Day: November 18, 2021

On 18 November, White & Case published an article containing key considerations for banks engaging with governments and peer institutions to improve financial crime compliance systems.  It says that innovative public-private partnerships (PPP) have demonstrated some success in meeting government objectives, but is the system manifestly better for banks? The article explores key considerations for banks engaging with their governments and their peers in AML PPP, with a particular focus on the UK, the US and Germany.

https://www.whitecase.com/publications/insight/financial-regulatory-observer-autumn-2021/winning-aml-intelligence-war

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A release on Mondo Visione on 18 November, detailed the SEC enforcement results for Fiscal Year 2021 (which ended in September).  It filed 434 new enforcement actions in fiscal year 2021, representing a 7% increase over the prior year.  70% percent of these new or “stand-alone” actions involved at least 1 individual defendant or respondent. The new actions spanned the entire securities waterfront, including against emerging threats in the crypto and SPAC spaces.  It filed 697 total enforcement actions in fiscal year 2021, including the 434 new actions. 

https://mondovisione.com/media-and-resources/news/sec-announces-enforcement-results-for-fy-2021-agency-brought-significant-actio/

https://www.sec.gov/files/2021-238-addendum.pdf

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On 18 November, the EU Commission released a report which says that the EU Directive 2017/541 helped Member States strengthen their criminal justice approach to terrorism. Having minimum standards for defining and sanctioning terrorist offences within the EU has clear added value, it says, preventing the existence of legal loopholes that may be exploited by terrorists.  The Directive also helped strengthen the level of assistance and protection provided to victims of terrorism.  Its impact on fundamental rights has been evaluated as proportionate. Despite this positive assessment, the report warns that several challenges remain in the implementation of the rules.  One issue identified in some Member States relates to challenges in classifying violent extreme right-wing acts as acts of terrorism. 

https://ec.europa.eu/home-affairs/report-impact-counter-terrorism-directive_en

https://ec.europa.eu/home-affairs/document/download/4ea35d2a-1f3e-4839-bf41-8ef3650e5221_en

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On 18 November, a Notice from FinCEN was issued to call attention to an upward trend in environmental crimes and associated illicit financial activity.  FinCEN said that it was highlighting this trend because of:

• its strong association with corruption and transnational criminal organisations, 2 of FinCEN’s national AML/CFT priorities;
• a need to enhance reporting and analysis of related illicit financial flows; and
• environmental crimes’ contribution to the climate crisis, including threatening ecosystems, decreasing biodiversity, and increasing carbon dioxide in the atmosphere.

The Notice provides financial institutions with specific SAR filing instructions and highlights the likelihood of illicit financial activity related to several types of environmental crime.  The crimes mentioned include – illegal logging, wildlife trafficking, illegal (IUU) fishing, illegal mining, and waste and hazardous substance trafficking.

https://www.fincen.gov/sites/default/files/2021-11/FinCEN%20Environmental%20Crimes%20Notice%20508%20FINAL.pdf

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On 18 November, OFAC advised a number of new designations – 5 Iranian and 1 Yemeni nationals, plus 1 new Iranian entity – EMENNET PASARGAD (aka IMANNET PASARGAD).  3 existing Yemen-related and 1 Iran-related designated individuals have seen their details amended.  One of those designated is a senior Houthi military officer Saleh Mesfer Alshaer, commander of the Houthi-controlled military logistics support organization, whom Houthi-controlled courts have designated as the “judicial custodian” of assets confiscated from opponents of the Houthis.  Alshaer has overseen the Houthis’ seizure of property in Yemen valued at greater than $100 million, using a variety of unlawful tactics, including extortion.   The Iranian listings involve 6 Iranian individuals and an Iranian entity for attempting to influence the 2020 US presidential election.  

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211118

https://home.treasury.gov/news/press-releases/jy0495

https://home.treasury.gov/news/press-releases/jy0494

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On 18 November, the US Treasury announced that President Biden had signed an Executive Order terminating the national emergency with respect to Burundi and revoking EO 13712, which has authorised sanctions with respect to Burundi since 2015.  As a result –

• All persons blocked solely pursuant to the Burundi Sanctions Regulations have been removed from OFAC’s Specially Designated Nationals and Blocked Persons List;
• All property and interests in property blocked solely pursuant to the Burundi Sanctions Regulations are unblocked; and
• OFAC will remove the Burundi Sanctions Regulations from the Code of Federal Regulations at a future date.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211118

On 17 November, Global Financial Integrity reported on the scrapping and dismantling of vessels marred in opacity, human rights violations, environmental pollution and corruption through the exploitation of an international legal loophole known as flags of convenience (FoC).  The process of dismantling ships is known for its high levels of fatalities, injuries and work-related diseases, making it amongst the most dangerous jobs in the world.  The working conditions and environmental impacts have become so hazardous that the EU has banned the demolition of vessels in India.  Vessel owners take advantage of the ambiguity within the international framework for re-flagging maritime vessels allowing them to circumvent environmental and labour legislation.  How, it asks, does a European, Chinese, or American owned vessel end up on the beaches of Bangladesh, India, or Pakistan for dismantling?

https://gfintegrity.org/flags-of-convenience-and-the-hazards-of-shipbreaking/

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On 16 November, the NGO TRAFFIC published a report which reveals how examining HS Codes (aka Commodity Codes), used to monitor worldwide goods trade, can uncover illegal and unsustainable wildlife trade patterns that may have consequences on climate action and conservation efforts.

https://www.traffic.org/site/assets/files/16231/int386_-_retta_cracking_the_code_-_20211115.pdf

https://storymaps.arcgis.com/stories/32faae6b8f3c49f9aa5b4dba39449750

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EU Regulation 2021/2015/EU has added the 3 Houthi names recent added to the UN sanctions list to the EU list. 

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:JOL_2021_410_I_0001&from=EN

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.LI.2021.410.01.0007.01.ENG&toc=OJ:L:2021:410I:TOC

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On 18 November, BNE Intellinews reported that Montenegro’s specialised prosecution has launched a probe into allegations by Albanian oil businessman Rezart Taci that President Milo Djukanovic has been participating in an international money laundering scheme.

https://www.intellinews.com/montenegro-probes-allegations-of-president-djukanovic-s-involvement-in-money-laundering-ring-227333/?source=albania

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