SFO ANNUAL REPORT AND ACCOUNTS 2014-15  

The UK Serious Fraud Office (SFO) has published its Annual Report and Accounts for 2014-15. The Annual Report notes the start of 16 new investigations, which is an increase on the previous year and includes a number of high profile matters including Forex and Tesco.  The Report cites a conviction rate of 78% from prosecutions brought, noting the SFO's first Bribery Act convictions (the "biofuels" case) in December 2014 and a guilty plea in LIBOR during the course of the year. Our blog post on the "biofuels" case can be found here. The report confirms that resolution by DPA is under active consideration in a number of cases.   

In respect of DPAs, there has been considerable press attention in the last few weeks, with reports that negotiations are at an advanced stage with two UK-based privately held companies (such reports being unconfirmed).  It has also been reported that the SFO has invited Barclays to discuss a deal to settle the SFO's probe into the bank's dealings with Qatari investors, though this is also unconfirmed by the SFO and Barclays has stated that no offer has been made of a DPA.  Further news is awaited in this regard.  

OFGEM CONSULTATION PROSECUTION POLICY STATEMENT  

The Office of Gas and Electricity Markets (Ofgem) has launched a consultation on its proposed prosecution policy statement. The consultation relates to, among other things, Ofgem’s powers under REMIT to bring criminal prosecutions relating to market abuse. Comments should be submitted by 25 September 2015.  

NORTHERN IRELAND POLICE LAUNCH INQUIRY INTO £1.1BN PROPERTY SALE OF NAMA ASSETS  

The Police Service of Northern Ireland (PSNI) has launched an investigation into allegations of bribery in the sale of an Irish state-owned property portfolio. The PSNI will investigate whether there is any connection between the alleged bribe and the £1.1bn sale of distressed assets in Northern Ireland owned by the Irish National Asset Management Agency (Nama).  

GLENN MAUD V THE LIBYAN INVESTMENT AUTHORITY: HIGH COURT RULES THAT PAYMENT UNDER A GUARANTEE WOULD BREACH EU LIBYA SANCTIONS REGIME, AND CONSIDERS CONTRACTUAL EXEMPTION PROVISIONS  

In a recent judgment, the English High Court has considered some of the exemption language commonly found in EU sanctions regimes which is applicable to contractual performance.  The case of Glenn Maud v The Libyan Investment Authority [2015] EWHC 1625 concerned an application to set aside a statutory demand for payment under a guarantee. The court found that payment of the guarantee was prohibited by the sanctions regime, and granted the application to set aside.  

The judgment principally concerns the scope of the obligations and prohibitions relating to the freezing and the making available of funds and economic resources to designated persons, particularly in the context of the specific provisions of the EU - Libya sanctions regime.  However, it also considered two key questions relevant to the impact of sanctions on contracts, namely (i) the extent of the general exemption for claims under contracts, the performance of which has been affected by sanctions; and (ii) whether there is an obligation to seek a licence from the competent authority before it is possible to rely upon a sanctions prohibition as defeating a contractual obligation.  In so doing, guidance was provided on the scope of these provisions which have not frequently been considered by the courts.  

Our full blog post can be found here.  

IRAN SANCTIONS – AGREEMENT ANNOUNCED REGARDING NUCLEAR PROGRAM AND SANCTIONS RELIEF  

In the early hours of July 14, 2015, it was announced that the P5+1/EU3+3 and Iran had reached agreement on the Joint Comprehensive Plan of Action regarding Iran’s nuclear program (the “JCPOA”). This builds on the framework announced in April 2015. One of the key elements of the JCPOA will be extensive relief from the current EU and US sanctions against Iran. However, sanctions relief will be effective only upon Iran meeting its obligations regarding its nuclear program and, as such, the existing UN, US and EU sanctions remain in force, for the time being.  

The text of the JCPOA itself has been released and runs to over 100 pages, including various Annexes. Our bulletin summarises the milestones for the implementation of sanctions relief and the key sanctions-related elements of the JCPOA which provide relief from the UN, US and EU regimes.  

ESMA Q&A ON AML AND INVESTMENT-BASED CROWDFUNDING PLATFORMS  

The European Securities and Markets Authority (ESMA) has published questions and answers (Q&A) on the application of rules on anti-money laundering (AML) and terrorist financing to investment-based crowdfunding platforms. The Q&A aims to promote common supervisory approaches and practices in the application of anti-money laundering rules to investment-based crowdfunding.  

FATF PLENARY OUTCOMES AND DE-RISKING STATEMENT  

The Financial Action Task Force (FATF) has published the outcomes of its plenary meeting in Brisbane on 24-26 June, including the adoption of:  

  • Revised best practices on combating the abuse of non-profit organisations;
  • Guidance for a risk-based approach to virtual currencies;
  • a Typologies report on the money laundering / terrorist financing risks and vulnerabilities associated with gold; and
  • statement and future work plan on de-risking.

In relation to de-risking, FATF is undertaking work to further clarify the interplay between the FATF standards on correspondent banking and other intermediated relationships, and the FATF standards on customer due diligence and wire transfers. FATF is also developing guidance on the risk-based approach for money or value transfer services (MVTS) which will address the issue of access to banking services by MVTS, and will undertake further work on financial inclusion and customer due diligence.  

The FCA has published a statement supporting the work of FATF on derisking.