Legislation

Australia: Australian Government announces second round of sanctions against Russia

On 1 September 2014, the Prime Minister of Australia, Tony Abbott, announced that the Australian Government would implement further autonomous sanctions against Russia in response to the operation of Russian troops in eastern Ukraine and the downing of Malaysian Airlines Flight MH17.

Australia's expanded sanctions will target key sectors of the Russian economy, and will place restrictions on:

  • the export of arms and dual-use goods to Russia
  • the export of goods and services for use in deep water, arctic, or shale oil exploration or production projects in Russia
  • the sale of Australian uranium to Russia
  • the ability of Russian state-owned banks to access Australian capital markets and
  • Australian trade and investment in Crimea.

The expanded sanctions will be implemented through amendments to the Autonomous Sanctions Regulations 2011 (Cth), and in coordination with the U.S., Canada and Europe.

The Australian Government has also imposed targeted financial sanctions and travel bans on an additional 63 Russian and Ukrainian individuals and 21 entities.

More information on Australia's sanctions against Russia can be found here 

UK: Corporate criminal liability for economic crime by associates under consideration by government

​The Attorney General for England and Wales, Jeremy Wright, confirmed in a speech at the Cambridge Symposium on Economic Crime on 2 September 2014 that the government is considering introducing a general corporate offence of failure to prevent economic crime, modelled on the "corporate offence" introduced by section 7 of the Bribery Act 2010. Currently, the prosecution of large corporate bodies for such offences remains difficult, given the need to prove that the "controlling mind" of the company knew of the unlawful conduct. This means demonstrating that directors or senior officers were involved in the illegality, when in practice it is usually managers much further down the chain who were responsible. Proposals to extend the ambit of section 7 BA to make companies criminally liable for failure to prevent acts of financial crime by associated persons rather than just bribery offences, are supported by David Green, director of the SFO. Speaking at the same symposium, Mr Green commented that such an extension "would significantly increase [the SFO's] reach on corporate criminality, and is an idea that appears to be gaining traction".

The Attorney General confirmed the UK government will "shortly" publish its first ever anti-corruption plan. The issue is a priority for the government, he said, since the City's position as a global financial and business centre means that the Government has a responsibility to tackle economic crime and corruption. Mr Wright highlighted the Libor rigging scandal as an example of how economic crime, while often seen as "victimless" (as the losses are borne by corporates or institutional investors), actually has an effect on the public in general, through the reduction in the value of investments and pension funds, or the increase in the prices people pay for goods. "The evolving nature of economic crime means we need to continue to find and develop new ways to expose and combat it," Mr Wright said. 

UK: Extractive industries to report on payments to governments from 2015

The Department for Business, Innovation and Skills has published a response to its consultation on new reporting requirements for extractive industries, plus a revised set of regulations. The Reports on Payments to Governments Regulations 2014 will implement the requirement in the Accounting Directive (Directive 2013/34/EU) for large undertakings and public interest entities that operate in the mining and logging of primary forestry industries to disclose the payments they make to governments on a by country, by project and by payment type basis.

Subject to approval by Parliament, the regulations will require disclosures for financial years commencing on or after 1 January 2015, one year earlier than required by the Directive. The new provisions have been seen as potentially clamping down on corrupt conduct by large companies operating in these sectors and have already proved controversial.

The BIS response statement can be found here and the impact assessment here. The draft regulations can be found here.