Included in this issue: Section 54 of Modern Slavery Act -Law Society Practice Note; Hearing begins for largest ever Korean Corruption Probe; FCA urges more careful investment as investment fraud rises and more...


Section 54 of Modern Slavery Act -Law Society Practice Note

The Law Society has published guidance in relation to the Modern Slavery Act 2015 and in particular, section 54 of the Act.

Section 54 of the Modern Slavery Act 2015 requires certain commercial organisations to produce a statement for each financial year. The statement is required to describe the steps the organisation has taken during that year to ensure that slavery and human trafficking are not taking place in any of its supply chains or in any part of its business.

The practice note is intended to help solicitors, both in house and in private practice, in advising companies that may be impacted by this requirement.

The Law Society, 7 December 2016

Bribery and Corruption

Hearing begins for largest ever Korean Corruption Probe

Many of the heads of Korea's largest companies line up this week for a parliamentary hearing into the corruption scandal surrounding President Park Guen-hye. The leaders of companies such as Samsung, Hyundai, Lotte and many others are to appear this week in front of parliament to explain accusation that tens of millions of dollars have been given, as bribes, to foundations controlled by close friend of Park's- Choi Soon-sil.

The President herself is accused to have colluded in the scheme by pressuring large companies to donate to Choi's charities in order to gain preferential treatment or regulatory approval. The hearing is set to take place over the course of this week with parliament due to vote on Friday whether to impeach President Park for her involvement.

Bloomberg, 4 December 2016


FCA urges more careful investment as investment fraud rises

Recent FCA research suggests that 22% of those aged over 55 and 32% of those aged 75 and over, with above average incomes, suspect they have been targeted by fraudulent investment scams in the past three years.

The FCA data suggests that inadequate research into the legitimacy of investment products being purchased has much to do with the rise in investment fraud which, on average, cost victims £32,000 each last year. The FCA suggest that prospective investors reject unsolicited offers of investment products. The FCA also recommends that investors check the FCA register and FCA Warning List to ensure sellers are authorised and that before investing they should seek impartial advice.

FCA, 5 December 2016

Thousands at risk of fraud after Standard Chartered break-in

It is reported that a burglary at Standard Chartered Bank potentially leaves 25,000 exposed to fraud after computers were stolen containing sensitive financial details.

The information stored on these computers included bank details, names and addresses.

The bank have stated that they believe the motivation for the theft was the computers themselves and it is unlikely that the personal information they contained will be discovered.

The Telegraph, 5 December 2016

Israeli Billionaire under SFO investigation for Congo mining fraud

It has been reported that the Serious Fraud Office (SFO) has sent a letter to the Congolese government seeking evidence to assist with the SFO's investigation into Eurasian National Resources Corp (ENRC).

The investigation by the SFO is understood to centre on ENRC's acquisition of copper and cobalt minding projects in the Democratic Republic of Congo. The letter sent to the Congolese government asks them to provide banking and business records in respect of four Congo-registered companies as well as financial information on nine individuals relating to its investigation.

Bloomberg, 5 December 2016

Money Laundering

Credit Suisse fined over anti-money laundering failures

The Financial Industry Regulatory Authority (FINRA), the regulator of the US securities industry, announced on Monday that it has fined the US securities arm of Credit Suisse $16.5 million after finding "significant deficiencies in its anti-money laundering programme".

FINRA found that Credit Suisse firstly relied upon its own registered representatives to identify and escalate potential suspicious activity but high risk activities were not always escalated and investigated. In addition, there were shortfalls in the firm's surveillance system as important data feeds were missing information that would ordinarily allow the system to work effectively.

FINRA, 5 December 2016

Guidance published on the Criminal Finances Bill

Parliament has published a memorandum on how the new Criminal Finances Bill intersects with the European Convention on Human Rights (ECHR).

Gov.UK, 6 December 2016

FATF praise US for Improvements in Anti-Money Laundering policy

The Financial Action Task Force (FATF) has recently released a report on US measures to combat money laundering and terrorist financing.

