Publications

Pensions Weekly Update: 22 September 2026

Tue, 22 Sep 2026 10:47:51 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

New regulations will bring into force provisions of the Data (Use and Access) Act 2025, which provide for the transfer of the functions, rights, liabilities and property of the information commissioner to a new Information Commission. The transfer is due to take effect on 30 September 2026. The post of information commissioner will be abolished from that date. These changes will mean that references to the information commissioner in privacy notices and other scheme documentation will be out of date. The current Information Commissioner’s Office (ICO) has confirmed that during the transition period it remains focused on ensuring a smooth transition and continuity of service for customers and stakeholders.
The first prosecutions for failing to carry out identity verification with Companies House have been brought against three company directors. The directors were convicted and fined following action brought by the Insolvency Service. It should be noted that one of the directors had correctly verified their identity, but they were still convicted because a co-director had not verified their identity and they had allowed that co-director to continue acting as a director of the company. If your pension scheme has a corporate trustee, the trustee directors will need to complete an identity verification process before the trustee company is able to submit its annual confirmation statement. While most trustee directors will have now completed this process, for those who have not yet done so, they can check their hard deadline by searching against their name on the Companies House website. If a person is a director of more than one company, they will need to complete their identity verification before the earliest date shown. More information on verifying a director’s identity can be found in this Companies House publication.
The Work and Pensions Committee (WPC) has launched an inquiry into pensions adequacy and automatic enrolment contributions for low earners and their employers. The call for evidence includes questions around the extent to which minimum contributions should increase, how any increase should be shared between the employee and employer and whether there is a case for reducing or removing the lower earnings limit on contributions and/or the earnings trigger for automatic enrolment. The call for evidence closes at 4 p.m. on 26 October 2026.
The Pensions Regulator (TPR) has published a market oversight report on UK pension funds and private market investment. TPR asked more than 40 key stakeholders about market opportunities, available investment vehicles, limitations, barriers, enablers and appetite of private sector defined benefit (DB) and defined contribution (DC) pension schemes for private market investments. The report found that while trustees of occupational pension schemes are generally open to UK private market investment, trustees of DB schemes are less likely to invest further in private markets. The reasons include the lack of need for growth assets (in relation to well-funded schemes that are locking down risk), the illiquid nature of private market investments (which reduces endgame flexibility) and some open and immature schemes already hold material allocations to private market investments. Trustees’ fiduciary duties were cited as a factor that prevented schemes from making a firm commitment to a certain proportion of assets allocated to private market investment. The report notes that industry appetite for venture capital is limited. There is greater appetite for investment in private equity, private debt/credit, infrastructure and property/real estate. The need for a strong pipeline of high-quality investible opportunities, and fund structures which help facilitate such investments, is highlighted in the report. The report also sets out some actions for trustees.
The EU has invited Canada to become its first “associate member”. In this insight, we look at what this could mean.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

International dispute resolution update

Mon, 21 Sep 2026 16:15:39 +00:00

Welcome to the IDR update from our world-ranked International Dispute Resolution Practice Group. This is a series of announcements that we send to our clients, friends and colleagues about recent news in our field and how we are working to impact change.

Our update includes:

Mining and the global supply chain: The sulphuric acid crisis

Mon, 21 Sep 2026 11:14:15 +00:00

China has permitted its first outbound shipment of sulphuric acid since May, despite wider export restrictions remaining in place.¹ The 32,000 tons shipment, which left Nanjing for Chile, is a small fraction of the approximately four million metric tonnes of sulphuric acid that Chile annually imports, and it is unclear whether further shipments will follow.²

Sulphuric acid is essential to the production of copper, lithium, nickel, cobalt and uranium.

The restriction of China’s exports of sulphuric acid since May, is part of a wave of global protectionism that has arisen out of the ongoing Middle East conflict. Prior to the conflict, the Middle East accounted for one third of global sulphur production. Half of the world’s seaborne sulphur trade transited through the Strait of Hormuz. Since then:

7 April 2026, Turkey imposes export restrictions on sulphur exports
1 May 2026, China, producer of more than 40% of the world’s sulphuric acid, introduces restrictions on most exports to protect domestic supply
31 May 2026, Russia extends its own sulphur export ban through June 2026

The commercial effect is significant. Chile’s CFR Mejillones spot prices doubled in under seven weeks, from US$190 per metric ton on 25 February 2026, to US$380 per metric ton by 15 April 2026.³

Sulphuric acid’s share of hard-rock lithium processing costs has reportedly increased from around 3% to 11%, while sulphur’s share of costs in certain nickel operations has risen from 26% to approximately 42%.⁴ Some refiners have already reduced production because of limited physical supply.⁵

From a legal perspective, the below contractual considerations may be relevant when considering who will bear the immediate additional cost and supply risk of the ongoing export bans.

Force majeure

Under English law, force majeure can only be relied upon where expressly provided for in the contract. Often the clauses extend to government or export bans or embargoes, which depending on the wording of the clause, may be of relevance to the current sulphuric acid export restrictions.

When reviewing the force majeure clause, the following questions should be considered:

Does the event fall within the categories set out under the clause?
Was the event causative?
Has the threshold (delayed, prevented or hindered etc.) been met for relief?
Could the event or impact of the event be avoided or mitigated?
Are there notice provisions, and have they been met?
What are the consequences of relying on the force majeure clause?

This last question is important. Invoking force majeure does not simply exclude a party’s liability – it may trigger rights, such as:

Termination rights after prolonged nonperformance
Suspension of exclusivity or supply commitments
Obligations to implement contingency measures

The short-term benefit of force majeure may therefore be outweighed by the long-term contractual or commercial risks. Parties must consider whether invoking force majeure could inadvertently give a counterparty a strategic advantage. For example, a supplier may rely on a force majeure clause to evade the immediate repercussions of their inability to supply, but could find itself permitting the buyer to exit an otherwise profitable long-term agreement.

It should also be noted that force majeure relates to unforeseeable events, which are not in contemplation when the parties contracted, therefore for contracts recently entered into, the ability to rely on force majeure for sulphuric acid export bans/government restrictions, may become much more difficult.

Price adjustment or indexation provisions

Parties to long-term supply agreements may link the contract price to a published benchmark, that reflects how they allocated the risk of market movements. These clauses may therefore be of assistance where there is considerable price volatility. Depending on the wording of the clause, parties should consider:

Are prices tied to a specific benchmark or third-party assessment process?
Does the clause contain a cap, floor or threshold before being triggered?

Hardship clauses

Hardship clauses seek to protect parties against the risk of hardship caused by unforeseen changes that impact the economic equilibrium of the contract. Such clauses have been described as the “ultimate safety net” or “manual override”. Once triggered, they typically permit renegotiation or arbitration to adjust the contract terms to alleviate the hardship, or termination if such adjustment cannot be agreed or accommodated.

Under English law, the meaning of “hardship” will depend on the terms of the particular clause. The initial questions will be:

What is the definition of hardship under the clause?
Is the clause linked to any assumptions?
Are there any exclusions?
Does the clause need to be triggered, and if so, are there notice provisions?
What are the consequences, negotiation, arbitration and/or termination?
What are the continuing performance obligations?

Looking across the contractual chain

The immediate supply agreement should not be reviewed in isolation. A shortage may also affect offtake agreements, mineral sales contracts, financing documents, joint venture arrangements and project delivery obligations.

The same event may have different consequences under each agreement. A miner might receive force majeure relief from a supplier, but remain liable to its offtakers or purchasers for any resulting failure to supply contracted volumes. Equally, a temporary shortage may not justify terminating a commercial contract, but could affect production commitments, delivery obligations, financial covenants or access to further funding.

Businesses should therefore assess their position across the contractual chain and ensure that statements made to suppliers are consistent with those made to offtakers, purchasers, lenders, insurers and other project counterparties.

Practical steps

Review the contractual risk allocation – This includes reviewing the events covered by force majeure, the applicable causation threshold and any hardship, price adjustment, termination or dispute resolution provisions.
Check the notice requirements – This includes when it must be given, how it must be served and what information it must contain.
Comply with any reasonable endeavours or mitigation requirement – Investigate alternative suppliers, sources, products and shipping routes, as well as recording why any option was not commercially or operationally viable.
Preserve evidence of causation and impact – This includes government measures, supplier communications, shipping data and operational records.
Assess the wider contractual chain – Particularly assess customer and offtake contracts, financing arrangements and insurance policies, where the same event may have different legal consequences.
Engage counterparties early, while preserving existing rights – Explore temporary pricing, revised volumes, deferred deliveries or alternative sourcing arrangements, as well as considering any consequences of invoking formal relief.

A commercial response

The recent shipment from China shows that market conditions can change quickly. If your business is preparing to issue a force majeure notice, or if you need to review your price adjustment clauses to manage the price volatility or simply want to consider what options may be available, we would be happy to assist.

1 “China Ships Out First Sulfuric Acid Cargo Since Halt on Exports”, Julian Luk, Bloomberg, September 2026.

2 “China’s Sulfuric Acid Restrictions Set to Squeeze Miners”, Kip Keen, S&P Global, April 2026.

3 “No Quick Sulfuric Acid Fix for Chilean Copper Sector: Analysts”, Kip Keen, S&P Global, April 2026.

4 “What the Sulphuric Acid Supply Crunch Means for Critical Minerals”, Matthew Bird, Benchmark Minerals, May 2026.

5 Ibid.

EU invites Canada to become its first “associate member”

Fri, 18 Sep 2026 14:28:26 +00:00

On 16 September 2026, European Commission President Ursula von der Leyen invited Canada to work towards becoming the EU’s first “associate member”. Up until now, EU law has not contemplated such a status, nor has either side yet defined what it would mean.

As a matter of fact, the concept is absent from the EU’s treaties. Canada has welcomed a closer alliance, while stressing that it is not seeking EU membership. The US has warned that it could impose tariffs on the EU if it views the initiative as hostile, while EU Parliament President Roberta Metsola has suggested that Australia and New Zealand might eventually pursue similar arrangements.¹

Background

The initiative comes after US-Canada trade talks broke down in late August. Canada has accused Washington DC of seeking concessions on French-language protections. The US then imposed tariffs of up to 50% on Canadian cars and trucks, and later extended measures to certain steel products. Canada responded with tariffs on a range of US imports.

Reports from the 12 and 13 September said that Prime Minister Mark Carney was exploring a new form of association with the EU and that European officials were open to the idea. Discussions reportedly covered freer movement of goods, services and workers in strategic supply chains, as well as joint undersea cables, data centres and satellite networks. They also included the possibility of visa-free residence and work for Canadians in the EU. Carney has nevertheless described Canada’s objective as a “unique alliance”, not EU membership. Canadian officials have likewise said that Ottawa did not propose the “associate member” label and expects the Montreal summit to clarify the relationship.

With Prime Minister Carney present in the chamber, President Von der Leyen formalised the invitation in her state of the union address. She called for the parties to move beyond the Comprehensive Economic and Trade Agreement (CETA) and build an “alliance for the future” centred on prosperity and economic security. Canada welcomed the proposal to deepen the relationship, but again stopped short of adopting the associate member label. Jonathan Wilkinson, Canada’s incoming ambassador to the EU, has similarly said that the parties have not yet settled on a name for the relationship.²

Scope of the proposed relationship

President Von der Leyen identified manufacturing, technology, defence production, Arctic cooperation, energy, critical minerals and batteries, artificial intelligence (AI), quantum technology, cybersecurity and economic security as possible areas for closer cooperation. Canada is also in early talks to join Erasmus+, and to secure mutual recognition of professional qualifications. It would be the first non-European country to join Erasmus+.

The proposal would build on an already substantial relationship. CETA has applied provisionally since 2017, although 10 EU member states, including France, Italy and Poland, have not ratified it. Canada already participates in Pillar II of Horizon Europe. It also signed an EU-Canada Security and Defence Partnership in June 2025, and became the first non-European participant in Security Action for Europe (SAFE), the EU’s €150 billion defence loan programme. SAFE already allows Canadian companies to supply some of the capabilities bought by member states with programme funding. That existing network matters because the parties could deepen cooperation step-by-step without first creating an entirely new legal category.³

Legal framework

As the treaties currently stand, Canada cannot join the EU. Article 49 of the Treaty on the European Union (TEU) limits membership to European states. Creating true membership for Canada would therefore require a fundamental change to the EU treaties. Likewise, the treaties do not provide for associate membership.

Canada’s accession to the EU then would possibly amount to formal association. Article 217 of the Treaty on the Functioning of the EU (TFEU) allows the bloc to conclude agreements with third countries, creating thereby reciprocal rights and obligations, common actions and special procedures. The provision is broad enough to support close economic, security and institutional cooperation without making the partner an EU member state. Article 8 TEU has also been mentioned, but it concerns the EU’s relations with neighbouring countries and is therefore a less obvious basis for Canada.

The procedure could be lengthy. Under Article 218 TFEU, the European Council would first authorise negotiations and later conclude the agreement. An association agreement requires unanimous approval in the council and the consent of the European Parliament. If the deal also covers matters that belong partly to the member states, national ratification would be required as well.

Association would not give Canada a vote in EU institutions. Existing arrangements generally exchange access for compliance with EU rules in the areas that they cover. Representatives of partner countries may take part in meetings or joint bodies, but that is distinct from participating in EU decision-making as a member state and enjoying the rights bestowed upon them. A customs union also appears difficult because applying the EU’s common external tariff would sit uneasily with Canada’s trade commitments in North America.

The phrase “associate member” could therefore describe very different outcomes. At one end, the EU could widen Canada’s participation in programmes such as Horizon Europe, SAFE and Erasmus+, with limited effects on Canadian domestic law. At the other, a broader treaty could give Canada access to parts of the single market in return for following EU rules in those sectors, overseen by joint institutions. Norway’s relationship through the European Economic Area and Switzerland’s network of agreements show how extensive such arrangements can become. Neither Brussels nor Ottawa has yet said how far it wants to go, and the eventual substance will matter far more than the label.⁴

Reactions

In the US, President Donald J. Trump has objected publicly to the proposal. On 16 September, he called it “laughable” and said Washington DC would impose serious tariffs on the EU, or halt trade in many products, if it regarded the initiative as hostile. He also signed a memorandum directing federal procurement agencies to remove Canadian-origin products, although a White House official said that measure was unrelated to the EU proposal. The European Commission has maintained that the initiative is not directed against any third country.

Within the EU, Trade Commissioner Maroš Šefčovič presented the offer as a sign of solidarity with Canada, and Ireland, which holds the council presidency, endorsed the initiative. France said it would examine the proposal before taking a position. The German government has reportedly questioned the “associate member” label, while remaining open to new forms of partnership.

In Canada, the conservative opposition has warned against accepting EU laws, taxes or immigration rules, and opposition parties have called for parliamentary approval before the government proceeds. An Abacus Data survey conducted from 4 to 9 September found 81% support for closer integration with the EU and 49% support for full membership.⁵

Australia and other partners

No EU leader has made Australia an equivalent offer. On 17 September, however, Metsola said that Australia and New Zealand could eventually follow Canada, while stressing that discussions remain at an early stage. Australian Trade Minister Don Farrell had said two days earlier that Canberra was “on the same page” as Ottawa on closer EU ties, without defining the form that relationship might take.

Australia’s current framework with the EU is less developed than Canada’s. The parties concluded negotiations on a free trade agreement on 24 March 2026, and Australia expects signature in late 2026 or early 2027 followed by parliamentary procedures. Their Security and Defence Partnership also took effect in March 2026, and Australian entities are due to participate in Pillar II of Horizon Europe from January 2027. If the EU develops a workable status for Canada, it could therefore provide a model for other close non-European partners.⁶

Implications for business

The initiative creates no new legal obligations for businesses today. It nevertheless has immediate practical significance for companies operating across the EU, Canada and the US, particularly where their supply chains, investment decisions or regulatory obligations touch more than one of those markets.

The immediate concern is trade exposure. The US has linked possible tariffs on the EU to its view of the initiative, while USCanada trade measures are already escalating. Companies should identify where further US measures against either jurisdiction, or Canadian countermeasures against US goods, could affect their supply chains, contracts and pricing. Businesses that rely on inputs moving repeatedly across the Atlantic or the US-Canada border may face the greatest practical exposure.

Economic security could also become an important part of the relationship. Von der Leyen placed it at the centre of the proposed alliance, which could lead the parties to coordinate more closely on export controls, foreign investment reviews and sanctions, although neither side has confirmed that these subjects will form part of the talks. Companies in defence, advanced technology, critical minerals and other sensitive sectors should therefore watch any negotiating mandate for signs that the EU and Canada intend to bring their rules closer together.

The proposal may also widen market access. Closer defenceindustrial cooperation could expand opportunities for Canadian suppliers in EU procurement, while cooperation on critical minerals could support further European investment in Canadian projects. Any broader access to parts of the EU single market would probably come with an obligation to follow the relevant EU rules. For companies, the practical question will be whether the additional access justifies the cost of meeting another set of regulatory requirements.

Next steps

The next major milestone would be the EU-Canada summit in Montreal on 29 and 30 October 2026. If the parties choose a formal association agreement, the council would then need to authorise the commission to begin negotiations. Businesses should watch member state positions, any further US trade response and whether Australia or New Zealand seeks a comparable dialogue.

“Canada invited to become first “associate member” of the EU”, Euronews, 16 September 2026; “Carney to address EU Parliament after Trump says “membership possible hostile act”, Associated Press (ABC News), 17 September 2026.
“Carney pushes idea of making Canada “associate member” of EU, WSJ reports”, Reuters (The Japan Times), 14 September 2026; “Carney says Canada planning to discuss “unique alliance” with EU, but not membership”, CBC News, 14 September 2026; “European Parliament to open Ottawa office as Carney seeks “unique alliance” with EU”, CBC News, 15 September 2026.
“Mark Carney addresses EU Parliament amid “associate membership” furore”, Euronews, 17 September 2026; “Canada in talks to join EU’s Erasmus+ exchanges programme”, Euronews, 16 September 2026.
“Von der Leyen dangles associate EU membership for Canada”, TEU, arts 8 and 49; TFEU, arts 217 and 218; Borderlex, 16 September 2026; “Towards an “Associate Membership” Status for Ukraine?”, Verfassungsblog, May 2026.
“Hostile act”: Trump threatens EU with tariffs over Canada associate-membership proposal”, CNBC, 17 September 2026; “Mark Carney addresses EU Parliament amid “associate membership” furore”, Euronews, 17 September 2026; “As Carney Heads to Europe, 4 in 5 Canadians Support Closer Integration with the EU”, Abacus Data, September 2026.
“Australia and New Zealand could follow Canada into associated EU membership, Metsola tells Euronews”, Euronews, 17 September 2026; “Australia-European Union Free Trade Agreement: Next Steps”, Australian Department of Foreign Affairs and Trade, 2026; “The European Union and Australia successfully conclude Horizon Europe negotiations”, European Commission, 9 June 2026.

New 2025 CFIUS annual report to Congress

Thu, 17 Sep 2026 15:43:39 +00:00

The Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) recently released its most recent annual report to Congress for the calendar year (CY) 2025, containing anonymized and aggregated data on the CFIUS filings and cases during that year.

The report generally reinforces the historical CFIUS trend in filings and shows a steadied increase in the investigation of non-notified cases, but also had some notable deviations. This alert summarizes some of the notable data and trends in the CFIUS annual report, logically separately by the data related to the short-form declaration-type filings and data relating to the long-form (tradition) joint voluntary notices (JVNs) (a summary of the different filings and their significance is included in our CFIUS Authority and Process Overview), followed by some important observations on CFIUS investigations and enforcement actions.

2025 annual report takeaways on declaration filings

CFIUS reviewed 20% more declarations (140) in CY 2025, bringing the volume in line with 2021 and 2022 numbers. Only 116 declarations were submitted in CY 2024, which continued a 2023 trend toward less declaration filings. Declarations filed in 2023 and 2024 were significantly less than those submitted in 2021 and 2022 (164 and 154, respectively), when declaration filings were just introduced under a new law. The increase in declaration filings is likely attributed, in part, to more benign transactions (i.e., those unlikely to raise national security concerns) seeking to file with CFIUS to address the uncertainty accompanying the recent increase in scope of national security concerns, as well as an increase in mandatory filings by more trusted investors (51 of the declarations were for mandatory filings, compared with 36 from 2024).
Japan remained the leading filer of declarations in 2025, submitting 18 filings. Canada, which previously ranked second, fell to sixth place after being surpassed by France (14 declarations), Singapore (13), Germany (12), and South Korea and the UK (11). All the top countries are historic sources of foreign investment and have historically invested in “critical technology” US businesses, which are those that may implicate mandatory filing obligations.

Ranking	2025 country	2025 number of declarations filed	2024 country	2024 number of declarations filed
1	Japan	18	Japan	16
2	France	14	Canada	11
3	Singapore	13	France/UK	9
4	Germany	12	Germany	8
5	South Korea/UK	11	UAE	7

Continuation of Chinese investors rightly avoiding the declaration process. In 2025, five Chinese transactions were filed as declarations, a slight increase from the two Chinese transactions filed as declarations in both CY 2024 and 2023. This continued trend of low declaration numbers for China (PRC) demonstrates that PRC filers are aware that their chances of clearing a deal within the abbreviated CFIUS declaration process remain slim – and that the parties in PRC-related transactions are often better served by filing JVNs, as evidenced by the far higher number of JVNs filed by PRC in 2025 (see discussion in the JVN section below). Nonetheless, there may still be strategic reasons to file a declaration for PRC investors in some cases.
Material risk remains that declaration filings can prolong the process: CFIUS requested full notice filings from parties in approximately 25% of the declaration filings. Of the 140 declarations, 36 (approximately 25%) resulted in a request from CFIUS to submit a JVN filing in 2025. This indicates that a declaration filing option should not have been pursued for 25% of the cases, causing parties to incur additional resources to undergo the declaration process when it would have been more efficient to proceed directly to a notice filing. This highlights the importance of conducting an upfront CFIUS diligence assessment to properly weigh the strategic option of a declaration filing in the context of a deal, particularly deals with tight timelines.
Given the risk that CFIUS can ask for a JVN at the end of the 30-day review, declarations are best suited for only the most straightforward cases that will likely raise minimal issues to diligence by CFIUS (e.g., internal reorganizations). Some declarations are, of course, mandatory, including foreign government-controlled investments, but parties always have the option to submit a JVN in lieu of a declaration, which is commonly used because mandatory filings involve the more sensitive “TID US businesses.”
CFIUS cleared 67% of the declaration filings, indicating that it remains a viable option for straightforward cases. Despite the difficulties with government shutdowns (resulting in 120 days of lapsed funding in 2025), CFIUS impressively was able to clear over two-thirds of all declaration filings within the abbreviated 30-day review period. Note that CFIUS was “unable to conclude action” on 11 declarations in 2024 (8% of the 140 declarations filed); in 2024, the number was seven. The report does not provide statistics on the number of these transactions that were refiled as JVNs.

2025 annual report takeaways on JVN filings

Consistent number of JVNs, but similar investor countries involved. The number of JVNs filed in CY 2024, 207, continues a downward trend from 2022’s record number of 286, 2023’s number of 233, and 2024’s number of 209. PRC is at the top for filer of JVNs, with 33 in total, followed by Japan and the UAE, with 23 and 18, respectively.

	2025 country	2025 number of JVNs filed	2024 country	2024 number of JVNs filed
1	PRC	33	PRC	26
2	Japan	23	France/Japan	23
3	UAE	18	UAE	21
4	Canada	15	Singapore	14
5	Israel	12	Canada/Germany	12

Consistent with prior years, around half of all cases are going into a second-phase investigation. Of the 207 JVNs accepted for review, 114 went to investigation – roughly 55% of JVNs filings. This is consistent with historical data in this category (with an aggregate average of approximately 55%) as evidenced in the following table.
Consistent aggressive review of non-notified transactions (NNTs) (“thousands”) but material drop in official inquiries (down approximately 36%) and subsequent filings (down 25%). As in previous years, CFIUS’ NNT enforcement team reviewed and considered “thousands of potential non-notified transactions.” Of these reviews, the CFIUS NNT team put forth 62 transactions to the Committee for approval to open official inquiries compared to 98 in 2024. CFIUS’ NNT team continues to increase its efforts, year over year, in tracking down cases of interest that have not been filed, but appears to have been more selective in 2025 in those cases it put forth to the Committee for a full vote and official inquiry. Nonetheless, the volume of cases reviewed serves as a warning to transaction parties to carefully consider their exposure – even a seemingly innocuous foreign investment could raise CFIUS interest and, as such, parties should conduct appropriate CFIUS diligence.
Material drop in mitigation conditions but increase in transactions abandoned. In 15 of the 2025 JVNs, CFIUS concluded its review after adopting mitigation measures to resolve national security concerns compared to 15 cases in 2024. The report notes that 10 JVNs were withdrawn and the subject transactions abandoned, which when added to the total cases mitigated would bring the figures in line with 2024. (Note: CFIUS must agree to grant a withdrawal, and the imposition of conditions with a withdrawal is a common occurrence.) The increase in transactions that were abandoned after withdrawal could be attributable to the America First Investment Policy’s preference for mitigation agreements that have concrete achievable goals instead of open-ended obligations, and a preference away from mitigation with foreign adversary countries.
Despite similar number of filings in 2024, material increase in the number of withdrawals and refilings with CFIUS. Sixty-one of the 207 JVNs were withdrawn by the parties after commencement of a CFIUS investigation (roughly 29%), an increase from the previous year (49). There are any number of reasons why this occurs – the most common being because CFIUS or the parties need more time than the investigation period allows: In 51 of these cases, the parties resubmitted their JVNs (37 refiled in 2025, and 14 in 2026). As noted above, in 10 cases the parties withdrew their JVNs and then abandoned the transactions: seven because the parties could not agree on mitigation measures that would resolve the national security concerns, and three due to commercial reasons.

Other notable facts from the 2025 annual report

Same countries at the table. Cumulatively, investors from the top five filing jurisdictions represented approximately 35% of total filings, JVNs and declarations combined:

Top five investor country names	Number of filings (JVNs + declarations) for 2025	Percentage of total filings for 2025 (out of 347)
Japan	41 filings	11.82%
PRC	33 filings	9.51%
UAE	18 filings	5.19%
Canada	15 filings	4.32%
France	14 filings	4.03%

Steady use of presidential authority. As in 2024, there were two presidential orders issued for CFIUS-reviewed transactions in 2025:
- In June 2025, President Donald J. Trump issued a presidential order permitting Nippon Steel Corp. and United States Steel Corp. to complete their merger, originally prohibited by presidential order in January 2025, by then President Joseph R. Biden, subject to the condition that the parties enter into a national security agreement (NSA), with key terms including the parties issuing a “golden share” to the US government.
- In July 2025, President Trump imposed an ordered prohibiting Suirui International Co., Limited (China/Hong Kong) from acquiring Jupiter Systems, LLC and requiring divestment of the US business.

Conclusion

The annual report for CY 2025 is 70 pages long, and transaction parties contemplating filing with CFIUS always are well advised to coordinate with experienced CFIUS counsel when considering how the data and trends outlined within these pages may be applicable to their transactions, and when weighing the shifting national security and foreign policy priorities that may impact their risks. Each transaction presents its own challenges. As with any regulatory risk in the M&A process, diligence preparation is crucial to limiting deal risk and timing uncertainties.

For more information, please contact any of the following members of our International Trade & Foreign Investment Practice Group.

Implementation of the Employment Rights Act 2025

Thu, 17 Sep 2026 15:23:59 +00:00

With the next tranche of Employment Rights Act (ERA) 2025 reforms coming into force in October, now is the time for businesses to assess readiness and ensure that their policies, processes and management capability are aligned with the new requirements.

This update highlights the practical steps that employers should have taken (or be taking now) to prepare for the October changes. Looking further ahead, it also provides a status update on some of the most significant outstanding ERA 2025 measures to help businesses with their planning and priorities for 2027 and beyond.

Read the full insight to learn more.

Second thoughts in moderation: Involve v. DWP clarifies remoderation, technical expertise and conflict controls in public procurement

Thu, 17 Sep 2026 11:09:54 +00:00

In Involve Visual Collaboration Ltd v. Secretary of State for Work and Pensions [2026] EWHC 2209 (TCC), O’Farrell J dismissed a challenge by an incumbent supplier whose technical score in a public procurement process fell from 7 to 1 after remoderation.

The judgment confirms that contracting authorities may reopen completed moderation exercises where there is a genuine concern that published criteria have been misapplied, provided the process remains transparent and consistent. It also provides useful guidance on the use of technical expertise during evaluation and the consequences of breaching agreed conflict-management measures.

Although decided after the Procurement Act 2023 came into force, the procurement was conducted under the legal regime applicable at the relevant time, the Public Contracts Regulations 2015.

Key takeaways

Contracting authorities may reopen moderation where there is a genuine concern that criteria were misapplied.
The reasons for reopening moderation should be clearly documented.
Technical explanations are permissible, but comparisons based on extraneous material are not.
Incumbent suppliers must comply strictly with agreed conflict-management measures.

