The press release issued by the Department for Business and Trade on 29 September 2023.
UK notification denying the advantages of Part III of the Energy Charter Treaty to the specified categories of investors of the Russian Federation.
The UK has taken the decision to exercise its right via notification to deny the benefits of the investment protection provisions within the Energy Charter Treaty to sanctioned Russian investors and Russian mailbox investors to ensure those investors cannot benefit from the treaty’s investment protection provisions.
Russia is not a Contracting Party to the Energy Charter Treaty. However, Russian owned or controlled investments that are structured through Contracting Parties could in some cases claim coverage under the Treaty and benefit from its investment protection provisions. This notification makes clear that those investors are not entitled to the benefits of those provisions, with respect to any investments made in the UK’s energy sector, where they are a sanctioned investor or a mailbox investor.
The United Kingdom hereby:
(i) denies, pursuant to Article 17 (1) of the Energy Charter Treaty (the “Treaty”), the advantages of Part III of the Treaty to all legal entities owned or controlled by any citizen(s) or national(s) of the Russian Federation where those entities have no substantial business activities in the Area of the Contracting Party in which they are organised; and
(ii) denies, pursuant to Article 17 (2) of the Treaty, the advantages of Part III of the Treaty to all Investments of Investors who:
- are Investors of the Russian Federation (within the meaning of Article 1.7 (b) of the Treaty); and
- are included in the UK Sanctions List (https://www.gov.uk/government/publications/the-uk-sanctions-list), as that list may be amended from time to time, or in any list issued in replacement thereof, or who are otherwise subject to any sanctions regime imposed or administered by the United Kingdom from time to time.