prac member news · applications to resume baker botts iran sanctions development— new measure...

►ARIAS Puma Energy Obtains US$300 Million Loan for its Central American Operations ►ARIFA Advises Bancolombia and Grupo Agromericantil Shareholders in Equity Stake Acquisition ►BAKER BOTTS Represents CSC in $1 Billion Sale of Credit Services Business to Equifax ►CAREY ICSID Ad Hoc Committee Decides Favorably to Chile on Annulment Remedy in the Oldest Case of the Entity ►CLAYTON UTZ Advises Gindalbie Metals Ltd on approx AU$62 Million Capital Raising ►FRASER MILNER CASGRAIN Argonaut Gold In and Prodigy Gold Inc Complete Business Combination ►GIDE LOYRETTE NOUEL Advises Acron Project Development and Expansion of the Talitsky area of the Verkhnekamsk Potassium-Magnesium Salt Deposit in Russia ►HOGAN LOVELLS Advises SIM Technology on US$22 Million Rights Issue ►KING & WOOD MALLESONS Advises Weichai Power to Successfully Complete the Transaction with Kion Group to Establish Long-term Strategic Partnership ►McKENNA LONG Acts for LINPAC Group US$265 Million Sale of Ropako BWay Corporation ►NAUTADUTILH Advises Lenders in PPP Livan 1 Project ►SyCipLaw Advises Maybank, Stan Chart and UBS on Sale of SMC's 15% Stake in Purefoods ►TOZZINIFREIRE Assistance to U-Shin in the global acquisition of Valeo’s Comfort Access Mechanism Division for an Enterprise Value of €223 Million ►WILSON SONSINI GOODRICH & ROSATI Gilead Sciences to Acquire YM BioSciences

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►Baker Botts Announces 2013 Special Counsel ►Clayton Utz Appoints Five New Partners ►Hogan Lovells Announces 24 Promoted to Partnership and 46 to Counsel and Consultant ►McKenna Long Elects Eleven Partners ►Tilleke & Gibbins Promotes Four to Partnership ►AUSTRALIA Securities & Investments Committee Proposed Changes to Financial Services Licensees: Making Custody Safer CLAYTON UTZ ►CANADA Bill S-11 Safe Food for Canadians Act Includes News and Expanded Provisions of Power FRASER MILNER CASGRAIN ►CHILE Superintendant of Environment Now Fully Operational /CAREY ►CHINA Single Purpose Commercial Prepaid Cards and Their Implementing Practices in Shanghai DAVIS WRIGHT TREMAINE ►CHINA Retrial Ruling of the Supreme People's Court Settles the Disputes on the Jurisdiction over Joint Tort Cases KING & WOOD MALLESONS ►INDONESIA Trade Regulation on Export Bench-mark Prices of Mining Products Subject to Export Tax ABNR ►NETHERLANDS Financial Markets Amendment Act 2013 and Amendment Decree Adopted and Published NAUTADUTILH ►NEW ZEALAND Bill Proposes Significant Amendment to Companies Act and Limited Partner-ship Act SIMPSON GRIERSON ►SINGAPORE Competition Laws in ASEAN RODYK ►SOUTH AFRICA Perennial Protests, Industrial Action and the Risk to the Security of Energy Supply WERKSMANS ►TAIWAN Ministry of Interior Plans to Open Taiwan's Construction Industry to Mainland Chinese Investment LEE & LI UNITED STATES ►Department of Energy Releases LNG Export Study for Public Comment: Processing of Non-FTA Export Applications to Resume BAKER BOTTS ►Iran Sanctions Development— New Measure Expands Extra-Territorial Scope of the U.S. Sanctions HOGAN LOVELLS ►Small Business Administration Creates More Innovative Research and Technology Opportunities for Business Partially Owned by Venture Capital Companies, Hedge Funds and Private Equity Firms McKENNA LONG & ALDRIDGE ►Mobile Apps Face Heightened Privacy Enforcement - Policies and Practices Scrutinized WILSON SONSINI GOODRICH & ROSATI

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January 2013 e-Bulletin

MEMBER NEWS 2013 April 13-16 - 53rd International PRAC Conference- Jakarta Hosted by ABNR

2013 May 4 - PRAC Members Gathering @ INTA Dallas

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Washington, D.C. -Hosted by Hogan Lovells

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COUNTRY ALERTS

M E M B E R D E A L S M A K I N G N E W S

HOUSTON, January 3, 2013-- New Special Counsel at Baker Botts L.L.P. were announced today by Baker Botts L.L.P.

Managing Partner Andrew M. Baker. The appointments took effect January 1, 2013.

"The promotion of these lawyers to Special Counsel reflects their commitment -- throughout their careers at the firm -- to

providing the highest quality of legal counsel to our clients," Baker said.

The new Special Counsel are:

Shawn Shillington, Corporate

Shawn Shillington represents corporate clients, including public issuers, private companies, underwriters, private equity

funds and hedge funds. He advises clients regarding corporate issues, including the conduct of public and private securities

offerings, SEC disclosure, strategic transactions and corporate governance.

Omar Alaniz, Corporate

Omar Alaniz represents debtors and creditors in all aspects of complex chapter 11 reorganizations and liquidations. He

served as a law clerk to the Honorable D. Michael Lynn of the United States Bankruptcy Court for the Northern District of

Texas. Omar was presented with the "Sandra Day O’Connor Award for Professional Service" in the Supreme Court of the

United States in October of 2012.

Robert Riddle, Intellectual Property

Robert Riddle’s practice ranges across intellectual property law, focusing primarily on matters relevant to the pharma-

ceutical, chemical and life science industries. His practice is devoted to helping clients leverage their intellectual property

assets. He represents plaintiffs and defendants in patent litigation, with substantial experience in federal court.

Ania Farren, Litigation

Ania Farren represents clients on dispute resolution matters, with an emphasis in international arbitration and litigation.

She has advised clients in arbitrations conducted under the auspices of various institutions, including the London Court of

International Arbitration, International Chamber of Commerce, and the International Centre for Settlement of Investment

Disputes.

