Law Times

Law Times • February 3, 2014 Page 13 www.lawtimesnews.com Brazilian anti-corruption law among latest international developments BUSINESS STRUCTURES UNDER EU TRADE DEAL For all of the hullaballoo about the Comprehensive Economic and Trade Agreement between Canada and the European Union, it's unlikely to aff ect Canada's domestic tax laws apart from customs and related duties. "CETA will not be revolu- tionary from the perspective of Canadian tax law and practice," says Claire Kennedy of Bennett Jones LLP's Toronto offi ce. " ere are usually carve-outs in these agreements that exempt existing tax measures." But that doesn't mean CETA won't off er business-structuring options. "CETA will create opportu- nities for businesses to structure their activities to benefi t from liberalization in a wide range of areas, including duty elimina- tion, labour mobility, providing cross-border services, and in- vestment," says Kennedy's part- ner Matthew Kronby. "But as is the case with every trade treaty, CETA will not off er blanket liberalization and busi- nesses will have to understand where the opportunities are." As well, CETA will have its own dispute resolution mecha- nisms. "CETA will have something akin to an updated version of NAFTA's Chapter 11," says Kronby. BRAZIL'S NEW CORRUPTION LAW New legislation creating civil and administrative liability for acts of corruption comes into force in Brazil this week. e groundbreaking legislation exposes companies — and not just individuals — to sanctions for the fi rst time. e law, which will aff ect all foreign companies doing busi- ness in Brazil as well as Brazil- ian companies with operations abroad, applies to off ences in- volving public offi cials in Brazil and abroad. e legislation's general struc- ture will be familiar to foreigners as it implements the Organisa- tion for Economic Co-operation and Development's anti-bribery convention. Otherwise, says Latham & Watkins LLP in one of the fi rm's client alerts, the law is "broadly in line" and in some respects "even stricter" than cor- responding legislation such as the U.S. Foreign Corrupt Practices Act and Britain's Bribery Act. CHINESE COURTS MUST PUBLISH JUDGMENTS In a landmark move, the Su- preme People's Court of China has ordered all levels of court in China to submit their judg- ments and rulings for publica- tion on a central web site. Traditionally, many judg- ments from Chinese courts haven't been publicly accessible. " e 2013 regulation rep- resents the [Supreme People's Court's] latest eff ort to improve judicial transparency," says Her- bert Smith Freehills LLP in a recent bulletin on developments in China. "As such, it is by no means a standalone event; rather, it is one further step in the Chinese gov- ernment's recent campaign for judicial reform." On the same day that the court issued its edict, it pub- lished a notice citing what it called its three major platforms of judicial transparency: publi- cation of trial procedure, publi- cation of judgments and rulings, and publication of enforcement information. "A central, comprehensive, and free database of people's court decisions should improve not only judicial transparency in China, but also the quality of future decisions, by providing judges with a benchmark when considering their own rulings," said Herbert Smith in its bulletin. "Judges may also exercise extra caution in their dra ing and reasoning when faced with public scrutiny of their own de- cisions." VOLCKER RULE FINAL REGULATIONS A er years of deliberation and consultation, U.S. authorities have issued fi nal regulations implementing the so-called Vol- cker rule. e rule prohibits "banking entities" from pro- prietary trading of fi nancial instruments and owning, sponsoring or having certain other relationships with pri- vate equity and hedge funds. Foreign banking organiza- tions, however, are exempt from the proprietary trading rule but only to the extent that the activ- ity takes place solely outside the United States. A recent Baker & McKenzie LLP client alert out- lined the conditions foreign banks must adhere to in order to meet the requirement: • e foreign banking organiza- tion can't be organized under U.S. law or be directly or indi- rectly controlled by a banking entity that's organized under U.S. law. • e banking organization must be a qualifi ed foreign banking organization or meet at least two of the following requirements: a majority of its assets, revenue, and total net income are held or derived outside the United States; a majority of its total revenue is derived outside the United States; or a majority of its total net income is derived outside the United States. • e foreign banking organiza- tion engaging in the trading a c- tivity or decisions must be lo- cated outside the United States and not be organized under U.S. law. • e trades don't appear as prin- cipal directly or on a consoli- dated basis on the books of any branch or affi liate in the United States or organized under U.S. law. • No fi nancing of any trades may be provided directly or indirectly by a U.S. branch or affi liate of the foreign banking organization. • e transaction isn't conduct- ed with or through any U.S. entity except for transactions with the foreign operations of a U.S. entity as long as no per- sonnel in the United States are involved in the trades; trans- actions with an unaffi liated in- termediary acting as principal so long as the transactions are promptly cleared and settled through a central counter- party; or transactions through an unaffi liated market in- termediary acting as agent if conducted anonymously on a trading facility and promptly cleared and settled through a central counter party. Otherwise, subject to certain restrictions, the rules permit U.S. affi liates of foreign banking organizations to engage in pro- prietary trading in foreign sov- ereign obligations of the foreign entity's home country. ey may also, and again subject to certain restrictions, engage in propri- etary trading in government ob- ligations of the country in which they're organized. LT FOCUS Cross-Border Litigation: Interjurisdictional Practice and Procedure provides guidance on all aspects of cross-border litigation. 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