Day: November 21, 2019

On 21^st November, the Financial Services Authority published a public statement about a civil penalty issued against Fedelta Trust Ltd for £73,644 (discounted by 30% to £51,551 due to co-operation by the company).  In the key learning points identified for business, the FSA states that s regulated entity’s risk management arrangements, including in respect of AML/CFT, should extend to understanding of the investment and operational activities of its clients – even when the regulated entity is, as a registered agent, providing only limited services to its clients.  Not all clients have the same characteristics; and the risks associated with a particular client may not be mitigated by simply applying ‘standard’ processes and procedures.

https://www.iomfsa.im/fsa-news/2019/nov/public-statement-concerning-the-imposition-of-a-discretionary-civil-penalty-under-section-16-of-the-financial-services-act-2008/

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On 19^th November, 5 Saint Andrews Hill published an article about the alleged tax fraud being investigated in Germany.  It explains that under certain double taxation treaties, offshore investors are entitled to a refund of dividend withholding tax on shares held in domestic corporations.  It is noted that not all EU jurisdictions operate such a scheme and, in particular, the UK does not operate such a scheme.  Cum-Ex is said to be one of the refund models, which use rapid share transactions to contrive successive multiple ownership of shares to facilitate multiple refunds of WHT from European tax authorities.  The comprehensive article provides a briefing on the scandal and its implications for and in the UK, and recommends that FCA rules, taken together with EU Market Abuse Regulation, clearly indicate that firms potentially exposed to or involved in dividend arbitrage should conduct extended due diligence on relevant clients and transactions; and, where any clients or transactions raise any concerns, these should be properly documented and considered for reporting to the FCA.

https://www.5sah.co.uk/news-and-events/articles/2019-11-19/the-cumex-trading-scandal-what-are-the-implications-for-the-uk

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On 19^th November, Dechert LLP published an article about new Guidelines which offer insight into French expectations for companies investigating wrongdoing in this new era and overlap substantially with similar guidance issued by the US and the UK SFO.  The French deferred prosecution agreements are available to companies under investigation for specific offences of corruption, influence peddling and laundering the proceeds of tax fraud or related offences.  The article provides an overview of the emerging French regime, comparing and contrasting it with the US and UK approaches.

https://info.dechert.com/10/13166/november-2019/how-the-new-french-guidance-on-deferred-prosecution-eligibility-affects-settlement-negotiations.asp?sid=397a8681-6df5-4d72-93c6-c579135676c2

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On 21^st November, KYC 360 reported that FATF has suspended evaluations of financial crime laws mid-way through an examination of Australia’s progress in the area.  It was announced that FATF has decided to temporarily pause the start of all scheduled follow-up assessments pending the outcomes of the strategic review of FATF currently underway, and that the next FATF Plenary will discuss aspects of this review at its next meeting in February 2020, with new dates for the start of follow-up assessments, including for Australia, are still to be finalised.  A FATF’s 2018 report found Australia non-compliant or partially compliant with 14 of the 40 FATF recommendations.

https://www.riskscreen.com/kyc360/news/international-body-suspends-australias-anti-money-laundering-law-evaluations/

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On 20^th November, Kharon Brief carried an article about Sohayl Talebi, who was designated in July by OFAC.  He was designated for his role in a procurement network helping Iran acquire aluminium has spent decades building commercial connections across the globe, starting from his time in the 1980s at an Iranian aircraft manufacturing company.  He has both Irish and Iranian citizenship, and has lived in several parts of Europe, including the UK, Netherlands and Belgium, and he frequently travelled between Europe, China and Iran.  He also is said to have owned and directed companies, including in the UK and Ireland.  The article says that earlier this year, he founded China-based Sanming Sino-Euro Import and Export Co Ltd, which he also owns and manages, to arrange the payment and shipment of aluminium to Iran, according to the US Treasury.

https://brief.kharon.com/updates/sanctioned-iranian-procurement-agent-built-global-business-network/

On 19^th November, the Chicago Tribune reported that the UN Security Council has extended an arms embargo on Somalia and a ban on trade in charcoal, a key source of funds for al-Shabab extremists — and it imposed a new ban on ingredients for explosive devices the group is increasingly using.  It reports that a UN panel of experts said that for the first time it obtained “definitive evidence” that al-Shabab has been manufacturing improvised explosives, and the new Resolution ordered all countries to prevent the direct or indirect sale or supply of precursors to Somalia if there is evidence or “a significant risk they may be used in the manufacture in Somalia of improvised explosive devices” – and give the sanctions committee 15 days advance notice of any sale, supply or transfer of precursors.

https://www.chicagotribune.com/sns-bc-un–united-nations-somalia-sanctions-20191115-story.html

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y