Read on for the latest news and updates in bribery and corruption; money laundering; health and safety and more...

Bribery and Corruption

SFO issues new guidance on self-reporting

The Serious Fraud Office has published a chapter from its handbook offering comprehensive guidance on how it approaches Deferred Prosecution Agreements (DPAs), and how it engages with companies where a DPA is a prospective outcome.  The new guidance states that companies must report suspected wrongdoing "within reasonable time of the offending conduct coming to light" to qualify for a DPA.

SFO Director Lisa Osofsky has previously said that companies should "do a bit of leg work to work out what you're looking at and whether it is real or not" before reporting matters to the SFO, apparently in contrast with the approach preferred by her predecessor David Green. The latest guidance appears to suggest that companies have some leeway to carry out an initial investigation into the conduct before making a report to the SFO, while still remaining eligible in principle for a DPA.

SFO, 23 October 2020

Goldman Sachs agrees $2.9 billion settlement in 1MDB scandal

Goldman Sachs has agreed to pay over $2.9 billion to ten authorities as a result of its role in the 1MDB corruption scandal in Malaysia.  The bank admitted to conspiring to violate the US Foreign Corrupt Practice Act (FCPA) in connection with bribes paid to government officials to obtain lucrative business for the bank in Malaysia, including its role in underwriting approximately $6.5 billion in three bond deals for 1MDB.  The payment is part of a coordinated resolution to settle criminal and civil charges in the United States, the United Kingdom, Singapore and elsewhere.

DOJ, 22 October 2020

Money Laundering

New Parliamentary inquiry into economic crime

The UK Parliament's Treasury Committee has launched a new inquiry into economic crime.  The inquiry will have two strands: anti-money laundering systems and the sanctions regime; and how consumers are affected by economic crime.  The Committee is inviting parties to submit written evidence on a wide range of topics, including concerns regarding or suggested improvements to the UK's anti-money laundering regime, the impact of the recent FinCEN files leak, corporate liability for economic crime and any emerging trends in consumer-facing economic crime as a result of the Covid-19 crisis.

Parliament, 23 October 2020

EU calls for Europe-wide authority against money laundering

It is reported that EU Member State finance ministers will put forward a proposal to establish a new EU body to tackle money laundering risks across the bloc in a harmonised way.  Ministers are also calling for a single EU rulebook, to avoid national disparities in the transposition of EU directives into national laws.  It is expected that draft conclusions will be adopted during the next EU finance ministers meeting on 4 November.  The European Commission plans to put forward ideas in early 2021 to reinforce the anti-money laundering framework.

Euractiv, 27 October 2020

Fraud

SFO charges Balli Group founder with fraud offences

The SFO has charged the founder of commodities trading group Balli Group plc, Vahid Alaghband, with three fraud offences in relation to the group's activities.  The charges include two counts of fraudulent trading in the carrying on of the businesses of Balli Steel plc and Balli Group plc with the intent of defrauding creditors and one count of conspiracy to defraud the Development Bank of Singapore.  The SFO has previously brought charges against four other executives in relation to the company's activities.

SFO, 22 October 2020

Sanctions

China threatens sanctions on major US defence companies in response to Taiwan sales

A spokesperson for the Chinese Foreign Ministry, Zhao Lijian, has announced that China intends to impose sanctions on major US defence companies including Lockheed Martin, Boeing, and Raytheon, in response to a recent $2.37 billion arms deal agreed between the United States and Taiwan.  Taiwan has confirmed that it has purchased the Boeing-made Harpoon Coastal Defence System, and has also approved the purchase of $1.8 billion of missiles and rocket artillery.  The Chinese government has called for the US to stop selling weapons to Taiwan, citing that the sales "severely violate" the one-China principle.  The US does not recognise China's sovereignty over Taiwan.

