Publications

China’s first court decision rejecting compliance with foreign sanctions as a defence to breach of contract

Mon, 20 Jul 2026 17:43:49 +00:00

On 24 June 2026, the Supreme People’s Court of China (Supreme Court) published six representative maritime cases of 2025,¹ including a shipping contract dispute between a Hong Kong shipper and a Singaporean carrier. In that case, the Shanghai Maritime Court ruled in favour of the plaintiff based on China’s Anti-Foreign Sanctions Law (AFSL), marking the first application of the AFSL in a judicial decision since its enactment in 2021. This case further affirmed that compliance with foreign sanctions cannot serve as a defence for refusing to perform contractual obligations.

A model or representative case published by the Supreme Court, although it does not have binding precedential effect in the same manner as decisions in common law jurisdictions, is highly influential in judicial practice and is generally followed by lower courts across China. Accordingly, this case provides important guidance on how Chinese courts are likely to interpret and apply the law in future cases.

The facts

In this case, a Hong Kong company (plaintiff) engaged a Singapore shipping company (defendant) to transport electronic products valued at RMB4.99 million from Shanghai to Panama. After receiving and loading the cargo, the defendant refused to issue a bill of lading and further refused to deliver the goods upon the cargo’s arrival at the destination, on the basis that the plaintiff had been placed on a foreign sanctions list.

Subsequently, the plaintiff obtained a maritime injunction from the Shanghai Maritime Court, compelling the defendant to issue the bill of lading. Following the injunction order, the defendant issued the bill of lading but returned the cargo to Shanghai while the injunction proceedings were pending.

The plaintiff then commenced legal proceedings against the defendant and its Chinese affiliate, claiming losses of goods, relevant charges and interest accruing thereon for breach of contract.²

The court’s ruling

The Shanghai Maritime Court held that the defendant, as the carrier, materially breached the contract as it refused to perform its obligations thereunder. The court further held that the defendant’s reliance on foreign sanctions as a justification for nonperformance was legally untenable because it contravened Article 12 of the AFSL.

In reaching its decision, the court reasoned that:

Under Article 4 of the Law of the People’s Republic of China on the Application of Laws to Foreign-Related Civil Relations, Chinese overriding mandatory provisions apply to foreign-related civil relationships notwithstanding the parties’ choice of law or contractual arrangements.
Article 12 of the AFSL expressly prohibits any organisation or individual from implementing, or assisting in the implementation of, discriminatory restrictive measures imposed by foreign countries against Chinese citizens or organisations.
Article 12 constitutes an overriding mandatory provision of Chinese law and therefore applies regardless of any contractual provisions or sanctions-related arrangements between the parties.

Accordingly, the Shanghai Maritime Court ruled in favour of the Hong Kong company and ordered the defendants to compensate the plaintiff for the full value of the goods – RMB4.99 million – together with interest. The judgment became final after no appeal was filed.

The Supreme Court’s remarks

In its commentary, the Supreme Court described the case as a landmark application of AFSL, confirming for the first time through a judicial decision that compliance with foreign unilateral sanctions cannot serve as a defence for refusing to perform contractual obligations owed to Chinese parties. The Supreme Court emphasised that the ruling strengthens legal protection for Chinese companies engaged in cross-border business by limiting the extraterritorial impact of foreign discriminatory sanctions and providing greater certainty for international commerce.

Key takeaways

Increased AFSL-related litigation is likely– While this case marks the first reported decision based on the AFSL, it is not the first case in which the statute has been invoked. In another maritime dispute reported in 2025 that was ultimately settled, the Nanjing Maritime Court cited the AFSL and exerted pressure on the defendant to make payment.³ Although the AFSL was enacted in 2021, enforcement efforts have largely focused on placing foreign entities on China’s countersanctions lists, while Article 12 has rarely been applied in litigation. This decision, together with the Nanjing Maritime Court case, recent blocking measures targeting foreign sanctions⁴ and other newly introduced regulatory tools,⁵ signals that Chinese authorities are increasingly encouraging companies to use the AFSL as an affirmative litigation tool to protect their interests. As a result, more AFSL-based claims and defences are likely to emerge in the coming years.
Sanctions clauses may not be enforceable in China – The case confirms the mandatory nature of Article 12 of the AFSL and suggests that Chinese courts may apply the provision regardless of contractual sanctions-related termination or nonperformance clauses. Such clauses have traditionally been regarded by multinational companies as a contractual “safe harbour” for complying with foreign sanctions regimes. Following this decision, however, a party may no longer be able to rely on a foreign sanctions clause as a valid defence for nonperformance or termination where doing so would amount to implementing or assisting in the implementation of foreign sanctions against a Chinese counterparty.
“Overcompliance” with foreign sanctions carries increasing litigation risk – Although the Supreme Court’s publication did not disclose the parties’ identities or the specific foreign sanctions involved, publicly available information suggests that the plaintiff may have been a company included on the US Bureau of Industry and Security (BIS) Entity List and the Section 1260H List. If so, neither designation would necessarily prohibit a Singapore-based carrier from conducting shipping business with the plaintiff. The defendant may therefore have been engaging in “over-compliance” with foreign sanctions a phenomenon that is not uncommon in practice. Chinese courts typically assess whether parties have acted in good faith and exhausted all reasonable means to perform their contractual obligations. In this context, overcompliance with foreign sanctions may increasingly be viewed as an unjustified refusal to perform, or even as discriminatory treatment of Chinese counterparties, thereby exposing companies to liability under the AFSL.

Supreme People’s Court of the People’s Republic of China, “The Supreme People’s Court Publishes the 2025 National Typical Maritime Cases”, 24 June 2026.
The published case does not disclose the identity of the parties, details of the “foreign sanctions”, the Singapore company’s defense or its shipping contract arrangement with the Hong Kong company.
Breaking Long-Arm Jurisdiction and Escorting Enterprises! The Top Case Among the Top Ten: The First Tort Lawsuit Against Foreign Sanctions. In this case, the Swiss defendant refused to make payment to a Chinese company on the basis that the Chinese company was placed on a foreign sanction list.
See our earlier publications: China Issues Its First Blocking Order and China’s first prohibition order targets the EU Foreign Subsidies Regulation.
See our earlier publications: China’s New Supply Chain Security Regime and China’s New Supply Chain Security Regime

Unconsented texts to DNC numbers: No private right of action under TCPA

Mon, 20 Jul 2026 17:00:00 +00:00

The Telephone Consumer Protection Act (TCPA) provides a private right of action to Do Not Call (DNC) number registrants who receive more than one “telephone call” within a 12-month period from the same entity that violates the Federal Communications Commission Rules (47 U.S.C. 227(c)(5)) (Section 227(c)(5)). Over the last year, at least 10 Federal District Court decisions have held that texts are not “telephone calls” for purposes of that provision. However, at least twice that many have held that they are. You can see where this division of view is likely headed.

Most recently, in a well-reasons decision, a panel of the US Court of Appeals for the 7th Circuit (Court) in Seth Steidinger et al v. Blackstone Medical Services voted “no” – affirming that “Section 227(c)(5) does not permit plaintiffs to sue for the receipt of unwanted texts.”

Background

Blackstone made marketing texts and calls urging called parties to buy the company’s home sleep tests. The calls continued even after plaintiffs replied “STOP” or added themselves to the National Do Not Call list. After plaintiffs filed a class action under Section 227(c)(5), Blackstone moved to dismiss, arguing that the provision does not cover unwanted text messages, only telephone calls. The Federal District Court in Illinois agreed in Seth Jones et al. v. Blackstone Medical Services. The 7th Circuit appeal ensued.

The Court’s findings and conclusions

The Court thoroughly and effectively deals with key points of statutory interpretation and plaintiffs’ arguments in support of its conclusion. The essential supporting points in the panel’s ruling include the following:

Based on the ordinary public meaning of “telephone call” at the time of the TCPA’s enactment in 1991, texts are not calls, so Section 227(c)(5) does not authorize the plaintiff’s suit.
The provisions surrounding Section 227(c)(5) refer to “telephone solicitations,” which include the “initiation of a telephone call or message.” These terms are absent from Section 227(c)(5).
As a result, the overall statutory scheme and the ordinary meaning of “telephone call” indicate that Section 227(c) (5)’s private right of action does not extend to unwanted text messages.
Plaintiffs’ citations to cases relying on other provisions of Section 227 do not require otherwise.
The Federal Communications Commission’s (FCC) implementation of the DNC registry was under a provision that related to “telephone solicitations,” so it does not inform the understanding of Section 227(c)(5), which refers only to “telephone calls.
In any case, under the Supreme Court’s McLaughlin Chiropractic decision, the Court is not bound by the FCC’s statutory interpretation.
Congress’ repeated amendment of the TCPA in other provisions without challenging the FCC’s regulation of text messages cannot be translated into inclusion of text messages within the term “telephone calls” in Section 227(c)(5). Congress could have amended that Section to include texts, but it did not.
The statutory presumption of consistent usage – including text messages in another section of the statute means it must have been intended to be included in 227(c)(5) – does not apply here because the cited provisions include different language.
Congress’ general concern about intrusive telemarketing practices also does not necessarily mean it adopted a broad definition of “telephone call.”
Finally, while unwanted text messages do not fall within the private right of action pursuant to Section 227(c)(5), they may be curbed by other provisions of the TCPA, which the Court left “undisturbed.”

So, what is potentially next?

Certainly, this ruling provides a roadmap for other appeals if brought in connection with the cases finding that texts are included. District courts also facing the issue can perhaps rely on the ruling, although it is currently only governing law in the three states of Illinois, Wisconsin and Indiana, which comprise the 7th Circuit.

Perhaps it provides a framework for the Supreme Court. As the Court here observes, “Here, the parties dispute the meaning of telephone call, so we confront a question that the Supreme Court hasn’t answered.” Ultimately, if a conflict in the circuits ensues, the question may make it to the Supreme Court’s docket.

Congress is the other actor that could step in to resolve the divide on this issue. But legislative activity on the TCPA has been quiet of late, including on this issue. A recent bill reintroduced in Congress, the Protecting American Consumers from Robocalls Act, would make amendments to the TCPA, but does not address the unwanted text issue.

One other reminder regarding scope: the ruling applies to texts to numbers on the DNC under Section 227(c). As the Court observed, texts are covered under other provisions of the TCPA and the ruling left those “undisturbed.”

Truth mandated, speech challenged:

Fri, 17 Jul 2026 13:40:25 +00:00

Our firm published this prior client alert to help companies prepare for California’s SB 343, known as the “Truth in Recycling Law,” which is set to become effective on October 4, 2026. However, the law was recently challenged in the US District Court for the Southern District of California by a coalition that includes the Flexible Packaging Association and the American Forest & Paper Association, and earlier this week on July 14, 2026, that court issued a preliminary injunction preventing enforcement of SB 343 pending further proceedings in litigation.

Plaintiffs contend that SB 343 is (1) unconstitutionally vague under the Fourteenth Amendment to the US Constitution and (2) facially unconstitutional because it infringes on their members’ free speech rights under the First Amendment to the US Constitution.

The court found that plaintiffs are likely to prevail in their argument that several SB 343 provisions are unconstitutionally vague under the Fourteenth Amendment. Specifically, the court concluded that SB 343 failed to provide adequate notice of the requirements that:

Materials “routinely become feedstock”
Materials be reclaimed in a manner “consistent with the Basel Convention”
Plastic packaging complies with the Association of Plastic Recyclers (APR) Design Guide
Products be designed to “ensure recyclability” and not “prevent recyclability”

The court also concluded that plaintiffs are likely to succeed in their First Amendment challenge because:

SB 343 regulates potentially misleading rather than inherently misleading speech
California has substantial interest in (1) improving recycling rates and (2) reducing consumer confusion
Defendant fails to establish that SB 343 directly and materially advances California’s substantial interests in improving recycling rates and reducing consumer confusion
The law is more extensive than necessary to serve defendant’s purported interests

Importantly, the court held that the challenged provisions are severable from the remainder of the statute, meaning those provisions could potentially be invalidated without eliminating the entire statutory framework. That said, it appears the current preliminary injunction applies to the entirety of SB 343 and ultimately, the court directly enjoined enforcement of SB 343 pending further order.

The decision also raises serious questions regarding the validity of California’s Extended Producer Responsibility law, SB 54. SB 54’s recyclability requirements are closely tied to SB 343’s definitions and determinations (e.g., under SB 54, packaging is “recyclable” if it satisfies SB 343’s criteria). Therefore, further proceedings assessing SB 343 may well have significant implications for SB 54.¹

Given the inherent uncertainty, it seems prudent for companies to continue their internal preparations for compliance with SB 343 but pause finalizing changes to packaging until there is more certainty.

Squire Patton Boggs (US) LLP will continue to monitor this case and other related challenges and update as appropriate.

SB 54 has also separately been challenged by a similar coalition. On June 22, 2026, a group of 17 state attorneys general, as well as the National Association of Wholesaler-Distributors (NAW) challenged SB 54 on First Amendment and commerce clause grounds, as well as various other state and federal constitutional grounds.

UK Government consults on major reform of the equal pay framework

Fri, 17 Jul 2026 10:02:00 +00:00

On 14 July, the UK government launched a consultation on proposed wide-ranging reforms to the UK’s equal pay and pay discrimination framework, in acknowledgement that the current equal pay system is far from fit for purpose. The government states that the current system “encourages protracted and adversarial disputes, multiplying the time and expense involved”. Similarly, the government’s view is that the existing regime “does not do enough to protect those who need it, including disabled employees, those from ethnic minority groups and outsourced workers”

It is therefore seeking views from stakeholders including employers, trade unions, individuals and representative organisations on proposals to fix the areas of the system that are currently falling short, as well as on its planned expansion of the equal pay system.

Digital duty of care

Fri, 17 Jul 2026 09:00:00 +00:00

Earlier this year, the Australian government released an issues paper on a proposed digital duty of care (the Duty) framework under the Online Safety Act 2021 (Cth) (the Act) (the Issues Paper). While there is still a long way to go, if enacted, the reforms will complement, among other things, the social media minimum age law which took effect on 10 December 2025.

The Duty has been a topic of ongoing discussion in Australia and covers similar ground to other countries, including the obligation for “Very Large Online Platforms” (VLOPs) in the EU to identify, analyse and assess systemic risks that are linked to their services¹. Individual members of Parliament have also emphasised their desire for such obligations to be enacted, with Independent Zoe Daniel introducing a bill at the end of 2024, which has now lapsed.

Ultimately, the government’s main incentive is to action a key recommendation made in its statutory review of the Act, published in early 2025. That review suggested the introduction of an overarching duty of care, which would require all online services to take reasonable steps to prevent foreseeable harm. Prime Minister Anthony Albanese has given pride of place to the Duty in his recent speech on the future of AI regulation in Australia, naming the design of the Duty as part of the government’s “ongoing work” on AI.²

What does the Duty require?

As proposed by the government, the Duty will require all entities regulated by the Act to maintain effective systems and processes to:

So far as is reasonably practicable, provide a safe online environment for all Australians
Prevent, monitor and appropriately address illegal and harmful content
Ensure the safety of service features such as AI systems, algorithmic content recommendation systems and bot accounts

Some observations:

Illegal content will include content that is illegal under the Act or other Commonwealth law but may also extend to content that is a “seriously harmful threat” to public safety, noting that this would need to be balanced against an individual’s right to freedom of express and speech. Some of this content is already regulated under the Phase 1 Codes and Standards, which sit under the Act and came into effect in 2024.
Harmful content is typically harder to assess but will involve content or activity that is harmful to young people, including content which promotes eating disorders or seriously harmful activity. Some of this content is already regulated under the Phase 2 Codes, which came into effect earlier this year.

A failure to take reasonable steps to maintain the systems and processes mentioned above would constitute a breach of the Duty. Importantly, the Issues Paper clarifies that entities will not be liable for individual instances of harmful content or activity, but rather a wider failure to appropriately address harmful content or activity. This is consistent with the approach taken to the social media minimum age law, which requires the eSafety commissioner to “[assess] the totality of the steps taken by a platform to comply…this is about systems and processes, not individual accounts”.³

Who would be subject to the Duty?

The Duty will apply to online services already within the scope of the Online Safety Act, including social media, messaging apps, online games, dating services, general websites/ apps, pornography services, generative AI services, hosting services, internet service providers (ISPs), search engines, app stores and equipment/operating system services.

As with the consolidated codes of practice that were enacted under the Act, the Issues Paper acknowledges that compliance measures should be proportionate to the level of risk attached to an online activity or service, as well as a service’s opportunity to address risks “in the chain of service provision” to users.

What could “effective systems and processes” mean?

In the Issues Paper, the government provides the following, non-exhaustive examples of what might be meant by this term:

Moderation/classification tools
Law enforcement engagement processes
Internal dispute resolution
Terms of use/community standards
User safety controls
Privacy/recommendation settings
Parental controls and family safety settings

Some observations:

For mature technology platforms, many of these measures will already be in place. However, even though the Australian government has flagged that the duty will apply proportionately to a service’s risk profile, it seems unlikely that even a nascent, lower-risk online service could satisfy the Duty without having any of the above in place.
References to appropriate “privacy/recommendation settings” suggest, at first glance, that the Australian government is approaching the issue more flexibly than other lawmakers. For example, the EU Digital Services Act requires VLOPs to provide users with at least one recommender system option “not based on profiling” of individuals by automated systems⁴. Requiring adjustable settings would not go so far.

How does this interact with an already complex regulatory regime?

If enacted, the Duty would complement rather than replace existing regimes under the Act. For example, the Act penalises, and allows the eSafety commissioner to investigate, cyberbullying, adult cyber abuse, image-based abuse and illegal/restricted material. As mentioned, the codes enacted under the Act also govern illegal and harmful content.

To use the Relevant Electronic Services (Phase 2) 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 games
Have terms and conditions in place that prohibit the sharing of illegal material
Moderate content to ensure compliance with those terms and conditions

Many of these obligations overlap with the sample “effective systems and processes” stated above. In addition to the duties set out in the Basic Online Safety Expectations and, of course, the social media minimum age rules, it will be important for online service providers to understand the delta between their existing obligations and the new Duty – if indeed such a delta exists, as many services will find that the steps that they have taken may already help to establish compliance. It is crtical that, if and when the Duty comes into effect, legislators are clear that it does not impose wholly new obligations, but may instead cover many of the steps naturally taken by services to protect their users.

What does this mean for online regulation more generally?

The Act regularly interacts and overlaps with other laws, including the Privacy Act and the Australian Consumer Law.

In respect of the overlap with the Privacy Act in particular, two observations:

The government offers AI tools that identify and prevent the generation and sharing of content by users of illegal or seriously harmful material, such as unwanted “nudification”, as a possible feature to reduce harm. Any use of AI in a way which significantly affects an individual’s rights or interests, including when there is justification to do so, still requires certain kinds of disclosures in a service’s privacy policy under amended Australian Privacy Principle (APP). It is conceivable that, for some online services and some moderation decisions, any decision to remove content or shadowban or, at worst, ban an account would fall within the APP 1 threshold. Any mandatory disclosures must strike the difficult balance between enough information to be meaningful, but not so much as to allow circumvention of protective measures.
Another potentially dangerous feature put forward is systems that allow anonymous or pseudonymous accounts. For the government, these accounts could be misused to “…support or propagate seriously harmful inauthentic activity or to menace, threaten and harass other users”. However, APP 2 preserves the right for individuals to interact anonymously or pseudonymously with an entity, where that is reasonably practicable. With the advent of age assurance, this APP is already under threat, but it remains an important hallmark of Australian privacy law and online life when not used to shield unlawful or harmful behaviour.

What might be the penalties for breach of the Duty?

According to the Issues Paper, a key obligation attached to the Duty is recurring risk management. Services would need to assess risks of serious harm at least annually, reassess when significant changes are made to the service, implement appropriate mitigation measures and regularly evaluate whether those measures are effective, making changes where necessary. Unlike many other online safety laws (including the codes), services are given the discretion both to identify and rectify any failure to comply with the Duty. Services will likely have in place periodic or targeted reporting obligations, and cannot withhold information from eSafety merely because it is commercial-in-confidence. eSafety may also require independent audits where there is a reasonable basis to believe systemic noncompliance exists. The Issues Paper indicates serious civil penalties for egregious and systemic breaches, but the penalty figure will only be confirmed if and when the bill is released. Importantly, the government has proposed a 12-month transition period between the legislation passing and commencement of the Duty, with guidance to be developed during this period. At a minimum, we would hope that any such guidance covers the points that we have raised above.

What other reforms are on the table?

The Issues Paper also mentions other recommended amendments to the Act and indicates whether they are supported by the government, including if only supported in principle.

A few to note are:

Requiring the best interests of the child to be a primary consideration for online service providers in assessing and mitigating risks arising from the design and operation of their services. Note: This has in part been reflected in the Office of the Australian Information Commissioner’s (OAIC’s) Children’s Online Privacy Code (currently under consultation).
Reducing the waiting period before eSafety can issue certain removal notices from 48 hours to 24 hours
Allowing the regulator to waive the delay in certain circumstances Allowing removal notices for reposted material
Requiring simple and accessible complaint mechanisms
Exploring how to prohibit search engines and app stores from surfacing or distributing “nudify” apps and undetectable stalking apps
Requiring major platforms to have a contact point for service in Australia
Requiring services to maintain records of steps taken to comply with the Act

¹^{Article 34, EU Digital Services Act}²^{Anthony Albanese, “AI in Australia’s interests” on 15 July 2026.}³^{Social Media Minimum Age: Compliance update}^.⁴^{Article 38, Digital Services Act}

The UK's new supply chain strategy: What businesses should be thinking about now

Thu, 16 Jul 2026 16:06:29 +00:00

As global supply chains face increasing pressure from geopolitical tensions, trade restrictions, climate risks and evolving regulation, supply chain resilience has become a key business priority.

The UK Government's latest publications, while not introducing new legal obligations, provide valuable insight into the growing expectations on businesses to understand, manage and strengthen their supply chains. This article explores the key takeaways and what they mean for legal, procurement and supply chain professionals.

To read the full alert, please click here.

Pensions Weekly Update: 16 July 2026

Thu, 16 Jul 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 Department for Work and Pensions (DWP), HM Revenue and Customs (HMRC), The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) have published a flurry of consultations and papers to keep the pensions industry busy over the summer period. Below are links to those documents. We look at some of these in more detail in this update.
The government has updated its pensions roadmap. This provides a detailed timeline for the implementation of the measures introduced by the Pension Schemes Act 2026 (PSA26). Some of the timescales have moved since the original roadmap. Expected timings for full implementation of the key provisions in the PSA26 are now: 6 April 2027 (release of surplus); March 2028 (FCA contractual override in place); March 2028 (VFM – first schemes to submit data); April 2029 to June 2029 (Retirement Collective Defined Contribution (CDC) – first schemes to be authorised); July 2029 to September 2029 (guided retirement – master trusts and FCA regulated workplace schemes to be compliant (note later July 2030 date for those offering retirement CDC default pensions)); April 2030 (consolidation of small pots begins); April 2030 (DC master trusts and group personal pension schemes to have £25 billion of assets in default fund, transitional period starts for schemes with £10 billion or more) and April 2035 (transitional arrangements for DC scaling up to £25 billion of assets ends). Also of note is that the DWP plans on publishing for consultation fiduciary duty and investment decision-making guidance between July 2026 and September 2026, with the final guidance being published between January 2027 and March 2027. In relation to the DWP’s response to consultation on pension trusteeship, this will be published “in due course”.
The DWP has issued a lengthy consultation on draft regulations and draft FCA conduct of business rules relating to the new VFM framework. Consistent with earlier consultations, it is proposed that the VFM requirements will initially apply to pension savings in accumulation in default and quasi-default DC arrangements within workplace schemes, but this will be extended in due course. Although the first VFM assessments are scheduled for 2028, a phased approach to implementation is now planned, starting with larger schemes (i.e. DC master trusts, single employer trusts with more than 50,000 active and deferred members, as well as non-bespoke multiemployer contract-based arrangements open to new employers). Full assessments for other schemes will begin in 2029, although data returns will still be required in 2028. As a result of the phased implementation, the application of consequences attached to red and amber ratings would be delayed until 2029. Consultation closes on 1 September 2026.
The DWP has issued a short policy paper on principles for guided retirement. The broad aims are to reduce the complexity and risk for members, and improve the sustainability of retirement incomes. Although the principles are largely based on member inertia, members would still need to give consent at the point of accessing their pension via the default option (but would not be required to consent multiple times if a default pension includes different phases, such as a “flex then fix” approach). Individuals will still have the freedom to make their own retirement choices. The DWP has also issued the findings of its research on DC pension decumulation and decision-making, which may be interesting to trustees and pensions professionals engaged in designing decumulation strategies or member communications.
The DWP is consulting on changes to the general levy. The general levy recovers the funding provided by the DWP to TPR, The Pensions Ombudsman and some pensions related functions of the Money and Pensions Service. The DWP sets out its revised plans to recover the current levy deficit in a way that avoids substantial levy increases over a short period. It also proposes to revise the amounts payable by different scheme types to reflect the concentration of regulatory effort. For the three-year period from 2027 to 2030, schemes would see an increase of between 5% and 9% per year, depending on scheme type, with the larger increases applying to master trusts and personal pension schemes. Alongside this, modest and predictable annual increases would be applied. Consultation closes at midday on 8 September 2026.
HMRC has published VAT notice 700/17. This provides some further explanation around the updated guidance that HMRC published in relation to the deduction of VAT by employers on the management of pension fund assets. Our weekly update of 24 June 2026 provides more information. The VAT notice clarifies that an employer of a defined benefit (DB) scheme can reclaim all VAT incurred in relation to the management of the scheme, including where a provider’s invoice covers both administration and investment costs, provided the employer contracted for the services, as evidenced by an invoice made out to the employer. Wording in the VAT guidance manual notes that this can include the scenario where the invoice is “c/o” the employer. The VAT notice says, “You should hold tax invoices made out in your name. If the trustees pay for the supplies on your behalf, you should arrange for the suppliers to make out the invoices in your name.” However, if the employer is reimbursed by the trustees or charges them for costs incurred in managing the pension scheme, the employer cannot charge output tax. This is because these costs are treated as business costs. There is no longer any apportionment between the trustees and employer of dual use of costs. If there is a corporate trustee, VAT grouping with the employer continues to be an option. The 30/70 split is no longer in use. Likewise, the tripartite agreement is no longer in use. (See our weekly update of 25 June 2025 for an explanation of the 30/70 split and tripartite agreements).

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

US extends EAR enhanced favourable treatment to the UAE:

Wed, 15 Jul 2026 12:45:00 +00:00

On 10 July 2026, the US Bureau of Industry and Security (BIS) issued a final rule amending the Export Administration Regulations (EAR). The rule removes the United Arab Emirates (UAE) from country groups D:3 and D:4, and adds it to Country Group A:5, the group that receives the most favourable licence-exception treatment the EAR offers.¹ Press coverage has described the rule as making controlled military goods, satellites and advanced computing hardware licence-free for the UAE. The new rule for the UAE widens access to licence exceptions for controlled items rather than removing licensing requirements, as often reported. These exceptions require BIS approval of the recipient by name, while the Commerce Control List (CCL) obligations remain fully in place.

To find out more, please read our full insight.

¹BIS, Enhanced Favorable Treatment for the United Arab Emirates under the Export Administration Regulations (Final Rule, RIN 0694-AK54, filed for public inspection 10 July 2026; publication 14 July 2026); Bureau of Industry and Security, Department of Commerce Eases Export Controls for UAE (10 July 2026).

The Federal Trade Commission (FTC) obtains record US$12 million penalty for HSR filing avoidance

Wed, 15 Jul 2026 11:00:00 +00:00

On July 13, 2026, the FTC announced a proposed settlement imposing US$12 million in civil penalties against Edwards Lifesciences Corp. and Genesis MedTech Group for alleged violations of the Hart-Scott-Rodino Act (the “HSR Act”).

According to the FTC, this is the largest civil penalty ever obtained for alleged failure to comply with the premerger notification requirements of the HSR Act, highlighting that HSR avoidance remains an important enforcement priority. Importantly, the alleged violation came to light during the agency’s investigation of a separate transaction that was subject to an in-depth Second Request investigation, highlighting the risk that information uncovered during a merger investigation can lead to independent enforcement actions.

The FTC’s allegations

The FTC alleged that Edwards agreed to acquire JC Medical for US$115 million, just below the HSR threshold (US$119.5 million at the time), while making a contemporaneous investment in Genesis MedTech for US$25 million. The complaint alleges that the parties structured the transaction in this way to avoid the consideration for JC Medical exceeding the HSR threshold, which would have triggered a mandatory HSR Act notification and corresponding 30-day waiting period before the parties could close. The FTC contends that the structure was designed to avoid HSR review while Edwards was pursuing a separate acquisition of a company called JenaValve, a deal the FTC successfully obtained a preliminary injunction to enjoin in January 2026. It was during the FTC’s investigation of the JenaValve deal that the JC Medical acquisition came to the FTC’s attention.

Key takeaways

While merger enforcement priorities have evolved, HSR compliance remains a bipartisan priority. During the Biden administration, FTC leadership warned that HSR avoidance posed an “existential threat” to the effectiveness of the premerger notification program. The Edwards settlement demonstrates that the current enforcement agencies, including the Department of the Justice (DOJ), which shares responsibility for administering the premerger notification program, continue to treat alleged efforts to circumvent the HSR Act as serious violations warranting substantial penalties. It follows other recent HSR enforcement actions seeking millions of dollars in penalties, signaling that the agencies remain focused on identifying and pursuing conduct they believe undermines the integrity of the HSR Act’s premerger notification requirements. Deal teams should evaluate the substance of all related agreements, investments and consideration early in the transaction process and ensure that HSR analyses are carefully documented.

The Edwards settlement also highlights a frequently overlooked risk of the Second Request process. During a Second Request investigation, the agencies obtain access to extensive internal documents, communications, data and testimony well beyond the materials initially submitted with an HSR filing. As a result, the review often provides insight into a company’s broader business practices and prior transactions. Information disclosed during the Second Request can therefore lead to separate investigations into potential HSR compliance issues, gun jumping, information sharing or other potential antitrust violations unrelated to the competitive merits of the transaction under review. A well-known example is the canned tuna price-fixing investigation, which arose from evidence uncovered during a Second Request investigation. Companies contemplating complex US antitrust review should always consider these ancillary risks, including evaluating potential exposure as early as possible in the document review process.

AI Tools: A Due Diligence Guide for the recruitment sector

Tue, 14 Jul 2026 09:00:00 +00:00

Artificial intelligence is transforming the recruitment industry. From candidate sourcing and CV screening to skills matching and workforce analytics, AI tools are helping organisations improve efficiency and make faster hiring decisions. However, alongside these opportunities come important legal, ethical and operational risks that cannot be overlooked.

As AI becomes more deeply embedded in recruitment processes, organisations must ensure they understand how these tools operate, what data they rely on, and whether they comply with evolving ethical, legal, and regulatory requirements. The responsibility for managing these risks ultimately sits with the organisation using the technology, and not the vendor providing it.

This guide has been developed through a collaboration between The Satori Partnership and Squire Patton Boggs. The Satori Partnership brings extensive experience advising recruitment organisations on technology, transformation and operational excellence, while Squire Patton Boggs is a global law firm with deep expertise in data privacy, cybersecurity, technology regulation and AI governance, including in relation to how these areas intersect with labour and employment law.

The guide is co-authored by Jacky Carter, principal at The Satori Partnership, and Tanvi Mehta Krensel, partner in the Data Privacy, Cybersecurity & Digital Assets practice at Squire Patton Boggs. Tanvi regularly advises organisations on privacy compliance, cybersecurity, governance and the legal implications of emerging technologies, helping businesses innovate while managing regulatory risk. Meanwhile, Nicola Martin advises on AI-related contractual protections and governance frameworks, and compliance with antidiscrimination laws, and can support businesses in establishing appropriate human oversight of AI-assisted hiring decisions.

The purpose of this report is to help recruitment organisations ask the right questions when evaluating AI tools. It provides a practical due diligence framework covering transparency, bias and ethics, privacy compliance, candidate obligations and vendor accountability. By taking a structured approach to AI procurement, organisations can better protect themselves from legal, regulatory and reputational risk while maximising the value of their technology investments.

We encourage you to use this guide as a practical resource for making informed decisions about AI adoption. The organisations that will benefit most from AI are those that embrace innovation responsibly, with specific use cases, strong governance and a clear understanding of the risks involved.

We invite you to explore the guidance that follows and use it as a framework for building a more effective, compliant and trustworthy approach to AI in recruitment.

^{This guide is co-authored in collaboration with the Satori Partnership;}^{published on their website on 14 July 2026}^{, and reposted with permission. 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.}

Variations under the FIDIC Yellow Book: Lessons from Uniform Building Contractors Ltd v. The Water and Sewerage Authority of Trinidad and Tobago

Mon, 13 Jul 2026 15:56:30 +00:00

A recurring tension under lump-sum EPC and design-build contracts is the distinction between a genuine “variation” and work that simply falls within the contractor’s original contractual obligations. Indeed, according to the Eighth Annual HKA Crux Insight Report, from a pool of 2,204 engineering and construction projects in 114 countries, 34.7% of all claims or disputes arose because of “changes in scope”.

The recent Privy Council decision in Uniform Building Contractors Ltd v. The Water and Sewerage Authority of Trinidad and Tobago provides helpful guidance on how courts and tribunals may approach that question. While the case concerned the 1999 FIDIC Yellow Book, the underlying risk allocation and contractual structure are substantially similar to the 2017 edition.

The contractual test for a variation

Under the 1999 Yellow Book, a “variation” is defined in Subclause 1.1 as any change to the employer’s requirements, or the works instructed or approved under Clause 13.

To claim for varied works, a contractor will ordinarily need to demonstrate:

1. A valid instruction – The engineer must issue an instruction (or approve a proposal) in accordance with Clause 13. Engineers commonly issue directions through correspondence, meeting minutes, drawings, sketches or site communications. As Subclause 3.3 contemplates that instructions will be issued in writing, contractors would be well advised to create proper records and confirm any oral instructions in writing – especially if a “no oral variation” clause exists. An engineer’s or employer’s failure to object to the contractor’s design or execution of the works does not amount to an instruction.

2. A genuine change in scope – Establishing a variation requires a clear and reasoned articulation grounded in a proper interpretation of the contract, identification of the original contractual scope, a comparison with the relevant instruction or change, and a coherent explanation of how and why that instruction departs from the agreed scope.

3. Procedural compliance – The contractor must provide timely notice under Clause 20.1 and follow all mandatory valuation mechanisms. The Privy Council reaffirmed that Clause 20.1 of the 1999 FIDIC Yellow Book, as written, operates as a condition precedent under English law. The Privy Council did not address the procedures for submitting a detailed claim. However, under the 1999 FIDIC Yellow Book, noncompliance with those procedures may adversely affect its assessment – including the potential reduction or rejection of elements of the claim to the extent that such noncompliance has prejudiced the engineer’s or employer’s ability to evaluate it properly.

4. Substantiation – The claimed costs must be properly valued and substantiated in accordance with the contractual valuation mechanism.

Case study: The asphalt verge dispute

One of the central issues in Uniform centred on installing sewer infrastructure.

5. Tender documents – Although the evidence on the record was limited, there was some indication that the drawings contemplated the sewer being located within a strip of grass, gravel or lightly surfaced land immediately adjacent to an asphalt road (commonly referred to as a verge).

6. Preliminary design – The contractor’s preliminary design showed that the sewer would run through the verge.

7. Requirement for site investigations – The contract placed responsibility on the contractor to investigate the site, including borehole data and hydrological conditions. The employer’s requirements further made clear that only limited ground investigation had been undertaken and that the contractor was deemed to have satisfied itself that it had sufficient information regarding the ground conditions.

8. Final design/execution – Ultimately, the sewer was installed directly beneath the asphalt roadway rather than the verge, thereby requiring extensive cutting, excavation and reinstatement that the contractor claimed was unanticipated.

9. Claim – The contractor claimed this was a variation. Crucially, the engineer supported this view, acknowledging portions of the work as variations and approving payment recommendations.

The lower courts initially agreed. The Privy Council, however, took a stricter contractual approach, dismissing the contractor’s claims based on the following:

The contractual definition of a variation – The council stressed that an engineer’s characterisation of work as a “variation” is not determinative. While evidentially relevant, an engineer’s views do not override the proper interpretation of the contract. This aspect of the judgment is particularly significant for Yellow Book projects, where parties sometimes rely heavily upon informal site instructions, provisional agreements, or contemporaneous understandings reached during project delivery.
The need for qualifying instructions – The fact that the engineer discussed the issue, approved payment recommendations or considered aspects of the works to be additional did not itself constitute a contractual variation instruction.
Design and execution risk under a design-build contract – Absent a contractual notice or formal variation instruction, the employer was not required to object to construction methodologies adopted by the contractor. In the council’s view, under a design-build contract, the contractor itself retained primary responsibility for design and execution.
No change to employer’s requirements – The invitation to tender expressly stated that pipe routes provided to tenderers were “indicative only” and required the contractor to confirm the “final routes” “with site investigation and field surveys”. Furthermore, contractual specifications included provisions addressing asphalt cutting and roadway reinstatement, and the bill of quantities included separate line items for both verge and roadway excavation. Taken together, the council concluded that the contract expressly contemplated under-road excavation as part of the original obligations.

Practical implications

The decision highlights several practical lessons for both employers and contractors:

1. Distinguish scope changes from execution effort – Parties should carefully distinguish between (a) a genuine change to the employer’s requirements and (b) increased effort required to achieve the original contractual requirements. Only the former is likely to constitute a compensable variation.

2. Review risk allocation for design development – EPC and design-build contracts frequently contain provisions expressly shifting responsibility for site investigation, design development and verification of preliminary engineering information onto the contractor. Accordingly, even where tender drawings appear to contemplate a particular construction methodology or alignment, the employer’s requirements may nevertheless allocate the ultimate risk of design development and constructability to the contractor. Where possible, contractors should undertake the necessary investigations before accepting those risks, incorporate appropriate contingencies within their lump-sum pricing, or negotiate limitations during the contract negotiation phase.

3. Retain records to evidence the “why” – The contractor weakened its case by failing to evidence why the pipe alignment moved from the verge to the road. Had contemporaneous records proven the shift was caused by the employer (e.g. failure to secure access rights, revised performance requirements or unforeseen utility conflicts), the outcome might have been different.

4. Governing law matters – The Privy Council interpreted the contract objectively – the standard approach under English and many common law systems. By contrast, some US jurisdictions and civil law systems seek to identify the parties’ mutual intention and shared commercial understanding. The council’s reasoning may apply differently depending on the contract’s governing law. It is therefore advisable to review the impact of whatever governing law may be proposed at the outset.

5. Arguments relying on implication are difficult – Contractors sometimes advance claims on the basis that an instruction was implied by necessity, conduct or surrounding circumstances, or “constructively” issued, or that the employer is estopped from denying an instruction despite the lack of a formal variation. Such arguments are difficult to win under a heavily risk-allocated lump-sum design-build contract. This is particularly true if records are incomplete, the contract includes a no oral variation clause, and there is an express stipulation that the engineer is not entitled to amend the terms of the contract, as exists in the FIDIC Yellow Book.

6. Procedural compliance is essential – Employers are likely to rely on the engineer’s technical expertise to ensure variations are not issued unnecessarily. In turn, engineers are likely to take a cautious approach before issuing variations. Where no variation is issued or proposal approved, entitlement under the FIDIC Yellow Book will almost certainly depend upon strict compliance with the notice and claims provisions contained in Clause 20.

Darchem Ruling Clarifies Status Of JV Members' Solo Claims

Fri, 10 Jul 2026 16:40:20 +00:00

This article was originally published in Law360 on April 27, 2026 and is reposted with permission.

The High Court's decision on Feb. 6 in Darchem Engineering Ltd. v. Bouygues Travaux Publics provides important guidance on a recurring but often underexamined issue: whether individual members of an unincorporated joint venture, or JV, can pursue claims in their own name against an employer.¹

JVs are a cornerstone of major construction and infrastructure projects, enabling parties to combine expertise, resources and risk. Yet, despite their commercial ubiquity, unincorporated JVs remain legally fragile structures.

While the JV agreement governs the relationship between the co-venturers, it is typically the JV — rather than its individual members — that operates as the contractual counterparty to the outside world.

This structural tension gives rise to difficult questions when the relationship fractures. If one JV member withdraws or refuses to participate, can the remaining member or members step into the breach and pursue claims alone? Do they have standing to commence proceedings or enforce decisions in their own name? Does the absence of one participant undermine the JV's ability to act altogether?

The Darchem decision confronts these issues directly, offering a clear reminder that, under English law, the answers lie not in commercial convenience, but in the careful construction of the underlying contract.

Background

The dispute arose from a new engineering contract subcontract at the Hinkley Point C nuclear project. The claimant, Darchem Engineering, was part of an unincorporated JV. It sought to enforce an adjudication decision of approximately £23.9 million ($32.2 million) against the main contractor — also an unincorporated JV.

Darchem brought three sets of adjudication proceedings alone, alleging it was "acting jointly and severally as the Subcontractor." The third adjudication was the subject of the enforcement proceedings in question.

The respondents raised the jurisdiction objection: Darchem was not the subcontractor — the JV was. Darchem was therefore not a party to the contract and therefore not entitled to pursue adjudication.

While the jurisdiction objection was rejected by the adjudicator, the objection was maintained during the enforcement proceedings. The question considered by the court was whether one entity in an unincorporated JV was entitled to bring proceedings in its own name, rather than together with the other company in the JV.

High Court Judgment

Judge Adam Constable agreed with the respondent and refused to enforce the decision. His reasoning provides a helpful road map for how English law considers a JV's standing.

Judge Constable considered that whether one party to an unincorporated JV could pursue a claim under a contract was one of contractual construction, which requires a determination of the "the objective meaning of the language by which the parties have chosen to express their agreement."

As Justice David Neuberger confirmed in 2015 in Arnold v. Britton, this means considering the following matters²:

The natural and ordinary meaning of the clause;
Any other relevant provisions of the contract;
The overall purpose of the clause and the contract;
The facts and circumstances known or assumed by the parties at the time the contract was executed; and
Commercial common sense, but disregarding subjective evidence of any party's intentions.

As Judge Constable clarified, it also means:

Reading the provisions of the contract together in a manner that, so far as possible, avoids inconsistencies between different parts in the assumption that the parties had intended to express their intentions in a coherent and consistent way; and
Except in exceptional circumstances, applying definitions, as agreed by the parties in the contract.

In reviewing the contract, the court identified the following issues.

Bilateral Versus Multilateral

The contract indicated that it was intended to be bilateral, not multilateral, with the conditions defining "parties" as "the contractor and the subcontractor." Also, the language used, i.e., "either," "both" and "the other," was consistent with there being a pair of entities, not a crowd.

Inference From Specificity

The contract identified where the word "party" was intended to address each constituent member of the JV, rather than the JV itself. The inference being that everywhere else, "party" meant the JV as a collective.

Industry Standard Wording

The commonly used wording "Where either Party constitutes (under applicable laws) a joint venture, consortium or other unincorporated grouping of two or more persons the liability of such persons to the other Party under this Agreement shall be joint and several" is consistent with there being only two parties: the employer and the JV.

Background Principles

In the context of unincorporated joint ventures, according to Construction Law, 4th edn, "if a joint venture is not incorporated it has no separate legal identity distinct from those of the venturers themselves."³ As the court reasoned, each constituent entity of the JV had to execute the contract.

Substance Over Signature

The execution block was not sufficient for Darchem to be considered a party for the purposes of the subcontract when taken in the whole and considered in light of the wording: "[t]he Parties are the Contractor and the Subcontractor."

The court also identified practical implications of finding that unincorporated JV members could act alone. Indeed, if each JV member could act alone, an employer could face multiple, concurrent adjudications on identical issues, each before a different adjudicator, leading to inconsistent results and a procedural quagmire.

Practical Considerations

Many questions arise from this scenario. What becomes of the damages claim? Can the participating JV members pursue the full amounts owed to the joint venture even if part of those sums would ultimately be attributable to the absent member or members?

If it is determined that each unincorporated JV member may bring proceedings individually, would any resulting decision, award or judgment bind the nonparticipating member? These issues also have practical implications for settlement: If only one JV member remains engaged, can a settlement ever effectively address the risk of the absent member reemerging later with competing claims?

Although the judgment relates to adjudication, the principles apply to international arbitration and litigation. There may well be mechanisms in the applicable rules that permit consolidation or concurrency of proceedings — such as the current London Court of International Arbitration or International Chamber of Commerce Rules — but that is not a simple matter and can lead to costly satellite litigation.

This decision also may have practical implications during the project. The court identified that where there is clear language, "party" and "parties" are references to the JV, rather than the individual members, and the less likely it is that the objective intention of the subcontract was that each constituent part could act severally, as opposed merely to having several liability.

So, what happens if one JV member decides to walk away or ceases to exist? Could that amount to an event entitling the employer to terminate the contract?

Unincorporated JVs are common in large infrastructure projects. However, they are not limited to such projects. Premeditated and thought-out risk allocation is key.

First, to avoid jurisdictional disputes later, parties need to agree who are the intended parties to the contract, what are their rights, and who can enforce them. They should consider how to deal with res judicata, i.e., there has been a final judgment and the matter cannot be raised again, parallel proceedings, consolidation and joinder when drafting an agreement involving an unincorporated JV.

Second, for contractors, it may be beneficial to explicitly provide that the lead member has authority to bring actions under the JV's behalf. This is seen, for example, in the 2017 International Federation of Consulting Engineers Red Book, which specifies that the "JV leader shall have authority to bind the Contractor and each member of the Contractor."

Further, especially for projects that are to run over large durations, contractors should negotiate for flexibility for changes in the JV team during contract negotiations to avoid being later being found in default when one member withdraws from the project.

Third, in terms of project management, employers should consider the commercial hierarchy within a JV. If a minor member becomes insolvent or withdraws, it may be a mere administrative hurdle. However, if the substantial lead partner, whose technical or financial credentials secured the bid, exits, it creates a fundamental shift in risk.

To avoid the employer having to accept a minor member taking over the scopes of the other JV members, contracts should distinguish between these scenarios, specifying where a withdrawal is a curable breach and where it constitutes a material change in control or a termination event that goes to the heart of the agreement.

The Red Book provides helpful guidance in this respect, stating that "neither the members nor (if known) the scope and parts of the Works to be carried out by each member… shall be altered without the prior consent of the Employer."

Fourth, subcontractors and other third parties should be mindful of the structural limitations of unincorporated JVs, particularly in relation to the main contractor's ability to pursue upstream claims against the employer. Where the JV is unable to act — whether due to internal disagreement or the absence of a participating member — this may impede the advancement of employer-facing claims. In turn, this can compromise a subcontractor's ability to recover sums due, especially where payment depends on pass-through or back-to-back recovery mechanisms.

Conclusion

The decision in Darchem is a reminder that, under English law, unincorporated joint ventures are creatures of contract, not separate legal persons. The ability of any individual JV member to act, whether in adjudication, arbitration or litigation, will turn on the objective construction of the underlying contract.

The judgment underscores a critical distinction that is often overlooked in practice: Joint and several liability does not equate to joint and several rights. Absent clear drafting, the party to the contract may be the JV as a collective, even if that collective has no independent legal personality. In such circumstances, unilateral action by one member risks jurisdictional failure, rendering even a successful adjudication decision unenforceable.

The decision emphasizes the discipline in drafting. It reinforces that parties who choose the flexibility of an unincorporated JV must accept the corresponding need for precision in defining how that vehicle operates — both during the project and when things go wrong.

Darchem Engineering Ltd. v Bouygues Travaux Publics & Anor [2026] EWHC 220 (TCC).
In Arnold v. Britton [2015] UKSC 36.
See Julian Bailey's Construction Law (4th edn, 2024) at 2.108.

Family Office Insights:
Managing Family Office AI Risk

Fri, 10 Jul 2026 13:06:54 +00:00

AI is rapidly becoming embedded in family office technology infrastructure and increasingly shaping how family offices operate. Across the sector, principals are seeking greater efficiency, improved decision quality and more effective systems to navigate an increasingly dynamic and complex investment and operational environment.

When appropriately deployed, AI can streamline processes, enhance the synthesis of complex information and improve responsiveness across lean teams. More fundamentally, AI has the potential to strengthen decision-making, particularly in environments where information is fragmented, workflows are distributed and institutional knowledge is not always formally captured.

However, family offices operate in a highly sensitive environment, where confidentiality, discretion and trust are paramount. At the same time, AI introduces a range of new and evolving risks. Threat actors, too, are also beginning to make increasingly sophisticated use of AI to target vulnerable high-value targets. As AI adoption accelerates, the central challenge is therefore no longer whether AI can deliver productivity gains, but how those gains can be realized within a controlled and risk-aligned framework. In short, the use of AI without appropriate governance and guardrails has the potential to become a significant area of strategic risk for family offices.

Key AI-related risks for family offices

The risks presented by AI in the family office context are not uniform; they will be use-case dependent and may arise across multiple layers, such as technology, data and information security, human resources, third-party relationships and organizational behavior, among others. Fundamental risks that we are increasingly observing include:

Model level and operational risks
Systemic risks may be baked into AI models themselves and, given the lack of transparency in how AI models behave, the risks may be difficult to detect during routine operations. For example, where AI models are trained on historical data, biases can be embedded that produce systematically skewed outputs.
Models can also experience drift, whereby performance degrades as underlying data patterns, model behaviors, market dynamics and regulations evolve. Additionally, staff usage may lead to inadvertent prompt injections. Inputs used from third-party materials, such as emails, could be malicious and lead to misleading outputs or even disclosure of sensitive data.
Hallucinations and automation bias
AI models are known to confidently produce inaccurate information that is not obviously wrong, but convincingly wrong. The quality and clarity of such hallucinations can create a tendency to place undue reliance on them; a phenomenon often described as “automation bias”.¹ This can reduce critical scrutiny, particularly where outputs align with pre-existing assumptions, or are produced efficiently relative to traditional methods. In decision-making contexts, such as investment, this creates a risk that AI shifts from being a decision-support tool to an implicit decision driver, without appropriate oversight or challenge.
Data exposure and confidentiality risks
The use of AI tools, particularly externally hosted or publicly available systems, creates a risk that personal and sensitive information about families, often spanning generations, may be disclosed, stored or processed outside the organization’s control, potentially resulting in breaches of confidentiality, loss of proprietary information or noncompliance with data protection requirements. Unlike traditional cybersecurity incidents, this form of exposure may arise through ordinary use without a clear breach event, making it more difficult to detect and manage.
Cybersecurity risks
Family offices face growing exposure to cybersecurity threats as they manage significant concentration of wealth, sensitive personal data and complex transactions across multiple entities, which makes them high-value targets. Vulnerabilities can also be introduced by third parties who have privileged data about families who expand the attack surface. A single successful breach could result in material financial loss, reputation damage and compromise of highly sensitive data.
AI-enabled fraud and social engineering
AI is increasingly being used to enhance the sophistication of fraud and social engineering attacks. This includes the generation of highly convincing written communications, as well as the use of voice cloning and deep fakes to impersonate trusted individuals. Family offices can be key targets given the nature of the data they deal with, the lean structures of the team, reliance on informal communication channels and the premium placed on speed and discretion in decision-making. The risk is not limited to technical compromise, but extends to manipulation of human behavior through increasingly credible forms of impersonation.
Vendor opacity
The use of third party AI tools introduces dependencies on external systems which often have underlying models, data practices and operational controls that are not fully transparent. Limited visibility over the full AI supply chain and underlying contractual arrangements can create legal, operational and jurisdictional risks that may not be apparent at the point of adoption, particularly where sensitive information is involved, or outputs are relied upon for decision-making.
Regulatory exposure
Although AI-specific regulation, such as the EU AI Act, continues to evolve, the use of AI is already subject to a wide range of existing legal and regulatory frameworks in most jurisdictions, such as data privacy and other regimes governing automated decision-making, laws prohibiting discriminatory practices and laws relating to product safety. Sector-specific regulators, such as the Information Commissioner’s Office and the Financial Conduct Authority in the UK, have also published specific guidance on how existing rules can be aligned with the UK government’s AI regulatory and policy objectives, and the same trend can be observed in many other jurisdictions. Inadequate controls over AI usage may therefore trigger exposure under these adjacent regimes, even where no AI-specific rules have been expressly breached.
Organizational and reputational risks
The risks above are multilayered, and their complexity necessitates a coordinated organizational response, rather than ad hoc or tool-specific controls. Given the nature of family office operations, where discretion, trust and long-term relationships are central, AI failure arising from AI use may have consequences that extend beyond operational disruption to include financial loss, legal and regulatory exposure and reputational harm. These risks are compounded by the threat posed by external actors who increasingly deploy AI for its cyber-offence capabilities, as noted above.

Governance response

The multilayered nature of AI-related risk requires a structured and proportionate governance response that aligns with the operational realities of the family office. The objective is not to introduce complexity or reinvent the wheel. It is to establish clear parameters within which AI can be used effectively and responsibly, as well as to introduce these within a governance framework that can be effectively and efficiently adopted by the organization.

1. Use-case identification and risk classification

Family offices should develop a clear understanding of how AI is being used across the organization. This can be achieved by developing and regularly refreshing an inventory of use cases, which can then be categorized by risk level, for example, distinguishing between administrative applications and those that inform investment or strategic decisions. This allows governance efforts to be tailored to the use-cases and focused on where risk is greatest.

2. Understand the AI systems you have deployed

Because of the inherent limitations of AI systems, it is important that family offices have a baseline understanding of how these systems operate, the type of models that have been procured (e.g.: narrow, generative or agentic), the capabilities of the underlying model enabling the use-case, the intended uses of the models that have been procured and whether they are being deployed in alignment with the intended uses, and so on. Where available, it is good practice to refer to dataset nutrition labels, system documentation (such as system or model cards), and evaluation results, as they can provide insight into explainability or interpretation, capabilities, expected behavior, limitations and risks, enabling more informed and disciplined use.

3. AI policies, data governance and regulatory compliance

A foundational step is the implementation of clear internal AI governance frameworks, setting out permitted and restricted uses of AI tools and establishing guardrails around the handling of sensitive data. This should be closely aligned with existing data governance practices, ensuring that confidentiality, privacy and data protection considerations are consistently applied in an AI context. Such policies must also be aligned with any AI-specific and existing legislation in parallel domains.

4. Human oversight and accountability

AI should not be a substitute for judgment, requiring clear lines of oversight and accountability, particularly in higher-risk use cases. Family offices should ensure that AI-assisted outputs are subject to appropriate human review, that the role of AI in decision-making processes is understood and, where material, documented and that ultimate responsibility remains clearly attributable to identified individuals or functions.

5. Supply chain mapping

To the extent possible, family offices should implement a proportionate approach to vendor oversight, focused on understanding the risks being transferred. This includes undertaking targeted due diligence on AI providers and reviewing core contractual terms to ensure, for example, that content submitted to AI systems remains the organization’s and is not used in outputs provided by the system to other users. In addition, mapping key dependencies within the AI supply chain can provide greater visibility over indirect exposures and support more informed risk-management.

6. AI literacy and awareness

Family office teams should have a practical understanding of how AI systems operate. They must be trained on limitations and the risks of AI, particularly in relation to hallucinations, potential bias, AI-enabled cyber threats and human behavioral manipulation risk, as well as the creation of security vulnerabilities through untrusted or malicious inputs. This does not require technical expertise, but rather sufficient awareness to ensure that inputs are reviewed and outputs treated with appropriate scrutiny, that suspicious or anomalous behavior is recognized and that AI tools are used in a controlled and security-conscious manner as part of dayto- day workflows.

Conclusion

AI presents a clear opportunity for family offices to enhance efficiency, strengthen decision-making and modernize operational processes. However, as its use becomes more embedded within core activities and operational infrastructure, the associated risks, ranging from data exposure and model limitations to external dependencies and AI-enabled threats, become correspondingly more complex and interconnected.

The challenge for family offices is to ensure that AI is integrated in a manner that is consistent with their existing risk profile, governance standards and the high degree of trust and confidentiality that underpins their operations. This requires a shift from viewing AI as a standalone tool to recognizing it as part of the broader operational and decision-making framework of the organization. A proportionate, well-structured governance approach enables family offices to capture the benefits of AI while maintaining discipline and oversight.

For more information, please visit our AI Law & Policy Hub.

However, automation bias can occur for reasons other than hallucinations as well.

CRD VI: Key considerations for non-EU banks

Fri, 10 Jul 2026 10:00:00 +00:00

The implementation of the Capital Requirements Directive VI (CRD VI) represents one of the most significant regulatory developments affecting third-country banks operating in the EU. With member states required to transpose CRD VI by 10 January 2026, and the new third-country branch regime applying from 11 January 2027, attention has recently focused on 11 July 2026, which marks the practical deadline for many institutions wishing to ensure that existing cross-border banking relationships are capable of benefiting from the grandfathering provisions.

For non-EU banks with European clients, this is an important opportunity to review existing documentation and future business models.

Grandfathering

The most pressing issue for financial institutions concerns grandfathering. CRD VI contains transitional provisions designed to preserve existing contractual relationships that were entered into before the new regime becomes fully operational. While the precise implementation will depend on individual member states, the policy objective is clear: existing cross-border banking services should not be unnecessarily disrupted merely because a third-country bank would, under the new rules, require authorisation or a third-country branch to continue carrying on certain activities. However, the protection is not unlimited. Material amendments to legacy transactions after the relevant cut-off date may jeopardise grandfathered status, particularly where changes are viewed as creating a new contractual relationship rather than simply administering an existing one.

This has led many non-EU banks to undertake extensive reviews of their European loan portfolios before the 11 July deadline. Banks are identifying facilities that may require amendment in the coming years, and considering whether documentation should be updated now while grandfathering remains available. Amendments extending maturity, increasing commitments or fundamentally changing commercial terms may attract particular scrutiny. By contrast, operational changes that merely facilitate the administration of an existing facility are generally viewed as presenting lower risk, although the legal analysis remains highly fact specific.

The treatment of novation with respect to grandfathering

How novation is used in the context of loan participation is also attracting attention. Novation is frequently used in syndicated lending to transfer participations between lenders. Under English law, a novation extinguishes the existing contractual relationship and creates a new one between the borrower and the incoming lender. The question therefore arises as to whether an incoming financial institution participating through a novation after the grandfathering cut¬off can itself rely upon grandfathering.

The issue is important because, unlike an assignment, a novation typically results in the incoming institution becoming a lender of record under a newly constituted contractual relationship. A regulator could therefore conclude that the incoming bank is entering into a new lending arrangement after the relevant grandfathering date, preventing reliance on the transitional provisions. While there remains debate within the market, many institutions are approaching post-cut-off novations cautiously and considering alternative transfer mechanisms where commercially feasible. Careful analysis of both the governing law documentation and the relevant national implementation measures will be essential before assuming that grandfathering continues to apply following a transfer.

Reverse solicitation

As third-country banks consider alternative methods of serving European clients, the issue of reverse solicitation has become increasingly important. Reverse solicitation is a regulatory concept under EU financial services law that allows a non-EU financial institution to provide services to an EU client where the client has approached the institution entirely on its own initiative, rather than because of any marketing or solicitation by the institution itself. CRD VI recognises that banking services provided exclusively at the unsolicited initiative of a client should not ordinarily trigger the third-country branch requirements. However, regulators have consistently interpreted reverse solicitation narrowly across several areas of European financial services legislation.

For non-EU banks, this means reverse solicitation should not be viewed as a business model capable of supporting systematic EU client coverage. Genuine reverse solicitation requires that the client approaches the bank entirely on its own initiative, without prior marketing, promotion or other solicitation by the institution, or persons acting on its behalf. Follow-on services closely connected with the original client request may be permissible, but any evidence of organised marketing into the EU could undermine reliance on this exemption. Internal governance, record keeping and clear policies documenting how client relationships originate and develop with time, will therefore become increasingly important.

The broader message for Indian banks is that CRD VI is not simply a licensing exercise, but a catalyst for reassessing European operating models, as part of a regulatory shift. Institutions should identify which relationships are capable of benefiting from grandfathering, understand how future amendments and transfer mechanics may affect such protection, as well as avoid assuming that reverse solicitation provides a broad exemption from the new regime. With regulators expected to scrutinise cross-border banking activity more closely, detailed legal analysis and careful transaction planning will be essential to minimise disruption while maintaining access to European clients under an evolving regulatory framework.

From recall to resolution: The lifecycle of mass product litigation

Wed, 08 Jul 2026 16:41:44 +00:00

As part of London International Disputes Week, Squire Patton Boggs were delighted to co-host a panel session on “From recall to resolution: The lifecycle of mass product litigation” with 2 Temple Gardens.

The panel was chaired by Miles Robinson from Squire Patton Boggs, alongside colleagues John Burlingame and Nicola Smith, 2 Temple Gardens’ Charles Dougherty KC and Meghann McTague, with Chris Occleshaw of Sedgwick Brand Protection.

Using a hypothetical scenario to illustrate how a dispute might develop, and the potential issues that could arise, attendees were taken through each stage of a product liability issue – from initial awareness of the issue to a group claim.

Nicola Smith discussed the immediate regulatory response required once a company becomes aware of a potential safety concern. The panel was then invited to consider whether any sector-specific product recall provisions applied, and to reflect on the obligation to: (i) notify the competent authority; and (ii) implement corrective actions, including bringing the product into conformity, withdrawing it or issuing a recall. John Burlingame explored and compared the US position, noting the differing notification position.

Chris Occleshaw addressed the practical considerations associated with implementing a product recall, highlighting challenges such as limitations in local warehousing infrastructure, the risk of fraudulent activity exploiting the recall process and the improper (and potentially hazardous) disposal of defective products at home by consumers. The panel then considered alternatives to a full product recall, along with measures to improve the effectiveness of the recall process. These included the use of over-the-air software updates to defective products, as well as the advantages of unique serial numbers to enhance traceability and mitigate against fraud.

John Burlingame offered a US perspective on mass claims for product liability in the US, considering the structure of claims in the US and the causation issues that arise in these claims. Charles Dougherty KC and Meghann McTague then turned to the UK position. They highlighted the various procedural routes by which claims could be brought, the strategic considerations involved from both claimant and defendant side, as well as whether potential legislative changes in the UK would impact the position. They also discussed why successful claims in the US did not necessarily translate into viable claims in other jurisdictions, particularly the UK.

In closing, the panel considered the increased frequency of product recalls and how that has lowered the potential brand damage that such a recall causes. Finally, the session considered the impact of social media when it comes to increasing the risks to business of product recalls.

Pensions weekly update: 8 July 2026

Wed, 08 Jul 2026 10:35:58 +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 Pension Schemes Act 2026 contained the framework for changes to pooling and governance arrangements in relation to the Local Government Pension Scheme (LGPS). The pooling regulations and governance regulations provide the details and came into force on 30 June 2026. To accompany these regulations, the government has now published statutory guidance relating to asset pooling, statutory guidance relating to the preparation and maintenance of an investment strategy statement and statutory guidance in relation to fund governance.
Gaucho Rasmussen, executive director, enforcement and legal group at The Pensions Regulator (TPR) has issued a blog post urging trustees, administrators and pension providers to respond to the Department for Work and Pensions’ consultation on amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 (which we covered in a previous update). The blog post highlights how the proposed changes to regulations are intended to help with the fight against pension scams. The consultation closes on 21 July 2026.
The Financial Conduct Authority (FCA) has issued a press release alongside its report on insurance firms’ price and value practices for unit-linked non-workplace pensions and savings. Although positive steps are being taken by many firms, the FCA finds that legacy pension products often deliver poorer value compared with newer arrangements, with higher charges and lower investment returns. The FCA sets out its expectations for improvements, saying “we expect firms to engage with us where they believe that legal, regulatory, taxation or other practical barriers affect their ability to deliver.”
The Pensions Dashboards programme has issued a blog post highlighting the findings of an independent evaluation report on how the dashboards connection process has worked in practice. The evaluation identifies seven lessons to inform future connection activity, including setting more realistic and transparent timeframes for connection and improving the availability of testing environments.
TPR has published its annual report and accounts 2025 to 2026. The report sets out TPR’s performance in meeting its corporate priorities against the backdrop of new requirements under the Pension Schemes Act 2026 and TPR’s commitment to evolving its regulatory approach.
In a House of Lords debate on 30 June, Lord Livermore, financial secretary to the Treasury, said that the government would review accessibility to private pension savings in the event of terminal illness. It was noted during the debate that while individuals with a life expectancy of less than 12 months may already take a serious ill health lump sum at any age (subject to medical evidence and scheme rules), owing to medical advancements it is harder for medics to estimate that life expectancy will be less than 12 months. This means that potentially fewer terminally ill pension scheme members will be granted a serious ill health lump sum than Parliament had originally intended. Lord Livermore said that the government would also consider during its review the fact that early access rules vary between schemes.
Legislation has been made that will bring into force TPR’s Code of Practice: Authorisation and supervision of collective defined contribution (CDC) schemes on 31 July 2026. The existing code will be revoked from the same date.
Labour & Employment partner, David Whincup, looks at options for dealing with employee grievances that have been drafted using artificial intelligence, in this blog post.

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

Will businesses be taxed for using AI?

Tue, 07 Jul 2026 18:05:28 +00:00

As AI systems continue to be adopted at scale, they are increasingly performing tasks carried out by human employees. From drafting documents, to writing code, to handling customer queries and concerns have grown about the economic risks this shift may pose, including job displacement and the erosion of the income taxes generated by human labour.

This rapid automation of roles raises difficult questions around labour displacement, reduction and redeployment. A direct economic consequence of this is the growing fiscal pressure that governments may face due to loss of income tax. This has renewed interest in proposals for a robot tax, alongside the emergence of AI policy research on alternatives such as token tax and FLOP tax, each targeting a different point in the AI value chain: labour displacement, AI-driven usage and compute power.

In short, as companies increase the pace and scale of AI adoption, there is an increasing likelihood that today’s efficiency gains will become tomorrow’s tax liabilities. Understanding if and how governments are proposing to tax AI deployment is therefore a new, but critical component of effective business strategy and tax planning.

Robot tax

One potential economic consequence of businesses automating roles previously performed by human employees is a reduction in income tax revenues generated from labour.

A key policy question is whether AI systems that perform tasks traditionally carried out by workers should be taxed as capital assets, rather than as a substitute for labour. Treating it as capital can create a tax-driven incentive for firms to replace human workers with automated systems, and a robot tax would eliminate this fiscal advantage and restore tax neutrality between human and automated labour.

This would also prompt businesses to consider the real cost of labour replacement by weighing the benefits of human labour against automation. A robot tax can preserve government revenue that would otherwise be lost to automation and can be used to fund retraining programmes or unemployment support for displaced workers. However, taxing the use of machines can disincentivise investment in new technology, and the method of taxation would require a careful exercise of balancing labour interests with advancing innovation.

Token tax

Tokens are small units of data that come from breaking down whole words into parts of words, or punctuation, that AI models process language in. This is a computational unit, and not a linguistic one. AI providers typically use token-based pricing for AI models, with both inputs and outputs being chargeable.

Unlike a robot tax, which targets labour substitution, a token tax would seek to capture value from AI usage directly, regardless of whether specific jobs are displaced. A token tax would be a levy applied to the provider’s billed token cost and may be simpler to implement as tokens are already tracked and billed by AI providers, making it a measurable proxy for AI-driven business activity.

One of the challenges is that taxation may vary by model type. Models with less efficient architecture generate far more tokens for the same task than advanced models. The tax burden would depend heavily on which models a business happens to use rather than the value or complexity of the work performed.

FLOP tax

Significant computational resources are required to train and operate increasingly powerful models. The most capable AI systems depend on vast amounts of compute, measured in FLOPs. FLOP regulation is already within regulatory scope of the EU under the EU AI Act, whereby compute usage beyond a certain threshold would serve as a proxy for model-capability and trigger enhanced safety controls for general-purpose AI models that pose systemic risks.

Beyond systemic risks, however, compute can also raise economic challenges as resource concentration can create barriers to entry. A FLOP tax (also called compute tax) would be borne by the AI model provider, and impose a levy based on the volume of compute used to train or run AI systems.

Critics argue that a FLOP tax could discourage investment in AI innovation because taxing the very infrastructure needed for AI development is likely to be a self-defeating policy. And, if a FLOP tax were introduced, it would be surrounded by challenges around accurately measuring and monitoring compute usage given the global nature of the AI infrastructure. Compute resources, data centres, cloud networks, semiconductor manufacturers and model developers are geographically dispersed, with a handful of jurisdictions occupying critical chokepoints in the AI supply chain. This creates significant international interdependence, while also raising questions about where a FLOP tax should be imposed and if and how it could be enforced. In the absence of international coordination, AI providers may relocate compute-intensive activities to lower-tax jurisdictions, potentially undermining the effectiveness of the tax, increasing geopolitical competition for AI investment and complicating national efforts to achieve AI sovereignty.

Conclusion

Regardless of whether AI use is taxed, it seems clear that widespread AI adoption will not only reshape the future of work, but will also shift the cost base of most, if not all industries, leading to AI-driven fiscal challenges. Enterprises that are currently adopting AI should therefore stay abreast with developments as AI efficiencies could potentially introduce costs in the future that are not currently anticipated.

UK Update: UK Supreme Court grants permission to appeal in opt-out environmental claim brought in the Competition Appeal Tribunal

Tue, 07 Jul 2026 13:57:19 +00:00

Update

The UK Supreme Court has granted permission for proposed class representative Professor Carolyn Roberts to appeal against the Court of Appeal’s decision not to allow an environmental claim against six water and sewerage undertakings to proceed under the Competition Appeal Tribunal’s opt-out collective proceedings regime.

Background

In March 2026, the Court of Appeal upheld the 2025 decision of the Competition Appeal Tribunal (CAT) not to allow an environmental claim against six water and sewerage undertakings, regarding the reporting of pollution incidents to proceed under the CAT’s opt-out collective proceedings regime for breaches of competition law.

This case has been closely watched, as it is the first time the CAT’s collective proceedings regime, which is currently the only forum for bringing US style opt-out claims in England and Wales, has been used to try to bring an environmental claim, arguably trying to extend the scope of the opt-out regime beyond more traditional competition cases.

While the CAT and the Court of Appeal declined to certify the claim, the first step in the collective proceedings regime, this was not because they did not consider that the acts complained of amounted to a potential abuse of dominance in breach of competition law, but because the remedies for any inaccurate reporting were limited to those set out in the Water Industry Act 1991 (WIA). This is also the question for the Supreme Court: Is a cause of action under the Competition Act excluded by the WIA?

We could therefore see further attempts to broaden the scope of collective proceedings brought in the CAT to non-traditional competition claims in this way. While the Law Commission has recently announced it is considering a potential opt-out class actions regime for consumer claims more generally (see our update here: Update: Law Commission Considering a New Consumer Class Actions Regime – What You Need To Know | Insights | Squire Patton Boggs), any such regime outside of the CAT is likely to be some way off.

What is the claim?

Professor Carolyn Roberts, an environmental science and water management specialist, seeks to act as class representative to bring claims against six English water and sewerage companies, seeking damages on an “opt-out” basis on behalf of millions of their household customers. The claims are understood to backed by up to £31 million of litigation funding. Separate claims were issued against each water company, but the CAT directed that they be heard together. The claims allege that the water companies had under-reported the number of pollution incidents, which under the established pricing regime allowed them to charge higher prices to their customers. The claims seek damages comprising the difference between the amounts customers actually paid, and the lower amounts they say should have been charged if pollution incidents had been properly reported. Crucially, given the CAT’s collective proceedings regime is limited to breaches of competition law, this is alleged to constitute an abuse of a dominant position contrary to s.18 Competition Act 1998.

Following a three day certification hearing in 2025, the CAT found that as the damages claim was tied to under-reporting (if established) being in contravention of a relevant condition of appointment under the WIA, the statutory exclusion of “other remedies” in s.18(8) WIA operated to exclude these damages claim for abuse of dominance.

While not strictly necessary to do so, the CAT’s judgment went on to consider whether the alleged conduct was outside the scope of competition law and the CAT expressly said that if the claims were not so excluded by the WIA, it would have granted collective proceedings orders (CPOs) in each set of proceedings.

The CAT’s refusal to grant the CPOs therefore turned on the wording of the WIA, rather than any finding that this was not a competition law claim within the scope of the CAT’s collective proceedings regime.

The appeals

Professor Roberts first appealed to the Court of Appeal. The question before it was whether the CAT was correct as a matter of law to find that the claims were excluded by the WIA. In March 2026, it said that the key question was whether Professor Roberts was claiming remedies that were available only by virtue of the relevant acts (the alleged inaccurate or under-reporting) constituting a contravention of the WIA. It found that this was an essential ingredient of her claims, and so dismissed the appeal, though there was a dissenting judgment from Zacaroli LJ, who did not think the claim could only be maintained by relying on the reporting obligations in the licence conditions.

The Supreme Court has now granted permission to appeal this finding.

Iran deal uncertainty threatens sanctions relief

Tue, 07 Jul 2026 13:00:00 +00:00

On June 17, the Trump administration formalized a memorandum of understanding (MOU) with Iran to end hostilities, open the Strait of Hormuz, and commit within 60 days to a final deal on broad sanctions relief and Iran’s nuclear program. The MOU also commits the US to immediate sanctions relief, and as a first, quite significant step, the US Treasury Department authorized purchases of Iranian oil without risk of sanctions, including the unprecedented move of allowing Iran to use the US financial system until August 21, 2026. Read our publication on OFAC General License X for additional information.

Whether the rest of the provisions in the MOU will come to fruition, not to mention a final deal, is an open question – although traffic through the strait has picked up in recent days, the first weeks following the signing were rocky with Iran and the US trading fire, and significant issues must still be negotiated to reach a final deal. Stakeholders should expect the political situation to remain fluid and for changes to the sanctions to come in fits and starts.

This alert outlines the key provisions of the deal, the challenges to implementation, and three scenarios projecting how the future of the MOU could unfold and their impacts on business.

What is in the deal?

The administration has not officially released the text to the public, but major news outlets have published the language, and the key provisions include the following:

Permanent cessation of all military operations, including in Lebanon
Immediate 60-day “only” Iranian opening of Strait of Hormuz to commercial traffic, without charge, and engagement with Oman to define the future administration of the strait
Immediate 60-day US sanctions waivers on Iran’s export of petroleum and products, and all associated services, such as banking, insurance and transportation
US unfreezing of Iranian funds held abroad – “upon implementation” of the agreement– which Iran may use to pay any party it chooses
Iran’s commitment to not procure or develop nuclear weapons, and to dispose of its stockpiled enriched nuclear material pursuant to a “mutually agreed mechanism”
US commitment under the final deal to terminate all sanctions against Iran, including UN sanctions, and to develop with Gulf partners a US$300 billion reconstruction plan for Iran

What are the challenges to implementation?

A number of things could prevent the parties from securing these terms. For example, further negotiations could be derailed by MOU violations, or the 60-day sanctions relief for Iranian oil sales could fail to materialize in a meaningful way, blocked by existing EU, UK and Swiss sanctions – which are not eased by US licenses – as well as Financial Crimes Enforcement Network (FinCEN) restrictions on US banks maintaining correspondent accounts on behalf of Iranian banks. Even if the parties weather the rocky start, and negotiations proceed to a final deal, Congress could still limit the administration’s ability to deliver on the additional promised relief through mandatory sanctions.

And if none of that happens, the parties reach a final deal, and the US lifts sanctions and regulatory restrictions and allows for normalized economic relations with Iran, the private sector around the world could still decide to pass, and could do so at any step along the way. Businesses could easily remain cautious given the whiplash of previous Iran policy reversals (like the first Trump administration’s reimposition of sanctions following President Obama’s sanctions easing under the Joint Comprehensive Plan of Action (JCPOA)); existing partner and UN sanctions regimes; global banks’ reluctance to process transactions with Iran; and legacy implications of risks associated with banking in Iran, including broad economic entanglements with designated groups like the Iranian Revolutionary Guard Corps (IRGC), Hezbollah and Hamas.

How could this all unfold and what does it mean for businesses?

To consider the implications of the MOU and a final deal for businesses, we consider three scenarios of how the initial agreement and final deal could unfold.

Scenario 1: The MOU generally holds and the parties agree to a final deal based on its provisions

Iran agrees to permanent and verifiable denuclearization, and, in response, receives broad US and international sanctions relief. Assuming many private sector actors around the world, including US companies, judge that the agreement will be durable, they begin to explore opportunities in Iran, which has vast development needs. Iran can export oil without sanctions impediments, get paid in the currency of its choice, including US dollars, and rebuild its foreign reserves, some of which it spends on economic development and bilateral trade. These funds are held in Iranian banks, not in external accounts. Iran also reestablishes banking connections with other countries (likely limited at first), which further enable foreign investment to flow to Iran.

Wild cards

Financing terrorism – The MOU establishes that Iran can use its unfrozen funds “for any final beneficiary” it chooses, implying that Iran can continue financing its proxies – Hamas, Hezbollah, the Houthis. However, broad-based sanctions relief may not extend to these parties, ensuring continued risk of sanctions exposure through Iran. If history is a guide, Iran will continue to financially prop up its proxies. This will be enough to discourage many private sector actors from engaging with Iran, likely including major global banks, without which Iran’s international business will continue to be limited. It may also result in a further push for Iran to access banking channels through front companies in key banking jurisdictions, like the UAE and Hong Kong.
View from the region – The MOU makes no provisions for Iran’s missile program and envisions Iran defining the administration of the Strait of Hormuz, which pose potentially significant security and commercial threats to Iran’s Arab neighbors. The Gulf States likely will be very uneasy with these arrangements going forward, but will not overtly oppose or undermine them, choosing a flawed deal over a return to war.

Scenario 2: The parties engage in negotiations, which are prolonged to come to a final deal

Using the existing 60-day sanctions waivers, Iran exports oil to markets including China, India and Turkey and receives payment, at least in part, in US dollars. With negotiations ongoing, the Trump administration extends the waivers beyond August 21. This coincides with the end of the 60 days of “no charges” for passage through the strait, and Iran resumes tolls, pursuant to the MOU provision that Iran “defines the administration” of the strait. Iran rebuilds its reserves from these income streams. However, the broad US and international sanctions architecture remains in place, and this prevents additional economic engagement with Iran beyond oil purchases.

Wild cards

US congressional action – Members of Congress have expressed frustration at not being privy to the details of the Iran negotiations – with many fearing a step back from sanctions and Iran’s reintegration into the global economy would risk destabilizing Lebanon, Gaza, Israel and other high-risk jurisdictions through proxy organizations. In response, Congress may update Treasury’s counterterrorism authorities to make sanctions on the IRGC, Hezbollah, Hamas and other groups historically associated with Iran obligatory rather than discretionary, particularly around midterms as members seek to reinforce their reputations for being tough on terrorism or consistently protective of American peers like Israel. If the Office of Foreign Assets Control continues to add Iranian targets to its Special Designated Nationals (SDN) list, members may perceive this as an intermediate pressure point that gives the Trump administration flexibility to negotiate a resolution with Iranian authorities, while reinforcing rules that hold banks to the same financial integrity standards as Iran reintegrates into the global economy.
Administration reversal on the oil waivers – Reacting to either failure to make consistent progress in negotiations or to the tolls, the Trump administration could decide to terminate the oil waivers at any time.
View from the region – Out of necessity, the Gulf States likely fall in line. They will seek more consultation with the Trump administration than they have had to this point, but none will risk antagonizing Iran over procedural matters that are mostly outside of their control.

Scenario 3: The MOU falls apart before any meaningful progress is made on a final deal

Continued Iranian disruption to commercial shipping in the Gulf, more conflict between Israel and Lebanon, or limited Iranian diplomatic flexibility stymie meaningful negotiation toward a final deal. The US abandons the terms of the MOU, terminates the oil waivers, reverses any steps to unfreeze Iran’s funds held abroad, and drastically increases economic pressure on Iran and any Iranian facilitators, with or without resumed military action. The increase in economic pressure could be significant and come without warning, including sanctions or regulatory actions – such as FinCEN’s Section 311 actions – against non-US financial institutions, corporates, the shipping or insurance industries, ports, or any party facilitating the export or purchase of Iranian oil. This pressure could lead Iran to close the strait once again and would signal increased sanctions risk for any parties transacting with a nexus to Iran.

Sanctions brief

Mon, 06 Jul 2026 15:45:00 +00:00

The Commodities & Shipping Practice at Squire Patton Boggs highlights the following recent developments regarding US economic sanctions:

Iran

Temporary sanctions relief – On 22 June, the Office of Foreign Assets Control (OFAC) issued General License (GL) X, providing substantive, but temporary, sanctions relief for Iran’s energy sector for the first time since 2016.
- Subject to limitations, GL X authorizes US and non-US persons to engage in transactions necessary to the production, sale, offloading and delivery of Iranian-origin crude, petroleum products and petrochemicals until GL X expires on August 21, 2026, at 12:01 a.m. EDT.
- GL X also authorizes US imports, US$ transactions and dealings with certain blocked vessels (e.g., docking, anchoring, crewing, emergency repairs, environmental mitigation, salvage, vessel management, crewing, bunkering, piloting, registration, flagging, insurance and classification).
- EU and UK sanctions remain in effect, and may be applicable to transactions authorized under GL X. Challenges may arise regarding insurance, financial services, logistics and other services.
- Parties may be subject to restrictive sanctions clauses imposed by financial institutions, charterparties and other agreements.
- GL X provides only temporary sanctions relief. Indeed, it is possible GL X could be revoked before it expires if US-Iran negotiations fall apart. This contingency should be addressed in relevant contracts, both with regard to the assignment of risk and setting realistic timelines for performance of all relevant transactions and activities.
Longterm sanctions relief – Under a memorandum of understanding (MOU) signed on 17 June, a 60-day negotiation process is underway to reach a final agreement between Iran and the US. A final agreement, if reached, would provide long-term relief from US primary and secondary sanctions against Iran. Termination of sanctions is expected to be conditional and phased pursuant to an agreed schedule. Vice President J.D. Vance has emphasized that further sanctions relief will be contingent on Iran meeting its agreement obligations.
Strait of Hormuz – The MOU reopened the Strait of Hormuz and initiated an end to the US naval blockade of Iranian ports. Under the agreement, passage through the strait is toll-free for 60 days, although it is unclear whether Iran will attempt to impose tolls at a later date. US and Iranian forces exchanged strikes from 25 to 28 June after Iran struck a commercial vessel in the strait, threatening the MOU’s status. However, both sides agreed to stand down and resume negotiations, leading to increased traffic in the strait. Before the strikes, reports indicated an increase in vessels crossing the strait with their automatic identification system (AIS) activated. Following the strikes, the number of vessels broadcasting their passage dropped, but traffic has rebounded again in recent days. Still, visible traffic is higher than it has been for several months.
Liquefied petroleum gas (LPG) exports – New blocking sanctions were imposed on tank vessels, as well as a network of front companies in the UAE involved in exporting Iranian LPG to Asia. In many cases, such exports were carried out under false Omani certificates of origin.

Cuba

Energy – The US Department of State designated Cuba’s state-owned oil and gas company, Union Cuba-Petroleo (CUPET), on the Specially Designated Nationals and Blocked Persons (SDN) List pursuant to Executive Order (EO) 14404 (May 1, 2026), which expanded Cuba sanctions to authorize the blocking of non-US parties operating in Cuba’s energy sector. The Trump administration announced it will “continue to target Cuba’s ability to leverage energy trade.” Also at risk are non-US persons engaged in Cuba’s metals, mining, finance and defense sectors.
Grupo de Administración Empresarial SA (GAESA) – OFAC issued FAQ 1258 to confirm the risk to non-US persons dealing with GAESA, the Cuban military-run conglomerate. GAESA is involved in Cuba’s shipping and port sector, particularly port management (e.g., Port of Mariel), container terminals, warehousing, logistics and related services. GAESA typically acts through subsidiaries, like Almacenes Universales SA (AUSA). Although GAESA was added to the SDN List in 2020, its designation in May 2026 by the US State Department under EO 14404 created new risk for non-US persons. Substantial transactions that benefit GAESA or its subsidiaries (directly or indirectly) expose non-US persons to secondary sanctions. Consequently, two major container companies announced they were suspending bookings to and from Cuba. This is dramatically reducing Cuba’s shipping volume.
AUSA – The US State Department sanctioned AUSA (a GAESA subsidiary) involved in logistics, warehousing, handling and transportation services, including port-related activities. Other Cuban entities involved in Cuban financial services, mining and steel production were also sanctioned.

Venezuela

Amended general licenses – OFAC renewed and amended several GLs authorizing certain commodity and shipping transactions involving the Government of Venezuela (GoV), including GL 46C (oil and petrochemicals), GL 47A (US diluents), 48B (supply of certain items and services), GL 50B (oil and gas operations), GL 51B (minerals/gold), including GL 52A (certain transactions with PdVA) and GL 54A (mineral operations). Each GL is narrowly drawn and subject to terms and conditions. Generally, these GL amendments expand the permissible dispute venues for contracts with PdVSA to include the UK, France and Singapore, subject to conditions.
Contract terms – Some of the Venezuela GLs require US law and specific dispute venues. OFAC has clarified in FAQ 1260 that US law must govern contract interpretation (e.g., performance, breach, remedies, payment obligations, termination, validity, assignment/novation and enforceability), but contract terms can recognize Venezuelan law concerning the underlying activity (e.g., governing exercise of Venezuela’s sovereign regulatory authority, permits and licenses, concessions, labor, environmental, health and safety, etc.). Regarding venue, certain GLs require dispute proceedings to be in the US, UK, France or Singapore. If parties agree to arbitration, the procedural rules applicable are those agreed by the parties or the rules of internationally recognized institutions, or the rules of the seat of arbitration.

Russia

Petroleum services – In a new FAQ 1216, OFAC clarified its January 2025 Determination prohibiting the export/ reexport, or supply of “petroleum services” from the US (or by US persons) to Russia. These are services related to exploration, drilling, well completion, production, refining, processing, storage, maintenance, transportation, purchase, acquisition, testing, inspection, transfer, sale, trade, distribution or marketing of petroleum, including crude and products, as well as any activities that help Russia develop, maintain or expand its domestic petroleum production and refining resources. This includes services related to natural gas as a byproduct of oil production in Russia.
Metals and mining – In a new FAQ 1117, OFAC clarified its Determination of February 2023, authorizing sanctions for operating in Russia’s metals and mining sectors. This authority may be used to block non-US persons for activities with blocked persons in this sector. However, OFAC does not intend to block persons for providing goods or services solely for the health or safety of personnel, or the environment in these sectors (e.g., safety equipment and preventative or rescue efforts, etc.).
Liquified natural gas (LNG) – OFAC issued GL 55F, authorizing certain services related to Sakhalin-2.
Lukoil – OFAC renewed GL 131 (131G) authorizing contingent contracts for the sale of Lukoil entities.

Family Office Insights:
An Update on Beneficial Ownership Reporting Requirements Under the Corporate Transparency Act

Mon, 06 Jul 2026 11:28:28 +00:00

The Corporate Transparency Act (CTA) has changed significantly since beneficial ownership information (BOI) reporting requirements first took effect in January 2024. On March 26, 2025, the US Department of the Treasury’s (Treasury) Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that significantly narrowed the scope of entities subject to BOI reporting.

Treasury stated that the revised rule was intended to reduce compliance burdens on US businesses, while continuing to support national security and law enforcement objectives through a more targeted reporting framework focused on foreign entities operating in the US.

The interim final rule is currently in effect as the final rule awaits review and approval by the Office of Management and Budget (OMB). As a result, many domestic family office structures that were previously expected to file BOI reports are no longer subject to CTA reporting requirements. However, several international family office arrangements, offshore holding structures, investment vehicles and foreign-owned operating companies may still fall within the CTA’s scope.

In addition to FinCEN’s rulemaking, Congress has made efforts to scale back the CTA through proposed legislation, S. 4419 (introduced April 2026) and H.R. 425, the Repealing Big Brother Overreach Act (introduced January 2025). Both bills would repeal or substantially limit CTA reporting obligations for many privately held entities. It remains to be seen whether these legislative efforts will succeed. Additionally, on June 5, 2026, OMB’s Office of Information and Regulatory Affairs received a copy of FinCEN’s final rule to review.

This alert provides an overview of the revised reporting framework and highlights several considerations for family offices and private wealth structures.

What is the CTA, and why was it enacted?

Congress enacted the CTA in 2021 as part of the Anti-Money Laundering Act of 2020 to address public interest concerns that anonymous legal entities could be used to facilitate money laundering, sanctions evasion, corruption, terrorist financing, tax crimes and other illicit activities. The CTA also served as a response to longstanding criticism from the Financial Action Task Force, a global financial watchdog that had identified the lack of timely access to beneficial ownership information as a weakness in the US anti-money laundering framework. The CTA went into effect in 2024, and originally required domestic companies formed in the US and foreign entities registered to do business in the US to report their BOI to FinCEN unless an exception applied. It also sought to create a centralized federal database containing beneficial ownership information for many entities formed or registered in the US.

What changed in 2025?

Following challenges of the CTA’s scope in federal court, FinCEN issued an interim final rule in March 2025 that substantially narrowed the CTA’s reach. The interim final rule altered the BOI reporting framework by explicitly exempting “domestic reporting companies” from the term “reporting company.” This definitional change effectively narrowed the term to only include entities formed under the laws of a foreign country that are registered to do business in a US state or tribal jurisdiction through a filing with a secretary of state or similar office. It further exempted these foreign reporting companies from reporting beneficial ownership information on any US persons, and maintained that US persons were not required to provide beneficial ownership information to foreign reporting companies.

FinCEN’s stated objectives for narrowing the scope of the CTA were to eliminate the burden on domestic entities, particularly small businesses, of having to self-report while still requiring foreign entities, which pose greater national security and illicit financing risks, to report.

The interim final rule became effective upon publication in the Federal Register on March 26, 2025.

Who must report?

For most family offices, the threshold question is now whether a foreign entity qualifies as a “foreign reporting company.” A foreign reporting company is an entity that both:

Is formed under the laws of a foreign jurisdiction
Registers to do business in a US state or tribal jurisdiction through a filing with a secretary of state or similar office

If a foreign entity is not registered to do business in the US, the CTA will generally not apply. Importantly, the reporting obligation turns on where the reporting entity is organized and whether it is registered to do business in the US, rather than its ultimate ownership. As such, a domestic subsidiary would not be subject to reporting even if wholly foreignowned. Family offices should not assume, however, that the use of a US subsidiary automatically eliminates CTA considerations. Foreign parent entities should separately evaluate whether their US activities may require registration under applicable state law, which could result in the entity becoming subject to CTA reporting requirements.

Examples potentially subject to reporting

Examples of structures that may still trigger CTA reporting obligations include:

A Cayman Islands holding company that registers in Delaware to manage US real estate investments
A Luxembourg investment vehicle that registers to conduct business activities in the US
A UAE family office management company that establishes a US office and registers in Florida
A foreign operating company owned by a family trust that registers in Texas to conduct business operations
A foreign real estate acquisition vehicle that registers in a US state to own and manage a portfolio of US properties

Examples generally outside the reporting regime

Examples that may not be subject to CTA reporting include:

A Delaware LLC formed to hold family investments
A domestic family office management company
A domestic special purpose investment vehicle
A US holding company owned by a family trust
A foreign investment vehicle that merely holds passive investments in US funds, and is not registered to do business in a US state

Do the 23 exemptions still apply?

Yes.

Although the number of entities subject to the CTA has been significantly reduced, the statutory exemptions remain in place and continue to play an important role in determining whether a foreign reporting company must file BOI reports.

For family office clients, some of the more relevant exemptions include the following:

Large operating company exemption

An entity may qualify if it:

Employs more than 20 full-time employees in the US
Maintains a physical operating presence in the US
Reports more than US$5 million in gross receipts or sales.

This exemption is often relevant for family-owned operating businesses, manufacturing companies, hospitality businesses and other active enterprises.

US Securities and Exchange Commission (SEC)- regulated and investment adviser exemptions

Certain SEC-registered investment advisers, registered funds, broker-dealers and other regulated entities may qualify for an exemption.

These exemptions may be relevant where family offices sponsor investment platforms, private funds or co-investment structures that operate through regulated affiliates.

Pooled investment vehicle exemption

Certain pooled investment vehicles advised or operated by exempt entities may qualify for an exemption.

This analysis frequently arises in connection with offshore fund structures, club deals and family-sponsored investment vehicles.

Tax-exempt entity exemption

Private foundations and certain charitable organizations may qualify for an exemption, although separate analysis may be required for foreign charitable structures and related entities.

Subsidiary exemption

Certain entities wholly-owned or controlled by exempt entities may themselves qualify for an exemption, making ownershipchain analysis particularly important.

What information must be reported?

For entities that remain subject to the CTA, FinCEN requires reporting of information about both the reporting company and its beneficial owners. Family offices should be aware that a foreign reporting company may still have a filing obligation even where none of its reportable beneficial owners ultimately need to be disclosed because all such individuals are US persons.

Company information

Foreign reporting companies must generally report:

Legal name
Jurisdiction of formation
US registration information
Principal business address
Tax identification information

Beneficial owners

A reporting company must disclose information regarding its beneficial owners who are not US persons.

A beneficial owner is any individual who, directly or indirectly:

Owns or controls at least 25 percent of the ownership interests of the reporting company; or
Exercises substantial control over the reporting company

For each reportable beneficial owner, FinCEN generally requires:

Full legal name
Date of birth
Residential address
A unique identifying number from an acceptable government-issued identification document, together with an image of that document, unless the individual has obtained a FinCEN identifier

Ownership interests

The 25 percent ownership test is broadly applied, and may include direct or indirect ownership through equity interests; membership interests in an LLC; partnership interests; stock or similar ownership interests; convertible instruments; options or other rights to acquire ownership interests and certain trust or intermediary arrangements.

For family office structures, ownership often must be analyzed through multiple tiers of entities, trusts, and holding companies to determine whether an individual ultimately owns or controls 25 percent or more of the reporting company.

Substantial control

An individual may be a beneficial owner even if he or she owns little or no equity in the entity.

FinCEN’s substantial control test includes individuals who:

Serve as a senior officer of the reporting company;
Have authority to appoint or remove senior officers, or a majority of the governing body;
Direct, determine or have substantial influence over important decisions of the entity; or
Otherwise exercise substantial control over the reporting company

As a result, multiple individuals may need to be reported under the substantial control standard.

For family office structures, substantial control may extend to family principals, managers, directors, trustees, protectors or other individuals who possess significant decision-making authority over the entity.

Why does this matter for family offices?

Although the CTA now applies to a much smaller group of entities, family offices frequently utilize the types of international structures that remain within the law’s scope.

Particular attention should be paid to:

Offshore holding companies
Foreign family investment vehicles
Cross-border real estate structures
Foreign management companies with US operations
International estate planning structures involving foreign entities
Family-controlled operating businesses expanding into the US

Historically, many family offices focused on whether their domestic entities had CTA filing obligations. Now, the more important assessment is whether a foreign entity has registered, or may be required under applicable state law to register, to do business in the US. Because the CTA’s revised reporting framework is tied to registration status, family offices should carefully evaluate whether a foreign entity’s US activities may trigger state-law registration requirements that could ultimately result in the entity having to report.

What UK employers need to know about the extension of right to work checks from 1 October 2026

Fri, 03 Jul 2026 11:31:10 +00:00

UK organisations will recall that the Home Office consulted in December 2025 on the extension of the right to work (RTW) scheme, which we wrote about here. The Home Office has finally responded to that consultation but, more importantly has also published a draft Code of Practice on Preventing Illegal Working: Right to Work Scheme for Employers (Code), introducing significant changes to the UK’s rules on carrying out RTW checks, which will come into force on 1 October 2026.

In our latest insight, we provide an overview of the proposed changes, including who will be in scope, the extension of liability provisions, and the practical steps organisations should take now to prepare for the new requirements.

Legal NewsBITE: Food and Drink Quarterly June 2026

Fri, 03 Jul 2026 09:00:00 +00:00

Welcome to Legal newsBITE: Food and Drink Quarterly, put together by our UK and EU food and drink team.

Articles this quarter include:

Sanitary and phytosanitary (SPS) agreement between the UK and the EU: Progress and guidance
Fines from French regulator for organic food “cartel”
UK Deposit Return Scheme (DRS): DRS logo and the Return Handling Fee published
EU Court of Justice (CJEU) rules on case around misleading origin on packaging: Unfair commercial practices rules and food information rules can apply together
Pest traces alone suffice to prove a food hygiene breach, CJEU rules in Case C-483/24
EmpCo transposition and green claims enforcement update
First Rulings on UK “Less Healthy” Advertising Restrictions
Plastic Packaging Tax: Proposed changes could increase compliance
Statutory guidance on assessing packaging recyclability for packaging extended producer responsibility
Law Commission considering a new opt-out consumer class actions regime for England & Wales: Potential impact on consumer food businesses
UK Employment Rights Act 2025: Checklist for October 2026
European Council agrees mandate on European Biotech Act I Directive
EU Packaging and Packaging Waste Regulation (PPWR) “just around the corner”
Penalties for reducing pack sizes in Germany?
Advertising Standards Authority (ASA) ruling on supplement “health claims"
Procurement law update for those supplying the public sector
Benedict’s Law: Changes to statutory guidance mandating school allergy safety policies
UK Food Standards Agency (FSA) board agenda June 2026: Annual science update
UK Incidents & Resilience Annual Report 2025/2026 highlights shifting risks in food and feed safety
Unfair trading practices in the agri-food supply chain: A shifting balance of power

If you have any comments or suggestions for Legal newsBITE or you would like to get in touch, please contact us.

SCCA issues Saudi Arabia’s first contribution to the UNCITRAL Digest of Case Law on the Model Law on International Commercial Arbitration

Thu, 02 Jul 2026 16:37:54 +00:00

On 1 July 2026, the Saudi Center for Commercial Arbitration (SCCA) issued a country report covering arbitration in Saudi Arabia (Report). The Report was prepared in response to an invitation from the United Nations Commission on International Trade Law (UNCITRAL) for Saudi Arabia to contribute to the revision of the UNCITRAL Digest of Case Law on the Model Law on International Commercial Arbitration (Digest). The Digest is a tool developed in 2001 to provide a structured overview of global judicial decisions and arbitral awards that interpret the UNCITRAL Model Law, with a view towards helping legal professionals understand how its provisions are applied worldwide.

The Report, being Saudi Arabia’s first contribution of its kind, performed a comprehensive study of the Saudi arbitration framework through a legislative analysis of the Saudi Arbitration Law (Arbitration Law) vis-à-vis the UNCITRAL Model Law and case law analysis of Saudi judicial practice. The Report further examined the provisions of the new draft of the Saudi arbitration law yet to be passed as of the date of this article (Draft Law).

Squire Patton Boggs Al-Akkas was invited by the SCCA among selected law firms to review the Report prior to its official release. In this article, we examine key topics, judicial precedents and trends in Saudi arbitration featured in the Report and how they compare to international practice.

No more upward-only rent reviews

Thu, 02 Jul 2026 15:54:34 +00:00

It is approximately 12 months since the government introduced the English Devolution and Community Empowerment Bill (Bill) to Parliament, sending shock waves through the real estate sector with its proposed ban on upward-only rent review clauses (UORRs) in commercial leases. The Bill has now received royal assent and is known as the English Devolution and Community Empowerment Act 2026 (EDCEA 2026). As a result, the proposals are well on their way to being implemented, through provisions to be inserted into the Landlord and Tenant Act 1954.

UORRs are found in a vast number of commercial leases, meaning that at rent review, rents can only be reviewed upward, or at worst, remain the same as the current passing rent, even where market conditions would otherwise justify a rental decrease. UORRs have been an almost unique feature of the UK real estate industry for decades, and one reason the UK has been the go-to place for incoming investment, but the EDCEA 2026 will be changing that.

This is not the first time that a ban on UORRs has been considered. As referred to below, the ban was proposed in the early 1990s. Some critics have accused the government of attempting to quietly push through these proposals via the EDCEA 2026, which, in the main, deals with unrelated points focusing on devolution of power to local authorities and measures to strengthen local government. Whatever the position is on that, the EDCEA 2026 certainly has the industry’s attention now, and it will be interesting to see whether the sector is willing to lobby again this second time around, prior to the secondary legislation being passed to implement it.

Why reform and why now?

In published guidance for the recent reforms, the government states that it believes UORRs lead to market inefficiencies, principally that in economic downturns, tenants get stuck paying rents at levels above open market levels, leading to lower profits for tenants and risking higher prices for consumers. The government is now proposing to intervene to ban such clauses, instead of simply relying on the sector to self-regulate, as it has up till now. It is notable that the effect on “consumers” and “high street rents” is specifically mentioned, implying that the government is mainly focused on the retail sector, which has been struggling over recent years.

The early 1990s saw similar reforms proposed by the then government. The criticisms of UORRs, and the reasons for those proposals largely mirror those being put forward today.

The fierce lobbying against the proposals at that time was ultimately successful, and the proposal were abandoned, but evidently the government believes enough time has passed to try again.

What does the reform look like today?

The EDCEA 2026 provides that all new commercial leases in England and Wales (excluding agricultural leases) must allow for rent reviews to be both upward and downward. The initial proposals were not retrospective, but a change was made so that the EDCEA 2026 will apply to tenancy renewals if they are made pursuant to a tenancy renewal arrangement (i.e. an option or other agreement) entered into on or after 17 March 2026. In addition, the EDCEA 2026 modifies the provisions of any existing superior lease that states an underlease must provide for a UORR, so that instead, rent reviews in underleases can be upward or downward. That could of course result in a rental mismatch. Any UORR clause inserted into a new lease in the UK will simply be unenforceable once the EDCEA 2026 is implemented.

Stepped rents, where future rent increases are fixed (and so obviously known) at the start of the lease, are not caught by the prohibition, so would be allowed, and if EDCEA 2026 is implemented, may become one of the more favoured approaches. They do introduce certainty for both parties as lease terms progress, but, on the other hand, do not necessarily result in rents being more reflective of market conditions. Stepped rents are also generally not so favourable for tenants on a cost point, as stepped rents will inevitably bake in higher annual rents to compensate landlords for foregoing any possibility of benefiting from open market rent increases.

It would be difficult to properly gauge such market conditions at lease completion, especially if a lease term is 10 years or longer. All this seems contrary to the government’s objectives in these proposals.

It is interesting to note that Australian states have similar legislation, which primarily protects retail leases of shops, but also extends to commercial premises where there is provision of retail goods and services. That has been in place since 2003 and was brought in primarily to promote fairness and transparency. The Republic of Ireland is another jurisdiction that moved to ban UORRs, passing legislation outlawing them in 2010. The scope there went further than in Australia, covering all commercial leases, akin to that which will now be implemented under the EDCEA 2026 in the UK. What the effect will be on UK real estate is unknown, but we can look to Ireland to see what may be on the horizon. There was immediate concern that the ban would create a two-tier system of leases, and cause havoc for valuations and comparisons. Such an effect would be fairly short lived, as pre-ban leases expired. However, the market needed time to adjust to that. A resulting and more lasting effect has been that shorter leases are now more common, to avoid having to insert rent reviews . That has led to increased property management and lease renewal costs for landlords. While the ban has made way for greater flexibility and a more fluid market for tenants, again, it has been something of a double-edged sword, with less certainty for long-term occupation and higher initial rents as landlords cater for the lack of guaranteed long-term income.

What about workarounds?

The government has stated that they want to remove the ability for landlords to find “loopholes” within the legislation, otherwise it would do little to rebalance the power between landlord and tenants – one of its stated aims. A good illustration of this is that the legislation will allow tenants to trigger rent reviews, to avoid the obvious work-around of inserting only landlord-triggered rent reviews, which, in the event of a decline in markets, landlords would just not implement in order to keep rents as they are.

Inevitably however, legislation can only prevent loopholes if they are anticipated, although note the EDCEA 2026 does contain anti-avoidance provisions. Landlords will no doubt seek to be creative to limit the clear disadvantages to them and their income streams. The ability to do so will of course depend on the negotiating power between parties, but as an example, one interpretation of the EDCEA 2026 suggests landlords may seek to include dual rent review clauses which take the higher of an open market rent review and an RPI or CPI rent review (albeit this has not, of course, been tested and may still fall foul of the anti-avoidance provisions). While these options independently would each have to result in the ability for a downward result, including both of these options means a landlord may be able to reap the benefits if one of those options results in an increased rent, or take the least worst review in a particularly bad market.

Arguably, a dual rent review means that results could be favoured toward a landlord and therefore not achieve the proposal’s aims of assisting tenants and realigning with market forces.

We wait to see whether the government will clarify the position on this prior to implementation of the EDCEA 2026. Caps and collars will also be on the minds of both tenants and landlords, but the position on this under the EDCEA 2026 is unclear and is another aspect that the government needs to clarify. They have committed to a consultation on caps and collars, so the outcome of that is awaited.

At present, the government has ruled out imposing on landlords an additional legislative requirement to provide government-issued guidance to tenants at the outset of negotiations. This would have created a greater burden for landlords and required enforcing. The government has, however, said that this option will be kept under review for future introduction, so they will no doubt be keeping an eye on the effect of the proposals once implemented.

