Brexit: Keep Calm and Carry On

As the country recovers from the shock outcome of last Thursday’s Referendum, the question which Restructuring professionals must now consider is “what does Brexit mean for me?”. The truth is that nobody really knows. The Referendum decision is not legally binding on the UK Government and the process of the UK leaving the EU will only start once the UK has served formal notice on the EU pursuant to Article 50 of the Treaty on the European Union. This will start a two year negotiation period to effect Brexit. In the meantime, the UK remains a member of the EU and EU law continues to apply.

Brexit, EU Referendum

So, in some respects it is very much business as usual for now, but on the basis that David Cameron’s successor will give notice to leave the EU, we recommend that clients start considering the consequences of Brexit now. Preparation for those consequences may include looking at the following:

Contract Reviews – Many contracts refer to an array of EU laws, regulators and territories which should be reviewed to determine how Brexit may/will impact. Can the contract be varied to mitigate the impact of Brexit? What is the potential impact on the contract price being linked to Sterling, the Euro or the Dollar? Does the governing law clause need amending? Will Brexit result in a breach of contract? Whilst unlikely, can force majeure or material adverse effect clauses be relied upon? How can the contract be future-proofed?

Financing and security reviews – Brexit caused turmoil in the markets initially and led to a reduction in the UK’s credit score rating and a significant devaluing of sterling. Before the Referendum, warnings of a post Brexit recession were rife. Is your business/customer at risk of breaching its financial covenants as a consequence of Brexit? Do those facilities and security need to be reviewed and changes made to protect the position?

Vulnerability to Brexit – Brexit is going to impact some more than others. How much do you or your clients/customers trade with other EU countries? How will your supply chain be affected? Do you currently benefit from EU funding? Is the tax efficiency of your business based on EU law? Does your business benefit from EU emission allowances? Will you need a licence or other authorisation to trade in the EU?

Public Policy – The UK will have to review where domestic legislation may need to be amended to take account of Brexit. It will be important to businesses to understand what changes are likely to be coming down the line. Many of the legal changes will be driven by policy decisions made in London and/or Brussels in particular. Keeping on top of these Policy decisions may allow businesses to position themselves to benefit from or at least mitigate the effects of legislative change. Do you need to engage with public policy professionals to assist in lobbying for changes which will have a positive impact on your business?

International Trade Arrangements – To what extent does your business involve the supply of goods between the UK and other EU member states? How will your business be impacted by the potential imposition of tariffs and other trade barriers restricting the free movement of goods post-Brexit?

Immigration and employment– What nationality are your employees? How will your ability to recruit/second employees be affected and will any parts of your business have to be downsized?

Communication – To what extent do you need to make any public statements or disclosures in relation to the impact of Brexit on your business. What is your strategy for communicating the impact of Brexit with your staff?

Other issues will arise as the full impact of Brexit unravels over the coming weeks and months.

ARTICLE BY John Alderton & Caroline Castle of Squire Patton Boggs (US) LLP

© Copyright 2016 Squire Patton Boggs (US) LLP

Massive Consumer Product Safety Commission IKEA Recall Leaked to Press by “CPSC Source” Prior to Official Agency Announcement

IKEA recallToday the U.S. Consumer Product Safety Commission (“CPSC”) and Health Canada announced a massive joint recall with IKEA involving over 35 million pieces of furniture that can pose a tip over hazard to small children. While we would normally write about the recall itself, a troubling development has caught our attention.  A CPSC employee prematurely leaked the recall to staff reporter Tricia Nadolny at the Philadelphia Enquirer.

The CPSC and IKEA officially announced the recall this morning, but the Philadelphia Enquirer prematurely broke the story yesterday afternoon. The reporter confirmed in the story that her source works for the CPSC and did not have clearance to discuss the recall publicly. Additionally, the story included quotes from consumer advocates and other interested parties reacting to the recall—indicating that the reporter had the information for a decent amount of time prior to publishing the story.

After the Enquirer article was published, multiple other media outlets began reporting the recall. This likely put IKEA (and the CPSC) in an incredibly difficult situation of having to quickly make decisions about the release of information about the recall. For companies and legal counsel negotiating a recall—especially one of this magnitude—this is a nightmare scenario.

Even if a company has a contingency plan in the event a recall is leaked early (something we usually recommend for higher profile recalls), the carefully negotiated messaging and CPSC agreed rollout of the recall will have been thrown out the window and replaced by the leaked information. The company will be forced to scramble to respond to media questions while also not spoiling the originally planned announcement.

