ANDY COULSON TO FACE RETRIAL ON BRIBERY CHARGES
U.K. prosecutors have announced that former News of the World editor Andy Coulson will face retrial over charges relating to alleged corruption of public officials after the jury in his previous trial failed to reach a verdict.
SFO LAUNCHES FORMAL INVESTIGATION OF UAE BRIBERY CLAIMS AT SWEETT GROUP
The Serious Fraud Office (SFO) has confirmed that it has opened a formal investigation into Sweett Group in relation to its activities in the United Arab Emirates and elsewhere. The investigation reportedly relates to allegations that a Dubai-based former employee of Sweett Group asked a firm of architects to bribe officials to secure a US$ 100m contract.
FCA HIGH RISK COUNTRIES WEBPAGE
The FCA has published a webpage with a list of countries considered high risk in relation to the FCA's financial crime objectives, which are linked to tackling money laundering, sanctions systems and controls, terrorist financing, and bribery and corruption. The publication comes after the FCA was forced by a Freedom of Information Act request to release the information. The FCA has explained that the list is used in supervisory visits to assist supervisors in focussing on higher risk business relationships.
HMT ADVISORY NOTICE ON MONEY LAUNDERING
HM Treasury (HMT) has published an advisory notice on money laundering and terrorist financing controls in overseas jurisdictions. The notice includes two statements published by the Financial Action Task Force (FATF) on 27 June 2014 identifying jurisdictions with strategic deficiencies in their anti-money laundering and counter financing regimes. The notice advises firms to consider Algeria, DPRK, Ecuador, Indonesia, Iran and Myanmar high risk for money laundering purposes, and advises firms to apply enhanced due diligence measures in accordance with the risks.
HMT FINANCIAL SANCTIONS - REVISION OF POLICY
HM Treasury has revised its policy on certain transactions relating to the payment of funds by asset freeze targets in light of recent EU case law. Any funds arriving in the UK or in a UK bank anywhere in the world which have come from or via a designated person outside of the EU will be required to be frozen in a suspense account upon arrival in the UK bank. A licence from HM Treasury will be required to be obtained in order to release the funds to the intended recipient. The new policy will come into force on 31 July 2014.
CRIMINAL CHARGES AGAINST ALSTOM IN THE UK
The SFO has commenced criminal proceedings against an Alstom company by written charge as part of an ongoing investigation. Alstom Network UK Ltd, formerly called Alstom International Ltd, a UK subsidiary of Alstom, has been charged with three offences of corruption contrary to section 1 of the Prevention of Corruption Act 1906, as well as three offences of conspiracy to corrupt contrary to section 1 of the Criminal Law Act 1977. The alleged offences, which concern large transport projects in India, Poland and Tunisia, are said to have taken place between 1 June 2000 and 20 November 2006.
BRUCE HALL SENTENCED TO 16 MONTHS IN PRISON
Bruce Hall has been sentenced to 16 months in prison for conspiracy to corrupt in relation to contracts for the supply of goods and services to a Bahraini company, Alumunium Bahrain B.S.C (Alba) of which he served as CEO from September 2001 to June 2005. Between 2002 and 2005, Mr Hall received £2.9 million in corrupt payments from Sheikh Isa Bin Ali Al Khalifa, a member of the Bahraini royal family, who was, at that time, Bahrain's minister of finance and Alba's chairman. In exchange for these payments, Mr Hall allowed corrupt arrangements made by Sheikh Isa before his appointment as CEO to continue.
SFO SPEECH TO UK AEROSPACE AND DEFENCE INDUSTRY SEMINAR
The Joint Head of Bribery and Corruption at the SFO, Ben Morgan, delivered a speech to the UK Aerospace and Defence Industry seminar on deferred prosecution agreements (DPAs). In his speech Mr Morgan discusses why a DPA is worth considering as a potential resolution to and issue and what needs to be done, as far as the SFO is concerned, in order to pursue a DPA. The extensive cooperation expected by the SFO and early stage reporting requirements are of particular interest. The full text of the speech can be found here.
The SFO has opened a criminal investigation into "allegations of fraudulent conduct in the foreign exchange market". The SFO will cooperate with the FCA and the US Department of Justice, which announced its own criminal probe in October 2013.
AMENDMENTS TO EXTRADITION ACT 2003
A number of amendments to the Extradition Act 2003 inserted by the Anti-Social Behaviour, Crime and Policing Act 2014 came into force on 22 July 2014 (see The Anti-social Behaviour, Crime and Policing Act 2014 (Commencement No. 4 and Transitional Provisions) Order 2014, 2014/1916). These include a new proportionality bar, under which an extradition request received from a Part 1 territory (i.e. a European Arrest Warrant) can be rejected – either at the outset of the extradition process, or during the extradition hearing – on the basis that it is disproportionate, based on an assessment of the seriousness of the conduct, the likely penalty and the possibility of the issuing state taking less coercive measures than extradition. This provision seeks to address concerns about the UK's obligation to act on warrants issued for potentially trivial offences by Member States in which there is no prosecutorial discretion, but might be perceived as a failure by the UK to fully implement the Framework Decision on the European Arrest Warrant (2002/584/JHA).
