Category: Global

Beware OFAC in a Time of Sanctions

On Monday, April 25, 2022, the U.S. Treasury Department’s Office of Foreign Asset Control (“OFAC”) announced a settlement with Toll Holdings Limited (“Toll”), an Australian freight forwarding and logistics company, with respect to Toll’s originations and/or receipt “of payments through the U.S. financial system involving sanctioned jurisdictions and persons.” Toll, which is not an American entity, and is neither owned by Americans nor located in the U.S. or any of its territories, was involved in almost 3000 transactions where payments were made in connection with sea, air, and rail shipments to, from, or through North Korea, Iran, or Syria, AND/OR involving the property of a person on OFAC’s Specially Designated Nationals and Blocked Persons List. OFAC did not have direct jurisdiction over Toll, BUT because the payments for Toll’s freight forwarding and logistics services flowed through U.S. financial institutions, Toll “caused the U.S. financial institutions to be engaged in prohibited activities with … sanctioned persons or jurisdictions.”

Each OFAC violation can be the basis of civil sanctions. Here the 2853 violation would have supported the imposition of civil sanctions totaling over $826 million. Toll was “happy” to settle OFAC’s enforcement action for $6 million. OFAC found that the Toll violations were “non-egregious,” in part due to the rapid growth of Toll after 2007 through acquisitions of smaller freight forwarding companies. OFAC noted that by 2017 Toll had almost 600 invoicing, data, payment, and other systems spread across its various units. OFAC also noted that Toll did not have adequate compliance procedures and procedures in place and did not attend to those issues until an unnamed bank threatened to cease doing business with Toll because Toll was using its U.S. dollar account to transact business with sanctioned jurisdictions and/or persons. OFAC took note of Toll’s voluntary self-disclosure, well-organized internal investigation, and extensive remedial measures.

OFAC traces its origins to the War of 1812, when the then Secretary of the Treasury imposed sanctions on the United Kingdom in retaliation for the impressment of American sailors. The Treasury Department has had a special office dealing with foreign assets since 1940 (and the outbreak of World War II), with statutory authority found in the Trading With The Enemy Act of 1917 (as World War I raged), and a series of federal laws involving embargoes and economic sanctions. OFAC received its current name as part of a Treasury Department order on October 15, 1962 (contemporaneous with the Cuban missile crisis).

The Toll settlement reflects the growing use by OFAC of public enforcement against foreign businesses for “causing” violations by involving U.S. payment systems. The use of U.S. dollars in any part of a transaction will typically involve the U.S. financial system, directly or indirectly – that subjects the entirety of the transaction to U.S regulatory jurisdiction, including that of OFAC. The Toll settlement evidences OFAC’s increasing willingness to exercise its expansive jurisdiction over foreign businesses, even those involving primarily extraterritorial transactions — for example, the increase in OFAC sanctions of foreign businesses seen as facilitating the Russian invasion of Ukraine.

Foreign businesses must give serious and continuing attention to having substantial policies and procedures in place to insure compliance with U.S. sanctions and, thereby, to avoid OFAC enforcement actions. Companies can start by reviewing OFAC’s Framework for Compliance Commitments and implementing the recommendations there. In addition, all parties to a transaction should be screened against sanction lists (OFAC’s, and also those of the U.K. and E.U.). Companies should consider adopting preventive measures, not only to deter violations, but also to demonstrate a vigorous compliance program.  Similarly, these issues MUST be considered as part of any merger or acquisition (as the Toll experience suggests).Finally, all counterparties, including financial intermediaries, should be evaluated for potential sanction list issues. Otherwise, a foreign business may have to “pay the Toll” for its shortcomings.

Experienced American business lawyers may prove helpful in designing and/or evaluating the compliance programs of non-U.S. companies.

Article By Peter D. Hutcheon of Norris McLaughlin P.A.

For more financial legal news, click here to visit the National Law Review.

©2022 Norris McLaughlin P.A., All Rights Reserved

Afghanistan Temporary Protected Status Application Instructions To Be Issued

The Temporary Protected Status (TPS) grant for Afghanistan will go into effect on May 20, 2022, with publication of the notice in the Federal Register with instructions on how to apply for TPS and for Employment Authorization.

In March 2022, Department of Homeland Security (DHS) Secretary Alejandro Mayorkas announced that Afghanistan was added to the list of countries eligible for TPS. This would benefit approximately 75,000 individuals and provide temporary employment authorization. The 18-month initial grant and registration period became effective on March 20, 2022, and runs through November 20, 2023.

To be eligible, individuals must demonstrate their continuous residence in the United States since March 15, 2022, and their continuous physical presence in the United States since March 20, 2022. Any nationals or residents of Afghanistan who are not currently residing in the United States or who arrived after March 15, 2022, will not be eligible for this TPS designation.

Eligible individuals must submit Form I-821, Application for Temporary Protected Status, during the 18-month initial registration period. They may also submit a request for an Employment Authorization Document using Form I-765, Application for Employment Authorization. The applications may be submitted together and may be submitted online.

Afghan nationals who arrived in the United States through the evacuation effort, Operation Allies Welcome, received humanitarian parole and work authorization for a period of two years. Those individuals may also be eligible for TPS.

DHS has also announced that F-1 students from Afghanistan experiencing severe economic hardship due to the situation in Afghanistan will be eligible for work authorization, increased permittable work hours, and a reduction in their course load as an accommodation.

Article By Rashmi K. Shah of Jackson Lewis P.C.

For more immigration legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

Trade Mark Infringement – Muslim Dating App Meets its Match [.com]

A recent Intellectual Property Enterprise Court Decision (IPEC) on 20 April 2022 has decided that ‘Muzmatch’, an online matchmaking service to the Muslim Community has infringed Match.com’s registered trade marks.

The decision by Nicholas Caddick Q.C was that Muzmatch’s use of signs and its name amounted to trade mark infringement and/or passing off of Match.com’s trade marks. This case follows successful oppositions by Match.com to Muzmatch’s registration of its marks in 2018, and unsuccessful attempts by Match.com to purchase Muzmatch between 2017 and 2019.

Match.com is one of the largest and most recognisable dating platforms in the UK. It first registered a word mark ‘MATCH.COM’ in 1996 and also owns other dating-related brands including Tinder and Hinge with other marks including the word mark ‘TINDER’. Match.com used a 2012 TNS report to illustrate its goodwill and reputation and 70% of people surveyed would be able to recall Match.com if prompted, 44% unprompted and 31% of people would name Match.com as the first dating brand off the ‘top of their head.’

Muzmatch is a comparatively niche but growing dating platform, which aims to provide a halal (i.e. in compliance with Islamic law) way for single Muslim men and women to meet a partner. Muzmatch is comparatively much smaller and was founded in 2011 by Mr Shahzad Younas and now has had around 666,069 sign-ups in the UK alone.

The Court considered that the marks ‘Muzmatch’ and ‘MATCH.COM’ and each company’s graphical marks, had a high degree of similarity in the services provided. The marks were also similar in nature orally and conceptually and the addition of the prefix ‘Muz’ did not distinguish the two marks, nor could the lack of the suffix ‘.com’ or stylistic fonts/devices.

The key issue of the case relates to the idea of the term ‘Match’ which is used by both marks to describe the nature of the business: match[ing]. Muzmatch argued that as both marks share this descriptive common element, so it is difficult to conclude that there is a likelihood of confusion between the two marks as the term just describes what each business does.

 The Court found that finding that there is a likelihood of confusion for a common descriptive element is not impossible, as the descriptive element can be used distinctively. The average consumer would conclude that the portion ‘Match’ is the badge of origin for Match.com due to its reputation as a brand and the very substantial degree of distinctiveness in the dating industry. An average consumer would have seen the word ‘Match’ as the dominant element in the Match.com trade marks and Match.com is often referred to as just ‘Match’ in advertisements.