Additionally, and even more problematic, consumers who may have recalled units will start calling and emailing the company before they know the company’s official 800 number to call and before the company has sufficient staff to start fielding those calls. With over 29 million units involved in this specific recall, that could add up to quite a lot of phone calls and emails.

There are many compelling reasons why the CPSC and companies agree to not only the content of a recall, but also its timing. For a recall of this magnitude to be leaked to the media is a very troublesome precedent and cause for concern to companies negotiating higher profile recalls with the CPSC. Companies have not historically had much to fear in terms of recall information leaking from the agency, but this development potentially calls that into question.

Not only is it a violation of CPSC’s own statutes and regulations for recall information to be prematurely leaked to the press (and potentially could lead to employee sanctions), but it is also potentially disruptive to the effectiveness of the recall itself. The CPSC should take steps to ensure such leaks do not occur in the future.

ARTICLE BY Matthew R. Howsare & Charles A. Samuels of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

©1994-2016 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

The New Federalization of Trade Secret Law – What You Should Know About the DTSA

trade secretsOn May 11, 2016, the Defend Trade Secrets Act of 2016 (DTSA) officially became law, creating for the first time a federal private civil cause of action for misappropriation of trade secrets. The DTSA is actually an amendment to the Economic Espionage Act, which was passed 20 years ago and provides for criminal prosecution of trade secret theft.

Prior to the DTSA, civil actions for trade secret misappropriation were governed solely by state law. Over the years, 48 out of 50 states have adopted some form of the Uniform Trade Secrets Act (UTSA).  The two exceptions are Massachusetts, which adopted its own trade secret statute distinct from the UTSA, and New York, which has relied on common law alone.

Many viewed this state-by-state approach as inadequate. The application of state-specific nuances in the law led to unpredictability, and the lack of federal law governing conduct that increasingly involved interstate or foreign activities caused jurisdictional and choice-of-law issues, including concerns that US companies had insufficient recourse against trade secret thieves operating overseas. In such cases, access to federal courts was not automatic. Such access required either diversity of citizenship or supplemental jurisdiction based on another asserted claim arising under federal law.

In view of these concerns, Congress has proposed various federal trade secrets bills over the past several years. Finally, with broad bipartisan support, the DTSA passed in spring 2016.

Importantly, the DTSA does not preempt state trade secret misappropriation laws. Parties may still pursue claims based on state law. But in cases with a nexus to interstate commerce, plaintiffs also will have access to the new federal statutory regime. Some parties have argued that having access to both state and federal causes of action may actually create complexity rather than engendering a more harmonized body of law, but that remains to be seen. Based on the substantial overlap in the DTSA’s and the UTSA’s definitions of “trade secret” and “misappropriation,” one might expect that DTSA and UTSA claims in the same case will not differ much from a substantive perspective. Likewise, DTSA remedies are similar to UTSA remedies: injunctive relief, compensatory damages (in the form of actual damages, unjust enrichment or reasonable royalties), enhanced damages for willful and malicious misappropriation (capped at two times compensatory damages) and attorneys’ fees (in cases involving bad faith or willful and malicious conduct). Nonetheless, there are differences between the DTSA and the UTSA, and having a new federal cause of action available should compel plaintiffs to weigh carefully which claim or claims to pursue, and where to file such claim.

A key feature of the DTSA that has received significant attention is the ex parte seizure provision, 18 USC § 1836(b)(2), which is a new remedy not available under state versions of the UTSA, although UTSA plaintiffs may have had similar vehicles of relief, such as a temporary restraining order. Under the DTSA, per a plaintiff’s expedited, unilateral request, courts may order law enforcement to seize property “necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” This procedure is intended only for emergency situations to prevent or mitigate immediate and irreparable injury when less severe procedures would be ineffective. Indeed, this provision requires “extraordinary circumstances” and, if abused, can result in damages against the seizing party. To that end, the movant must post a bond sufficient to cover such damages if the seizure was unwarranted.

In addition, satisfying the threshold requirements for an ex parte seizure is not easy. A plaintiff must prove that the defendant actually possesses the misappropriated information and must identify “with reasonable particularity” the property to be seized and its location. Once seized, that property remains safeguarded by the court pending an expedited hearing on the propriety of the seizure.