Other amendments affect requests from Part 2 territories as well (i.e. territories with which the UK has entered into extradition arrangements but which are not EU Member States), including the removal of appeals other than with permission of the High Court; a bar on extraditing persons who are the subject of an ongoing asylum claim (regardless of whether the claim was made before or after the start of the extradition proceedings); and confirmation that an "extradition offence" does not include conduct which took place partly in the UK which was not also an offence under UK law (i.e. "double criminality" will always be required if part of the conduct took place in the UK).
Finally, some amendments affect only requests from Part 2 territories, such as the power conferred on the Secretary of State to discharge a person from extradition proceedings if they have been granted refugee status or leave on the ground that it would breach Articles 2 or 3 of the European Convention on Human Rights to remove them to the requesting territory. These changes supplement earlier amendments to the Extradition Act 2003 made in October 2013, as a result of the Crime and Courts Act 2013 (the introduction of a forum bar and the removal of the Secretary of State's discretion).
INTERIM RELIEF FROM IRAN SANCTIONS EXTENDED TO NOVEMBER 2014
In January 2014, the P5+1 (China, France, Germany, Russia, the UK and the US) agreed a six month suspension of EU and US sanctions against Iran as part of the Geneva Joint Plan of Action (the "JPoA"). It was announced on 21 July 2014 that the JPoA will be extended until 24 November 2014 to allow negotiations between the P5+1 and Iran to continue. Further information can be found in our most recent Iran sanctions update, available here.
OUTCOMES FROM THE MEETING OF THE FATF PLENARY, PARIS, 25-27 JUNE 2014
The third FATF Plenary meeting was held in Paris from the 25-27 June 2014. The main issues dealt with were:
- Producing two public documents as part of FATF ongoing work to identify jurisdictions that may pose a risk to the international financial system
- Approving the exit from the follow-up process of Argentina, Australia, Germany and Korea.
- Calling on Japan to enact adequate anti-money laundering and counter terrorist financing legislation.
- Receiving an update on AML/CFT improvements in Kenya, Kyrgyzstan, Mongolia, Nepal and Tanzania.
- Issuing a communiqué concerning the end of the third round of mutual evaluations and the start of the fourth round of mutual evaluations.
- Reviewing the voluntary tax compliance programmes in several jurisdictions.
- Adopting and publishing a report on the key definitions and potential AML/CFT risks of virtual currencies.
- Adopting and publishing a typologies report on the risk of terrorist financing abuse of the non-profit sector.
- Adopting and publishing a typologies report on the financial flows linked to the illicit production and trafficking of Afghan opiates and associated ML/TF activities.
- Agreeing on an expansion of membership.
ICC GUIDELINES ON GIFTS AND HOSPITALITY
The International Chamber of Commerce (ICC) has published guidelines on gifts and hospitality. The guidelines offer guidance for companies on how to establish and maintain a policy relating to gifts and hospitality based on the most recent international, regional and national rules as well as on commercial best practice.
SANCTIONS UPDATE: EU AND OFAC EXTENDS ASSET FREEZE AND INTRODUCES NEW SANCTIONS ON ENERGY AND FINANCIAL SECTOR
The US Treasury Department’s Office of Foreign Assets Control ("OFAC") has imposed several new Ukraine-related sanctions as of July 16, 2014. Significantly, the new sanctions impose restrictions on certain types of dealings by US persons with specified Russian energy, defense and financial services entities. The EU has also announced new sectoral sanctions, as well as additional designations. Our briefings on recent developments are available here.
PUBLICATION OF DIRECTIVE ON THE EUROPEAN INVESTIGATION ORDER IN CRIMINAL MATTERS
On 1 May 2014, the EU Directive regarding the European Investigation Order in criminal matters was published in the Official Journal. The Directive is designed to replace the existing legislative framework, which has been criticised as over-complicated and ineffective.
The Directive allows the judicial authorities of a Member State (the issuing State) to issue a European Investigation Order (EIO) for specific investigative measures to be carried out in another Member State (the executing State) for the purposes of obtaining evidence. EIOs may be issued in relation to investigations into legal or natural persons, and the possible measures expressly include steps to identify the holders of accounts in banks and other financial institutions, as well as the real-time monitoring of banking and other financial operations. A suspected or accused person, or their counsel, may also request the issue of an EIO.
The judicial authorities of an issuing State may only issue an EIO where it: (i) is "necessary and proportionate"; and (ii) could have been issued "under the same conditions in a similar domestic case". The executing authority may refuse to recognise or execute an EIO on a number of grounds, including domestic rules or laws on freedom of the press or freedom of expression and national security grounds.
The Member States must take the steps necessary to implement the Directive by 22 May 2017.