Episode 264

3rd July – 5th July 2026

Sanctions

US Treasury Sanctions Brazilian Financial Network Over PCC Drug Laundering Allegations

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned two Brazilian nationals, three Brazilian businesses, and one Portuguese company for their association with Latin America's largest criminal organisation, the Brazil-based Primeiro Comando da Capital (PCC). The targeted network, which operated in Florida and São Paulo, Brazil, is accused of laundering more than $30 million in drug proceeds using cryptocurrency to move funds back to Brazil. Specifically, OFAC designated Victor Henrique de Oliveira Shimada, who allegedly led the São Paulo node and acted as a liaison to foreign drug traffickers, alongside his associate Stella Stefanie Nunes Henrique de Oliveira. The sanctions also blocked four entities owned or controlled by Shimada, including São Paulo-based financial and construction firms Victory Trading, Pixwave, and Wave, as well as Lisbon-based transport firm Avenidas Flutuantes. This coordinated enforcement action under Executive Orders 14059 and 13224 follows the January 2026 indictment and arrest of six of the network's Florida-based operatives.

US OFAC Issues Filing Reminder for 2026 Annual Report of Blocked Property

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued an official reminder requiring US persons holding blocked property as of 30th June 2026, to file their Annual Report of Blocked Property (ARBP) by 30th September 2026. Under the Reporting, Procedures and Penalties Regulations at 31 C.F.R. § 501.603, this mandatory filing must be completed electronically through the OFAC Reporting System (ORS) using the specialised spreadsheet form TD-F 90-22.50, and failure to do so constitutes a regulatory violation. The reminder specifies that property unblocked by an OFAC licence, or previously blocked under sanctions programmes terminated on or before 30th June 2026, is excluded from the filing. Additionally, restricted accounts of ordinary residents of Iran do not need to be reported in the ARBP unless a blocked party holds an active interest in the account.

OFSI Reviews Industry Feedback on UK Sanctions Ownership and Control Test

The UK’s Office of Financial Sanctions Implementation (OFSI) has concluded its call for evidence on the ownership and control test within UK financial sanctions regulations, gathering 42 responses from industry stakeholders to inform future policy. Initiated as part of HM Government's May 2025 Review of Sanctions Implementation and Enforcement, the review focused primarily on "hypothetical control," which respondents identified as a major compliance challenge particularly under the Russia regime and when dealing with trusts, state-linked entities, and politically connected individuals. Industry feedback indicated that making these control assessments on limited information raises operational costs by requiring enhanced due diligence, external legal counsel, and delayed business decisions. While respondents expressed differing views on how to resolve these challenges, OFSI stated that the gathered evidence will guide the government’s next steps, reminding firms that they remain legally required to assess ownership and control under existing UK guidelines in the interim. Firms should also consult relevant guidance for support, such as: UK financial sanctions general guidance (section 4); and Public Officials and Control guidance.

Money Laundering

EDPB and AMLA Collaborate to Draft Joint Guidelines on Financial Crime Information Sharing

The European Data Protection Board (EDPB) and the Anti-Money Laundering Authority (AMLA) have announced a joint effort to establish regulatory guidelines addressing the intersection of financial crime prevention and personal data protection. Operating under Article 75 of the Anti-Money Laundering (AML) Regulation, which permits regulated companies and professionals to share information with peer entities and public authorities starting 10th July 2027, the two bodies aim to provide practical guidance on building compliant partnerships. A joint drafting team composed of representatives from both organisations will lead the project. To incorporate external perspectives, the EDPB and AMLA plan to host a stakeholder event later this year to gather early feedback, followed by a public consultation on the draft guidelines scheduled for the first half of 2027.

Bribery and Corruption

Former North Charleston Councilmembers and Co-conspirators Sentenced in Federal Public Corruption Scheme

United States District Judge Richard M. Gergel has sentenced four additional defendants, including two former North Charleston city councilmembers, for their involvement in a public corruption scheme involving bribery, extortion, and the embezzlement of taxpayer funds. Former councilmember Jerome Sydney Heyward, 63, was sentenced to six years in federal prison, followed by three years of supervision, and ordered to pay $200,000 in restitution for extorting a businessman, accepting bribes for a hospital site rezoning, and laundering kickbacks from non-profit grants. Co-defendant Mike A. Brown, 47, also a former councilmember, received a two-year prison sentence for accepting a bribe from Aaron Hicks to support the Baker Hospital site rezoning application. Additionally, Michelle Stent-Hilton, 58, and Donavan Laval Moten, 48, founder of the Core4Success Foundation, were each sentenced to 18 months in prison for paying Heyward $20,000 kickbacks in exchange for his official support of their non-profit violence reduction grant applications.

