SFO TO INVESTIGATE POSSIBLE MONEY LAUNDERING CONNECTED TO WORLD CUP BIDS
The Director of the SFO, David Green QC, has told the House of Commons Culture, Media and Sport Committee that the SFO is investigating a series of potentially suspicious payments made in connection with bids for the 2018 and 2022 football World Cups. Mr Green told the Committee that the bidding rounds pre-dated the introduction of the Bribery Act 2010 (which does not apply retrospectively) but that the SFO was reviewing recent information relating to potential money laundering. Mr Green noted that "nothing has emerged so far that provides a UK jurisdictional nexus and would merit an SFO investigation".
SFO DROPS OLYMPUS CORPORATION PROSECUTION
At a hearing at Southwark Crown Court on 10 November, the SFO offered no evidence against Olympus Corporation and Gyrus Group Ltd (a UK subsidiary of Olympus), effectively ending its proceedings against the two companies.
The SFO had charged the companies with offences of making misleading statements to auditors in September 2013. The companies, however, successfully argued that they did not fall into the relevant category of "persons" that could commit an offence under section 501 of the 2006 Companies Act. A decision by the Court of Appeal on the point in February 2015 (which was embargoed until now) confirmed that English law does not criminalise the misleading of auditors by the company under audit. The SFO has further noted that it could not extradite the individuals involved as Japan does not extradite its nationals.
BEN MORGAN SPEECH AT ANTI BRIBERY & CORRUPTION FORUM
The Joint Head of Bribery and Corruption at the SFO, Ben Morgan, has delivered a speech at the AMLP Annual Anti Bribery and Corruption Forum, which was hosted by Herbert Smith Freehills on 29 October. In his speech, Mr Morgan provided an update on the SFO's priorities, its current work and its policies. In particular, Mr Morgan focused on the SFO's successes in securing convictions against both individuals and corporates in relation to bribery, fraud and LIBOR manipulation. Mr Morgan also spoke about SFO policy in relation to DPAs including the general premise that if a party wishes to keep the option of a DPA available to it, the SFO will expect that company to have approached the SFO voluntarily rather than the SFO having heard information about potential wrongdoing from elsewhere.
HIGH COURT CONFIRMS LEGAL ADVICE PRIVILEGE CAN INCLUDE LAWYER’S SUMMARY OF FACTS
In a decision of importance for companies involved in investigations, the High Court has upheld RBS's claim to privilege over certain documents which the bank had been ordered to produce to the court for inspection: Property Alliance Group Limited v The Royal Bank of Scotland Plc  EWHC 3187 (Ch).
The decision confirms, in line with earlier authorities, that the protection of legal advice privilege is not restricted to actual legal advice. The first instance decision had raised some doubts on this point. The privilege will protect other information communicated from the lawyer to the client (or vice versa) to enable the lawyer to advise and the client to make informed decisions in a relevant legal context. This may include references to matters in the public domain or to meetings and correspondence that would not, in themselves, be privileged.
The decision is particularly helpful in recognising that the policy justification for privilege applies equally in the context of regulatory investigations, where the public interest will be advanced if regulators can deal with experienced lawyers who can accurately advise their clients how to respond and co-operate. The judgment notes: "Such lawyers must be able to give their client candid factual briefings as well as legal advice, secure in the knowledge that any such communications and any record of their discussions and the decisions taken will not subsequently be disclosed without the client's consent."
See our further consideration of the decision here.
JOINT COMMITTEE MLD IV AML/CFT CONSULTATIONS
The Joint Committee of the European Supervisory Authorities (ESAs) has published two consultations on anti-money laundering and countering the financing of terrorism (AML/CFT) guidelines under the fourth Money Laundering Directive (MLD IV):
- a consultation paper (JC 2015 060) on the characteristics of a risk-based approach to AML/CFT supervision and the steps to be taken when conducting supervision on a risk-sensitive basis; and
- a consultation paper (JC 2015 061) on simplified and enhanced customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions.
Responses are requested by 22 January 2016. The Joint Committee will hold a public hearing on the consultations on 15 December 2015.
PROCEEDS OF CRIME STATUTORY INSTRUMENTS
The Home Office has published four statutory instruments relating to Part 11 of the Proceeds of Crime Act 2002:
- The Proceeds of Crime Act 2002 (Enforcement in different parts of the United Kingdom)(Amendment) Order 2015
- The Proceeds of Crime Act 2002 (External requests and orders)(Amendment) Order 2015
- The Proceeds of Crime Act 2002 (External Investigations)(Amendment) Order 2015
- The Proceeds of Crime Act 2002 (External Investigations)(Amendment)(No. 2) Order 2015
The four instruments make provision for cooperation in the investigation and enforcement of Orders relating to recovering the proceeds of crime. There are separate instruments that provide for cooperation between the jurisdictions of the United Kingdom for the enforcement of court Orders, and for the United Kingdom to assist overseas authorities. The four new instruments are necessary because of amendments made to POCA by the Policing and Crime Act 2009, the Crime and Courts Act 2013 and the Serious Crime Act 2015, which introduced various new powers relating to the investigation and recovery of the proceeds of crime and will mean that equivalent powers are available in providing assistance to other UK jurisdictions and overseas courts and authorities. The instruments are accompanied by an explanatory memorandum.
ADOPTION DAY UNDER THE IRAN AGREEMENT – US AND EU PUBLISH DETAILS OF CHANGES TO THEIR SANCTIONS REGIMES
The Joint Comprehensive Plan of Action relating to Iran's nuclear programme (the "JCPOA") officially came into effect on 18 October ("Adoption Day"), requiring all JCPOA participants to make the necessary arrangements and preparations for implementation of their respective JCPOA commitments. In our full briefing, we summarise the most recent steps taken by the US and EU under the JCPOA.
In the case of both the EU and US, there have been no immediate changes to the legislative position and all sanctions continue to apply.
For further background on the JCPOA, please see our previous briefing.
FATF OUTCOMES FROM PLENARY MEETING
The Financial Action Task Force (FATF) has published the outcomes from its plenary meeting held in Paris from 21-23 October 2015. The document is accompanied by:
- guidance on effective supervision and enforcement by anti-money laundering and countering financing of terrorism (AML/CFT) supervisors of the financial sector and law enforcement;
- a public statement on strategic deficiencies;
- a webpage on improving global AML/CFT compliance; and
- a webpage on FATF action to tackle de-risking.
The FATF aims to complete its work on de-risking, including the development of industry guidance as well as best practices on appropriate customer due diligence, in 2016.