Episode 151

31st March – 6th April 2025

Sanctions

This week’s sanctions news starts in the United States, where the Office of Foreign Assets Control (‘OFAC’) has announced the designation of ‘five individuals and three associated companies involved in a Lebanon-based sanctions evasion network supporting the Hizballah finance team. The Hizballah finance team manages a variety of lucrative commercial projects and oil smuggling networks, often in conjunction with Iran’s Islamic Revolutionary Guard Corps – Qods Force (IRGC-QF), to generate and transfer revenue for Hizballah. The Hizballah finance team uses front companies to generate millions of dollars in revenue for Hizballah and support the group’s terrorist activities, while also allowing key associates and family members,... to enrich themselves through these commercial enterprises.’ This is the Department of State press release. Then, later, OFAC designated ‘a network of Houthi financial facilitators and procurement operatives working in coordination with Sa’id al-Jamal, a senior Houthi financial official backed by Iran’s Islamic Revolutionary Guard Corps-Qods Force.’ This is the Department of State press release. Additionally, OFAC has designated ‘a network of six entities and two individuals based in Iran, the United Arab Emirates, and the People’s Republic of China responsible for the procurement of unmanned aerial vehicle components on behalf of Iran-based Qods Aviation Industries…. This network has also facilitated procurement for other entities in Iran's military-industrial complex, to include Iran Aircraft Manufacturing Industrial Company and Shahid Bakeri Industrial Group.’ Since we are on the subject of Iran, this week the US Treasury Secretary ‘led a public-private partnership event with 16 systemically important global financial institutions and federal law enforcement agencies, focused on denying Iran access to the global financial system. This event was the first in FinCEN’s “Iran Maximum Pressure and Counter Terrorism” (or IMPACT) Exchange series. The event focused on Iran’s sprawling global oil and “shadow banking” networks.’

In other news from the US this week, OFAC has designated ‘six individuals and seven entities involved in a money laundering network supporting the Sinaloa Cartel,.... The Sinaloa Cartel is responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States and has exploited multiple ports of entry along the southern border for its criminal activities. [The] action is the culmination of a coordinated investigation by the U.S. Attorney’s Office for the Southern District of California, the Drug Enforcement Administration, the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, Homeland Security Investigations, and the Government of Mexico, including the Unidad de Inteligencia Financiera, Mexico’s Financial Intelligence Unit.’ In other news related to the Sinaloa Cartel, the Department of Justice has announced charges against five alleged money launderers for the group.

In further designations from the US this week, the State Department has designated ‘six individuals who have engaged in actions or policies that threaten to further erode the autonomy of Hong Kong in contravention of China’s commitments, and in connection with acts of transnational repression.’

And finally from the US this week, two small pieces. First, some enforcement news where ‘Oleg Sergeyevhich Patsulya, a Russian national, [has been] sentenced … to 70 months… in prison for his role in a conspiracy to export controlled aviation technology to Russia and to launder money in connection with the illegal export scheme.’ Secondly, Karina Rotenberg has been removed from the US designations list. The White House has given no reason for the removal. Rotenberg remains on the UK designations list where her listing is because of the relationship of her husband to the Russian President.

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has extended General Licence INT/2023/2824812 on Bond amendments and restructuring for non-designated persons until 27th March 2026. Secondly, General Licence INT/2022/1552576 on London Court of International Arbitration (‘LCIA’) Arbitration Costs was revoked following the issuance of the Arbitration Costs General Licence INT/2025/5787748. Thirdly, General Licence INT/2024/5334756, Legal services, was amended. Fourthly, the new General Licence INT/2025/5787748, Arbitration Costs, was issued, which I mentioned a moment ago. ‘This licence allows persons to make payments to Arbitration Associations and Arbitrators to cover fees and expenses for their arbitration services. The General Licence also permits Arbitrators and Arbitration Associations to direct payment of, receive and use such payments to cover Arbitration Costs.’

