Episode 155

28th April– 4th May 2025

Sanctions

China may lift sanctions on MEPs

China is reportedly preparing to lift sanctions on several Members of the European Parliament (MEPs) as part of a broader effort to improve relations with the European Union. The sanctions, first imposed in 2021, targeted MEPs who had criticised China’s human rights policies, particularly concerning alleged abuses in Xinjiang. The removal of these restrictions could make diplomatic engagement easier, though experts suggest it is unlikely to revive the stalled EU-China investment deal.

This shift comes amid uncertainty over US trade policies under President Donald Trump, which have created economic challenges for China. Analysts believe Beijing is attempting to position itself as a more attractive trade partner for the EU, particularly as it faces new tariffs on exports to the United States. However, significant barriers to deeper EU-China cooperation remain, including Beijing’s close ties to Moscow and ongoing European concerns about human rights.

While some European lawmakers welcome the easing of sanctions, others see it as a limited gesture which will not substantially change EU-China relations. The European Commission, meanwhile, has no plans to lift its own sanctions on Chinese officials accused of abuses in Xinjiang. The situation remains fluid, with further developments expected ahead of a scheduled EU-China summit in July.

Transparency International reflects on professionals enabling sanctions evasion

Now a direction to some light reading in the form of a blog post from Transparency International which examines how UK professionals—including lawyers, estate agents, and property managers—are assisting Russian elites in bypassing asset freezes imposed following Russia’s invasion of Ukraine. According to the Office of Financial Sanctions Implementation (OFSI), it is "almost certain" that sanctioned individuals are exploiting complex corporate structures and offshore jurisdictions to circumvent sanctions. This often involves transferring assets to family members or associates to shield them from restrictions.

One method of sanctions evasion involves pre-emptive asset transfers before restrictions take effect. For instance, Russian billionaire Roman Abramovich allegedly moved his property holdings to his children just weeks before UK sanctions were imposed. These tactics highlight the ease with which individuals can shift ownership to avoid penalties, taking advantage of opaque legal arrangements and trusts to obscure their financial dealings.

The article also raises concerns about the effectiveness of the UK’s transparency measures. While the introduction of the Register of Overseas Entities aimed to increase oversight, enforcement has remained weak. Many property owners continue to conceal their identities behind legal loopholes, making it difficult for authorities to detect violations. Offshore jurisdictions—including the British Virgin Islands and Jersey—have played a key role in suspected breaches, underscoring the need for stricter corporate transparency.

Another major issue is the role of professional enablers. Small property firms and service providers continue facilitating sanctions evasion by making payments on behalf of sanctioned individuals without proper licensing. Many of these transactions cover property maintenance, household staff wages, and utility bills, effectively allowing restricted individuals to continue benefiting from their assets.

The article concludes by calling for stronger enforcement measures. It suggests that improving corporate transparency, closing loopholes in trust ownership, and increasing oversight of professionals aiding sanctions evasion are necessary to uphold the UK’s sanctions regime. Without these measures, a small but influential network of enablers will continue to undermine the effectiveness of financial sanctions against Russia’s elite.

OFSI issues and amends licences

The Office of Financial Sanctions Implementation (‘OFSI’) in the UK has amended a licence (INT/2025/5855272) to include the International Maritime Organisation. The licence permits payments from the Government of Russia via Gazprombank Group to maintain membership in certain UK-based international trade and diplomatic organisations which have recognised status under international law. It applies to organisations such as the International Coffee Organisation, International Grains Council, International Sugar Organisation, International Renewable Energy Agency (IRENA), North Atlantic Salmon Conservation Organisation, Northeast Atlantic Fisheries Commission, and now to the International Maritime Organisation. OFSI has also issued a licence which provides exemptions for specific legal and financial transactions involving designated persons (DPs). The licence allows payments for legal services provided to individuals or entities subject to sanctions, ensuring that they can access professional legal representation despite financial restrictions. The licence permits legal fees, counsel fees, and associated expenses to be paid within set financial limits. Each law firm can receive up to £4 million, while additional expenses such as translation fees or court transcripts are capped at £400,000. These payments must be made directly to legal professionals and law firms, ensuring funds are not misdirected or used beyond the scope of legal services. The eligibility criteria specify that this exemption applies to UK-regulated law firms, legal advisers, and counsel, including international branches operating in Canada, the EU, EFTA states, and the US. However, the licence explicitly excludes payments for defamation cases. Legal professionals must also adhere to capped hourly rates, such as £896 per hour for solicitors with over eight years’ experience and £1,500 per hour for counsel. This licence is effective from 29th April 2025 to 28th October 2025, replacing the previous licence which expired on 28th April 2025.

