Episode 176

1st August– 3rd August 2025

Sanctions

US Sanctions Brazilian Supreme Court Justice Alexandre de Moraes for Human Rights Abuses

The US Department of the Treasury has sanctioned Brazilian Supreme Federal Court Justice Alexandre de Moraes under Executive Order 13818 for serious human rights violations. Accusations include arbitrary pre-trial detentions, censorship of journalists and social media users—including Americans—and political targeting, notably of former President Jair Bolsonaro. These actions are considered threats to free expression and US interests. Sanctions block de Moraes' assets in the US, restrict transactions, and aim to pressure behavioural reform under the Global Magnitsky framework.

US Treasury Unleashes Largest Iran Sanctions Package Since 2018, Targeting Shamkhani Shipping Empire

On 30th July 2025, the US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) announced a sweeping sanctions package against a vast Iranian shipping network led by Mohammad Hossein Shamkhani, son of a top regime advisor. The action includes:

-          The designation of over 50 individuals and entities, plus more than 50 vessels involved in transporting Iranian and Russian oil globally.

-          The network allegedly generated tens of billions of dollars in profits, using aliases, front companies, and opaque ownership structures to evade detection.

-          OFAC also issued Iran General License R, allowing limited safety and environmental transactions involving newly blocked persons or vessels.

-          The sanctions were enacted under Executive Orders 13902 and 13846, as part of a broader campaign of maximum economic pressure on Iran.

The move marks the most extensive Iran-related sanctions since 2018 and underscores the US government's intent to disrupt financial flows supporting Tehran’s regime.

US Sanctions Palestinian Officials Over Non-Compliance with Peace Commitments

The US State Department announced sanctions on officials from the Palestinian Authority and the Palestine Liberation Organisation (‘PLO’) following a congressional report stating they violated obligations under the PLO Commitments Compliance Act and the Middle East Peace Commitments Act. Key reasons cited include:

-          Initiating actions at international bodies like the ICC and ICJ which contradict previous peace agreements.

-          Supporting terrorism through payments to perpetrators and glorification of violence in educational materials.

-          Undermining peace efforts endorsed by UN Security Council Resolutions 242 and 338.

Sanctions include visa bans on implicated officials, underlining US intent to hold them accountable and uphold national security interests.

UK Supreme Court Upholds Sanctions on British Billionaire Shvidler, Drawing Powerful Dissent

In a significant ruling, the UK Supreme Court has dismissed the appeal of British multi-billionaire Eugene Shvidler, upholding the legality of the sanctions imposed on him by the UK government. The decision, delivered on 29th July 2025, found the sanctions to be lawful and proportionate.

Shvidler, a British citizen of Russian origin and a friend of Roman Abramovich, was sanctioned in March 2022, resulting in his assets being frozen worldwide, and making it a criminal offence for others to deal with him. The grounds for his designation included his association with Roman Abramovich, who was linked to obtaining benefits from or supporting the Russian government, and his role as a non-executive director of Evraz plc, a company in a strategically significant sector for Russia.

The Supreme Court majority (Lord Sales and Lady Rose, with whom Lord Reed and Lord Richards agreed) found the sanctions lawful, emphasising that the effectiveness of a sanctions regime depends on the cumulative effect of all measures. They held that Shvidler's designation contributed to this cumulative effect. The majority also stated that the Foreign Secretary and Transport Secretary have "special constitutional responsibilities" and "superior institutional competence" in matters of national security and foreign relations, warranting a "wide margin of appreciation" for their judgments on sanctions. While acknowledging the "drastic" and "severe" impact of the asset freeze on Shvidler and his family, they noted that the Office of Financial Sanctions Implementation (‘OFSI’) licensing system acts as a "safety valve" to meet basic needs, even if a luxury lifestyle is disrupted.

