SCHEDULE 1Rules for interpretation of regulation 7(2)
Application of Schedule
1.
(1)
The rules set out in the following paragraphs of this Schedule apply for the purpose of interpreting regulation 7(2).
(2)
They also apply for the purpose of interpreting this Schedule.
Joint interests
2.
If two or more persons each hold a share or right jointly, each of them is treated as holding that share or right.
Joint arrangements
3.
(1)
If shares or rights held by a person and shares or rights held by another person are the subject of a joint arrangement between those persons, each of them is treated as holding the combined shares or rights of both of them.
(2)
A “joint arrangement” is an arrangement between the holders of shares or rights that they will exercise all or substantially all the rights conferred by their respective shares or rights jointly in a way that is pre-determined by the arrangement.
(3)
“Arrangement” has the meaning given by paragraph 12.
Calculating shareholdings
4.
(1)
In relation to a person who has a share capital, a reference to holding “more than 50% of the shares” in that person is to holding shares comprised in the issued share capital of that person of a nominal value exceeding (in aggregate) 50% of that share capital.
(2)
In relation to a person who does not have a share capital—
(a)
a reference to holding shares in that person is to holding a right or rights to share in the capital or, as the case may be, profits of that person;
(b)
a reference to holding “more than 50% of the shares” in that person is to holding a right or rights to share in more than 50% of the capital or, as the case may be, profits of that person.
Voting rights
5.
(1)
A reference to the voting rights in a person is to the rights conferred on shareholders in respect of their shares (or, in the case of a person not having a share capital, on members) to vote at general meetings of the person on all or substantially all matters.
(2)
In relation to a person that does not have general meetings at which matters are decided by the exercise of voting rights—
(a)
a reference to holding voting rights in the person is to be read as a reference to holding rights in relation to the person that are equivalent to those of a person entitled to exercise voting rights in a company;
(b)
a reference to holding “more than 50% of the voting rights” in the person is to be read as a reference to holding the right under the constitution of the person to block changes to the overall policy of the person or to the terms of its constitution.
6.
In applying regulation 7(2) and this Schedule, the voting rights in a person are to be reduced by any rights held by the person itself.
Rights to appoint or remove members of the board
7.
A reference to the right to appoint or remove a majority of the board of directors of a person is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all or substantially all matters.
8.
A reference to a board of directors, in the case of a person who does not have such a board, is to be read as a reference to the equivalent management body of that person.
Shares or rights held “indirectly”
9.
(1)
A person holds a share “indirectly” if the person has a majority stake in another person and that other person—
(a)
holds the share in question, or
(b)
is part of a chain of persons—
(i)
each of whom (other than the last) has a majority stake in the person immediately below it in the chain, and
(ii)
the last of whom holds the share.
(2)
A person holds a right “indirectly” if the person has a majority stake in another person and that other person—
(a)
holds that right, or
(b)
is part of a chain of persons—
(i)
each of whom (other than the last) has a majority stake in the person immediately below it in the chain, and
(ii)
the last of whom holds that right.
(3)
For these purposes, a person (“A”) has a “majority stake” in another person (“B”) if—
(a)
A holds a majority of the voting rights in B,
(b)
A is a member of B and has the right to appoint or remove a majority of the board of directors of B,
(c)
A is a member of B and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in B, or
(d)
A has the right to exercise, or actually exercises, dominant influence or control over B.
(4)
In the application of this paragraph to the right to appoint or remove a majority of the board of directors, a person (“A”) is to be treated as having the right to appoint a director if—
(a)
any person's appointment as director follows necessarily from that person's appointment as director of A, or
(b)
the directorship is held by A itself.
Shares held by nominees
10.
A share held by a person as nominee for another is to be treated as held by the other (and not by the nominee).
Rights treated as held by person who controls their exercise
11.
(1)
Where a person controls a right, the right is to be treated as held by that person (and not by the person who in fact holds the right, unless that person also controls it).
(2)
A person “controls” a right if, by virtue of any arrangement between that person and others, the right is exercisable only—
(a)
by that person,
(b)
in accordance with that person's directions or instructions, or
(c)
with that person's consent or concurrence.
12.
“Arrangement” includes—
(a)
any scheme, agreement or understanding, whether or not it is legally enforceable, and
(b)
any convention, custom or practice of any kind.
Rights exercisable only in certain circumstances etc.
13.
(1)
Rights that are exercisable only in certain circumstances are to be taken into account only—
(a)
when the circumstances have arisen, and for so long as they continue to obtain, or
(b)
when the circumstances are within the control of the person having the rights.
(2)
But rights that are exercisable by an administrator or by creditors while a person is subject to relevant insolvency proceedings are not to be taken into account while the person is subject to those proceedings.
(3)
“Relevant insolvency proceedings” means—
(a)
administration within the meaning of the Insolvency Act 1986 M1,
(b)
administration within the meaning of the Insolvency (Northern Ireland) Order 1989 M2, or
(c)
proceedings under the insolvency law of another country during which a person's assets and affairs are subject to the control or supervision of a third party or creditor.
(4)
Rights that are normally exercisable but are temporarily incapable of exercise are to continue to be taken into account.
Rights attached to shares held by way of security
14.
Rights attached to shares held by way of security provided by a person are to be treated for the purposes of this Schedule as held by that person—
(a)
where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with that person's instructions, and
(b)
where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in that person's interests.
SCHEDULE 2Treasury licences: purposes
PART 1Designated Persons
Basic needs
1.
(1)
To enable the basic needs of a designated person, or (in the case of an individual) any dependent family member of such a person, to be met.
