Welcome to the Spring 2019 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.
In this blog post, we round-up forthcoming developments in the UK and at EU and International levels in financial services regulation for July 2019.
Author: Hanne Gundersrud
The FCA and PRA have announced their second enforcement action in relation to outsourcing failures by the retail bank R. Raphael & Sons plc (“Raphaels“). The firm failed to manage its outsourcing arrangements properly, in breach of FCA Principles 2 and 3, the applicable provisions of Chapter 8 of the FCA’s Senior Management Arrangements, Systems and Controls sourcebook (“SYSC 8”), and PRA Fundamental Rules 2, 5 and 6. Raphaels received separate fines of £775,100 from the FCA and £1,112,152 from the PRA in respect of the breaches, resulting in a combined fine of £1,887,252. Raphaels agreed to resolve the matter with its regulators and therefore qualified for a 30% discount in the fines imposed by both regulators.
In this blog post, we round-up forthcoming developments in the UK and at EU and International levels in financial services regulation for June 2019.
|By 30 Jun|
On 24 April 2019 the FCA published its final “Approach to Enforcement” document, following a consultation period which ended in June 2018. The approach document attempts to provide transparency and explain the FCA’s approach in greater depth.
The FCA’s overriding principle in its approach to enforcement is substantive justice – a commitment to achieve fair and just outcomes in response to misconduct. It intends to conduct consistent and open-minded investigations in order to achieve the right outcomes. Continue reading
Welcome to the Winter 2019 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. Below we provide a brief overview of what is covered in each update.
Authors: Daniel Hudson, Partner, London and Daniel Hyde, Associate (Australia), London
On 25 February 2019, the UK Government’s Office of Financial Sanctions Implementation (“OFSI”) published a notification of its first imposition of a monetary penalty under new powers afforded to it under the Policing and Crime Act 2017 (“the Act”). The £5,000 penalty was imposed on Raphaels Bank for dealing, without a licence, with funds belonging to a designated person in breach of EU financial sanctions in relation to Egypt. The penalty amount represents a 50 per cent reduction of the baseline penalty amount initially assessed by OFSI as a result of Raphaels Bank’s voluntary disclosure of the breach and subsequent cooperation.
The notification is brief, seemingly because OFSI is making ongoing enquiries in connection with other aspects of the breach unconnected with Raphaels Bank. However, it is apparent that OFSI determined the penalty amount in accordance with its case assessment process set out in its monetary penalty guidance (“Guidance”), which makes this case a useful, albeit currently limited, illustration of its application of that process.
In this briefing, we discuss the significance of the first monetary penalty imposed by OFSI, particularly:
- the reduction to the final penalty amount as a result of Raphaels Bank’s disclosure and co-operation;
- the low-value of the breach;
- the current brevity of the notification;
- possible public interest considerations behind the penalty; and
- the two procedural rights of review available under section 147 of the Act.
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.
On 21 February 2019, the FCA announced its first decision under its competition enforcement powers, finding three asset management firms have breached competition law. This decision is an important assertion of the FCA’s intention to use its competition powers – previous matters which involved the FCA were subsequently taken over by the European Commission under EU competition law. In its announcement, the FCA emphasised its commitment to taking enforcement action to protect competition, issuing a warning to the asset management industry to avoid undermining the proper process for setting the prices of shares in IPOs and placings and the potential impact failure to do so has on the UK’s capital markets.
To read our full briefing on the decision, please click here.
Authors: Kyle Wombolt and Anita Phillips
Kyle Wombolt, global head of corporate crime and investigations, and Anita Phillips, professional support consultant, have updated their guide to corporate investigations in China. This forms part of GIR’s acclaimed text, The Practitioner’s Guide to Global Investigations 2019, third edition. It is regarded as the only text covering the nuts and bolts of multi-jurisdictional corporate investigations.