Episode 149

17th March – 23rd March 2025

Sanctions

This week’s sanctions news starts in the European Union, where the Council has ‘imposed restrictive measures on nine individuals and one entity responsible for acts that constitute serious human rights violations and abuses in the Democratic Republic of the Congo (DRC), for sustaining the armed conflict, instability and insecurity in the DRC and exploiting the armed conflict through the illicit exploitation or trade of natural resources.’ Additionally, and in relation to the Russia financial sanctions regime, the Council has extended ‘the restrictive measures targeting those responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine for another six months, until 15 September 2025.’

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has removed Farkhad Akhmedov, the Azerbaijani-Russian businessman, from the Russia Financial Sanctions Regime. Additionally, five entries on the Russia, Belarus, and Global Human Rights Sanctions Regimes have been amended, as well as one amendment on the Russia Financial Sanctions Regime. The Consolidated List has been updated. On enforcement news from the UK, law firm Herbert Smith Freehills has been issued with a monetary penalty of £465,000. ‘The monetary penalty relates to six payments made by HSF Moscow with a collective value of £3,932,392.10 to designated persons subject to an asset freeze. The designated persons were Alfa-Bank JSC, PJSC Sovcombank, and PJSC Sberbank. In committing the breaches, the firm made funds directly available to sanctioned entities. The payments, which took place over a period of seven days as the firm wound down its Russian offices, demonstrated a pattern of failings.’ Finally from the UK, OFSI has published its Annual Review for 2023 – 2024 ‘Engage, Enhance, Enforce’. Its content covers UK and UN financial sanctions regimes; UK counter-terrorism asset freezes; frozen funds review; compliance and enforcement; licensing; and, engagement.

In the US, the Office of Foreign Assets Control (‘OFAC’) has sanctioned ‘Jumilca Sandivel Hernandez Perez (Hernandez Perez), a key leader of the Lopez Human Smuggling Organization (HSO), a Guatemala-based Transnational Criminal Organization responsible for the smuggling of thousands of illegal aliens from Guatemala, through Mexico, and into the United States. Additionally, Hernandez Perez has coordinated her illegal activity with members of the violent U.S.-sanctioned drug trafficking organization, La Linea, which among other heinous acts is responsible for the November 2019 murders of nine American citizens, including six children, in the Mexican state of Sonora.’ OFAC has also designated ‘a “teapot” oil refinery and its chief executive officer for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil, including from vessels linked to the Foreign Terrorist Organization, Ansarallah, commonly known as the Houthis, and the Iranian Ministry of Defense of Armed Forces Logistics.’ The State Department has taken allied action.

In other news, the Centre for Research on Energy and Clear Air (‘CREA’) has published its monthly analysis of Russian fossil fuel exports and sanctions. The February report finds that monthly fossil fuel exports from Russia have fallen by three per cent month-on-month. In relation to EU importers of Russian fossil fuels, the five largest paid a total of €1.3bn. Of the carriers of Russia crude and oil products, approximately 47 per cent were shipments via the ‘shadow fleet’. That said, shipments by the ‘shadow fleet’ have fallen by 21 per cent when compared with January. ‘In contrast, oil transported via G7+ owned or insured vessels rose by 15% over the same period. This shift suggests that US sanctions imposed by the Office of Foreign Assets Control in January may have had a tangible impact on Russian oil flows.’ The CREA estimates that a $30 barrel oil price cap would have reduced Russian oil export revenue by 41 per cent for the period from December 2022 until February 2025.

And finally this week, a direction to some light reading. First, a blog by William A. Reinsch, Senior Adviser and Scholl Chair Emeritus with the Economics Program and, Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C. on ‘The Story of Sanctions’. Secondly, global law firm, Baker McKenzie has produced a handy ‘state of play’ on Russian sanctions under the current US administration.

Money Laundering

This week’s money laundering news starts with the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (‘MONEYVAL’) which has announced the launch of its sixth round of mutual evaluation of Albania.

In the UK, the National Crime Agency has published its SARs Reporter Booklet for March 2025. In this month’s issue, the usual range of case studies on money laundering and fraud.

Bribery and Corruption

On bribery and corruption news this week, first, back to a story from last week and the arrests for alleged bribery and corruption linked to a number of individuals with links to the European Parliament. This week, the Belgian prosecutor’s office has announced that ‘the investigating judge has charged four people with active corruption and criminal organisation. A fifth person was charged with money laundering. These four people were placed under arrest warrants and the fifth person was released on conditions. On Tuesday 18 March, these four people appeared before the council chamber, which decided to extend their pre-trial detention.’ If you access the link, you might want to use a translate function, unless your Dutch is up to scratch.

In news from the UK, France, and Switzerland, a new alliance has been agreed to combat bribery and corruption. The new taskforce will ‘strengthen collaboration … [and] existing ties between these countries and lead to greater joint working on cases, as well as sharing of insight and expertise.’

