Brazil has seen extensive legal changes and enforcement efforts against corruption over the past few years. As a result, local and multinational companies active in the region have increased their anti-corruption compliance efforts, particularly by introducing more frequent and comprehensive anti-corruption risk assessments and touchpoints with government entities and officials, as well as strengthening their anti-corruption compliance programmes.
Despite the steps taken by Brazil to fight corruption in recent years, it remains one of the main challenges for the country. Mindful of this, the new government – which came into power in 2018 on the back of its vow to fight corruption – has promised a series of measures to tackle the issue. The measures include toughening prison sentences for corruption-related crimes, separating investigations involving high-level officials and making illegal campaign donations a criminal offence.
The new year started with a new government taking office. Naturally, this has led many to speculate what the government's priorities and policies will be. In particular, enforcement policies are receiving more attention than during previous inaugurations, largely due to the widespread corruption scandal following Operation Car Wash and the appointment of Sergio Moro (former lead judge overseeing Operation Car Wash) as the minister of justice.
The Superior Court of Justice recently appraised a noticeable theme regarding personal data protection from a criminal law perspective: the validity of police evidence obtained from smartphones without a specific judicial order to do so. The precedent has had a strong effect on investigations of varying scope and importance. Two recent examples occurred in the wake of high-profile anti-corruption and anti-money laundering investigations.
A recent review has detailed the limited application of corporate criminal liability and the indirect legal consequences that companies may face following criminal investigations targeting individuals. Corporations may face harsh administrative and civil penalties for business crimes which only individuals can be held liable for. This is especially true where cross-border investigations result in white collar crime regulations becoming increasingly denationalised and tougher than ever before.
The government and the Cayman Islands Monetary Authority are well aware that it is imperative that the Cayman Islands is not only perceived to, but does in fact, play a central role in the global fight against money laundering and terrorist financing. At the same time, there is a deep understanding of the need to remain competitive and commercial. This article addresses a number of key questions concerning the 2018 amendments to Cayman's anti-money laundering regime.
In Ahmad Hamad Algosaibi & Brothers Company (AHAB) v Saad, the Grand Court found that AHAB's claims, which attempted to trace its funds into the hands of defendant SIFCO5, were "unparticularised and unprincipled". Further, AHAB was unsuccessful in establishing that funds representing traceable proceeds from the Money Exchange reached SIFCO5 or in articulating any discernible cause of action against SIFCO5 in respect of such funds.
In a landmark ruling, the Grand Court emphatically dismissed a multibillion-dollar claim in a case involving allegations of fraud arising from one of the largest corporate collapses of the financial crisis. The case has showcased the court's ability to manage high-profile large-scale litigation, demonstrating especially the quality of the Cayman Islands judiciary and the court's ability to use cutting-edge technology, as well as the resources and flexibility to manage a year-long, multi-jurisdictional trial.
Under new anti-money laundering legislation, the list of activities classed as relevant financial businesses has been expanded. Unregulated investment funds and some insurance entities have now been given a grace period until May 31 2018 to establish anti-money laundering compliance programmes. This is a welcome move, particularly for unregulated investment funds which were not bound by the preceding regulations and therefore may not have policies and procedures in place.
The government recently adopted updated Anti-money Laundering Regulations. The regulations demonstrate the Cayman Islands' ongoing commitment to comply with the highest international standards on combating money laundering and terrorist financing and aim to ensure consistency with the Financial Action Task Force 2012 recommendations. The move is part of an overall update of the territory's anti-money laundering regime.
Criminal activities such as illegal payment and settlement business and FX trading have become increasingly rampant in recent years. Although these activities have been classified as business crimes in various laws and regulations, the applicable penalties have been unclear. However, new interpretations of the Supreme People's Court and the Supreme People's Procuratorate set out the applicable convictions and penalties for illegal business operations involving FX trading and payment and settlement business.
Articles 59 and 60 of Law 2016-1691 (the Sapin II Law) on transparency, anti-corruption and the modernisation of economic life established a system of immunity from the execution of civil judgments on property in France which is owned by foreign states. The main purpose of this aspect of the Sapin II Law is to limit the risk of litigation arising from seizures or attachments of property belonging to foreign states.
According to the Federal Court of Justice's established case law, the penalty for tax evasion of more than €1 million should generally be imprisonment rather than a suspended sentence. However, the court recently ruled that these principles cannot apply to breach of trust allegations. The decision has significant implications for white collar crime and compliance.
A recent Federal Constitutional Court decision has clarified whether documents relating to internal investigations can be regarded as defence documents. Against the hope of companies and law firms, the court rejected the general prohibition on the seizure of such documents; however, it indicated that such a prohibition should always be determined on a case-by-case basis.
The federal government plans to create new corporate penalties and abandon the discretionary principle which has thus far applied in corporate prosecutions. Further, the upper limit of penalties will be significantly increased. At the same time, the government aims to establish legal requirements for internal investigations that provide an incentive for investigation support.
German businesses have steadily expanded their compliance structures and internal training programmes and have never been in a better position than they are now. However, declining support for compliance issues among management is giving compliance officers cause for concern, and recent compliance scandals appear to indicate that further work is necessary to make management fully acknowledge the significance of compliance matters.
The Federal Court of Justice recently decided for the first time that the establishment of a compliance management system designed to prevent breaches of the law can reduce fines in accordance with the Administrative Offences Act. The court pointed out that even the optimisation of a compliance management system following compliance breaches can lead to a reduction in fines and provided guidelines for the measures to be taken in such cases.