Eric Faragi, Intellectual Property

Eric Faragi’s practice includes patent litigation, patent prosecution and client counseling involving matters pertaining to

electrical, mechanical and business method patents. He has been selected to receive the John K. Geiger Award as part of

inMotion’s 2013 Commitment to Justice Awards for his work in representing low-income women in family law cases.

Michael Heister, Environmental

Michael Heister handles complex environmental matters, with an emphasis on trial and appellate litigation involving the

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Clean Water Act, the Clean Air Act

and the Resource Conservation and Recovery Act. He also counsels clients on regulatory compliance, permitting issues,

brownfields redevelopments and administrative proceedings.

For additional information visit www.bakerbotts.com


B A K E R B O T T S A N N O U N C E S 2 0 1 3 S P E C I A L C O U N S E L

Sydney, 12 December 2012: Leading independent Australian law firm Clayton Utz has announced the appointment of give new partners, effective 1 January 2013. They are:

Commenting on the appointments, Clayton Utz Chief Executive Partner Darryl McDonough said: "I congratulate Adrienne,

Alastair, Cameron, David and Tim on being promoted to the partnership. Each is an outstanding lawyer with a strong

commitment to delivering the highest levels of client service."

The announcement follows the appointment of six new partners earlier in the year: Angus Foley (Project Finance);

Ilan Freiman (Construction and Major Projects - Hong Kong); Jonathan Li (Corporate Advisory / M&A); Clive Luck

(Construction and Major Projects); Stephen Moulton (Corporate Advisory / M&A); and Robbie Walker (Workplace

Relations, Employment and Safety).

For additional information visit www.claytonutz.com

April 13—16, 2013

Hotel Indonesia Kempinski

Details at www.prac.org


C L A Y T O N U T Z A P P O I N T S F I V E N E W P A R T N E R S

Adrienne Parker Construction & Major Projects, Perth

Alistair Gregory Real Estate, Canberra

Cameron Gascoyne, TIP, Brisbane

David Gerber, Insurance, Sydney

Tim Jones Commercial Litigation, Brisbane


H O G A N L O V E L L S A N N O U N C E S 2 4 P R O M O T E D T O P A R T N E R S H I P A N D 4 6 T O C O U N S E L A N D C O N S U L T A N T S

Hogan Lovells has announced the promotion of 24 new partners, effective 1 January 2013, taking the number of partners to more than 800 in offices across Asia, Europe, the Middle East and the U.S.

Collectively, the group of new partners represents each Hogan Lovells practice group:

· Eight in Corporate including Corporate Commercial, Financial Institutions, Pensions and Tax

· Five in Government Regulatory including ACER, Environment , Health and International Trade & Investment

· Six in Litigation, Arbitration & Employment including Commercial Litigation, Financial Services Disputes, International Arbitration, and Investigations, Contentious Insolvency & Fraud

· Three in Finance including Banking and Infrastructure, Projects & Public Finance

· Two in Intellectual Property

The jurisdictional spread reflects the broad international nature of Hogan Lovells' practice:

· 13 in Europe; 7 in the United States, 4 in Asia & the Middle East

In addition to the 24 new partners, 46 new appointments to the role of Counsel, Of Counsel or Consultant have also been made.

Speaking today, Co-CEOs of Hogan Lovells, Warren Gorrell and David Harris, said: "These latest promotions are testament to Hogan Lovells’ commitment to recruiting and retaining the best talent in the legal sector and our on-going investment in the business. In addition to acknowledging the hard work of each individual, the promotions demonstrate the depth and quality of Hogan Lovells around the world. On behalf of everyone at Hogan Lovells we would like to send our congratulations and best wishes to all those who have been promoted.”

New Partners

Jennifer Biever: Government Regulatory (Environment)

Edward Brown: Corporate (Pensions)

Anthony Capobianco: Government Regulatory (International Trade & Investment)

Jonathan Chertkow: Corporate (Financial Institutions)

Manon Cordewener: Corporate (Commercial Litigation)

Ingmar Dörr: Corporate (Tax)

Tanja Eisenblätter: Litigation, Arbitration & Employment (Litigation)

Adrian Emch: Government Regulatory (Antitrust, Competition and Economic Regulation)

Tobias Faber: Finance (Infrastructure, Project & Public Finance)

Lisa Fried: Litigation, Arbitration & Employment (Commercial Litigation)

Casto González-Páramo: Government Regulatory (Antitrust, Competition and Economic Regulation)

Sébastien Gros: Corporate (Financial Institutions)

Elizabeth Halpern: Government Regulatory (Health)

Allen Hicks: Corporate (Corporate/transactional)

Carlo Massini: Finance (Banking)

Patrick Mittmann: Finance (Banking)

Mahvesh Qureshi: Corporate (Corporate/transactional).

Alex Sciannaca: Litigation. Arbitration & Employment (Financial Services Litigation)

Gary Serbin: Intellectual Property, Media and Technology (Patent Litigation)

Thomas Tarala: Corporate (Corporate/transactional)

Paul Teo: Litigation, Arbitration & Employment (International Arbitration)

Warren Thomson: Corporate (Corporate Commercial)

John Tillman: Litigation, Arbitration & Employment (Litigation, Contentious Insolvency & Fraud) Sarah Turner: Intellectual Property, Media and Technology (Trade Secrets and Patents) cont’d next page


H O G A N L O V E L L S A N N O U N C E S 2 4 P R O M O T E D T O P A R T N E R S H I P A N D 4 6 T O C O U N S E L A N D C O N S U L T A N T S C O N T ’ D New Counsel, Of Counsel and Consultants

Natasha Ayres: Finance (Business Restructuring and Insolvency) -(Of Counsel)

C. Alex Bahn: Corporate (Corporate/transactional) - (Counsel)

Shalini Bhuchar: Finance (Banking) - (Of Counsel)

Helen Bignall: Government Regulatory (Antitrust, Competition and Economic Regulation) - (Of Counsel)

Sabine Boos: Intellectual Property, Media and Technology - (Counsel)

Christine Burke: Litigation, Arbitration & Employment (Employment) - (Counsel)

Laurence Davidson: Corporate (Corporate/transactional) - (Consultant)

Christian Di Mauro: Litigation, Arbitration & Employment (Litigation) - (Of Counsel)