Another key aspect of the DTSA remedies provision is the inclusion of employee mobility protections similar to protections in states that reject the “inevitable disclosure” doctrine. Section 1836(b)(3)(A)(i) restricts injunctive relief that would “prevent a person from entering into an employment relationship,” requiring that such relief be “based on evidence of threatened misappropriation and not merely on the information the person knows.” Notably, the law explicitly seeks to avoid conflicts with existing state employment laws—an area where disputes are expected to arise given that the DTSA is likely to be asserted against former employees.

Yet another employee protection of the DTSA is the immunity provided to whistleblowers who might disclose confidential information when reporting unlawful activities to government officials or as part of an anti-retaliation lawsuit. Under § 1833(b), employers are required to provide notice to employees of this immunity protection in any agreement governing the use of trade secret or other confidential information. As a result, it is important for companies to review and, if necessary, modify their standard employment and non-disclosure agreements to bring them into compliance with the DTSA.

The DTSA is silent on whether the plaintiff must first identify its asserted trade secrets with reasonable particularity before conducting any discovery. This is a fundamental statutory protection for defendants in certain states, such as California. Federal courts have grappled with whether this provision (Cal. Civ. P. Code § 2019.210) is applicable in federal cases under the Eriedoctrine.

The DTSA recognizes the great economic harm inflicted on US businesses by theft of trade secrets, particularly by overseas entities. The law requires the US Attorney General and other agencies to report to Congress (within the next year and biannually thereafter) on the breadth and extent of this threat, as well as on any hurdles preventing trade secret owners from avoiding misappropriation by foreign actors and recommendations for further reducing the threat. At a time when many innovators are carefully evaluating whether to guard their intellectual property as trade secrets or patents (particularly in view of legal developments that have invalidated many patents), this new law signals that trade secret protection in the United States is becoming more muscular.

ARTICLE BY Eric W. Hagen of McDermott Will & Emery
© 2016 McDermott Will & Emery

Gender Neutral Restrooms Now Required in NYC

gender neutral restroomsOn June 28, 2016, New York City Mayor Bill de Blasio signed legislation passed earlier this month by The New York City Council to amend the City’s administrative code, plumbing code and building code to require gender neutral restrooms. The new law applies to businesses and other establishments in the City’s five boroughs with existing single-occupancy, publicly-accessible restrooms. The law does not require businesses to build new single-occupant restrooms, nor does it affect larger restrooms with multiple single-stalls.

Instead, the law prohibits the labelling of single-occupant restrooms as gender-specific. Beginning January 1, 2017, signs designating single-person restrooms for one gender, i.e., “men” and “women,” must be removed and replaced with signs for all sexes.  Employers with establishments in the City that may be affected should take advantage of the lead time to ensure compliance.

ARTICLE BY Laura A. Stutz of Epstein Becker & Green, P.C.
©2016 Epstein Becker & Green, P.C. All rights reserved.

Tax Treatment of Bitcoin Has Many Open Questions

bitcoinIt has been over two years since the IRS came out with its initial position on the tax treatment of Bitcoin and other virtual currencies, but there has yet to be any follow-up on questions that this initial position has raised. The American Institute of Certified Public Accountants has written a letter to the IRS urging the Service to publish additional guidance to provide more certainty on these open issues.

IRS Notice 2014-21 stated that virtual currencies are to be treated as property, not as currency. This was potentially good news to Bitcoin investors, since it would allow them to pay the lower long-term capital gains tax rate on profits if they held the Bitcoin for over a year. On the other hand, this position was  inconvenient for consumers and merchants who use and accept virtual currencies as a means of exchange, because each transaction, no matter how small, must be reported in order to determine the amount of gain  or loss every time a consumer uses the virtual currency as a means of exchange, and every time the merchant converts the virtual currency received in a transaction into U.S. currency.

In the two years since the IRS published Notice 2014-21, this classification of virtual currencies as property rather than a currency, many other questions have been raised, but have not been addressed. The letter from the AICPA sets them out:

(1) Determining Fair Market Value of the Virtual Currency: The IRS should publish guidance on whether a taxpayer can use any published exchange rate to determine the fair market value of virtual currencies, and whether the taxpayer must use the same published exchange rate for all other transactions. The letter notes that there are  wide variance in the fair market value of Bitcoin on four Bitcoin published rates (Google, Bitcoin exchange rate, Bitstamp, CEX and Winkdex), citing an example selected at the same time, reflecting a range of value from a low of $227.84 to a high of $231.14.