In terms of new sanctions from the UK this week, the Global Anti-Corruption regime is in focus, with designations made relating to pro-Kremlin ‘operatives responsible for rigging elections in Moldova…. This crackdown is the latest … to tackle corruption and dirty money…. The sanctions target a network of pro-Russian actors named Evrazia operating in Moldova on behalf of corrupt fugitive oligarch Ilan Shor, previously designated by the UK in 2022, to destabilise Moldovan democracy and spread Russia’s malign influence.’ In addition to these, additions were made respecting Guatemala and Georgia.

OFSI has published a blog on the lessons for industry from the recent decision to impose a monetary penalty on Herbert Smith Freehills CIS LLP, the global law firm, for breaches of UK financial sanctions on Russia. In terms of the key lessons for industry, the decision underscores the importance of understanding sanctions risks, appreciating their exposure and to seek professional advice where necessary. Further, firms ought to adhere to policies by compliance with relevant sanctions screening and due diligence measures, regardless of seniority. Finally, careful consideration ought to be given to ownership and control issues.

And finally on sanctions news this week, OFSI in the UK has published its Legal Services Threat Assessment Report. In news which is allied to the legal profession and the context of OFSI’s report, the Institute of Business Ethics has published – A review of client acceptance by solicitors in England and Wales in relation to Kleptocracy, State Capture and Grand Corruption. The catalyst for the report is the Russian invasion of Ukraine, which naturally focused attention on the work law firms did for anyone with connections to Russia and its senior political figures. The report examines the current rules and practices of UK law firms regarding client selection, suggesting new ethical standards. In terms of its recommendations, first, it suggests that law firms should adopt a six-step ethical decision-making framework for client take-on. Secondly, it should implement a 'Legitimate Provenance of Wealth Test' to ensure credible explanations for clients' wealth. Thirdly, they should increase transparency and accountability to restore public trust in the profession. Fourthly, they should emphasise the profession's duty to act in the public interest and uphold ESG values. The aim of the report is the amplification of ethical decision-making processes within the legal profession to prevent the facilitation of kleptocracy and grand corruption.

Money Laundering

This week’s money laundering news starts in Australia, where AUSTRAC (Australian Transaction Reports and Analysis Centre), which is the financial intelligence agency responsible for monitoring financial transactions to identify money laundering, and other financial crimes, has made a range of updates to its website. First, providing a summary of changes for current reporting entities; secondly, changes to the tipping-off offence; thirdly, provision of a human interest story on the laundering of the proceeds of a romance scam; and, fourthly, how it is harnessing data for a clearer picture of money laundering.

In the UK, the Financial Conduct Authority has updated its webpage on strategy and plans to reduce cash-based money laundering. The webpage highlights efforts to reduce money laundering through cash deposits, particularly via the Post Office.

The final money laundering news this week is a story from Transparency International on Switzerland’s anti-money laundering reform. ‘Policymakers in Switzerland must not buckle under pressure from lobbyists but signal to the international community that they are taking the fight against money laundering seriously, with an effective beneficial ownership register and requirements for professionals in the non-financial sector that meet global standards. The country’s reputation as one which seeks to fight transnational corruption depends on it.’

Fraud

On fraud news this week, Stop Scams UK has published a joint statement on its collaborative efforts to fight fraud. ‘Leading companies from across the technology, telecoms, and financial sectors have pledged to come together under the banner of Stop Scams UK to drive forward collaborative counter fraud efforts to protect consumers, build confidence, and drive UK economic growth…. The first wave sees, Amazon, Barclays UK, BT, Google, HSBC, Lloyds, Nationwide Building Society, NatWest, Match Group, Meta, Monzo, Santander, and Three all sign a joint statement to further support Stop Scams UK’s intelligence sharing pilots.’

