Corporate Crime Update – Winter 2019

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.

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Anti-money laundering regulatory round-up

Author: Susannah Cogman

Late 2018 and early 2019 saw a flurry of regulatory developments and proposals relating to anti-money laundering. We have reported on these in brief in our regular corporate crime updates, but for those who have been – for example – too immersed in Brexit to read the underlying documents in detail, we have taken this opportunity to bring together an overview of, and commentary on, a number of recent anti-money laundering/counter-terrorist financing (“AML/CTF”) developments. In particular, we discuss in this briefing:

  • the FCA’s report on data submitted in the first annual financial crime data return;
  • recent developments in the EU’s list of high risk third countries;
  • amendments to compliance requirements in respect of anonymous safety deposit boxes;
  • the FCA’s thematic review on money laundering risks in the e-money sector;
  • a Decision Notice issued by the FCA to a CEO for failings in his oversight of his bank’s AML systems and inadequate supervision of the MLRO to whom he had delegated relevant responsibilities;
  • proposals relating to money laundering supervision in the EU;
  • the FATF’s Mutual Evaluation Review of the UK;
  • FATF guidance on a risk-based approach to the securities sector;
  • other FATF developments of interest, in particular in relation to virtual assets;
  • reform of the UK Suspicious Activity Reporting regime;
  • a recent RUSI paper on the scale of money laundering in the UK;
  • AML-related amendments to the Financial Crime Guide (FC), following consultation GC 18/1; and
  • an overview of the current position regarding AML compliance post-Brexit, in the event of a no-deal exit.

Please click here to read our full briefing.

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Managers' Transactions – Restrictions and Notification Requirements

As was the case under the previous market abuse regime, MAR imposes various obligations on persons discharging managerial responsibility (PDMRs) in listed companies and their dealings in the securities of the company which they are connected to.

Notification requirement

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Market abuse update – July 2016

The Market Abuse Regulation (MAR) and the Criminal Sanctions (Market Abuse) Directive came into application in Europe on 3 July 2016.  Various outstanding pieces of secondary legislation were published in the Official Journal shortly before then, and further material has emerged since 3 July. ESMA published final form guidelines in relation to delay in disclosure of inside information and market soundings and an updated MAR Q&A document on 13 July, and on 26 July, its final report on Draft Implementing Technical Standards on sanctions and measures under MAR. Further guidelines are expected later this year.

In our latest update, we discuss the implications of these developments, the secondary legislation under MAR and the changes made to the UK regulatory regime to accommodate it.  We also look at some recent enforcement actions in a range of different jurisdictions.


EU extends Russian sectoral sanctions

On 1 July, the Council of the EU announced that its sectoral sanctions against Russia (which were previously due to expire on 31 July 2016) will be extended for a further six months until 31 January 2017.  This extension was effected by Council Decision (CFSP) 2016/1071 of 1 July 2016 (the "Decision"), amending Council Decision 2014/512/CFSP.  The Decision came into force upon publication in the Official Journal on 2 July 2016.  For further detail on the sectoral sanctions currently in force, please see our previous briefings here and here

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EU further expands sanctions against Democratic People’s Republic of Korea

In light of missile and nuclear weapons tests by the Democratic People’s Republic of Korea (“DPRK”) earlier this year, which the EU has described as posing “a grave threat to international peace and security”, the EU Council has decided to impose additional restrictive measures against DPRK. This follows the EU’s expansion of its DPRK sanctions in May 2016, in response to UN Security Council Resolution 2270 (2016) in March 2016.

The EU measures, as summarised in this briefing, include:

  • a prohibition on investment into the EU by DPRK persons;
  • restrictions on funds transfers to/from DPRK and the ability of EU financial institutions to carry out transactions with DPRK; and
  • additional trade sanctions, including a ban on the import of listed petroleum products from DPRK.

We also provide a summary of recent US developments in relation to DPRK, in particular its recent designation as a jurisdiction of primary money laundering concern and the special measures proposed in relation to this finding.

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Financial firms: protecting customer personal data

A recent case provides a rare example of the criminal prosecution of an individual (in this case the former employee of an insurer) for breach of the Data Protection Act 1988 (DPA). 

David Barlow Lewis was a former employee of the insurer LV. He offered an ex-colleague £3,000 a month to send him the details of customers involved in road accidents. She refused to do so, and Lewis was subsequently prosecuted at Bournemouth Magistrates’ Court for attempting to commit an offence under section 55 of the Data Protection Act 1998 . He had knowingly or recklessly attempted to obtain personal data without the data controller’s consent.

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Iran sanctions: Implementation Day (16 January 2016) marks a significant relaxation of EU and US sanctions against Iran

 On 16 January 2016, or "Implementation Day", legislation in the United States ("US") and European Union ("EU") came into effect, relaxing significantly the sanctions in place against Iran. This followed the issuing of a report by the International Atomic Energy Agency ("IAEA") to the UN Security Council, confirming that Iran had complied with its commitments under the Joint Comprehensive Plan of Action ("JCPOA").

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EU extends existing limited suspension of Iran sanctions for a further two weeks

The EU announced on 14 January that it would prolong its existing suspension of certain (limited) sanctions on Iran until 28 January 2016 to allow time for implementation of the Joint Comprehensive Plan of Action (the "JCPOA").   Council Decision (CFSP) 2016/35, Council Decision (CFSP) 2016/36 (both amending Decision 2010/413 CFSP), and Council Regulation (EU) 2016/31 (amending Regulation (EU) 267/2012) were published in the Official Journal on 15 January to give effect to this extension.

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