An article from Arent Fox on 20 August says that US Customs & Border Protection has taken an increasingly enforcement-minded posture to prevent and penalise the importation of goods produced using forced labour into the US. CBP may issue civil penalties against importers for entering, introducing, or attempting to enter or introduce merchandise that is prohibited or restricted. Shipments suspected of being produced with forced labour will be detained by CBP and excluded if CBP determines that forced labour was used in the production of the goods. Merchandise is subject to exclusion through withhold release orders (WRO) enforced by CBP and/or seizure, and may lead to criminal investigation of the importer(s). There have been 12 WRO since September 2019. The article says that enhanced due diligence is essential to mitigate forced labour-related risk, and there are several steps that a company can take to better equip itself to minimise the risk of penalties. The US authorities have also provided additional guidance on due diligence steps to take in regarding to use of North Korean labour in the supply chain. Guidance suggests that this risk analysis should include both the internal supply chains and third party suppliers.
On 20 August, CNBC and others reported that the former White House chief strategist Steve Bannon was arrested, together with 3 others, on charges of defrauding hundreds of thousands of donors through his “We Build the Wall” fundraising campaign. It is claimed that they defrauded donors by raising “more than $25 million to build a wall along the southern border of the United States”, but some of that money was used for personal gain.
On 20 August, Bloomberg Quint reported that Congo Aconde Sarl, the DRC unit of Cameroon’s Afriland First Bank Group may be violating sanctions by providing banking services to a North Korea-linked statue-building company. North Korea has used statue-building as a way of gaining favour with African leaders. It is also claimed that the bank has allowed access to other sanctioned persons, including Dan Gertler.
Meanwhile, NK News reported (citing the same source) that 2 North Korean businessmen were able to illegally open a bank account in the DRC and use it for international money laundering, saying that North Korean nationals Pak Hwa Song and Hwang Kil Su were contracted by government officials to carry out construction projects using public funds in Congo in 2018 and 2019.
On 20 August, OFAC announced the addition of 6 new individuals to its Syria sanctions lists. These senior officials included 2 senior members of the Syrian government: Assad’s top press officer and a prominent member of the Syrian Ba’ath Party.
Dechert LLP has issued a briefing about the Deferred Prosecution Agreement (DPA) with G4S Care and Justice Services (UK) Ltd (a wholly owned subsidiary of G4S plc) which, the article says, has given further insight into the practical developments of the DPA regime. Offering recommendations, the firm says that, with G4S C&J being the eighth DPA entered into with the SFO, we are seeing an evolution of the requirements of the SFO for companies hoping to benefit from entry into the process.
On 18 August, Crowell Moring issued a client alert saying that FinCEN on 3 August released FAQ regarding customer due diligence (CDD) requirements for covered financial institutions detailed in FinCEN’s “CDD Rule” providing additional detail on conducting due diligence, developing customer risk ratings, and updating customer information. The firm says that the new FAQ do not break any major new ground with respect to the CDD Rule, but can be helpful for financial institutions seeking to set risk-based limits on when specific types of information are needed to determine customer risk. It also says that the FAQ may provide a valuable reference point for financial institutions explaining – for example, to regulators – the risk-based decisions that have gone into their AML programmes and why not all accounts with certain characteristics need to be treated the same way.
On 18 August, Global Investigations Review reported that the FCA has approximately halved its investigations into whether companies have established adequate safeguards to prevent sanctions violations. It has 6 investigations as of 4 August, compared to 11 ongoing sanctions-related investigations in May 2019, and has opened just 1 new investigation since the beginning of 2019.