In other fraud news from the UK this week, the All-Party Parliamentary Group on Fair Banking has published a report – Authorised Push Payment Fraud – Who Bears the Burden? The Report consider the scale and impact of authorised push payment (‘APP’) fraud. It highlights the growing issue of APP fraud, where victims are tricked into authorising payments to fraudsters, against the effectiveness of current regulations in combating APP fraud. In terms of recommendations which are made by the report, it suggests that Payment service providers should establish clear pathways for reporting fraud across all platforms. Secondly, that there should be greater disclosure of APP fraud statistics, including the number of payments per case and complaints about non-payment of compensation. Thirdly, that firms should comply with a five-day target for compensation under the Mandatory Reimbursement Requirement (‘MRR’) scheme. Fourthly, social media companies should contribute to the MRR and the Economic Crime Levy and be held accountable for their role in tackling fraud. Fifthly, the Payment Systems Regulator should monitor the use and effectiveness of fraud warnings. The report is part of ongoing research into APP fraud and aims to provide a comprehensive overview of the issue and potential solutions.

Bribery and Corruption

On bribery and corruption news this week, the Organisation for Security and Cooperation in Europe has announced that it organised a study visit where anti-corruption practitioners from Italy, Moldova, and Romania ‘shared good practices in combating corruption and the misuse of virtual assets, highlighting the significance of interinstitutional and international co-operation in this area.’

In the UK, The Guardian reports analysis conducted by Spotlight on Corruption (‘Spotlight’) into the scale of hospitality offered to those in or around government. For the period from the first quarter of 2019 to the second quarter of 2024, government ministers, senior officials, and special advisers received lunches, dinners, and tickets to various events on 3,500 occasions. Now, I couldn’t find the report on Spotlight’s website when I looked, but I did find something else worth flagging, and it is that Spotlight has highlighted the issue of influence on economic policy. Spotlight suggest that ‘much of decision-making in government is done in the dark. It is still far too hard to find out who is influencing decision-makers in the UK government and there are multiple loopholes and transparency deficits in the UK government’s lobbying regime. That is despite numerous expert recommendations to improve lobbying transparency. Meanwhile, recommendations made by ethics experts to level the playing field to ensure fairer access to decision-makers have gone unheeded.’

In news from the US, it is being widely reported that Charles Cain and Tracy Price, both senior officials at the US Securities and Exchange Commission’s foreign corrupt practices unit are leaving the agency following changes which have been announced to enforcement policy. No confirmation, but the reporting is quite extensive. On an allied theme, a link to an interesting blog from the Brookings Institute on the growing threat of corruption in the US putting democracy at risk. It explores how corruption undermines democratic institutions, weakens public trust, and allows authoritarian tendencies to take root. The piece examines recent developments in political financing, lobbying, and governance that contribute to these risks, highlighting both domestic and international influences. It also proposes potential reforms to strengthen democratic integrity and accountability.

To Lebanon now, where the National Anti-Corruption Commission has convened a high level discussion on strengthening the right of access to information law in the name of the advancement of transparency. This has been done in partnership with the UNDP. ‘Only 40% of administrations proactively publish information, and less than 50% of national, and 25% of local administrations have assigned an information officer, revealed the first report on the “Compliance of Public Administrations with the Right of Access to Information Law”, produced by the National Anti-Corruption Commission (NACC)…. The event offered an opportunity to convene high-level discussions around the implementation of the Right of Access to Information Law which was enacted in 2017. It focused on strategies to strengthen the law, promote transparency, and reinforce anti-corruption efforts, marking an important step towards accountability and institutional reform, especially in light of Lebanon’s current governance challenges and the formation of the new government.’ The Report is available here.

And finally on bribery and corruption news this week, in Australia, the National Anti-Corruption Commission has provided an update on its work.

Market Abuse

In the European Union, the European Securities and Markets Authority (‘ESMA’) has opened a consultation on ‘changes to the format for drawing up and updating insider lists, as part of the Listing Act amendments to the Market Abuse Regulation (‘MAR’). The Listing Act mandates ESMA to review the Implementing Technical Standards (ITS) on insider lists to extend the simplified format - currently used by issuers on Small and Medium Enterprises (SME) Growth Market - to all issuers. The proposed changes aim at reducing the administrative burden on issuers required to draw up and maintain insider lists under MAR.’ The Consultation Paper is here.

