UK government sanctions on Russia and Belarus: implications for Costs Lawyers
Last updated: 4 November 2022
The CLSB is advising all Costs Lawyers to be alert to any implications for their practice arising from the UK Government’s recent announcement of sanctions on Russia and Belarus. All Costs Lawyers must play their part in safeguarding the UK and protecting the reputation of the legal services industry. Breaching the financial sanctions requirements can result in criminal prosecution or a fine, and is also likely to constitute a breach of the Costs Lawyer Code of Conduct (see, for example, Principle 2.1 which requires Costs Lawyers to act within the law at all times). Potential breaches of the Code of Conduct will be dealt with under the Disciplinary Rules and Procedures.
The financial sanctions prevent law firms from doing business or acting for listed individuals, entities or ships. Firms should check the financial sanctions lists before offering services or undertaking transactions for clients.
The lists and information about the UK sanctions regimes in force are constantly updated and published online. The FCA has also published guidance on the sanctions regime. Further guidance is available on exemptions for which a licence may be sought from the Office of Financial Sanctions Implementation (OFSI).
In October 2022, OFSI issued a general licence to permit the payment of legal fees owed by individuals and entities designated under the Russia and Belarus sanctions regimes. More information is available here.
We encourage all Costs Lawyers to keep any client work that has a Russian nexus under review to ensure compliance, this includes checking clients against the sanctions list. It is possible to search for financial sanctions targets under the Russia regulations by using the OFSI Consolidated List Search – more information is available here.
The CLSB has produced a risk chart, mapping the types of work that Costs Lawyers carry out against the risk of non-compliance with the sanctions regime, as well as measures that have been taken to mitigate those risks. This may be a useful starting point for Costs Lawyers in assessing any risks presented by their own practice.
If you decide you want to act for an entity or person subject to sanctions, you’ll need to apply for a licence from OFSI before proceeding. You should also inform the CLSB, contact us here.