Episode 136

Sanctions

The sanctions news this week starts in the UK, where two additions have been made to the Russia Financial Sanctions regime. Alfastrakhovanie plc and VSK are subject to an asset freeze and trust services sanctions. The Consolidated List has been updated. In addition, the UK government announced new sanctions targeting the transportation of Russian oil and oil products. ‘Thirty ships in Russia’s shadow fleet,… have ... been sanctioned… [with] half of the ships targeted ... transporting more than $4.3bn worth of oil and oil products ... in the last year alone…. The move will further constrain the Kremlin’s ability to fund their illegal war in Ukraine and their malign activity worldwide, and brings the total number of oil tankers sanctioned by the UK to 73, more than any other nation – demonstrating the UK’s leadership on tackling the shadow fleet.’ This action is part of a broader coordinated action against the transportation of Russian oil and related products by 46 nations and the European Union.

In the EU, the Council of the European Union has sanctioned three individuals for their repression and human rights abuses in Syria. 'The new listings are three recently appointed Ministers of Internal Trade and Consumer Protection, Louai Emad El-Din al-Munajjid, the recently re-appointed Minister of Petroleum and Mineral Resources, Firas Hassan Qaddour, and Minister of State, Ahmed Mohammad Bustaji. As members of the government, they share the responsibility for the Syrian regime’s continued violent repression against the civilian population.’

Finally on sanctions news this week, the US Office of Foreign Assets Control (‘OFAC’) has sanctioned ‘21 security and cabinet-level officials aligned with Nicolas Maduro…. They have supported and carried out Maduro’s orders to repress civil society in his efforts to fraudulently declare himself the winner of Venezuela’s July 28 presidential election, thus ignoring the will of the overwhelming majority of Venezuelan voters who elected Edmundo Gonzalez Urrutia as their next president.’

Money Laundering

On money laundering news this week, the Council of Europe has convened a regional workshop in Strasbourg to ‘facilitate the exchange of information at the regional level on managing money laundering and terrorist financing risks associated with innovative technologies in financial services’ in the western Balkans.

In Australia, AUSTRAC has welcomed the ‘passage of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill 2024 through Parliament’, and outlined the principal changes effected by the Bill, including the expansion of AML/CFT to professional services’ providers.

Bribery and anti-corruption

To anti-bribery and corruption news now and, just as with last week, the bulk of the stories are concerned with pan-national organisations. First, the United Nations Office on Drugs and Crime (‘UNODC’) has highlighted the efforts of its new anti-corruption platform operating in central Asia ‘to identify shared corruption-related challenges and adopt a roadmap of commitments and actionable steps.’

The Council of Europe’s Group of States against Corruption of the Council of Europe (‘GRECO’) has announced the publication of a ‘follow-up report assessing the Republic of Moldova’s compliance with the 18 recommendations contained in an evaluation report on the prevention of corruption in respect of parliamentarians, judges and prosecutors adopted in 2016. GRECO concludes that the Republic of Moldova has implemented satisfactorily 13 of the 18 recommendations and has partly implemented four recommendations. One recommendation, concerning the introduction of rules for parliamentarians on how to interact with third parties seeking to influence the legislative process, has not been implemented.’

And finally this week, to mark International Anti-Corruption Day, the European Bank for Reconstruction and Development (‘EBRD’) has provided an open invitation for individuals to listen to Ambassador Michelle Gavin at the EBRD’s HQ in London on 2nd December at 1600 (GMT). Registration is required for those wishing to attend.

Market Abuse

On market abuse news this week, the Securities and Exchange Commission (‘SEC’) has published its enforcement results for the fiscal year 2024. It ‘filed 583 total enforcement actions … while obtaining orders for $8.2 billion in financial remedies, the highest amount in SEC history.’ While the number of enforcement actions is a drop on 2023, the amount obtained increased significantly from the figure of just under $5bn in 2023.