(2) Expenses of Obtaining Virtual Currencies: Are the expenses to mine virtual currencies currently deductible, or are they to be added to the basis of the mined currency? This would normally be an easy call – costs would normally be added to the basis of the property that is manufactured – but the 2014 guidance intimates that this might not be the case.

(3) Tracking Basis of Virtual Currency: Because virtual currencies are treated as property, the taxpayer must track the cost of purchasing each unit acquired, in order to determine the taxable gain when it is sold (including every time a consumer uses it to purchase goods and services).  The AICPA letter says that tracking the basis for virtual currency is virtually impossible when it is used in everyday commerce, and asked for the IRS to consider alternative means to determine basis.

(4) General Transaction Rules Applicable to Property: The AICPA letter asks whether the general tax rules applicable to property (rather than currencies) would apply to virtual currencies. For example, the letter asks whether a taxpayer would be able to take advantage of the tax free like-kind exchange rules of section 1031 if one type of virtual currency is exchanged for a different type of virtual currency (for example, a Bitcoin for Ethereum exchange).

(5) Character of Virtual Currencies Held By Merchants: How should virtual currencies that are accepted by a merchant be classified for tax purposes – as a capital asset or as an ordinary income asset?

(6) Charitable Contributions: Does a contribution of virtual currencies to a charitable organization require a formal appraisal? The general rule is that if a taxpayer donates property worth more than $5,000 to a charitable organization, the taxpayer must obtain a formal appraisal to support the amount to be deducted as a charitable contribution. There is an exception, where an appraisal is not needed for the donation of securities that are traded on a published exchange. The letter asks whether the donation of virtual currency should be subject to the same exception, since they are traded on published exchanges.

(7) Is Virtual Currency a Commodity: If virtual currencies are treated as a commodity, would it be subject to the mark-to-market rules for commodity traders?

(8) How About a De Minimus Exception For Small Transactions: The letter asks the IRS for an exception to the rule requiring a taxpayer to report each virtual currency transaction as a taxable sale of property when used to make small consumer purchases.

(9) Retirement Accounts: Can virtual currencies be held as an investment in a qualified retirement plan (like a 401(k) plan)? The rules for eligible investments in such plans limit the types of property than can be held in a qualified retirement plan.

(10) Foreign Reporting Requirements: Are virtual currencies subject to Foreign Bank Account Reports (FBAR) and/or Foreign Bank Account Tax Compliance Act (FATCA) reporting?

As these issues get worked out, others are likely to arise. Until they are addressed by the IRS, the uncertainty will likely inhibit the growth of virtual currencies in the U.S. economy.

To see a copy of the AICPA letter to the IRS, please click here.

ARTICLE BY Marvin A. Kirsner of Greenberg Traurig, LLP

©2016 Greenberg Traurig, LLP. All rights reserved.

Audience Polling Results from MPF 2016 Leadership Conference: Building for the Future

MPF Leadership ConferenceOn May 5, 2016, more than 100 managing partners and law firm leaders gathered in Atlanta for The MPF 2016 Leadership Conference. During the opening session, we distributed audience polling devices and asked participants to weigh in on a variety of issues important to leading a successful mid-size law firm. The polling technology is fun, and the results are anonymous and instantaneous. Looking at the data, here are a few highlights from this year’s Conference:

  • Ten percent (10%) of firm leaders report that their firms use psychological assessment tools as part of their hiring and recruiting process. With few exceptions, Fortune 1000 companies use these instruments routinely as they onboard and assess talent. Given the importance of recruiting and retaining top legal talent, shouldn’t your law firm be using them as well?
  • Thirty-eight percent (38%) of firm leaders say their law firms provide leadership training to junior partners and associates. Sixty percent (60%) say their firms provide training in marketing and business development. To be competitive in the long run, law firms must invest in the “soft skills” of their young lawyers.
  • Seventy-three percent (73%) of firm leaders report that that their firms are doing a “fair” or “poor” job when it comes to grooming future leaders. Just two percent (2%) say “excellent.” If your firm’s owners care about succession, here’s an area where most firms can improve.
  • Forty percent (40%) of firm leaders say their law firms are proactively dealing with underperforming equity partners. Fifty-nine percent (59%) report that they want to act, but have yet to do anything about the situation. Healthy and successful law firms recognize the importance of dealing with partners who aren’t pulling their weight.

As always, this year’s MPF Audience Polling Results provide great benchmarking data to share with your colleagues. Click here to see the full results of the MPF Audience Polling presentation.

