Included in this issue: Tougher corruption laws for UK Companies; Former French Minister Cahuzac in court for tax fraud and money laundering; Financial Reporting Council drops investigation into ex-finance chief at Tesco and more...

Bribery and Corruption

Tougher corruption laws for UK Companies

Attorney General Jeremy Wright, speaking at the Cambridge International Symposium on Economic Crime on 5 September 2016 stated that, under Theresa May's direction, the UK government will press ahead with plans to widen the range of corruption offences under which UK companies can be prosecuted.

Wright stated at the conference in Cambridge, England, that the "…weaknesses in our current law result in other jurisdictions holding British companies to account when ours has not." Whilst it is already a criminal offence for UK companies to 'fail to prevent' bribery, these new plans intend to widen the scope of corruption laws in order to hold companies to account for other economic crimes such as money laundering, fraud and false accounting.

Alun Milford (General Counsel at the Serious Fraud Office) also speaking at the Cambridge International Symposium described the current model for attributing criminal liability to corporates, covering the vast majority of offences, as "…unfair in its application, unhelpful in its impact and it underpins a law of corporate liability that is unprincipled in scope".

Bloomberg, 07 September 2016

SFO, 06 September 2016

Prime Minister Najib named as 'Malaysian Official One' in 1MDB corruption scandal

A Senior Malaysian government minister has stated to the BBC that Malaysian Prime Minister Najib Razak is 'Malaysian Official 1', the unnamed official accused by the US Justice Department of stealing $681m of national wealth from the state investment fund 1MDB (or 1 Malaysia Development Berhad) launched by Najib in 2009 and supervised by him.

BBC, 07 September 2016

Ukraine launches online earnings declaration system to combat corruption

On 1 September Ukraine re-launched an online income declaration system intended to prevent corruption among state officials. The new system is intended to add transparency to revenue and property ownership amongst state officials so that they are subject to public scrutiny.

It has been reported that the system's developer and watchdogs have warned that insufficient political backing could undermine the project.

Reuters, 07 September 2016

Money Laundering

Former French Minister Cahuzac in court for tax fraud and money laundering

Former French budget minister, Jerome Cahuzac, was appointed by President Francoise Hollande to tackle tax evasion. Cahuzac is notable for his outspoken campaign against the use of overseas tax havens but he stands on trial this week for tax fraud. One of the charges against Mr Cahuzac is that he had kept an undeclared Swiss bank account from 1992-2010. Mr Cahuzac denied this allegation in Parliament but after meeting with investing magistrates admitted to holding the account.

In addition, Mr Cahuzac is charged with money laundering through foreign bank accounts in Switzerland and Singapore as well as through front companies in Panama and the Seychelles from 2003-2013. If charged, Cahuzac faces 7 years in prison as well as a EUR 2 million fine.

BBC, 07 September 2016

Guardian, 07 September 2016

South African banks request Zuma passes money laundering law

It is reported that the Banking Association of South Africa (BASA), which represents South Africa's largest banks, is urging President Zuma to pass the Financial Intelligence Centre Amendment Bill. The Bill aims to prevent money laundering by scrutinising politically exposed persons such as politicians, their families and their business associates by requiring enhanced due diligence when such persons transact through the banking system.

Bloomberg, 07 September 2016

Standard Chartered faces extension of US money laundering supervision

Standard Chartered reached a deferred prosecution agreement (DPA) with US authorities in 2012 in respect of Iran-related anti-money laundering issues. The DPA stipulated that the bank was to remain independently supervised until 2017.

It has been reported that sources at the bank suggest that this date will be extended for a number of years whilst the bank continues to improve its internal standards. This has been partly prompted by a number of shortfalls in relation to anti-money laundering efforts surrounding Iran.

Reuters, 07 September 2016


Financial Reporting Council drops investigation into ex-finance chief at Tesco

It has been reported that the Financial Reporting Council, the accountancy watchdog has dropped an investigation into former chief financial officer at Tesco, Laurie McIlwee. The investigation was sparked by the accounting scandal at Tesco involving £263m black hole in the company's accounts. The investigation was dropped after the FRC decided that 'there was no realistic prospect that a tribunal would make an adverse finding in relation to [McIlwee's] conduct'.

