The Iraq (Sanctions) (EU Exit) Regulations 2020

PART 3 U.K. Finance

CHAPTER 1 U.K. Interpretation

Meaning of “designated person” in Part 3 U.K.

6.—(1) In regulation 8 (partial asset-freeze in relation to the former Government of Iraq and its state bodies, corporations or agencies) a “ designated person” means a person who is designated for the purposes of regulation 8 by reason of regulation 5(1).

(2) In regulations 9 to 13 (asset-freeze etc. in relation to persons connected with the former Iraqi regime) a “designated person” means a person who is designated for the purposes of regulations 9 to 13 by reason of regulation 5(2).

Commencement Information

I1 Reg. 6 not in force at made date, see reg. 1(2)

I2 Reg. 6 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

Meaning of “owned or controlled directly or indirectly” U.K.

7.—(1) A person who is not an individual (“C”) is “owned or controlled directly or indirectly” by another person (“P”) if either of the following two conditions is met (or both are met).

(2) The first condition is that P—

(a) holds directly or indirectly more than 50% of the shares in C,

(b) holds directly or indirectly more than 50% of the voting rights in C, or

(c) holds the right directly or indirectly to appoint or remove a majority of the board of directors of C.

(3) Schedule 1 contains provision applying for the purpose of interpreting paragraph (2).

(4) The second condition is that it is reasonable, having regard to all the circumstances, to expect that P would (if P chose to) be able, in most cases or in significant respects, by whatever means and whether directly or indirectly, to achieve the result that affairs of C are conducted in accordance with P's wishes.

Commencement Information

I3 Reg. 7 not in force at made date, see reg. 1(2)

I4 Reg. 7 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

CHAPTER 2 U.K. Partial asset-freeze

Partial asset-freeze in relation to the former Government of Iraq and its state bodies, corporations or agencies U.K.

8.—(1) A person (“P”) must not deal with relevant funds or economic resources owned, held or controlled by a designated person if P knows, or has reasonable cause to suspect, that P is dealing with such funds or economic resources.

(2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) For the purposes of paragraph (1), “relevant funds or economic resources” are funds or economic resources which were located outside Iraq on 22 May 2003.

(5) For the purposes of paragraph (1), a person “deals with” funds if the person—

(a) uses, alters, moves, transfers or allows access to the funds,

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

(c) makes any other change, including portfolio management, that would enable use of the funds.

(6) For the purposes of paragraph (1), a person “deals with” economic resources if the person—

(a) exchanges the economic resources for funds, goods or services, or

(b) uses the economic resources in exchange for funds, goods or services (whether by pledging them as security or otherwise).

(7) The reference in paragraph (1) to funds or economic resources that are “owned, held or controlled” by a person—

(a) includes, in particular, a reference to—

(i) funds or economic resources in which the person has any legal or equitable interest, regardless of whether the interest is held jointly with any other person and regardless of whether any other person holds an interest in the funds or economic resources;

(ii) any tangible property (other than real property), or bearer security, that is comprised in funds or economic resources and is in the possession of the person;

(b) does not include funds or economic resources 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.

(8) For the avoidance of doubt, the reference in paragraph (1) to a designated person includes P if P is a designated person.

Commencement Information

I5 Reg. 8 not in force at made date, see reg. 1(2)

I6 Reg. 8 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

CHAPTER 3 U.K. Asset-freeze etc.

Asset-freeze in relation to persons connected with the former Iraqi regime U.K.

9.—(1) A person (“P”) must not deal with relevant funds or economic resources owned, held or controlled by a designated person if P knows, or has reasonable cause to suspect, that P is dealing with such funds or economic resources.

(2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) For the purposes of paragraph (1) a person “deals with” funds if the person—

(a) uses, alters, moves, transfers or allows access to the funds,

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

(c) makes any other change, including portfolio management, that would enable use of the funds.

