On 19 October the UK Government published the text of a proposed new Sanctions and Anti-Money Laundering Bill (the “Bill“), which seeks to create a post-Brexit domestic legislative framework for the imposition and enforcement of sanctions. The introduction of the Bill follows the publication on 2 August of the Government’s response to the consultation on the UK’s future legal framework for sanctions (see our previous blog post).
The new proposals would give the Government broad discretionary powers to impose a wide range of sanctions by way of secondary legislation, including asset freezes and other financial sanctions, travel bans and immigration restrictions and trade restrictions affecting goods and services. The Bill also provides for the creation of exceptions and licences in relation to any sanctions, including a new ability for the Government to issue general licences to permit particular types of conduct, such as (according to the impact assessment for the Bill) the operation of NGOs in Syria.
The Government has expressly stated that the Bill is not designed to bring any substantive policy changes in respect of the current sanctions regime, with the main aim being to make it easier to impose sanctions and respond to future events while maintaining the existing sanctions regime, which currently comprises a mixture of EU and UK legislation. The proposals also give the Government wide-ranging powers to supplement or amend the UK’s existing anti-money laundering (“AML“) regime, although the Bill itself does not impose any new AML-related requirements. Continue reading
In the recent case of HKSAR v Pang Hung Fai (FACC 8/2013), the Court of Final Appeal (the CFA) offered, for the first time, authoritative guidance on the mental element of “having reasonable grounds to believe” under section 25(1) of the Organized and Serious Crimes Ordinance (Cap 455) (the OSCO). Continue reading
In October 2013, the Financial Conduct Authority (FCA) published the much-anticipated report of its thematic review into anti-money laundering (AML) and anti-bribery and corruption (ABC) systems and controls at asset management and platform firms. The report follows the FSA/FCA’s previous thematic reviews of ABC controls in commercial insurance broking (2010), ABC controls in investment banks (2012), and AML and sanctions controls in trade finance (2013). As with other thematic work, whilst the review is of a particular sector, the FCA expressly expects other regulated firms to consider the findings and examples of good and poor practice. Continue reading
On 8 August 2013 the Financial Conduct Authority (“FCA”) issued a Final Notice against Guaranty Trust Bank (UK) Limited (“GTBUK”), the fifth in a series of cases arising from the FSA’s 2010 thematic review of banks’ management of higher money laundering risk situations. Continue reading
The EU has recently published a new Regulation (Regulation 697/2013 of 22 July 2013 (“Regulation 697/2013”)) which amends Regulation 36/2012, the key piece of legislation setting out the EU’s sanctions against Syria. In this briefing we analyse the new provisions and provide an update on other recent changes to EU and US sanctions. Continue reading
Daniel Hudson, Karen Anderson Jeremy Sher and Richard Wright comment on recent developments concerning the EU sanctions regimes applying to Myanmar (Burma), North Korea, Syria and Libya.
Following a somewhat leisurely consultation process, the Government has this week published a response to its consultation on changes to the Money Laundering Regulations 2007 (“MLR”) and an impact assessment of the proposed changes (http://www.hm-treasury.gov.uk/fin_review_laundering_regs.htm). The consultation follows a review of the operation of the MLR which was undertaken in 2009-10, and a consequential consultation last year on proposed changes to the regime. The Government has published the draft legislative amendments it intends to make, the majority of which will come into force on 1 October 2012.
The changes are said to be directed at reducing the regulatory burden imposed by the current MLR, making them more effective and proportionate, whilst strengthening the overall anti-money laundering regime.
This process is separate from the revisions to the MLR which are expected to flow from the current EU review of the Third Money Laundering Directive (“Third Directive”). Following the Financial Action Task Force’s (“FATF”) publication of its revised Recommendations earlier this year, and drawing on both the new FATF Recommendations and an earlier review of the operation of the Third Directive, the European Commission in April 2012 adopted a Report which considers, amongst other matters, proposed changes to the Third Directive. It is expected that this will lead to new EU legislation in late 2012, which is in turn likely to need to be implemented via amendments to the MLR. The changes following from the amendments at EU level are likely to be more significant for financial institutions than the current Government amendments – although neither will fundamentally alter the current AML framework in the UK. The proposals are summarised in full below.
In May 2012 the FSA issued Final Notices fining Habib Bank AG Zurich (“Habib”) £525,000 for failure to take reasonable care to establish and maintain adequate anti-money laundering (“AML”) systems and controls and fining its former Money Laundering Reporting Officer (“MLRO”) Syed Hussain £17,500 for failure to take reasonable steps to ensure that Habib complied with relevant AML requirements. Please click here for our update which summarises the decisions and identifies the key messages for MLROs.
The High Court has clarified whether banks owe liability or have disclosure obligations to their customers in respect of whom they have made money laundering disclosures. This case highlighted the difficult practical issues which can arise when a bank reports money laundering suspicions in relation to a customer. The High Court firmly rejected the customers’ claim that the bank had acted improperly in refusing to follow instructions whilst awaiting consent from SOCA in respect of a SAR and also found that the bank had no obligation to provide information to the customers concerning the reasons for its refusal to act on instructions. Although the conclusion will be of comfort to banks, the case does highlight the need to ensure that banks have in place clear procedures in order to be able to withstand challenges from their customers, and suggests that firms may wish to review whether their standard terms of business provide adequate protection. Click here for our briefing on the case.