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AUG
30

Lewis Nedas Interview in Acquisition International

Acquisition InternationalInterviewed as part of the 2016 White Collar Crime Top 50, read more below.

AI-Magazine-August-2016-Lewis-Nedas-Law.pdf

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JUL
28

The Property Update; July Newsletter

london skylineWhether you voted to leave or remain, it's true to say that both the residential and commercial property markets have felt the effect of the ‘leave’ vote.

It's still too early to identify the underlying effects, but our specialist property lawyers noted that almost immediately some purchasers indulged in 'gazundering'. One purchaser, a banker, decided to reduce his offer on the date of exchange (which fell on the day after the referendum) by 25 percent, an offer which was abruptly rebuffed by our client, the vendor, and the sale fell through. However, the majority of all our property transactions completed normally during this period because our clients kept cool heads.

Our multi-lingual lawyers have stated that thanks to the pound being at its lowest level for over 30 years and record low mortgage deals on offer, that there has been renewed interest from foreign investors from the USA, Italy, France, China, South East Asia, Qatar and UAE, and they have dealt with a large number of such enquiries.

 

First Time Buyers

There has been a surge in First Time Buyers during the first two quarters of 2016, i.e. pre-Brexit. According to the Halifax, an estimated 154,200 stepped onto the property ladder for the first time.

The average age of such a buyer has now increased to 33 years old and is very likely to have been assisted by the Bank of Mum, Dad and Grandparents, who will lend/give an estimated £5billion to their offspring this year.

It seems that there is also a marked increase in the numbers of couples buying for the first time. Most of these types of buyers are buying well under the stamp duty limit, especially those buying outside London and the South East. There has also been a growing trend for young purchasers to purchase a 'buy to let’ property initially, with the intention of selling on in order to buy their first residential property. These individuals should take immediate advice, because they may find themselves facing a 3% Stamp Duty surcharge when selling that original property.

Additionally, those parents who own the properties that they live in but have added their names to their off springs mortgage may also find themselves in the same predicament - take advice now should you be in that situation.

 

Is this a good time to buy?

There are some stunning mortgage deals on the market at the moment; in fact, mortgages are at their lowest level to date. With the prospect of a Bank of England cut in August, lenders are looking to increase the volume of their mortgage sales.

So for a buy or re-mortgage from this prospective, it seems the answer is yes.

Additionally Santander, working with Legal & General (and equity release specialist Key Retirement) has just launched a lifetime mortgage, an acknowledgement that the days when a buyer could expect to pay off his or her mortgage within 25 years have now gone.

Certainly there has been a correction in price levels at the very top end of the London market, (this has been happening since 2014), RightMove in its July report state that post Brexit there has been a reduction of .9% (a UK average of £2,647) in prices of those properties coming onto the market in July. With the enormous uncertainty following Brexit that trend is likely to continue.

It has also been reported to our property lawyers that developers selling on 'off plan’ properties are reducing their prices markedly and this has attracted a great deal of interest from foreign investors. One word of advice; don't buy in the larger of developments of smaller flats where there are likely to be any number coming onto the market. There has been a definite slow down in the London new build market so there could be some great bargains there.

 

Downsizing?

Senior and mature property owners have recently been warned by Government not to look to their home as an additional source of income to fund their retirement, in fact it was described as a 'very risky strategy'. Once would be 'downsizers' have done their figures, it's likely that it will not be such a lucrative move.

There is also a huge demand for bungalows, which now command an average 16% premium. These properties are now rarely built by developers, older bungalows have traditionally been built in large plots with big gardens and there is often the potential to build on top of the original property, so they are an attractive proposition for older buyers and developers alike.

A third of equity release customers over 55 years of age still have mortgages and a large number of these have interest only mortgages.

 

Commercial Property

British Land have stated that post Brexit they expect that both tenants and investors will be very cautious.

This is against a background in which investment in commercial property has slumped over the last two years in any event. It is accurate to say that there has been a decline in commercial property prices, and of course there was enormous publicity following several property funds stopping withdrawals by their investors when facing the prospect of an avalanche of redemptions. However, there is evidence that SME’s (small medium enterprises) are bucking that trend.

The technological, media and creative industries in London have been the fastest growing sectors over the last 5 years. These (often young companies) want flexible working space - in admittedly cheaper areas -following the latest trends in 'agile’ working (hot design / working remotely etc.) The business life cycles of these SME are much shorter than traditional companies, so business owners are unwilling to commit to long leases any more. These tenants are more demanding and it pays commercial landlords to engage regularly with these tenants, rather than wait to for lease renewal dates.

 

If you require assistance with any prospective purchase or sale of any type of property in England and Wales, please contact our experienced specialist property (Real Estate) lawyers on 0207 387 2032 or use our online enquiry facilities at www.lewisnedas.co.uk

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JUL
25

Lewis Nedas Law announces Co-operation with Leading Frankfurt Law Practice, Edificia.

edificia.jpgLewis Nedas Law are delighted to announce co-operation between themselves and leading Frankfurt boutique law practice, EDIFICIA Rechtsanwälte.

