Financial Crime

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Examples of good and poor practices provide helpful guidance, and a reminder of supervisory expectations.

By Frida Montenius, Jonathan Ritson-Candler, and Charlotte Collins

The FCA has published TR18/3, setting out the findings from its thematic review of the anti-money laundering (AML) and counter-terrorist financing (CTF) systems and controls in 13 Electronic Money Institutions (EMIs). Although the review only focused on EMIs, the findings have wider read-across and therefore are of interest to all firms within scope of the Money Laundering Regulations 2017 (MLRs 2017).

Indeed, given the FCA’s current focus on financial crime as a priority area in its supervisory (and enforcement) activities — and the fact that updating policies and procedures to reflect changes brought about by the MLRs 2017 perhaps may have been overlooked by some — now is a good time for firms to reflect on AML and CTF systems and controls and check that they are up to date and meeting expectations.

English Court of Appeal reaffirms privilege over internal investigation documents prepared in contemplation of litigation.

By Jon Holland, Andrea Monks, Stuart Alford QC, Nate Seltzer, Dan Smith, and James Fagan

In a much anticipated decision, the Court of Appeal has reaffirmed legal privilege protection for documents prepared during internal investigations (e.g., interview notes, forensic accounting analysis) whose dominant purpose is preparing for litigation reasonably in contemplation, and on the facts confirmed that this can occur even in the early stages of a government investigation.

This decision affirms that English law remains in line with other jurisdictions, including the work-product privilege in the United States, and should permit corporates to conduct internal investigations in anticipation of litigation without fear that external counsel will be required to turn over interview notes or other documents to authorities or to adversaries in collateral litigation.