Question to the HM Treasury:

To ask His Majesty's Government what is the difference between the amounts agreed by the Office of Financial Sanctions Implementation in respect of fees for services and access to justice for UK legal firms on behalf of Russian individuals and companies (1) before the February 2022 invasion of Ukraine, and (2) since the invasion.

The Office of Financial Sanctions Implementation (OFSI) in HM Treasury is responsible for financial sanctions implementation and enforcement.

OFSI can only issue specific licences where relevant licensing grounds exist as set out in the legislation. One such licensing ground is professional legal fees and reasonable expenses associated with the provision of legal services. This ground exists because it is important that designated persons can still access legal representation. A ‘reasonableness’ test is applied to each legal fees application which requires applicants to provide sufficient evidence to demonstrate to OFSI that the legal fees and expenses are reasonable.

OFSI releases an Annual Review each year which provides information about the number of licences issued under each regime. However, for confidentiality purposes and in order to comply with UK data protection law, OFSI does not publish details about the parties involved in individual licences granted.

Following Russia’s invasion of Ukraine and an increase in the scale and impact of financial sanctions, OFSI has processed a larger number licence applications than previous years. Many licence applications under the legal services licensing ground involve very complex legal cases, some with very high values, across multiple jurisdictions. The amounts agreed in respect of fees for legal services on behalf of Russian designated persons are not readily available and would involve disproportionate costs to gather at this time.

Even where a licensing ground exists and the reasonableness test is met, OFSI will only issue licences where doing so does not undermine the intent or purpose of the Russia sanctions regime.