Tag: Europe

Global Regulatory Update for April 2024

WEBINAR – Registration Is Open For “Harmonizing TSCA Consent Orders with OSHA HCS 2012”: Register now to join The Acta Group (Acta®) and Bergeson & Campbell, P.C. (B&C®) for “Harmonizing TSCA Consent Orders with OSHA HCS 2012,” a complimentary webinar covering case studies and practical applications of merging the requirements for consent order language on the Safety Data Sheet (SDS). In this webinar, Karin F. Baron, MSPH, Director of Hazard Communication and International Registration Strategy, Acta, will explore two hypothetical examples and provide guidance on practical approaches to compliance. An industry perspective will be presented by Sara Glazier Frojen, Senior Product Steward, Hexion Inc., who will discuss the realities of managing this process day-to-day.

SAVE THE DATE – “TSCA Reform — 8 Years Later” On June 26, 2024: Save the date to join Acta affiliate B&C, the Environmental Law Institute (ELI), and the George Washington University Milken Institute School of Public Health for a day-long conference reflecting on the challenges and accomplishments since the implementation of the 2016 Lautenberg Amendments and where the Toxic Substances Control Act (TSCA) stands today. This year, the conference will be held in person at the George Washington University Milken Institute School of Public Health (and will be livestreamed via YouTube). Continuing legal education (CLE) credit will be offered in select states for in-person attendees only. Please check ELI’s event page in the coming weeks for more information, including an agenda, CLE information, registration, and more. If you have questions in the meantime, please contact Madison Calhoun (calhoun@eli.org).

AUSTRALIA

Changes To Categorization, Reporting, And Recordkeeping Requirements For Industrial Chemicals Will Take Effect April 24, 2024: The Australian Industrial Chemicals Introduction Scheme (AICIS) announced regulatory changes to categorization, reporting, and recordkeeping requirements will start April 24, 2024. For the changes to take effect, the Industrial Chemicals (General) Rules 2019 (Rules) and Industrial Chemicals Categorisation Guidelines will be amended. According to AICIS, key changes to the Rules include:

  • Written undertakings replaced with records that will make compliance easier;
  • Greater acceptance of International Nomenclature of Cosmetic Ingredients (INCI) names for reporting and recordkeeping;
  • Changes to the categorization criteria to benefit:
    • Local soap makers;
    • Introducers of chemicals in flavor and fragrance blends; and
    • Introducers of hazardous chemicals where introduction and use are controlled; and
  • Strengthening criteria and/or reporting requirements for health and environmental protection.

AICIS announced final changes to the Industrial Chemicals Categorisation Guidelines that will take effect April 24, 2024. According to AICIS, the changes include:

  • Refinement of the requirement to check for hazardous esters and salts of chemicals on the “List of chemicals with high hazards for categorisation” (the List);
  • Provision to include highly hazardous chemicals to the List based on an AICIS assessment or evaluation;
  • Expanded options for introducers to demonstrate the absence of skin irritation and skin sensitization; and
  • More models for in silico predictions and an added test guideline for ready biodegradability.

AICIS states that it will publish a second update to the Guidelines in September 2024 due to industry stakeholders’ feedback that they need more time to prepare for some of the changes. It will include:

  • For the List: add chemicals based on current sources and add the European Commission (EC) Endocrine Disruptor List (List I) as a source; and
  • Refined requirements for introducers to show the absence of specific target organ toxicity after repeated exposure and bioaccumulation potential.

CANADA

Canada Provides Updates On Its Implementation Of The Modernized CEPA: As reported in our June 23, 2023, memorandum, Bill S-5, Strengthening Environmental Protection for a Healthier Canada Act, received Royal Assent on June 13, 2023. Canada is working to implement the bill through initiatives that include the development of various instruments, policies, strategies, regulations, and processes. In April 2024, Canada updated its list of public consultation opportunities:

  • Discussion document on the implementation framework for a right to a healthy environment under the Canadian Environmental Protection Act, 1999 (CEPA) (winter 2024);
  • Proposed Watch List approach (spring/summer 2024);
  • Proposed plan of chemicals management priorities (summer 2024);
  • Draft strategy to replace, reduce or refine vertebrate animal testing (summer/fall 2024);
  • Draft implementation framework for a right to a healthy environment under CEPA (summer/fall 2024);
  • Discussion document for toxic substances of highest risk regulations (winter 2025); and
  • Discussion document on the restriction and authorization of certain toxic substances regulations (winter/spring 2025).

EUROPEAN UNION (EU)

ECHA Checks More Than 20 Percent Of REACH Registration Dossiers For Compliance: The European Chemicals Agency (ECHA) announced on February 27, 2024, that between 2009 and 2023, it performed compliance checks of approximately 15,000 Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) registrations, representing 21 percent of full registrations. ECHA states that it met its legal target for dossier evaluation, which increased from five percent to 20 percent in 2019. ECHA notes that for substances registered at quantities of 100 metric tons or more per year, it has checked compliance for around 30 percent of the dossiers.

According to ECHA, in 2023, it conducted 301 compliance checks, covering more than 1,750 registrations and addressing 274 individual substances. ECHA “focused on registration dossiers that may have data gaps and aim to enhance the safety data of these substances.” ECHA sent 251 adopted decisions to companies, “requesting additional data to clarify long-term effects of chemicals on human health or the environment.” ECHA states that during the follow-up evaluation process, it will assess the incoming information for compliance. ECHA will share the outcome of the incoming data with the EU member states and the EC to enable prioritization of substances. ECHA will work closely with the member states for enforcement of non-compliant dossiers. Compliance of registration dossiers will remain a priority for ECHA. In 2024, ECHA will review the impact of the Joint Evaluation Action Plan, aimed at improving REACH registration compliance, and, together with stakeholders, develop new priority areas on which to focus. More information is available in our March 29, 2024, blog item.

Council Of The EU And EP Reach Provisional Agreement On Proposed Regulation On Packaging And Packaging Waste: The Council of the EU announced on March 4, 2024, that its presidency and the European Parliament’s (EP) representatives reached a provisional political agreement on a proposal for a regulation on packaging and packaging waste. The press release states that the proposal considers the full life-cycle of packaging and establishes requirements to ensure that packaging is safe and sustainable by requiring that all packaging is recyclable and that the presence of substances of concern is minimized. It also includes labeling harmonization requirements to improve consumer information. In line with the waste hierarchy, the proposal aims to reduce significantly the generation of packaging waste by setting binding re-use targets, restricting certain types of single-use packaging, and requiring economic operators to minimize the packaging used. The proposal would introduce a restriction on the placing on the market of food contact packaging containing per- and polyfluoroalkyl substances (PFAS) above certain thresholds. The press release notes that to avoid any overlap with other pieces of legislation, the co-legislators tasked the EC to assess the need to amend that restriction within four years of the date of application of the regulation.