Aside from its marks, Muzmatch utilised a Search Engine Optimisation strategy from January 2012 whereby it utilised a list of around 5000 keywords which would take a user to a landing page on the its website. In the list of the keywords used, Muzmatch used the words ‘muslim-tinder’, ‘tinder’ and ‘halal-tinder’ which were accepted by Muzmatch during the litigation to have infringed Match’s trade marks of the Tinder brand including the word mark ‘TINDER’. Muzmatch’s SEO use was also found to cause confusion based on some of its keywords including ‘UK Muslim Match’, which again uses the term Match distinctively, therefore a consumer may confuse a link to ‘UK Muslim Match’ with ‘Match.com’.

Therefore, the Court found that there was likely to be confusion between Muzmatch and Match.com because of the distinctive nature of the term ‘Match’ in the world of dating platforms.  An average consumer would conclude that Muzmatch was connected in a material way with the Match.com marks, as if it was targeted at Muslim users as a sub-brand, so this confusion would be trade mark infringement under S10(2) of the Trade Marks Act 1994.

The Court also considered that Muzmatch had taken unfair advantage of Match.com’s trade marks and had therefore infringed those marks under S10(3) of the Trade Marks Act 1994. This was due to the reputation of Match.com’s trade marks and because a consumer would believe that Muzmatch was a sub-brand of Match.com.

The Court rejected Muzmatch’s defence of honest concurrent use and found that Match.com would also have an alternative claim in the tort of passing off.

Key Points:

  • The Court found that a common descriptive element can acquire distinctiveness in an area, solely because of a company’s reputation and influence in that market.
  • The use of Search Engine Optimisation strategies can also constitute a trade mark infringement.
  • The lack of the suffix ‘.com’ in a mark is not sufficient to distinguish use from a household brand such as Match.com, so care should be taken with brands such as ‘Match.com’, ‘Booking.com’[1]

Source:

[1] Match Group, LLC, Meetic SAS, Match.Com International Limited v Muzmatch Limited, Shahzad Younas [2022] EWHC 941 (IPEC)

[1] Note- Blog Post of July 6 2020 Relating to Booking.com- https://www.iptechblog.com/2020/07/us-supreme-court-opens-doors-to-generic-com-trademarks/

Article By Connor Sargeant and the Intellectual Property and Technology Practice Group at Squire Patton Boggs (US) LLP ​.

For more intellectual property legal news, click here to visit the National Law Review.

© Copyright 2022 Squire Patton Boggs (US) LLP

Comparing and Contrasting the State Laws: Does Pseudonymized Data Exempt Organizations from Complying with Privacy Rights?

Some organizations are confused as to the impact that pseudonymization has (or does not have) on a privacy compliance program. That confusion largely stems from ambiguity concerning how the term fits into the larger scheme of modern data privacy statutes. For example, aside from the definition, the CCPA only refers to “pseudonymized” on one occasion – within the definition of “research” the CCPA implies that personal information collected by a business should be “pseudonymized and deidentified” or “deidentified and in the aggregate.”[1] The conjunctive reference to research being both pseudonymized “and” deidentified raises the question whether the CCPA lends any independent meaning to the term “pseudonymized.” Specifically, the CCPA assigns a higher threshold of anonymization to the term “deidentified.” As a result, if data is already deidentified it is not clear what additional processing or set of operations is expected to pseudonymize the data. The net result is that while the CCPA introduced the term “pseudonymization” into the American legal lexicon, it did not give it any significant legal effect or status.

Unlike the CCPA, the pseudonymization of data does impact compliance obligations under the data privacy statutes of Virginia, Colorado, and Utah. As the chart below indicates, those statutes do not require that organizations apply access or deletion rights to pseudonymized data, but do imply that other rights (e.g., opt out of sale) do apply to such data. Ambiguity remains as to what impact pseudonymized data has on rights that are not exempted, such as the right to opt out of the sale of personal information. For example, while Virginia does not require an organization to re-identify pseudonymized data, it is unclear how an organization could opt a consumer out of having their pseudonymized data sold without reidentification.

ENDNOTES

[1] Cal. Civ. Code § 1798.140(ab)(2) (West 2021). It should be noted that the reference to pseudonymizing and deidentifying personal information is found within the definition of the word “Research,” as such it is unclear whether the CCPA was attempting to indicate that personal information will not be considered research unless it has been pseudonymized and deidentified, or whether the CCPA is mandating that companies that conduct research must pseudonymize and deidentify. Given that the reference is found within the definition section of the CCPA, the former interpretation seems the most likely intent of the legislature.

[2] The GDPR does not expressly define the term “sale,” nor does it ascribe particular obligations to companies that sell personal information. Selling, however, is implicitly governed by the GDPR as any transfer of personal information from one controller to a second controller would be considered a processing activity for which a lawful purpose would be required pursuant to GDPR Article 6.

[3] Va. Code 59.1-577(B) (2022).

[4] Utah Code Ann. 13-61-303(1)(a) (2022).

[5] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-573(A)(1) through (4)

[6] C.R.S. 6-1-1307(3) (2022) (exempting compliance with C.R.S. Section 6-1-1306(1)(b) to (1)(e)).

[7] Utah Code Ann. 13-61-303(1)(c) (exempting compliance with Utah Code Ann. 13-61-202(1) through (3)).

[8] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-573(A)(1) through (4)

[9] C.R.S. 6-1-1307(3) (2022) (exempting compliance with C.R.S. Section 6-1-1306(1)(b) to (1)(e)).

[10] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-573(A)(1) through (4)

[11] C.R.S. 6-1-1307(3) (2022) (exempting compliance with C.R.S. Section 6-1-1306(1)(b) to (1)(e)).

[12] Utah Code Ann. 13-61-303(1)(c) (exempting compliance with Utah Code Ann. 13-61-202(1) through (3)).

[13] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-574).

[14] Va. Code 59.1-577(D) (2022) (exempting compliance with Va. Code 59.1-574).

Article By David A. Zetoony of Greenberg Traurig, LLP

For more data privacy and cybersecurity legal news, click here to visit the National Law Review.

©2022 Greenberg Traurig, LLP. All rights reserved.

Are You Ready for the UK Plastic Packaging Tax?

The plastic packaging tax (the ‘Tax’) came into force on 1 April 2022, with UK businesses that produce or import plastic packaging components in quantities of 10 or more tonnes per year affected. However, despite already being in force, research conducted by YouGov, on behalf of Veolia, has found that a high proportion of retail and manufacturing businesses (77% of those surveyed) are still not aware of the Tax.

As businesses gain increased awareness, the Tax is likely to receive a mixed reception. Whilst most would support the Government’s aim of increasing the use of recycled content in plastic packaging components, the Tax comes at a time when 92% of manufacturers and 90% of importers are reporting increased costs. With the introduction of the Tax, those businesses that have not already passed these increased costs on to customers will likely do so, meaning that the Tax may unintentionally add to the cost of living in the UK. This is compounded when one considers that the Tax came into force just five days before the controversial increase in national insurance contributions.

To manage increased costs and to ensure compliance with the law, businesses should pay close attention to the rules of the Tax.

© Copyright 2022 Squire Patton Boggs (US) LLP
For more articles on international laws, visit the NLR Global section.

Your Employee As Your Arbitrator? Maybe!

The Hon’ble Supreme Court of India (“Court”) has, by its order dated August 24, 2009, in the matter of Indian Oil Corporation Ltd. & Ors. (“Appellants”) Vs. M/s. Raja Transport (P) Ltd. (“Respondent”)1, once again upheld that the Court must give full effect and meaning to the appointment procedure set by the parties in the arbitration agreement before appointing arbitrator of their choice.

BRIEF FACTS OF THE CASE:

The Appellant and Respondent entered into an agreement dated February 28, 2005 (“Agreement”), where under, the Respondent was appointed as the dealer of the Appellant for the retail sale of petroleum products. Clause 692 of the Agreement provided for settlement of disputes by arbitration where the Director, Marketing of the Appellant, or a person appointed by him, was to act as the sole arbitrator.

On August 06, 2005, the Appellant terminated the dealership. The Respondent filed suit in the Civil Court, Dehradun, seeking (1) a declaration that the order of termination of dealership was illegal and void and (2) for a permanent injunction restraining the Appellant from stopping the supply of petroleum products to the retail outlet of the Appellant. In this same suit, the Appellant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (“the Act”), praying that the suit be rejected and the matter be referred to arbitration in terms of Section 69 of the Agreement. The Ld. Judge allowed the Appellant’s application and directed the parties to refer the matter to arbitration within two months and also directed the Appellant not to stop supplies to the Respondent for a period of two months.

