One Planet Development in Wales: A Sustainable Future?

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Written by Rachel Kelway-Lewis, LLM and member of the Environmental Law and Sustainability Research Group

The Institute of Public Policy Research[1] of UK has urged that ‘the historical disregard of environmental considerations in most areas of policy has been a catastrophic mistake’[2] which suggests that policy, in many instances, is failing to protect the environment. Thus, as international obligations prioritises the need for policy to promote sustainability[3] it seems necessary to begin analysing the policies which claim to do so.

One Planet Development

The Welsh Assembly Government has created the One Planet Development policy[4] (hereafter referred to as OPD) with the objective of adhering to global sustainable development targets. The OPD policy aims to encourage individuals, families and co-operatives alike to create residential developments that are either low impact, or do not significantly degrade the environment.[5] Such developments are required to meet 65% of the residents’ basic needs from the land within the first five years, including income, energy and food. The mere creation of such a policy could be deemed an achievement, however in practice, the policy appears to be facing some challenges.

OPD Challenges

The flow chart below identifies the key concerns challenging the policy’s implementation, and classifies the concerns as legal, non-legal, and procedural. The flow chart visualises the issues, the result of the issues and, the underlying constraint.

It is evident that the content of OPD policy[6] has the potential to intrinsically meet all three pillars of sustainable development (i.e., economic, social and environmental), however implementation related challenges may be restricting this. Research suggests that there is a resource deficiency within local planning authorities which is affecting the policy’s implementation from planning applications to monitoring OPD settlements’ progress. Thus, the policy cannot be successful without additional resources or a change in the policy’s specifications.[7] Despite efforts to support participants through the application process[8] as well as training being offered to planning authorities specifically for OPD developments,[9] there remains a gap which has not been addressed. Demands upon local planning authorities are likely to grow and exceed their capacity.[10] Furthermore, without addressing the challenges, the OPD is unlikely to achieve its’ objectives thus, will not promote the aims of ‘One Wales: One Planet’.[11]

Moving forward

The following reforms have been suggested to ensure that the solutions are feasible, ranging from providing mandatory online training to reducing the reporting obligations of established OPDs. Whilst these reforms are focused upon accessible improvements to the OPD policy, long-term reform is essential.

  • Community land trust

The Calon Cymru report identified the challenges associated with funding and finding suitable land due to increased prices.[12] Thus, the short-term reform suggestion to promote community land trusts is based upon a successful case in London[13] and more recently, the prospective plan to establish the first Welsh community land trusts in Solva, Pembrokeshire.[14] Furthermore, by creating community land trusts partnerships with housing associations such as Ateb[15] and ceiling prices on land for such projects, funds and prices could be more accessible. Such reform could benefit the community, promote UN Sustainable Development Goals 11,[16] the Well-being of Future Generations (Wales) Act[17] and the ‘Improving lives and Communities, homes in Wales’ scheme[18] throughout Wales. 

  • Public Transport

The long-term regional reform of improving public transport links within rural Wales could result in additional suitable land being accessible for such projects. Such improvements could also support many of Wales’ objectives at all levels, from the Well-being of Future Generations (Wales) Act[19] to the Paris Agreement[20] and UN Sustainable Development Goals 11.2.[21]

  • Low carbon building

Nationally, more must be done to promote accessible, low-carbon building. This could be achieved by mainstreaming environmentally conscious building methods and utilising training programmes to educate trades people. Furthermore, the establishment of ‘green mortgage’ can promote and incentivise low-carbon building for the public as seen in the Netherlands.[22]

Concluding comments

The fundamental constraint identified is a lack of resources, the impact of which is significant. Challenges associated with the resource deficiency range from inconsistent implementation[23] to failures of OPD settlements to submit reports.[24] The policy will require additional funding to meet its objectives, however in the short-term practical solutions could elevate the strain. Such reforms have been discussed to ensure that the solutions are feasible. Whilst the suggestions are focused upon accessible improvements to the OPD policy, long-term reform is essential specifically with regards to the resource deficiency.

This article is a brief summary of a document titled ‘One Planet Development: a sustainable future? A critical analysis of whether the One Planet Development Policy promotes the United Nations Sustainable Development Goal 11 (Sustainable communities)’ which has been published by Lammas.


[1] Institute for public policy research, ‘This is a crisis facing up to the age of environmental breakdown’, Institute for Public Policy Research, February 2019, available at: https://www.ippr.org/files/2019-02/risk-and-environment-feb19.pdf

[2] Ibid.

[3] United Nations, The Millennium Development Goals Report 2012 (New York, 2012).

[4] Welsh Assembly Government, ‘Technical Advice note 6’ (Planning for sustainable rural communities, July 2010), available at: https://gov.wales/docs/desh/policy/100722tan6en.pdf

[5] Ibid.

[6] Ibid.

[7] Ibid.

[8] One Planet Council, ‘The One Planet Council’ (Supporting One Planet Developments, no-date), available at: http://www.oneplanetcouncil.org.uk/about-the-one-planet-council/

[9] Welsh Assembly Government, ‘Technical Advice note 6’ (Planning for sustainable rural communities, July 2010), available at: https://gov.wales/docs/desh/policy/100722tan6en.pdf

[10] BBC, ‘Put a stop to eco-homes being built, says councillor’, BBC news, 29 April 2019. Available at: https://www.bbc.co.uk/news/uk-wales-48084556

[11] Welsh Assembly Government, ‘The Sustainable Development Scheme of the Welsh Assembly Government’ (One Wales: One Planet, May 2009), available at: http://www.wales.nhs.uk/sitesplus/documents/829/One%20Wales-%20One%20Planet%20%282009%29.pdf

[12] Calon Cymru Network, ‘Feasibility of a resilient neighbourhood at Llandovery’ (Affordable Homes and Sustainable Livelihoods in Rural Wales, 2017), available at: http://www.caloncymru.org/uploads/1/4/9/3/14932334/affordablehomessustainablelivelihoodsruralwales.pdf  

[13] Emma Howard, ‘ Could community land trusts offer a solution to the UK’s housing crisis?’ (The Guardian, 25 June 2014), available at: https://www.theguardian.com/society/2014/jun/25/community-land-trusts-uk-housing-crisis-east-london-mile-end

[14] Becky Hotchin, ‘Solva Community Land Trust wins Pembrokeshire County Council second home council tax grant’, The Western Telegraph, 10th October 2020.

[15] Ibid.

[16] United Nations, Transforming our world: The 2030 agenda for sustainable development (New York, 2015) No. A/RES/7011.

