In March 2022, a year after Russia’s invasion of Ukraine, the Treasury Committee published a report regarding the development, implementation and impact of economic sanctions on Russia (the 2022 Report). In brief, the 2022 Report found that: The UK’s sanctions framework has continued to evolve, with businesses left to navigate the increasing complexity of implementing … Continue Reading
With a record number of enforcement cases resolved in recent years, the Financial Reporting Council (FRC) is continuing to show its determination to hold firms and individuals to account for serious accounting and audit failures. In our latest briefing, we set out five key themes for relevant firms and individuals to be aware of as … Continue Reading
The UK’s Industry and Economic Security Minister, Nusrat Ghani, today announced the creation of a new civil enforcement unit, the Office of Trade Sanctions Implementation (OTSI). OTSI is expected to become operational early next year, and will focus on the civil enforcement of trade sanctions, including in relation to the circumvention or evasion of the current … Continue Reading
Introduction As anticipated in our previous horizon scan (see here), the end of 2023 has brought about significant developments in financial crime enforcement and a real focus on fraud. Looking ahead to 2024, we predict that developments affecting organisations doing business in the UK will include: a focus from organisations on fraud, in particular preparing … Continue Reading
Introduction Following the unprecedented levels of sanctions activity in response to Russia’s invasion of Ukraine, which has resulted in companies dealing with the most significant and complex sanctions regimes across multiple jurisdictions, authorities in the US, UK and EU are now turning their attention to enforcement of those sanctions. Sanctions authorities have indicated that they … Continue Reading
On 6 October 2023, the English Court of Appeal (Court of Appeal) handed down its judgment in Mints v PJSC National Bank Trust [2023] EWCA Civ 1132. The judgment considered the English High Court’s decision in PJSC National Bank Trust and another v Boris Mints and others [2023] EWHC 118 (Comm), and concerned a claimant’s … Continue Reading
On 6 September 2023, the UK Financial Conduct Authority (the FCA) published the findings of its review of the sanctions systems and controls in place at over 90 financial services firms operating in a range of sectors (the Review). This briefing summarises the FCA’s findings on good practices currently being followed by firms, as well … Continue Reading
As anticipated in our previous blog post on predictions for 2023, this year has brought about significant developments in investigations and a real focus on fraud. Looking ahead to the second half of 2023, we predict that developments affecting UK business or those doing business in the UK will include: 1. Fraud Economic Crime and … Continue Reading
In line with indications that it will prioritise enforcement in the coming year, the Office of Financial Sanctions Implementation (OFSI) has expanded its enforcement guidance concerning the approach it takes when assessing potential breaches of financial sanctions. Earlier this month, OFSI amended its “OFSI enforcement and monetary penalties for breaches of financial sanctions” guidance (the … Continue Reading
A recent survey of senior in-house lawyers found that a majority are concerned about the impact of emerging data sources such as collaboration platforms and cloud file-sharing tools. Rightly so, as the pandemic and shift to hybrid working patterns have accelerated the expansion of the corporate data footprint. Traditional channels such as email and laptops are no longer the only data sources that must be addressed when considering data preservation requirements, or in litigation and … Continue Reading
As we enter a recession against the backdrop of ongoing geopolitical instability, we expect to see significant financial crime enforcement and investigations in 2023, including a focus on emerging areas such as ESG, cryptocurrencies, and significant developments in financial sanctions. We predict that developments in 2023 will include: 1. Fraud We expect to see continued political … Continue Reading
In addition to the obligations on regulated firms to comply with applicable sanctions regimes, individuals also need to be aware of their own compliance with sanctions restrictions. From a territorial perspective, individuals must comply with the sanctions regimes in their home jurisdiction wherever in the world they are located — for example, EU, UK and … Continue Reading
On 28 July 2022, the Office of Financial Sanctions Implementation (OFSI) updated its general guidance for financial sanctions under the Sanctions and Anti-Money Laundering Act 2018. The guidance outlines firms’ obligations under financial sanctions, as well as OFSI’s approach to licensing and compliance issues. It takes into account relevant case law and guidance at the … Continue Reading
The sixth instalment of our Beyond Sanctions podcast series is now available to stream and download on Apple Podcasts and Spotify. In this episode, David Harris, Co-Head of our Contentious Financial Services Group in London, discusses some recent developments in the sanctions landscape for regulated firms, including key points from the: Red Alert on Financial Sanctions … Continue Reading
On 4 May 2022, the UK Government announced a ban on services exports to Russia, and as of 21 July 2022 that ban is now in force by virtue of regulation 54C of The Russia (Sanctions) (EU Exit) Regulations 2019 (as amended by The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022) (the Regulations). … Continue Reading
In this post, we summarise emerging litigation and investigations trends and their practical implications for financial institutions (FIs). Litigation Litigation trends are largely dependent on social and political changes and we continue to see the impact of the global pandemic and the related financial downturn on emerging litigation trends. Civil fraud claims 2022 has seen … Continue Reading
The Economic Crime (Transparency and Enforcement) Act 2022 (the Act), which came into force in March 2022, aimed amongst other things, to give UK sanctions authorities greater power to take enforcement action and impose penalties on persons that breach sanctions restrictions, through the introduction of a “strict liability” test. These new powers of the UK’s … Continue Reading
Whilst historically there have been relatively low levels of sanctions enforcement in the UK, in light of recent developments, in the coming months we expect to see more scrutiny in this area and increased enforcement activity in relation to sanctions breaches. In our latest briefing, first published on Thomson Reuters Regulatory Intelligence on 24th June … Continue Reading
UK regulated firms seeking to comply with the Russian sanctions have had to grapple with fast moving legislative and regulatory change, and have inevitably encountered governance challenges along the way. The lessons learned as part of that process have read across which may assist firms in reacting to future developments beyond sanctions. Conducting a governance … Continue Reading
The next instalment of our Beyond Sanctions podcast series is now available to stream and download on Apple Podcasts and Spotify. In this episode, David Harris and Katie Stephen, Co-Heads of our Contentious Financial Services Group in London, discuss some recent developments regarding sanctions enforcement for regulated firms. For further updates in this area please … Continue Reading
This week, the European Commission is reportedly expected to present a legal proposal to make the evasion of sanctions an EU crime. This step will equip EU countries with a legal tool to confiscate frozen assets as part of the measures taken against Russia. It is estimated that to date around €30 billion in assets … Continue Reading
The events in Ukraine and the economic sanctions imposed on Russia raise a number of issues that financial services firms will need to consider. Above and beyond the immediate challenges arising from the imposition of sanctions on clients and counterparties, firms may also need to address concerns about market conduct and systems and controls. This … Continue Reading
The FCA has recently conducted a review of financial crime controls at a sample of six challenger banks in order to identify the key financial crime risks to which such banks are exposed. The review was prompted by a substantial increase in the volume of Suspicious Activity Reports (SARs) filed by challenger banks. Whilst the … Continue Reading
On 12 April 2022, the FCA updated its webpage on financial sanctions by adding information on making notifications to it and the Office of Financial Sanctions Implementation (OFSI). The FCA explains that authorised firms should notify it in line with the requirements in chapter 15 of the Supervision manual (SUP 15) through the usual reporting … Continue Reading
