International Law: India Supreme Court Ruling, Data Privacy in China, Russia Update, & More

For your reference, here’s a roundup of recent legal developments affecting US corporations and financial institutions doing business around the globe:

Supreme Court of India’s Vodafone Judgment: Implications for International Investors (White & Case LLP)

“On January 20, 2012, the Supreme Court of India delivered a landmark judgment in Vodafone International B.V. v. Union of India & Anr. ruling that the transfer of shares of a company incorporated outside India from a seller resident outside India to a buyer resident outside India is not taxable by the Indian tax authorities even if such transfer indirectly transfers an asset in India.” Read more»

Indian Supreme Court Holds for Vodafone (King & Spalding)

“Under Indian law, the purchaser of an asset located in India is required to withhold tax on payments to a non-resident seller. In the Vodafone case, the Indian tax authorities attempted to look through the Cayman Islands holding structure and treat the transaction as if it were the direct sale of the Indian assets of HEL and thus subject to withholding tax. The Bombay High Court ruled in favor of the government, exposing Vodafone to a potential tax liability in excess of $2 billion… The Indian Supreme Court refused to disregard the form of the taxpayer’s transaction and reversed the lower court’s decision.” Read more»

China’s Online Data Privacy Rules Coming into Effect; Other Recent Data Privacy Developments in China (Morrison & Foerster LLP)

“China, like many jurisdictions, continues to grapple with the issue of whether and how to protect personal information in light of new technologies and services designed to collect and use personal information in new and different ways. One of the more far-reaching legislative efforts in recent months is new regulations issued by the Ministry of Industry and Information Technology governing the collection, storage and use of personal information by Internet companies.” Read more»

Russian Legal Update (Dechert LLP)

“The [Russian] Foreign Strategic Investments Law has been heavily criticized by foreign investors and Russian business as it creates excessive administrative barriers, which de facto have no social benefits, to investment in Russian businesses. The Russian government responded to this criticism by introducing amendments to the law, which were adopted by the State Duma, the Federation Council and signed by the President into law in November 2011.” Read more»

New German Insolvency Law Rules to Facilitate Restructurings, Debt-Equity Swaps and Debtor in Possession (K&L Gates LLP)

“On 1 March 2012 new German insolvency law rules will come into effect which are intended to facilitate and promote debtor-in-possession proceedings and the use of restructuring plans and debt-equity swaps… When it comes into effect the new insolvency law is likely to drastically change the rule set for insolvency proceedings in Germany, increasing the number of plan proceedings versus liquidations and making distressed investment targets more attractive to financial investors.” Read more»

SFO Obtains Convictions in Private Sector Oil and Gas Corruption Case (Morrison & Foerster LLP)

“The UK Serious Fraud Office has recently obtained convictions against four individuals who received corrupt payments in return for the disclosure of confidential procurement information relating to the award of £66 million offshore oil and gas engineering contracts in Iran, Egypt, Russia, Singapore and Abu Dhabi. This case (“Operation Navigator”) and the sentences handed down highlight the increasing appetite of the UK authorities for high-profile prosecutions under anti-corruption legislation.” Read more»

Qatar Financial Markets Authority Adopts New Regulation for Offering and Listing Securities on the Second Market (White & Case LLP)

“In January 2012, the Qatari financial regulator, the Qatar Financial Markets Authority, adopted a new regulation governing the offering and listing of securities on a second market of the Qatar Exchange, which is now officially known as the QE Venture Market. The QE Venture Market is intended for small and medium-sized enterprises. The New Regulation reiterates most of the articles comprising the initial regulation governing the offering and listing of securities on the Qatari market in general, which was adopted by the QFMA in November 2010.” Read more»

Some European Short Selling Restrictions Lifted (Katten Muchin Rosenman LLP)

“On February 13 and 15, the French (AMF), Belgian (FSMA) and Spanish (CNMV) financial markets regulators announced the end of their respective bans on establishing or increasing net short positions in relation to certain banking and financial services issuers. The applicable French, Belgian and Spanish net short position disclosure regimes continue to be in force, as do prohibitions on naked short selling. The AMF, FSMA and CNMV have each made clear that they will continue to monitor market developments and will re-impose restrictions on short selling if they deem it necessary.” Read more»

Changes To Patent And Trade Mark Law In The Cayman Islands (Harney Westwood & Riegels)