Paul Dillbeck: Finance (Infrastructure, Projects & Public Finance) - (Counsel)

Robert Efthimos: Corporate (Corporate/transactional) - (Counsel)

Jan Eggers: Government Regulatory (Antitrust, Competition and Economic Regulation) - (Counsel)

Vincent Fidelle: Finance (International Debt Capital Markets) - (Counsel)

Jerome Finnis: Litigation, Arbitration & Employment (International Arbitration) - (Of Counsel)

"Sherry" Yingzi Gong: Corporate (Corporate/transactional) - (Counsel)

Tomasz Grygorczuk: Corporate (Corporate/transactional) - (Counsel)

Miriam Gundt: Intellectual Property, Media and Technology - (Counsel)

Christopher Healy: Finance (Infrastructure, Projects & Public Finance) - (Of Counsel)

Hilary Holt LoCicero: Litigation, Arbitration & Employment (Investigations, White Collar and Fraud) - (Counsel)

Rebecca Huntsman: Litigation, Arbitration & Employment (Financial Services Litigation) - (Of Counsel)

Tim Joppich: Litigation, Arbitration & Employment (Employment) - (Counsel)

Bruno Knadjian: Corporate (Tax) - (Counsel)

Richard Lewis: Litigation, Arbitration & Employment (Litigation, Contentious Insolvency & Fraud) - (Of Counsel)

Perrine Limousin: Finance (Infrastructure, Project & Public Finance) - (Counsel)

Ling Lui: Finance (Banking) - (Counsel)

Geraldine Marteau: Litigation, Arbitration & Employment (Litigation) - (Counsel)

Katie McConnell: Intellectual Property, Media and Technology - (Of Counsel)

Derek Meilman: Corporate (Corporate/transactional) - (Counsel)

Bernardino Muniz: Litigation, Arbitration & Employment (Litigation) - (Counsel)

Nancy Parsons: Government Regulatory (FDA/Pharmaceuticals) - (Counsel)

Marieke Poulie: IPMT, (IPMT International Practice) - (Counsel)

Edward "Ned" Purdon: Finance (Banking) - (Counsel)

Evans Rice: Litigation, Arbitration & Employment (Investigations, White Collar and Fraud) - (Counsel)

Nicholas Roberts: Corporate (Real Estate) - (Of Counsel)

James Robinson: Finance (Business Restructuring and Insolvency) - (Of Counsel)

Nicola Rondel: Corporate (Pensions) - (Of Counsel)

Stanislas Roux-Vaillard: Intellectual Property, Media and Technology - Paris (Counsel)

Christian Schaefer: Corporate (Corporate/transactional) - (Consultant)

Peter Stokking: Corporate (Corporate/transactional) - (Counsel)

Arne Thiermann: Corporate (Corporate Commercial) - (Counsel)

Matt Thomson: Corporate (Corporate/transactional) - (Counsel)

David Toy: Intellectual Property, Media and Technology - (Counsel)

Andrea Trento: Litigation, Arbitration & Employment (Litigation) - (Counsel)

Christian Ulrich: Corporate (Corporate/transactional) - (Counsel)

Hein van den Bos: Government Regulatory (FDA/Pharmaceuticals) - (Counsel)

Lucky Vidmar: Intellectual Property, Media and Technology - (Counsel)

Thomas Weber: Corporate (Corporate/transactional) - (Counsel)

For more information about Hogan Lovells, the partners and their qualifications, visit www.hoganlovells.com


M C K E N N A L O N G & A L D R I D G E E L E C T S 1 1 P A R T N E R S

ATLANTA (January 3, 2013) — The law firm of McKenna Long & Aldridge LLP (MLA) announces the election of 11 lawyers to the firm’s partnership, effective January 1, 2013. The new partners operate across a range of practice areas including corporate, government contracts, intellectual property and technology, litigation, and real estate.

“We are pleased to welcome these eleven lawyers to our partnership,” said MLA Chairman Jeff Haidet. “They share in the firm’s commitment to excellent client service and will be important parts of the firm's future success.”

The new partners in the following offices are:

Kristen Beystehner is a member of the firm’s corporate group and focuses her practice on general corporate counseling, with an emphasis on mergers and acquisitions. She also regularly counsels clients in financing transactions, commercial contract negotiations and corporate governance matters.

John MacMaster is a member of the firm’s corporate group and focuses his practice on domestic and cross-border tax planning and controversy, primarily relating to project and structured finance, including tax-exempt bonds and inbound-portfolio and direct investments. His clients come from a variety of industries including banking and finance, health care, investment companies and hedge funds, private equity, and utilities.

Robert Rozier is a member of the firm’s litigation group and concentrates his practice in the area of health care law, including regulatory and litigation matters. He has also served as the executive director of health planning for the Georgia Department of Community Health as well as counsel in the Office of General Counsel for the Georgia Department of Community Health, prior to joining the firm.

Jennette Roberts is a member of the firm’s litigation group and focuses her practice on commercial, employment, and government contracts litigation. She represents corporate clients in federal and state trial courts, the United States Court of Federal Claims, and the United States Court of Appeals for the Tenth Circuit, as well as international arbitration, in actions involving claims of employment discrimination, breach of contract, fraud, qui tam, and subcontractor/prime contractor disputes.

Andrea Chang is a member of the firm’s real estate and finance practice. Her practice focuses on workouts, restructuring, real estate loan documentation, development and real estate finance, including loan sales and debt portfolio transactions, commercial acquisitions and leasing. She regularly represents banks and also private companies, property management companies, and individuals in acquisitions of all types of real estate investments and assumption of loans, including but not limited to retail shopping centers and mixed-used properties.

Bradford DeJardin is a member of the firm’s litigation practice and concentrates his practice in general civil litigation with an emphasis on toxic tort and product liability. He regularly handles settlement negotiations for a number of clients and has extensive experience in mediation and arbitration.

David Ginsberg is a member of the firm’s government contracts practice and concentrates his practice on counseling clients in establishing and adhering to government contract compliance programs, as well as representing clients in False Claims Act and other complex civil litigation, including Federal and state bid protests. In addition, David counsels his clients in connection with Contract Disputes Act (CDA) claims and Terminations. While he practices primarily in the area of government contracts law, his experience also includes work in environmental (CERCLA) litigation.