OFSI has issued a general licence which grants permission under Regulation 64 of The Russia (Sanctions) (EU Exit) Regulations 2019 for the transfer of assets and liabilities required to integrate Credit Suisse Group AG into UBS Group AG.

The licence enables two key types of integration: the UK Integration, which covers the transfer of business from Credit Suisse UK entities to UBS UK entities, and the Global Integration, which deals with the broader operational merger of Credit Suisse Group AG into UBS Group AG. This permission extends to individuals, corporate bodies, and organisations involved in these transactions, allowing them to conduct activities necessary for the process.

Importantly, the licence comes with notification requirements for those using it. It does not override other restrictions outlined in the Russia Regulations, except where explicitly permitted under this or other licences. This ensures compliance with broader sanctions laws while facilitating the necessary business adjustments.

The licence is effective from 28 April 2025 until 26 April 2030. This time frame provides a structured period for the completion of the integration process, ensuring that necessary transfers and adjustments can take place within a defined regulatory framework.

OFSI amends Russian designation

OFSI has published a Notice which amends existing sanctions on Albert Kashafovich Shigabutdinov (Group ID: 15609), who remains subject to an asset freeze and trust service restrictions due to his involvement in key Russian industries. Shigabutdinov was designated due to his involvement in obtaining a benefit from or supporting the Russian government, specifically through his role as a director or manager in the AO TAIF Group of companies. These entities operate in sectors deemed strategically significant to Russia, including energy, financial services, and digital technologies.

ECJU issues Syria sanctions amendments and licence

The UK government has amended its Syria sanctions and revoked the General Trade Licence which was previously in place for earthquake relief efforts in Syria. The amendments, effective from 25 April 2025, remove export restrictions on several sectors, including aviation fuel, crude oil and natural gas technology, financial services, and electricity production-related goods. These changes aim to facilitate investment in Syria’s energy infrastructure and support the country's economic recovery. However, other export prohibitions remain in place, and UK businesses must ensure compliance with remaining sanctions and counter-terrorism finance measures.

The revocation of the General Trade Licence follows the removal of restrictions which previously prohibited the acquisition, supply, or delivery of petroleum products, as well as related financial services under multiple regulations. Businesses engaged in export activities to Syria should conduct due diligence to ensure they do not violate other international sanctions. Additional guidance on compliance can be found in the UK government’s Syria sanctions guidance.

OFAC updates Counter Terrorism Designations, targets oil derivatives

The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has outlined recent counter-terrorism and Iran-related sanctions updates. Specifically, it has listed entities and vessels newly designated under the Specially Designated Nationals (SDN) List due to their involvement in delivering oil derivatives to the Houthis, which poses secondary sanctions risks. Several maritime companies and tankers linked to Ansarallah have been sanctioned, along with vessel name changes reflecting updated designations related to Iran. Again, and in relation to Iran, OFAC has sanctioned six entities and six individuals from Iran and China for procuring ballistic missile propellant ingredients for Iran’s Islamic Revolutionary Guard Corps. The network facilitated shipments of sodium perchlorate and dioctyl sebacate, key chemicals for solid rocket motors, from China to Iran, violating international missile non-proliferation agreements. The sanctions, imposed under Executive Order 13382, block all designated persons' US-linked assets and prohibit transactions involving them. OFAC emphasises that these measures aim to curb Iran’s missile program and promote regional stability while outlining procedures for delisting sanctioned individuals upon demonstrated compliance.

OFAC has also sanctioned three maritime companies and their vessels for delivering refined petroleum products to Houthi-controlled ports in Yemen. These deliveries occurred after the expiration of a key general license, violating US sanctions aimed at disrupting Houthi revenue streams which fund their attacks in the region. The sanctioned entities—Zaas Shipping, Bagsak Shipping Inc, and Great Success Shipping Co—have been designated for materially supporting the Houthis. Their vessels, Tulip BZ, Maisan, and White Whale, have been identified as blocked property. The action reinforces US efforts under Executive Order 13224 to counter terrorist financing and restrict Iran-related sanctions evasion. OFAC warns that transactions with these designated entities pose secondary sanctions risks.