Timeline and outlook

Although the EDCEA 2026 has received royal assent, the implementation date is unknown. Commentary suggests this is likely to be 2027-2028. The proposals, which had fairly limited consultation , initially came as a shock to the industry, and now the Bill has received royal assent, discussion around it has intensified.

Landlords and institutional investors will be worried about the income risk that comes with downward rent reviews, and, ultimately, about the effect on valuations. It is arguable, however, that properties with existing leases containing UORRs will have higher valuations, compared to ones with new leases. Though difficult to assess at present, the EDCEA 2026 is very likely to increase volatility in the real estate market at a time when there is already economic uncertainty.

Rent review disputes resulting in litigation are not common in current times. Surveyors, landlords and tenants are well used to determining rents using existing mechanisms, and they are rarely litigated. However, new mechanisms and the legislation governing them can be expected to increase litigation as the market adjusts to the new systems and seeks clarification. This is to be especially expected if markets are in decline and parties are disputing what the “correct” rent should be in a world where downward rent reviews will be, at least for the first few years, uncharted territory.

The outlook on future rentals is unfortunately uncertain for both landlords and tenants. The market will take time to adjust to the reforms. This is clearly a time of change for the real estate market, a move away from a self-regulating market to one of greater government intervention. This is something that the recently implemented Renters’ Rights Bill also signifies and is, perhaps, a sign of further things to come.

Despite that though, similar bans in other jurisdictions indicate that the reforms might not turn out to be quite the coup for commercial tenants that the government would have the market believe. A double-edged reform? Only time will tell.

Read our commentary on the Renters Rights Bill.

Calling all employers with a contingent workforce

Wed, 01 Jul 2026 10:00:00 +00:00

With the government recently issuing its latest consultation on its proposed reforms to zero hours and similar contracts, we thought this was a good opportunity to remind employers of what the Employment Rights Act (ERA) 2025 has in store for them if they engage certain types of individuals on a contingent basis.

Having a contingent workforce (e.g. engaging zero hours workers, agency workers and other casual workers, etc.) can give your business strategic and operational advantages. It allows you to be more flexible, is often more cost-effective than engaging permanent staff and can provide you with access to specialist skills. The government is, however, concerned that this flexibility is too “one-sided”, and is committed to ensuring that workers on zero hours and similar contracts are protected and have a baseline of security.

With this in mind, the ERA 2025 will introduce three key new rights giving zero hours workers and other workers on low-hours contracts (it is important to remember that it is not just zero hours workers that will be impacted) statutory rights to:

Guaranteed hours, to reflect the hours they regularly work during a reference period
Reasonable notice of shifts
Payment for shifts cancelled, curtailed or moved at short notice

The above provisions will also be extended to eligible agency workers, largely it seems to prevent agency work becoming a loophole for employers to avoid this new legislation. We will be doing a separate note on how these changes will impact end-user hirers when engaging agency workers.

For employers, these changes will make it more administratively complex to engage such workers, but also much more expensive and less flexible. According to the government’s own economic analysis, the administrative costs of offering workers a contract that reflects their working pattern after an expected 12-week reference period is estimated at around £160 million per year. It goes on to say that the impact of lost flexibility to employers (i.e. having a smaller pool of workers that can “flex up” or ”flex down”) “is not possible to accurately quantify”, but is “likely to be up to hundreds of millions of pounds”, depending on how the policy is designed. We should stand heads bowed for a moment to remember the warm assurances in the government’s press release for the ERA 2025: “that’s why it’s vital to give employers the flexibility they need to grow”.

Although we do not yet have final details of what these new rules are going to look like, or a specific date when the changes are coming into force (the government’s implementation timetable simply says “in 2027”), it is important that businesses that engage a significant number of zero hours workers, or those on similar contracts, are thinking now about what steps, if any, they can take to mitigate the impact of these changes. In this note, we provide a summary of the key changes, as well as the practical steps that employers should be taking now to prepare for them.

Guaranteed hours

As highlighted above, the government wants to ensure that workers on zero hours and similar contracts have a degree of security and predictability when it comes to their hours of work. In its recent consultation, it gives the (more than faintly unrealistic) example of a worker on a zero hours contract, who under the current regime could have been working 40 hours per week for the same employer for years, but still not have any contractual guarantee of how many hours they will get the next day, let alone the next month.

In very simple terms, the ERA 2025 creates a new obligation on employers to offer eligible workers “guaranteed hours” that reflect the number of hours they regularly work during a reference period. An eligible worker will be someone who works under a zero hours contract/arrangement, or someone who is only contractually entitled to a low minimum number of hours. This minimum hours threshold is one of the issues that the government is currently consulting about, and is likely to be between 8 to 20 hours per week. The government gives the following example of how this might work in practice if the minimum hours threshold is set at 12 hours per week: in this scenario, any worker on a contract guaranteeing 12 or fewer hours per week would be in scope of the right to guaranteed hours. Any worker on a zero hours contract (i.e. no guaranteed hours per week) would similarly be in scope. Whereas any worker who is guaranteed more than 12 hours per week would be out of scope. Where the government sets this threshold will therefore be key in determining the number of workers who are covered by these new rules, as well as the attendant impact for businesses.

The government’s intention is that only workers who work regularly for their employer will be entitled to this new right. The meaning of “regular” is also the subject of the current consultation. As will become clear during this note, there is still quite a bit that the government needs to finalise about how these new rules are going to work in practice – and so there is still time for affected employers to influence the outcome by responding to the consultation.

The obligation to make a guaranteed hours offer will be a recurring obligation – employers will be obliged to make such an offer at the end of each reference period. According to its current consultation, the government’s preference is for the initial reference period to be 12 weeks (on the basis that this balances the need for qualifying workers to be offered guaranteed hours reasonably soon after they start a role, and the reference period being long enough to establish the hours they regularly work), but interestingly they have said that subsequent reference periods may be longer (possibly up to 52 weeks and possibly with gaps in-between). The government seems to be acknowledging the concerns that rolling 12-week reference periods would be unworkable, and would significantly increase the administrative burden on employers. Longer reference periods, on the other hand, would mean that the duty to offer guaranteed hours would arise much less frequently than was initially envisaged – something that would be welcomed by employers, but presumably not trade unions.

In terms of what a “guaranteed hours offer” will look like, any offer will have to take the form of a variation to the worker’s existing terms and conditions or an offer of a new contract. Either way the new terms will require the employer to provide the worker with work for a number of hours that reflects the hours they were regularly working during the reference period. The government is also consulting on how the guaranteed hours offer should be calculated.

Workers will be able to reject an offer of guaranteed hours and remain on their current arrangements if they wish.

If a worker qualifies for the right to guaranteed hours, but does not receive such an offer from their employer, they will be able to bring an employment tribunal claim.

As mentioned above, much of the “nitty gritty” of these new rules has yet to be finalised, but even the simple summary above demonstrates how complicated matters have the potential to become. The complexity of the legislation seems guaranteed to dissuade some employers from using zero hours and similar contracts (which is clearly the government’s intention!). Part of the reason for the complexity seems to be that the government is trying to anticipate all the different ways that employers may seek to sidestep these obligations and legislate accordingly. The problem is the traditional one, i.e. the government’s recurring inability to distinguish between employers trying to sidestep the rules on the one hand, and those merely trying to make them work and remain a going concern on the other.

Right to reasonable notice of shifts and payments for shifts cancelled, moved or curtailed at short notice

The ERA 2025 also introduces new obligations on employers to give zero hours workers and other workers on low-hours contracts “reasonable notice” of the shifts that they are required to work, including notice of how many hours are to be worked and when the shift is to start and end, etc. Reasonable notice of the cancellation of, or changes to, a shift will also be required.

We do not yet know how much notice employers will be required to give – what amounts to “reasonable notice” is another issue that is the subject of the latest government consultation exercise. It is currently seeking views on what this should be, ranging from one week to four weeks. It is also seeking views on the circumstances in which it might be acceptable to offer shifts with less notice, and in which circumstances employers should be required to provide more notice.

The government proposes that the right to reasonable notice should only apply to workers with up to and including a certain number of hours guaranteed in their contract. This mirrors the approach to guaranteed hours, but employers should be aware that the government may set a different hours threshold for each, just to make things even more complicated!

Qualifying workers will also have the right to be paid for shifts that are cancelled, moved or curtailed at short notice. The aim is to incentivise employers to plan effectively so they do not need to cancel or change as many shifts at short notice, and to ensure workers do not bear all the financial risk of unforeseen circumstances. The amount of the payment and what constitutes “short notice” will be set out in regulations. According to its consultation, the government is considering whether to have a short notice period (between one and seven days) and a “very short notice period”, with a higher payment due for cancellations, movement and curtailments at “very short” notice. It is also considering whether there may be some exceptions from the right to short notice payments (but these will be very limited).

In another new development, the government has indicated that it is considering giving the Fair Work Agency the power to enforce the right to payment for shifts cancelled, moved or curtailed at short notice. This would be in addition to workers being able to complain to the employment tribunal where they wish.

Action points for employers

As highlighted above, according to the government’s implementation timetable, the provisions outlined in this note will be coming into force at some point in 2027. Employers therefore still have time to prepare for the impact of these changes. They also still have time to potentially influence the details of these new provisions. We would encourage affected businesses to respond to the government’s latest consultation to ensure their views are heard on how the different options being considered by the government will likely work in practice. The consultation closes on 25 August 2026.

We set out below our top five tips for employers:

Carry out an audit of your workforce to enable you to determine how many workers will be eligible for these new rights. Do you engage zero hours workers, and/or workers on low guaranteed minimum hours, e.g. fewer than 20 hours per week? How many such workers do you engage? Do such workers regularly work more hours than you are contractually obliged to offer them? Such an assessment will allow you to determine the extent to which your business is likely to be affected by these changes.
If you are regularly using such workers (rather than simply using them to fill short-term labour gaps), consider whether you need to change your current workforce strategy to minimise your exposure once these reforms are introduced. Are you able, for example, to contractually provide a greater number of hours to these workers, potentially taking you outside these new rules, while still giving you sufficient flexibility? Data released by the Office for National Statistics suggests that the sectors that rely most on zero hours contracts are hospitality (accommodation and food), transport, arts and other services, health and social care, as well as retail and wholesale trade.
Do you have the necessary systems and processes in place to enable you to track working hours? Employers will need to know the number of hours that such workers are working to be able to determine whether, for example, the obligation to make a guaranteed hours offer is triggered. This may mean that you need to invest in new technology/software to enable you to identify eligible workers, and flag when offers should be made at the end of relevant reference periods. This can take both time and budget to implement.
In terms of shifts, how are they currently scheduled for such workers? How much notice is typically given and how often are such shifts cancelled, curtailed or moved at short notice (e.g. with less than seven days’ notice)? The above information will also allow you to determine your likely financial exposure. Do you need to redesign your rotas? Do you also need to introduce new controls/processes before such shifts can be cancelled to minimise the potential financial exposure to the business?
Do you have trade unions in place? Employers will potentially have more flexibility in relation to zero hours workers and others on low minimum hours if they have trade unions in place, and are able to reach an agreement with them. The ERA 2025 states that the provisions governing guaranteed hours, reasonable notice of shifts and compensation for cancelled, curtailed or moved shifts can be excluded by a relevant collective agreement, provided there are terms that expressly replace any terms that are excluded. This is potentially useful for businesses, although it is difficult to imagine that any trade union would agree to any significant watering down of any of the provisions. This is also clearly an attempt by the trade unions to try to increase collective bargaining agreements in sectors where they might not currently have a big presence.

Home Office indicates extension of right to work checks

Another forthcoming development that will be relevant to businesses with large contingent workforces is the government’s proposal to extend the illegal working regime in the UK to workers and subcontractors. The Home Office has indicated that these changes will come into force from 1 October 2026, but it is yet to issue much-needed guidance to clarify how the new rules will be applied. Businesses can prepare in the meantime by carrying out internal right to work audits on their existing workforce; assessing the nature of their contingent workforce to understand their potential additional obligations and liabilities, and then reviewing and scaling up onboarding processes as necessary; and ensuring relevant recruitment, HR personnel and hiring managers have adequate support and training and are well versed in the new requirements. We include a link to our recent blog setting out further details of the changes.

Welcome news for liquidators and creditors

Wed, 01 Jul 2026 09:00:00 +00:00

A recent decision of the Full Federal Court of Australia provides clarity in respect of the ambit of the court’s power to make freezing orders against third-party discretionary trustees and has real practical implications for Australian liquidators, creditors and trustees.

Background

Prior to entering liquidation, Keystone Asset Management (Keystone) was the responsible entity of a registered managed investment scheme, the Shield Master Fund (SMG), and the trustee of the Australian Diversified Property Fund (ADPF).

Between 2022 and 2024, Keystone, as trustee of the ADPF, made payments totalling AU$305 million to Chiodo Corporation, of which Paul Chiodo was a director, for proposed property developments on behalf of the ADPF.

It is alleged that Chiodo Corporation subsequently made payments totalling at least AU$158 million to a Mr. Fillipini and his company, City Built, for purported construction and development works that it is now alleged never occurred.

Keystone’s liquidators sued each of Mr Fillipini, City Built, Paul Chiodo and Chiodo Corporation for knowing receipt of trust property. Keystone’s liquidators sought and obtained freezing orders over a wide range of assets of Mr. Fillipini to prevent the dissipation or disposal of those assets pending a judgment. The appeal to the Full Federal Court in Fillipini v Keystone Asset Management (in liquidation) [2026] FCAFC 71 related to freezing orders made in respect of specific assets that were held on trust, being two properties in Melbourne, three Lamborghinis and a Maserati.

The Trusts

Both properties are held by discretionary trusts with Mr. Fillipini as the appointer, and his wife, Mrs Fillipini, as the trustee. The cars are held by a separate discretionary trust, the trustee of which is corporate entity for which Mr. Fillipini is the sole shareholder. The only director is an accountant whom the evidence demonstrated may have acted at the direction of Mr. Fillipini.

For each of the discretionary trusts, Mr. Fillipini is a beneficiary and, as appointer, has power to remove and appoint the trustee. It was also common ground between the parties that Mr. Fillipini can otherwise appoint himself trustee, distribute all income or capital to himself and accelerate the vesting date.

Mr. and Mrs. Fillipini and the corporate trustee entity (the Fillipini Parties) appealed the freezing orders over the Melbourne properties and the cars on the basis that, under orthodox trust law, a beneficiary of a discretionary trust does not have a proprietary interest in any particular asset of the trust fund. On that basis, it was argued, insofar as the Federal Court Rules permitted the court to make freezing orders against a third party “that holds … a power of disposition in respect of the assets (including claims and expectancies) of … a prospective judgment debtor”, Mr. Fillipini has no proprietary or beneficial interest in the trust assets, and so they are not assets “of” a prospective judgment debtor.

The Full Federal Court decision

First, the Full Federal Court (Beach, Button and Younan JJ) noted High Court authority to the effect that the power to make freezing orders must be exercised according to the exigencies of the case and that “the schemes which a debtor may devise for divesting himself of assets being legion, novelty of form is no objection to the validity of such an order.”

The Full Court then noted that the language of the relevant provision, which includes “assets (including claims and expectancies)”, is inconsistent with the proposition that a prospective judgment debtor must have a legal or beneficial interest in the asset in order for the preservation of that asset to constitute a proper exercise of the court’s power.

In this respect, just because Mr. Fillipini’s rights as a beneficiary under a discretionary trust were no more than an “expectancy”, this did not preclude the power to make freezing orders over the trust assets, particularly where the third party may be amenable to some compulsive process requiring it to disgorge the assets to satisfy a judgment debt. Freezing orders are appropriate in cases in which they are directed to a third party, like a trustee, to prevent the third party from dealing with property where that expectancy is worth preserving.

The Full Court noted that, in the case of a discretionary trust in respect of which a prospective judgment debtor was merely a beneficiary, it is doubtful that the circumstances could ever warrant a freezing order being made. However, it is different where the beneficiary, like Mr. Fillipini, is able to exercise control and influence over what the trust does with its income and assets.

While Mr. Fillipini was a beneficiary of the three trusts, his expectancy is not of the same character as other mere beneficiaries, because he held extensive powers under the trust deeds to control each trust, appoint himself as trustee, and direct the distribution of the income and assets. According to the Full Court, this put him in a very different category. In that context, Mr Filipini’s expectancy under the trusts was one worth preserving to avert the prospect of a prospective judgment debt subsequently going unsatisfied.

The Fillipini Parties raised an argument that the freezing orders should only be granted where it could be demonstrated that there was a clear “enforcement pathway” by which the trust assets could ultimately be accessed in enforcement action following judgment. It was argued that no such enforcement pathway had been identified by Keystone, and it was unclear on the facts what that pathway would be.

This argument was rejected by the Full Court. It was inconsistent with the text of the relevant provision that the identification and enforcement pathway was a precondition to enlivening the power to make freezing orders. All that is required is a “reasonably arguable” case for an enforcement pathway, noting that a case with a potential avenue to enforcement that follows a well understood legal path but is subject to factual uncertainties will be treated differently to a case with pathways that involve greater legal uncertainty.

Referring to the relief granted in another case, Mr. Fillipini also offered to be restrained from exercising his powers under the trust deeds as a possible solution to avoid the freezing orders. The Full Court rejected that solution on the basis that, unlike the circumstances in the example relied upon, a restraint against Mr. Fillipini alone would not protect the assets because Mrs. Fillipini and the corporate entity were the trustees.

Construction and Engineering Matters (UK): Summer 2026

Tue, 30 Jun 2026 23:59:00 +00:00

Welcome to the Summer edition of Construction and Engineering Matters, where we provide you with bite-sized updates on UK construction and engineering issues.

This Summer edition includes:

RBH Building Contractors Ltd v James: When can a residential occupier withhold payment?
Separate and distinct: The relationship between payment notices and pay less notices examined in Laing O’Rourke v Shepperton
FIDIC: “If X, then Y” – The Privy Council’s guidance on contractual issues
In the spotlight: Contract interpretation and extensions of time under the JCT: Lessons from Mace v Baltic
Costs penalty in the context of a refusal to mediate: a consideration of reasonableness in MJS Projects v RPS Consulting
Pre-construction services agreement breaches and liabilities: Where do they go?

Crossing the pond? Group actions in the US and UK compared: Where we are, what we should expect and how to prepare

Tue, 30 Jun 2026 15:58:05 +00:00

Key takeaways from our London International Disputes Week session:

As part of London International Disputes Week, we hosted a panel discussion looking at the similarities and differences between the US and UK group action landscapes.

Hosted by Miles Robinson, John Burlingame and Deborah Polden gave an overview on the US and UK mass litigation landscape respectively. We were also delighted to be joined by Adam Heppinstall KC from Henderson Chambers, providing a barrister’s view on developments from both the claimant- and defendant-side perspective, and Steven Friel, CEO of Woodsford, one of the leading funders in this space, which has been involved with many of the leading cases both in the Competition Appeal Tribunal (CAT) and also the developing area of English securities litigation.

Now the dust has settled on the week, Laura Hollowood sets out the key takeaways from the panel below.

The US remains the bellwether

In the US, “bellwether” trials effectively act as test claims. In a similar way, class action trends in the US often act as an early indicator for what may emerge in the UK.
Businesses that monitor US litigation developments can identify potential UK exposure before it materialises.

Collective actions are growing in the UK

Growth in the UK group action is particularly evident in:

Environmental claims
Securities litigation
Competition disputes
Insurance-related claims

The panel also expects increased activity in data breach and social media-related group actions.

The UK’s framework is different

The UK does not have class actions as a well-entrenched feature of its judicial system. Instead, there are a number of procedural mechanisms that can be used, including:

Group litigation orders (GLOs) – Structured process to coordinate the management of claims that involve common or related issues of fact or law.
Omnibus claim forms – Enabling multiple claimants on a single claim form, reducing issue fees. Coupled with proactive case management under the court’s existing powers.
Representative actions under Civil Procedure Rule 19.6 – Enables a claimant to act on behalf of a wider group, but all members must share the “same interest” in the claim, which can be challenging.
CAT proceedings – The CAT’s opt-out regime continues to drive growth in competition-related claims.

The advantages and limitations of each of these was discussed.

Not every US trend translates to the UK

The US benefits from a more developed and structured framework, including:

Federal class actions
Mass tort litigation
Multidistrict litigation
Mass arbitrations

In contrast to the US, the panel’s sense was that English courts apply stricter rules on:

Causation
Damages
Collective recovery

The absence of punitive damages can make certain US-style claims more difficult to replicate in the UK.

What businesses should be doing now

A proactive approach can reduce future litigation risk:

Ensure robust compliance programmes are in place.
Monitor emerging claims trends across the US and UK.
Act early. Employ remediation and redress strategies that could help mitigate the risk of future collective actions.

Watch competitors and regulators

Early warning signs often emerge from:

Competitor litigation – These can highlight emerging risk areas and provide valuable early warning signals.
Regulatory investigations – Shifts in regulation can often foreshadow litigation trends – understanding these early enables better strategic planning.
Sector-wide disputes – Keeping a close watch on claims in your industry can help identify vulnerabilities and strengthen your risk management approach.

Understanding these developments can help businesses prepare before claims arise.

Stay ahead of the curve

Businesses best positioned to manage group action risk are those that:

Track litigation trends closely
Monitor regulatory change
Identify sector-specific vulnerabilities early
Act before issues escalate
Have robust corporate governance and compliance

Prevention remains more effective than defence.

Outlook

The UK group litigation landscape is evolving rapidly. While it remains distinct from the US model, the direction of travel in the UK is clear:

Claimants are becoming more innovative in the mechanisms by which they look to bring group action claims.
As a result, group action is becoming more frequent in the UK.
Businesses that anticipate these trends and developments will be better placed to manage risk and respond effectively.
While there is some difference in opinion between those on the claimant and defendant sides regarding the adequacy of the claims mechanisms already in place, there was clear agreement on one key point: robust corporate governance and compliance is key to minimising claims risk.

Pensions weekly update: 30 June 2026

Tue, 30 Jun 2026 11:25:46 +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.

Several pensions-related regulations have been made. The Pension Schemes Act 2026 (Commencement No. 1) Regulations 2026 were made on 22 June 2026, and brought section 123 of the Pension Schemes Act 2026 (PSA26) into force on 29 June 2026. This section amends the way that the Pension Protection Fund (PPF) is able to set its risk-based levy, making it less problematic when the PPF intends setting the levy at zero, or a minimal amount. The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 came into force on 25 June 2026. These make further amendments to primary and secondary legislation relating to the abolition of the lifetime allowance so that the legislation works as it was intended to. The Registered Pension Schemes (Net Pay Arrangements) Regulations 2026 come into force on 14 July 2026. They make tweaks to the existing legislation that was introduced to address the disparity for low earners arising from differences in pension tax relief between individuals saving under net pay arrangements, and those saving under relief at source schemes. The changes are designed to ensure that all affected individuals are in scope for a low earner’s payment representing the amount of tax relief they would have received had they had taxable earnings.
Kim Goodall-Brown, director of defined contribution (DC) and master trust supervision at The Pensions Regulator (TPR) has published a blog post highlighting the new trustee duties under the PSA26. TPR started a communications campaign last week, targeting schemes likely to be in scope. TPR says that trustees should now assess whether they can meet the higher legislative standards or if members would benefit from consolidation into a scheme providing scale, value and good governance. Employers are expected to engage with trustees on the scheme’s future. TPR’s PSA26 webpage will be populated with secondary legislation, as it emerges.
HM Revenue and Customs (HMRC) has published Newsletter 182. This includes a notification that HMRC has changed its policy regarding identity verification of persons taking on the role of HMRC scheme administrator for a registered pension scheme. By way of reminder, this is not your third-party administrators, but the person responsible (usually a trustee) for operating HMRC’s managing pension scheme service. If you have not yet migrated your pension scheme over to the managing pension schemes service, it is important that you take action now. This is not something your third-party administrators can do on your behalf. Our blog post provides more information on the steps that trustees should take.
The Pensions Dashboards Programme has issued an update, including the outcome of consultation on daily reporting (which we covered in last week’s newsletter), a response to private sector dashboards proposals, updates to guidance and a blog on how dashboards could boost employee engagement. The next dashboards webinar, “Connection is just the start: are you ready for what’s next?” will be held on Wednesday 8 July at 2:30 p.m.
The Pensions Ombudsman has updated its factsheets relating to ill health pensions, incorrect information about pensions, death benefit lump sums and how a member can complain about their pension.
Have you spotted the PPF’s list of schemes in the PPF and Financial Assistance Scheme that will benefit from the pre-1997 indexation provisions of the Pension Schemes Act 2026?

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

Dueling lists: China’s answer to the Section 1260H expansion and the risk in the pattern – what US stakeholders should know

Mon, 29 Jun 2026 17:07:10 +00:00

Executive summary

Washington and Beijing are increasingly reaching for the same instrument: targeted, list-based tools, including procurement bans, export-control designations, sanctions listings and investment restrictions, that let each pressure the other without forcing a broader rupture in the economic relationship. China’s latest measures are a clear example.

On June 22, 2026, the People’s Republic of China announced two new restrictive measures affecting dozens of US companies. The move came two weeks after the US Department of Defense, on June 8, expanded its Section 1260H list of “Chinese Military Companies” (CMCs) by 65 entities, among them several of China’s best-known commercial technology firms. Beijing has not formally called its measures retaliation, but the timing and the targets strongly suggest they answer the Pentagon’s designations, which had added Alibaba, Baidu, BYD and other leading Chinese technology and industrial companies.

These actions look limited in their immediate commercial impact, but they are a signal of expanding regulatory risk for US companies in advanced technology, critical supply chains and strategic industrial sectors. The restrictions stop well short of broad sanctions, but they still create real commercial, compliance and supply-chain exposure, and the pattern they extend warrants particular attention.

What China announced

China moved on two fronts on June 22. The Ministry of Finance (MOF) barred government procurement entities from buying goods or services from 46 US companies in covered projects. The Ministry of Commerce (MOFCOM) separately added 10 US companies to the Export Control Entity List, cutting off their access to certain China-origin dual-use items. The two announcements landed together, but they carry very different weight.

The procurement ban: Largely symbolic

The 46 companies are mostly US defense contractors, among them Lockheed Martin, Raytheon, Boeing Defense, Space & Security, General Dynamics Land Systems and General Atomics, together with newer drone manufacturers such as Shield AI, Anduril and Edge Autonomy. Chinese-registered foreign-invested affiliates of these firms appear to be carved out.

