June 2019 About Us Founded in 2014, Aperio Intelligence is a specialist, independent corporate intelligence firm staffed by individuals who collectively have decades of experience in undertaking investigations and intelligence analysis. Our team has worked in over 150 countries, on thousands of cases, for a wide range of leading global corporations, financial institutions and law firms. We have both knowledge of and access to relevant public and proprietary data sources, as well as a longstanding network of reliable, informed local contacts in the regions where we operate, cultivated over decades, who support us regularly in undertaking local enquiries on a confidential and discreet basis. As a specialist provider of corporate intelligence, we source our intelligence and conduct research to the highest legal and ethical We provide specialist investigation skills, together with local standards. jurisdictional knowledge, to enable you to identify and understand financial crime, integrity and reputational risks arising from a lack of We operate a “Client First” policy that ensures strict adherence to the knowledge of counterparties or local jurisdictions. We empower you core principles of quality control, confidentiality and respect for time to make better informed decisions, allowing you to achieve positive constraints, and provide cost-effective solutions, which allows our outcomes and realise the full benefits of your business activities. clients to obtain the highest quality standard of EDD at one of the best cost-to-benefit ratios in the marketplace. Our independence enables Our enhanced due diligence (EDD) services help clients comply with us to avoid many of the potential conflicts of interest that may affect anti-bribery and corruption, anti-money laundering and other relevant our larger competitors. financial crime legislation, such as sanctions compliance, or the evaluation of tax evasion risks. For banking and asset management Should you like to know more about our services or discuss how we clients, our services are designed to support on-boarding new may be able to help you, please do not hesitate to get in touch with our customers or third parties, reviewing existing relationships, or as part London or Paris offices. of a remediation process. We support clients in assessing complex integrity and political risks in opaque and high-risk markets through local insight and contact networks. Critical to our intelligence-gathering capabilities are the Find out more about the Aperio Intelligence team at: languages we speak in-house, including all major European languages, www.aperio-intelligence.com as well as Russian, Arabic, Farsi, Mandarin, Cantonese and Japanese. 2 FINANCIAL CRIME DIGEST IN THIS ISSUE: JUNE 2019 TECHNICAL UPDATES 03 SPECIAL FEATURE 24 Welcome to the June edition of the Financial Crime Digest, CORRUPTION IN PERU: AN INTERVIEW WITH JOSÉ UGAZ Aperio Intelligence’s monthly newsletter, an informative PRESS AND MEDIA 31 summary of the most recent developments relating to the MONEY LAUNDERING | FRAUD | TERRORIST FINANCING world of money laundering, fraud and terrorist financing, bribery PRESS AND MEDIA 48 and corruption, and sanctions. BRIBERY | CORRUPTION [email protected] PRESS AND MEDIA 61 SANCTIONS COUNTRY UPDATES 74 TECHNICAL UPDATES Law Commission’s report on reforming the SARs regime The UK Law Commission published • The establishment of an advisory board funds to be released by a Crown Court judge a report on anti-money laundering with oversight for the regime, with a remit when an application for an extension of the and the suspicious activity reporting to oversee the drafting of guidance, to moratorium period is made; regime (SARs) on 18 June, following measure the effectiveness of the regime an extensive consultation on the need and advise the Secretary of State on ways to • Maintaining the status quo for the reporting to reform the current SARs under the improve it; of “all crimes”; Proceeds of Crime Act 2002 and the Terrorism Act 2000. • Retaining the consent regime, subject to • Extending the circumstances in which a amendments to improve effectiveness; reporter may have a reasonable excuse not According to the UK’s National Crime to make a voluntary disclosure; and Agency (NCA), it continues to receive rising • Statutory guidance on legislative concepts numbers of authorised disclosure reports, underpinning the reporting regime, which • Further research into the utility of thematic which means that the regime in its present includes guidance on suspicion, appropriate reporting or geographical targeting orders, form is “unsustainable.” The report states consent and arrangements with prior which remove the discretion to assess that the high volume of low-quality SARs consent and what may amount to a suspicion. stems, amongst other things, from a fear of reasonable excuse; Amongst the proposed reforms to improve individual criminal liability, which results in the regime, the Law Commission has overreporting. • Prescribing the form in which suspicious activity is reported, including devising an also recommended that the government The Law Commission’s report puts forward online interactive form; consider the need for guidance in relation 19 recommendations, which includes a to transactions involving the legal cannabis proposal to provide statutory guidance to • An exemption to allow ringfencing of industry in Canada and elsewhere. assist in applying the provisions of the current suspected criminal property by a credit or regime. The NCA and the Financial Conduct financial institution, which according to Authority (FCA) have also expressed support the Law Commission provides for a more The press release can be found HERE. for the provision of more guidance. proportionate response to the reporting of suspected criminal property. Supplementary The SARs report can be found HERE. The main recommendations are: to this, the Law Commission recommends 3 aperio-intelligence.com FINANCIAL CRIME DIGEST | JUNE 2019 TECHNICAL UPDATES British Crown Dependencies announce action plan to establish registers of company beneficial ownership The governments of Guernsey, Jersey • The final stage will see the public granted and the Isle of Man jointly announced access to the registers by 2023 following commitments to establish registers of the introduction of legislation permitting beneficial ownership of companies on such disclosure, aligned with the approach 19 June, which includes an action plan taken in 5MLD. on how they will develop international standards of accessibility and In addition to this, Guernsey published transparency in the coming years. a separate action plan in which it has committed to report to its parliament by 2023 The action plan sets out three stages ownership with those within the EU for on the effectiveness of such registers. within a set timeframe that are consistent access by law enforcement and Financial with Europe’s approach to transparency of Intelligence Units beginning in 2021; then beneficial ownership under the Fifth Money The joint statement can be found HERE. Laundering Directive (5MLD): • The second stage, beginning in 2022, will see access for financial services businesses • The first stage concerns the interconnection and other prescribed businesses for Guernsey’s action plan can be found HERE. of the islands’ registers of beneficial corporate due diligence purposes; then Latvian parliament adopts new legislative package to strengthen laws to combat financial crime The Latvian parliament (Saeima) six months ahead of the deadline. The authorities will no longer have to wait for EU adopted on 13 June a comprehensive government will complete the remaining mechanisms to transpose sanctions. The legislative package to overhaul financial measures in its overhaul of financial sector measures also take into account advisory sector regulation to strengthen the fight regulation by the end of 2019. directions from international bodies, including against financial crime. Latvia’s prime the European Central Bank, the OECD and the minister Krišjānis Kariņš commended The reforms strengthen the independence, Egmont Group. the parliament’s decisive vote to pass governance, and democratic accountability the landmark reforms to strengthen of the governance structure of the Latvian Other recent amendments have also been financial sector supervision. Financial and Capital Market Commission implemented to extend the scope of the (FCMC), as all members of the FCMC board register of company beneficial ownership. “These ambitious reforms are a big step – including the chairman – will be appointed forward in our fight against money laundering, by the Latvian parliament. These changes are Meanwhile, on 25 June, Latvia’s Cabinet of the financing of terrorism, and arms in line with international standards and are Ministers supported a report from the Ministry proliferation,” said Kariņš. “These measures in compliance with the Basel Committee’s of Justice, which calls for an audit to assess demonstrate our unbending political will to banking supervision principles, in that they the factors that may have a negative impact make further changes in the financial sector further improve the transparency of the on effective criminal proceedings relating to as quickly as possible, and to become a candidate selection process. economic and financial crime. leader in transparency and governance in EU.” The measures will also enable Latvia to impose sanctions approved by the United The reforms implement