Read on for the latest news and updates in bribery and corruption; money laundering; sanctions; fraud; cyber crime; FCA enforcement; and health and safety
Bribery and Corruption
The Organisation for Economic Co-operation and Development's ("OECD") Working Group on bribery has expressed concern that Hungary has not commenced any foreign bribery investigations or prosecutions in over nine years.
Following the Working Group's Phase 4 evaluation of Hungary's implementation of the OECD Convention on Combating Bribery of Foreign Public officials in International Business Transactions, their report has suggested that Hungary take a series of steps to improve enforcements of its foreign bribery offences. The steps include increasing resources, improving whistleblowing & self-reporting regimes, adopting measures to safeguard foreign bribery investigations, extending its two-year investigation time limit, raising awareness and strengthening its capacity to provide mutual legal assistance
OECD, 1 August 2019
Police have executed search warrants on eight addresses in connection with allegations of bribery regarding a £200m government contract to build a Wellness and Life Science Village in Wales. South Wales Police stated that the searches are connected to a complaint made by Swansea University and that their enquiry is looking at the tendering process of the Llanelli Wellness and Life Science Village Project. No arrests were made following the raids but the police confirmed that they have seized a number of documents and electronic equipment.
BBC News, 1 August 2019
The National Crime Agency ("NCA") has announced that they have secured an Unexplained Wealth Order ("UWO") against properties owned by a Northern Irish woman with suspected links to serious organised crime such as paramilitary activity and cigarette smuggling. The UWO was served on the 30 July 2019 and orders the woman to explain how she was able to afford to purchase six properties worth approximately £3.2m. Interim Freezing Orders were also granted meaning that the woman will be unable to sell, transfer or dissipate her properties whilst the NCA investigation is ongoing.
Andy Lewis, Head of Asset Denial at the NCA, commented that "This is the fourth case in which we have obtained a UWO… This latest order shows that we will act against those who we believe are causing the most harm to our communities."
NCA, 31 July 2019
The Crown Prosecution Service ("CPS") has announced that three siblings working for the leader of a Nigerian crime gang, Black Axe, have been jailed for a total of 16 years after being found guilty of money laundering offences. The announcement detailed how the police were able to identify 174 suspicious transactions where money from a number of victims of original frauds ended up in the defendant's bank accounts and were then subsequently laundered by the defendants.
Philip Slough, for the CPS, stated that "We were able to show the Nakpodias (the defendants) were talking to… the leader of Black Axe, based on conversations found on their devices. They talked about the amounts, and what to do with the funds after they arrived including how much to keep for themselves… This prosecution will play a role in starving a dangerous criminal gang of funds and we will seek to recover their proceeds of crime at a later hearing."
CPS, 2 August 2019
The SFO has announced that it has charged a second former director, Omari Bowers, in connection with its Global Forestry Investments ("GFI") investigation. The former director has been charged with conspiracy to defraud, forgery and misconduct in the course of winding up and follows the announcement on the 9 July 2019 that Andrew Skeene, another former director of the GFI has been charged with the same offence. The charges relate to alleged fraud concerning GFI between 2010 and 2015.
SFO, 31 July 2019
The Serious Fraud Office ("SFO") has published new guidance detailing the benefits of corporate cooperation in its investigations and suggestions for best practice in this regard. The document details how cooperation plays a role in the SFO's charging decisions as set out in the Guidance on Corporate Prosecutions and the Deferred Prosecution Agreements Code of Practice. The SFO defines co-operation as providing assistance to an investigation that goes above and beyond what the law requires and provides examples such as identifying suspected wrongdoing and criminal conduct, reporting this to the SFO within a reasonable time and preserving evidence and providing it promptly to the SFO. The guidance goes on to detail good practice for the preservation and providing of materials to the SFO and the use of witness accounts and privilege over documents.
SFO, 6 August 2019
The US has announced further sanctions on Russia in response to the poisoning of Sergei and Yulia Skripal in March 2018. The measures include US opposition to the provision of loans or technical assistance to Russia by international financial institutions such as the World Bank and a prohibition on US banks from participating in the primary markets for non-ruble denominated Russian sovereign debt and lending of non-ruble denominated funds to the Russian government.
In addition, US export licence applications relating to dual-use items that are controlled for chemical and biological weapons reasons will be subject to a presumption of denial. These are the second round of sanctions required under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991.
US State Department, 2 August 2019
The European Commission has published a non-binding Recommendation intended to assist companies in developing appropriate internal export control compliance programmes. The document identifies seven core elements that exporters should seek to incorporate in their compliance programmes.
European Commission, 30 July 2019
PricewaterhouseCoopers Business Solutions ("PwC BS") has been fined €150,000 by the Hellenic Data Protection Authority ("DPA") for illegally processing employee data. Responding to a complaint, the DPA carried out an investigation into the company and found that as a data controller, PwC BS had unlawfully processed the personal data of its employees contrary to the GDPR. In addition to the fine, the DPA ordered the business to bring the processing of its employees personal data into compliance with the GDPR within three months.
