Financial crime

Sanctions & Export Controls Policy

The firm’s approach to financial sanctions, trade restrictions and export control obligations across the jurisdictions in which it operates.

Document reference: FGL-LEG-11
Version date: 1 July 2026
Applies to: Fratres Limited

1.Interpretation and definitions

1.1

In this Policy, the following capitalised terms have the meanings given to them below. Terms defined in the Anti-Money Laundering & Counter-Terrorist Financing Policy (FGL-LEG-08) or the Client Due Diligence & Know Your Customer Standard (FGL-LEG-09), and not otherwise defined here, bear the meanings given to them in those documents.

Company: Fratres Limited, a company incorporated and registered in England and Wales under the Companies Act 2006, together with any subsidiary, branch, representative office or controlled entity through which it conducts its activities.
Counterparty: Any client, prospective client, project sponsor, investor, co-investor, joint venture partner, local partner, agent, introducer, consultant, contractor, supplier, lender, guarantor, payment recipient or other person with whom the Company deals or proposes to deal, whether or not a contract is entered into.
Designated Person: A person, entity or body designated, listed, specified or otherwise made subject to Sanctions under any Relevant Sanctions Regime, including any person owned or controlled by such a person within the meaning of clause 6.
Dual-Use Item: Any good, software or technology capable of both civil and military application, or capable of contributing to the design, development, production, handling, operation, maintenance, storage, detection, identification or dissemination of chemical, biological, radiological or nuclear weapons or their means of delivery, including any item specified on the UK Strategic Export Control Lists.
Economic Resources: Assets of every kind, whether tangible or intangible, movable or immovable, which are not Funds but which may be used to obtain Funds, goods or services, including land, project rights, licences, concessions, plant, equipment, vessels, aircraft, intellectual property and contractual entitlements.
Export Control Legislation: The Export Control Act 2002, the Export Control Order 2008, the retained EU dual-use regulation as it forms part of the law of England and Wales and as amended from time to time, the Customs and Excise Management Act 1979 so far as it relates to the exportation of goods, and any equivalent legislation of any other jurisdiction that applies to the Company or to a transaction it supports.
Funds: Financial assets and benefits of every kind, including cash, cheques, claims on money, deposits, debt instruments, securities, interest, dividends, credit, guarantees, letters of credit, bills of lading and documents evidencing an interest in funds or financial resources.
Mandate: Any advisory, facilitation, introduction or project support engagement accepted by the Company, whether or not fees are payable and whether or not an engagement letter has been executed.
OFSI: The Office of Financial Sanctions Implementation, part of HM Treasury, which is responsible for the implementation and civil enforcement of financial sanctions in the United Kingdom and which maintains the UK consolidated list of financial sanctions targets.
Policy: This Sanctions & Export Controls Policy, as amended, reissued and republished from time to time.
Relevant Sanctions Regime: The UK Sanctions Regime, together with any sanctions, restrictive measure, embargo or export control regime imposed by the United Nations Security Council, the United States of America, the European Union or any other jurisdiction, in each case to the extent it applies to the Company, to a Counterparty, to a transaction, or to any asset, currency, good, technology or person involved.
Restricted Activity: Any activity prohibited or restricted by a Relevant Sanctions Regime, including dealing with Funds or Economic Resources owned, held or controlled by a Designated Person, making Funds or Economic Resources available directly or indirectly to or for the benefit of a Designated Person, and any trade, financial, investment, transport, professional services or export restriction.
Sanctions: Financial sanctions, immigration sanctions, trade sanctions, transport sanctions, sectoral restrictions, asset freezes, investment prohibitions, professional and business services restrictions and any other restrictive measure imposed under a Relevant Sanctions Regime.
Sanctions Officer: The officer appointed by the board of the Company with day-to-day responsibility for the operation of this Policy, being the same individual who discharges the function of Money Laundering Reporting Officer under FGL-LEG-08 unless the board resolves otherwise.
Staff: The directors and officers of the Company and every employee, secondee, consultant, contractor, agent and representative acting for or on behalf of the Company, in the United Kingdom, in Bangladesh or elsewhere.
UK Sanctions List: The list maintained and published by the Secretary of State for Foreign, Commonwealth and Development Affairs under section 21 of the Sanctions and Anti-Money Laundering Act 2018, recording those persons designated under regulations made under that Act.
UK Sanctions Regime: The Sanctions and Anti-Money Laundering Act 2018 and the regulations made under it, the Anti-terrorism, Crime and Security Act 2001, Part 8 of the Policing and Crime Act 2017, the Counter-Terrorism Act 2008 and any other United Kingdom legislation imposing Sanctions, in each case as amended from time to time.

1.2

A reference to a statute, statutory instrument, regulation or order is a reference to it as amended, extended, consolidated, replaced or re-enacted from time to time, and includes any subordinate legislation made under it and any guidance issued under it by the responsible authority.

1.3

A reference to a person includes a natural person, a body corporate, an unincorporated association, a partnership, a trust, a fund, a governmental or quasi-governmental body, a state-owned enterprise and any other legal or commercial entity, in each case whether or not having separate legal personality.

