The judgment is significant for financial institutions navigating overlapping sanctions regimes – it reminds us that UK sanctions will be interpreted broadly by the UK courts, aiming to ensure compliance even at the risk of catching some unintended arrangements.
Although outside the scope of the initial case, the Court of Appeal decision highlights that the prohibition on enforcement of illegal contracts cannot be used as a blanket defense where other avenues to comply with the contracts are available, such as securing a licence – as Regulation 28 is interpreted broadly, the response needs to be suitable applications for any relevant licenses for exemptions.
In line with expectations in the market, the Court of Appeal’s interpretation of the SAMLA defence continues to support the adoption by business of a cautious approach when interpreting and complying with sanctions prohibitions.
Key Takeaways
The judgment is significant for financial institutions navigating overlapping sanctions regimes – it reminds us that UK sanctions will be interpreted broadly by the UK courts, aiming to ensure compliance even at the risk of catching some unintended arrangements.
Although outside the scope of the initial case, the Court of Appeal decision highlights that the prohibition on enforcement of illegal contracts cannot be used as a blanket defense where other avenues to comply with the contracts are available, such as securing a licence – as Regulation 28 is interpreted broadly, the response needs to be suitable applications for any relevant licenses for exemptions.
In line with expectations in the market, the Court of Appeal’s interpretation of the SAMLA defence continues to support the adoption by business of a cautious approach when interpreting and complying with sanctions prohibitions.