Both parties challenged the said order before the District Court, Dehradun. The Respondent also filed an application under Section 9 of the Act seeking an interim injunction against the Appellant. Both appeals and the Section 9 application were disposed off by a common order dated January 20, 2006, whereby, both appeals were dismissed and the Section 9 application was allowed, retraining the Appellant from interrupting the supply of petroleum products to the Respondent for two months as well as directing the parties to refer the matter to arbitration as per the agreement, within the said period of two months.

While the appeals were pending, the Respondent issued letter dated January 04, 2006, through their counsel, wherein, the Respondent, referring to the Appellant’s insistence that only its Director, Marketing could be appointed as the Arbitrator, inter alia alleged that it (the Respondent) did not expect fair treatment or justice if the Director, Marketing or any other employee of the Appellant was appointed as the Arbitrator and called upon the Respondent to have a joint meeting so as to enable the parties to mutually agree on an independent arbitrator. This request was not accepted by the Appellant.

Thereafter, the Respondent filed an application before the Chief Justice of the Uttaranchal High Court under Section 11(6) of the Act for appointment of an independent arbitrator to decide the dispute. This application7 was allowed and a retired High Court Judge was appointed as the Sole Arbitrator to decide the dispute. The Ld. Chief Justice inter alia assigned the following two reasons to appoint a retired Judge as an Arbitrator instead of the persons as named in the arbitration agreement.

  1. The Director (Marketing) of the Appellant, being its employee, should be presumed not to act independently or impartially.
    1. The Respondent had taken steps in accordance with the agreed appointment procedure contained in the arbitration agreement and directions of the civil court by issuing notice dated January 04, 2006, calling upon the Appellant to appoint an arbitrator. After receipt of the said notice, the Appellant had to refer the matter to its Director, Marketing, which it did not do, nor did it take any steps for the appointment of an Arbitrator. The Appellant had, thus, failed to act as required under the agreed procedure.

    Aggrieved by the said order, the Appellant preferred an appeal before the Court.

    JUDGMENT:

    The facts and circumstances of this case raised three issues for the Court to consider:

    1. Whether the Ld. Chief Justice of the Uttaranchal High Court was justified in assuming that when an employee of one of the parties to the dispute is appointed as an arbitrator, he will not act independently or impartially.

    On this issue, the Court inter alia noted as under:

    • Arbitration is a binding and voluntary dispute resolution process by a private forum so chosen by the parties.
    • Where a party, with open eyes and full knowledge and comprehension of the said provision enters into a contract with a government/statutory corporation/public sector enterprise, where such arbitration agreements providing for settlement of disputes where the arbitrator will be one of its senior officers, were common, such party cannot subsequently turn around and contend otherwise unless performance of that part of the arbitration agreement is impossible, or is void being contrary to the provisions of the Act.
    • It was settled law that arbitration agreements in government contracts providing that an employee of the department (usually a high official unconnected with the work or the contract) will be the arbitrator are neither void, nor unenforceable.
    • Whilst the provisions relating to independence, impartiality and freedom from bias are implicit under the Arbitration Act, 1940, the same are made explicit in the Act.
    • This position may differ where the person named as the arbitrator is an employee of a company/body/individual other than the state and its instrumentalities e.g. a Director of a private company who is party to the arbitration agreement. In such cases, there may be a valid and reasonable apprehension of bias in view of his position and interest. In such cases, the court has the discretion not to appoint such a person.
    1. In what circumstances the Chief Justice or his designate can ignore the appointment procedure or the named arbitrator in the arbitration agreement to appoint an arbitrator of his choice.

    On this issue, the Court inter alia noted as under:

    • The court must first ensure that the terms of the agreement are adhered to or given effect to, as far as possible and those remedies, as provided for, are exhausted.
    • It is not mandatory to appoint the named arbitrator but at the same time, due regard has to be given to the qualifications required by the agreement and other considerations. Referring the disputes to the named arbitrator shall be the rule. Ignoring the named arbitrator and nominating an independent arbitrator shall be the exception to the rule, which is to be resorted to for valid reasons.

    Interestingly, the Court also proceeded to expound on the scope of Section 11 of the Act, which contains the scheme of appointment of arbitrators.

    1. Whether the Respondent had taken the necessary steps for the appointment of an arbitrator in terms of the agreement, and the Appellant had failed to act in terms of the agreed procedure, by not referring the dispute to its Director, Marketing for arbitration.

    On this issue, the Court inter alia noted as under:

    • In view of the order dated January 20, 2006, the Respondent ought to have referred the dispute to the Director (Marketing) of the Appellant within two months from January 2006. The Respondent had not done so and in light thereof, it was the Respondent that had failed to act in terms of the agreed procedure and not the Appellant.
    • As the Arbitrator was already identified, there was no need for the Respondent to ask the Appellant to act in accordance with the agreed procedure.

    The Court proceeded to hold that the Chief Justice had erred in having proceeded on the basis that the Respondent had performed its duty under the agreement and that there was justification for appointment of an independent arbitrator.

    The Court then proceeded to allow the appeal, set aside the impugned order and appointed the Director (Marketing) of the Appellant as the sole arbitrator to decide the disputes between the parties.

    ANALYSIS:

    By this decision, the Court has once again upheld that when a person enter into a contract with a government/statutory corporation/public sector enterprise having an arbitration agreement providing for settlement of disputes where the arbitrator will be one of its senior officers, such person cannot subsequently turn around and contend otherwise unless performance of that part of the arbitration agreement is impossible, or is void being contrary to the provisions of the Act. However, this position may differ where the person named as the arbitrator is an employee of a company/body/individual other than the state and its instrumentalities e.g. a Director of a private company who is party to the arbitration agreement.

    Referring to its decision taken earlier in the matter of Northern Railway Administration, Ministry of Railway, New Delhi Vs. Patel Engineering Company Ltd. (please refer to our earlier hotline dated August 26, 2008) Court reiterated that it is important to first ensure that the terms of the arbitration agreement are adhered to or given effect to, as far as possible and those remedies, as provided for, are exhausted, before they intervene in any manner.

    However, If circumstances exist, giving rise to justifiable doubts as to the independence and impartiality of the person nominated, or if other circumstances warrant appointment of an independent arbitrator by ignoring the procedure prescribed, the Chief Justice or his designate may, for reasons to be recorded ignore the designated arbitrator and appoint someone else.

    FOOTNOTES

    1 Civil Appeal No. 5760 of 2009 arising out of SLP (C) No. 26906 of 2008.

    2 “69. Any dispute or a difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this Agreement shall be referred to the sole arbitration of the Director, Marketing of the Corporation or of some officer of the Corporation who may be nominated by the Director Marketing. The dealer will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the contract related or that in the course of his duties or differences. ………………..It shall also be a term of this contract that no other person other than the Director, Marketing or a person nominated by such Director, marketing of the Corporation as aforesaid shall act as arbitrator hereunder…………………….”

    Nishith Desai Associates 2022. All rights reserved.

Article By Sahil Kanuga and Vyapak Desai with Nishith Desai Associates.

For more articles on international law updates, visit the NLR Global section.

Legal News Reach – Season 2, Episode 1: Immigration & Its Impacts on the U.S. Labor Market with Raymond Lahoud [PODCAST]

Welcome to our first episode of Season 2! Rachel and Jessica speak with Raymond Lahoud, a Member of Norris McLaughlin, P.A., focusing on immigration law. Immigration issues are complicated enough, but how does that factor into boosting the U.S. economy?  Listen to our last episode to find out more.

Be sure to also check out the latest episode of Mr. Lahoud’s podcast, “Immigration Matters.”

We’ve included a transcript of our conversation below, transcribed by artificial intelligence. The transcript has been lightly edited for style, clarity, and readability.

Full Transcript

INTRO  00:02

Hello and welcome to Legal News Reach, the official podcast for The National Law Review. Stay tuned for our discussion on the latest trends, legal marketing, SEO, law firm best practices, and more.