However, Lord Leggatt issued what Professor Mark Elliott (in a blog post) described as a "striking, powerfully written dissent" – which I have also linked in the podcast transcript. He "profoundly disagree[d]" with the majority's deference to the Executive, arguing that courts should not "rubber-stamp assertions" which invade individual liberties. Lord Leggatt contended that the government's reasons for sanctioning Shvidler were "inadequate and lacking credibility" and did not establish a "rational connection" between the measure and the desired aims. He criticised the "Orwellian" implication that it is legitimate to freeze assets to pressure someone to support government policy. In his view, the indefinite, worldwide asset freeze on a British citizen who had done nothing unlawful was "oppressive, unjust and disproportionate".

£300,000 Penalty for Breach of UK Russia Sanctions

Markom Management Limited (‘MML’) has been fined £300,000 by the Office of Financial Sanctions Implementation (‘OFSI’) for breaching UK sanctions linked to Russia's 2014 annexation of Crimea. MML facilitated a £416,590.92 payment to a designated person under asset freeze, despite knowing the recipient's sanctioned status and failing to implement appropriate compliance procedures. The case underscores the importance of robust sanctions controls for firms of all sizes. The UK continues to strengthen sanctions enforcement, with proposed measures to increase penalties and expedite case resolutions. The Notice is here.

UK Amends Consolidated List

On 31st July 2025, the Office of Financial Sanctions Implementation in the UK made 19 variations under the Cyber sanctions regime and one variation under the Russia sanctions regime. The Consolidated List has been updated.

Money Laundering

New Guidance on Money Laundering Exemptions Under PoCA Updated

The UK government has updated its guidance on exemptions to money laundering offences under the Proceeds of Crime Act 2002 (‘PoCA’), incorporating legislative changes from the Serious Organised Crime and Police Act 2005 and the Economic Crime and Corporate Transparency Act 2023. Key updates include:

• Raised Thresholds: The threshold for exempt transactions increased to £3,000 across various contexts.

• Account Operation Exemption: Deposit-taking bodies can conduct routine account operations below the threshold without filing a Suspicious Activity Report (‘SAR’).

• Paying Away Exemption: Businesses ending a client relationship may return funds under £3,000 without a SAR if due diligence is met.

• Mixed Property Exemption: Firms can release non-suspicious portions of assets while retaining suspected funds

• Reporting Exemption: Information gained through immigration status checks does not trigger mandatory reporting.

Fraud

Massive COVID-19 Testing Scheme Exposed: CEO and Doctor Charged in $500M Fraud

A CEO and medical director were arrested for orchestrating an alleged $500 million health care fraud involving bogus COVID-19 tests. Fast Lab Technologies, led by Cemhan “Jimmy” Biricik and medical director Dr. Martin Perlin, billed Medicare, Medicaid, TRICARE, and private insurers for COVID-19 testing services which, it is alleged, were never performed. Their website promised “free” tests, but insurance information was exploited to submit claims for antigen and PCR tests—many of which had not occurred, were done at home, or lacked proper sample collection. Dr. Perlin authorised the tests without patient relationships. Fast Lab billed over $500M and received more than $50M in payments.

EFCC Cracks Down on Internet Fraudsters in Abuja

On 29th July 2025, the Economic and Financial Crimes Commission (‘EFCC’) arraigned eight individuals at the Federal High Court in Lafia, Nasarawa State for internet fraud. Each was charged separately for impersonating foreign nationals online to deceive victims, using platforms like Telegram, Instagram, and Facebook. The suspects pleaded guilty and received one-year prison sentences, with fines ranging from ₦50,000 to ₦150,000. One convict was ordered to pay the remaining balance of restitution, and all devices used in the fraud will be sold, with proceeds directed to the government crime fund.

Market Abuse

Korea’s Financial Authorities Unite to Combat Stock Market Manipulation with New Joint Response Team

South Korea’s Financial Services Commission (‘FSC’), Financial Supervisory Service (‘FSS’), and Korea Exchange (‘KRX’) have launched a Joint Response Team to address stock market manipulation. This collaborative unit, unveiled on 30th July 2025, is housed within the KRX and aims to eliminate the jurisdictional and informational silos which previously hindered swift enforcement.

