Episode 179

11th August– 14th August 2025

Sanctions

US Sanctions Iranian Network for Financial Evasion and Domestic Repression

The US Departments of Treasury and State jointly sanctioned 18 Iranian entities and individuals for orchestrating complex schemes to bypass US sanctions and suppress civil liberties. The Treasury’s Office of Foreign Assets Control (‘OFAC)’ targeted financial institutions and IT firms which have enabled Iran to repatriate illicit oil revenues and fund its proxies, while also facilitating domestic surveillance and censorship.

Among the designated entities is RUNC Exchange System Company, which developed the Cross-Border Interbank Messaging System (‘CIMS’) to shield Iranian transactions from international scrutiny. Another key target is Cyrus Offshore Bank, secretly controlled by Parsian Bank and used to funnel oil revenues to the Islamic Revolutionary Guard Corps (‘IRGC’) via offshore accounts. These efforts reflect Iran’s strategic pivot toward shadow banking and alternative financial messaging to evade sanctions. The Specially Designated Nationals List has been updated.

The sanctions also extend to Pasargad Arian Information and Communication Technology Company (‘FANAP’), an Iranian tech firm linked to the Ministry of Intelligence and the IRGC. FANAP has developed tools like facial recognition software and censorship platforms used to enforce hijab laws and restrict internet access. The State Department emphasised that these actions are part of a broader campaign under Executive Order 13902 and National Security Presidential Memorandum 2, aimed at applying maximum economic pressure on Iran while promoting accountability for human rights violations and destabilising activities.

US Treasury Sanctions Entities Fuelling Violence and Illegal Mining in Eastern Congo

The US Treasury’s Office of Foreign Assets Control (‘OFAC’) has imposed sanctions on armed groups and companies linked to violence and illicit mining in the Democratic Republic of the Congo. The sanctions target PARECO-FF, a militant group responsible for human rights abuses and illegal mineral trade in Rubaya, as well as Congolese and Chinese firms facilitating the export of conflict minerals. These actions aim to disrupt funding for armed groups, protect civilians, and promote legal investment in the region’s critical mineral supply chains.

US Court Rejects Ljiljana Karadzic’s Appeal Against Sanctions

The District Court in Columbia has once again denied Ljiljana Karadzic’s appeal to be removed from the US sanctions list, citing her continued public support for her husband Radovan Karadzic—convicted of genocide and war crimes—and her past efforts to help him evade arrest. The court upheld the Office of Foreign Assets Control’s (‘OFAC’) decision, referencing her attendance at events glorifying Karadzic’s legacy, her criticism of the International Criminal Tribunal for the former Yugoslavia, and misleading information about her contacts with him while he was in hiding. Despite her lawyer’s argument that these actions occurred decades ago and that the EU lifted similar sanctions years earlier, the court found her recent conduct still justified maintaining the sanctions.

US Auctions Seized Russian Superyacht Amid Crackdown on Oligarch Assets

The US government is auctioning off the $300-million-plus superyacht Amadea, seized from sanctioned Russian oligarch Suleiman Kerimov. The vessel, currently docked in San Diego, features luxury amenities including a glass elevator, mosaic pool, and heli-deck. The auction, requiring a $10 million deposit, is part of broader efforts to pressure Kremlin-linked elites over Russia’s invasion of Ukraine. Legal disputes continue over ownership, with prosecutors alleging that Eduard Khudainatov is a straw owner shielding Kerimov’s interests.

OFSI amends designations

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has made amendments to entries on the Global Irregular Migration Regime, Cyber Regime, and the UN Iraq Sanctions Regime. The changes have been added to the UK Sanctions List.

Money Laundering

US Senate Proposes Art Market Integrity Act to Combat Money Laundering

A bipartisan group of US Senators has introduced the Art Market Integrity Act, aiming to bring transparency to the $25 billion domestic art industry by subjecting art dealers and auction houses to the Bank Secrecy Act (‘BSA’). The bill would require these entities to report suspicious transactions, retain records of high-value sales, and identify beneficial ownership—aligning US standards with those already adopted by the EU and UK.

The move responds to longstanding concerns that the art market’s culture of discretion enables money laundering and sanctions evasion. Past investigations, including the Panama and Pandora Papers, revealed how shell companies and trusts obscure ownership of valuable artworks. Notable cases, such as Russian oligarchs and sanctioned individuals using art to bypass restrictions, have underscored the urgency for reform.

Supporters argue that the bill closes a major loophole in US financial oversight, with Transparency International and the Antiquities Coalition highlighting the risks posed by the art market’s opacity. If passed, the legislation would require any broker selling art worth $10,000 or more to comply with BSA reporting standards.

