On 30 June, HM Treasury published a consultation on reform of the AML/CFT supervisory system, in line with a commitment in the Economic Crime Plan 2023-26. The UK system comprises the FCA, the Gambling Commission and HMRC – and 22 professional body supervisors (PBS) who supervise the legal and accountancy sectors. The consultation closes on 30 September.
Month: June 2023
FATF: PUBLIC CONSULTATION ON BEST PRACTICE PAPER TO COMBAT THE ABUSE OF NON-PROFIT ORGANISATIONS (NPO) AND RECOMMENDATION
On 29 June, FATF said that it is considering proposals for the update of the FATF Best Practice Paper to Combat the Abuse of NPO. This project is being undertaken in parallel to the proposed amendments to FATF Recommendation 8 and its Interpretive Note (which are also under public consultation) to better clarify the implementation of a risk-based approach. FATF has not approved the draft amendment text to Recommendation 8 and INR.8 and will consider the views received to revise the text before its proposal for adoption at the October 2023 Plenary.
https://www.fatf-gafi.org/en/publications/Fatfrecommendations/R8-public-consultation-jun23.html
SANCTIONS — HOW THEY WORK, AND HOW OLIGARCHS GET AROUND THEM
On 29 June, an article in EU Observer was concerned with a new study about what happened to the 20 individuals subjected to the first corruption-related sanctions under the Global Magnitsky Act 2016 in the US? The names included a senator and a lobbyist from the Dominican Republic; the former president of The Gambia; a former provincial governor and a businessman from Iraq; an Israeli billionaire; a former governor from Mexico; the former president of Nicaragua’s electoral council; the son of Russia’s prosecutor general; an alleged Serbian arms dealer; a politically-connected businessman from South Sudan; the former president’s daughter from Uzbekistan; as well as an Indian-South African business family with ties to the former president of South Africa. The study finding include that no fewer than 10 types of impact on those targeted, ranging from heightened press scrutiny to the loss of political influence or employment; and that a third of the designations had no apparent effect, save for media scrutiny, which can be taken for granted in all sanctions cases.
AUSTRALIA: SANCTIONS ON PERSONS INVOLVED IN THE DOWNING OF FLIGHT MH17
On 24 June, a news release advised that the Australian Government has imposed targeted financial sanctions and travel bans on three persons involved in the downing of Malaysia Airlines Flight MH17. The sanctions target Sergey Dubinskiy and Leonid Kharchenko, who were both found guilty by the District Court of The Hague. The third convicted perpetrator Igor Girkin, was sanctioned by Australia in 2014 for supporting separatist activity in eastern Ukraine. Australia has also sanctioned Sergey Muchkaev, a Colonel with the Russian Armed Forces who in July 2014 was the Commander of the 53rd Anti-Aircraft Missile Brigade, which supplied the Buk-TELAR that downed Flight MH17.
OFAC: COUNTER TERRORISM DESIGNATIONS UPDATED; AND COUNTER NARCOTICS AND VENEZUELA-RELATED DESIGNATIONS REMOVALS
On 29 June, OFAC advised of 15 removals from its SDN List, and amendment of entries relating to ISIL-Libya, Real IRA and Ali Mohamad SALEH.
UK: SANCTIONS GUIDANCE – PROTECTION OF TRADING INTERESTS
On 26 June, the Department for Business and Trade published this Guidance on how UK persons’ trading interests are protected and when authorisations must be obtained to trade with countries subject to specific extraterritorial laws. It explains that legislation protects legitimate trade between UK persons and countries affected by the extraterritorial application of certain laws. These laws are currently extraterritorial US sanctions against Iran and Cuba, and these extraterritorial sanctions seek to regulate the activities of non-US persons in any jurisdiction. The intention of the protection of trading interests legislation is to protect UK persons from the extraterritorial effect of proscribed sanctions.
US: AUTHORITIES EXPECT COMPANIES, INCLUDING BANKS AND CRYPTOCURRENCY EXCHANGES, THAT COLLECT GEOLOCATION DATA TO USE IT FOR SANCTIONS COMPLIANCE
On 26 June, a legal update from Dechert LLP said that in recent settlements, OFAC made clear its expectations for companies that collect geolocation data: they should integrate such data in connection with their economic sanctions compliance programs.
NEW LAW IMPOSES FRESH SANCTIONS ON RUSSIA ACCESSING UK LEGAL EXPERTISE
On 29 June, the MoJ in the UK advised that new regulations will prevent UK lawyers from advising Russian companies in certain business deals. The amendment extends existing regulations on Russia using UK legal professionals to facilitate certain commercial activity which benefits the country – and may block legal professionals from advising international companies on lending decisions to Russian businesses.
LATEST EU SANCTIONS PACKAGE ENTRIES “NOT YET REFLECTED IN THE ELECTONIC EU SANCTIONS LIST VERSION”
On 28 June, a German sanctions specialist warns that checks he had made had revealed names from the 11th round of Russia sanctions had not yet made it onto the EU electronic sanctions lists. He warns that this means a big gap in sanctions screening operations and compliance risks for everybody who relies entirely on the electronic EU sanctions lists; as well as giving time for sanctioned parties to remain under the radar and to move their assets.
https://www.linkedin.com/posts/activity-7079856612332457984-sjAz
JOINT US/UK FACT SHEET ON UNDERSTANDING UK AND US RUSSIA-RELATED SANCTIONS AND THE PROVISION OF HUMANITARIAN ASSISTANCE
On 28 June, OFAC in the US and OFSI in the UK jointly published a factsheet to provide additional clarity on U.S. and UK Russia-related sanctions and the relevant authorisations, exceptions, and public guidance.
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