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UK new sanctions on legal services

A law has come into effect in the UK that restricts the provision of legal advisory services in certain cases (changes have been made to Regulation No. 855 of 2019). Local lawyers are now prohibited from directly or indirectly providing legal advisory services to any foreign individual or company if such services are related to restricted activities. Restricted activities refer to actions benefiting individuals with connections to Russia, which would be prohibited under specific articles of the Regulation if conducted by British individuals or within the territory of the United Kingdom.

The same rules apply to Mann, Guernsey, and Jersey islands.

What is meant by legal advisory services?

However, if the services are provided to existing or pending litigation, arbitration proceedings, or mediation procedures, they are not considered legal advisory services and are not subject to these restrictions.

Are there exceptions?

The restrictions do not apply if the services assess the compliance of any actions with a new law. Additionally, a transitional period lasts until September 29, 2023.

New limitations in practice

Let's consider the new limitations using the example of trust services. The provision of trust services is prohibited, particularly if the individual is a permanent Russian resident or resides in Russia. However, this prohibition does not apply to legal relationships that arose and existed before December 16, 2022 (this exception does not apply to individuals on the UK sanctions list).

Based on the logic of these innovations, if the provision of trust services is not prohibited under the Regulation, then associated legal advisory services may also be provided (preparation of legal opinions on trust conditions, interpretation of trust declaration provisions and applicable legal norms, etc.). An individual, for example, residing in Russia and being a beneficiary of a trust created before December 16, 2022, can receive legal advisory services in the UK or from lawyers who are citizens of that country regarding matters related to the existing trust. However, obtaining legal services from such individuals concerning a new trust would fall under the newly established prohibitions.

We will keep you updated on additional clarifications from the regulator regarding the practical specifics of these limitations.

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