Can Artificial Intelligence Be Used as a Tool to Help Ukraine Fight Corruption?

Ukraine flagWith day four of public hearings in the President Trump’s impeachment proceedings, Ukraine is on everyone’s mind. In his public testimony on November 19, 2019, Lieutenant Colonel Vindman mentioned several of Ukraine’s anti-corruption efforts, including the establishment of High Anti-Corruption Court.  For the most part, however, consistent with the origin of the impeachment inquiry, the focus has been more on the United States than Ukraine.

In an article published in the New Eastern Europe Magazine this month, Kristina Arianina, a senior associate with a Russian/Ukrainian background, examines a recent development in Ukraine’s fight against corruption that got lost amidst all other Ukraine-related news.

OFAC Sanctions the Gupta Family for Bribery, Corruption and Misappropriation of South African State Assets

In an earlier post, here, we examined the Global Magnitsky Human Rights Accountability Act (“GloMag”), which was formally implemented by an Executive Order that declared “serious human rights abuses and corruption globally” as an emergency threat to U.S. interests. The President delegated his authority under GloMag to the Global Targeting Office of the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the U.S. Department of State to sanction human rights offenders or other persons who have materially assisted significant acts of corruption, freeze their assets, and ban them from entering the U.S.

OFAC recently used its authority under GloMag to designate a wealthy Indian family with significant business interests in South Africa in response to allegations of widespread bribery, corruption and misappropriation of state assets. As a result, the Guptas, their business associate Salim Essa, and all entities owned fifty percent or more by them individually, or by them and other designated persons in aggregate, now are barred from the U.S. financial system. U.S. persons are prohibited from dealing with them and must “block,” or seize, all property or interests in their possession or control.

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SEC Expands Jurisdiction to Sanctions Violations

The Securities and Exchange Commission (“SEC”) recently penalized a public company for violating U.S. economic sanctions. The violation cited the “books and records” and “internal controls” provisions of Securities Exchange Act of 1934 (the “Exchange Act”). With this unprecedented action, the SEC has put companies on notice that the Department of Justice (the “DOJ”) and the Office of Foreign Assets Control (“OFAC”) are not the only sanctions enforcers in Washington.


It is well known that under Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act – enacted as part of the Foreign Corrupt Practices Act (“FCPA”) – public companies must keep accurate books and records and maintain internal controls sufficient to ensure that transactions are executed in accordance with management directives and accurately recorded for reporting in the company’s financial statements. The SEC often cites public companies for violations of these provisions in cases involving allegations of foreign bribery. In this context, the SEC often will assert that a public company violated these provisions by disguising the illicit transactions in its books and records and by failing to maintain internal controls capable of detecting and preventing such transactions.

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United Arab Emirates Financial Centers Enhance Economic Security and Business Viability

In an earlier post, here, we examined Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations, the new Federal AML Law enacted by the United Arab Emirates (“UAE”) to ensure best practice anti-money laundering and counter-terrorist financing measures.

In this post, we consider how the UAE’s two financial free zones, established in the Emirates of Dubai and Abu Dhabi, which both possess their own civil and commercial legal frameworks, inclusive of court systems modeled closely on international standards and principles of common law and, importantly, autonomous financial services regulation, have followed suit by augmenting their financial crimes regulatory frameworks.

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New Antitrust Strike Force Focuses on Government Contracts

A new strike force of federal and state investigators is targeting antitrust violations in government procurement. The strike force consists of investigators from a variety of agencies who will receive special training in detecting and prosecuting antitrust agreements. The strike force seeks to increase both criminal and civil enforcement actions.

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So You Think Tailored FCPA Training Does Not Matter? – Think Again

ComplianceAsk the bank that just paid the SEC more than $ 6 million for failing to adequately train its Asia Pacific Region (APAC) personnel on antibribery with respect to hiring practices.  The bank had policies against hiring personnel in exchange for business, but, according to the SEC’s order, the company “failed to effectively train APAC employees or monitor their compliance with those policies…. APAC bankers and compliance personnel lacked familiarity with and understanding of [the company’s] anti-bribery and corruption policies, particularly as those policies relate to hiring.” SEC Order in Administrative Proceeding File No. 3-19537. Continue Reading

Company May Characterize Employee as a Compliance Risk

Wooden Blocks with the text "Risk"In certain circumstances, a company’s statement that one of its employees poses a significant and unacceptable compliance risk is not defamatory. According to a recent federal appellate decision, such a statement (made by a company while complying with a deferred prosecution agreement relating to Foreign Corrupt Practices Act (FCPA) violations) had no “provably false factual connotation,” and was a statement of opinion beyond the reach of defamation law. Continue Reading

Bipartisan Banking Committee Senators Introduce Anti-Money Laundering Reform Bill

United States Capitol BuildingOn September 26, 2019, a bipartisan group of eight Senators introduced the Illicit Cash Act[1], which, among other proposed reforms, would require certain companies to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) at incorporation and within 90 days of any change in beneficial ownership.

Led by Sen. Mark Warner (D-VA), co-sponsors to the bill include Republican Sens. Tom Cotton (R-AR), Mike Rounds (R-SD), John Kennedy (R-LA), and Jerry Moran (R-KS); and Democratic Senators Doug Jones (D-AL), Bob Menendez (D-NJ), and Catherine Cortez Masto (D-NV). This cohort of Senators – who sit on the powerful Senate Banking Committee – achieved something rarely seen in the current US political climate: bipartisanship. Though the sponsors have crossed the aisle in introducing this legislation, prospects for passage this year remain uncertain. Against the backdrop of the recently-announced House Democrats’ impeachment inquiry, lawmakers have a shrinking number of legislative days to tackle complex issues like anti-money laundering (AML) reform. What’s more, Congress must also come together to fund the government when the current Continuing Resolution expires on November 21. Looking ahead, the Illicit Cash Act is a step toward meaningful AML reform but it still has a long way to go. Below, we discuss what’s in the bill, outside support, uncertainty for AML reform in the House, and next steps. Continue Reading

Australia Plans to Join U.S. and U.K. in the CLOUD Act

Following its agreement with the United Kingdom, the United States announces formal negotiations are underway with Australia about joining the CLOUD Act. Although also a bi-lateral negotiation, the U.S. talks with Australia strike a more practical tone than those with the U.K.

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