HMT UPDATED ADVISORY NOTICE ON AML AND CTF IN OVERSEAS JURISDICTIONS
HM Treasury has published an updated anti-money laundering (AML) and counter-terrorist financing (CTF) Advisory Notice, in response to the recent Financial Action Task Force (FATF) statement on jurisdictions with AML/CTF deficiencies. The Advisory Notice alerts firms to jurisdictions to be considered high risk for the purposes of compliance with the Money Laundering Regulations 2007.
NATIONAL CRIME AGENCY LAUNCH
As part of its launch of the National Crime Agency (NCA) the UK government has published an NCA strategy document and a document on its Serious Organised Crime Strategy. These documents note a number of actions the government is considering for its anti-bribery/anti-corruption regime. The possible changes include a new structure for investigating bribery as well as the possibility of a new reporting mechanism that incentivises whistleblowers. Any implementation dates have not yet been announced.
SFO SPEECH: WORLD BRIBERY AND CORRUPTION COMPLIANCE FORUM
The Serious Fraud Office (SFO) has published a speech by Alun Milford, SFO General Counsel, delivered at the World Bribery and Corruption Compliance Forum. Mr Milford explained how the SFO will decide what overseas bribery to prosecute and how it seeks to manage its work load. He noted that the SFO has withdrawn its previous guidance on facilitation payments, which was seen as ambiguous.
FCA THEMATIC REVIEW INTO ASSET MANAGEMENT AND PLATFORM FIRMS' AML AND CORRUPTION SYSTEMS
The FCA has published the findings of its thematic review into the anti-money laundering (AML) and anti-bribery and corruption (ABC) systems and controls at asset management and platform firms. The thematic review found common weaknesses in firms' AML and ABC systems, and particularly in relation to ABC controls around the use of third party introducers etc. The review contains examples of good and poor practice consistent with existing guidance in the Handbook; the FCA expects all firms to consider the findings in relation to their own AML/ABC practices.
BIS ANNOUNCES PUBLIC REGISTER OF BENEFICIAL COMPANY OWNERSHIP
The Department for Business, Innovation and Skills (BIS) has announced that, following its recent consultation on the government's proposals to establish a register recording the ownership and control of UK companies, it has been decided that the register is to be publicly accessible. The registry will be held by Companies House and will contain information on individuals with an interest in more than 25% of a company’s shares or voting rights, or who otherwise control the way a company is run. BIS will set out further detail on the register in early 2014.
UPDATED FAQS ON OFT SUPERVISION UNDER MLR 2007
The Office of Fair Trading (OFT) has published an updated set of FAQs on supervision under the Money Laundering Regulations 2007 (MLR). The OFT's anti-money laundering (AML) regime applies to (among others) consumer credit lenders carrying on business in the UK who are not authorised under the Financial Services and Markets Act 2000 (FSMA) or supervised by HMRC as a money service business (MSB). Consumer credit lenders that fall within the OFT's regime are known as "consumer credit financial institutions" or "CCFIs".
CONSULTATION ON SENTENCING GUIDELINES FOR FRAUD, BRIBERY AND MONEY LAUNDERING OFFENCES CLOSES
A number of bodies have published responses to the consultation on the draft sentencing guideline for fraud, bribery and money laundering offences including the City of London Law Society (CLLS) Corporate Crime Committee. Generally, the Committee welcomes the guidelines and supports the proposed methodology for calculating sentences. It further suggests that it may assist public understanding if the steps and categories of sentencing were explained by way of a graph or flow-chart.
The Justice Committee has also published a report commenting on the guidelines. The Justice Committee argues that fines imposed to punish corporate offenders for financial crimes should be calculated primarily on a percentage of turnover, rather than on an evaluation of the amount of financial harm caused by the crimes. The Committee broadly supports the Sentencing Council’s draft guidelines in other respects.
UK PRINTING COMPANY AND EXECUTIVES CHARGED WITH CORRUPTION
Smith & Ouzman Limited, a UK based printing company, appeared in court on charges brought by the Serious Fraud Office (SFO). The charges relate to allegations of agreeing to make payments totalling nearly £500,000, contrary to section 1 of the Prevention of Corruption Act 1906. It is alleged that these payments were used to influence the award of business contracts to the company in Mauritania, Ghana, Somaliland and Kenya. For our blog post on this matter, please click here.