[17] Well-being of Future Generations (Wales) Act 2015, available at: https://www.futuregenerations.wales/about-us/future-generations-act/

[18] Gov.wales, ‘Homes in Wales’ (Improving Lives and Communities, 2010), available at: https://gweddill.gov.wales/docs/desh/publications/100421housingstrategyen.pdf  

[19] Well-being of Future Generations (Wales) Act 2015, available at: https://www.futuregenerations.wales/about-us/future-generations-act/

[20] The Paris Agreement (2015), available at: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

[21] United Nations, SDG 11: Make cities inclusive, safe, resilient and sustainable, available at: https://www.un.org/sustainabledevelopment/cities/

[22] UK Committee on Climate Change, ‘UK housing: Fit for the future?’ (2019), available at: https://www.theccc.org.uk/publication/uk-housing-fit-for-the-future/

[23] Louise Kulbicki, ‘Does Welsh National Planning Policy effectively address Low Impact Development in the open countryside?’ (2011) 6. Available at: http://lammas.org.uk/wp-content/uploads/2013/03/Does_Welsh_National_Planning_Policy_effectively_address_Low_Impact_Development_in_the_open_countryside_Louise_Kulbicki_2011.pdf

[24] BBC, ‘Put a stop to eco-homes being built, says councillor’, BBC news, 29 April 2019. Available at: https://www.bbc.co.uk/news/uk-wales-48084556

Rights redacted – a global view

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By Ezinwa Awogu – BA philosophy graduate, current GDL Law student at UWE Bristol and aspiring solicitor 

With the UK’s announcement of approval for the Pfizer vaccine, a cautious sense of hope and optimism has been restored as the public dares to envision an end to a year rife with uncertainty and confusion. However, as technology and science leap forward in their red capes as the saviours of the day, democracy around the globe takes several staggering steps back. A combination of draconian restriction implementation, global confusion, economic downfall and, widespread fear, has created the perfect storm for abuse of power and democratic regress to take place throughout the world. Under the thick cover of chaos, oppressive legislation and disgraceful abuses of power have been able to take place largely un-reported. Due to the unrelenting dominance that COVID-19 has wielded over the news headlines this year, regressions and oppressions have been able to thrive, unchallenged by the usual scrutiny of the public eye.

According to this year’s annual global report on political rights and civil liberties from Freedom House, democracy has worsened in 80 countries so far. Particular areas of decline seem to be freedom of speech, democratic elections (especially in countries declaring a state of emergency), and freedom of religious practice. Whilst true that a lot of false and misleading information was spread about COVID-19 and how to treat it, some governments have used the excuse of limiting inaccurate information to go above and beyond to restrict journalistic rights and push political agendas by silencing anti-government voices. Democratic elections have been postponed or discarded altogether and government opposition parties have been systematically attacked under the excuse of the pandemic.

Earlier this year in Algeria, legislation aimed to reduce media and curtail freedom of expression were reportedly passed with ‘minimal discussion mechanisms’ in parliament. Further to this, the sentencing of three government critics took place in May due to their choice of social media activity. Amongst these was Yacine Mebarki, a pivotal member of the Hirak anti-government protest movement, arrested on September 30th and sentenced to 10 years in prison. An expression of concern has been published by Reporters Without Borders, over the zealous tightening on freedoms of expression in Algeria. However, no change seems imminent, as currently the scheduled Algerian 2020 constitutional referendum has been announced as ‘no longer a priority’ by President Tebboune.

Similarly, according to published interior ministry statements from Turkey, on the 25th of March over 400 people were arrested under charges of ‘provocative’ social media posts concerning the virus. A report by Human Rights Watch four months later in late July displayed evidence suggesting Turkish police involvement in torture and ill-treatment of citizens. In terms of parliamentary democracy, the revocation of status was implemented for three deputies in the opposition party on the 4th of June. All three were then arrested the very next day. Electoral law reformations that may prevent future opposition parties from entering parliament at all are currently under discussion. Should this move forward, it would mean that without opposition in parliament, the government (and legislature passed by the government) goes unchecked and unchallenged, thus, an already fragile democracy suffers another critical blow.

In Hong Kong, The pandemic has been sighted as justification to delay elections by a year, however, this decision is widely viewed as an attempt by Beijing to buy more time to solidify the eradication of certain remaining freedoms and autonomies. In Sri Lanka, the arrest of critics of the official government line of the pandemic has been authorized by Prime Minister Mahinda Rajapaksa. In Nigeria since the start of restriction implementation and curfews, up to 18 people have been killed in the hands of security forces reportedly enforcing COVID-19 restrictions with minimal reported penalties against the individual offending security officers. Meanwhile, the Nigerian democratic by-elections for the senatorial districts in Bayelsa state, Imo state, and Plateau state have been indefinitely postponed with no new date announced. In the USA, although the scheduled presidential elections have taken place, the incumbent Trump administration consistently and embarrassingly attempts to discredit the result of the democratic election in an attempt to cling to a fading political spotlight.

In Russia, a combination of laws implementing drastic penalties on individuals and media organizations who spread ‘knowingly false information’ was approved by President Vladimir Putin, on top of the already existing prohibition of ‘false information’. In practice, however, it would seem that said ‘false information’ happens to include anything that may highlight failings and present criticisms of the government’s handling of COVID-19. Most worryingly, this year’s referendum – originally set for April but rescheduled for the 1st of July – was approved by a 77% majority and includes provision amendments allowing President Putin to remain in power until 2036.

Restrictions on freedom of religion have been more evident this year with instances of faith-based discrimination and religious targeting in Pakistan, Sri Lanka, Serbia, and India. In Pakistan COVID -19 has been renamed ‘the Shia virus’ and there have been reports of Christians forced to recite the kalima in order to access help and aid. Hindu communities in Lyari have been rejected from receiving essential rations and Muslims in India have been labelled as “super spreaders” in a bid to use the pandemic as a weapon of religious prosecution.

This is of course simply a snapshot exposing only a fraction of the hidden pandemic of global rights redaction taking place. Fragile democratic advancements – some of which took over a decade or longer to instil – have been swiftly and devastatingly destroyed by opportunistic governments all over the world, using the tragedy of this year as an advantageous edge in disgraceful power-play dynamics. Meanwhile, citizens are stripped of hard-fought rights and left more vulnerable than ever before. As an end to COVID-19 seems to become more of a reality, we must not forget that for many around the globe, things will certainly not return to ‘business as usual’. Perhaps, with the potential of COVID-19 soon no longer dominating the media platform, the scrutiny of the public eye can return to where it is desperately needed most, and assist each of the 80 countries through the steep uphill climb to the restoration of civil liberties and democratic progression.

Useful Reference links

  1. https://freedomhouse.org/report/special-report/2020/democracy-under-lockdown
  2. https://freedomhouse.org/article/new-report-democracy-under-lockdown-impact-covid-19-global-freedom
  3. https://www.idea.int/gsod-indices//#/indices/countries-regions-profile?rsc=%5B770%5D&covid19=1
  4. https://www.economist.com/international/2020/10/17/the-pandemic-has-eroded-democracy-and-respect-for-human-rights
  5. https://www.idea.int/news-media/news/malawi-victory-democracy-after-euphoria-long-hard-work
  6. https://abcnews.go.com/Health/wireStory/turk-evacuated-sweden-coronavirus-treatment-70361281
  7. https://english.alaraby.co.uk/english/news/2020/10/8/algeria-sentences-activist-to-10-years-for-inciting-atheism

What role can the Ramsar Convention play in protecting Lake Urmia in Iran?

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Written by Siavash Ostovar, Doctoral Student and a member of the Environmental Law and Sustainability Research Group

Lake Urmia located in the north-western part of Iran between the two provinces of East-Azerbaijan and West-Azerbaijan was declared a wetland of international importance by the Ramsar Convention on Wetlands of International Importance in 1971 and designated a United Nations Educational, Scientific and Cultural Organization (UNESCO) Biosphere Reserve in 1976. It is also designated as a ‘National Park’ in Iran. The Lake is drying out and it is in its worst condition ever. Over the years, the water level has been declining continuously and there are different reasons causing such degradation.

The direct drivers (i.e., climate change, highway and dam constructions around the Lake, over-exploitation of water) and indirect drivers (i.e., growth of agriculture in the region and inefficient irrigation methods and poor water management) have been considered as the causes of wetlands’ degradation. The shrinking of Lake has also led to detrimental consequences such as climate change in the region, agricultural degradation, threats to human health, migration problems, threats to the tourism industry, threats to flora, fauna and habitats.

