Doing Business in Europe: Latest Need-to-Know

Do business in Europe? Here’s a roundup of recent commentary and analysis on conducting business in Europe, including REACH regulations, patent classification, taxation, mobile apps, dawn raids, and more:

Some clarification regarding challenges to REACH candidate listing (K&L Gates LLP):

“In a series of recent judgments the EU General Court has given some guidance to companies considering challenging the inclusion of their substances in the REACH Candidate List. In summary, it is now clear that the listing of a PBT (Persistent, Bioaccumulative and Toxic) or vPvB (very Persistent and very Bioaccumulative) substance is of direct concern to registrants of that substance. There is therefore no formal bar to manufacturers and importers of such stances challenging their inclusion in the Candidate List, in contrast to manufacturers and importers of substances listed on the grounds that they are carcinogenic, mutagenic or reprotoxic.” Read on>>

The Cooperative Patent Classification System Becomes The Official Patent Classification System At The U.S. And European Patent Offices (Downs Rachlin Martin PLLC):

“Just this past January, the U.S. Patent and Trademark Office (USPTO) and the European Patent Office (EPO) each announced the launch of the Cooperative Patent Classification system (CPC) as the official system for classifying patent documents at both patent offices.” Read on>>

Changes to the UK Tax Treatment of Fee Rebates and Trail Commissions (Dechert LLP):

“HM Revenue & Customs this week made a surprise announcement regarding the tax treatment of fee rebates and similar payments made to UK investors in collective investment schemes and other investment products. The announcement advises that such payments are taxable and, in the case of payments made by UK entities, should be paid to investors subject to a withholding in respect of basic rate income tax. This announcement is of immediate relevance as it affects payments made for the tax year commencing 6 April 2013.” Read on>>

UK Regulators Propose Implementing Rules and Regulations on AIFMD (Proskauer Rose LLP):

“On 19 March 2013, the UK Financial Services Authority (FSA) published Part II (CP2) of its three-part consultation series on Implementation of the Alternative Investment Fund Managers Directive (AIFMD). The consultation period closes on 10 May 2013.” Read on>>

Implications of the UK 2013 Budget for Investment Funds (Orrick):

“The 2013 budget, delivered by the U.K.’s Chancellor of the Exchequer, George Osborne on March 20, incorporated a number of provisions affecting investment funds, which are included in a UK investment management strategy. The U.K. government announced a package of measures in areas of taxation, regulation and marketing, designed to make the UK one of the most competitive places in the world for investment funds.” Read on>>

ESMA Publishes EMIR Q&As (Katten Muchin Rosenman LLP):

“On March 20, the European Securities and Markets Authority (ESMA) published Questions & Answers (Q&A) relating to the implementation of the Regulation on OTC Derivatives, Central Counterparties (CCPs) and Trade Repositories (Regulation EU 648/2012, generally known as EMIR).” Read on>>

Russia Litigation Update (Quinn Emanuel Urquhart & Sullivan, LLP):

“Jurisdictional conflicts between courts of different countries are an unavoidable consequence of developed global trade. This has led to an increase in multi-national forum shopping. Some Russian courts however, view the adjudication of Russian-related disputes in foreign courts as a direct threat to Russian state sovereignty.” Read on>>

Jackson Reform Implementation Imminent (Reed Smith):

“As a result of concerns that in some areas of civil litigation costs are disproportionate and impede access to justice, Lord Justice Jackson began a review of the rules and principles governing the costs of civil litigation in January 2009. His objective was to make recommendations “in order to promote access to justice at proportionate cost”. His proposals were published in January 2010 and the majority will be implemented commencing 1st April 2013.” Read on>>

European Agreement on Creation of a Single Supervisory Mechanism (Orrick):

“An agreement has been reached on the way the European Central Bank (ECB) will be responsible for the supervision of banks within the framework of the single supervisory mechanism. The agreement, made between the Council of the EU, the European Commission and the European Parliament (EP), was announced in a press release.” Read on>>