FATF: MEETING ON CORRUPTION
The Financial Action Task Force (FATF) has published the President's Summary of Outcomes from the third meeting of the G20 Anti-Corruption Working Group (ACWG). The Experts' Meeting focused on leveraging synergies between anti-money laundering (AML), counter-terrorist financing (CTF) and anti-corruption efforts. Participants expressed strong support for the FATF’s draft Best Practices Paper on the Use of the FATF Recommendations to Combat Corruption, which has now been published by FATF along with a summary page. The Group also focused on overcoming the challenges of tracing corruption proceeds through promoting transparency and timely access to beneficial ownership information.
The FATF has recently published the outcomes from its meeting in Paris on 16 -18 October 2013, an updated statement on jurisdictions with strategic AML and CTF deficiencies, and a statement on the on-going review of jurisdictions reported to have AML/CTF deficiencies. The FATF has also published a follow up report on the mutual evaluation of the Russian Federation (summary) and New Zealand (summary).
CRIM FINAL REPORT ON ORGANISED CRIME, CORRUPTION AND MONEY LAUNDERING
The European Parliament has published the final report of its special committee on organised crime, corruption and money laundering (CRIM). The report sets out a motion for a resolution on recommendations on actions and initiatives relating to organised crime, corruption and money laundering. The provisional text was adopted by the European Parliament at its plenary session on 23 October 2013 and sets out a wide ranging EU action plan for 2014 - 2019 for the Parliament, the European Commission and the Council of the European Union.
ESAS REPORT ON AML AND CTF RISK-BASED SUPERVISION
The joint committee of the European Supervisory Authorities (ESAs) (comprising the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA)) has published a preliminary report on anti-money laundering (AML) and counter terrorist financing (CTF) risk-based supervision. The report is not binding on supervisors but is intended to assist supervisors of EU financial institutions in adopting effective risk-based approaches to AML and CTF. The report does not cover how EU financial institutions implement their own AML and CTF risk-based approach.
TI'S ANNUAL PROGRESS REPORT 2013: ASSESSING COUNTRY ENFORCEMENT OF THE OECD ANTI-BRIBERY CONVENTION
Transparency International (TI) has published its ninth annual progress report on the enforcement of the OECD Anti-Bribery Convention. The report presents an independent assessment on the status of enforcement in all of the 40 Parties to the Convention, including Russia and Colombia, where the Convention entered into force in 2012 and 2013, respectively.
TI REPORT 'CORRUPTION IN LOCAL GOVERNMENT: THE MOUNTING RISKS'
Transparency International has published a report 'Corruption in Local Government: The Mounting Risks' which warns that an unintended consequence of changes such as the Localism Act and those proposed in the Local Audit and Accountability Bill may be to create an enabling environment for corruption. In a 2011 survey, 47% of people felt that UK local government was affected by corruption. The report includes a list of legislative changes which increase the risk of corruption and includes recommendations including a Government corruption risk assessment and the strengthening of whistleblowing measures.
TI CALLS FOR EU COUNTRIES TO DO MORE TO PROTECT WHISTLEBLOWERS
Transparency International (TI) has published an article calling on EU countries to do more to combat corruption by better protecting whistleblowers following a recent study. The study by TI found that only four EU countries have advanced whistleblowing laws and of the remaining 23, 16 partially protect employees who report wrongdoing, while seven have either no or very inadequate laws in place.
UNODC PAPER TRACING THE PROCEEDS OF SOMALI PIRACY MONEY
The United Nations Office on Drugs and Crime (UNODC) has published a paper in conjunction with the World Bank and INTERPOL, which looks at the ransom money gained by Somali pirates and the range of criminal activities it has been used to fund. The report, 'Pirate Trails', uses data and evidence from interviews with former pirates, government officials, bankers and others involved in countering piracy – and investigates the flow of ransom money paid out to Somali pirates operating in the Indian Ocean. The report examines the reach of the pirates into the stimulant "khat" trade, human trafficking and other illegal activities that hinder development. The full text of the report can be found here.