Accordingly, my research investigated the effectiveness of the legal regulations of the ecosystem of Lake Urmia. To study the effectiveness of the legal regulation around the Lake Urmia, a complex array of international and national legal provisions which to a large extent converges around the Ramsar Convention were scrutinised. This convention was signed in 1971, in Ramsar City, Iran. The Convention focuses on ‘wetlands’ and how States should ensure their management, conservation and stewardship. Lake Urmia is indeed 722 Km (448 mi) from Ramsar City.[1] The Ramsar Convention is considered the first global agreement to address the conservation and enhancement of wetlands as a particular part of the ecosystem.[2] The Ramsar Convention is the intergovernmental treaty that provides the framework for the conservation and wise use of wetlands and their resources.[3] Since 1975, almost 90% of UN member states, from all the world’s geographic regions, have acceded to become ‘Contracting Parties’.[4] UNESCO is responsible for the adoption of the Ramasar Convention and performs secretariat functions.  

In my research, the drying up of Lake Urmia is used as an example to study the weaknesses of the international and national rules and regulations aiming at protecting the environment in general and wetlands in particular. In highlighting the local effects of such a crisis, the thesis argued that there is an urgent need for global action to preserve such essential environmental assets across the world. We all depend on the natural world for our survival, so every environmental degradation becomes a concern touching us all.

In order to investigate the opportunities and challenges to implement the Ramsar Convention in Iran, my research focused on the following concepts and provisions of the Ramsar Convention:

  • Definition of the wetlands (Articles 1 and 2)
  • Listing approach (Article 2)
  • Exclusive sovereign right (Article 2)
  • Wise use (Article 3)
  • Ecological character of wetlands (Article 3)
  • Information exchange (Article 4)
  • Financial resources (Article 6)
  • NGO participation (Articles 7 and 8)

The thesis showed that a successful plan for conservation and sustainable use of Lake Urmia and their resources and for the benefit of present and future generations needs a rigorous study of the current condition of the Lake in combination with an in-depth analysis of their feasibility concerning existing legal, political, administrative constraints. Hence, in Iran, it is crucial to regularly review the national laws on/related to wetlands management, share information between involved legal bodies, designate a competent body to wetlands management, and ensure political support for effective national laws and policies on wetlands.


[1] Behrah , ‘ Ramsar route to Urmia’ ( Behrah ) < http://behrah.com/direction.php?sid=473&did=28>

[2] Sands P and Peel J, ‘Principles of International Environmental Law’ (3rd end, Cambridge University Press 2018) 492-493.

[3] Ibid.

[4] Ramsar Secretariat, ‘ About the Ramsar Convention’ ( Ramsar.org 2014) < https://www.ramsar.org/about-the-ramsar-convention>

The contagion of disinformation

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By Ezinwa Awogu – BA philosophy graduate, GDL Law student at UWE Bristol and aspiring solicitor 

More connected than ever, information spreads instantaneously, and amongst that information, none seems to spread quite as viciously as disinformation. To be distinguished from misinformation, disinformation, as defined in 1952 by the great soviet encyclopaedia, is information deliberately designed to spread falsehoods for the deception of the public, usually with an underlining agenda for political, social, or economic gain. Disinformation is often more entertaining, and attention-grabbing than reality, and there it finds its strength over real news. Between the COVID-19 health crisis and the highly influential USA presidential election, we have seen myths, conspiracy theories, and disinformation erupt like wildfires. As the global pandemic has forced increased digitization, a higher rate of IT reliance, and an increased online presence, people are liking, sharing, re-tweeting, and subscribing more and more. The conditions are prime for the contagion of disinformation to spread within the algorithm networks of our social media and news provider outlets.

Battling disinformation in democratic countries is a delicate task, often fraught with debate and controversy. The right of freedom of expression under the common law was incorporated into domestic law in 1998 from the European convention, and the right to freedom of expression (subject to certain formalities, conditions, restrictions, and penalties) was ratified by Article 10 of the Human rights act (1998). Many of these restrictions, however, are intentionally broad and appear to have a high degree of subjectivity making them difficult to apply strictly. This broadness can make it hard to police media content, which on one hand rightly protects freedom of expression but on the other makes it more difficult to identify and combat disinformation. Section 127 of the communications Act (2003) criminalizes the use of an electronic communications network to put out messaging that is ‘grossly offensive or of an indecent, obscene, or menacing character’. However, in practice, enforcement is largely absent, as we all know, offensive and obscene content has flooded electronic communication networks for a long time with few criminal actions brought forward.

COVID-19 conspiracy theories, such as the idea that the virus is part of an elaborate government plan to increase observations and curtail rights, started around January and has culminated in mass no-mask protests with many swearing that the pandemic is fake. Whilst true that the response to the virus has been confusing and unclear on many accounts, the deliberate efforts of some to persist in the spread of conspiracy disinformation works to distract from the reality of the inequalities that the virus had illuminated. Realities such as the disproportionate effect on BAME communities and the worldwide devastating disparities in social welfare and healthcare that the virus has exacerbated are therefore pushed to the wayside with attention-grabbing disinformation headlines taking the spotlight.

The efforts in the summer months by the outgoing Trump administration, amongst other world leaders, to spread disinformation, hailing hydroxychloroquine as a ‘miracle cure’ based on insufficient evidence and inadequate testing, served the political ulterior motive to use hope and optimism as a distraction from criticisms of poor handling of the pandemic. We can see similar attempts to capitalize on the pandemic when we observe the Russian disinformation campaign labelling the Oxford vaccine as the ‘monkey vaccine’ in favour of the Russian vaccine, conspicuously named Sputnik. Most recently, the current saga of electoral fraud claims during the recent USA elections attempts to delegitimize the incoming Biden presidency and stoke the fire for social and political upheaval.

In England and Wales, Law aiding the efficient battle of disinformation is scarce. Ofcom, established under the Communications Act (2003) is a regulatory body set up to enforce certain content standards across TV and radio broadcasting, ensuring accuracy and impartiality, but there is currently no regulatory body set up for social media and online content in the same way, which has become a major source of information communication. There have been proposals to change this, and introduce more regulation and accountability in online platforms, namely in the 2019 Cairncross Review report. Nothing concrete has amounted from this as of yet. Social media outlets have recently been taking it upon themselves, in response to public pressure, to internally implement regulations on the content published on their sights. During the ongoing voter election disinformation campaign, Twitter has been flagging up tweets from outgoing president Donald Trump as misleading. Other popular social media sights such as Facebook and Instagram have displayed instances of some resistance to disinformation, but this has been limited and certainly not widespread enough to effectively battle the contagion of disinformation.

A strong argument can be made in favour of social media giants exercising more of their social responsibility and offering more content regulation. However, constitutional protection of freedom of expression limits the allowance for online content restriction, and admittedly, the more content policing happens, the less freedom is available. Finding the delicate line between personal liberty and public interest is an age-old dilemma that has not appeared to be solved as of yet, so it would seem for the moment that the responsibility lies largely with us the audience. In an age where information is so easily weaponized, it is important to be conscientious consumers with regards to the plethora of information flooding our screens. More than ever, active engagement, independent research, and a degree of critical analysis must be essential activity when choosing which information to accept and which sources to trust. We can no longer afford to be passive recipients of information that may harbor active ulterior agendas.