Theona Zhordania is a member of the firm’s litigation practice group and her practice focuses primarily on business and insurance litigation. She regularly represents insurance companies in class action, bad faith and unfair competition litigation. She also represents her technology and retail distribution clients in securities fraud litigation, RICO claims, employment and real estate disputes as well as administrative investigations instituted by governmental agencies.

Jim McNeill is a member of the firm’s litigation practice with a national practice concentrated in employment and ERISA litigation, class action defense, intellectual property litigation, and complex business/commercial disputes. A member of the Firm’s Employer Services Group, Jim regularly counsels clients on a wide range of employment and human resource policies and practices. Jim also counsels clients with interests in Central and South America on cross-border issues.

. ..cont’d next page


M C K E N N A L O N G & A L D R I D G E E L E C T S 1 1 P A R T N E R S C O N T ’ D

Renzo Rocchegiani is a member of the firm’s intellectual property and technology group and his practice focuses on patent litigation, patent prosecution, and client counseling, with an emphasis on intellectual property and technology. He has been closely involved in numerous patent litigations and has extensive experience prosecuting patent applications and counseling clients on patents, patent due diligence, and patent validity and freedom to operate opinions.

Timothy Halloran is a member of the firm’s litigation practice and focuses on commercial litigation, civil fraud matters, and white collar defense. His commercial litigation practice involves a variety of business disputes and tort cases, including class actions. In the civil fraud area, he has extensive experience litigating cases under the False Claims Act and handling parallel investigations. His white collar experience includes defending against government enforcement actions, conducting internal investigations, and compliance matters.

For additional information visit www.mckennalong.com

BANGKOK, THAILAND, January 8, 2013 - Coming from across the major practice groups in the firm’s Bangkok office, the new partners include Charunun Sathitsuksomboon and Kobkit Thienpreecha of the firm’s corporate and commercial group, Chusert Supasitthumrong of the dispute resolution department, and Sukontip Jitmongkolthong of the intellectual property team. “Our new partners, who have each built their careers at our firm, have truly distinguished themselves due to the strength of their legal advice and the quality of their client service,” said Tilleke & Gibbins’ Co-Managing Partners Darani Vachanavuttivong and Tiziana Sucharitkul. “With these promotions, we are confident that Charunun, Kobkit, Chusert, and Sukontip will continue to dedicate themselves to providing the highest level of representation for our clients in Thailand and throughout Southeast Asia.” Brief biographical information about each new partner is provided below. Charunun Sathitsuksomboon, who has been with Tilleke & Gibbins in Bangkok since 1999, handles a wide range of commercial transactions and related matters, including mergers and acquisitions, joint ventures, due diligence, foreign direct investment, cross-border transactions, corporate restructuring, and e-commerce. She also assists clients with high-stakes regulatory matters in Thailand, with a particular focus on trade competition laws. Kobkit Thienpreecha has been a leading corporate lawyer at Tilleke & Gibbins for more than a decade. Kobkit develops customized, practical solutions for prominent foreign investors that wish to start doing business in Thailand. His expertise includes company incorporation, joint ventures, M&A, investment promotion, Foreign Business License, capital markets and IPOs, specific business permits and licenses, banking, immigration, regulatory compliance, and other commercial matters. Chusert Supasitthumrong is a litigator specializing in labor and employment law. An expert in this field and the go-to lawyer for Thailand’s largest employers, Chusert excels at solving critical employment disputes, including labor strikes, layoffs, and contested for-cause terminations. In 2012, he won the ILO Client Choice Award for Employment and Labor. Chusert was the only attorney in Thailand to win an award in this category, and one of just four lawyers in Asia whose employment and labor expertise was singled out for this award. Sukontip Jitmongkolthong is a member of Tilleke & Gibbins’ highly regarded intellectual property team, focusing on IP enforcement. She acts for leading apparel, automotive, electronic, and fashion companies to investigate infringers, draft warning letters, conduct mediations and negotiations, and collaborate with the police, the Department of Special Investigation, and Customs in raid actions and other enforcement measures. With a practice spanning Thailand, Cambodia, Laos, and Myanmar, Sukontip frequently trains government authorities on product identification to help improve IP enforcement efforts in the region. For additional information visit www.tillekeandgibbins.com

T I L L E K E & G I B B O N S P R O M O T E S F O U R T O P A R T N E R S H I P


A R I F A A D V I S E S B A N C O L O M B I A A N D G R U P O A G R O M E R I C A N T I L S H A R E H O L D E R S I N E Q U I T Y S T A K E A C Q U I S I T I O N

Panama, January 2, 2013. ARIFA acted as transaction

counsel on the multijurisdictional, cross-border sale of a 40%

equity stake in Grupo Agromercantil Holding to the Panama

affiliate of Bancolombia. ARIFA represented both the buy-

side (Bancolombia) and the sell-side (shareholders of

Agromercantil) in this matter.

Grupo Agromercantil Holding owns the financial

conglomerate Agromercantil de Guatemala, composed of

Banco Agromercantil de Guatemala (BAM), Barbados-based

offshore bank Mercom Bank Ltd, and Seguros Agromercantil

de Guatemala, among others. The deal is subject to

regulatory approval in Colombia, Panama and Guatemala.

This deal gives Bancolombia Panama a minority stake in

Grupo Agromercantil; Bancolombia has stated its plans to

boost that to a controlling stake in the medium term.

Agromercantil Holding firm's total assets are US$2.23 billion.

The acquisition increases Bancolombia’s overseas

participation while also consolidating its financial services in

the region. The Colombian institution already has a presence

in El Salvador and Panama.

Shares of Bancolombia, the largest bank in Colombia in

terms of deposits, are traded in New York and Bogota. The

bank posted third-quarter consolidated net income of

US$238 million, a 2 per cent increase from the same quarter

a year earlier, as lending increased.

Key ARIFA attorney who handled the matter was Ricardo M.

