Chatterbox - Edition 3 Volume 3 · 2020. 12. 7. · Chatterbox 07/12/2020 Edition 3, Volume 3 A...

Chatterbox07/12/2020

Edition 3, Volume 3

A note from the Editor Lee Byrne

Contents

“IN FOCUS” - Sanctions

Part One:

CRIME AWARENESS

2. Tax Crimes - Egmont Report Money Laundering2. ABC - First Energy Outs CEO 3. ABC-PfizerReceivesInquiry3. MoneyLaundering-Financial Crime in Casino’s3. HumanTrafficking–report issued by FinCEN

Part Two:

REGULATORY RESPONSE

4. FCAUpdatesOnCovid-194. CriminalFinancesAct2017- ReviewBegins5. MAR-ParliamentIntroduces NewBill5. UK Trust Register6. Sanctions-UKSanctions Review7. EU-UpdatedNon-Cooperative List8. GRECOIssuesLuxembourg Report8. ESMAPublishesFinalReport9. DoJAnnouncesPublicationof EnforcementFramework10. DoJArtworkRiskAssessments Arising11. Singapore-MeasuresAgainst Money Laundering11. Germany-Regulationon ReportingDuties12. Cayman-Anti-Money Laundering12. FrancePublishesNew Ordinance13. Qatar-ThreeYearsOn13. China–SanctionsUSEntities

Part Three:

ENFORCEMENT ACTION

14. GoldmanSachsFined£96.6 Million14. DeutscheBankFined€13.5m

2020hascertainlybeenaninterestingandchallengingyearforusallandasweapproachtheChristmasholidayperiodandthestartofanewyearletushopethatthenewyearbringsmorecertaintyinourhealth,wealthandhappiness!Theendoftheyearbringswithitanopportunitytoreflectuponwhatweresomeofthehighlightsandlowlightsinthefinancialcrimecompliance2020calendar,andtolookaheadto2021.

ItisclearthatCOVID-19mayhavedisruptedsomecrimes,suchascashplacementinretailcash-intensivebusinesses(waitforthe‘bubble’ofcashactivityoncethelockdownssubside!),butithasalsoprovidedtheingredientsforfraudsterstocommitnewcrimes.During2021wecanexpecttoseecasesoflarge-scalefraudandmisrepresentationrelatingtoindividualentitlementtogovernmentsupportandsubsidiesandlargerfraudsrelatingtofirms’falselyclaimingtobeabletodeliverongovernmentcontractstosupplyPPEandevenmedicines.

Asfinancialcrimecomplianceprofessionalswemustmanageabroadwaterfrontofcrimerisks,buttheemergencein2020ofnewstoriesofallegedcorruptionbytherichandinfamousservestodemonstratethatcrimesrelatingtobribery,corruptionandtaxevasioncontinuetoblightourcommunitiesandareacommonandtransnationalmenace.

Atatimeofyearwhenweoftentakethetimetoconsiderhowwecandomoretohelpthosewhoarelessfortunatethanourselves,maybethebestnewyearresolutionforFCCprofessionalsisforustoredoubleoureffortstoinvestigateandidentifyincreasinglycomplexandtransnationalcrimesothatthesefundscanberecoveredandrepatriatedtopeoplewhoneedthemmostforfood,housing,education,healthcareandtobringhopeforabetterfuture.

RestassuredthathereatGCAL,wearefullycommittedtoensuringthat2021reallyisabetteryearandthatwewillprovideevenmoreeffectivesupportforourclients.

WishingyouallaverymerryChristmasandahappyandhealthynewyear.

www.greatchatwellacademy.com of 14

Chatterbox 07/12/2020Volume3,Edition3

Part One: Crime Awareness

Serious Tax Crimes – EGMONT report ‘Money

Laundering of Serious Tax Crimes’

Customised Online

Learning

TheprimaryfocusofanyonlinecoursehastobetheLearning,

howeverengagingtheuserswithprogramcontentandmaintainingthisengagementrequiresinformedprogramme design and programme

delivery.

Workingwithoutstandingandcreativedesigners,weensurethatthetoneandtechnicalcontentareappropriatelybalancedtosupporta

learningjourneythatisinteractiveandmeaningful.

Weprovideanimatedlearningcontent,withaudioandvisual

stimulationthatprovideslearnerswithoutcomesfocusedlearningthatwillprovidegreaterconfidenceandcompetenceinmanagingrisks.

Hereisalistofsomeofthesubjectswenowcover:

1. Anti-Money Laundering &

CombatingtheFinanceofTerrorismAwareness

2. Opensource(Internet)InvestigationTechnique(OSINT)

3. Managing Bribery & Corruption

Risks

4. ManagingSanctionsRisks

5. ManagingFraudRisk

6. IntroductiontoBlockchainandVirtualCurrencyRiskManagement

7. ManagingTaxEvasionRisksUnderTheCriminalFinanceAct2017

8. AdvancedFinancialCrimeCompliance(AML)

9. Trade Based Money Laundering

10. TerroristFinancingRisks&TerroristGroupAnalysis

For further information please

contact us at:

[email protected]

©GreatChatwellAcademyofLearning2020AllRightsReserved

EGMONThaspublishedabulletintopresentkeylessons,bestpractices,andrepresentativecaseexamplestohelpenhancethefightagainstmoneylaundering(ML)ofserioustaxcrimesbothatthenationalandinternationallevels.

TheinformationinthisbulletinisdesignedtoassistwithestablishingnationalstrategiesandtofacilitateeffectivecooperationbetweenFIUs,

taxauthoritiesandtaxpractitioners.

ItshouldalsoassistreportingentitiestobetterdetectMLofserioustaxcrimesandinformtheriskassessmentfortaxevasionatatimewhenthisareaoffinancialcrimeriskisfacingincreasingscrutiny.

https://egmontgroup.org/en/content/money-laundering-serious-tax-crimes-iewg-public-bulletin-now-

available

Bribery and Corruption - FirstEnergy Ousts CEO

Amid $61M Bribery Investigation Scandal

OneofthelargestUSelectricutilitycompanies,FirstEnergyCorp,isunderinvestigationforbriberyatthefederallevel,aswellasracketeering,inrelationtotheso-calledHouseBill6,alawgrantingsubsidiestoseveralAmericannuclearpowerplants.