Rachel  00:15

Today’s episode is the first of the second season, where we’re broadening our focus to trending topics in the legal industry. Today we’re speaking with Ray Lahoud, Member of North McLaughlin about the impact of COVID-19 on immigration and labor shortages. Ray, would you like to tell our listeners a little bit about yourself?

Raymond Lahoud  00:30

Well, thanks for having me, Rachel. It’s really awesome to be here on this podcast and to talk about such an interesting area of law right now, in the world, particularly immigration law. I’m a partner at Norris McLaughlin, where I serve as the Chair of the Immigration Law Group here. I handle employment-based immigration matters, removal defense, employment, verification, I noncompliance all types of immigration matters, a broad spectrum with my great team of attorneys, paralegals, and assistants here at North McLaughlin. So thank you again for having me. It’s great to be here.

Rachel  01:05

One of the first topics we wanted to focus on here is immigration’s impact on labor shortages. You’ve written a lot about the impacts on the U.S. economy due to labor shortages. Can you explain how immigration can help remedy the situation?

Raymond Lahoud 01:18

I think we can all agree that without labor without employees, without people to go and work in whatever company, whatever organization, whatever place that exists out there that that needs to provide services or goods to the American public needs, needs employees. Without labor, there’s no economy, immigration right now is really a huge part of the employment demand, or the employment shortage share. There’s a lot of Americans who are able to legally work who just don’t want to work or have you know, taken different decisions or different approaches on life or what they want to do with their life. But we still need people to perform some of these essential functions from farming, to nursing care to handling, you know, mushroom picking to manufacturing, immigration is the way that has long proven to be a way to solve that through temporary visa programs through you know, green card programs that existed out there. And under the Trump administration. And when COVID hit, things really got hit pretty hard and really slowed down the ability for people to bring in international employees to the United States that fill that gap.

Rachel  02:29

This has been an ongoing issue. So are there any policy changes on your radar that will help solve this issue, either through immigration or otherwise?

Raymond Lahoud 02:38

The only way to solve this issue is through comprehensive immigration reform. For over a decade now, we’ve been using the number of 11 million people that are in the country without documentation, I think we can all agree that that number is significantly higher, probably 20, or 30 million people, step one is going to be trying to figure out how we handle those 20 to 30 million people or even Federalists 11 million people that 11 to 20 million people that we have the United States without documentation. And that means that some people are going to have to be deported, who you know, may have certain crimes may have certain issues in terms of their background, but a significant number of these individuals have been in the country for a long time, working without authorization, pleading taxes. So there has to be a process of legalization for those individuals, which is the big issue. We don’t what is legalization for them. And then there also has to be a secure border where people can’t just cross the border without any documentation. I mean, every country has borders, borders are important. We can all see how important borders are right now with what’s happening in Ukraine. You know, comprehensive immigration reform includes having an ability for individuals to come into the United States to work to claim asylum if they have to, to help our employers here in the United States who need employees because people are just not taking part or not applying to Americans are just not applying to take on these jobs. The great resignation has, for some reason taken over the United States and it continues. So what do we need? We need comprehensive immigration reform? How do we get there? It’s getting members of Congress to agree daily, I’m talking to clients who will arrive in Pennsylvania and they’ll say how do I start working here I just crossed the border assuming that because they heard on Facebook before they came up here are on TikTok are though like that it would be very easy for them to claim asylum. So I’m dealing with a lot of clients and potentials and individuals who have just recently crossed the border now feel that they’re stuck in the United States because they can’t leave because they have to go through proceedings and they can’t work. I mean, there’s also in this representation, let’s say that we keep hearing the numbers, millions are coming to the United States. There are millions of encounters. So you may have one person try to come to the United States four or five times and each one is considered an encounter. And this is a problem that we see from President to President, by the way, and this is why I say we need comprehensive immigration reform. Because let’s go back to 1986. Ronald Reagan was going to deal with the immigration problem we had, you know, millions of people here in the United States back then. And he did put three amnesty 1213 14 million people were granted permanent resident status, they say that cost the turn of California to a blue state once they became citizens top political. In the end, they’re like going back to that every President has made immigration, much tougher, actually very tough. Actually, it was the administration that puts some of the toughest policies when it comes to what’s called the public charge rule. The way our system is written right now is that the executive branch just has so much ability and authority discretionary ability and authority over what to do or what not to do, what they can do what they can’t do in terms of immigration. And then every time a new president comes in, something changes drastically. So you had Obama come in, then he puts in place DACA, you know, gives eight 900,000 people, you know, a temporary quote-unquote, status, and you have President Trump come in, and he takes it away. And then you have President Biden come in. Again, it goes back to comprehensive immigration reform. It’s all just been patchwork since after ’86. Now we have 11, 12, 13, 14, 20 million people here. So it’s-I think the distaste is, is that we’re going to grant people status, and it’s just going to happen, again, has to be a two-fold fix as to be true, comprehensive immigration reform where we’re not, you know, 10 years down the road, we don’t have another 15 million people that don’t have documentation here.

Rachel  06:34

What can companies do to help deal with this shortage of immigrant labor or just labor in general?

Raymond Lahoud 06:39

Every day, I probably field 20 to 30 calls from employers who cannot find employees. It’s the biggest problem. I think that’s facing our country right now. And I’m not sure where it comes from, I really don’t understand what this great resignation is, I don’t know how people can live. Right now, there are several legal immigration processes that are available. One is the H Tubi. system, which is a great way of bringing in seasonal employees for farms for landscaping, contractors, painters, manufacturing work, which we bring workers over here year after year. The H1-B lottery is another visa process. So there’s visa processes that are out there, it’s good to avail as an employer to not be afraid of these processes to you know, when you’re recruiting globally recruit, and when you find a candidate, seek out an immigration attorney and say, Hey, is there a way that I can bring this person over legally sponsor them? Is there a pathway and there are. You have companies like the bigger tech companies that are getting all the big H1-B visas, you have the bigger farming companies that are getting all the H2-B visas, because the smaller ones are not really availing themselves, the legalized programs that exist there, we have a lot of people who are coming into the country across the border, these individuals, they’re turning themselves into the Customs and Border Protection. So there’s an expectation at some time that, you know, some of them have fears of returning, I mean, that they’re going to start going through processes. These are individuals that will likely have employment authorization documents, within a year or so don’t forget about the American worker offer good wages, offer good benefits offer time off the world’s change right now in terms of how things work. So if there’s, you know, remote operations that you can offer, do that offer child care services, if you could, but you have to be creative.

Jessica  08:25

So I would love to get your perspective since you’ve been involved in immigration law for so long, and you definitely have a great grasp on the history of a lot of immigration policy changes. I know with COVID, you know, the legal industry got backed up in general; just court cases being rescheduled, I would really like to know what the last two years for immigration law has looked for you how has it changed because of the pandemic updates on border restrictions? I’d love to get your take on that.

Raymond Lahoud 08:52

When the pandemic hit immigration really became incredibly, incredibly busy from the travel restrictions to a title 42 at the border expulsions to people that were detained in immigration custody that were getting COVID It was a disaster for a long time for a lot of people. A lot of people out there who are stuck in other countries, you know, travel bans were coming up and moving and changing by the minute. And companies. You know, the companies that we represent, the employers that we represent that keep operating there were essential. They were central companies and they were healthcare companies. They were companies that do industrial manufacturing or handle electricity and the like, so they needed their employees here. So during COVID, we spent a lot of time trying to figure out the ways to bring a lot of these employees into the United States through the waivers that existed. They’re reaching out to the State Department to seek special exemptions. And then at the same time, you know, the immigration to the deportation defense part of it really came to a halt. court hearings were halted for all like non detained cases, which took an already incredibly backlogged immigration court system and took it about I have four more years behind now. So you’re probably looking at a good 10 years before an immigration judge for a trial. And after continuances and the, like 10 cases COVID really spread pretty heavily, we have to file lots of petitions and requests to try to get clients that were detained by immigration out of custody within the United States. So a lot happened during COVID. And when it came to immigration, in those days, there were nights where I was awake at, you know, two, three in the morning, making sure a client was able to get back in.

