White-Collar Crime 2024

White-Collar Crime: A General Overview

We are delighted to present the fifth edition of the Chambers Global Practice Guide: White-Collar Crime.

The legal landscape continues to evolve. Increased scrutiny of corporate behaviour, new legislation and the tightening of regulatory frameworks all present issues that have to be managed by those in business.

It is important that corporates and individuals are properly equipped to navigate this terrain, and the 2024 Chambers White-Collar Crime Guide has been devised and written to help those in business achieve this. Containing analysis and opinion from leading practitioners from around the world, it provides detailed, practical advice on the enforcement of the law in relation to white-collar crime and insight regarding possible future developments.

With white-collar crime becoming increasingly global, those in business and legal practitioners need to be aware of the many different systems of regulation and enforcement that are in place and in operation around the world. This presents obvious challenges. The legal expertise and experience of the contributors have been brought together in this guide as a means of meeting those challenges.

Reading this guide makes it clear that no two countries are identical when it comes to white-collar crime investigation and enforcement; trends and developments in one jurisdiction will not necessarily be mirrored by those in other countries. But there are some broad issues that can be identified as having an effect on a number of states.

Expanding legal frameworks and enforcement tools

One of the most notable aspects of the white-collar legal landscape in recent years has been how the law has developed to stay abreast of business crime. Many countries have been looking to introduce new laws – and sometimes change and extend the scope of existing ones – to address issues as they arise.

To take just one example, the UK passed the Economic Crime & Corporate Transparency Act 2023. This has reformed corporate criminal liability in an attempt to target bad conduct and make it easier for agencies such as the Serious Fraud Office (SFO) to pursue those companies it believes are responsible for wrongdoing. The Act also created the offence of failure to prevent fraud, and introduced measures relating to Companies House reform, crypto-assets and money laundering.

This is a far from unique situation. To take another example, French authorities are placing a greater emphasis on tackling environmental offences, with the first criminal case being brought in relation to greenwashing allegations in January 2023.

Global investigations

In the UK, there currently seems to be a drop in the number of major global investigations, although the charging of individuals in relation to Glencore means that there is still one huge bribery case ongoing.

It is hard to predict with any real accuracy what factors might affect the likelihood of future investigations – so it remains to be seen whether the current situation will remain the norm.

One factor that could prove significant, however, regarding the number of major investigations is the course that Nick Ephgrave steers as Director of the SFO. He has spoken of his wish to see whistle-blowers paid and has vowed to develop a programme to prevent fraud, bribery and corruption. Three cases have been taken to trial this year, six criminal investigations have been opened and another six have been closed. These figures appear more impressive than in previous years, although the new cases that have been opened may not be of the same calibre as those seen in the past or those pursued by the US authorities.

But the SFO seems to have gained a new momentum and has made increased efforts to attract and retain the best talent. It also has the boost of the aforementioned Economic Crime & Corporate Transparency Act, which gives the agency strengthened pre-investigation powers.

The rise of aggressive sanctions regimes

The increasing use of sanctions has been a response adopted by many countries to Russia’s 2022 invasion of Ukraine. This has placed many new obligations on those in business – obligations that can carry severe penalties for those who fail to meet them.

In March 2022, the UK’s Economic Crime (Transparency and Enforcement) Act 2017 was amended to enable the Office of Financial Sanctions Implementation (OFSI) to operate on a strict liability basis, meaning it can now penalise companies and individuals for sanctions breaches they may not know they have committed. It is a move towards a US-style enforcement model, and comes at a time when there is closer co-operation between authorities worldwide and increased use of intelligence sources in relation to sanctions enforcement.

This trend of stricter sanctions enforcement as a critical component of white-collar crime prosecution cannot be ignored. An indicator of this is the European Union’s harmonisation of sanctions evasion as a criminal offence across all member states in May 2024. Sanctions enforcement is picking up across the bloc.

Cybercrime and cryptocurrency

The rapid evolution of digital assets has, to some degree, redrawn the white-collar crime map, creating new issues and frontiers. Nations are having to acknowledge and try to manage the rapid rise in cryptocurrency-related fraud, the complexities of asset recovery and the difficulties of policing what amounts to a borderless digital world.

This has led to a string of landmark rulings in the UK, on issues including cryptocurrency being recognised as property, the location of cryptocurrency in relation to the court’s jurisdiction, and crypto exchanges’ obligations to identify those involved in crypto-related wrongdoing. The precedents they set are both significant and far-reaching.

In addition, recent times have seen increased enforcement action by the United States Department of Justice and Securities and Exchange Commission (SEC). One example is the 2024 jailing for 25 years of Sam Bankman-Fried, co-founder of failed crypto exchange FTX, for defrauding customers and investors. This year has also seen Terraform Labs file for bankruptcy and agree to pay USD4.47 billion to the SEC after a jury found it liable for defrauding investors. The SEC had accused Terraform of defrauding cryptocurrency investors, who lost an estimated USD40 billion when the TerraUSD and Luna tokens collapsed in 2022.

In addition, former head of Binance Changpeng Zhao was jailed for money laundering violations and fined USD50 million. Binance itself was fined USD4.3 billion and also agreed to pay USD1.76 million to the Brazilian Securities and Exchange Commission (CVM) as a settlement for an investigation into its unauthorised derivatives trading in the country.