“The Cayman Islands legislature recently passed the Patents and Trade Marks Law, 2011 (the “Law”) which repeals and replaces the previous law and introduces some significant changes to patent and trade mark law in the Cayman Islands, as summarized below. The Law became effective on 7 December 2011. Pursuant to the Law, except for general searches of the Cayman Islands Registry of Patents and Trade Marks, only a registered agent who is ordinarily resident in the Cayman Islands and licensed by the Registrar of Patents and Trade Marks may transact business with the Registry.” Read more»

Globalizing in China in 2012 (Fisher & Phillips LLP)

“China’s current Labor Law is expected to be amended in 2012. The issue is to what degree and to what effect the 2012 amendments, if enacted, will have on employers.  The changes and effect of the 2012 amendments are yet to be fully known or disclosed, but it is now a good time for all of us to review and ensure compliance with the complexities of China’s labor laws to: (1) reduce risks of legal liability and (2) understand and implement any changes that may be required should the 2012 amendments be enacted.” Read more»

German Court Protects the Confidentiality of Leniency Submissions (McDermott Will & Emery)

“Despite the fact that the ruling of the Bonn Court only defines the legal situation in Germany, it is possible that it may have some influence on the UK High Court’s decision on whether to disclose leniency documents or not. It may also influence the development of the law in other EU Member States. This issue is of some practical importance given the undesirable prospect of conflicting judgments in the European Union.” Read more»

Argentina’s Parliament Approves A Measure Limiting Amount Of Land That Can Be Purchased By Foreigners (Sheppard Mullin Richter & Hampton LLP)

“On December 22, 2011, Argentina’s parliament approved a law limiting the amount of rural land foreigners can purchase in Argentina (the ‘Law’)… ‘Rural land’ is defined as all land that is outside of an urban area. An “urban area” is any an area with 2000 or more inhabitants. Under this definition, most of Argentina’s land mass will be classified as rural land. Total foreign ownership of rural land cannot exceed 15% of Argentina’s total land mass. No more than 15% of the 30% (e.g. 4.5% of Argentina’s total land mass) can be acquired by persons and/or entities of the same nationality.” Read more»

France Proposes Financial Transaction Tax (Katten Muchin Rosenman LLP)

“On February 8, the French government released details of a proposed financial transaction tax (FTT). The proposal will be considered by the French parliament and, if passed, will impose taxes on certain transactions in shares and other financial instruments, as well as on high frequency trading.” Read more» 

High Court of England and Wales Rules Emissions Allowances to be Treated as Property (McDermott Will & Emery)

“Following a decision of the High Court of England and Wales the legal status of European Union Allowances (EUAs) traded under the EU Emissions Trading Scheme (EU ETS), has now been clarified, with the Court holding that EUAs should be classed as intangible property under English law… EUAs are entirely electronic and, unlike shares for example, they are not evidenced by a title document.  Each EUA has a unique identifier number and when it is bought and sold it is moved from one registry account to another registry account.” Read more»

Venezuela’s Exit from ICSID (K&L Gates LLP)

“On 24 January 2012, President Hugo Chávez followed through on his repeated threats to withdraw Venezuela’s membership from the International Centre for the Settlement of Investment Disputes, the most widely used facility for the settlement of global investment disputes… [I]nvestors in Venezuela need to consider how to best protect their future rights.” Read more»

New Registration Requirements for Cayman Islands Master Funds (Foley Hoag LLP)

“As the result of a recent amendment to the Cayman Islands Mutual Funds Law, master funds formed in the Cayman Islands may be required to register with the Cayman Islands Monetary Authority… The new requirements apply to master funds that (i) hold investments and conduct trading activities; (ii) issue equity interests that are redeemable at the option of the investors (for this purpose, a feeder fund would constitute an investor); and (iii) have CIMA-registered feeder funds within their structure.” Read more»

EU Council of Ministers Updates Position on EMIR (Katten Muchin Rosenman LLP)

“On January 24, the EU Council of Ministers published a press release setting out its evolving position with respect to the proposed European Market Infrastructure Regulation. The main change relates to the introduction of an enhanced role for European Securities and Markets Authority and the college of national regulator supervisors in the procedure for authorizing central counterparties.” Read more»

Recent Developments in the Regulation of European Commodities Markets (McDermott Will & Emery)

“The [European Commission] is working towards a deadline of late 2012, by which time all standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, as appropriate, and be cleared through central counterparties, again, where appropriate. Now over a year has passed since the publication of the draft regulation and … the final text is yet to be published. With so many issues still outstanding … it is not clear how realistic this timeframe is.” Read more»

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See also: Data Privacy: A Look at Europe’s “Right to be Forgotten” and Other Protection Laws

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