Overview

The Department for Work and Pensions (DWP) conducted a procurement for a strategic video channels solution. Involve, the DWP’s incumbent supplier of audio-visual services, was excluded after receiving 1 out of 10 on a qualitative question, below the minimum score of 4. The DWP therefore did not evaluate Involve’s commercial proposal and awarded the contract to the successful bidder, Accenture (UK) Limited.

The DWP’s evaluation panel had initially agreed to give Involve a score of 7 out of 10 for the question concerned. One evaluator subsequently raised a concern that Involve’s proposed use of URL masking did not meet the requirement for the service to be integrated into and provided from within DWP or GOV.UK web pages.

The proposed service would look like a GOV.UK page, but would be hosted outside the DWP or GOV.UK domain. The DWP reconsidered every bidder’s response to the relevant question, after which the panel agreed to award Involve a score of 1.

Involve challenged the DWP’s decision to reopen moderation, as well as the way the second exercise was conducted and the revised score. The DWP argued that Involve would in any event have been excluded for failing to follow conflict of interest measures that had been put in place because of its incumbent position.

The High Court decision

Authorities may reopen moderation in appropriate circumstances

The High Court found that, although the invitation to tender did not contain an express remoderation procedure, this did not prevent the DWP from reopening the exercise. The transparency duty required the DWP to publish the award criteria, marking scheme and overall evaluation process. The DWP did not also have to set out every internal step by which evaluators would assess and moderate bids.

Remoderation may be appropriate in certain circumstances, such as where an evaluator identifies a possible error in applying the award criteria. Reopening simply because the contracting authority dislikes the result, on the other hand, would be arbitrary.

In this case, the DWP discarded the earlier assessments and reconsidered every response to the relevant question afresh, which helped ensure equal treatment. The court nevertheless criticised the DWP’s limited written record of how the concern had been raised and discussed internally, and how the remoderation had been approved.

Technical explanation became an impermissible comparison

During remoderation, an evaluator used screenshots and a presentation to explain the technical difference between a service provided from within DWP web pages and one using a masked URL. This was permitted because it helped the panel understand and apply the published requirement, and the explanation was relevant to all bidders.

The same evaluator also compared Involve’s proposal with the existing Attend Anywhere service. That comparison was not part of the published criteria and was made only against Involve.

This therefore crossed the line from explaining a technical point into evaluating Involve’s bid against outside material. This breached the transparency duty. However, the breach did not change the result because the permitted technical reasoning still supported a score of 1, and there was no evidence that the other evaluators were influenced by the improper comparison.

The revised score was not manifestly erroneous

Question 6.4, for which Involve scored 1 point, contained two requirements. The customer interface had to look like a GOV.UK page, and the service had to be integrated into and provided from within DWP or GOV.UK web pages. Involve’s response addressed the GOV.UK appearance requirement, but its proposed use of URL masking did not satisfy the separate hosting and integration requirement.

Alternative methods raised by Involve at trial were not set out in its tender and could not be used to repair the submitted response. The DWP was not required to clarify an already clear requirement or invite bidders to revise their bids.

The conflict measures provided a separate basis for exclusion

Because Involve was the incumbent, its access to information created a risk that it could have had an unfair advantage in the procurement of a new contract.

The DWP and Involve therefore agreed prior to the start of the procurement process that Involve’s technical lead could oversee and review its bid but could not take part in its detailed preparation. The technical lead principally drafted the response to Question 6.4 and contributed to six other technical answers. The court held that this went beyond the agreed role. Involve could not decide for itself that the measures were no longer needed. If they had become unworkable, it could have asked the DWP to revise them.

The DWP was entitled to exclude Involve for that breach and showed that it would have done so had it known the position during the procurement. The court held that Involve had not met the high threshold required to show that exclusion would have been manifestly disproportionate. Involve was therefore entitled only to a declaration recording the transparency breach. It was not entitled to damages or an order setting aside the award decision.

Practical implications

Contracting authorities

A notable feature of the judgment is the court’s criticism of the limited contemporaneous record explaining why moderation was reopened. Authorities should ensure that decisions to revisit an evaluation are documented clearly at the time.

A completed moderation may be reopened for a proper, recorded reason, particularly where the published criteria may have been applied incorrectly. The fresh process should treat bidders consistently, and contracting authorities should guard against information from later evaluation stages influencing technical judgments.

Evaluators may explain technical matters but should not assess a bid against outside material or comparisons that are not part of the published criteria.

The concern, internal discussion, decision and reasons for reopening should be recorded at the time.

Suppliers

Tender responses must contain the solution on which the supplier relies. Alternatives raised after exclusion are unlikely to assist. Incumbent suppliers should also ensure that everyone involved in the bid understands any agreed conflict controls. If those controls prove unworkable, the supplier should seek an agreed variation before departing from them.

Final thoughts

The case confirms that moderation is not necessarily a one-way process. Contracting authorities may revisit evaluation where there is a genuine concern that published criteria have been misapplied, but must document their reasoning carefully and avoid introducing extraneous considerations. Suppliers, particularly incumbents, should ensure both compliance with tender requirements and strict adherence to agreed conflict controls.

Above all, the judgment demonstrates that while authorities have flexibility to correct perceived evaluation errors, that flexibility depends on a process that is transparent, documented and applied consistently across bidders

Defective contract award notices may preserve Procurement Act set-aside claims

Thu, 17 Sep 2026 09:36:10 +00:00

In Apasen Limited v. London Borough of Tower Hamlets [2026] EWHC 2239 (TCC), the High Court refused to strike out a claim seeking the set-aside of interim domiciliary care contracts that had been awarded directly under the Procurement Act 2023, indicating that defects in a contract award notice may leave completed contracts vulnerable to set-aside claims.

In refusing a strike-out application, the court held that it was arguable that a contract award notice should be treated as unpublished if it failed to provide accurate information about the basis for a direct award. It was also arguable that the urgency justification had to appear in the contract award notice itself, rather than only in an earlier transparency notice. The ruling is preliminary and it does not decide that the contract awards were unlawful, the notice was inaccurate or the contracts must be set aside.

Why this judgment matters

Contracting authorities relying on direct award grounds should ensure that their justification is fully and accurately reflected in the contract award notice itself. Failure to do so may leave completed contracts exposed to set-aside claims. This is so even where a contract award notice has been published and a voluntary standstill period has been observed.

Overview

The contracting authority, the London Borough of Tower Hamlets, abandoned a competitive procurement for domiciliary care services after challenges by Apasen Limited (Apasen) and other tenderers. On 13 March 2025, the contracting authority published a transparency notice stating that it intended to make seven interim direct awards on grounds of “extreme and unavoidable urgency”. It published a contract award notice later that day, but that notice did not identify or explain the urgency justification.

Two of the proposed direct awards were initially intended for Apasen. Tower Hamlets subsequently decided not to proceed with the awards to Apasen and instead entered into contracts with other providers. Apasen challenged those decisions and sought orders setting aside the contracts in question.

Tower Hamlets applied to strike out Apasen’s set-aside claim. It argued that none of the set-aside conditions in Section 105 of the Procurement Act 2023 (2023 Act) could be met because it had published a contract award notice and waited until the end of an eight-working-day voluntary standstill period before entering into the contracts.

The key legal issue

Under Section 104 of the 2023 Act, where the court finds a relevant breach after the contract has been entered into, it must set aside the contract if a Section 105 condition is met, unless an overriding public interest requires the contract to remain in place. Those conditions address cases where the claimant was denied a proper opportunity to seek a precontractual remedy. Section 105(4) of the 2023 Act treats a published notice that did not provide accurate information about the contract as not having been published.

The strike-out application therefore turned on whether Apasen had an arguable case that the contract award notice published by Tower Hamlets was inaccurate or failed to contain information required by the Procurement Regulations 2024, and hence should be treated as never having been published.

The High Court decision

Inaccuracy may not be apparent from the face of a notice

Despite the different statutory terminology and notice framework that apply under the 2023 Act and the Public Contracts Regulation 2015 that it replaced, the court treated R (Faraday Development Ltd) v. West Berkshire Council [2018] EWCA Civ 2532; [2019] PTSR 1346, which had been decided under the 2015 regulation, as a useful guide to the information needed in a procurement notice. Drawing on Faraday, the court considered that a notice should provide a clear explanation and enough objective detail for interested third parties to make a properly informed decision on whether to challenge.

An inaccuracy may not be apparent from the face of a notice. The court may need to examine the underlying facts and contract documentation. Omitted facts may also be so extensive or misleading that the notice becomes inaccurate. The judgment does not set a general test under Section 105(4) of the 2023 Act, and the answer will be fact specific.

An unsupported urgency justification may render a notice inaccurate

Apasen alleged that the urgency was neither extreme nor unavoidable and arose from Tower Hamlets’ own actions or omissions. The court did not decide whether those allegations were correct. It held that, if the urgency justification was not factually well founded, it was at least arguable that a notice asserting that the urgency condition was met would not provide accurate information.

The justification may need to appear in the contract award notice

For a direct award under Section 41 of the 2023 Act, Regulation 27(2)(u) of the Procurement Regulations 2024 requires the contract award notice to contain the relevant direct award information specified in Regulation 26, including the applicable Schedule 5 justification and an explanation of why the contracting authority considers that it applies.

In this case, that explanation appeared in the transparency notice but not the contract award notice. The court held that Apasen’s argument that the contract award notice itself had to contain the explanation was arguable. Although not clearly pleaded, the point could be added by amendment without injustice.

The court therefore refused to strike out the parts of Apasen’s claim seeking set-aside orders. Whether the urgency ground applied, whether the contract award notice was inaccurate and whether any contract should be set aside remain for later judicial determination.

Practical implications

Contracting authorities

Before making a direct award, a contracting authority should:

Verify that the factual basis that justifies the direct award is fully documented
Review whether urgency was genuinely unforeseeable and not self-inflicted
Ensure that the contract award notice itself contains all information required by the Procurement Regulations 2024
Not assume that information contained elsewhere, such as in a transparency notice, will cure deficiencies in the contract award notice

Suppliers

Suppliers considering a challenge should review the notices and the facts behind the stated justification. Publication alone may not be decisive. Missing required information, a justification that does not match the facts, or material omissions, may support an argument that the notice should be treated as unpublished under Section 105(4) of the 2023 Act. A claimant must still prove the relevant breach and establish a set-aside condition under Section 105 of the 2023 Act.

Looking ahead

The decision leaves open important questions on the operation of sections 104 and 105 of the Procurement Act 2023. A substantive hearing may provide further guidance on when inaccuracies in procurement notices are sufficiently serious to justify treating a notice as unpublished.

If it reaches full trial, any decision may clarify the circumstances in which suppliers can seek a set-aside remedy after a contract has been entered into, particularly where challenges focus on the adequacy or accuracy of procurement notices rather than the fact of publication alone.

Pensions Weekly Update: 16 September 2026

Wed, 16 Sep 2026 09:46:10 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

Along with its final response to consultation, The Pensions Regulator (TPR) has published a new enforcement strategy. The new approach is designed to reflect the more prudential style of regulation that TPR has been moving towards. It sets out a high-level, principles-based framework that allows TPR to respond to risks faster and act earlier to prevent harm. It integrates enforcement with TPR’s supervision and market oversight work, and says that it centres its focus on delivering outcomes for members. TPR says that it aims to be proportionate, accountable, consistent, transparent and targeted in its enforcement approach. It will act early where it can, take a risk-based, outcome-focused approach and target deterrent action where it counts, focusing on the greatest risks and harms to members. TPR notes that this approach will give it flexibility to adapt to changing priorities and risks more swiftly while achieving statutory objectives. The underlying enforcement policies and guidance will be reviewed and developed as new legislation and regulations come into force.
In line with its updated pensions roadmap, and following on from the Pension Schemes Act 2026, the Department for Work and Pensions (DWP) has published a consultation document relating to the framework and digital infrastructure for multiple default consolidators in relation to small pots, including appropriate eligibility criteria and potential exemptions within the system. Pensions minister, Torsten Bell, notes that the intention is to have small pot consolidation operational from 2030. The DWP is expected to publish its response to consultation during Q2 of 2027. Consultation closes at 11:59 p.m. on 17 November 2026.
TPR has published its occupational defined benefit (DB) scheme funding analysis 2026. The analysis provides an overview of funding levels and recovery plans in occupational DB and hybrid pension schemes in the UK. The publication is based on tranche 19 schemes, with effective valuation dates from 22 September 2023 to 21 September 2024 inclusive. The key findings are that 67% of schemes reported a surplus position in tranche 19 on a technical provisions basis. This compares with 39% in tranche 16. The average (mean) assets to technical provisions liabilities ratio for schemes in tranche 19 was 106% (median: 104%). This compares with 94% (median: 95%) in tranche 16. The average (mean) recovery plan length for schemes in deficit was four years (median: 3.2 years), with a median end date falling in 2027, while the average (mean) recovery plan length in tranche 16 was 5.7 years (median: five years). TPR notes that this is the last year that the analysis will be produced in this format, given that all subsequent valuations will fall under the new DB funding code. TPR is still formulating how future analyses will be presented.
The Society of Pension Professionals (SPP) has published a paper, "In praise of contingent assets". This argues that contingent assets deserve renewed attention. Adrian Bourne, co-chair, SPP Covenant Committee says that “properly designed, they are not simply technical funding devices or insolvency protections. They are flexible risk-sharing instruments that can strengthen member security while preserving sponsor flexibility and supporting sustainable covenant outcomes”. The paper looks at the broader picture and includes some useful case studies.
New research from the Money and Pensions Service has found that two in five people (41%) aged 55-65 have no financial plan for later life. In response to this, it has launched a new retirement guidance tool to help with understanding options, estimating retirement income and finding information on where to get help and support.
UK Private Capital has published three reports on “Defined Contribution (DC) Pensions & Private Capital: The State of the Market”, “The Local Government Pension Scheme (LGPS) & Private Capital: An Evolving Landscape” and “Understanding UK DC Pension Schemes: A Practical Guide for Private Capital Firms”. The first report on DC pensions found that evidence to-date indicates that actual allocations from default funds into private markets remain very low. The most recent update of Mansion House Compact signatories found that as of February 2025, only 0.6% of assets under management by signatories were allocated to private markets, while a UK Private Capital survey of venture capital and growth equity firms could only identify two legally binding commitments. UK Private Capital notes that with the ambition to reach significant allocations into private markets by 2030, now only a few years away, further action is needed. The LGPS report found that there was a strong commitment across the system for supporting regional growth and maintaining investment in private capital, but there are ongoing challenges over local investment targets and investment ticket sizes. There are challenges in relation to LGPS investments small enough to include lower and mid-market private capital funds, along with challenges around the regional investment requirements where private capital firms cannot guarantee a specific level of investment in one region or locality.
Large-scale redundancy exercises can create significant legal, operational and reputational challenges for businesses. Careful planning and effective execution are essential to minimise risk, ensure compliance and support successful business outcomes. Register for a webinar on 7 October 2026, in which our UK Labour & Employment colleagues will provide some practical tips for dealing with these challenges.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

What can you expect from the proposed digital duty of care?

Fri, 11 Sep 2026 14:21:01 +00:00

The Australian government has introduced a draft digital duty of care (the Duty) bill for consultation.¹ Initially proposed by the government in 2024, the return to this mode of regulation signals what the government itself referred to as a “shift away from reacting to harms by relying on content regulation alone, and moving towards systems-based prevention”.

However, after recent legislative efforts, such as the industry codes and Basic Online Safety Expectations (both now repealed), have codified obligations (rather than overarching duty-based regulation), the maze of online legislation continues, with a real risk of historically different laws creating confusion.

The future of the Duty is not assured, with the Coalition expressing significant objections. However, with the Greens on side, our prediction is that some form of it will make its way into Australian law. Meanwhile, the public’s time to provide feedback on the draft Bill will soon be up. The deadline of Noon 22 September – and the government’s emphasis that they are looking for only “targeted consultation”² – is consistent with recent, equally short time frames for other digital laws.

In this article, we answer some of your most pressing questions about the Duty and identify the provisions that we believe would benefit from greater clarity.

Who does the Duty apply to?

Much of the discourse around the Duty has focused on social media services – the prime minister himself introduced the bill by calling it “the next step following [the government’s] world leading social media age ban”³, and by referring specifically to social media algorithms. However, the impact of the Duty goes beyond social: the Duty covers internet search engines, app distribution services, hosting and internet services, relevant electronic services (including games and apps), equipment providers and services that allow the generation and sharing of gen AI material: see Section 25A.

Unlike other online safety legislation⁴, there is no express statement that a service’s obligations under the Duty will vary depending on the level of risk posed by that service, and where it sits in the online ecosystem (for example, whether the service provider directly engages with individuals). Given its breadth, this will need to be clarified in supporting materials.

What does the Duty require?

The Duty requires a person responsible for an online service to ensure, so far as is reasonably practicable, a safe online environment. This means:

Managing design features of the service appropriately, including through providing user empowerment tools (further discussed in “Does the duty really require opt-in to algorithms?”)
Conducting risk assessments (further discussed in “Are there related governance obligations”?)
Taking effective measures necessary to address those risk assessments.⁵

What is a safe online environment?

At a high level, providing a safe online environment will include protecting:

All Australians from serious harmful material and conduct (e.g. child abuse, sexual violence, extreme violence or cruelty and promotion of illicit drug use).
Australian children from both material and conduct that is harmful to children (e.g. pornography, encouragement of disordered eating or hostile attitudes towards women) and harms associated with the operation of design features. Where the online service is a social media service, then any design features which have “negative behavioural impact” must not operate for under 16s. Other online services may need to take a more nuanced approach to design.

And what is “reasonably practicable”?

The bill sets out what is meant by “reasonably practicable” in Section 25H. The standard expressly requires an organisation to take into account and weigh up relevant matters, including (on a non-exhaustive basis) the matters set out in Subsections 25(a) to (e), such as the likelihood of the harm concerned occurring, the degree of harm that might result and the availability and suitability of ways to eliminate or mitigate the risk.

This framing borrows heavily from work health and safety duties, which require a person conducting a business or undertaking to ensure, so far as reasonably practicable, the health and safety of workers while they are at work⁶, and which list factors for determining what is “reasonably practicable”⁷ that are almost identical to those set out in the bill. The intention appears to be to keep this concept as broad as possible, allowing different online services to craft their own approach towards ensuring a safe online environment.

Although they address different subject matter, we expect that recent enforcement on work health and safety duties – and, specifically, the “weighing up” that was undertaken – will prove informative.

Are the concepts of “harm” or “negative design features” static?

No, “harm” and “serious harm” can change over time. Much has been made of the minister’s new ability under Sections 25C and 25D of the Bill to prescribe new forms of “harm” and “serious harm” under legislative rules, with the opposition alleging that the “government is now actively seeking to censor and has been active in censoring, attempting to censor any view they don’t like”. Equally, under Section 25G, the minister may determine that a specific design feature shall be deemed as having negative behavioural impacts, in addition to those which are already listed.

While we understand that technologies can evolve, in preparing for the Duty, online services need to exhaustively and clearly understand what is meant by harm and which design features are in-scope. The fact that there is no effective limitation on the minister’s powers listed above frustrates this objective, which is all the more critical given the application of the Duty.

We have also identified that many forms of harm (or serious harm) are broadly defined. While the intention behind this is clear, the penalties under the Act are prohibitive, reaching to over AU$100 million. There is a real risk that, where the characterisation of content posted is complex or unclear (for example, in the context of illicit drug use, where such content can serve to help those who are addicted), online services will err on the side of caution and act swiftly to contain.

Does the Duty really require opt-in to algorithms?

No, but watch this space. The Duty has automatically deemed certain hallmark features of online life as being unlawful. One of the most significant is recommender systems or algorithms, which is identified in Section 25G as having “negative behavioural impacts”.

The Bill explicitly requires that an online service provide “user empowerment tools” as part of satisfying the Duty, and that such a tool should allow a user to manage the way design features of the service operate for the user (such as through providing control over the kind of content that is recommended). However, in case this is not enough, the bill expressly reserves the right for the minister to required “specified” online services to provide “specified” user empowerment tools: see Section 26(4). It is not difficult to guess what these services and tools might be.

We have identified three issues with this approach:

The intention of the Duty is that it is principles-based, with online services able to determine what steps are reasonably practicable for that provider. As flagged in “Are the concepts of ‘harm’ or ‘negative design features’ static?” above, rules which propose a highly prescriptive approach to compliance for certain services detract from that objective.
A recommender system is not necessarily negative. As others like the Digital Industry Group, Inc. have persuasively noted, an algorithm is not just “one thing…they make digital services more relevant and useful for Australians' different interests and needs”.⁸
Offering total opt-outs as a form of “user empowerment” becomes difficult for platforms that depend on certain personal information to deliver a meaningful service. For example, online retailers may struggle to provide a nonpersonalised feed, when understanding the location of their users helps determine which products and services are available.

While the other design features stated in both Section 25F and 25G are unlikely to generate the same level of attention (for example, feedback features, through which services display information to end-users about who has engaged with their material), some of these are unlikely to be relevant to many services captured by the Duty, making it unclear as to how the Duty is intended to operate beyond social media and gaming platforms (who seem increasingly to be the specific targets of a broad-brush approach).

Isn’t online safety already regulated?

Yes, and some existing laws will be repealed. In particular, the bill proposes to repeal both the Basic Online Safety Expectations (BOSE) and the commissioner’s ability to enact industry codes and standards, which will in practice also mean the phasing out of industry codes as and when the Duty takes hold.

If enacted, the Duty would require that online services comply with what is now a very broad obligation to put in place open-ended systems and processes to ensure a safe online environment. The trouble with this approach is that for a long time now, service providers have been subject to highly specific obligations. To use the Relevant Electronic Services Online Safety Code (Class 1C and Class 2 Material) (RES Code) as an example; under that code, a gaming service provider must:

Implement appropriate age assurance and access control measures to prevent under 18s from playing 18+ computer games⁹
Have terms and conditions in place that prohibit the sharing of illegal material
Moderate content to ensure compliance with those terms and conditions¹⁰

The BOSE are even more prescriptive. For example, they expressly require a service which uses “recommender systems” (i.e. an automated system which shows users posts, ads and accounts to follow, typically based on what a user is most likely to engage with) to take reasonable steps to consider end-user safety and incorporate safety measures in the design, implementation and maintenance of recommender systems.¹¹ This is quite different from the blunter approach foreshadowed by the Duty: “see Does the Duty really require opt-in to algorithms?” above.

There are real questions about whether repealing highly prescriptive legislative instruments is appropriate. The BOSE have been in place for four years, meaning that the industry would have already taken significant steps towards ensuring compliance with them. Conversely, the latest of the codes have only been in place since March 2026, meaning that there has been no time to truly test their impact on the online ecosystem. If enacted, there is no guarantee that steps taken to comply with these laws would still satisfy the Duty – industry may find themselves establishing an entirely new set of compliance standards.

Equally, age-restricted social media services have taken steps to remove under 16 accounts from their platforms, in accordance with Part 4A of the Online Safety Act 2021 (Cth). While this remains law, the Duty includes as part of its assessment of whether there is a “safe online environment” and whether negative design features have been “switched off” for under 16s. This shifts focus and distracts from the main obligation introduced by law not yet two years ago.

What will this mean for upcoming laws and for age assurance?

As any digital enthusiast will know, laws in this space have been rapidly shifting. Over the next few months, we can expect to see several amendments to existing laws (including the Privacy Act 1988 (Cth)), as well as a brand-new Children’s Online Privacy Code (COPC), coming into effect in December.

While still in draft form, the COPC covers similar ground to the Duty, and proposes equivalent protections (including a requirement to handle personal information consistently with ‘the best interests of [a] child’ and a qualified right to erasure, which applies to large digital platforms). Imposing an entirely new obligation on online service providers, before the impact of these changes is understood, seems premature. Equally, any contradictions between these two laws need to be addressed. For example, the COPC requires that an entity only collect personal information about a child that is strictly necessary to provide an online service – it will need to be clear that “strictly necessary” includes implementing steps which satisfy the Duty.

As to age assurance, unlike the COPC, the Duty does not expressly require that services take steps to ascertain the age of their users. In practice, though, this will be required for online services who are required under the Duty to protect children from harmful materials, conduct and design features (if they elect not to remove any such risks altogether). While the Duty creates an exception in Section 26(7) for lawful private communications between adults, online services will still have to put in place measures to assess whether the senders and recipients of such communications are in fact over 18.

Are there related governance obligations?

As expected, yes. Most relevantly, a provider of an online service must conduct a written assessment of the risk of harm posed by that service: Section 26A. This needs to be retained for six years and must be produced to the eSafety Commissioner on demand. A service provider must also prepare transparency reports about the safety of the online service, on request by the eSafety Commissioner: Section 192C.

A few comments:

The scope of the assessment under Section 26A exceeds what is required by the Duty, with Section 26A(2) specifying that “all reasonably foreseeable risks” includes, but is not limited, to those relevant to the Duty. This potentially puts no limit on the “risks”, which should be included, although it is obviously limited by context.
As flagged in “What will this mean for upcoming laws?”, digital regulation is a crowded space. An assessment is clearly necessary to determine the scope of the Duty but may in practice need to be combined with an organisation’s other related obligations, including to conduct a privacy impact assessment under the COPC
Transparency reports can only be issued if certain criteria are met (including if the Commissioner considers them necessary to promote best practice) but can, at least potentially, be required on a periodic, ongoing basis.

What are the penalties for non-compliance?

As mentioned above, penalties for breach of the Duty can extend past AU$100 million for online services. Importantly, the bill clarifies that the Duty applies to a person responsible for an online service, indicating that individuals who either provide the service or exercise day-to-day control over it may have personal liability for breach – including, potentially, criminal liability for failing to comply with issues noticed by the Commissioner or requests for cooperation.

“Online Safety Amendment (Digital Duty of Care) Bill 2026—Exposure Draft”, Australian Government, 8 December 2026 (the Consultation).
See the Consultation.
“My Feed, My Way”, Anthony Albanese, 8 September 2026.
For example, the Head Terms to the Industry Codes of Practice for the Online Industry, which state the following:
Electronic products and services provided across different sections of the online industry may include different functionalities, which in turn may be relevant to:
- The connection between a product or service and risks associated with access or exposure to class 1C and class 2 material
- The relationship between a product or service and an end-user, including whether or not a service controls the end-user interface
- The visibility, control or administration of specific material accessible to an end-user
Section 26(3) of the Bill.
See for example Section 19 of the Work Health and Safety Act 2011 (NSW) (WHS Act).
Section 19 of the WHS Act.
“Digital duty of care to let Aussies opt out of social media algorithms”, Information Age, 8 September 2026.
Section 7.1, RES Code.
Section 8.1, RES Code
Section 8B, BOSE.

No adverse costs, greater private enforcement risk

Thu, 10 Sep 2026 14:33:10 +00:00

The usual rule for litigation in Australia is that “costs follow the event”. In other words, the party that loses will usually be ordered to make a payment in respect of the legal costs incurred by the winning party.

One exception to the usual rule is where a losing claimant has successfully obtained a “no adverse costs order” (NACO) from the court. As the name suggests, a NACO prevents a claimant from being liable for the other party’s costs if the legal claim fails at trial. This is a highly beneficial outcome for a claimant because legal costs associated with defending a complex legal claim can easily run into the millions of dollars.

NACOs are able to be made in legal proceedings brought by parties alleging breaches of Australia’s competition laws under Part IV of the Competition and Consumer Act 2010 (Cth) (CCA). Under sections 82(4) and (5) of the CCA, the court has the discretion to make a NACO where the action raises a reasonable issue for trial, that issue may also be significant for other parties and the financial disparity between the parties means that a potential adverse costs order might deter the applicant from continuing the action.

The NACO regime was introduced in 2019, to address concerns highlighted by the 2015 Harper Competition Policy Review about the barriers smaller businesses face in privately enforcing competition law.

The recent decision in Woodman Beenleigh Pty Ltd v Bunnings Group Ltd (no adverse costs order) [2026] FCA 1231 appears to be the first reported instance in which the Federal Court has granted a NACO under section 82(4) of the CCA, and is the first detailed judicial consideration of the statutory criteria. In that proceeding, Woodman – the operator of two Mitre 10 hardware stores in Jimboomba – alleges that Bunnings has substantial market power in a national wholesale hardware market.

It claims that Bunnings’ conduct in developing and proposing to open a new Bunnings Warehouse adjacent to Woodman’s Mitre 10 store in Jimboomba has deterred Woodman from expanding its store, and will ultimately force it to exit the local retail market as a result of the retail overcapacity that will be caused by the opening of Bunnings’ store, thereby substantially lessening competition in the local hardware retail market in contravention of section 46(1) of the CCA. Those allegations have not been determined.

