UK Sanctions Regime Applies to all BVI Companies

The UK implements a range of sanctions regimes through regulations made under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). The Sanctions Act provides the main legal basis for the UK to impose, update and lift sanctions.

UK sanctions Regulations made under the Sanctions Act apply in the whole of the UK, including in Northern Ireland. The prohibitions and requirements in these Regulations apply to conduct by UK persons. This includes anyone in the UK (including its territorial waters), UK nationals outside of the UK, and bodies incorporated or constituted under the law of any part of the UK. It is government policy for UK sanctions measures to be given effect in the British Overseas Territories and Crown Dependencies to make sanctions as effective as possible. The Virgin Islands is a British Overseas Territory (“OT”) and the UK Sanctions regimes are applicable to the Virgin Islands and Virgin Islands companies. 

The UK may impose the following types of sanctions measures:

• trade sanctions, including arms embargoes and other trade restrictions
• financial sanctions, including asset freezes
• immigration sanctions, known as travel bans
• aircraft and shipping sanctions, including de-registering or controlling the movement of aircraft and ships

Some sanctions measures (such as asset freezes and travel bans) apply only to persons or ships which have been designated or specified by the UK Government. This is publicised through the UK sanctions list, which contains designations or specifications made using legislation under the Sanctions Act.

The Department for Business and Trade (DBT) implements trade sanctions.

Trade sanctions can include prohibitions on:

• the import, export, transfer, movement, making available or acquisition of goods and technology
• the provision or procurement of services related to goods and technology
• the provision or procurement of certain other non-financial services

The Office of Financial Sanctions Implementation (OFSI) implements and enforces financial sanctions. Financial sanctions include restrictions on designated persons, such as freezing their financial assets, as well as wider restrictions on investment and financial services. OFSI maintains a Consolidated List of Asset Freeze Targets, which contains details of designations specifically for financial sanctions, where asset freeze measures apply.

Financial Sanctions which are in effect, generally apply to:

• Any person in the Virgin Islands;
• Any person who is a British citizen, a British Overseas Territories citizen, a British subject, a British National (Overseas) or a British protected person who is ordinarily resident in the Virgin Islands;
• A body incorporated or constituted under the laws of the Territory; and
• any person on-board a ship or aircraft that is registered in the Territory.

The most common types of financial sanctions are:

• asset freezes, which prohibit you from:
• dealing with a sanctioned person’s assets, including funds and property
• making funds or goods available – directly or indirectly – to a sanctioned person
• restrictions on access to financial services and markets

The Home Office implements and enforces immigration sanctions, also known as travel bans. Those subject to travel bans will be refused leave to enter or remain in the UK.

Transport sanctions include restrictions on the ownership, registration or movement of ships and aircraft. This can include restrictions on movements to and from ports, harbours and airports, and the detention of ships and aircraft.

Directors of Virgin Islands companies need to be aware of the sanctions regimes and know who their trading counterparties are. Breaching sanctions regimes could result in substantial penalties. If in doubt, we can recommend legal advisors.