1.4

The words “including”, “includes” and “in particular” are illustrative and do not limit the generality of the words preceding them. Headings are for convenience only and do not affect interpretation.

1.5

Where this Policy imposes an obligation expressed by the word “must” or “shall”, that obligation is mandatory and is not subject to commercial override.

2.Purpose, scope and application

2.1

The purpose of this Policy is to ensure that the Company, its Staff and the Mandates it accepts comply in full with all applicable Sanctions and Export Control Legislation, and that the Company does not directly or indirectly make Funds or Economic Resources available to, or otherwise confer economic benefit on, any Designated Person.

2.2

This Policy applies to all Staff, without exception, and to every Mandate, Counterparty, introduction, payment, receipt, disbursement, project and transaction in which the Company has any involvement, wherever performed. It applies equally to activity conducted in the United Kingdom, in Bangladesh and in any third country.

2.3

The Company operates as a strategic advisory and project facilitation business. It does not hold client money, it does not act as a financial institution, and it does not itself export goods. Its principal Sanctions exposure arises from the persons with whom it deals, the projects it supports, the counterparties it introduces to one another and the services it provides. This Policy is calibrated to that exposure and is not qualified by it.

2.4

Compliance with Sanctions is a matter of strict liability. Civil monetary penalties may be imposed by OFSI under Part 8 of the Policing and Crime Act 2017 without proof that the person concerned knew or had reasonable cause to suspect that its conduct breached a prohibition. The Company therefore treats the absence of intent as no defence and designs its controls to prevent breach rather than to explain it.

2.5

This Policy is to be read together with, and does not replace:

(a)the Anti-Money Laundering & Counter-Terrorist Financing Policy (FGL-LEG-08);
(b)the Client Due Diligence & Know Your Customer Standard (FGL-LEG-09);
(c)the Anti-Bribery & Anti-Corruption Policy (FGL-LEG-10);
(d)the Prevention of the Facilitation of Tax Evasion Policy (FGL-LEG-12);
(e)the Conflicts of Interest Policy (FGL-LEG-13); and
(f)the Whistleblowing & Speak-Up Policy (FGL-LEG-14).

2.6

Where this Policy and the law of another jurisdiction in which the Company operates impose different standards, the Company applies the higher standard, save that the Company will not comply with a foreign requirement where doing so would itself breach the law of England and Wales. Any such conflict must be escalated to the Sanctions Officer before any step is taken.

2.7

No provision of this Policy may be waived, disapplied or varied for the convenience of a Counterparty, the value of a Mandate, the seniority of a person making a request, or the urgency of a transaction.

3.The United Kingdom sanctions framework

3.1

United Kingdom Sanctions are principally imposed by regulations made under the Sanctions and Anti-Money Laundering Act 2018. That Act empowers a Minister of the Crown to make regulations for purposes including compliance with obligations arising from the United Nations Charter, the prevention of terrorism, national security, international peace and security, and the promotion of respect for human rights and the rule of law.

3.2

Designations are made by the Secretary of State for Foreign, Commonwealth and Development Affairs and recorded on the UK Sanctions List published under section 21 of that Act. OFSI separately publishes and maintains the UK consolidated list of financial sanctions targets, which is the operative reference for asset-freeze screening.

3.3

The United Kingdom operates country, thematic and sectoral regimes. Country regimes are established by dedicated statutory instruments under the Sanctions and Anti-Money Laundering Act 2018 for individual territories. Thematic regimes address counter-terrorism, global human rights, global anti-corruption, chemical weapons, cyber activity and the counter-proliferation of weapons of mass destruction. Sectoral measures restrict identified economic sectors, goods, technologies and services irrespective of whether any person involved is designated.

3.4

Separate and additional financial restrictions arise under the Anti-terrorism, Crime and Security Act 2001, the Counter-Terrorism Act 2008 and the Terrorist Asset-Freezing etc. Act 2010, and terrorist property offences arise under sections 15 to 18 of the Terrorism Act 2000. Nothing in this Policy limits the Company’s obligations under those enactments.

3.5

Sanctions obligations are distinct from, and additional to, the Company’s obligations under the Proceeds of Crime Act 2002 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. A matter may require a suspicious activity report to the National Crime Agency, a report to OFSI, or both. One report does not discharge the other.

3.6

The Company also has regard to Sanctions imposed by the United Nations Security Council, which are given effect in the United Kingdom by regulations made under the Sanctions and Anti-Money Laundering Act 2018 and, in Bangladesh, principally through the Anti-Terrorism Act 2009 and the Money Laundering Prevention Act 2012 as administered by Bangladesh Bank and the Bangladesh Financial Intelligence Unit.

3.7

Where the Company supports a project or Counterparty in Bangladesh, it screens against the United Nations consolidated list and the domestic listings maintained under Bangladeshi counter-terrorism legislation in addition to the UK consolidated list. A person not designated in the United Kingdom may nonetheless be restricted locally, and the Company will not act where local designation applies.

4.Non-UK regimes and extraterritorial reach

4.1

Compliance with the UK Sanctions Regime is necessary but not sufficient. Other regimes bite on the Company’s activity in defined circumstances, and the Company assesses those circumstances before accepting a Mandate rather than after a payment has failed.

