Episode 140

13th January – 19th January 2025

Sanctions

The sanctions news this week starts in the US where the Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has sanctioned ‘eight Venezuelan officials who lead key economic and security agencies enabling Nicolas Maduro’s repression and subversion of democracy in Venezuela. The individuals sanctioned, pursuant to Executive Order (E.O.) 13692, as amended, include the president of Petroleos de Venezuela, S.A., (PdVSA), Venezuela’s state-owned oil company, and Maduro’s Minister of Transportation and president of the Venezuelan Consortium of Aeronautical Industries and Air Services (CONVIASA), the state-owned airline. In addition, OFAC is sanctioning high-level Venezuelan officials in the military and police who lead entities with roles in carrying out Maduro’s repression and human rights abuses against democratic actors.’ OFAC has also taken ‘sweeping action’ to block two major Russian oil producers and imposed ‘sanctions on an unprecedented number of oil-carrying vessels, many of which are part of the “shadow fleet,” opaque traders of Russian oil, Russia-based oilfield service providers, and Russian energy officials.’ Similar action was taken by the UK. The US also imposed sanctions aimed at Russia’s military capabilities. The Department of State has designated over 150 individuals and entities designed to 'thwart sanctions evasion, particularly by actors based in the Peoples’s Republic of China, and to degrade Russia’s military industrial base. Additional designations target subsidiaries of State Atomic Energy Corporation Rosatom (Rosatom). Concurrently, the Department of the Treasury is re-designating nearly 100 previously sanctioned targets across Russia’s financial services, energy, and defense and related materiel sectors. Treasury is also designating entities involved in several financial sanctions evasion schemes.' Information from the Treasury is here.

Then, later in the week, OFAC also sanctioned Abdel Fattah Al-Burhan, the leader of the Sudanese Armed Forces, as well as an allied weapons supplier, then more sanctions on ‘two individuals and four entities for generating illicit revenue for the Democratic People’s Republic of Korea (DPRK) government.’

In news of UK-US collaboration, the Office of Financial Sanctions Implementation (‘OFSI’) and the Office of Foreign Assets Control (‘OFAC’) have published a Memorandum of Understanding which ‘facilitates the exchange of information between the organisations on implementing and enforcing sanctions.’ A blog post from Ropes and Gray provides further analysis.

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has issued General Licence INT/2025/5632740 permitting individuals to make funds available to or for the benefit of a UK Designated Person up to a specified permitted maximum. It has also made a correction to the Consolidated List, and Domingo Antonio Hernandez Larez has been added to the Venezuela financial sanctions regime.

In other news from the UK, the Supreme Court heard in the last week an appeal by Eugene Shvidler, the Russian-born businessman, over his designation following Russia’s invasion of Ukraine. Judgment is, I suppose, to be expected in a couple of months, while the sessions in the hearing are available to view on the Supreme Court website.

Bribery and corruption

On bribery and corruption news this week, the US Department of Justice has secured ‘final judgment forfeiting to the United States over $20 million in foreign bribery and money laundering proceeds, including interest.’ In 2023, ‘a civil forfeiture complaint [was filed] against approximately $21.2m in U.S. currency alleging that the funds were proceeds of foreign bribery and money laundering offenses. As alleged in the complaint, from 2008 to 2014, a Venezuelan national, Naman Wakil, controlled a number of companies that sold food products to Venezuela’s state-owned food agency, Corporacion de Abastecimiento y Servicios Agricola (CASA). To obtain these food contracts, Wakil paid tens of millions of dollars in bribes to multiple presidents of CASA. As a result of those bribes, Wakil, through his companies, obtained hundreds of millions of dollars in proceeds into accounts he controlled in the Cayman Islands and Switzerland. Wakil laundered the proceeds from the scheme into South Florida and elsewhere.’

In other news from the US, the Department of State has agreed with the Federal Government of Nigeria to ‘repatriate approximately $52.88 million in forfeited corruption proceeds. These funds were forfeited to the United States as part of the Kleptocracy Asset Recovery Initiative of the U.S. Department of Justice…. Through court proceedings ending in 2023, the U.S. Department of Justice’s Money Laundering and Asset Recovery Section, the Federal Bureau of Investigation’s International Corruption Unit, and the Internal Revenue Service – Criminal Investigation successfully forfeited various high-value assets, including the superyacht Galactica Star and prime real estate in California and New York. The forfeited assets had been illegally acquired using funds linked to money laundering and a conspiracy to bribe former Petroleum Resources Minister Diezani Alison-Madueke. Nigerian authorities played a vital role by providing substantial assistance to the U.S. investigation.’

Fraud

On fraud news this week, in the UK, two individuals have been charged in relation to ‘the creation and online sale of fraudulent Covid 19 vaccination records during the pandemic…. The investigation relates to the creation of almost 2,000 fraudulent records at a health centre in Luton between June and October 2021, and the seizure of £145,000 in cash from a safety deposit box in the town.’