ARTICLE BY Managing Partner Forum of The Remsen Group

Copyright 2016 The Remsen Group

New USCIS Policy Decision Broadens Permissible Bases for Visa Transfer of Multinational Managers

visa transferAfter four years of internal deliberations, U.S. Citizenship & Immigration Services (USCIS) recently issued a policy memorandum binding all USCIS personnel to follow the reasoning of a 2013 USCIS Administrative Appeals Office (AAO) decision. That AAO decision broadened the type of evidence a U.S. employer may cite in support of an L-1A intracompany transfer visa, which is used by U.S.-based entities that seek to transfer employment of a manager or executive from a foreign-based affiliate.

The 2013 AAO decision was petitioned by the U.S. subsidiary of a publically traded Japanese parent company that manufactures packaging solutions for the medical, pharmaceutical, and food industries. Its U.S. subsidiary imports, markets, and distributes the Japanese parent company’s product line in North America. In 2012, the U.S. subsidiary sought to extend the L-1A visa of a transferee employee, who acted as the U.S. employer’s vice president and chief operating officer. The USCIS California Service Center denied the extension request, claiming the transferee was not employed in a managerial capacity because the U.S. employer did not have an organizational structure large enough to support a managerial position. By citing the existence of only two payroll employees besides the L-1A transferee, USCIS denied the visa extension, claiming that in the absence of other employees, the transferee L visa beneficiary was primarily performing sales duties rather than managerial duties. The denial decision gave no weight to the fact that the transferred employee supervised contracted U.S. service providers and a foreign staff of eight employees, which included three sales employees, four engineers, and a shipping clerk.

AAO overturned that California Service Center decision, citing as error the denial’s emphasis on the small size of the U.S.-based operations. As the AAO noted, “That a petitioner may only have a few employees directly on its payroll, although a relevant consideration in the determination of whether a beneficiary qualifies as an L-1A manager, does not necessarily compel a conclusion that the beneficiary primarily performs day-to-day operational duties.”

By adopting as policy the guidance provided by the 2013 AAO decision, USCIS has now made it a requirement that all USCIS employees follow the reasoning of the AAO decision. U.S. multinational employers will be the prime beneficiaries of this reversal in longstanding USCIS practice. Now, even U.S. employers with quantitatively limited organizational structures can benefit from the advantages of the L employment visa category.

ARTICLE BY Roy J. Barquet of Foley & Lardner LLP

© 2016 Foley & Lardner LLP

“Brexit” Dominates, as Financial Markets Roil

brexit financial marketsSecretary Kerry Heads to Brussels and London; President Obama Heads to Canada for the North American Leaders’ Summit; While the House is in Recess, Senate Committees Will Focus on the State-Foreign Operations Appropriations Measure and the Full Chamber May Consider the Zika Compromise Measure

President Barack Obama acknowledged from San Francisco early Friday morning that the British had exercised their sovereign rights and chosen to exit the European Union.  Washington awoke to the news and the corresponding negative reaction of the international financial markets soon after. Secretary of State John Kerry changed his travel schedule, adding a stop in Brussels and London to a trip that had him in Italy over the weekend. Meanwhile, President Obama travels to Canada this week to attend the annual North American Leaders’ Summit.

Democratic Members of the House staged a 24-hour sit-in on the floor of the chamber last week, protesting what they believed was the Republican leaders’ unwillingness to address gun control through legislation.  On Thursday, Speaker Paul Ryan (R-Wisconsin) abruptly adjourned the House until after the July Fourth holiday.

Senate Majority Leader Mitch McConnell (R-Kentucky) cut off an effort to keep suspected terrorists from buying guns last Thursday after Republicans and Democrats failed to reach an agreement on the issue, effectively ending debate of gun control in that chamber ahead of the November elections.  The Senate will be in session this week.

Brexit: British Vote to Exit the EU

Washington awoke to news Friday morning that the British had decided to exit the EU, a development that promptly caused international markets to slump.  Many expect market uncertainty will eventually impact the anemic economic growth in the United States.  After traveling to London in April and speaking in favor of Britain remaining in the EU, President Obama released a statement on Friday saying:

“The people of the United Kingdom have spoken, and we respect their decision.  The special relationship between the United States and the United Kingdom is enduring, and the United Kingdom’s membership in NATO remains a vital cornerstone of U.S. foreign, security, and economic policy.  So too is our relationship with the European Union, which has done so much to promote stability, stimulate economic growth, and foster the spread of democratic values and ideals across the continent and beyond.  The United Kingdom and the European Union will remain indispensable partners of the United States even as they begin negotiating their ongoing relationship to ensure continued stability, security, and prosperity for Europe, Great Britain and Northern Ireland, and the world.”

