In brief

Please join us for a new weekly video series, hosted by Baker McKenzie’s North America Government Enforcement partners Tom Firestone and Jerome Tomas.

This weekly briefing is available on demand and will cover hot topics and current enforcement actions related to white collar crime and criminal investigations in the US and abroad to arm you with the information you need to start your business week.

As one of the largest global law firms, we will call upon our exceptionally deep and broad bench of white collar experts throughout the world and particularly in the commercial hubs of Europe, Asia, Africa and Latin America to join our weekly discussion series.

These briefings will cover:

  • High-profile DOJ case updates and implications
  • SEC enforcement developments
  • CFTC enforcement developments
  • Other white collar defense industry developments

1 February 2021

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18 January 2021

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4 January 2021

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14 December 2020

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07 December 2020

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23 November 2020

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16 November 2020

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9 November 2020

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26 October 2020

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19 October 2020

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5 October 2020

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29 September 2020

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8 September 2020

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24 August 2020

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17 August 2020

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10 August 2020

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3 August 2020

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27 July 2020

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20 July 2020

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13 July 2020

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6 July 2020

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29 June 2020

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22 June 2020

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17 June 2020

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9 June 2020

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26 May 2020

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On December 31, 2020, the Federal Emergency Management Agency (FEMA) issued a temporary final rule extending and modifying export restrictions on certain types of medical supplies and personal protection equipment products (“PPE Products“) used in response to the COVID-19 global health pandemic.  The new rule became effective December 31, 2020; extends previously-imposed export restrictions on covered PPE Products to June 30, 2021; and adds certain types of syringes and needles to the list of covered PPE Products.  We have previously authored blogs on the original FEMA rule, the exemptions from export restrictions, and a previous modification to the original FEMA rule.

FEMA first imposed export restrictions on certain PPE Products on April 7, 2020, to reserve supplies for domestic use to combat the COVID-19 pandemic, as described in our blog post here.  These covered PPE Products included certain respirators, surgical masks, gloves, and surgical gowns.  The new FEMA rule expands the list of covered PPE Products to include certain syringes and hypodermic needles, in light of the high rate of influenza vaccine administration and the rollout of the COVID-19 vaccines. In addition, the new rule clarifies the PPE surgical masks category.  The current list of covered PPE Products includes:

  • Surgical N95 Filtering Facepiece Respirators, including devices that are disposable half-face-piece non-powered air-purifying particulate respirators intended for use to cover the nose and mouth of the wearer to help reduce wearer exposure to pathogenic biological airborne particulates;
  • PPE surgical masks as described by 21 CFR 878.4040, including masks that cover the user’s nose and mouth providing a physical barrier to fluids and particulate materials, that meet fluid barrier protection standards pursuant to— (i) ASTM F 1862; and (ii) Class I or Class II flammability tests under CPSC CS 191–53, NFPA Standard 702–1980, or UL 2154 standards;
  • PPE nitrile gloves, specifically those defined at 21 CFR 880.6250 (exam gloves) and 878.4460 (surgical gloves) and such nitrile gloves intended for the same purposes;
  • Level 3 and 4 Surgical Gowns and Surgical Isolation Gowns that meet all of the requirements in ANSI/AAMI PB70 and ASTM F2407–06 and are classified by Surgical Gown Barrier Performance based on AAMI PB70; and
  • Syringes and hypodermic needles (whether distributed separately or attached together) that are either: (i) Piston syringes that allow for the controlled and precise flow of liquid as described by 21 CFR 880.5860, that are compliant with ISO 7886–1:2017 and use only Current Good Manufacturing Practices (CGMP) processes; or (ii) Hypodermic single lumen needles that have engineered sharps injury protections as described in the Needlestick Safety and Prevention Act, Pub. L. 106–430, 114 Stat. 1901 (Nov. 6, 2000).

All previous blogs posts on trade restrictions imposed throughout the COVID-19 pandemic can be found here.  Baker McKenzie’s COVID-19 Product Import/Export Review (“COVID-19 PIER“), a multijurisdictional tracker for trade restrictions imposed worldwide, can be found here.

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During the first two weeks in January, the Office of Foreign Assets Control (OFAC) published a series of FAQs related to Executive Order 13959, “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies” (the “CCMC EO” or the “EO”). That EO aimed to prevent US investors from financing the development of the People’s Republic of China’s military, intelligence, and security capabilities by prohibiting purchases of securities of certain “Communist Chinese military companies.” Our prior blog posts on the EO and on the Defense Department’s announcement of additional companies that would be subject to the EO are available here and here.