Arango, partner; Julianne Canavaggio, senior associate;

Andrés N. Rubinoff, international associate

For additional information visit www.arifa.com

A R I A S & M U N O Z P U M A E N E R G Y O B T A I N S U S $ 3 0 0 M I L L I O N L O A N F O R I T S C E N T R A L A M E R I C A N O P E R A T I O N S

January, 2013 In a transaction that required a multiple

jurisdictional coordination effort, the offices of Arias &

Muñoz in El Salvador, Guatemala and Nicaragua, acted as

legal counsels to Citibank, N.A. in the granting of a

syndicated loan to Puma Energy for US $300 million.

In its capacity as legal counsel to the Administrative Agent

(acting as a representative of all financial institutions

participating in the syndicated loan), the regional team led

by Senior Associate David Gruter, coordinated the execution

of all local security interest by the participating Central

American affiliates of Puma Energy.

Since security interests were required to be created in

Guatemala and Nicaragua, Partners José Augusto Toledo,

Ana Teresa Rizo and Bernard Pallais, were actively involved

in the transaction.

For additional information visit www.ariaslaw.com


B A K E R B O T T S R E P R E S E N T S C S C I N $ 1 B I L L I O N S A L E O F C R E D I T S E R V I C E S B U S I N E S S T O E Q U I F A X

DALLAS, December 4, 2012 -- On December 1, 2012,

Computer Sciences Corporation (NYSE: CSC) entered into an

agreement to sell its credit services unit to Equifax

Information Services LLC, a subsidiary of Equifax Inc. (NYSE:

EFX), for $1 billion in cash.

The disposition is consistent with CSC’s previously disclosed

strategy to focus on its core business and assets.

CSC’s credit services unit, which owns credit files in 15

Midwestern and Central U.S. states representing 20 percent

of the U.S. population, is the largest independent U.S.

consumer credit reporting agency and has been an Equifax

affiliate for more than 20 years.

The deal is subject to regulatory approval.

Baker Botts is representing CSC in the transaction.

CSC is a global leader in providing technology-enabled

business solutions and services. Headquartered in Falls

Church, Va., CSC has approximately 95,000 employees

around the world.

The CSC news release announcing the transaction is

available here http://www.csc.com/investor_relations/

press_releases/93190-

csc_agrees_to_1_billion_sale_of_credit_services_business_to

_equifax.

For more information, please visit www.bakerbotts.com

G I D E L O Y R E T T E N O U E L A D V I S E S A C R O N G R O U P P R O J E C T D E V E L O P M E N T & E X P A N S I O N O F T A L I T S K Y A R E A O F V E R K H N E K A M S K P O T A S S I U M M A G N E S I U M S A L T D E P O S I T I N R U S S I A

12 December 2012 - Gide Loyrette Nouel Moscow advised

Acron Group, a leading Russian corporation and one of the

world’s major mineral fertilizer producers, in connection

with contracting Bank for Development and Foreign

Economic Affairs (Vnesheconombank, VEB, a major Russian

bank), Raiffeisenbank, and the Eurasian Development Bank

in the implementation of a project of development and

expansion of the Talitsky area of the Verkhnekamsk

potassium-magnesium salt deposit located in the Perm

Region (Russia).

The project provides for both equity and debt financing. The

raised funds will be used for the construction of the Talitsky

GOK, a mining and refining facility with an annual potash

production capacity of 2 million tonnes. The total invest-

ment necessary for the development and expansion of the

Talitsky area is estimated at USD 2 billion.

The project will contribute to the de-monopolization of the

Russian potash fertilizer market and enable Acron to access

the market of raw materials suppliers, a new venture for

the company. Additionally, the project meets priority

initiatives identified in Russia's state programme for the

development and regularisation of markets for agricultural

goods, raw materials, and foodstuffs.

Gide Loyrette Nouel's team of lawyers provided all of the

legal support required for the transaction, including

structuring of the deal, provision of relevant strategic advice

to the client and drafting of all necessary documentation.

Partner Boris Arkhipov, leading the team on this project,

said: "We were very pleased to implement such a complex

and ambitious project together with highly qualified

specialists of Acron Group. There is no doubt that this

transaction has become one of the biggest to have recently

taken place in this market, and we were happy to use all

our experience and expertise both for further development

of the business of Acron Group and for the development of

the industry as a whole."

For additional information visit www.gide.com

C A R E Y I C S I D A D H O C C O M M I T T E E D E C I D E S F A V O R A B L Y F O R C H I L E O N A N N U L M E N T R E M E D Y I N O L D E S T C A S E O F T H E E N T I T Y


After a 15 year battle, the ICSID decided favorably to Chile on the annulment remedy filed by the Republic against the

award that granted Víctor Pey Casado and Fundación Salvador Allende a compensation of USD$ 10 million, plus interests.

The trial, which is the longest and one of the most complex cases on ICSID’s history, was initiated by Víctor Pey Casado and

Fundación Salvador Allende requesting compensation for the expropriation of the Clarín newspaper, which was executed

during Pinochet’s dictatorship in Chile. Initially, the claim -which is the largest ever brought against the Chilean Republic-

requested compensation for USD$ 515 million, which was then increased to USD$ 797 million. The award only granted

compensation for USD$ 10 million, based on an alleged discrimination as a result of Chile’s compensation to the successors

of several individuals who claimed interests in Clarín, but failing to similarly compensate Mr. Pey.

The Republic of Chile filed an annulment remedy against said award, claiming among others that the arbitral panel had

violated basic rules of the proceeding, not giving the parties the chance to present and refute arguments related to the

damages requested in connection with the alleged discrimination and denial of justice.

The award by the ad hoc committee agreed with Chile’s remedy, thus partially annulling the ruling rendered by the ICSID

arbitral panel, specifically the part that granted compensation for USD$ 10 million. As the annulment award only refers to

the compensation in connection with the alleged discrimination and denial of justice, it maintains those considerations that

rejected the claims related to expropriation included in the original judgment. Additionally, the ad hoc committee decided

that the BIT between Spain and Chile did not apply to issues occurred before its subscription, thus any compensation had to

refer to facts after 1994.

At the request of the President of the Republic, Carey has been advising the Republic of Chile ad honorem for the past

decade, leading the team senior partner Jorge Carey and litigation partner Gonzalo Fernández.