Jessica  10:34

We’re in such an interesting environment at this point, especially more recently with the Ukraine crisis, but we also had a changing of the hands in the White House, all the different elections. So there’s been a lot of transition period. And you know, we touched on it a little bit already. But the changes moving forward, I mean, now that the pandemic is having some type of release, besides needing that comprehensive immigration law changes, do you see any other changes now that we’re getting out of the pandemic, whether that’s Ukraine specifically, or just in general? What do you think is gonna happen here?

Raymond Lahoud 11:07

I think that we’ve, we’ve moved on to our next disaster with our next emergency, we’ll say, which is Ukraine right now. This is all that we hear about on the news, there aren’t COVID numbers at, you know, at the bottom, how do people are dying, how many people died and the like, I just feel that, you know, Ukraine has as taken over COVID. Now COVID brought on a time of remote hearings, which are still continuing now. The immigration courts, making fun of them with, you know, video, WebEx hearings in Zoom hearings, are able to move them quicker through the system and the like, and I have some serious issues. When it comes to remote hearings. You know, there’s huge due process concerns and having my client be able to testify in person where the judge can see his or her face. You know, there’s some very serious concerns in that. So they’re changes that, you know, came about from COVID, in terms of remote operations and the like, but I don’t know if they’re necessary to our benefit, even for, you know, immigrants work were coming in. And also, you would think that we really learned how to process things a lot faster. You know, what, we’re kind of hit with the crisis, and we just aren’t, you know, our embassies are still in a huge backlog when it comes to processing visas and, you know, fiance petitions and merit-based petitions and the like, but we are seeing movement here stateside within that, honestly, in terms of change. I mean, you just, it’s all patchwork.

Jessica  12:27

If memory serves me correctly, I know the Biden administration has put more emphasis on visas for STEM. I think people coming either for schooling or for employment, if I’m remembering correctly, do you think that’s a step in the right direction, I know it’s another “patch,” but…

Raymond Lahoud 12:43

 The United States has a huge number of international students in the United States, even locally here in what’s called the Lehigh Valley, Pennsylvania, Lehigh, Lafayette, Cedar Crest Moravian, their F huge international student populations and international student populations are critical to cultural diversity to you know, just to the growth of the school and it’s bringing the world together. So as part of it, so students will come here from abroad, Saudi Arabia, countries, China, Japan, Australia, they’ll come to the F1 visa complete their courses here to get a bachelor’s degree. And if they typically, if you come in under the f1 visa, regardless of your degree, you’ll get 12 months of what’s called occupational practical training. And that’s because you 12 months of just training in your, your area of of studies, when you were in school, if you earned a STEM degree science, tech, engineering or math degree, you can get an additional 24 months of occupational practical training. To me, that’s great to me for bringing people here, and we’re educating them, we should keep them here and you know, give them jobs here. I mean, we there’s no reason that you know, we should be training talent and, you know, bringing in talent from across the world, and then just sending them, you know, back to, you know, their home country, particularly if they’re willing to stay and work here and become members of society in good standing that contribute pay taxes. Why not? Even if you were you came in, you knew you were coming in across the border, see, you’re still a kid, and then you turn over all of your information to the government when you’re 17 or 18 years old. And then, you know, four, eight years later, the Trump ministration says that they are going to get rid of it and it goes through courts who put it back in and take it out and put it back in and then there’s an injunction lifted, and these are hundreds of thousands of lives in people’s hands. People really have to recognize that there are faces to these individuals that have deferred action that have temporary protected status that there are faces to them. And it’s more than just politics. But could you imagine if you were in that position with deferred action, not knowing should I finish going to college should I spend the money should I take a job, what do I do next?

Jessica  15:01

COVID already caused a very large limbo feeling if you’re coming from another country, or you’ve been here, and then you might be told, “oh, you gotta go back to where you came from.” And I can’t imagine being young when you come here and then going back to a country you don’t even really know.

Rachel  15:17

So we wanted to get your viewpoints on Ukrainian refugees and immigration, how does this compare to other refugee crises that we’ve had in the past

Raymond Lahoud 15:27

Ukraine refugee crisis has brought the US government to its peak when it comes to refugees, and the like, they’ve acted very quickly, to bring in them what’s called Temporary Protected Status. You compare it to you know, what happened in Afghanistan and the lake, there are a lot of differences, I would say just that how quickly they are granted temporary protected status. You know, if you’re from Ukraine, there’s countries that are setting up policies like Canada to try to bring in people from Ukrainian. And I hope that these policies that these countries are putting together to help refugees in times of crisis will stay for other countries to beyond Ukraine’s. Hopefully this won’t be the last time that you’ll see other countries open their doors to help people. My mom and dad are both born in Lebanon and immigrated here during the civil war in the late 70s. And it was devastating. And the US opened its doors to the Christians from the north, they came in and became an integral part of the society life here in Pennsylvania, it’s good to see that in Ukraine, but we’re going to have other countries that are going to have similar issues. And who knows where, you know, President Putin may stop, we just really have to think long term about it. Because we also have to be realistic. And we can only handle so many people in our country. I hate to say that.

Rachel  16:49

How does that factor into maybe some of the more, like, long-term policy changes that the country could implement? Is there a need to sort of rethink how we bring in refugees, and how many people we can take and how that process really goes?

Raymond Lahoud 17:02

There is, there is, but how do you rethink that? You know, how do you it’s even just saying, you know, how many people can we take in I know you just feel I feel internally bad because you don’t want to turn anybody away, that’s really hurting, you know, and but we have to, thankfully, I’m not in Congress to make up those decisions. But I think there has to be, you know, some sense of reason, and balance. And I’m not really sure what that is.

Rachel  17:29

Like the US has to work together with other countries to make sure that we help them out of people that need to be helped. I don’t think it’s realistic for one country to sort of shoulder most of the burden.

Raymond Lahoud 17:38

It’s very hard to get refugee status. I mean, you don’t just kind of come into the United States and walk-in and may take years to go through I mean, if you’re going to the Iraqi refugee have to go in through the United Nations refugee program, there’s a huge process you have to go through, it’s not easy. The things that happened in Afghanistan kind of made known the issues with our you know, the refugee program and the lake. But it’s not, it’s not an easy process to go through. You can’t just walk into an embassy, US Embassy and say, Hey, I’m I’m afraid of where I’m living, I want to go to United States,

Rachel  18:09

Right, yeah. And I imagine on top of even having to be in a situation where you have to flee your home.

Raymond Lahoud 18:15

Anybody that goes through pain, like a harm or fear, you know, I mean, whether it’s domestic violence, and those are the worst of cases where I have clients who are coming in suffered extreme domestic violence, like at the hands of their spouses and the like, and, and with those, you know, you know, what you do, you can send them back, you know, when that when the spouse is going to kill them on, you know, they’re dead on arrival. And so those are cases that we’re dealing with inside the United States right now. It’s like we have refugees coming in. But we also have asylees, here in the United States that were people who are in here applying affirmatively for asylum, we have a lot of people in the United States that are here on like a protective status we do. We do so much. And other countries are recognizing that if you take a look at Australia, so people are coming into the to Australia, they don’t go into the country, they sit off-island for a long period of time for they claim asylum or anything like that. The other countries that are out there, I think that they all have some pretty unique set of circumstances that are there, and in ours has a lot of issues that we have to really work through.

Rachel  19:16

So you’ve written about policy changes in Pennsylvania aimed at helping undocumented immigrants, you know, entrepreneurs, people who are getting driver’s licenses, things like that. I was curious to get your insight on how you see these changes impacting both immigrants in the state as a whole, like what sort of have been the changes there?

Raymond Lahoud 19:33

Driver’s licenses in Pennsylvania, we’re seeing a movement. New Jersey, just fair aware, they pass legislation in the implement to the driver’s licenses, people who may not have a social security number or the like, right now in Pennsylvania. I believe it’s in the House Committee. It’s being discussed. I don’t see it moving out of there given the current makeup of the legislature. I don’t foresee it happening in Pennsylvania anytime soon. It does keep coming up a lot by members of the State House, I think it’s a good idea because people are driving. Let’s get real. There are people without papers in the United States. I mean, if we don’t realize that, I think that we’re just fooling ourselves. So, you know, it’s if it’s a way for them, they’re voluntarily providing their information, you know, why not register it, they can get their insurance. It’s not a federal issue. It’s a state issue as the as right to get driver’s licenses, it’s state-by-state. Pennsylvania considers that they look at it, they bring it up, but it always fills in committee doesn’t go anywhere. Pennsylvania, has the political planet as a swing state, as we all know, and immigration is a hot topic issue here.

