The Government is taking powers to maintain Russian sanctions until compensation is paid to Ukraine and is introducing a route for frozen Russian assets to be donated for Ukrainian
reconstruction, under new legislation announced by Foreign Secretary James Cleverly today.
We will also mandate that persons and entities in the UK, or UK persons and entities overseas, who are designated under the Russia financial sanctions regime, must disclose assets they hold in the UK.
It comes as the UK prepares to legislate to require those 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) to disclose them to the Treasury.
These new measures mark a major strengthening in the UK’s sanctions approach against Russia as Putin and his cronies continue their illegal war and as Ukraine embarks its counter-offensive.
Foreign Secretary James Cleverly said:
As Ukraine continues to defend itself against Russia’s invasion, the terrible impacts of Putin’s war are clear. Ukraine’s reconstruction needs are – and will be – immense.
Through our new measures today, we’re strengthening the UK’s sanctions approach, affirming that the UK is prepared to use sanctions to ensure Russia pays to repair the country it has so recklessly attacked.
We will stand with Ukraine for as long as it takes to recover from Russia’s war of aggression and lay the groundwork for a prosperous nation.
Chancellor of the Exchequer Jeremy Hunt said:
Putin’s Russia must take financial responsibility for the wanton devastation it has wrought on Ukraine.
These new measures – on top of our largest ever sanctions package – show the UK is ready and able to clear new paths to ensure Russian money reaches Ukrainian people.
Home Secretary Suella Braverman said:
Ukraine is fighting for the same freedom we enjoy here in the United Kingdom, and we cannot let them face an uncertain future alone.
We have long said that we want to strengthen our sanctions regime to help the Ukrainian people rebuild.
Our proposal to force sanctioned individuals to disclose UK assets will bring in greater transparency and leaves less room to hide. It is a clear sign that the UK stands by its pledge.
This package enables the government to keep sanctions in place by amending the purposes of the UK’s Russia sanctions. It will now state that sanctions can also be used for the express purpose of promoting the payment of compensation by Russia.
It also delivers on the commitment by the Prime Minister and G7 leaders last month that sovereign assets will remain immobilised until Russia pays for damage it has caused to Ukraine.
Sanctioned Russians who say they support Ukraine, will now also have a way to do the right thing - via a route to donate their frozen funds for Ukrainian reconstruction.
This will be a voluntary process whereby sanctioned individuals may apply for funds to be released for the express purpose of supporting Ukraine’s recovery and reconstruction.
There will be no coercion of individuals to encourage them to transfer funds, nor any offer of sanctions relief in return for making a donation.
The precise mechanics of the fund which will disburse these donations will be announced in due course.
The new reporting obligations on people and entities designated through the Russia regime is another step in strengthening transparency of assets - taking us further than the current reporting obligations which exist for relevant firms.
This new responsibility builds on the UK’s existing compliance tool kit and tightens the net on those hiding assets in the UK. The failure to disclose assets may lead to the imposition of further financial penalties or confiscation of assets.
Finally, the reporting of CBR, MOF and NWF assets in the UK will help ensure the government has a comprehensive picture of their value and nature. This will assist the Treasury in monitoring compliance with, and detecting evasion of, financial sanctions. Photo by Sajmon~commonswiki, Wikimedia commons.