Risk & Compliance weekly highlights—1 July 2021

Risk & Compliance weekly highlights—1 July 2021

In this issue:

Data protection

Financial crime

LexTalk®Risk & Compliance: a Lexis®PSL community

UK/EU divergence—have your say

Daily and weekly news alerts

New and updated content

Trackers


 

Data protection

European Commission adopts adequacy decisions for UK

The European Commission and the government have announced that the Commission has adopted two adequacy decisions under the EU’s General Data Protection Regulation, Regulation (EU) 2016/679 (EU GDPR) and the Data Protection Law Enforcement Directive, Directive (EU) 2016/680, allowing data to continue to flow freely from the EEA to the UK. While the EU-UK Trade and Cooperation Agreement provided a conditional interim regime, it was due to expire on 30 June 2021. The Department for Digital, Culture, Media & Sport (DCMS) has announced that the EU has formally recognised the UK’s high data protection standards which allows for the continued seamless flow of personal data from the EU to the UK. The government have said that they welcome the move, and that this move ‘rightly recognises the country’s high data protection standards’.

See: LNB News 28/06/2021 80.


Consultation on UK SCCs for international transfers to start in July 2021, ICO official says

MLex: UK companies will be able to give feedback on draft UK standard contractual clauses (SCCs) for international data transfers in July 2021, a senior official at the Information Commissioner’s Office (ICO) said on 23 June 2021. Steve Wood also said that it was ‘good regulatory practice’ to review the country’s implementation of the EU GDPR, Regulation (EU) 2016/679, given that it was first drafted in 2012.

See News Analysis: Consultation on UK SCCs for international transfers to start in July 2021, ICO official says


ICO gets powers to conduct financial investigations

The UK government is handing authorities, including the ICO, new powers that will give them the power to conduct their own financial investigations. Laura Gillespie of Pinsent Masons considers the implications of this development.

See News Analysis: ICO gets powers to conduct financial investigations.


Information Commissioner issues enforcement notice to Emailmovers Ltd

The Information Commissioner has issued an enforcement notice to Emailmovers Ltd (EML) given EML’s non-compliance with Article 5(1)(a) of the UK GDPR. This is partly because EML is a controller, rather than a processor, as it has always maintained. The Information Commissioner’s justification for this is that EML determines the purposes and manner of processing data. According to the Information Commissioner, in controlling data, EML acted in a manner that was not fair, lawful or transparent, as consent received was not sufficiently specific or informed.

See: LNB News 28/06/2021 2.


The Children’s Code and parental consent

The Data Protection Intelligence Group (the Group) has begun a series of work on the UK’s Children’s Code, which becomes applicable in September 2021. The protection of children’s personal data is a regulatory priority for the ICO. In this analysis, the Group considers the issue of parental consent under the code as relevant to commercial organisations. This analysis explains why commercial organisations subject to the code should think carefully before relying on consent as a lawful basis and should generally avoid relying on consent where possible.

See News Analysis: The Children’s Code and parental consent.


 

Financial crime

The Law Commission’s consultation on expanding corporate criminal liability—introduction and observations

In the second article in our series considering the Law Commission’s proposed improvements to the law relating to corporate criminal liability, Christopher Gribbin, associate at Mishcon de Reya, provides an introduction to the background to and overarching comments on the Law Commission’s consultation paper.

See News Analysis: The Law Commission’s consultation on expanding corporate criminal liability—introduction and observations


Expanding corporate criminal liability—are DPAs fit for purpose?

In the third in our series of analysis on the Law Commission’s consultation on reforming corporate criminal liability, Neil Swift, partner at Peters & Peters, considers the suitability of deferred prosecution agreements (DPAs) as a means of holding businesses to account for a wider range of criminal conduct.

See News Analysis: Expanding corporate criminal liability—are DPAs fit for purpose?


FATF publishes outcomes from 25 June 2021 plenary

The Financial Action Task Force (FATF) has published the outcomes of its 25 June 2021 plenary meeting, which noted that although it is important for governments to focus on rebuilding their economies after the coronavirus (COVID-19) pandemic, they must also continue to fully and effectively implement the risk-based FATF Standards and ensure that criminals and terrorist do not find new and emerging loopholes to exploit. Among the issues explored at the meeting were the challenges that digital transformation presents for anti-money laundering and countering the financing of terrorism (AML/CFT), and the use of advanced analytics and machine learning in detecting suspicious AML/CFT activities.

See: LNB News 28/06/2021 34.