In the European Union, the European Public Prosecutor’s Office has initiated charges ‘of fraud against four suspects, following an investigation into a project to design and build signalling and telecommunication systems on the Bulgarian rail network. The project, which concerns the railway section between Plovdiv and Burgas, is worth over €94.5 million in EU financing. The contract for the execution of the project was awarded to a consortium formed by four companies. Two managers of an Italian company and the manager of a Bulgarian company, part of the consortium that won the contract, have been charged with public procurement fraud. A former director of the National Company Railway Infrastructure has also been charged.’

Money Laundering

On money laundering news this week, the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (‘MONEYVAL’) has published a follow-up report on Estonia and another on Slovakia. In relation to Estonia, the report indicates that while it has ‘improved its efforts towards implementing targeted financial sanctions related to terrorism and terrorist financing’ work remains to be done as it is still only partially compliant on 14 of the FATF40. On Slovakia, it has ‘made progress in addressing some of the technical compliance deficiencies impacting the application of the Financial Action Task Force (FATF) standards on non-profit organizations (Recommendation 8), on virtual assets and virtual assets service providers (Recommendation 15), and on high-risk countries (Recommendation 19). However, it points out that the progress made was not sufficient to grant an upgrade and all three recommendations remain rated Partially Compliant.’

Other Financial Crime News

In other financial crime news this week, INTERPOL has announced its ‘first-ever Silver Notice to help trace and recover criminal assets, combat transnational organized crime and enhance international police cooperation. The Notice, requested by Italy, seeks information on the assets belonging to a senior member of the mafia.’ The scheme, which we reported as being readied in episode 123 in late August / early September last year, is an addition to Interpol’s ‘Notices’ which it uses as worldwide alerts on a coded scheme. The addition of the ‘Silver Notice’ is to address, specifically, money laundering and illicit financial flows being conducted with use of virtual currencies.

In other news, the Royal United Services Institute (‘RUSI’) has published a report on the principal findings of the ‘first meeting of the Taskforce on Public–Private Partnership in Fighting Financial Crime in Ukraine.’

Cyber Crime

On cybercrime news this week, the Prudential Regulation Authority in the UK has announced that it plans to focus some of its attention this coming year on cyber resilience. ‘By March 2025 firms must be able to show they can remain within impact tolerances for all their important business services throughout severe but plausible disruptions. We expect firms to have made significant progress already to strengthen their response and recovery capabilities to address cyber threats, remediate vulnerabilities exposed by legacy infrastructure and develop contingency procedures when material third party services are disrupted…. To further enhance the sector’s cyber resilience capabilities, the PRA intends to start consulting with the FCA in the second half of 2025 on policy relating to the management of Information and Communication Technology (ICT) and cyber risks.’

The World Economic Forum (‘WEF’) has published its ‘Global Cybersecurity Outlook 2025’ which ‘examines the cybersecurity trends that will affect economies and societies in the year to come.’ This year’s report has shone a light on ‘the increasing complexity of the cyber landscape, which has profound and far-reaching implications for organizations and nations.’ This complexity is charged by geopolitical tension, more complex supply chains, rapid adoption of emerging technologies by cybercriminals, and the proliferation of regulatory requirements. These are exacerbated by a widening skills gap, making it extremely challenging to manage cyber risks effectively.

In the European Union, the Commission has announced plans to address the growing cybersecurity risks in healthcare. ‘The European Action Plan builds on existing legislation and aims to establish a pan-European Cybersecurity Support Centre for hospitals and healthcare providers, offering tailored guidance, tools, services, and training.’ The programme has four priorities: first, enhanced prevention; secondly, better detection and identification of threats; thirdly, a more response to Cyberattacks to minimise their impact; and, fourthly, enhanced deterrence aiming to reduce attacks.

In the US, one of the final executive orders (‘EO’) issued by President Biden aims to address cybersecurity issues. The EO sets out initiatives to make sanctions more effective to punish cyber attackers, including those who use ransomware. Secondly, to make software more secure. Thirdly, by amplifying online security by use, for example, of a digital ID issued by government. Fourthly, to harness artificial intelligence to enhance security.

And finally on cybercrime news this week, the Home Office in the UK has launched a consultation on new legislative proposals designed to address the amplified ransomware threat to which the UK public sector is exposed. ‘The Home Office proposes to introduce legislation to counter ransomware and meet three main objectives: to reduce the amount of money flowing to ransomware criminals from the UK, thereby deterring criminals from attacking UK organisations; to increase the ability of operational agencies to disrupt and investigate ransomware actors by increasing our intelligence around the ransomware payment landscape; to enhance the government’s understanding of the threats in this area to inform future interventions, including through cooperation at international level.’ The consultation closes at 17:00 on 8th April 2025.