COUNTERING PROLIFERATION FINANCE: MODEL LAW SECOND EDITION

On 2nd October, the Royal United Services Institute published an updated version of the model law from the previous guidance paper produced by RUSI in July 2017 on countering proliferation finance.  It aims to assist governments seeking to strengthen their legal and institutional frameworks to counter proliferation finance.  It says that there have been a number of updates to UN Security Council Resolutions relating to North Korea that are taken into account.  Updated elements include –

  • the quick reference table summarising relevant obligations under UN Security Council Resolutions and FATF recommendations has also been updated and appended to the model law;
  • creates a definition of proliferation financing;
  • a schedule of Controlled Items related to North Korea;
  • provisions allowing for the administration of frozen assets added; and
  • simplifies some offence provisions.

https://rusi.org/publication/other-publications/countering-proliferation-finance-model-law-second-edition

JP MORGAN BANK SETTLES US SANCTIONS CASE FOR $5¼ MILLION

On 5th October, OFAC announced a $5,263,171 settlement with JPMorgan Chase Bank to settle potential civil liability for 87 apparent violations of the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, and Weapons of Mass Destruction Proliferators Sanctions Regulations.  OFAC says that the bank voluntarily self-disclosed the apparent violations which involved “net settlement payments”, of which a very small portion appears to have been attributable to interests of airlines that were at various times on the OFAC SDN List, blocked pursuant to OFAC sanctions, or located in countries subject to the sanctions programmes administered by OFAC.

Separately, OFAC announced that the bank had self-disclosed some 85 other transactions violating OFAC Foreign Narcotics Kingpin and Syrian sanctions, and having maintained 8 accounts for individuals on the SDN List.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181005.aspx

STATEMENT ON NEW US NATIONAL STRATEGY FOR COUNTER-TERRORISM

On 5th October, the US Treasury published a news release containing a statement by the Treasury Secretary saying that, “President Trump’s new National Strategy for Counterterrorism will harden the US financial system against terrorist threats and promote collaboration with allies to counter international terror financing networks.   Treasury employs a broad array of tools to help disrupt terrorist attacks without putting our troops in harm’s way, and this Administration has accelerated efforts to shut down networks that terrorists use to finance their operations.  Treasury will continue to apply sustained pressure on ISIS, Al-Qaeda, Hizballah and other Iran-sponsored proxies, Lashkar-E Tayyiba, and other terrorist organisations”.

https://home.treasury.gov/news/press-releases/sm504

The Strategy itself can be found at –

https://www.whitehouse.gov/wp-content/uploads/2018/10/NSCT.pdf

UN, US AND UK ADD 1 NAME TO ISIL (DA’ESH)/AL-QAIDA SANCTIONS LISTS – JAMA’A NUSRAT UL-ISLAM WA AL-MUSLIMIN (JNIM)

On 4th October, the UN announced that it had added Jama’a Nusrat ul-Islam wa al-Muslimin (JNIM) to its ISIL (Da’esh) and Al-Qaida sanctions list.  Based in Mali, and regarded as the official “branch” of Al-Qaida in Mali and associated with Al-Qaida in the Maghreb (AQIM).  It was designated by the US State Department on 5th September, and included on the UK Consolidated List with effect from 5th October.

https://www.un.org/press/en/2018/sc13531.doc.htm

https://www.state.gov/r/pa/prs/ps/2018/09/285705.htm

IMPLICATIONS OF A “6TH MONEY LAUNDERING DIRECTIVE” FOR BRITISH BUSINESS

On 5th October, law firm Field Fisher Waterhouse published an article saying that on 12th September, the European Parliament approved a proposal for the EU’s latest piece of AML legislation, the 6th AML Directive (6MLD).  Significant is Article 7 of the directive, whereby any company operating in an EU member state can be held criminally liable for failing to prevent money laundering – but only applies corporate liability to companies operating in regulated sectors, such as banking.  If/when enacted, Member States would have 2 years to implement the new rules (and states already have until 10th January 2020 to implement the 5th AML Directive).  In the light of Brexit, the article discusses what are the implications for British businesses doing business in or with the EU.  It asks how significant are the changes in the new proposed Directive, including, in addition to Article 7 mentioned above –

