Included in this issue: Wolfsberg Group's updated guidance on anti-bribery and corruption compliance programmes for financial institutions; FCA publishes finalised guidance on treatment of PEPs for AML purposes and more...
Bribery and Corruption
Wolfsberg Group's updated guidance on anti-bribery and corruption compliance programmes for financial institutions
The Wolfsburg Group has updated its guidance on how financial institutions ought to construct their compliance programmes dealing with bribery and corruption. The original paper was published in August 2011 and has been developed with the help of the Basel Institute and Transparency International.
The guidance makes substantive changes to the following areas: the definition of government/public officials; the definition of intermediaries and associated controls; risk management of principal investments and joint ventures; offers of employment and work experience; and the reduction of focus on customer-related anti-money laundering provisions.
The full guidance can be found here
Serious Fraud Office opens investigation into Amec Foster Wheeler
The SFO has opened an investigation into Amec Foster Wheeler regarding its dealings with Unaoil and the possible payments of bribes through the use of middlemen. Amec has stated that it is cooperating with the SFO.
Unaoil is at the centre of a wide ranging global investigation in relation to allegations that it paid bribes to secure deals with Petrofac already having been brought into the scope of the investigation. Executives from Petrofac have already been questioned by the SFO in relation to the global corruption scandal that has centred around Unaoil. Petrofac had previously stated that it had no evidence of internal wrongdoing.
Money Laundering
FCA publishes finalised guidance on treatment of PEPs for AML purposes
The FCA has published finalised guidance on the treatment of politically exposed persons (PEPs) for anti-money laundering purposes. The publication sets out that the FCA expects firms to take appropriate but proportionate measures in meeting their financial crime obligations.
The guidance also offers clarity on how UK firms should apply the definition of a PEP, according to the money laundering regulations in the UK. The guidance is aimed at any institution that has its anti-money laundering systems and control overseen by the FCA.
The full guidance can be found here
ICAEW publishes overview of money laundering regulations 2017
The Institute of Chartered Accountants in England and Wales (ICAEW) has published an overview of the Money Laundering Regulations 2017, which transposed the 4th Anti-Money Laundering Directive into UK law from 26 June 2017.
In particular, it considers the following sections of the regulations: whole firm risk assessment (section 18); internal controls (section 21); enhanced due diligence (section 33); and simplified due diligence (section 37).
G20 Leaders show commitment to tackling terrorist financing
At this year's G20 summit, leaders expressed their commitment to tackling terrorist financing together. The Financial Action Task Force (FATF) reported to the G20 on its ongoing work in the area. FATF has been working to increase transparency regarding beneficial ownership of legal persons and legal arrangements, alongside working to strengthen the FATF's governance and institutional basis.
As part of the summit, the G20 leaders issued a statement on Countering Terrorism. The statement detailed issues for FATF to tackle and priorities for the coming year. This included calls to shut down alternative sources of financing terrorism, a focus on FinTech, Financial Intelligence Units and Banks developing new tools and technologies to follow terrorist financing and recognising and strengthening the FATF's institutional basis.
The G20 Leaders asked FATF to provide a further update report in early 2018.
Singapore sentences ex-BSI banker to additional jail time
Yeo Jiawei, former wealth manager of the Swiss bank BSI, has been jailed for four and a half years, in a case connected to the scandal at the Malaysian sovereign wealth fund, 1Mayalsia Development Berhad (1MDB). The case was described by the prosecution as "the most complex, sophisticated and largest money laundering case" ever carried out in Singapore.
The case against Yeo related to transactions made which attempted to veil the fact that $1 billion belonging to 1MDB had been transferred to a bank account owned by Low Taek Jho, a Malaysian businessman. Low was formerly an adviser to 1MDB, whose advisory board was chaired by the Malaysian Prime Minister, Najib Razak.
Fraud
Metropolitan Police Fraud Unit start probe into Grenfell Tower fire alarms firm
The contractor responsible for installing fire alarms at Grenfell Tower, Lakehouse, is at the centre of a fraud inquiry following a three-year investigation by police and Hackney Council in relation to a £184 million government grant to install fire and smoke alarms.
Ten people have been arrested by police after Hackney Council received allegations from whistle-blowers relating to "fraud and overcharging".
Tory MP Craig Mackinlay denies election expenses fraud
Tory MP Craig Mackinlay has denied inaccurately recording his expenses during his campaign in South Thanet in 2015, in which he defeated Nigel Farage.
The case is focused on whether the MP's agents ought to have filed the costs of the "battlebus" visiting its constituencies as local expenses. Mackinlay is charged under the Representation of the People Act 1983, under two counts of making false election declarations.
Ex-Barclays bankers appear in court
Four ex-Barclays bankers, along with their former employer Barclays plc, have appeared at a preliminary hearing at Westminster Magistrates' Court, charged with fraud for actions relating to the way the bank raised billions of pounds from investors in Qatar in 2008.
