Names, Penguins, and Sanctions

Gibraltar Company Name Reservation
Company name reservation has been introduced in Gibraltar by the Gibraltar Companies Registry. This fantastic new opportunity means that it is now possible to reserve a company name of your choice while completing the company incorporation process. The name reservation ensures no-one can use or take your choice of company name while it is reserved. The reservation period lasts 90 days and is similar to what is already in place in some other jurisdictions.

Social Responsibility Update for 2023: Douglas the African Penguin
In 2017, the Europa Group participated in an “adopt a penguin programme” in South Africa. After the “adopted” egg hatched, the hatchling was named Douglas. We are pleased to report that earlier this year Douglas celebrated his 6th Birthday. Douglas continues to form part of the Europa Group’s social responsibility for 2023.

Russia Trade Sanctions Circumvention Awareness

The United Kingdom’s Department for Business and Trade has issued guidance on trade sanctions circumvention awareness. This is particularly important if you are operating a trading company.

The Russia sanctions regulations impose sanctions for the purposes of encouraging Russia to cease actions which destabilise, threaten, or undermine the territorial integrity, sovereignty, or independence of Ukraine. Trade sanctions seek to deny Russia access to the goods, technologies, and revenue necessary to pursue hostile actions.

Awareness of the obligations and risks in relation to sanctioned goods is an important step for trade and business. While direct trade with Russia has significantly fallen since sanctions were introduced, Russia will seek to procure restricted goods via other routes.

1) Ensuring Due Diligence

Due diligence on counterparties and internal governance in relation to sanctions is essential. Even on established and known counterparties, due diligence will need to be repeated at various intervals to ensure that the risk has not changed.

2) Procurement Cycle

The procurement cycle below illustrates the different stages and types of entities likely used to acquire goods covertly. Using this model, the end-user typically uses a ‘front’ or ‘cover’ company to request goods from networks of complicit intermediaries.

International suppliers
Commodities are sourced from specialist manufacturers or distributors.

Intermediary
(Overseas) Trading companies could be complicit but probably have legitimate business too. They may claim to be the end-user, or cover company or name another intermediary.
Cover/front company
An entity acting entirely on behalf of the sanctioned entity. They may be a registered business, or may be solely a cover name. These companies may be seen named in international trade paperwork.

The true end-user
A sanctioned person, organisation, or destination.

3) Key Risk Indicators

Risks need to be considered in the circumstances of individual companies and due diligence/internal governance tailored accordingly. These can be broadly grouped by customer, product and Country/ Jurisdiction location.

There are a number of initial risk indicators examples below.

Customer:
• The customer is, directly or indirectly, involved in the sale, supply, delivery, or purchase of restricted or high-risk goods, particularly to higher risk destinations.
• The customer uses complicated structures to conceal involvement – use of layered letters of credit, intermediaries and brokers, front companies.
• Customer maintains connections with a country of concern.

Product:
• The description of the goods on the trade/financial documentation is misleading or non-specific.
• The transaction concerns sanctioned, proliferation-sensitive, dual-use, or military goods, whether licensable or not.
• The shipment of goods is inconsistent with normal trade patterns.

Country/Jurisdiction Location:
• Countries which are actively engaged with a sanctioned country.
• Shipments located in a country with weak export control laws or weak enforcement of these laws.
• payments or transfers made to countries and ports near the border of sanctioned countries

Further information can be found on the United Kingdom Government website by following the link.

Working with The Europa Group

Europa Trust Company Limited is part of the Europa Group. We have been based in Gibraltar for over 37 years and have built a reputation as a stable and reputable business.

We provide a comprehensive range of company and trust formation and management services including company and trust administration, foundations, partnerships, corporate directors, shareholders and secretaries, accounting, marine registration and other associated services.

Our clients are an eclectic mix of international executives, authors, sportsmen, corporations, wealthy individuals, families and many more. Their individual interests and needs are at the centre of our focus. Each client benefits from the experience and multi-jurisdiction knowledge of a dedicated Europa Group professional.

The Europa Group is able to work in over 31 jurisdictions around the World and we are authorised and regulated by the Gibraltar Financial Services Commission.