The UK Government consults on proposed changes to the TUPE Regulations (Pillsbury):

“In a previous post, TUPE: Service Provision Change, we discussed that the UK Government had issued a Call for Evidence to review the current Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE 2006’) as part of its wider review of reforms to UK employment laws. The Call for Evidence concluded in 2012 and the UK Government has now launched a consultation on its proposal to amend TUPE 2006, which it believes will improve and simplify the regulations for all parties involved.” Read on>>

European Regulators Issue Opinion on Mobile Apps (Wilson Sonsini Goodrich & Rosati):

“On March 14, 2013, the European data protection regulators (the Article 29 Working Party, or WP) issued a 30-page opinion addressing how mobile apps should comply with EU data protection law (the Opinion). The main focus of the Opinion is on app developers, but it also describes the obligations of other parties involved in the development and distribution of apps, such as app stores, operating system and device manufacturers, and third-party advertising providers.” Read on>>

New Regulations Pave The Way for Increased Employee Owned Companies (McDermott Will & Emery):

“The UK Department for Business, Innovation and Skills (BIS) published on 4 July 2012 the final report from the Nuttall Review of Employee Ownership (the Nuttall Review). It identifies a number of barriers to the creation and uptake of employee ownership arrangements. The Nuttall Review identified significant economic and social benefits in employee ownership, which the UK Government has endorsed. As a result, the UK Government has published new regulations to deregulate the current share buyback regime, which are to take effect later this year and intend to simplify the current overly burdensome rules.” Read on>>

Mintz Levin’s London-based IP Practice Group Identifies the UK’s ‘Patent Box’ as a Boon for Clean Technology Clients (Mintz Levin):

“The UK government has proposed a new initiative called the “Patent Box,” designed to foster UK-based innovation and development, and enhance the competitiveness of the UK tax system. And, as an advantageous bonus for clean technology companies, the Intellectual Property Office is fast-tracking clean technology patents through to grant in 12 to 18 months, allowing companies to start claiming the tax relief sooner.” Read on>>

Son of FATCA – Swiss/U.K. Agree on Information Exchange (Sanford Millar):

“In what is clearly the first of many to come intergovernmental agreements similar to the Foreign Account Tax Compliance Acct (FATCA) adopted by the U.S. in 2010, the governments of Switzerland and the United Kingdom entered into an agreement with features similar to FATCA provisions.” Read on>>

The UK’s New Financial Services Act – a Guide to the Main Changes (White & Case LLP):

“The UK’s Financial Services Act 2012 (the Act) will come into force on 1 April 2013. On implementation, the Act will amend many of the UK’s existing financial services legislative measures and give effect to several of the Government’s financial regulatory reform proposals.” Read on>>

Seizure of Electronic Data: Dawn Raid Inspection Guidance Revised (McDermott Will & Emery):

“In an era when the vast majority of written communications are made by electronic means, a company’s obligations to cooperate with Commission officials in an “antitrust dawn raid” extend to the granting of access to all electronically stored data. This is emphasised in the Commission’s revised guidelines on conduct of “dawn raids,” published on 18 March 2013. Every company is subject to the possibility of an unannounced inspection (‘dawn raid’) by the European Commission.” Read on>>

UK’s Department of Business, Innovation and Skills Proceeds with Private Competition Action Reforms (Skadden, Arps, Slate, Meagher & Flom LLP):

“The U.K.’s Department of Business, Innovation and Skills (BIS) has issued a ‘government response’ or plan for reform indicating that the government will move forward with a number of substantial changes to the U.K.’s antitrust private action regime. The government explained the actions it intends to take following a public consultation in 2012 on proposals for reforming private antitrust actions in the U.K. Most significantly, the government announced it will introduce an opt-out class action mechanism for antitrust claims in front of the U.K.’s Competition Appeal Tribunal (CAT).” Read on>>

The Role of the Depositary Under the AIFM Directive (Dechert LLP):

