Episode 143

3rd February – 9th February 2025

Sanctions

The sanctions news this week starts in Australia, where the government has announced anti-terrorism sanctions on Terrorgram, the white supremacist terrorist network. ‘It is now a criminal offence to use or deal with the assets of, or make assets available to, Terrorgram.’

In the US, the President has signed an Executive Order sanctioning the International Criminal Court (‘ICC’) for what the Order described as engaging in ‘illegitimate and baseless actions targeting America and our close ally Israel.’ You may remember that in episode 113 of the podcast, we reported that the US House of Representatives passed a Bill purporting to sanction the ICC, but things have now changed politically. Other nations, Amnesty International, and other organisations, have condemned the action. In other news from the US, sanctions have been imposed on the ‘international network for facilitating the shipment of millions of barrels of Iranian crude oil worth hundreds of millions of dollars to the People’s Republic of China’ and the authorities in Dominican Republic have seized an aeroplane used by Venezuela’s State-Owned Oil and Natural Gas Company which had been maintained and serviced using parts from the US.

In Ukraine, sanctions have been announced against captains working in Russia’s shadow fleet. Now, on the subject of Russian sanctions, the Treasury Select Committee has, following an investigation by Sky News, sent notice to HM Revenue & Customs seeking answers on the enforcement of trade sanctions against Russia.

And finally this week, the Council of Europe has updated its sanctions page, and law firm Dentons has published an explainer on the new sanctions reporting requirements for insolvency practitioners.

Money Laundering

On money laundering news this week, in the Republic of Ireland it has been reported that the Revenue Commissioners are receiving a higher volume of reports for suspicious transactions. The responsibility for this increase in reports has been placed at the feet of those bodies which facilitate cryptocurrency transactions. In 2024, 54,000 suspicious transaction reports were made across the financial services sector, which it is suggested will grow further in 2025. If that does happen, it will need a further resource commitment from government. The Republic is not alone in this experience.

The Council of Europe has announced the outcomes of a workshop help in Moldova as the country beings ‘preparations for conducting a review and update of its national risk assessment on money laundering and terrorist financing…. Participants received training and instruction on both the methodology and useful tactics and measures to apply to ensure an accurate and informed assessment of financial crime risks was successfully undertaken. The workshop highlighted the importance of robust data collection and verification, pro-active management of data limitations and related challenges, whilst also exploring strategies for addressing vulnerabilities in the risk assessment process.’

Sticking with the Council of Europe and its anti-money laundering body, MONEYVAL, it has published a report ‘urging Bosnia and Herzegovina to improve its measures to combat money laundering and terrorist financing. The assessment highlights moderate effectiveness in nine of eleven areas, including risk understanding, international cooperation, use of intelligence and ML/TF investigations. However, major improvements are needed in these areas.’

In the European Union, the European Commission has launched the ‘‘Next‑Generation’ FIU.net … providing Financial Intelligence Units and Europol with a significantly improved, state‑of‑the‑art IT solution enabling a quicker, more efficient exchange and cross‑matching of information.’

And finally on money laundering news this week, a couple of stories relating to the Financial Action Task Force (‘FATF’). First, the FATF has published its Annual Report for 2023 – 2024. The report highlights progress on strengthening of global FATF standards, transparency and beneficial ownership, amendments to the FATF Standard on Non-Profit Organisations, global networks, responding to risks to the global financial system, asset recovery, virtual assets, and women in the FATF. Secondly, the Financial Action Task Force and the Middle East and North Africa Financial Action Task Force has held joint assessor training in Doha, Qatar, this week. The training was held in collaboration with the Gulf Cooperation Council states.

Bribery and Corruption

The bribery and corruption news this week takes us to Switzerland, where a court has convicted the former Chief Operating Manager of Trafigura, Mike Wainwright, in a case concerning bribery payments made by the company in order to obtain easy access to Angola's oil market. Wainwright has been sentenced to a 32-month term of imprisonment, and the company fined $148m (£119m).

In Europe, the Council of Europe’s Group of States against Corruption (‘GRECO’) ‘has published the first report assessing Bulgaria’s compliance with its recommendations to prevent corruption and promote integrity in central government and law enforcement agencies, addressed to Bulgaria in 2022. GRECO concludes that Bulgaria has fully implemented seven of the 28 recommendations. Of the outstanding 21 recommendations, eleven have been partly implemented and ten have not been implemented at all.’