Other Financial Crime News

In other financial crime news this week, the Financial Conduct Authority in the UK has launched a new portal to make reporting easier. ‘Previously, firms needed to sign in to 3 different systems.’ However, from ‘31 March 2025, firms can access My FCA as a single point of sign in for regulatory reporting tasks including submitting regulatory data and paying fees.’

In other news, in the UK, the government hosted a summit which agreed new measures against organised immigration crime. The Home Office press release is here, and the PM’s Office press release is here.

And finally, two agencies have published significant documents this week. First, the National Crime Agency in the UK has published its annual plan for 2024-2025. Secondly, the Serious Fraud Office has published its 2025-2026 Business Plan. The Plan focuses on the use of ‘new tools, enhancing its intelligence capacity and working ‘more vigorously’ with domestic and international partners…. This approach has already delivered faster progression of cases with stricter case discipline creating capacity to open eight new investigations and charge a case within 15 months of opening. [The] SFO aims to use the new “failure to prevent fraud” offence, part of the Economic Crime and Corporate Transparency Act, which comes into force in September. The plan also includes delivery of refreshed corporate guidance for engaging with the SFO and advancing plans for a whistleblower incentivisation scheme. Operational divisions will also begin rolling out Technology Assisted Review, which has been found during a pilot to review documents for disclosure up to 40 per cent faster than our standard method. The SFO will continue to invest in its covert operational capacity and work more closely with key law enforcement and regulatory partners. The SFO recently created a new taskforce to tackle international bribery and corruption, with key partners Switzerland and France.’

Cybercrime

The cybercrime news this week starts in the US, where the House Oversight Sub-Committee has examined state-sponsored cyber-attacks targeting critical infrastructure. The cyber-threat from China to US critical infrastructure is one which has been widely appreciated in US political circles for some time. The Cybersecurity and Infrastructure Security Agency, which is part of the Department of Homeland Security, identified the problem as early as last February, and the FBI has persistently warned of the threat. In consequence, it is maybe time for talking to take a bit of a back seat, and more action in its place.

In the UK, JISC (Joint Information Systems Committee), the organisation which supports education and research in further and higher education, has launched a ‘managed service for tertiary education and research to monitor, detect, and respond to security threats [which will] help universities, colleges, and research centres guard against multiplying cyber security threats in the education and research sectors. In 2024, the educational institutions across the UK that make up Jisc’s membership dealt with hundreds of cyber incidents, including 11 major incidents that severely impacted business as usual operations, according to the non-profit company’s annual cyber posture survey. With each cyber-attack requiring expert attention and resource, the overall cost to the sectors is estimated to be around £2 million.’

In other news from the UK, the Centre for Emerging Technology and Security (‘CETaS’) has published a new report on ‘AI and Serious Online Crime’. The report indicates that there is ‘considerable evidence emerging of a substantial acceleration in AI-enabled crime.’ AI’s ability to automate and operate at scale accounts for much of the acceleration, and ‘Chinese innovation in frontier AI is beginning to have a significant impact on the threat landscape.’ From the perspective of the UK, ‘law enforcement is not adequately equipped to prevent, disrupt or investigate AI-enabled crime.’ With this warning ringing in our ears, the government has published a Policy Paper ‘Cyber Security and Resilience Policy Statement’. As the Policy Paper provides, ‘Changes in global politics and developments in technology mean that the UK is facing greater challenges to its cyber security than ever before…. It is clear that this is the right time to update the UK’s legacy frameworks, address gaps in the current regulation, and ensure that all relevant entities are brought within scope of the rules. [The] proposals will ensure that critical infrastructure is protected from hostile actors – securing essential services, such as the NHS and energy providers. Improved standards and regulation will also foster the secure networks and systems that are essential for business growth and innovation.’ Allied, is the publication of the National Cyber Security Centre’s Seventh Annual Review which warns of the continuing threat to UK’s critical infrastructure.

We end this round-up of the cybercrime news this week with news that in Australia superannuation funds have been the subject of a cyber-attack, with data having been compromised, and some members losing money. According to reports, AustralianSuper, as it is known, has been the subject of around 600 cyber-attacks in the past month alone.