The Libya (Financial Sanctions) Order 2011 (S.I. 2011 No. 548)

Summary

This is a UK Statutory Instrument (extended to the Virgin Islands) that implements UN Security Council Resolution 1970 (2011) by freezing the assets of persons designated in connection with the Libya sanctions regime. It came into force at 5.15pm on 27 February 2011 and prohibits dealing with, or making available, funds, financial assets or economic resources connected to designated persons.

• Asset freeze: No person may deal with funds, financial assets or economic resources owned or controlled by a designated person (or someone acting on their behalf, or an entity they control) if they know or suspect this to be the case.
• No funds to designated persons: No person may make funds, financial assets or economic resources available to a designated person, or to anyone else for the benefit of a designated person, where they know or suspect this.
• Frozen account exceptions: Relevant institutions may credit a frozen account with interest, earnings, or payments due under pre-existing obligations, and must notify the Treasury without delay when they do so.
• Reporting duty: Relevant institutions (banks and other FSMA-authorised firms, EEA deposit-taking passport firms, and money service/currency exchange businesses) must inform HM Treasury as soon as practicable if they know or suspect a person is a designated person or has committed an offence under the Order, providing supporting details and, if the person is a customer, the nature and amount of any funds/assets held for them.
• Licensing route: The prohibitions do not apply to acts done under a Treasury licence, which may be general or specific, conditional, and time-limited.
• Information requests: The Treasury may require designated persons, licensees, or any person in or resident in the jurisdiction to supply information relevant to monitoring compliance or detecting evasion, within a specified or reasonable time.
• Offences: Contravening the freezing prohibitions, circumventing them, or breaching licence conditions or reporting duties are criminal offences with penalties up to two years' imprisonment on indictment.

The Order binds relevant institutions and any person dealing with designated persons' assets; it does not itself set out a designated persons list, which is maintained separately (originally via HM Treasury's published list). Given this is a 2011 UK sanctions instrument, readers should check whether it has since been superseded by later Libya sanctions legislation before relying on it as the current regime.

Key obligations

• Relevant institutions and other persons must not deal with funds, financial assets or economic resources owned or controlled by a designated person if they know or suspect this.
• Persons must not make funds or financial assets available to a designated person, or to any person for the benefit of a designated person, where they know or suspect this.
• Relevant institutions must inform HM Treasury as soon as practicable if they know or suspect a person is a designated person or has committed an offence under articles 9 or 10, stating the basis for that knowledge/suspicion and identifying information.
• Where the designated person is a customer, the relevant institution must also state the nature and amount of funds, assets or economic resources it holds for that customer.
• A relevant institution must inform the Treasury without delay if it credits a frozen account with interest, earnings, or payments due under pre-existing obligations, or with incoming transferred funds.
• Persons acting under a Treasury licence must comply with any conditions attached to it.
• Persons must comply with Treasury requests for information relevant to monitoring compliance or detecting evasion, within any period specified or otherwise within a reasonable time.

Applies to

relevant institutions, banks and firms with FSMA Part 4 permission, EEA deposit-taking passport firms, undertakings operating currency exchange, money transmission or cheque cashing businesses, designated persons

Deadlines

• 27 February 2011, 5.15 p.m.: Order comes into force.
• as soon as practicable: Relevant institutions must report knowledge or suspicion of a designated person or an offence to HM Treasury.
• without delay: Relevant institutions must inform the Treasury when crediting a frozen account under the permitted exceptions.
• period specified by Treasury, or reasonable time if none specified: Deadline for providing information requested by the Treasury under the Schedule.

Related documents

• The Libya (Asset-Freezing) Regulations 2011 (S.I. 2011/605) amends this document