Day: November 25, 2020

A post on the Compliance & Enforcement Blog from the Program on Corporate Compliance and Enforcement from the School of Law at the New York University says that many UK regulated firms will be currently (re-)assessing staff as fit and proper and training staff on the FCA (or the Prudential Regulation Authority) Conduct Rules. The FCA has recently banned 3 individuals from working in the financial services industry for non-financial misconduct outside the workplace. The enforcement actions are, therefore, a timely reminder for regulated firms that the FCA has indicated it will bring an increased focus on how firms deal with non-financial misconduct by employees, both within and outside of the workplace.  It says that it is clear that there is increasing regulatory focus on how regulated firms deal with non-financial misconduct and that failure to tackle such issues appropriately can be taken by the FCA as an indicator of poor culture. Firms would be advised to undertake an assessment as to how they in practice deal, or would deal, with instances of non-financial misconduct by staff. It offers practical steps as examples of matters that firms should consider to ensure that they meet regulatory expectations in this area.

https://wp.nyu.edu/compliance_enforcement/2020/11/25/the-challenge-of-addressing-non-financial-misconduct-in-uk-regulated-firms/

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On 24 November, an article from Kharon says that the Xinjiang Production and Construction Corps (XPCC) and its subsidiaries are deeply embedded within the global economy, and their commercial and financial ties with firms around the world are coming under fresh scrutiny in the wake of US sanctions imposed this Summer. It was designated due to its role in human rights abuses against ethnic minorities in China.  However, it owns thousands of subsidiaries across China, including more than a dozen firms with shares traded on mainland China and Hong Kong stock exchanges, and the US allowed wind-down transactions until 30 November with majority-owned XPCC subsidiaries.  In addition, XPCC may also own subsidiaries outside of China through nominee shareholders, according to corporate records, and the article gives an example.

https://brief.kharon.com/updates/sanctions-expose-sprawling-operations-of-xinjiang-production-and-construction-corps/

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On 25 November, OFAC advised that Mohamed AL-KANI (who has numerous aliases) and the KANIYAT MILITIA (which also has alternative and former names) had been added to its SDN Lists.  The militia and its leader are designated and said to be responsible for the murder of civilians recently discovered in numerous mass graves in Tarhouna, as well as torture, forced disappearances, and displacement of civilians.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20201125

https://home.treasury.gov/news/press-releases/sm1192

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On 24 November, Khaleej Times reported that the UAE Central Bank will start taking legal action against non-registered Hawala service providers when registration deadline expires, after which no Hawala service provider will be allowed to operate in the country. Hawala, also knowns as hundi, is a process whereby money value is transferred to individuals in other countries, and is usually used in remote places of those countries, which do not have access to banking services.

https://www.khaleejtimes.com/business/banking-finance/uae-to-take-action-against-non-registered-hawala-operators-from-december-3

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On 25 November, Hellenic Shipping News reported that the US  requires all ships, US-flagged ships and foreign flagged ships that call on ports in the US to ensure cyber risk management is appropriately addressed in their safety management system by the company’s first annual verification of the Document of compliance after 1 January 1.  Failure to this requirement may result in detention of ship in US port.

https://www.hellenicshippingnews.com/us-to-impose-tough-port-state-control-measures-on-cyber-risk-management/

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A blog post from Corker Bining (in conjunction with Linklaters) on 25 November looks at where a SAR submitted to the NCA may end up, including its use in subsequent civil or criminal litigation.  It warns that –

1. It may be used as the basis of an application for an account freezing order;
2. It may be discloseable in civil litigation;
3. It may be considered in later investigations; and
4. It could even could one day be the part of a data leak.

https://www.corkerbinning.com/where-a-sar-submitted-nca-may-end-up/

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On 25 November, Sandler Travis Rosenberg reported that the State Department had named Chengdu Best New Materials Co Ltd (China); Zibo Elim Trade Company Ltd (China); Aviazapchast (Russia); JSC Elecon (Russia); and Nilco Group (aka Nil Fam Khazar Company, and Santers Holding) (Russia) as being involved in the transfer to, or acquisition from Iran, Syria, or North Korea of goods, services, or technology controlled under multilateral control lists or otherwise having the potential to make a material contribution to the development of weapons of mass destruction or cruise or ballistic missile systems.  The report details the restrictions placed on the entities as a result.

https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/exports-to-russian-chinese-entities-restricted-for-illegal-shipments

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Thomson Reuters reported that synthetic identity fraud, one of the fastest-growing financial crimes in the UUS, has become an increasing concern for regulators, as banks struggle to find common ways of tackling the innovative theft technique that combines real and fictitious data about individuals.  One widely reported analysis by Auriemma Group, an information and advisory firm for the payments and lending industries, suggested that synthetic identity fraud cost US lenders $6 billion. Meanwhile, the consultancy McKinsey estimates the financial theft accounts for 10–15% of charge offs in a typical unsecured lending portfolio.  US bank regulators, in particular the Federal Reserve, are increasingly focused on synthetic theft and have been working with banks and technology firms to help identify solutions and common definitions.  “Traditional fraud models are not designed to detect synthetic identities,” said the Boston Fed, citing research that showed such models were ineffective at catching 85% to 95% of likely synthetic identities.

https://legal.thomsonreuters.com/blog/synthetic-identity-fraud-worrying-u-s-regulators/

I had omitted the following link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y

On 24 November, Khaleej Times reported that the UAE Central Bank will start taking legal action against non-registered Hawala service providers when registration deadline expires, after which no Hawala service provider will be allowed to operate in the country. Hawala, also knowns as hundi, is a process whereby money value is transferred to individuals in other countries, and is usually used in remote places of those countries, which do not have access to banking services.

https://www.khaleejtimes.com/business/banking-finance/uae-to-take-action-against-non-registered-hawala-operators-from-december-3

I had omitted the following link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y