On to some light reading now, and LAWFARE has published a blog on the worthiness of corruption sanctions, and Spotlight on Corruption has published a blog on the announcement made by the UK government at the end of 2024 concerning the extension of funding to support the National Crime Agency’s International Corruption Unit.

Fraud

The fraud news this week starts in the UK, where the Comms Council UK (‘CCUK’) and National Trading Standards have launched a joint information-sharing initiative to address the issue of telephone fraud. ‘The initiative enables CCUK’s members to share information on fraudulent behaviour more easily both within the CCUK membership and with relevant industry stakeholders. Members are invited to share reports of potential misuse with the National Trading Standards Scams Team. The Scams Team will also combine such data with existing intelligence to build patterns and profiles, allowing for further action to be taken against these criminals. By participating in this innovative initiative, telecoms companies can not only save victims from substantial financial losses, but help rebuild trust in telephone calls. The scheme sits alongside existing efforts taking place within Government, regulators, law enforcement bodies, and other sectors like banking.’

In the UK, the Charity Commission, the regulatory body responsible for most charitable trusts in English law, has issued an alert to charities in relation to the imminent coming into force of the failure to prevent fraud offence. The ‘offence will affect large, incorporated charities that meet at least two of the following criteria: more than 250 employees, £36m of income or £18m in total assets. Under the offence, an organisation may be criminally liable where an employee, agent, subsidiary, or other “associated person”, commits a fraud intending to benefit the organisation (or its clients) and the organisation did not have reasonable fraud prevention procedures in place. It does not need to be demonstrated that directors or senior managers ordered or knew about the fraud.‘ Charities are urged to read the Home Office guidance on the offence. And, while on that subject, law firm DLA Piper has a good range of video resources on the Economic Crime and Corporate Transparency Act, in which the offence can be found.

Market Abuse

The market abuse news this week comes from the UK, where following his conviction for insider dealing in 2024, Mohammed Zina has now had a confiscation order made against him in the sum of £587,000. In 2024, Zina was sentenced to 22 months imprisonment.

Other Financial Crime News

In other financial crime news this week, in the UK, the Serious Fraud Office (‘SFO’) has been granted permission to bring enforcement action against Guralp Systems Ltd which is alleged to have breached the financial provisions of a deferred prosecution agreement, the terms of which were finalised on 22nd October 2019. No further information is available, but I am sure the SFO will keep us updated.

In other news from the UK, a report by the whistleblowing charity, Protect, has published a report which has found that the failure to listen to whistleblowers has had a significant cost for the taxpayer. For example, in relation to the Post Office Horizon scandal – which we mentioned in last week’s podcast in the context of potential legal action against lawyers involved at all stages – has cost the taxpayer £178m. In total, across three opportunities identified, £426m has been the cost to the taxpayer. As with so many of these things, the metwand provided is in terms of what could have been done with the money had it not been lost. It ‘could have funded the construction of 14 new schools. Or it could have been spent on employing 1,440 doctors or 2,580 nurses for five years.’

And finally on other financial crime news, two things. First, the Serious Fraud Office has published the initial findings from its e-discovery review. This software helps ‘identify evidence and other relevant material for use in [SFO] criminal investigations and prosecutions. This ensures [they] can process very large amounts of digital material across [its] cases and is line with the approach taken by most law enforcement agencies.’ Secondly, the Bank for International Settlements has published a speech delivered this week by Derville Rowland, Deputy Governor of the Central Bank of Ireland, on the subject of innovation and technology in financial crime. It focused on the themes of collaboration and developing a wider approach to financial crime prevention.

Cyber Crime

On cybercrime news this week, in the UK, the government has announced a new Code of Practice which ‘sets out baseline cyber security principles to help secure AI systems and the organisations which develop and deploy them.’  The Code ‘will give businesses and public services the confidence they need to harness AI’s transformative potential safely.’

And finally on cybercrime news this week, the National Cyber Security Centre, along with ‘cyber security agencies in Australia, Canada, New Zealand, and the US’ have issued guidelines ‘to help manufacturers of edge devices make their products more secure and easier to investigate if a compromise occurs…. Edge devices are internet-connected devices that sit at the ‘edge’ of a network, acting as entry points for data between local networks and the wider internet. Examples include routers, smart appliances, IoT devices, sensors and cameras, which can be particularly vulnerable to hackers as they often handle important data and connect directly to external networks.’