The past year saw the UK’s Financial Conduct Authority (FCA) bring a record number of criminal charges against individuals, and double the number of entities it took regulatory approval away from. This may be due to the FCA benefiting from an increase in staffing and operating costs – and the FCA has only been the UK regulator for crypto marketing since October 2023. But the FCA’s added strength can be seen as an indicator of crypto coming under closer scrutiny – as shown by the first charges being brought in recent months for operating illegal cryptocurrency ATMs.

International harmonisation and co-operation

As business has become increasingly global, white-collar crime has also evolved to be more international in nature. This, in turn, has prompted greater co-operation between states.

A number of high-profile cases have illustrated the extent to which agencies in various nations are now working more closely together than ever before in an attempt to achieve an outcome. One example would be the Airbus case. This saw the UK’s Serious Fraud Office working alongside the United States Department of Justice and Department of State and France’s Parquet National Financier to resolve bribery charges with the aircraft manufacturer. It led to Airbus agreeing in 2020 to pay more than USD3.9 billion in penalties.

In addition, laws relating to white-collar crime are becoming more aligned, due in part to the influence of bodies such as the OECD Anti-Bribery Convention and the Financial Action Task Force, which function on the basis of international co-operation.

Deferred prosecution agreements (DPAs)

DPAs are becoming part of more countries’ legal systems as the authorities recognise the benefits of taking a co-operative – rather than purely combative – approach to enforcement.

While the US has had DPAs since the 1990s and the UK introduced them under the provisions of Schedule 17 of the Crime and Courts Act 2013, other states are now following suit. France concluded its first DPA (known as a CJIP) in 2017. The same year saw Singapore pass the Criminal Justice Act, which created a framework for DPAs, and Canada, Argentina and Japan introducing DPA-style arrangements. The past year has also seen calls in Australia for a DPA regime to be introduced, although this has not yet become a reality.

Such developments illustrate an increasing acknowledgement of the value of using DPAs to resolve incidents of serious corporate misconduct, with an emphasis on the corporate accepting liability and the need to put right the wrongs. France in particular seems to be taking to the use of DPAs. The scope of French DPAs was initially limited to certain offences, such as corruption and money laundering, but has since been extended to cover tax fraud and environmental offences. The French Financial National Prosecutor (PNF) and its Anticorruption Agency (AFA) have published guidelines on CJIPs to encourage the self-reporting and co-operation of corporate wrongdoers.

It is worth noting, however, that the last DPA concluded in the UK was in December 2023, between the Crown Prosecution Service and Entain plc. This was for Entain’s alleged failure to prevent bribery occurring in its legacy Turkish-facing business and involved the company agreeing to pay a total of GBP615 million over a four-year period. The SFO, which had concluded all 12 previous UK DPAs prior to the Entain one, has not concluded one since 2021.

Enforcing anti-money laundering laws

The increasing awareness of the need to tackle money laundering has put it at the top of the agenda for many nations. The UK’s aforementioned Economic Crime & Corporate Transparency Act’s provisions relating to Companies House reform in order to improve corporate transparency, the seizure and recovery of crypto-assets, intelligence sharing and proactive intelligence gathering by law enforcement are, in part, a response to the threat of money laundering.

April 2024 saw the EU adopt a package of laws to strengthen its efforts to combat money laundering and terrorist financing. The measures introduced include giving Financial Intelligence Units (FIUs) more powers to analyse and detect money laundering and suspend suspicious transactions. Enhanced due diligence measures and checks on customers’ identities are now required, and the Authority for Anti-Money Laundering and Countering the Financing of Terrorism is to be created to ensure that EU anti-money laundering rules are applied correctly and consistently.

Self-reporting and whistle-blowers

There is now a greater expectation that companies will self-report their wrongdoing, with more lenient treatment often being the reward for such a course of action.

For a company to be able to benefit from such an approach, it will need to have whistle-blowing procedures in place that are fit for purpose. It will also need to be prepared to act on such reports, which may involve planning and carrying out an internal investigation. Any corporate in such a situation will also have to know how to respond to and negotiate with an investigating agency, particularly if it hopes to obtain a DPA and thus avoid a criminal prosecution.

All of these issues place demands on those operating in the corporate world. Technological advances and the associated further globalisation of corporate crime make it inevitable that legal frameworks will keep evolving. This is why the role of the legal practitioner in ensuring corporate clients choose the most appropriate course of action cannot be over-emphasised. Neither can the importance of such practitioners being fully informed when it comes to all such developments.

The 2024 edition of the Chambers White-Collar Crime Guide has been written to ensure that practitioners are equipped to manage all aspects of white-collar crime in the jurisdictions in which they operate. It is an informative resource that focuses on and explains the key issues that are faced at all stages of an investigation.

In an era of heightened regulatory scrutiny and greater international co-operation between enforcement agencies, the corporate world is under more obligations than ever before. Ensuring compliance with an area of law that is subject to continual change takes both knowledge and effort. The Chambers White-Collar Crime Guide provides assistance with this to those who operate in the corporate sector.