4.2

United States sanctions administered by the Office of Foreign Assets Control of the US Department of the Treasury apply where there is a United States nexus. Staff must treat a United States nexus as present where any of the following features is or may be involved:

(a)a payment denominated in United States dollars, or any payment that clears or is routed through a United States financial institution or correspondent account;
(b)a United States person, being a United States citizen, lawful permanent resident, entity organised under United States law, or any person physically located in the United States, including as an adviser, investor, officer or employee;
(c)goods, software or technology of United States origin, or incorporating United States-origin content, or produced using United States-origin technology or software;
(d)the use of United States infrastructure, including servers, cloud services, insurance, reinsurance, shipping or professional services provided from the United States; or
(e)a counterparty or transaction of a type exposed to secondary sanctions, which may apply to non-United States persons dealing with certain designated persons or sectors even where no other United States nexus exists.

4.3

European Union restrictive measures apply where an activity is carried out in whole or in part within the European Union, where it involves a national of a Member State wherever located, an entity incorporated under the law of a Member State, or business done in whole or in part within the European Union. The Company assesses European Union exposure wherever a Mandate involves a European Union sponsor, lender, insurer, supplier or shipping route.

4.4

Sanctions lists maintained under different regimes do not correspond. The Company applies the widest applicable restriction: where a person is designated under any Relevant Sanctions Regime that applies or may apply, the Company will not deal with that person, whether or not the person is designated in the United Kingdom.

4.5

Where the Company identifies a genuine conflict between the requirements of two Relevant Sanctions Regimes, or between a Relevant Sanctions Regime and a blocking or anti-boycott provision, no Staff member may resolve that conflict unilaterally. The matter must be escalated under clause 14 and external legal advice obtained before any further step is taken.

4.6

The Company does not represent that it holds any licence, registration or authorisation under any non-UK regime. Where a Counterparty requires the Company to act in a way that would require such an authorisation, the Company will decline the Mandate.

5.Asset freezes and prohibited dealings

5.1

Where an asset freeze applies to a Designated Person, the Company must not:

(a)deal with Funds or Economic Resources owned, held or controlled by that Designated Person, including by using, altering, moving, transferring, allowing access to, or otherwise dealing with them in any way that would result in a change in their volume, amount, location, ownership, possession, character or destination;
(b)make Funds available, directly or indirectly, to or for the benefit of that Designated Person;
(c)make Economic Resources available, directly or indirectly, to or for the benefit of that Designated Person, where the Designated Person would be likely to exchange them for, or use them in exchange for, Funds, goods or services; or
(d)enter into, perform or facilitate any arrangement the object or effect of which is, directly or indirectly, to do any of the above.

5.2

The words “directly or indirectly” are to be given their full effect. The prohibition is not confined to payments. It captures the provision of advisory services, the making of an introduction, the transmission of project information of commercial value, the grant of access to a concession or approval pathway, the release of a report, and the performance of any obligation which confers economic benefit on a Designated Person.

5.3

A benefit conferred through an intermediary, a nominee, a family member, a trust, a foundation, a joint venture vehicle or a professional adviser is a benefit conferred indirectly. Interposing a person between the Company and a Designated Person does not make an otherwise prohibited act lawful.

5.4

Staff must not receive Funds from, or transmit Funds to, any person in circumstances where a Designated Person is or may be the ultimate source, ultimate recipient or ultimate beneficiary. Where the source or destination of Funds cannot be established to the satisfaction of the Sanctions Officer, the transaction must not proceed.

5.5

Where a freeze applies, Funds and Economic Resources are not confiscated. They remain the property of the person concerned but must be immobilised. The Company must not release, return, set off, apply or otherwise deal with frozen assets or entitlements, including in satisfaction of the Company’s own fees, except under a licence granted under clause 9.

5.6

Immigration sanctions may also apply, with the effect that a Designated Person is excluded from the United Kingdom. Staff must not sponsor, invite, arrange travel for, or support a visa application by, any person subject to a travel ban under a Relevant Sanctions Regime.

The core rule

If a Designated Person is, or may be, on either side of a proposed dealing, or would obtain any benefit from it, the dealing stops. It does not proceed pending advice, it does not proceed on a best-endeavours basis, and it does not proceed because a payment has already been committed. It stops, and the Sanctions Officer is informed the same day.

6.Ownership, control and aggregation

6.1

An asset freeze extends beyond the Designated Person named on a list. An entity that is owned or controlled directly or indirectly by a Designated Person is treated as subject to the same restrictions, whether or not that entity is itself named. Screening a corporate name against a list is therefore the beginning of the enquiry and never the end of it.

6.2

Under the UK Sanctions Regime, a person is taken to own or control an entity where either of the following conditions is met:

(a)the ownership condition — the person holds, directly or indirectly, more than 50 per cent of the shares or voting rights in the entity, or holds the right, directly or indirectly, to appoint or remove a majority of its board of directors; or
(b)the control condition — it is reasonable, having regard to all the circumstances, to expect that the person would be able, in most cases or in significant respects, to ensure that the affairs of the entity are conducted in accordance with the person’s wishes.