FATF publishes report on laundering proceeds from environmental crime

FATF has published a report on the prevalence and workings of environmental crime, which it deems is partly due to inconsistent global regulation and law that does not address the financial aspects of these crimes. Methods that criminals adopt include using shell and front companies to launder illegal gains and co-mingling legal and illegal goods to conceal the latter’s illicit source. FATF has advised anti-money laundering authorities to establish multi-stakeholder dialogues with non-traditional partners, such as environmental crime investigators.

See: LNB News 28/06/2021 82.


CPS announces conviction of former chairman for money laundering

The Crown Prosecution Service (CPS) has announced that the former chairman of the Association of UK Payment Institutions has been convicted of money laundering by Southwark Crown Court. The individual, Dominic Thorncroft, laundered the proceeds of an investment fraud worth £850,000, which involved over 60 victims. The investigation into Thorncroft commenced in 2016 and found that he allowed his business to be used by fraudsters to transfer money to Hong Kong and China.

See: LNB News 24/06/2021 62.


Notification of ECA special report on EU AML/CFT efforts published in the Official Journal

The European Court of Auditors (ECA) has published a notice in the Official Journal of the EU announcing that its Special Report No 13/2021, ‘EU efforts to fight money laundering in the banking sector are fragmented and implementation is insufficient’ (2021/C 254/05) has been published on the ECA website. The report concludes that the EU needs a stronger and more coherent oversight framework for combating money laundering.

See: LNB News 29/06/2021 52.


Wolfsberg Group issues statement on demonstrating the effectiveness of AML/CTF programmes in financial institutions

The Wolfsberg Group has issued a statement entitled ‘Demonstrating effectiveness’ setting out how financial institutions (FIs) should assess risk in defined priority areas and demonstrate their anti-money laundering/combatting terrorist financing (AML/CTF) programme effectiveness. The document builds on the Group’s prior effectiveness statements to underline that the starting point for an effective AML/CTF programme should be an understanding of the priority risks identified by countries or supra-national bodies in their own assessments of AML/CTF risks and the applicability of those risks to the FI.

See: LNB News 30/06/2021 43.


OFSI publishes blog on reasonableness

The Office of Financial Sanctions Implementation (OFSI) has published a blog on ‘reasonableness’, following changes introduced by the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018).

See: LNB News 30/06/2021 62.


SFO and US DOJ agree DPA with Foster Wheeler following bribery charges

The Serious Fraud Office (SFO) has announced that it has agreed a Deferred Prosecution Agreement (DPA) in principle with Amec Foster Wheeler Energy Ltd (Foster Wheeler). This comes following Foster Wheeler agreeing to pay more than $US43m after it was charged with bribing officials in Brazil in order to procure a $US190m contract to design a gas-to-chemicals complex. For breaching the Foreign Corrupt Practices Act, Foster Wheeler agreed to pay over $US43m. The UK DPA was reached following resolutions from the SFO, the US Department of Justice (DOJ), the US Securities and Exchange Commission (SEC), the Brazil Controladoria-General da Unio and the Ministério Publico Federal. Foster Wheeler has also entered into a three-year DPA with the US DOJ.

See: LNB News 28/06/2021 91.


The Bribery Act 2010 at 10 years, and what’s next

Lauded as a gold standard that put the UK in step with modern commercial practices, the Bribery Act 2010 (BA 2010) turns ten years old with just a few unmet goals, mostly at the prosecutorial end—and those charged with enforcement will likely face some real tests in the next decade, says Anneka Randhawa at White & Case.

See News Analysis: The Bribery Act 2010 at 10 years, and what’s next.


SFO publishes speech on keeping the UK safe for business

The SFO has published a speech by its director, Lisa Osofsky, concerning the SFO’s work to defend the UK’s global reputation for openness, its economy and the rule of law. The speech highlights that the need to maintain the integrity of Britain as a safe place to do business and invest is critical, especially when building a new international identity for trade.

See: LNB News 30/06/2021 58.


 

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UK/EU divergence—have your say

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New and updated content

Practice Note: What’s new and what’s changed in 2021—Risk & Compliance contains a summary of substantive changes to our content.

New Practice Notes


Updated Practice Notes


Updated Precedents


 

Trackers

Lexis®PSL Risk & Compliance has a dedicated area on the Key Resources section of the home page that tracks interesting and important cases, legislation, consultations and other key developments in the world of Risk & Compliance. For more information, see: Risk & Compliance forecast as at 15 June 2021.

 

 

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About the author:
Allison is a former partner of Shoosmiths, with extensive experience of legal management and practice compliance.