The four senior employees – including former Chief Executive John Varley – will appear at Southwark Crown Court on 17 July 2017. The case is the first time any UK bank or its senior executives have faced criminal charges arising out of the 2008 and 2009 financial crisis. All defendants are expected to enter a not guilty plea.
Barclays facing possible further charges over Qatar cash call
The Serious Fraud Office (SFO) is apparently preparing a fresh charging decision regarding the Barclays 2008 emergency cash call, where Barclays sought funding support from Qatar to remain out of UK government control. Whilst Barclays PLC currently faces charges of making false representations and providing unlawful financial assistance, these new charges are being considered against the subsidiary of Barclays PLC, Barclays Bank.
The charging decision is anticipated to be made by the SFO within the next week.
Sanctions
Gulf states prepare to ramp up economic sanctions against Qatar
The Gulf States are preparing to issue tougher sanctions against Qatar as well as preparing to widen the diplomatic isolation of the emirate and suspending it from the Gulf Co-operation Council (GCC). The hardened stance against Qatar arises as it faces accusations from other GCC members that Qatar supports terrorism.
The stronger embargo proposed would lead to reduced investment in Qatar, withdrawal of deposits and a tightening of the air blockade. The Qatar foreign minister, Sheikh Mohammed bin Abdulrahman al-Thani, said the list of demands from countries isolating Qatar “is unrealistic and is not actionable… It’s not about terrorism, it’s talking about shutting down the freedom of speech”.
Environmental
"Illegal and unscrupulous waste criminals" ordered to pay £175,000
PCS Recycling owners Patrick James Corbally Snr and Patrick Lee Corbally Jnr were prosecuted for illegal waste tipping and storage at Baldwins Farm and Bush Farm in Essex. The Environment Agency investigated the company and its owners between 1 March 2012 and 8 May 2013 and found over 16,000 tonnes of waste had been deposited between the two sites. In some areas waste was over 15 metres high and covered an area the size of 2 football pitches.
The criminals were each given 10-month prison sentences, which were suspended for 2 years and were ordered to pay fines of £120,000 and £55,000 respectively, in compensation to the landowner, Cemex UK. It is one of the highest ever fines imposed on individual defendants following an Environment Agency prosecution.
Health and Safety
Company fined £1.9 million following breach of equipment regulations
Warburtons Ltd has been fined after an agency worker was injured when his arm got trapped against a running conveyor belt. The worker was cleaning parts of the bread line when his arm got trapped leaving him with friction burns requiring skin grafts.
Warburtons Ltd pleaded guilty to breaching Regulation 11 of the Provision and Use of Work Equipment Regulations 1998. The company has been fined £1.9 million and ordered to pay full costs of £21,459.71.
Haulage firm fined after employee suffers life changing industries
A haulage firm, Maxi Haulage Limited, has been fined after a load from the top of a double-decked trailer fell onto an employee.
A piece of metal ducting, weighing 28kg, fell from the top deck of the trailer, hitting the employee on his head. The blow caused serious, life changing injuries, including a fractured skull.
Maxi Haulage Limited pleaded guilty to breaching Section 2(1) of the Health and Safety at Work etc. Act 1974 and have been fined £100,000 and ordered to pay costs of £53,401.
Construction company fined £2.4 million and boss jailed following incident in which two employees died
A construction company boss has been sentenced to 14 months in jail after two employees fell from a balcony in London’s Cadogan Square suffering fatal injuries.
Martin Gutaj was found guilty of section 33 (1) and section 71 (1) of the Health and Safety at Work etc Act 1974 after failing to undertake an adequate risk assessment and offer training to the two construction workers who fell to their deaths trying to lift a sofa over balcony railings and through an upper floor window.
The two workers were asked to perform a lifting operation at height without supervision or training, they were also not provided with a method statement or risk assessment and were given a rope to haul the sofa over a balustrade and into a first floor apartment. The workmen fell when the railings on the balcony gave way as they were manoeuvring the sofa.
Mr Gutaj's company, Martinisation London Ltd, was found guilty of two counts of corporate manslaughter, contrary to section 1 (1) of the Corporate Manslaughter and Corporate Homicide Act 2007 and two counts of section 33 (1) and section 71 (1) of the Health and Safety at Work etc Act 1974. The company was fined £2.4m (£1.2m for each death) and £650,000 for breaches of Health and Safety Regulations.
£1 million fine for incident that left worker with serious burns
Sheffield Forgemasters Engineering Limited (SFEL) have been fined after a worker suffered life changing injuries after an explosion on 9 August 2013.
The work was being carried out by an in-house contractor to fit a valve to an oxygen pipe that carried pure oxygen. The worker was carrying out checks when he heard hissing from the valve. While investigating the noise, the pipe and valve erupted in flames.
He suffered third degree burns as a result of this incident. He was kept in a coma for several weeks and underwent several skin grafts.
Sheffield Forgemasters Engineering Limited pleaded guilty to breaching Section 2(1) of the Health and Safety at Work Act 1974 and was fined £1,000,000 with £58,000.45 costs.
