UK Taking Tougher Stance Around Licensing for Services to Russian Subsidiaries

The U.K.’s Department for Business & Trade will soon remove a “licensing consideration” that outlines a pathway for U.K. companies to apply for a license to provide certain services to their Russian subsidiaries, the agency announced this week. Beginning Oct. 31, the U.K. will remove wording from its statutory guidance on Russia sanctions that described this license, saying it may no longer “be consistent with the aims of the sanctions regime.”

The guidance currently includes language that says: "A licence may be granted for services to a person connected with Russia by a UK parent company or UK subsidiary of that parent company." License applications submitted before Oct. 31 “will not be affected” by the announcement.

The U.K. noted that the agency can grant licenses “even where no licensing consideration exists,” although companies may have a more difficult time acquiring a license. “This means that any company that wishes to provide intra-corporate services to their Russian subsidiary must explicitly demonstrate how the provision of any ongoing services aligns with the overarching purposes of the sanctions, as set out in Regulation 4 of the Russia sanctions Regulations,” the agency said.