On March 25, the European Commission issued guidance on the screening of foreign direct investment in the context of the COVID-19 pandemic. The Commission calls Member States to make use of existing FDI regimes to protect critical health infrastructure, supply of critical inputs, and other critical sectors. Further details can be found in our memorandum,
Brexit has happened. The UK is no longer an EU Member State. What does that mean for competition law in the UK?
Has Anything Changed?
In the short term, nothing will change. Until the end of the transition period set out in the UK Withdrawal Agreement, the rights and obligations of EU law continue to apply just as they did before. That transition period is due to end on 31 December 2020, unless both sides agree to an extension. So far, the UK Government has refused to consider a possible extension and has even sought to legislate against one.…
Brexit has happened. The United Kingdom is no longer part of the European Union or the European Economic Area. But in the short term, nothing really changes. The UK has entered a transition period during which it remains bound by EU rules and trade policy.
Until the end of the transition period, which is set out in the UK Withdrawal Agreement, the rights and obligations of EU law continue to apply in the UK largely as they did before, although the UK will be outside the EU’s decision making institutions. The transition period is due to end on 31 December 2020, unless both sides agree to an extension. So far, the UK Government has refused to consider a possible extension and the UK Parliament has even legislated to prohibit the Government from agreeing one. Parliament can of course undo the prohibition but, at this point, an extension looks unlikely. Under the Withdrawal Agreement any extension must be agreed with the EU by June 2020.…
U.S. authorities take an expansive view of their jurisdiction when it comes to sanctions. They cannot, however, directly restrict persons outside U.S. jurisdiction from dealing with sanctioned persons. They therefore exert pressure on persons outside U.S. jurisdiction by threatening to designate them as sanctioned persons if they engage in certain activities contrary to U.S. sanctions policy (“Target Activities”). Sanctions imposed in such circumstances are known as ‘secondary sanctions’, and were the topic of the September 2019 judgment of the High Court of England and Wales in Lamesa Investments v. Cynergy Bank. In a ruling that will surprise many, the Court found that the risk of incurring secondary sanctions could be invoked by a party seeking to be excused from its contractual obligations under an illegality clause. While the Court’s interpretation of secondary sanctions appears questionable in several respects, parties will nonetheless need to take it into account when drafting contractual provisions.…
Over the past few months a number of developments have highlighted the growing pressure in favour of reactive sanctions implementation in the EU and the UK.
New EU chemical weapons sanctions regime
On October 15, 2018, the Council of the EU adopted a new programme of restrictive measures (Council Regulation (EU) 2018/1542). Where necessary to address the use or proliferation of chemical weapons, the EU is now able to impose asset freezes and travel bans on persons and entities anywhere, regardless of their nationality and location, and forbid EU persons and entities from making funds available to them.
In recent years, sanctions have become one of the issues of greatest concern for parties entering into international transactions. As a result, detailed contractual clauses designed to manage sanctions risks have become commonplace. The October 2018 judgment of the High Court in Mamancochet Mining v. Aegis Managing Agency (the “Judgment”) has highlighted certain pitfalls in the standard wording of some sanctions clauses, and should be heeded by any party seeking to contractually protect itself from sanctions risks by, for example, making its performance under the contract conditional upon the non-occurrence of certain sanctions events, or tying a termination event to sanctions. The Judgment also casts some light on the interpretation of the EU Blocking Regulation and suggests exercising contractual rights (even ones designed to ensure compliance with U.S. sanctions) does not breach the Blocking Regulation.…
On July 24, 2018, the UK Government published proposals for legislative reform that would give it significantly greater powers to intervene in UK transactions on national security grounds.
This Alert Memorandum summarizes the proposals and the possible implications.
On 18 May 2018, the European Commission announced its intention to expand Council Regulation (EC) 2271/96 of 22 November 1996 (the “Blocking Regulation”) in order to discourage European companies from complying with newly re-imposed U.S. Iran-related sanctions. On 6 June 2018, the European Commission adopted a delegated regulation to enact these changes, which will come into force by 6 August 2018 (the date when the first wind-down period for the U.S. secondary sanctions on Iran expires), provided the EU Parliament and Council do not have objections.
This blogpost considers how the Blocking Regulation will work in practice for UK and European companies, in particular in light of the UK’s departure from the European Union (“EU”) in 2019.…
On 24 May 2018, the Sanctions and Anti-Money Laundering Act 2018 (the “Act”) received Royal Assent, marking the conclusion of its passage through Parliament and its entry into law. The sanctions powers under the Act are expected to be exercisable following the UK’s withdrawal from the European Union in March 2019 (“Brexit”). This blog post takes a look at the sanctions provisions in the Act and explores how the UK’s sanctions regime might look following Brexit.…