Held, application dismissed. (1) The court could lawfully enter judgment on a sanctioned claimant’s claim. As a matter of construction of the Sanctions and Money Laundering Act 2018 and the Russia (Sanctions) (EU Exit) Regulations 2019, the prohibition on making funds available to a designated person did not apply to the case of making a judgment debt available to a designated person. Although earlier sanctions legislation had contained express exceptions contemplating the entry of judgments, and such exceptions were not included in the 2018 Act or the 2019 Regulations, that did not indicate an intention to change approach and bar entry of judgments. It was, moreover, correct to construe the relevant provisions by applying the principle of legality, by which certain fundamental common law rights would not be treated as curtailed unless clearly authorised by primary legislation. As a matter of textual construction, it was unclear as to whether entry of a judgment was unlawful under regulations 11 and/or 12. In the absence of any clarity in intent to derogate from the fundamental right of access to the court for determination of rights, the principle of legality compelled the answer that judgment could be entered (paras 11, 94, 96, 98–113, 131, 134–137, 139, 162, 266).

(2) The Office for Sanctions Implementation (“OFSI”) could license a sanctioned claimant to pay an adverse costs order, satisfy an order for security for costs, and pay damages awarded in respect of a cross-undertaking in damages. In relation to adverse costs orders, as a matter of construction of the wording and set against consideration of the legislative intent and the overall intention of the Regulations as regards licensing, paragraph 3 of Schedule 5 to the Regulations allowed a licence to be issued to enable a designated person to pay a costs order in favour of the other party to litigation. The same conclusion pertained to orders for security for costs, it making obvious sense that OFSI could also issue a licence to permit the payment of security for costs for the very purpose of meeting adverse costs orders that were themselves licensable. In relation to damages awarded in respect of a cross-undertaking in damages, as a matter of construction of the wording, such eventuality fell within paragraph 5 of Schedule 5 to the Regulations. Accordingly, OFSI had power to license those three acts, and a court could order them (paras 11, 167, 168–170, 173–176, 177, 179, 183–187, 195, 198, 266).

(3) The OFSI could license payment to a sanctioned claimant of a favourable costs order. Paragraph 3 of Schedule 5 to the Regulations was widely worded and on its face covered payment of a costs order in either direction. Such construction also made sense in context, for otherwise non-designated litigants could take free shots at the designated person, protected from real-world consequences. Any Russian VAT element was covered by the same paragraph, being part and parcel of the legal fees. However there was no licensing ground for ordering the payment of interest on costs (paras 11, 258–260, 261, 263).

Per curiam. As a matter of construction and in light of the approach of the UK sanctions regime against Russia, which does not target the Russian state directly but operates at a personal level, regulation 7(4) does not extend to a designated person’s power to control companies through their office, as opposed to personally. That conclusion is reinforced by the principle of doubtful penalisation, which is of application in circumstances where the relevant legislation imposes not insignificant criminal sanctions, and by OFSI guidance (paras 11, 233, 237–238, 240–244).