Useful Reference links

  1. https://www.nytimes.com/2020/11/05/technology/donald-trump-twitter.html
  2. https://www.thetimes.co.uk/article/russians-spread-fake-news-over-oxford-coronavirus-vaccine-2nzpk8vrq
  3. https://www.loc.gov/law/help/social-media-disinformation/uk.php
  4. https://www.bbc.co.uk/bitesize/guides/zyt282p/revision/2
  5. https://www.statnews.com/2020/06/15/fda-revokes-hydroxychloroquine/
  6. https://www.kcl.ac.uk/investigating-the-most-convincing-covid-19-conspiracy-theories
  7. https://www.legislation.gov.uk/ukpga/2003/21/section/127

Is there light at the end of the tunnel?

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Blog by Demelza Hall and Professor Nicholas Ryder

Financial crime is synonymous with the seminal work of Professor Edwin Sutherland who famously and somewhat controversially used the term ‘white collar crime’ in his 1939 presidential lecture to the American Sociological Society.[1] He defined white collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation”.[2] Sutherland concluded that financial crime was committed by “merchant princes and captains of finance and industry” whilst working for a wide range of corporations including those involved in “railways, insurance, munitions, banking, public utilities, stock exchanges, the oil industry [and] real estate”.[3] White collar crime has also been referred to as ‘financial crime’, ‘economic crime’ and ‘illicit finance’.[4] The early interpretation offered by Sutherland has attracted a great deal of debate amongst criminologists and commentators. Some have expressed their support for the definition such as Benson and Simpson,[5] whilst a majority of others have disputed the accuracy of Sutherland’s definition including as Bookman,[6] Podgor,[7] and Freidrichs.[8] Brody and Kiehl concluded that “many scholars continue to redefine and develop a more useful and working definition of the term”.[9]

Whilst commentaries on Sutherland’s definitions have concentrated on crimes committed by individuals who are an employee, representative or agent of a corporation, very few have considered financial crime committed by corporations. Corporations are juridical persons that through the legal process of incorporation are endowed with a legal identity which distinguishes them from its creators. The common law provides that corporations are qualified to breach certain offences under the criminal law largely because of this legal procedure.[10] A number of common law rules have evolved in order to limit disproportionate abuse of power by corporations, including breaches of criminal law.[11] Corporate financial crime has been referred to as a “complex subject on many levels and efforts at strict definitional exactitude rapidly become self-defeating”.[12] The international profile of corporate financial crime has substantially increased during the last past three decades. This is due, in part, to instances of corporate financial crime in the US including ZZZZ Best Cleaners, the Savings and Loans Crisis, the collapse of several large corporations including Enron and WorldCom, the Bernard Madoff Ponzi fraud scheme and the ‘Great Wall Street Rip-Off’. Similarly, the UK has experienced wide scale corporate financial crime including Barlow Clowes International, the Bank of Credit and Commerce International, Barings Bank, market manipulation by financial institutions and money laundering. It is within this context that this blog comments on the approach towards corporate financial crime in the US and UK and suggests a number of reforms.

The United States of America

The evolution of the doctrine of corporate criminal liability by the US judiciary resulted in the Department of Justice (DoJ) initially prosecuting the employees of corporations and they then moved towards targeting prosecuting corporations. However, this approach culminated in a change of policy following the acquittal of Arthur Andersen, which resulted in the DoJ prioritising Deferred Prosecution Agreements (DPAs) as opposed to corporate prosecutions. The appropriateness of DPAs has been questioned in light of the actions of HSBC in December 2012. A DPA is placed on a corporation when it is under investigation for breaching the law for a set period of time, acting as a contractual agreement between that corporation and financial regulatory or government agency. The offending corporation is required to pay a fine, cooperate with the investigating agencies, illustrate good conduct and improve its internal corporate governance procedures.[13]When the offending corporation can demonstrate they have complied with the terms of the DPA, the charges they are under investigation for will be dropped. Whilst DPAs have been used as alternative method to indicting corporations and generated substantial financial penalties,[14] the case of HSBC is a prominent example of why it is an enforcement tool that ultimately lacks impact.

HSBC entered into its first DPA in 2012 for anti-money laundering and sanctions violations, lasting five years. The financial institution also agreed to pay $1.92 billion in financial penalties and improve its compliance procedures.[15] In 2017, the DPA against HSBC expired and all charges were deferred.[16] A main aim of DPAs is to deter corporations from committing further corporate criminal offences but, like many others, HSBC has been a repeat offender. In total HSBC has entered into three DPAs with the DOJ since 2012, the most recent in 2019 for assisting US clients to evade tax.[17] This suggests that for tackling corporate economic crime the use of DPAs as an enforcement tool is inadequate and fails to prevent future wrongdoing by offending corporations. Moreover, for corporations it appears to be no more than a tick box exercise in the normal course of business.

United Kingdom

The enforcement of corporate economic crime in the UK has been limited by the seminal, if rather restrictive decision of the House of Lords in Tesco v Nattrass.[18] Subsequent attempts to tackle corporate economic crime have focused on the introduction of failure to prevent offences under the Bribery Act 2010 and the Criminal Finances Act 2017  In January 2017, the Ministry of Justice published its Call for Evidence on Corporate Economic Crime, in which is sort views on

  • whether the need to prove the involvement of a “directing mind” in corporate offending is hindering the prosecution of companies for wrongdoing
  • alternatives to proving “directing mind” complicity in corporate criminal conduct, including:
  • a US-style ‘vicarious’ liability offence, making companies guilty through the actions of their staff, without the need to prove complicity
  • the failure to prevent model, whereby a company is liable unless it shows it has taken steps to prevent offending
  • the benefits of strengthening regulatory regimes.[19]

After receiving evidence from interested parties and key stakeholder, the Government published its response in November 2020. The government concluded:

“After careful consideration and a further evidence gathering exercise, the government has concluded that the evidence submitted was inconclusive. Further work is required before considering any change to the law and the Government has commissioned an expert review by the Law Commission”.[20]

This response by the government has been described by Susan Hawley, director of campaign group Spotlight on Corruption, as ‘a real danger that…kicks reform into the long grass, and will result in corporate impunity for large banks and companies for several more years.’[21] Further, it demonstrates that the fight to hold corporations to account lacks the political will to make a significant difference and that maybe a more appropriate course of action to take would be holding those who run corporations accountable.

Within the UK, mechanisms are already in place to hold senior individuals within corporations accountable for financial crimes committed to benefit a corporation. In 2016 the Senior Managers Certificate Regime (SMCR) was introduced to the banking sector to deter misconduct and improve culture, governance and accountability. Its overall aim is to ensure those in senior positions have more responsibility and accountability for their conduct, actions and competence. For non-compliance with the SMCR, the FCA will take enforcement actions against senior managers which are effective and proportionate.[22] However, whilst the FCA has issued financial penalties on individuals since the SMCRs introduction, the overall effectiveness and deterrent of the regime has been questioned.

A recent Freedom of Information request from financial regulation consultancy Bovill has revealed that since its inception there have been only 34 investigations with one successful enforcement action.[23] In 2018 the FCA together with the PRA each imposed Staley with a £458,000 financial penalty, which was combined to a total of £642,430 after a 30% discount for early settlement. This followed Staley’s two attempts in 2016 to uncover the identity of an anonymous whistleblower who had raised concerns regarding his hiring strategy.[24] The regulators found Staley had not declared his conflict of interest in the allegations, nor had he sufficiently let compliance take control of the matter.[25] By attempting to unmask a whistleblower Staley was found to have breached Individual Conduct Rule 2 (to act with due skill, care and diligence); however, he was not found to be in breach of Individual Conduct Rule 1 (to act with integrity) and had not lacked the fitness and propriety to continue in his role as CEO.[26] It is praiseworthy that a financial penalty was imposed upon Jes Staley for his actions, but it must be acknowledged that the outcome in this instance seems insufficient considering the seriousness of Staley’s actions and his position held. Further, with only one successful prosecution in four and half years, whilst a step in the right direction to tackle corporate economic crime, a more proactive stance needs to be taken by the FCA to show the SMCR can serve its purpose; an approach that can be adopted from the CMA.

