Norris McLaughlin & Marcus, P.A.

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REWIND: International Business News #48

Posted on December 13th, 2012 | Author: admin

  • In a move sure to impact the controls on money moving internationally, the U.S. Justice Department struck a deal with HSBC bank imposing $1.9 Billion in penalties for HSBC’s alleged involvement in laundering money for Mexican drug cartels.  The Justice Departments investigation found a near total absence of any internal money laundering prevention measures inside the bank.  The investigation also found that HSBC failed to follow U.S. trade control laws for conducting transactions on behalf of customers in sanctioned countries including Cuba, Iran, Libya, Sudan, and Burma.  Despite these widespread violations, the Justice Department did not charge the bank’s executives, citing the HSBC’s cooperation in the investigation and the possible collateral damage further sanctions might create.  The settlement has lead to a 5-page compliance roadmap.  Skeptical industry watchdogs are terming this softer approach “too big to prosecute.”  Nevertheless, regulators hope that the sheer size of the fine and the embarrassment this scandal has caused will push major banks to reevaluate their internal compliance measures.
  • There are two major developments currently taking place involving internet law and policy that are sure to impact international ecommerce for years to come.
    • First, the U.S. Senate Judiciary Committee voted to update the Electronic Communications Privacy Act of 1986 in a manner that would require criminal investigators to obtain a search warrant prior to forcing internet service providers (ISPs) to provide access to a suspect’s email and other online content, such as videos and photographs, as well as information stored in the “cloud.”  This measure brings the law up-to-date with technology and goes a long way to help keep in tact the expectation of privacy and absence of governmental interference that has helped the internet flourish.
    • The second development involves efforts by the International Telecommunications Union (ITU), an intergovernmental body affiliated with the United Nations, to revisit its treaty regulating global telecommunications.  The ITU’s main event, the World Conference on International Telecommunications in Dubai, is the forum for the discussions.  Certain factions within the ITU, claiming that the internet’s current rules favor developed nations at the expense of the developing world,  are seeking the ability grant governments the authority to charge content providers such as Amazon, Google, Facebook and Twitter for allowing their data to flow over national borders.  Internet freedom advocates worry that this move, while superficially geared at leveling the playing field, will have a chilling effect on ecommerce and internet innovation generally.