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The guidance summaries the professional services that have been prohibited and the organisations and individuals that are impacted by EU and US export prohibitions.

Issued 30 June 2022. We will update as soon as we have clarity on the UK prohibitions.

 

Sanctions Regime

Detailed Russian Export Sanctions Prohibitions 

United States

From 7 June 2022 prohibits US persons from providing, directly or indirectly, certain accounting, trust and corporate formation, and management consulting services to any person located in the Russian Federation. [Source: Determination of May 8, 2022 per EO 14071; OFAC FAQ 1033]

Accounting services includes services related to the measurement, processing, and evaluation of financial data about economic entities. This includes auditing services. [Source: OFAC FAQ 1034]

Trust and corporate formation services includes services relates to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.  Please note that all of these activities are common activities of trust and corporate service providers (TCSPs), although they may be provided by other persons. [Source: OFAC FAQ 1034]

Management consulting services includes services related to strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management. [Source: OFAC FAQ 1034].

Exclusions: the following are excluded from the prohibition: (a) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person, and (b) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.

Russian person means an individual who is a citizen or national of the Russian Federation, or an entity organised under the laws of the Russian Federation. [Source: OFAC FAQ 1034].

Non-Russian person, owned or controlled ultimately by Russian persons: it is not prohibited to provide services to such persons so long as it is not an indirect export to a person located in Russia. Indirect provision of prohibited services includes when the benefit of the services is ultimately received by a person located in the Russian Federation.  OFAC would not consider to be prohibited the provision of services to a non-Russian company that has a physical presence and operations outside of the Russian Federation, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or re-exported to persons located in Russia [OFAC FAQ 1059].

US persons working as employees of entities located in the Russian Federation: US persons are prohibited from exporting, reexporting, selling, or supplying, directly or indirectly, the services detailed above, to persons located in the Russian Federation. Thus US persons are prohibited from providing these services to companies located in the Russian Federation in their capacity as employees.

US subsidiaries providing services to a parent company located in the Russian Federation. The prohibition applies to a US subsidiary providing services to its Russian parent company.

European Union 

From 3 June 2022 it is prohibited for an EU person, or a person located in the EU, to provide, directly or indirectly, accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services to:

  • the Government of Russia; or
  • legal persons, entities or bodies established in Russia.

From 4 June 2022 it is prohibited for an EU person, or a person located in the EU, to register, provide a registered office, business or administrative address / management services to a trust, or similar legal arrangement, that has a trustor or beneficiary who is a:

  • Russian national, or natural persons, residing in Russia
  • Legal persons, entities or bodies established in Russia
  • Legal persons, entities or bodies whose proprietary rights are directly or indirectly owned for more than 50% by a natural or legal person, entity or body referred to in (a) or (b)
  • Legal persons, entities or bodies controlled by a natural or legal person, entity or body referred to in points (a), (b) or (c)
  • A natural or legal person, entity or body acting on behalf or at the direction of a nature or legal person, entity or body referred to in points (a), (b), (c), or (d)

Prohibition does not apply when the trustor or beneficiary is a national of an EU member state or a nature person having a temporary or permanent residence permit in an EU member state.

The following definitions are provided by the EU (Recital 26, to Reg 2022/879):

Accounting, auditing, bookkeeping and tax consultancy services cover the recording of commercial transactions for businesses and others; examination services of accounting records and financial statements; business tax planning and consulting; and the preparation of tax documents.

Business and management consulting and public relations services cover advisory, guidance and operational assistance services provided to businesses for business policy and strategy and the overall planning, structuring and control of an organisation. Management fees, management auditing; market management, human resources, production management and project management consulting; and advisory, guidance and operational services related to improving the image of the clients and their relations with the general public and other institutions are all included.

United Kingdom

To be confirmed once the legislation, and any related guidance, is issued.