(2)
In the case of an individual, in sub-paragraph (1) “basic needs” includes—
(a)
medical needs;
(3)
In the case of a person other than an individual, in sub-paragraph (1) “basic needs” includes needs for—
(a)
payment of insurance premiums;
(b)
payment of reasonable fees for the provision of property management services;
(c)
payment of remuneration, allowances or pensions of employees;
(d)
payment of tax;
(e)
rent or mortgage payments;
(f)
utility payments.
(4)
In sub-paragraph (1)—
“dependent” means financially dependent;
“family member” includes—
(a)
the wife or husband of the designated person;
(b)
the civil partner of the designated person;
(c)
any parent or other ascendant of the designated person;
(d)
any child or other descendant of the designated person;
(e)
any person who is a brother or sister of the designated person, or a child or other descendant of such a person.
Legal services
2.
To enable the payment of—
(a)
reasonable professional fees for the provision of legal services, or
(b)
reasonable expenses associated with the provision of legal services.
Maintenance of frozen funds and economic resources
3.
To enable the payment of—
(a)
reasonable fees, or
(b)
reasonable service charges,
arising from the routine holding or maintenance of frozen funds or economic resources.
Extraordinary expenses
4.
To enable an extraordinary expense of a designated person to be met.
Pre-existing judicial decisions etc
F35.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior obligations
6.
To enable, by the use of a designated person's frozen funds or economic resources, the satisfaction of an obligation of that person (whether arising under a contract, other agreement or otherwise), provided that—
(a)
the obligation arose before the date on which the person became a designated person;
(b)
the obligation is not related to any of the prohibited items, materials, equipment, goods, technologies, assistance, training, financial assistance, investment, brokering or services referred to in Annex B of resolution 2231; and
(c)
no payments are made to another designated person, whether directly or indirectly.
Activities related to the Joint Comprehensive Plan of Action
7.
(1)
To enable anything to be done that is—
(a)
necessary for the civil nuclear cooperation projects described in Annex III of the Joint Comprehensive Plan of Action;
(b)
necessary for activities directly related to any activity required for the implementation of the Joint Comprehensive Plan of Action; or
(c)
necessary for any other activities directly related to nuclear-list goods or nuclear-list technology provided that such activities are consistent with the Joint Comprehensive Plan of Action.
(2)
In sub-paragraph (1), “nuclear-list goods” and “nuclear-list technology” have the same meaning that they have in Part 5 (Trade).
F4Part 1APurposes relating only to UN designated persons
Pre-existing judicial decisions etc.
7A.
To enable, by the use of a designated person's frozen funds or economic resources, the implementation or satisfaction (in whole or in part) of a judicial, administrative or arbitral decision or lien, provided that—
(a)
the funds or economic resources so used are the subject of the decision or lien,
(b)
the decision or lien—
(i)
was made or established before the date on which the person became a designated person, and
(ii)
is enforceable in the United Kingdom, and
(c)
the use of the frozen funds or economic resources does not directly or indirectly benefit any other designated person.
PART 2Non-UN designated persons
Humanitarian assistance activities
8.
(1)
To enable anything to be done in connection with the performance of any humanitarian assistance activity.
(2)
In sub-paragraph (1) “humanitarian assistance activity” includes the work of international and non-governmental organisations carrying out relief activities in Iran for the benefit of the civilian population there.
Diplomatic missions etc
9.
(1)
To enable anything to be done in order that the functions of a diplomatic mission or consular post, or of an international organisation enjoying immunities in accordance with international law, may be carried out.
(2)
In sub-paragraph (1)—
“consular post” has the same meaning as in the Vienna Convention on Consular Relations done at Vienna on 24 April 1963 M3, and any reference to the functions of a consular post is to be read in accordance with that Convention;
“diplomatic mission” and any reference to the functions of a diplomatic mission, is to be read in accordance with the Vienna Convention on Diplomatic Relations done at Vienna on 18 April 1961 M4.
Extraordinary situation
10.
To enable anything to be done to deal with an extraordinary situation.
F5Insolvency
10A.
(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, Parts 1A to 7 of the Insolvency (Northern Ireland) Order 1989 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;
(c)
arrangements and reconstructions for companies in financial difficulty under Part 26A of the Companies Act 2006;
(d)
the proceedings and arrangements set out in the Bankruptcy (Scotland) Act 2016;
“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;
- (ii)
the Insurers (Reorganisation and Winding Up) (Lloyd’s) Regulations 2005;
- (iii)
Parts 1 to 3 of the Banking Act 2009 (including Parts 2 and 3 as applied to building societies by section 90C of the Building Societies Act 1986);
- (iv)
the Investment Bank Special Administration Regulations 2011;
- (v)
Part 6 of the Financial Services (Banking Reform) Act 2013;
- (vi)
the Payment and Electronic Money Institution Insolvency Regulations 2021;
- (vii)
Schedule 11 to the Financial Services and Markets Act 2023;
(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 or Schedule B1 to the Insolvency (Northern Ireland) Order 1989, and
(b)
provides for the administrator to have one or more special objectives instead of or in addition to the objectives of ordinary administration.
Judicial decisions etc.
10B.
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 12;
(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.
PART 3Interpretation
11.
F6(1)
In this Schedule—
“designated person” has the same meaning as it has in Part 3 (Finance);
F7“frozen account” has the meaning given in regulation 37(7);
“frozen funds or economic resources” means funds or economic resources frozen by virtue of regulation 12, and any reference to a person's frozen funds or economic resources is to funds or economic resources frozen as a consequence of the designation of that person for the purposes of that regulation.
F8(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 6 or 7A when C became a designated person, C is to be treated as having become a designated person at the same time as P.