Rachel  20:37

I’m glad to hear that at least it’s even if it’s not, you know, moving forward, I think it being on people’s minds is a good thing. So in terms of changes like that, and maybe large scale changes, like we spoken about how we just need really large scale immigration reform, I was wondering, we could talk about the changes that you think need be made to both attract and retain immigrants in the United States, I think there’s a lot of talk about specifically, after the Trump administration, a lot of international students to stop coming here, you know, the United States is losing talent to countries like Canada and other places like that. So I was curious to get your thoughts on that.

Raymond Lahoud 21:14

COVID-19 opened up a different way of kind of operating, we had spoken earlier, where, you know, these companies are now recognizing that they could get that global talent opened up a facility in India or, you know, have somebody remote in from Canada, or actually just physically move their locations to Canada, or their offices or their manufacturing sites to another country, because it’s easier to bring labor in. I think that other countries are starting to embrace certain kinds of immigration, like I know that Canada is, you know, they’ve implemented that another investment-based immigration system, they’ve made it easier for Indian workers a certain kind of ticket during COVID in the light. So there are countries that are taking no more proactive approach to bringing in people but during the Trump administration, people from abroad really felt they weren’t welcomed in the United States. And I saw that a lot with students, and there was a significant number. It’s coming back, and I’m seeing the numbers come back, and just from the schools locally, that that we’re working with. So in terms of the International Student Program, you know, I do feel that it’s picking back up after COVID. And after the Trump administration, I just think we have to kind of keep going with it to make sure that, you know, we know that the people that we’re inviting into our country, we know that we have to welcome them here and treat them kindly, and work with them. Because we’re just we are one world one people. I’m really just, I think it’s a realist here, and that, you know, you have immigration lawyers who, you know, will just, you know, push things to like an end and say, No, open borders, and you have no people on another end that would say, you know, close everything to anybody. And but I think we have to have recent ability. I mean, you just can’t close the United States to everything. I mean, you can’t close the United States to the globe’s cultures, we just have to find a middle ground. And I hope that, you know, I was able to kind of present some of that reason that no middle ground, that’s there being immigration where it’s hard to take, you know, some things that Trump did weren’t necessarily I’m going to do but if somebody heard me say that, and I will now, you know, they would be shocked at it. But I think that’s what the issue is, is that there’s no meeting of minds. People just become enemies, because somebody has a different political opinion. You know, I think there really has to come a realization that we just can’t shut the borders down completely. And you can’t open the borders up completely. There just has to be a middle ground that we all have to reach in. Our members of Congress really have to grow up and hopefully, they will. And hopefully, they’ll work with the Biden ministration. We’ll get somewhere.

Jessica  23:52

I actually have an interesting question. Since you’re located in Pennsylvania; Lancaster’s, a certified welcoming status for refugees. Do you think that’s helpful in situations like Ukraine? And like if more cities did that, do you see that as a positive direction?

Raymond Lahoud 24:06

I do, I do. I mean, like…Philadelphia has, like a welcome center for Lancaster was one of the counties like that. It’s really what they do with it is, yeah, it certainly hops. The more the better. Governor Wolf has actually taken very proactive actions towards the Ukrainian community here, even locally. But again, there’s more than just the Ukrainian community that are suffering from prosecution. So hopefully, it’ll open our minds to how we deal with other areas and in the future when this happens and how other countries can work together with it. But yeah, it does. It does help because it shows that we care you know, things like that only they can start shows that we care. You know, even if you know, New Jersey, they couldn’t give them give people a real ID driver’s license, but they gave them a license to drive and pencil and they can leave the state drive and add to it, it’s still a driver’s license so they can give What they want to know as much as they can give them and if that’s what Lancaster was able to give them, that’s what it was. They can’t give driver’s licenses but um, you know, that opens up a door for immigrants and to have stuff like that it’s good for them to have programs like that is good.

Rachel  25:14

Well, excellent. Thanks again, Ray for joining us today. We had a great conversation.

Raymond Lahoud 25:20

 It’s really been good being here talking about immigration. It’s an interesting topic. And hopefully, we’ll see things changing in the years to come and I’m here to talk to you whenever. Yeah, thank you for having me.

OUTRO  25:40

Thank you for listening to The National Law Review’s Legal News Reach podcast. Be sure to follow us on Apple Podcasts, Spotify, or wherever you get your podcasts for more episodes for the latest legal news. Interested in publishing and advertising with us? Visit www.natlawreview.com. We’ll be back soon with our next episode.

Article By Rachel Popa and Jessica Scheck of The National Law Review / The National Law Forum LLC

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Copyright ©2022 National Law Forum, LLC

Better Late than Never, Just About – UK Government Issues Workplace Guidance on Living with COVID

So with Covid 19 now officially behind us for all purposes (except actual reality, obviously), we have now been graced by the Government’s new “Living with Covid” guidance.  This was due to come into force on 1 April and was released fashionably late in the afternoon on, well, 1st April.  You could say with some justification that this did not give employers much time to prepare, but that is OK because on close review of the guidance there is in fact very little to prepare for.  As a steer to businesses, this is little short of directionless.

First, it makes the obvious point that the abolition of the requirement to give covid express consideration in workplace risk assessments does not take away any of the employer’s obligations to continue to comply with its health & safety, employment and equality duties (in the latter two cases, although unsaid, presumably as they may be affected by the former).

From there, the Government moves to normalise covid through a long list of symptoms common to it, colds, flu and other respiratory diseases – fair enough so far – but also to other quite unrelated conditions such as hangovers, migraines, food poisoning, being unfit, malaria and frankly just getting old (“unexplained tiredness, lack of energy”).  The list is significantly expanded from the traditional trio of continuous cough, fever, loss of taste and smell and now also includes muscle pain, diarrhoea, headache, loss of appetite and “feeling sick” (what, really?). Some medical practitioners say that this is long overdue recognition of all the things covid can do to you. However, it is still a wincingly unhappy expansion for employers, since the published list now essentially includes something from pretty much every ailment known to man. The guidance notes that it will not usually be possible to tell whether you have covid or something else from the symptoms alone and of course the free testing by which that could have been determined in the past is now largely withdrawn.  Therefore the guidance to individuals is that “if you have symptoms of a respiratory infection such as covid and you have a high temperature or you do not feel well enough to go to work, you are advised to try to stay at home and avoid contact with other people” and then “Try to work from home if you can.  If you are unable to work from home you should talk to your employer about options available to you”.  Given the rich panoply of symptoms now available to the discerning malingerer, justifying taking yourself home for five days while you work out whether your headache is covid or just a headache has never been so easy.

As a result, the burden is shifted squarely to employers to keep up the anti-covid fight, and in particular to decide whether to maintain restrictions on entry to their premises for those who are unvaccinated and/or untested.  Both will be increasingly difficult to sustain in view of the obvious official indifference to the question evidenced by the guidance, which focuses instead on the traditional measures of ventilation, regular cleaning of high-touch surfaces, provision of sanitiser and hygiene advice, etc. The other big hole in the guidance is as to the employer’s rights (or is it obligation?) to send someone home if they have one or more of that long list of potentially relevant symptoms, and even if the employee himself feels able to work and/or cannot work from home.  Nor does it deal with the employees’ sick pay rights in those cases.

Taking a reasonably hawkish view of those two questions:-

  1. If you know that the employee has symptoms which could well indicate that he is suffering from covid, and even if it could equally be something less serious, are you complying with your Health & Safety at Work Act duty to take all reasonably practicable steps to maintain a safe system of work if you allow him in anyway?  If he works in a sparsely –occupied well-ventilated area, perhaps yes, but otherwise probably not.  Given the virulence of Omicron, it is unarguably foreseeable that allowing someone who may have it to breathe wantonly on other people may lead to their contracting it too.  It is also clearly foreseeable, if no longer as much so as with the earlier covid variants, that those other people may become properly ill or die as a result.  Put mathematically, breach of duty + foreseeable risk of injury + causation + actual injury = liability.

