Image: Title: SargentiniThe European Union is pressing forward with its overhaul of anti-money laundering rules to clamp down on tax evasion and the financing of terrorism. The Council of the European Union signed off on the 4th Anti-Money Laundering Directive, tightening due diligence and reporting requirements, creating registers of beneficial ownership, and imposing stiff financial penalties. The rules “will provide much greater transparency of the shadowy business structures that are at the heart of money laundering schemes,” EU Parliament member Judith Sargentini said. More inside.
Roberta Holland
Posted inFrom the Archive
Belgium Eyeing Arrest Warrants for HSBC Managers
It hasn’t been an easy week for London-based HSBC. Rocked last weekend by the International Consortium of Investigative Journalists’ Swiss Leaks probe, detailing massive tax evasion by HSBC’s private Swiss bank, HSBC is now faced with the prospect of Belgian authorities issuing arrest warrants for former and current managers of the Swiss unit. Media reports indicate a Belgian judge is frustrated by the lack of cooperation from the firm in relation to charges of fraud and money laundering. Details inside.
Posted inRegulatory Enforcement
European Commission Probing Belgian Tax Scheme for Unlawful State Aid
Image: Title: VestagerThe European Commission is investigating whether Belgium’s “excess profit” rule, which allows certain companies to get deep deductions on taxable profits by claiming economies of scale stemming from being part of a multinational group, is breaking EU competition laws. “If our concerns are confirmed, this generalized scheme would be a serious distortion of competition,” Competition Commissioner Margrethe Vestager said. More inside.
Posted inAnti-Bribery
U.K. Court Orders Trials for Alstom Units in Bribery Case
According to published reports, a Crown Court judge has ordered two jury trials for separate units of French conglomerate Alstom SA and is holding out the possibility of a third trial as the U.K.’s Serious Fraud Office continues its investigation. The Alstom subsidiaries, and four former employees, are accused of disguising bribes as consulting fees to win contracts in Poland, India, Tunisia, and Lithuania. Details inside.
Posted inUncategorized
EU Cracking Down on Abuse of Parent-Subsidiary Rules
Image: The European Union has amended its parent-subsidiary directive to prevent national tax authorities from granting benefits to a corporation if its tax arrangement is determined to be not reflective of the company’s economic reality. Initially intended to prevent parent corporations from being taxed twice on profits made by subsidiaries in other member states, the directive was providing a loophole to avoid taxes. “Fighting tax avoidance by multinationals is a high priority both for the European Union and at the international level,” Latvian Minister of Finance Janis Reirs said. More inside.
Posted inRegulatory Enforcement
U.K. Financial Watchdog Will Keep Sharp Eye on Compliance Lapses
News coming from the United Kingdom’s Financial Conduct Authority indicates the three-year-old regulator is going to enhance its vigilance of bribery and other financial crimes while keeping close tabs on companies’ controls and processes, according to articles in the Financial Times and FCPA Blog. The FCPA Blog noted that the FCA has taken a much more assertive posture in monitoring compliance. Authors Caroline Black and Anneka Randhawa advise the thousands of firms regulated by the agency to take steps now to ensure systems are up to par before any potential run-in with the regulator. Details inside.
Posted inRegulatory Enforcement
U.K. Regulator Places Corporate Culture at Heart of Compliance
Image: Title: BischoffWith the recent release of an annual report detailing compliance gains, the head of Britain’s Financial Reporting Council called on boards to tackle the complex issue of corporate culture to ensure ethical corporate behavior. FRC Chairman Sir Winfried Bischoff said his agency this year will delve into how effective companies have established and embedded a strong corporate culture to promote best practices. “Strict adherence to the principles and provisions of the [corporate governance] code is not, on its own, necessarily an indication that company culture is completely healthy,” Bischoff wrote in an opinion piece. Details inside.
Posted inRisk Management
Survey: Cyber-Threats a Growing Concern for European Risk Managers
Image: Title: HirsWhile traditional risks due to business interruption and the supply chain remain risk managers’ top concern, cyber-risks are moving up the list, particularly in some European countries. Allianz SE’s Risk Barometer 2015 showed cyber-risks cracked the top five concerns globally for the first time, up from 8th last year, and they rose into the top three for Germany, Austria, and the United Kingdom. “The growing interdependency of many industries and processes means businesses are now exposed to an increasing number of disruptive scenarios … Risk management must reflect this new reality,” Allianz CEO Chris Fischer Hirs said. More inside.
Posted inUncategorized
EU Bankers Bristle Against ‘Unjustified’ Proposed Structural Changes
Image: Jan. 14—Bankers in the European Union have received support for their continued opposition to the European Commission’s bid to mandate structural changes to the bloc’s biggest banks. The proposal would force some of the biggest banks to stop proprietary trading or split off certain trading activities from deposit-taking activities. Bankers argue the proposal will raise costs and hamper activities that promote economic growth. European Parliament Member Gunnar Hökmark also has reservations, noting in his report to Parliament that while specialized banks are important, they alone are not sufficient and increased dependence on them would weaken financial stability. More inside.
Posted inUncategorized
EU Insurance Sector Ramping Up to Meet New Regime
Image: Jan. 14—Insurers are finally preparing to meet solvency requirements passed nearly six years ago. Member states have until the end of March to transpose the Solvency II Directive into national law, with insurers starting to seek approval in April for their models used to calculate capital requirements. A recent stress test of the industry showed that, “the European insurance sector is, broadly speaking, in good health although vulnerabilities have been identified, in particular for smaller insurers,” said Jonathan Hill, commissioner in charge of financial stability, financial services, and the Capital Markets Union. More inside.