UK Sanctions Update: OFSI Releases Financial Services Threat Assessment – Part 1

In February 2025, the UK’s Office of Financial Sanctions Implementation (“OFSI”) issued a report outlining its assessment of the sanctions-related threats posed to the UK by firms operating in the UK’s financial services sector. As to be expected, the report focuses on the risks associated with transactions since February 24, 2022, when Russia invaded Ukraine and countries around the world, including the UK, responded with an unprecedented expansion of financial sanctions. However, while OFSI acknowledges that compliance with Russia sanctions must remain a priority for UK financial services firms, it simultaneously makes sure to remind firms that they must strictly comply with all UK sanctions, and many of the insights in the OFSI report are of broader relevance to sanctions compliance.

In our two-part article, we first outline the key threats that OFSI identified in its report, and then we set forth the steps that financial services firms can and should take to address those threats when developing or enhancing their sanctions compliance programs.

Friends Now, Foes Later – Written JDAs Are Critical to Protecting Clients in Multidefendant Investigations and Criminal Actions

By Benjamin Glassman and Luke Burton on March 7, 2025 Posted in Courts, Department of Justice, General, Government Investigation, U.S. Securities and Exchange Commission, U.S. Supreme Court, United States

Multi-defendant criminal investigations present a classic prisoner’s dilemma. The parties would benefit from cooperating with one another but are incented to become adversaries, most often due to a lack of information sharing and resultant lack of trust and transparency. Fortunately, the law provides a tool: the common-interest privilege, which enables parties to share information in aid of their common defense while maintaining attorney-client and work-product privileges over the shared information.

Yet even the closest of allies can later turn against one another, leading to a common-interest breakup. What, then, of the information that was shared while the parties were united? And what duties might counsel for one party owe to another because of that sharing?

These questions and others are best addressed at the outset of a common defense via a written joint-defense agreement. Experienced counsel can guide defendants through these issues, thereby maximizing the benefits of a joint defense while minimizing the risks.

DOJ’S False Claims Act Based Civil Cyber-Fraud Initiative in 2024

By Vipal Patel and Karen Harbaugh on February 28, 2025 Posted in Compliance Program, Corporate compliance, Cyberattack, Cybersecurity, Data Protection & Privacy, Data provider, False Claims Act (FCA), General, Government Investigation, United States, US Department of Justice

The start of a new year presents an opportune time to reflect on the past. We have been tracking and reporting on the U.S. Department of Justice (“DOJ”)’s Civil Cyber-Fraud Initiative (“CCF Initiative”), which former U.S. Deputy Attorney General Lisa O. Monaco announced in October 2021. The CCF Initiative employs the powerful False Claims Act (“FCA”) in an effort to “hold accountable entities or individuals that put U.S. information or systems at risk by (1) knowingly providing deficient cybersecurity products or services, (2) knowingly misrepresenting their cybersecurity practices or protocols or (3) knowingly violating obligations to monitor and report cybersecurity incidents and breaches.”

We previously offered insight into the first two FCA enforcement actions brought under this initiative, then a third, and a fourth. 2024 brought even more.

The EU suspends certain Sanctions on Syria to support Economic Stabilization, Political Transition, and Reconstruction

By Richard Gibbon, José María Viñals and Tigran Piruzyan on February 25, 2025 Posted in Economic sanctions, Energy, EU, General, Middle East, Power/Energy, Sanctions, Sanctions, Technology

To encourage democratic development and achieve a peaceful and inclusive political transition, and to aid the swift reconstruction and economic recovery of the country and facilitate its eventual reincorporation into the global financial system, the European Council decided yesterday to suspend with immediate effect a number of sanctions and restrictive measures that had targeted key sectors of the Syrian economy, including its banking, energy, and transport sectors.

In this article, we summarize the suspensions and consider the positive change that they may foreshadow for all Syrians, in the country and diaspora.

Trump Pauses FCPA Enforcement and Resets Priorities

On February 10, 2025, President Donald Trump issued an executive order titled, “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security” (“FCPA EO”) that directs the Department of Justice (“DOJ”) to pause enforcement of the Foreign Corrupt Practices Act (15 U.S.C. 78dd-1 et seq.) (“FCPA”) for 180 days until new Attorney General (“AG”) Pam Bondi issues new FCPA guidelines and policies on enforcement. The FCPA EO seeks to eliminate “excessive barriers to American commerce abroad,” states that current FCPA enforcement has been “stretched beyond proper bounds and abused in a manner that harms the interests of the United States,” and states that “overexpansive and unpredictable FCPA enforcement against American citizens and businesses . . . actively harms American economic competitiveness and, therefore, national security.”

For the uninitiated, the FCPA is a criminal statute enacted in 1977, which the DOJ and U.S. Securities & Exchange Commission (“SEC”) have employed to impose over $31 billion in penalties over the last 48 years, as well as secure scores of criminal convictions. During the Biden Administration alone, the DOJ and SEC imposed total penalties over $4 billion under the FCPA, so the fact that President Trump just stopped the DOJ from enforcing the FCPA with a stroke of a pen was a change in the enforcement landscape to say the least.

