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In Trade and Foreign Investment

United States: CFIUS issues FAQ related to springing rights and mandatory filings

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On 11 May 2023, the Committee on Foreign Investment in the United States (CFIUS) issued a Frequently Asked Question (FAQ), which calls into question the use of ā€œspringing rights,ā€ a broadly used instrument to expedite financings while complying with mandatory filing requirements. The FAQ addresses the timing for when a filing must be made for a transaction triggering a mandatory filing. Since implementation of the mandatory filing requirements, transaction parties have used springing or deferred rights to allow financings to proceed while those rights triggering a CFIUS filing are deferred or held in abeyance until after CFIUS clearance.

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United States: Texas Data Privacy and Security Act for Governor’s approval

by 9 Mins Read

On 29 May 2023, Texas’s H.B. 4, also known as the Texas Data Privacy and Security Act, passed in the Texas legislature. The Texas Data Privacy and Security Act joins the growing number of states that have passed or enacted legislation in 2023, including Iowa, Indiana, Tennessee and Montana, and more are expected in the coming months.

In Trade and Foreign Investment

Canada Proposes ā€œlast saleā€ rule in relation to Customs Valuation

by 8 Mins Read

On 27 May 2023 the Canada Border Services Agency introduced amendments to the Valuation for Duty Regulations, which will alter existing Canadian customs valuation rules. The Amendments intend to clarify the ā€œsaleā€ used to establish the value for duty under the transaction value method for all goods imported into Canada. Effectively, the Amendments propose a ā€œlast saleā€ approach to customs valuation, which has the potential to increase the declared value for duty of imported goods, directly increasing duties and taxes owing, and indirectly increasing the cost of doing business in Canada.

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United States: Recent settlement by GCI signals expanded use of False Claims Act

by 8 Mins Read

On 11 May 2023, GCI Communications Corp. (GCI) agreed to pay more than USD 40 million to the US government to settle allegations that it submitted false claims to the Federal Communications Commission (FCC) by knowingly inflating its prices in a competitive bidding program regulated by the FCC. The investigation began when a former GCI employee, Robert Taylor, filed a qui tam action against the company under the False Claims Act (FCA) after it allegedly falsely claimed and received funds from the FCC’s Rural Health Care Program. This settlement signals the DOJ’s intent to partner with other government agencies, in this case the FCC, in using the False Claims Act to combat fraud by organizations that service health care providers. It is also one of the DOJā€™s largest settlements of allegations under the FCA in 2023.

In Environment

United States: Green projects get needed guidance on domestic content bonus credit

by 7 Mins Read

Released 12 May 2023, Notice 2023-38 provides interim guidance on the “domestic content” bonus tax credit amounts available for facilities that generate electricity from renewable resources (e.g., wind and solar facilities) and certain energy storage property. The “domestic content” bonus incentivizes owners of green energy projects to utilize domestically-manufactured materials and components (including steel, iron, and “manufactured products”) by offering them an additional incentive in the form of an increased tax credit for doing so.

In Product Regulation & Liability

United States: A legal makeover guide for complying with new cosmetic regulations under MoCRA (Part I)

by 6 Mins Read

Beginning 29 December 2023, the Modernization of Cosmetic Regulation Act of 2022, which was signed into law last year to establish a more strengthened US Food and Drug Administration regulatory framework to ensure the safety of cosmetic products, will begin to take effect. Like with cosmetic application, prepping for full coverage to comply with the new law is important.

In Tax

United States: Supreme Court sustains IRSā€™s power to issue no-notice summons, but indicates that power is not unlimited

by 5 Mins Read

On 18 May 2023, the Supreme Court sided with the IRS in a dispute that centered on the agencyā€™s power to issue summons for bank account records without notice to the interested account holders. The courtā€™s decision, however, is far from an unmitigated victory for the agency. In fact, the majority and concurring opinions reflect the court has significant reservations about the IRSā€™s use of no-notice summons, particularly in cases involving innocent third parties.

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