There has been press reporting into the ongoing investigation by the German financial service regulator, BaFin, into the German bank Varengold Bank AG.
The investigation remains ongoing and so far no individuals have been accused of wrongdoing, and no reference has been made in relation to a criminal prosecution.
For our earlier post regarding the BaFin announcement see here.
Following widespread press reports (initially in the Financial Times) that a series of front companies linked to the Iranian Revolutionary Guard held accounts in the UK with Lloyds Bank and Santander, it is now being reported (behind a paywall) that both banks have been contacted by the Financial Conduct Authority in relation to the allegations.
Both banks have denied breaching sanctions.
In three decisions last year, the German Federal Court of Justice (Bundesgerichtshof) issued judgments dealing with persons charged with (amongst other crimes) making funds available to ISIS in breach of the relevant EU sanctions regulation.
One of the questions considered in the judgments is the extent to which transfers to individual members of the ISIS rank and file count as “making funds available” to ISIS itself.
It has been reported today that the UK’s National Crime Agency has arrested and charged Dmitry Ovsyannikov, a Russian national, with seven counts of circumventing sanctions as well as two money laundering charges.
Ovsyannikov was formerly the governor of Russian-seized Sevastopol and was designated by the EU in 2017 and then post-Brexit by the UK in 2020.
He is due to first appear in Southwark Crown Court on 20 February. He was arrested on 22 January.
To date the National Crime Agency has not issued a press release
The Danish FSA has issued a press release stating that an investigation it commenced into Nets Danmark A/S, has not resulted in a need for any further regulatory action to be taken.
The investigation was commenced in May 2023 and related to compliance with EU sanctions in general and Russian and Belarusian sanctions in particular.
An unnamed financial services provider regulated by the Dutch National Bank has challenged fines imposed upon it in relation to KYC and due diligence failings including in relation to sanctions screening.
The DNB had initially fined the provider €1.1m and €625,000, but these were reduced through a review process to €850,000 and €480,940.
The first fine in particular related to allegations of a failure to screen any of the sample of analysed customers against EU and Dutch sanctions lists.
On further appeal to the Rotterdam District Court the fines were upheld but further reduced to €718,841.25 and €451,250.
The Latvian VDD has announced that it has carried out raids in Moscow House in Riga on 21 and 22 December with significant data and document seized.
A criminal case has been initiated against one individual.
It has been reported that Federal Prosecutors in Germany have applied to confiscate €720 million in frozen assets belonging to Russia’s National Securities Depository.
After the NSD had been designated it had sought to move the funds and made transfer requests to JP Morgan and Commerzbank which refused to proceed with the transfer. As such the prosecutors are seeking to have the funds treated as the proceeds of crime and so confiscatable under ordinary anti-money laundering rules.
The UK’s Office of Financial Sanctions Implementation has today published its Annual Review for 2022-2023.
The report includes the following regarding enforcement activity:
“As of April 2023, OFSI’s Enforcement Unit had 172 cases under live investigation, many of which are complex and remain ongoing.
In 2022-2023, OFSI recorded 473 suspected breaches of financial sanctions (excluding oil price cap and counter-terrorism breaches). This is a significant increase on the 147 cases recorded in 2021-2022. This increase was expected given the scale of increased Russia sanctions, and OFSI’s increased enforcement capabilities. This data refers to the year in which a suspected breach is recorded, rather than the year in which the potential breach activity occurred. Recorded breaches includes cases which are self-reported, reported by a third party, and those independently generated by OFSI.
Over the course of the financial year, OFSI issued 7 warning letters in response to confirmed breaches which OFSI did not consider warranted public enforcement action, and 2 monetary penalties. 51 cases were closed with no further action, 44 of which related to Russia related sanctions breach reports. OFSI does not in all cases provide its view of whether a breach occurred or not, although many suspected breaches recorded by OFSI are considered not to be breaches of financial sanctions following further investigation. A number of cases in this period were referred to other agencies, including criminal and regulatory authorities. OFSI does not provide further breakdowns on referrals to criminal authorities”.
It has been reported today that 28 reports to the Cypriot authorities have been received between May and November of this year.
The reports are said to have come from multiple sources including the Ministry of Finance, the Foreign Ministry, the anti-money laundering unit MOKAS, the Association of Cyprus Auditors, the Cyprus Bar Association, the Legal Service, and the Central Bank.
