A blog post on the FCPA Blog on 21 January reported that the UK Serious Fraud Office has published, with very little fanfare, new 8-page guidance about how it assesses the effectiveness of the companies it investigates. It is said that the guidance is actually part of the SFO’s Operational Handbook, which by its terms is “internal guidance” for the SFO only. The new guidance pays close attention to the 6 principles detailed in the Bribery Act guidance from the MoJ in 2011. However, the post says that what the business world needs to know is just how the SFO weighs up precisely what it will consider adequate – but there is little that is new or noteworthy in the guidance that assists in this.
On 21 January, the FATF-style regional body, CFATF, published the 4th round MER undertaken by CFATF. This followed the on-site visit made in September 2018. Since the last CFATF Mutual Evaluation in 2008, the country has progressively advanced the legislative framework to address gaps in the country’s AML/CFT framework, so improving its technical compliance. In the months preceding the on-site visit, it made a significant number of amendments to its AML/CFT laws and other subsidiary legislation. In terms of effectiveness, the jurisdiction has achieved a moderate level of effectiveness for Immediate Outcomes (IO) 1, 2, 5, 6 10 and 11 a low level of effectiveness for IO 3, 4, 7, 8, and 9.
On 21 January, Kenneth Rijock in his blog reported that the two countries have designated Hezbollah a terrorist organisation. Colombia has adopted US & EU lists of terrorists and terrorist organisations. Argentina and Paraguay have previously sanctioned Hezbollah; but were the only other Latin American nations to have taken that step.
On 21 January, OFAC advised that General License 20B (“Authorizing Official Activities of Certain International Organizations Involving the Government of Venezuela”) had been reissued in amended form, and that 15 aircraft (13 executive or business jets and 2 turboprop aircraft) had been added to the Venezuelan sanctions lists. The aircraft are said to be the property of Petroleos de Venezuela, S.A. (PdVSA).
On 21 January, Reuters reported that Nynas, which is owned by Venezuela’s state-run PDVSA and Finland’s Neste Oil, said it planned to reorganise its business in an attempt to disentangle itself from US sanctions. The proposed changes have been filed with OFAC.
The Overseas Production Orders and Requests for Interception (Designation of Agreement) Regulations 2020, which come into force on 28 February, designate the 2019 the Agreement between UK and US on access to electronic data for the purpose of countering serious crime as a relevant treaty under the Crime (Overseas Production Orders) Act 2019. This will enable overseas production orders to be made in respect of persons located in the US. The Agreement permits the UK to acquire, or obtain access to, electronic communications held or transmitted by US companies and permits US to acquire, or obtain access to, the content of communications held or transmitted by UK companies. The 2019 Act created a new form of overseas production order to obtain electronic communications data and has extra-territorial effect, meaning that these orders are granted by UK courts exerting jurisdiction over evidence and persons outside the UK. This jurisdiction may only be asserted where a relevant treaty to which the UK is a party permits this to happen and which has been designated for the purposes of the 2019 Act – hence the need to designate the Agreement with the US. The Home Secretary has sought and obtained written assurances from the US relating to the non-use of information obtained by virtue of the Agreement in connection with proceedings for a death penalty offence in the US.
On 21 January, a Notice from OFAC announced that the LLC had agreed to pay $12,150 to settle its potential civil liability for apparent violations of the Global Terrorism Sanctions Regulations, in that it dealt in the property or interests in property of the Al-Barakaat Group of Companies Somalia Limited, a Specially Designated Global Terrorist (SDGT), the New York-based lobbying firm providing lobbying services for Al-Barakaat.
AUSTRAC has produced a guide to identifying Illegal phoenix activity in the labour and payroll sector, explaining that this activity is when a company liquidates its operations to avoid paying its creditors, taxes and other regulatory payments. Before liquidation, it goes on, the company transfers its assets to a newly created company. The new company operates in the same, or similar industry and the same directors or close associates maintain control. The guidance specifically focuses on entities suspected of illegal phoenix activity, fraudulent taxation claims and money laundering activities pertaining to labour hire and payroll services. The introduction says that a recent report by PWC estimated the annual direct impact of illegal phoenix activity to be between A$2.85 billion and A$5.13 billion. Those targeting a specific market, the guidance may have more general application for assessing and avoiding risk.
The Middle East Monitor on 21 January reported that the High Representative of the EU for Foreign Affairs and Security Policy has announced that the EU is preparing a list of names of figures and businesses from Turkey who are to be sanctioned over the ongoing dispute regarding resources in the Eastern Mediterranean waters. It says that no further details were given, particularly regarding when the sanctions would be imposed. It explains that Turkey’s action was in retaliation to a deal between Greece, Southern Cyprus, and Israel to build a pipeline harnessing the reserves of natural gas off the southern shores of the island.