6.3

For the purposes of the ownership condition, holdings are aggregated. Where two or more Designated Persons each hold an interest in the same entity, their holdings are added together, and the entity is treated as owned by Designated Persons if the aggregate exceeds 50 per cent. Staff must therefore examine the whole capital table and not only the largest single holding.

6.4

Indirect ownership must be traced through every intervening layer. Where a Designated Person holds more than 50 per cent of an intermediate entity, and that intermediate entity holds more than 50 per cent of a further entity, both entities are treated as owned by the Designated Person. Chains must be traced to ultimate beneficial ownership in accordance with FGL-LEG-09, and a chain that cannot be traced is a reason to decline.

6.5

The control condition is not limited to shareholdings. Control may arise through voting agreements, golden shares, veto rights, board appointment rights, security arrangements, contractual dependency, management agreements, family arrangements or informal but effective influence. Staff must assess the substance of the relationship, not the form of the register.

6.6

Published guidance issued by HM Treasury and the Foreign, Commonwealth and Development Office records the Government’s position that a designated public official is not, by reason only of holding political office, to be treated as controlling a public body of the state concerned. The Company applies that position, but does not extend it: where a designated official exercises actual influence over a specific entity or transaction, the control condition may still be met and must be assessed on the facts.

6.7

Ownership and control analysis is not a one-off exercise. It must be repeated whenever the Company becomes aware of a change in the ownership or governance of a Counterparty, on each periodic review under clause 7, and before any material step in a Mandate, including financial close, the signature of a joint venture agreement, or the payment of any fee.

6.8

Where ownership or control cannot be established with reasonable confidence, the Company treats the entity as if it were owned or controlled by the Designated Person concerned until the position is resolved.

7.Screening at onboarding and on an ongoing basis

7.1

No Mandate may be accepted, no engagement letter may be signed, no introduction may be made and no payment may be made or received until Sanctions screening has been completed and recorded in accordance with this clause.

7.2

At onboarding, the Company screens each of the following against the UK consolidated list of financial sanctions targets, the UK Sanctions List, the United Nations consolidated list, and the lists maintained under the United States and European Union regimes:

(a)the Counterparty itself, including all trading names and former names;
(b)each direct and indirect shareholder holding 10 per cent or more, and each ultimate beneficial owner identified under FGL-LEG-09;
(c)each director, officer, senior manager and person exercising significant control;
(d)any parent, subsidiary, guarantor, joint venture vehicle or special purpose vehicle within the transaction structure;
(e)any agent, introducer, consultant or intermediary through whom the relationship arises or is to be conducted;
(f)each financial institution, paying bank and correspondent through which Funds are expected to move; and
(g)the jurisdictions, ports, vessels, aircraft, goods and technologies involved in the underlying project, so far as identified.

7.3

Screening must be conducted using fuzzy matching capable of accounting for transliteration variance, alternative spellings, name order, patronymics and diacritics. Exact-match screening alone is not sufficient, in particular for names transliterated from Bengali, Arabic, Russian or Chinese script.

7.4

Screening is repeated on an ongoing basis. At a minimum, the Company rescreens the whole of its active Counterparty population:

(a)promptly following the publication of any change to the UK consolidated list or the UK Sanctions List;
(b)on each occasion a new designation is announced under a Relevant Sanctions Regime that is capable of affecting a live Mandate;
(c)before any payment is made or received, and before any material transaction step;
(d)on any change of ownership, control, directorship or transaction structure of which the Company becomes aware; and
(e)in any event at intervals no longer than three months for higher-risk relationships and twelve months for all others.

7.5

A relationship is higher risk for the purposes of clause 7.4 where it involves a politically exposed person, a state-owned or state-linked entity, a jurisdiction identified under clause 12, a complex or opaque ownership structure, a sector subject to sectoral restrictions, or any Dual-Use Item.

7.6

The Company records for each screening event the date, the lists screened, the identity of the person performing the screening, the matching parameters applied, the results returned, and the reasoned disposition of each result. A screening that produces no match is recorded in the same terms as one that does.

7.7

Screening is a control and not a substitute for judgement. The absence of a list match does not permit the Company to proceed where the circumstances of a Counterparty or transaction otherwise indicate Sanctions risk, including any of the red flags in clause 13.

8.Positive matches, freezing and reporting

8.1

Where screening or any other source produces a possible match against a Designated Person, the Staff member concerned must immediately suspend all activity in relation to the Counterparty and the transaction, and must notify the Sanctions Officer the same day. Activity must not resume until the Sanctions Officer has determined the position in writing.

8.2

The Sanctions Officer shall assess whether the match is a true match or a false positive by reference to full name, date of birth, place of birth, nationality, identification numbers, registered address, corporate registration details, ownership and control, and any other identifying particular published with the designation. The assessment and its basis must be recorded in writing.

8.3

Where the match is confirmed, or cannot be discounted, the Company shall:

(a)freeze any Funds and Economic Resources which it holds, controls or is in a position to deal with, and take no further step in relation to them;
(b)refrain from making any Funds or Economic Resources available, directly or indirectly, to or for the benefit of the Designated Person, including by delivering work product, releasing information of commercial value or performing any further part of the Mandate;
(c)report the matter to OFSI as soon as practicable, giving the information required by the applicable regulations, including the identity of the person, the nature and value of any Funds or Economic Resources held, and the basis of the Company’s knowledge or suspicion;
(d)consider whether the same facts give rise to a suspicion of money laundering or terrorist financing requiring a report to the National Crime Agency under the Proceeds of Crime Act 2002 or section 21A of the Terrorism Act 2000, and make that report where required;
(e)consider whether a report is also required to any non-UK authority with jurisdiction, and obtain external advice before making any such report; and
(f)preserve all relevant records, communications and documents without alteration.

