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.
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.
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
Almost a year after it was introduced, a key piece of UK domestic Brexit legislation has now been passed. The European Union (Withdrawal) Act 2018 (EUWA), which aims to provide a functioning statute book on the day the UK leaves the EU, completed its difficult passage through the UK Parliament and passed into law on 26 June 2018. Please refer to our briefing, “The UK’s new legal order post-Brexit: A new class of UK law” for a summary of the EUWA.
Following the passing of the EUWA, HM Treasury, the Bank of England, FCA and the Payment Services Regulator (PSR) have each published statements on their approaches to their role in preparing for Brexit, a summary of which is set out here.
The Department for Business, Energy and Industrial Strategy (BEIS) has published the response to its Call for Evidence on the creation of a register of ownership and control of foreign companies that purchase property in the UK or enter into UK public procurement contracts. The proposal for a register was first announced at the UK’s International Anti-Corruption Summit in May 2016, and forms part of the Government’s broader transparency agenda.
Welcome to the May 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.
Following the announcement of the Joint Comprehensive Plan of Action ("JCPOA") in July 2015, companies have been preparing for the relaxation of sanctions that will allow them to re-enter Iran. As Implementation Day (the point at which many sanctions will be relaxed) approaches, the UK's Foreign & Commonwealth Office (the "FCO") has updated its guidance on doing business with Iran to assist British companies looking to take advantage of this new opportunity. The updated document includes guidance, among other things, on entry into MOUs or conditional contracts prior to Implementation Day, relating to currently prohibited activity.
On 23 October Smith & Ouzman Limited, a UK based printing company, appeared in court on charges brought by the Serious Fraud Office (“SFO“). The charges relate to allegations of agreeing to make payments totalling nearly half a million pounds, contrary to section 1 of the Prevention of Corruption Act 1906. It is alleged that these payments were used to influence the award of business contracts to the company in Mauritania, Ghana, Somaliland and Kenya.
The Serious Fraud Office (“SFO“) had its first day in court in a Bribery Act prosecution on 24 September 2013, with three of four defendants connected with a £23m fraud at Sustainable AgroEnergy plc (“AgroEnergy“) facing charges of making and accepting a financial advantage contrary to sections 1(1) and 2(1) of the Bribery Act 2010. Continue reading
As expected, the UK Government yesterday revoked the Burma/Myanmar (Financial Restrictions) Regulations 2009. These regulations contained criminal penalties for breaches of financial sanctions. The practical effect is that there are no more asset freezing and financial sanctions in respect of Myanmar. However, the arms embargo remains in force for at least one more year.