On the application of Woodman, the Federal Court was persuaded that the statutory criteria for the grant of a NACO were satisfied and ordered that Woodman not be liable for Bunnings’ costs, regardless of the outcome of the legal proceeding. Bunnings was also ordered to pay Woodman’s costs of obtaining the order.

A key issue was what constitutes a “reasonable issue for trial”. Bunnings argued that Woodman needed to establish at least a prima facie case or a “serious question to be tried”, involving a sufficient likelihood of success. Bromwich J rejected that approach, holding that an issue need only be capable of being reasonably argued or contested at trial. Notably, Bromwich J held that detailed opposition to a legal claim may itself reinforce the conclusion that there are genuinely contestable issues. In this case, the court considered that Bunnings’ arguments and competing expert evidence supported the existence of serious legal and factual issues requiring determination at trial.

His Honour reasoned that a higher threshold would undermine the regime because a NACO has practical significance precisely where an applicant may ultimately lose, and described Woodman’s proceeding as “precisely what the NACO regime was intended to facilitate”.

On the other elements required to be satisfied before exercising its discretion to order a NACO, the court found:

· Woodman’s claim raised issues potentially significant for other independent hardware retailers “contending with Bunnings in a way that imperils their commercial viability”

· Notwithstanding Woodman had received some financial support from the Mitre 10 group, the disparity in available resources between Bunnings, owned by Wesfarmers, operating over 300 stores nationally and with revenue and profit in the billions of dollars, and Woodman, a family-owned operator of two Brisbane hardware stores, was “undeniably enormous” and the possibility of an adverse cost order could deter Woodman from pursuing its case

To be clear, the court has not decided that opening a store next to a competitor constitutes misuse of market power by Bunnings. That remains to be determined at trial.

Family Office Insights
Affluent Neglect: A Perspective for Family Offices, Advisors

Thu, 10 Sep 2026 14:08:45 +00:00

This article was previously published in WealthBriefingAsia in two parts. Part one can be read here, and part two can be read here.

Material wealth does not automatically equate to a happy and balanced childhood. Patricia Woo, taking a lead from important work on human relationships and psychology, examines how high-net worth (HNW) families and their advisors can work together to achieve better outcomes.

Introduction

Affluent neglect refers to forms of neglect experienced by children in wealthy families that may be less visible than neglect in economically disadvantaged contexts, yet can have significant consequences for psychological development, relational functioning and long-term family continuity. Material abundance can coexist with limited emotional availability, intense performance pressure, inconsistent attunement and chronic under-recognition of children’s subjective needs.

For family offices, trustees and advisors, these dynamics matter because they are not confined to childhood. They may emerge later as succession conflict, next-generation disengagement, dependency, secrecy, impaired stewardship capacity or disputes about control, recognition and entitlement. Parents may be deeply committed to provision, education, opportunity and protection, while still having limited time, emotional presence or capacity for relational contact. In some families, care is expressed mainly through access, structure, control and achievement-oriented investment, rather than emotional availability.

Bowen theory in practice

“Bowen” family systems theory offers a useful framework because it shifts the focus from locating pathology in a particular parent or child, to examining the emotional processes that organize the family over time. Rather than asking only whether a parent is neglectful or a child is problematic, a Bowenian approach considers how chronic anxiety is managed across relationships and generations, and how family members become organized around particular roles, symptoms, expectations and patterns of distance.

For advisors, this perspective is particularly valuable. A family office may believe that it is dealing with isolated issues, for example an unmotivated beneficiary, a difficult sibling relationship, a reluctant successor or a demanding patriarch, when it is in fact encountering a broader family emotional system.

Differentiation of self

Differentiation of self is Bowen theory’s central construct. Intrapersonal differentiation of self refers to the capacity to balance thinking and feeling, and interpersonal differentiation of self is about maintaining a balance between individuality and togetherness. A differentiated person can remain meaningfully connected to important others while retaining the ability to think, decide, set boundaries and articulate personal values under emotional pressure.

High-functioning, high-status families may appear highly differentiated because they are capable, educated, disciplined and successful. Yet their apparent competence may depend substantially on external structures, role expectations, wealth, status and image management. When anxiety rises, for example through illness, business decline, divorce, succession, public scrutiny or conflict over wealth, members may become reactive, controlling, compliant or emotionally cut off.

The distinction between the solid self and the pseudo self is important here. A solid self rests on internally grounded principles, values and beliefs that remain reasonably stable despite relational pressure. A pseudo self is more reactive and context-dependent: it is shaped by the need for approval, status, belonging or protection from conflict. The related idea of a borrowed self describes identity and functioning adopted from significant others rather than developed through independent reflection.

In affluent neglect, children may be conditioned to perform, conform and protect the family’s reputation. They may become highly successful academically, professionally or in business, yet their identity may depend heavily on parental approval, elite institutional affiliation, family wealth or expectations about legacy. Their competence can therefore mask a limited ability to tolerate disagreement, make independent decisions, identify authentic preferences or remain connected while differing from the family script.

This can appear in family office work when a beneficiary presents as polished and capable, but cannot express views that differ from a parent’s, a family council’s or a dominant wealth-holder’s expectations. Others may over comply, become emotionally reactive or withdraw from governance participation. Advisors should not assume that technical competence, educational pedigree or social confidence necessarily reflects a solid self.

For practice, the question is not whether the next generation is “ready” in an abstract sense. It is whether family structures allow members to develop and express an internally grounded identity while maintaining connection with the family. Trustee discretion, committee design, beneficiary development, family employment policies and succession planning should avoid rewarding only compliance with an inherited family identity.

Triangles

Triangles are natural and universal ways of managing anxiety. When tension rises between two people, one or both may involve a third person to stabilize the relationship. Triangles become problematic when positions harden over time, limiting flexibility, direct communication and genuine emotional contact.

For a child experiencing affluent neglect, the primary triangle is often formed with the two parents. Marital tension about work, wealth, status, relationships or family obligations may be displaced onto the child. One apparently constructive route is to focus on the child’s education, leadership development, elite opportunities or anticipated role in the family business. This can create a shared parental project that appears attentive and invested, but is actually instrumental.

The child may become central to family discussion, while remaining emotionally peripheral. The parents share the real emotional and material power, while the child functions as a container for their anxiety. Achievement pressure may regulate marital distance: the parents can collaborate over the child’s performance rather than address conflict, loneliness, resentment, grief or ambivalence in their own relationship.

Sibling triangles may become organized around comparison, competition and uncertainty. Parents may keep succession plans, ownership arrangements or expectations about children’s roles unclear, ostensibly to preserve flexibility or avoid upsetting anyone. In practice, secrecy and partial disclosure can direct parental anxiety into sibling rivalry. Children compete to demonstrate loyalty, competence and alignment with parental values, rather than engaging openly with their own interests or concerns.

Intergenerational triangles can be especially powerful in wealthy families. A patriarch or wealth creator may designate a grandchild as a future steward, while sidelining the middle generation. The resulting structure can leave the adult child feeling displaced or resentful, the selected grandchild burdened and fearful and other family members uncertain about their standing. Yet the family may focus primarily on trusts, share transfers, education pathways and governance appointments rather than the emotional impact of these decisions.

Family advisors can be drawn into triangles as secret-keepers, informal messengers, proxy decision-makers or allies of a dominant family member. This may temporarily reduce tension, but can reinforce the underlying emotional process. Good practice requires role clarity, disciplined communication channels, appropriate documentation and careful resistance to carrying messages that family members should address directly with one another.

Nuclear family projection process

The nuclear family projection process describes how a couple manages chronic anxiety through recurring patterns: emotional distance between spouses, marital conflict, dysfunction in one spouse expressed through dominant-submissive positioning and impairment of one or more children through intense parental focus.

In affluent families, emotional distance can be rationalized through legitimate demands: business responsibilities, international travel, philanthropy, social obligations, family expectations and the maintenance of wealth and reputation. These activities may genuinely be necessary, but they can also serve as anxiety regulators. Work and public engagement can become ways for one or both parents to avoid emotional contact, marital vulnerability or conflict.

Marital conflict may also become focused on what children “need.” Parents may disagree intensely over education, lifestyle, discipline, career planning, relationships or family-business involvement, while both believe that they are acting for the child’s benefit. The child’s emotional experience can become incidental, minimized or dismissed. In a dominant-submissive marital pattern, the less powerful spouse may be constrained by explicit or implicit no-talk rules: “Do not complain,” “be grateful” or “family matters stay within the family.”

The projection process becomes particularly evident when parental anxiety is concentrated on one child. Fear of failure, loss of status, disappointment or missed opportunity may be transmitted as relentless monitoring of performance and prospects. A child can be positioned as the future repository of the family’s hopes, status and continuity. Elite education, coaching, leadership grooming and early governance exposure may be valuable developmental support, but they may also reflect over functioning around a child who is carrying a disproportionate share of family anxiety.

Meanwhile, siblings perceived as less relevant to succession may be overlooked, underprepared or informally written off. The contrast between the heavily groomed child and the less attended sibling may later fuel resentment, dependency, disengagement or disputes about fairness.

For family offices, this means that parental investment should not automatically be equated with healthy preparation. Advisors should ask whether development opportunities reflect genuine aptitude and interest, or whether they are organized around projection, status anxiety and rigid assumptions about who must carry the family forward. Succession criteria, stewardship programs and family employment policies should support broader participation, and avoid embedding a single child’s projected role into formal structures without adequate reflection.

Multigenerational transmission process

The multigenerational transmission process explains how patterns of relating, anxiety management, role allocation and emotional functioning are transmitted across generations. Affluent neglect is rarely a first-generation phenomenon. It often reflects longstanding family adaptations to migration, economic hardship, business formation, public scrutiny, loss, conflict or the demands of preserving a family enterprise.

In wealthy families, anxiety may be intensified because relatives not only live together but may also work together, invest together, hold assets together and share responsibility for a family name and legacy. Wealth can create powerful togetherness pressures. Family members may believe that individual choices affect not only themselves, but the reputation, security and continuity of the entire system.

Founder narratives often become central to family governance and education. They can inspire resilience, responsibility and stewardship. However, they may also normalize the sacrifice of emotional life for survival, achievement, prestige or business expansion. A story of exceptional success may leave little room to acknowledge the psychological cost borne by spouses, children, siblings or employees.

To protect family image, difficult experiences such as affairs, addiction, mental-health crises, financial collapse, estrangement or perceived failures may be minimized, reframed or hidden. Positive elements of the family story are amplified, while complexity is excluded. Children may then experience pressure to live up to an idealized legacy and uncertainty about whether they can ever meet its standards.

For advisors, continuity planning is therefore not merely an asset-transfer exercise. Legacy is transmitted relationally, as well as economically. Governance documents, mission statements, philanthropy programs, family constitutions and next-generation education should be designed with awareness that unresolved anxiety, secrecy and rigid role expectations can be reproduced through otherwise sophisticated legal and financial arrangements.

Emotional cutoff

Emotional cutoff is a way of managing anxiety through physical or emotional distance. It may occur in families at any economic level, but in affluent families it can take socially sanctioned forms. Children may attend boarding school, study abroad, live internationally or be cared for primarily by nannies, tutors, household staff and specialist programs. These arrangements can provide real opportunity and excellent practical care, but may also involve an outsourcing of emotional availability.

A child may experience material abundance alongside invisibility, loneliness or a sense that their inner life is not of primary interest. Later, geographic distance may feel like freedom. A young adult may be able to develop interests, relationships and a way of life away from family scrutiny. However, physical distance is not necessarily differentiation of self. A person may remain highly reactive to family expectations, financial dependence, approval, criticism or the possibility of exclusion.

Complete cutoff may be difficult where financial security, social status and access to family networks are at stake. Consequently, many people maintain physical contact and apparent loyalty while adopting an internalized form of cutoff. They compartmentalize, avoid difficult topics, keep their feelings private, do not ask questions and refrain from challenging family decisions. This allows the outward structure of unity to continue while authentic emotional contact remains limited.

Family offices should distinguish differentiated autonomy from emotionally driven cutoff. A beneficiary who lives overseas, declines a family-business role or limits participation in family governance is not necessarily disengaged or immature. The critical question is whether that person can remain connected, communicate clearly and make thoughtful decisions without fusion, avoidance or fear of punishment.

Sibling position

Sibling position can shape expectations about responsibility, caretaking, achievement and leadership. In affluent families, birth order may influence not only family roles but also access to information, developmental investment, governance participation and control over wealth.

In traditional high-wealth contexts, particularly in parts of Asia, the eldest son may be positioned as the natural leader and expected to be strong, stoic, responsible and emotionally restrained. The eldest may also be functionally promoted into a quasi-parental role, supporting younger siblings when parental availability is limited. This can create competence and authority, but also burdens the child with family anxiety.

Middle and younger children may be neglected in subtler ways. Resources and attention may concentrate on the heir or designated successor, while others are expected to find their own path, accept a more peripheral role or rely on endowment support without comparable emotional or developmental investment. These patterns can become embedded in succession arrangements, even when they are not explicitly articulated.

Advisors should assess whether opportunities and roles have been intentionally designed or simply allocated according to birth order, gender, family habit or historical expectations. The apparent preparedness of a designated successor may reflect projection and training, rather than genuinely superior aptitude. Conversely, a less visible sibling may have substantial ability but limited confidence, information access or permission to develop an independent role.

Societal emotional process

Affluent neglect is shaped not only by family dynamics, but also by societal emotional process. Wider cultural assumptions often treat children from wealthy homes as inherently advantaged because their material needs, education and opportunities are well supplied. This can make emotional neglect, limited supervision, performance pressure and psychological distress harder to recognize.

Family offices operate within this broader field. An office that is highly client-dependent or culturally deferential to family authority may avoid difficult issues, minimize conflict, preserve secrecy or prioritize superficial harmony. In doing so, it can become absorbed into the family’s anxiety system and inadvertently sustain the invisibility of emotional problems.

A family office is not outside the family system. It often becomes one of the principal structures through which the system organizes itself. In relatively stable families, this can promote continuity, trust, stewardship and thoughtful decision-making. In more anxious systems, however, the office may be recruited into buffering conflict, controlling information, preserving family myths or stabilizing a dominant principal at the expense of broader family inclusion.

Implications for family advisory

For this reason, one of the most valuable contributions a family office can make is to help reduce chronic anxiety rather than amplify it. This begins with clear role definition, transparent communication and consistent decision-making processes that lower uncertainty and reduce the need for rigid triangling. Family offices can also support differentiation of self by encouraging thoughtful boundaries, rather than emotional fusion or cutoff.

This may include separate forums for different generations, structured family meetings, independent advice for beneficiaries and governance processes that allow disagreement without punishment or withdrawal. It also involves creating safe environments in which next-generation members can speak for themselves, make decisions gradually and develop a more solid sense of self, rather than relying on borrowed identity or constant external validation.

References

“‘We’re giving you the sack’ – Social workers’ perspectives of intervening in affluent families when there are concerns about child neglect,” Bernard, C, & Greenwood, T., British Journal of Social Work, 49, 2266–2282, 2019.
“Family therapy in clinical practice,” Bowen, M., Jason Aronson, 1978.
“Differentiation of self: A scoping review of Bowen Family Systems Theory’s core construct,” Calatrava, M, Martins, M, Schweer-Collins, M., Duch-Ceballos, C, & Rodríguez- González, M, Clinical Psychology Review, 91, 102101, 2022.
“Shadow of the Prince: Parent-incumbents’ coercive control over child-successors in family organizations,” Huang, X, Chen, L., Xu, E, Lu, F., & Tam, K-C, Administrative Science Quarterly, 65(3), 710–750, 2020.
“Family evaluation,” Kerr, M E, & Bowen, M, W W Norton, 1988.
“Privileged but pressured? A study of affluent youth,” Luthar, S S, & Becker, B E, 73(5), 1593-1610, Child Development, 2002.
“Bowen’s effort to differentiate a self: Detriangling from triangles and interlocking triangles,” In P Titelman (Ed.), “Triangles: Bowen family systems theory perspectives (pp. 85-103,)” Titelman, P., Haworth Press, 2008.
“Family feelings: Affective ties and the reproduction of wealth in super-rich families,” Wiest, F, Emotions and Society, 7(3), 331-348. 2005.

The opinions expressed in this update are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

Case insight: The Tribunal’s discretion to award indemnity costs in compensation claims

Wed, 09 Sep 2026 16:24:57 +00:00

The Tribunal’s discretion as to costs in claims for compensation is long established, as prescribed in both Section 29 of the Tribunals, Courts and Enforcement Act 2007, as well as the Tribunal’s Practice Direction.

Notwithstanding this wide discretion, in practice, the Tribunal awarding costs on an indemnity basis remains noteworthy, with indemnity costs only generally being awarded where there is something “exceptional” to warrant it (Purfleet Farms Ltd v Secretar of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430).

The recent case of Harnek Singh Samra and Karnail Singh Samra v Sandwell Metropolitan Borough Council [LC-2024-709] gives a timely example of one of those “exceptional” instances.

Facts

The claimants made an offer to settle the compensation claim on 21 October 2025, in the amount of £425,000 (and £100,000 plus value-added tax (VAT) in respect of costs). The acquiring authority made a counteroffer on 31 October 2025, in the sum of £250,000 plus £21,242 for costs. The claimants were ultimately awarded compensation of £547,039 by the Tribunal in February 2026, and therefore “beat” their October 2025 offer.

The acquiring authority accepted liability for costs in principle but rejected the claimants’ argument that costs should be assessed on an indemnity basis.

Arguments raised

The claimants’ primary position hinged upon the principle of equivalence, meaning that claimants should be put as closely as possible in the same position as if their land had not been taken.

The claimants raised a further argument that the acquiring authority had been unreasonably obstructive in their approach to the claim, which was not ultimately addressed by the Tribunal.

The acquiring authority did not specifically raise a defence to the claims that it had been obstructive, but instead relied on the position that, in this case, the compulsory purchase had been made on public interests grounds because the claimants had failed to adequately maintain their land. The acquiring authority also highlighted that there is a clear absence, within the Tribunal Practice Direction, of confirmation that the principle of equivalence is to apply to costs comprised within a disturbance claim.

Decision

The claimants were therefore awarded their costs, assessed on an indemnity basis, in line with the principle of equivalence. While the Tribunal acknowledged the acquiring authority’s position in respect of the Tribunal Practice Direction, this was ultimately not enough to dissuade the Tribunal from exercising the wide powers of discretion afforded to it.

In reaching its decision, the Tribunal referred earlier decisions, including Mann & Ors v Transport for London [2018] EWCA Civ 1520 and Purfleet Farms Ltd v Secretar of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430, which acknowledge that costs can be awarded on an indemnity basis where there is something exceptional to warrant it and, where the claimant has been awarded compensation in excess of the amount offered to it and has accordingly incurred costs in order to determine the correct compensation payable, all costs should be paid to the claimant unless it can be found that the expenses were unnecessary and unreasonable.

What does this mean in practice?

In reality, nothing has changed as a result of this decision. While the decision in this case operates as a reminder that the principle of equivalence can apply to cost claims, this gift has always been the Tribunal’s to give, in line with its wide discretion.

However, unless and until the Tribunal Practice Directions are amended to explicitly provide for the same, this decision will not be binding and therefore isn’t likely to impact advice that is given to claimants in respect of cost risk. Instead, the emphasis remains on the parties to seek to engage collaboratively, notwithstanding any history between the parties, and to carefully consider sensible and early settlement offers.

Multi-club ownership (Part III): Football spotlight – MCO types, trends and compliance

Wed, 09 Sep 2026 11:19:12 +00:00

Sport has been described as the “new frontier” for private capital, of which football has been front and centre. There has been a palpable shift from “passion-led” to “returns-oriented” investment. Rather than “trophy assets”, football clubs are increasingly viewed as yield-generating, diversified asset vehicles.

In our previous article, we reviewed the portfolio-style investment and regulatory approaches in other sports, including rugby union, cricket and motorsport, where further MCO opportunities may present themselves, particularly in relation to new sports, competitions and territories.

In Part III of our multi-club ownership (MCO) series, we examine:

The three core types of MCO group
The latest investment trends in football, including recently published statistics, the role of private equity (PE) and the rise in minority investments
The regulations (current and impending) that shape MCO decision-making

Pensions Weekly Update: 9 September 2026

Wed, 09 Sep 2026 09:23:52 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Department for Work and Pensions (DWP) has published two consultations relating to guaranteed minimum pensions (GMPs). The first consultation seeks views on the proposed continuation of 3.25% per annum as the rate of revaluation applied to fixed rate revaluation of GMPs for early leavers. It is proposed that this rate would apply to contracted-out members who leave pensionable service in the period 6 April 2027 to 5 April 2032. The second consultation builds on the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022 (2022 Act), which is not yet in force. The consultation seeks views on proposed draft regulations that are intended, in particular, to help those pensions schemes that plan to use the conversion methodology to fulfil their obligation to equalise for the effect of GMPs. By way of recap, the 2022 Act introduced three key measures:
- It clarifies that the existing conversion legislation in the Pension Schemes Act 1993 applies to survivors and provides for a power to set out in regulations the conditions that must be met in relation to survivors’ benefits.
- It allows the DWP to set out in regulations what trustees must do and who they must ask consent from if the sponsoring employer at the time the GMPs were accrued no longer exists or there are multiple employers.
- It removes the requirement to notify HM Revenue and Customs (HMRC) of the conversion exercise.
The draft regulations pick up on the first two elements, and also include a new option for the certification of actuarial equivalence when the benefits of only one individual member are being converted at a time. The draft regulations, once in force, would only apply to GMP conversions undertaken after the regulations come into effect. Both consultations close on 29 October 2026.
The MoneyHelper dashboard is expected to be available to the general public during the 2027/28 tax year. The pensions industry anticipates a high level of member interest, which could lead to changes in member behaviour. Trustees and administrators may experience a surge in member enquiries in the initial weeks, followed by an increase in transaction activity, such as transfer requests. The Pensions Administration Standards Association (PASA) has issued a toolkit, outlining the internal reporting that may be useful for schemes to assess whether emerging trends require further action. PASA encourages trustees to adopt a consistent approach to reporting, so that industry trends can also be explored.
PASA has published new guided retirement operational readiness guidance. This focuses on the practical questions that schemes should be asking to assess their readiness for guided retirement, with implementation expected to commence in 2029. The guidance also includes a readiness checklist. David Fairs, chair of PASA, says “The additional implementation time for guided retirement is welcome, but it shouldn’t be confused with a reason to wait. Administration needs to be part of this conversation from the outset. Decisions about default pensions and member journeys have consequences for systems, data, people, processes and ultimately the experience members receive. There’s an important balance to strike. The industry shouldn’t build final solutions before the requirements are sufficiently clear, but neither should it wait to understand its capabilities and the scale of change which may be needed. Starting readiness work now will put schemes in a much stronger position as the framework develops.”
The 2026 Pay Your Pension Some Attention campaign launched last week, with record breaking vegetables and a message to encourage workers to grow their pension.
In the first episode of our AI Perspectives video series, international affairs advisor, Matthew Kirk, speaks with partner, Tanvi Mehta Krensel about the role of in-house counsel in evaluating, deploying and governing AI across multinational organisations. Together, they discuss how legal, business and technology teams can work together to balance innovation with risk and compliance. The conversation also explores the evolving debate around AI governance, online safety regulation and emerging challenges for social media companies, including Australia’s approach to protecting children online.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

Sanctions brief

Mon, 07 Sep 2026 09:00:00 +00:00

Our Commodities & Shipping Practice highlights the following recent developments regarding US economic sanctions:

Iran

“Operation Economic Outcast” – President Donald J. Trump announced a campaign to “sever the economic lifelines that sustain the Iranian regime.” Most of the secondary sanctions to be used for this effort have long been in place, but we anticipate increased targeting of vessels, owners, operators, managers, logistics companies, brokers, commodity traders, refineries and smaller financial institutions. In addition, the Office of Foreign Assets Control (OFAC) issued a determination to strengthen secondary sanctions on non-US parties that operate in the Iranian shipping sector, as well as the aviation, gold, digital asset and technology sectors.
Strait of Hormuz – OFAC issued an alert on the “Sanctions Risks of Iranian Demands for Strait of Hormuz Passage,” warning of the secondary sanctions risk associated with any form of payment, swap, charitable donation or other exchange made to Iran or its proxies for safe passage. This alert builds on prior guidance identifying payments to Persian Gulf Strait Authority (PGSA), Persian Gulf Marine Insurance Company (PGMIC) and HormuzSafe Marine Services Authority (Hormuz Safe) as sanctionable conduct. Maritime service providers are advised to implement compliance measures, as needed, to ensure vessels are not paying prohibited fees in any form.
Enforcement action – OFAC settled potential sanctions violations with a US manufacturer for equipment sales that its European subsidiary made to a distributor in the UAE. The distributor reportedly knew or should have known the equipment was destined for Iran. This case highlights both the risks of goods being rerouted to Iran, but also the potential liability US entities have for the activities of their non-US affiliates. This is especially the case with the Iran sanctions program, which requires non-US entities owned or controlled by US persons to comply to nearly the same extent as their US parent.
New designations – OFAC designated numerous individuals and entities to the Specially Designated Nationals and Blocked Persons List (SDN List) for transactions related to trade in Iranian crude oil, petroleum and petrochemicals. The sanctionable conduct included vessel management, commodity sales and purchases, as well as customs broker services. Targeted parties were located in countries such as India, Turkey, Singapore and Hong Kong. These sanctions are indicative of the broadening scope of Iranian secondary sanctions.

Cuba

Metals and mining – The US Department of State (DoS) designated several companies to the SDN List for helping the government of Cuba exploit the country’s metals and mining sector. Blocked companies include Metalcuba, Geominsal, Acinox Comercial and Empresa De Niquel Comandante Ernesto Che Guevara.
Other SDN designations – DoS continued to designate entities engaged in trade that supports Cuban military and security forces. Among these are Sociedad Mercantil Duna SA, a Cuban importer, as well as entities affiliated with Grupo de Administración Empresarial S.A. (GAESA), such as Tecnoimport and Tecnotex. Although transactions involving these entities are strictly prohibited only when there is a US nexus, significant transactions by non-US persons can trigger secondary sanctions under Executive Order 14404.

Russia

Specific license – Naftna Industrija Srbije (NIS), which operates Serbia’s only oil refinery, was granted a renewed specific license by OFAC to operate through September 30, 2026. OFAC designated NIS in 2025, and it is owned ultimately by blocked Russian entities. This license, which was announced by NIS, reportedly authorizes continued operations, including operation of the Pančevo refinery and performance under existing contracts.

Syria

State sponsor of terrorism – Secretary of State Marco Rubio authorized the formal recission of Syria’s designation as a “State Sponsor of Terrorism.” This action follows the broad sanctions and export control relief ordered by President Trump in 2025. This step eliminates barriers to private sector investment in Syria by lifting various restrictions on certain exports, loans by international financial institutions and tax credits.

Venezuela

Amended general licenses (GLs) – OFAC amended several GLs that authorize Venezuela-related transactions to remove the requirement that terms of authorized contracts be interpreted in accordance with US law. These GLs still require dispute resolution proceedings to be held in the US, UK, France or Singapore. These amendments were made in response to investment-related reforms made recently by the Government of Venezuela. The amended GLs include: GL 46D, 47B, 48C, 50C, 51C, 52B, 54B and 61A.

The EU’s Packaging and Packaging Waste Regulation kicks off – key questions answered

Fri, 04 Sep 2026 14:49:25 +00:00

With the application of the first wave of requirements under the PPWR on 12 August 2026, here is an overview of some key points that may be especially useful for companies that are new to the PPWR, as well as those looking to explain it to their customers.

What is the PPWR?

The new set of EU rules applying to packaging and packaging waste.

When do the rules kick in?

The first set of requirements applies from 12 August 2026. Additional requirements will take effect at later dates, many of them currently planned for 2030.

What packaging is covered?

All packaging, be it sales packaging, grouped packaging or transport packaging.

What are the main rules?

For the first wave, they can roughly be divided up into:

The conformity assessment procedure
Registration for extended producer responsibility (EPR)

Conformity assessment requires assessing the packaging for heavy metal content and, in the case of food contact packaging, per- and polyfluoroalkyl substances (PFAS) content. It also means adhering to the reuse conditions of the packaging, if it is claimed to be reusable. There is also a general obligation to minimise so-called “substances of concern”. While the Commission has recently provided some guidance, the precise scope and practical application of this obligation remains somewhat unclear. Further clarity is expected later this year, when the European Chemicals Agency (ECHA) and the Commission are due to publish reports on the topic. The above has to be documented by the PPWR manufacturer in the technical documentation (TD), and then overlaid with a “declaration of conformity” (DoC). There are also traceability requirements to ensure packaging is linked to a DoC and that the manufacturer and, if applicable, importer are identified.
EPR registration generally requires companies that are putting packaging onto the market to register with a producer responsibility organisation (PRO), report packaging volume and/or weight on an annual/quarterly basis and pay associated fees. EPR schemes are currently set up on a Member State-by-Member State basis, which can make assessing which company is obliged to report (known as the “producer”) quite complicated, as well as making the actual reporting cumbersome in practice.

