Sweett Group sentenced and ordered to pay £2.25 million after Bribery Act conviction  

Sweett Group PLC has been sentenced and ordered to pay £2.25 million as a result of a conviction arising from a Serious Fraud Office (SFO) investigation into its activities in the United Arab Emirates. The company pleaded guilty in December 2015 to a charge of failing to prevent an act of bribery intended to secure and retain a contract with Al Ain Ahlia Insurance Company, contrary to Section 7 of the Bribery Act 2010. The amount is broken down as £1.4m in fine, £851,152.23 in confiscation. Additionally, £95,031.97 in costs were awarded to the SFO.  

Divisional Court rules SFO procedure for isolating LPP material is lawful  

In a recent decision which addresses the practical aspects of evidence handling, the  Divisional Court dismissed a claim that the SFO was under a duty to use independent third party IT staff to apply search terms to material in its possession in order to identify which material  may be subject to legal professional privilege (LPP).   The Court ruled that the SFO’s policy (as set out in its Operational Handbook), whereby search terms are applied by the SFO before any responsive material is then reviewed by independent counsel, was lawful.  

The case (R (McKenzie) v Director of the Serious Fraud Office [2016] EWHC 102 (Admin)) also has some read-across value for the approach adopted by other investigation agencies to potentially privileged material.  In this e-bulletin we summarise the court's ruling and its implications.  

Our full briefing is available here.  

FCA decision notice banning former investment manager for assisting in market abuse  

The FCA has issued a further decision notice to Tariq Carrimjee of Somerset Asset Management LLP banning him from performing the significant influence functions of compliance oversight and money laundering reporting. The decision notice follows a decision by the Upper Tribunal finding that Mr Carrimjee failed to act with due skill, care and diligence in failing to escalate the risk that his client might have been intending to engage in market manipulation. However, the Tribunal did not uphold the FCA’s decision of 26 March 2013 that Mr Carrimjee had acted without integrity and remitted the matter back to the FCA to reconsider and reach a decision as to the extent of any prohibition in accordance with the findings of the Tribunal.

Mr Carrimjee has referred the decision notice to the Upper Tribunal.  

BIS updated guidance on PSC  

The Department of Business Innovation and Skills (BIS) has published updated guidance on requirements relating to the register of people with significant control functions (PSC). These requirements are due to come into force on 6 April 2016. From that date most companies, limited liabilities partnerships and European companies (SEs) will be required to hold a register of people with significant control. The requirements form part of the drive for transparency of beneficial ownership.  

MLD IV – responses to Joint Committee consultation on risk factors and simplified and enhanced customer due diligence  

The European Banking Authority (EBA) has published the responses to the Joint Committee of the European Supervisory Authorities (ESAs) consultation on Guidelines on risk factors and simplified and enhanced customer due diligence under the fourth Money Laundering Directive (MLD IV). The Guidelines set out how the risk-based approach to AML/CFT should be applied by credit and financial institutions and competent authorities around the EU.  

European Council tightens up proposed timetable for MLD IV  

The European Council has urged member states to complete the implementation of the Fourth Anti-Money Laundering Directive (MLD IV) by the end of 2016. The Council has also called on the European Commission to submit some targeted amendments that will lead to the drafting of the Fifth Anti-Money Laundering Directive no later than the second quarter of 2016.  

The new timetabling demands are part of the European Council's published conclusions on the fight against the financing of terrorism. Member States have been asked to carry out national risk assessments and prioritise operationally relevant terrorist financing risks and to share any findings before the end of 2016.  

In addition, the Council has requested that the Commission explores the need to restrict cash payments over certain thresholds and to work with the European Central Bank to consider appropriate measures regarding high denomination notes and to report its findings to the Council by 1 May 2016.  

BCBS revised guide to account opening  

The Basel Committee on Banking Supervision (BCBS) has published the revised version of its general guide to account opening. The revised version of the guide has been added as an annex to the BCBS guidelines on sound management of risks related to money laundering and financing of terrorism, published in January 2014. The guide aims to support banks in implementing relevant Financial Action Task Force (FATF) standards and guidance, which require the adoption of specific anti-money laundering and counter-financing of terrorism (AML/CFT) policies and procedures on account opening.  

FATF mutual evaluation report on Italy  

The Financial Action Task Force (FATF) has published a mutual evaluation report following the International Monetary Fund's (IMF) assessment of Italy's anti-money laundering and counter-terrorist financing (AML/CFT) system based on the 2012 FATF recommendations, and using the 2013 Methodology.  

The FATF report highlights the need for Italy to enhance its money laundering investigative and prosecutorial action on risks associated with self-laundering, standalone money laundering and foreign predicate offences and the abuse of legal persons. The report was adopted by FATF at its plenary meeting in October 2015.  

FATF plenary outcome  

FATF held its plenary week from 13-19 February 2016. The main issues dealt with by the plenary meeting, held on 17-19 February 2016 were:  

  • Work on terrorist financing, which remains the top priority for the FATF, including:
  • Approval of a Consolidated FATF Strategy on Combating Terrorist Financing
  • A statement on Brazil’s continued failure to address the serious deficiencies identified in its mutual evaluation reports.
  • An update on AML/CFT improvements in Algeria, Angola and Panama
  • Malaysia welcomed as a member to the FATF
  • Israel welcomed as an observer to the FATF
  • Adoption of Guidance on the Risk-Based approach for Money or Value Transfer Services
  • Revising the FATF/FATF-Style Regional Body High-Level Principles and Objectives
  • Developments on de-risking

FATF also published the following documents: