Former derivatives trader convicted of LIBOR fixing
A former derivatives trader has been convicted of 8 counts of conspiracy to defraud. He was sentenced to a total of 14 years in prison in relation to LIBOR fixing. He is the first individual to stand trial for rigging LIBOR. Our blog post is available here.
SFO investigation into Soma Oil and Gas
The UK Serious Fraud Office (SFO) has opened an investigation into Soma Oil and Gas Ltd in relation to allegations of corruption in Somalia. The allegations follow a leaked report by the UN Somalia and Eritrea Monitoring Group, which claimed that payments made by Soma to the Federal Government of the Republic of Somalia were "improper, unlawful and give rise to a conflict of interest". Soma has asserted that the payments were legitimate capacity building arrangements and has requested a meeting with the UN Security Council to discuss the allegations.
HMT/BIS review of AML/CTF rules
HM Treasury and the Department of Business, Innovation and Skills (BIS) have launched a review of the current anti-money laundering and counter-terrorist finance (AML/CTF) regime and the role of supervisors in that regime. The review seeks to identify any aspects of regulatory activity that could be made more efficient, including considering the impacts on banks and financial institutions. Comments to the call for evidence should be submitted by 23 October 2015.
Suspects charged with £12 million fraud and money laundering against public and private bodies
The Crown Prosecution Service (CPS) has charged 15 suspects in relation to alleged £12 million fraud and money laundering offences committed against public and private bodies. The alleged offence involved the defendants contacting mainly public bodies and falsely representing themselves as legitimate construction companies which were being contracted by the public bodies. The defendants claimed that bank details for payment had changed and provided the bodies with the bank details of companies controlled or owned by them for payment. The defendants appeared in Lincoln Magistrates Court on 4 September 2015 on charges of conspiracy to defraud, conspiracy to launder money and money laundering.
Delay to implementation dates of Small Business, Enterprise and Employment Act
As noted in previous bulletins, the Fourth Money Laundering Directive (MLD IV) was passed in June 2015 with a date for implementation of 26 June 2017. Among other requirements, the Directive reflects the wider emphasis on transparency which has been a feature of the G20 discussions under the UK chairmanship and which is a feature of the FATF 2012 Recommendations. Specifically, MLD IV requires member states to ensure that legal entities incorporated with their territory and certain trusts are "required to obtain and hold adequate, accurate and current information on their beneficial ownership, including the details of the beneficial interest held". Such information must be held in a central register.
In parallel to MLD IV, but, again, informed by the broader transparency agenda, the Small Business, Enterprise and Employment Act 2015 (SBEE Act) introduced a requirement on companies to keep a register of people with significant control (PSC) over the company, and to file such information at Companies House. The Act received Royal Assent in March 2015 and a provisional plan for implementation, published in January 2015, has now been updated, with a two month delay to most filing related changes. The requirement on companies to keep a PSC register is now planned to take effect in April 2016, with a requirement to file the information at Companies House from 30 June 2016.
The PSC register requirement in SBEE is not a strict reflection of the requirements in MLD IV (for example the Directive has a broader application to include, for example, trusts). Notwithstanding this, in light of the overlap between the two, there may be merit in the authorities taking steps to ensure that the PSC structure put in place under SBEE implements so far as possible, the requirements of MLD IV. It is possible that the extra time before implementation wil enable these issues to be considered by the Government working group which is being set up to help draft the statutory and non-statutory guidance required to support implementation of the PSC register regime.
New multi-agency International Corruption Unit
A new International Corruption Unit (ICU) has been established to investigate cases of international corruption affecting developing countries. The new ICU brings together existing investigation units funded by the Department for International Development (DFID) including units from the Metropolitan Police Service, City of London Police and National Crime Agency. The multi-agency team will be operated by the National Crime Agency and be the central point for investigating international corruption in the UK.
Advocate General opinion on MLD III
The ECJ has published the opinion of Advocate General Sharpston in Safe Interenvios (C-235/14) (3 September 2015). The case concerns a request for a preliminary ruling on whether the Third Money Laundering Directive (MLD III) precludes a Member State from authorising a credit institution to apply customer due diligence (CDD) measures to a payment institution which is also subject to the requirements of MLD III. The Opinion argues that MLD III is a minimum harmonising directive which permits Member States to adopt or retain in force stricter provisions than set out in MLD III, and a Member State may therefore provide for CDD measures to be applied by a credit institution in relation to a payment institution where justified and otherwise consistent with EU law. However, any such national legislation must be proportionate, the assessment of which involves determining the level of protection desired by the Member State with respect to the identified level of risk of money laundering and terrorist financing, the degree to which the CDD measures may intrude upon other protected rights and interests, and whether there are alternative, less restrictive means to achieve the same level of protection. The Advocate General's opinion is not binding on the ECJ.
Transposition of Directive on attacks against information systems
The deadline for transposition into national law of the Directive on attacks against information systems was 4 September 2015. The Directive, which came into force on 24 August 2013, updated (and replaced) minimum rules, established by the Council Framework Decision 2005/222/JHA (the “Framework Decision”), relating to the definition of relevant criminal offences and sanctions across Member States and the improved cooperation between competent authorities.