Who is the “manufacturer” that has to do the conformity assessment procedure?

Generally speaking, the company whose name and/or trademark appears on the packaging is considered the manufacturer.

For unbranded transport packaging, responsibility as the PPWR manufacturer generally rests, according to the Commission, with the entity that physically manufactures the packaging. This approach also applies to items such as cardboard boxes supplied flat and pallet wrap supplied in roll form.

What evidence is required for the conformity assessment procedure?

It is a subjective self-assessment, which depends on the circumstances, and guidance remains incomplete.

Existing practice under the heavy metal restrictions provides a useful reference point. These restrictions have applied to packaging for many years under the Packaging and Packaging Waste Directive (PPWD), the PPWR’s predecessor. Compliance can generally be demonstrated using information or statements from suppliers on constituents, with testing only normally required where reliable upstream information is unavailable.

Similarly, for PFAS, it has been noted that where PFAS are not intentionally added, the likelihood of exceeding the concentration limits is extremely low. The Commission has therefore proposed a draft three-pillar risk-based assessment for manufacturers focusing on intentional use, potential contamination during manufacture and the likelihood of PFAS being present in the material.

Whether or not testing is undertaken, the technical documentation should explain the assessment carried out and include supporting evidence, such as statements and other information obtained from upstream suppliers.

What about companies that are concerned about the quality or completeness of their compliance documentation as of 12 August?

Such concerns are understandable as the PPWR is new, and there is considerable disagreement on its practical application. Hence, a degree of flexibility is expected from market surveillance authorities that may review the TD and DoC.

Importantly, the Commission has stated that the obligations applicable from 12 August 2026 should not disrupt trade flows, supply chains or consumer access to goods. In particular, it states that economic operators identified as being non-compliant should, as a first step, be informed of the issue and given an opportunity to remedy the non-compliance before more restrictive measures are imposed.

The Commission is also publicly recommending Market surveillance authorities not to take a sanctions-orientated approach and instead to support companies in complying with the new rules, including through requests for corrective action within a reasonable adaption period.

Do the DoC and TD need to be submitted proactively?

Generally, no. It is a self-assessment procedure, and the documents just need to be retained in-house and made available to the relevant authorities upon request.

In the case of non-EU manufacturers, the DoC should generally be provided to the importer, so that they can keep this at the disposal of the authorities. As the TD may contain commercially sensitive information, it is not uncommon for manufacturers and importers to agree that the former will retain it and provide it directly to a market surveillance authority should an audit occur.

Can non-compliant stock remain on the market?

Packaging first sold in the EU before 12 August 2026 can remain on the market, even if it does not comply with the PPWR.

For packaging that has been manufactured but not yet sold (e.g. sitting in the manufacturer’s stock), the appropriate approach should be assessed on a case-by-case basis, depending on the nature of the non-compliance.

Who is the producer that has to register for EPR?

Generally speaking, the producer is the locally established company that first sells a packaged product (in the case of sales and grouped packaging) in the Member State where that packaging is expected to become waste. In the case of transport packaging, the same principle applies to the first sale of the empty transport packaging.

Further rules apply where packaging is supplied directly to an end user or unpacked while still in the distribution chain.

The exact rules depend on the type of packaging and the supply chain arrangements, and the producer is not necessarily the same entity as the packaging manufacturer.

How to get ready in case of an audit from market surveillance authorities?

Keep your DoC and TD readily available to ensure that you can reply within the 10-day deadline foreseen in the PPWR. You should also be prepared to provide translations into the language required by the market surveillance authority, if requested.

As PPWR enforcement is still at an early stage, the Commission supports a cooperative approach by market surveillance authorities, focusing on awareness-raising, requests for information and corrective action rather than sanctions. Companies that have taken reasonable steps to comply should therefore be well placed to address any initial compliance issues.

Restructuring Roundup (UK)

Fri, 04 Sep 2026 13:52:03 +00:00

Here is our summary of key developments relevant to restructuring professionals that you might have missed, with links for further information.

It’s not quite over, but with the end of summer approaching and people already forgetting about their holidays we thought we’d brighten inboxes with a bumper edition of our newsletter.

As the picture around risk and liability under the Building Safety Act 2022 begins to grow (rapidly), our Insight explains how liability for building defects and fire risk extends beyond high rise residential buildings and is now affecting commercial property and mixed-use buildings, as well as how responsibility for payment can infiltrate group structures notwithstanding attempts to ringfence risk/liability. A sobering read, but one which all practitioners need to think about when considering the impact on a proposed restructuring.
Our recently released quick guide outlining an insolvency practitioner’s (IP) investigatory powers completes our insolvency litigation collection. This last alert considers how an IP can use their investigatory powers to establish and support litigation claims.
The case of Float Capital provides guidance to IPs on remuneration applications, most notably when an insolvency practitioner can turn to the court for assistance. We have refreshed our earlier newsletter to include the key takeaways from Float Capital, and the newsletter now covers all recent cases that offer practical guidance to IPs on fixing, increasing and agreeing remuneration.
The case of Saxon Wood, although not an insolvency case, provides clarity on how a director should exercise their duties if their views differ from the rest of the board. It is not uncommon to find, particularly in a distressed situation, that the views of the board are split. This case makes it clear that where a director holds a different view, they must act in accordance with the company’s constitution and not, even if they genuinely think it is the better decision, act outside of the governance rules. Our blog explores the decision, the impact on directors and advisors and how the case sits alongside the findings in Sequana.
Across the pond, the US court recognised another restructuring plan proposed by a US based company, New Fortress Energy. Our US colleague shares positive thoughts on the English process from a US perspective and “good forum shopping”.
As we await the outcome of the Novalpina appeal concerning the 12-month rule in member voluntary liquidations (expected soon), the Insolvency Service published this research looking at the effectiveness of MVLs shortly prior to the appeal being heard. Timely, yes. Interesting, yes. Will it sway the outcome of the appeal – let’s wait and see. But in the meantime, make sure an MVL statutory declaration is executed correctly, failure to do so could see the company enter CVL instead – the case of Greenback sends an important warning.
In other news:
- Can you serve a notice of intention to appoint administrators on a foreign qualifying floating charge holder (QFCH) without the court’s permission? The court says yes, but exercise some caution, and try to address the position practically.
- A foreign judgment can form the basis of a bankruptcy petition (and arguably therefore a winding up petition). The judgment creditor does not need to ask the English court to recognise the judgment.
- A sole trader cannot rely on the exception in Rule 22.7 in order to use a “prohibited name”. Read more here.
- Administrator costs can be paid ahead of protected moratorium debts (in the right circumstances). Cross Transport sets out the reasons why.
The Renters Rights Act introduced significant changes to the residential letting market. We explore in this quick guide, what those changes are and the impact that they could have for practitioners and lenders.
The Insolvency Service launched its second review of the Insolvency Rules 2016 in July, which proposes to overhaul the rules to ensure they are efficient and future proofed. With the consultation ending on 6 October 2026, now is the time to voice thoughts on those rules that create problems in practice. We share a few thoughts on the review in this blog and if you are interested in what else the Insolvency Service are up to, see their 2026-2027 Annual Plan.
And finally, for something a little different. Wayne Barnes is a partner in our Government Investigations & White Collar Practice. He is also a former international rugby union referee and has presided over more international rugby matches than anyone else in history, including the 2023 Rugby World Cup Final. In this podcast, Wayne discusses with partner Tom Firestone the parallels between rugby refereeing and legal practice, including why referees and lawyers face many of the same practical and ethical dilemmas, from decision-making under pressure to the importance of trust, communication and consistency – this may also resonate with IPs.

If you would like specific advice on any of these issues or anything else, please contact a member of our UK Restructuring & Insolvency team.

Privacy reset on a deadline

Fri, 04 Sep 2026 09:00:00 +00:00

In a record 1.5 months from the attorney-general’s announcement that her office would “[consult] on a second tranche of privacy reform to responsibly strengthen, modernise and simplify Australia’s personal data protection laws”, the Australian government has delivered, with an exposure draft of the Privacy Amendment (Personal Data Protection) Bill 2026 (Cth) (Draft Bill) released on 21 August.

The Draft Bill arrives with a consultation paper (Paper), which clarifies how some of the proposals in the Draft Bill could operate while seeking feedback on other proposed measures under development. In particular, the Paper focuses on recent areas of public attention, asking whether additional measures are required to regulate new technologies such as wearables.

The Draft Bill is subject to consultation until 18 September, with responses limited to 1,000 words. This suggests that, after years of consulting on privacy reform, the government has crafted the Draft Bill to minimise challenge and put forward ready-to-go amendments that they think reflect consensus (or something close to it). This is supported by the introduction to the Draft Bill, which emphasises that most of the proposals have been taken from the government response to the Privacy Act Review Report (Government Response).

We have summarised highlights from the Draft Bill in the full insight, as well as what these might mean in practice and questions or concerns that we have. While the Paper also asks stakeholders whether the proposals adequately protect the privacy risks associated with emerging technologies, our sense of both the Draft Bill and the attorney-general’s accompanying announcement is that the Privacy Act 1988 (Cth) (Privacy Act) will continue to regulate these devices in general and from a tech-neutral perspective, with no discrete and specific focus on any one kind of technology (regardless of the public attention).

The Draft Bill notably excludes most of the proposals in the Government Response, including tinkering with the small business and employee record exemptions or granting individuals a direct right of action. It is difficult to predict whether these will reenter the conversation in the future, but, for now, we expect that the Draft Bill reflects the furthest that the government is willing to go.

Read full insight to learn more.

Pensions Weekly Update: 2 September 2026

Wed, 02 Sep 2026 09:00:00 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Pensions Regulator (TPR) has updated its statement on defined benefit (DB) surplus flexibilities. The introductory wording has been amended to clarify that, “figures used within the case studies are not intended to be benchmarks. As a regulator we have not set expectations regarding either the sharing of surplus or the level of value that may be released”. The statement will be replaced by more detailed guidance, which TPR says that it will be consulting on towards the end of 2026. TPR says that this will be timed to support the enactment of regulations under the Pension Schemes Act 2026 that introduce new flexibilities for surplus release.
HM Revenue and Customs (HMRC) has published a detailed second technical note on pensions and inheritance tax (IHT). The note provides further information on “notional property” that is caught by the new regime, information sharing requirements, withholding notices and operation of the process, pensions direct payment scheme notices and operation of the process, as well as clearance. It includes a timeline of what will be issued and when. The note also includes further information on verifying personal representatives, as well as the position where there are “prospective” personal representatives, along with some helpful case studies.
HMRC has published Newsletter 184. This covers a variety of topics, most unusually including clearance applications and the disposal of nonstandard pension scheme assets. In relation to clearance applications, HMRC says that these should only be made if the question relates to a specific scheme, and the in-depth guidance on pensions tax rules in the Pensions Tax Manual does not provide clarification. The clearance application must explain why the rules are open to more than one interpretation, summarise the different interpretations and explain why the tax consequences are uncertain, as well as specify the pages in the Pensions Tax Manual and relevant parts of the pensions tax legislation that are unclear. HMRC has said that it will only provide clearance in cases of genuine uncertainty, and where all relevant information is provided. In relation to the disposal of nonstandard assets, HMRC says that where an asset is identified as being genuinely worthless, the disposal of such an asset is unlikely to attract unauthorised payment charges. Those that are disposed of that do have a value could incur unauthorised payment charges. HMRC notes that it is the responsibility of the “pension scheme administrator” (this usually means the trustees and not a third-party administrator) to undertake the appropriate due diligence to determine the value of any assets.
Have you seen our Autumn Hot Topics in Pensions? Our cosmic-themed publication is packed with current pensions issues for your trustee and corporate agenda.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

Hot Topics in Pensions – Autumn 2026

Tue, 01 Sep 2026 14:45:01 +00:00

Inspired by the recent solar eclipse, our autumn Hot Topics takes readers on an interstellar voyage through the pensions universe. Join us as we navigate the latest developments orbiting trustee and corporate agendas and scan the horizon for what lies ahead.

Topics include:

The key developments affecting defined benefit schemes, including whether scheme surpluses are ready for liftoff to employers and members.
Emerging issues for defined contribution schemes, including the latest Value for Money (VFM) consultation and The Pensions Regulator’s work to help establish the VFM trajectory.
Preparing for upcoming changes, including inheritance tax reforms, the increase in minimum pension age, and ensuring that migration to HMRC’s Managing Pension Schemes Service is complete. Are your scheme’s key missions on course?
How the growing use of artificial intelligence is exerting its gravitational pull on scheme governance and decision-making.

Please contact a member of the pensions team for further information on any of the pensions topics covered. (We will leave the laws of astrophysics to the experts!)

Family Office Insights: Family Offices and the Investment Advisers Act

Tue, 01 Sep 2026 11:00:00 +00:00

Introduction

In managing the wealth and investments of a family, a family office frequently provides advice regarding investments in securities, manages investment portfolios, and oversees other financial matters on behalf of family members. While these activities are central to the purpose of many family offices, they may also cause a family office to fall within the broad regulatory framework of the Investment Advisers Act of 1940, as amended (Advisers Act).

The Advisers Act generally regulates people and entities that provide investment advice regarding securities for compensation. Because a family office often provides investment advice to family members and related entities, it may be considered an “investment adviser” unless it qualifies for an applicable exemption or exclusion.¹

Historically, many family offices relied on the private adviser exemption under Section 203(b)(3) of the Advisers Act, which allowed certain advisers with fewer than 15 clients to avoid registration. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) eliminated that exemption and directed the Securities and Exchange Commission (SEC) to establish a separate exclusion specifically for family offices.²

In response, the SEC adopted Rule 202(a)(11)(G)-1 under the Advisers Act, commonly referred to as the “Family Office Rule.” The rule excludes qualifying family offices from the definition of investment adviser, allowing them to avoid registration and most substantive requirements applicable to registered investment advisers.

Because the Family Office Rule provides an exclusion rather than merely an exemption from registration, understanding its requirements is essential. A family office that does not satisfy the Rule may need to restructure its operations, seek exemptive relief from the SEC, or register as an investment adviser.

The Investment Advisers Act

The Advisers Act was enacted to protect investors by establishing a regulatory framework for people and entities engaged in the business of providing investment advice. The Act imposes registration, disclosure, recordkeeping and conduct requirements intended to promote transparency and prevent fraudulent practices.

Section 202(a)(11) of the Advisers Act defines an “investment adviser” broadly as any person or firm that:

for compensation
is engaged in the business of
providing advice to others or issuing reports or analyses regarding securities.

A person or entity generally must satisfy all three elements to fall within the definition of “investment adviser. The term “securities” is broadly interpreted and includes common investment instruments such as stocks, bonds and other financial products. It also includes investment contracts, as described under the Howey Test.³

Investment advisers that fall within this definition generally must register with the SEC or applicable state securities regulators unless an exclusion or exemption applies.

Click read full insight at the top of the page to learn more.

¹Institutional investment manager” is an entity that either invests in, or buys and sells, securities for its own account, and or a natural person or an entity that exercises investment discretion over the account of any other natural person or entity. Section 3(a)(9) of the Securities Exchange Act and Section 13(f)(6)(A) of the Advisers Act.

²Section 202(a)(11)(G) of the Advisers Act.

³SEC v. W.J. Howey Co., 328 U.S. 293 (1946) (establishing the “Howey test” for determining whether a transaction constitutes an investment contract under US securities law).

The Private Credit Market: The Data Behind the Headlines

Tue, 01 Sep 2026 07:00:00 +00:00

In March 2026, we published “The Private Credit Market: Understanding Its First Real Test,” examining several noteworthy market developments, including collapses driven by alleged fraud, increased redemption pressure at some of the largest funds and growing concerns regarding software-sector concentration and opacity in private credit fund net asset valuations.

This update addresses four themes that have been top of mind for clients since March: (I) how retail private credit continues to evolve; (II) where capital is being reallocated across private credit strategies; (III) what second-quarter 2026 results reveal about the health of corporate lending generally and private credit funds specifically; and (IV) the extent to which prevailing headlines compare with underlying performance data.

The emerging data increasingly suggest a market bifurcation rather than a market-wide deterioration.

Is your five-year rebate analysis due?
A reminder to tax-exempt bond issuers

Mon, 31 Aug 2026 17:35:14 +00:00

Public entities that issue tax-exempt bonds or notes, or other securities such as certificates of participation (COPs)¹, are required to complete a rebate computation as of the fifth anniversary date of the issuance date of the bonds, and every fifth year thereafter. Any rebate payment owed to the US Department of Treasury must be paid within 60 days of the relevant anniversary date. Some issuers complete rebate computations more often than the required every five years in order to identify and plan for potential rebate liabilities.

Many bonds issued in 2021 and 2022, were sold in a lower interest-rate environment than exists today. As investment yields have increased in subsequent years, it is possible that issuers have earned or are earning investment returns on bond proceeds that exceed the arbitrage yield limit on their bonds, increasing the possibility of rebate exposure.

What Is Rebate?

In general, rebate is owed when the yield an issuer earns by investing bond proceeds exceed the arbitrage yield on the bonds (i.e., when the issuer has earned positive arbitrage). Stated another way, the rebate amount is generally the difference between the amount actually earned on an investment of bond proceeds, and the amount that would have been earned on that investment had it earned a yield equal to the arbitrage yield on the bonds. For fixed rate bonds, the arbitrage yield on the bonds can be found on Form 8038-G, which should have been filed with the Internal Revenue Service shortly after the bonds were issued. The yield on variable rate bonds and the yield the issuer earned by investing the bond proceeds will need to be calculated by a rebate consultant.

Are there exceptions to rebate?

Certain bond issues may qualify for exceptions to the rebate requirement. Qualifying for an exception from rebate means that the issuer can keep all of the investment earnings on the bond proceeds that qualify for the exception.

On the issuance date of the bonds, the issuer may qualify for the small issuer exception from rebate by certifying that it does not expect to issue more than $5 million of bonds in that calendar year, or more than $15 million of bonds for construction of public school facilities in that calendar year.

There are also three spending exceptions that an issuer can qualify for in order to avoid owing rebate, as follows:

A six-month spending exception whereby all gross proceeds² of the bonds are spent within 6 months of the issue date of the bonds. Current refundings of prior bonds oftentimes qualify for this exception, which also happens to be the only rebate exception refundings can qualify for.
An 18-month spending exception whereby all gross proceeds of the bonds are spent within 18 months of the issue date of the bonds. In order to qualify for this exception, the issuer generally must also meet the following spending targets:
1. At least 15% of gross proceeds within six months;
2. At least 60% of gross proceeds within one year; and
3. 100% of gross proceeds within 18 months.
A 24-month spending exception for a construction issue³ whereby all the available construction proceeds⁴ of the construction issue are spent within 24 months of the issue date of the issue. In order to qualify for this exception, the issuer generally must also meet spending targets:
1. At least 10% of available construction proceeds within six months;
2. At least 45% of available construction proceeds within one year;
3. At least 75% of available construction proceeds within 18 months; and
4. 100% of available construction proceeds within two years.

It is important to note that, even if the above spending targets are met, there may be earnings on amounts not included in the spending exception (e.g., amounts held in a reserve fund allocable to the bonds) that may be subject to rebate. Also, although amounts in the debt service fund for the bonds are included in the definition of gross proceeds, earnings on qualifying bond debt service funds are often excepted from rebate. Due to the complexity of the spending exceptions, it is advisable to review any potentially applicable spending exception with bond counsel to determine whether all the criteria have been met.

Why Does This Matter?

Failure to timely pay a required rebate amount may result in the bonds being treated as arbitrage bonds under federal tax law, potentially jeopardizing the tax-exempt status of the bonds.

Recommended Action Steps

Issuers should begin by identifying the issuance date of all outstanding bond issues and then determine whether a five-year rebate computation date has occurred or is approaching. If so, the issuer should review any potential exception to rebate with bond counsel, and, if it appears that no exception applies, engage a rebate consultant to determine whether any rebate is or will be owed by the issuer.

In the interest of simplicity, the remainder of this client alert shall refer to all such tax-exempt obligations as “bonds.”
Gross proceeds generally include (a) sale proceeds (amount paid for the bonds by the purchaser), (b) investment proceeds (earnings on the investment of proceeds), (c) transferred proceeds (remaining proceeds of a prior bond issue when a refunding occurs) and (d) replacement proceeds (which most commonly consist of amounts in the debt service fund for the bonds, or other collateral for the bonds not acquired with bond proceeds).
A construction issue is an issue of governmental use bonds or qualified 501(c)(3) bonds where at least 75% of the available construction proceeds (defined below) will be used for construction expenditures. Construction expenditures are capital expenditures allocable to the cost of constructing real property and certain tangible personal property.
Available construction proceeds generally consist of sale proceeds and investment proceeds, and can include earnings on a reserve fund allocable to the bonds.

The Impact of the Building Safety Act 2022 on UK Restructuring

Fri, 28 Aug 2026 09:00:00 +00:00

The Building Safety Act 2022 has created a significantly broader liability landscape than its focus on cladding and high-rise residential buildings might suggest. While the legislation was introduced in response to concerns around building safety, its provisions can extend liability beyond the original developer or contractor and, in some circumstances, to associated companies that had no involvement in the construction project. The Act also extends limitation periods for certain claims, meaning historic building safety issues can continue to present a material risk many years after a project has been completed.

The insight highlights a key and often unexpected risk under the BSA: building safety liabilities may not stay with the company responsible for the original development. Instead, they can potentially spread to other companies connected to it, including businesses that had no involvement in the construction or the defect itself. This means that a problem arising from one historic project could affect other parts of a corporate group, or even businesses outside the group, creating a wider financial risk than might previously have been expected. The insight considers how this “contagion” risk can undermine the assumption that liabilities are safely contained within one company.

This has important implications for insolvency practitioners, lenders, corporates, sponsors and purchasers. The insight highlights why BSA exposure should be considered as part of restructuring, lending and transaction due diligence, particularly where there is historic development activity or connections between businesses through ownership, control or directorships.

Read full insight to learn more.

“When a release of “all claims” doesn’t mean “all claims”

Thu, 27 Aug 2026 09:00:00 +00:00

Parties often include broad general releases from liability in respect of “all claims” in deeds of settlement and other agreements with the intention of resolving matters between them. The recent decision of FMR Investments Pty Ltd v Keogh [2026] WASC 138 serves as a reminder that a release of “all claims” may not in fact bar every claim between the parties and illustrates the willingness of Australian Courts to constrain broad general releases, particularly in respect of unknown claims arising out of dishonesty or fraud.

The facts

FMR Investments Pty Ltd (FMR) is a mining company that owns and operates the Gordon Sirdar gold mine located north-east of Kalgoorlie and the Greenfields Mill east of Coolgardie.

The defendant was employed by FMR between May 2009 and March 2020, in an executive position as manager of operations. His employment was terminated in circumstances where it had recently come to light that he had a conflict of interest in respect to involvement with the operations of a contractor.

On the day that the manager’s employment ended, the manager and FMR entered into a deed containing mutual releases in respect of “all Claims that party has or may have in connection with, arising from or touching on the Employment”, being the manager’s employment with FMR.

Clause 2 defined “Claims” as “all actions, claims, demands, complaints, suits, proceedings, liabilities, sums of money, damages, costs or any legal administrative, governmental, arbitral or other proceedings or investigations, whether directly or indirectly, arising out of, related to or in connection with the Employment, but excluding any entitlement to workers’ compensation that may exist pursuant to legislation”.

After executing the deed, FMR discovered that the manager had engaged in (additional) misconduct while he was an officer of FMR. The conduct involved:

Appropriating gold bearing ore from FMR’s tailings stockpile for use by a third-party as part of their milling campaign at FMR’s Mill, for which the manager and his wife received payments from the third-party
Causing FMR to pay invoices for unauthorised “management fees” that were applied for the manager’s ultimate benefit in circumstances where no such services had been supplied. FMR commenced proceedings against the manager. The manager contended (among other things) that the claims fell within the scope of the release and could not be pursued.

Findings

The court rejected the manager’s position and held that the release did not extend to FMR’s claims.

Restraining broad general releases

The court confirmed that when construing deeds of release, the approach of the plurality of the High Court in Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 applies. This means that courts will restrain the scope of broad general releases by applying the following three principles.

First, as a matter of construction, wide general words in a release of obligations should be restrained by the particular occasion mentioned in any recitals
Secondly, as a matter of construction, wide general words in a release of obligations may be limited by the matters that were in the contemplation of the parties when the release was given • Thirdly, in equity, a releasee may not rely upon wide general words in a release of obligations as a mechanism for avoiding the fulfilment of obligations that fall outside “the true purpose of the transaction as ascertained from the nature of the instrument, and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor”.
However, the third principle will not apply if it is plain that the parties intended that wide general words in a release of obligations should include all conceivable further disputes between them in relation to a particular subject matter or generally, whether or not the facts underpinning the further disputes were in existence or known to one or both of the parties when the release was given.

Application to FMR’s claims

In determining that the release did not bar FMR’s claims, the court received evidence regarding the decision to terminate the manager, FMR’s internal processes and subjective intentions with respect to the deed. The court also examined the correspondence during the negotiation of the deed, as well as the deed itself. It then applied the three principles arising from Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 as follows.

First, the “particular occasion” mentioned in the two recitals forming part of “background” of the deed was the mutual ending of the manager’s and FMR’s employment relationship without any admission as to liability and the release should be so confined.
Second:
- At the time of execution of the deed, while it occurred in the context of the discovery of his conflict of interest, FMR was not aware of the facts giving rise to the specific claims in the proceedings, and there had been no suggestion that the manager had acted dishonestly or fraudulently
- The manager failed to prove that the claims the subject of the proceedings were within the parties’ contemplation when entering into the deed, and the release could not be construed to release the manager from claims arising from facts not known to FMR at that time, let alone from claims based on allegations of dishonest or fraudulent conduct
Third:
- Although the release was wide, it could have been broader, including that it did not expressly state that it was to apply to claims that either party was unaware of at the time of execution, and/or to claims involving fraud or dishonesty and the deed did not otherwise make it plain that it was to extend to such claims. Accordingly, it was not plain that the parties intended for the release to extend to FMR’s claims
- It would be unconscientious for the manager to be permitted to rely on the wide general words reflected in the release as a mechanism for escaping liability for the claims the subject of the proceedings
Additionally, claims based on allegations of dishonest or fraudulent conduct would, in any event, have fallen outside the lawful scope of the manager’s employment with FMR and, thus, outside the meaning of “Employment” as defined in the deed.

Pensions Weekly Update: 26 August 2026

Wed, 26 Aug 2026 09:00:00 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Pensions Dashboards Programme (PDP) has issued a blog on the ongoing responsibilities of maintaining connection to the pensions dashboards ecosystem. PDP says “Whether you have connected directly or via a third-party, there are ongoing responsibilities to maintain your connection, keep your data accurate and ensure your systems remain secure. Understanding where these responsibilities sit, and how they are shared with any third parties you work with, will help you stay compliant and support the smooth running of dashboards for members.”
The Finance Act 2026 introduced a new requirement for “tax advisers” to register with HM Revenue and Customs (HMRC). HMRC has now updated its guidance on registration as a tax adviser. This includes an interactive tool. The definition of tax adviser is wide. It captures an organisation that, in the course of a business carried on by it, assists other persons with their tax affairs, including providing assistance with any document that is likely to be relied on by HMRC to determine the other person’s tax position (such as a tax return). Schedule 20 provides certain exemptions from the obligation to register as a tax adviser. HMRC reassured the pensions industry in Newsletter 176 that providers of pension scheme administration services (referred to as scheme practitioners) would be exempt from the requirements. Schedule 20 does not, however, specifically carve out those providing pension scheme administration services from the obligation to register. Instead, pension scheme administrators are likely to have to rely on exemption (h) (where the adviser interacts with HMRC in order to comply with an obligation of the adviser under any enactment, including the Finance Act 2026), and/or exemption (i) (where the adviser interacts with HMRC in response to a request for information from HMRC). Unfortunately, the latest guidance provides no further clarification in relation to pension scheme administrators.
Various consultations are closing over the next few weeks, including:
- Consultation on draft regulations relating to the release of surplus to the employer: 11:59 p.m. on 2 September 2026
- Consultation on draft legislation amending the Finance Act 2004 to make surplus release to members an authorised payment: 7 September 2026
- Discussion paper on scaling up defined contribution schemes: 11:59 p.m. on 7 September 2026
- Consultation on changes to the general levy for the period April 2027 to March 2030: Midday on 8 September 2026
- Consultation on the value for money framework, draft regulations and draft Financial Conduct Authority (FCA) rules: 11:59 p.m. on 15 September 2026
- Consultation on draft secondary legislation to provide transitional tax provisions in connection with the increase in the normal minimum pension age from age 55 to age 57 from 6 April 2028: 11:59 p.m. 28 September 2026
Did you see the partial eclipse on 12 August? From eclipses to pensions, there is more on the horizon: watch out for our Autumn Hot Topics in Pensions, which has a cosmic theme.
We are pleased to be shortlisted for Lawyer of the Year in the LGC (Local Government Chronicle) Investment Awards 2026, which recognises excellent service and innovation in the Local Government Pension Scheme.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

Legal intelligence for resilient global supply chains

Mon, 24 Aug 2026 11:09:18 +00:00

The first half of 2026 has reinforced a fundamental shift in how organisations approach supply chain risk. Rather than responding to isolated disruptions, organisations are redesigning supply chains to withstand a prolonged period of geopolitical uncertainty, economic nationalism and regulatory change.

