🔒 Not so trusting

In today's email, we've got:

  • the latest financial sanctions against Russia

  • Elon trying to bounce from San Francisco

  • a Daft Punk-themed virtual cafe

If you take just one thing from this email...

The UK government has banned trust services for certain Russian individuals. This comes as part of the latest round of financial sanctions against Russia for its invasion of Ukraine. This means that law firms that provide trustee services really have to check who their client is to ensure they don't breach the new rules.

EDITOR'S RAMBLE 🗣

The first week back of January is over, we did it!

To help me get through the first week, as part of my down time in the evenings, I started watching the TV show 'Limitless with Chris Hemsworth' (it's on Disney+ if you want to watch!). 

The show covers Chris taking on a series of challenges in an attempt to lengthen his life and make sure he's as healthy as he can possibly be. As part of this, he takes on some crazy challenges, like an open swim in the arctic ocean, doing a crane walk atop a skyscraper in Sydney, and climbing up rope over a 1,000 feet drop (pictured below). 

Credit: Disney+

But as cinematic, athletically challenging and interesting as these tasks were, it was the episode on acceptance that really hit hard. 

In that episode, Chris was faced with the concept of growing old and ultimately of his own mortality.

And what was the thing he focused on most when thinking about this? Not his time playing the Norse God of Thunder, or any of his career achievements, but the time he spent with his loved ones and friends. 

I think that's a quite important thing to think about when moving through this next year.

Yes - do well in your degree and strive for the best results.

Yes - aim for that career you've always wanted.

But don't get so caught up in those goals that you don't treasure the time with those you love. 

Anyway, enough Thor-induced revelations from me, onto the good stuff! 

- Connor

FEATURED REPORT 📰

🔒 Not so trusting

Credit: Giphy

What's going on here?

The UK government has banned trust services for certain Russian individuals. 

What does this mean?

This all stems from Russia's invasion of Ukraine early last year. The UK, as well as many other countries, put in place a number of financial sanctions to punish Russia and deter it from further action.

As part of the latest round of financial sanctions against Russia, the UK has banned anyone either from Russia, or connected with it, from using any kind of trust services.

What is a trust?

A trust is a legal arrangement of managing an asset (sorry for any law school flashbacks induced by this section). It is a form of asset protection and, in certain circumstances, can help to mitigate tax (although this is not the primary purpose).

There are three main parties to a trust:

  1. Settlor - this is the person who creates the trust in the first place. They "settle" their asset into trust.

  2. Trustees - these are the people who are responsible for managing the trust asset. They hold legal ownership and must manage the asset in a way that most benefits the third party to a trust.

  3. Beneficiaries - these are the people who will (or have a chance of) benefit from the asset itself.

Trusts, when set up correctly, can be crucial in estate planning (planning for after someone's died).

Although trusts can be used by everyone, those with sizeable wealth often set up multiple trusts which can end up saving them lots of money through changing legal ownership and claiming tax reliefs. 

So, by banning trusts services for Russian individuals, and those connected to Russia, it is hoped that the wealthier and more influential figures in Russia will feel the effect. 

So what do 'trust services' mean and who is actually banned from using them?

The new regulations define trust services as trust creation, provision of offices, management of a trust and acting as trustee of a trust or arranging for another person to so act.

An individual is considered to be 'connected with Russia' if they normally live in or are located in Russia.

Corporate entities are also affected and are connected with Russia if they are incorporated or constituted under Russian law.

Why should law firms care?

Many law firms that offer private client work also offer services as professional trustees, or give advice relating to trusts and the assets within those trusts.

This change means that law firms will need to carry out much more due diligence on who they're taking on as clients and who is benefiting from the trust to ensure that they are not 'connected with Russia'.

Aside from the closer eye that must now be kept on new parties involved in the trust, this will also cause a lot of confusion for existing trusts where beneficiaries have any kind of links to Russia.

Definitive guidance hasn't been given by the Office of Financial Sanctions Implementation (the body that issued the new sanctions), so it's not clear exactly who will be affected. 

But in the legal world, uncertainty can be good for lawyers. The less clients know, the more confused they are, the more they seek legal advice. 

 A BIT OF FUN 😄

IN OTHER NEWS 🗞

  • 🙅‍♂️ A long-term solicitor has been struck off for dishonesty: After a series of 12 acts of dishonesty, including misusing client monies, creating false records and providing false information, a solicitor has been struck off by the Solicitors Disciplinary Tribunal.

  • 💵 The Chinese fintech giant changes its leadership: Ant Group, which owns the world's largest mobile payment platform Alipay, has had its founder step down. Jack Ma is stepping away now has his reputation at the company has been blemished since Ant Group's IPO was cancelled last minute in 2020.

  • 🤖 Elon is trying to bounce from San Francisco: Elon Musk, who is currently in the midst of a shareholder lawsuit, is asking that the trial be moved out of San Francisco. He claims that the local media coverage, which portrays Musk in a very negative light, will affect the outcome. He thinks Texas would be a better alternative.

AROUND THE WEB 🌐

  • 🤣 Haha: Got some time to kill? This website will always find a photo of someone who points at your mouse.

  • 🎶 Musical: They may be retired, but this Daft Punk online cafe is a great way to spend 30 minutes.

  • 🥘 Foodie: This website lets you search for recipes with the ingredients you already have.

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