In response to the illegal invasion of Ukraine, the UK introduced the largest and most severe package of economic sanctions that Russia has ever faced. As a result, the Office of Financial Sanctions Implementation (OFSI) continues to experience unprecedented high demand to consider applications for new licences and for amendments to existing licences.
When applying for a specific licence, or an amendment to an existing specific licence, applicants must provide evidence to support an application and demonstrate that all criteria of the relevant licensing ground have been met. Where an application has insufficient details or evidence, OFSI’s General Guidance states that: 'Incomplete applications will not be considered and will be returned to the applicant for re-submission' (see paragraph 6.9).
Since the invasion, and to help mitigate the impact on applicants, OFSI has repeatedly engaged with applicants until such a time as sufficient details and evidence have been received and a decision can be taken.
To reduce delays and ensure a timely service can be provided for all applicants, OFSI will be ending this temporary measure and will resume returning applications which are not complete at the time of receipt.
An incomplete application is one in which key information is missing, such as an adequate explanation as to why the licensing purpose applies.
Applicants will be able to re-apply; however, this will be treated as a new application and will not be prioritised purely because it has been resubmitted.
OFSI will continue to assist applicants who contact us to understand the licensing process as well as our evidentiary requirements. However, we cannot provide legal advice and applicants should consider taking independent legal advice before applying, especially for complicated matters.
To ensure that an application is complete and to prevent it from being returned, applicants may wish to:
- fully complete an application form
- read OFSI’s Introduction to Licensing Blog
- read OFSI’s Reasonableness in Licensing Blog
- check if there are any applicable General Licences
- consult the relevant regime specific guidance and the prohibitions and licensing purposes of the Regulations
- seek independent legal advice
Some of the key pieces of information that applicants will need to provide are:
The Regulations
- which sanctions regime does the application relate to?
- which prohibition does the application engage and why? For example, Part 3, Chapter 1, Paragraph 11 of The Russia (Sanctions) (EU Exit) Regulations 2019
Please note that OFSI can only issue licences which relate to financial sanctions. If an application relates to another type of sanction, then it should be redirected to the relevant Department. Further information can be found here.
The UK Nexus
- what is the UK link in an applicant’s case? OFSI can only issue licences where there is a UK nexus. For example, are the frozen assets located in the UK? Are UK Persons involved in the transaction?
The Licensing Purpose
- what is the legal basis for a licence to be issued (i.e., which applicable licensing purpose are applicants relying on)?
- why does this licensing purpose apply to an applicant’s case?
- why are the conditions of that purpose met in the applicant’s case? For example, where applicants seek to use the extraordinary situations licensing purpose, applicants should demonstrate that their case is extraordinary in nature (unexpected, unavoidable and not recurring)
- where there is a requirement for reasonableness, for example when applying under the legal services or routine maintenance of frozen funds purposes, applicants must clearly demonstrate that this is reasonable. Please see OFSI’s Reasonableness in Licensing Blog for further information
How can applicants demonstrate this?
- provide evidence wherever possible, such as bills or invoices. If evidence is not available, please explain why this is the case.
- please ensure that OFSI will be able to access any documents that applicants provide. For example, if it is password protected or in an unusual file format, we may not be able to access the documentation and therefore will be unable to assess an application.
- provide certified English-language translations where original documents are in another language.
- provide full details of payment chains where applicable, including account details for those involved.