Supply chain resilience is no longer driven by a single event or crisis. Instead, businesses are navigating an increasingly complex risk landscape shaped by geopolitical conflict, evolving trade policy, export controls, supply chain diversification, critical mineral shortages and heightened regulatory scrutiny. Together, these developments have accelerated the move away from cost-driven procurement models towards more resilient, transparent and strategically diversified supply chains.

Against this backdrop, governments continue to deploy tariffs, export controls and industrial policy as tools of economic security, while organisations face increasing scrutiny of supply chain governance through evolving environmental, social and governance (ESG) legislation, shareholder activism, regulatory enforcement and expanding group litigation. Recent geopolitical tensions in the Middle East, together with continuing uncertainty across global trade routes, have reinforced the importance of building supply chains that can adapt quickly to disruption rather than simply react to it.

As a result, in-house legal teams are becoming increasingly involved in strategic procurement decisions, supplier diversification programmes and governance frameworks. The role of legal has moved well beyond contract formation and dispute resolution; it now sits at the heart of supply chain resilience, helping organisations anticipate risk, strengthen governance and build more resilient commercial relationships.

This edition of the Squire Patton Boggs Global Supply Chain Radar includes a global heat map of current supply chain risks, examines five key developments that shaped the first half of 2026 and considers the legal and commercial issues likely to influence organisations during the remainder of the year. We also highlight key questions for boards, our clause of focus and five practical actions organisations can take to strengthen supply chain resilience during the second half of 2026.

The defining theme of the first half of 2026 is clear: competitive advantage increasingly lies not in having the lowest-cost supply chain, but in having the most resilient one.

To read the full insight, please click the button above.

OPSS delivery report 2025-2026

Fri, 21 Aug 2026 15:21:47 +00:00

The Office for Product Safety and Standards (OPSS) has published its 2025-2026 Delivery Report (Delivery Report).

OPSS is the national product regulator for the UK (part of the Department for Business and Trade). The Delivery Report summarises a year of regulatory reform, enforcement action and a focus on delivering consumer protection alongside economic growth. As such, it provides useful insights for businesses supplying products onto the UK market, on trends in regulation and enforcement and possible areas of risk.

The Delivery Report covers the passage of the Product Regulation and Metrology Act 2025 (Act), which we explored in our frESH Law Horizons publication.

Pensions Weekly Update: 19 August 2026

Wed, 19 Aug 2026 09:00:00 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Pensions Regulator (TPR) has issued an overview of the proposed new value for money (VFM) framework to help trustees understand the latest consultation and draft regulations and prepare for implementation. TPR summarises the latest proposals from the Department for Work and Pensions (DWP)/Financial Conduct Authority (FCA), including the phased introduction of VFM, which will cover master trusts and larger schemes first. The DWP/FCA consultation closes on 15 September 2026. The overview includes a handy flowchart for assessing which defined contribution (DC) arrangements are in scope of the requirements (based on the consultation). TPR suggests the preparations that trustees can take now towards VFM compliance.
TPR has also issued details of its proposed digital service that will allow schemes to submit data, access comparator data for assessments and report VFM outcomes for public disclosure. Schemes will be required to engage with the service throughout the year, which will require initial implementation activity and ongoing operational resource. Data submitted via the service will be made available to TPR and the FCA for monitoring and enforcement purposes.
TPR has started to populate its webpage dedicated to the Pension Schemes Act 2026. The webpage contains sections with links to guidance and other useful documents, along with a timeline of expected developments and is intended to serve as a central resource as implementation of the act progresses.
The government has now published explanatory notes to the Pension Schemes Act 2026. They run to a total of 106 pages and provide detailed commentary on the act’s provisions. The notes also include a table that sets out how various clauses in the bill progressed through Parliament, along with a table citing the Hansard references when various parts of the bill were discussed in Parliament.
And now for something a little different, for those sports fans among you. Wayne Barnes is a partner in our Government Investigations & White Collar Practice. He is also a former international rugby union referee and has presided over more international rugby matches than anyone else in history, including the 2023 Rugby World Cup Final. In this podcast, Wayne discusses with partner Tom Firestone the parallels between rugby refereeing and legal practice, including why referees and lawyers face many of the same practical and ethical dilemmas, from decision-making under pressure to the importance of trust, communication and consistency.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

Insolvency practitioners investigatory powers

Tue, 18 Aug 2026 09:52:59 +00:00

Sections 234–236 of the Insolvency Act 1986 provide office holders with important tools for establishing whether there are grounds for an insolvency claim. In practice, an IP will often take an appointment with an incomplete picture of the company’s affairs, with key documents missing, records held by third parties or important decisions lacking sufficient explanation. The investigatory powers enable the IP to piece together that missing information and understand the circumstances leading up to insolvency before deciding whether litigation is justified.

The powers have broader uses beyond simply obtaining documents. Section 234 can be used to recover company books, papers, and records from third parties such as former professional advisers, lenders, IT providers, cloud storage providers, and directors. Section 235 allows IPs to obtain explanations from relevant individuals, helping to establish the rationale behind transactions, understand decision-making and identify where further evidence or witnesses may be located. Section 236 provides a mechanism, allowing the court to require individuals to attend a private examination and answer questions under oath. Used together, these powers can help an IP move from identifying suspicious transactions to understanding the underlying facts and assessing whether a viable claim exists.

However, the powers are not without some limitations. Requests must be reasonable, proportionate and sufficiently specific; an IP cannot use them simply as a fishing expedition in the hope that something useful will emerge. Section 234 does not override privilege or resolve complex disputes over ownership of documents, while the effectiveness of Section 235 may depend on the quality and willingness of individuals to provide explanations. Section 236 is generally a last resort and requires the court to balance the need for information against the respondent’s rights and the potential costs.

This Insight sets out when and how the powers in s234-236 can be used and might be useful, as well as setting out key considerations ahead of exercising the powers and what hurdles an officeholder can face.

Family Office Insights: Family Offices and Private Capital in Latin America: Legal, Regulatory and Valuation Considerations in an Increasingly Complex Environment

Mon, 17 Aug 2026 15:28:39 +00:00

Latin America’s evolving investment landscape

Latin America continues to attract family offices, private equity sponsors and strategic investors seeking growth opportunities, access to critical industries and portfolio diversification in markets that remain underpenetrated relative to more developed economies. In recent years, family offices, private equity sponsors and high-net-worth individuals have shown renewed interest in the region, driven by opportunities in infrastructure, energy, technology, agribusiness, financial services and special situations.

At the same time, increased regulatory scrutiny, geopolitical uncertainty, evolving compliance requirements and fluctuating economic conditions have made cross-border investing more complex than ever. Successful investors recognize that identifying a promising opportunity is only one component of a successful transaction. Equally important is understanding how legal, regulatory, financial and valuation considerations intersect throughout the investment life cycle.¹

Based on our observations across numerous cross-border transactions, many of the most significant value impairments, disputes and failed investments in Latin America do not arise from flawed investment theses or adverse market conditions. Rather, they stem from governance shortcomings, regulatory risks that were underestimated during diligence, unrealistic valuation assumptions, or compliance issues that emerged after capital had been deployed. Investors who successfully navigate the region understand that execution risk can be just as important as investment risk.

The new Latin American investment landscape

Today’s investment environment differs significantly from what existed a decade ago. Governments throughout the region have strengthened anti-money laundering regimes, enhanced financial regulatory oversight and increased transparency requirements. International sanctions programs, anti-corruption enforcement and beneficial ownership disclosure obligations have also become increasingly important considerations for investors operating across borders.^{2 3 4}

Recent investment activity across Mexico, Brazil, Colombia, Chile and other markets demonstrates that sophisticated investors remain willing to commit substantial capital despite heightened regulatory scrutiny and geopolitical uncertainty. Opportunities continue to emerge across infrastructure, renewable energy, technology, logistics, healthcare and family-owned businesses seeking growth capital, liquidity solutions or succession-planning alternatives. The question is rarely whether opportunities exist; rather, it is whether investors have adequately evaluated the legal, regulatory, governance and valuation risks associated with those opportunities.

Technology startups throughout Latin America continue to attract significant capital. Infrastructure projects require substantial private investment. Family-owned businesses are increasingly considering strategic partnerships, recapitalizations and succession driven transactions.

While opportunities remain abundant, the margin for error has narrowed considerably.

Beyond traditional due diligence

Many investors approach diligence as a checklist exercise. Legal counsel reviews contracts, accountants analyse financial statements, and compliance teams evaluate regulatory issues. However, the most successful transactions involve integrated diligence that considers legal, financial, operational and strategic risks simultaneously.

Although confidentiality obligations preclude discussion of specific engagements, we have observed transactions in which unresolved licensing issues, shareholder disputes, regulatory deficiencies or customer concentration risks materially affected valuation and deal structure despite strong underlying financial performance. In some cases, risks that appeared manageable during diligence later became central drivers of post-closing disputes, purchase price adjustments or value impairment.

Consider a hypothetical family office evaluating an acquisition of a successful logistics company operating in multiple Latin American jurisdictions.

Initial financial statements suggest strong profitability and attractive growth prospects. Traditional diligence may focus on revenue validation, customer concentration and tax compliance.

A deeper review, however, might reveal several hidden issues:

Key revenue streams depend on government contracts nearing expiration.
Significant operations rely on third-party intermediaries operating in higher-risk jurisdictions.
Certain permits and licenses have transfer restrictions.
Related-party transactions materially impact reported earnings.
Expansion projections assume regulatory approvals not yet obtained.

Individually, none of these issues may derail the transaction. Collectively, they could materially affect value and risk.

The lesson is straightforward: valuation and legal analysis should not occur in separate silos.

Valuation is more than mathematics

The findings uncovered during diligence often become the primary drivers of value. As a result, valuation analysis cannot be separated from the legal and regulatory realities surrounding a transaction.

One of the most common misconceptions in cross-border transactions is that valuation is simply a financial exercise. In reality, legal and regulatory factors frequently influence value as much as financial performance.^{5 6}

Across many cross-border engagements, we frequently observe a disconnect between financial models and legal realities. Financial projections may assume uninterrupted operations, regulatory approvals or stable contractual relationships, while legal diligence identifies risks that could materially alter future cash flows. A valuation that does not adequately incorporate those risks may create a false sense of precision.

For example, a business operating in a highly regulated industry may appear attractive based on historical earnings. However, pending regulatory changes, compliance deficiencies or unresolved licensing issues can significantly affect future cash flows and investor returns.

Similarly, ownership disputes, shareholder conflicts, sanctions exposure, unresolved litigation and uncertain contractual rights can reduce value even when underlying business operations remain strong.

We often advise clients that value should not be viewed as a single number. Rather, value exists within a range influenced by risk, uncertainty, governance quality and future expectations.^{6 7}

This principle becomes particularly important when investors enter unfamiliar jurisdictions or industries where local legal frameworks and regulatory environments may differ substantially from those in the US.

Currency and political risk considerations

In addition to legal, regulatory and operational concerns, investors should carefully evaluate currency exposure and political risk when structuring Latin American investments. Exchange rate volatility, changes in tax policy, capital controls, shifts in regulatory priorities and political transitions can materially affect projected returns and investment outcomes.

Sophisticated investors increasingly incorporate these factors into their valuation analyses and transaction structures through appropriate risk adjustments, scenario analyses, contingency planning and contractual protections. While such risks are not unique to Latin America, they often play a more prominent role in investment decision making and can significantly influence both value and exit strategies.

Family offices face unique challenges

Family offices have become increasingly sophisticated investors, often competing directly with institutional private equity firms.

Unlike traditional private equity funds, family offices frequently invest with longer holding periods and broader objectives. Wealth preservation, family legacy, strategic relationships and intergenerational planning often influence investment decisions alongside financial returns.

Family offices also possess strategic advantages that differentiate them from many institutional investors. Their longer investment horizons, greater flexibility and relationship-driven approach can create opportunities that traditional financial sponsors may overlook. At the same time, those same characteristics can sometimes lead investors to place greater emphasis on trust and relationships than on governance mechanisms, documentation and exit protections.

In our view, governance deficiencies remain one of the most underestimated risks in Latin American private capital transactions, particularly in founder-led and family-owned businesses, where informal decision-making structures may not align with investors’ expectations.

We have seen situations in which minority investors entered otherwise attractive businesses without adequate governance protections, only to discover years later that their ability to influence material business decisions was significantly more limited than anticipated.

Disputes may emerge regarding dividend policies, management compensation, related-party transactions, strategic direction or future capital requirements. Although the investment itself may remain profitable, the investor’s practical ability to protect its interests can become constrained.

The result is not necessarily a failed investment, but it may become a significantly less attractive one.

Robust governance provisions, dispute-resolution mechanisms, exit rights and information rights remain critical regardless of how promising an opportunity appears at closing.⁵

Compliance is now a value driver

Historically, many investors viewed compliance primarily as a defensive exercise designed to avoid penalties. Increasingly, compliance has become a value driver.

Over the past several years, compliance related issues have moved from the periphery of transactions to the center of investment discussions. Questions involving anti-corruption controls, beneficial ownership transparency, sanctions exposure and anti-money laundering procedures are now receiving attention from investors, lenders, regulators and counterparties much earlier in the investment process than was common a decade ago.

Institutional investors, lenders, strategic buyers and regulators are placing greater emphasis on transparency, governance, anticorruption controls, sanctions compliance and anti-money laundering procedures.^{2 3 4 8}

Companies that demonstrate mature compliance frameworks often benefit from:

Greater access to capital
More favorable financing terms
Broader strategic buyer interest
Reduced transaction friction
Enhanced enterprise value

Conversely, compliance deficiencies discovered during a sale process frequently lead to purchase-price adjustments, indemnity demands, extended diligence periods or abandonment of proposed transactions.

Sophisticated investors increasingly treat compliance assessment as a core component of value creation rather than a post-closing administrative requirement.

Preparing for disputes before they occur

One of the most overlooked areas in cross-border investing is dispute preparedness.

Most investors focus on how to complete a transaction. Relatively few devote equal attention to what happens if the relationship deteriorates.

Many cross-border disputes reveal that the most significant challenges are not necessarily related to the merits of a claim. Enforcement considerations, jurisdictional limitations, local legal requirements and practical business realities often have a substantial impact on outcomes. Investors who address these issues at the outset frequently place themselves in a far stronger position should disagreements arise later.

Cross-border disputes can be expensive, time consuming and operationally disruptive. Jurisdictional issues, enforcement challenges, language barriers and differing legal traditions can complicate outcomes.

Accordingly, investors should consider several issues before closing:

What law governs the transaction?
Where will disputes be resolved?
Is arbitration preferable to litigation?
Can judgments or awards be enforced effectively?
Are shareholder protections adequate?
How will damages be measured if disputes arise?

Addressing these questions in advance often proves substantially less expensive than resolving conflicts after they emerge.

Looking ahead

Latin America will likely remain a significant destination for private capital in the years ahead. The region offers substantial opportunities across both traditional and emerging sectors.

Successful investors, however, will increasingly distinguish themselves not by their willingness to assume risk, but by their ability to understand and manage it.

Legal, regulatory, compliance and valuation considerations are no longer separate workstreams. They form an integrated framework that shapes investment outcomes from origination through exit.

For family offices, private equity sponsors, financial institutions and strategic investors, the most successful transactions will be those that combine thoughtful legal structuring, rigorous financial analysis, disciplined compliance practices and realistic valuation assumptions.

Our experience suggests that the most successful investors in Latin America are not necessarily those willing to assume the greatest risk, nor those capable of moving the fastest. Rather, they are the investors who combine disciplined underwriting, rigorous diligence, realistic valuation assumptions and thoughtful legal structuring with a clear understanding of the region’s unique opportunities and challenges. As investment environments become increasingly complex, the ability to ask the right questions before capital is deployed may prove to be one of the most valuable competitive advantages of all.

Footnotes

^{1. The views expressed herein are informed by the authors’ combined experience advising clients on legal, regulatory, financial, valuation and dispute-related matters arising in cross-border investments and transactions throughout Latin America.}

^{2. US Department of Justice and US Securities and Exchange Commission, A Resource Guide to the U.S. Foreign Corrupt Practices Act (2nd ed. 2020).}

^{3. Financial Action Task Force (FATF), International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (FATF Recommendations).}

^{4. US Department of the Treasury, Office of Foreign Assets Control, Sanctions Programs and Country Information.}

^{5. International Bar Association, Corporate Governance and Cross-Border Investment Guidance.}

^{6. American Society of Appraisers, Business Valuation Standards.}

^{7. International Valuation Standards Council, International Valuation Standards (latest edition).}

^{8. Organization for Economic Co-operation and Development (OECD), Foreign Bribery Report: An Analysis of the Crime of Bribery of Foreign Public Officials (2014).}

Disclaimer

This article is provided for informational purposes only and does not constitute legal, tax, investment, valuation, accounting or other professional advice. Readers should consult qualified advisers regarding their specific circumstances.

HEAP and the missing middle: A construction lawyer’s reflection on the ICC’s new speed rules

Fri, 14 Aug 2026 10:32:05 +00:00

The 2026 International Chamber of Commerce (ICC) Arbitration Rules, in force since 1 June, introduce the Highly Expedited Arbitration Provisions (HEAP), offering a final award within three months.

It’s a genuinely interesting innovation, and understandably one of the most talked-about features of the revision. Looking at it from a construction disputes perspective though, where dispute boards and statutory adjudication have shaped procedure for over two decades by now, it’s worth pausing on a question that the ICC’s published materials don’t seem to address directly: given that construction has already tested a fast, compressed process paired with a revisable outcome (the ability to review the adjudication outcome in court), why does HEAP build its version of speed around finality instead?

Two separate dimensions worth looking at

Dispute resolution design arguably has two independent dimensions, namely, how quickly the process runs and whether the outcome is final or provisional. Full arbitration sits at slow-and-final. HEAP sits at fast-and-final.

Statutory adjudication and International Federation of Consulting Engineers (FIDIC)-style Dispute Avoidance/ Adjudication Boards (DAABs) occupy a different space, which is fast and provisional. That combination isn’t incidental because it’s arguably what makes the compressed procedure commercially workable in the first place. A DAAB can decide a valuation dispute in under three months on a limited record partly because the losing party isn’t being asked to treat that decision as the last word. They comply now and, if they still want to, argue the point properly later in arbitration. The rough edges of a fast process are easier to live with when there’s a corrective tier sitting above it.

HEAP takes the speed of that model, without the same safety net. A HEAP award is final, and where the parties agree, can even be unreasoned. That’s a meaningfully different commercial proposition from a DAAB decision, even where the timetables look similar on paper.

What the ICC’s own materials suggest

To be fair to the ICC, this doesn’t look like a case of weighing a DAAB-style provisional model against finality and choosing finality for stated reasons. Reviewing the “Unveiling the 2026 Rules” commentary on HEAP, the emphasis is largely procedural; embracing a sole arbitrator, front-loaded submissions, an optional documents-only process and an award within three months. The framing is that HEAP delivers a fast, fully enforceable award, while preserving the quality associated with ICC arbitration generally. There doesn’t appear to be a published discussion of why an interim or advisory model wasn’t considered as an alternative.

HEAP is also presented as a natural extension of emergency arbitration, which already deals with interim relief, suggesting a continuum running from urgent interim protection through to a rapid final merits decision, without an obvious place on that continuum for a provisional merits determination.

That sequencing is suggestive rather than conclusive, but it points toward HEAP having been developed within a model where speed is the main variable and finality was more or less assumed, rather than one where a provisional alternative was actively weighed and set aside. If that reading is right, it’s a slightly different and perhaps more useful criticism than saying the ICC got the trade-off wrong; it’s closer to saying the trade-off may not have been fully in view, even though it’s one the construction sector has been quietly testing for over 20 years.

Why this might matter in practice?

For construction disputes, which occupy almost 50% of the disputes dealt with in the ICC, there’s a mismatch worth thinking through. Adjudication and DAAB determinations are deliberately rough justice, and that’s tolerated because a full-merits corrective sits underneath them.

If that corrective process is itself compressed into three months, and largely documents-based, there’s a risk that the rough-justice exercise effectively happens twice, with the second version made final.

That could leave parties with something less useful than either extreme on its own, namely, arbitration-priced fact-finding, conducted at something closer to adjudication quality, without a further tier to catch errors that compression tends to produce in factually complex disputes, which of course describes a fair number of delay, defects and final-account disputes.

There’s also a practical dynamic around consent worth flagging gently. HEAP only applies where parties agree to it, and post-dispute, the party proposing a compressed timetable is often the one who stands to benefit most. The side holding most of the documents, or the one with a more developed case already? The party for whom HEAP genuinely suits the dispute and the party willing to agree to it won’t always be the same. Building HEAP into the arbitration clause before any dispute exists carries a related risk that at drafting stage nobody can really know whether the eventual dispute will be a modest point of valuation or something far larger, and a pre-agreed clause captures both without distinction.

Where HEAP may genuinely fit well.

None of this suggests HEAP is a poor idea across the board – it looks well suited to a fairly specific category of case such as discrete, largely documentary disputes, a point of contractual interpretation, a bond call or a defined final-account line item where the facts are essentially agreed and both parties want a quick, final answer, ideally decided by agreement once the dispute has actually taken shape.

It may also find a more natural home outside construction altogether, in sectors without an existing interim tier such as share-price adjustments, trade disputes and agency terminations where it could genuinely fill a gap rather than sitting alongside, and arguably duplicating, a tier that already exists.

For FIDIC-based contracts specifically, a reasonably cautious approach might be to preserve the DAAB tier for what it already does well, that is to say dispute avoidance and interim cash-flow protection during the works but think very carefully before building HEAP into the arbitration clause itself, particularly for contracts of unpredictable scale.

Treating it instead as an option to consider once a dispute has crystallised, and only where it genuinely fits the narrower profile above, seems the more prudent course.

The broader reflection is about how institutional reform tends to get made. Speed and finality often behave as substitutes rather than complements; meaning gaining one typically means giving up some of the other. A rules revision that borrows the outward form of adjudication without fully engaging with the feature that makes adjudication work is not necessarily wrong, so much as still developing. Construction lawyers, who’ve lived with that particular trade-off for two decades, are simply well placed to point it out.

AI data centres in the UK: Environmental permitting and consenting risks

Wed, 12 Aug 2026 14:46:41 +00:00

The environmental consenting landscape for artificial intelligence (AI) data centres in the UK is developing quickly. The UK government is actively encouraging the build-out of data centre capacity, including through critical national infrastructure designation, AI Growth Zones, grid connection reforms and changes to the planning regime. At the same time, large-scale AI data centres raise increasingly prominent environmental issues, particularly around power demand, standby generation, air quality, water use, cooling, local planning impacts and grid capacity.

The tension is between central government policy support for AI and digital infrastructure on the one hand, and site-specific environmental, planning, water and energy constraints on the other. This article summarises the relevant UK consenting framework, recent policy developments, substantive environmental pressure points and practical considerations for developers, operators and investors.

Environmental permitting and consenting overview

There is no single “data centre environmental permit”. The permitting and consenting position depends on what the project involves, where it is located and which supporting infrastructure is required.

A data centre development may require planning permission, environmental impact assessment, environmental permits for standby generating plant, water and wastewater arrangements, drainage approvals, grid connection approvals, biodiversity and flood risk assessment, construction-phase controls and, in some cases, greenhouse gas permitting under the UK emissions trading scheme (ETS).

The key point is that environmental risk is often infrastructure-led. The data centre itself may not be the regulated environmental activity. Instead, permitting and consenting issues are commonly triggered by the systems required to operate the facility: backup power, cooling, water supply, drainage, fuel storage, grid infrastructure and associated energy plant.

Government acceleration and strategic policy support

The UK government has increasingly treated data centres as strategically important infrastructure. In September 2024, data centres were designated as part of the UK’s critical national infrastructure, reflecting their importance to the digital economy.

The government has also placed data centres at the centre of its AI infrastructure policy. AI Growth Zones are intended to accelerate the deployment of AI data centres by addressing barriers such as slow planning processes and delays in access to electricity grid capacity. Government materials identify timely grid connections as one of the main blockers to AI data centre development.

The government is therefore strongly pro-development. However, policy support does not remove the need for project-specific environmental assessment, planning scrutiny or environmental permitting. In practice, the main question is likely to be whether consenting processes can accommodate rapid AI infrastructure growth while still addressing local environmental impacts.

Planning remains a central control point for data centre development. In England, local planning authorities are generally responsible for deciding planning applications, applying the National Planning Policy Framework, local planning policies and other material considerations. Planning controls may trigger a range of environmental obligations for data centre development, including contamination investigation and remediation conditions, as well as conditions around water conservation, energy provision, drainage and biodiversity net gain.

Backup generation and air quality

Backup power is likely to be one of the most important environmental permitting issues for large AI data centres. Data centres require a stable and resilient electricity supply. As a result, large facilities often include banks of diesel, hydrotreated vegetable oil, gas or other standby generators to maintain operations during grid outages or other interruptions.

Those generators may require environmental permits under the medium combustion plant and specified generator regimes. Larger or more complex installations may also interact with industrial emissions permitting, local authority permitting or ETS requirements, depending on the capacity and configuration of the combustion plant.

It is important to distinguish the generator permit from the data centre as a whole. A specified generator permit is not a general environmental permit for every aspect of the data centre. It is principally concerned with air emissions from the generating plant, including pollutants such as nitrogen oxides, sulphur dioxide and dust.

Issues such as aggregate thermal input, operating-hour assumptions, emergency use, testing and maintenance, emissions modelling and abatement may all be relevant. For developers, this means that generator strategy can affect the permitting route, programme, air quality assessment, operating constraints and design of the wider project.

Water use and cooling

Cooling is essential to data centre operation. The environmental significance of water use depends heavily on the cooling technology, the size and density of the facility, site location, local water stress and whether the facility uses potable water, non-potable water, closed-loop cooling, air cooling, evaporative cooling or any other systems.

The UK position, however, should not be overstated. UK data centres may not generally follow the most water-intensive models seen in some other jurisdictions, and industry sources suggest that many English data centres use relatively low volumes of water or waterless cooling systems. However, water remains a relevant policy and planning issue, particularly for future AI data centres with high cooling demand.

The National Framework for Water Resources recognises data centres as an emerging water demand issue, and recent analysis has called for AI and data centre water demand to be integrated into national and regional water planning. In practical terms, water should be considered early in site

selection and planning strategy. Even where no separate abstraction licence is required because the facility relies on mains supply, water availability and cooling design may still be scrutinised by local planning authorities, water companies, regulators and local communities.

Planning, Environmental Impact Assessment (EIA) and local environmental impacts

Even where national policy favours data centre development, site-specific environmental scrutiny and planning assessment remains important.

A recurring concern is whether data centres are treated too much like ordinary warehouses. Physically, data centres can resemble large industrial or logistics buildings. Environmentally, however, they may have a materially different profile because of their power demand, cooling requirements, resilience systems and supporting infrastructure.

Local planning authority and third-party concerns may be particularly acute where projects are proposed on sites subject to planning constraints, such as those located in the green belt or other planning designations, in water-stressed areas, in locations with constrained grid capacity or where the perceived local benefits are limited compared with the scale of land and infrastructure required.

Developers should therefore expect scrutiny not only from local planning authorities, but also from statutory consultees, water companies, network operators, environmental groups and third parties (such as local communities). A clear environmental assessment record will be important, particularly in relation to alternatives, mitigation and cumulative impacts.

Key considerations going forward

Developers, operators and investors in UK AI data centres should consider the following points early in the project lifecycle:

Identify whether standby generators require medium combustion plant, specified generator or installation permitting
Assess aggregate thermal input, emergency-use assumptions, testing and maintenance hours, as well as emissions limits and abatement requirements
Consider whether UK ETS obligations may arise for large combustion capacity
Engage early with the Environment Agency where bespoke permitting may be required
Assess whether the planning strategy should proceed through the local planning route, or whether a request that a direction under Section 35 of the Planning Act 2008 would be more appropriate
Build the planning and EIA strategy around the full infrastructure package, not just the data hall Assess grid connection timing and whether temporary, or onsite power solutions create additional consenting risk
Evaluate water supply, cooling technology, local water stress, wastewater and trade effluent arrangements
Engage early with local planning authorities, water companies, network operators, statutory consultees and local communities
Consider construction-phase controls, fuel storage, spill prevention, waste and hazardous materials

The UK policy environment is increasingly supportive of AI data centre development. However, that does not make these projects environmentally straightforward. The key point is that data centre permitting risk is design-led. Decisions about power, cooling, water, resilience and site selection made early in the project can determine the consenting route, permitting burden and litigation risk later on.

