Following the implementation of wide-ranging new sanctions after the Russian invasion of Ukraine last year, Governor John Rankin has been swamped with requests for the licence needed to use frozen assets to pay legal fees, according to a Friday press release from the Financial Services Commission.
In response, he issued a blanket licence last Thursday — the Virgin Islands General Licence No. 03, 2023 (payment of reasonable professional legal fees and expenses) — that covers all such applicants under the Russia and Belarus sanction regimes.
“In acknowledging the importance of a person’s ability to receive legal advice and representation, the governor has long held a position of not prohibiting the provision of legal advice to a designated person under an asset freeze,” the press release stated. “By contrast, payment for legal services, including payment for legal services provided on credit, has required a licence from the governor.”
However, an “extraordinary number” of new designations under the Russia and Belarus regimes has driven a corresponding increase in licence requests, according to the FSC.
To address the issue, the governor issued the general licence, which permits all individuals and entities designated under the two regimes to pay legal fees.
The FSC advised that anyone planning to use the permissions should first carefully consider the terms of the general licence.
“The licence distinguishes between legal fees in relation to pre-designation work and work started post-designation,” the statement notes. “For legal work carried out in satisfaction of a prior obligation (for example, where a law firm or barrister is engaged before the designation of the individual or entity), there is a $600,000 cap on the amount that can be claimed over the duration of the licence.”
For post-designation legal work, licence users must demonstrate that that all fees paid are reasonable.
“This will be done by providing details of hourly fees, work streams, and evidence that overall fees are at or below a cap of $600,000,” according to the statement.
In compliance with the general licence, reporting obligations to the governor should be emailed to GovofficeSanctions.Tortola@fcdo.gov.uk.