8.4

Reports to OFSI are made by the Sanctions Officer alone. No other Staff member may correspond with OFSI, the Foreign, Commonwealth and Development Office, the National Crime Agency or any equivalent authority in relation to a Sanctions matter without the express written authority of the Sanctions Officer.

8.5

Staff must not disclose to a Counterparty, or to any other person, that a report has been made or is contemplated, or that a matter is under Sanctions review, where doing so is likely to prejudice an investigation. Disclosure of that kind may constitute the offence of tipping off under section 333A of the Proceeds of Crime Act 2002 and is in every case a disciplinary matter.

8.6

Where the Company declines or terminates a relationship on Sanctions grounds, the communication to the Counterparty shall be confined to a statement that the Company is unable to proceed. No explanation of the underlying reason may be given without the written approval of the Sanctions Officer.

8.7

A false positive must be documented with the same rigour as a true match, so that the same name can be cleared consistently on subsequent screening without repeating the analysis. A whitelist entry expires after twelve months and must then be reconfirmed.

9.Licences, derogations and authorisations

9.1

Certain acts that would otherwise be prohibited may be permitted under a licence granted by OFSI, or by an equivalent authority under another Relevant Sanctions Regime. A licence must be obtained in advance. Nothing in this Policy permits an act to be performed in the expectation that a licence will later be granted or that a retrospective licence will be available.

9.2

Applications for a specific licence are made by the Sanctions Officer. Grounds on which OFSI may grant a licence under the applicable regulations include basic needs, reasonable professional fees for the provision of legal services, reasonable fees and service charges for the routine holding or maintenance of frozen Funds or Economic Resources, extraordinary expenses, prior obligations, and the satisfaction of a judicial decision. The availability of a ground does not entitle the applicant to a licence.

9.3

Where a general licence published by OFSI is relied upon, the Sanctions Officer must record the identifier and version of that general licence, the analysis establishing that the activity falls within its permission, and the reporting and record-keeping conditions attaching to it. Those conditions must be diarised and complied with.

9.4

A licence permits only what it expressly authorises, for the period it specifies, in favour of the persons it names. Any act outside the scope of a licence is a breach. Where the facts change, the Sanctions Officer must reassess whether the licence continues to apply and, where it does not, must cease the activity and seek a variation.

9.5

The Company will not seek a licence in order to preserve the commercial value of a Mandate where it has concluded that the underlying relationship is inconsistent with this Policy or with the standards in the ESG & Responsible Business Policy (FGL-LEG-16). A licence addresses legality; it does not settle whether the Company should act.

9.6

Export licensing is dealt with separately under clause 11. A financial sanctions licence does not authorise the export of controlled goods, software or technology, and an export licence does not authorise dealings with a Designated Person.

10.Sectoral, trade and services restrictions

10.1

Sectoral and trade restrictions apply to categories of activity rather than to named persons. A Counterparty that appears on no list may nonetheless be the subject of restrictions by reason of the sector in which it operates, the goods it handles, the finance it seeks or the territory in which it is established.

10.2

Restrictions of this kind may include:

(a)prohibitions on new investment in, or the provision of financing or financial assistance to, identified sectors or territories;
(b)restrictions on dealing in transferable securities, money-market instruments or loans issued by specified entities;
(c)prohibitions on the import, export, supply, delivery, transfer, brokering or transport of specified goods and technology;
(d)restrictions on the provision of professional and business services, which may extend to management consulting, accounting, auditing, architectural, engineering, advertising, IT consultancy and legal advisory services;
(e)restrictions on aviation and shipping, including the provision of aircraft, aircraft parts, insurance, technical assistance, ground handling, maintenance, overflight and port access; and
(f)restrictions on infrastructure, energy, mining, telecommunications and construction activity in specified territories.

10.3

The Company’s core services fall within the categories of activity that professional and business services restrictions are capable of reaching. Before accepting any Mandate with a connection to a restricted territory or sector, the Sanctions Officer must record a written analysis of whether the services to be provided are restricted, and that analysis must identify the specific regulation relied upon.

10.4

Trade sanctions are enforced in the United Kingdom by His Majesty’s Revenue and Customs and, in respect of certain civil enforcement, by the Office of Trade Sanctions Implementation within the Department for Business and Trade. The Company reports suspected trade sanctions breaches to the appropriate authority through the Sanctions Officer.

10.5

Where a Mandate involves the movement of goods, Staff must establish the origin, destination, end user and end use of those goods before the Company provides any facilitation service, and must apply clause 11.

10.6

Sectoral measures change frequently and often at short notice. Staff must not rely on an analysis performed for an earlier transaction. Each Mandate requires a current assessment against the regulations in force on the date of the act in question.