EP Adopts Position On Establishing System To Verify And Pre-Approve Environmental Marketing Claims: The EP announced on March 12, 2024, that it adopted its first reading position on establishing a verification and pre-approval system for environmental marketing claims to protect citizens from misleading ads. According to the EP’s press release, the green claims directive would require companies to submit evidence about their environmental marketing claims before advertising products as “biodegradable,” “less polluting,” “water saving,” or having “biobased content.” Micro enterprises would be exempt from the new rules, and small and medium-sized enterprises (SME) would have an extra year to comply compared to larger businesses. The press release notes that the EP also decided that green claims about products containing hazardous substances should remain possible for now, but that the EC “should assess in the near future whether they should be banned entirely.” The new EP will follow up on the file after the European elections that will take place in June 2024.

On April 3, 2024, a coalition of industry associations issued a “Joint statement in reference to ‘the ban of green claims for products containing hazardous substances’ in the Green Claims Substantiation Directive (GCD).” The associations “fully support the principle that consumers should not be misled by false or unsubstantiated environmental claims and share the EU’s objective to establish a clear, robust and credible framework to enable consumers to make an informed choice.” The associations express concern that the proposed prohibition of environmental claims for products containing certain hazardous substances “will run contrary to the objective of the Directive to enable consumers to make sustainable purchase decisions and ensure proper substantiation of claims.” According to the associations, for a number of consumer products, “the reference to ‘products containing’ would encompass substances that would have intrinsic hazardous properties,” implying that there would be a ban of making any environmental claim(s), “even if such trace amounts of unavoidable and unintentional impurities and contaminants are present in these products.” The signatories include the International Association for Soaps, Detergents and Maintenance Products; the European Brands Association; APPLiA; the Association of Manufacturers and Formulators of Enzyme Products; CosmeticsEurope; the European Power Tool Association; the Federation of the European Sporting Goods Industry; the International Fragrance Association; LightingEurope; the International Natural and Organic Cosmetics Association; Toy Industries of Europe; Verband der Elektro- und Digitalindustrie; and the World Federation of Advertisers.

ECHA Clarifies Next Steps For PFAS Restriction Proposal: ECHA issued a press release on March 13, 2024, to outline how the Scientific Committees for Risk Assessment (RAC) and for Socio-Economic Analysis (SEAC) will progress in evaluating the proposal to restrict PFAS in Europe. As reported in our February 13, 2023, memorandum, the national authorities of Denmark, Germany, the Netherlands, Norway, and Sweden submitted a proposal to restrict more than 10,000 PFAS under REACH. The proposal suggests two restriction options — a full ban and a ban with use-specific derogations — to address the identified risks. Following the screening of thousands of comments received during the consultation, ECHA states that it is clarifying the next steps for the proposal. According to ECHA, RAC and SEAC will evaluate the proposed restriction together with the comments from the consultation in batches, focusing on the different sectors that may be affected.

In tandem, the five national authorities who prepared the proposal are updating their initial report to address the consultation comments. This updated report will be assessed by the committees and will serve as the foundation for their opinions. The sectors and elements that will be discussed in the next three committee meetings are:

March 2024 Meetings

  • Consumer mixtures, cosmetics, and ski wax;
  • Hazards of PFAS (only by RAC); and
  • General approach (only by SEAC).

June 2024 Meetings

  • Metal plating and manufacture of metal products; and
  • Additional discussion on hazards (only by RAC).

September 2024 Meetings

  • Textiles, upholstery, leather, apparel, carpets (TULAC);
  • Food contact materials and packaging; and
  • Petroleum and mining.

More information is available in our March 18, 2024, blog item.

ECHA Adopts And Publishes CoRAP For 2024-2026: On March 19, 2024, ECHA adopted and published the Community rolling action plan (CoRAP) for 2024-2026. The CoRAP lists 28 substances suspected of posing a risk to human health or the environment for evaluation by 11 Member State Competent Authorities. The CoRAP includes 11 newly allocated substances and 17 substances already included in the previous CoRAP 2023-2025 update, published on March 21, 2023. For 11 out of these 17 substances, ECHA notes that the evaluation year has been postponed, mainly to await submission of new information requested under dossier evaluation. Of the 28 substances to be evaluated, ten are to be evaluated in 2024, 13 in 2025, and five in 2026. The remaining substance of the 24 substances listed in the previous CoRAP was withdrawn as its evaluation is currently considered to be a low priority. According to ECHA, for this substance, a compliance check is needed first. ECHA states that the substance can be placed in the CoRAP list again, if after the conclusion of the dossier evaluation process, concerns remain beyond what can be clarified through dossier evaluation. ECHA has posted a guide for registrants that need to update their dossiers with new relevant information such as hazard, tonnages, use, and exposure.

Comments On Proposals To Identify New SVHCs Due April 15, 2025: A public consultation on proposals to identify two new substances of very high concern (SVHC) will close on April 15, 2024. The substances and examples of their uses are:

  • Bis(α,α-dimethylbenzyl) peroxide: This substance is used in products such as pH-regulators, flocculants, precipitants, and neutralization agents; and
  • Triphenyl phosphate: This substance is used as a flame retardant and plasticizer in polymer formulations, adhesives, and sealants.

UNITED KINGDOM (UK)

HSE Publishes UK REACH Work Programme For 2023/24: In February 2024, the Health and Safety Executive (HSE) published its UK REACH Work Programme 2023/24. The Work Programme sets out how HSE, with the support of the Environment Agency, will deliver its regulatory activities to meet the objectives and timescales set out in UK REACH. Alongside these activities, HSE and the Environment Agency will engage with stakeholders. The Work Programme includes the following deliverables and target deadlines:

Topic Deliverable Target
Substance evaluation Evaluate substances in the Rolling Action Plan (RAP) Evaluate one
Authorization Complete the processing of received applications within the statutory deadline (this includes comments from public consultation and REACH Independent Scientific Expert Pool (RISEP) input) 100 percent
SVHC identification Undertake an initial assessment of substances submitted for SVHC identification under EU REACH during 2022/23 and consider if they are appropriate for SVHC identification under UK REACH Assess up to five
Regulatory management options analysis (RMOA) Complete RMOAs initiated in 22/23 

Initiate RMOAs for substances identified as priorities

 Up to ten 

Up to five
Restriction Complete ongoing restriction opinions 

Begin Annex 15 restriction dossiers

Initiate scoping work for restrictions

 Two

One 

Two

HSE Opens Call For Evidence On PFAS In FFFs: HSE is working with the Environment Agency to prepare a restriction dossier that will assess the risks of PFAS in firefighting foams (FFF). HSE will propose restrictions, if necessary, to manage any significant risks identified. To help compile the dossier, HSE opened a call for evidence. HSE states that it would like stakeholders to identify themselves as willing to engage in further dialogue throughout the restrictions process. In particular, it would like to hear from stakeholders with relevant information on PFAS (or alternatives) in FFFs, especially information specific to Great Britain (GB). Regarding relevant information, HSE is interested in all aspects of FFFs, including:

  • Manufacture of FFFs: Substances used, process, quantities;
  • Import of FFF products of all types: Quantities, suppliers;
  • Use: Quantities, sector of use, frequency, storage on site, products used;
  • Alternatives to PFAS in FFF: Availability, cost, performance in comparison to PFAS-containing foams, barriers to switching;
  • Hazardous properties: SDSs, new studies on intrinsic properties and exposure, recommended risk management measures;
  • Environmental fate: What happens to the FFF after it is used, where does it go;
  • Waste: Disposal requirements, recycling opportunities, remediation; and
  • Standards: Including product-specific legislation, performance, certification.

