Included in this issue: Queen's Speech omits the proposed abolition of the SFO; US seek to reinstate restrictions against Cuba; Tesco hit with major £8million fine for pollution incident and more...


General

Queen's Speech omits the proposed abolition of the SFO

The Conservative's plan to merge the Serious Fraud Office (SFO) into the National Crime Agency (NCA) appear to have been dropped, as the Queen's speech did not mention the proposed merger.

Earlier this year, the Conservative manifesto announced plans to abolish the SFO if Theresa May was re-elected in June. The proposal was criticised by those that did not believe that the NCA was equipped to investigate serious and complex fraud.

Sir Edward Garnier, Conservative MP and former solicitor-general had commented that merging the SFO and the NCA would have been “…destabilising and damaging to our relations with the US Department of Justice and similar bodies around the world”.

We understand that the proposed merger may not have gone away entirely but it certainly has a lower priority.

Telegraph, 21 June 2017

FT, 21 June 2017

European Union introduces European Public Prosecutor’s Office to fight crimes against the EU

On June 8, 2017, the European Commission announced in a press release that twenty EU Member States had reached an agreement to establish the European Public Prosecutor's Office (EPPO). The independent EU public prosecutor will have the power to investigate and prosecute criminal cases such as corruption or cross-border VAT fraud that affect the EU's budget.

The EPPO will operate as a single office across all participating Member States. The EPPO will combine European and national law enforcement.

The EPPO could start its activity between 2020 and 2021. Non-participating Member States can join at any time after the adoption of the Regulation. The Member States that have so far agreed to implement the EPPO are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Portugal, Romania, Slovakia, Spain and Slovenia.

Global Compliance News, 20 June 2017

European Commission press release, 8 June 2017

Sanctions

Queen's Speech announces the International Sanctions Bill

The Queen's speech announced the International Sanctions Bill as one of the legislative bills designed to deal with Brexit.

Currently, the UK has chosen to levy economic sanctions with the rest of the Europe against countries like Russia, Syria and Iran. Following Brexit, the bill is intended to return decision-making powers on non-UN sanctions from the EU to the UK. The bill will also establish a new sovereign UK framework to implement international sanctions on a multilateral or unilateral basis.

Independent, 21 June 2017

US seek to reinstate restrictions against Cuba

On 16 June 2017, President Trump signed a directive to reverse some of the changes implemented by the Obama administration. The new policy directs U.S. government agencies, including the Treasury Department’s Office of Foreign Assets Control (“OFAC”) which is responsible for the administration of U.S. sanctions against Cuba, and Commerce departments to draft new regulations to implement the changes.

The Obama administration had formerly relaxed regulations currently in place under the US embargo to allow US citizens to visit Cuba. The new changes propose reverting to group travel, thereby stopping individual people-to-people travel from the U.S. A document detailing the changes in a FAQs document issued by OFAC can be read here.

The U.S. Chamber of Commerce commented that the reversals would “…limit the possibility for positive change on the island and risk ceding growth opportunities to other countries that, frankly, may not share America’s interest in a free and democratic Cuba that respects human rights.”

Cuba’s government issued a statement characterizing Trump’s decision as a “setback” in relations between the two countries.

The Washington Post, 16 June 2017

CNBC, 16 June 2017

NBC News, 17 June 2017

Fraud

Barclays charged with fraud over a Qatari deal 

On 20 June 2017, the SFO announced that they had charged Barclays and four former directors with conspiracy to commit fraud and the provision of unlawful financial assistance contrary to the Companies Act 1985.

Former CEO John Varley, Roger Jenkins (former senior banker who led Barclay's Middle Eastern business), Thomas Kalaris (wealth division) and Richard Boath (ex-head of its financial institutions group) comprise the accused senior officials. The charges relate to a deal with Qatar Holding LLC and Challenger Universal Ltd during the 2008 financial crisis.

The defendants will appear before Westminster Magistrates’ Court on 3 July 2017.

SFO, 20 June 2017

Bribery and Corruption

Multi-million banker convicted for accepting bribes

The CPS announced that Mr Andre Ryjenko, a London-based banker has been charged, following a joint investigation by the Overseas Anti-Corruption Unit of the City of London Police and the FBI.

Peter Ratcliffe of the City of London Police’s economic crime directorate praised the international collaboration, commenting that the result "…wouldn’t have been possible without the outstanding cooperation with both the FBI and the EBRD in overcoming the substantial hurdles that occur when investigating international bribery cases."

The CPS commented that: "This conviction was made possible through effective cross-border partnerships between a number of jurisdictions, including the United States."

The Court heard that Ryjenko was employed by the European Bank for Reconstruction and Development in a role which required him to consider equity investment and loan applications from firms. He accepted bribes totalling over $3.5 million between July 2008 and November 2009 which were paid into bank accounts in the name of his sister Tatjana Sanderson.