Conclusion

It has now been four years since the then Justice Minister, Dominic Raab, announced the Government’s plans to reform how the UK tackles corporate economic crime. It is rather worrying that successive Governments have continued to delay tackling the problems associated corporate economic crime and it will continue to highlight the success of the Bribery At 2010 and its nine DPAs. The decision to as the Law Commission to investigate proposals for reform on corporate economic crime is to be welcomed. However, the limited action to tackle corporate economic crime in the UK following the association between the 2007/2008 financial crisis and financial crime, the revelations of the Panama Papers, the Paradise Papers and the FinCEN Papers suggest that we are a long way from introducing a new regime for corporate economic crime.


[1] E. Sutherland ‘The White Collar Criminal’ (1940) 5 American Sociological Review 1.

[2] E. Sutherland, White Collar Crime (Dryden: New York, 1949) 9.

[3] See Sutherland, above n. 1 at 2.

[4] For the purpose of this blog we will use the term financial crime.

[5] M. Benson and S. Simpson, S.S. White-Collar Crime: An Opportunity Perspective, (Routledge: New York, 2009).

[6] Z. Bookman ‘Convergences and omissions in reporting corporate and white collar crime’, (2008) 6 DePaul Business & Commercial Law Journal 355.

[7] E. Podgor ‘White collar crime: a letter from the future’ (2007) 5 Ohio State Journal of Criminal Law 247.

[8] D. Freidrichs ‘Wall Street: Crime Never Sleeps’ in S. Will, S. Handelman and D. Brotherton (eds), How they got away with it – white collar criminals and the financial meltdown (Columbia University Press: New York 2013) 9.

[9] R. Brody and K. Kieh ‘From white- collar crime to red-collar crime’ (2010) 17 Journal of Financial Crime 351.

[10] Ministry of Justice Corporate Liability for Economic Crime Call for evidence (Ministry of Justice: London, 2017) at 10.  See generally Salomon v Salomon [1897] A.C. 22.

[11] See generally R. v P&O European Ferries (Dover) Ltd (1991) 93 Cr. App. R. 72, 83.

[12] T. Edwards House of Commons Library Briefing Paper – Corporate Economic Crime: bribery and corruption,  Number 7359, 22 March 2017, at 3.

[13] N Ryder, ‘Too scared to prosecute and too scared to jail? A critical and comparative analysis of enforcement of financial crime legislation against corporations in the USA and the UK’ (2018) The Journal of Criminal Law 1, 6.

[14] See United States Department of Justice, ‘Airbus agrees to pay $3.9 Billion in global penalties to resolve foreign bribery and IATR case’ (United States Department of Justice: 31 January 2020) < https://www.justice.gov/opa/pr/airbus-agrees-pay-over-39-billion-global-penalties-resolve-foreign-bribery-and-itar-case> accessed November 2020.

[15] United States Department of Justice, ‘HSBC Holdings Plc. and HSCB Bank USA N.A> Admit to money laundering sanctions violations, forfeit $1.256bn in Deferred Prosecution Agreement’, 11 December 2012, <https://www.justice.gov/opa/pr/hsbc-holdings-plc-and-hsbc-bank-usa-na-admit-anti-money-laundering-and-sanctions-violations> accessed 16 November 2020.

[16] HSBC, ‘HSBC Holdings plc Expiration of 2012 Deferred Prosecution Agreement’ (HSBC: 11 December 2017) <http:// www.hsbc.com/news-and-insight/media-resources/media-releases/2017/hsbc-holdings-plc-expiration-of-2012-deferred-prosecution-agreement> accessed 16 November 2020.

[17] United States Department of Justice, ‘Justice Department Announced Deferred Prosecution Agreement with HSBC Private Bank (Suisse) SA), (United States Justice Department: 10 December 2019)<https://www.justice.gov/opa/pr/justice-department-announces-deferred-prosecution-agreement-hsbc-private-bank-suisse-sa> accessed 16 November 2020.

[18] Tesco v Nattrass [1971] UKHL 1.

[19] Gov UK, ‘New crackdown on corporate economic crime’ (GovUK: 13 January 2017) <https://www.gov.uk/government/news/new-crackdown-on-corporate-economic-crime> accessed 16 November 2020.

[20] Ministry of Justice, ‘ Corporate liability for economic crime: Call for evidence’ (Ministry of Justice: 3 November 2020) <https://consult.justice.gov.uk/digital-communications/corporate-liability-for-economic-crime/> accessed 16 November 2020.

[21]Spotlight on Corruption, ‘Response to the Law Commission’ (Twitter, 3 November 2020) <https://twitter.com/EndCorruptionUK/status/1323591794509205504> accessed 16 November 2020.

[22] Financial Conduct Authority The Senior Managers and Certification Regime: Guide for insurers (Financial Conduct Authority: February 2019) at 16.

[23] Bovill, ‘Only 34 investigations and one enforcement action after four and a half years of SMCR’ (Bovill: 27 October 2020) <https://www.bovill.com/only-34-investigations-and-one-enforcement-action-after-four-and-a-half-years-of-smcr/> accessed 16 November 2020.

[24] Minter Ellison, ‘First case brought by the FCA and PRA under the SM&CR’ (Lexology, 18 May 2018) <https://www.lexology.com/library/detail.aspx?g=88423b44-c1f8-4acf-94a9-7ec00c56ef0f> accessed 16 November 2020.

[25] Financial Conduct Authority, ‘FCA and PRA jointly fine Mr James Staley £642,430 and announce special requirements regarding whistleblowing systems and controls at Barclays.’ (2018)16 <https://www.fca.org.uk/news/press-releases/fca-and-pra-jointly-fine-mr-james-staley-announce-special-requirements> Accessed 16 November 2020.

[26] See MinsterEllison above, n 24.

Don’t worry if stores aren’t accepting cash…

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You could always suggest Pokémon cards as a form of payment – say the Bank of England – if the store is willing, of course

By Dr Monica Vessio, Associate Lecturer, FBL; Research Associate Centre for Banking Law, University of Johannesburg

Through the ages, money has taken various forms, from feathers, cowrie shells, gold and silver to cash and bank deposits. While most of the money in the UK is held electronically as deposits (96%), a small proportion (4%) is still held in physical form as cash (banknotes and coins). Despite the relatively low percentage of cash compared to bank deposits, cash continues to be important. There are over 70 billion pounds of notes in circulation.

Most recently, and because of the Covid-19 pandemic, many store holders are refusing to accept cash. The immediate question that arises is – but cash is legal tender, so are stores not obliged to accept this form of payment?

According to the Bank of England, a shop owner can choose what form of payment they are prepared to accept. If you want to pay for a pack of gum with a £50 note, it is perfectly legal for them to refuse to accept this payment type. It is, apparently, entirely, a matter of discretion. If your local corner shop decided to only accept payments in Pokémon cards, the Bank of England says that would be within their right to.

Legal tender takes on a narrow technical meaning and means that if you offer to fully pay off a debt to someone in legal tender, they cannot sue you for failing to repay.