Carey’s partner Gonzalo Fernández emphasizes that “this award is an outstanding victory, not only for the result itself, but

also because it is very unusual for an ad hoc committee of the ICSID to annul a previous judgment. The award annulled the

only section of the original ruling that granted the defendants compensation, for considering that there were violations to

the Republic of Chile’s right to be heard on an issue that was relevant for the outcome of the trial”.

Carey advised the Republic of Chile through a team led by partners Jorge Carey and Gonzalo Fernández.

Date of completion: December 19, 2012.

For additional information visit www.carey.cl

C L A Y T O N U T Z A D V I S E S G I N D A L B I E M E T A L S L T D O N A P P R O X $ 6 2 M I L L I O N C A P I T A L R A I S I N G


Perth, 30 November 2012: Clayton Utz advised ASX-listed Perth based iron ore producer Gindalbie Metals Ltd in

connection with its A$40 million fully underwritten placement to institutional and sophisticated investors. The placement is

underwritten by UBS.

The raising is being undertaken to fund the development of the Karara iron ore project.

It is also proposed that Gindalbie's major shareholder Ansteel (35.89%) will participate in a separate placement of

approximately A$22 million, subject to shareholder approval and legal and regulatory approvals.

Clayton Utz Perth Corporate partner Mark Paganin led the firm's team with support from senior associate James Clyne and

lawyers Tracy Chew and Rebekah Winsor.

Ansteel is one of China's biggest steel makers.

For additional information visit www.claytonutz.com

On December 11, 2012, Argonaut Gold Inc. (“Argonaut”), a Canadian gold company engaged in exploration, mine

development and production activities in Mexico, and Prodigy Gold Inc. (“Prodigy”) completed their business combination by

way of plan of arrangement (the “Arrangement”) in a transaction valued at approximately $341 million. Pursuant to the

Arrangement, Argonaut has acquired all of the issued and outstanding common shares of Prodigy (“Prodigy Shares”), and

former Prodigy shareholders are entitled to receive 0.1042 of a common share of Argonaut (“Argonaut Shares”) and

$0.0001 in cash per Prodigy Share. Outstanding options to acquire Prodigy Shares have been converted into options to

acquire Argonaut Shares, adjusted in accordance with the same ratio.

Argonaut was represented by Fraser Milner Casgrain LLP with a team including Sander Grieve, Elianeth Alicea, Alan

Hutchison, Sam Khajeei, Alan Monk, Kelli Patel, John Sabine, Ralph Shay, Tim Banks, Lisa Telebar and Denise Williams

(M&A & securities), Andrea Raso Amer, Saba Zia (employment & labour), David Hunter (environmental and aboriginal),

Blake Moran (financial services), Kathryn McCulloch, Lionel Tupman (litigation), Brian Abraham (mining) Mark Dunsmuir

(pensions & benefits), Sonja Homenuck (real estate), Zahra Nurmohamed and Matthew Peters (tax).

For additional information visit www.fmc-law.com

F R A S E R M I L N E R C A S G R A I N A R G O N A U T G O L D I N D A N D P R O D I G Y G O L D I N C C O M P L E T E B U S I N E S S C O M B I N A T I O N

H O G A N L O V E L L S A D V I S E S S I M T E C H N O L O G Y O N U S $ 2 2 M I L L I O N R I G H T S I S S U E


HONG KONG, 28 December 2012 - Hogan Lovells has advised SIM Technology Group Limited ("SIM Technology") on its

one for two rights issue to raise US$22 million (or HK$170 million).

The rights issue is fully underwritten by Toman Investments Limited, a company controlled by the controlling shareholders

of SIM Technology. The controlling shareholders owned 45.5% of the issued share capital of SIM Technology before

completion of the rights issue. Upon completion of the rights issue, the controlling shareholders own approximately 46.2%

of the enlarged issued share capital. A whitewash waiver of the obligation of the controlling shareholders to make a

mandatory general offer was approved by the independent shareholders and was granted by the Securities and Futures

Commission of Hong Kong on 19 November 2012.

SIM Technology is the first Hong Kong listed company with depositary receipts listed on the Taiwan Stock Exchange that

underwent a rights issue. SIM Technology is an investment holding company listed in Hong Kong. Its subsidiaries include

Shanghai Simcom, a leading Chinese mobile handset developer and Shanghai Sunrise Simcom, a leading Chinese wireless

communication developer.

The Hogan Lovells team was led by Hong Kong-based partner Terence Lau, supported by associate Priscilla Lee, trainee Don

Chan and senior paralegal Sunny Sun.

For additional information visit www.hoganlovells.com

19 December 2012 - On 18 December, De Lijn closed the so-called PPP Livan 1 Project, a tram line to be constructed in

the existing eastern premetro tunnel under the Turnhoutsebaan and a tram extention between N116a Herentalsebaan and

N12 Turnhoutsebaan via Florent Pauwelslei and Ruggeveldlaan and access to the P&R Wommelgem/round-about.

NautaDutilh Brussels has assisted the lenders (Belfius Bank NV, KBC Bank NV, UniCredit Bank AG and DekaBank Deutsche

Girozentrale) in this successfull transaction.

The NautaDutilh team consisted of Didier De Vliegher, Benoit Samyn, Thibaut Willems, Vincent Ost, Jens Mosselmans and

Harry Eliaerts.

For additional information visit www.nautadutilh.com

N A U T A D U T I L H A D V I S E S L E N D E R S I N P P P L I V A N 1 P R O J E C T

K I N G & W O O D M A L L E S O N S A D V I S E S W E I C H A I P O W E R T O S U C C E S S F U L L Y C O M P L E T E T R A N S A C T I O N W I T H K I O N G R O U P E S T A B L I S H I N G L O N G T E R M S T R A T E G I C P A R T N E R S H I P S I M T E C H N O L O G Y O N U S $ 2 2 M I L L I O N R I G H T S I S S U E


On 27 December, 2012, the leading Chinese automotive and equipment manufacturer Weichai Power Co., Ltd. ("Weichai

Power"), a subsidiary of Shandong Heavy Industry Group, represented by King and Wood Mallesons has successfully

completed the transaction with Kion Group ("Kion"), one of the world’s leading manufacturers of industrial trucks and a

global leader in hydraulic technology.