Sanctions on Traders of Iranian Petroleum and related products

And finally on US sanctions and action related to Iran, the Department of State has announced new sanctions targeting seven entities involved in the trade of Iranian petroleum and petrochemical products, as well as two vessels identified as blocked property. These measures are part of Executive Order (E.O.) 13846, aimed at curbing Iran’s ability to generate illicit revenue.

The sanctions focus on key actors enabling Iran’s evasion of restrictions by exporting petrochemical products to third-party countries. Four sellers and one purchaser have allegedly facilitated transactions worth hundreds of millions of dollars, contributing to Iran’s destabilising activities in the Middle East. Additionally, a marine management company responsible for transporting Iranian petroleum products and an Iran-based cargo inspection company assisting in verification of illicit shipments have been sanctioned.

These restrictions mean that all assets and interests held by the designated entities within the United States or controlled by US persons are blocked. Transactions involving these entities are prohibited, unless specifically authorised by the OFAC.

RUSI blogs on the shift to tariffs replacing sanctions

The Royal United Services Institute (‘RUSI’) has published a blog on how President Trump’s administration has shifted from traditional sanctions enforcement to unilateral tariff measures, fundamentally altering US economic diplomacy. By using tariffs as coercive tools, the administration has weakened the multilateral frameworks that underpin sanctions, creating compliance risks and regulatory burdens for European partners. The dismantling of enforcement mechanisms, such as the KleptoCapture Task Force, signals a retreat from resource-intensive sanctions in favour of visible pressure tactics. This shift threatens the effectiveness of global sanctions, making enforcement more fragmented and vulnerable to circumvention. The article argues that Europe must strengthen its autonomous enforcement capacity and coordination to maintain sanctions as a credible diplomatic tool in an increasingly volatile economic landscape.

Money Laundering

BVI government launches National Strategic Action Plan

The Government of the Virgin Islands has launched its National Strategic AML/CFT/CPF Action Plan, aimed at strengthening the territory’s defences against money laundering, terrorist financing, and proliferation financing. Approved by the National Anti-Money Laundering Coordinating Council (‘NAMLCC’) in February 2025, the plan supports the 2024–2026 National AML/CFT/CPF Strategy and aligns with international standards set by the Financial Action Task Force (‘FATF’).

The plan outlines key priorities, including legislative reforms, enhanced regulatory oversight, improved supervision of financial institutions and non-financial businesses, and greater transparency in beneficial ownership. It also focuses on detecting, investigating, and prosecuting financial crimes, as well as strengthening international cooperation.

Premier Dr. Natalio D. Wheatley, who chairs the NAMLCC, emphasised that the plan reflects the Virgin Islands’ commitment to financial integrity, transparency, and accountability. The strategy assigns responsibilities to agencies such as the Financial Investigation Agency, Financial Services Commission, Attorney General’s Chambers, and Royal Virgin Islands Police Force. Progress will be continuously monitored to ensure effective implementation.

Bribery and Anti-Corruption

SFO data bribery investigation

The Serious Fraud Office (SFO) has launched an international bribery investigation involving UK company Blu-3 and former associates of Mace Group, related to suspected corruption in a major construction project. This investigation centres on alleged bribes exceeding £3 million, paid in connection with the development of a Microsoft data centre in the Netherlands.

As part of the operation, the SFO conducted searches at five properties across London, Kent, Surrey, and Somerset, seizing evidence and making three arrests for questioning. In coordination with Monaco authorities, an additional suspect’s premises were searched. Over 70 SFO staff participated in the operation, underscoring the scale and seriousness of the investigation.

Nick Ephgrave QPM, Director of the SFO, emphasised the negative impact of bribery on financial markets and corporate integrity, affirming the agency's commitment to robust enforcement against corruption both domestically and internationally. The operation aligns with broader UK anti-corruption efforts, supported by the National Crime Agency (NCA).

Solicitor General Lucy Rigby KC MP, who attended one of the arrests, reiterated the government’s focus on tackling bribery as part of its broader reforms. She highlighted how corruption undermines fairness, damages businesses, and harms the wider economy. The government’s Plan for Change reinforces its stance on financial transparency and ensuring criminal accountability.