HSE states that the call for evidence targets companies (manufacturers, importers, distributors, and retailers) and professional users of FFFs, trade associations, environmental organizations, consumer organizations, and any other organizations and members of the public holding relevant information. HSE intends to publish the final dossier, including any restriction proposals, on its website in March 2025. Interested parties will also then be able to submit comments on any proposed restriction.

New GB BPR Data Requirements Will Apply To Applications Submitted In October 2025: The Biocidal Products (Health and Safety) (Amendment and Transitional Provision etc.) Regulations 2024, which update the data requirements in Annexes II and III of the GB Biocidal Products Regulation (BPR), were laid in Parliament on March 13, 2024, and came into force on April 6, 2024. The legislation updates some of the data requirements to reflect developments in science and technology. These include the use of alternative testing approaches to determine some hazardous properties that previously relied on animal testing. HSE held a public consultation on the proposed changes in 2023 and has posted a report on the outcome of the consultation. The new data requirements will apply to applications received 18 months after the legislation came into force (October 6, 2025) and do not apply to existing applications. HSE will provide further guidance on the changes in the future.

© 2016 The Acta Group All Rights Reserved.
For more on Global Regulation, visit the NLR Environmental, Energy & Resources section.

European Commission Aims to Tackle Greenwashing in Latest Proposal

On March 22, the European Commission unveiled a proposal, the Green Claims Directive (Proposal), aimed at combating greenwashing and misleading environmental claims. By virtue of the Proposal, the EC is attempting to implement measures designed to provide “reliable, comparable and verifiable information” to consumers, with the overall high-level goal to create a level playing field in the EU, wherein companies that make a genuine effort to improve their environmental sustainability can be easily recognized and rewarded by consumers. The Proposal follows a 2020 sweep that found nearly half of environmental claims examined in the EU may be false or deceptive. Following the ordinary legislative procedure, the Proposal will now be subject to the approval of the European Parliament and the Council. There is no set date for entry into force at this time.

The Proposal complements a March 2022 proposal to amend the Consumer Rights Directive to provide consumers with information on products’ durability and repairability, as well as to amend the Unfair Commercial Practices Directive by, among other things, banning “generic, vague environmental claims” and “displaying a voluntary sustainability label which was not based on a third-party verification scheme or established by public authorities.” The Proposal builds on these measures to provide “more specific requirements on unregulated claims, be it for specific product groups, specific sectors or for specific environmental impacts or aspects.” It would require companies that make “green claims to respect minimum standards on how they substantiate and communicate those claims.” Businesses based outside the EU that make environmental claims directed at EU consumers will also have to respect the requirements set out in the Proposal. The criteria target explicit claims, such as “T-shirt made of recycled plastic bottles” and “packaging made of 30% recycled plastic.”

Pursuant to Article 3 of the Proposal, “environmental claims shall be based on an assessment that meets the selected minimum criteria to prevent claims from being misleading,” including, among other things, that the claim “relies on recognised scientific evidence and state of the art technical knowledge,” considers “all significant aspects and impacts to assess the performance,” demonstrates whether the claim is accurate for the whole product or only parts of it, provides information on whether the product performs better than “common practice,” identifies any negative impacts resulting from positive product achievements, and reports greenhouse gas offsets.

Article 4 of the Proposal outlines requirements for comparative claims related to environmental impacts, including disclosure of equivalent data for assessments, use of consistent assumptions for comparisons and use of data sourced in an equivalent manner. The level of substantiation needed will vary based on the type of claim, but all assessments should consider the product’s life-cycle to identify relevant impacts.

Pursuant to Article 10, all environmental claims and labels must be verified and certified by a third-party verifier before being used in commercial communications. An officially accredited body will carry out the verification process and issue a certificate of conformity, which will be recognized across the EU and shared among Member States via the Internal Market Information System. The verifier is required to be an officially accredited, independent body with the necessary expertise, equipment, and infrastructure to carry out the verifications and maintain professional secrecy.

The Proposal is part of a broader trend of governmental regulators, self-regulatory organizations, and standard setters across industries adopting a more formalized approach toward greenwashing. For example, as we recently reported, the UK’s Advertising Standards Authority (ASA) published rules on making carbon neutral and net-zero claims. Instances of enforcement actions over greenwashing allegations have also been on the rise. The Securities and Exchange Board of India recently launched a consultation paper seeking public comment on rules to prevent greenwashing by ESG investment funds, and the European Council and the European Parliament reached an agreement regarding European Green Bonds Standards aimed at, among other things, avoiding greenwashing.

Article By Sukhvir Basran and Rachel Rodman of Cadwalader, Wickersham & Taft LLP

Click here to visit the National Law Review for more environmental law news.

© Copyright 2023 Cadwalader, Wickersham & Taft LLP

Fleeing Ukrainians to Get More Help From United States

The United States has joined many European countries that are opening their doors and offering humanitarian assistance to fleeing Ukrainians.

Ireland, Great Britain and Canada have all started private sponsorship programs for Ukrainians. That assistance is not necessarily a one-way street. Easing the way for incoming Ukrainians may help those nations deal with their own labor shortages.

Ukraine is known for its skilled workforce, including tech engineers, and some companies in Europe are specifically targeting jobs for Ukrainians, offering everything from language training to child care to attract the refugees. Even temporary employment agencies are involved and new companies are being founded for the purpose of matching Ukrainians to jobs across Europe – jobs that run the gamut from highly skilled tech work, to healthcare aids, to retail and hospitality positions.

U.S. employers are generously offering humanitarian aid and donations to help Ukrainian refugees, but now those employers may be able to offer jobs to displaced Ukrainians seeking refuge. The Biden Administration will open various legal pathways that could include the refugee admissions program (which can lead to permanent residence through asylum, but is a long process), visas, and humanitarian parole (a temporary solution). The focus will be on Ukrainians with family in the United States or others considered to be particularly vulnerable. Approximately 1,000,000 people of Ukrainian descent currently live in the United States.

The administration originally believed that most Ukrainians did not want to flee to the United States because it was too far away from other family members who have remained in Ukraine. Secretary of State Antony Blinken had stated that the priority was to help European countries who are the dealing with huge waves for migration instead. But advocates have been arguing that the administration could create special status for Ukrainians to allow them to enter the U.S. or stay with family members.

In early March, the Biden Administration established Temporary Protected Status (TPS) for Ukrainians who have been in the United States continuously since March 1, 2022, but that did not help those who are still abroad. Visitor visas are hard to come by because applicants for visitor visas need to be able to show that their stay will be temporary and that they have a home to return to in Ukraine, and such temporary nonimmigrant visas may not meet that criterion or be practical in most of these situations. Moreover, consulates abroad are already overwhelmed and understaffed due to COVID-19.

While small numbers of Ukrainians have made it to the United States by finding private or family sponsors, this new policy should at least open the doors to some Ukrainians and likely make it possible for U.S. companies to hire some of the incoming refugees. They will need and want employment, but they will also need support.