Senate Foreign Relations Committee Chairman Bob Corker (R-Tennessee) also issued a statement on Friday recognizing the British decision, while emphasizing the “special relationship” and importance of trade between the two countries:

“[The] referendum will not change our special relationship with the United Kingdom.  That close partnership will endure, and we will continue to work together to strengthen a robust trade relationship and to address our common security interests.”

Secretary of State Kerry said on Friday of the U.K. Referendum:

“I want to emphasize that although the U.K. will be leaving the European Union, the British are in no way departing from the principles and values that undergird the Transatlantic Partnership or from the important role the U.K. plays in promoting peace and stability in the world. The special relationship that has long existed between the United States and the U.K. endures. Our two countries remain strong and vigilant NATO Allies, permanent members of the UN Security Council, commercial partners, and close friends.”

He added:

“I also want to reaffirm the U.S. commitment to the European Union and the common agenda we share with Europe on such issues as Ukraine, nuclear nonproliferation, climate change, trade, and human rights.”

Secretary Kerry will be in Brussels and London today, meeting this morning with EU High Representative for Foreign Affairs and Security Policy Federica Mogherini, and later today with U.K. Foreign Secretary Philip Hammond.  In speaking with reporters in Italy over the weekend, Secretary Kerry said,

“The most important thing is that all of us as leaders work together to provide as much continuity, as much stability, as much certainty as possible in order for the marketplace to understand that there are ways to minimize disruption, there are ways to smartly move ahead in order to protect the values and interests that we share in common.”

North American Leaders’ Summit This Week

President Barack Obama, Mexican President Enrique Pena Nieto, and Canadian Prime Minister Justin Trudeau will meet on Tuesday in Ottawa for the annual North American Leaders’ Summit.  President Obama will also address a joint session of the Canadian Parliament.

Upcoming Presidential Trip – NATO, Poland and Spain

From 7-11 July, President Obama will travel to Poland and Spain. He will participate in the NATO Summit in Warsaw from 7-9 July.  The summit is expected to underscore the Alliance’s solidarity and to advance efforts to bolster security along NATO’s eastern and southern fronts. While in Warsaw, President Obama will hold a bilateral meeting with Polish President Andrzej Duda. He will also meet with the Presidents of the European Council and the European Commission to discuss U.S.-EU cooperation across a range of shared priorities, including countering terrorism, fostering economic growth and prosperity, and addressing the global refugee crisis. The U.K. referendum will also likely be a topic of discussion, as well as ongoing free trade agreement negotiations between the United States and EU.

From 9-11 July, President Obama will visit Spain, where he will meet with King Felipe VI and Acting President Mariano Rajoy.  This visit to another NATO member country will highlight security cooperation between the United States and Spain as well.

SelectUSA Investment Summit & GES

President Obama started last week out at the SelectUSA Investment Summit in Washington, which focused on attracting investments to the United States.  In addressing the forum, President Obama spotlighted, “Over the last four years, no other country has been named by CEOs around the world more frequently as the best place to invest with confidence.”

President Obama ended the week in San Francisco, attending the annual Global Entrepreneurship Summit (GES), which focuses on innovation.  The President signed an Executive Order on Friday to institutionalize key entrepreneurship programs of his Administration highlighting entrepreneurship is a hallmark of American leadership in the world.  The White House released a fact sheet on the GES, available here.

North Korea – Censured Again

After a failed attempt early last week, North Korea claimed on Thursday to have conducted a successful test-firing of a ballistic missile, swiftly drawing the censure of the United Nations Security Council.  In a press statement, the Security Council urged all countries “to redouble their efforts” to fully implement sanctions against North Korea, particularly those imposed in March, which were the toughest in two decades.  U.S. Ambassador Samantha Power sharply criticized North Korea’s “inherently destabilizing behavior” on Wednesday.

Venezuela Dialogue – U.S. Participates

Secretary General of the Organization of American States (OAS) Luis Almagro cited the current Government in Caracas as responsible for the near-collapse of Venezuela’s economy and called for the recall of President Nicolás Maduro.  Under Secretary of State for Political Affairs Tom Shannon joined the mediation efforts underway in Caracas last week, saying that a follow-on meeting date has yet to be determined.