“The Alternative Investment Fund Managers Directive (the ‘AIFM Directive’) requires that private funds appoint a ‘depositary’. To date, there has been no cross-border regulatory requirement for hedge or other private funds to appoint a depositary… In essence, a depositary acts not only as custodian but also as a sort of monitor or auditor of the fund. In this latter role, it ensures that the fund’s assets are held independently of the investment manager, that the fund’s accounting records are reconciled (where appropriate) with third-party records, and that investors’ entitlements are correctly calculated.” Read on>>

UK Employment Law Changes to Take Effect in April (Morgan Lewis):

“Changes to the collective consultation regime were announced by the UK government on 18 December 2012. The changes will reduce the consultation burden on UK employers and mean that redundancy dismissals can take effect more quickly. Employers should note the changes and consult the new redundancy guidance to be published by the Advisory, Conciliation and Arbitration Service (ACAS) when proposing redundancies after 6 April 2013.” Read on>>

Tax Measures in 2013 UK Budget (Morgan Lewis):

“On 20 March, UK Chancellor of the Exchequer George Osborne released the UK’s 2013 budget. The budget reaffirmed the government’s goal to make the UK a competitive place to locate multinational businesses,[1] and it includes a number of measures designed to support businesses and encourage growth and jobs. There are also several measures to address the growing public concern with tax avoidance and tax evasion, designed to ensure that businesses pay their ‘fair share’ of tax.” Read on>>

Insight: Asset Finance – High Hopes for Regulating International Aviation Emissions (White & Case LLP):

“’Application of the [EU] emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the Open Skies Agreement’. This was the judgment of the European Court of Justice in December 2012, in response to the landmark case brought by certain US airlines, the Air Transport Association of America (now, A4A) and the International Air Transport Association.” Read on>>

EMSA Publishes Guidance on Recognition of Third Country Central Counterparties (TC-CCPs) under EMIR (Orrick):

“On March 12, The European Securities and Markets Authority (ESMA) published a guidance on the recognition of TC-CCPs under EMIR (the Regulation on OTC derivatives, CCPs, and trade repositories). The guidance note reviews ESMA’s recognition process and offers practical guidance for applicants.” Read on>>

The European Financial Transactions Tax (Dechert LLP):

“The European Commission on 14 February 2013 adopted a proposal for a Directive authorising eleven countries – Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the ‘FTT Zone’) – to proceed with the enhanced cooperation procedure to enact a Financial Transactions Tax (‘FTT’). This effectively clears the way for these countries to establish the levy based on the ideas of economist James Tobin to recoup the cost of the financial crisis from financial institutions.” Read on>>

ESMA Publishes Draft Standards for Prospectus Supplements (Morgan Lewis):

“On 15 March, the European Securities and Markets Authority (ESMA) published draft regulatory standards for, and an accompanying consultation paper on, specific situations that require the publication of a supplement to a prospectus. The aim of the consultation is to clarify the circumstances where a supplement will be required.” Read on>>

Continuation of contracts under an insolvency proceeding governed by French law: Better be short! (K&L Gates LLP):

“When a company is in good standing and healthy, the question of the renewal of a contract or its duration arises only in a competitive environment. In case of an insolvency proceeding, the situation is more complex, notably for suppliers whose payment remains uncertain. If challenging the decision taken by the judicial administrator imposing the continuation of a contract has little chance of success, one solution may lie in the nature and the terms of the original contract. When a company is under an insolvency proceeding, the judicial administrator is entitled by law to decide, to the exclusion of any other parties, whether or not a contract should be terminated.” Read on>>

EU Parliament Approves Online Transaction Dispute Resolution Platform (BuckleySandler LLP):

“On March 12, the European Commission announced that the European Parliament voted to support new legislation governing the out-of-court resolution of contractual disputes resulting from online transactions for the sale of goods or services, referred to as Online Dispute Resolution (ODR).” Read on>>

Find additional updates on doing business in Europe at JD Supra Law News>>