The following points in OFAC’s FAQs concerning the scope of the CCMC EO are noteworthy:

Treatment of Subsidiaries and EO Definitions

  • FAQ 857 clarifies that the EO applies to any subsidiary of the identified “Communist Chinese military companies,” provided that such subsidiaries are publicly listed as such by the US Treasury Department. OFAC has published a list of companies subject to the EO here (the “Communist Chinese Military Companies List”). Accordingly, until a subsidiary of a currently-listed Communist Chinese military company is itself publicly listed, the prohibitions of the EO do not apply with respect to securities issued by such subsidiary. However, the FAQ indicates that the Treasury Department intends to publicly list any entity that issues publicly traded securities and that is (i) 50 percent or more owned by a “Communist Chinese military company,” or (ii) determined to be controlled by one or more “Communist Chinese military companies.”  It is therefore, at least, the current intention of the Treasury Department to list majority-owned subsidiaries of and entities controlled by currently-listed Communist Chinese military companies.
  • FAQ 858 clarifies that the EO applies with respect to publicly traded securities (or any publicly traded securities that are derivative of, or are designed to provide investment exposure to such securities) of an entity with a name that exactly or closely matches the name of a listed entity. FAQ 864 indicates that this name-matching guidance also applies to subsidiaries, regardless of whether the subsidiary’s name is expressly listed or not. OFAC has not provided additional guidance on the apparent conflict between the FAQ 864 guidance and the guidance indicating that non-listed subsidiaries are not covered under the EO, as set out at FAQ 867 and discussed above. However, OFAC issued General License 1 to the EO authorizing transactions and activities involving securities of any entity with a name that exactly or closely matches the name of a listed entity through 9:30 a.m. EST on January 28, 2021.
  • FAQ 859 provides that the term “publicly traded securities” will be interpreted to include securities denominated in any currency that trade on a securities exchange or through the method of trading that is commonly referred to as “over-the-counter,” in any jurisdiction.
  • FAQ 860 provides that the phrase “any publicly traded securities that are derivative of, or are designed to provide investment exposure to” will be interpreted to include, but is not limited to, derivatives (e.g., futures, options, swaps), warrants, American depositary receipts (ADRs), global depositary receipts (GDRs), exchange-traded funds (ETFs), index funds, and mutual funds. The effect of this guidance is to bring within the scope of the EO a broad trade of financial instruments and is consistent with OFAC’s position in other contexts.

Permissible and Impermissible Transactions

  • FAQ 861 clarifies that US persons are prohibited from investing in US or non-US funds, such as exchange-traded funds (ETFs) or other mutual funds that hold publicly traded securities of a listed Communist Chinese military company, regardless of such securities’ share of the underlying index fund, ETF, or derivative thereof. This guidance is significant as it relates to non-US funds with US person investors, even where securities of listed Communist Chinese military companies constitute a less than predominant portion of the fund’s overall asset pool.
  • FAQ 862 provides that US persons, including US funds and related market intermediaries and participants, are not required to divest their holdings in publicly traded securities (and securities that are derivative of, or are designed to provide investment exposure to, such securities) of the “Communist Chinese military companies” identified in the Annex to the EO by January 11, 2021. However, as further discussed in FAQ 865, if a US person chooses to divest of such securities, such divestment must be completed by November 11, 2021.  By the plain language of the EO, US persons continuing to hold such securities after that date will be required to maintain the position absent further guidance or a modification of the EO.
  • FAQ 863 provides that US persons can engage in activities related to clearing, execution, settlement, custody, transfer agency, back-end services, and other such support services, provided that such services are not provided to US persons in connection with transactions prohibited by the EO. In effect, FAQ 863 authorizes US persons to provide certain types of support to non-US persons in connection with transactions that are otherwise restricted under the EO where engaged in directly by US persons. While FAQ 863 provides guidance on a limited set of facilitation activities, additional guidance on a broad range of other facilitation activities has yet to be published.
  • FAQ 864 clarifies that China Telecom Corporation Limited, China Mobile Limited, and China Unicom (Hong Kong) Limited are subject to the EO because, consistent with the name-matching guidance set out in FAQ 858, they closely match the names of entities included in the Communist Chinese Military Companies List. The FAQ also clarifies that compliance with the EO will be measured by trade date, rather than settlement date.
  • FAQ 865 provides that market intermediaries and other participants may engage in ancillary or intermediary activities that are necessary to effect divestiture during the relevant wind-down periods, or that are otherwise not prohibited under the EO. The FAQ also states that “[t]ransactions by US persons (including investors and intermediaries) involving investment funds that are seeking to divest during the relevant wind-down periods to ensure compliance with the EO are permitted.”  We understand that this section of the FAQ provides authority for US persons to invest in a fund that holds restricted securities (or instruments that are derivative of such securities) provided that the fund intends to divest of such securities during the relevant one-year wind-down period. Under this interpretation, a fund that holds such securities is therefore not “off limits” to investment by US persons as long as the fund intends to divest. FAQ 865 also reiterated the guidance set out at FAQ 862 that US persons are not required to divest of restricted securities, but stated that “[d]ivestment must be completed by November 11, 2021.”  We understand that this last statement is meant to indicate that if a US person chooses to divest, such divestment must be completed by November 11, 2021 (or otherwise by the completion of the relevant wind-down period for securities issued by entities listed in the future).

