In regulation 35 (“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.

(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), 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 or Article 3 of the Insolvency (Northern Ireland) Order 1989.

(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 40A (finance: disclosure to the Treasury), in paragraph (1), for “sanctions” substitute “any sanctions regulations contained in these Regulations”.

(1)

S.I. 2019/573, amended by the Sentencing Act 2020, Schedule 24, paragraph 446(1); and by S.I. 2019/843, 2020/591, 2020/950, 2020/1289, 2022/500, 2022/819, 2023/149, 2024/644, 2024/946.