The importance of supply chain due diligence and the risks of modern slavery – OFAC settles North Korean sanctions case with fine

Authors: Kyle Wombolt, Jeremy Birch, Antony Crockett and Emily Purvis.

A recent enforcement action by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) against US company e.l.f Cosmetics Inc (ELF) highlights the importance of supply chain due diligence in conducting cross border business. The action against ELF reflects a global trend of increased regulatory focus on supply chains in relation to a range of business conduct issues, including corruption, modern slavery, and other human rights violations. To mitigate sanction violation risk, companies should verify the country of origin of goods and services in their supply chains.

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SFC publishes AML/CFT inspection findings and urges intermediaries to ensure compliance

The Securities and Futures Commission (SFC) issued a circular on 31 August 2018 highlighting both deficiencies and good practices observed in relation to anti-money laundering and counter financing of terrorism (AML/CFT) compliance by licensed corporations (LCs) and associated entities (AEs). The observations were made over the past year from the SFC’s review of AML/CFT measures, policies, procedures and controls (AML/CFT systems) belonging to 13 LCs during thematic inspections and around 270 LCs during routine inspections. This follows on from the SFC’s circular issued on 26 January 2017, setting out its observations relating to AML/CFT compliance from inspections conducted in 2016 (see our earlier bulletin here). Continue reading

Hong Kong: former responsible officer of SHKI suspended for sponsor-related failures

The Securities and Futures Commission (SFC) has suspended Mr. Eric Shum Kam Chi as a representative in all regulated activities and withdrawn approval for him to act as a responsible officer for 3 years.   As responsible officer and sponsor principal of SHKI at the relevant time, Mr. Shum was found to be responsible for deficiencies in the sponsor work of Sun Hung Kai International Limited (SHKI) relating to the listing of Sino-Life Group Limited. Continue reading