In practice, the measure changes little, because most of the 46 were already restricted. Lockheed Martin and Raytheon have sat on the Unreliable Entity List since 2023, and China added General Dynamics, several Boeing Defense units and others across 2024 and 2025. The newer autonomy firms now named, among them Anduril, Shield AI and Edge Autonomy, were placed on that list in 2025. Most of the 46, in other words, had already been swept into China’s earlier countermeasures over US arms sales to Taiwan, whether through the Unreliable Entity List, the Export Control Entity List or sanctions under the Anti-Foreign Sanctions Law. The defense primes also have almost no business in Chinese government procurement to lose in the first place. The ban reaffirms a posture already in place rather than breaking new ground.

The Export Control Entity List: The measure that matters

The MOFCOM listing is the one to read closely, and not only for who is on it. Its immediate legal effect is narrower than a general rare-earth embargo, because the measure is entity specific. It does not halt China’s rare-earth exports as a whole, and it leaves China’s other US customers untouched. What it does is effectively cut the named firms off from China-origin dual-use items, unless MOFCOM were to authorize a transaction.

The rule also appears intended to reach beyond China’s borders. MOFCOM’s announcement prohibits organizations and individuals in any country or region from transferring or supplying China-origin dual-use items to the listed firms, so on its face the measure is aimed at offshore transfers of China-origin items and not only at goods shipped from China. The practical enforcement contours remain unsettled. Even so, a company that treats the listing purely as a limit on shipments from China could be underestimating its exposure, and this is a dimension to watch as the rules are applied.

The profile of the 10 firms is what gives the measure its weight. China’s restrictive lists have historically centered on conventional defense suppliers. This round concentrates instead on two areas central to the current contest: rare earths and unmanned systems. It names the two companies at the heart of the American effort to rebuild a domestic rare-earth and permanent-magnet supply chain, MP Materials (operator of the Mountain Pass mine) and USA Rare Earth (developing an integrated magnet supply chain), both backed by Washington for the express purpose of reducing reliance on China.

Alongside them is a cluster of drone and autonomy companies: Aveox, Red Cat Holdings and its Teal Drones subsidiary, Jaia Robotics (autonomous underwater vehicles) and IMSAR (synthetic-aperture radar). The remainder are established defense and aerospace names: Ball Aerospace & Technologies, Oshkosh Defense and L3Harris Maritime Services.

The choice of targets carries a message beyond the individual companies. Beijing went after US firms that depend on Chinese inputs, and it did so in the sectors where China, not the US, holds the supply-chain leverage. That let it aim squarely at US industrial-policy priorities, and at firms tied to US military modernization, while leaving the cost to its own exporters close to nil. The action carries a real compliance dimension, but it is at least as much a strategic signal: China will use its own export-control machinery to answer US measures against Chinese firms that Washington treats as part of its military and defense-industrial base.

China’s restrictive-list toolkit

That architecture has matured considerably over the past two years, and in structure it now resembles the US restricted-party model. The four lists below are Beijing’s principal instruments; the Export Control Entity List used here is only one of them. Clients should monitor all four, for their own names and for those of key counterparties, with particular attention to critical minerals, rare earths, permanent magnets, drones and defense-adjacent components.

List	Legal basis and lead authority	Principal restrictions	Scale (approximate)
Sanction List	Anti-Foreign Sanctions Law; Ministry of Foreign Affairs; MOFCOM	Freezes assets within China; bars any person in China from transacting or cooperating with the listed party; and denies visas and entry.	Well over 150 parties added since 2021; a handful suspended after the Busan summit
Unreliable Entity List (UEL)	Provisions on the Unreliable Entity List; MOFCOM	Measures imposed case-by-case. Commonly bars import/export trade with China and new investment in China; may also bar executives from entering or working in China and impose fines.	Several dozen entities; some stopped or suspended in late 2025
Export Control Entity List	Export Control Law; Dual-Use Items Export Control Regulations; MOFCOM	Bars export, transfer or supply of China-origin dual-use items to the listed party; transactions require MOFCOM authorization.	Roughly 100 or more entities; some suspended
Watch List	Export Control Law; Dual-Use Items Export Control Regulations; MOFCOM	No general or record-filing licenses for dual-use exports to the listed party; single-use applications require added risk assessment and compliance commitments.	A small number, on the order of two dozen

Figures are approximate and shift as Beijing adds, removes or suspends entities; several measures were partly rolled back or suspended under recent US-China understandings and China does not publish a single consolidated tally for every list.

A structural difference: China’s system is more list-based than the EAR

US companies tend to read China’s export-control regime through the lens of the US Export Administration Regulations (EAR), and the comparison misleads. As a general matter, China’s dual-use system is more list-based than the EAR. Unlike the EAR, it does not contain a broad EAR99-style residual category that pulls nearly all commercial items into the export-control framework. But that does not make the test country of origin. Product controls, temporary controls, end-use and end-user restrictions, as well as listed-party restrictions, all still need to be checked.

The practical point for exposure analysis follows from this. Appearing on China’s Export Control Entity List does not sever a company from all Chinese-origin goods, and the right question is not whether an input comes from China, but whether the specific item is caught by one of those controls, a determination that country of origin alone cannot answer.

Why this matters, and why now

These steps are best read against the stabilization both governments have pursued over the past year, including the understandings reached in Busan and reaffirmed at the recent Beijing summit. On the reading we find most persuasive, Beijing’s response is measured retaliation rather than a break with that framework; the procurement and export-control measures together form a coordinated but restrained answer to US listing activity. Not every observer agrees. Some argue there is no real truce at all, only diplomatic cover over a national-security contest that keeps hardening in both capitals regardless of summitry. Even on the more cautious view, the leadership truce still holds; what is shifting is the environment beneath it, which grows more institutionalized, reciprocal and list-driven with each round.

The symmetry between the two sides’ lists is part of why the retaliatory reading is hard to avoid. The June 1260H expansion marked a deliberate shift in how the Pentagon uses that instrument. Earlier iterations ran heavily to traditional defense and dual-use suppliers; the most recent round extends coverage to companies the US views as foundational to China’s innovation ecosystem more broadly, reaching even firms usually regarded as largely or entirely commercial, such as Alibaba, Baidu and BYD. China’s response runs in the same direction. Instead of confining its export-control list to defense end-users, MOFCOM similarly trained it on US firms central to American industrial-policy and supply-chain-security priorities, again on the ground where China holds the leverage, including the rare-earth and autonomous-systems producers named above. That each government has now pointed an ostensibly security-focused list at the other’s commercial-innovation base supports reading Beijing’s measures as an answer to the 1260H update.

The US timing fits congressional work on the Fiscal Year 2027 National Defense Authorization Act, the usual vehicle for export-control and investment-screening measures. A broader list lets the administration show resolve to China hawks without forcing an immediate break in the leadership-level stabilization that both governments have tried to preserve. Beijing’s reply follows the same logic, choosing narrow measures over the sweeping restrictions that would accelerate the decoupling it says it wants to avoid.

For multinationals, the exposure now reaches well beyond defense contractors and chipmakers, into advanced technology and AI infrastructure, batteries and electric vehicles, biotechnology, drones, critical minerals, aerospace and advanced manufacturing. Several questions will shape what comes next: whether China keeps its listings entity-specific and measured, whether China will expand the list of dual-use items, whether MOFCOM starts slowing or denying export license applications in ways that disrupt supply chains and which sectors produce the next round of names. Two nearer-term developments bear directly on this: implementation of China-related National Defense Authorization Act (NDAA) provisions, including any biotechnology supply-chain and outbound-investment measures, as well as the 2026 midterm elections, which could shift control of Congress and reshape the next round of China legislation.

The more Washington relies on list-based national-security tools, the more likely Beijing is to normalize its own. As each side widens its lists to take in the other’s commercial champions, these designations become harder to treat as narrow or technical. The practical risk is that each measured response lowers the threshold for the next one, making list-based retaliation a more routine feature of the relationship. For now, leadership-level stability and below-the-line escalation coexist; whether that can hold as the lists grow is an open question that we will continue to monitor and analyze closely.

Recommended actions

Take stock rather than scramble, but do so promptly. Trade-compliance programs can no longer be built only around US, EU, UK and allied lists; they need to screen against the Chinese lists as well, beginning with the newly listed entities and their known aliases. Companies with China-origin inputs, Chinese suppliers, China-based logistics or China-linked dual-use technology should identify where controlled Chinese-origin items actually sit in their supply chains, and should review open purchase orders, distributor and reseller arrangements and pending shipments that involve any listed party. Companies that received dual-use items from China under an export control license with specified end use and user should comply with the conditions of the license and keep a trackable record of the dual-use items.

Because the restriction may reach beyond goods leaving China, it is worth confirming that contractual controls on re-transfer are adequate to that potential exposure. Where a transaction is affected but commercially necessary, the practical question is whether a special application to MOFCOM is realistically available.

Beyond these immediate steps, this is a sensible moment to revisit overall China exposure on both the supply and compliance sides, assessing it at the product level as noted above and to build in some flexibility before the next listing arrives, from either capital. The measure should not be read as a wholesale embargo, nor as proof that the bilateral truce has failed. It is better understood as a targeted but consequential escalation within that truce. In our view, that pattern, more than any single listing, is what to plan around.

The UK’s new consolidated Dual-Use Open General Export Licence:

Mon, 29 Jun 2026 09:00:00 +00:00

On 25 June 2026, the UK’s Export Control Joint Unit (ECJU) announced, in Notice to Exporters 2026/14, a new, consolidated Dual-Use Open General Export Licence (OGEL) that merges the existing EU member states Dual-Use OGEL and General Export Authorisation 001 into a single open licence, and extends open licence coverage to new destinations: South Korea, Singapore, Chile, Uruguay and the British Overseas Territories. The ECJU projects that the change will save exporters more than 500 individual licence applications a year.¹

What has changed

The reform is best understood as export facilitation, not a relaxation of controls. The underlying control lists are unchanged, registration on the SPIRE system remains mandatory and the conditions attaching to use of open licences continue to apply. What has changed is the packaging of permissions: two separate instruments (and associated reference numbers) are replaced by one licence, and the trusted destination list is enlarged on the basis of a data-led review of historic licensing decisions that found exports to the new destinations permitted under this OGEL to be consistently approved and presenting low risk.

The additions rest on the UK’s own risk assessment rather than that of a multilateral regime, a distinction that matters for diversion risk diligence, discussed below. A parallel measure, introduced in May, will mean that all relevant OGELs will change in the coming months to add a condition requiring the licence reference to be entered on Customs Declaration Service (CDS) for all tangible exports. The inclusion of said licence reference will be an HM Revenue and Customs (HMRC) enforcement matter.

The statutory Framework Is unchanged

UK strategic export controls rest on the Export Control Act 2002 and the Export Control Order 2008 (SI 2008/3231), with dual-use goods, software and technology with both civil and military applications, defined in Article 2(1) of the Order and listed in Annex I to the Assimilated Dual-Use Regulation (EC) No 428/2009 and in Schedule 3 to the Order (the UK Dual-Use List). The new OGEL operates within this framework; it changes how permissions are packaged, not the scope of what is controlled.^2/p>

An OGEL is a “ready to use” licence with fixed terms, open to any exporter who registers, offering a low friction route for lower-risk goods to lower-risk destinations. A Standard Individual Export Licence (SIEL) is exporter-, consignee- and item-specific, and is assessed case-by-case. An Open Individual Export Licence (OIEL) is exporter-specific, but covers multiple shipments of specified goods to specified destinations over a period. Registration to use an OGEL binds the exporter to its conditions, means an exporter is subject to ECJU compliance audits and triggers record-keeping requirements. Exporting controlled items without a valid licence, or in breach of OGEL conditions, is a criminal offence carrying up to 10 years’ imprisonment, although most cases are resolved by compound settlement with HMRC.

The two predecessor licences

The EU member states Dual-Use OGEL, first published in 2019 as a “no deal” contingency and most recently updated on 16 December 2025, permitted the export of Annex I dual-use items from Great Britain to EU member states.^{3 GEA001, the assimilated successor to the EU’s Union General Export Authorisation EU001, authorised the export of the bulk of Annex I items to Australia, Canada, Japan, New Zealand, Norway, Switzerland (including Liechtenstein) and the US.4 Both are now being folded into one OGEL with a single registration and a single Great Britain Open General Export Licence (GBOGE) reference, and the destination list has been expanded. The permitted and excluded items are not loosened by the consolidation; rather, the change is structural. Exporters relying on either predecessor should not assume continuity. They should reread the consolidated conditions and confirm whether their existing arrangements carry across, or whether and update to processes are required.}

The new permitted destinations

South Korea has a free trade agreement (FTA) with the UK, and it is a major dual-use and semiconductor trading partner. Singapore, a leading financial and logistics hub covered by a UK FTA and the UK-Singapore Digital Economy Agreement, operates robust national controls under its Strategic Goods (Control) Act, even though it is not itself a member of the multilateral regimes. Chile, Uruguay and the British Overseas Territories are also included.

A regime-membership reality check

The advent of this new OGEL with expanded permitted destinations does not align directly to membership of the four multilateral export-control regimes. The four regimes are the Wassenaar Arrangement, the Nuclear Suppliers Group, the Australia Group and the Missile Technology Control Regime. Of the five new destinations, only South Korea participates in all four. Singapore, Chile and Uruguay are members of none (Chile has been a candidate country for the Wassenaar Arrangement since 2015), and the British Overseas Territories are not members in their own right.⁵

This divergence means end-use, end-user and diversion-risk screening remain important, despite expanded options for export under this new OGEL and the EU will not necessarily treat the same destinations as comparably low-risk under its own authorisations.

The CDS declaration requirement: The operational connection

Notice to Exporters 2026/13 introduces a critical operational consideration. Registered OGEL and General Export Authorisation (GEA) users receive a unique reference in the form GBOGE20XX/XXXXX. In this notice the Export Control Joint Unit is notifying exporters that all relevant OGELs will be updated in due course with a condition, which will require the licence reference to be entered in the licence field (currently box 44) on the CDS for all tangible exports. This brings open-licence exports into line with SIELs and OIELs.⁶

Once the condition applies to a given licence, inclusion of the reference on CDS becomes an enforcement matter for HMRC and an incorrect declaration could constitute a criminal offence under section 167 of the Customs and Excise Management Act 1979.^{7 Where a freight forwarder declares on the exporter’s behalf, the exporter must supply the correct reference and instruction. The exporter of the goods and any agent concerned in the exportation or shipment may both be considered responsible for the accuracy of a declaration. If a reference is missed, a CDS entry can be amended before clearance, or afterwards via form C1700. The resulting Export Entry Reference must be retained. The ECJU is encouraging exporters to begin quoting their OGEL or GEA licence reference on CDS now, before the updates are made.}

Post-Brexit divergence from the EU

The reform widens, rather than narrows, post-Brexit divergence. The EU’s framework is Regulation (EU) 2021/821, whose Union GEA EU001 covers Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland (including Liechtenstein), the UK and the US.^{8 The UK’s consolidated OGEL now reaches South Korea, Singapore, Chile, Uruguay and the British Overseas Territories, none of which are on the EU001 list. The UK is therefore building a broader trusted-destination network than the EU.}

The two control lists remain broadly aligned at the Annex I/Wassenaar level, but update on different timetables and through different instruments. The EU’s latest emerging-technology update took effect on 15 November 2025, and the UK’s on 16 December 2025, while Wassenaar itself has been effectively stalled on new dual-use listings since 2022, pushing both sides toward autonomous national updates.^{9 The authorisation architecture and destination coverage are thus diverging even where the substantive controls converge.}

Northern Ireland and dual-stream operators

Under the Windsor Framework, EU dual-use law (Regulation (EU) 2021/821) continues to apply in Northern Ireland, while the assimilated regulation applies in Great Britain.10 A UK licence, including this OGEL, authorises export from Great Britain only; it does not cover exports from Northern Ireland or the EU. Movements of Annex I items from Great Britain to Northern Ireland do not require an export licence. From an EU perspective, the requirement for relevant commercial documents relating to intra-union transfers of dual-use items listed in Annex I clearly indicating that those items are subject to controls if exported from the customs territory of the EU remain in place.

How can we help?

As an international firm with a dedicated International Trade & Foreign Investment Practice, we help exporters turn changes such as this new OGEL into an operator-ready compliance plan, advising on item classification against the consolidated control list, OGEL eligibility and registration, the new CDS declaration workflow and freight-forwarder instructions. We support dual-stream UK and EU operators in mapping flows to the correct point of export, calibrating diversion risk diligence and assisting with preparation for ECJU compliance audits, so that more open licensing arrangements do not create avoidable enforcement exposure. ¹⁰

¹^{Export Control Joint Unit, Notice to Exporters 2026/14 announcing the new consolidated Dual-Use Open General Export Licence (}^GOV.UK^{, c. 25 June 2026). The consolidation, the new permitted destinations and the projected saving of 500+ applications are as stated in the notice.}
²^{Export Control Act 2002; Export Control Order 2008 (SI 2008/3231); Assimilated Regulation (EC) No 428/2009 (Annex I), retained for Great Britain under the European Union (Withdrawal) Act 2018.}
³^{“Open general export licence (export of dual-use items to EU member states)”, ECJU, dated 16 December 2025 (}^GOV.UK^).
⁴^{“Union General Export Authorisations (GEAs)”;}^GOV.UK^{, Assimilated General Export Authorisation No. EU001, covering Australia, Canada, Japan, New Zealand, Norway, Switzerland (incl. Liechtenstein) and the USA.}
⁵^{Membership lists of the Wassenaar Arrangement, Nuclear Suppliers Group, Australia Group and Missile Technology Control Regime; US Bureau of Industry and Security / Department of Commerce country guidance. Only South Korea participates in all four; Singapore, Chile and Uruguay participate in none (Chile a candidate since 2015).}
⁶^{Notice to Exporters 2026/13: “Declaring exports under OGELs and GEAs on the UK’s Customs Declarations System”, ECJU, (}^GOV.UK^{, published 13 May 2026).}
⁷^{Customs and Excise Management Act 1979, section 167.}
⁸^{Regulation (EU) 2021/821 (in force 9 September 2021); Union General Export Authorisation EU001 (Annex II), covering Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland (incl. Liechtenstein), the United Kingdom and the United States.}
⁹^{Commission Delegated Regulation (EU) 2025/2003 (EU control-list update, in force 15 November 2025); Export Control (Amendment) (No. 2) Regulations 2025 (UK, in force 16 December 2025).}
¹⁰^{Windsor Framework / Protocol on Ireland/Northern Ireland: Regulation (EU) 2021/821 continues to apply in Northern Ireland, while the assimilated Regulation applies in Great Britain.}

What does the OAIC’s recent investigation into Medmate and Monash’s use of pixels mean for websites dealing with “sensitive information”?

Fri, 26 Jun 2026 09:00:00 +00:00

The Office of the Australian Information Commissioner’s (OAIC) determinations against Medmate Australia Pty Ltd (Medmate) and Monash IVF Pty Limited (Monash) demonstrates the expectation for health-focused websites to treat sensitive information with caution, and confirms the OAIC’s position in their 2024 guidance (the Pixel Guidance) that organisations deploying a third‑party tracking pixel on their websites remain responsible for ensuring that any personal information collected complies with the Australian Privacy Principles (APPs).

The determinations found that Medmate and Monash tracked online users on their websites and collected, used and disclosed to third parties sensitive information without those users’ consent, as required by APPs 3.3 and 7.1, and without taking steps to notify individuals, as required by APP 5.1. The findings are specific to sensitive information and not everything will be relevant to organisations who capture personal information through tracking technologies. However, they clarify the OAIC’s interpretation of “personal” and “sensitive information” in an ad tech context and underscore websites’ responsibility for the information that they choose to share with third party pixel providers. While the determinations focus on health information, all organisations should be aware of the implication that any inferences made about sensitive information (like an online user’s racial origins or sexual life) may be in play.

To see the determinations in full, please visit (the Medmate Determination) here, and (the Monash Determination) here.

Background

Both Medmate and Monash are organisations, which provide health services to Australian individuals, including through their websites. Over the period covered by the determinations, both Medmate and Monash deployed tracking pixels on their websites. When an individual visits a website where a tracking pixel has been deployed by the website operator, information collected by the tracking pixel is shared with the pixel provider’s server. Once pixel information is received by the provider, they are usually able to match this information with individuals’ profiles on their platform and present them with relevant advertising as directed by the website operator.

Depending on the parameters set by the organisation who deploys the website, different kinds of information about an individual’s website activity will be disclosed to the thirdparty pixel provider, from the details of the webpage viewed by the individual (i.e. URL, domains visited and metadata such as timestamp and device information) (Page View Information) to more customisable data (such as when an individual books an appointment or completes a registration or sign-up process).

For Medmate and Monash:

	Medmate	Monash
Services provided	Telehealth consults, online prescriptions, medical certificates and mental health and weight loss support.	Fertility services and treatments
Key categories of data collected, based on website’s configuration of pixel	Page View Information Purchase – When an individual completes a purchase on the website (including order ID, value and currency) View content – When an individual views content or a specific product, including telehealth, express consult and medical certificate	Page View Information Lead phone clicks/contact – which track phone calls Lead form submit/submit form lead – which track successful form submissions Lead book appointment/book appointment – which track appointment bookings¹

Key findings

Below are the key findings that we have gleaned from the Medmate and Monash Determinations:

A website operator is responsible for collecting data through pixels, which are deployed on their website

In its updated guidance on APP 3², the OAIC clarifies that two entities may collect the same personal information at the same time. Whether the entity with “control”, but not possession is taken to collect personal information will depend on the contractual arrangements in place. The Medmate and Monash Determinations put this statement into practice. In both determinations, the OAIC found that the website operator exercised control over the deployment, configuration and customisation of the tracking pixels, and that this control was sufficient to constitute “collection” under the Privacy Act, even though the data was stored directly within the tracking pixel itself and by the pixel provider.³

Insight
The Privacy Act does not (yet) distinguish between controllers and processors of personal information, but these determinations suggest that in practice, the OAIC will distinguish between the responsibilities held by organisations, depending on each organisation’s role. Where a website operator has chosen to deploy and customise tracking pixels, then they will be held to have control over the personal information collected through those pixels. This is the case even where it is the pixel provider (rather than the website) which stores such information.

In the Medmate determination, the OAIC briefly mentions that Medmate has undertaken a review of their “contractual arrangements with external marketing agencies”.⁴ We strongly recommend that all organisations who engage third parties to collect personal information on their behalf (whether through marketing or other arrangements) review the scope of their contracts and, specifically, consider how responsibility is allocated under the contract and what that means for each party’s obligations under the Privacy Act. It is also worth revisiting liability and audit positions in this context, to make sure that they reflect the likely risk.

Data collected through a tracking pixel will typically constitute “personal information”

Under the Privacy Act, “personal information” includes information, or an opinion about an individual who is “reasonably identifiable” from such information (or opinion).⁵ While Medmate and Monash argued that they could not identify individuals from the information collected by the tracking pixels “in the sense of knowing or using resources available to it to gain access to direct identifiers”,⁶ this argument was unsuccessful. The OAIC confirmed that: “…the definition of personal information does not expressly require that an individual be specifically identifiable, or identifiable by direct identifiers such as their legal name, passport or driver’s licence number, or date of birth."⁷ The OAIC took a similar position in relation to hashed email addresses and phone numbers, when submitted with URLs as part of an advanced matching technique.

Particularly relevant to the ad tech context, the OAIC found that “reasonably identifiable” applies to circumstances where information facilitates “individuation”: i.e. circumstances where an organisation can single out an individual from others in a way that affects their rights and interests, even if such information does not include or cannot be easily combined with the individual’s direct identifiers (such as name)⁸ This was the case where Medmate and Monash used the information obtained to retarget individuals on pixel providers’ platforms, as part of Medmate and Monash’s advertising campaigns. Both organisations also created Custom Audience lists to retarget individuals based on their behaviour on the website.

While the OAIC admits that this is a novel approach, the finding remains in keeping with the Privacy Act and, particularly, the revisions to the definition of “personal information” in 2012 to ensure that the term was “sufficiently flexible and technologically-neutral to encompass changes in the way that information that identifies an individual is collected and handled⁹ It is also consistent with the government’s response to the Privacy Act review report, where they considered that an individual may be reasonably identifiable “where they are able to be distinguished from all others, even if their identity is not known".¹⁰

Insight
Direct identifiers have never been the only hallmark of whether an individual is “reasonably identifiable” from information about them, and it is not surprising that if an organisation can track, profile or target people at an individual level, the information which allows them to do so may be personal information. That said, the OAIC’s stated test as to whether information “affects an individual’s rights and interests” is somewhat novel. Organisations should assess whether information that they hold “reasonably identifies” an individual by reference to factors, such as the decisions, opinions or inferences which they make using such information, and how those decisions impact the individual. This is in addition to other relevant factors, such as the likelihood of identification occurring and the resources available to an organisation to identify an individual (including other information which is available to them).¹¹

In these determinations, the tracking pixel collected, used and disclosed sensitive information

For the OAIC, both Medmate and Monash had configured the tracking pixel to collect sensitive information. In part, this is because of the nature of both organisations’ websites, which clearly provide health services to individuals. At a high level, “sensitive information” includes information or an opinion about an individual’s health, their expressed wishes about the future provision of health services or a health service which is provided, or to be provided, to them.¹²

Both websites used tracking pixels to collect and log information about an individual’s engagement with a health service provider’s website. In the view of the OAIC, this could constitute either health information about an individual or allow inferences or opinions to be made about that individual’s health, as it demonstrates their interest in a specific, health-related service. This is consistent with the Pixel Guidance, in which the OAIC takes a broad interpretation of “sensitive information”, and suggests that it may be revealed “solely by [an individual] visiting a website, for example, a website providing mental health or counselling services".¹³

Insight
The OAIC’s interpretation of “sensitive information” is expansive, particularly in the case of MedMate, which provided a variety of health services to individuals. Specifically, sensitive information includes a user’s visit to specific sections of a health website, even where the visit may not reveal the individual’s precise health condition. Again, the driver behind the OAIC’s interpretation seems to be that both Medmate and Monash used the information collected through pixels to retarget ads relating to their services, suggesting that they had formed an opinion about the individual’s health, which was connected to their own offering (even if that opinion was not specific to a particular condition). Squire Patton Boggs notes too that health information is only one example of sensitive information – the same logic set out in the determinations would likely apply to inferences drawn by advertisers about other sensitive factors (like sexuality or political opinions).

Neither website obtained consent to collect sensitive information

The OAIC found that consent was not obtained from individuals who visited either the Medmate or Monash websites in respect to the collection of their sensitive information through tracking pixels and, therefore, that both organisations acted in breach of APP 3.3.¹⁴

While cookie consent pop ups were implemented, the OAIC acknowledged that these did not refer to tracking pixels, and that individuals were thus unlikely to be sufficiently informed of the implications of providing consent.¹⁵ Furthermore, the OAIC noted that cookies are distinct from tracking pixels in that the latter sends data to pixel providers and can track individuals across multiple devices¹⁶

Insight
Where sensitive information is collected (including through tracking pixels), the OAIC is clear that the threshold for valid consent is high. This is not surprising, especially in light of the OAIC’s recent determination against IRE Pty Ltd¹⁷, which finds that consent must offer users “the ability to exercise effective control over how their personal information is used"¹⁸ and that practices like bundled consent may “result in users inadvertently consenting to their personal information being used in ways they do not want".¹⁹

Neither website took reasonable steps to notify individuals of the matters required under APP 5.2

The OAIC found that neither Medmate nor Monash’s privacy policy contained sufficient disclosures around both organisations’ use of tracking pixels on their websites. While there were references to the use of cookies, as explained above, this is not sufficient to cover the use of tracking pixels. Both policies stated that personal information could be used for direct marketing purposes, but not in a way that recognised the reality of pixel-based ad tracking.

Insight
The OAIC acknowledges that privacy policies are one way of sufficiently notifying individuals of the matter set out in APP5.2.²⁰ Interestingly, they suggest that, in addition to this, organisations should also deploy a more point-in-time notification. For example, they may choose to deploy a banner or pop-up (akin to a cookie banner), which provides specific information under APP 5.2 (or directs individuals to more detailed information) in relation to the use of tracking pixels.²¹ In the Medmate and Monash Determinations, both privacy policies were deficient, so we are curious as to whether a more comprehensive privacy policy – without including a banner or pop-up – would meet an organisation’s obligations under APP 5.2.

Conclusion

While the OAIC adopts a novel application of “reasonably identifiable” in the context of tracking technologies, the commissioner’s broad and expansive view of “sensitive information” makes evident the increased responsibility and onus that is now expected and placed on websites, who ultimately bear responsibility for “collecting” personal information through such technologies.

¹^{This is a summary online: for full list of standard and custom events, please see paragraph [42] of “Commissioner Initiated Investigation into Monash IVF Pty Ltd” (Privacy) [2026] AICmr 40 (11 June 2026) (the Monash Determination).}
²^{Office of the Australian Information Commissioner, “Chapter 3: APP 3 Collection of Solicited Personal Information” (13 May 2026) <}^{Chapter 3: APP 3 Collection of solicited personal information | OAIC}^>.
³^{The Monash Determination}^{(n 1) [54]; “Commissioner Initiated Investigation into Medmate Australia Pty Ltd” (Privacy) [2026] AICmr 41 (11 June 2026) [55] (the Medmate Determination).}
⁴^{“Commissioner Initiated Investigation into Medmate Australia Pty Ltd” (Privacy) [2026] AICmr 41 (11 June 2026) [7] (the Medmate Determination).}
⁵^{Privacy Act 1988}^(Cth)^{s 6.}
⁶^{The Monash Determination (n 1) [65]; The Medmate Determination (n 3) [66].}
⁷^{The Monash Determination (n 1) [66]; The Medmate Determination (n 3) [67].}
⁸^{The Monash Determination (n 1) [73]; The Medmate Determination (n 3) [72].}
⁹^{Explanatory Memorandum 2012 to changes in Privacy Act.}
¹⁰^{Australian government, “}^{Government Response}^{” | Privacy Act Review Report (2023).}
¹¹^{See Office of the Australian Information Commissioner, “}^{Key Concepts}^{” (21 December 2022).}
¹²^{Privacy Act 1988}^(Cth)^{s 6. 13 Office of the Australian Information Commissioner, “}^{Tracking pixels and Privacy obligations}^{” (4 November 2024).}
¹⁴^{The Monash Determination (n 1) [90]-[93]; The Medmate Determination (n 3) [90]-[94].}
¹⁵^{The Medmate Determination (n 3) [93].}
¹⁶^Ibid.
¹⁷^“^{Commissioner Initiated Investigation into IRE Pty Ltd (Privacy)}^{” [2026] AICmr 24 (1 April 2026).}
¹⁸^{“Commissioner Initiated Investigation into IRE Pty Ltd (Privacy)” [2026] AICmr 24 (1 April 2026) [116].}
¹⁹^Ibid.
²⁰^{The Monash Determination (n 1) [110]; The Medmate Determination (n 3) [111].}
²¹^{The Monash Determination (n 1) [115]; The Medmate Determination (n 3) [118].}

OFAC’s General License X and the easing of Iran energy sanctions

Wed, 24 Jun 2026 11:00:00 +00:00

On June 22, 2026, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License (GL) X, providing substantive, but temporary, sanctions relief for Iran’s energy sector for the first time since 2016, when OFAC implemented the US-Iran Joint Comprehensive Plan of Action (JCPOA).

Scope of GL X

Subject to terms and limitations, GL X authorizes US and non-US persons to engage in transactions that are ordinarily incident and necessary to the production, sale, offloading and delivery of Iranian-origin crude, petrochemicals and petroleum products (Covered Products). This authority, which expires on August 21, 2026, at 12:01 a.m. EDT, also provides authorization for:

Imports into the US of Covered Products purchased pursuant to GL X
US dollar payments to Iran, the government of Iran and certain blocked persons for the purchase of Covered Products authorized under GL X
Transactions involving certain blocked vessels, including the safe docking and anchoring of vessels carrying Covered Products; the preservation of the health or safety of the crew of any such vessel; emergency repairs or environmental mitigation or protection activities relating to any such vessel or to Covered Products held in storage and services such as vessel management, crewing, bunkering, piloting, registration, flagging, insurance, classification and salvage.

GL X authorizes the above transactions to the extent they would otherwise be prohibited by the following sanctions authorities:

Iranian Transactions and Sanctions Regulations, 31 CFR Part 560, as well as OFAC regulations at Parts 544, 561, 587, 589 and 594
Executive orders 13846, 13876, 13902 and 3949

Notably, the list above includes two Russia-related sanctions authorities (31 CFR Parts 587 and 589). The inclusion of Part 587 reflects the significant overlap between Iranian and Russian sanctions networks, as many parties in Iran’s energy sector were simultaneously designated under both Iran and Russia-related authorities due to their participation in overlapping evasion networks. The inclusion of Part 589 reflects the fact that authorized delivery transactions may involve Russian ports, energy companies or other persons otherwise subject to Ukraine- and Russia-related sanctions authorities.

Limitations

Parties contemplating transactions pursuant to GL X should carefully consider the following:

EU and UK sanctions remain in effect at the time of this writing and may be applicable to transactions authorized under GL X. Accordingly, challenges may arise regarding insurance, financial services, logistics and other services.
Parties may be subject to restrictive sanctions clauses imposed by financial institutions, charterparties and other agreements.
GL X provides only temporary sanctions relief. While more permanent relief is expected if the ongoing negotiations between the US and Iran are successful, it is possible GL X could be revoked before its August 21, 2026 expiration date if negotiations fall apart. This contingency should be addressed in relevant contracts, both regarding the assignment of risk and setting realistic timelines for performance of all relevant transactions and activities.

GL X does not authorize:

Transactions involving persons located or organized in North Korea, Cuba, Crimea, Luhansk People’s Republic or Donetsk People’s Republic, or any entity that is owned or controlled by or in a joint venture with such persons
Transactions prohibited by executive orders or OFAC regulations beyond those addressed by GL X (listed above), such as the Iranian Assets Control Regulations at 31 CFR Part 535

If you have any questions about the scope of GL X or related issues under US, EU or UK sanctions, please contact a member of the International Trade practice at Squire Patton Boggs.

Global snapshot – Hot employment law topics for 2026: Midyear update

Wed, 24 Jun 2026 10:25:59 +00:00

We know that for many of our clients and contacts with a multijurisdictional mandate, horizon-scanning and trend spotting is critical to allow for forward planning and to avoid surprises.

With this in mind, at the start of this year, we asked the partners across our global Labour & Employment Practice to identify the key employment law topics for 2026 in their respective jurisdictions. Six months on, we thought it would be useful to provide a “midyear update”, as we are aware that, in certain jurisdictions, there have been further legislative developments, which mean there are new issues for businesses to be aware of. We also wanted to share some of the global employment law trends and themes we have been discussing in our recent conversations with in-house employment counsel and HR professionals in global businesses.

Pensions weekly update: 24 June 2026

Wed, 24 Jun 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 response to its consultation on proposals to update the reporting standards to implement routine daily reporting of data to the Money and Pensions Service (MaPS) via an application programming interface. The proposed implementation date of 30 November 2026 will be pushed back to 1 March 2027, in response to industry concerns that the original date is not universally achievable. However, directly connected organisations that have not been able to implement daily reporting will be required to undertake some manual reporting from Autumn 2026, to ensure that information is flowing through to MaPS and regulators at the earliest opportunity.
The Pensions Administration Standards Association (PASA) has issued guidance to support trustees, administrators and others with monitoring ongoing dashboards compliance across the core areas of data matching, pension information provision and connection performance. PASA has also issued a short note covering the treatment of survivor benefit indicators within dashboards value data, to support consistent interpretation across schemes and providers. Separately the Local Government Pension Scheme has issued an updated before and after connection guide for administering authorities.
In our update on 25 June 2025, we noted that HM Revenue & Customs (HMRC) had published a policy paper relating to the deduction of value added tax (VAT) by employers on the management of pension fund assets. Our update contained some background information generally in relation to the treatment of VAT and defined benefit (DB) occupational pension schemes. HMRC has now updated guidance in its internal tax manual to expand on the policy set out in the 2025 paper. Paragraph VIT44650 states that input tax incurred by an employer on services provided in relation to its funded occupational pension scheme will be the employer’s input tax. This input tax is considered an overhead, as it is directly linked to the employer’s business as a whole. HMRC says that it is therefore recoverable in full, subject to any partial exemption restrictions. This treatment is the same whether the costs incurred relate to administration or management of the scheme’s investments. However, the manual goes on to require that employers contract directly with a provider of fund management services (usually evidenced by an invoice) or, if the services are provided to the trustees, who are invoiced, the trustees must make a taxable charge to the employer for their services of running the scheme on the employer’s behalf. The employer will then be able to deduct input tax on this charge. Alternatively, a corporate trustee of an occupational pension scheme can VAT group with an employer, subject to certain conditions. DB trustees and employers may therefore wish to review how they currently deal with the deduction of VAT. In relation to defined contribution (DC) schemes, the manual notes that many investment and administration services will be exempt. Guidance on determining whether this applies in any specific case can be found in VATFIN5350.
The Pensions Regulator (TPR) has published a blog by executive director of market oversight, Ben Gunnee, in which the potential for further innovation in the DB landscape and TPR’s expectations of trustees are discussed. The blog focuses on a flexible apportionment arrangement that occurred in December 2025, that caused interest in the industry because it was not implemented as part of a wider corporate restructuring, but as a means of simply transferring a scheme to a different sponsor. The blog notes that the trustees of the scheme in question consulted TPR, and took appropriate advice. The circumstances were unusual and innovative and allowed the trustees to pay an immediate uplift to benefits, along with the potential to share ongoing surplus between the members and the new sponsor, rather than paying a premium to buyout benefits with an insurer. Pending consultation by the government on the use of flexible apportionment arrangements, TPR expects any other schemes looking at innovative endgame options to consult with TPR in the first instance.
In this LinkedIn post, Matthew Giles shares his thoughts on whether the imposition of a robot tax is on the cards for those in the pensions industry.

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

Key priorities for legal leaders

Tue, 23 Jun 2026 10:36:12 +00:00

We were delighted to be Gold Sponsors of the recent Association of Corporate Counsel (ACC) Europe Annual Conference, which brought together senior legal leaders from across the region to discuss the evolving role of the in-house function in an increasingly complex environment.

The opening keynote session was led by Jason L Brown, president and CEO of the global ACC, alongside Dave Hart, head of legal affairs for Europe and Latin America at Ericsson and president of the European chapter. Their discussion set the tone for the conference, focusing on the key priorities for general counsel (GCs) and chief legal officers (CLOs) today.

Executive leadership in strategic decisions

GCs and CLOs are now part of core business decision-making. They are not only advisers but contributors to strategy, shaping direction at the highest level.

1. The key issues

Geopolitical risk is the primary concern

Geopolitical risk has become the leading issue, especially in Europe, where it is seen as three times more important than in other regions.
It is no longer a simple east versus west picture. The landscape is more complex and constantly shifting.
Legal teams are now at the centre of organisational response during periods of instability.

Technology and AI cannot be ignored

There is a clear risk of organisations falling behind if they do not keep pace with technology.
AI is a critical area where GCs have an opportunity to adapt and lead change. This is not a future issue; it is current and evolving quickly.
A recent CLO survey showed 63% reported no impact on staffing yet. This suggests change is coming, but many teams have not yet adjusted.

2. The pace of regulatory change

Regulation is moving quickly and becoming more complex.
GCs and CLOs must step up as trusted advisers to the C-suite, providing clear guidance and insight. This role is moving to the next level, beyond pure legal interpretation.

3. Crisis management (shaped by geopolitics)

Organisations need structured crisis management approaches for unforeseen events.

Key actions include:

Developing a clear crisis playbook
Defining how legal supports during a crisis
Positioning legal at the centre as coordinator and project lead
Regularly updating and refining the playbook

There is also value in practical testing:

Bringing executive teams together
Running scenario based exercises
Learning from past events such as the COVID-19 period

4. The shift in the role of legal: From transactional to strategic

There is a move away from purely transactional relationships.

Legal teams are more effective when they:

Engage early in business decisions
Understand operations deeply
Contribute to competitive advantage

GCs should be involved at the start of strategy, not only as a support function.

5. Rethinking risk

Risk assessment must be more creative.
It is not only about mitigation, but also about identifying opportunity and competitive advantage linked to risk decisions.

6. Addressing misconceptions

The perception of legal as the function that says no must change.
The GC should act as the conscience of the organisation, guiding decisions rather than blocking them.

7. Importance of peer networks

The GC role can be a lonely one, particularly given the weight of geopolitical risk and executive responsibility.
Building strong peer networks is essential. Sharing experience, learning from others and exchanging best practice helps to:
- Drive innovation
- Improve decision making
- Strengthen resilience

Summary

The role of the GC and CLO is expanding in both scope and influence.

Success will depend on the ability to:

Navigate geopolitical complexity
Lead on technology and AI
Redefine partnerships with external counsel
Act as a strategic voice at the centre of the business

Legal is no longer just there to protect the organisation. It is there to shape its future.

To find out how we can support you in navigating these evolving challenges, or to learn more about our global legal leadership programmes, events, and network, please do get in touch. We would welcome the opportunity to partner with you as you shape the future of your legal function and strengthen your impact within your business.

Employment issues in M&A transactions in Australia: Common red flags for buyers to be aware of

Mon, 22 Jun 2026 10:12:31 +00:00

In Australia, employment-related issues are becoming increasingly important for buyers in M&A transactions – and not only in the due diligence stage, but also in the negotiation of transaction documents (particularly in the warranties and indemnities) and post-completion items.

The employment landscape in Australia is complex, heavily regulated and constantly evolving. When employers are noncompliant (even inadvertently), it can give rise to serious legal, commercial and/or reputational risks. In such an environment, employment due diligence is no longer just a “box-ticking” exercise, and it is important that buyers “look under the hood” to better understand what workforce risks may need to be identified and addressed as part of the transaction, and proactively managed post-completion, to achieve a sustainable and successful business.

The risks that could become relevant for the buyer will depend on the type of transaction (i.e. whether it is an asset purchase, a share purchase, or a combination of both). This article explores some of the common red flags that buyers need to be aware of.

From listing to interdiction

Wed, 17 Jun 2026 16:33:00 +00:00

On 16 June 2026, as the prime minister attended the G7 summit, the UK announced a major new package under the Russia sanctions regime: 70 additions to the UK Sanctions List, running from RUS3620 to RUS3689, directed at Russia’s ageing “shadow fleet”, its military-procurement supply chains and the illicit-finance networks used to circumvent Western sanctions.

The headline figure is best understood as a bundle of two different legal instruments: 43 newly designated persons and entities subject to asset-freeze and related restrictions, and 27 newly specified ships subject to ship-specific transport and trade sanctions. The package is the most visible element of a wider shift. Over the preceding month the UK had quietly assembled the legal machinery for active enforcement at sea, and two days before the package it used that machinery for the first time, boarding and detaining the tanker SMYRTOS in the English Channel. Read together, the enabling powers, the operation and the new designations show the UK moving from passive listing towards an active, repeatable interdiction posture.¹

Background

The Foreign, Commonwealth and Development Office (FCDO) sanctions notice records the 70 additions, while the government frames the action as choking off Russia’s war effort across multiple fronts. The package targets more than 20 oil tankers using powers enhanced the previous month, together with several vessels linked to Russian liquefied natural gas (LNG); on the government’s own account, the UK has now sanctioned more than 600 shadow-fleet and Russian LNG vessels, and almost 500 individuals, entities and ships under the Russia regime in 2026 alone. Alongside the maritime measures it exposes a military-intelligence procurement network centred on the alleged Main Directorate of the General Staff of the Armed Forces of the Russian Federation (GRU) front company LLC Neptune Co Ltd, designating three connected companies and 10 individuals identified as GRU officers, and reaches third-country suppliers of military and dual-use goods in China, Thailand and Türkiye, together with banks and alternative finance facilitators linked to the so-called A7 circumvention infrastructure.²

The design is deliberately systemic. Shadow-fleet activity depends not only on vessels, but on beneficial owners, managers, bunkering, insurance, crew, port and anchorage services, finance and documentation. Russian military procurement depends on front companies, logistics, third-country suppliers, payment rails and human procurement officers. The designations map onto those dependencies rather than naming assets in isolation, and a significant share of the targets sit outside Russia, in China and Hong Kong, Thailand, Türkiye, Laos and Nigeria. The sections that follow explain the distinction between designated persons and specified ships, the powers and the Office of Financial Sanctions Implementation (OFSI) licence that together made an interdiction executable, the SMYRTOS operation that drew on them, and the compliance implications for maritime, finance and trade businesses.

Read our full PDF insight

The Supreme Court ends the challenge to the executive branch’s authority to modify Section 301 tariffs

Wed, 17 Jun 2026 12:03:41 +00:00

On June 15, 2026, the US Supreme Court denied the petition for the writ of certiorari filed by HMTX Industries, LLC to challenge the Office of the US Trade Representative’s (USTR) authority under Section 307 of the Tariff Act of 1974 to modify existing Section 301 tariffs.

Most immediately, the US Supreme Court’s denial of the petition marks the end of the efforts from importers to force USTR to rollback its List 3 and List 4A modifications of the initial Section 301 tariffs levied on China after the conclusion of its Section 301 investigation. More broadly, it ends what has been a years-long effort by importers that may have resulted in some guardrails on the president’s Section 301 tariff authorities.

Background of the Section 301 tariff litigation

In August 2017, during President Donald Trump’s first term, USTR launched a Section 301 investigation into China’s trade practices that concluded in March 2018, and resulted in the imposition of 25% tariffs on a variety of goods included in List 1 and List 2 created by USTR as in the remedy stage.
Following Chinese retaliation in response to the initial Section 301 tariffs, USTR announced modifications to the initial Section 301 tariffs via release of List 3 and List 4A effective in 2018 and 2019, respectively. List 3 and List 4A included new tariffs on a variety of goods that were different than those on List 1 and List 2.
The imposition of the additional tariffs led thousands of importers to file lawsuits at the Court of International Trade (CIT) in 2020 to challenge (1) the use of Section 301 in response to China’s retaliatory tariffs, and (2) USTR’s modification of the initial Section 301 tariffs by expanding the universe of goods subject to the tariffs.
After a procedural victory for the petitioners in 2022, the CIT ruled in favor of the government in 2023, upholding the List 3 and List 4A tariffs as lawful exercises of authority under Section 301.
In 2025, importers escalated the litigation by filing an appeal to the US Court of Appeals for the Federal Circuit. The petitioners failed to convince the court that USTR’s authority to modify Section 301 tariffs pursuant to Section 307 is limited to modest adjustments, rather than entirely new tariffs. The US Court of Appeals for the Federal Circuit upheld List 3 and List 4A tariffs in full. The plaintiffs subsequently filed a writ of certiorari seeking Supreme Court review of the appeals court’s decision.

Impact on importers

With the US Supreme Court’s denial to hear the petitioner’s case, the appellate path for importers to challenge these Section 301 tariffs is exhausted and the decision by the US Court of Appeals for the Federal Circuit stands. As a result, the Section 301 tariffs are upheld, the government can continue to collect them and the government will not have to refund importers for duties paid.

All consolidated cases filed by thousands of importers after HMTX Industries, LLC will either be dismissed or decided in accordance with the precedent set by the US Court of Appeals for the Federal Circuit.

Importers can expect that with the courts’ blessing of the government’s broad interpretation of the modification authority under Section 307, USTR may decide to impose additional tariffs with respect to this Section 301 investigation and others in the future.

Next steps

In the short-term, importers should focus on optimizing operational and compliance strategies, such as supply chain reviews and adjustments, as well as tariff mitigation via robust tariff classification and country of origin analyses of their products. Importers can potentially reduce their tariff liability if products are sourced from outside of China, and ensure that the correct tariff classification and country of origin of their products are declared at entry.

Looking ahead, importers can participate in USTR’s periodic reviews of imposed Section 301 tariffs. By statute, the Section 301 tariffs expire after four years unless an interested party requests their continuation. At that time, importers can submit comments to advocate for their termination. Outside of the statutory timeline, USTR may launch periodic reviews in response ongoing or new trade issues and hold public hearings where importers can further argue that the Section 301 tariffs should be abandoned. Additionally, at USTR’s discretion, importers can have opportunities to apply for product specific exclusions to reduce their duty liability. USTR recently launched the second four-year review of the Section 301 tariffs, and is currently accepting comments from interested parties on whether to continue the action. Later this year, USTR may open a second comment window focused on potential tariff modifications.

Finally, importers can engage Congress to advocate for changes in Section 301 authority or refund legislation. Importers can also engage the executive branch on ways to achieve alignment between the government’s trade policy goals and importers’ commercial realities across various tariff frameworks.

Pensions weekly update: 17 June 2026

Wed, 17 Jun 2026 09:27:47 +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 a consultation on draft regulations that provide the detail to the release of surplus provisions contained in the Pension Schemes Act 2026. The final legislation will mean that trustees will be able to refund surplus to the employer, even if their scheme rules do not currently allow for this, subject to certain conditions being met. Before exercising the power to release surplus, trustees will need to check their scheme rules to see if they need to use the new power to modify their rules. This power is expected to be in force alongside the draft regulations in April 2027. The draft regulations set out the full process for making a refund of surplus to the employer. Trustees will be able to release surplus to the employer if the scheme has excess funding calculated on the low dependency basis and is not in winding-up. Trustees must first obtain an actuarial assessment from the scheme actuary at an assessment date specified by the trustees. The trustees must next take advice from the actuary and consult with the employer before deciding on a provisional amount of surplus to be released, and a target date for payment. At least three months before making payment, the trustees must provide a written statement to members advising them of the amount and payment date. The actuary must then provide a certificate before payment is made that in the actuary’s opinion the scheme has surplus funding on a low dependency basis as of the date of the certificate, and the scheme is likely to be overfunded on a low dependency basis at any given time in the three years following the date of the certificate. Payment must be made within five working days of the certificate date. Within one week of making a surplus payment, certain information must be provided to The Pensions Regulator (TPR). Under the draft regulations, a section of a segregated scheme will be treated as a single scheme for the purposes of the legislation. Tax legislation will also be amended to permit authorised surplus payments to members, provided the payment is made once the member has reached their normal minimum pension age. Consultation on the draft regulations closes at 11:59 p.m. on 2 September 2026.
TPR has published a statement to support trustees and employers considering surplus release, pending more detailed guidance that will sit alongside the final form regulations. The Financial Reporting Council has said that it will publish technical actuarial guidance to assist actuaries with their obligations in connection with release of surplus, and invites stakeholders to attend a roundtable on 28 July 2026.
TPR has updated its guidance on potential remediation for past alterations to salary-related contracted-out pension schemes (also known as the “Virgin Media remedy”) to reflect the Pension Schemes Act 2026 becoming law. We remind trustees of affected schemes to add this issue to their next meeting agenda to discuss next steps. See our Pension Schemes Act 2026 publication for more information.
The evidence pack supporting the Second Pensions Commission report, Pensions 2050: evidence and future priorities has been updated with underlying data and statistics. The webpage also contains links to a two-part audio version of the full report, which lasts for a mere 14 hours.
Torsten Bell, pensions minister, has published a written statement in connection with a transaction that took place in December 2025, which used the flexible apportionment arrangement (FAA) legislation to effectively transfer the assets and liabilities of a defined benefit (DB) pension scheme to an asset manager, without going through TPR’s approval process for commercial consolidators. The pensions minister said, “whilst this transaction complied with the existing FAA mechanism it did so in a way not anticipated when the mechanism was introduced. We therefore intend to review this area of legislation to ensure the regulatory standards and safeguards evolve, and keep pace with the innovation we are seeing in the pension market.” As a consequence, the government plans to consult on whether and how the existing FAA legislation could be strengthened.
In connection with automatic enrolment, the DWP has published a call for evidence seeking views on whether the alternative benefit quality requirements for DB, hybrid and collective defined contribution (CDC) schemes are operating as intended. The closing time for contributions is 11:59 p.m. on 27 July 2026.

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

Ethics under pressure: A defining challenge for legal leaders

Tue, 16 Jun 2026 16:41:57 +00:00

We were delighted to sponsor and introduce one of the most popular sessions at the recent Association of Corporate Counsel Europe Annual Conference in Copenhagen, which brought together leading voices from across the legal community to explore how ethical decision making stands up under real pressure.

The session was led by Andrea Moretti, Legal Director at eBay, alongside Casper Munch, Head of Legal and Vice President at Maersk and Alice Flacco, Group General Counsel at MicroPort Scientific MedTech Corp. Together, they led a highly engaging and interactive discussion that encouraged participants to look beyond theory and confront the realities of complex ethical dilemmas in practice.

Drawing on their experience across technology, global logistics and healthcare, the speakers shaped a conversation that reflected the growing complexity of modern legal roles. Participants were invited to test their judgement against real world scenarios, share perspectives and explore practical ways to identify risks, as well as escalate concerns and act with integrity when pressures increase.

