Day: November 20, 2020

An article in the November issue of Compliance Today from WilmerHale focuses on several recent DoJ guidance documents that provide companies with increased transparency in corporate enforcement actions.  These include DoJ guidance on cooperation credit in FCA investigations.  Another guidance document examines how a prosecutor can evaluate claims that a corporation is unable to pay a proposed fine or monetary penalty.  A third describes the attributes of an effective compliance programme, and a fourth details the circumstances in which, as a part of a resolution, DoJ may require a corporate monitor.  It says that the policies should serve as guideposts for companies to gauge the DoJ expectations on compliance, analyse strategic decisions, and conform their conduct to appropriate standards.  It says that this guidance, including the commentary on cooperation credit, effective compliance programmes, and the use of monitorships, will help companies ensure that they appropriately detect and respond to risks of misconduct. Ideally, effective compliance programmes will afford a strong defence against any governmental inquiry or enforcement actions.

https://www.jdsupra.com/legalnews/the-role-of-compliance-in-government-64544

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On 20 November, bnamericas reported that Mexico’s congress is poised to approve a Bill that would give the federal government’s financial crimes unit the ability to freeze bank accounts without a court order in suspected cases of money laundering and financing of terrorism.  The proposed legislation, dubbed the Ley Nieto, is viewed by proponents as a powerful tool that will help the country comply with stringent international AML/CFT guidelines established by FATF.  The UIF said that there are $99 million in blocked bank accounts that have not been claimed by any individual, adding that it believes it has blocked accounts holding 1 billion pesos tied to the infamous Jalisco Nueva Generación cartel, as well as 1,300 accounts held by 14 criminal organisations frozen in the so-called Operation Zócalo.

https://www.bnamericas.com/en/news/mexican-authorities-may-freeze-bank-accounts-without-court-order-under-new-law

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On 19 November, an article from Forsters LLP on the International Law Office website reminds one that the EU Fifth AML Directive was enacted into UK law with effect from 10 January and requires art businesses to implement systems intended to prevent their potential use in money laundering or for various other offences (in addition to those systems already required under the Proceeds of Crime Act 2002).  The rules apply to those trading, storing or acting as intermediaries in ‘works of art’, where the value involved is more than €10,000 (either for a single work of art or as part of a series of transactions).  Those affected are expected to register with HMRC.  It says that those businesses affected should have implemented systems and checks to address the new rules. This is potentially difficult for an industry that has emphasised discretion and whose clients may be unused to the level of due diligence information required.  The deadline for registration was originally 10 January 2021, but it has now been proposed that this be extended to 10 June 2021 (although the other requirements are already in force).  The article says that it is hoped that more detailed guidance will be forthcoming and (assuming registration is extended as proposed) that HMRC will take a more sympathetic approach to non-compliance during the period following 10 June 2021.  In the long term, it will be interesting to see how the art market reacts and whether this legislation will cause a cultural shift in an industry which is notorious for its lack of transparency and regulation.

https://www.internationallawoffice.com/Newsletters/Private-Client-Offshore-Services/United-Kingdom/Forsters-LLP/Anti-money-laundering-rules-impact-on-art-market

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On 15 November, the South China Morning Post reported that an Asian Racing Federation’s research paper shows that unregulated betting is growing quicker than the legal alternative throughout the region.  A research paper outlines the widespread damage as illegal gambling grows at a quicker rate than the legal market. The report focuses on Hong Kong, Singapore, South Korea, Australia, New Zealand and South Africa, with illegal betting growing faster than legal gambling in all of those jurisdictions.  The article says that, in Hong Kong, illegal betting profits in 2016 were estimated to be between HK$12 billion to HK$13 billion – in comparison to the Jockey Club’s net margin of HK$11.45 billion in the 2016-17 financial year; and that triads “run the vast majority” of illegal betting in Hong Kong and the issue is extended regionally by “the deep involvement of transnational organised crime in Macau casino junkets”.  In South Korea illegal betting makes up 62% of the total market and the government losing out on $7.9 billion in tax revenue each year.

https://www.scmp.com/sport/racing/article/3110655/golden-sixty-looks-join-elite-company-10th-consecutive-win-jockey-club

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