Article By Forrest G. Read IV of Jackson Lewis P.C.

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

Jackson Lewis P.C. © 2022

U.S. Senate Subcommittee on Investigations Recommends Regulation of the Art Market & Other Headlines

U.S. Senate Subcommittee’s Report Recommends Art Market Regulations

As part of its investigation into the effectiveness of sanctions against foreign persons and entities, the Permanent Subcommittee on Investigations of the United States Senate issued a report focused on lack of regulation and pervasive secrecy in the art market. Specifically, the report notes that the art industry is considered the largest legal industry in the United States that is not subject to the requirements of the Bank Secrecy Act, which mandates detailed procedures aimed at preventing money laundering and requires businesses to know their customers’ identity. The report further observes that under the unwritten rules of the art market, a large number of art sales happen through intermediaries, with purchasers and sellers frequently not inquiring into each other’s identities and sellers not asking about the origin of the purchase money. Art advisers are frequently reluctant to reveal the identity of their clients for fear of losing the business.

The 147-page report sets forth a case study of how the art market was used to evade sanctions imposed on Russia. Brothers Arkady and Boris Rotenberg, billionaire business tycoons and long-time friends of Vladimir Putin, were among a number of Russians placed under U.S. sanctions in 2014 as part of an effort to punish Putin and his associates for the annexation of Crimea. It is illegal for U.S. companies to do business with sanctioned persons, but there are no specific laws in place obliging a buyer or seller in a transaction for the sale of art to identify themselves. The Subcommittee’s report concludes that the Rotenbergs took advantage of the lack of transparency required in art transactions, successfully evading the sanctions imposed on them. It is alleged that through the use of shell companies and a Moscow-based art adviser and dealer, they hid their identities and purchased more than $18 million in art from U.S. dealers and auction houses while under sanction.

Of significance to all art market participants, the Senate Subcommittee’s report recommends, among other things, that Congress should amend the Bank Secrecy Act to add businesses handling transactions involving high-value art. While the term “high-value” is not defined, the report cites the recent European Anti–Money Laundering (AML) legislation, which requires businesses handling art transactions valued at €10,000 to comply with AML laws, including the Know Your Customer rule. The report further recommends that the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury issue a comprehensive guide on the steps auction houses and art dealers should take to ensure that they are not doing business with sanctioned individuals or entities.

Legislation will be necessary to amend the Bank Secrecy Act to apply to the art market. In fact, a bill proposing to do exactly that was previously introduced and is presently pending, proposing to regulate antiques dealers only in connection with transactions over $10,000.

White Supremacist Scientist’s Skull Collection to Be Reexamined by University

Last year, a group of students at the University of Pennsylvania presented findings that a collection of skulls kept by the university include crania from at least 55 enslaved individuals. The collection was the work of Samuel George Morton, a now-discredited physician, who used the skulls to come up with pseudoscientific justifications for slavery. Discovery Magazine has touted him as the “founding father of scientific racism.” After facing calls for the skulls to be repatriated or buried, the university moved the collection to storage. Repatriation may be difficult since little is known about the skulls’ origin other than that Morton obtained them from Cuba.

Outdoor Art Serves the Public until New York’s Museums Reopen

New York Governor Andrew Cuomo announced that New York City’s museums can reopen beginning August 24. In the meanwhile, New York City’s tourism and marketing division has put together a list of outdoor and open-air art available for viewing by the public throughout all five boroughs.

Two Museums Fear Their Gauguins May Be Fakes

Fabrice Fourmanoir, a Gauguin enthusiast, investigator and collector who exposed the J. Paul Getty Museum’s Gauguin sculpture as a fake has now set his astute gaze on paintings at the National Gallery of Art in Washington D.C. and the Museum of Fine Arts in Boston. Fourmanoir has alleged that both paintings are not Gauguins and were instead commissioned and sold by a Parisian art dealer. The museums are considering a scientific examination of the paintings to confirm their origin and authenticity.

EUROPE

Raphael’s True Cause of Death Revealed

Scientists have dispelled the myth that Renaissance painter Raphael, noted by historians as having had many trysts, died of the sexually transmitted disease syphilis. A new study conducted at the University of Milan Bicocca has concluded that the artist likely died instead from a pulmonary disease similar to pneumonia. Raphael’s physicians subjected him to bloodletting, a process wherein blood is drawn from a patient to rid the body of disease. As physicians of that period did not typically practice bloodletting for lung ailments, it is suspected that Raphael’s doctors failed to properly diagnose his symptoms. Moreover, it has been determined that rather than aiding in his recovery, the bloodletting likely contributed to and quickened his death. Raphael died in 1520 in Rome at the age of 37.

Selfie Menace Continues

Security camera footage has confirmed that an Austrian tourist broke two toes off of a sculpture by famed neoclassical sculptor Antonio Canova. The damage occurred at the Gipsoteca Museum in Possagno, when the tourist sat on a sculpture of Paolina (Pauline) Bonaparte, Napoleon’s sister, to take a selfie. The perpetrator surrendered to authorities. The work damaged was an original plaster cast model dating back to 1804, the marble version of which is kept at the Galleria Borghese in Rome. Artnet previously assembled a round-up of tragic cases of art being damaged by tourists angling for better selfies.

Building Decorated by Picasso Demolished, Triggering Protests

Despite ongoing protests, the Norwegian government has begun tearing down the Y-block office building in Oslo, part of its governmental headquarters in the city damaged in the 2011 terrorist attack by Anders Breivik, who detonated a car bomb. Prior to any demolition of the Y-block building, Picasso’s The Fishermen, a sand-blasted 250-ton section of the building’s facade, and The Seagull, a 60-ton floor-to-ceiling drawing in the building’s lobby, were removed and relocated. Opponents of the demolition argue that the Y-block building’s brutalist architecture should be preserved, and that Picasso’s works and the building “belong together.” They also argue that the demolition is, in essence, a symbolic completion of what Breivik wanted, to erase the symbols of democracy. Construction of the new governmental headquarters is expected to be completed in 2025.

Ancient Greek Architecture Likely Catered to the Handicapped

New research conducted at California State University suggests that the stone ramps featured on many ancient Greek temples were primarily built to accommodate the disabled and mobility impaired. While these ramps may have served other purposes, such as enabling transportation of materials, they were featured most prominently in quantity and size at temples dedicated to Asclepius, the Greek god of healing. As these sites drew in many visitors with disabilities, illnesses and ailments, who would have had difficulty navigating stairs, it is now thought that the ramps were specifically crafted to assist these guests.

Croatian Museums and Historic Sites Can’t Catch a Break

After the coronavirus forced churches, galleries and museums throughout Croatia to close, in March 2020, a 5.3 magnitude earthquake rocked the country, damaging its largest Gothic-style cathedral and many other landmarks, including the Archaeological Museum in Zagreb. The strongest earthquake recorded in the country in almost 150 years made many buildings structurally unsound, and museum owners began storing works in their facility basements. On July 24, 2020, that was no longer an option when a severe storm hit Zagreb, leading to massive flooding. As water surged into their basements, The Archaeological Museum and Museum of Decorative Arts, among others, struggled to protect their collections. The full extent of the damage from the storm is not yet known, but expected to be significant.

