Financial Sanctions Policy

Version 2.1

Introduction

The University has a legal obligation to follow financial sanctions imposed by the UK Government.

Financial sanctions are restrictions placed upon individuals or entire countries, which limit what sorts of business relationship the 菜肱郭創利 can have with them. For example, we might be unable to receive funds from certain people or countries, or be unable to send them money.

The University's key policy is twofold:

1. Follow all UK legislation on sanctions.

2. Take into account US sanctions, as these affect key suppliers to us and make operating in certain countries difficult or impossible (banking and insurance services are the most obvious examples)

This means that we cannot do business with certain countries and individuals. The situation can be complicated; we can teach students from certain sanctioned countries, for example, but not accept tuition fees sent directly from these countries. We therefore need to be very careful that we understand the situation.

The University's approach to complying with legislation mirrors its anti- money laundering policy, in that the best approach is a robust "know your customer" procedure, regular training, and an understanding of our key risk areas.

The University will identify which countries pose a risk to the University in terms of complying with financial sanctions. The dynamic nature of the imposition of sanctions means that they change very quickly, and Finance will maintain a website with a "live" link to both UK and US sanctions information. This also means the University may have to terminate financial relationships at short notice should the legal context change.

On an annual basis, this policy will be reviewed by Scrutiny and Finance Committee.

Definition of Sanctions

The UK Government define financial sanctions as 'restrictions put in place that limit the provision of certain financial services or restrict access to financial markets, funds and economic resources in order to achieve a specific foreign policy or national security objective.'

Most financial sanctions applicable in the UK are made via EU regulations (some come via the UN to the EU). This means, at present, they have direct legal impact in UK law. (This arrangement will doubt be reviewed as part of terms around the UK's exit from the EU, but the assumption is the UK will continue to mirror EU sanctions at least in the short to medium term.)

The UK can implement its own domestic sanctions under certain pieces of counter terrorism legislation (Terrorist Asset Freezing act 2010, Counter Terrorism Act 2008, Anti-Terrorism, Crime and Security Act 2001).

Certain U.S. regulations have extra-territorial reach ("Secondary Sanctions") and importantly all US nationals, wherever resident, always have a primary obligation to comply with U.S. Sanctions Regulations. Consequently, the University's policy is to allow US persons to recuse themselves from any strategic decisions (e.g. plan to increase student recruitment from regions subject to sanctions) or direct involvement or activity with sanctioned countries/regions (e.g. payment processing, research partnerships or alliances with institutions, etc.) that is not either generally or specifically licensed. This may also extend to US goods, such as research material that has been produced in the US but which could potentially be prohibited by US sanctions from being provided to certain countries/regions.

How do they work?

Sanctions are imposed to:

Coerce a regime or individual to change behaviour by increasing the cost to such an extent that they cease the offending behaviour;
Constrain a target by denying them access to resources required to continue their offending behaviour;
Signal disapproval;
Protect the value of assets that have been embezzled.

Sanctions can be applied to:

Individuals 'designated person' and Entities -included on a list maintained by OFSI;
Countries/ regions - highlighted on OFSI's website and include Syria, North Korea and Sudan;
Governments/regimes
Sectors or activities - would refer to, for example, terrorism, and drug-trafficking.

Financial sanctions are imposed as:

An asset freeze - an asset can refer to funds, economic resources or goods;
Financial market and service restrictions - by the authority of OFSI;
Directions to cease all business.

The following acts are prohibited:

Making funds available, directly or indirectly, to or for the benefit of, an individual or entity on the sanctions list.
Dealing with funds owned or controlled by an individual or entity on the sanctions list, or a person acting on behalf of an individual or entity on the sanctions list.
Knowingly participating in activities that directly or indirectly circumvent the prohibitions on making funds available and dealing with funds.

Whose sanctions we must follow by law, and where they are found:

The Office of Financial Sanctions Implementation (OFSI), part of the HM Treasury, is the body responsible for the implementation of financial sanctions under UK law. The Foreign Office and
Department for Business, Energy and Industrial Strategy (BEIS) are also involved with negotiations and implementation of trade sanctions respectively.

UK website

The 菜肱郭創利 and US Financial Sanctions

The 菜肱郭創利 does not have to comply with US sanctions as a legal requirement, but in practice it has to take them into account due to a number of key commercial relationships.

This is due mainly due to two key relationships:

1. Banking. The University's bankers (as at November 2018, Barclays) have a US banking licence and therefore they have to be fully compliant with US sanctions. This means that we can neither make payments to, nor receive payments from, countries and individuals named on the US sanctions list. (There are no major UK banks which do not have a US banking licence, and therefore this situation could not be avoided simply by moving banks.)

2. Insurance. The University's current insurers will be unable to provide assistance to staff or students who require it if they are in a sanctioned country. This is because they too are unable to move funds into certain countries.

Therefore, in practice, the University must seriously consider US sanctions, for commercial and operational reasons, as well as legal reasons. Before undertaking work in an area covered by US sanctions, or entering into a commercial relationship with an entity or individual from a sanctioned area, Finance should be contacted in order to assess the potential impact. For the avoidance of doubt, the University will never be able to receive funds that come directly from Iran or North Korea, nor make payments to those countries, and insurance cover is impossible also for both of these countries

US Sanctions can be found at the following OFAC (Office of Foreign Assets Control) website:

US website:

There are currently NO major UK banks which do not follow US sanctions.