The authors would like to thank Oliver Wilkins (trainee) for his contribution to this piece.

Pensions Weekly Update: 12 August 2026

Wed, 12 Aug 2026 09:49:11 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The normal minimum pension age (NMPA) is increasing from age 55 to age 57 on 6 April 2028. HM Revenue and Customs (HMRC) has published draft legislation for consultation, which HMRC intends will implement transitional arrangements for individuals who are aged 55 or 56 immediately before the NMPA increase and who may already have become entitled to pension benefits or may already have taken steps to access those benefits. These provisions broadly mirror the transitional provisions that were put in place when the NMPA increased from age 50 to age 55 in April 2010, although they have been expanded to take account of some of the increased flexibilities for accessing pensions that were introduced in 2015. The consultation notes that without further provision, payments made after 5 April 2028 could potentially fail to satisfy conditions linked to the NMPA, despite the individual having satisfied the rules in force prior to the increase. Consultation closes at 1:59 p.m. on 28 September 2026.
HMRC has published Newsletter 183. This includes a reminder that the “Pension schemes online” service will be closing in April 2027 and that all schemes still using that platform should migrate over onto the new “Managing a pension scheme” service by the end of this calendar year. Our blog post provides more information. Also worth noting is that the process for contacting HMRC for pension-related enquiries is changing. Going forward, there will be an interactive guidance tool for use (rather than an email address).
HMRC’s Newsletter 183 also contains an update on the payment of inheritance tax in connection with pension death benefits from 6 April 2027. There will be further legislation later in 2026 to complement information sharing regulations that amend existing legislation to include the information sharing requirements between pension scheme administrators and personal representatives of deceased members. Also, a further technical note is expected later in the summer, which will contain information on withholding and payment notices, and scenarios to illustrate the new inheritance tax on pensions process, as well as addressing common queries raised by industry stakeholders.
The Pensions Administration Standards Association (PASA) has published interim guidance to help administrators, providers and service centres when replying to member questions about pensions dashboards. It sets out frequently asked questions and responses that provide simple, factual explanations while managing member expectations about dashboards functions. The interim guidance will be updated as more information becomes available.
In our weekly update on 16 July 2026, we highlighted several documents that the government has published in connection with measures contained in the Pension Schemes Act 2026, including a consultation on value for money (VFM) draft regulations and Financial Conduct Authority rules. The deadline for responding to the consultation has now been extended from 11:59 p.m. on 1 September 2026, to 11:59 p.m. on 15 September 2026.
Labour and employment partner David Whincup looks at proposed changes to the Acas code of practice in his latest blog post. The proposals would effectively make mediation the default start point for tackling workplace disputes and employees would be able to rely less on content generated by artificial intelligence (AI).
Natasha Maric, director in our Intellectual Property & Technology team, considers areas that deserve particular attention when reviewing and negotiating AI contracts in order to protect commercial interests and to maximise the value of the AI investment.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

Family Office Insights: An Update on “Institutional Investor” Restrictions on Single-family Home Purchases: What Family Offices Need to Know

Wed, 12 Aug 2026 09:00:00 +00:00

Since publication of our April 2026 client alert, Congress has passed the “Homes Are for People, Not Corporations” provisions as Title X of the 21st Century ROAD to Housing Act (“Act”).

The key takeaways for family offices remain largely unchanged. The Act closely tracks the March Senate bill, retaining both the 350-home threshold and the broad concept of “investment control” in the definition of a “large institutional investor” (“LII”). Accordingly, absent unusual governance or control rights, most family offices are unlikely to be considered LIIs and therefore are not expected to be directly subject to the Act’s purchase restrictions.

There are, however, two notable developments in the enacted version relating to compliance and enforcement.

First, the Act requires LIIs to submit annual reports to Congress regarding their single-family home holdings. Although these reporting requirements apply only to LIIs, family offices invested as limited partners in funds sponsored by LIIs should be aware that some of the associated compliance costs may result in higher management fees, fund expenses or similar charges.

Second, the Act establishes a renter outreach program, administered by the Department of Housing and Urban Development (HUD), whereby renters may report disputes and potential violations of the Act involving properties owned by LIIs. HUD is also authorized to investigate certain complaints, request information from covered investors, coordinate with other agencies and publish annual reports summarizing the information received. The increased oversight created by this program, together with the Act’s purchase restrictions and congressional reporting requirements, are likely to contribute to the heightened regulatory scrutiny discussed in our prior post and may continue to affect deal flow involving large single-family home portfolios.

Airbus Operations Limited:

Mon, 10 Aug 2026 15:08:43 +00:00

On 30 July 2026, His Majesty’s Revenue and Customs (HMRC) announced that Airbus Operations Limited (Airbus) had paid £6,409,388 to settle multiple breaches of the UK’s strategic export control regime, a sum it describes as the highest compound settlement it has reached for offences of this class.¹

The published material identifies no unlicensed export and no diversion of controlled goods. What it records are repeated failures to keep the requisite records and registers, together with one breach, of undisclosed character, of an individual licence. The question for exporters on both sides of the channel is what administrative noncompliance under an open licence now costs, and how the decision to disclose voluntarily is altered once those who settle are named.

Background

The framework principally engaged is the Export Control Act 2002 and the Export Control Order 2008, with licensing and compliance sitting with the Export Control Joint Unit (ECJU) and criminal enforcement with HMRC. The bargain underlying an Open General Export Licence (OGEL) is this: in place of the advance authorisation a Standard Individual Export Licence (SIEL) requires, the exporter assumes the record-keeping and audit obligations by which the ECJU verifies, after the event, that the licence has been used within its terms. Those obligations sit in Article 29, which requires detailed registers or records of each authorised act, capturing the act, the goods or technology, the dates and quantity, the identities of licence user, consignee, supplier and end-user so far as known, and whatever further information the licence itself requires. Records are kept for three years from the end of the relevant calendar year, four where the licence authorises an act otherwise prohibited by the Part 4 trade controls and longer where a licence so prescribes, as those covering military technology commonly do. Breach of a licence condition, or of an Article 29 obligation, is an offence under Article 38(1), carrying up to two years on indictment and section 152(a) of the Customs and Excise Management Act 1979 permits the commissioners to compound proceedings, so that a settlement is an alternative to prosecution rather than a species of civil penalty.²

The breaches

On multiple occasions the company failed to keep accurate records of transfers of controlled technology as three of its OGELs required, contrary to Article 29(2)(a) to (g); to keep the registers those licences required, contrary to Article 29(3) and to keep records as one licence specifically required, engaging Article 29(2)(i). It breached a SIEL condition once. The three licences are not identified, and nothing published indicates that a licence was suspended, that an unlicensed export occurred or that controlled goods reached an unauthorised destination. The offences are those of Article 38(1), not Article 34(5), under which knowing involvement in a prohibited activity with intent to evade attracts up to 10 years.³ The matter concerns record-keeping and licence administration rather than evasion, though the nature of the SIEL breach has not been disclosed.

The fine

The sum is without precedent: approximately double the £3,231,762.40 paid in February 2025 for unlicensed exports of military goods, and approaching the £6,900,587.14 that 22 settlements produced across the whole of 2022. Repeated record-keeping failures have therefore attracted a sum comparable to a full year of enforcement in previous years, notwithstanding the voluntary disclosure, cooperation and remediation of the notice records. HMRC publishes the criteria for setting a compound sum, among them the type and value of the goods and the offender’s previous history, but not how they are to be calculated.⁴ Neither their weighting, nor the number of transfers concerned nor the nature of the technology has been disclosed. The published material supports no attribution of the sum to any single factor, and no conclusion confined to any sector.

Character and publicity

A compound settlement is not a conviction, and no court makes any finding. Airbus is nonetheless recorded as having admitted the breaches, and HMRC compounds only where the evidence would support a prosecution, the breach was inadvertent or attributable to weak internal control and the exporter disclosed voluntarily. Until recently the identity of an exporter accepting a settlement was not published. That changed when HMRC named Petrofac Facilities Management Limited over a settlement of £569,157.07 concerning the Russia sanctions regime, and naming will now, according to HMRC, form a condition of the offer where appropriate. According to HMRC’s own press release, “Naming the company marks a shift in how HMRC handles compound settlements in relation to strategic exports.”

Intangible transfers of technology

Technology here is the specific information necessary for the development, production or use of controlled goods or software, and a transfer is a transmission by electronic or non-electronic means from a person or place in the UK to a person or place outside it.⁵ Where the data is controlled, the transfers accumulate quietly. Engineering data crossing a federated product-lifecycle system, an attachment to an overseas affiliate, remote access granted to a person abroad or material made available through a cloud service: each may amount to a transfer, and each authorised act must be identifiable in the records. On the ECJU’s guidance the location of the server decides nothing; everything turns on where the intended recipient sits and who controls access.

Records generated at the point of despatch do not capture a transfer effected by an engineer granting access to a repository, and few enterprise systems produce, unprompted, a record containing every element Article 29 prescribes. Volume defeats manual capture. The ordinary answer, though the order nowhere requires one by name, is a technology control plan governing overseas access by employees, secondees, contractors and affiliates, supported by logs kept at the point of access rather than of shipment. Unlike under US law, the controls ask where a person is, not what nationality they carry.

Comparison

Groups established in the EU face analogous, though not identical, obligations. Article 27 of Regulation (EU) 2021/821 requires registers or records kept for at least five years from the end of the relevant calendar year, three for intraunion transfers of Annex I dual-use items and the recast regime reaches intangible transfers and technical assistance expressly. The regulation applies in Northern Ireland; the UK obligations arise under the assimilated dual-use regime. Penalties remain a matter of national law. In Germany, licensing under the Foreign Trade and Payments Act (Außenwirtschaftsgesetz) sits with the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle), which has published extensive guidance on intangible transfers, and enforcement by the customs and prosecution authorities; in France, licensing sits with the dual-use goods service (Service des biens à double usage) and enforcement with the customs administration. In the UK, HMRC retains criminal enforcement and the power to bring a compound settlement, the Office of Trade Sanctions Implementation may impose civil penalties on a strict-liability basis within its remit, and the secretary of state, acting through the ECJU, may amend, suspend or revoke an open general licence as it applies to a particular user.⁶

Outlook

How the settlement comes to be read will depend on what follows: the cadence of named settlements, whether the ECJU tightens the record-keeping conditions attaching to open general licences and what the next UK Strategic Export Controls Annual Report discloses. Whether the sum sets a new baseline, or reflects no more than the particular facts cannot be determined from the published material. The prudent working assumption is the former, and acting on it begins with an audit of records the law already obliges the exporter to keep. What is beyond any doubt is that the sums involved in these settlements in the UK are trending upwards, with a robust compliance strategy therefore more important than ever.

HM Revenue and Customs, “Aircraft Manufacturer Breached Strategic Export Controls” (press release, 30 July 2026); Export Control Joint Unit, “Notice to Exporters 2026/17: Compound Settlement for Breaches of Export Control” (30 July 2026).
Customs and Excise Management Act 1979, s 152(a); Export Control Act 2002; Export Control Order 2008 and SI 2008/3231, arts 29, 31 and 38.
Notice to Exporters 2026/17, supra n. 1; Export Control Order 2008, supra n. 2, art 34(5) to (7).
Export Control Joint Unit, “Notice to Exporters 2025/08” (9 April 2025), collected at “Notices to Exporters”; Department for Business and Trade, United Kingdom Strategic Export Controls Annual Report 2022 (2023) and HM Revenue and Customs press release, supra n. 1.
Export Control Order 2008, supra n. 2, art 2; Export Control Joint Unit, “Export of Technology: Remote Access and the Use of Cloud Computing Services” (guidance, 22 March 2021).
Export Control Order 2008, supra n. 2, art 32; Foreign Trade and Payments Act (Außenwirtschaftsgesetz), § 4; Regulation (EU) 2021/821 [2021] OJ L206/1, art 27; Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, SI 2024/948.

Corporate Insights: Georgia enacts significant corporate governance reforms under HB 1185

Mon, 10 Aug 2026 10:00:00 +00:00

On May 11, 2026, Georgia enacted House Bill 1185, marking a significant reform of the state’s corporate governance and shareholder litigation framework. Signed into law by Governor Brian Kemp, the legislation became effective on July 1, 2026 and applies to claims filed on or after that date.

HB 1185 amends Titles 14 and 15 of the Georgia Code, introducing new provisions governing “internal entity claims” (a new defined term, explained below, that includes derivative claims and more), expanding the jurisdiction and use of the Georgia State-wide Business Court and revising key aspects of shareholder litigation. These reforms align Georgia more closely with other business-friendly jurisdictions, such as Delaware, Texas and Nevada, which have adopted measures to centralize corporate disputes and limit shareholder litigation exposure.

Key changes under HB 1185

1. Expanded Business Court jurisdiction

HB 1185 significantly expands the jurisdiction of the Georgia State‑wide Business Court over “internal entity claims,” a newly defined category set forth in new O.C.G.A § 14-1-1 that includes:

Derivative actions
Fiduciary duty claims
Books‑and‑records inspection demands
Valuation proceedings
Disclosure‑based claims

For qualifying entities, such claims are now channeled into the Business Court, and the Business Court may be required to retain jurisdiction in certain circumstances.

2. Authorization of exclusive Business Court forum provisions

Under new O.C.G.A. § 14-2-206(c), Georgia corporations now may include provisions in their articles of incorporation or bylaws requiring that internal entity claims be brought exclusively in the Business Court. This marks a significant shift from prior law, under which the Business Court’s jurisdiction was largely consensual and voluntary, as well as provides companies with a powerful tool to centralize internal disputes and reduce forum-shopping.

3. Streamlined removal and transfer of cases to Business Court

HB 1185 introduces new mechanisms to facilitate transfer of cases into the Business Court under new O.C.G.A § 15-5A-4:

90‑day deadline for unilateral transfer petitions (extended from 60 days)
Up to one year for consensual removal
Required retention of certain internal entity claims

These changes are designed to increase utilization of the Business Court and promote consistency in business dispute resolution.

4. New limits on shareholder derivative actions

Under new O.C.G.A. § 14-2-741, public companies may adopt minimum ownership thresholds (up to 1% of outstanding shares) for shareholders seeking to bring derivative suits.

This reform will likely deter low‑stake or opportunistic litigation, and ensure that plaintiffs have a meaningful economic interest in the company.

5. Restrictions on shareholder inspection rights

Historically, for a shareholder to inspect and copy a company’s books and records, the shareholder must assert a “proper purpose” for doing so, under O.C.G.A. § 14-2-1602(d). HB 1185 narrows what constitutes a “proper purpose” for books‑and‑records requests in new O.C.G.A. § 14 2 1602(g). Notably, a shareholder generally lacks proper purpose when the shareholder is already engaged in litigation against the company, or pursuing a derivative claim.

6. Limitations on disclosure‑only settlements and fee awards

A new subsection (b) was added to O.C.G.A. § 14 2 746 to provide that additional or amended disclosures to shareholders alone do not constitute a “substantial benefit” sufficient to justify plaintiffs’ attorneys’ fees, regardless of the materiality of such disclosures. This provision targets strike suits and merger‑related disclosure challenges designed primarily to extract fee awards.

7. Expanded liability protections for corporate officers

HB 1185 authorizes corporations to extend exculpation provisions to officers under new O.C.G.A. § 14 2 202(b)(4), allowing limitations on liability for monetary damages similar to those long available to directors. However, as with director protections, exceptions apply for:

Bad faith or intentional misconduct
Improper personal benefit
Other specified conduct

Practical implications for companies

HB 1185 is widely viewed as aligning Georgia more closely with leading corporate law jurisdictions, while offering companies greater predictability and control over internal disputes. Companies organized in or doing business in Georgia should consider taking the following actions:

Review and update governing documents
– Evaluate whether to adopt exclusive Business Court forum provisions
– Consider implementing derivative standing thresholds
Reassess litigation strategy
– Expect increased use of the Business Court as the primary forum for internal disputes
Evaluate officer and director protections
– Consider whether to extend exculpation protections to officers
Prepare for reduced shareholder litigation exposure
– Anticipate fewer disclosure‑based suits and inspection‑driven claims

Conclusion

HB 1185 fundamentally reshapes Georgia’s corporate litigation landscape by expanding the role of the Georgia State-wide Business Court, raising barriers to shareholder litigation and strengthening protections for corporations, as well as their directors and officers. Companies should act promptly to evaluate potential updates to their governing documents, litigation strategies and risk management frameworks in light of such changes.

^{The author would like to thank Kate Whittle, a summer associate in our Atlanta office, for her contributions to this alert.}

Annual DC Area Public Company Local Trends Review

Fri, 07 Aug 2026 14:11:31 +00:00

Our Washington DC corporate and securities team reviews the most recent proxy statements filed with the Securities and Exchange Commission (SEC) of the approximately 100 largest public companies in the DC area by annual revenue, and assesses high-level trends regarding the local public company market, as well as how the DC market aligns and contrasts with the trends and data of public companies nationally.

In each annual report, we analyze local public company metrics against the Fortune 500, S&P 500, Russell 3000 and other national surveys as available. These reports provide helpful benchmarking data regarding how the DC area public company market, while robust in numbers, differs at least in some respects from governance and disclosure perspectives compared to other markets, including from the national public company statistics.

Prior year reports and related articles

Proxy Statement Overview and the Changing Landscape of SEC Disclosure
November 2025

2025 Proxy Season – DC Area Public Company Local Trends Review
October 2025

2024 Proxy Season – DC Area Public Company Local Trends Review
October 2024

2023 Proxy Season – DC Area Public Company Local Trends Review
September 2023

The cancelled buy-back: Federal Law No. 319-FZ and the departing seller’s option:

Thu, 06 Aug 2026 17:35:26 +00:00

Since the Russian Federation’s (Russia) invasion of the Republic of Ukraine (Ukraine) in February 2022, foreign companies leaving the country have had to request permission to sell their Russian businesses.

Under this regime, operators are having to sell at steep discounts and are required to make payments into the Russian federal budget. Many sellers took a token price because the sale agreement carried an option to buy the business back at a later date. On 4 August 2026, the president of the Russian Federation signed Federal Law No. 319-FZ, altering such arrangements. The question for a seller that still holds such options is whether they are worth anything at all; the answer is that a Russian court may now take it away.¹

Background

Russia has controlled these sales from the outset. Since March 2022, an investor from a state Russia designates as unfriendly has needed the permission of the Government Commission on Control of Foreign Investment in the Russian Federation (the Government Commission) before it may dispose of securities, real estate or an interest in a limited liability company. Shareholdings in banks, in strategic enterprises and in the fuel and energy sector are treated more strictly again and may not change hands at all without a decision of the president himself. A government directive lists the unfriendly states.²

These terms have only hardened since. A sub-commission of the Government Commission set new ones on 15 October 2024. A seller from an unfriendly state must now take a discount of at least 60% to the market value assessed by an approved appraiser, and pay a contribution of at least 35% of that same undiscounted market value into the federal budget. The two are cumulative and both are calculated on the undiscounted valuation, so a seller nets in the region of 5% of what the business is appraised at.

Now, all sales above RUB50 billion need the president’s approval as well, regardless of the sector involved. The state brandishes another weapon: a decree from 25 April 2023, lets it put such investors’ Russian assets under temporary external management, and it has used that power against the holdings of such companies as Uniper, Fortum, and Carlsberg’s Baltika brewery among others.³

Buy-back options were a common feature of the earliest exits, though never a standard term of the permission regime. Nothing in the decrees provided for them; they were negotiated deal by deal and the Government Commission later extended its approval requirements to cover call options, after which they became uncommon. A seller who could not get anything approaching fair market price took a nominal price instead, and negotiated an option to buy the business back if conditions changed.

Analysis

Article 3 of the new law inserts an Article 20.1 into the Federal Law on Foreign Investments in the Russian Federation of 9 July 1999. It comes into play where a foreign owner, called below the departing investor, sold shares, participation interests or other Russian business assets carrying foreign capital. The purchaser must be Russian, or a foreign company that a Russian citizen controls and that sits outside the unfriendly states, and the statute calls that purchaser the acquirer. The two labels are used consistently in what follows: the departing investor is the foreign party that sold, and the acquirer is the Russian party that bought. Article 20.1 reaches a departing investor tied to an unfriendly state by nationality, by where it is registered or by where it trades, together with the entities it controls, wherever they may be. The drafters were aware of how this would read from the outside.

The article says of itself that it secures “the economic sovereignty and economic security of the Russian Federation”, and that it is “not aimed at the unjustified impairment of the rights and legitimate interests of foreign investors”.⁴

Two conditions must be met at once. After 22 February 2022, the departing investor must have done any one of three things: firstly, it may have backed unfriendly actions against Russia in public, or called for them or committed acts aimed, in the statute’s terms, at discrediting the use of the Armed Forces of the Russian Federation; secondly, it may have financed terrorism, extremism or the spread of weapons of mass destruction; and finally, it may have announced in public that it was leaving or suspending its Russian business, performed its obligations improperly or acted to restrict contracts that matter to the business (n.b., withdrawing intellectual property counts, and so does the cutting off of supply). A further rule widens this provision, since such acts count where they are not explained by obvious economic reasons, or where there are grounds to believe the investor did them to comply with foreign sanctions.

The second condition is economic, and either of its two provisions will satisfy the condition: firstly, that the price at which the option may be exercised sits 25% or more below the current market value of the business; the second is that the acquirer invest fresh capital, or takes other steps, without which the business would have ceased trading, contracted materially or closed. The first provision is directed at exits agreed at a token price; the second is directed at businesses the acquirer has since recapitalised.

Standing is not the acquirer’s alone. Before going to court the acquirer must obtain the position of the ministry that regulates the sector and the conclusion of the Government Commission, and neither body can yet give one, because the government has not made the procedure. The ministry may also bring the claim in its own name, once the Government Commission agrees. The acquirer need not wait to be approached and may sue whether the departing investor has sought to exercise the option or not. One court hears these claims, the Arbitration Court of the Moscow Region, and it hears them even where the parties chose a foreign court or an arbitration seat outside Russia, the statute setting that choice aside where sanctions have closed a party’s route to justice.

While compensation is technically available for departing investors, it is neither guaranteed automatically nor calculated by a set formula. Instead of covering the original sale of the business, which was already paid out at the time, any potential money specifically answers for the cancellation of the option itself. To get it, the investor has exactly one year from the date of the judgment to file a claim. Crucially, this claim must be brought directly against the new acquirer, rather than against the state. The exact payout amount is left up to the same court that cancelled the option in the first place.

This court has the power to slash the final sum by weighing the investor’s behaviour, evaluating the financial damage their conduct caused and factoring in how much money the new acquirer has pumped into the business since taking over. In fact, the court can refuse to award a single penny if the departing investor or their chief executive is found liable in criminal or administrative proceedings for funding terrorism, backing extremism or spreading weapons of mass destruction. Compounding this uncertainty, the statute is completely silent on how to actually measure the compensation. It fails to clarify whether the payout should mirror the standalone value of the option, cover the gap between the option price and the market value of the business, or reflect a different calculation altogether. Finally, two other articles heavily impact foreign assets: Article 5 pushes the deadline out to 31 December 2028, for Russian courts to suspend a foreign holding company’s corporate rights in economically vital organisations, while Article 2 permanently shuts down a loophole that previously allowed ownership stakes to change hands without a declared price.⁵

Cross-border implications

The venue rule drops these disputes into the framework Russia built for sanctions litigation. Articles 248.1 and 248.2 of the Arbitration Procedure Code of the Russian Federation, inserted in June 2020, give Russian courts exclusive jurisdiction over disputes involving sanctioned Russian parties, whatever the parties agreed and lets those courts stop a party from litigating abroad. Article 20.1 never mentions them. Yet it borrows their test, and it names a single forum for the whole class.

The EU has already legislated against recognising what those courts decide, and it has done so in both of its Russia regulations. Council Regulation (EU) 2026/1844 of 23 July 2026, part of the 21st sanctions package, put a new Article 11c into Council Regulation (EU) No 269/2014, and Council Regulation (EU) 2026/1848 of the same date replaced Article 11c(1) of Council Regulation (EU) No 833/2014, which has carried a non-recognition rule since December 2024. The older provision is the one that matters here, because it bars the recognition or enforcement in a member state of any injunction, order, relief, judgment or other decision made pursuant to, or derived from Articles 248.1 or 248.2 of the Arbitration Procedure Code, or from equivalent Russian legislation. Whether Article 20.1 is equivalent legislation for that purpose has not been decided, but the drafting invites the argument, since Article 20.1 borrows the test of those articles without naming them.

A judgment cancelling an option works on a right that would be exercised in Russia, over assets in Russia and never needs recognising abroad: it helps a departing investor fighting enforcement in Europe and does nothing for one that wants its business back. Article 11ca of Regulation (EU) No 833/2014, inserted by Council Regulation (EU) 2026/506 in the 20th package, goes further. An EU party may obtain, from a member state court, an order upholding the jurisdiction or arbitration clause the parties agreed and requiring the Russian party to discontinue the Russian proceedings, with financial penalties payable to the EU party in proportion to its loss. That does not return the business either, but it answers the venue rule with something other than silence. How much it is worth remains untested. Article 11ca has been available only since April 2026, and the transaction bans that flank it, which reach those who bring or enforce such claims and those who benefit from Russian temporary-management decisions, depend on Council listings in Annexes XLIII, LIV and LV; said annexes have yet to be populated.

Russia’s bilateral investment treaties with the states whose companies left ordinarily forbid expropriation without compensation and require fair and equitable treatment, and a court order cancelling a contractual right, with compensation a court may cut to nothing, arguably engages both standards. The drafting of Article 20.1 suggests its authors saw that coming. Two obstacles stand in the way even so: many of those treaties send only the amount of compensation to arbitration, not liability for it, and an award still has to be enforced against assets. The European Commission has meanwhile asked member states to give the treaties up, its proposal of 3 December 2025 for a reparations loan to Ukraine recording that the member states concerned are to withdraw from, or terminate those treaties and adopt a common attitude to achieve it. An investor weighing a claim must therefore ask whether the instrument it would rely on will still be there when the claim matures.⁶

How can we help?

Our International Trade & Foreign Investment Practice Group advises operators, financial institutions and their boards on the Russian counter-sanctions regime and on the EU, US and UK measures it runs alongside. We read exit documentation and option structures for exposure to Article 20.1, test the conduct and pricing limbs against the record of a particular exit, advise on Government Commission applications and on how a Russian judgment would fare in Europe and prepare investment-treaty exposure and ownership-and-control analyses. If you would like to discuss what Federal Law No. 319-FZ means for an option your business still holds, please contact any member of our team.

Federal Law of 4 August 2026 No. 319-FZ, arts 3 and 6(1), official publication No. 0001202608040061 (4 August 2026); introduced as Bill No. 1206580-8, adopted by the State Duma on 21 July 2026 and approved by the Federation Council on 24 July 2026. Translations of Russian titles and quoted text throughout are the drafter’s.
Decrees of the President of the Russian Federation No. 81 of 1 March 2022, No. 520 of 5 August 2022 (para 5), and No. 618 of 8 September 2022; Directive of the Government of the Russian Federation No. 430-r of 5 March 2022.
Minutes of the sub-commission of the Government Commission on Control of Foreign Investment of 15 October 2024 No. 268/1; “Russian Finance Minister Confirms Hike in “Exit Tax,” Sales Discount for Foreign Companies” The Moscow Times (17 October 2024); Decree of the President of the Russian Federation No. 302 of 25 April 2023.
Federal Law No. 319-FZ, supra n 1, art 3, inserting art 20.1(1) into the Federal Law of 9 July 1999 No. 160-FZ ‘On Foreign Investments in the Russian Federation’. Russian text of the quoted passages: “обеспечение экономического суверенитета и экономической безопасности Российской Федерации”; “не направлены на необоснованное ущемление прав и законных интересов иностранных инвесторов”.
Ibid., art 20.1(2) to (7): conditions at art 20.1(2), sub-paras 1 and 2; standing and venue at art 20.1(3) to (5); compensation at art 20.1(7). See also arts 2 and 5, amending respectively art 21(11) of the Federal Law of 8 February 1998 No. 14-FZ ‘On Limited Liability Companies’ and art 6(5) of the Federal Law of 4 August 2023 No. 470-FZ.
Arbitration Procedure Code of the Russian Federation, arts 248.1 and 248.2, inserted by Federal Law of 8 June 2020 No. 171-FZ; Council Regulation (EU) 2026/1844 of 23 July 2026, art 1(4), inserting art 11c into Council Regulation (EU) No 269/2014; Council Regulation (EU) 2026/1848 of 23 July 2026, replacing art 11c(1) of Council Regulation (EU) No 833/2014; Council Regulation (EU) 2026/506 of 23 April 2026, inserting art 11ca into Regulation (EU) No 833/2014; European Commission, COM(2025) 3502 final (3 December 2025), recital (59).