As to what is classed as legal tender varies, depending where you are in the UK. In England and Wales, Royal Mint Coins and Bank of England notes are legal tender, while in Scotland and Northern Ireland it is only Royal Mint coins and not banknotes. There are further restrictions when using small coins. For example, 1p and 2p coins only count as legal tender for any amount up to 20p. Cheques, debit cards and contactless are not legal tender. Bank of England notes stop being legal tender, once withdrawn, but don’t worry the Bank of England will give plenty of warning before they retire any notes.

Kiyotaki & Wright (1993) tell us that the most important function of money is probably its role as a medium of exchange. While, Wicksell (1906) explained that a medium of exchange means “an object which is taken in exchange, not on its own account, . . . not to be consumed by the receiver or to be employed in technical production, but to be exchanged for something else within a longer or shorter period of time.” Thus, if you could talk a store into accepting Pokémon cards in exchange for bread and milk or other “essential” items, you would not be paying in legal tender but certainly a legal and valid transaction will have occurred. 

The GMO debate: Is law the answer to effectively regulate GM crops in India?

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This blog is by Subhashree Panda, LLM (Environmental Law and Sustainable Development)

Agriculture, the largest source of livelihoods for India, is plagued by several problems such as small and fragmented land-holdings, use of poor quality seeds, indiscriminate use of biocides causing environmental pollution, areas affected by salinity, alkalinity, water-logging due to lack of irrigation and inadequate storage facilities depriving farmers of their legitimate income.[1]

As a solution to overcome the persistent problem of food insecurity, India is promoting the use of Genetically Modified (GM) crops that offer many opportunities. These opportunities range from promoting sustainable agriculture as they may be able to reduce agriculture’s environmental footprint, reducing the use of pesticides, decreasing carbon-dioxide emissions, conserving soil moisture.[2] However, after the introduction of Bt-cotton in 2002 which is an insect-resistant transgenic crop,[3] there has been a lot of controversy in India surrounding its performance and impact on the environment and biodiversity. According to the critics, GM crops fail to reduce the need for pesticides, and mixtures of varieties being sold to farmers in the name of standardized seeds often result in uneven crop production and low yields.[4] Despite such controversy, several Indian seed companies and public sector research institutions are developing GM crops  (about 85 plant species), mainly for pest resistance, herbicide tolerance, abiotic stress tolerance (e.g. drought, salinity and soil nutrient), nutritional enhancement, and nutritional, medicinal or metabolic phenotypes.[5]

In India, even prior to joining the World Trade Organisation (WTO), the patentability and the scope of protection to be afforded to GM crops have been controversial.[6] Since joining the WTO, India has amended its Patents Act (in 1999, 2002 and 2005) to comply with the obligations set out in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. In addition, intellectual property rights in relation to plant varieties, including transgenic varieties, are the subject matter of protection under the provisions of the Protection of Plant Variety and Farmers Rights Act, 2001. These two laws play a crucial role in regulating the patentability and the use of GM crops in India.

In addition, the Environmental Protection Act 1986, the Food Safety and Standards Act 2006, the Rules for the Manufacture/Use/Import/Export and Storage of Hazardous Micro-organisms, GE organisms or cells 1989, Drugs and Cosmetic Rule 1988, Biological Diversity Act, Plant Quarantine Order 2003 and Directorate General of Foreign Trade Notification relating to inclusion of GM trade policy in foreign trade policy (2006-2009), the Seed Order 1983, the Seed Policy 2002, the Patent Act 1970 are also applicable for activities relating to GM crops in India. However, the Environmental Protection Act, Consumer Protection Act 1986 and Food Safety and Standard Act 2006 lack coherence and fail to apply the precautionary principle.[7] There is a lack of transparency and little or no public involvement in the governance process regarding agriculture and manufacture of GM crops. In addition, labelling and traceability provisions regulating GM crops are weak. For example, the recent draft Food Safety and Standards (Labelling and Display) Regulations 2018 seeks to make labelling of GM food mandatory.[8] However, the criteria for exemption from labelling of food containing GM ingredients remain lax.[9]

India as a powerful developing country has attempted to domesticate global obligations in ways which conform to its domestic priorities.[10] There is no doubt that agricultural biotechnology must give farmers and local community adequate information and a meaningful opportunity to participate in decisions that affect their health, their livelihoods, and their natural resources. It is still possible to promote transparency and include strong labelling and traceability provisions in the 2018 Draft Regulation. Such integration of the precautionary principle in GMO laws will help to strengthen risk assessment procedure and monitoring in the biosafety regime.


[1] Puja Mondal, ’10 Major Agricultural Problems of India And Their Possible Solutions’ (Your Article Library) <http://www.yourarticlelibrary.com/agriculture/10-major-agricultural-problems-of-india-and-their-possible-solutions/20988>

[2] Graham Brookes and Peter Barfoot, ‘Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions (2017) 8 GM Crops & Food 117; David Zilberman, Tim G. Holland and Itai Trilnick, ‘Agricultural GMOs—What We Know and Where Scientists Disagree’ (2018)10 Sustainability 1514.

[3] K.S Jayaraman, ‘India Investigates Bt Cotton Claims’ (Nature, 2012) <https://www.nature.com/news/india-investigates-bt-cotton-claims-1.10015>.

[4] Suman Sahai, ‘What Is Wrong with Bt Cotton’ (Iatp.org)

<https://www.iatp.org/sites/default/files/What_Is_Wrong_With_Bt_Cotton.htm>

[5] ‘Agricultural Biotechnology Annual’ (Gain.fas.usda.gov,2017)

<https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Agricultural%20Biotechnology%20Annual_New%20Delhi_India_11-28-2017.pdf>

[6] Rajdeep Banerjee and Joyeeta Banerjee, ‘The Future of Genetically Modified Crops in India | Forbes India Blog’ (Forbes India, 2018) <http://www.forbesindia.com/blog/economy-policy/the-future-of-genetically-modified-crops-in-india/>

[7] K. K. Tripathi, ‘Genetically Modified Organisms: Concerns and biosafety issues’ (2002)15 The national medical journal of India 187.

[8] ‘FSSAI Drafts New Labelling and Display Regulations 2018 – Food Safety Helpline’ (Food Safety Helpline, 2018) <https://foodsafetyhelpline.com/2018/04/fssai-drafts-new-labelling-and-display-regulations-2018/>

[9] A. S. Bawa and K. R. Anilakumar, ‘Genetically modified foods: safety, risks and public concerns-a review’ (2013)50 Journal of Food Science and Technology 1035.

[10] Peter Newell, ‘Lost in Translation? Domesticating Global Policy on Genetically Modified Organisms: Comparing India and China’ (2008) 22 Global Society 115.

Twitter Bitcoin Scam

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By Henry Hillman, Lecturer in Law at UWE Bristol.

On 15 July 2020, numerous high profile Twitter users’ accounts were hijacked to display messages promising to return double the Bitcoin sent to a published Bitcoin address. Compromised accounts included Barack Obama, Elon Musk, and Kim Kardashian,[1] as well as accounts linked to high profile cryptocurrency service providers such as Coindesk and Binance.[2] The nature of the compromised accounts meant that the incident very quickly became headline news, and Twitter acknowledged the issue publicly through its CEO[3] and support pages.[4] Needless to say, nobody who sent the Bitcoins to the scam address received any Bitcoins in return. Responsibility for the attack has been claimed by ‘Cryptoforhealth’ which was registered on Instagram at the same time as the scam tweets. The account posted a statement claiming the attack was for charity and that the “money will find its way to the right place.”[5]

As further details have emerged, Twitter has revealed that 130 accounts were targeted, 45 had their passwords reset, and the account information for 8 accounts was downloaded.[6] While the identities of the compromised accounts is clear from the accounts the scam address was tweeted from, it is not known whose data has been downloaded. Twitter has stated that no ‘verified’ accounts have had their data downloaded, meaning no account with the blue tick, assigned to high profile assure the account is genuine,[7] and, understandably, Twitter will not reveal any further details on who has had their data downloaded.

