Tag Archives: Karolos Seeger

The New ‘Failure to Prevent Fraud’ Corporate Offence — UK Government Publishes Guidance

by Karolos Seeger, Aisling Cowell, Andrew H. Lee, and Sophie Michalski

Photo of the authors

Left to Right: Karolos Seeger, Aisling Cowell, Andrew H. Lee, and Sophie Michalski (photos courtesy of Debevoise & Plimpton LLP)

On 6 November 2024, the Home Office finally published government guidance on the corporate offence of failure to prevent fraud (the “FTPF Offence”), which was introduced in the Economic Crime and Corporate Transparency Act 2023 enacted last October. The new offence will now come into force on 1 September 2025, giving companies a longer period to prepare than had been expected. 

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A Game-Changer for UK Corporate Crime Enforcement? Major Expansion of Corporate Criminal Liability Proposed

by Karolos Seeger, Konstantin Bureiko, Aisling Cowell, and Andrew Lee

Photos of the authors

From left to right: Karolos Seeger, Konstantin Bureiko, Aisling Cowell, and Andrew Lee (Photos courtesy of Debevoise & Plimpton LLP)

Recently, the UK government announced a groundbreaking proposal to reform the identification doctrine—the principle used to hold a company liable for criminal offences committed by those who represent its “directing mind and will”.[1]

For a wide range of offences, including bribery, money laundering, sanctions, fraud and false accounting offences, the actions of a “senior manager… acting within the actual or apparent scope of their authority” will be attributable to his or her employer. The draft wording was added to the Economic Crime and Corporate Transparency Bill, which, as part of the government’s focus on overhauling UK economic crime legislation, already includes a new failure to prevent fraud corporate offence.[2]

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OFSI Publishes Updated Enforcement and Penalty Guidance

by Satish M. Kini, Jane Shvets, Karolos Seeger, and Konstantin Bureiko

Key takeaways:

  • On 8 June 2022, the United Kingdom’s Office of Financial Sanctions Implementation (OFSI) announced that its new strict liability enforcement standard and updated accompanying guidance would take effect on 15 June 2022.
  • The guidance reflects key measures in the Economic Crime (Transparency and Enforcement) Act 2022, including: the new strict liability test for imposing civil monetary penalties; changes to the review of monetary penalties; and a new ability for OFSI to publish details of breaches where it has not imposed a monetary penalty.

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SEC Brings its First Corporate Anti-Corruption Action of 2022

by Kara Brockmeyer, Andrew M. Levine, Karolos Seeger, and Konstantin Bureiko

On February 17, 2022, the SEC brought a settled FCPA administrative proceeding against KT Corporation (“KT” or the “Company”), a South Korean telecom operator with American depository shares trading on the New York Stock Exchange.[1]  In its Cease-and-Desist Order (the “Order”), the SEC found that KT engaged in multiple schemes to make improper payments in Korea and Vietnam, including through purported charitable donations and third-party payments.  The SEC also found that KT paid executives inflated bonuses in order to generate slush funds to pay for gifts and illegal political contributions.  As a result of the settlement, the Company agreed to pay $6.3 million in disgorgement and civil penalties, and to a two-year reporting obligation.[2]  The settlement with the SEC came several months after the Company and fourteen executives were indicted in South Korea for the political contribution scheme.

Of particular note, the KT settlement is the SEC’s most recent action involving charitable contributions, and it goes somewhat beyond earlier cases in that the Order does not find that the donations were made as part of any quid pro quo.  It is also a cautionary tale demonstrating various ways that slush funds can be created.

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France Moves to Boost Its White Collar Enforcement

by Antoine F. Kirry, Alexandre Bisch, Aymeric D. Duoulin, Fanny Gauthier, and Karolos Seeger

On July 7, 2021, a French National Assembly Committee led by MPs Raphaël Gauvain and Olivier Marleix, published a long-awaited 180-page evaluation report about France’s anti-corruption law of December 9, 2016 (the so-called “Sapin II Law”)[1]. While recognizing the significant progress made by France in its fight against corruption and tax fraud over the last five years, MPs suggest further strengthening the existing legal framework. Their 50 recommendations cover various topics, including the French-style deferred prosecution agreement; the self-reporting of corporate crimes; corporate criminal liability criteria; the introduction of a new pre-trial guilty plea; French extra-territorial enforcement of corruption crimes; and the role of the French anti-corruption agency. We provide below the main highlights of the report.