Whileneitherthecompany,noritsrepresentativesfaceanyofficialcharges,federalprosecutorssuspectthatahugeamountoffundstoforcetheadoptionoftheBillcamefromFirstEnergy.Theinternalinvestigation

launchedbythecompanyitselffollowingthearrestoftheHouseSpeakerLarryHouseholderandseveralallegedaccomplicesfoundthattheCEOofFirstEnergy,aswellastwootherseniormanagers,breachedthecompany’scodeofconductandpolicies.Theiremploymentwasterminated.

https://www.greentechmedia.com/articles/read/firstenergy-ousts-ceo-amid-61m-bribery-investigation-scandal





https://egmontgroup.org/en/content/money-laundering-serious-tax-crimes-iewg-public-bulletin-now-available




http://[email protected]/



Thepharmaceuticalsgiantreceived

severalinquiries,inJuneandAugust,

fromtheFCPAunitsoftheSECandDoJ

regardingthecompany’soperations

inChinaandRussia.Thecompany

statedthatitcooperatedfullywiththe

authoritiesandprovidedallnecessary

responsesanddocumentation.

Previouslyin2012,thecompanyfaced

aninvestigationfromUSauthorities

andagreedtopaymorethanUSD60

milliontosettlecorruptionchargesfor

misconductrelatedtoseveralEuropean

andAsiancountries.

https://www.wsj.com/articles/pfizer-

receives-inquiry-from-sec-bribery-

unit-11604674900

Bribery and Corruption - Pfizer Receives Inquiry From SEC Bribery Unit

United Nations Security Council

UNSCisanexecutivebodyofthe

UNestablishedin1946andnow

headquarteredinNewYork(US).

With5permanentsmembers

disposingoftherightofveto

(Russia,China,France,United

StatesandUnitedKingdom)and

10members-elect,theSCaimsto

maintaininternationalpeaceand

security.

TheCouncilwasestablished

followingtheendoftheWWII

andaimedatunitingtheEastern

and Western nations around a

commonobjective.Originally,only

6members-electcouldenterthe

Councilbutin1963thenumber

wasincreasedto10.

Thebody’scompositionwas

changedonlyonce,whenin1971

theGeneralAssemblyvotedto

ousttherepresentativesofthe

RepublicofChina,nowknown

asTaiwan,andtoacceptinstead

thosefromthePeople’sRepublic

ofChina.

Continue Overleaf...


Part One: Crime Awareness

Money Laundering and Gambling - Two admit to using casinos to facilitate financial crimeTheUSIRSremindsusagainofthefact

thatthegoodoldmethodsofmoney

launderingviathegamblingindustryare

stillwithus.

Duringanongoinginvestigationinto

illicitmoneytransmittersandsimilar,

IRShasuncoveredseveral“institutions”

thatperformedfundstransfersbetween

ChinaandtheUnitedStates,“thereby

circumventingdomesticandforeign

lawsregardingmonetarytransfersand

reporting,includingUnitedStatesanti-

moneylaunderingscrutinyandChinese

capitalflightcontrols”.

https://www.irs.gov/compliance/

criminal-investigation/two-admit-to-

using-casinos-to-facilitate-financial-

crime

In Focus

Sanctions

Human Trafficking – US FinCEN issues advisory on identifying and reporting Human Trafficking and Related ActivityTheFinancialCrimesEnforcement

Network(FinCEN)hasissuedan

advisorytohelpsavelives,andto

protectthemostvulnerableinour

societyfrompredatorswhopreyonthe

innocentanddefencelessformoneyand

greed.

Theadvisorysupplementsthe2014

FinCENGuidanceonRecognizing

ActivitythatMaybeAssociated

withHumanSmugglingandHuman

Trafficking–FinancialRedFlags(“2014

Advisory”).

https://www.fincen.gov/sites/default/

files/advisory/2020-10-15/Advisory%20

Human%20Trafficking%20508%20

FINAL_0.pdf

https://today.rtl.lu/news/world/a/1593438.html

https://www.fincen.gov/sites/default/files/advisory/2020-10-15/Advisory%20Human%20Trafficking%20508%20FINAL_0.pdf


https://www.irs.gov/compliance/criminal-investigation/two-admit-to-using-casinos-to-facilitate-financial-crime




https://www.wsj.com/articles/pfizer-receives-inquiry-from-sec-bribery-unit-11604674900






Part Two: Regulatory ResponseIn Focus

Sanctions

Covid-19 - FCA updates on market abuse compliance

Continued...

ThemissionstatementoftheUNSC

hasnotchangedovertheyearsand

todaypromotesworldpeaceand

protectsinternationalsecuritybyway

ofresolutionsthatallowtheCouncil

toimposesanctions(asameansof

non-armedconflictresolution)on

countries,entitiesandindividuals

thatpresentathreattothepeace

andsecurity.Thiscanincludestates

thatsupportterrorism,nationswhere

anarmedconflictthreatenslocal

population,directaggression,useof

weaponsofmassdestruction,etc.

Thesanctionsmeasuresadoptedby

theUNSCaredirectlyapplicableto

itsMembers,withoutanyneedfor

transpositionintolocallaw.

Asoftoday,thereare14ongoing

sanctionsregimesimposedbythe

UNSC,related,forexample,to

particularstatessuchasNorthKorea,

tocertainorganizationssuchasISIL

orAl-NusrahFront,toarmedconflicts

andannexationssuchastheconflict

betweenRussiaandUkraine.Thereis

atotalof712sanctionedindividuals

and305entities.

TheUNSCconsolidatedsanctionslist

canbefoundhere:

https://www.un.org/securitycouncil/

content/un-sc-consolidated-list

InOctober,theUKFCAreminded

businessesandemployeesoftheir

obligationsintermsofmarketabuse

detectionandpreventionduringthe

Covid-19pandemic.

