Russia Sanctions Update - New Divestment Licensing Ground

Ever since Russia's invasion of Ukraine in 2022, UK sanctions have made it very difficult for Cayman Islands and British Virgin Islands ("BVI") entities to divest themselves of sanctioned investments held in Russia and / or to remove sanctioned investors from their registers. A new legislative amendment that came into force on 14 March 2024 may now make both a possibility.

Cayman Islands and BVI entities can apply to their jurisdictions' respective Governors for a specific licence to permit an activity that would otherwise be prohibited by UK asset-freezing measures. Such applications must be made, and such specific licences may only be granted, under one or more specified licensing grounds set out in the legislation. Until recently, no such licensing ground existed to deal with the difficulties Cayman Islands and BVI entities have faced regarding frozen investments held in Russia and sanctioned investors on their registers.