The Guardian, 27 October 2020

US issues more sanctions on Iran's oil industry

The US has this week imposed new sanctions measures targeting Iran's oil industry.  OFAC has designated the Iranian Ministry of Petroleum, the National Iranian Oil Company (NIOC) and the National Iranian Tanker Company (NITC) pursuant to counter-terrorism laws, because of the organisations' alleged support for Iran's Islamic Revolutionary Guard Corps Qods Force.  OFAC's announcement states that senior NIOC and NITC officials have worked closely with Rostam Ghasemi, a senior ORGC official and former Minister of Petroleum who was sanctioned by the US in 2019.

OFAC has also designated four people involved in the sale of Iranian gasoline to Venezuela.

OFAC, 26 October 2020

FCA Enforcement

FCA takes action against individual linked to Ponzi scheme

The FCA has commenced criminal charges against Stephen Allen following an investigation.  Mr Allen is alleged to have conspired with fraudster Renwick Haddow by disguising Mr Haddow's interest in a London property to prevent it from being available as an asset to satisfy any order made in proceedings brought by the FCA against Mr Haddow.  Mr Haddow was the founder of a shared office business in New York City called Bar Works.  Investors could buy desks at Bar Works locations for $25,000 and lease them back to the company.  The scheme was found to be akin to a Ponzi scheme and criminal proceedings against Mr Haddow are ongoing in the United States.

FCA, 28 October 2020

Corporate Tax Evasion

HMRC has 13 live investigations ongoing into facilitation of tax evasion corporate offences

The government has published a Freedom of Information Act response confirming that HMRC currently has 13 live investigations into the corporate criminal offence of failing to prevent the facilitation of tax evasion.  Three new investigations have been opened since 31 July 2020.  A further 18 live opportunities are under review.  To date, HMRC has reviewed and rejected an additional 33 potential cases.  The investigations and potential cases reviewed span a wide range of business sectors, including financial services, oil, construction, labour provision and software development.

HMRC, 21 October 2020

Health and Safety

Cheshire care provider fined for failing to provide safe care

The operator of a Cheshire care home has pleaded guilty to the criminal offence of failing to provide safe care and treatment, following the injury of a resident. The CQC found that Vivo Care Choices Limited had failed to implement basic health and safety measures, such as motion sensors and safety mats, to mitigate the known risk of the resident falling.  The company was fined £200,000 and ordered to pay a £170 victim surcharge plus £19,305.94 in costs.

CQC, 26 October 2020

Care home operator fined £40,000 after care home fatality

A care home operated by the Roman Catholic Diocese of Dunkeld has been fined for health and safety failings which resulted in the death of a resident at a property in Dundee. In May 2017, an elderly man fell nearly 30 feet from a second floor window of the Wellburn Care Home. HSE inspectors found that the windows had not been fitted with adequate restrictors that would prevent someone from falling from the window.

The court heard that the Diocese had failed to put in place measures to protect vulnerable elderly residents from an obvious risk of death or serious injury arising from a fall from height. The Diocese pleaded guilty to contraventions of the Health and Safety at Work Act 1974 and was fined £40,000.

Scottish Legal, 27 October 2020

HSE updates guidance on REACH chemicals regulations after end of Brexit transition period

The HSE has updated its guidance on how REACH requirements on the movement, storage and use of chemicals will apply after the end of the Brexit transition period.  The updated guidance explains that a domestic regime, known as UK REACH, will operate from 1 January 2021.  From that date, the UK REACH and existing EU REACH requirements will operate independently from each other. However, the key principles of the EU REACH Regulation will be retained.  The updated guidance note includes more detailed information on the grandfathering of existing EU requirements and on how the new UK regime will be applied.

HSE, 26 October 2020

Environmental 

Pet toy company fined for breaches of packaging recovery scheme

The UK subsidiary of a US manufacturer of dog toys has to make a payment of £4,930 to environmental projects to redress a breach of packaging waste regulations.  Kong Company Ltd, based in Salisbury, had failed to register for a packaging recovery scheme, resulting in savings of £3,792 over three years. Kong's finance director admitted to three offences under the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, including failure to register, failure to take reasonable steps to recover and recycle waste packaging and failure to submit certificates of compliance.

Gov.uk, 22 October 2020