MLex: The US administration has warned against applying ‘Made in Europe’ rules in the EU's long-term budget—which is meant for investing in strategic industries—arguing that it will limit international companies, disrupt supply chains and undermine strong trade ties, MLex has learned. The European Commission is currently considering applying EU preference rules, in a bid to strengthen the bloc’s competitiveness and reduce reliance on other countries.

Contained within the Hiring Incentives to Restore Employment Act (HIRE Act), the Foreign Account Tax Compliance Act (FATCA) has three core elements: • enhanced due diligence • broader information reporting, and • a potential withholding tax on US source payments The main purpose of the FATCA provisions is to obtain information reporting on US-owned offshore accounts, and so imposes broad disclosure and reporting requirements on foreign financial institutions (FFIs) (and other foreign entities). See Title V, Subtitle A of the HIRE Act, 111 PL 147, 124 Stat 71. Identifying what is, and what is not, an FFI is essential to understanding the scope and application of FATCA. This Practice Note examines: • what an FFI is, as broadly defined in the lengthy and detailed set of FATCA regulations (the US Treasury Regulations) • what the exceptions from the definition of FFI are, and • what deemed-compliant FFIs are For a detailed introduction to FATCA, and the due diligence, reporting and withholding obligations that it imposes on FFIs

The Foreign Account Tax Compliance Act (FATCA) has three core elements: • enhanced due diligence • broader information reporting, and • a potential withholding tax on US source payments This Practice Note considers some of the issues that commonly arise in relation to the implementation of, and compliance obligations arising from, FATCA, including: • whether refunds or tax credits are available for taxes withheld under FATCA • what obligations are excluded (grandfathered) from FATCA, and • what pre-existing obligations are in respect of FATCA For an analysis of the broad definition of what constitutes a foreign financial institution (FFI) for the purposes of FATCA, and the obligations that arise as a result of falling within its scope, see Practice Note: US: FATCA—foreign financial institutions (FFIs). For an examination of what a non-financial foreign entity (NFFE) is (and what isn't) and the various different types of agreements that can help ease the burdens imposed by FATCA, see Practice Note: US: FATCA—non-financial foreign entities (NFFEs) and FATCA agreements. For

The Hiring Incentives to Restore Employment Act (HIRE Act) includes provisions that give the US Internal Revenue Service (IRS) new administrative tools to: • detect, deter and discourage offshore tax abuses, and • encourage improved foreign account tax compliance See Title V, Subtitle A of the HIRE Act, 111 PL 147, 124 Stat 71. These provisions are based on legislation originally introduced in the House of Representatives and Senate in October 2009 as the Foreign Account Tax Compliance Act of 2009 (FATCA). The proposals are, therefore, generally (and in this Practice Note) referred to as FATCA or the FATCA regime. The HIRE Act, and with it the FATCA regime, was signed into US law by President Obama on 18 March 2010. The US FATCA regime is contained in: • Chapter 4 (Taxes to enforce reporting on certain foreign accounts) of Subtitle A (Income taxes) of Title 26 (Internal Revenue Code) of the United States Code (USM) (see 26 USCS §§ 1471–1474), and • Final Regulations relating

On 18 March 2010, the Hiring Incentives to Restore Employment Act (HIRE Act) was signed into law. The international tax reform provisions in the HIRE Act are limited to provisions regarding withholding and information reporting. The language in the Act is based on legislation introduced in October 2009 as the Foreign Account Tax Compliance Act 2009 (FATCA). See Title V, Subtitle A of the HIRE Act, 111 PL 147, 124 Stat 71. The provisions of the HIRE Act that address foreign account tax compliance are intended to improve taxpayer compliance by giving the US Internal Revenue Service (IRS) new administrative tools to detect, deter and discourage offshore tax abuses. In doing so, the HIRE Act imposes broad disclosure and reporting requirements on foreign financial institutions (FFIs) and other foreign entities, including: • private equity funds • hedge funds • certain investment vehicles (including foreign issuers of collateralised debt obligations or collateralised loan obligations), and • entities engaged in banking or similar businesses For more