The claims purporting the charitable nature of the attack cannot be corroborated, and the real identity of the perpetrators is still not known. The ‘CryptoForHealth.com’ domain name was created on 15 July,[8] the same day of the scam tweets, using a fake address and phone number.[9]  The name ‘Anthony Elias’ was used to register the website, but no genuine identity can be traced.[10]

How?

The exact methods employed by the perpetrators of the scam will likely never be known, as it is not likely an organisation would want to provide the details of how to breach its security, for fear of similar attacks. Twitter has been relatively open in recognising the security breach so quickly, and providing a public update on 18 July 2020 stating that “attackers targeted certain Twitter employees through a social engineering scheme.”[11] Social engineering is a broad term, which refers to obtaining sensitive information from an individual or group of people in possession of the information, or with access to it.[12] This could be as simple as phishing, or more complex by duping an individual using other relevant information to gain trust. Twitter state that the “attackers successfully manipulated a small number of employees and used their credentials to access Twitter’s internal systems,”[13] in order to post tweets from high profile accounts. Given the number of affected accounts, and the complexity of two-factor authentication,[14] it is likely to have been a complex operation, but it cannot be ruled out that the perpetrators were the benefactors of a slice of good fortune in obtaining their ‘all access pass’ to twitter accounts.

Analysis

While such a scam has not made headline news before, the nature of it has many similarities to previous scams, both in Bitcoin and wider internet scams. There are issues with the term hacking, the simplicity of the scam proposition, and the behaviour of the Bitcoin address in the scam being similar to that of ransomware attacks, such as Wannacry.

While a technical point, it should be acknowledged that this is not a hack, Twitter’s security infrastructure was not breached due to a weakness exploited by the attackers. The reason the attackers were able to post tweets from compromised accounts was due to human error, if Twitter’s statements are to be believed.

The scam was a very simple one, which relied upon the fame of the account holders, and the influence they may have on their followers, to provide veracity to the address and encourage victims to send Bitcoins. If the aim was to make money then the tactics used once the attackers had access appear unsophisticated. The premise should not cause many to believe they will get their sent Bitcoins doubled, and only 12.8652 Bitcoins were sent to the address, equating to around £94,000 based on the value of Bitcoin around the time of the attack. The simplicity of the tweets may be why only 44 incoming transactions can be seen for the Bitcoin address published.[15] The second way in which the attack was crude was in the victim twitter accounts chosen, and the tweets being posted in short order. By selecting high profile victims, and tweeting from all of their accounts on the same day, the attackers were always going to be detected quickly. The attackers would have been naïve in the extreme not to realise their attack would be detected very quickly, this has led to the attack being described as a “smash and grab” exercise.[16] The crudeness of the tactics suggest acquiring Bitcoins could have been a secondary aim for the attack, with publicity being the main goal.

The behaviour of the Bitcoin address published in the tweets follows a predictable path. The Bitcoins received were not kept in the address for very long, quickly being moved to various addresses, which in turn moved the Bitcoins on again. With patience the Bitcoins can be traced, as distributed ledger technology means all transactions are published on the blockchain, but the owners of the addresses remain unknown. These practices are similar to those employed by ransomware attackers once the ransoms are paid to their respective addresses. The biggest weakness from publishing a criminal Bitcoin address is that investigators have a starting point from which to follow transactions. This issue can be addressed by using ‘mixer’ services. These services allow users to disguise which addresses Bitcoins are being sent to by completing the transaction as part of a group of transactions. Bitcoin transactions can have numerous input address and numerous output addresses, a mixer service will gather large numbers of inputs and send them all in one transaction to the outputs, but it will not be possible for investigators to know which senders correlate to which recipients.

Conclusions

This incident will fade out of the public consciousness very quickly, and it is unlikely the full details of how the attack was conducted will ever be made public. It is also unlikely that any Bitcoins sent to the scam address will be retrieved, and equally unlikely that the attack was a charitable one. For investigators, it provides an opportunity to view the behaviour of the attackers and it also serves as a very public lesson in basic financial intelligence; do not send your money to random locations on the internet, and if a deal sounds too good to be true, in invariably is.


[1] BBC News, ‘Major US Twitter accounts hacked in Bitcoin scam’ (16 July 2020) <https://www.bbc.co.uk/news/technology-53425822> accessed 20 July 2020.

[2] Cameron Winklevoss, ‘Twitter Status’ (Twitter, 21:18 BST 15 July 2020) <https://twitter.com/winklevoss/status/1283493640287989760?s=20> accessed 20 July 2020.

[3] Jack Dorsey, ‘Thread’ (Twitter, 02:18 BST 16 July 2020) <https://twitter.com/jack/status/1283571658339397632?s=20> accessed 20 July 2020.

[4] Twitter Support, ‘Thread’ (22:45 15 July 2020) <https://twitter.com/TwitterSupport/status/1283518038445223936?s=20> accessed 20 July 2020.

[5] BBC News, ‘Twitter hack: FBI investigates major Twitter attack’ (17 July 2020) <https://www.bbc.co.uk/news/technology-53439585> accessed 21 July 2020.

[6] Twitter, ‘An update on our security incident’ (18 July 2020) <https://blog.twitter.com/en_us/topics/company/2020/an-update-on-our-security-incident.html> accessed 20 July 2020.

[7] Twitter, ‘About verified accounts’ <https://help.twitter.com/en/managing-your-account/about-twitter-verified-accounts> accessed 20 July 2020.

[8] Whois Domain Tools, ‘Whois Record for CryptoForHealth.com’ (created 15 July 2020, last updated 21 July 2020) <https://whois.domaintools.com/cryptoforhealth.com> accessed 21 July 2020.

[9] Samuel Haig, ‘Who Owns the ‘CryptoForHealth’ Domain Behind the Twitter Hacks?’ (CoinTelegraph, 16 July 2020) <https://cointelegraph.com/news/who-owns-the-cryptoforhealth-domain-behind-the-twitter-hacks> accessed 21 July 2020

[10] BBC News, ‘Twitter hack: FBI investigates major Twitter attack’ (17 July 2020) <https://www.bbc.co.uk/news/technology-53439585> accessed 21 July 2020.

[11] Twitter, ‘An update on our security incident’ (18 July 2020) <https://blog.twitter.com/en_us/topics/company/2020/an-update-on-our-security-incident.html> accessed 20 July 2020.

[12] F. Mouton, L. Leenen, and H.S. Venter, ‘Social engineering attack examples, templates and scenarios’ (2016) 59 Computers & Security 186 at p187.

[13] Twitter, ‘An update on our security incident’ (18 July 2020) <https://blog.twitter.com/en_us/topics/company/2020/an-update-on-our-security-incident.html> accessed 20 July 2020.

[14] Twitter, ‘How to use two-factor authentication’ <https://help.twitter.com/en/managing-your-account/two-factor-authentication> accessed 20 July 2020.

