Peters & Peters

Testing times: Does UK Litasco ruling clarify ‘control’ meaning?

Anna Bradshaw and Alistair Jones publish in-depth analysis of the current state of play of the UK’s ownership and control test in leading industry publication WorldECR, the Journal of Export Controls and Sanctions (see issue #125).

They assess the combined impact of the Court of Appeal’s comments in Mints on 6 October, the High Court’s subsequent comments in Litasco on 15 November and the latest government guidance published on 17 November on the concept of control in the context of designated public officials.

They point to the absence of a compelling reason for the UK’s departure from the EU test of ownership or control and the lack of evidence the EU or US sanctions regimes are less effective than the UK’s. They conclude that, unless and until there is legislative change:


“… the hypothetical element to regulation 7(4) will necessarily prevent a consistency of approach, because there will always be scope for objective ‘reasonableness’ assessments to result in different conclusions depending on subjectively known circumstances. Otherwise, it will only be in the event of legal challenges to licensing decisions under section 38 [of the Sanctions and Anti-Money Laundering Act 2018], or private disputes such as in Mints and Litasco, that the reasonableness of private sector ‘control’ assessments ever receive judicial scrutiny, which to date have failed to mitigate the unfairness and lack of legal certainty in the UK’s ‘control’ test”.