The United Kingdom’s Office of Financial Sanctions Implementation (OFSI) has granted the London Court of International Arbitration (LCIA) a General Licence allowing it to process payments from designated parties (DPs) who are subject to the United Kingdom’s recent financial sanctions against Russia and Belarus.
The General Licence took effect on 17 October 2022 (see notice of publication) and applies indefinitely.
Any parties conducting activities that are permitted by the General Licence should note the obligation to keep accurate, complete, and readable records of any such activity for a minimum of six years.
The General Licence is a positive development for the LCIA, which has seen a number of arbitrations interrupted by the sanctions on Russia and Belarus. It also aligns the United Kingdom’s position with that of the European Union, which confirmed on 21 July that transactions with Russian state-owned entities are exempt from its sanctions regime where they are strictly necessary to ensure access to arbitral proceedings.
In a press release concerning the General Licence, the LCIA emphasised that it “recognises and supports the use of sanctions as a legitimate tool to address the consequences of the war against Ukraine.” The LCIA added that it will reach out to parties and arbitrators in potentially affected cases, who “will need to satisfy themselves that they can receive payments after considering the impact, if any, of the sanctions of any relevant jurisdiction other than the UK.”
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Trainee solicitor Alasdair Johnston contributed to this LawFlash.