Theregulatordrewparticularattention

tothefactthatissuersmusthave

appropriatepoliciesandprocedures

inplaceandemployeesmuststickto

them,aswellastothegeneral“civiland

criminallawrequirements”withregards

totheirpersonaldealings.

AccordingtotheDirectorofMarket

OversightwithinFCA,JuliaHoggett,the

so-called“WorkFromHome”thathas

beenimplementedduetothepandemic,

doesnotalleviateorrenderobsolete

orirrelevanttheexistingrequirements

aroundmarketabuse.Thefirms

must“haverobustandproportionate

controlsandsystemsinplace”,beable

toidentifybreachesandreportthemin

atimelymanner.Thekeywordsforthe

businessestorememberseeminglyare

“proactiveapproach”.

Investigationsintoallegedmisconduct

mustnotbedelayedandinternal

processmustbeefficientandwell-

defined.

Finally,theFCAalsopointedoutthatthe

regulatorwasabletotrackeverysingle

suspicioustradeandthatindividuals

mustbecarefulwhencarryingouttheir

personaltrades.

https://www.pinsentmasons.com/out-

law/analysis/market-abuse-compliance-

covid-19

UNITED KINGDOM

Law Commission begins project on Corporate

Criminal Liability

ThehighlypromotedCriminalFinances

Act2017hasfailedtobringthe

prosecutionresultsthatwereexpected

andsotheGovernmenthasturnedto

theUKLawCommissiontoreview“the

lawsaroundcorporatecriminalliability

andprovideoptionstoreformthem”.

Theeffectivenessofcurrentlaws

incriminalisingthemisconductof

corporateentitiesisontheradar,in

ordertoensuretheUKdoesnotlag

behindtheinternationalstandards

inthisfield.Thereportfromthe

Commissionisexpectedlate2021.

https://www.lawcom.gov.uk/law-

commission-begins-project-on-

corporate-criminal-liability/

https://www.lawcom.gov.uk/law-commission-begins-project-on-corporate-criminal-liability/




https://www.pinsentmasons.com/out-law/analysis/market-abuse-compliance-covid-19



https://www.un.org/securitycouncil/content/un-sc-consolidated-list

https://www.un.org/securitycouncil/content/un-sc-consolidated-list




Part Two: Regulatory Response

Office of Foreign Assets Control(“OFAC”)

OFACisa“financialintelligence

andenforcementagency”

undertheauthorityoftheUS

DepartmentofTreasury,was

establishedin1950underthe

PresidencyofHarryTruman,

thoughsimilarbodieshaveexisted

intheUSAsince1812.

OFACwascreatedasaresponse

totheRepublicofChinaentering

intotheKoreanWar;OFAC

wasthenmandatedbytheUS

PresidenttofreezeallChineseand

NorthKoreanassetsunderUSA

jurisdiction.

Today,theroleofOFACremains

unchanged:itaimsatprotecting

“USnationalsecurityandforeign

policyobjectives”byimposing

andenforcingeconomicand

financialsanctions.Similarlyto

theUNSecurityCouncil,OFAC

hasestablishedseveralsanctions

regimesunderwhichitsanctions

states,territories,entitiesand

individuals,based,firstofall,on

theUNSCresolutions.


In Focus

Market Abuse Regulation – Financial Services Bill introduced to Parliament

TheFinancialServicesBillwas

introducedtotheUKParliamenton

October21,andincluded,interalia,

amendmentstotheUKMARregime,for

thepurposeofpreparingthepost-Brexit

transitionperiodendingonDecember

31,2020.

Theamendmentsincludeseveralpoints:

• Notificationofdealings

Personswithmanagerialresponsibilities

willhavetonotifytheirdealingsinthe

issuer’ssecuritiestotheFCAandto

theissuerwithin3workingdaysofthe

trade.“Thedefinitionofworkingdays

capturesspecificUKholidaysincluding

ChristmasDay,GoodFridayandother

designatedbankholidays”.

• Insiderlists

Issuers,aswellaspersonsactingon

theirbehalforontheiraccount,have

toestablishinsiderlists.Noescapefor

thirdparties.

• Increasedpenaltiesformisconduct

Marketabusemaximumprisonterm

sentencewillbeincreasedfrom7to10

years.

https://www.osborneclarke.com/

insights/listed-companies-ready-

changes-market-abuse-regulation/

UK Sanctions Statutory Instruments Review

Sanctions

TheUKsanctionsregimeshave,

untilfairlyrecently,beenbasedon

threesources:UNSecurityCouncil

Resolutions,EUregulationsand

domesticdecisions.

Withtheendofpost-Brexittransition

periodlooming,theEU-imposed

sanctionswillnolongerbeapplicable.

In2018,theSanctionsandAntiMoney

LaunderingActwasadoptedinorder

todefinetheframeworkaftertheend

ofthetransitionperiod,exceptfor

theGlobalHumanRightsSanctions

Regulations2020thatcameintoforcein

July2020.

UKFinancereleasedacomprehensive

guideontheUKsanctionsregimesto

date.

https://www.ukfinance.org.uk/

system/files/UK%20Sanctions%20

Statutory%20Instruments%20

Review%201.01.pdf

https://www.ukfinance.org.uk/system/files/UK%20Sanctions%20Statutory%20Instruments%20Review%201.01.pdf




https://www.osborneclarke.com/insights/listed-companies-ready-changes-market-abuse-regulation/






ThenewMoneyLaunderingand

TerroristFinancing(Amendment)

(EUExit)Regulations2020were

implementedintheUKinOctober,

inordertotakeintoaccountthe

amendmentsintroducedbythe5AMLD.

The5AMLDimposedonesignificant

changewithregardstothetrust

registers:fromnowon,allUKandnon-

UKtrusts,regardlessoftheirtaxliability,

havingbusinessrelationships(i.e.

relationshipslastingatleast12months)

withUKconsultantsand/orpurchasing

UKrealestate,willhavetoregistertheir

data(name,creationdate,taxresidency,

etc.),alongwiththatoftheirbeneficial

owners,withaspecialregister,theUK

TrustRegistrationService(“TRS”).