(5) For the purposes of paragraph (1) a person “deals with” economic resources if the person—

(a) exchanges the economic resources for funds, goods or services, or

(b) uses the economic resources in exchange for funds, goods or services (whether by pledging them as security or otherwise).

(6) The reference in paragraph (1) to funds or economic resources that are “owned, held or controlled” by a person includes, in particular, a reference to—

(a) funds or economic resources in which the person has any legal or equitable interest, regardless of whether the interest is held jointly with any other person and regardless of whether any other person holds an interest in the funds or economic resources;

(b) any tangible property (other than real property), or bearer security, that is comprised in funds or economic resources and is in the possession of the person.

(7) For the purposes of paragraph (1), 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.

(8) For the avoidance of doubt, the reference in paragraph (1) to a designated person includes P if P is a designated person.

Commencement Information

I7 Reg. 9 not in force at made date, see reg. 1(2)

I8 Reg. 9 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

Making funds available to persons connected with the former Iraqi regime U.K.

10.—(1) A person (“P”) must not make funds available directly or indirectly to a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available.

(2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) The reference in paragraph (1) to making funds available indirectly to a designated person includes, in particular, a reference to making them available to a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

Commencement Information

I9 Reg. 10 not in force at made date, see reg. 1(2)

I10 Reg. 10 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

Making funds available for benefit of persons connected with the former Iraqi regime U.K.

11.—(1) A person (“P”) must not make funds available to any person for the benefit of a designated person if P knows, or has reasonable cause to suspect, that P is making the funds so available.

(2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) For the purposes of this regulation—

(a) funds are made available for the benefit of a designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit, and

(b) “financial benefit” includes the discharge (or partial discharge) of a financial obligation for which the designated person is wholly or partly responsible.

Commencement Information

I11 Reg. 11 not in force at made date, see reg. 1(2)

I12 Reg. 11 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

Making economic resources available to persons connected with the former Iraqi regime U.K.

12.—(1) A person (“P”) must not make economic resources available directly or indirectly to a designated person if P knows, or has reasonable cause to suspect—

(a) that P is making the economic resources so available, and

(b) that the designated person would be likely to exchange the economic resources for, or use them in exchange for, funds, goods or services.

(2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) The reference in paragraph (1) to making economic resources available indirectly to a designated person includes, in particular, a reference to making them available to a person who is owned or controlled directly or indirectly (within the meaning of regulation 7) by the designated person.

Commencement Information

I13 Reg. 12 not in force at made date, see reg. 1(2)

I14 Reg. 12 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

Making economic resources available for benefit of persons connected with the former Iraqi regime U.K.

13.—(1) A person (“P”) must not make economic resources available to any person for the benefit of a designated person if P knows, or has reasonable cause to suspect, that P is making the economic resources so available.

(2) Paragraph (1) is subject to Part 5 (Exceptions and licences).

(3) A person who contravenes the prohibition in paragraph (1) commits an offence.

(4) For the purposes of paragraph (1)—

(a) economic resources are made available for the benefit of a designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit, and

(b) “financial benefit” includes the discharge (or partial discharge) of a financial obligation for which the designated person is wholly or partly responsible.

Commencement Information

I15 Reg. 13 not in force at made date, see reg. 1(2)

I16 Reg. 13 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)

CHAPTER 4 U.K. Circumvention etc.

Circumventing etc. prohibitions U.K.

14.—(1) A person must not intentionally participate in activities knowing that the object or effect of them is, whether directly or indirectly—

(a) to circumvent any of the prohibitions in regulations 8 to 13 (partial asset-freeze and asset-freeze etc.), or

(b) to enable or facilitate the contravention of any such prohibition.

(2) A person who contravenes a prohibition in paragraph (1) commits an offence.

Commencement Information

I17 Reg. 14 not in force at made date, see reg. 1(2)

I18 Reg. 14 in force at 31.12.2020 by S.I. 2020/1514, reg. 14(2)