The report praises the US on its targeted financial sanctions, high-value confiscations, national and international cooperation and its investigatory capabilities. However, the report suggested that more could be done by the US in the area of risk mitigation, supervision of non-financial businesses and access to comprehensive information on beneficial ownership.

FATF, 1 December 2016

Cyber Crime

Cross-border forces help bring down criminal cyber network

Law enforcement agencies from over 30 countries including the UK converged last week to bring down cloud-hosting service, Avalanche, which was used by criminals to commit large-scale cyber fraud. Through Avalanche criminals could send out a million fraudulent emails each week in order to infect computers and steal personal data or hijack these computers to coordinate larger cyber-attacks.

It is estimated that fraud connected to Avalanche has cost victims hundreds of millions of dollars since it was first launched in 2009 and that 500,000 computers or more were controlled globally on any given day.

Whilst this operation is a significant move in tackling cyber-crime, those victims whose computers have already been infected with malware through Avalanche are still at risk and the NCA has urged users to install anti-virus software as soon as possible to clean any computers already affected.

NCA, 1 December 2016


Parliament announces Sanctions consultation

HM Treasury has announced plans to impose a monetary penalty on enforcing sanctions for those who breach them. HM Treasury is seeking views on the circumstance and guidance around this new regime, e.g. when a penalty shall be enforced and the level of any fine. The consultation is open until 26 January 2017.

Gov.UK, 5 December 2016

Iran urges Obama not to renew Iran Sanctions extension

After the senate voted 99-0 to extend the Iran Sanctions Act last Thursday, it is now for Obama to decide whether to enact laws to extend sanctions over Iran's energy sector. Obama has already waived most sanctions under the nuclear accord but those inside the White House suggest that it is important to keep this last sanction in place in order to provide political leverage against Iran.

There are fears, however, that Iran will retaliate as 260 of the 290 members of Iran's parliament have called President Rouhani to take reciprocal action if the sanctions are extended.

Bloomberg, 4 December 2016

Health and Safety

Shipbuilder from Birkenhead fined £400,000 for safety failings

Cammel Laird Shiprepairers and Shipbuilders has been prosecuted by the Health and Safety Executive (HSE) for serious safety failings after a 59 year old worker suffered fractures and crush injuries to his right hand whilst carrying out repair work.

The incident occurred when the worker used emery cloth to clean shafts and couplings on a lathe, and had his hand pulled into the machine's moving parts. Cammell Lairds had failed to adequately identify the risks involved in the common practice of using emery cloth on moving parts and to recognise that its employees were carrying out their own repairs rather than involving maintenance.

HSE, 5 December 2016

English councils paid out at least £10 million in school asbestos claims in last ten years

According to reports by the BBC, in the past decade councils in England have settled claims for a total sum of upwards of £10 million made by people suffering illness due to asbestos exposure in school buildings.

The National Union of Teachers is now calling for the Government to put in place a long term strategy for the phased removal of asbestos from all schools, as it is reported that up to 300 adults die each year because of exposure to asbestos while at school. Asbestos exposure is known to cause serious ailments such as asbestosis and mesothelioma.

SHP, 2 December 2016

London Underground has been fined £500,000 after a worker fell 9.5m from a tower scaffold

The worker was cleaning a former lift shaft in a disused station at South Kentish Town when they fell nearly ten metres. The worker suffered several injuries and had to spend ten days in hospital.

The Office of Rail and Road (ORR) prosecuted London Underground for breaching Section 3 of the Health and Safety at Work etc. Act 1974, London Underground were fined £500,000 and ordered to pay costs of £50,000.

SHP, 5 December 2016

Volvo has been fined £900,000 after a worker suffered head injuries and had to be placed into an induced coma

The worker was using a step ladder to service a large delivery truck, repairing the driver’s access rope for the cab, when he fell, hitting his head and falling unconscious. He was placed in a medically-induced coma for two weeks and has been unable to return to work.

Volvo Group UK Limited of Warwick, pleaded guilty to a safety breach and was fined £900,000 and ordered to pay costs of £5,820.28, with a £150 victim surcharge.

SHP, 7 December 2016

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Nichola Peters

Nichola Peters

Partner, Global Investigations

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