Restoration Plans for Notre Dame by Traditional Methods Finalized

After discussing the issue for more than a year, the decision was made to reconstruct the roof and spires of the renowned Notre-Dame de Paris cathedral to resemble their appearance prior to the April 2019 fire. Despite calls from French President Emmanuel Macron to rebuild these features in a contemporary style, they will be constructed using the original material and traditional methods to the extent possible. In addition to the roof and spires, the vault will need to be repaired and three of the cathedral’s gables will have to be dismantled and rebuilt. After this work is completed, the building’s statues, which fortunately were removed just days prior to the fire, will be returned. The reconstruction of Notre Dame is scheduled to be completed in 2024.

© 2020 Wilson Elser

For more art world news, see the National Law Review Entertainment, Art & Sports law section.

The Rise Of Digital Services Taxes

Governments are coming after online businesses. Multinational clients that provide online advertising services, sell consumer data, or run online intermediary platforms should prepare themselves for the imminent arrival of digital services taxes (DSTs) on revenues from digital activities.

IN DEPTH

Having failed to reach an EU-wide unanimous consensus on an earlier EU Commission proposal for a DST Directive, certain EU countries, including Austria, the Czech Republic, France, Italy, Spain and the United Kingdom, decided to go it alone and introduce DSTs unilaterally into their own national tax systems. These decisions were driven primarily by a perception that larger multinationals, many of which have highly digitalised operations, are not paying their “fair share” of taxes globally. In addition, a growing consensus has emerged in recent months that “market jurisdictions” should have the right to tax, because those markets—namely, the countries where the users and consumers are based—ultimately create value for online businesses.

The Organisation for Economic Co-operation and Development (OECD) takes a neutral view on the use of DSTs by its members, in that it neither recommends nor discourages them. Member countries that do decide to adopt a DST should

  • Comply with international obligations
  • Ensure the DST is temporary and narrowly targeted
  • Minimise over-taxation, cost, complexity, and compliance burdens
  • Ensure the DST has a minimal adverse impact on small businesses.

The French DST is already in force. The Italian DST is in draft form, with the government intending for it to enter into force in January 2020, while other DST regimes, including that of the United Kingdom, are expected to come into force some time during 2020. None of these national rules seem to have complied with the OECD guidelines, and there are several practical challenges for businesses that are common across all three regimes.

Identifying Taxable Revenues and Services 

In France, each company belonging to a group that derives gross revenues from digital services exceeding €750 million on a worldwide basis, and €25 million in France, is subject to French DST at a rate of 3 per cent. French DST is assessed at the company level only, based on gross revenues derived from digital services deemed to be provided in France during the previous calendar year. This is calculated as the gross revenues derived from taxable digital services, multiplied by the proportion of French users over the total number of users of the taxable digital services.

As it currently stands, the Italian DST would apply to Italian resident and non-resident companies that, at the individual or group level, earned during a calendar year a total amount of worldwide revenues of over €750 million, and an amount of revenues derived from digital services provided in Italy of over €5.5 million.

Only groups with annual worldwide revenues above £500 million and UK revenues above £25 million would be affected by the UK DST, with the first £25 million of UK revenues being exempt. The UK DST would be calculated on a group-wide basis and apportioned pro rata to each group member. Groups with low operating margins may opt for a “safe harbour” alternative DST calculation, based on the group’s operating margin.

Identifying Taxable Services

The taxable services that fall within the scope of the French, Italian, and UK DSTs are broadly similar and include

  • The provision of a social media platform
  • Search engines
  • Any online marketplace
  • Online advertising business, including those that use or sell individual users’ data

It is noteworthy that digital platforms for the provision of payment services, communication services, crowdfunding services, or digital content, as well as self-operated digital platforms for the direct sale of goods and services, are specifically beyond the scope of the French and UK DST.

The issues that arise are also broadly similar. There are likely to be conflicts regarding dual-purpose platforms, i.e., those that include both taxable and exempt digital services. The fact that the lists are not exhaustive and that the DSTs will apply to all revenues received in connection with a relevant DST activity means that affected businesses will need to analyse the nature of the revenue streams and the activities from which they are generated, and each case will turn on its own facts.  This will entail a substantial administrative burden for affected businesses, as well as a lack of certainty over potential DST filing obligations.

Identifying Users 

Both France and Italy consider the location of users to be based on the location of the electronic device when the user accesses the digital services. The United Kingdom intends to determine that someone is a UK user if, it is reasonable to assume, they are normally located or established in the United Kingdom.

France and Italy will use IP addresses, wi-fi connections, GPS data, etc., plus reference to that user’s personal data and place of residence; while the UK plans to extrapolate user location from data such as delivery addresses, payment details, IP addresses, contractual evidence, or the address of properties for rent or location of goods for sale.

There are many problems with these approaches. At the most basic level, different data sources can provide conflicting evidence of a user’s location, and IP addresses can be easily manipulated. Businesses will, therefore, need to come to a reasonable, evidence-based conclusion on the likelihood of that user’s location, further adding to their administrative burden and broadening the scope to make a mistake. The use of personal data and place of residence are also likely to trigger data protection issues under the EU General Data Protection Regulations.

Potential Double Taxation and Reimbursements

There is a risk of double taxation if another jurisdiction imposes a DST on the same revenues, for example as a result of inconsistencies between one set of national rules and those of another jurisdiction regarding user location or taxing rights. DST is however generally deductible for corporate income tax purposes.

France’s President Macron stated at the 2019 G7 that any excess of French DST over the new international DST being brokered by the OECD would be refunded. He did not, unfortunately, give much detail as to how and under what limitations this refund will take place.

The Italian draft DST provisions do not include any specific rule on this aspect and, although they seem to propose a sunset clause according to which the Italian DST is automatically repealed when the new OECD-agreed corporate income tax enters into force, there does not appear to be scope for a retroactive reimbursement of the difference (if any) between the Italian DST and such future corporate income tax.

The draft UK DST rules disregard 50 per cent of UK revenues from cross-border transactions between a buyer and a seller through an online marketplace where the non-UK party is in another DST jurisdiction. But this does not fully resolve the issue of potential double taxation if the other jurisdiction imposes a DST on the same revenues, for example due to inconsistencies between the UK national rules and those of the other DST jurisdiction regarding user location and/ or taxing rights.

The UK DST will also not be creditable against either corporation tax, income tax under the Offshore Receipts in respect of Intangible Property regime, or diverted profits tax; although it should generally be deductible for corporation tax purposes as a trading expense. Unlike France or Italy, neither the draft legislation nor HMRC guidance mentions the possibility of a retroactive reimbursement of the UK DST once the OECD’s long-term solution for a revised corporate income tax has been agreed and implemented by member countries.

The US Response

The US administration takes a hostile view of DST proposals generally, as evidenced by a recent investigation into whether the French DST discriminates against US businesses. This could lead to retaliatory US tariffs being imposed on imports from France and punitive US tax charges on French companies doing business in the United States.

