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The government has extended regulations to prohibit the UK from providing auditing services to Russia following ongoing sanctions against the country.
In May 2022, the government first announced its intention to prohibit the provision of accountancy, management consultancy and public relations services to Russia as part of a package of sanctions imposed on the country following its invasion of Ukraine.
On 30 September, the government said it intends to impose further restrictions on the provision of these services, in response to Russia’s illegal annexation of the Ukrainian regions of Donetsk, Luhansk, Kherson and Zaporizhzhia.
On 15 December 2022, new regulations were laid in Parliament that extend the prohibition on the provision of professional services to include “auditing services”, which took effect from 16 December 2022.
The categories involved in this round of sanctions are the professional services relating to IT consultancy, architectural, engineering, transactional legal advisory, advertising, and agricultural as well as auditing.
It comes as the government suggested that Russia imports over two-thirds of these services from countries issuing sanctions. Around 80% of Russian imports in accounting, audit, bookkeeping, and tax consultancy services are said to come from the UK, EU, and US, major players in the sanctioning of Russia.
Following the new regulations, a person must not directly or indirectly provide, to a person connected with Russia: accounting services; advertising services; architectural services; auditing services; business and management consulting services; engineering services; IT consultancy and design services, or public relations services.
The prohibitions and requirements apply to all companies established in any part of the UK, as well as branches of UK companies operating overseas.
