A jury has failed to reach a verdict in relation to a bribery charge against the former Chief Executive of Hong Kong, Donald Tsang Yam-kuen. On Friday 3 November, after 14 hours of deliberation, the jury advised the court that it was unable to reach a verdict and was dismissed. This is the second time a jury has been unable to reach a verdict on this charge. In February, Mr Tsang was convicted of misconduct in public office but the jury was hung on the concurrent bribery charge and a retrial was ordered. Yesterday, the prosecution indicated that the Department of Justice is not intending to seek a second retrial.
Following our earlier bulletin, on October 31, 2017, the US Department of State and Department of Treasury’s Office of Foreign Assets Control (“OFAC”) posted comprehensive guidance related to the Countering America’s Adversaries Through Sanctions Act of 2017 (“CAATSA”). The new guidance addresses multiple provisions of CAATSA, mainly the provisions concerning secondary sanctions targeting Russia. The new guidance significantly limits and clarifies the scope of these secondary sanctions.
As detailed in our prior alert, on August 2, 2017, President Trump signed CAATSA into law. The legislation provided several new categories of primary and secondary sanctions relating to Russia, Iran and North Korea.
Welcome to the October 2017 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions. Below we provide a brief overview of what is covered in each update.
On 12 October 2017, the government published the Criminal Finances Act 2017 (Commencement No. 2 and Transitional Provisions) Regulations 2017 (“the Regulations”), which will bring into force several more sections of the Criminal Finances Act 2017 (the “Act”) on 31 October 2017.
The Act received royal assent on 27 April 2017. It contains various measures intended to “tackle money laundering and corruption, recover the proceeds of crime and counter terrorist financing”. For more information, see our blog post here.
The first commencement regulations under the Act were introduced on 13 July 2017, and brought into effect the “failure to prevent the facilitation of tax evasion” offences from 30 September 2017. For more information on these offences, please see our blog post here.
On 19 October the UK Government published the text of a proposed new Sanctions and Anti-Money Laundering Bill (the “Bill”), which seeks to create a post-Brexit domestic legislative framework for the imposition and enforcement of sanctions. The introduction of the Bill follows the publication on 2 August of the Government’s response to the consultation on the UK’s future legal framework for sanctions (see our previous blog post).
HKMA CONTINUES ITS FOCUS ON CORPORATE GOVERNANCE HONG KONG WITH CIRCULAR TO HARMONISE SECTION 72B WITH “MANAGER IN CHARGE” REGIME
On 16 October 2017, the Hong Kong Monetary Authority (HKMA) introduced by way of a circular new measures to heighten management accountability at Registered Institutions (RIs) for conducting or supervising the conduct of businesses that constitute regulated activities (RAs). These measures are detailed in a set of FAQs accompanying the circular.
This clarification is not unexpected given questions raised around how the Securities and Futures Commission’s (SFC) Manager in Charge (MIC) regime would be harmonised with the regime administered by the HKMA under section 72B of the Banking Ordinance (please see our briefing on the MIC regime here). However, the new guidance will require RIs to consider their existing governance frameworks and amend where appropriate to ensure full compliance with the HKMA’s expectations.
President Trump has repeatedly criticised the ‘Iran deal’, referring to it as an ‘embarrassment’ for the United States. On 13 October 2017, he laid out new strategies his administration is taking concerning Iran. In a speech delivered at the White House, he also announced that his administration will not certify Iran’s compliance with the Joint Comprehensive Plan of Action (“JCPOA”). Such a step raises the spectre of sanctions being reimposed and may well disrupt foreign direct investment in Iran. Continue reading
Increased focus on board and senior management in Hong Kong as HKMA issues enhanced guidance on corporate governance
On 6 October 2017, the Hong Kong Monetary Authority (HKMA) issued a circular to announce the publication of two revised Supervisory Policy Manual (SPM) modules, namely CG-1 “Corporate Governance of Locally Incorporated Authorised Institutions” and IC-1 “Risk Management Framework”. Revisions were made to the modules to incorporate guidelines issued by the Basel Committee on Banking Supervision and the Financial Stability Board on corporate governance and risk management principles, thereby bringing Hong Kong more in line with international standards. Continue reading
On 4 October 2017, HM Treasury’s Office of Financial Sanctions Implementation (“OFSI”) published a quick guide for UK businesses, with the aim of helping them understand and comply with financial sanctions. The guide is intended to help explain what financial sanctions are, when and how to comply with sanctions, and where to go for further information and guidance.