Chapter 16
In: International Sanctions: Monetary and Financial Law Perspectives
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Abstract
The sanctions against Russia are unprecedented in their scope and impact. They are also rife with innovation. The ban on trust services for Russian individuals and companies is one such innovation for which the EU takes credit. While it appears to target private trusts for wealthy Russian individuals, it affects many other trusts that have other commercial or financial purposes and should not be in scope. This chapter compares the specific restrictions adopted by the EU Council and the UK government. The UK sanction on trust services, which was adopted nine months after the EU, addresses several problems that are not satisfactorily resolved by EU Regulation 833/2014. Contrary to expectations, the problems identified in this chapter affect not only Russian settlors, beneficiaries, and trustees, but also all European financial institutions that service trust assets. An excessive restriction on trust services creates a competitive hurdle for the European banking and financial industry. The policy for restricting trust services should be more thoroughly clarified and its material scope narrowed in line with this policy.