This case signals the UK’s continued aggressive approach to corporate bribery enforcement and may have wider implications for businesses operating internationally. Authorities will likely scrutinise compliance measures within major firms, particularly those engaged in large-scale construction and infrastructure projects.

Fraud

Fighting fraud depends on identifying beneficial ownership

The US Government Accountability Office (‘GAO’) discusses in a podcast the challenges inspectors general face in identifying the true ownership of companies involved in federal programs drawn from a new report. Fraud is a persistent issue, with some private companies obscuring their ownership to secure government contracts or federal benefits. The report highlights efforts to improve transparency and suggests that the Financial Crimes Enforcement Network (‘FinCEN’) should take steps to help inspectors general better determine beneficial ownership.

A key development in addressing this issue is the beneficial ownership registry established by the US Department of the Treasury’s Financial Crimes Enforcement Network. This registry, mandated by a 2024 law, requires certain companies to report their ownership details. While some OIGs have begun accessing this data, they report difficulties in using it effectively due to limitations in bulk data downloads and unclear access policies.

The GAO recommends that FinCEN improve communication with Office of the Inspectors General (‘OIGs’) to clarify access procedures and enhance the usability of the registry for fraud detection. Treasury has also announced plans to narrow reporting requirements to foreign companies only, which may impact the effectiveness of the registry.

UK government updates on Fraud Bill

The Department for Work and Pensions in the UK has updated on the Public Authorities (Fraud, Error, and Recovery) Bill, currently progressing through the UK Parliament. The Bill aims to strengthen government powers to tackle welfare fraud and financial mismanagement. Introduced by the Department for Work and Pensions (‘DWP’), the Bill is expected to save taxpayers £1.5 billion over the next five years by enhancing fraud detection and recovery mechanisms. Key provisions include allowing DWP to recover money directly from fraudsters’ bank accounts and granting investigators more authority to detect and recover fraudulent claims across the public sector. The legislation also introduces new measures to prevent overpayments, protect vulnerable customers, and implement stricter oversight to ensure proportionate use of these powers.

Additionally, the Bill expands the investigative capabilities of the Public Sector Fraud Authority, doubling the time limit for civil claims against COVID-related fraud from six to twelve years. The government has framed the initiative as part of broader efforts to address the £35 billion in taxpayer money incorrectly paid out since the pandemic, aiming to curb systemic fraud while redirecting funds towards public services. With new oversight mechanisms and additional DWP fraud investigators, the legislation represents a major step in addressing financial abuse within welfare and public spending systems.

Market Abuse

Price Manipulation and Crypto

Now a direction to an interesting article which discusses the tactics used by those who manipulate crypto prices. The tactics include pump-and-dump schemes, where groups artificially inflate a token’s price before selling off, whale moves, where large holders influence market trends, and wash trading, where fake transactions create the illusion of demand. Other methods include spoofing and layering, where manipulators place fake orders to mislead traders.

The piece highlights how emotional reactions—greed, fear, and FOMO (fear of missing out)—play a crucial role in market manipulation. It also discusses advanced tactics, such as bot-driven price manipulation, insider trading, and oracle manipulation in decentralised finance (DeFi).

Ultimately, the article warns that manipulation erodes trust in crypto markets, fuels regulatory scrutiny, and slows innovation. It advises traders to research thoroughly, monitor trading volume, and use trusted platforms to avoid falling victim to scams. The article is well-worth a read.

FCA addresses its strategy to market abuse

The Financial Conduct Authority (‘FCA’) in the UK’s joint executive director of enforcement and market oversight, Therese Chambers, has outlined the regulator’s agenda to combat market abuse. It is built on the "three Ps" approach: Predictable, Proportionate, and Purposeful. The regulator aims to enhance transparency, streamline transaction reporting, and reduce burdens on firms while maintaining market integrity. Organised crime groups pose a significant threat, accounting for 25% of suspicious transaction reports, prompting intensified enforcement efforts. The FCA is also tackling strategic leaks, unlawful disclosures, and insider trading through proactive surveillance and collaboration with industry stakeholders. Additionally, the regulator is exploring innovative market structures, such as the Private Intermittent Securities and Capital Exchange System (‘PISCES’), to support economic growth while balancing regulatory oversight. Strengthening international cooperation remains a priority to address cross-border financial crime and ensure UK markets remain resilient and trusted.

