Bribery and Corruption

Impact of GDPR on internal investigations

The General Data Protection Regulation (GDPR), which came into force on 25 May 2018, requires businesses to complete mandatory data protection impact assessments (DPIAs) when processing data that is likely to result in a high risk to individuals.  In an investigations context, a DPIA may be required prior to any covert monitoring of employees.  Companies should factor this in when conducting internal investigations into the conduct of their employees or agents.  Businesses will need to consider the purpose and scope of such activities, and document this assessment in order to ensure these measures are necessary and proportionate in the context of the investigation.  Failure to conduct a DPIA in such circumstances could result in a breach of the GDPR, resulting in fines of up to €10 million or 2% of annual global turnover.

ICO, 25 May 2018

Egyptian officials arrested over suspected bribery

Four Egyptian government officials, including the head of a state-run food importer and a ministerial adviser, have been arrested on suspicion of bribery. The officials are thought to have accepted more than $110,000 in bribes to help secure orders and facilitate payments. Egypt is one of the world's largest importers of wheat, and many people rely on state-subsidised bread supplies. Past disruption to the supply of food, including trader boycotts and allegations of smuggling and fraud, has led to public protests.

Bloomberg, 29 May 2018

Head of Kenya's National Youth Service arrested over corruption scandal

Richard Ndubai, the Director General of Kenya's National Youth Service (NYS), has been detained in the second NYS scandal in the past three years. NYS was set up by the government to teach young people business and life skills. Unpaid suppliers allege that funds were stolen via NYS through fake invoices. Some 40 civil servants and 14 private sector officials were charged. Charges include stealing public funds of £59 million, forgery and abuse of office.

BBC, 28 May 2018


US announces import tariffs on aluminium and steel from Canada, Mexico and the European Union

US Commerce Secretary Wilbur Ross has announced that the US will impose a 25% tariff on steel imports and 10% tariff on aluminium on imports from the EU, Canada and Mexico.  The measures came into effect at midnight (Friday 1 June) and have led to harsh criticisms from affected parties. European Commission President Jean-Claude Juncker has suggested that the EU will seek to safeguard European markets by imposing similar tariffs on certain US-origin goods.

Reuters, 31 May 2018

Senior North Korean official to visit US

General Kim Yong-chol, the most senior official from North Korea to visit the US for 18 years, is to meet US President Donald Trump on 12 June 2018. The meeting follows President Trump's withdrawal last week from meeting North Korean leader, Kim Jong-un. This is part of a wider strategy of North Korean diplomacy, following Kim Jong-un's recent meeting with South Korean President Moon in Panmunjom on their shared border.

BBC, 29 May 2018

Indian exporters urged to complete transactions with Iran due to threat of US sanctions

Two Indian banks, IndusInd and UCO, are urging exporters of Indian resources to Iran to complete all business by 6 August 2018 over fears they may not be paid beyond this date. Payments for Iranian exports normally take between one to one and a half months to reach the Indian exporter.

Reuters, 29 May 2018

Money Laundering

Four men imprisoned over attempt to smuggle proceeds of crime in animal feed

Four men have been jailed for attempting to smuggle almost £1.5 million in cash out of the UK in 2015. Border Force officers at the Channel Tunnel terminal in Folkestone stopped a van on 11 November 2015 and discovered £980,000 in cash, hidden in sacks of animal feed allegedly being transported to a zoo in Poland.  A second van was intercepted eight days later, purportedly destined for the same zoo, and officers found a further £500,000 in cash. The men were arrested on suspicion of possessing criminal property.  The National Crime Agency identified the point at which the vans collected the money and brought charges against the individuals, who were all found guilty and sentenced to between two and seven years' imprisonment.

NCA, 29 May 2018

Mexico detains wife of notorious drug lord

The wife of Mexican drug lord Nemesio "El Mencho" Oseguera has been detained by marines. Rosalinda Garcia allegedly administered resources for her husband's drug cartel, thought to be the most powerful in Mexico. El Mencho is Mexico's most wanted drug trafficker following the extradition to the US of drug lord Joaquin "El Chapo" Guzman last year.  His Jalisco New Generation cartel is notorious for using extreme violence, including murder, kidnapping and extortion, to expand their share of the heroin market. Garcia has been charged with money laundering and organised crime. The US is offering $5 million for information leading to El Mencho's capture.