  • the harmonisation of 22 predicate offences which may generate criminal property for the purposes of committing a money laundering offence;
  • a maximum term of 4 years’ imprisonment for anyone found guilty of money laundering offences within EU Member States – thus aligning penalties across the EU; and
  • an offence for a business of failure to supervise if an individual representing or employed by it is convicted of a money laundering offence.

https://www.fieldfisher.com/publications/2018/10/dirty-laundry-do-british-businesses-risk-being-tarnished-by-new-eu-anti-money-laundering-rules-post-brexit

ARMENIA: MONEYVAL FIRST FOLLOW-UP REPORT PUBLISHED BY FATF

On 5th October, FATF published the 1st follow-up report to Moneyval’s mutual evaluation of Armenia following the mutual evaluation report of December 2015.  his report analyses the progress of Armenia in addressing the technical compliance deficiencies identified in its report, and re-ratings are given where sufficient progress has been made: FATF Recommendation 1 and 7 have been re-rated from PC to LC; and Recommendation 8 has been re-rated from LC to C.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/fur-armenia-2018.html

ISLE OF MAN: MONEYVAL FIRST ENHANCED FOLLOW-UP REPORT PUBLISHED BY FATF

On 5th October, FATF published the 1st follow-up report to Moneyval’s mutual evaluation of the Isle of Man which says that, in light of progress in strengthening its framework to tackle money laundering and terrorist financing since the adoption of its report in December 2016, MONEYVAL has re-rated the jurisdiction on 8 of the 40 FATF Recommendations.  Recommendations 5, 6, 29, 32 and 33, initially rated as LC, are re-rated as C; Recommendation 16, initially rated as PC, is re-rated as C; and Recommendations 24 and 35, rated as PC in the MER, are re-rated as LC.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/fur-isle-of-man-2018.html

EU LIST OF NON-COOPERATIVE JURISDICTIONS FOR TAX PURPOSES – AND OTHERS’ PROGRESS

On 5th October, the EU published the updated list of those jurisdictions it regards as non-cooperative for the purposes of taxation.  The 6 listed jurisdictions are Samoa, American Samoa, Guam, Namibia, Trinidad & Tobago and the US Virgin Islands.  For other jurisdictions, Annex 2 to the announcement details the progress made (or being made).  Of note is the mention of the Crown Dependencies (Jersey, Guernsey and the Isle of Man) being “committed to addressing the concerns relating to economic substance by 2018”.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2018.359.01.0003.01.ENG&toc=OJ:C:2018:359:TOC

EU CONFIRMS REMOVAL OF STATE ORGANISATION FOR CONSTRUCTION INDUSTRIES FROM IRAQ SANCTIONS LISTS

EU Regulation 2018/1483/EU formally removes the STATE ORGANISATION FOR CONSTRUCTION INDUSTRIES from the Iraq sanctions list with effect from 6th October, following the decision of the relevant UN sanctions committee on 1st October.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.251.01.0022.01.ENG&toc=OJ:L:2018:251:TOC

EU CONSULTS ON INTERNAL COMPLIANCE CONTROLS COMPANIES THAT TRADE IN DUAL-USE GOODS

On 4th October, Out-Law published an article saying that the European Commission has launched a consultation on draft guidance on best practices for internal compliance programmes when trading goods that have both a civilian and military use, so called dual-use items.  This guidance, it says, will support businesses exporting so-called ‘dual-use’ items to design and implement compliance programmes designed to ensure they are complying with EU and national trade restrictions.  The guidance is intended to provide a framework to identify and manage the impact of dual-use controls and mitigate any associated risks.

https://www.out-law.com/en/articles/2018/october/eu-consults-on-internal-compliance-for-trade-in-dual-use-goods/

The guidance itself is available at –

http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157336.pdf