And finally on bribery and corruption news this week, the UN Office on Drugs and Crime has sat down with Ricky Yau, Deputy Commissioner and Head of Operations of the Hong Kong Special Administrative Region of China Independent Commission Against Corruption ‘to talk about the fight against corruption, the challenges of uncovering hidden crimes and the importance of global cooperation.’

Fraud

The fraud news this week starts in the UK, where the secondary legislation which confirms the commencement of section 199, Economic Crime and Corporate Transparency Act 2023, has come into force. The much anticipated ‘failure to prevent fraud’ offence under the 2023 Act will commence on 1st September 2025.

In other news from the UK, the Independent Review of Disclosure and Fraud Offences – Disclosure in the Digital Age, has been published. Secondly, the government has announced a pilot scheme to ‘detect suspected fraud committed in relation to the CJRS [Coronavirus Job Retention Scheme] furlough funding available to eligible companies and/or government grant recipients. As the potential crossover of government grant recipients wrongfully also applying for furlough funding relief should be relatively straightforward to identify, UK Research and Innovation seeks to detect overlap of CJRS funding – covering periods wherein the grant recipients were claiming grant awards for carrying out specific activities that either were not performed (as staff were correctly furloughed) or where activities were carried out by staff who should not have been working.’

In other fraud news this week, the International Organization of Securities Commissions (‘IOSCO’) has announced a new ‘investors alerts portal, [which is] a dedicated platform to help combat investment fraud globally. The International Securities & Commodities Alerts Network (I-SCAN) is a unique global warning system where any investor, online platform provider, bank or institution can check if a suspicious activity has been flagged for a particular company by financial regulators worldwide. The introduction of I-SCAN forms part of IOSCO’s Roadmap for Retail Investor Online Safety, an initiative which was launched in November last year and which has five waves of activity.’

Other Financial Crime News

The big news from the rest of the world of financial crime this week is the publication of Europol’s EU Serious and Organised Crime Threat Assessment (EU-SOCTA) 2025. With the headline statement that the DNA of organised crime is changing, the report identifies that organised crime has a destabilising effect on the European Union’s institutions and society. ‘The destabilising properties and effects of serious and organised crime can be seen on two fronts: Internally, through the laundering or reinvestment of illicit proceeds, corruption, violence and the criminal exploitation of young perpetrators; Externally, with criminal networks increasingly operating as proxies in the service of hybrid threat actors, a cooperation which is mutually reinforcing.’ In an aspect of the report which should not come as a surprise, online environment plays a significant part. ‘Nearly all forms of serious and organised crime have a digital footprint, whether as a tool, target or facilitator. From cyber fraud and ransomware to drug trafficking and money laundering, the internet has become the primary theatre for organised crime. Criminal networks increasingly exploit digital infrastructure to conceal their activities from law enforcement, while data emerges as the new currency of power – stolen, traded and exploited by criminal actors.’ Finally, that ‘AI is fundamentally reshaping the organised crime landscape. Criminals rapidly exploit new technologies, using them both as a catalyst for crime and a driver of efficiency. The same qualities that make AI revolutionary – accessibility, adaptability and sophistication – also make it a powerful tool for criminal networks. These technologies automate and expand criminal operations, making them more scalable and harder to detect.’ Other interesting takeaways from the report suggest that cyber-attacks are increasingly showing ‘state-aligned objectives,’ and that online fraud schemes are ‘increasingly driven by AI-powered social engineering.’ The report is worth a read, and at only 100 pages, is more readily digestible than some publications. The press conference which accompanied the announcement was recorded and is available on YouTube.

In other financial crime news this week, the Council of Europe has announced that it ‘organised a cascade training for legal professionals, judges, prosecutors, and lawyers on advancing the safety of journalists with a focus on anti-SLAPP standards.’ The event was co-ordinated between the European Union, Council of Europe, and the School of Magistrates.

Earlier this week, the Organisation for Security and Co-operation in Europe (‘OSCE’) ‘conducted an introductory workshop for financial institutions on investigating the criminal use of virtual assets in Armenia. The workshop brought together representatives from the Central Bank of Armenia, the Financial Monitoring Center, and private banks. The aim of the workshop was to enhance participants’ capabilities in identifying and mitigating risks related to virtual assets and financial crime.’

And finally this week, two things. First, the World Wildlife Fund (‘WWF’) has announced an update to the Land Conversion and Financial Crime Risk Assessment. Secondly, the UN Office on Drugs and Crime has blogged on how the financial sector can help to prevent human trafficking, suggesting it has a ‘unique role to play in preventing human trafficking, supporting investigations and prosecutions, promoting financial inclusion for vulnerable people and providing remedies for victims.’

Cybercrime

A limited amount of cybercrime news this week, but what I do have is quite interesting, and it is that the latest Kaspersky Incident Response analyst report which has found that the average duration of long-lasting cyber-attacks is 253 days. This should come as no surprise. The cyberattack on the British Library, which I have mentioned a number of times, caused significant damage and certain services remain offline. For example, the Thesis database remains offline, some 512 days after the attack.