Government inaction appears to be hamstringing lawyers applying through official channels to represent Russian clients on the sanctions list.
Sanctions on Russian individuals and entities imposed since the invasion of Ukraine bar solicitors and professional services firms from doing business with those on the sanctions list. However holders of a licence from the Office of Financial Sanctions Implementation (OFSI) may receive 'reasonable fees for the provision of legal advice'.
But the Treasury, which oversees the OFSI, has confirmed that weeks into the conflict in Ukraine, firms have been unable to secure licences.
A freedom of information request by the Gazette has revealed that from the start of this calendar year to 10 March, the OFSI received 15 licence applications relating to Russian individuals and entities. Of these, 10 were made by regulated law firms.
But the Treasury said that the OFSI has not granted a single licence since the start of this year. Effectively this leaves those on the sanctions list unable to access legal support in the UK.
A Treasury spokesperson said: 'OFSI carefully scrutinises all applications made to assess whether they fall under the relevant licensing grounds as outlined in sanctions legislation. OFSI aims to engage with applicants on the substance of completed applications for specific licences within four weeks. A completed application is one where OFSI has received all the information needed to make a decision about whether there is a legal basis to grant a licence. This does not mean that a licence will necessarily be issued within four weeks.'
The spokesperson added that applicants are encouraged to state when and why an application may be urgent, and OFSI prioritises cases that involve a risk of harm or a threat to life.
Firms have been reminded several times by regulators of the importance of complying with financial sanctions. The SRA said in updated guidance last month that breaching the financial sanctions requirements can result in criminal prosecution or a fine from the OFSI.
The SRA stated that there were exemptions to these restrictions for firms who have applied for a licence in order to receive reasonable fees for the provision of legal advice.
In its own guidance, the Treasury states that the OFSI can issue licences only where there are ‘specific and relevant licensing grounds’, and licences cannot be issued retrospectively.
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