On 8th March, KYC 360 carried an article which starts by saying that the government of the Isle of Man has spent the last several months in damage control mode, as revelations from the Panama and Paradise Papers continue to expose the Island’s role in the complex web of offshore finance. The Island featured prominently in both the Panama and Paradise Papers.
On 8th March, law firm Shearman & Sterling reported that the CPS has confirmed that a refurbishment company, Skansen Interiors Limited, has been found guilty of failure to prevent bribery under section 7 of the Bribery Act 2010. A defence to this offence is available if a company can show that it has adequate procedures to prevent bribery and Skansen unsuccessfully argued that it had such controls in place.
The Consultancy Committee of Accountancy Bodies (CCAB, which has 5 members – ICAEW, ACCA, CIPFA, ICAS and Chartered Accountants Ireland – has issued on 7th March revised guidance. The guidance has been updated for the 2017 AML Regulations and is approved by HM Treasury. It has also been adopted by the UK accountancy AML supervisory bodies. The guidance covers the prevention of money laundering and the countering of terrorist financing. [I note that there is no mention of “proliferation”].
On 7th March, Crowell Moring reported that OFSI had commenced a new blog on 1st March, intended to “keep you informed about financial sanctions events, changes to our guidance and topical issues”.
The blog can be found at –
On 7th March, Eversheds Sutherland reported that, on 22nd February, HMRC issued an AML/CFT thematic review of AML compliance in the money services business (MSB) Sector. This focused on those MSB which operate via agent networks but is likely to be instructive to all MSB supervised by HMRC. It follows on from HMRC’s supervisory activity in 2014/2015 of those MSB with the largest agent networks. The article details the contents of the review. HMRC also sets out a number of recommendations for good practice in order to minimise the exposure of principal MSB to money laundering risks. These build upon guidance already issued by HMRC.
DNA reports that the Indian authorities have traced Pramod Kumar Mittal, who the agencies allege defrauded government-owned State Trading Corporation of India Limited (STC), to London. Pramod is the younger brother of steel tycoon Lakshmi Mittal. The CBI in India had registered a case against Mittal and 19 officers of STC in March 2017, alleging that Mittal’s company ‘Global Infrastructure Holdings (GIHL), registered in Isle of Man, now also known as Global Steel Holdings (GSHL) approached STC seeking assistance in terms of providing financing facility by establishing letters of credit for purchasing raw materials required for their newly-acquired steel plants in Philippines and Bosnia.
The Times on 8th March reported that a claim against a Glasgow law firm linked to a failed hedge fund has been dropped. Paul Duffy, a liquidator with Ernst & Young, had been suing Levy & McRae solicitors after the collapse of Heather Capital, amid allegations that £90 million had gone missing. However, the last action in the case has been abandoned in the Court of Session in Edinburgh. The Heather fund was established on the Isle of Man in 2005 by Gregory King, a lawyer turned financier. After it failed 5 years later, an Isle of Man court judgement likened it to a Ponzi scheme.