The Chemical Weapons (Sanctions) (Overseas Territories) Order 2018 (S.I. 2018 No. 1361)

Summary

This UK Order in Council extends the EU's chemical weapons sanctions regime (Council Regulation (EU) 2018/1542 and related Council Decision) to specified British Overseas Territories, including the British Virgin Islands. It creates an asset freeze and related offences targeting persons designated by the EU Council as responsible for, involved in, or associated with the proliferation or use of chemical weapons, and imposes reporting duties on financial institutions and certain non-financial businesses and professions.

• Asset freeze offences: It is an offence to deal with funds or economic resources belonging to, or held or controlled by, a designated person, or to make funds or economic resources available (directly or indirectly) to or for the benefit of a designated person, where the person knows or has reasonable cause to suspect this.
• Reporting duty: Relevant institutions (deposit takers, building societies) and relevant businesses or professions (auditors, casinos, dealers in precious metals or stones, external accountants, independent legal professionals, real estate agents, tax advisers, trust or company service providers) must inform the Governor as soon as practicable if they know or suspect a customer is a designated person or has committed an offence under the Order, and must supply specified identifying and transactional information.
• Frozen account crediting: A relevant institution that credits a frozen account with interest, pre-existing contractual payments, or judicial/administrative/arbitral awards, or with incoming transferred funds, must notify the Governor as soon as practicable.
• Licensing regime: The Governor, with the Secretary of State's consent, may grant, vary or revoke licences authorising otherwise prohibited dealings (e.g. basic expenses, legal fees, routine account maintenance, extraordinary expenses); making false statements to obtain a licence is itself an offence.
• Enforcement powers: Authorised officers are given powers (detailed in the Schedules) to stop, board, search and detain ships, aircraft and vehicles connected to the Territory in order to enforce the sanctions.

The Order came into force on 9 January 2019 and applies to persons in the Territory, British-connected persons ordinarily resident there, bodies incorporated there, and persons aboard Territory-registered ships or aircraft. It operates alongside the underlying EU Council Regulation, which lists designated persons in its Annex I.

Key obligations

• Do not deal with funds or economic resources belonging to, held by, or controlled by a designated person where there is knowledge or reasonable suspicion of this.
• Do not make funds or economic resources available, directly or indirectly, to a designated person or for their benefit where there is knowledge or reasonable suspicion of this.
• Relevant institutions and relevant businesses/professions must inform the Governor as soon as practicable upon knowing or suspecting a customer is a designated person or has committed an offence under article 4 or 7(10), including specified identifying and fund/resource information.
• A relevant institution must inform the Governor as soon as practicable if it credits a frozen account under article 5(1)(b), (c) or 5(2).
• Any person seeking to conduct otherwise-prohibited activity must obtain a licence from the Governor (with Secretary of State consent) and comply with its conditions.
• Do not knowingly or recklessly make a false statement or provide false documents/information to obtain a licence.

Applies to

relevant institutions (deposit-taking businesses and residential loan societies), auditors, casinos, dealers in precious metals or stones, external accountants, independent legal professionals, real estate agents, tax advisers, trust or company service providers, designated persons, persons in the Territory and British-connected persons ordinarily resident there

Deadlines

• 9th January 2019: Date the Order comes into force.
• as soon as practicable: Relevant institutions and relevant businesses/professions must report knowledge or suspicion of a designated-person customer or an offence to the Governor as soon as practicable.
• as soon as practicable: Relevant institutions must notify the Governor as soon as practicable after crediting a frozen account under article 5(1)(b), (c) or 5(2).

Related documents

• The Sanctions (Overseas Territories) (Revocations) Order 2020 repeals this document