The Lebanon and Syria (Asset-Freezing) Regulations 2012 (SI 2012 No. 1517)

Summary

This is a UK Statutory Instrument (SI 2012/1517) implementing EU restrictive measures (Council Regulation (EC) No. 305/2006) against persons designated in connection with the assassination of former Lebanese Prime Minister Rafiq Hariri. It establishes an asset-freezing regime under UK law, defining designated persons, prohibiting dealing with or making funds/economic resources available to them, and setting out licensing, reporting and information-gathering powers for HM Treasury. It is published on the BVI FSC alerts page for awareness of this UK sanctions instrument rather than as BVI domestic legislation.

• Freezing prohibition: No person may deal with funds or economic resources belonging to, or owned, held or controlled by, a designated person, if they know or have reasonable cause to suspect this (regulation 3).
• No funds to designated persons: Prohibits making funds available, directly or indirectly, to a designated person or for their benefit (regulations 4 and 5).
• No economic resources to designated persons: Prohibits making economic resources available to a designated person or for their benefit where they would likely be exchanged for funds, goods or services (regulations 6 and 7).
• Frozen account crediting: Relevant institutions may credit a frozen account with interest or incoming transfers but must inform the Treasury without delay when they do so (regulation 8).
• Licensing: The Treasury may license otherwise-prohibited dealings, subject to conditions; breaching licence conditions or providing false information to obtain a licence is an offence (regulation 9).
• Offences: Contravening the prohibitions, circumventing them, or facilitating circumvention are criminal offences with penalties up to two years' imprisonment on indictment (regulations 10 and 13).
• Reporting and information duties: Relevant institutions must report knowledge or suspicion of a designated person or an offence to the Treasury as soon as practicable, and provide details of any funds/economic resources held for that person if a customer (Schedule paragraph 1); persons may also be compelled to provide information to the Treasury on request (Schedule paragraph 2).

The Regulations bind relevant institutions (UK FSMA-authorised firms, certain EEA passported deposit-takers, and money service businesses/currency exchanges), designated persons, and more generally any person dealing with such funds or resources; offences can also be committed by UK nationals or UK-incorporated bodies acting wholly or partly outside the UK. The Regulations revoke the Lebanon and Syria (United Nations Measures) Order 2005.

Key obligations

• Relevant institutions and other persons must not deal with funds or economic resources belonging to, owned, held or controlled by a designated person if they know or have reasonable cause to suspect this (regulation 3).
• Persons must not make funds available, directly or indirectly, to a designated person or for the benefit of a designated person (regulations 4 and 5).
• Persons must not make economic resources available to a designated person, or for their benefit, where the resources would likely be exchanged for funds, goods or services (regulations 6 and 7).
• A relevant institution must inform the Treasury without delay if it credits a frozen account upon receiving transferred funds (regulation 8(3)).
• 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, stating the basis for the suspicion and identifying information, and details of any funds/resources held for that customer (Schedule paragraph 1).
• A person receiving a Treasury information request under the Schedule must provide the information within the period specified by the Treasury, or within a reasonable time if no period is specified (Schedule paragraph 2(6)-(7)).
• A person acting under a Treasury licence must comply with the licence's conditions or commits an offence (regulation 9(6)).

Applies to

relevant institutions (FSMA Part 4 authorised firms), EEA firms with deposit-taking passport rights, money service businesses / currency exchange offices, designated persons, UK nationals and UK-incorporated bodies

Deadlines

• 5th July 2012: Date the Regulations come into force.
• without delay: A relevant institution must notify the Treasury when it credits a frozen account with transferred funds.
• as soon as practicable: A relevant institution must notify the Treasury upon knowing or suspecting a person is a designated person or has committed an offence.
• within a reasonable time (if no period specified): A person must comply with a Treasury information request within any period specified, or otherwise within a reasonable time.