Other Financial Crime

UK Takes the Lead at Global Financial Watchdog with an Ambitious Focus on Fraud

The global financial watchdog has a new president. On 1st July 2026, Giles Thomson assumed the presidency of the Financial Action Task Force (FATF), succeeding Elisa de Anda Madrazo of Mexico. Thomson, who serves as the Director for Economic Crime and Sanctions in His Majesty's Treasury, brings two decades of domestic policy experience to the role, having led the UK's delegation to the watchdog since 2016. This background appears to give him significant institutional credibility. However, the sheer scale of the global fraud epidemic, which drained an estimated $500 billion from victims between 2024 and 2025, presents an incredibly difficult operational challenge.

To mount a defence, the UK presidency launched a dedicated Roadmap on Combatting Fraud on its very first day. Historically, fraud has been a primary driver of illicit wealth, appearing as a major proceeds-generating offence in nearly 90% of the watchdog's previous country assessments. The new strategy is likely to target transnational syndicates running physical scam compounds, alongside the digital channels they use to move money. These networks frequently exploit virtual assets and online platforms to scale their operations. The watchdog aims to counter this by promoting more effective private-to-private and cross-border data sharing to keep pace with rapid digital transfers.

On paper, the strategy is highly focused. Yet, implementing a strict risk-based approach across a highly unequal global network is likely to prove difficult. Low-capacity jurisdictions often lack the domestic regulatory infrastructure to monitor virtual assets effectively, which might leave substantial gaps in the international safety net. The UK hopes to use its concurrent leadership of the G7 and G20 to build political momentum for these regulatory changes. But whether high-level diplomatic pressure can translate into immediate, practical compliance in struggling jurisdictions remains to be seen. The event marking the launch of the FATF’s Roadmap 26-28 on Combatting Fraud was recorded and can be accessed here.

Cybercrime

UNDP Report Highlights Cybersecurity as a Critical Enabler of Global Digital Transformation

The United Nations Development Programme (UNDP) Global Centre Singapore has published an analysis emphasising that national cybersecurity commitments must keep pace with rapid digital transformation to protect critical infrastructure and boost economic performance. Authors Shermeen Eng and Abdullah Alrebdi noted that while digitalisation has successfully expanded service access to three-quarters of the global population, it has also vastly expanded the cyber-attack surface. The analysis highlighted severe real-world impacts, noting that global scam losses reached an estimated $442 billion across 42 surveyed countries in 2025, and citing historic ransomware attacks which caused permanent data loss in Sri Lanka and $30 million in daily GDP disruptions in Costa Rica, as well as power grid blackouts in Ukraine. While developing countries face substantial resource constraints in funding and staffing, research cited by the UNDP suggests that strengthening national cybersecurity commitments can reduce these vulnerabilities and potentially increase GDP per capita by 1.5% over a decade.

UK Trade Remedies Authority Declines to Disclose Cyber Security Breach Data Citing Public Interest Exemptions

The UK's Trade Remedies Authority (TRA) has issued a formal response refusing to disclose specific data regarding cybersecurity breaches, citing statutory exemptions under the Freedom of Information Act 2000. The original request, submitted on 4th April 2026, sought detailed statistics on the number of malicious cyberattacks, their root causes, associated financial costs, and occurrences linked to known system vulnerabilities. In invoking sections 31(1)(a) and 31(3) of the Act, the TRA declined to confirm or deny whether it holds the requested information, arguing that public disclosure could expose defensive gaps and facilitate criminal cyberattacks. The authority concluded that while public transparency remains important for accountability, the public interest in protecting its systems from open-source intelligence profiling by global threat actors outweighed the benefits of disclosure. The TRA is a non-departmental public body in the UK which investigates unfair international trading practices.