On July 21, 2022, the Russia (Sanctions) (Leaving the EU) (Amendment) Regulations 2022 (No. 14) (“the 2022 Regulations”) introduced new sanctions aimed at restricting the access of Russia to UK business and management consultancy, accountancy and public relations. services.
The introduction of the 2022 Regulations follows the announcement by Liz Truss on May 4, 2022 of “a ban on services exports to Russia, preventing them from doing business with UK sectors that are essential to the Russian economy“.
The 2022 Regulations expand the current financial and trade sanctions regimes by introducing the following prohibition:
“A person shall not directly or indirectly provide, to a person connected with Russia—
(a) accounting services;
(b) business and management consulting services; Where
(c) public relations services”
(see: Regulation 54C of the Russia (Sanctions) (Leaving the EU) Regulations 2019)
Persons linked to Russia
The UK financial sanctions regime is largely focused on providing funds and economic resources to or for the benefit of persons on the UK financial sanctions list. However, the prohibitions in Rule 54C are much broader and will include the provision of certain professional services to:
- An individual, or association or combination of individuals who ordinarily reside or are located in Russia;
- Entities incorporated or incorporated under Russian law;
- Entities domiciled in Russia.
Summary of Prohibited Professional Services
Rule 54B explains that the prohibitions regarding “accounting services” include account review services, financial statement preparation services, and bookkeeping services. However, certain services are specifically excluded from the prohibitions on accounting services (eg the provision of auditing services).
“Business and management consulting services” include (but are not limited to) management auditing, market management, human resources, production management and project management consulting.
“Public relations services” include services provided for the purpose of improving the image of clients and their relations with the general public and other institutions. However, the planning and creation of advertising or opinion polling services are expressly excluded from the prohibitions on public relations services.