11.Export controls and dual-use items

11.1

Export controls operate independently of financial sanctions. They restrict the export, transfer, brokering, transit and technical support of military items and Dual-Use Items by reference to the item, its destination, its end user and its end use, whether or not any person involved is designated.

11.2

In the United Kingdom, controls arise under the Export Control Act 2002 and the Export Control Order 2008, together with the retained dual-use regulation as it forms part of domestic law. Controlled items are specified on the UK Strategic Export Control Lists. Licensing is administered by the Export Control Joint Unit within the Department for Business and Trade.

11.3

The Company does not itself manufacture or export controlled items. Its exposure arises because it advises on, facilitates and introduces parties to projects in sectors where controlled items are commonplace. Staff must treat the following mandate types as presumptively engaging export controls:

(a)civil aviation and aerospace mandates, including aircraft, aero-engines, avionics, navigation and communications equipment, simulators, maintenance and overhaul capability, aircraft parts and associated technical data;
(b)technology and innovation mandates, including data centre and high-performance computing equipment, semiconductors, encryption and information security products, telecommunications interception or monitoring capability, and surveillance technology;
(c)mining and natural resources mandates involving explosives, blasting technology, detonators or specified chemicals;
(d)port, transport and infrastructure mandates involving security screening, scanning or detection equipment; and
(e)any mandate involving equipment capable of use for internal repression or human rights abuse.

11.4

Control extends beyond physical goods. Software and technology are controlled, and an export can occur by intangible transfer, including email, remote access, cloud upload, screen sharing or oral disclosure of controlled technical know-how. A transfer of controlled technology to a foreign national may itself require a licence. Staff must not transmit technical specifications, drawings, design data or source code relating to a potentially controlled item without clearance from the Sanctions Officer.

11.5

End-use controls apply even to items that are not listed. A licence may be required where the exporter knows, suspects, or is informed by the competent authority that an item is or may be intended, wholly or in part, for use in connection with weapons of mass destruction or their means of delivery, or for a military end use in an embargoed destination. Staff must escalate any such knowledge or suspicion immediately and must not proceed on the basis that the item is unlisted.

11.6

Before supporting any transaction involving a potentially controlled item, the Company shall obtain and record:

(a)a technical description of the item sufficient to permit classification against the UK Strategic Export Control Lists;
(b)the identity, address and business of the ultimate end user, supported by an end-user undertaking where appropriate;
(c)a statement of the stated end use, and an assessment of whether that end use is plausible given the nature and quantity of the item and the profile of the end user;
(d)the full routing of the shipment, including transhipment points and any free trade zone involved; and
(e)confirmation from the exporting party of the licence or licence exception relied upon, and the licence identifier.

11.7

Where United States-origin goods, software or technology are involved, the Export Administration Regulations may apply extraterritorially, including through re-export controls, the foreign direct product rules and entity-based restrictions. Defence articles and related technical data may be subject to the International Traffic in Arms Regulations. The Company will not facilitate any transaction of this kind without written confirmation from the exporter that the necessary United States authorisations are held.

11.8

Responsibility for holding an export licence rests with the exporter. The Company does not act as exporter of record, does not perform classification on behalf of a Counterparty, and does not certify compliance. Where an exporter is unwilling or unable to evidence its licensing position, the Company shall withdraw from the transaction.

11.9

Breach of export controls is a criminal offence, including under the Export Control Order 2008 and section 68 of the Customs and Excise Management Act 1979. The Company treats any deliberate breach by Staff as gross misconduct.

12.High-risk and restricted jurisdictions

12.1

The Company classifies jurisdictions for Sanctions purposes into three categories, which are maintained by the Sanctions Officer and reviewed at least quarterly:

(a)Prohibited jurisdictions, being territories subject to comprehensive or near-comprehensive Sanctions under a Relevant Sanctions Regime. The Company accepts no Mandate connected with a Prohibited jurisdiction, and no exception may be granted;
(b)Restricted jurisdictions, being territories subject to targeted, sectoral or partial measures. A Mandate connected with a Restricted jurisdiction may be accepted only with the prior written approval of the Sanctions Officer, supported by a documented regime-by-regime analysis; and
(c)Elevated-risk jurisdictions, being territories identified as high risk by the Financial Action Task Force or under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, or presenting significant proliferation, corruption or circumvention risk. Enhanced due diligence under FGL-LEG-09 applies.

12.2

A connection with a jurisdiction exists where that jurisdiction is the place of incorporation, residence, nationality, tax residence, principal business, asset location, project location, shipping route, source of funds, destination of funds or place of performance in relation to a Counterparty, a Mandate or any part of a transaction structure.

12.3

The classification of a jurisdiction is determined by the measures in force, not by the Company’s commercial interest in it. A change in classification takes effect immediately on notification by the Sanctions Officer and applies to Mandates already in progress.

12.4

Particular care is required in relation to circumvention through third countries. The Company applies heightened scrutiny where goods, funds or services are routed through a jurisdiction that has no evident commercial connection with the transaction, or where trade volumes between that jurisdiction and a restricted territory are known to have risen sharply.

12.5

Nothing in this clause qualifies the Company’s commitment to the markets in which it operates. Bangladesh is not a restricted jurisdiction. The controls in this Policy are applied there as they are applied in the United Kingdom, and with the same rigour.

