BVI Governor Issues General Licence for Payment of Legal Fees for Sanctioned Persons

On 13 April 2023, the Governor of the British Virgin Islands signed and issued the Virgin Islands General Licence No. 03, 2023 (payment of reasonable professional legal fees and expenses), which came into force with immediate effect. The General Licence is granted under regulation 64 of The Russia (Sanctions) (EU Exit) Regulations 2019 (as amended) as modified by paragraph 38 of The Russia (Sanctions) (Overseas Territories) Order 2020 (as amended) and regulation 34 of the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 as modified by paragraph 19 of the Republic of Belarus (Sanctions) (Overseas Territories) Order 2020.?

The General Licence acknowledges how important it is for legal persons to receive legal advice and representation and it is consistent with the Governor’s long held position that legal persons designated under an asset freeze should not be deprived of legal assistance. Until the General Licence was issued, payment for legal services required a licence from the Governor.?

Given the significant increase in new designations under the Russian and Belarus sanction regimes and, therefore, the significant increase in the number of legal persons seeking a licence from the Governor for the payment of legal fees, the issue of this General Licence is sensible and welcome.

Anybody wanting to make use of the General Licence should consider its terms carefully. The General Licence draws a distinction between pre-designation work and post-designation work. For legal work undertaken before the designation of a legal person, there is a US$600,000 cap on the amount that can be claimed over the duration of the licence. For legal work commenced post-designation, users of the licence will need to demonstrate through their reporting obligations that all fees which have been paid are reasonable by providing details of hourly fees, work streams and by providing evidence that overall fees are at or below US$600,000.

The General Licence remains in force for a period of six months from issue unless revoked by the Governor. The Governor may vary, suspend or revoke the General Licence at any time and any such variation, suspension or revocation will be published on the Virgin Islands Official Gazette and on the official website of the BVI FSC.