Reuters, 27 May 2018


Vietnamese court upholds verdict in country's biggest ever fraud case

The Ho Chi Minh City People's High Court has rejected an appeal in the country's largest fraud case to date. The ruling relates to the theft of $215 million by an employee of state-controlled bank VietinBank, the country's second largest listed bank by market value.  The court found that the central perpetrator, referred to as the "Super Swindler" by local media, was responsible for repaying some of the amounts owed to defrauded victims, but that the bank itself was not liable for repayments. The chief executive of Saigonbank Berjaya Securities JSC, one of the victims which had deposited money with VietinBank, said losing the case would cost them 70% of their capital because they would not be able to recover sufficient funds from the individual.  The individual was previously found guilty of the misappropriation of funds and sentenced to life imprisonment, while 22 accomplices were also convicted.

Reuters, 30 May 2018

Cyber Crime

TSB customers warned about fake text messages and phishing emails

ActionFraud, the UK’s national reporting centre for fraud and cyber-crime, has reported a sharp rise in fraudulent text messages and emails claiming to be from TSB. TSB is working with ActionFraud to keep consumers safe, following a surge in phishing reports from 30 in April 2018 to 321 in May 2018. Criminals are "smishing" by using spoof SMS messages to gather personal information to defraud customers. The advice to consumers is not to assume communications are authentic and not to open links provided in emails and text messages.

ActionFraud, 24 May 2018

Cyber criminals target two of Canada's largest banks

Fraudsters recently contacted the Bank of Montreal and Canadian Imperial Bank of Commerce, Canada's fourth and fifth biggest lenders respectively, claiming they were in possession of personal and financial information belonging to their customers. Both lenders are contacting customers advising them on how to monitor accounts and report suspicious activity. Other Canadian banks are not thought to have been affected.

Reuters, 28 May 2018

Computer hacker imprisoned for 10 years

A computer hacker, Grant West, pleaded guilty to offences of money laundering and conspiracy to defraud on 14 December 2017 at Southwark Crown Court. The CPS had overwhelming evidence which proved Mr West was the hacker known as "Courvoisier". West sold lists of financial information and used stolen credit cards to fund holidays. Mr West was sentenced to 10 years in prison.

CPS, 25 May 2018

Colombia to join NATO as global partner

Colombia will next week become the first Latin American member of NATO. The 29-member alliance reached a partnership agreement with Colombia last May. This follows Colombia's declaration of peace with the Revolutionary Armed Forces of Colombia and Colombian President Juan Manuel Santos being awarded a Nobel Peace Prize. Though Colombia will not be committed to take military action with fellow NATO partners, they will cooperate on areas of global security including organised crime and cyber security.

Reuters, 26 May 2018

Financial Regulation

Tesla asks San Francisco court to dismiss securities fraud claim brought by shareholders

The claim surrounds statements Tesla Inc. made about the production of its new Model 3. Shareholders bought stock in Tesla between 4 May 2016 and 6 October 2017. The shares were allegedly "artificially overinflated" due to allegedly misleading statements made by executives including Elon Musk, Tesla's Chief Executive. Claimants dispute Tesla's claims in May and August 2017 that Model 3 production was "on track". Tesla said it had a "good faith belief" in the Model 3 programme and that difficulties are likely to arise with the vehicle, the ramp of which is "the first of its kind". A hearing is scheduled for August 2018.

Reuters, 26 May 2018

Health & Safety

Two companies fined £170,000 for site failures

HSE inspectors visited the site of a timber frame extension being built in Exmouth in 2016. It found uncontrolled high risk activities were taking place, putting workers at risk. It also found a total disregard for health and safety and site management. Coast & Country Construction Limited (formerly known as Make a Loft a Home) was the principal contractor. The timber frame extension work was designed by Paul Humphries Architects Ltd.

HSE launched an investigation which found work was not properly planned, supervised or carried out in a safe manner.

Coast & Country Construction Limited was found guilty of breaching Section 2 (1) and 3 (1) of the Health and Safety at Work etc. Act 1974, and has been fined £150,000 with costs of £6,039. Paul Humphries Architects Ltd pleaded guilty to breaching Regulation 11 (1) and 11 (3) of the Construction (Design and Management) Regulations 2015, and was fined £20,000 and ordered to pay costs of £6,039.

SHP, 24 May 2018

Power line incident results in £500,000 fine for company

Construction Company Mick George Ltd has been fined following an incident in March 2016. An employee was driving a vehicle which came into contact with overhead power lines. The employee, who was unhurt in the incident, was emptying soil at a site in Northampton. He raised the body of the vehicle, which then touched, or came near to touching, the 33kv power line. The need for Permanent Protection Structures had been raised prior to the incident but only one had been installed.

The HSE investigation found that assessment of the power lines should have been more thorough and the system of work was inadequate. Mick George Ltd pleaded guilty to a breach of Regulation 25(3) of Construction (Design and Management) Regulations 2015 (CDM). The company was fined £566,670 and ordered to pay costs of £9,000.

HSE, 25 May 2018