Other DSTs, including those of the United Kingdom and Italy, can probably expect similar responses from the United States. UK Prime Minister Boris Johnson has indicated his support in principle for a UK DST or a similarly targeted tax. He has also indicated that the structure of this tax would be on the table in any trade negotiations with the United States, and the future of the current draft Finance Bill hinges on the result of the UK general election in December, so there is currently very little certainty as to whether UK DST will take effect at all.

For now, the best course of action for affected businesses is to assume that all DSTs will take effect as planned and prepare accordingly, notwithstanding any current legislative or political uncertainty.

© 2019 McDermott Will & Emery

More on digital taxation on the National Law Review Tax law page.

A Week of Surreal Headlines: A Charging Bull Smashed by Man Wielding Banjo, A Stolen 18-Karat Gold Toilet, and a $20 Million Consignment Decided by a Game of Rock, Paper, Scissors

UNITED STATES

Mercedes-Benz Suit Against Street Artists Allowed to Proceed

Mercedes-Benz brought a declaratory judgment action against four street artists who saw their work prominently displayed on social media as background for the automaker’s G-Class track ads. Mercedes is seeking a declaration that its use of the artworks was not a copyright infringement as it was either fair use or because the claim is precluded by the Architectural Works Copyright Protection Act (1990).

After a hearing last week, a Detroit court denied the artists’ motions to dismiss Mercedes’s claims. The artists contended, among other things, that Mercedes’s claim was not ripe as the artists have not yet registered their copyrights. Distinguishing the U.S. Supreme Court’s recent decision in Fourth Estate v. Wall-Street.com, this court concluded that copyright registration is not a prerequisite for an action seeking a declaration of non-infringement.

Los Angeles Police Department Seeks to Reunite Recently Discovered Artworks with Their Owners

The LAPD has uncovered a trove of more than 100 antiques and artworks that have been missing since a spree of thefts in 1993, including works by Pablo Picasso and Joan Miró. Two individuals involved in the thefts were captured in 1993, but it was not until this summer that an auctioneer’s tip led to the discoveries.

Charging Bull, a Symbol of Wall Street Power, Damaged by a Man with a Banjo

A man armed with a metal banjo bashed the famous Charging Bull on Wall Street, leaving it with a six-inch gash and several scratches. The attacker, who was arraigned and released without bail, gave no motive for his actions. He is due back in court on October 16. The artwork was installed in December 1989 by sculptor Arturo Di Modica, intended as a symbol of optimism after the Black Monday stock market crash in 1987.

EUROPE

Works of Art from the Collection of Nazi Collaborator Hildebrand Gurlitt to Be Exhibited in Israeli Museum

Artworks amassed by Hildebrand Gurlitt, noted Nazi collaborator, will go on view for the first time at the Israel Museum later this month. The collection includes works by Pierre-Auguste Renoir, Édouard Manet, Otto Dix and Max Ernst, among others. The show will include works declared “degenerate” by the Nazis and acquired by Gurlitt during the war, as well as works that have no red flags that might indicate ties to the Nazis. The exhibition, called “Fateful Choices: Art from the Gurlitt Trove,” reveals the historical circumstances behind the fate of art during the Third Reich and is intended to generate discussion about art and ethics.

Extreme Weather Leads to the Reemergence of a “Spanish Stonehenge”

This summer, an extreme drought in the Extremadura area of Spain has revealed the “Dolmen de Guadalperal,” a series of megalithic stones that were previously submerged. The Dolmen are 7,000 years old and are located in the Valdecañas Reservoir. They were last seen in 1963. A local group is working to move the Dolmen before they submerge again.

Police on the Hunt for Maurizio Cattelan’s 18-Carat Gold Toilet

Maurizio Cattelan’s America (2016), a fully functioning 18-carat gold toilet, was stolen from an exhibition at Blenheim Palace in Oxfordshire, UK. Blenheim Palace is the 18th Century home and ancestral seat of the Duke of Marlborough. The burglars caused significant damage and flooding while removing the toilet.

Gagosian Gallery Adds Estate of Simon Hantaï to Its Roster

Gagosian Gallery added the estate of postwar abstractionist Simon Hantaï. Gagosian will host its first Hantaï show in October at its gallery in France. Hantaï, who is well known for his surrealist and abstract expressionist works, died in 2008. He is beloved in France and represented the country at the Venice Biennale in 1982.

Arrests Made in Connection with a String of Forgeries of High-Profile Old Master Paintings

An arrest was made and an additional warrant issued in connection with a high-profile string of suspected forgeries of Old Master paintings uncovered in 2016. The scandal has involved such institutions at the Louvre, London’s National Gallery and the Metropolitan Museum. The forgery ring may have been involved in as much as $255 million in sales of fake Old Masters.

Banksy Gallerist Calls It Quits

Steve Lazarides, who started out as the driver, photographer and later dealer for street artist Banksy, is leaving gallery life. Lazarides said that he entered the art world to “promote a subculture that was being overlooked, and that’s gone now.” His first project post-gallery life is to sort through the 12,000 photographs he took over 11 years with Banksy and publishing a book titled Banksy Captured.

ASIA

Art Recovery International Calls for the Return of a Painting They Allege Was Stolen from a UK Residence in 1984

Art Recovery International seeks intervention from the International Council of Museums (ICOM) in the return on a painting, The Portrait of Miss Mathew, later Lady Elizabeth Mathew, sitting with her dog before a landscape, which was allegedly stolen from the home of Sir Henry and Lady Price in East Sussex in 1984. The painting is currently located at Tokyo’s Fuji Art Museum, an ICOM member. The museum is contesting the claim.

The Pushkin State Museum of Fine Arts Will Soon Take Over Russia’s National Centre for Contemporary Arts

Russia’s National Centre for Contemporary Arts (NCCA), which consists of nine branches, has begun merging with the Pushkin State Museum of Fine Arts in Moscow as part of Pushkin’s ambition to open a “Pushkin Modern.” Vladimir Medinsky, Russia’s minister of culture, announced the merger in July, saying that NCCA staff had requested the merger after a series of ideological and financial scandals.

How a $20 Million Consignment Was Decided by a Game of Rock, Paper, Scissors

In the spring of 2005, a Japanese electronics giant decided to auction off works from its art collection worth about $20 million. The collection included works by Paul Cézanne, Camille Picasso, Vincent Van Gogh, Paul Gauguin and others. Unable to choose whether to consign with Sotheby’s or Christie’s, the company president decided that representatives from each company would meet at the Tokyo office and compete in a game of rock, paper, scissors. Christie’s chose scissors and Sotheby’s chose paper, and we all know scissors cut paper

© 2019 Wilson Elser

Three Important Considerations For All Businesses in Light of GDPR

Today, the European General Data Protection Regulation (“GDPR”) takes effect. The GDPR is the most comprehensive and complex privacy regulation currently enacted. The GDPR can apply to a business or organization (including a non-profit organization) anywhere in the world and its potential financial impact is huge; fines can reach up to € 20 million Euros (over $23 million USD) or 4% of an entity’s total revenue, whichever is greater. Not surprisingly, the potential for this type of penalty has caused concern and chaos leading up to the May 25, 2018 effective date. In light of this significant international development, all organizations should consider the following:

1. Does the GDPR Apply?

If your entity “processes” the “personal data” of anyone within the European Union, then the GDPR may apply. “Personal data” under the GDPR is any information that could identify an individual, directly or indirectly, like a name, email address or even an IP address. The GDPR also broadly defines “processing” to include activities such as collecting, storing or using the personal data. For more information on how to determine if the GDPR applies to your entity, watch our 3-minute video on the subject.

