How UK persons’ trading interests are protected and when authorisations must be obtained to trade with countries subject to specific extraterritorial laws.
The Protection of Trading Interests (“PTI”) legislation protects legitimate trade between UK persons and countries affected by the extraterritorial application of certain laws.
These laws are currently extraterritorial US sanctions against Iran and Cuba (“proscribed sanctions”). These extraterritorial sanctions seek to regulate the activities of non-US persons in any jurisdiction.
The intention of the PTI legislation is to protect UK persons from the extraterritorial effect of proscribed sanctions.
Breaches of the PTI legislation are criminal offences in the UK.
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The PTI legislation protects UK persons by:
- prohibiting compliance with the proscribed sanctions specified below, both directly and indirectly
- requiring UK persons to inform the Secretary of State for Business and Trade within 30 days of discovering that their economic and/or financial interests have been affected by the proscribed sanctions
- allowing the recovery of damages arising from the application of the legislation imposing the proscribed sanctions
- allowing protected persons to request an authorisation from the Secretary of State who is responsible for trade to comply with the legislation imposing the proscribed sanctions, which would otherwise cause serious damage to their interests or the interests of the UK
The PTI legislation protects all UK persons and businesses listed in the regulations, regardless of how many people they employ or the nature of their business. UK persons must remain compliant with UK laws, such as export controls.
A protected person is:
- a UK national resident in the UK
- a non-national resident in the UK
- any legal person incorporated in the UK
- a UK national providing maritime transport services
- any legal person (wherever incorporated) providing maritime transport services and controlled by a national of the UK, where the vessel is registered in the UK
- any other natural person physically present within the UK, including within its territorial waters or air space, or in any aircraft or on any vessel under the jurisdiction or control of the UK acting in a professional capacity
What to do if your interests are affected
You must notify the Department for Business and Trade (DBT) by completing theif you are a listed protected person and you consider that your interests have been affected by the legislation imposing the proscribed sanctions.
You must do this within 30 days of obtaining information that leads you to consider that your interests have been affected.
The Secretary of State for Business and Trade will consider whether to undertake a review and decide on any further steps.
In addition to notifying DBT that your interests have been affected, you may be able to file a civil claim to recover any damages incurred.
You should seek independent legal advice to decide if this is an option for you.
Authorisation to comply with proscribed sanctions
In exceptional circumstances, protected persons may be authorised by the Secretary of State for Business and Trade to comply with the legislation imposing the proscribed sanctions. In assessing applications seeking authorisation, the Secretary of State will consider the criteria set out in the Commission Implementing Regulation legislation.
An authorisation may be granted if not doing so would seriously damage the interests of the protected person or those of the UK. Not every nuisance or damage suffered by protected persons will entitle them to obtain authorisation.
Protected persons must obtain authorisation from the Secretary of State to apply for a licence from US authorities to be exempt from legislation imposing the proscribed sanctions. Without this authorisation, any application for a licence would constitute compliance with the proscribed sanctions and is in breach of the PTI legislation.
The legislation sets out the basis on which applications will be assessed. The Secretary of State for Business and Trade will consider applications for authorisation. DBT’s assessment of your application will consider the impact to your business and the wider impact on UK interests if you were to comply with the proscribed sanctions.
DBT does not provide legal advice ahead of an application. UK entities should seek independent legal advice if they are in any doubt over the need to apply for authorisation.
How to apply for an authorisation
Apply for an authorisation by completing the.
Protected persons must state:
- what activity they seek to adopt that requires authorisation
- which provision(s), or application, of the legislation imposing the proscribed sanctions they wish to comply with and describe the scope of the authorisation sought
- the serious damage that would be caused – either to the interests of the protected person themselves or to those of the UK – if they were not able to comply with the relevant proscribed sanction
Appropriate evidence to show that serious damage would be caused by not complying with the legislation imposing the proscribed sanctions must be provided.
If granted, the authorisation will take the form of regulation made by statutory instrument. The authorisation will become effective on the date that the instrument comes into force and will be publicly available.
- Cuban Liberty and Democratic Solidarity Act of 1996
- Iran Sanctions Act of 1996
- Iran Freedom and Counter-Proliferation Act of 2012
- National Defense Authorization Act for Fiscal Year 2012
- Iran Threat Reduction and Syria Human Rights Act of 2012
- Iranian Transactions and Sanctions Regulations
- 31 Code of Federal Regulations (CFR) Part 515: Cuban Assets Control Regulation
The Secretary of State for Business and Trade has the authority to amend the list of legislation imposing the proscribed sanctions. Updates will be posted on this page. You can use the ‘Get emails about this page’ link at the bottom to subscribe to updates for this page.
Application to UK entities
Subsidiaries and UK nationals resident outside the UK
UK nationals resident outside of the UK, including the US, remain subject to the PTI legislation.
UK subsidiaries of US businesses
UK subsidiaries of US businesses incorporated in any part of the UK are considered UK legal persons and are subject to the provisions of the PTI legislation. Their parent businesses are not UK legal persons and therefore are not subject to the PTI legislation.
Branches of US businesses in the UK
Branches of US businesses in the UK are not considered to have distinct legal personality from their parent company. They are not considered UK legal persons and therefore are not subject to the PTI legislation.
US subsidiaries of UK businesses
US subsidiaries of UK businesses are subject to the law under which they are incorporated. The PTI legislation only applies to legal persons incorporated in the UK.