What emerged from the session was a clear and timely message. Ethics under pressure is becoming one of the defining challenges for organisations today. When legal, ethical, commercial and human considerations do not align, in-house lawyers are increasingly required to guide decisions where there is no clear answer.

Ethical challenges rarely present themselves as simple questions of right and wrong. They arise in situations where legal compliance may be clear, but the outcome feels uncomfortable, where commercial priorities conflict with wider human impact, and where decisions must be made quickly with incomplete information. In these moments, being legally correct does not resolve the issue. It is only the starting point.

The role of legal leaders is continuing to evolve. Legal teams are no longer focused solely on compliance. They are increasingly expected to contribute to decisions that reflect organisational values, as well as long-term risks and consequences.

This requires the ability to recognise when an issue becomes ethical rather than purely legal, the confidence to challenge senior stakeholders, the judgement to balance competing interests and the courage to speak up when needed.

The discussion brought these challenges to life through real world scenarios and raised important questions about whether compliance alone is enough when outcomes are not equal.

Another example explored the tension between global company standards and local practices. This highlighted the challenge of deciding whether ethical standards should be consistent across all locations or adapted to local realities.

Across industries, a consistent pattern emerged. Ethical decisions are often made under pressure, with limited time, incomplete information and competing priorities that all have merit. There is rarely an option that is without risk. In these situations, success is not about finding a perfect answer, but about making a decision that is considered, transparent and aligned with organisational values.

The session closed with a reflection that captures the essence of the challenge. When does being legally right stop being enough. This question continues to resonate as organisations navigate an increasingly complex and high pressure environment.

Key Takeaways

Legal compliance alone is not enough. It provides a foundation, but ethical judgement must guide the final decision.
The role of legal teams is expanding. Legal leaders are expected to influence strategy and act as ethical advisors.
Most real world decisions involve trade-offs. Leaders must balance competing priorities rather than look for perfect solutions.
Tansparency and accountability are essential. Decisions should be clearly reasoned and capable of being explained.
Courage is a critical leadership skill. Speaking up and remaining aligned to values is vital under pressure.

The council’s restrictive measures of 15 June 2026 against Russia

Mon, 15 Jun 2026 15:45:00 +00:00

On 15 June 2026, the Council of the EU (Council) adopted a further set of restrictive measures in response to what it terms the Russian Federation’s (Russia’s) war of aggression against Ukraine. The measures add 34 individuals and 47 entities to the EU’s asset-freeze and travel-ban lists across three sanctions regimes, and they renew, on the Council’s annual review, the measures responding to the annexation of Crimea and the city of Sevastopol. This is not a new numbered sanctions package but a batch of fresh designations; the broader twenty-first package is still to come.¹

Background

The measures form part of the EU’s now-extensive framework of restrictive measures against Russia, which combines sectoral economic sanctions with individual and entity designations. Today’s listings fall under three distinct regimes, each with its own legal basis: the territorial-integrity regime (Regulation (EU) No 269/2014), which carries the core asset-freeze and travel-ban designations; the destabilising-activities regime (Regulation (EU) 2024/2642) and the situation-in-Russia regime (Regulation (EU) 2024/1485). All three work in the same basic way: they freeze the funds and economic resources that a listed person owns or controls, prohibit anyone from making funds or economic resources available to that person, and, for listed individuals, impose a ban on entry into or transit through the territory of the member states.²

The designations announced today take the cumulative total of persons and entities listed in response to the war to well over 2,600, and they follow the 20th package adopted on 23 April 2026, the most recent of the numbered economic packages. What matters about the present action is less its scale than its composition: instead of amending the sectoral prohibitions, it widens the designation lists across the four components the Council has identified as priorities and it reaches enablers established well beyond Russia. The analysis that follows takes each component in turn before turning to the cross-border reach that, for most operators, is the salient feature.

Read our full PDF insight

¹Council Decision (CFSP) 2026/1364 of 15 June 2026 amending Decision 2014/145/CFSP, and Council Implementing Regulation (EU) 2026/1361 of 15 June 2026 implementing Regulation (EU) No 269/2014, both concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine; vid., Council of the EU, Russia’s War of Aggression against Ukraine: New EU Sanctions Target Energy Revenues, the Military-Industrial Complex, Propaganda and Human Rights Violations (Press Release, 15 June 2026).

²Council Regulation (EU) No 269/2014 of 17 March 2014 and Council Decision 2014/145/CFSP of 17 March 2014; Council Decision (CFSP) 2024/2643 of 8 October 2024 and Council Regulation (EU) 2024/2642; Council Decision (CFSP) 2024/1484 of 27 May 2024 and Council Regulation (EU) 2024/1485.

Family Office Insights: Section 13(f) Compliance

Fri, 12 Jun 2026 14:52:43 +00:00

Amidst a complex landscape of securities regulation, family offices face several potential “traps for the unwary” when discerning which rules and requirements apply. One such trap is that family offices may qualify for exemption from investment adviser registration under the Investment Advisers Act of 1940, as amended (the Advisers Act), but may still be subject to the institutional investment manager filing requirements of Section 13(f) of the Securities Exchange Act of 1934, as amended (the Exchange Act).

To avoid this trap, family offices and their legal advisors should develop comprehensive compliance plans that account for both their exemption from investment adviser registration, as well as their inclusion in Section 13(f)’s filing and reporting obligations.

Restructuring Roundup (UK)

Fri, 12 Jun 2026 09:00:25 +00:00

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

The Court of Appeal in TAQA (TAQA Bratani Ltd & Ors v Fujairah Oil and Gas UK LLC & Ors [2025] EWCA Civ 1669 (19 December 2025)) recently considered the meaning of “transaction” for the purposes of a s238 of the Insolvency Act 1986. Our blog explains what the decision means for officeholders in light of the court’s findings in relation to the meaning of transaction and the scope of the statutory defence in s238(5)(b)
Our next insolvency litigation quick guide: Limitation Periods on Corporate Insolvency Claims is now available in our Thought Leadership library. This explores the typical limitation periods for different types of corporate insolvency claims and provides various options for IPs to consider when approaching the expiry of a limitation period – worth taking a look.
The Insolvency (England and Wales) (Amendment) Rules 2026 makes several minor changes to the Insolvency Rules 2016 (Rules) with effect from 22 June. Many of the changes were those announced by the Insolvency Service and although not significant, are helpful. We explain the practical impact here. The most recent special edition Dear IP 171 explains the reason for the changes.
However, what is likely to be significant, is the forthcoming Rules review. With a consultation paper expected before Summer, now is the time to sharpen pencils and make some noise about any changes/clarity required to make the rules work better in practice. We know there are some that create real issues in practice.
Given the duties of both IPs and solicitors as officers of the court, it is helpful to flag this judgment, which provides a salutatory warning about ensuring that there are robust procedures in place for using AI (and checking the responses it provides) given that many firms use it (to a lesser or greater extent) to support their business.
Businesses in construction have been one of the hardest hit sectors in recent months/years – not helped by the fallout from the Grenfell disaster and the legislation that (understandably) was put in place following that. The responsibility for remedying liabilities does, however, reach far beyond those immediately responsible as this recent case highlights, extending into the wider group and associated companies.
The Joint Insolvency Committee (JIC) has launched a consultation on proposed updates to Statement of Insolvency Practice (SIP) 2, comments are invited by 6 August 2026. This edition of Dear IP provides a helpful overview of the proposed changes, including a comparison of the proposed new SIP 2 against the current version.
For IPs who are appointed over a company with real estate assets that have residential tenants in situ, they will need to consider the impact of the Renters Rights Act 2025. This gives residential tenants enhanced rights, most notable around eviction. Although this does not mean that IPs can no longer remove a tenant, the process is likely to be longer and more costly. One of the first steps required by the new law was the requirement to provide residential tenants with an “Information Sheet” – see our blog. Watch this space for our new alert outlining the key points for IPs.
Dealing with HM Revenue and Customs (HMRC) debt in a restructuring plan remains topical, as the recent Waldorf RP demonstrates. Although HMRC were not successful in their challenge to the plan, nor in obtaining permission to appeal, we suspect that this will not be the last challenge. Perhaps, as alluded to by the judge in the application for permission to appeal, HMRC will, in another case, pursue the question of, whether, as a matter of public policy, the cram down power can be used against HMRC.
And while mentioning HMRC are you aware of the mandatory requirements to register as a tax advisor? There are exceptions to the need to register, but these only apply once an IP is formerly appointed, so for pre-appointment advice, which might involve engagement with HMRC, registration is required. Although we expect most IP firms (and relevant individuals) will be registered, check the guidance.
The eagerly awaited appeal of Novalpina is expected to be heard at the end of this month. The first instance decision caused waves last year following the court determining that all debts must be paid within 12 months of a company entering member’s voluntary liquidation (MVL). Although many practitioners had understood the legislation in that way, it could be read differently – our original blog gives more detail on the case. The appeal will, we understand, consider this point but also the question of how to deal with contingent/disputed debts in an MVL. Whatever the outcome, it will hopefully bring clarity to the market.

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

Payday Super – The changes and unexpected consequences

Fri, 12 Jun 2026 09:00:00 +00:00

New rules for making superannuation contributions, branded “Payday Super”, come into force for Australian employers from 1 July 2026. Although many of the changes are straightforward, there are some others that require employers to reevaluate the way that they pay certain employees to avoid some unintentional consequences.

In with the new...

The following changes come in from 1 July 2026:

The change	What this means
Employers need to make superannuation contributions within seven days of payment of an employee’s salary. Previously, superannuation contributions had to be made once per quarter.	Employers need to make superannuation contributions on a more regular basis, in line with their payroll schedule. A failure to make superannuation contributions within the sevenday timeframe of each pay run will attract a substantial super guarantee charge (SGC). The SGC will be calculated by the Australian Tax Office and includes: The total of the superannuation guarantee shortfall Interest (compounding daily) from the date that the contribution was due to be made An administrative uplift amount of up to 60% that reflects the cost of enforcement and encourages early disclosure by employers A “choice loading” of up to AU$1,200 per employee for failing to follow the choice of fund rules
The concept of “ordinary time earnings” has been replaced with “qualifying earnings”.“Qualifying earnings” is similarly defined, but has a slightly broader scope that now includes all commissions (including commissions solely for work performed entirely outside of ordinary hours of work), salary sacrifice amounts that would qualify as qualifying earnings had they not been salary sacrificed.	Employers need to check that they are paying superannuation contributions on “qualifying earnings”. Some employees, like those who receive commission payments for work performed outside of ordinary hours of work, will be entitled to additional superannuation.
An annual maximum contribution base (which will be AU$270,830 for the 2026/2027 financial year) will replace the current quarterly maximum contribution base.	Once an employee reaches the maximum contribution base for a financial year, the employer can cease making superannuation contributions for that financial year. See below for our comments about how the introduction of the annual maximum contribution base affects salary packaging for high earning employees.

Rethinking annualised salaries

The Payday Super changes mean, from 1 July 2026, an employer must make superannuation contributions on behalf of an employee at 12% each pay period, until the employee’s qualifying earnings reach the maximum contribution base for that financial year. This means, for high-earning employees whose qualified earnings are higher than the maximum contribution base (High Earning Employees), their superannuation contribution amounts over the course of a year may differ depending when in the year they reach the contribution cap (e.g. if they cap out in December, they will not be entitled to any further superannuation in that financial year).

This may give rise to some practical issues for employers. For example, with respect to High Earning Employees, employers will no longer be able to pay superannuation in equal monthly instalments. This may affect employers using a “total fixed remuneration” or “total employment cost” method, where superannuation is packaged with the employee’s salary.

Example

Harry’s base salary is AU$312,000 per annum. This equates to a monthly base salary of AU$26,000.

Based on the maximum contribution base of AU$270,830, his total annual remuneration package, comprising base salary and super, would be AU$344,500 as follows:

Annual base salary

AU$312,000

Annual superannuation contribution (12% up to the maximum contribution base of AU$270,830)

AU$32,500

Total

AU$344,500

Harry’s employer needs to make superannuation contributions at 12% of Harry’s base salary on a monthly basis, as follows:

Month	Amount of superannuation payable	Cumulative total of superannuation contributions
July	AU$3,120	AU$3,120
August	AU$3,120	AU$6,240
September	AU$3,120	AU$9,360
October	AU$3,120	AU$12,480
November	AU$3,120	AU$15,600
December	AU$3,120	AU$18,720
January	AU$3,120	AU$21,840
February	AU$3,120	AU$24,960
March	AU$3,120	AU$28,080
April	AU$3,120	AU$31,200
May	AU$1,300	AU$32,500
June	AU$0	AU$32,500

As shown above, for the first 10 months of the financial year, Harry’s employer needs to make superannuation contributions of AU$3,120 per month. But once the maximum contribution base is reached, Harry’s employer no longer needs to make superannuation contributions.

As such, (depending on the contractual arrangements) we are usually recommending that most employers separate the payment of base salary from superannuation, such that the base salary can be paid in equal instalments over the course of a year, and superannuation paid in addition in accordance with the superannuation legislation.

That said, if an employer wants to continue to package superannuation in a High Earning Employee’s remuneration, we recommend that they obtain advice on structuring their remuneration in light of the Payday Super laws. Our labour and employment and tax lawyers can assist with any such advice.

Watch out for bonuses

If an employer pays bonuses or commissions, these amounts will be “qualifying earnings”, and so superannuation contributions must be paid in respect of these amounts.

The timing of these amounts in the financial year will also impact the amount of superannuation contributions payable in respect of a High Earning Employee.

Example

If Harry received a bonus of AU$50,000 in September, Harry’s employer would need to make superannuation contributions as follows:

Month	Amount of superannuation payable	Cumulative total of superannuation contributions
July	AU$3,120	AU$3,120
August	AU$3,120	AU$6,240
September	AU$3,120 + AU$6,000 super for bonus	AU$15,360
October	AU$3,120	AU$18,480
November	AU$3,120	AU$21,600
December	AU$3,120	AU$24,720
January	AU$3,120	AU$27,840
February	AU$3,120	AU$30,960
March	AU$1,540	AU$32,500
April	AU$0	AU$32,500
May	AU$0	AU$32,500
June	AU$0	AU$32,500

As shown above, due to the additional superannuation payable on the bonus that Harry receives in September, the maximum contribution base will be reached in March. Once the maximum contribution base is reached, Harry’s employer no longer needs to make superannuation contributions for that financial year.

Super guarantee opt-out

An employee with multiple employers, either at the same time or because they have changed jobs during the course of a financial year, and who is likely to exceed the maximum contribution base for a financial year, can provide their employer with an “SG shortfall exemption certificate”.

If an employer receives an exemption certificate from an employee, then they are released from their super guarantee obligations for a specified period, which ends at the end of the financial year. The employer may, however, choose to disregard an exemption certificate and continue to make super guarantee payments.

Takeaways

With less than three weeks until 1 July, your organisation should be urgently considering the following (if it has not already):

Review payroll systems, processes and provider arrangements – To ensure superannuation contributions can be calculated, processed and remitted within seven days of each salary payment from 1 July 2026.
Audit earnings categories – To confirm super is being calculated on the new “qualifying earnings” basis, including relevant bonuses, commissions and salary sacrifice amounts.
Identify High Earning Employees and model cap impacts – Particularly where bonuses or commissions may affect when the annual maximum contribution base is reached.
Review remuneration structures and contract templates – Especially total fixed remuneration or total employment cost arrangements, and consider separating base salary from superannuation where appropriate. Your contract templates will also need to be reviewed to ensure that, as an employer, you have the ability to change the structure of the remuneration and superannuation components.

If this article raises any questions or issues for your organisation, or you otherwise would like any advice on the matters set out, our employment and tax teams are well-placed to assist.

Navigating disruption in the private credit market

Thu, 11 Jun 2026 15:26:07 +00:00

An expert Q&A on structural and legal risks highlighted by recent disruption in the private credit market, including liquidity mismatches inherent in certain business development company (BDC) structures, risks of back leverage, software sector concentration, and net asset value (NAV) opacity.

Recent high-profile defaults in the private credit market and unprecedented redemption pressure on large private credit funds have placed the $1.8 trillion private credit industry under wide public scrutiny for the first time since the industry’s phenomenal rise following the 2008 global financial crisis. Additionally, JPMorgan’s decision to mark down the value of collateral on software loans in private credit financing facilities, reducing the availability of funding for private credit lenders, has also led some observers to question portfolio valuations, particularly if exposed to the software sector. However, rather than signaling an imminent collapse of the asset class, these disruptions likely represent a market correction that may strengthen the private credit market and support continued and sustainable growth.

Practical Law asked Gabriel Yomi Dabiri and Cynthia Weiss of Squire Patton Boggs (US) LLP to discuss the structural vulnerabilities and legal risks behind disruptions in the private credit market, and steps that private credit funds, private equity sponsors, and banks can take to navigate the current disruption.

Read full insight

This article was originally published in the June 2026 issue of Practical Law The Journal and is reposted with permission of Thomson Reuters.

The “real risk” threshold for sanctions exposure: The Court of Appeal in The Catalan Sea

Wed, 10 Jun 2026 15:40:14 +00:00

On 22 May 2026, the Court of Appeal handed down its judgment in Tonzip Maritime (Singapore) Pte Ltd v. 2 Rivers Pte Ltd (The Catalan Sea), allowing the owners’ appeal and clarifying the evidential threshold that a charterparty sanctions clause imposes when it permits the refusal of orders that would “expose” the vessel or its insurers to sanctions. The court held that the clause requires no more than an objectively reasonable judgment of a real risk of sanctions liability, and that the trial judge had erred in demanding positive proof that the sanctioned beneficial owner of the cargo retained actual control.

Background

The dispute arose from a voyage charter dated 5 November 2021 for the carriage of a cargo of crude oil from the Russian Baltic ports of Ust-Luga and Primorsk to Aliağa in Turkey. The charter incorporated an amended sanctions clause under which the owners were not obliged to comply with employment orders that, in their reasonable judgment, were prohibited by sanctions or would “expose the owners, the vessel or its managers, crew, the vessel’s insurers or reinsurers to sanctions”, and under which the charterers warranted that no person with an interest in the cargo was a designated person. The named shipper was a Russian oil company, JSC Neftyanaya Kompaniya Neftisa (Neftisa), which the owners’ screening associated with Mr. Mikhail Gutseriev, an individual designated by the European Union on 21 June 2021 and by the UK on 9 August 2021 in connection with the situation in Belarus. Shortly before those designations, Mr. Gutseriev had transferred his majority interest in the relevant corporate chain to his brother, retaining a holding of approximately 7%.

The owners’ screening through a commercial sanctions database recorded Neftisa as “associated to sanctioned individual” and identified Mr. Gutseriev as an indirect owner until 2021. On that basis, the owners refused to load and called for alternative orders.

The charterers responded with a letter on Neftisa’s headed paper stating that Mr. Gutseriev was neither a board member nor the controlling person of the company, together with legal opinions from two international firms to the same effect; the charterers then purported to cancel the charter, and the owners terminated for repudiation on the same day. At first instance, the Commercial Court accepted that the clause required only a real risk of sanctions liability rather than proof of an actual breach, but held that no reasonable owner could have concluded that such a risk existed on the material before it, because that material did not establish that Mr. Gutseriev controlled Neftisa as of November 2021. The owners’ claim accordingly failed, and the charterers’ counterclaim succeeded.

President Trump orders US Customs and Border Protection to tighten regulations on importers of record

Wed, 10 Jun 2026 12:24:00 +00:00

On Wednesday, June 3, 2026, President Trump issued an executive order (EO), titled “Strengthening Customs Enforcement,” along with a factsheet. The EO concerns tightening regulations on importers of record (IORs), particularly foreign IORs.

The expressed intended goal of the EO is to enhance customs enforcement to prevent importation of unlawful and dangerous goods, ensure IORs are correctly identified, available and accountable for duties owed, and guarantee compliance with existing law.

Pensions weekly update: 10 June 2026

Wed, 10 Jun 2026 10:55:46 +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 issued a consultation on amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021. The consultation proposes amendments to address “operational challenges that, while well‑intentioned, may have at times created unnecessary friction for legitimate transfers”. The consultation notes the high instance of member referrals for safeguarding appointments triggered solely by amber flags on overseas investments and acknowledges concerns that trustees cannot exercise their experienced judgement in straightforward cases where the risk of a scam is demonstrably low. The consultation also sets out targeted measures to address the risk of fraud within small self-administered schemes (SASS). The consultation runs until 21 July 2026.
HM Revenue and Customs (HMRC) has issued a technical consultation on draft regulations impacting guaranteed minimum pension (GMP) conversion. Currently, when pension schemes equalise GMPs using the DWP’s statutory conversion method, some protections could be lost. The effect of this is that certain deferred members could lose their deferred member carve-out protection so that additional monitoring and communication of the value of their converted benefits for their annual allowance is required and means that they could face unexpected annual allowance tax charges. The draft regulations are intended to maintain those deferred carve-out protections so that any alteration in benefit to implement GMP conversion does not form part of the member’s annual allowance. Consultation closes at 11:59 p.m. on 13 July 2026.
The government has published its outcome of consultation on chapter nine of the public policy consultation on retirement collective defined contribution (CDC) pension schemes, which was launched on 23 October 2025. The consultation considered amendments to the legislation that would permit the bulk transfer without member consent of occupational defined contribution (DC) benefits without guarantees to authorised CDC schemes. The government has confirmed that it intends to proceed with this proposal, which will include transfers to CDC sections as well as whole schemes, along with unconnected multiple employer schemes. The logic is that the receiving CDC scheme or section “has passed a robust authorisation process and remains subject to regulatory supervision on an ongoing basis, which means that the risk of member detriment is significantly reduced”. The changes being introduced will not, however, apply in relation to the transfer of members into a retirement CDC scheme as part of a default retirement solution. Member consent will be required in those circumstances. Regulations have been laid before parliament and are due to come into force on 31 July 2026. The regulations will amend regulation 12 of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991. Guidance first published in 2018 has also been amended to reflect the change.
The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 have been laid before Parliament, and make consequential amendments to legislation in relation to the abolition of the lifetime allowance and lifetime allowance charge. Some of the provisions come into force for events occurring on or after 29 June 2026, while the remainder have effect for the tax year 2024-2025 onwards.
Pensions UK has issued an update to its retirement living standards, estimating how much income is needed to maintain a minimum, moderate and comfortable lifestyle in retirement. In a press release, Pensions UK says that “the nation is not saving enough” with only around 23% expected to reach a moderate lifestyle.
The Pensions Policy Institute (PPI) has published a report on the strengths and limitations of megafunds, the challenges faced by the UK and what we can learn from international experience. The report highlights that a move to consolidate UK pension schemes into megafunds will not automatically lead to higher investment returns. Other challenges include member experience – it is noted that the larger Australian superfunds are “finding it difficult to service members effectively”. The PPI has also published reports on Designing guided retirement solutions: meeting member needs and Unlocking DB surpluses: balancing risks and rewards.
The Money and Pensions Service (MaPS) is inviting applications to join a private sector dashboards working group. Membership will be drawn from organisations planning to operate a private sector dashboard and technology suppliers. It is not yet known when private sector dashboards will be able to operate.
In our #how2dopensions quick guide, we explore the risks and opportunities of using artificial intelligence (AI) to take trustee meeting minutes and notes, and offer some practical tips.

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

Publications

China’s first court decision rejecting compliance with foreign sanctions as a defence to breach of contract

The facts

The court’s ruling

The Supreme Court’s remarks

Key takeaways

Unconsented texts to DNC numbers: No private right of action under TCPA

Background

The Court’s findings and conclusions

So, what is potentially next?

Truth mandated, speech challenged:

UK Government consults on major reform of the equal pay framework

Digital duty of care

What does the Duty require?

Who would be subject to the Duty?

What could “effective systems and processes” mean?

How does this interact with an already complex regulatory regime?

What does this mean for online regulation more generally?

What might be the penalties for breach of the Duty?

What other reforms are on the table?

The UK's new supply chain strategy: What businesses should be thinking about now

Pensions Weekly Update: 16 July 2026

US extends EAR enhanced favourable treatment to the UAE:

The Federal Trade Commission (FTC) obtains record US$12 million penalty for HSR filing avoidance

The FTC’s allegations

Key takeaways

AI Tools: A Due Diligence Guide for the recruitment sector

Variations under the FIDIC Yellow Book: Lessons from Uniform Building Contractors Ltd v. The Water and Sewerage Authority of Trinidad and Tobago

The contractual test for a variation

Case study: The asphalt verge dispute

Practical implications

Darchem Ruling Clarifies Status Of JV Members' Solo Claims

Background

High Court Judgment

Practical Considerations

Conclusion

Family Office Insights: Managing Family Office AI Risk

Key AI-related risks for family offices

Governance response

Conclusion

CRD VI: Key considerations for non-EU banks

Grandfathering

The treatment of novation with respect to grandfathering

Reverse solicitation

From recall to resolution: The lifecycle of mass product litigation

Pensions weekly update: 8 July 2026

Will businesses be taxed for using AI?

Robot tax

Token tax

FLOP tax

Conclusion

UK Update: UK Supreme Court grants permission to appeal in opt-out environmental claim brought in the Competition Appeal Tribunal

Update

Iran deal uncertainty threatens sanctions relief

What is in the deal?

What are the challenges to implementation?

How could this all unfold and what does it mean for businesses?

Scenario 1: The MOU generally holds and the parties agree to a final deal based on its provisions

Scenario 2: The parties engage in negotiations, which are prolonged to come to a final deal

Scenario 3: The MOU falls apart before any meaningful progress is made on a final deal

Sanctions brief

Iran

Cuba

Venezuela

Russia

Family Office Insights: An Update on Beneficial Ownership Reporting Requirements Under the Corporate Transparency Act

What is the CTA, and why was it enacted?

What changed in 2025?

Who must report?

Examples potentially subject to reporting

Examples generally outside the reporting regime

Do the 23 exemptions still apply?

What information must be reported?

Why does this matter for family offices?

What UK employers need to know about the extension of right to work checks from 1 October 2026

Legal NewsBITE: Food and Drink Quarterly June 2026

SCCA issues Saudi Arabia’s first contribution to the UNCITRAL Digest of Case Law on the Model Law on International Commercial Arbitration

No more upward-only rent reviews

Why reform and why now?

What does the reform look like today?

Family Office Insights:
Managing Family Office AI Risk

Family Office Insights:
An Update on Beneficial Ownership Reporting Requirements Under the Corporate Transparency Act