Fortheabovetrusts,theregistration

deadlinesareOctober5,2021incase

taxesaretobepaidforthefirsttime

inthecurrentyear,andJanuary31,

2022inanyothercase.Nevertheless,

additionalinformationregarding

beneficialowners,suchastheir

nationalitiesandcountriesofresidence,

ofthetrustshastobeprovidedby

March10,2022atthelatest.

SpecialattentionmustbepaidtoUK

nexusfordeterminationofobligationto

register.

Non-taxabletrustsarealsocoveredby

theTRSandincludethefollowing:

• TypeAtrusts–UKexpresstrusts

• TypeBtrusts–non-UKtrustswith

atleastoneUKresidenttrustee

wherethetrusteeseitherengagea

UKbusinessadviseroracquirean

interestinUKland

• TypeCtrusts–non-UKtrusts

whosetrusteesareallnon-UK

residentandwhoacquirean

interestinUKland.

Severalcategoriesoftrustsare

exemptedfromregistration,including

propertyco-ownershiptrusts,bereaved

minors’trustsandtrustscreatedbywill.

TheinformationregisteredwithTRSwill

normallynotbegenerallyaccessible;

onlypersonsthatcandemonstrate

legitimateinterestwillbeabletoaccess

thedata.Anexceptiontothisrule

concernssituationswhereatrustholds

acontrollinginterestinathirdcountry

company,withexclusionoftypeCtrusts.

Thepenaltiesincaseofnon-compliance

withtheregistrationrequirementsare

stillunderdiscussion.

https://www.taylorwessing.com/en/

insights-and-events/insights/2020/10/

the-uk-trust-register---where-are-we-

now


Continued...

Thesanctionsregimesvary

significantlyintheir“sources”:

terrorism-related,orlinkedto

violationofhumanrights,WMD

proliferation,armedconflictordrug

trafficking.Therearecurrently58

sanctionsregimesadministeredby

OFACwhichcanincludeonlypartial

measuressuchaspartialtrade

restrictionsorbecomprehensivein

theirnature.

Interestingly,OFACdoesnot

prohibitcompletelyalldealingswith

sanctionedcountriesorentities;it

issuesgeneralorspecificlicenses

authorisingparticulartransactions.

OFACfrequentlyreviewsthe

regimesandsanctionslists

andpublishesguidanceand

interpretativenotes.Youcanfollow

theamendmentsbysubscribingto

theOFAC’snewsletterandperform

thesearchofsanctionedindividuals

andentitiesviaaspecialtool:

https://sanctionssearch.ofac.treas.gov/

OFACalsohasthepowerto

imposesubstantialpenalties

(financialfinesandevenprison

sentences)oncompaniesthat

breachtherestrictions,regardless

ofthedirectUSnexus(primaryvs

secondarysanctions).

The UK Trust Register - where are we now?

In Focus

Sanctions



https://www.taylorwessing.com/en/insights-and-events/insights/2020/10/the-uk-trust-register---where-are-we-now








The EU list of non-cooperative jurisdictions for

tax purposes — updated list

Thefollowing12jurisdicitons

continuetobelistedbytheEUand

businessesarerequiredtonotethese

changesintheirriskassessmentsfor

taxcrimesandintheirjurisdictionrisk

assessments:

1. AmericanSamoaAmerican

2. Anguilla

3. Barbados

4. Fiji

5. Guam

6. Palau

7. Panama

8. Samoa

9. Seychelles

10. Trinidad and Tobago

11. USVirginIslands

12. Vanuatu

ItsworthnotingthatTurkeycontinues

tohoveroverthe‘naughtylist’andis

expectedtomaketangibleprogress

intheeffectiveimplementationofthe

automaticexchangeofinformation

withallEUMemberStatesandwas

granteduntil31December2020to

do so.

Undertheheading,‘Existenceof

harmfultaxregimes’Australia

featureswithMorocco,Namibia,

JordanandSaintLucia.

https://www.consilium.europa.eu/en/

policies/eu-list-of-non-cooperative-

jurisdictions/

In Focus

Sanctions

UK Office of Financial Sanctions Implementation

(“OFSI”)

OFSIwascreatedin2016,isundertheauthorityofHMTreasury.Priortothis,thepredecessorof

OFSIbelongedtotheCentralBankofEnglandwhopasseditspowerstotheHMTreasuryonlyin2007.ItsprimarygoalistoprotecttheUK’sinterests,foreignpolicyand

security.

OFSIhasestablishedmultiplesanctionsregimes,mostofthembasedontheUNSCresolutions,

EuropeanCommissionregulations,aswellasowndomesticsanctions.

TheOfficeregularlypublishesguidanceondealingwithsanctionedpersons,its

consolidatedlistofsanctionsisavailableontheirwebsite:

https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets

Interestingly,in2006,twoindividualstriedtochallengeOFSI’sdecisiontoputthemon

thesanctionslistandfreezetheirassets.Nevertheless,theirclaimwasdismissedonthegroundsoftheabsenceofobstaclestriggeredbytheassetfreezemeasuretolead“asatisfactorypersonal,

familyandsociallife”.

“OFSIhasthepowertoimposecivilmonetarypenaltiesfor

breachesofsanctions,butunliketheOFACcannotimposecriminalsanctions.OFSImustrefertheseconcernstothelawenforcement

agenciestoinvestigateandprosecute.”

EUROPE




https://www.consilium.europa.eu/en/policies/eu-list-of-non-cooperative-jurisdictions/







Europe

Therestrictivemeasuresin

Europe,oraccuratelythe

EuropeanUnion,aredefinedby

theEuropeanUnionCouncil.Most

ofthesearebasedonUNSecurity

Councilresolutionstransposed

intotheEUlegislation.

TheEUalsohasitsown“domestic”

sanctionsregimes,transposedinto

thenationallawofeachMember

State,andeachMemberState

canalsohaveoneorseverallocal

sanctionsregimesatthenational

level.

Sanctions,orrestrictivemeasures,

arepromotedasaforeignpolicy

toolusedbytheEUandcan

targetthirdcountrygovernments,

entities,companies,groups,

organizationsandindividuals.

