Welcome to the autumn 2018 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.
For the full update on each jurisdiction, please click on the name of the jurisdiction below where we provide a brief overview of what is covered. Continue reading
Filed under Announcements, Bribery and Corruption, China, Corporate Crime, Dubai, Germany, Hong Kong, Indonesia, International, Investigations, Japan, Middle East, Philippines, Sanctions and Money Laundering, Sector Updates by Herbert Smith Freehills, Singapore, Spain, Thailand, US, Vietnam
On financial services, the final political declaration contains essentially the same three points as in last week’s outline political declaration (the implications of which were discussed in our blog post of 15 November, available here), although there is some limited further clarification. The three points on financial services are copied below with new substantive additions underlined: Continue reading
Last Friday, the SFC announced (via a circular) that it had commenced a thematic review of selected licensed corporations (LCs) to assess their risk governance and oversight frameworks as well as risk management practices. Continue reading
Yesterday’s announcements on the terms agreed for the UK’s withdrawal from the EU say relatively little about the future framework for cross-border trade in goods or services. More detail is expected on this next week.
The draft withdrawal agreement provides that a transition period will continue until 31 December 2020. Although this was provisionally agreed in March 2018, yesterday’s statements make this a more likely reality. Continue reading
The Hong Kong Court of Final Appeal (CFA) has recently allowed the Securities and Futures Commission’s (SFC) appeal against the Market Misconduct Tribunal’s (MMT) findings that two former executives of a listed company (ATML), Mr Charles Yiu Hoi Ying and Ms Marian Wong Nam, had not engaged in insider dealing in ATML shares. Continue reading
Following President Trump’s decision on May 8, 2018 to withdraw the United States from the Joint Comprehensive Plan of Action (“JCPOA”), the US government announced that it would re-impose pre-JCPOA nuclear-related Iran sanctions (both primary and secondary) that were lifted under the JCPOA. As we reported previously, two “wind-down” periods—of 90 and 180 days respectively—commenced from the day of the announcement, during which non-US, non-Iranian companies were encouraged by the US government to withdraw from operations in Iran that would be affected by re-imposed sanctions. OFAC’s guidance discouraged non-US persons from engaging in new activity during the wind down periods, and stated that any such new activity may be a factor in connection with future enforcement action for actions taken after the wind-down period.
Yesterday, the Securities and Futures Commission (SFC) published a statement (Statement), together with a press release, setting out its new regulatory framework for virtual assets (also known as cryptocurrencies, crypto-assets and digital tokens). Continue reading
In the case of R (On The Application Of KBR Inc) v The Director of the Serious Fraud Office  EWHC 2368 (Admin) (“KBR“), the High Court dismissed a judicial review brought by the applicant, finding that the SFO was able to compel the production of documents located outside the jurisdiction held by a foreign company. This is the first time that an English court has reasoned that compulsory disclosure powers exercisable by a UK criminal enforcement agency have extraterritorial application. Continue reading
How far can a sanctions clause protect a party from having to perform their contractual obligations – and in the case of Iran-related sanctions concerns, how does this interact with the Blocking Regulation? In Mamancochet Mining Limited v Aegis Managing Agency Limited and Others EWHC 2643, the High Court held that, in order to avoid payment of a claim, insurers were required to show that payment would expose them to sanctions under US or EU law. A mere exposure to the risk of a sanction was not sufficient.
In this post, our Insurance Disputes team consider the implications of the decision. Continue reading
On 5 October 2018, HM Treasury’s Office of Financial Sanctions Implementation (OFSI) published its Annual Review for the 2017-18 financial year. This is the first such review published by OFSI and provides an overview of OFSI’s activities in 2017-18, as well as looking to the future. We set out some of the highlights of the Annual Review below.
The Annual Review confirms that 122 new asset freeze targets (or “designated persons”) were added to the UK Consolidated List, mostly under the DPRK and ISIL regimes. During this period, the UK also introduced ‘avoidance of delay’ provisions allowing new UN sanctions regimes to be implemented immediately after the relevant resolution is adopted (rather than waiting for EU action, as was previously the case), reducing the risk of asset flight.
In 2017-18, 122 suspected breaches of financial sanctions were reported to OFSI. OFSI did not impose any monetary penalties in 2017-18 (having had the power to do so since April 2017), but it is currently investigating several cases where a penalty may be appropriate. OFSI states that it is likely to impose monetary penalties in 2018-19, although the majority of cases will continue to be resolved by enforcement activity short of a penalty.
The Annual Review says that OFSI will continue to raise awareness of financial sanctions obligations in 2018-19, by producing guidance and speaking at events. It will ensure it maintains a central role in global sanctions implementation as the UK prepares to leave the EU. It is said that the Sanctions and Anti-Money Laundering Act, which received Royal Assent in May, will help to achieve this.