What’s changing? Of most interest is the update to the “prior obligations” specific licensing ground. As a reminder, the respective Governors of the Cayman Islands and the BVI can only grant specific licences with respect to asset freezing measures if those fall within the scope of one or more of the licensing grounds set out in the regulations.
The current regulations require the prior obligation to be satisfied using the designated person’s frozen funds and (in most cases) only where that designated person personally owed the obligation, both of which limit the authorities’ ability to license legitimate pre-designation obligations.
The forthcoming change broadens the licensing ground so that prior obligations may be met using any funds, and may be discharged by any person, including owned or controlled entities, which should enable a wider range of legitimate prior obligations to be licensed.
This will be good news for affected clients, particularly given the continued designation of new individuals and entities by the UK Government across the various sanctions regimes.
More detail on the changes can be found here.
Maples Group has significant experience in advising on Cayman Islands, BVI, and European Union sanctions law, including but not limited to risk assessment, upstream and downstream asset freezing measures, and specific licence applications. Please reach out if we can be of assistance.
