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In this issue:
The Home Office has published its summer 2019
anti-corruption newsletter providing a progress update on the government's
efforts to battle corruption both in the UK and abroad. It covers the economic
crime plan, open government partnership and extractive industries transparency
initiative. See: LNB News 24/07/2019 53.
HM Treasury and the Home Office have published an
economic crime plan for 2019 to 2022, providing information on action being
taken by the public and private sectors. The plan aims to draw together actions
to overhaul the approach to tackling economic crime, with greater partnering
between the government, law enforcement and the private sector. See: LNB News 12/07/2019 52
and News Analyses: UK economic crime plan
prompts worries about banks’ role
and Economic Crime Plan
2019-2022—reinforcing the UK’s position in combatting economic crime?
As the problem of modern slavery persists, UK
companies must take a broad approach when rooting out slave labour in their
supply chains and should not ignore the risk posed by suppliers within the UK,
says Maria Theodoulou of Stokoe. See News Analysis: Addressing modern slavery
inside and outside the UK.
The government has published a consultation on changes
to the transparency in supply chain provisions in section 54 of
the Modern Slavery Act 2015. It has also published its response to the
Independent Review of the MSA and announced a new £10m Policy and Evidence
Centre for Modern Slavery and Human Rights. See: LNB News 09/07/2019 69
and LNB News 11/07/2019 54.
The Serious Fraud Office (SFO) has announced that a
former Unaoil executive has pleaded guilty to five offences of conspiracy to
give corrupt payments relating to the SFO’s investigation into Unaoil.
See: LNB News 19/07/2019 67.
The SFO has confirmed the acquittals of three
individuals of conspiracy to corrupt and conspiracy to bribe. Michael Sorby,
Adrian Leek and David Justice were all found not guilty of conspiring with
agents to agree bribes relating to 27 separate overseas contracts for Sarclad
Ltd. After the removal of reporting restrictions, the SFO confirmed that these
acquittals follow the Deferred Prosecution Agreement that was reached with
Sarclad in July 2016. See: LNB News 17/07/2019 24
and News Analysis: Former execs acquitted
after Sarclad's deal with SFO.
An appeals court has upheld the conviction of a
British Alstom subsidiary over bribes paid to secure a valuable African
infrastructure project, finding that the executives involved in the case did
not have to be present for the transportation giant to get a fair trial. See
News Analyses: Appeals court upholds
Alstom’s UK bribery conviction, ‘Mr Lithuania’ told to pay up over
Alstom bribery plotand Alstom ruling helps UK
prosecutors tackling corporations.
French oil conglomerate TechnipFMC was recently called
out by the US Department of Justice for one of its predecessor companies being
a Foreign Corrupt Practices Act ‘recidivist,’ but the settlement shows that
being a repeat offender doesn’t block a company from getting co-operation and
remediation credit. See News Analysis: FCPA policy benefits open
to repeat bribery offenders.
The Financial Action Task Force (FATF) has set out the
procedures for the fourth round of mutual evaluations for its members based on
the FATF Recommendations (2012), and the Methodology for assessing compliance
with the FATF Recommendations and the effectiveness of AML and CTF systems
(2013). See: LNB News 26/07/2019 29.
In response to concerns about an excess of suspicious
activity reports, the UK Law Commission recently published a report
recommending improvements to the UK’s anti-money laundering (AML)
regime. The proposed reform is welcome, but may have missed an opportunity to
advocate for some additional changes, says Jonah Anderson of White & Case.
See News Analysis: Key reforms in UK
anti-money laundering proposal.
The European Commission has adopted a communication
and four reports that stress the need for full implementation of the fourth and
fifth Anti-Money Laundering Directives (MLD4 and MLD5) while underlining that a
number of structural shortcomings in the implementation of the EU’s AML and counter-terrorist
finance 9CTF) rules still need to be addressed. See: LNB News 24/07/2019 32.
