Whistleblowing trial at Central London Employment Tribunal
We represented 2 employees in the Central London Employment Tribunal against a multi billion dollar publishing company.
The employees were salesmen serving the Middle East area, and they discovered sales of software to banks in Syria, Iran and North Korea. This software facilitated international bank transfers between sanctioned banks.
They blew the whistle and resigned after alleged victimisation by the employer. The story was reported by the Wall Street Journal on 1 October 2014, and is summarised below.
UK authorities have been probing past transactions between a division of Anglo-Dutch publisher Reed Elsevier and Iranian banks, to consider whether sanctions may have been breached.
Reed Business Information continued to provide services to banks in Iran after those entities had been put on the HM Treasury sanctions list, according to internal documents seen by the Financial Times. In one instance, the company sold a database subscription to a bank a month after it was placed on the list in 2008.
Several other banks retained access to the database for months after they were added to the list. Internal emails from Reed Business Information show that its staff had advised several banks on alternative ways to pay for their subscriptions and other services because payments were rejected by the company’s bank.
HM Revenue & Customs’ criminal investigation division last month decided to refer a complaint to the UK’s National Crime Agency Economic Crime Command to consider whether financial sanctions were breached, the FT has learnt. The National Crime Agency and HMRC said they could not comment on individual cases.
RBI said it had not been contacted by either HMRC or NCA.
The company reviewed its sanctions policy after managers in July 2013 wrote several emails that demonstrate they were unsure about the legality of some proposed and existing transactions and considered them high risk.
RBI and US-based Accuity – which its parent Reed Elsevier acquired at the end of 2011 – operate together as Accuity and sell databases such as Bankers Almanac. That database allows clients to find and validate bank payment routing data and share their own payment information.
“The product does not contain functionality to execute payment transactions,” a spokesperson for RBI told the FT. Accuity also offers screening tools to help financial institutions comply with sanctions and anti-money laundering compliance programmes.
The email trail suggests that the company as at July last year did not have a systematic procedure in place to decide whether to allow banks access to their product in countries under sanctions.
However, a spokesperson for RBI said internal procedures had existed, and were implemented by back-office staff before January this year. In January it issued a policy document on how to comply with sanctions and began a training programme for sales staff. The policy directs its sales staff not to seek out business opportunities in countries under sanctions.
The company sold Bank Melli Iran a subscription to Bankers Almanac shortly after the UK imposed sanctions on the bank in June 2008, according to subscription data reviewed by the Financial Times.
Sales staff attempted to sell a subscription to the Iranian bank, Bank Sepah, more than two years after it was put on the sanctions list in early 2007, the emails show.
A spokesperson for RBI did not dispute the timing of the transactions with the banks but said that contracts with entities under sanctions were terminated “as soon as they became apparent in our screening process”.
The company acknowledged, in response to questions from the FT, that three banks had retained access to Bankers Almanac “beyond the EU’s two-month grace period after they were designated”.
Export Development Bank of Iran retained access for 10 months after designation, Bank Saderat for 11 months, and Sina Bank for five months. “It should be noted that many of the regulations allowed for existing contracts to run on until completed”, a spokesman for RBI said.
The company said that the products consist entirely of publicly available information and that the transactions were worth approximately £30,000.
“External legal counsel has informed us that it is unclear whether these products are even subject to sanctions,” a spokesperson said.
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You can read the original article in the Wall Street Journal here (You need WSJ membership which costs £1 to read the article in full).