Update on the Proposed Amendments to the Foreign Agents Registration Act Regulations

By Clark Ervin on February 11, 2025 Posted in China, Corruption, Department of Justice, General, Government Investigation, Iran, Russia, United States, US Department of Justice

On her very first day in office, Attorney General Pam Bondi issued a sweeping memorandum laying out what the Department of Justice’s (DOJ) enforcement priorities will be going forward under her leadership. It seems that the Foreign Agents Registration Act (FARA) will not be among those priorities, or, at least, the focus of FARA criminal enforcement efforts will be much narrower than it was during not only the Biden Administration but also the first Trump Administration.

UK Sanctions Update: New OFSI Reporting Requirements for High Value Dealers and Art Market Participants

By Richard Gibbon and Katy Fisher on February 11, 2025 Posted in Anti-corruption, Anti-money laundering measures, Compliance Program, Corporate compliance, Corruption, Courts, Economic sanctions, General, Government Investigation, Industry Investigations, Russia, Sanctions, Sanctions, United Kingdom

Late in 2024, the UK’s Office of Financial Sanctions Implementation (“OFSI”), the agency within His Majesty’s Treasury that is charged with the implementation of financial sanctions in the UK, introduced new sanction measures aimed generally at augmenting the operation and enforcement of UK financial sanctions and targeted specifically at High Value Dealers (“HVDs”) and Art Market Participants (“AMPs”).

These new measures come into force in May 2025—just two months from now—making time very much of the essence.

To Disclose or Not to Disclose (and how much) – That is the Question

By Colin Jennings and Lauryn Durham on January 28, 2025 Posted in Compliance Program, Corporate compliance, Courts, Cyberattack, Cybersecurity, Data Protection & Privacy, Department of Justice, General, Government Investigation, U.S. Securities and Exchange Commission

The decision-making process involved in disclosing a cyber incident is a nuanced and delicate dance. Companies need to consider a myriad of factors, including when to disclose and how much detail to disclose to employees, customers, or regulators, such as the Securities and Exchange Commission (“SEC”).

A New York bank was recently forced to pay over $3.5 million to settle allegations that it minimized the extent of a cybersecurity incident in its SEC filings and public notices to customers. According to the SEC, the bank was negligent in making “materially misleading statements” regarding a cybersecurity incident involving the bank’s network between November 22, 2021 and December 25, 2021.

DOGE and a New Senate Caucus May Further Empower Inspectors General

By Clark Ervin on January 22, 2025 Posted in Artificial Intelligence, Department of Justice, General, Government Investigation, Technology, U.S. Congress, United States, US Department of Justice, US Treasury

In the flurry of developments last week in the run-up to the inauguration, it was easy to overlook one that could have significant and positive impact by making government more effective, efficient, and economical.

On January 17, 2025, Senators Joni Ernst (R-IA) and Chuck Grassley (R-IA) announced the launch of a bipartisan Inspector General Caucus. The other members of the caucus are Senators Maggie Hassan (D-NH), Richard Blumenthal (D-CT), Gary Peters (D-MI), and James Lankford (R-OK). Quoting Senator Ernst, “Inspectors General serve a vital role in uncovering waste in Washington and must be empowered to continue looking out for taxpayers.” Quoting Senator Hassan, “Inspectors General play a critical role in rooting out waste, fraud, and abuse within the federal government and the bipartisan Congressional Inspectors General Caucus will help build support for the important work that Inspectors General do.” Quoting a representative of the Inspector General community, Mike Ware, the Chairman of the Council of the Inspectors General on Integrity and Efficiency, “The Federal IG community looks forward to working with the bipartisan IG Caucus and Congressional leaders to enhance efforts to detect and prevent waste, fraud, abuse, improve government efficiency, and deliver for the American public.” Ware, who also serves as the Inspector General of the Small Business Administration and as the Acting Inspector General of the Social Security Administration, noted in a press release that the IG community’s work last year alone identified savings in federal programs of more than $93 billion, suggesting that there are even more savings to be found if IGs are given additional authority and resources to find them.

Time is of the Essence to Implement New ADGM Whistleblower Protection Regulations

By Richard Gibbon, Malak Abbas and Molly McKenna on January 21, 2025 Posted in Anti-corruption, Compliance Program, Corporate compliance, Corruption, General, Middle East, United Arab Emirates, Whistleblowing

In 2024, the Abu Dhabi Global Market (“ADGM”) further enhanced transparency, accountability, and market integrity within the financial freezone by introducing the Whistleblower Protection Regulations 2024 (the “Regulations”). In brief, those Regulations require certain entities registered or licensed to operate or conduct any activity within the ADGM to implement arrangements for handling whistleblowing, including having appropriate written policies and procedures, and to maintain related records for at least six years. The Regulations also afforded the Registrar of the ADGM the power to issue censures, impose financial penalties, or suspend or withdraw licenses for contraventions.

Importantly, ADGM entities have until May 31, 2025—approximately just four more months—to implement those arrangements. The clock is ticking.