This continues the long and successful professional relationship between Ian Coupland, our specialist commercial and litigation partner, and Bertrand Prell of EDIFICIA. Both firms will now be able to offer full legal services to companies and individuals with interests in both the UK and Germany.

Contact us on 0044( 0) 2073872032 or, use our online enquiry facility at www.lewisnedas.co.uk.

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JUL
18

VAT Fraud and the Statutory Regime

One of the UK’s most well-known banks has once again been featured in the news for the wrong reasons. It was recently reported that the Royal Bank of Scotland (RBS) is being sued for over £140 million, for its role in a carbon trading VAT fraud. Reports suggest that the suit is based on a carousel fraud which saw traders buy and sell goods, register a VAT charge on the trade but never actually pay the VAT due. When these same goods were later sold, the VAT is reclaimed. In this particular situation, the carbon credits – pollution permits issued by the EU – were purchased in France, imported into the UK by supposedly fake organisations which then sold them on to various other businesses. It is believed that RBS traders bought the carbon credits and then sold them abroad before claiming a VAT rebate from HMRC which was not due.

It is unfortunate that another of the UK’s banks is again being implicated in a potential breach of UK law. However, this development also places a spotlight on the framework for policing fraud in the UK. Lewis Nedas is a leading commercial law firm providing advice and representation on all aspects of corporate crime. In this blog post, we provide an overview of the current legal regime governing fraudulent activities.

 

Where is the law?

The majority of the law governing the commission of fraud is contained with the Fraud Act 2006 (the “2006 Act”). The Act was designed to dissuade individuals from participating in fraudulent activities. In reality, it is very difficult to prescribe a single definition for the act of committing fraud. The 2006 Act reflects this fact and identifies three distinct patterns of behaviour, which it deems to be illegal:

  1. An individual's representing to someone that something that that is known to be false is in fact true.

This is one of the offences under the 2006 Act. It is made up of 4 components: (i) making a false representation; (ii) dishonestly; (iii) in full knowledge that the representation was or could be false or misleading; and (iv) intending to make a personal gain or for someone else, or to cause actual or the risk of loss to someone else.

  1. An individual who neglects to bring information to someone's attention whom they owe a duty of disclosure to.
  1. Being in a position of trust which merits protection, and that person failing to safeguard that position.

The acts mentioned above are in fact the key offences under the 2006 Act. In order for a charge for having committed these offences to be raised, it will have to be demonstrated that the certain actions took place:

  1. A party must be behaving dishonesty:
  2. The intention for acting in a dishonest way must be either (i) to make some kind of gain; or (ii) to cause actual or the risk of loss to someone else: and
  3. The 2006 Act does not require for there to be evidence that loss was actually suffered for an individual to be vulnerable to a charge. The fact that there was an opportunity for loss to have been caused will be enough to attract liability under the 2006 Act.

Who is responsible for enforcing the law?

Fraud is a specialised crime and as a result, is enforced by specialised agencies. In the UK, the job of enforcing the terms of the 2006 Act is that of the Serious Fraud Office (SFO). The SFO routinely works in partnership with a host of other regulatory agencies – this tends to be due to the fact that fraud is incredibly difficult to identify. A pooling of resources and the sharing of intelligence among regulatory bodies/ agencies tends to increase the likelihood that evidence of fraudulent activities will be uncovered where suspected.

The SFO is endowed with significant powers in order to investigate suspected instances of fraudulent activity. This includes the ability to enter business premises and conduct an exacting review of business activities, and to interview members of staff with a view to identifying a paper trail of fraudulent activity. The SFO will avail itself of the investigatory powers it has been granted to the fullest extent possible, particularly given the difficulty involved in bringing a successful prosecution for fraud: the relevant behavioural component must be identified, together with the necessary (possibility) of loss.

The regulatory framework for policing fraud in the UK has been re-enforced in recent years. Not only is the SFO actively involved in investigating suspected instances of fraud, the Joint Fraud Taskforce also provides assistance. This body – a combination of UK retail banks, government representatives and law enforcement officials – is responsible for pinpointing weaknesses in the regulatory framework, and identifying opportunities to enhance the UKs approach to policing against the commission of fraud.

The legal regime governing fraud is sophisticated, and the agencies charged with enforcing the act are endowed with a range of powers to ensure that any illegality is identified and prosecuted. Any indication that a regulatory investigation for suspected fraudulent activity is pending, should be treated with the utmost seriousness and comprehensive legal advice sought. 

Who has the expertise to advise in this specialist area?

The law governing fraud is highly technical, and complicated to navigate. If you are concerned that you or your business have been implicated in fraudulent activity, then you should seek the guidance and support of specialist lawyers that have a track record of advising in this area.

Lewis Nedas is a leading city law firm advising on all aspects of corporate crime, providing a dedicated team to clients seeking assistance from commercially oriented, technically able lawyers. Our team is made up some of the leading individuals advising on the law of fraud in the UK, and are highly experienced in dealing with regulatory investigations by the SFO. We understand the approach that regulators take, and will be able to advise you on how to respond to any approach by a regulatory body with a view to protecting your interests at all times. If you would like to know more, contact our team today.