Europeansanctionscanrange

fromsimpleeconomicrestrictions

totravelbanstocomplete

embargoes.

TheconsolidatedEUsanctionslist

isavailableontheofficialwebsite

oftheEU:

https://eeas.europa.eu/

topics/sanctions-policy/8442/

consolidated-listof-sanctions_en


In Focus

Sanctions

Market Abuse Regulations - ESMA publishes the new final report on the amendments to the MAR for the promotion of the use of SME Growth

MarketsOnOctober29,theEuropeanSecuritiesandMarketsAuthority(“ESMA”)publisheditsfinalreport,relatednotablytotheImplementingTechnicalStandardsfortheinsiderlists.

AccordingtotheArticle18oftheEuropeanMarketAbuseRegulation,“issuersandanypersonactingontheirbehalforontheiraccount,mustdrawupalistofallpersonswhohaveaccesstoinsideinformation.SuchlistshallbeupdatedasperArticle18(4)andprovidedtotherelevantNCAuponrequest”.

SeveralamendmentshavebeenintroducedforSMEGrowthMarketissuerstosimplifytheirobligationsunderMAR,suchastheirexemptionfromestablishinginsiderlists,thoughspecifyingthatsuchissuersstillneedtofollowuponthepossibleinsidersandbeabletoprovidetherelevantauthoritieswithalistofinsidersuponrequest.Toreducetheadministrativeburdenfortheseissuers,anotheramendmentsuggestsmaintaininginsiderlists

onlyforinsiderswithregular(andnotoccasional)accesstoinsideinformation.

Followingapublicconsultation,ESMAsuggested,initsdraftITS,recordingonlywell-defineddatapointsintheinsiderlists:

• Thedealoreventthatgeneratestheobligationtopreparetheinsiderlist;

• Thenameandsurnameoftherelevantperson;

• Thetimeofgaining(andlosing)accesstoinsideinformation;

• Professionalandpersonalphonenumbers;

• Identificationnumber;and

• Thegroundsforbeingincludedinthelist.

ThereportwassubmittedtotheEuropean Commission for examination.

https://www.esma.europa.eu/sites/default/files/library/esma70-156-3581_final_report_on_sme_gms_rts-its_under_mar_0.pdf

ArecentreportbytheGroupofStatesAgainstCorruption(Greco)highlightedthatlittleprogresshasbeenmadebyLuxembourginimplementingthemeasurestheGroupsuggestedinitslastreportonLuxembourginMarch2019.

Thedeficienciesarerelatedtotheoversightoftherelationshipsbetweenthelawmakersandlobbyists,aswellasdeclarationsoffinancialassetsheldbytheMPsandsupervisionofthebreachesofparliamentarycodeofconduct.Theprovisionsforindependenceofthepublicprosecutionhavealsobeen

disregardedandhavenotbeenincludedintothecountry’sconstitution,meaningthatprosecutor’sofficestillremainsunderthecommandoftheMinistryofJustice.

Thoughsomemeasureshavebeentakentoremediatethesituation,GrecostillconsidersthemasinsufficientandcallLuxembourgtofurtherenhanceitsABCframework.

https://delano.lu/d/detail/news/lux-globally-unsatisfactory-anti-corruption-compliance/212318

Luxembourg - receives ‘unsatisfactory’ report

card from GRECO








https://eeas.europa.eu/topics/sanctions-policy/8442/consolidated-listof-sanctions_en







Continued

SimilartotheUSandUKsystems,

theEUhasimplementeda

licensingprocedurethatenables

companiesandMemberStates

todealwithsanctionedcountries

andcompaniesunderspecific

conditions.

Interestingly,theEUfollowedthe

USsanctionsregimetargeting

Iran,butafterIran’swithdrawal

fromJCPOA,theEUrefused

tosupportAmericansanctions

againsttheIslamicRepublicand

updateditsexistingBlocking

Statute(initiallyintroducedin

1996tocounterUSsanctions

onCuba,IranandLibya)toallow

Europeancompaniestodeal

withIranaspartofinternational

trade.TheEUalsocreateda

specialmechanism,Instex(akind

ofaclearinghouse),aimedat

facilitatingthetradewithIran.

Asoftoday,afteralmost2-years

ofexistence,only1transaction

hasbeenpassedthroughthe

mechanismbyGermany.

In Focus

SanctionsUNITED STATES OF AMERICA

Cryptocurrency - DoJ Announces Publication of

Enforcement Framework

EarlyOctober2020,theUS

DoJreleasedareportcalled

“Cryptocurrency:AnEnforcement

Framework”.Itisaninventoryofthe

threatsand“enforcementchallenges”

relatedtocryptocurrencies,the

relationshipsoftheUSregulatorswith

theircolleaguesaroundtheworldand

DoJ’s“responsestrategies”.

TheFBIalsocontributedtothereport

withitsobservationsaroundtheillicit

useofcryptocurrencies.Accordingto

theagency,despitetheuseofblockchain

thatismeanttomaketransactionsin

cryptocurrenciesmoretransparent,

thelatterarestillaprivilegedmeansof

criminalsto“hidetheirtrueidentities”.

DoJalsohighlightedtheimportance

ofthelegalrequirementsgoverning

theuseofcryptocurrenciesanddrew

public’sattentiontotheguidance

availabletobettercomplywiththe

obligations.

Thus,PartIofthereportprovides

aninventoryofthreatsposedby

cryptocurrencies,withthreemajor

categories:

• Financialtransactionsassociated

withthecommissionofcrimes;

• Moneylaunderingandthe

shieldingoflegitimateactivity

fromtax,reporting,orotherlegal

requirements;

• Crimes,suchastheft,directly

implicatingthecryptocurrency

marketplaceitself.

PartIIdescribesthelegalandregulatory

meansavailabletolawenforcement

tocounterthesethreatsandoutlines

differentpartnershipsbetweenlocal

agenciesandforeigncolleagues.

