A report from ACAMS and the US Immigration & Customs Enforcement published a document described as a Comprehensive Educational Guide for Law Enforcement and Financial Crime Investigators. It describes organised retail crime as a low-risk, high-reward business line for transnational criminal organizations’ portfolios that presents a significant financial and public safety risk. While retailers and law enforcement partner to investigate such cases and provide education on the misconceptions and misunderstandings, it is clear there is a missing link in these partnerships, and that link is financial institutions. It says that criminal organizations need to launder the nearly $70 billion of illicit proceeds gained from such activities annually. These organisations are looking to launder their billions through the formal financial sector, unregulated payment processors, and online marketplaces.
The UK has made the Virgin Islands Constitution (Interim Amendment) Order 2022. Following an inquiry into allegations of impropriety in the BVI, this Order is designed to allow action to be taken to address concerns about poor governance by providing for certain provisions of the Constitution to be suspended in whole or in part on an interim basis, and certain other provisions to be given effect in their place. The Order is being made in order to fulfil the UK broad responsibility to support the Overseas Territories and to ensure their security and good governance for the people in each Territory. The final report of the Commission of Inquiry identified numerous, serious, failures of governance and concluded that serious dishonesty in relation to public officials is highly likely to have taken place. Amongst numerous recommendations, the report concluded that the only way in which the relevant issues can be addressed is for there to be a temporary suspension of those parts of the Constitution by which areas of government are assigned to elected representatives. The report recommended that the suspension should be as short as possible to enable principled elected government to be restored. come into force on such day as the Governor, acting in his or her discretion, may appoint by proclamation
On 9 June, FATF published a follow-up report following the 2021 mutual evaluation report. It says that the country has taken a number of actions to strengthen its framework, and FATF has now re-rated the country on Recommendation 13 from partially compliant to Compliant. Hence, the UK is compliant on 24 FATF Recommendations and largely compliant on 15 others. It remains partially compliant on 1 Recommendation. The UK will remain in regular follow-up and will continue to inform the FATF of progress achieved on improving the implementation of its AML/CFT measures.
On 9 June, Nikkei Asia reported that Thailand has decriminalised cannabis, delisting hemp and marijuana as narcotics. However, whereas individuals can grow cannabis plants at home for health purposes, smoking cannabis recreationally remains unlawful, and commercial cultivation without a licence is not allowed.
On 8 June, an article from Hannaford Turner says that there has been concern for many years amongst trade finance practitioners and corporates dealing with LC that both the autonomy and irrevocability of LC are at risk of being undermined through the increasing use of a varied range of sanction clauses. It says that it is accepted, certainly as a matter of English law, that sanctions (if they apply) override obligations under LC, such that the financial institution may be prevented from making payment regardless of the terms of the LC. For that reason, it says, there are 2 key questions to be considered when considering the impact of sanctions on an LC transaction. It warns that it cannot be assumed that any liability of the institution to make a payment under the LC is extinguished once the sanctions clause bites; the clause may simply have the effect of suspending the payment obligation for the period that the prohibition remains in place9 and limiting consequential liability, e.g. due to delay.
On 8 June, an article from Charles Russell Speechlys says that trustees or fiduciaries may be at risk of becoming involved or even subject to UWO, if it is suspected that assets which may have been acquired with criminal funds have been invested into structures of which they are trustees. It notes that the UK Government has also recently introduced new reforms to the UWO regime, which are intended to give enforcement agencies more scope to obtain, enforce, and monitor UWO. The article considers the implications of the UWO regime for trustees and fiduciaries, looking at the most recent cases where such orders have been made. It also reviews the recent amendments to the legislation governing UWO introduced in May and explains how those changes have broadened the UWO regime and its possible application to trustees and fiduciaries alike.