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On January 15, 2021, Enforcement and Compliance, International Trade Administration (ITA), Department of Commerce, published in the Federal Register a notice announcing that, effective immediately upon publication of the notice, it is discontinuing its policy to issue liquidation instructions in certain segments of antidumping duty (AD) and countervailing duty (CVD) administrative proceedings to US Customs and Border Protection (CBP) 15 days after publication or mailing, whichever applies, of final administrative determinations where no statutory injunction was requested, which was announced on its website August 14, 2002, revised in November 2006, and again modified by an announcement on its website November 9, 2010. Such timeframes for AD/CVD administrative proceedings involving subject merchandise from Canada and Mexico were not affected by the 15-day policy.

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On January 15, 2021, the Department of Defense (DoD) published in the Federal Register a final rule [Docket DARS–2019–0063] adopting as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections of the National Defense Authorization Acts for Fiscal Years 2018 and 2019 related to the procurement of covered telecommunications equipment or services. Specifically, the rule prohibits the use of telecommunications equipment or services from certain Chinese entities and from any other entities that the Secretary of Defense reasonably believes to be owned or controlled by, or otherwise connected to, the government of the People’s Republic of China or the Russian Federation, as a substantial or essential component of any system, or as a critical technology as a part of any system.

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On January 15, 2021, the Office of the US Trade Representative (USTR) published in the Federal Register a notice that announces the U.S. Trade USTR’s determination to make a technical amendment to a previously granted exclusion and the extension to that exclusion. The product exclusion amendment announced in annex A of the notice will apply from September 24, 2018 to August 7, 2020. The product exclusion extension amendment announced in annex B of the notice will apply from August 7, 2020 and continue through December 31, 2020. The notice does not further extend the period for product exclusions or extensions. CBP will issue instructions on entry guidance and implementation.

Annex A to the notice contains one technical amendment to U.S. note 20(qq)(25) to subchapter III of chapter 99 of the HTSUS, as established in the annex of the notice published at 85 FR 6674 (February 5, 2020). This amendment modifies U.S. Note 20(qq)(25) by deleting ‘‘zinc oxide absorbent” and by inserting “zinc oxide” in lieu thereof.

Annex B to the notice contains one technical amendment to U.S. note 20(iii)(54), to subchapter III of chapter 99 of the HTSUS, as established in the annex of the notice published at 85 FR 48600 (August 11, 2020) by deleting “zinc oxide absorbent” and by inserting “zinc oxide” in lieu thereof

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In brief

Baker McKenzie’s Energy and Environmental Groups held a webinar to examine what is in store for the energy sector under a Biden Administration and his ambitious plan for a “Clean Energy Revolution and Environmental Justice.”

The panel spoke on the potential impacts of the Biden Administration’s immediate and long-term actions on both the conventional and renewable energy sector, as companies seek transformation and diversification in their portfolios and market offerings. The team also discussed expected climate change regulatory initiatives and expanded ESG reporting and disclosure efforts likely to affect the direction and pace of the US energy transition.


Watch recording here.

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Insurtech (Part 2)

Taking off from the recent publication, Insurtech: Opportunities and Legal Challenges for the Insurance Industry, Chris Murrer and Iris Barsan walk through observations in the market, as well as key developments that define the current insurtech landscape. In this second installment, they take a deeper look into regulations and considerations around recent developments in insurtech. They also touch on important points covering ethical concerns, data privacy, discrimination, and other financial regulations.

 

Insurtech (Part 1)

Taking off from the recent publication Insurtech: Opportunities and Legal Challenges for the Insurance Industry, Chris Murrer and Iris Barsan walk through observations in the market, as well as key developments that define the current insurtech landscape. This first installment focuses on new capabilities across the US and Europe, and how regulations are moving in response to innovations in the market.

 

Special Edition: Finding Balance – Insurance

In this special edition, Martin C.W. Tam, a partner at our Hong Kong office, talks with Ying Yi Liew about the future of the insurance sector as it transitions into the business renewal phase. Basing on client, industry and legal perspectives, we explore what the post-COVID environment looks like for the sector. This episode is part of the fourth installment of Finding Balance: The Post-COVID Landscape for Financial Institutions.