Finally,PartIIIdiscussesthepotential

challengesthatthegovernmentmay

faceinthefuture.

https://www.justice.gov/ag/page/

file/1326061/download

https://www.justice.gov/ag/page/file/1326061/download

https://www.justice.gov/ag/page/file/1326061/download





In2015,theFrenchbankBNP

ParibaswassentencedbytheUS

courttoarecordfineofUSD8.9

billionforbreaching,between

2000and2010,theembargo

regimesimposedbytheUSin

relationtoCuba,Sudan,Iranand

Libya.

Thebankmanagedto

negotiateapleadealwiththe

USregulators.Inadditiontothe

substantialfinancialpenalty,

thebankwasalsosubjecttoa

5-yeartrialperiodduringwhich

thefinancialgiantwassubject

toenhancedsupervisionand

committedtofullyrevampingits

complianceframework.


In Focus

Sanctions Art - US Department of Treasury issues guidance

on Potential Sanctions Risks Arising from Dealings in High-Value Artwork

OnOctober30,USDepartmentof

Treasuryissuedguidanceondealingsin

high-valueartworklinkedtotheOFAC

DesignatedIndividualsandEntitiesand

therisksassociatedwiththesedealings.

Artobjectsandantiquitiesarerecognised

asapossiblechannelthroughwhich

personshitbytheUSsanctionsregimes

canaccessfinancialsystems.

Awidearrayofmarketplayersare

coveredbythisguidance,includingart

dealers,artgalleries,privatecollectors,

auctionhouses,agentsandbrokers,

diamondandotherpreciousstones

dealersandevenmuseums.

Theguidancehighlightsthe“lackof

transparencyinartworktransactions

andahighdegreeofanonymityand

confidentiality”,andfrequentuseofshell

entitiesandintermediaries.Thisseems

especiallytrueifweremembertheissues

aroundfreeports’opacityandadditional

scrutinytheyattractfromregulators

aroundtheworld.

Theguidancealsoreferstoareport

publishedinJuly2020bythePermanent

SubcommitteeonInvestigationsofthe

SenateCommitteeonHomelandSecurity

andGovernmentalAffairsthatmentions

severalindividuals,notablyfromRussia

andNorthKorea,thatusedhighlyopaque

schemesinvolvingartobjects.

Finally,theguidanceremindscovered

personsoftheprohibitiontodealwith

sanctionedentitiesandindividualsand

drawstheirattentiontothefactthat

theso-called“BermanAmendment”

doesnotautomaticallyandfullyexempt

transactionsrelatedtoartfrom“OFAC

regulationandenforcement”.

https://home.treasury.gov/policy-

issues/financial-sanctions/recent-

actions/20201030

Case Study – BNPP

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20201030







OTHER INTERNATIONAL

Continued...

BNPParibaspleadedguiltyto

thechargesstatingthatthebank

hadwilfullystrippednecessary

informationfromtheirwire

transferssothatitwasimpossible

todetecttheyweregoingtoor

fromthesanctionedcountries.The

bankwasalsoaccusedoftrying

towilfullyconcealevidenceand

informationaboutthesedealings

andoffailuretocooperatewiththe

authorities.

Interestingly,andunprecedently,

DoJacceptedtodistributethe

forfeitedsumstotheclaimants

consideredtobeharmedby

thedealingsofthebankwith

thesanctionedcountries.This

decisionthoughwassubjectto

multiplecontroversies.

In2020,BNPParibashasagain

appearedontheradarofUSand

Frenchauthoritiesforitsalleged

conspiracyincrimesagainst

humanity,genocideandtorturein

SudanundertheregimeofOmar

AlBachir.

Whilethebankhasalreadybeen

sanctionedbytheUS,theFrench

authoritieshaveonlylauncheda

judicialinvestigation.Averdictis

yettocome.

In Focus

SanctionsSingapore - Measures against money laundering,

terrorist financing strengthened under proposed changes to payment services law

Germany - Regulation on Reporting Duties under the German Money Laundering Act - Real Estate (GwGMeldV-Immobilien)

TheMonetaryAuthorityofSingaporeenhancesitsarsenalagainstmoneylaunderingandterroristfinancingviatheuseofvirtualpayments,thusechoingthesameregulatorytrendinEuropeandtheUS.

TheamendmentstothePaymentServicesActwerepresentedtotheParliamentearlyNovemberandwillcovermainlydigitalexchanges,e-walletprovidersandcryptocurrencyfirms.Thebillalsosuggestsexpandingseveraldefinitions,suchasthatofdigital

paymentservicetokenandcross-bordermoneytransferservice,inordertoencompassallpossiblevulnerableconduitsformoneylaunderingandterroristfinancing.

TheMonetaryAuthorityofSingaporewillalsoreceiveadditionalpowerstotakeallmeasuresitdeemsappropriateforthe

stabilityofthelocalfinancialsystem.

https://www.straitstimes.com/singapore/politics/parliament-proposed-changes-to-law-regulating-payment-services-to-reduce-money

Germany,acountrythathasbeenin

thebreakingnewsforsometimedue

tothescandalsaroundDeutscheBank,

isstrengtheningitsAMLframework.

Newreportingobligationswere

introducedinOctoberfortheGerman

LegalandTaxAdvisoryProfessionals

(lawyers,notaries,etc.)inRealEstate

Transactions.

Theseobligationsarenotnew,buttheGermanregulatordecidedtoextendthem.TheRegulationconcernscorporatetransactionsinvolvingdomesticrealestatewhichistransferredbymeansofsuchtransactionstoanotherlegalentity.

Whatneedstobereported:

• Transactionsinvolvinghigh-riskorsanctionedcountries,asperFATFandEUlists,orindividuals/entities(residencyorcloseties)

• Inconsistenciesregardingthecounterpartiesorbeneficialowners(falseidentity,forgeddocuments,criminalcharges,cross-bordertaxarrangements)

• Inconsistenciesregardingrepresentation(forgedpowerofattorney,etc.)

• Inconsistenciesregardingtheprice,acquisitionorpayment(useofcashexceedingEUR10’000,useofcryptocurrencies,bankaccountinathirdcountry,differenceinpurchaseandmarketvalue,paymentstoorfromathirdpartynotinvolvedinthedeal,etc.)