Weichai Power has invested a total of EUR 738 million, including EUR 467 million paid in to acquire a 25% stake in Kion

through a capital increase, EUR 271 million to acquire from Linde Material Handling for a 70% majority stake in Linde

Hydraulics and the right to continue using Linde trademark for future hydraulic products. In addition, the Parties agreed to

grant Weichai Power options to further increase its shareholding in Kion both before and after the completion of a potential

future IPO.

Weichai Power (2338HK/000338SZ) is a leading automotive and equipment manufacturing group in China. It operates in

three main business segments, covering power assembly (including engines, gear boxes and axles), commercial vehicles,

and automobile electronics and parts, encompassing one of the most comprehensive product ranges in the industry.

Weichai Power has the highest sales volume globally in high-speed heavy-duty engines and heavy-duty gearboxes. Its

spark plug products enjoy the largest market share in China, and its heavy-duty axle products are considered a top brand in

China. The company also ranks No. 4 in heavy duty trucks in China. The company was listed on Hong Kong Stock Exchange

in 2004 and on Shenzhen Stock Exchange in 2007. In 2011, Weichai Power’s revenue reached at RMB 60 billion (about EUR

7.5 billion).

Kion is Europe's market leader in the trucks industry and the second largest truck manufacturer in the world as well as the

leading international supplier in China. It possesses six brands include Linde, STILL, Fenwick, OM STILL, Baoli and Voltas.

The Linde and STILL brands serve the premium segment worldwide. Fenwick is the largest supplier of material handling

products in France, while OM STILL is a market leader in Italy. The Baoli brand focuses on the economy segment, and

Voltas is one of the two market leaders in India. In 2011, KION Group generated revenue of around EUR 4.4 billion.

This seven month project was led by Xu Ping and Mark Schaub, together with core members from the King & Wood

Mallesons team consisting of Liu Cheng, Tian Wenjing, Wei Kao, and Melanie Stoeckert. The King & Wood Mallesons team

fully participated in all aspects of the project, including due diligence, negotiation and executions of agreements,

government approvals, financing as well as closing. The King & Wood Mallesons team was also in charge of facilitating and

coordinating the entire project, including coordination amongst all legal advisors and played a vital role in communications

and negotiations with Kion and its investors KKR and Goldman Sachs Capital Partners. The project involves, inter alia, the

investments in Kion and its hydraulic business, the different options to increase future Kion shareholding and the carve-out

structure and arrangement, which presented special challenges and requirements in designing and implementing this

transaction. The King & Wood Mallesons team has been actively pursuing this transaction from the beginning so that the

deal can be completed within a very short time frame. Due to such efforts, the Parties completed the signing of the

framework agreement on 31 August, 2012. After the signing, in order to fulfill the various conditions precedent under the

agreements, the King & Wood Mallesons team has been continuing to represent Weichai Power in negotiation with the

stakeholders, and ultimately procured a successful closing of this project.

For additional information visit www.kingandwood.com


T O Z Z I N I F R E I R E A S S I S T S U - S H I N I N G L O B A L A C Q U I S I T I O N O F V A L E O ’ S C O M F O R T A C C E S S M E C H A N I S M

S Y C I P L A W A D V I S E S M A Y B A N K , S T A N C H A R T A N D U B S O N S A L E O F S M C ’ S 1 5 % S T A K E I N P U R E F O O D S

January 3, 2013 - SyCip Salazar Hernandez & Gatmaitan

(SyCipLaw) advised Maybank ATR Kim Eng Capital Partners,

Inc., Standard Chartered Securities (Singapore) Pte. Lim-

ited, and UBS AG, Hong Kong Branch, joint lead managers

of the sale of the 15% stake of San Miguel Corporation

("SMC") in San Miguel Pure Foods Co. Inc. ("SMPF").

The sale raised SMPF's public float from 0.08%, exceeding

the required 10% minimum public float. The PhP6 billion

proceeds will be used by SMC for general corporate pur-

poses, which include expansion and repairs of existing facili-

ties.

SMPF is SMC's food manufacturing unit and owns popular

leading brands Magnolia, Monterey, Purefoods, B-Meg, Dari

Crème, and Star. It also has presence in Vietnam and Indo-

nesia through subsidiaries in San Miguel Pure Foods (VN)

Co. Ltd. and PT San Miguel Pure Foods Indonesia.

The SyCipLaw team was composed of partner Simeon Ken

R. Ferrer, senior associate Jennifer Jill I. Lim, and associates

Joan Mae S. To, Diana Grace L. Uy, Joyce Melcar T. Tan,

Maricar G. Ramos, and Jennifer S. Go.

For additional information visit www.syciplaw.com

The deal was valued at at 223 million euros and was

announced in November 30, 2012. Closing is subject to

approval by the competition authorities.

Through the acquisition of Valeo’s Access Mechanisms

Business, U-Shin will become a global market leader with a

diversified customer base and a front-rank presence in Asia,

Europe and South America. Closing is subject to approval by

the competition authorities and is expected to occur no later

than March 31, 2013

About U-Shin U-Shin is one of Asia’s largest producers of

automotive access mechanisms. With €580 million in sales in

2012 and 4,500 employees operating in 12 industrial sites,

the acquired access mechanisms business comprises

products such as locksets, steering column locks, handles

and latches.

Partner Jun Makuta and associate Walkyria Bozza acted in

the transaction.

For additional information visit www.tozzinifreire.com.br

McKenna Long & Aldridge LLP is representing UK-based

LINPAC Group in its sale of Ropak Packaging to BWAY

Corporation, a Platinum Equity company and leading North

American supplier of general line rigid containers.

Under the terms of the agreement, which was signed on

November 30, 2012, BWAY will acquire Ropak from LINPAC

via a stock purchase. The transaction is valued at

approximately $265 million and is subject to customary

closing conditions, including the expiration or earlier

termination of the Hart-Scott-Rodino waiting period.

Ropak is a North American producer of rigid, plastic

shipping containers serving the consumer goods, food

processing, construction, dairy, petroleum and other

industries.