Guardian, 07 September 2016

Ex-Harman Executive gets eight months for insider trading

An ex-Harman executive who netted more than $130,000 on insider trades has been sentenced to eight months in jail by a court in the US and ordered to pay a fine of $131,958 after pleading guilty to one count of securities fraud in March. The executive had bought Harman shares the day before the release of the company’s earnings after learning of their results.

Bloomberg, 03 September 2016

Cyber Crime

Swift says bank hacks persist and reports new fraud cases

Banks are continuing to fall victim to cyber-attacks that aim to fraudulently use their connections to the Swift messaging system. Swift have identified a common theme amongst victims - weaknesses in their local security systems, and have warned customers to update their access software. The threat continues despite a high profile attack in February, where hackers used the global service to steal $81 million from Bangladesh’s central bank.

Bloomberg, 31 August 2016


Apple to pay hefty bill to Ireland after recent tax ruling

Apple was ordered to pay as much as EUR 13 billion plus interest on 30 August 2016. This is in the wake on a European Commission decision which judged that Ireland had illegally reduced Apple's tax bill between 2003-2014. The Commission ruled that Ireland had breached state aid rules by offering the technology giant favourable tax arrangements. Both Apple and Ireland have vowed to appeal the decision.

Bloomberg, 07 September 2016

Health and Safety

Director jailed after series of company fatalities

A company director has been jailed for 12 months following the death of one of his employees resulting from the overturn of a spider lift during loading. This fatality follows the guilty plea from the director over a separate incident in 2010 when employee Bernard Rowson was crushed to death in a metal gate.

Company director Kenneth Thelwall was charged under section 37 of the Health and Safety at Work Act, sentenced to 12 months in prison and ordered to pay costs of £4,000. He was also disqualified from being a company director for seven years. Thorn Warehousing Ltd was charged under Section 2 of the Health and Safety at Work Act was fined £166,000 and ordered to pay £10,400 costs.

SHP Online, 5 September 2016

Firm fined after worker injured arm in roller

A Wirral based company has been fined £170,000 after a worker’s arm was injured in machinery as he was commissioning a new conveyor belt system.

Solvex Limited were found guilty of breaching Section 2(1) of the Health and Safety at Work etc. Act 1974, and fined £170,000 with £24,000 costs.

HSE, 2 September 2016

Fine after labourer fractures spine

A construction firm has been fined £144,000 after a worker was seriously injured when he fell off a roof as he completed demolition work during which no scaffolding was provided and the work was not being supervised.

Romanian labourer Ioan Vancea fell five metres from the partly demolished roof to the ground and sustained a series of injuries including a fractured spine.

Montway Limited pleaded guilty to breaching Section 2(1) of the Health and Safety at Work Act 1974 and was fined £144,000 and ordered to pay £43,606.15 in costs.

SHP Online, 6 September 2016

G4S Cash Solutions has been fined £1.8 million after failing to reduce the risk of Legionnaires’ disease from its water systems

In October 2013, a G4S worker was reported to have contracted Legionnaires’ disease, which causes flu-like symptoms and can, in some cases, lead to life-threatening problems. Harlow Council investigated but environmental health o were unable to prove that the worker had contracted the disease from the site but the council did uncover a serious lack of compliance in maintaining water systems at the workplace.

G4S pleaded guilty to two charges under the Health and Safety at Work etc Act 1974 in June. The judge at Chelmsford Crown Court sentenced G4S to pay £1.8 million in fines and court costs of £34,000.

SHP Online, 8 September 2016

Fatal injury statistics

The provisional figure for the number of workers fatally injured in 2015/16 is 144, a fatal injury rate of 0.46 deaths per 100,000 workers. This is 7% lower than the average rate for the past five years (155), 0.52. This corresponds with the downward trend in the rate of fatal injury, although in recent years the rate is showing signs of levelling off.

Health and Safety Executive

Key Contacts

Nichola Peters

Nichola Peters

Partner, Global Investigations

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