So in my view, despite the vacuum in the new guidance, an employer not just can, but really should send home immediately an employee with any material case of the symptoms listed, as a minimum until it becomes clear that the real issue is something else (though not malaria – best not let them in either).

A firm stance on this will also help combat reluctance to return to the office among those staff concerned about the health risk of doing so.  If they or their cohabitants are particularly vulnerable, the knowledge that basically no precautions are being taken to ensure that those present in the workplace are all covid-free will only feed those anxieties.

  1. If the employee is sent home on these grounds and cannot work there, will he be entitled to full salary (as it was not by his choice) or sick pay only?  In many cases he will be back within a week and the two may be the same.  Where they are not, however, I believe that it would strictly be sick pay only – though the employee may himself be physically able to work, he is practically unable to do so by reason of his own possible medical condition, the risk it may pose to others in the workplace and the duty of the employer to take reasonable steps to head off that risk.  That said, there are employment relations arguments both ways on this – on the one hand, that the symptoms listed are so varied and transient that they represent an easy avenue for abuse, and on the other that if reporting them means you get packed off home on reduced pay (perhaps none until SSP kicks in on day 4), you are much less likely to report them in the first place and will probably prefer to pass your day posing an undeclared but potentially quite serious risk to your colleagues.

Article By David Whincup of Squire Patton Boggs (US) LLP

For more coronavirus legal news, click here to visit the National Law Review.

© Copyright 2022 Squire Patton Boggs (US) LLP

Russian Sanctions Create Patent Risks

While multi-national sanctions recently imposed on Russia were intended to punish Russia for its aggression in Ukraine, the effects of the sanctions have led to a need for tough decisions for U.S. entities with patent interests in Russia.  The prohibitions on financial exchanges with certain Russian banks will essentially prevent any payment of fees to Rospatent (the Russian patent office), and although a general license from the Department of the Treasury provides a short window for winding down certain administrative transactions, U.S. entities engaged in patent transactions with Rospatent only have a short time to make decisions about current and future patent activities in Russia.

Prohibited Activities

On February 28, 2022, the Department of the Treasury initiated prohibitions related to transactions involving certain financial institutions in Russia, including the Central Bank of the Russian Federation.1 The directive specifically prohibits a United States person (unless otherwise excepted or licensed) from engaging in any transaction involving the listed financial institutions, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.  Under the directive, the prohibitions are specifically worded to include: (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the directive; and (2) any conspiracy formed to violate any of the prohibitions of the directive.

Notably, the prohibited activities do not expressly prevent any transactions of a U.S. person with Rospatent.  And although the United States Patent and Trademark Office (USPTO) has cut off direct engagement with Rospatent for carrying out activities such as use of the Global Patent Prosecution Highway (GPPH) program2, Rospatent is not currently a sanctioned entity under the directive.  This, however, is essentially a distinction without a difference.  Moreover, since the USPTO (and also the European Patent Office) has already cut ties with Rospatent, there still remains the possibility that Rospatent itself will be added to the sanctions at a future date and thus completely eliminate any pursuits by U.S. persons with Rospatent.

The current sanctions directly affect entities seeking patent protection in Russia since payments of required fees related to patent applications and granted patents in Russia are processed through the Central Bank of the Russian Federation.  This includes a number of financial transactions, such as payment of government filings fees for directly filing a patent application in Russia or filing a national phase of an international PCT application in Russia, as well as incidental fees incurred during prosecution of pending Russian patent applications and payment of yearly maintenance fees for issued Russian patents.  This would also include payment of yearly maintenance fees for patents obtained through the Eurasian Patent Organization (EAPO) and maintained in Russia since such fees paid to the EAPO must be forwarded to Rospatent.  Because of the intertwining of Rospatent with the Central Bank of the Russian Federation, any fees paid to Rospatent must be considered equivalent to making a transaction through said bank.

Patent prosecution in Rospatent requires engagement with a Russian patent practitioner.  While U.S. entities pursuing patent interests in Russia are unlikely to directly engage Rospatent and pay fees that are ultimately processed through the prohibited bank, it is clear from the directive that strategies, such as routing payments through countries that are neutral in relation to sanctions, are prohibited.  As noted above, the directive prohibits any transaction that actually “evades or avoids” the other prohibitions of the directive, as wells as any transaction that “has the purpose of evading or avoiding” the other prohibitions.  This language appears to have the potential to ensnare purposeful non-adherence as well as actions that unwittingly end in non-adherence (e.g., forgetting to discontinue an automated payment of a patent maintenance fee to Rospatent).

Deadline for Administrative Transactions

U.S. entities still have time to complete administrative transactions with Rospatent despite the February implementation of the directive.  On March 2, 2022, the Department of the Treasury issued a general license authorizing certain transactions that are otherwise prohibited by the directive.3  The license authorizes U.S. persons to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations or certifications to the extent such transactions are prohibited under the directive, provided such transactions are ordinarily incident and necessary to such persons’ day-to-day operations in the Russian Federation.  For at least U.S. entities whose day-to-day operations include securing and maintaining intellectual property, including in Russia, this license provides a window to complete activities and avoid violation of the directive.  Currently, the transaction window provided under the license runs through 12:01 a.m. eastern daylight time on June 24, 2022.

Forming a Russian Patent Strategy

The incursion of Russia into Ukraine has been underway for shortly more than one month, but there is no way to know when hostilities may cease.  Moreover, even when peace is achieved, it is impossible to know how long the current sanctions against Russia may continue.  Those familiar with patent law know that the business of obtaining patents is a deadline-driven venture, and uncertainty of time quickly breaks apart the paradigm.  A “wait and see” approach thus has the potential to result in a loss of patent rights as well as possible liability for knowingly or unknowingly engaging in activities that are prohibited under the directive.  Anyone engaged in patent activities in Russia thus would be advised to undertake a portfolio review and utilize the time remaining under the General License to form a plan that ensures compliance with the current sanctions.  This can include at least the following items.

Anyone engaged in patent activities in Russia thus would be advised to undertake a portfolio review and utilize the time remaining under the General License to form a plan that ensures compliance with the current sanctions.