This Practice Note analyses the impact of the US Supreme Court’s ruling in Harrington v Purdue Pharma LP, 144 S.Ct. 2071 (2024) striking down non-consensual third-party releases on recognition and enforcement of such releases in Chapter 15 proceedings. Although the Purdue ruling prohibits these releases in US Chapter 11 cases, many foreign insolvency systems permit non-consensual third-party releases. Prior to Purdue, US bankruptcy courts in Chapter 15 cases regularly recognised and enforced foreign proceedings and plans that included non-consensual releases (see Practice Note: US Chapter 15 overview). Post-Purdue, Chapter 15 courts have continued to do the same, where appropriate under sections 1521 and 1507 of the Bankruptcy Code, guided by comity and the purposes of Chapter 15, though some courts have scrutinised attempts to expand relief beyond what the foreign court approved. This Practice Note addresses the above issue as follows: • overview of third-party releases • availability of third-party releases in Chapter 11 (see Practice Note: US Chapter 11 proceedings)

The Foreign Account Tax Compliance Act (FATCA) has three core elements: • enhanced due diligence • broader information reporting, and • a potential withholding tax on US source payments The main purpose of the FATCA provisions is to obtain information reporting on US-owned offshore accounts, and so imposes broad disclosure and reporting requirements on foreign financial institutions (FFIs) (and other foreign entities). A major point of concern that the Internal Revenue Service (IRS) has identified in connection with under-reporting of income by US taxpayers is the use of foreign corporations to hold assets offshore. This Practice Note examines: • what a non-financial foreign entity (NFFE) is • what an excepted NFFE is • what foreign financial institutions (FFI) agreements are • what an intergovernmental agreement (IGA) is, and • the broad reporting and due diligence obligations under an IGA For an analysis of the broad definition of what constitutes an FFI for the purposes of FATCA, and the obligations that arise as a result of falling within its scope, see: US: FATCA—foreign

Law360: In the context of enforcement proceedings in the US District Court for the District of Columbia (DC), Spain reported to the court that the ad hoc Committee (the Committee) in parallel International Centre for Settlement of Investment Disputes (ICSID) annulment proceedings between the parties had decided that Spain would not have to provide security (or satisfy any other conditions) pending the determination of the state’s application to annul an arbitral award issued to renewable energy investors, and that a stay of enforcement of the award would be continued.

Law360: According to documents provided to the US District Court for the District of Columbia (DC), the Svea Court of Appeal, considering whether to set aside a €39m investment treaty arbitration award issued to renewable energy investors, denied Spain’s request to obtain a preliminary ruling from the Court of Justice on, among other matters, the proper interpretation of Article 26 of the Energy Charter Treaty (ECT).

Law360: A federal judge in Chicago is forcing fintech investment company Faes & Co to arbitrate its allegations that a bitcoin miner it hired in October 2021 is no longer generating the valuable cryptocurrency, saying Faes tacitly agreed to a contract with a broad arbitration clause.

Law360: Louisiana's top court has concluded that state law bars domestic insurers from looking to force a dispute with a policyholder into arbitration based on a clause contained in a foreign insurer's policy, ruling in an opinion that criticizes the Fifth Circuit's opposing stance on the issue.

Arbitration analysis: This case involves the opposition to confirmation of a New York Convention arbitration award based on the allegation that the award violated US public policy. First, the court distinguished between motions seeking to vacate (non-domestic) arbitration awards and opposition to confirming such awards. When moving to vacate arbitral awards parties are limited to the grounds set forth in §10 to the Federal Arbitration Act (FAA) (which does not contain a defence based on public policy) and which must be raised within three months; however, when opposing confirmation of an award, parties may assert public policy as a defence as that defence is contained in the New York Convention. The court held that a public policy defence is permissible when opposing the confirmation of an arbitral award if directed at the award itself, but not if the defence is directed to the contract which was the subject of the underlying arbitration. Written by Luis O'Naghten, partner at Nelson Mullins.