Theonlyexceptionfromreportingobligationsconcernstheconsiderationofparticularcircumstancesandabsenceofanysuspicionregardingmoneylaunderingorterroristfinancing.

Incaseofviolationofthereportingobligations,thecoveredpersonsmaybesubjecttoafineamountingtoEUR150’000forsimplebreachesoruptoEUR1millionforrepeatedoraggravatedbreaches,oruptotwicetheeconomic

benefitderivedfromthebreach.

https://www.beiten-burkhardt.com/en/blogs/rst/geldwaeschegesetzmeldepflichtverordnung-immobilien-gwgmeldv-immobilien













Iranian Bank Used to Fund

Hezbollah Is Implicated

In Money Laundering In

Toronto, Canada

SaderatBank,anIranianfinancial

institution,channelledfundsto

CanadathroughaToronto-based

currencyexchangebusiness.The

bankisastate-ownedFIandwas

allegedlyusedbyHezbollahforits

operations.

In2019,theCanadianSecurity

IntelligenceServicemonitored

andreportedonAlirezaOnghaei,

anIranianimmigrantownerofa

currencyexchangecompany.He

allegedlycircumventedsanctions

byredirectingfundsthrough

Dubaithatis–togetherwiththe

restoftheUAE–isknownfor

ratherlaxAMLcontrolsandmajor

deficienciesidentifiedbythe

standard-setting FATF.

https://www.the961.com/csis-

report-iranian-bank-hezbollah-

toronto/

In Focus

SanctionsCayman – Report on anti-money laundering progress to FATF

France publishes a new ordinance to update its

asset freeze regime

TheCaymanshavebeenunderFATF

supervisionsinceitslastmutual

evaluationreportof2019,whenseveral

deficiencieswerehighlightedinthe

CaymanIslandsAMLframework.

Theseshortfallsincludedtheabsence

ofMLinvestigationsandprosecutions,

insufficientandinadequateassessment

ofrisksposedbylegalentitiesand

arrangements.

TheUKCrowndependencyhasprovided

anupdateonit’sprogressindeveloping

enhancementsofitsAMLmeasures

Theterritoryhas:

• Launchedriskassessmentsfor

terroristfinancingrisks,

• Excludedpersonsunderthe

SecuritiesInvestmentBusinessLaw,

• Non-financialbusinesses,suchas

realestateagentsandartdealers,

arenowcoveredbytheAML

requirementsandsupervisedbythe

localregulator,

• ABureauofFinancialInvestigation

hasbeenestablishedwithinthelocal

PoliceServiceinordertoinvestigate

complexcross-bordercases,

• ThelocalRegistrarofCompanieshas

alsobeenamendedtoincludeand

makeavailablenamesofdirectors,

“includingalternatedirectors,aswell

asmanagingmembersoflimited-

liabilitycompaniesandauthorised

sharecapital”,

Finally,legislationhasbeenupdated

withregardstolegalarrangementsto

increasetheirtransparencyandallowlaw

enforcementandauthoritiestorequest

necessaryinformationfromthetrustees

whoseAMLobligationshavebeen

specified.

Thesedevelopmentshaveprobably

alsocontributedtothereassessment

bytheEUofitslistofnon-cooperative

jurisdictionsfortaxpurposes,andtothe

removalofCaymanIslandsfromthislist

inOctober.

https://www.caymancompass.

com/2020/11/03/cayman-reports-anti-

money-laundering-progress-to-fatf/

OnNovember4,theFrenchlegislators

issuedtheOrdinancen°2020-1342

enhancingtheassetfreezeregime.

Thedocumentcomprises13articles

amendingthecurrentframeworkaround

assetfreeze.

https://www.afg.asso.fr/wp-content/

uploads/2020/11/rapport-ordonnance-

2020-1342-du-4-novembre-2020-

gel-des-avoirs-interdiction-de-mise-

disposition-2020-11-05.pdf

https://www.afg.asso.fr/wp-content/uploads/2020/11/rapport-ordonnance-2020-1342-du-4-novembre-2020-gel-des-avoirs-interdiction-de-mise-disposition-2020-11-05.pdf





https://www.caymancompass.com/2020/11/03/cayman-reports-anti-money-laundering-progress-to-fatf/



https://www.the961.com/csis-report-iranian-bank-hezbollah-toronto/







Qatar – Three years on

China - sanctions imposed on major US defence

companies after arms sales to Taiwan

AmidsttheRussia-Ukraineconflict,themigratorycrisisinEurope,presidentialelectionsinFrance,andsomepoliticalturmoil,theyear2017wasnottheonetoberememberedforthesanctionsimposedonQatar.Yet,exactlyin2017,acoalitionledbySaudiArabia,andincludingBahrain,theUAE,Egypt,laterjoinedbyYemen,Jordan,Mauritania,Senegalandsomeothernations,laidthefoundationofwhatwascalledtheQatardiplomaticcrisiswhichis,bytheway,isstillongoing.

Theyear2020thereforemarksthe3rdanniversaryofthisMiddle-Easternimbroglio.

ThecoalitionaccusedQatarofsupporting terrorism and imposed

sanctionsontheArabnation.SincethenQatarhasmanagedtomeetallthe13requirementsoftheultimatumissuedbythecoalition,includingclosingAl-JazeeraandothermediaoutletsfundedbyQatarandseveringtieswithallegedlyterrorist(ideologicalandreligious)organisations.

Butwhathasbeentheimpactofthesesanctions?Havetheybeengenuinelysuccessful?

https://www.energypolicy.columbia.edu/research/report/qatari-sanctions-episode

ChinasanctionsBoeingDefense,Space&Security,LockheedMartin,andRaytheon,alongwithindividualsthatplayedacrucialroleinthesecontracts,forUSarmssalestoTaiwanthatChinastillconsidersasapartofitsterritoryand“hasneverruledoutretakingcontrolofbyforce”.TheUShasneverformallysupportedthepolicyadoptedbyChinawithregardstoTaiwan.