2. If the GDPR Does Apply, What is the Compliance Strategy?

You need a plan. Yes, it would have been ideal to have it in place by today but if the GDPR applies to your entity, do not delay any further in creating a GDPR compliance strategy. A GDPR compliance strategy starts with a detailed examination of your entity’s data collection and use practices. Those practices must comply with the GDPR requirements and your entity may need to implement new or revised policies to address specific compliance requirements. This process is specific to the particular practices of each entity – there is no one-size-fits-all GDPR compliance program. You can find the regulatory language here.

3. Even If the GDPR Does Not Apply, How Do You Handle the Data You Collect?

Even if the GDPR does not apply to your entity, there are significant risks and liability surrounding the data collection and processing practices of any business. Data breaches happen every day. No business is immune. Each organization should closely examine its data collection and use practices and determine if it absolutely needs all of the data it collects. Then, the organization must determine whether the steps it is taking to protect the data it collects are reasonable in today’s environment. In Massachusetts, businesses must undergo this process and create a written information security plan. In Connecticut, having such a plan may help avoid a government enforcement action if you experience a data breach. In addition, the Federal Trade Commission and states’ Attorneys General are actively pursuing companies with questionable privacy practices.

© Copyright 2018 Murtha Cullina.
This post was written by Dena M. Castricone and Daniel J. Kagan of Murtha Cullina.

Bioplastics Industry Responds To Revised European Parliament Report On Waste Legislation

European Parliament EU BioplasticsOn June 9, 2016, European Bioplastics (EUBP) announced the support of a European Parliament (EP) report emphasizing the role of bioplastics in the creation of a circular bioeconomy. The report, produced by Italian MEP Simona Bonafè¨, outlines legislation that is needed to use waste more efficiently to create bio-based materials. Increasing the value of waste by promoting its use to create other bioproducts will help shift the linear bioeconomy to a circular, more efficient, bioeconomy. The report suggested defining composting and anaerobic digestion of organic waste as recycling, and requiring the collection of biowaste by 2020 in order to increase organic recycling of biowaste to 65 percent by 2025. On June 15, 2016, the EP debated possible new definitions of litter, with the intent of reducing both land and marine based litter by 50 percent by 2030.

ARTICLE BY Kathleen M. Roberts of Bergeson & Campbell, P.C.

©2016 Bergeson & Campbell, P.C.

FIVE MINUTES ON… Anti-Bribery and Corruption Laws in Europe

Anti-bribery and corruption has been a hot topic in the US for almost 40 years. The topic has historically however received much less attention within Europe. That is now changing as Europe is beginning to catch up and many European countries have already implemented anti-bribery laws much stricter than those in the US. Recent events have put the topic back on the agenda and we can expect further debate on the effectiveness and efficacy of enforcement in Europe.

The levels of perceived corruption within Europe are generally quite good. Transparency International publish an annual Corruptions Perceptions Index which shows the perceived levels of corruption in 175 countries globally. In its 2014 report, the average score across the EU and Western Europe was 66 (with 0 being highly corrupt and 100 being very clean), much better than the global average of 43. Even those countries with the lowest scores in the EU and Western Europe, being Greece, Romania and Italy, had a score of 43, consistent with the global average. Seven of the top 10 least corrupt countries are actually in Europe (Denmark, Finland, Sweden, Norway, Switzerland, Netherlands and Luxembourg).

Over the last five or so years, countries within Europe have been overhauling their existing, in many cases insufficient, anti-bribery regimes and some countries have implemented anti-bribery laws for the first time. We consider some of the specific regimes below along with their differences and similarities. The majority, if not all, are actually stricter than the laws in the US. The differences of the laws in Europe to the laws in the US have been somewhat of a surprise to many organisations who currently comply with the laws in the US and who don’t necessarily realise that they now need to enhance their practices to comply with more stringent regimes.

What’s Been Happening Across the Pond?

In the US, the Foreign Corrupt Practice Act (FCPA) came into force on 19 December 1977. The FCPA criminalises the paying or offering of a bribe to a foreign official, although the public official themselves do not commit an offence by receiving the bribe. The FCPA requires organisations to have accounting and other controls in place to prevent and detect bribery, but does not specifically require broader anti-bribery programmes. As well as US organisations, the FCPA has extraterritorial reach and catches any other organisation that uses any means of US commerce, including mails, emails, faxes, bank transactions, and similar acts.

Top of the Class: the Uk

Much of the change in approach within Europe and indeed further afield has arguably been led by the introduction in the UK of the Bribery Act 2010 (Bribery Act), which came into force on 1 July 2011, and which is thought to be the strictest anti-bribery legislation in the world.

Similarities between the FCPA and the Bribery Act Differences between the FCPA and the Bribery Act

Territorial Reach

The Bribery Act has a wide territorial reach. It extends not only to offences committed in the UK but also to offences committed outside the UK where the person committing them has a close connection with the UK by virtue of them being a British national or ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership. For corporations, the corporate offence in the Bribery Act extends to UK as well as non-UK organisations that carry on business or part of a business in the UK. So, for example, a Spanish company that exports to the UK can be in breach of the corporate offence for bribery occurring in Spain, even though that bribery does not involve any UK connected person.

Penalties

The penalties available for breaches of the Bribery Act are severe. They include an unlimited fine, up to 10 years in prison, and orders for directors to be disqualified. Companies can also be prohibited from public procurement and the proceeds from the bribe, for example the monies gained from a contract obtained through corruption, can be confiscated. Penalties under FCPA are slightly less severe with fines being capped to US$2 million (for corporations) and imprisonment for individuals being limited to a maximum of five years.

All Bribes Are Caught, Even Business-to-Business!

Arguably the single most important difference between the Bribery Act and the FCPA is that the Bribery Act prohibits the offering or receiving of a bribe and the bribery of Foreign Public Officials. Unlike the FCPA, the Bribery Act therefore captures private (business to business) bribery and also makes it an offence to receive a bribe as well as pay/offer to pay one. Directors and senior managers can also be found guilty of an offence if their organisation commits one of these offences with their consent or connivance.

Facilitation Payments

Facilitation Payments are payments made to expedite or secure the performance of a “routine government action”. The FCPA expressly authorises such payments. In the UK, such payments are prohibited under the Bribery Act.

The Corporate Defence

The Bribery Act also introduces a corporate offence of failing to prevent a bribe being paid, for which it will be a defence for an organisation to show that it has “adequate procedures” in place to prevent such bribery. Guidance produced by the UK Ministry of Justice explains that these “adequate procedures” need to be guided by six principles: Top-level commitment; Risk assessment; Proportionate procedures; Due diligence; Communication (including training) and Monitoring and review. As stated above, FCPA only requires accounting and other controls to prevent and detect bribery, nothing broader.