ESMA issues supervisory guidelines to prevent market abuse under MiCA

The European Securities and Markets Authority (‘ESMA’) has issued supervisory guidelines to prevent market abuse under the Market in Crypto Assets Regulation (‘MiCA’). These guidelines, based on ESMA’s experience with the Market Abuse Regulation (‘MAR’), provide National Competent Authorities (‘NCAs’) with principles for effective supervision and specific practices for detecting and preventing market abuse in crypto assets. They address the unique challenges of crypto trading, including its cross-border nature and the influence of social media. ESMA emphasises a risk-based and proportionate approach, encouraging NCAs to foster a common supervisory culture through industry dialogue and collaboration. The guidelines will be translated into all EU languages and officially applied three months after publication, though ESMA recommends early implementation. NCAs should, within two months, notify ESMA whether they already comply, or intend to comply, with the guidelines.

Other Financial Crime News

Transparency International and golden passports

A new article by Transparency International examines the European Commission’s legal challenge against Malta’s golden passport scheme, which allows foreign nationals to obtain Maltese—and by extension, EU—citizenship in exchange for financial investment. The Commission argues that this practice undermines EU integrity by granting citizenship without requiring a genuine connection to the country, potentially enabling money laundering and corruption. On Tuesday of this week, the European Court of Justice agreed that Malta must end its golden passport program, which allowed wealthy individuals to buy citizenship. The court determined that selling EU citizenship violates European law, as nationality cannot be acquired through commercial transactions. Despite Malta’s previous reforms, the court found that the scheme failed to establish the necessary bond of solidarity and trust between member states.

Malta’s government has stated that it will respect the ruling while assessing its legal implications. The program, which has generated €1.4 billion since 2015, has faced criticism for enabling money laundering, corruption, and sanctions evasion. Transparency advocates welcomed the decision, arguing that such schemes have allowed individuals linked to financial crimes and geopolitical conflicts to gain access to the EU. The ruling also reinforces the European Commission’s broader stance against citizenship-for-sale programs, which have been phased out across most EU countries in recent years.

Council of Europe launches new economic crime project

The Council of Europe and the Swedish International Development Cooperation Agency have launched the Countering Economic Crime in Serbia project, aimed at strengthening Serbia’s anti-money laundering (AML), counter-terrorism financing (CFT), and asset recovery frameworks. The initiative aligns Serbia’s policies with evolving European and international standards, including recommendations from the Financial Action Task Force (FATF) and EU legislation.

The project focuses on three key areas:

-    Enhancing prevention mechanisms for economic crimes, including corruption and money laundering, by improving risk assessments and regulatory frameworks.

-         Strengthening legal and operational capacities for detecting, investigating, and prosecuting financial crimes.

-         Optimising asset recovery and management systems to ensure effective identification, confiscation, and disposal of illicit proceeds.

The initiative includes expert consultations, capacity-building workshops, case mentoring, and IT tool development to improve efficiency in both the public and private sectors. By reinforcing Serbia’s financial crime enforcement mechanisms, the project aims to bolster transparency and accountability.

Spotlight on Corruption responds to SFO corporate enforcement guidance

As we reported last week, the Serious Fraud Office (SFO) is taking a fresh approach to corporate crime enforcement under Director Nick Ephgrave, aiming to incentivise self-reporting with quicker investigations and guaranteed Deferred Prosecution Agreements (DPAs) for companies which cooperate fully. The agency has also ramped up international anti-bribery efforts and initiated new prosecutions, signalling a stronger stance. However, Spotlight on Corruption has said this week that the effectiveness of its new corporate guidance remains uncertain, as it does not distinguish sufficiently between firms which self-report early and those which wait until investigations are underway. Without clear benefits for proactive disclosure, many companies may continue to take a “wait-and-see” approach rather than coming forward voluntarily.

Additionally, existing court processes often make guilty pleas more appealing than DPAs. Lower fines in the UK compared to jurisdictions like France, along with the lack of corporate probation orders for convicted firms, reduce incentives for cooperation. The article argues that increasing corporate fines, ensuring meaningful consequences—such as exclusion from government contracts—and requiring firms to address victim compensation could strengthen corporate accountability. While the SFO’s new strategy is promising, systemic changes are still needed to ensure companies take enforcement efforts seriously.