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Insights

Adrian Waterman KC Further Commentary: Mints and others v PJSC National Bank Trust and others

Published:

Further to the judgment of the Court of Appeal in Mints and others v PJSC and another [2023] EWCA Civ 1132 (see commentary here), the FCDO has issued a statement today (here).

It addresses the effect of the judgment on the meaning of ‘control’ in Regulation 7 of the The Russia (Sanctions) (EU Exit) Regulations 2019. The statement says that the case of Mints was ‘not decided on this point’. In other words, it seeks to emphasise that what the judgment says about control is obiter. It goes on to say:

‘There is no presumption on the part of the Government that a private entity based in or incorporated in Russia or any jurisdiction in which a public official is designated is in itself sufficient evidence to demonstrate that the relevant official exercises control over that entity.

In the interests of reducing any uncertainty, we are exploring the options available to the Government in clarifying this position further.’

In Mints, Sir Julian Flaux C in the Court of Appeal expressly acknowledged that what said about control was obiter. He chose to give the guidance nonetheless due to the importance of the issue. In doing so, this very senior judge interpreted the meaning of Regulation 7 having heard full argument by counsel.

It is not known what has prompted the FCDO to issue its statement. It may be that it was the words of Sir Julian Flaux themselves. Following submissions from counsel as to the absurd position which the wide (and obvious) interpretation gave rise to, he said: ‘the absurd consequences arise not from giving the Regulation its clear and wide meaning but from the subsequent designation by the Government of Mr Putin, without having thought through the consequences that…Mr Putin is at the apex of a commend economy…in a very real sense…Mr Putin could be deemed to control everything in Russia.

It is the Government who chose to draft the Regulations on the issue of control so widely. At no stage since they were drafted has the Government sought to narrow or to refine them.  Now, the Government seems very concerned that their scope is as wide as seems initially to have been intended.

For the time being, the position for those seeking – and indeed those giving – advice is less than certain, as is implicitly acknowledged in the statement. It ends with the following words:

In the interests of reducing any uncertainty, we are exploring the options available to the Government in clarifying this position further.’