Europa, 31 July 2019
Information Commissioner's Office publishes steps for safeguarding personal data when using AI systems and calls for openness on proposed Facebook currency
The Information Commissioner's Office ("ICO") has recently published two posts on its website. The first provides some key safeguards for organisations to consider implementing when using artificial intelligence over processes that access personal data. The second details how the ICO has joined a list of international signatories expressing concerns regarding Facebook's plans to launch Libra, a digital currency. The statement, signed by data authorities across the world, asks for assurances from Facebook and the other 28 companies behind the project that the service will be transparent and that the data collected will be kept to a minimum.
ICO, 5 August 2019 and ICO, 5 August 2019
Attorney Generals from the UK, USA, Canada, Australia and New Zealand have signed a statement reaffirming their support of the Council of Europe Convention on Cybercrime and acts "as a strong, legally binding framework to combat cybercrime". The statement also supports the Intergovernmental Expert Group on Cybercrime – a United Nations forum where experts discuss responses to cybercrime. At the meeting in London, the Attorney Generals also discussed corporate criminal liability, sentencing frameworks, hostile state activity, social media and data privacy and the use of IT to improve the legal system.
The UK Attorney General, Geoffrey Cox QC MP commented that "International Cooperation is vital in the fight against cybercrime and my Quintet counterparts and I believe the Council of Europe Convention on Cybercrime is the best means to do this. We hope that our statement sends a clear message: we stand united in our efforts to tackle this threat."
Gov.uk, 31 July 2019
The Treasury Committee has expressed concern that the FCA's perimeter of regulation and the grey area at its edge is complex and has published a report focusing on non-regulated activities carried out by regulated firms. The report makes the following recommendations:
where regulated firms undertake unregulated activity, there should be clear warnings for consumers on what the lack of regulatory cover means and put in place sanctions for firms that fail to include these warnings;
the FCA should be given the power to formally recommend changes to the perimeter, in particular, to prevent consumer harm;
the FCA should be given the remit and power to highlight risks faced by consumers; and
the Treasury should undertake research on increasing the FCA powers to gather information and should report annually on the work it does to monitor the perimeter of regulation.
Parliament, 2 August 2019
Health and Safety
Two firms have been fined after an employee fell from a shed structure while carrying out refurbishment work. He was standing on metal sheeting and stepped backwards onto a fragile roof light when he fell 5.44 metres. He suffered two broken arms and broken ribs.
The HSE investigation found that no risk assessments had been carried out and that there was a failure to ensure that the risks from the fragile roof lights were adequately controlled. Both companies failed to ensure that there was adequate safe access onto the roof and there was inadequate management supervision. There had also been previous cases of unsafe work which they failed to act on.
Bifrangi UK pleaded guilty to breaching section 2(1) and 3(1) of the Health and Safety at Work Act 1974 and was fined £140,000 plus costs of £2607. Zamperoni F.lli srl was not present in court but was fined £54,000 plus costs of £1240.
SHP, 7 August 2019
The incident happened in March 2014 when an employee of Clancy Docwra Limited was struck by an excavator during night work at a construction site in Stratford. Mr Campbell had been disconnecting lift accessories from a metal pile that had been extracted from the ground when he was crushed against a concrete wall and fatally injured. The HSE investigation found that the company failed to ensure the safety of its employees and others working on the site. The site supervisor and person operating the excavator Daniel Walsh, was also found not to have taken reasonable care for other persons on site.
Clancy Docwra Limited pleaded not guilty to breaching Section 2(1) and 3(1) of the Health & Safety at Work Act 1974 and was fined £1,000,000 plus costs of £108,502.30. Daniel Walsh pleaded not guilty to breaching Section 7(a) of the Health & Safety at Work Act 1974 and was given a 6 month custodial sentence, suspended for 12 months and ordered to pay costs of £15,000.
HSE, 2 August 2019
A contractor suffered permanent damage to his eyesight in an incident in which he fell from the roof of a warehouse in April 2016. The contractor worked for Kingswinford Engineering Co Limited and was repairing a section of pipework on the warehouse roof owned by James Durrans & Sons. He slipped and banged his head and suffered permanent blindness to one eye and blurred vision in the other.
The investigation found that there were multiple failings in how the work was planned, managed and monitored. Neither company had undertaken a suitable and sufficient risk assessment or had a safe system of work in place for repairing the pipework on the roof.
Kingswinford Engineering Co Limited pleaded guilty to breaching Section 2(1) of the Health and Safety at Work Act 1974 and was fined £18,000 plus costs of £9,000. James Durrans & Sons Limited pleaded guilty to breaching Section 3(1) of the Health and Safety at Work Act 1974 and was fined £100,000 and costs of £20,000.
HSE, 5 August 2019