The UK government has unveiled new legislation, announced by Foreign Secretary James Cleverly, aimed at maintaining Russian sanctions until compensation is paid to Ukraine. Additionally, the government plans to establish a route for frozen Russian assets to be donated to aid Ukrainian reconstruction. These measures demonstrate a significant strengthening of the UK’s sanctions approach against Russia, as the country continues its illegal war, and provide support to Ukraine in its counter-offensive efforts.
Disclosure of Assets under Russia Financial Sanctions
Under the proposed legislation, persons and entities in the UK, as well as UK individuals and entities abroad, who are designated under the Russia financial sanctions regime, will be required to disclose assets they hold in the UK. This step ensures greater transparency and accountability among those subject to sanctions, leaving no room for hidden assets.
Mandating Asset Disclosure for Central Bank of Russia and Others
The forthcoming legislation will also impose requirements on individuals holding assets in the UK on behalf of the Central Bank of Russia (CBR), Russian Ministry of Finance (MOF), or Russian National Wealth Fund (NWF). These individuals will be obligated to disclose these assets to the Treasury. This move aims to enhance the government’s oversight of such assets and strengthens the net against those attempting to hide their financial holdings in the UK.
Promoting Compensation and Supporting Ukraine
The new measures reflect the UK government’s commitment to hold Russia accountable for the devastating consequences of its actions in Ukraine. The legislation explicitly states that the UK’s Russia sanctions can now be amended to include the purpose of promoting compensation payments by Russia. This underlines the government’s determination to ensure that Russia takes financial responsibility for the damage caused.
Donating Frozen Funds for Ukrainian Reconstruction
As part of the government’s comprehensive approach, sanctioned Russians who express support for Ukraine will have the opportunity to contribute to its recovery and reconstruction. A voluntary process will be established, enabling sanctioned individuals to apply for the release of their frozen funds specifically for the purpose of supporting Ukraine. It is important to note that there will be no coercion or offer of sanctions relief in exchange for donations. The precise mechanisms for managing and disbursing these donations will be announced in the future.
Strengthening Transparency and Compliance
The legislation further strengthens transparency and compliance by imposing reporting obligations on individuals and entities designated under the Russia sanctions regime. This goes beyond the current reporting requirements for relevant firms, providing a comprehensive picture of assets held by those subject to sanctions. Failure to disclose assets may result in additional financial penalties or asset confiscation.
Source: Gov[Dot]UK