The team’s creation marks a strategic shift toward a “one-strike-out” approach to financial crime. It integrates personnel from all three institutions to streamline investigations, enhance surveillance, and ensure rapid enforcement. AI technology will be introduced to shift market monitoring from account-based to individual-focused tracking, allowing for more precise detection of manipulation.

Chairman Kwon Dae-young emphasised that violators should face penalties exceeding their illicit gains and be barred from future market participation. The team also plans to work closely with law enforcement to accelerate criminal investigations and impose severe sanctions, especially in cases involving financial industry insiders. Financial firms are being urged to strengthen internal controls and adopt robust codes of conduct to prevent abuse of privileged information.

Other Financial Crime News

UK's Economic Crime Fight: Unpacking the NECC's 2024-2025 Battle Against Fraud and Filthy Lucre

The National Economic Crime Centre (‘NECC’) in the UK has just released its Annual Report for 2024-2025, painting a clear picture of the evolving fight against economic crime. This past financial year saw significant advancements in system-wide disruptions, actions to deny criminals their assets, and an increase in convictions for fraud and money laundering offences. The NECC's strategy has been rooted in intelligence-led operations, robust cross-sector collaboration, and leveraging cutting-edge data and technology to counter these ever-changing threats. It is also a landmark year, marking the 10th anniversary of the NECC's public-private partnership model, and a new chapter begins with Rachael Herbert taking the helm as Director in April 2025, succeeding Adrian Searle.

The landscape of economic crime in the UK remains challenging. Fraud, startlingly, is still the most reported crime in England and Wales, accounting for a massive 43% of all incidents in the year ending December 2024, showing an upward trend after a post-COVID decline. This rise highlights how quickly criminals adapt, exploiting new online and technological vulnerabilities to target individuals and businesses on an industrial scale, often from overseas. Money laundering, which underpins nearly all forms of organised crime, is also growing more complex, with criminals increasingly turning to cryptocurrencies and new financial services to conceal and move illicit proceeds at speed and scale.

Despite these formidable challenges, the NECC has spearheaded and supported several impactful operations. For instance, Operation MACHINIZE targeted money laundering through cash-intensive businesses, leading to 35 arrests, 84 warrants, and the seizure of over 200,000 items of contraband. Another significant victory was Operation DESTABILISE, which disrupted Russian-speaking money laundering networks, resulting in 84 arrests and the seizure of over £20 million in cash and cryptocurrency. The newly established Fraud Targeting Cell has also been instrumental, proactively identifying high-harm fraudsters using cross-sector intelligence and enabling arrests through its intelligence packages. The NECC also supported the UK's first Crypto Wallet Freezing Order, successfully forfeiting approximately $190,000 in August 2024, demonstrating new powers in action.

A cornerstone of the NECC's success is its "world-leading" public-private partnership model, which has expanded to include 200 members. A prime example is the Data Fusion Pilot, involving seven UK banks and the National Crime Agency (‘NCA’), which produced 338 tactical and eight strategic intelligence reports, leading to six new investigations. This initiative allows for joint analysis of transaction data to generate richer intelligence. International cooperation is also key, as seen with EUROPOL's A.S.S.E.T Sprint, which identified over £30 million in criminal assets, and the UK's first INTERPOL Silver Notice issued with NECC support, aimed at tracing and recovering criminal assets globally. Overall, the NECC's Public Private Partnership network has directly or indirectly supported the identification of over 900 new accounts associated with criminality and over £66 million in restrained or recovered assets in 2024/25.

Looking ahead, the NECC continues to innovate and adapt. Alerts have been issued on emerging threats such as the use of artificial intelligence in financial crime and SIM card fraud, prompting cross-sector action to close vulnerabilities and prevent criminal exploitation. The new Director, Rachael Herbert, has stated her dedication to continuing the NECC’s valuable work, with a strong focus on using data at scale and seeking new information from both public and private sector partners to further unlock opportunities for preventing and disrupting economic crime. The centre emphasises prevention, real-time intervention, and asset recovery as key aims to combat the adaptable nature of criminals. The increasing maturity of the NECC's operations, leading to a rise in system-wide disruptions and convictions, underscores its vital role in protecting UK citizens and the financial system from economic crime.