Regulation
The Al-Qaida (Asset-Freezing) Regulations 2011 (S.I. 2011/2742)
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Summary
This is a UK Statutory Instrument (S.I. 2011/2742) made by HM Treasury implementing EU/UN asset-freezing sanctions against persons and entities associated with the Al-Qaida network, as listed in Annex I to Council Regulation (EC) No. 881/2002. It is reproduced on the BVI FSC's alerts page as background sanctions legislation relevant to firms with UK links or obligations flowing from UK-extended sanctions regimes; the text itself does not state that it directly binds BVI-incorporated entities, so its application to BVI licensees should be checked against any extending Order.
- Core prohibitions: No person may deal with funds or economic resources belonging to, held by or controlled by a designated person, or make funds or economic resources available directly or indirectly to a designated person or for their benefit, where they know or have reasonable cause to suspect this.
- Who is bound: UK nationals, bodies incorporated or constituted under UK law, and 'relevant institutions' -- firms with FSMA Part 4 permission, certain EEA deposit-taking passport firms, and businesses operating currency exchange, money transmission or cheque-cashing services.
- Licensing exception: HM Treasury may grant licences authorising specified acts otherwise prohibited, which may be general, conditional, time-limited, and varied or revoked at any time.
- Reporting duties: Relevant institutions must notify the Treasury without delay when crediting a frozen account under permitted exceptions, and must inform the Treasury as soon as practicable if they know or suspect a person is a designated person or has committed an offence under the Regulations, including details of funds/resources held for that customer.
- Offences and penalties: Breach of the prohibitions, circumvention, providing false information to obtain a licence, or breaching licence conditions are criminal offences, carrying up to two years' imprisonment on indictment (or lesser summary penalties); corporate officers can also be personally liable.
- Revocation and savings: The Regulations revoke the Al-Qaida and Taliban (Asset-Freezing) Regulations 2010, with existing licences under the 2010 Regulations continuing in effect as if granted under these Regulations.
The instrument is UK primary sanctions legislation rather than a BVI FSC-issued rule; BVI-regulated entities should treat it as informational unless separately extended to the Territory, and should verify current designated-person lists and any successor instruments (the document's title references ISIL (Da'esh) and Al-Qaida sanctions, suggesting later consolidation not reflected in this 2011 text).
Key obligations
- Relevant institutions and other persons must not deal with funds or economic resources of a designated person where they know or suspect this.
- Persons must not make funds or economic resources available, directly or indirectly, to a designated person or for their benefit.
- A relevant institution must inform the Treasury without delay if it credits a frozen account under the permitted interest/pre-existing-obligation exceptions.
- A relevant institution must inform the Treasury as soon as practicable if it knows or suspects a person is a designated person or has committed an offence under regulation 9 or 10, and must provide the basis for that suspicion and identifying information.
- Where the suspected designated person is a customer, the institution must also state the nature and amount of funds or economic resources it holds for that customer.
- A person acting under a Treasury licence must comply with all conditions attached to that licence.
Applies to
relevant institutions (FSMA Part 4 permission holders), EEA deposit-taking passport firms, currency exchange, money transmission and cheque-cashing businesses, UK nationals, bodies incorporated or constituted under UK law
Deadlines
- without delay: Relevant institution must inform the Treasury without delay upon crediting a frozen account under the permitted exceptions in regulation 8.
- as soon as practicable: Relevant institution must inform the Treasury as soon as practicable on knowing or suspecting a person is a designated person or has committed an offence under regulations 9 or 10.