FCC adds foreign-produced power inverters and advanced robotic devices to the Covered List

Thu, 06 Aug 2026 16:00:00 +00:00

On July 28, 2026, pursuant to national security determinations adopted by the relevant executive branch agencies (Determinations), the Federal Communications Commission’s (FCC; Commission) Public Safety and Homeland Security Bureau (PSHSB) announced that foreign-produced power inverters and foreign-produced advanced robotic devices are being added to the Covered List maintained by the Commission pursuant to Section 2 of the Secure and Trusted Communications Networks Act of 2019.¹The practical consequence of these additions is that a newly covered device may no longer obtain a required FCC equipment authorization – without which it generally cannot be imported into, marketed in, or sold in the US.

The restriction is prospective. Models that the Commission authorized before July 28 may continue to be imported, marketed and sold; consumers may go on using devices they have already bought; and nothing in the action affects sales to or use by the federal government or federal agencies.² The FCC’s Office of Engineering and Technology (OET) issued a companion waiver the same day preserving the ability to push software and firmware updates to that installed base, which we discuss below.

For a foreign-produced device that falls within the applicable definition, the only express route to a new FCC authorization is a conditional approval. The Department of Defense (DoD) may grant one for an advanced robotic device; either DoD or the Department of Homeland Security (DHS) may grant one for a power inverter. Applications, which are filed through the FCC, are due by January 1, 2028.

Companies in either sector should keep two things in mind as they work through the analysis. The listings turn on where and how a product is produced rather than on the nationality of the company producing it, so a US manufacturer producing abroad may be caught while a foreign-owned manufacturer producing domestically may not. And the definitions that the DoD and DHS prescribed are considerably narrower than what the FCC headline categories may suggest. Most close questions will be resolved by reading them. However, it is possible that clarifications could be requested through the FCC by affected parties.

Which products are covered

The threshold question is whether a device is “foreign produced.” Both Determinations adopt the same test, asking whether the article qualifies as a domestic end product under 48 CFR § 25.101(a). For a manufactured product, that ordinarily means the item must be manufactured in the US and must also satisfy the domestic-content requirement, which, for items delivered in calendar years 2024 through 2028, generally requires that domestic components exceed 65% of total component cost.

For inverters, Appendix B sets out a two-part definition. The device must be a bidirectional power device or system that converts direct current to alternating current, or alternating current to direct current, a category the determination says includes microinverters, string inverters, central inverters and hybrid battery-based inverters. It must also contain components enabling remote communication, control, sensing, data collection or monitoring through Wi-Fi, cellular, Bluetooth or other comparable connections.

Both parts of the definition must be satisfied. An inverter lacking the specified connectivity is outside the definition no matter where it was made, and manufacturers whose catalogs span connected and unconnected models would be well advised to map that boundary before pursuing an application for conditional approval.

Appendix C addresses robotic devices through a four-element definition. A covered device is a mechanical mobile device – including autonomous mobile robots, humanoid robots and quadrupeds – that (i) is capable of locomotion, obstacle avoidance, navigation or movement on the ground; (ii) operates at a distance from a human operator based on commands, sensor data or some combination; (iii) weighs more than 4.4 pounds, counting any ground station or docking station; and (iv) contains a sensor capable of perceiving its environment, a component providing wired or wireless network connectivity at 200 kilobits per second or better in either direction, and software, whether local or remote, including firmware and machine-learning model weights, controlling autonomous navigation, movement perception, data collection, or remote command and control.

Three features of that definition deserve comment. First, because the weight calculation includes the docking or ground station, a robot that would fall below the threshold on its own may exceed it once its base is counted. Second, the connectivity floor of 200 kilobits per second is low enough to capture a wide range of contemporary connected products. Finally, nothing limits the definition to industrial or defense equipment. It therefore can reach consumer household robots that satisfy all four elements, and the determination’s supporting evidence specifically discusses vulnerabilities affecting robots used in homes.

The determination excludes six categories: connected vehicles as defined in 15 CFR § 791.301, with the exclusion extended here to vehicles of any gross weight; vehicles operated only on a rail line; uncrewed aircraft and uncrewed aircraft systems; unmanned underwater vehicles able to operate without a human occupant; devices classified under Section 513 of the Federal Food, Drug and Cosmetic Act, including surgical instruments, medical and surgical robotic systems, external limb prostheses and their components, and mobility-assistance devices such as canes, crutches, walkers and wheelchairs, whether or not powered; and fixed, stationary, nonmobile robots, including articulating; parallel or delta; Cartesian or gantry; and selective compliance assembly/articulated robot arms (SCARA) intended for industrial or medical use.

Falling outside this listing does not necessarily end the analysis. Depending on the product and transaction, other regimes may apply, including the US Department of Commerce’s Information and Communications Technology and Services (ICTS) regulations implementing Executive Order 13873 – such as the connected-vehicles rule – as well as export controls, procurement restrictions and sector-specific cybersecurity requirements.

Effect on equipment already authorized

A rule change that the Commission adopted in October 2025, effective that December, removed equipment prohibited from authorization under Section 2.903 from the procedures that permit changes to already-certified equipment.³ Read mechanically against the new listings, that would have barred permissive changes to inverters and robotics devices authorized before July 28, including security patches, simply because the categories had been added to the list.

OET moved on the same day to prevent that result. Public Notice DA 26-789 announced that the prohibitions in 47 CFR §§ 2.932(b) and 2.1043(b) will not apply for the time being to covered inverters and covered advanced robotic devices, and that authorized devices may continue to receive software and firmware updates mitigating harm to consumers at least until January 1, 2029.⁴ The waiver covers Class I and Class II permissive changes alike and reaches updates that maintain device functionality, patch vulnerabilities, and preserve compatibility with different operating systems. It follows the same approach that OET took for uncrewed aircraft systems in January and for consumer routers in March, both of which were extended to 2029 in May.

But the relief is narrower than a quick reading might suggest. It allows only software and firmware updates to devices that the FCC had already authorized before the new listings; it does not cover hardware changes or new models. All other equipment authorization requirements remain in effect. OET described the waiver as temporary and indicated that the relief will remain available at least through January 1, 2029.⁵

Notably, much of the guidance most favorable to industry regarding previously authorized equipment appears not in the public notice but in an FCC fact sheet and an accompanying FAQ page.⁶ While those FCC-issued materials provide useful clarification, the operative documents are of course the Covered List Public Notice and OET’s waiver, themselves.

Seeking a conditional approval

Applications take the form of a machine-readable PDF sent to conditional-approvals@fcc.gov, certified by an authorized corporate officer, and accompanied by a continuing obligation to disclose material changes – with DoD or DHS evaluating power-inverter applications and DoD evaluating advanced-robotic-device applications.

The exercise bears little resemblance to a product certification. It functions instead as a national security review that requires extensive supply-chain disclosures and a detailed, time-bound plan to establish or expand US manufacturing.⁷ The specific disclosures required are summarized in the annex below.

Several aspects of the process warrant emphasis. The FCC has no role in the decision process other than to forward materials to the reviewing agencies, DoD or DHS, and report results. Applications are due January 1, 2028, and filing carries no assurance of success; the reviewing agencies may seek additional information at their discretion. Decisions are final, subject to adjustment only if the granting agency chooses to revisit them, and the guidance describes no administrative appeal. A knowing violation of an approval’s terms, or a material misrepresentation to the government, terminates the approval and bars the applicant from applying again.

The record supporting the Determinations

Notably, the FCC did not conduct the underlying risk assessment to justify the Determinations. The White House convened an executive branch interagency body under 47 U.S.C. § 1601(c)(1) and (c)(4), which authorize the convening of such a body and identify the national-security agencies that participate in it. On July 27, that body sent the FCC the two Determinations, each identifying the same two categories of risk, a supply-chain vulnerability capable of disrupting US economic and national security, as well as a cybersecurity risk to critical infrastructure and the safety and security of US persons.

The PSHSB then made the limited legal determination assigned to it by statute. It concluded that each interagency submission constituted a specific determination under section 2 of the Secure and Trusted Communications Networks Act of 2019, and that the Commission was therefore required to add the equipment to the Covered List. The PSHSB did not reassess the underlying security judgments; it found the statutory trigger satisfied and implemented the consequences. That framing will matter to anyone contemplating a challenge, because the FCC lacked discretion to decline once a qualifying determination was received.

Remote connectivity sits at the center of the government’s risk case for both categories, which explains why connectivity ended up as an element of both definitions rather than merely as a justification for listing.

For inverters, the determination emphasizes the grid’s dependence on inverter-based resources, the concentration of supply outside the US and an episode in which a non-US manufacturer remotely disabled inverters it had already sold following a commercial dispute with a distributor. The robotics determination focuses on high-fidelity sensing and the potential for remote control, citing a vulnerability that permitted a remote actor to take over certain humanoid robots and spread the compromise to others nearby, along with a reported preinstalled backdoor in foreign-produced quadrupeds.

An asymmetry in the record is worth noting. Neither Determination names a country in its operative language, but the evidence assembled to support them is heavily China-specific, drawing on reporting about Chinese technology in American humanoid robots, vulnerabilities in Chinese robotic platforms, Chinese LiDAR and Chinese vulnerability-disclosure law. The consequence is that a manufacturer producing in an allied, or otherwise trusted jurisdiction, falls within rule text that the Determinations do not address with anything like the same specificity.⁸

In our view, that gap has practical value. It supplies a factual predicate for a conditional approval submission involving trusted-jurisdiction production, and it raises a fair question whether the record supports treating all foreign production identically. We would temper any enthusiasm about the second point. A challenge would have to contend with the statutory structure and the national-security character of the underlying Determinations. Time better spent on preparing and filing request for conditional approval, which in other analogous jurisdictional contexts have been approved relatively quickly (e.g., consumer routers).

Questions the notice leaves open

The waiver’s limitation to software and firmware leaves hardware modifications, new model numbers and other changes requiring fresh authorization unaddressed. Producers contemplating product revisions should determine early whether what they have in mind fits within the waiver or will require a conditional approval, because the answer affects development timelines.

What happens after January 2029, is likewise unsettled. OET tied the current relief to a rulemaking that has not yet begun, and for equipment with a long service life, the resulting support-horizon question should factor into planning now rather than later.

There is also an asymmetry in timing that may prove more consequential than the filing deadline itself. Applicants face a fixed date; the reviewing agencies face none. The guidance establishes no deadline by which the DoD or DHS must decide an application, which makes it difficult to sequence a product launch or an investment against the process. The timeline for grant of conditional approvals for drone components and consumer routers may be instructive, but not determinative.⁹

Finally, the treatment of components differs from what the Covered List does elsewhere. The unmanned aircraft system (UAS) entry, for example, reaches “UAS critical components” in terms. The new inverter and advanced robotics categories are drafted at the level of the finished device, as reflected in the definitions. A foreign-produced actuator, sensor or power module may not be separately covered, merely because it is incorporated into a finished robot or inverter. It may nevertheless affect whether the finished product qualifies as a domestic end product, and a component that independently satisfies a covered definition would require separate analysis.

Why this action matters beyond these two industries

The Covered List started primarily as a company-based telecommunications instrument, and has since absorbed production-location-based uncrewed aircraft, consumer routers and now inverters and robots. Whatever organizing principle once tied the list to communications equipment has given way to something broader, such as whether a product connects to a network, gathers or moves data, accepts remote updates and can reach infrastructure or physical systems. Both of the new definitions write connectivity into the covered category itself, which suggests the interagency body and the supporting Commission¹⁰ are no longer treating the point as implicit.

The institutional design deserves as much attention as the technology. Congress created a framework for executive branch national-security determinations; agencies with threat expertise make those determinations through an interagency process and a civilian regulator supplies the enforcement mechanism using authority it already possessed.

Equipment authorization, a tool developed to manage spectrum and communications equipment, has become the point of control through which industrial-based policy is administered. A company seeking relief engages with the DoD or DHS, and what it must offer is not merely a demonstration of technical compliance, but disclosure of its supply chain and a commitment to invest domestically (i.e., onshoring).

We expect this pattern to recur. Companies working on connected devices, robotics, energy hardware or infrastructure supporting AI deployment should monitor and analyze interagency and congressional activity as closely as FCC proceedings, because the national-security judgment underlying a Covered List addition will generally have been made through those upstream processes before the FCC is provided with determinations, which are the basis for its update to the Covered List.

Annex: Information required for power-inverter and advanced robotic device conditional approval submissions

The power inverters and advanced robotic devices guidance documents require materially the same information, summarized below. As we describe above, power-inverter submissions may be evaluated by the DoD or DHS; advancedrobotic- device submissions may be evaluated only by the DoD.

Corporate structure – Legal name, jurisdictions of incorporation and principal place of ºbusiness; the complete ownership structure, including parents, subsidiaries, affiliates and joint ventures; each beneficial owner holding five percent or more; the nationality and country of residence of board members and executive leadership and any foreign-government ownership, control, influence, financing or material support, including any arrangement permitting foreign persons or governments to influence operations, decision-making or access to technology.

Manufacturing and supply chain – A detailed bill of materials; country of origin for every component and for the design of the device; the entities responsible for intellectual-property ownership and software updates; country of origin for onboard software and firmware; the locations of manufacturing, final assembly and testing; a quantitative assessment of supplychain concentration by country, expressed as a percentage of both total value and production volume; identification of single points of failure, including sole-source suppliers, their countries and contingency arrangements; and a justification for why the device is not currently manufactured in the US.

US manufacturing and onshoring – A detailed, time-bound plan to establish or expand domestic manufacturing; designation of an individual or office responsible for implementation, reporting quarterly to the granting agency; a description of existing US-based manufacturing and assembly, including the percentage of components assembled domestically and current headcount and facilities; and committed and planned capital expenditures, financing and other investments over the next one to five years, with expected timelines, projected hiring, planned facility expansion in square feet and investment amounts. An applicant holding any other Covered List conditional approval must also report progress under those earlier onshoring commitments.

¹^{Covered List Public Notice}^{, DA 26-786 (rel. July 28, 2026), with Appendix A (revised Covered List), Appendix B (Power Inverters National Security Determination), and Appendix C (Advanced Robotic Devices National Security Determination).}
²^{FCC Fact Sheet, “}^{FCC Updates Covered List to Include Foreign-Produced Advanced Robotic Devices and Power Inverters}^{” (July 28, 2026), “}^{FAQs on Recent Updates to FCC Covered List Regarding Foreign-Produced Advanced Robotic Devices and Power Inverters}^.”
³^“^{Protecting Against National Security Threats to the Communications Supply Chain Through the Equipment Authorization Program}^{,” 90 Fed. Reg. 53227 (Nov. 25, 2025).}
⁴^{Public Notice DA 26-789, “}^{Office of Engineering and Technology Announces Waiver of Prohibitions on Certain Class I and Class II Permissive Changes to Covered Foreign-produced Advanced Robotic Devices and Covered Foreign-produced Power Inverters}^{” (rel. July 28, 2026). Comparable to prior waivers issued at DA 26-69 (Jan. 21, 2026) (UAS) and DA 26-286 (Mar. 23, 2026) (routers), and extended and expanded at DA 26-454 (May 8, 2026).}
⁵^{Id. Note that in connection with routers, OET also has issued individual waivers relating to permissive hardware changes in certain cases. See Order, DA 26-641 (rel. June 26, 2026) (Verizon). Assuming potentially applicable, no such waiver requests have been filed for inverters or advanced robotic devices to date.}
⁶^{See supra Note 2.}
⁷^{The complete texts can be found in through the Covered List guidance documents on}^{foreign-produced power inverters}^and^{foreign-produced advanced robotic devices}^.
⁸^Notably,^{Reuters reports}^{, citing several sources, that following the most recent FCC’s update to its Covered List, it is expected to exempt many non-Chinese suppliers from the restrictions, as it has done with recent bans on foreign drones and routers. Foreign media, including Reuters, reported that the new bans, while framed as applying to foreign-produced devices generally, “target imports of new Chinese robots and power inverters, seeking to protect the US AI buildout from national security threats and reshore key industries slated for explosive growth.”}
⁹^{See the official}^{FCC website}^.
¹⁰^{The more general national security focus of the current Commission is exemplified by the fact that the Chairman has formed a National Security Council at the agency, and appointed a specific National Security Counsel in his office.}

Pensions Weekly Update: 5 August 2026

Wed, 05 Aug 2026 14:38:15 +00:00

Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Pensions Dashboards Programme (PDP) has issued guidance on manual reporting to the Money and Pensions Service (MaPS). Directly connected organisations that have not yet been able to implement daily reporting via an application programming interface need to undertake manual reporting from October 2026 (for September data). For more background, see our previous update.
The Collective Defined Contribution (CDC) regulations for unconnected multiple employers came into force on 31 July 2026. The Pensions Regulator (TPR) has issued new and updated CDC guidance, including how to approach the fit and proper persons requirement, as well as the promotion and marketing of multiemployer CDC schemes. The guidance should be read alongside the updated CDC code of practice.
The Society of Pensions Professionals (SPP) has issued a practical framework for the governance of artificial intelligence (AI) in the pensions industry. The framework is intended to complement existing regulatory expectations by “identifying the key questions trustees should ask, the controls they should expect to see and the governance arrangements that should underpin responsible AI adoption across the pensions ecosystem”. The paper highlights the opportunities presented by AI and the risks associated with poor management.
Scheme members are increasingly using AI to assist with complaints submitted through internal dispute resolution processes. The length of AI generated complaints and the language used in them is causing difficulties for pensions professionals and for ombudsman services, due to the time it takes to understand the basis of each complaint. In the world of employment, the use of AI is also causing headaches for HR professionals dealing with AI-expressed employee grievances. According to our firm’s Labour & Employment partner, David Whincup, AI tends to generate output in “a pseudo-legalistic and passive-aggressive tone, which cannot help but put the reader’s teeth on edge”. David suggests in his blog post how employers should work with the employee (rather than the “keyboard warrior”) to seek a resolution.
TPR has made some technical updates to its defined benefit (DB) superfunds guidance. The guidance focuses primarily on how trustees of a superfund pension scheme should approach managing the funding and governance risks associated with being a superfund. The guidance also contains important information for those setting up and running a superfund, including directors and senior managers. TPR says that it is considering separate guidance for trustees and employers who are considering alternative endgame options, including transfer to a superfund. TPR is applying this guidance in advance of the superfund regulatory regime, introduced by the Pension Schemes Act 2026, being in place. The Department for Work and Pensions (DWP) is expected to consult on draft legislation for the regime during Q1 of 2027. Final form legislation and a TPR code of practice is expected to be in place by October 2028. In the meantime, anyone considering setting up any alternative arrangements for endgame planning is asked to liaise with TPR.
The DWP has published statistics on workplace pension savings and participation trends from 2009 to 2025. The analysis shows that around 90% of employees in Great Britain who were eligible for automatic enrolment were saving into a workplace pension in 2025, while there was an overall workplace pension participation rate of all employees in Great Britain of around 82% in 2025 with 24.2 million employees saving into a workplace pension. In relation to accessing private pension savings, the analysis shows that 94% of the 12.9 million individuals in receipt of a private pension payment in 2025-2026 are in receipt of a DB pension or an annuity. However, when assessing private pensions accessed for the first time, the proportion receiving a defined contribution (DC) lump sum or other DC product has risen from 37% (280,000) in the 2016-2017 financial year to 49% (410,000) in the 2025 to 2026 financial year.
Our firm’s Employment & Labour senior practice development lawyer, Clare McNicholas, takes a look at a surprise consultation published by the Advisory, Conciliation and Arbitration Service (ACAS) on updates to its statutory Code of Practice on disciplinary and grievance procedures.
We are delighted to be shortlisted as one of only three firms in the “law firm of the year” category in the 2026 Local Authority Pension Funds (LAPF) Investment Awards, which recognises excellence in support and service to the Local Government Pension Scheme.

If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.

Sanctions brief

Wed, 05 Aug 2026 11:10:11 +00:00

Our Commodities & Shipping Practice highlights the following recent developments regarding US economic sanctions:

Iran

Revocation of sanctions relief – Due to the resumption of hostilities between the US and Iran, the Office of Foreign Assets Control (OFAC) revoked General License (GL) X on 7 July, and replaced it with GL X1, authorizing the wind down of transactions previously authorized by GL X until 12:01 a.m. Eastern Daylight Time. Payment for any authorized wind down transactions must be made into a US blocked account.
US-Iran negotiations – Diplomacy surrounding the Iran talks remains precarious. President Donald J. Trump has called off military strikes on Iran, stating the outlines of a deal were within reach. Iranians subsequently stated no direct talks with the US are expected, but Iranian and Omani representatives are meeting to discuss management of the Strait of Hormuz. The Saudis, in turn, following the visit of Defense Minister Khalid bin Salman to Washington DC on 30 July, have publicly called for deescalation. Other Gulf countries are avidly pursuing overland pipelines to avoid the Strait of Hormuz completely. It is unclear whether the memorandum of understanding (MOU) signed on 17 June will continue to be the basis for negotiations.
Strait of Hormuz – OFAC designated the Persian Gulf Marine Insurance Company and HormuzSafe Marine Services Authority to the Specially Designated Nationals and Blocked Persons List (SDN List) for the central role they have played in coercing vessels to purchase “insurance” for safe passage through the Strait of Hormuz. OFAC has confirmed that such payments are presumed to be for the benefit of the Islamic Revolutionary Guard Corps (IRGC), triggering secondary sanctions. US Central Command states that it remains on high alert and is ready to assist commercial vessels seeking to cross the Strait of Hormuz, having supported over 1,000 ships in crossing since early May.
New designations – OFAC designated numerous tankers, container vessels, individuals and entities, to the SDN List as part of its longstanding effort to degrade illicit shipping networks. Noteworthy is the targeting of the Dubai-based We Freight Shipping group and Singapore-based Sea Lead Shipping PTE Ltd and its subsidiaries (SeaLead). These sanctions have caused disruptions in containerized shipping due to the blocked status of numerous vessels and containers. OFAC issued GL Z to authorize the wind down of transactions involving SeaLead and certain other parties until 12 September 2026. OFAC also continued to designate vessels within Iran’s shadow fleet and their owner/operators.

Cuba

Energy – The US Department of State designated additional companies to the SDN List for operating in Cuba’s energy sector. These sanctions are authorized by Executive Order (EO) 14404 (May 1, 2026), which expanded Cuba sanctions to permit the blocking of non-US parties operating in Cuba. The most recent targets include Centro de Investigaciones del Petroleo S.A. (CEINPET), which is engaged in oil exploration and research, as well as Empresa de Energia S.A. (ENERSA) and Einarbo S.A., both major importers of natural gas and lubricants.
Grupo de Administración Empresarial SA (GAESA) – OFAC designated numerous entities to the SDN List pursuant to EO 14404, due to their affiliation with GAESA, the Cuban military-run conglomerate. An initial wave of designations included Coreydan S.A. and Enetec S.A., both from the fuels sector, the Grupo Empresarial de Transporte Maritimo Portuario (GEMAR), which includes 32 companies from the sector and the Grupo Empresarial de Comercio Exterior (GECOMEX) – a group that manages over 20% of Cuban imports and encompasses entities like Alimport, Cubaexport and Quimimport. A subsequent wave of designations included Terminal de Contenedores de Mariel S.A., Cuba’s principal container terminal, and its subsidiary, Coral Maritima S.A.

Venezuela

Foreign Government Deposit Funds (FGDFs) – OFAC issued guidance on how to make payments to FGDFs, which are required under certain general and specific licenses issued by OFAC to permit transactions involving the government of Venezuela.

Russia

New legislation – The Sanctioning Russia Act of 2026, introduced in the US Senate on 14 July, includes new sanctions and tariffs against Russia and extends current sanctions on Iran. In addition to new sanctions targeting Russia’s shadow fleet and state-owned energy projects, the latest version of the bill provides for “secondary tariffs” up to 100% on goods from the five largest purchasers of Russian crude oil (currently, China, India, Slovakia, Hungary and Azerbaijan) and Russian natural gas (currently, China, France, Japan, Hungary and Belgium). The bill provides an exception for countries whose imports of Russian natural gas for a 12-month period were less than 15% of Russia’s total gas exports for the same period. Despite broad bipartisan support, Republican leadership has yet to schedule a final vote on the measure before the chamber is scheduled to adjourn for the August recess.
Lukoil – OFAC renewed GL 131 (131H) authorizing contingent contracts for the sale of Lukoil entities. The scope of authorized transactions is explained in two new frequently asked questions (FAQs), 1224 and 1225.

Building Safety F(ACT)s

Tue, 04 Aug 2026 09:52:26 +00:00

Welcome to the summer edition of our Building Safety F(ACT)s newsletter, where we provide you with bite-sized updates on fire and building safety issues.

This summer edition includes:

Mulalley & Co. Ltd v. Sto Ltd and Sto SE & Co. KGaA [2026] EWHC 155 (TCC)
A new stage in Gateway 2: Gateway 2 applications and the potential shift to staged approvals
Into Nominee and the elusive doctrine of lease frustration
Proposals To Simplify Procedures For Telecommunications Infrastructure Works
Expert Corner: Cladding Remediation: Contrasting Cost Assessments under the Building Safety Act and the Defective Premises Act

The intersection of employment law and financial regulation: Addressing non-financial misconduct (NFM)

Tue, 04 Aug 2026 09:43:39 +00:00

The Financial Conduct Authority’s (FCA) new rules on NFM will come into force on 1 September. This will have a large impact on non-bank institutions. All firms regulated by the Senior Managers and Certification Regime (SMCR), and not just banks, must prevent unwanted conduct in the workplace even if it does not directly relate to regulated activities. This is a big shift; previously, the rules around unwanted conduct related to a non-bank’s regulated activities. Non-banks must soon take steps to prevent bullying, harassment or violence against colleagues where this is related to work. The handbook guidance (PS25/23) was published to help firms better understand their obligations.

This comes following years of consultation and consideration by the FCA on how to tackle NFM and drive systemic change in financial services firms, which have historically been perceived as problematic. This rule change does not have retrospective effect.

Financial Services (FS) firms are navigating a period of unprecedented regulatory and legislative convergence. The FCA’s NFM rules will be followed just weeks later by a materially strengthened sexual harassment duty on 30 October. Together with recent changes on the prohibition of non-disclosure agreements (NDAs) and sexual harassment now being classed as a qualifying disclosure for whistleblowing purposes, the days of managing harassment complaints quietly would seem to be coming to an end. This is in addition to a raft of changes being brought in by the Employment Rights Act 2025, including the doubling of the time employees have to bring employment tribunal proceedings from October 2026, and from 1 January 2027, reducing the required service to bring unfair dismissal claims to six months (as well as the removal of the compensatory award cap).

1 September 2026: NFM changes

The September rule change relates to the introduction of COCON 1.1.7FR, which brings non-banks into scope of NFM. What does this mean? It means that employees working in non-banks must not carry out NFM in the performance of their duties, and that this is no longer limited to regulated activities only. This means in turn that HR, legal and compliance teams sitting in non-banks must be alive to the fact that employees’ actions could well constitute NFM. What this necessarily entails in practice is that firms will be required to investigate misconduct where they feel the requisite criteria have been met (see below). This is the tricky part that will necessarily require some degree of trial and error.

Only if a finding that requires formal disciplinary action is made, should the FCA be informed. This leaves firms in an understandably conflicted scenario in needing to gauge and assess conduct against the regulatory threshold while remaining objective, so as to not jeopardise their own operations and individuals’ professional lives.

The test for NFM is now aligning more closely with the definition of harassment under the Equality Act 2010, though no protected characteristic is required. NFM is defined as unwanted conduct that either: (i) has the purpose or effect of violating a colleague’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for that colleague; or (ii) is violent to that colleague.

When assessing NFM, the FCA will have regard to several factors, including:

Whether the conduct formed a persistent and recurring pattern of behaviour
The sustained period over which it occurred
The gravity of its consequences for anyone affected
The authority/position held by the wrongdoer within the firm, and whether the individual demonstrated a lack of candour or acted in bad faith
The extent to which any previous warnings have been given

Our previous blog explored the FCA’s final guidance in 2025, and summarised the key factors the FCA will look out for. Firms are encouraged to implement training prior to the rule change so that all employees are clear on how this rule change impacts them.

In addition to the NFM changes, it is important to highlight the overlap with recent and upcoming revisions to employment law. The combined effect of this strengthened regime means that firms operating in the FS sector must be more prepared than ever to manage their employee workforce, as well as investigate and discipline misconduct appropriately.

Over the course of the year, it has become clear that several developments will impact the NFM regime:

1. Use of NDA clauses – The government has confirmed that it intends to introduce new statutory restrictions on the ability of employers to preclude workers from making allegations or disclosures about work-related harassment or discrimination (likely to come into force in 2027). This would have some bearing on NFM as it would remove the use of NDAs as a tool to manage misconduct quietly, which has historically often been the case.

