Our experience with cross-border financial services compliance issues, internal investigations, supervisory actions and contentious disputes allow us to successfully resolve, if not avoid entirely, cross-border risks. Our clients that operate in more than one country or that offer their products and services across borders face an often conflicting web of foreign and domestic legal and regulatory requirements. At the same time, financial services supervisory agencies in the United States, Europe and Asia are closely scrutinizing institutions that operate in multiple jurisdictions and increasingly pursuing coordinated investigatory and enforcement actions against them . These sources of potential exposure will only increase as the trend toward integration of financial transactions and markets continues.
How We Can Help: Cross-border Coordination
Mayer Brown’s Cross-Border Investigations & Enforcement practice comprises lawyers from our offices throughout the world, allowing us to provide localized advice and offer harmonized solutions to problems that implicate more than one domestic legal regime.
We fully understand compliance requirements in jurisdictions across the globe. Our experience extends to the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in the UK, the Federal Financial Supervisory Authority (BaFin) in Germany, the Swiss Financial Markets Supervisory Authority (FINMA) and the Hong Kong Monetary Authority, among others. As such, we have represented financial institutions with head offices in Belgium, Bermuda, Canada, France, Germany, Ireland, Israel, Italy, Japan, Lebanon, Puerto Rico, Switzerland, the UK, and countries in Africa and South America.
Our experience includes defending civil and enforcement actions involving the extraterritorial application of US laws, such as US Office of Foreign Assets Control (OFAC) sanctions and related criminal prohibitions; the USA PATRIOT Act, money laundering prohibitions, and politically exposed persons (PEP) regulations/guidance; the Racketeering Influenced and Corrupt Organizations Act (RICO); the US Foreign Corrupt Practices Act; the Anti-Terrorism Act; the Alien Tort Claims Act; US tax laws and qualified intermediary (QI) regime, as well as non-US operations and activities of non-US financial institutions.
Our practice frequently requires that we coordinate actions across a wide range of domestic, national and international enforcement and self-regulatory agencies that often conduct joint (or separate but parallel) enforcement investigations and actions. We are frequently called upon to provide advice concerning the Financial Action Task Force (FATF), the Wolfsberg Group, or UN resolutions (e.g., concerning the prevention of terrorism) affecting financial institutions.
Management of Multiple Risks
In every case we consider how our defense, our client’s choices and any potential resolution may have broader implications. We are sensitive to each case even if it appears small or isolated, and particularly if several agencies, the media or other parties have expressed interest. For example, improperly handled, a government investigation may invite unwanted and avoidable private civil litigation. Similarly, even a victory in a private or governmental dispute may, if not prudently managed, cause reputational damage. A regulatory inquiry may spark legislative interest or vice versa, or one government may follow in the footsteps of another. Thus, we carefully orchestrate defense strategies with an eye toward not only winning the immediate dispute, but also minimizing spill-over into other arenas.
What sets Mayer Brown lawyers apart is our ability to help clients achieve their objectives by exploring solutions beyond the face of the immediate dispute. For example, we may try to resolve an adverse judicial dispute legislatively or achieve a desired result by convincing one nation’s government to intervene with another’s government or courts.
We also pride ourselves on finding opportunities for our clients to turn a negative, such as a threat to the bottom line or to reputation, into a positive, such as a chance to streamline their operations to save on costs. For example, we have helped clients to showcase their strong compliance culture while addressing a potentially hostile regulatory inquiry in order to enhance their reputation with their regulator. We have also helped clients to resolve private civil litigation on terms that positioned them to avoid adverse legislation aimed at others in their industry, while also achieving a notable monetary result that compared favorably to results achieved by their peers.
We counsel our clients regarding how to best avoid cross-border enforcement risks. Counsel may include:
- Developing global sanctions, anti-money laundering, or anti-terror finance policies,
- Identifying key enforcement trends and related areas of risk to which they can denote enhanced compliance efforts
- Providing updates on rapidly evolving laws, regulations and supervisory actions or attitudes
- Advising on how to best avoid certain courts or regulators outside of the client’s home-country.
The Mayer Brown team includes several lawyers with former leadership experience in government and regulatory bodies. Using our insiders’ understanding of the techniques that government and regulatory investigators use and the key facts they seek to uncover, our team conducts internal investigations that strongly position our clients to definitively end governmental inquiries, often by showing a lack of wrongdoing. Where appropriate, team members suggest corrective measures that may lessen or prevent future law enforcement consequences. We work closely with our clients to establish goals and parameters carefully targeted to minimize not just exposure, but also any unnecessary investigation-related expenses. Whether an investigation is needed to deal with regulatory, civil or criminal concerns, we are alert to all issues that are crucial in the event of any government enforcement proceeding: attorney-client privilege, document retention and electronic discovery. In the cross-border context, we navigate conflicting data protection and financial privacy laws and expectations to ensure that no sovereign is offended and that clients can comply with home-country laws.
Members of our team have collectively defended scores of criminal, supervisory and regulatory inquiries and actions. Many have held senior agency or prosecutorial positions, allowing them insight into matters from the other side of the table. The firm is equally comfortable representing clients before the Federal Reserve Board or the SEC in the United States as it is representing them before the FCA or PRA in the United Kingdom or the Hong Kong Monetary Authority in Asia.
- International bank in connection with internal investigations and possible voluntary self disclosure to OFAC regarding possible violations of US sanctions laws, primarily concerning Cuba and Iran, involving wire transfers, trade finance and US origin goods.
- Large bank client in connection with a threatened enforcement action arising out of violations of the Farm Credit Act and the Farm Credit Administration’s implementing regulations. Conducted extensive internal investigations into the bank’s criminal referral procedures and practices involving loans to affiliated entities, and advised a special committee of the board of directors on remedial steps. Recommended improvements to the Bank’s legal hold procedures.
- Major bank holding company and subsidiary bank in regulatory enforcement actions taken by federal authorities for loan asset quality and related issues.
- Multinational financial services company in responding to a Congressional subpoena for transaction records and account information about its maintenance of a correspondent account for a foreign bank in connection with a Congressional investigation into US dollar denominated funds transfers through the US banking system to certain high risk countries.
- Non-US banks in connection with actions brought by the United States government in connection with efforts to collect taxes from U.S. citizens that maintained undisclosed accounts.
- International bank in two suits filed in US court under the Anti-Terrorism Act seeking to hold the bank liable for deaths and injuries that plaintiffs suffered in Israel during incidents of HAMAS and Hezbollah terrorism.