Zika Funding Compromise Reached – Veto Threat Issued

Last week, House and Senate Republicans reached a compromise on funding a response to the Zika virus without Democrats’ input.  Before adjourning, House Republicans advanced (239-171) a spending measure that includes a $1.1 billion plan for the Zika virus.  The measure would provide $230 million for the National Institutes of Health to develop a vaccine and $476 million for the Centers for Disease Control and Prevention for mosquito control efforts.

Democratic Senator Bill Nelson (Florida) objected to the compromise, citing the $750 million in budget cuts to other health care programs.  The bill would cut $543 million in unused funds for implementing the Affordable Care Act, $107 million from funds used to fight Ebola, and $100 million in administrative funds from the Health and Human Services Department.  The $1.1 billion is also short of President Obama’s request for $1.9 billion to combat the virus.  The Senate is expected to take up the bill before it leaves Washington this week for its July 4 recess, but its prospects are unclear at best.

TPP – Implementing Bill Reportedly Being Drafted

Despite the public backlash to trade in an election year, U.S. Trade Representative Michael Froman said last Monday that the Obama Administration has begun drafting an implementing bill for a potential lame-duck vote on the Trans-Pacific Partnership (TPP) under Trade Promotion Authority (TPA). Ambassador Froman acknowledged that Majority Leader McConnell “has made clear publicly that he doesn’t want to see a vote [on TPP] before the [November] election,” which leaves the lame-duck session as the best window of opportunity for trying to advance a TPP implementing bill.

Privacy Shield – Agreement Reached

The European Commission and U.S. negotiators wrapped up their discussions over the transatlantic data-flow “privacy shield” agreement late on Thursday.  A Commission official reported the deal contains “additional clarifications regarding the Ombudsperson mechanism, onward transfers and data retention, as well as on an additional U.S. document on the bulk collection of data.”  The Article 31 Committee will next vote on the text of the agreement.

NDAA – Pre-Conferencing Stage

Senate Armed Services Committee Chairman John McCain (R-Arizona) reported last week that the leaders of the House and Senate Armed Services Committees met on Thursday to begin the process of reconciling the differences in their versions of the National Defense Authorization Act (NDAA).  A formal House-Senate conference does not begin until the two chambers appoint their conferees, which has yet to occur.

Congressional Hearings This Week

  • On Tuesday, 28 June, the Senate Armed Services Committee is scheduled to hold a hearing titled, “Improving Strategic Integration at the Department of Defense.”

  • On Tuesday, 28 June, the Senate Foreign Relations Committee is scheduled to hold a hearing titled, “Global Efforts to Defeat ISIS.”

  • On Tuesday, 28 June, the Senate Appropriations Subcommittee on State-Foreign Operations (SFOPs) is scheduled to hold a mark-up of the Fiscal Year (FY) 2017 SFOPs measure.

  • On Wednesday, 29 June, the Senate Commerce, Science, and Transportation Committee is scheduled to hold an executive session, where they will consider S. 3084, The American Innovation and Competitiveness Act, among other matters.

  • On Thursday, 30 June, the Senate Foreign Relations Committee is scheduled to hold a hearing titled, “Corruption: Violent Extremism, Kleptocracy, and the Dangers of Failing Governance.”

  • On Thursday, 30 June, the Senate Armed Services Committee is scheduled to hold a closed hearing titled, “National Security Cyber and Encryption Challenges.”

  • On Thursday, 30 June, the Senate Appropriations Committee is scheduled to markup the FY 2017 SFOPs measure.

Looking Ahead

Washington is expected to focus on the following upcoming events:

  • 29 June: North American Leaders Summit in Ottawa, Canada.

  • 7-11 July: President Obama travels to Poland and Spain

  • 8-9 July: NATO Summit in Warsaw, Poland

  • 18-21 July: Republican National Convention in Cleveland, Ohio

  • 25-28 July: Democratic National Convention in Philadelphia, Pennsylvania

  • 4-5 September: G-20 Leaders’ Summit in Hangzhou, China

  • 13 September: 71st Session of the U.N. General Assembly (UNGA) Begins

  • 20 September: UNGA General Debate Commences

  • 19-20 November: Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit in Peru

ARTICLE BY Stacy A. Swanson of Squire Patton Boggs (US) LLP

© Copyright 2016 Squire Patton Boggs (US) LLP

Your Guide to Developing Your Personal Marketing Plan…and Why Every Lawyer Should Have One

In my humble opinion, every lawyer in private practice –- regardless of how many years practicing law — should have a Personal Marketing Plan. Here’s why:

You Will Seize Control of Your Career

Creating and implementing your Personal Marketing Plan enables you to seize control of your career. In time, it puts you in a position to attract and retain clients you enjoy, and matters you find challenging and interesting. You will also be less dependent on others to feed you. There are two kinds of lawyers in private practice: lawyers with clients, and lawyers who work for lawyers with clients. Which would you rather be?