CPS, 20 June 2017

FT Adviser, 20 June 2017

Cyber-Crime

FCA publishes warning over scammers pretending to be BlackRock

On 20 June 2017, the FCA has published a notice warning consumers about a ‘clone firm’ pretending to be BlackRock Asset Management. The FCA advised that the fraudsters claimed to be from a legitimate firm authorised by the FCA. In actual fact, this clone firm is not authorised or registered by the FCA but has been targeting people in the UK, claiming to be authorised.

In the past, scammers have tried to imitate other wealth management funds including Rothschild, Berenberg and Shawbrook Bank, as well as pretending to be the FCA itself.

The FCA advises that firms should check the Financial Services Register to protect themselves and avoid engaging in scams. The FCA also advise checking the Interim Permission Register to verify a consumer credit firm that may not yet have been authorised by them.

FCA, 20 June 2017

Money Marketing, 20 June 2017

Financial Regulation 

MiFID II will deliver some important changes to financial services regulation in the UK

The FCA is advising firms that need to change their regulatory permissions following MiFID II that they should submit a complete application for authorisation or a variation of permission.

MiFID II applies from 3 January 2018 and the FCA will need time to ensure applications are determined before MiFID II takes effect. The FCA warns that applications will needs to be completed by 3 July 2017 to be considered in time. The FCA cannot guarantee that any application which is completed after 3 July 2017 will be determined by 3 January 2018. Firms should therefore submit applications as a matter of urgency.

There are consequences for firms who undertake regulated activities without the required permissions under the Financial Services and Markets Act 2000 (FSMA).

FCA, 21 June 2017

Environment

Tesco hit with major £8million fine for pollution incident

Tesco Stores Ltd has been ordered to pay over £8million in fines and costs after pleading guilty to a pollution incident. The incident, which occurred in July 2014, sparked a huge multi-agency operation involving the Environment Agency, Lancashire County Council, United Utilities, Lancashire Fire and Rescue Service and Lancashire Police.

It had a massive impact on the local community and environment with residents having to leave their homes due to petrol odours coming from the sewer network. The Environment Agency’s joint investigation with partners found that the incident resulted from Tesco’s failure to address a known issue with part of the fuel delivery system and an inadequate alarm system and was compounded by poor emergency procedures.

Gov.uk, 16 June 2017

Company and director sentenced after pollution incidents

A company and its director have received fines and costs totalling £33,000 after significantly polluting a stream and then failing to notify the Environment Agency. The case against AWSM Recycling Ltd, of Lane Head Farm, Hutton Magna, west of Darlington and its sole director Adam Metcalfe, 37, of the same address, involves a number of breaches of environmental law over a significant period of time between July 2011 and October 2015.

The company stores waste and spreads it on agricultural land for the purpose of land improvement, which is controlled by environmental permits.

Gov.uk, 20 June 2017

Health and Safety

Company fined for failings in their work at height rescue planning

Contractor Peyroy Ltd has been fined following failings in their work at height rescue planning.

Keith Stevens was dismantling temporary roofing using a mobile elevated work platform (MEWP) when his colleagues found him trapped between a roof beam and the controls of the MEWP. There was a delay in lowering Mr Stevens to the ground. Mr Stevens died of a pre-existing heart condition.

Pyeroy Ltd pleaded guilty to breaching Regulation 4 (1) of the Work at Height Regulations 2005. The company was fined £130,000 and ordered to pay costs of £14,388.36.

SHP, 20 June 2017

Companies fined following incident in which a member of the public was sprayed with pieces of wire

RM Contractors Limited and a contractor working on behalf of Complete Tree Services have been fined after a member of the public suffered neck and leg injuries after being sprayed with pieces of fencing wire.

The member of the public was in her garden when she was sprayed with the fencing wire which had become tangled with a mechanical flail. She required surgery to remove the wire from her neck.

R M Contractors Limited pleaded guilty to breaching Regulation 15(2) of the Construction (Design and Management) Regulations 2015, and was fined £180,000 and ordered to pay costs of £22,000.

Matt Lea pleaded guilty to breaching Section 3(1) of the Health and Safety at Work etc. Act 1974, and was sentenced to 120 hours community order and ordered to pay costs of £3,600.

SHP, 16 June 2017

Company fined £135,000 following uncontrolled fire

Vertellus Specialties UK Limited have been fined £135,000 after an uncontrolled fire at their premises which involved large quantities of dangerous substances.

The fire involved the substance Vitride which caused a large fire ball to form and led the fire being declared a major incident. The HSE, Environment Agency and the Cleveland Fire Brigade found that the company had failed to maintain its equipment and failed to ensure the equipment was suitable to control temperature or prevent ignition to an uncontrolled release.

Vertellus Specialties UK Limited pleaded guilty to breaching Regulation 4 of the Control of Major Accident Hazards Regulations 1999. The company has been fined £135,000 and ordered to pay costs of £37,632.72.

SHP, 15 June 2017

 

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