Day: November 18, 2020

A timely and interesting post on the FCPA Blog on 18 November lists  5 things to bear in mind in connection with the Goldman Sach board’ plan to claw back $174 million from former and current executives following the $3.3 billion in fines and penalties imposed on the bank following the 1MDB scandal.  It looks at how clawbacks work, and asks whether they’re a good idea.

https://fcpablog.com/2020/11/18/at-large-five-things-to-know-about-executive-compensation-clawbacks-in-fcpa-cases/

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On 17 November, a report from the Atlantic Council claims that Russia has the world’s largest volume of dark money hidden abroad — about $1 trillion — both in absolute terms and as a percentage of its national GDP.  It says that an estimated quarter of this amount is controlled by President Putin and his close associates, and the Kremlin appears to be able to persuade dependent oligarchs to assist financially in its foreign policy undertakings.  The report argues that these funds pose a serious national security threat to the US because this money can be exploited and steered by the Kremlin for espionage, terrorism, industrial espionage, bribery, political manipulation, disinformation, and many other nefarious purposes.  It examines the pervasiveness of Russian money laundering practices globally, why the money is laundered, methods, and jurisdictions used, and how these exploit weaknesses in the US system.  It then discusses how to reframe AML/CFT strategy to focus not only on foreign policy threats emanating from abroad, but on domestic preventive measures and combating risks at home. 

https://www.atlanticcouncil.org/wp-content/uploads/2020/11/Russia-Dark-Money-Printable-PDF.pdf

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On 18 November, Client Alert from Dentons says that the 6^th AML Directive aims to improve the harmonisation of the criminal liability of money laundering and terrorist financing across 27 Member States.  In doing so, it significantly differs from its predecessors and their implementation in previous German AML legislation which mainly dealt with regulatory issues such as the obligation to conduct KYC checks and to report suspicious transactions.  The Client Alert summarises the key proposals and highlights the gold plating approach taken by the German government and takes a closer look at its regulatory implications on financial services firms and insurance undertakings.  The new law out to achieve a “paradigm shift” in the prosecution of money laundering by abandoning the concept of a catalogue of predicate offences, and the proposed money laundering offence, as a matter of German law, will be able to capture profits derived from any criminal activity.  The Client Alert asserts that prosecuting money laundering will become considerably easier in Germany, and extends the investigative power of prosecutors, by making greater use of online searches as well as surveillance of electronic and telephone communications in the investigation of money laundering.

https://www.dentons.com/en/insights/articles/2020/november/18/germany-implements-the-6th-anti-money-laundering-directive

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On 17 November, OFAC advised a number of changes added to its Iran-related sanctions lists, including the Iranian-flag vessel Bosco Gilan.  The entries for 1 individual and 3 entities have been amended.  The listings are said to target a key patronage network for the Supreme Leader of Iran, the Islamic Revolution Mostazafan Foundation, an immense conglomerate of some 160 holdings in key sectors of Iran’s economy, including finance, energy, construction, and mining.  It says that while Bonyad Mostazafan is ostensibly a charitable organisation charged with providing benefits to the poor and oppressed, its holdings are said to be expropriated from the Iranian people and are used by the Supreme Leader Ali Khamenei to enrich his office, reward his political allies, and persecute the regime’s enemies.  OFAC is also designating Iran’s Minister of Intelligence and Security, Mahmoud Alavi, pursuant to human rights authorities. 

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20201118

https://home.treasury.gov/news/press-releases/sm1185

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On 17 November, a news release from the US DoJ announced that the Working Group on Bribery of the OECD Working Group issued its Phase 4 Report of the US.  It is part of the OECD Working Group’s peer monitoring process and focuses primarily on the US enforcement of its foreign bribery statute, the FCPA, and was issued following a year-long review that included a series of interviews with government, private sector, academic, and civil society experts.  It highlights the US increasing foreign bribery enforcement level since the OECD Working Group’s Phase 3 Report in 2010.

https://www.justice.gov/opa/pr/oecd-working-group-bribery-issues-report-commending-united-states-maintaining-leading-role

https://www.state.gov/the-united-states-leads-the-fight-against-foreign-bribery-and-transnational-corruption

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On 17 November, an article from Bryan Cave Leighton Paisner sets out to explain how cooperation features in the deferred prosecution agreement (DPA) process, what it means to be “co-operative”, and why the SFO appears to be trying to strongly encourage organisations to lay “golden eggs” for it in the form of making privileged documents available.  On this point, the article makes clear that, in a very recent case, the defendant did not provide material requested by the SFO that was protected by legal professional privilege but was still found to have “actively cooperated” with the SFO.  It also says that the SFO could not be clearer in making the point, once again, that it will be cooperating and coordinating its efforts with other investigating authorities in the UK and internationally, as applicable.

https://www.bclplaw.com/en-US/insights/the-sfo-the-goose-and-the-golden-eggs-what-the-sfos-new-dpa-guidance-on-dpas-tells-us-about-the-prosecutors-approach-to-co-operation.html

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