You Will Make More Money

Rainmakers make more money — often a whole lot more money — than non-rainmakers in just about every law firm in the U.S. Chances are you’ve heard the terms “finders, minders and grinders.” Trust me; the action is with the finders.

You Will Have More Clout in the Firm

Lawyers who bring in business also have more power within their firms. Over time, they emerge as firm leaders, influencing important decisions about the firm, its policies and procedures, and its future direction.

How Much Time Should You Invest?

Of course, implementing your plan is the key to success….and it takes time. Non-billable time. I recommend that Partners invest 200 hours a year, and 100 hours a year for Associates. It’s critical you do a little bit every day. Fifteen minutes here. A half-hour there. Effective marketing and business development is not a “start-stop” process. It’s like an exercise regimen…results come with consistency over time.

What Types of Things Should You Do?

Partners should visit top clients at the clients’ places of business each year. (Refer to my previous Marketing Tip about Client Site Visits.) Associates should focus first on honing their legal skills and “credentialing” activities. For all attorneys, lunch once a week with a client, prospective client or referral source is a good habit. Joining and being actively involved in a well-chosen organization is another good thing to do. (Refer to my previous Marketing Tip about Individual Marketing Plans.) Article writing and speech giving are good activities, as well.

Make the Commitment to Yourself

Of course, developing and implementing your Personal Marketing Plan requires non-billable time. And, herein lies the dilemma for many lawyers. Non-billable “marketing time” is not rewarded — and sometimes not even measured — in many law firms. No matter, you should invest the time anyway. In his book True Professionalism, David Maister states that billable hours are for today’s income, but what you do with your non-billable time determines your future. I couldn’t agree more.

ARTICLE BY John Remsen, Jr of The Remsen Group

Copyright 2016 The Remsen Group

Congress Just Says No—to Banking Services for Marijuana Businesses

marijuana businessesYet another attempt has failed to pass legislation shielding banks that provide services to marijuana-related businesses from regulatory action or other penalties. Late last week, the US House of Representatives appeared likely to approve an amendment to the House Financial Services and General Government appropriations bill (the Amendment) that would prevent financial institutions from being penalized if they provided services to state-sanctioned marijuana-related businesses. A similar amendment had already been approved by the Senate Appropriations Committee and appeared likely to be approved by the US Senate.

Under recently passed procedures, the House Committee on Rules must approve all amendments to appropriations bills. On June 20, Representative Denny Heck (D-WA) and Representative Ed Perlmutter (D-CO) filed the bipartisan Amendment with the Committee on Rules. They emphasized that, without banking services, marijuana businesses are forced to conduct business and pay salaries in cash, which increases the risk of money laundering and theft. The Committee on Rules declined to consider the Amendment for a vote, effectively blocking it from further consideration in connection with the appropriations bill.

The Amendment is the latest effort by members of Congress to bring some certainty to banks that wish to provide banking services for marijuana-related businesses. Although both the US Department of Justice and the Financial Crimes Enforcement Network have provided guidance that allows banks to provide services to legal marijuana businesses, marijuana is still illegal under federal law, and banks have been reluctant to rely on such guidance, which they generally have concluded provides insufficient regulatory and law enforcement certainty.

Although marijuana businesses that seek traditional banking services will not see any relief in the current appropriations process, a number of bills that have been introduced in the Senate and House remain that would offer clarity for banks that wish to offer banking services to marijuana businesses. Even though none of those bills have passed the initial stages of the legislative process, these efforts, which are generally bipartisan in nature, are expected to continue and may at some point be successful. In any event, the legal marijuana industry is expected to continue to grow, and more states are likely to authorize recreational and medical use of marijuana. Meanwhile, the issue of providing legal certainty to banks that wish to offer banking services to marijuana business will continue to be debated.

ARTICLE BY Melissa R. H. Hall of Morgan, Lewis & Bockius LLP

Copyright © 2016 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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