The onset of sanctions by the UK, EU and US against Russia has had a significant impact on the ability of lawyers to accept instructions from any entity or person subject to sanctions. Bermuda, as one of the UK’s Overseas Territories, had previously enacted the International Sanctions Act and Regulations, 2013, which extends to Bermuda any order made by the Privy Council as an Order in Council. For all practical purposes, as far as the implementation of financial sanctions is concerned, Bermuda is in exactly the same position as the UK. As such, the UK’s sanctions measures are governed by the Russia (Sanctions) (EU Exit) Regulations, 2019, which are promulgated under the Sanctions and Anti-Money Laundering Act, 2018.
Of specific relevance to Bermuda are the amendments to the Sanctions Regulations that have focused on the transportation sector, particularly aviation. There is a prohibition on providing insurance and reinsurance services in aviation and space goods/technology to those connected with Russia or for use in Russia. Similar restrictions affect marine vessels.
At the moment, there are no regulations that specifically target Bermuda trusts with a “Russian connection”, and there is certainly no requirement to terminate such Trusts or make distributions to Beneficiaries, as is the case with Trusts directly affected by the EU Regulations. This situation may well, however, change in the future.