EBA Report Highlights SupTech’s Role in Strengthening EU Anti-Money Laundering Supervision

The European Banking Authority (‘EBA’) has released a report emphasising the transformative potential of supervisory technology (‘SupTech’) in enhancing anti-money laundering and counter-terrorism financing (AML/CFT) oversight across the EU. Drawing on surveys and workshops with national authorities and the European Commission’s AMLA Task Force, the report outlines how SupTech tools—nearly half of which are already operational—can improve data quality, collaboration, and risk detection. Despite promising results, challenges like resource limitations and legal uncertainties persist. The EBA pledges continued support to foster innovation and harmonise supervisory practices under the new EU AML/CFT framework.

Bribery and Corruption

Germany’s Anti-Corruption Efforts Fall Short, Says Council of Europe Watchdog

The Council of Europe’s Group of States against Corruption (‘GRECO’) has released a report evaluating Germany’s progress in implementing anti-corruption measures within central government and law enforcement. Out of 14 recommendations issued in the 2020 Fifth Round Evaluation, only four have been fully implemented, six partially, and four remain untouched.

In the realm of top executive functions, GRECO acknowledged steps such as expanding the Lobbying Register Act and introducing post-employment restrictions. However, it criticised the lack of robust mechanisms to monitor integrity standards, insufficient transparency around lobbying meetings, and the absence of mandatory conflict-of-interest disclosures.

Regarding law enforcement, GRECO welcomed the adoption of a tailored code of conduct for the Federal Police and the enactment of the Whistleblower Protection Act. Still, it urged stronger recruitment screening and internal oversight. The report concludes that Germany is not sufficiently compliant and requests a follow-up progress report by March 2026.

Other Financial Crime News

HMRC Launches First-Ever Corporate Prosecution Under Tax Evasion Facilitation Law

HMRC has initiated its first corporate prosecution under the Criminal Finances Act 2017’s “failure to prevent the facilitation of tax evasion” offence, targeting Stockport-based accountancy firm Bennett Verby Ltd over alleged R&D tax credit fraud. Six individuals, including a former director, face related charges. This landmark case comes after years of criticism over HMRC’s inaction despite reviewing over 100 cases. The prosecution signals a shift toward more assertive enforcement, urging businesses—especially in financial and professional services—to reassess their compliance procedures and prepare for heightened scrutiny.

Cybercrime

US Judiciary Bolsters Cybersecurity After Sophisticated Attacks

In response to a wave of persistent and sophisticated cyberattacks targeting its case management system, the US Federal Judiciary has announced enhanced cybersecurity measures to protect sensitive legal documents. While most filings remain publicly accessible to uphold transparency, the Judiciary is tightening access to confidential materials and collaborating with agencies like the DOJ and DHS to mitigate risks. Judge Michael Y. Scudder emphasised the urgency of modernising IT systems during recent congressional testimony, highlighting the evolving nature of cyber threats and the Judiciary’s commitment to safeguarding its digital infrastructure.

Emerging Tech Pairings Reshape Cyber Security Landscape

The UK government’s latest report explores how the convergence of emerging technologies—such as AI, Blockchain, IoT, Edge Computing, Quantum Communications, and Brain-Computer Interfaces—is reshaping cyber security risks across industries. While these pairings offer powerful benefits like real-time threat detection and enhanced automation, they also introduce novel vulnerabilities. For instance, AI combined with IoT and Blockchain improves threat response but amplifies risks like adversarial attacks and data manipulation. Similarly, Edge Computing boosts decision-making speed but expands the attack surface. The fusion of Quantum Communications with Low Earth Orbit satellites promises secure networks but raises concerns about side-channel and denial-of-service attacks. The report highlights the urgent need for proactive security frameworks, interdisciplinary collaboration, and robust governance to address these evolving threats, especially in sectors like healthcare, defence, transport, and critical infrastructure. As technology convergence accelerates, cyber resilience must evolve in tandem to safeguard interconnected systems.

Cybersecurity Crisis: UK’s Outdated Training System Leaves Nation Exposed

The UK faces a critical shortage of skilled cybersecurity professionals, leaving businesses and citizens vulnerable to escalating cyber threats. Experts warn that the current fragmented and outdated training ecosystem is ill-equipped to support the digital economy envisioned in the Industrial Strategy 2030. A new White Paper, authored by Dr Ismini Vasileiou and backed by the APPG on Cyber Innovation, outlines five urgent steps for government action:

·         Create a DSIT-led taskforce to develop a UK Cyber Skills Taxonomy

·         Establish a national body to oversee its implementation

·         Incentivise employers to adopt standardised recruitment practices

·         Align education and career pathways with real-world cyber roles

·         Scale regional efforts through a National Implementation Framework

Parliamentary and academic leaders stress the need for a unified, inclusive, and future-ready cyber workforce. Without reform, SMEs—key drivers of the UK economy—remain dangerously exposed.