The Compulsory Electronic Monitoring Licence Condition (Amendment) Order 2026

Published: Tue 7th Jul 26

This statutory instrument amends the Russia (Sanctions) (EU Exit) Regulations 2019 to refine the restrictions placed on financial institutions regarding payment processing.

It specifies that a relevant financial institution must not process a payment if it has reasonable cause to suspect the payment is received for, on behalf of, or for the benefit of a designated person.

These requirements apply to all relevant financial institutions operating within the UK's jurisdiction, including banks, credit institutions, and other regulated entities.

Arguments For

The explanatory note states that the instrument is intended to clarify the scope of the prohibition on the processing of payments in regulation 17A of the 2019 Regulations.
The document implies that the amendment ensures the prohibition on processing payments applies specifically to payments received by a relevant financial institution for or on behalf of a person, or for the benefit of a person, where that person is a designated person as defined by the regulations.
Proponents may argue that the regulation provides a more precise legal framework for financial institutions to comply with UK sanctions regimes following the United Kingdom's withdrawal from the European Union.

Arguments Against

Legal scholars might question the clarity of the phrase "for the benefit of a person," as the regulations do not provide an exhaustive list of what constitutes a benefit, potentially leaving financial institutions to make subjective determinations.
Financial institutions may identify implementation difficulties regarding the monitoring of complex transaction chains to identify whether a non-designated intermediary is receiving funds that ultimately benefit a designated person.
Critics of the broader sanctions regime might argue that frequent amendments to statutory instruments create a complex regulatory environment that increases compliance costs for the banking sector.

Citation and commencement

1.—(1) These Regulations may be cited as the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2024.

(2) These Regulations come into force on 17th May 2024.

This section establishes the official name of the statutory instrument and sets the date it becomes legally effective. All provisions therein apply from 17 May 2024.

Amendment of the Russia (Sanctions) (EU Exit) Regulations 2019

The Russia (Sanctions) (EU Exit) Regulations 2019 are amended as follows.

This provision identifies the primary legislation, the Russia (Sanctions) (EU Exit) Regulations 2019, which is being modified.

It serves as the legal hook for the subsequent changes outlined in the document.

Amendment of regulation 17A (prohibition on processing payments)

In regulation 17A (prohibition on processing payments), for paragraph (1) substitute—

“(1) A relevant financial institution (“A”) must not process a payment if A knows or has reasonable cause to suspect that the payment is—

(a) received by A (directly or indirectly) from a person (“P”),

(b) made (directly or indirectly) to a person (“P”), or

(c) processed by A for or on behalf of a person (“P”) or for the benefit of a person (“P”),

where P is a designated person.”.

This amendment replaces the existing text regarding the prohibition on processing payments to specify three distinct scenarios.

It prohibits a financial institution from processing funds if it knows or suspects the payment involves a designated person as the sender, recipient, or beneficiary.

The term "designated person" refers to individuals or entities specifically named by the Secretary of State under the sanctions regime.

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