Other EU Member States

Most EU Member States have enacted anti-bribery laws with heavy fines. When compared to the Bribery Act, however, such laws are generally more limited in scope and tend to focus on bribery of public officials. Most are however at least consistent with FCPA.

In France, most of the French anti-corruption provisions relevant to businesses are laid down in the French Criminal Code and relate to both the public and private sector and both the offeror and the recipient. Like the UK, the law in France also has an extraterritorial reach and will interestingly apply amongst other situations, where the victim of the bribe is a French national. Penalties for breach of French laws include imprisonment for, in some cases, up to 15 years and financial penalties including, for companies, fines of, in some cases, up to €5 million or twice the amount of the proceeds stemming from the offence. Unlike the UK, there are in France, however, no legal requirements for implementing preventive procedures.

Germany’s anti-bribery laws are contained in the Criminal Code, which prohibits offering, paying or accepting a bribe in domestic or foreign transactions. Separately, civil liability can, if certain criteria are met, attach to companies for offences committed on their behalf due to the Administrative Offences Act. Owners/managers can also be found liable in certain situations. Penalties include five years’ imprisonment (10 years’ imprisonment in severe cases involving a member/official of a public body), a criminal fine and confiscation of monies obtained from the bribe. The Criminal Code also applies to offences committed abroad. One of the key cases to be enforced in Germany was that against Siemens AG, who paid German authorities almost €600 million in fines after they were investigated for paying bribes to secure public-works contracts in a number of countries. This was in addition to fines paid in the US for breaching FCPA.

In the Netherlands, anti-corruption and bribery laws are predominantly aimed at attempts to bribe public officials. Unlike the UK, Dutch law has relatively limited jurisdictional reach. For example, a foreign non-Dutch company that has committed acts of bribery of a non-Dutch foreign official outside the Netherlands is not subject to the criminal laws of the Netherlands. The maximum penalty under Dutch law is a fine of €740,000 for each case of bribery and for individuals, imprisonment for four years (one year for private commercial bribery) and a fine of up to €74,000.

Outlook

While most Member States have clearly improved their anti-bribery regimes in recent years, what seems to be the biggest hurdle is insufficient enforcement and the considerable differences in the enforcement levels across Europe, in particular when it comes to bribery abroad. Relying on the UK (or the US) will soon stretch the already limited resources that individual countries can bring to bear. It seems that the European Union itself will take action in the foreseeable future. Certainly there would be jurisdictional concerns as regards the criminal aspects for individuals, but the Commission’s war on cartels has shown that it is well-suited to enforcing policy. Currently, however, the Commission contends itself with issues in a biannual report on corruption in each Member State.

Given the extra-territorial reach discussed above, European businesses need to make sure that they are compliant with all the different antibribery laws that could affect their business. This is not only the laws in their own countries, but also the laws abroad. Many organisations acting internationally and globally are seeking compliance with the Bribery Act as compliance with the Bribery Act should be sufficient to also achieve compliance with any other anti-bribery legislation.

ARTICLE BY Rob Elvin, Louise Roberts & Tim Wünnemann of Squire Patton Boggs (US) LLP

© Copyright 2015 Squire Patton Boggs (US) LLP

Just the TTIP (Transatlantic Trade and Investment Partnership): A Review of the Transatlantic Partnership Agreement One Year After It Is Introduced to America

Sheppard Mullin 2012

 

Next week will mark one year since President Obama introduced the Transatlantic Trade and Investment Partnership (TTIP) to the nation in his State of the Union Address.  Although the TTIP received only a brief nod in the President’s speech, the TTIP initiative has moved forward at a stunning pace . . . well, a stunning pace for an international trade negotiation, a process that normally crawls along.  As discussed in this blog, the U.S. and European parties to this proposed partnership set an ambitious goal of finalizing an agreement by the end of 2014.  A year into the process, we take a look at the progress to date and the challenges to come.

TTIP Background

We often hear news of trade agreements and other arrangements designed to increase business between the United States and one or more partner countries.

TTIP is different. It’s bigger.

The European Union and the United States comprise the largest and wealthiest market in the world, accounting for over 54% of the world’s GDP and 40% of the world’s purchasing power.  It follows that even the slightest reduction in marketplace barriers on a scale that large could result in sizeable trade increases and economic benefits.  The European Centre for Economic Policy Research estimates that TTIP could boost U.S. exports to the EU by $300 billion annually and add $125 billion to U.S. GDP each year.

Tariffs between the trading partners are already some of the lowest in the global market.  Accordingly, TTIP focuses on reducing non-tariff-barriers (NTBs) to trade between the United States and Europe.  The proposed NTB reductions include aligning domestic standards, cutting costs imposed by bureaucracy and regulations, and liberalizing trade in services and public procurement.

TTIP Negotiations Thus Far

Over the past year, U.S. and EU representatives have met for three rounds of negotiations – the first round was primarily introductory and the other two were more substantive.  The most recent of these negotiation rounds, completed in December, left the U.S. Trade Representative sanguine.  The USTR stated on its website that, “it is a measure of progress that we are firmly in the phase of discussing proposals on core elements of each of the main negotiating areas, as well as beginning to confront and reconcile our differences on many important issues. We have a lot of work to do in 2014, but I am optimistic about what we’ll be able to accomplish in the coming year.”

TTIP in the Coming Year

The next round of TTIP negotiations will be held in Washington, D.C. from March 16 – 20, 2014.  In this fourth round, negotiators expect to work on the wording of provisions designed to ease compliance with existing rules.  Negotiators also expect to draft agreement language to enable U.S. and EU regulators to work together as they draft their respective domestic regulations in the future.  Specific provisions to be addressed in this fourth round will include rules on food safety and animal and plant health, as well as technical regulations, product standards, and testing and certification procedures.  Taken together, these items are often referred to as “Technical Barriers to Trade” (TBTs).

The Chief Negotiator for the EU made clear that, although this set of negotiations will focus on the reduction of TBTs, “TTIP is not and will not be a deregulation agenda.”

This statement exemplifies the numerous conflicts that the negotiators will face in the coming year.  They will have a mandate to harmonize two regulatory systems, reducing the NTBs and TBTs without overly compromising or placing inordinate burdens on either system.  In other words, the negotiators must aim to reduce regulatory barriers without having a deregulation agenda – a tough target to hit.

From that conundrum, potential snares for the negotiating team only multiply.  Interest groups and protectionist factions from both sides of the Atlantic will continue to actively oppose the partnership.  Some Europeans will raise an objection that the deal gives away too much to American business interests.  Further, the voices of labor unions, consumer advocates, environmental groups and other skeptics in opposition to TTIP may grow louder as the parties get closer to a final agreement.  Finally, political sways – a backlash against NSA monitoring of European communications as well as elections in the U.S. and EU in 2014 – may adversely affect the ongoing negotiations.

TTIP proponents remain optimistic, however, confident that a deal can be completed by the end of 2014.  We will keep an eye on developments and report on how nimbly these negotiators can manage the myriad concerns to achieve a useful partnership for the economies on both sides of the Atlantic.

Article by:

Reid Whitten

Of:

Sheppard, Mullin, Richter & Hampton LLP