In the UK, the Financial Conduct Authority (‘FCA’) has fined Macquarie Bank Limited (‘MBL’) just over £13m for failings in its systems and controls which allowed a trader on the Metals and Bulks Trading Desk in London to conceal trading losses he had incurred by effecting fictitious trades over a 20-month period from 17 June 2020 through to 23 February 2022. 'The Fictitious Trading had not been prevented or detected earlier due to deficiencies in MBL’s systems and controls relating to oversight and monitoring of trader positions. These systems and controls were relevant to trading on the Metals and Bulks Trading Desk and thereby gave rise to the same risk across significant areas of trading activity.’ The FCA has also fined András Sebők, the former chief supply chain officer at Wizz Air Holdings plc, for trading ‘Wizz Air shares in the restricted 30-day period leading up to the firm’s financial results announcements. Mr Sebők also failed to notify the FCA and Wizz Air of his personal trades in the company’s shares within the required 3 business days.’

Fraud

On fraud news this week, in the US, the Financial Crimes Enforcement Network (‘FinCEN’) has ‘joined a multi-sector national task force dedicated to the prevention of fraud and scams. The National Task Force on Fraud and Scam Prevention, convened by the Aspen Institute’s Financial Security Program, brings together key stakeholders including the financial services sector, technology companies, consumer advocacy groups, information sharing and analysis centers, and federal government agencies to develop a comprehensive national strategy for combating fraud and scams. Fraud and cybercrime (including fraudulent schemes) are two of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism National Priorities.’

In the UK, the Report ‘Disclosure in the Digital Age: Independent Review of Disclosure and Fraud Offences’ has been submitted by its author, Jonathan Fisher, KC. ‘The Review identified that the continuing growth of digital material in criminal cases poses a significant challenge to the operation of the criminal disclosure regime and obligations set out in the Criminal Procedure and Investigations Act 1996 and Code of Practice. The findings of [the] Report were informed by expert insight provided by stakeholders from across the criminal justice system, which in turn supported [Fisher] in designing a suite of 45 recommendations.’

Other Financial Crime News

In other financial crime news this week, we are back on the subject of SLAPPs – Strategic Lawsuits Against Public Participation – where, first, the Council of Europe has announced the outcome of the European Anti-SLAPP Conference held this week. Experts globally convened to discuss the effectiveness of Council of Europe Recommendation CM/Rec(2024)2, on countering SLAPPs, and EU Directive 2024/1069, on protecting individuals engaged in public participation from unfounded claims and abusive legal proceedings. The Council of Europe has also reported on a training session organised for judges and prosecutors to disseminate new knowledge on recent anti-SLAPPs standards and Recommendation CM/Rec(2024)2. And finally on collaborative activity, the EU and United Nations Office on Drugs and Crime has held their third anti-corruption dialogue. In other SLAPPs news, the House of Commons debate on SLAPPs has now been published online. In a debate of almost two hours, there was broad support for anti-SLAPPs efforts to have greater momentum.

In other financial crime news, the Serious Fraud Office (‘SFO’) has informed a court that it believes the terms of a deferred prosecution agreement agreed with Güralp Systems Ltd have been breached. A hearing has been requested at Southwark Crown Court to take the matter forward.

Cyber Crime

On cybercrime news this week, the UK government has warned that Russia poses a significant threat to the UK and to NATO. The warning was provided by the British government at the NATO cybersecurity conference held in London. This comes amid warnings to citizens across the nations of Europe to prepare for circumstances where they might have cope without essential services for a number of days in the event of a cyber-attack.

In other cybercrime news this week, Interpol has announced a record 5,500 arrests and the seizure of over $400m worth of assets in a global operation involving law enforcement from 40 countries, territories, and regions. ‘The five-month Operation HAECHI V (July - November 2024) targeted seven types of cyber-enabled frauds: voice phishing, romance scams, online sextortion, investment fraud, illegal online gambling, business email compromise fraud and e-commerce fraud.’