[15] BitInfoCharts, ‘Bitcoin Address bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh’  <https://bitinfocharts.com/bitcoin/address/bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh> accessed 21 July 2020.

[16] Joe Tidy, ‘Major US Twitter accounts hacked in Bitcoin scam’ (BBC News, 16July 2020) <https://www.bbc.co.uk/news/technology-53425822> accessed 21 July 2020.

Surprised? You shouldn’t be.

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By Professor Nicholas Ryder, Head of Research, Global Crime, Justice and Security Research Group

In its 2018 Mutual Evaluation Report (MER) of the United Kingdom’s (UK) level of compliance with its Recommendations, the Financial Action Task Force (FATF) concluded that the UK’s anti-money laundering and counter-terrorism financing regimes were “effective”. In order to implement the FATF Recommendations and achieve this unprecedented endorsement, the UK has adopted an aggressive and, at times, holistic strategy towards tackling financial crime. For example, the UK Government has published two National Risk Assessments (NRA), one in 2015 and the second in 2017. These were followed by the publication of the Economic Crime Plan, which outlined seven strategic priorities and 52 action points. Collectively, these measures have gone some way to address the shortfalls identified in the FATF 2007-2008 MER and they have contributed towards the highest rating ever provided by the FATF. 

In particular, the MER praised the aggressive stance towards investigating and prosecuting money laundering cases, the adoption of Unexplained Wealth Orders, how the UK disrupts terrorism financing, preventing the misuse of companies and trusts and how it works with its international partners. John Glen, Economic Secretary to the Treasury and City Minister said, “I am incredibly proud that today’s report confirms that the UK has one of the strongest regimes in the world for deterring these criminals”. Ben Wallace, Minister for Security and Economic Crime said, “I’m delighted with today’s report which shows our efforts are being recognised, and sends a strong message to criminals that we will come for them, their assets and their money”. However, the Royal United Services Institute (RUSI) stated that “in PR terms at least, the government’s efforts [to tackle financial crime] seem to have paid off, with the UK receiving the highest aggregate scorings under the revised FATF evaluation methodology to date”.  RUSI added that “the UK has achieved top-of-the-class marks from the FATF – government officials will be both surprised and relieved.  However, the fact that the UK remains central to global money laundering schemes brings into question the relevance of this evaluation”. 

These sixth leaked published by the ICIJ since 2012/2013 (Offshore leaks; Luxembourg, Swiss, Panama Papers and the Paradise Papers), alleges that HSBC, JP Morgan, Barclays, Deutsche Bank and Standard Chartered were involved in a variety of related transactions. The FinCEN leaked reports suggest several of the world’s largest banks allowed criminals to move approximately $2tn via illegal financial transactions. The report also suggests that the UK is a ‘higher risk jurisdiction’ and compared to Cyprus. This is due to the number of UK registered companies (over 3,000 according to the BBC) that appears in the suspicious activity reports submitted to FinCEN. If the leaked reports are accurate, they represent a significant blow to the UK’s efforts to tackle financial crime, especially since the ‘glowing’ end of term report from the FATF. The leaked report tells us that despite the rhetoric from the UK government that very little has changed in how the global financial operates.

In the short-term, ‘profound apologies’ will follow, there will be condemnation, the accused financial institutions will receive the customary bad media coverage and share prices will be affected. Financial regulatory agencies will insist that the financial sector improves its levels of compliance, and fines could follow. Prosecutions? Unlikely if previous efforts are anything to go by. In the long term, nothing will change, it never changes.

Insights from the UK’s Implementation of Key Anti-Money Laundering Obligations

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Blog written by Samantha Bourton, Lecturer in Law at UWE Bristol.

Photo: Samantha Bourton

Money laundering refers to the process used by criminals to conceal or disguise the profits of their illegal activities and is known to have devastating effects on society, national security, the economy and the integrity of financial institutions. This is because money laundering potentially enables criminals, such as drug traffickers, terrorists, and tax evaders, to remain undetected and to channel their profits into further illegal activities. The United Nations Office on Drugs and Crime estimates that 2-5% of global GDP is laundered each year, while the National Crime Agency estimates that hundreds of billions of pounds are laundered annually in the UK alone. Accordingly, an international legal framework has been developed to combat this financial crime, with almost all countries globally committed to implementing the Financial Action Task Force (FATF) Recommendations on Combatting Money Laundering and the Financing of Terrorism.

The EU has implemented the Recommendations via a series of directives and has introduced its own measures to combat money laundering in the wake of the Panama Papers and recent terrorist attacks in Europe. One of the main innovations of the EU directives is the requirement for Member States to set up registers of the beneficial owners of legal entities and trusts. The fifth EU anti-money laundering Directive requires the information contained in the register of legal entities to be available to the public, while the register of trusts should be available to law enforcement authorities and those who can demonstrate a legitimate interest in the information. The aim of such registers is to reveal the identities of those who use companies to launder money and carry out illegal activities.

On Friday 29th November, I delivered a paper titled ‘Insights from the United Kingdom’s Implementation of Key Anti-Money Laundering Obligations’ at the CFE Tax Advisers 12th European Conference on the Tax Advisers’ Professional Affairs in Paris. The Conference aimed to examine the impact of the fifth European Union (EU) Anti-Money Laundering Directive, which Member States were required to transpose by the 10th January 2020. The speakers included representatives from the CFE, OECD, and the BASEL Institute on Governance, as well as legal practitioners and academics from several Member States.

My paper examined the UK’s implementation of some of the key obligations contained in the 4th and 5th EU Anti-Money Laundering Directives, including the inclusion of tax evasion as a predicate, or underlying, offence to money laundering and the introduction of beneficial ownership registers. The paper focused on the UK as a case study, as these measures were part of its legal framework long before they became an obligation within the EU; tax evasion has been a predicate offence to laundering in the UK since 1993 and the UK established the first publicly accessible beneficial ownership register in the G20, the People with Significant Control (PSC) Register.

The paper highlighted the benefits generated by these developments in the UK. Under the anti-money laundering legal framework, professionals in the regulated sector are required to submit reports, known as suspicious activity reports (SARs), to the National Crime Agency when they know or suspect that a client is engaged in money laundering. With the inclusion of tax evasion as a predicate offence to laundering, in the UK, professionals are required to submit SARs when they know or suspect that their clients are engaged in tax offences. This has led to a significant recovery of revenue, with the intelligence generated by the reports supporting the collection of over £40.2million in tax revenue from civil enquiries in 2018-19. The paper also highlighted research undertaken by the NGO Global Witness on the benefits of the UK’s PSC Register in detecting and preventing criminal activity. For example, Global Witness found that there has been an 80% reduction in the rate of incorporation of Scottish Limited Partnerships (SLPs) since SLPs have been subject to beneficial ownership requirements. SLPs are often associated with financial crime and were used in the Russian and Azerbaijani Laundromats.

However, the paper also cautioned against the implementation of these measures without appropriate resources devoted to their enforcement, or guidance provided on their operation. The information contained in the UK’s PSC register is not currently verified, leading to the inclusion of inaccurate and misleading information. This has caused some law enforcement authorities in the UK to refrain from using the register in investigations, effectively defeating its objective. In addition, the paper identified the difficulties professionals face in complying with the obligation to submit SARs for tax offences in the UK and stressed how these problems are likely to be exacerbated when these obligations are imposed at a European level.

I concluded the paper by recommending that the EU should define tax evasion for the purposes of the EU anti-money laundering directives and should provide further guidance on how Member States should verify the information contained in beneficial ownership registers.