13.No circumvention and red flags

13.1

It is an offence to participate, intentionally and knowingly, in activities the object or effect of which is, directly or indirectly, to circumvent any Sanctions prohibition or to enable or facilitate its contravention. The Company prohibits any such activity absolutely.

13.2

Staff must not, and must not assist any person to:

(a)restructure ownership, insert intermediaries, or transfer shares in order to bring a holding below a threshold at which Sanctions would apply;
(b)divide a transaction into smaller parts, or route it through additional parties, in order to obscure its nature, value, origin or destination;
(c)use a nominee, front company, family member, trust, foundation or professional adviser to hold or receive an interest on behalf of a Designated Person;
(d)mischaracterise goods, services, end use or end user in documentation;
(e)route shipments through third countries, free trade zones or transhipment points for the purpose of disguising their true destination; or
(f)use alternative payment channels, informal value transfer systems, cryptoassets or barter arrangements to move value outside the scrutiny of the financial system.

13.3

The following are red flags. Their presence does not establish a breach, but each requires escalation to the Sanctions Officer before the Company proceeds:

Reluctance or refusal to identify ultimate beneficial owners, or ownership structures that are complex without commercial explanation.
A recent change of ownership, name, registered office or corporate domicile shortly before or after a relevant designation.
A Counterparty newly incorporated in a jurisdiction adjacent to a restricted territory, with limited trading history and no evident operational substance.
Requests for payments to a third-party account, an account in a jurisdiction unconnected with the transaction, or an account in a name that does not match the contracting party.
Payment structures involving unusual currency conversion, unexplained intermediary banks, or a proposal to avoid United States dollar clearing.
A stated end use inconsistent with the end user’s known business, or the ordering of quantities or specifications disproportionate to that business.
A refusal to provide an end-user undertaking, or an undertaking that is evasive as to the final destination.
Shipping arrangements with unusual routing, transhipment through a free trade zone, or a vessel with a history of disabled automatic identification system transmission.
Pressure to complete quickly, to dispense with documentation, or to act before due diligence is finished.
An offer of remuneration materially above market for facilitation or introduction services.
Any statement by a Counterparty that Sanctions can be worked around, are not enforced locally, or do not apply to the arrangement in question.

13.4

Staff must not conduct any enquiry designed to avoid acquiring knowledge of a fact material to Sanctions compliance. Deliberate avoidance of knowledge is treated by the Company as equivalent to knowledge, and is a disciplinary matter.

13.5

Sanctions clauses shall be included in every engagement letter, joint venture agreement, introduction agreement and consultancy agreement to which the Company is party, requiring the Counterparty to warrant that neither it nor any of its owners, directors or affiliates is a Designated Person, to notify the Company immediately if that ceases to be true, and conferring on the Company an immediate right to suspend performance and terminate.

14.Escalation, decision-making and exit

14.1

Every Staff member has a personal obligation to escalate. A concern must be raised with the Sanctions Officer as soon as it arises, and in any event before the Company takes any further step in the matter. There is no threshold of certainty below which escalation may be deferred.

14.2

On escalation, the Sanctions Officer shall determine one of the following outcomes and record it in writing with reasons:

(a)proceed, where the analysis establishes that no prohibition applies;
(b)proceed subject to conditions, which may include restrictions on payment routing, currency, counterparties, information flow or geographic scope, each of which must be monitored;
(c)pause pending further information, external legal advice or an application for a licence, during which period no step may be taken in the Mandate; or
(d)decline or terminate, where a prohibition applies, where the position cannot be resolved, or where the risk is not acceptable to the Company.

14.3

The Sanctions Officer may decline or terminate a relationship on Sanctions grounds without the agreement of any other person, and that decision is not subject to commercial appeal. A decision to proceed, where a possible match or material Sanctions risk has been identified, requires the concurrence of the board.

14.4

Where a Mandate is terminated on Sanctions grounds, the Company shall cease all work immediately, shall not deliver outstanding work product where delivery would confer benefit on a Designated Person, shall not make or accept any further payment except under licence, and shall retain all records in accordance with clause 15.

14.5

No Staff member shall suffer detriment for raising a Sanctions concern in good faith, for declining to proceed with a transaction, or for reporting a suspected breach, whether or not the concern proves well founded. The protections in the Whistleblowing & Speak-Up Policy (FGL-LEG-14) and under the Public Interest Disclosure Act 1998 apply in full. Any attempt to penalise, isolate or discourage a person for doing so is itself a serious disciplinary matter.

14.6

Concerns may be raised with the Sanctions Officer directly or, where a Staff member considers it inappropriate to do so, through the channels set out in FGL-LEG-14. External parties may raise a concern under this Policy through the enquiry form at fratresgroup.com/contact, marking the submission for the attention of the Sanctions Officer.

15.Record keeping, training and assurance

15.1

The Company shall create and retain a written record of every step taken under this Policy, including screening events and their disposition, ownership and control analyses, licence applications and grants, end-user documentation, escalations and their outcomes, reports made to any authority, and decisions to decline or terminate.

