On 21 July 2022, the Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 ("the 2022 Regulations") introduced further sanctions intended to restrict Russia’s access to the UK’s business and management consulting, accounting and PR services.
The introduction of the 2022 Regulations follows on from the announcement by Liz Truss on 4 May 2022 of " a ban on services exports to Russia, cutting them off from doing business with UK sectors that are critical to the Russian economy".
The 2022 Regulations expand on the current financial and trade sanctions regimes by introducing the following prohibition:
" A person must not directly or indirectly provide, to a person connected with Russia—
(a ) accounting services;
(b) business and management consulting services; or
(c) public relations services"
(see: regulation 54C the Russia (Sanctions) (EU Exit) Regulations 2019)
Persons connected with Russia
The UK financial sanctions regime is largely focused on the provision of funds and economic resources to, or for the benefit of, persons listed on the UK Financial Sanctions List. However, the prohibitions in regulation 54C are much broader and will include the provision of certain professional services to:
- An individual, or an association or combination of individuals who are, ordinarily resident or located in Russia;
- Entities incorporated or constituted under the law of Russia;
- Entities domiciled in Russia.
Summary of prohibited professional services
Regulation 54B explains that the prohibitions on "accounting services" include account review services, compilation of financial statements services and book keeping services. However, certain services are specifically excluded from the prohibitions on accountancy services (e.g. the provision of audit services).
"Business and management consulting services" includes (but is not limited to) management auditing, market management, human resources, production management and project management consulting.
"Public relations services" includes services provided for the purpose of improving the image of clients and their relationship with the general public and other institutions. However, planning and creating services for advertising or public opinion polling services are specifically excluded from the prohibitions on public relations services.
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