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Regulatory & Investigations
Welcome to our latest edition of the Regulatory and Investigations Newsletter.
In this issue, we visit themes on corporate reporting obligations, key issues linked to climate change risk, greenwashing clampdown by authorities, regulatory changes to carbon markets, developments in cryptocurrency regulation, international sanctions, the EU’s latest decision on anti-money laundering policy, cannabis laws, the latest in financial crime, and a few other topics.
The newsletter contains analyses from our experts across Asia Pacific, Europe, the UK, and the Americas, and we hope you and your compliance teams find the articles useful and informative.
You are welcome to get in touch with us to discuss in more detail any of the issues covered.
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Avryl Lattin and Rachel Cropper-Mawer are pleased to report that our team recently launched a dedicated Global Regulatory and Investigations information hub on the Clyde & Co website. To visit the hub, please follow this link. The site is designed to provide our readers a wealth of information including news of the latest legal developments and expert insights on the rapidly evolving global regulatory landscape. The hub also details our deep sector knowledge and our vast multi-jurisdictional experience which includes internal and external investigations, regulatory, criminal, and private prosecutions, sanctions, data protection, cyber-related issues, compliance, and fraud and white-collar crime.
Year on year, the emphasis on climate-related issues increases, and as COP27 came to an end, emphasis was placed on who could make the most substantial change. In the UK a positive burden is placed on large corporate entities and financial institutions to report on how the company is managing issues such as environmental performance and climate-related risks. Measures taken in the EU, the US, China, and Brazil are also discussed.
Climate risk and the liability landscape continue to evolve at a rapid pace. The onus on boardrooms to manage the risks and respond to the opportunities presented by climate change is stronger than ever. This report examines the key issues, from recent and emerging developments in this area, to how organisations can best position themselves to withstand shocks and seize opportunities so that they can help to deliver a future that is for all of us.
In the UK, the Financial Conduct Authority is nearing the end of a three-month consultation period on proposed measures to combat greenwashing, the practice of making exaggerated or misleading sustainability-related claims, which, in turn, erodes consumers’ trust in the market. The article extends its examination of greenwashing clampdown to measures adopted in Canada and Singapore.
Geopolitical risk is always present, but today, the range and severity of issues it presents is creating extremely significant challenges for businesses to grapple with. From cybercrime and technology risks to the climate crisis, energy security, Russia’s war in Ukraine, trade tensions with China, and the threat from North Korea, companies today must prioritise attention and resources across a seemingly ever-growing roster of geopolitical risk areas.
The International Organization of Securities Commissions (‘IOSCO’) has published two papers that propose regulatory changes to carbon-related markets: a consultation report on Compliance Carbon Markets and a discussion paper on Voluntary Carbon Markets. The proposals are intended to solve issues associated with both markets, including greenwashing, criminal activity such as fraud and market abuse, and a lack of market integrity.
The Regulatory and Investigations team at Clyde & Co has been closely monitoring developments in regulation surrounding digital assets. In 2022, Singapore introduced measures to restrict the marketing and advertising of cryptocurrency services and released two consultation papers setting out proposed measures to reduce the risk of consumer harm in cryptocurrency trading. In parallel, the EU moved one step forward in its radical attempt to create a rigorous legal and regulatory framework for digital assets.
Authorised Push Payment fraud (“APP”) is now the largest type of payment fraud in the UK, affecting both individuals and businesses. In such cases, a fraudster will deceive their victim into instructing their own bank to transfer money from their account into an account controlled by the fraudster. For those other than consumers who may be protected by the Contingent Reimbursement Model Code, there are various legal claims which may be pursued to recover lost funds.
At the end of 2022, the Court of Justice of the European Union issued a ruling restricting the scope of the Fourth Money Laundering Directive by finding that open registers detailing beneficial ownership of legal entities were not necessary or proportionate for the objective of combating money laundering and terrorist financing. The European Court found they breached the right to respect for private life and protection of personal data under the Charter of Fundamental Rights for the EU.
A report of recent news in the financial crime arena starting with a series of significant FCA fines, forthcoming new consumer protection principles and the FCA’s strategy for 2022 to 2025. Finally, a review of PRA activity and a recap of successful prosecutions conducted by the SFO and the CPS over the past year.
In the recent case of Goh Ngak Eng v Public Prosecutor  SGHC 254, the Singapore High Court took the opportunity to develop a sentencing framework for private sector corruption offences, declining to adopt the existing framework as set out in Takaaki Masui v Public Prosecutor and another appeal and other matters  4 SLR 160. The authors explore the nature of this revised sentencing framework and consider its impact on future cases.
As of 5 December 2022, the EU, UK and US have imposed stringent prohibitions on the export of Russian oil. These new sanctions include: i) wide-ranging import bans on crude oil into the UK and EU; ii) bans on associated ancillary services; and, iii) a price cap of $60 per barrel, making UK, EU and US services available to third country importers and exporters, so long as the price paid for Russian oil is below that cap.
On February 24, 2022, the Russian Federation invaded Ukraine, and, in response, the international community issued a number of sanctions and trade restrictions against Russia and its allies. In Canada, the Special Economic Measures (Russia) Regulations was imposed. Canada has limited cases where enforcement of international sanctions has occurred, however, the Court of the King’s Bench of Alberta recently released a decision in Angophora Holdings Limited v Ovsyankin.
The Bermudian Progressive Labour Party (PLP) won a majority of 30 of the Bermudian assembly’s 36 seats at the 2020 general election — and the party pledged to legalise the recreational use of cannabis, having already decriminalised possession of small amounts three years earlier. But the day after Truss was appointed prime minister in September 2022, the UK government refused to allow Bermuda to pass the law.