We have seen in recent days, the impact the Russian invasion of Ukraine is having on international business. What is the potential impact from a Jersey perspective?
Current Sanctions
Jersey’s current sanctions regime is governed by the Sanctions and Asset-Freezing (Jersey) Law 2019 (the Sanctions Law) and the Sanctions and Asset Freezing (Implementation of External Sanctions)(Jersey) Order 2021 (the Sanctions Order). Pursuant to the Sanctions Order, any sanctions imposed by the United Kingdom have effect as if it were enacted under the Sanctions Law.
Accordingly, Jersey has imposed the same sanctions on Jersey businesses as the United Kingdom has imposed. The Jersey Financial Services Commission (JFSC) has a dedicated webpage detailing the current sanctions imposed on Russia which can be accessed here.
There are also specific sanctions targeted at specific entities and individuals. Again, the JFSC has a dedicated webpage providing information on the specific entities and individuals which can be accessed here.
What should Jersey based businesses be doing?
The above mentioned sanctions only apply to any person carrying on financial services business in or from within Jersey. There are serious ramifications if a financial services business were to fall foul of these sanctions. It is therefore imperative that financial services businesses remain fully up to speed with the sanctions that are imposed as they can change at very short notice.
It has also been seen that other businesses in the United Kingdom, whilst not necessarily subject to the sanctions have taken the moral decision to sever commercial ties with Russia. This has included:
- Manchester United terminating their sponsorship agreement with Aeroflot
- BP divesting its shareholding in Rosneft
- Shell exiting its partnerships with Gazprom
- Exeter City Council considering suspending its civic relations with its twinned town of Yaroslavl
Jersey businesses not necessarily subject to the Sanctions Law or Sanctions Order may nevertheless want to explore what commercial ties (if any) they may have to Russia. Conducting such an exercise would certainly fall within the statutory duties of a director to act in the best interests of the Company.
Register of Overseas Companies
The Russian invasion has also rekindled the British Government’s desire to introduce a requirement for companies incorporated outside of the United Kingdom who wish to acquire UK based real estate to be registered with Companies House and be obliged to reveal the identities of their ultimate beneficial owners which will be made available on a public register.
Jersey companies owning real estate based in the United Kingdom will have to ready to comply with this piece of legislation if and when it is enacted as they would have to ensure that they are registered with Companies House as an overseas entity in order to be able to deal with any UK based real estate.
Written by BCR Law Managing Partner David Benest and English Solicitor Ashley Quenault (pictured).
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