Consistent with past policy announcements, the UK Government has now brought forward new legislation which will further restrict the ability of UK citizens and companies to deal with Russian companies and individuals. A key aspect of this is the restriction on engaging in new investments or business in Russia. This is obviously of key importance to anyone contemplating investing in Russia or growing their existing operations there. We set out the details below.
The Russia (Sanctions) (EU Exit) (Amendment) (No. 12) Regulations 2022 ("No. 12 Amendment") came into force on 19 July 2022. It has amended the Russia (Sanctions) (EU Exit) (Amendment) (No. 12) Regulations 2022 (the "2019 Regulations") by restricting additional types of new investments in relation to Russia by UK persons or other persons in the UK.
The prohibited activities are as follows:
Under 19A(2) the 2019 Regulations, an individual is regarded as "connected with" Russia if they are ordinarily resident or located in Russia. An entity is "connected with Russia" if it is incorporated or constituted under the law or Russia or is domiciled in Russia. Under the No.12 Regulations, a "relevant entity" means an entity which has a place of business located in Russia but is not connected with Russia.
The No.12 Regulations make amendments to the 2019 Regulations to provide certain exemptions from the above measures.
The Explanatory Memorandum to the No.12 Regulations can be seen here: https://www.legislation.gov.uk/uksi/2022/801/pdfs/uksiem_20220801_en.pdf