15.2

Records created under this Policy shall be retained for not less than six years from the end of the relationship or the conclusion of the matter to which they relate, in accordance with the Data Retention & Records Management Policy (FGL-LEG-06), and for longer where an investigation, licence condition or legal proceeding requires it. Records must not be altered or destroyed once a Sanctions issue has been identified.

15.3

Personal data processed for Sanctions screening is processed on the basis that it is necessary for compliance with a legal obligation to which the Company is subject and, where applicable, in the substantial public interest, in accordance with the UK GDPR and the Data Protection Act 2018. Such processing is described in the Privacy Policy (FGL-LEG-04), and transfers of that data outside the United Kingdom are made under the safeguards described in the International Data Transfer Statement (FGL-LEG-07).

15.4

All Staff shall complete Sanctions and export controls training before undertaking any client-facing or transactional work, and at least annually thereafter. Training shall be role-appropriate and shall cover the prohibitions, ownership and control, screening, red flags, escalation and the personal criminal liability that attaches to breach. Attendance and completion shall be recorded.

15.5

Staff working on aerospace, technology, mining or infrastructure mandates shall receive additional training on Dual-Use Items, intangible transfers of technology and end-use controls before working on such a mandate.

15.6

The Sanctions Officer shall conduct, at least annually, a documented assessment of the Company’s Sanctions risk exposure across its Counterparty population, sectors, jurisdictions and payment flows, and shall test a sample of screening records and escalation decisions for quality and consistency. The results shall be reported to the board.

15.7

The Company shall provide information to OFSI, His Majesty’s Revenue and Customs, the Office of Trade Sanctions Implementation, the National Crime Agency or any other competent authority promptly on request, and shall comply with any information requirement imposed under Part 8 of the Policing and Crime Act 2017 or under the applicable regulations. Failure to comply with such a requirement is itself an offence.

16.Governance, breaches, enquiries and review

16.1

The board of the Company owns this Policy and is accountable for its effectiveness. The directors discharge that responsibility as part of their duties under sections 172 and 174 of the Companies Act 2006. The board appoints the Sanctions Officer, ensures that the role has the authority, independence and resource to operate, and receives reporting on Sanctions matters at each scheduled meeting.

16.2

Breach of Sanctions may constitute a criminal offence attracting imprisonment, an unlimited fine, or both, and may give rise to civil monetary penalties imposed by OFSI on a strict liability basis. Breach of export controls may attract separate criminal liability. Liability may attach to the Company and, separately, to the individual concerned.

16.3

Breach of this Policy by a Staff member is a disciplinary matter and, where deliberate or reckless, will be treated as gross misconduct justifying summary dismissal or immediate termination of engagement. The Company will report suspected criminal conduct to the appropriate authority and will co-operate fully with any investigation.

16.4

Where a breach is suspected, the Company shall investigate promptly, determine the facts, remediate the control failure, make any report required by law, and consider whether voluntary disclosure to the relevant authority is appropriate. Voluntary disclosure shall be made on external legal advice and with board approval.

16.5

This Policy is reviewed at least annually by the Sanctions Officer, and in addition whenever there is a material change in Sanctions or Export Control Legislation, in the sectors or jurisdictions in which the Company operates, or in its own structure or activities. The version date shown on this page is the date of the current version.

16.6

The Company publishes no direct telephone or email contact details. Enquiries about this Policy, requests for the Sanctions representations the Company is able to give, and notifications of a suspected breach should be submitted through the enquiry form at fratresgroup.com/contact, marked for the attention of the Sanctions Officer. Submissions will be acknowledged within five business days.

16.7

Nothing in this Policy creates any contractual right in favour of any Counterparty or third party, and no person may rely on this Policy as a warranty, representation or undertaking as to the status of any person, transaction or item. This Policy is a statement of the standards the Company applies to itself.

16.8

This Policy, its subject matter and its formation, and any non-contractual obligation arising out of or in connection with it, are governed by the law of England and Wales, and the courts of England and Wales have exclusive jurisdiction in relation to it.

Reporting a concern

If you believe that a person the Company deals with is subject to Sanctions, that a transaction the Company is involved in breaches a restriction, or that controlled goods or technology are being routed improperly, raise it through the enquiry form at fratresgroup.com/contact. A concern raised in good faith is welcome whether or not it proves to be well founded, and no adverse consequence will follow from raising it.

This Policy is issued by Fratres Limited, registered in England and Wales, and forms part of the Company’s published legal register at fratresgroup.com/legal.

Related policies

Anti-Money Laundering & Counter-Terrorist Financing PolicyThe firm’s risk-based approach to money laundering and terrorist financing risk, including customer due diligence, monitoring and reporting obligations.FGL-LEG-08 Client Due Diligence & Know Your Customer StandardThe identification, verification and beneficial ownership standards applied before and during any client engagement.FGL-LEG-09 Anti-Bribery & Anti-Corruption PolicyProhibitions, controls and procedures governing bribery, facilitation payments, hospitality, political contributions and third-party intermediaries.FGL-LEG-10 Prevention of the Facilitation of Tax Evasion PolicyReasonable prevention procedures addressing the corporate criminal offences under the Criminal Finances Act 2017.FGL-LEG-12

Full legal register