Europe’s energy regulators work together to tackle market abuse and insider trading

In recent months, Europe’s energy regulators have increasingly used their powers to police behavior in the European wholesale energy market. In the last quarter of 2018 and the first quarter of 2019 we have seen fines imposed and sanctions for abusive behavior on the European wholesale energy market, and a dawn raid in a potential case of insider trading.

While REMIT (EU Regulation on wholesale Energy Market Integrity and Transparency) has been in place since 2011, there were few proceedings during the first seven years. That has now changed, with the means to detect market manipulation becoming more sophisticated and an increase in alerts raised by market participants.

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Tip of the month: Responding to Complaints

Notice of non-compliance may come in many forms: civil/criminal/administrative lawsuits or complaints; subpoenas, letters, or phone calls. We have all read about the companies who quickly responded to the media with a general denial or the dreaded “no comment” only to subsequently back-track and admit some fault. So what should you do? Our tip includes:

1. You need to have a response team(s) ready to talk on extremely short notice before making a response to any inquiring party. Contact information must be current (including mobile phone/email that will be responded to when people are on vacation, playing golf, or asleep);
2. create diverse response teams, including executives, human resources, financial, public relations, and internal-external lawyers;
3. test the emergency response team in a non-emergency setting;
4. carefully consider who your media response contact will be. The best choice is often not your CEO/President or an attorney, and
5. have a good response(s) prepared in advance (for example, “we take these allegations seriously and will conduct a quick and thorough investigation”).

Dick (Richard) C. Mosher, Dentons

Sanctions

European Council revokes sanctions framework against the Maldives

On June 16, 2019 the European Council decided to revoke the sanctions framework against the Maldives that it adopted on July 16, 2018. This framework provided for the possibility of imposing a travel ban and an asset freeze on persons and entities responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives as well as persons and entities responsible for serious human rights violations. It was adopted following a deterioration of the political situation in the Maldives, particularly as institutions such as Parliament and the judiciary were being prevented from functioning properly. 

The decision to revoke the sanction framework was a reaction to the current positive developments in the Maldives. Since the inauguration of President Ibrahim Mohamed Solih' administration in November 2018, the political situation has improved. The holding of peaceful and democratic parliamentary elections on April 6, 2019 illustrates the positive political developments in the Maldives. 

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Data Protection

European Commission Releases Study on GDPR Data Protection Certification Mechanisms

In February 2019 the European Commission released a study on the GDPR Data Protection Certification Mechanisms. According to the GDPR, the Commission is empowered to adopt, delegate and implement Acts regarding certification of requirements and lay down certification mechanisms. 

The study aims to support the establishment of data protection certification mechanisms and of data protection seals and marks pursuant to Articles 42 and 43 of the directive, but more specifically the purpose is to explain the terms contained in the named articles, to map data protection certification schemes and provide recommendations on certification criteria. 

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Anti Money Laundering

New FATF Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

The FATF published their new Guidance for a Risk-Based Approach to virtual Assets and Virtual Asset Service Providers. The Guidance is intended to assist countries and virtual asset providers to effectively implement the FATF's anti-money laundering and anti-terrorist financing obligations and requirements in this sector which have become significantly more stringent. Countries must now assess and mitigate risks associated with virtual asset financial activities and providers and subject them to supervision or monitoring by competent national authorities. 

The G20 Finance Ministers and Central bank Governors (No. 13 of the Communiqué from the June 8 to 9, 2019 Meeting – see below) and also the G20 Osaka Leaders (No. 17 of the G20 Osaka Leaders’ Declaration – see read more links below) reaffirmed its commitment to applying the recently amended FATF Standards to virtual assets and related providers for anti-money laundering and countering the financing of terrorism.

Read more here, here and here

CSR Compliance

Switzerland: New developments towards mandatory human rights due diligence for Swiss companies

In June 2019 Switzerland’s National Council took an important step towards introducing mandatory human rights checks for all large Swiss companies by voting adhere to its bill. The Swiss bill regulates, that Swiss companies are held accountable for human rights violations and environmental damage committed by their subsidiaries abroad. 

The five major business associations from the French-speaking part of Switzerland - including the Groupement des Entreprises Multinationales GEM (representing 90 multinational companies in Switzerland) joined forces to advocate in favor of the bill. It is now up to the Council of States in September to either review its decision and enter into discussion of the bill, or to end the parliamentary process and to allow a popular vote in early 2020.

 Read more here, here and here

Compliance Management Systems

The European Parliament (EP) makes room for new copyright rules for the internet.

The EP approved on March 26, 2019 new rules to ensure copyright law obligations also apply to the internet; and was published in the Official Journal of the EU on May 17, 2019. Now, all European countries will have 2 years after publication to implement this legislation.

The decision will change the internet as we know it inside and outside the European Union. The purpose of the directive is to increase protection on the rights of creatives and news publishers, by holding internet platforms liable for the content that users upload. The new rules will apply not only to the big legal tech companies, but also to small start-up platforms. Therefore, companies will need to adopt all necessary measures to comply with the new regulations before 2021.

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