AccordingtotheChineseForeignMinistryspokesman,ZhaoLijian,“TheUSarmssalestoTaiwanseverelyviolatetheone-ChinaprincipleandthethreeChina-USjointcommuniqués,andseriously

undermineChina’ssovereigntyandsecurityinterests”.

SomeofthetargetedcompanieshavealreadystartedtojustifytheirdealingswithTaiwanbyconfirmingthesetransactionsarestrictlyregulatedandsupervisedbytheUSauthoritiesandarenottoaffectinanywaytheprivatetraderelationshipswiththe“Chineseaviationcommunity”.

https://www.theguardian.com/world/2020/oct/27/china-sanctions-major-us-defence-companies-after-arms-sales-to-taiwan

InOctober,theEuropean

CommissionandtheHigh

RepresentativeoftheUnionfor

ForeignAffairsandSecurityPolicy

presentedtheirjointProposalfor

aCouncilRegulationconcerning

implementationofrestrictive

measures(sanctions)against

serioushumanrightsviolations

andabusesworldwide.

Ifadopted,thisnewmechanism

willbeaddedtothecurrent

sanctionsregimesandenablethe

EUtosanctionindividualsand

entitiesthatviolatehumanrights,

regardlessoftheirgeographical

locationandtheactual

responsibilityforthesebreaches.

Thesanctionsthemselveswill

mostprobablyincludethewell-

knownassetfreezeandtravel

bans.

https://ec.europa.eu/commission/

presscorner/detail/en/ip_20_1939

In Focus

Sanctions

Sanctions and Human

Rights: towards a European

framework to address human

rights violations and abuses

worldwide








https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1939




InOctober,theAmericanbanking

giantwasfinedGBP96.6millionby

theUKFCAforseriousdeficiencies

initsriskmanagementframeworkas

partoftheglobal1MDBinvestigation,

inwhichenforcementauthoritiesfrom

severalcountriesclaimedtheirrightto

imposepenaltiesonGoldmanSachs.

AccordingtotheFCAFinalNotice,

“the1MDBtransactions“carried

significantriskforGSI.Theywere

highvalue,complexdeals,executed

incompressedtimescalesoveran

11-monthperiod”and“involved

clientsandcounterpartiesin

jurisdictionsthatGSIhadidentified

asrepresentingenhancedlegal,

complianceandreputationalrisk”.

Thebankisthereforeaccusedof

wilfulblindness,breachofitsduty

ofdiligencethatallowedbribery

andmisconducttogounnoticed

overacertainperiodoftime.The

Noticespecificallypointsoutthat

seniormanagementwasawareofthe

misconductanddidnottakeanysteps

to end it.

https://www.fca.org.uk/publication/

final-notices/gsi-2020.pdf

FrankfurtprosecutorsfinedDeutscheBank€13.5mforthebelatedreportingofsuspicioustransactionsitprocessedforDanskeBank’sEstonianbranch.Atthesametime,theprosecutorsclearedGermany’slargestlenderofmoneylaunderingallegationslinkedtoitsroleasacorrespondentbankforDanske’sEstonianbranch.Theprosecutorsdroppedacriminalinvestigationintothematter,citinga“lackofsufficientevidence”.

AfterDeutscheBank’sroleinthescandalwasexposedbyawhistleblowerinlate2018,FrankfurtprosecutorsandtheFederalCriminalPoliceOfficestartedajointcriminalinvestigationintothematterandseizeddocumentslinkedtosuspicioustransactions.DeutscheBanklaunchedtwointernalinvestigationsintotheissueandfacedquestionsfromUSregulatorsaboutitsrole.

WhileFrankfurtprosecutorsdroppedthecriminalinvestigationagainstDeutscheBank,theauthoritiesfoundthat,between2010and2015,in

627casesthelenderfailedtoflagpotentiallysuspicioustransactionstolawenforcementauthoritiesontime.Foreachofthesefailures,DeutscheBankwasfinedbetween€12,500and€30,000.

DeutscheBanksaidonthatitacceptedthefinebutpointedoutthat“noallegationsweremadeagainstthebankintermsofithavingbreacheditssupervisionobligationsororganisationaldutiesorcertainpersonsviolatingtheirresponsibility,norwereanybreachesascertained”.

https://www.internationalinvestment.net/news/4021650/deutsche-bank-fined-eur-tardy-flagging-suspicious-transfers

Goldman Sachs International (GSI) fined £96.6 million in UK for risk management failures

Deutsche Bank fined €13.5m for flagging suspicious transactions too late

Part Three: Enforcement ActionIn Focus

Sanctions

Treasury Sanctions Russian

Government Research

Institution Connected to the

Triton Malware

TheUSTreasuryincludedtheState

ResearchCenteroftheRussian

FederationFGUPCentralScientific

ResearchInstituteofChemistryand

Mechanicsintoitslistofdesignated

entitiesasacrucialmastermindbehind

thecyberattacksinvolvingtheTriton

malware–amaliciousprogrammethat

allegedlyattacksindustrysafetysystems.

AccordingtotheUSgovernment,this

malwarehasbeenusedincyberattacks

againsttheUSanditsalliesintheMiddle

East.

PursuanttoSection224ofCAATSA,the

Institute’sassets,propertyandinterests

withUSnexuswillbeblockedandUS

personsareprohibitedfromdealingwith

theentity.

https://home.treasury.gov/news/press-

releases/sm1162

https://home.treasury.gov/news/press-releases/sm1162

https://www.internationalinvestment.net/news/4021650/deutsche-bank-fined-eur-tardy-flagging-suspicious-transfers

https://www.fca.org.uk/publication/final-notices/gsi-2020.pdf

https://www.fca.org.uk/publication/final-notices/gsi-2020.pdf

Whileallreasonablecarehasbeentakeninthepreparationofthisnewsletter,neithertheAcademynorthepresenteracceptresponsibilityforanyerror,oranylosssustainedbyany

personplacingrelianceuponitscontents

Tolearnmoreaboutourriskandcomplianceproductsandservices,pleasecontactusat:www.greatchatwellacademy.com

www.greatchatwellacademy.com

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