 

Special Edition: Finding Balance – Financial Sponsors

In this special edition, Michael Fieweger, a partner at our Chicago office, talks with Ying Yi Liew about the future of financial sponsors — private equity/credit funds, asset management and sovereign wealth funds —  as the industry transitions into the business renewal phase. Basing on client, industry and legal perspectives, we explore what the post-COVID environment looks like for financial sponsors. This episode is part of the third installment of Finding Balance: The Post-COVID Landscape for Financial Institutions.

 

Episode 3: Data Journey Map for Virtual Communications (Singapore)

This episode outlines different steps that financial institutions must consider or take when using virtual communication platforms. Our experts from Singapore — Stephanie Magnus and Ken Chia — examine these steps, which should form part and parcel of financial institutions’ risk and compliance assessments, with a view to mitigating the potential risks of supervisory intervention and litigation.

 

Special Edition: Finding Balance – The Post-COVID Landscape for Financial Institutions

In this special edition, Jonathan Peddie, global chair of Baker McKenzie’s Financial Institutions Industry Group, is interviewed by Ying Yi Liew, a local principal and expert on financial services from our Singapore office. We analyze the future of financial institutions, as the industry transitions into the business renewal phase. Basing on client, industry, and legal perspectives, we explore what the post-COVID environment looks like for four industry segments and five global trends. This episode elaborates on our introductory publication under Finding Balance: The Post-COVID Landscape for Financial Institutions.

 

Episode 1: Data Journey Map for Virtual Communications (US)

This episode outlines different steps that financial institutions must consider or take when using virtual communication platforms. Our experts from the US – A. Valerie Mirko and Harry Valetk – examine these steps, which should form part and parcel of financial institutions’ risk and compliance assessments, with a view to mitigating the potential risks of supervisory intervention and litigation.

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As businesses and governments around the world prepare for a new US presidency, Baker McKenzie practitioners are taking a close look at the shifting legal and policy landscape. There are still many unknowns, and following the January 6 attack on the United States Capitol and the second impeachment of Donald Trump, 2021 has left many in Washington with a sense of uncertainty about the future.

Yet in other respects, a clearer picture of the overall political environment has begun to emerge, with the two Senate run-off elections in Georgia going to Democrats and President-elect Biden having completed a substantial number of Cabinet appointments.

As a new US president and vice president enter office, Baker McKenzie’s new report, Looking Ahead: How Will US Law and Policy Change under the Biden Administration? offers insights from partners various areas, with commentary on key changes, areas of highest impact, as well as contacts for more information.

Biden report cover

The report also raises and answers the following questions:

  • One of the Biden administration’s immediate priorities is environment and climate change. What will he focus on first?
  • How likely are we to see an increase in the corporate tax rate or the GILTI tax rate during the Biden presidency?
  • How will the Biden administration change companies’ obligations to employees?
  • Which immigration policies will the Biden administration focus on first?
  • What are the big changes coming in the healthcare sector both related to the pandemic and otherwise?

US Law and Policy Under the Biden Administration: A Conversation

As the Biden-Harris administration enters office, Partners Miguel Noyola and Rod Hunter join Associate Eunkyung Kim Shin for a conversation on the future of commerce, trade, and global cooperation under the new US presidency.

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In brief

The Global Immigration & Mobility App provides an introduction to our Global Immigration & Mobility practice and contains information on large-scale global immigration, employment, compensation and tax issues related to the movement of employees that employers need to know.


Contents

Key takeaways

Baker McKenzie’s Global Immigration & Mobility Practice

With immigration and mobility lawyers across the world’s major business centers, we have assisted leading companies in the financial services, technology, defense, manufacturing, healthcare and hospitality industries move their people around the world for over 60 years. In an environment of greater immigration enforcement and stiffer penalties, we design, implement and manage global mobility programs that address current legal and administrative issues and help clients avoid the pitfalls of international personnel transfers.

Global Immigration & Mobility App

The Global Immigration & Mobility App provides an introduction to our Global Immigration & Mobility practice and contains information on large-scale global immigration, employment, compensation and tax issues related to the movement of employees that employers need to know. The app contains a digital version of the Global Employer: Focus on Global Immigration and Mobility publication that covers over 35 country chapters, including specific immigration requirements related to various types of assignments as well as up to date insights regarding legal developments from around the world. Updated September 2020.

Request access here.

Download the App

Keep this go-to resource at your fingertips by downloading our free Global Immigration & Mobility app here.

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