  • Proceeding with Grant of Presently Allowed Applications – For Applicants that have received a Notice of Allowance with a due date after expiration of the General License, one may consider early payment of the fees.  This should only be done, however, to the extent that it is possible to confirm that payment will be processed through Rospatent and the Central Bank of the Russian Federation prior to the expiration of the General License on June 24, 2022.
  • Annuities on Granted Patents – Any patent annuity paid to Rospatent after the General License expires should be assumed to be in violation of the current sanctions.  Patent holders that engage a patent annuity service should contact their provider to confirm that they have a plan in place for compliance with the sanctions.  Some annuity services have, in fact, already announced that they will no longer make payments to the Rospatent until further notice.  Presumably, for Russian patents with annuities due in 2022, early payment could be made in the hope that normalcy will ensure prior to the deadline in 2023, but such action should only be taken to the extent one can ensure that payment is processed through Rospatent and the Central Bank of the Russian Federation before the deadline.  Even then, it may be advisable to consider whether “early” payment of patent annuities would be considered to be “ordinarily incident” to day-to-day operations of a person’s patent pursuits.  In the alternative, a patent owner should confirm that any Russian patents are under a “do not pay” order with their annuity provider to avoid an unintentional, automated payment in violation of the sanctions.
  • Filing a Direct or National Phase Patent Application – If a new patent application in Russia is planned, or if the deadline for national phase entry of a PCT application is approaching, one may consider early filing prior to the expiration of the General License.  This could be done in the hope that a deadline for payment of future fees to Rospatent do not arise before the time that sanctions are lifted.  This is seen to be a risky proposition since it is unknown how quickly Rospatent processes paid fees through the Central Bank of the Russian Federation, and it is likewise unknown to what extent a fee paid to Rospatent before expiration of the General License but only processed through the Central Bank of the Russian Federation after expiration would be viewed as being in violation of the sanctions.  Moreover, if Rospatent itself is later added to the sanctions, any early filings would be at significant risk for abandonment due to an inability to continue transactions with Rospatent.
  • Filing Through EAPO as an Alternative to Russia – Russia is one of several countries where patent protection can be secured based on a granted patent from the EAPO.  As of this writing, the banks utilized for processing financial transactions for the EAPO (AO UniCredit Bank and AO Raiffeisenbank) are not included in the U.S. sanctions.  As such, direct filing or national stage entry with the EAPO can provide an alternate pathway for patent protection in Russia.  The cessation of interaction between the USPTO and the EAPO would not have a bearing on this option, but care would need to be taken to ensure that all documents otherwise transferrable directly between the offices are handled by other routes.  Once a patent is granted by the EAPO and Russia is elected as a country for maintenance of the patent, annuities paid to the EAPO are forwarded to Rospatent.  As such, this alternative pathway is only effective for patents where annuities in Russia would not become due until after lifting of sanctions.  As the average length of time for completion of patent prosecution with the EAPO is generally two or more years, one would hope that the current situation in Russia would be resolved within that timeframe.  Again, however, uncertainty remains.
  • Using Russia as an International Search Authority – Rospatent is one of the limited number of patent offices available for use as the ISA in a PCT application, and Rospatent may be preferred because of the relatively low cost relative to other ISA options.  Search fees paid to the World Intellectual Proper Organization (WIPO) are forwarded to Rospatent when chosen as the ISA, and it is not possible to ensure that such fees paid to WIPO will be forwarded to Rospatent, and then to the Central Bank of the Russian Federation before the expiration of the General License deadline.  As such, it is recommended to not use Rospatent as the ISA in any PCT application from now until sanctions are lifted.
  • Enforcement of Granted Russian Patents – A comprehensive patent strategy in Russia must now also consider the relative value of any Russian patents in light of the recent decree on patent enforceability in Russia.4   Therein, any holder of a Russian Patent from a so-called “unfriendly” foreign state is required to give a mandatory license with no compensation to anyone in Russia wishing to exercise the right of use without consent of the patent owner.  As with the entire situation, uncertainty reigns with this decree, and it is impossible to know when (if ever) rights of Russian patent holders from “unfriendly” states will be returned.  Accordingly, a Russian patent strategy must consider not only options for proceeding in the near term to secure rights to the extent possible but must also consider the reality that any “rights” that are secured with a Russian patent are of no effect and will be for the foreseeable future.

Next Steps

For anyone with significant patent interests in Russia, time is of the essence for cementing a strategy for moving forward.  For some, the most expeditious approach could be to simply close your file on any Russian patents and patent applications.  If such approach is taken, careful attention must be made, as noted above, to ensure that any possibility of a fee being paid to Rospatent after June 24, 2022, is eliminated.  For others, investments in Russia may not allow for a complete abandonment of possible future patent enforcement rights in Russia.  If actions as noted above are taken to “batten down the hatches” of the Russian patent portfolio prior to the deadline in order to weather this storm, timing is again crucial in order to avoid unintentional engagement in sanctioned activities.  Also, moving to patent filings through the EAPO as a starting point for Russia can be an effective workaround so long as Russian sanctions get lifted before any patent annuities through an EAPO patent would become due in Russia.  Finally, in forming a strategy, one also must consider that even before its recent decree on patent enforceability, Russia was already one of nine countries on the United States Trade Representative (USTR) “Special 301 Report”  of trading partners presenting the most significant concerns regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection.

1  Directive 4 Under Executive Order 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” February 28, 2022, Office of Foreign Assets Control, Department of the Treasury.  See, https://home.treasury.gov/system/files/126/eo14024_directive_4_02282022….
2  USPTO Statement on Engagement with Russia, the Eurasian Patent Organization, and Belarus, March 22, 2022.  See, https://www.uspto.gov/about-us/news-updates/uspto-statement-engagement-r….
3  General License No. 13, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 Under Executive Order 14024, Office of Foreign Assets Control, Department of the Treasury, March 2, 2022.  See, https://home.treasury.gov/system/files/126/russia_gl13.pdf. 
4  Decree of the Government of the Russian Federation of 06.03.2022 No. 299 “On Amendments to Clause 2 of the Methodology for Determining the Amount of Compensation Paid to a Patent Owner When Deciding to Use an Invention, Utility Model or Industrial Design without His Consent, and the Procedure for its Payment.” See, http://publication.pravo.gov.ru/Document/View/0001202203070005?index=0&r…

Article By Ryan Cagle of Womble Bond Dickinson (US) LLP

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Copyright © 2022 Womble Bond Dickinson (US) LLP All Rights Reserved.

USCIS Policies Lead to High Denial Rates for L-1B Petitions

The L-1B nonimmigrant visa program is regularly utilized by companies to transfer employees with specialized knowledge from foreign countries to the United States. According to a recent analysis, the program continues to experience significant denial rates, raising questions about the underlying causes of the phenomenon.

L1-B Visa Program

The L1-B Visa Program allows employers to transfer certain nonimmigrant employees from foreign offices to offices within the United States. Specifically, the employment-based nonimmigrant visa program allows the transfer of professional employees with specialized knowledge relating to the organization’s interests from foreign offices to the United States, sometimes even to establish a U.S. office. To qualify under the program, the employee must possess “specialized knowledge,” which, according to the U.S. Citizenship and Immigration Service (“USCIS”), requires knowledge of the petitioning employer’s product, service, research, equipment, techniques, management, or other interests. USCIS evaluates L-1B petitions on a case-by-case basis.

In practice, L-1B petitions are filed by employers on behalf of their employees seeking intracompany transfer. While an employer may file an L-1B petition for an individual employee, larger companies may have the option to file a “blanket petition” so long as the company meets certain criteria. When petitioning for individual employees, the petition must be approved and then taken to a U.S. consulate for approval. For blanket petitions that have been approved, the employer need only submit a Form 129S, Nonimmigrant Petition Based on Blanket L Petition, which then may be taken to a consulate for approval.

High Denial Rates of L-1B Petitions

A recent article by Forbes analyzed government data concerning L-1B petitions and detailed their trends over the last decade. During that period, the average denial rate for L1-B petitions was 28.2%, a significant number, especially considering the denial rate for H-1B petitions averages under 5%. While the denial rate declined to 21.3% in the third quarter of the fiscal year 2021 and 20.7% in the fourth quarter, the denial rates were 32.7% and 33.3% respectively for the first two fiscal quarters of 2021.

Given that L-1B petitions appear to receive greater scrutiny than other business nonimmigrant visas, one must wonder what causes the denial rate, and what steps can be taken to ensure approval of such a petition.

Explanations for High L-1B Denial Rates

The unusually high denial rate for L-1B petitions could be explained in part by the high bar set by USCIS in adjudicating the petitions. However, at least one attorney noted the case-by-case nature of the petitions do not easily lend itself to a simple adjudication process, noting that “USCIS applies [the standard] in a way that favors documentary evidence while discounting the company’s own assessments of the worker’s importance and knowledge […]” While the USCIS Policy Manual provides immigration officers with some guidance, more comprehensive guidance could certainly be helpful.

In response to the investigation conducted by Forbes, USCIS commented,

“USCIS officers review each L-1B petition on a case-by-case basis to determine if they meet all standards required under applicable laws, regulations, and policies. […] The agency will continue to solicit feedback from stakeholders to identify procedural efficiencies and promote policies that break down barriers in the lawful immigration system.”

Additionally, the denial rate can be attributed at least in part to the political implications of the executive branch. For the fiscal year 2021, the improvement that can be detected in the L-1B denial rate followed President Biden’s assumption of office. This shift may be attributed not to a more liberal implementation of policy, but rather to the reinstatement of the USCIS policy of giving deference to previous decisions. This deference does not extend to petitions or applications made by Customs and Border Protection (“CBP”) or Department of State (“DOS”) officials.

The high denial rate for L-1B petitions serves to frustrate employers, and even discourages foreign investment in the United States. While the petitions continue to receive increased scrutiny, it is advisable to take the utmost care in the preparation of applications and ensure that all are supported with sufficient evidence and documentation.

Article By Raymond G. Lahoud of Norris McLaughlin P.A.

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©2022 Norris McLaughlin P.A., All Rights Reserved