The first contact in Finance is your normal Business Partner.

Which Countries are currently sanctioned for the 菜肱郭創利?

As noted above, the University follows UK sanctions as found here:

UK website:

In addition, consideration must be given to the practical impact of US sanctions, which are found here:

US website:

Sanctioned countries can be defined as broadly restricted (the whole country) or narrowly restricted (only certain entities or individuals). The most important ones are those considered broadly restricted by one of the major authorities (the US, UK, EU and/or UN). A list of narrowly sanctioned countries is found in an appendix, but the websites above must be considered regularly as the lists are very dynamic.

Broadly Restricted (Sanctions against them by the US, UK, EU and/or UN)

Iran *

North Korea *

Syria

Crimea (annexed area)

Donetsk People's Republic (aka DNR)

Luhansk People's Republic (aka LNR)

Kherson (region of Ukraine)

Zaporizhzhia (region of Ukraine)

Cuba *

Venezuela

* US sanctions are VERY strong here.

How the University will assess and mitigate the risk of breaching sanctions

BUFDG has identified the three key risk areas for HEIs:

Receiving student fees from 'designated' individuals, entities or countries/regions;
Engaging with contractors or suppliers who are 'designated' or from sanctioned countries/regions.
Research activity and collaborations with partners in sanctioned countries/regions or with 'designated' individuals.

Other specific risk areas that the 菜肱郭創利 has:

Sponsors may also be on the list of sanctioned entities.
Overseas campuses might have links with either designated individuals or sanctioned countries, of which the UK head office is unaware.
Our insurers may not be able to cover all risks for staff who might be in sanctioned countries.
We may not be able to get funds in an emergency to staff in sanctioned countries.

To mitigate these risks, the University relies upon the following key controls:

The policy will be updated annually, placed on the University's website, and will be included within management briefings.
All relevant members of staff within Finance and Procurement will receive training in this policy.
Scrutiny and Finance Committee will approve a revised policy annually. In addition University Executive Board will receive a copy of the policy.

Specific actions are as follows:

The University's bankers check all incoming payments automatically; we can place a certain level of reliance, as it is in the bank's interest to make such screening as thorough as possible;
The University, as allowed by UK data protection legislation, will aid its bankers in identifying potential sanctions risks, by disclosing relevant personal information of students as required to prevent crime. This is to be done on a case-by-case basis and reviewed by the University's Treasury Manager each time.
Finance will maintain an up-to-date website that has links to sanctions guidance from the US and the EU, and will on a regularly basis communicate this to the University, in particular to those parts of the University responsible for new contractual relationships and for student recruitment;
The University's Insurance Officer will make available a sanctioned countries questionnaire for those travelling on the business of the University;
The University's Treasury Policy mandates the Treasury Manager to report on sanctions compliance annually to Scrutiny and Finance Committee;
The University will in addition disclose its compliance to its bankers annually.
The University's "know your customer" procedures for money-laundering, as set out in the University's money-laundering policy, can give us additional comfort; the risks surrounding money-laundering and sanctions are similar, and similar mitigating controls can be put in place for both.
All new overseas corporate customers (including sponsors) will be checked for their Dun and Bradstreet credit rating; in addition they will be checked against the OFSI and OFAC websites, if they are deemed high risk by Credit Control and Collections. The University will reject those who are on the OFSI list, and if they are on the OFAC website, UEB will be informed for a decision on whether to accept them.
In addition, all students coming from the broadly sanctioned countries will be checked against the OFSI and OFAC websites. The University will reject those who are on the OFSI list, and if they are on the OFAC website, UEB will be informed for a decision on whether to accept them.
Staff travel to all broadly and narrowly sanctioned countries must be approved by a UEB member in all cases, and full risk assessments undertaken INCLUDING in respect of finance and insurance cover. THE PRESUMPTION WILL BE NOT TO APPROVE UNLESS MITIGATIONS ARE IN PLACE AND DOCUMENTED.
No travel at all can be undertaken on University business to Iran and North Korea until further notice.

There is no effective mitigation for political changes in either the UK or US which might lead to countries being added to the UKSI and OFAC lists without warning. The University must therefore accept that it might have to "walk away" from commercial relationships at short notice, and assess the geopolitical risks of all countries we deal with.

Revised May 2022, list of countries updated March 2024

Approved by Strategy and Finance Committee 6 June 2022

Narrowly Restricted (subject to trade restrictions and/or limited Sanctions on specific government agencies, officials etc.)

Afghanistan

Belarus

Burundi

Central African Republic

Democratic Republic of Congo

Republic of Guinea

Republic of Guinea-Bissau

Iraq

Lebanon

Libya

Mali

Myanmar (Burma)

Russia*

Somalia

South Sudan

Sudan

Tunisia

Ukraine

Yemen

Zimbabwe

*Subject to change at short notice, covered by significant finance sector restrictions

The above list is for guidance only and is not exhaustive (updated March 2024, source: Barclays Bank PLC and Lloyds Bank)