2. Sexual harassment may now receive whistleblowing protection – Sexual harassment allegations became capable of being classed as a protected disclosure on 6 April. An employee who has raised a concern about sexual harassment, whether internally or externally, may now be afforded full legal protection as a whistleblower, including the right to claim unfair dismissal from day one and uncapped compensation (from 1 January 2027). Firms that subject an employee to detriment for raising such a concern may face claims, but where a manager is concerned, there may also be a breach of the COCON rules, creating double exposure.

3. Doubling of employment tribunal litigation limitation period – From 1 October, the limitation period to bring an employment tribunal claim will increase to six months. This means that where an employee in an FS firm raises a grievance about bullying, harassment or other NFM, and is subsequently dismissed or subjected to a detriment, the exposure on a business is increased as they have double the time to bring Tribunal proceedings.

4. Increased sexual harassment prevention duty – The FCA’s manager obligations to take reasonable steps to prevent NFM sits separately to, but alongside, the employer duty to prevent sexual harassment. This will from 30 October be strengthened to a higher standard; a duty to take “all reasonable steps” to prevent sexual harassment. FS firms will therefore have two parallel prevention obligations – one regulatory and one under employment law. Their failure to do so can allow an employee a 25% compensation uplift should their claim be successful and deprive an employer of the defence it otherwise could show. This is consistent in that prevention must be systematic and evidenced. Robust policies and training will be paramount. In addition, from the same date, employers may be directly liable if a worker is harassed by a third-party such as a client or contractor, which means that for FS firms where client entertaining or other interaction is common, this is a significant new risk area that firms need to be alive to.

5. Lastly, from 1 January 2027, the requisite service for unfair dismissal claims will drop from two years to six months, and the compensatory award cap for unfair dismissal claims will be removed – This creates a real risk for firms where high earners/senior individuals are dismissed. This cap is currently £118,223 or 52 weeks’ gross pay, whichever is the lower. For FS firms, the cap removal materially increases the potential financial exposure in dismissal disputes, particularly where executives are easily earning six to seven figures. There is also an interaction with NFM, where an executive is investigated for NFM and later dismissed, the process followed can and will be scrutinised both from an employment law unfair dismissal perspective but also from a regulatory perspective.

This is a period of real change, particularly for those operating in the FS sphere.

Firms are encouraged to review and, where appropriate, update their policies, conduct breach reporting, approach to fit and proper assessments and regulatory references. Historic fitness and propriety assessments do not need to be reviewed.

Family Office Insights: US SEC Raises “Qualified Client” Investment Thresholds Under Advisers Act Rule 205-3

Tue, 04 Aug 2026 09:00:00 +00:00

Under Section 205(a)(1) of the Investment Advisers Act of 1940, as amended (Advisers Act), SEC-registered investment advisers generally are prohibited from entering into investment advisory contracts that provide for performance-based compensation or fees (that is, compensation based on the capital gains or the appreciation in value of a client’s funds under management). Many state investment adviser registration regimes include analogous prohibitions.

However, under Advisers Act Rule 205-3, a registered investment adviser is permitted to charge performance-based fees to “qualified clients.” To be a “qualified client,” a client must either (i) have at least a specified amount of assets under management with the adviser immediately after entering into the advisory contract, or (ii) immediately prior to entering into the contract, have a net worth exceeding a specified dollar amount. An analysis of the application of this definition often overlaps with an analysis of whether a client satisfies the definition of “qualified purchaser” in Section 2(a)(51) of the US Investment Company Act of 1940, as amended; clients who satisfy the “qualified purchaser” definition are also “qualified clients” for the purposes of Rule 205-3.

By statute, the relevant dollar thresholds are reviewed and adjusted by the SEC every five years. In Investment Advisors Act Release IA-6961, the SEC set the new definitional thresholds, which became effective for contracts entered into on or after June 29, 2026:

Test	Current Threshold	New Threshold
Assets under management test	$1,100,000	$1,400,000
Net worth test	$2,200,000	$2,700,000

Family offices and individuals entering into investment advisory contracts should be aware of the current definitional requirements as part of an effective and comprehensive compliance program.

Pay now, argue later: The consumer law challenge to security of payment debts

Mon, 03 Aug 2026 17:00:00 +00:00

Respondents resisting payment under security of payment legislation have, in recent years, reached for a constitutional argument. The contention is that the legislation is invalid, under Section 109 of the Commonwealth Constitution, to the extent it prevents a respondent raising a defence based on the Australian Consumer Law (ACL).

Where a state law is inconsistent with a commonwealth law, the commonwealth law prevails and the state law is invalid to the extent of the inconsistency. The argument gained enough traction in Western Australia to defeat an application for summary judgment. It has now been rejected on the merits in Victoria, and that rejection has been confirmed by the Victorian Court of Appeal. For claimants, that is welcome confirmation that the “pay now, argue later” regime works as intended; for respondents, it is a clear signal that an ACL allegation is not a ready shield against an interim payment obligation.

The question raised in Western Australia

In OSB Group Pty Ltd v Complete Hire & Sales Pty Ltd [2024] WASC 310, our client OSB sought to recover a payment claim as a statutory debt under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOP Act). Rather than proceed to adjudication, OSB applied for summary judgment in the Supreme Court of Western Australia.

The respondent, Complete, resisted the application. It contended that OSB had engaged in misleading or deceptive conduct that induced it to enter the construction contract, and that Section 27(3)(b) of the SOP Act – which precludes a respondent from raising any cross-claim or defence in recovery proceedings – was invalid under Section 109 of the Constitution to the extent it was inconsistent with Complete’s rights under the ACL.

Musikanth J approached the application on ordinary principles. Summary judgment is granted only where there is no real question to be tried, and the SOP Act does not displace that threshold. His Honour was satisfied there was a construction contract and that the SOP Act applied. However, because Complete was, on the face of Section 27(3)(b), prevented from raising an ACL defence, His Honour found there was a serious question to be tried as to whether that preclusion gave rise to a constitutional inconsistency. Summary judgment was refused.

The decision identified the constitutional question but did not resolve it. The substantive issue – whether the SOP Act truly is inconsistent with the ACL – was left open. The matter itself was subsequently resolved in OSB’s favour, without any definitive ruling on the Section 109 point.

The answer given in Victoria

That open question has now been answered, and answered on appeal. In 1559 High Street Pty Ltd v Camillo Builders Pty Ltd, the Supreme Court of Victoria rejected the argument at first instance ([2025] VSC 244, Stynes J), and on 9 June 2026, the Court of Appeal dismissed the developer’s appeal ([2026] VSCA 129).

The dispute arose under the Building and Construction Industry Security of Payment Act 2002 (Vic). The developer, 1559HS, had an adjudicated amount of roughly AU$1.85 million determined against it, on which the builder obtained judgment in the County Court. 1559HS applied to set that judgment aside, contending that it had been prevented from running a misleading or deceptive conduct defence under Section 18 of the ACL, and that the provisions governing the entry and setting aside of judgment – sections 28M, 28O and 28R – were invalid under Section 109 to the extent of any inconsistency with the ACL.

The Court of Appeal (McLeish, Kennedy and Kaye JJA) rejected the challenge. The SOP Act, it held, creates a novel statutory right to a provisional payment of an adjudicated amount that is separate and distinct from the parties’ rights under the contract or the ACL, and the two regimes operate concurrently. Enforcing an interim payment ahead of the final determination of the parties’ rights does not alter, impair or detract from ACL rights: a party kept out of its money can still pursue its ACL claim in separate proceedings, where the court can bring the provisional payment to account and order restitution, interest and other relief.

The court preferred the majority reasoning of the Full Federal Court in Birdon to the contrary view of Basten JA in Bitannia, and distinguished Façade Treatment as turning on the automatic setoff that liquidation attracts under the Corporations Act.

The court also dismissed a complaint that entering judgment without a hearing denied the developer procedural fairness, holding that the ability to bring an ACL claim could not affect the right to enter judgment under the SOP Act. One note for readers working with the current Victorian act: the decision considered the provisions as they stood before the significant amendments that commenced on 15 April 2026, some of which touch the sections in issue.

What this means for claimants and respondents

The Victorian decisions are not binding in Western Australia, but they are recent, directly on point and now carry the authority of an intermediate appellate court. Together they confront the very argument that secured the respondent a serious question to be tried in OSB v Complete and find it without substance. The clear signal is that the constitutional argument, while sufficient to resist summary judgment at the interlocutory stage in WA, is unlikely to succeed on the merits.

For claimants, that brings welcome confidence to the recovery of statutory debts and adjudicated amounts. The “speak up or pay up” architecture of the legislation is doing precisely what it was designed to do, and an ACL allegation is not a ready means of defeating it.

For respondents, the practical message is that misleading and deceptive conduct, where it is genuinely in issue, should be pursued as a substantive claim in separate proceedings, not deployed as a shield against an interim payment obligation. A respondent who disputes a claim or the existence of a contract should still respond to a payment claim within time; silence carries real consequences under this regime.

A note of caution remains on procedure. As OSB v Complete shows, summary judgment is not a soft option. Where there is any genuine factual contest over the existence of a construction contract, the identity of the contracting parties or the conduct alleged, a claimant may be better served by adjudication. The choice of recovery pathway warrants careful thought at the outset.

How we can help

We acted for OSB in the Western Australian proceedings. Our construction, engineering and projects team advises claimants and respondents across the full spectrum of security of payment matters, from payment claim strategy and adjudication to summary recovery, enforcement and the conduct of related court proceedings. If you would like to discuss how these decisions affect a current or anticipated dispute, please contact a member of our team.

China introduces simplified personal information protection regime for small-scale personal information handlers

Sun, 02 Aug 2026 17:49:15 +00:00

On July 22, 2026, the Cyberspace Administration of China (CAC) and the Ministry of Public Security jointly issued the Provisions on Simplified Measures for Personal Information Protection by Small-Scale Personal Information Handlers (the “Provisions”), which will take effect on September 1, 2026.

The Provisions are designed to reduce compliance burdens for smaller businesses, while maintaining baseline personal information protection requirements. They introduce a series of streamlined compliance measures for qualifying entities in China.

1. Who qualifies as a “small-scale personal information handler”?

Under the Provisions, a “small-scale personal information handler” refers to a handler, broadly analogous to a data controller under the EU and UK’s data protection regime, that processes personal information of fewer than 100,000 individuals. The threshold is calculated based on the cumulative number of individuals whose personal information is currently processed, excluding personal information that has already been deleted. Currently, the Provisions are not clear exactly how this number is calculated.

In practice, many small and medium-sized enterprises, including business-to-business (B2B) companies, brick-and-mortar retailers and online stores, are likely to fall within this category.

2. Key simplification measures

(1) Streamlined privacy rules

Small-scale personal information handlers are only required to include three core items in their personal information processing notices:

The name of the handler
Department or personnel responsible for handling data subjects’ rights requests and their contact details
The purposes and methods of processing, the categories of personal information processed and the applicable retention periods

Importantly, businesses that process personal information of minors under the age of 14 must still adopt a dedicated and age-compliant personal information processing policy for such processing.

(2) Alternative notice mechanism through public disclosure

The Provisions allow eligible small-scale personal information handlers to satisfy notification obligations by publicly disclosing their personal information processing rules, rather than providing notice to each individual separately.

This simplified approach is available where:

No sensitive personal information is processed
The personal information processed is necessary for the provision of products or services
Personal information is neither disclosed to any other personal information handler (i.e. controller) nor made publicly available, and this is expressly stated in the personal information processing rules

The processing rules must be presented in a prominent and easily accessible manner.

For offline businesses, the processing rules may be disclosed through simple means such as notices prominently displayed at the business premises. For online businesses, disclosure may be made through websites, service agreements or pop-up notices within mobile applications.

(3) Simplified consent mechanism

According to the Provisions, where a small-scale personal information handler has properly disclosed its processing rules and fulfilled its notification obligations, and an individual voluntarily provides or voluntarily cooperates in providing, personal information necessary for obtaining a product or service, such affirmative conduct may serve as a valid expression of consent.

This reflects a more practical approach to consent, reducing reliance on formal consent mechanisms such as separate forms or click-through acknowledgements.

However, the simplification does not apply to sensitive personal information. Where sensitive personal information is processed, small-scale personal information handlers must continue to provide specific disclosures regarding necessity and potential impact on individuals’ rights and obtain separate consent as required under the Personal Information Protection Law (PIPL).

(4) Reliance on platforms

Small-scale handlers operating exclusively through an online platform (such as Douyin, Tmall or JD.com), and not providing personal information to other personal information handlers outside the platform may rely on the platform’s personal information processing rules, provided that:

The platform has established compliant processing rules
The respective rights and obligations of the platform, as well as the small-scale handler are clearly allocated
The small-scale handler undertakes to comply with such rules, and its processing of personal information is necessary for the provision of products or services

Similarly, industrial parks, commercial complexes and other business management entities may formulate unified processing rules for businesses operating within their management scope. Participating businesses may rely on such unified rules instead of developing separate documentation.

That said, the above exemption ceases to apply if the business engages in processing activities that fall outside the scope of the relevant platform rules or unified rules.

(5) Simplified compliance audits

The Provisions substantially reduce compliance audit obligations required under the PIPL. Instead of conducting full-scale personal information protection compliance audits, small-scale personal information handlers are generally only required to complete a simplified self-assessment checklist (set out in an appendix to the Provisions) at least once every five years, and retain the records for at least five years.

In addition, small-scale personal information handlers that obtain a recognized personal information protection certification may be exempt from audit requirements during the certification period.

Notably, these simplifications do not apply to the processing of personal information of minors under the age of 14. All personal information handlers that process such personal information must continue to conduct annual compliance audits relating to such processing.

(6) Simplified Personal Information Protection Impact Assessment (PIPIA)

The Provisions also introduce a simplified PIPIA template. Rather than preparing a comprehensive assessment report, small-scale handlers may complete a standardized assessment form (set out in an appendix to the Provisions) and retain it for at least three years.

In addition, where a qualified small-scale personal information handler is entitled to rely on an online platform under the circumstances described in paragraph (4) above, and the platform’s compliance audit or PIPIA already covers the handler’s personal information processing activities conducted through the platform, the small-scale handler is not required to conduct a separate compliance audit or PIPIA in respect of those activities.

3. Cross-border data transfer obligations essentially unchanged

The Provisions do not materially change the existing regulatory framework of cross-border data transfer for small-scale personal information handlers. The current rules remain largely unchanged for small-scale personal information handlers. These Include requirements for:

Providing notices related to the transfer
Obtaining data subject specific informed consent for the transfer
Restricting the export only to the personal data that is strictly necessary for the legal bases
Conducting CAC filings and security assessments

While the Provisions do not create new relaxation from China’s cross-border data transfer requirements, they introduce a slightly streamlined review process for small-scale personal information handlers. Where a CAC security assessment is required, the competent provincial-level cyberspace administration authority will conduct an initial review and submit its assessment recommendation to the CAC for final approval. This contrasts with the existing process, under which applications are submitted directly to the CAC for review.

4. Penalty exemption and mitigation

The Provisions adopt a more lenient regulatory approach towards small-scale personal information handlers by expressly recognizing circumstances where penalties may be reduced or waived.

(1) Circumstances where penalties may be waived

Administrative penalties will generally not be imposed where (i) the violation is minor, promptly corrected and causes no harmful consequences; or (ii) the handler can demonstrate that it was not at fault.

In addition, regulators may, at their discretion, refrain from imposing administrative penalties where the violation is a first-time offence, results in only minor consequences and is promptly rectified.

Even where no administrative penalty is imposed, regulators may still adopt supervisory measures, such as regulatory interviews or reminder notices.

(2) Circumstances supporting reduced penalties

A lighter penalty should be imposed where the handler:

Voluntarily eliminates or mitigates harmful consequences
Proactively discloses violations not yet discovered by regulators
Promptly notified affected individuals, took remedial measures and proactively reported the incident to the relevant authorities following a personal information security incident
Provides significant assistance during regulatory investigations

5. Takeaways

The Provisions mark an important shift towards a more proportionate compliance framework under China’s personal information protection regime. By introducing simplified requirements for privacy policies, notices, consent, audits and impact assessments, the new rules should significantly reduce compliance costs for small businesses.

At the same time, the Provisions preserve enhanced protections for sensitive personal information and minors’ personal information, indicating that regulators remain committed to safeguarding higher-risk categories of data, while easing compliance burdens for lower-risk processing activities.

For more information, please feel free to reach out to Lindsay Zhu or Scott Warren.

frESH Law Horizons: Key Developments in UK and EU Environment Safety and Health Law Procedure and Policy

Fri, 31 Jul 2026 17:00:00 +00:00

Our Environmental, Safety & Health team is pleased to share with you the latest edition of our newsletter, frESH Law Horizons: Key Developments in UK & EU Environment, Safety and Health Law and Procedure; providing bite-size updates on EU and UK law, procedure, and policy. Take a moment to reflect on the key developments from April to July 2026.

The updates covered in this edition include (among others):

Plastic Packaging Tax: Proposed changes could increase compliance obligations.
Waste carriers, brokers and dealers reform: What to expect
Law Commission considering a new opt-out consumer class actions regime for England and Wales
Consultation opens on draft European Sustainability Reporting Standards (ESRS) for Corporate Sustainability Reporting Directive (CSRD) reporting for certain non-EU companies
Corporate criminal liability significantly expanded under Section 250 Crime and Policing Act 2026
Commission publishes draft act on exemptions to battery removability and replaceability requirements
Commission Consults on Corporate Sustainability Due Diligence Directive (CSDDD) implementation guidelines
Council greenlights circularity framework for vehicles

New Trade Fraud Task Force seizes over US$1 billion:
DOJ signals shift to more aggressive trade enforcement

Fri, 31 Jul 2026 13:23:48 +00:00

On July 14, 2026, the Department of Justice (DOJ) announced that the Trade Fraud Task Force (TFTF), a joint effort with the Department of Homeland Security (DHS) launched in August 2025, had surpassed US$1 billion in civil and criminal recoveries, penalties and forfeitures (the “Press Release”).

This milestone was framed as “reflect[ing] a fundamental shift in the federal government’s approach to customs and trade enforcement, emphasizing rigorous criminal prosecution and civil enforcement under the False Claims Act (FCA).” According to Assistant Attorney General Colin McDonald of the DOJ’s National Fraud Enforcement Division: “[f]or too long, fraud actors have viewed customs violations as a mere surcharge or cost of doing business… By utilizing the [DOJ]’s full weight, we are making it clear that trade fraud is a serious economic crime…This message should be heard loud and clear by all supply-chain actors.”

Consistent with this ominous warning, the DOJ announced the creation of a new trade enforcement unit –the Global Trade & Commerce Enforcement Section (GTCES) within the DOJ’s National Fraud Enforcement Division. The GTCES’s mission is to investigate and prosecute:

Criminal customs fraud
And other trade fraud offenses that:
- Undermine American industries and competitiveness
- Evade revenue protection
- Threaten consumers’ health and safety
- Finance foreign adversaries
- Violate US laws governing unfair trade practices harming US industries, such as through antidumping (AD) and countervailing duty (CVD) fraud.

At the same time, the DOJ and DHS published the first comprehensive US government statement on customs and trade fraud enforcement – “A Resource Guide to Trade Fraud Enforcement” (the “Guide”). The Guide outlines the relevant legal definitions and statutory requirements for each enforcement area, and highlights enforcement approaches by the DHS and DOJ with examples from prior enforcement actions. The Guide focuses on compliance and enforcement of special tariff programs now to be enforced by US Customs and Border Protection (CBP), the US Department of Commerce (DOC) and Office of the US Trade Representative (e.g., Sections 122, 232, 202, 301 and AD/CVD duties). These developments confirm a deliberate shift away from treating customs violations as administrative matters resolved through duty recovery and penalty notices, and toward criminal prosecution and civil enforcement.

The TFTF

The TFTF was established by the DOJ and DHS to investigate and prosecute fraud on the US government through material misrepresentations to CBP, including transshipment, mislabeling and false declaration.

Composition – The TFTF is staffed from the DOJ’s National Fraud Enforcement Division, Criminal Division, Civil Division and Environment and Natural Resources Division, as well as from the DHS’s US Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and CBP. 35 US Attorney’s Offices are named as “masthead” offices, and the US Attorney’s Office for the Northern District of Illinois (NDIL) has been selected as lead prosecutorial partner.
Agency partners – The CBP, HSI, Internal Revenue Service Criminal Investigation, the Environmental Protection Agency’s Criminal Investigation Division, the US Fish and Wildlife Service, the Consumer Product Safety Commission and the Food and Drug Administration.
New litigating component – The GTCES is the specialized DOJ section responsible for prosecuting criminal customs fraud, external revenue evasion, international supply chain forced labor offenses and related trade crimes, which now serves as DOJ’s central coordinator for interagency trade enforcement.
Scope of the mandate – TFTF’s mandate covers fraud across the supply chain, including importers, licensed customs brokers, downstream distributors, industrial and commercial end users and other parties that knowingly profit from merchandise imported contrary to law.
Enforcement Priorities:
- Evasion of Section 301 tariffs, and of AD and CVD
- Eradication of forced labor from global supply chains, including enforcement under Section 307 of the Tariff Act of 1930 and the Uyghur Forced Labor Prevention Act (UFLPA)
- Criminal violations concerning imported goods that threaten public health and safety

Enforcement mechanisms

The Guide explains that enforcement will rely on the customs entry process, the obligations of importers and brokers, as well as the civil and criminal consequences when goods enter or move contrary to law. These authorities are not new, but the Guide highlights how readily they overlap, and the TFTF’s charging record shows that investigators and prosecutors are prepared to use them in combination, and to use tools that importers may not typically associate with customs enforcement. For example, customs violations can serve as Racketeer Influenced and Corrupt Organizations Act (RICO) and money laundering predicates. Violations of health, safety and environmental statutes, including the Food, Drug and Cosmetic Act, the Consumer Product Safety Act and the Lacey Act, can be prosecuted independently and also supply the “contrary to law” predicate for smuggling. For public companies, a customs violation can also implicate booksand- records and disclosure obligations under the federal securities laws.

Practical implications

Criminal and civil enforcement now runs alongside CBP penalties – Administrative enforcement continues at scale. The DOJ reported that CBP has assessed more than US$2.1 billion in commercial trade penalties this fiscal year and debarred 35 parties from federal contracting. The same conduct is now more likely to lead to criminal and civil enforcement actions.
The Guide puts companies on notice as to supply chain oversight – Liability for a customs violation does not always require criminal intent, but can be based on negligence and reckless disregard. The Guide emphasizes that companies can no longer claim ignorance of their suppliers’ conduct and failure to examine red flags may be treated as evidence of willful blindness.
Enforcement is not confined to the stated priorities – The Press Release announced that the US Attorney’s Office for NDIL charged principals of two gold jewelry importers with falsely declaring origin as Singapore, Oman or the United Arab Emirates, thereby allowing the importers to avoid roughly US$38 million and US$13.6 million in duties. Neither matter involves Section 301 tariffs, AD/CVD, forced labor or product safety. Ordinary origin fraud, at ordinary duty rates, is being charged criminally.
The DOJ is inviting FCA whistleblowers – The DOJ used the Press Release to expressly solicit FCA filings and submissions to its Corporate Whistleblower Program. Given the FCA’s role in the largest recoveries to date, employees and competitors are a key source of future investigations and enforcement actions. The FCA can be used in parallel, or in lieu of traditional customs fraud penalty actions under 19 U.S.C. § 1592 and has advantages, such as that cases are brought in US federal district courts rather than the US Court of International Trade and can result in treble damages. Furthermore, the elements of an FCA action closely line up with traditional criminal fraud statutes often used in a customs context, such as 18 U.S.C. 542 and 545, enabling the government to leverage a corollary criminal case to obtain a global plea agreement that resolves both criminal culpability and civil liability. The key to many such fraud cases is a cooperator employee, so it is not a surprise that DOJ is sweetening the pot for those who may have direct evidence of fraud to come forward and be compensated for this information.

Precedents

The DOJ used the Press Release to underscore the Task Force’s nationwide mandate to investigate and prosecute trade fraud and related cases, both expressly and through the resolutions it profiled alongside the milestone. Those matters span a deliberately wide range of industries and legal theories.

Perfectus Aluminum (May 12, 2026) – The largest settlement resulted from an HSI-led criminal investigation into Perfectus Aluminum, which produced a US$549.5 million FCA settlement over a scheme to evade antidumping and countervailing duties on aluminum extrusions.
Ceratizit USA (December 18, 2025) – Ceratizit USA paid US$54 million to resolve FCA allegations that it knowingly failed to pay duties on tungsten carbide products imported from China.
Boise Cascade (April 27, 2026) – Others reached beyond duty evasion. For example, Boise Cascade pled guilty to a Lacey Act violation and paid a US$6.3 million fine after demonstrating willful blindness toward illegally imported birch plywood.
Royal Sovereign (April 28, 2026) – Royal Sovereign was ordered to pay an US$8 million criminal fine and restitution for failing to report to the Consumer Product Safety Commission defective imported air conditioners linked to more than 40 fires and one death.

Taken together, these precedents exemplify that any offense involving the importation of an object may be prosecuted. In fact, one of the most telling signs of this new and rigorous focus on importations and steadfast customs enforcement is the first substantive chapter in the Resource Guide, which is titled “The Customs Entry Process.”

If you have any questions about the TFTF, the Guide or related trade fraud exposure, please contact a member of the International Trade & Foreign Investment team.

Publications

Pensions Weekly Update: 22 September 2026

International dispute resolution update

Mining and the global supply chain: The sulphuric acid crisis

EU invites Canada to become its first “associate member”

New 2025 CFIUS annual report to Congress

Implementation of the Employment Rights Act 2025

Second thoughts in moderation: Involve v. DWP clarifies remoderation, technical expertise and conflict controls in public procurement

Key takeaways

Overview

The High Court decision

Authorities may reopen moderation in appropriate circumstances

Technical explanation became an impermissible comparison

The revised score was not manifestly erroneous

The conflict measures provided a separate basis for exclusion

Practical implications

Contracting authorities

Suppliers

Final thoughts

Defective contract award notices may preserve Procurement Act set-aside claims

Why this judgment matters

Overview

The key legal issue

The High Court decision

Inaccuracy may not be apparent from the face of a notice

An unsupported urgency justification may render a notice inaccurate

The justification may need to appear in the contract award notice

Practical implications

Contracting authorities

Suppliers

Looking ahead

Pensions Weekly Update: 16 September 2026

What can you expect from the proposed digital duty of care?

No adverse costs, greater private enforcement risk

Family Office Insights Affluent Neglect: A Perspective for Family Offices, Advisors

Case insight: The Tribunal’s discretion to award indemnity costs in compensation claims

Multi-club ownership (Part III): Football spotlight – MCO types, trends and compliance

Pensions Weekly Update: 9 September 2026

Sanctions brief

Iran

Cuba

Russia

Syria

Venezuela

The EU’s Packaging and Packaging Waste Regulation kicks off – key questions answered

Restructuring Roundup (UK)

Privacy reset on a deadline

Pensions Weekly Update: 2 September 2026

Hot Topics in Pensions – Autumn 2026

Family Office Insights: Family Offices and the Investment Advisers Act

The Private Credit Market: The Data Behind the Headlines

Is your five-year rebate analysis due? A reminder to tax-exempt bond issuers

The Impact of the Building Safety Act 2022 on UK Restructuring

“When a release of “all claims” doesn’t mean “all claims”

The facts

Findings

Restraining broad general releases

Application to FMR’s claims

Pensions Weekly Update: 26 August 2026

Legal intelligence for resilient global supply chains

OPSS delivery report 2025-2026

Pensions Weekly Update: 19 August 2026

Insolvency practitioners investigatory powers

Family Office Insights: Family Offices and Private Capital in Latin America: Legal, Regulatory and Valuation Considerations in an Increasingly Complex Environment

HEAP and the missing middle: A construction lawyer’s reflection on the ICC’s new speed rules

Two separate dimensions worth looking at

What the ICC’s own materials suggest

Why this might matter in practice?

Where HEAP may genuinely fit well.

AI data centres in the UK: Environmental permitting and consenting risks

Environmental permitting and consenting overview

Government acceleration and strategic policy support

Backup generation and air quality

Water use and cooling

Planning, Environmental Impact Assessment (EIA) and local environmental impacts

Key considerations going forward

Pensions Weekly Update: 12 August 2026

Family Office Insights: An Update on “Institutional Investor” Restrictions on Single-family Home Purchases: What Family Offices Need to Know

Airbus Operations Limited:

Background

Family Office Insights
Affluent Neglect: A Perspective for Family Offices, Advisors

Is your five-year rebate analysis due?
A reminder to tax-exempt bond issuers

New Trade Fraud Task Force seizes over US$1 billion:
DOJ signals shift to more aggressive trade enforcement