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The SFO Publishes Its Internal Guidance on Deferred Prosecution Agreements

by Karolos Seeger, Robin Lööf, and Aisling Cowell

On October 23, 2020, the United Kingdom’s Serious Fraud Office (the “SFO”) published the chapter on deferred prosecution agreements (“DPAs”) from its Operational Handbook, including how it “engages with companies where a DPA is a prospective outcome”.[1] The SFO has made clear that this guidance is for internal use only and was published “in the interests of transparency”; it is not authoritative. Although the guidance does not contain new information or changes from existing DPA practice, it is useful in setting out the SFO’s consolidated approach in respect of DPAs. It does not supersede or replace previous guidance and should be considered alongside the legislation covering entry into a DPA (Schedule 17 of the Crime and Courts Act 2013) and the DPA Code, which is authoritative, as well as previous guidance, including the Corporate Co-operation Guidance.

So far, the SFO has concluded eight DPAs, with a ninth DPA awaiting approval by the court on 30 October 2020.

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UK Introduces Magnitsky-Style Human Rights Sanctions Regime

by Karolos Seeger, Jane Shvets, Catherine Amirfar, Andrew M. Levine, Natalie L. Reid, David W. Rivkin, Alan Kartashkin, Konstantin Bureiko, and Martha Hirst

On 6 July 2020, the UK implemented a new sanctions regime targeting global human rights abuses, which allows the UK government to impose asset freezes and travel bans on persons it determines to have committed serious human rights violations. These restrictions have initially targeted 49 persons from Myanmar, Russia, Saudi Arabia and North Korea.

This is the first time since Brexit that the UK has diverged from EU sanctions policy. Although many of the targets and restrictions are broadly aligned with the “Magnitsky”-style sanctions previously implemented by the United States and Canada, the UK regime has some important differences. Companies operating in the UK will need to ensure that their sanctions systems and controls reflect this new regime.

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The EPPO and International Co-Operation –– New Kid on the Block

by Karolos Seeger, Jane Shvets, Robin Lööf, Alma M. Mozetič, Martha Hirst, Antoine Kirry, Alexandre Bisch, Ariane Fleuriot, Dr. Thomas Schürrle, Dr. Friedrich Popp, Dr. Oliver Krauß

The European Public Prosecutor’s Office (“EPPO”) is a new European Union body responsible for investigating and prosecuting criminal offences affecting the EU’s financial interests in 22 of its 28 Member States.[1] The EPPO is expected to begin investigations in November 2020.

Fraud against the financial interests of the EU is an international phenomenon: in 2018, the European Anti-Fraud Office (“OLAF”) concluded 84 investigations into the use of EU funds, 37 of which concerned countries outside the EU.[2] In this part of our series of analyses of the EPPO[3] we, therefore, consider the framework for the EPPO’s future international co-operation. This includes dealings with enforcement authorities in non-participating EU Member States as well as the rest of the world.

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U.K. and U.S. Sign Landmark Cross-Border Data Sharing Agreement

by Jeremy Feigelson, Karolos Seeger, Jane Shvets, Robin Lööf, Robert Maddox, and Alma M. Mozetič

On October 3, 2019, the United Kingdom and the United States signed a landmark data sharing agreement to give law enforcement agencies in one country faster access to digital evidence held by service providers, such as web hosts and social media companies, located in the other (the “Agreement”).[1]  The material scope of the Agreement is wide, including fraud, cyberattacks, corruption, and other serious offences.  The Agreement aims to provide an alternative, faster mechanism to the current system based on government-to-government requests pursuant to Mutual Legal Assistance Treaties (“MLATs”).  Under the Agreement, law enforcement authorities will be able to compel production directly from service providers.  The hope is that this will reduce waiting times to weeks or sometimes days.  The Agreement is expected to enter into force following review by the U.K. Parliament and the U.S. Congress, in early April 2020. Continue reading →

UK Law Commission Recommends Reforms to Money Laundering Suspicious Activity Reports

by Karolos Seeger, Aisling Cowell, Andrew Lee, and Natasha McCarthy

The Law Commission has published an extensive report examining the UK’s current Suspicious Activity Report (“SAR”) regime for notifying suspected money laundering to the National Crime Agency (“NCA”) and outlining 19 recommendations for reform.[1] These include both legislative and non-legislative mechanisms designed to improve the efficiency and effectiveness of the consent regime. This report follows a July 2018 consultation paper, which was discussed in a previous client update.[2] Interestingly, the Law Commission reviewed a sample of hundreds of SARs to help it analyse the potential impact of the various proposals and lend support to its final recommendations.

In short, the existing SAR regime will be largely retained, with the recommendations having limited practical effect, especially for organisations outside the regulated sector. We summarise below the key recommendations and consider their likely impact. Continue reading →