IMF BOARD REVIEWS AML/CFT STRATEGY

The Executive Board of the International Monetary Fund (IMF) has published a review of recent developments in anti-money laundering and combating the financing of terrorism (AML/CFT), and has discussed proposals for the IMF’s future AML/CFT strategy.   

UK OPENS PROBE INTO ALLEGED UKRAINIAN CORRUPTION

The UK's Serious Fraud Office (SFO) has opened a criminal investigation into possible money laundering tied to “suspicions of corruption” in Ukraine and obtained a restraint order freezing approximately $23 million of assets in the UK.  No further details have been published by the SFO.  This action came ahead of a forum hosted in London in conjunction with the US and the current Ukrainian government aimed at the recovery of misappropriated assets.   

FIRST EUROPEAN UNION INTEGRITY SYSTEM REPORT

According to a report published by the anti-corruption group Transparency International, EU institutions are vulnerable to corruption due to loopholes and poor enforcement of rules on ethics, transparency and financial control.  This is one of the main findings in the first-ever assessment of corruption risks across 10 EU institutions.   

EU ADOPTS BROAD COMPLIANCE DISCLOSURE RULES

The European Council and Parliament approved a new Directive on the Disclosure of non-financial and diversity information by certain large companies and groups on April 15. This will require an estimated 6,000 EU companies to disclose information about policies and risks relating to environmental compliance, human rights, bribery and corruption and certain social and employee issues. EU member states now have two years to implement the reform in their national legislation. The law applies to listed companies and certain public interest entities, such as credit institutions and insurance firms. Only companies with more than 500 employees are covered. The requirements significantly overlap with existing UK requirements under the Companies Act 2006 s. 414A to produce a Strategic Report, albeit that the formal requirement to report on anti-corruption policies is new. Many large companies report such information already in any event.

UKRAINE SANCTIONS

The EU further expanded the sanctions imposed in connection with the situation in Ukraine in light of a perceived continuation of efforts to destabilise eastern and southern Ukraine. On 12 May 2014, Regulation 476/2014 was published in the EU Official Journal with immediate effect. The Regulation amends the EU's existing asset freezing powers in particular to enable the listing of companies whose assets have been confiscated by the Crimean authorities. The new amendments also allow for the listing of persons responsible for actively supporting or implementing actions or policies which undermine the territorial sovereignty and independence of Ukraine or stability or security in Ukraine.

The EU released conclusions on Ukraine adopted at the 12 May Foreign Affairs Council meeting in Brussels, condemning any attempt to circumvent the sanctions regime and stating that "preparatory work by the Commission and Member States is underway on possible targeted measures, as requested by the European Council in March, so that further steps can be taken should events require." Both EU and US sanctions relating to the situation in Ukraine continue to develop rapidly with both authorities placing significant importance on the presidential elections held on 25 May 2014 in determining any further steps. Our most recent update on the Ukraine sanctions can be found here: 13 May 2014.

PHARMACEUTICAL BRIBERY CLAIMS 

The investigation of GlaxoSmithKline (GSK) PLC into allegations its employees bribed doctors has reportedly extended to further jurisdictions including Jordan and Lebanon, according to The Wall Street Journal.

GSK is reportedly also facing a criminal investigation in Poland for allegedly bribing doctors between 2010 and 2012. Polish prosecutors have accused GSK of paying doctors to promote its asthma drug and announced the possession of evidence to support claims of bribery payments relating to 13 health centres. Poland's anti-corruption bureau has charged thirteen people in relation to the allegations.

On 27 May, the UK SFO announced that it had opened a criminal investigation into the commercial practices of GSK and it subsidiaries.

Meanwhile, the PRC authorities are reportedly stepping up investigations into a number of other pharmaceutical companies.

In a statement, GSK said that it takes all bribery allegations seriously, has zero tolerance for unethical or illegal behaviour, and has strict controls in place with regard to compliance matters and anti-bribery and corruption.