The European Ombudsman, Emily O'Reilly, has published
her decision in case 925/2019/MIG. The case concerned a request for public
access to documents drawn up by the European Commission assessing the risk of
money laundering and terrorist financing in 54 third countries. The Commission
refused to make public the documents, arguing that disclosure would undermine
international relations, public security and the financial, monetary or
economic policy of the EU. The Ombudsman inspected the documents at issue and
found that the Commission was justified in refusing access to the documents.
See: LNB News 22/07/2019 42.
HM Treasury (HMT) has published its seventh annual
report on AML and CTF supervision. HMT appoints supervisors to monitor the
AML/CTF compliance of businesses that are in the scope of the Money Laundering
Regulations. See: LNB News 08/07/2019 69.
The FATF has published terrorist financing (TF) risk
assessment guidance, which aims to assist practitioners, and particularly those
in lower capacity countries, in assessing TF risk at the jurisdiction level by
providing good approaches, relevant information sources and practical examples
based on country experience. See: LNB News 05/07/2019 93.
The FATF has also published an updated version of the
FATF Recommendations, which set out international standards on combating money
laundering and the financing of terrorism and proliferation. An interpretive
note has been added, setting out the application of the FATF standards to virtual
asset activities and service providers. See: LNB News 04/07/2019 85.
The Royal Bank of Scotland (RBS) does not owe a major
foreign exchange company compensation for closing bank accounts allegedly
connected to a boiler room scheme as the lender had a responsibility to stop
suspected money laundering, a London court has ruled. See News Analysis: RBS cleared after freezing
accounts over AML fears.
The Department for Business, Energy and Industrial
Strategy (BEIS) has published the government response to its consultation on
changes to regulations on confidentiality clauses, also known as non-disclosure
agreements (NDAs). The final proposals include legislating to limit NDAs from
restricting disclosures being made to police, regulated health care
professionals and legal professionals. See: LNB News 22/07/2019 20.
Richard B Ritchie, barrister at XXIV Old
Buildings, Lincoln’s Inn, discusses the
case of Hotel Portfolio II Ltd v SMA Investment Holdings Ltd and others which
considered the test to be applied and what an applicant had to establish when
seeking to rely on the fraud exception in order to obtain disclosure of
documents otherwise privileged. See News Analysis: Legal professional
privilege and the fraud/iniquity exception (Hotel Portfolio II Ltd v SMA
Investment Holdings Ltd and others)
Lloyd’s of London has announced it believes it is in the
best interests of policy holders, brokers and syndicates for all insurance
policies to be clear on whether there is coverage for cyber-related losses.
is mandating that all policies provide clarity by explicitly excluding or
providing cover. Namely, if there is no exclusion for cyber-related losses and
no affirmation of cover, action is required to provide clarity of the cover
available.This will come into effect in 2020. See: LNB News 05/07/2019 23.
Claire Williams, principal associate at Mills & Reeve,
provides comment and analysis on the EU Cybersecurity Act which was recently
published in the Official Journal. See News Analysis: EU Cybersecurity Act—what to expect?
The Department for Business, Energy & Industrial
Strategy has declared that global businesses, including Google and Microsoft,
have backed the UK in becoming ‘a world leader in tackling the most damaging
cybersecurity threats.’ Approximately £117m of expected private industry
investment is to be combined with £70m in funding from the government in an
effort to develop new anti-cyber threat technologies in accordance with the
Industrial Strategy. See: LNB News 22/07/2019 58.
Matthew Richardson, barrister at Henderson Chambers,
examines the concept of ‘bulk hacking’ by intelligence services and
some of the legal implications, in light of the latest judicial review
challenge by Liberty International. See News Analysis: The implications of ‘bulk hacking’.
James Davies, barrister and mediator, at New Square
Chambers considers the case of Viagogo AG v Competition and
Markets Authority. It provides a useful
illustration of the issues which can arise in the context of drafting
agreements and consent orders dealing with the provision of information to
consumers. It also provides assistance and direction for those seeking to reach
agreements with regulators such as the CMA as to the provision of consumer
information through websites. See News Analysis: Providing required
information on websites—icons and cursors (Viagogo
AG v Competition and Markets Authority).