 

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JUL
18

Money Laundering

It was recently reported that Spanish police have searched the headquarters of Santander Bank, amid suspicions that the bank has been involved in money laundering and tax evasion on the part of some of its clients. This story stems from an ongoing investigation into the Falciani List of accounts from HSBC’s Swiss private bank in Geneva. The list included the names of over 100,000 suspected tax evaders, approximately 600 of whom were Spanish nationals.

The issues of tax evasion and money laundering are some of the most vexing for governments, and have been particularly topical issues in recent months. The rules governing money laundering have become particularly prominent, with reports in the UK suggesting that the regulatory framework is to be enhanced in the not-too-distant future.

The complexity of the Anti-Money Laundering (AML) framework and the difficulty in implementing it often calls for partnership with an experienced legal advisor in order to design a sophisticated plan in order to meet legal obligations. At Lewis Nedas, we are often sought out by clients to advise on the AML rules that apply in the UK. In this blog post, we review the established framework and provide an overview of the steps that need to be taken to comply with them. 

How are we to understand the term ‘money laundering’?

Arguably one of the most important steps to be taken in attempting to understand a set of rules or laws, is to develop an appreciation for the behaviour that they are designed to regulate. The rules governing Money Laundering are designed to prevent businesses and individuals from using money that is the result of some kind of criminal act, in order to purchase legitimate or ‘clean’ assets. The difficulty for regulators, and often the reason why AML rules are so complex, is that it can be very difficult to identify illegitimate funds at the outset.

What is the law on money laundering?

The relevant rules governing money laundering in the UK are contained within the Money Laundering Regulations 2007 (the “2007 Regulations”). This set of rules applies to a variety of different businesses in the UK, ranging from financial service type operations through to those involved in the provision of accountancy services. It is vital that you find out whether or not these rules apply to your business. The different business sectors to which these rules apply will have their own regulator, which will in turn supervise compliance 2007 Regulations. The principal enforcing authorities for the 2007 Regulations in the UK are: 

  1. The Financial Conduct Authority (FCA)

The FCA is charged with policing the activities of businesses providing ‘financial services’, which in turn will cover the provision of a number of different services - mortgage credit, factoring, financing of commercial deals, money broking and financial trading.

  1. Her Majesty’s Revenue & Customs (HMRC)

HMRC is responsible for regulating compliance with the 2007 Regulations by businesses that, amongst other things, accept cash of more than €15,000 in exchange for goods, provide any kind of accountancy type service, offer trust or company oriented services, or operate as an estate agency.

It is important to understand that the fact that a particular kind of business is not explicitly listed above does not mean that the Regulations will not apply. Other kinds of service providers including regulated professionals will be expected to observe the terms of the 2007 Regulations, and their regulator will be responsible for supervising compliance with the 2007 Regulations.

Another important point to note is that money laundering is something that many governments, including the UK’s, are anxious to end. Notwithstanding the sophisticated rules already in place in the UK, it has been recently suggested that businesses may soon face additional obligations under anti-money laundering legislation (see here). The team at Lewis Nedas will be watching developments on this point with great interest, and will be reporting on developments as and when they arise.

What steps do businesses need to take to meet their obligations?

The purpose of the 2007 Regulations is to prevent a business from becoming embroiled in money laundering. In order to achieve this, the 2007 Regulations place obligations on businesses to design their organisation in a way that reduces the risk of money laundering taking place. This can be particularly difficult, and is something that will need to be kept in mind as a business evolves. Some of the more important aspects of the 2007 Regulations that businesses should be aware of include:

  • the need to assess the risk of the business becoming involved in money laundering
  • reviewing the details of business customers and confirming their identity at regular intervals
  • investigating the structure of corporate clients to establish where ownership lies
  • maintaining an accurate record of all transactions and the parties involved
  • training employees to identify and guard against potential risks for the business becoming involved in the commission of money laundering

What are the penalties for breaching the 2007 Regulations? 

Regulators have significant powers to sanction organisations that violate the 2007 Regulations. The most popular tool used by regulators to penalise businesses that breach their obligations is a fine, which can in some instances be significant – depending on the level of breach. It is therefore vital that organisations not only design an AML framework to comply with the 2007 Regulations, but actively apply this in all of their dealings with clients and trading partners. 

The AML obligations on businesses can be onerous, and can be very difficult to understand. If you are in any way concerned about the 2007 Regulations, or need assistance in ensuring compliance with them, then you should take specialist advice.

Lewis Nedas is a leading city law firm providing advice to clients of various sizes, operating across a range of sectors on their obligations under the 2007 Regulations. Our lawyers are among some of the leaders in their respective spheres, and they pride themselves on providing tailored, accessible advice to clients in order to comply with their obligations. Our history of working with clients who are facing investigations for compliance with the 2007 Regulations has gained us a reputation as trusted counsel who help to protect our clients’ business interests and commercial reputation. If you would like to know more about how the AML framework works, or to speak to one of our team on how we could help you, contact us today.

 

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