Peter Broadhurst, partner and Annalie Grogan,
associate, both at Simmons and Simmons, discuss the new EU transparency
obligations for online platforms and the implications for UK companies in light
of Brexit. See News Analysis: The impact of EU
transparency obligations for online platforms.
The Information Commissioner's Office (ICO) has
similar technologies under the Privacy and Electronic Communications (EC
Directive) Regulations 2003, SI 2003/2426
(PECR 2003) and the General Data Protection Regulation (EU) 2016/679
See: LNB News 04/07/2019 19.
The European Commission has published a report
reflecting on the impact of the GDPR one year on from its first implementation.
The report finds that most Member States have set up the necessary legal
framework, and that the new system strengthening the enforcement of the data
protection rules is falling into place. See: LNB News 24/07/2019 57.
The ICO has announced its intention to fine Marriot
International £99,200,396 for breaches of the GDPR. The breaches are in
relation to a cyberincident in November 2018 where 339 million guest records
were exposed. The ICO investigation found that Marriott’s system security was not
sufficient and that Marriot failed to carry out proper due diligence. See: LNB News 09/07/2019 80.
The ICO has also declared its intention to fine
British Airways (BA) £183.39m under the GDPR following a data breach. BA
notified the ICO of a cyberincident in September 2018, which saw BA customers
redirected from the company’s website to a fraudulent site that harvested customer
details. See: LNB News 08/07/2019 66.
Nick Holland and Hamish Corner, Partners at
Shoosmiths, explain the announcements by the ICO of its intention to fine
British Airways and Marriott International £183m and £99m respectively under the
GDPR regime have not come as a surprise and examine the next steps and
implications for businesses. See News Analysis: ICO announce intent to
fine British Airways and Marriott International £183m and £99m respectively.
The US Federal Trade Commission has imposed a $5bn
penalty on Facebook for privacy violations. In addition to the financial
penalty, which is almost 20 times higher than the second-highest penalty
imposed on a company in a privacy enforcement action, Facebook has been ordered
to submit new restrictions and modify their corporate structure so that the
company can be held accountable for decisions made about users’ privacy. Rebecca Toman,
partner at Carter-Ruck, says despite the fine ‘grabbing headlines, it is the
non-financial aspects that should really have the corporate world sitting up
and taking note’.
See: LNB News 25/07/2019 74.
BEIS has published a guide for business on how to help
their customers better understand their contractual terms and privacy policies.
The guide examines techniques for improving consumers’ understanding of contractual
terms, conditions and privacy policies while focusing on methods offering
low-cost and scalable solutions. See: LNB News 19/07/2019 100.
The European Data Protection Board (EDPB) has issued
Opinion 14/2019 on draft standard contractual clauses (SCCs) submitted by the
Danish supervisory authority. That Opinion, which has so far received little
attention within the data protection community, provides a first glimpse of the
thinking on SCCs under Article 28 of the GDPR and, by extension, on the
drafting of contractual provisions for compliance with the mandatory
requirements of Article 28 more generally. See News Analysis: EDPB Opinion 14/2019 and
the drafting of Article 28 compliant clauses.
The ICO has published a blog post on how the use of
artificial intelligence (AI) can require trade-offs between data protection
principles and how organisations can assess and balance these. See: LNB News 25/07/2019 32.
The All Party Parliamentary Group (APPG) has published
a report addressing current whistleblower legislation. The APPG gives
recommendations in the form of a ‘10 point plan’ following analysis of over
400 pieces of evidence. See: LNB News 19/07/2019 31.
The Solicitors Regulation Authority (SRA) has
published figures relating to law firms’ customer service and handling
of complaints. The results show that law firms are improving in these areas—in 2018, 81% of complaints
were successfully resolved, compared to 71% in 2012. The report also finds that
88% of clients are satisfied with their solicitor’s services and 65% felt that
their solicitor offered good value for money. See: LNB News 10/07/2019 35.
The House of Commons Library has published a paper
providing an overview of the current product safety regime in the UK. Product
safety in the UK is governed mainly by the General Product Safety Regulations
2005, SI 2005/1803
implementing the General Product Safety Directive 2001/95/EC.
See: LNB News 24/07/2019 49.
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