For additional information visit www.mckennalong.com

M C K E N N A L O N G & A L D R I D G E A C T S F O R L I N P A C G R O U P U S $ 2 6 5 M I L L I O N S A L E O F R O P A K P A C K A G I N G T O B W A Y C O R P O R A T I O N

W I L S O N S O N S I N I G O O D R I C H & R O S A T I G I L E A D S C I E N C E S T O A C Q U I R E Y M B I O S C I E N C E S


On December 12, 2012, Foster City, California-based biopharmaceutical company Gilead Sciences and Canadian drug

development company YM BioSciences announced that they have signed a definitive agreement under which Gilead will

acquire YM for US$2.95 per share in cash, or approximately US$510 million. Wilson Sonsini Goodrich & Rosati advised

Gilead in connection with the transaction.

YM BioSciences' lead drug candidate, CYT387, is an orally administered inhibitor of both the JAK1 and JAK2 kinases, which

have been implicated in a number of hematological and immune cell disorders. The acquisition will enable Gilead to add a

complementary clinical program in the area of hematologic cancers to its growing oncology portfolio.

The transaction has been approved by YM's board of directors and is expected to close in the first quarter of 2013, subject

to the satisfaction of customary closing conditions.

The Wilson Sonsini Goodrich & Rosati team that advised Gilead in the matter includes corporate partners Marty Korman and

Denny Kwon; technology transactions partner Ian Edvalson; corporate associates Zach Patton and Lawrence Lee; and

technology transactions associates Farah Gerdes, Yang Yang, and Norman Hovijitra.

For additional information visit www.wsgr.com


A B N R T O H O S T P R A C 2 0 1 3 5 3 R D I N T E R N A T I O N A L C O N F E R E N C E I N J A K A R T A

April 13—16, 2013

Kempinski Hotel

Member On line Registration

www.prac.org/events.php

U P C O M I N G P R A C E V E N T S

PDAC March 5 Toronto 2013

PRAC Members Gathering

PRAC Jakarta Conference 2013

April 13 –16

Hosted by ABNR

PRAC @ INTA Dallas May 4 2013


PRAC Washington, D.C. Conference 2013

September 28 - October 1

Hosted by HoganLovells

PRAC @ IBA Boston October 6 2013


Visit www.prac.org/events.php

for details and to register for these and other events

PRAC e-Bulletin is published monthly.

Member Firms are encouraged to contribute

articles for future consideration.

Send to [email protected].


www.prac.org

.

The Pacific Rim Advisory Council is an international law firm association with a unique strategic alliance within the global legal community providing for the exchange of professional information among its 32 top tier independent member law firms.

Since 1984, Pacific Rim Advisory Council (PRAC) member firms have provided their respective clients with the resources of our organization and their individual unparalleled expertise on the legal and business issues facing not only Asia but the broader Pacific Rim region.

With over 12,000 lawyers practicing in key business centers around the world, including Latin America, Middle East, Europe, Asia and North America, these prominent member firms provide independent legal representation and local market knowledge.

Clayton Utz Insights

20 December 2012

Revised AFSL financial requirements: Making custodysaferBy Matthew Daley and Vanessa Pallone.

Key Points:

ASIC's proposed changes would affect trustees of unregistered managed investment schemes who currently do nothold any NTA on the basis that they provide custodial or depository services "incidentally" to other financial services.

There has been substantial regulator focus in recent months on the safety of assets held by custodians, the duty of carecustodians exercise and whether custodians have appropriate internal controls to ensure the safety of assets held forothers. Much of this concern has been borne out of events such as the collapse of Opes Prime and Trio/Astarra. Earlierthis year, the Australian Securities & Investments Commission (ASIC) released Report 291: Custodial and depositoryservices in Australia, which resulted in the identification of a number of key risks to the safety of client assets within theAustralian custodial and depository services industry.

ASIC has also recently focused on the financial requirements applying to Australian financial services (AFS) licenseesover the past 12 months more generally, which has seen ASIC issue revised financial requirements for operators ofregistered managed investment schemes and issuers of retail OTC derivatives. With so much activity and inquiry, it thencomes with little surprise that on 14 November 2012, ASIC released Consultation Paper 194: Financial requirements forcustodial or depository service providers (CP 194).

CP 194 contains a number of proposals for the introduction of new financial requirements for AFS licensees whichprovide custodial or depository services and responsible entities of registered managed investments schemes (whichbuild up on the NTA requirements introduced in November of this year) and platform operators that hold scheme propertyor other property and assets.

Arguably the most significant ASIC proposal contained in CP 194, and the focus of this article, is the introduction of therequirement that providers of "incidental custodial or depository services" (an incidental provider) hold a required level ofnet tangible assets (NTA). These proposed new requirements will be of particular interest to trustees of unregisteredmanaged investment schemes who currently do not hold any NTA on the basis that they provide custodial or depositoryservices "incidentally" to other financial services.

What are the proposed NTA requirements for incidental providers?

Currently certain AFS licensees (excluding responsible entities and IDPS operators) that provide custodial or depositoryservices "incidentally" to another financial service provided by the AFS licensee or a related body corporate are excludedfrom the requirement to meet the NTA requirements that would otherwise apply.

Pursuant to CP 194, incidental providers will be required to hold a minimum level of NTA equal to the greater of:

$150,000; or10% of "average revenue".

claytonutz.com/…/revised_afsl_financi… 1/4

Relevantly, an AFS licensee provides an "incidental custodial or depository service" if:

the custodial or depository services are a need of the client because of, or in order to obtain, the provision ofother financial services by the AFS licensee or its related bodies corporate;the custodial or depository services do not form part of an investor directed portfolio service (IDPS); andthe revenue of the AFS licensee and its related bodies corporate reasonably attributable to the custodial ordepository services (which at least includes the cost of providing those services) comprise less than 10% ofthe total revenue derived from the financial services business of the AFS licensee and its related bodiescorporate in the last financial year.

Practically, this definition of "incidental custodial or depository service" proposed in CP 194 will likely capture:

trustees of unregistered managed investment schemes (other than operators of IDPSs), given the custodialfunctions are performed incidentally to the investment management function;providers of nominee services which are provided in conjunction with stockbroking, given the limited roleundertaken by the nominee service; andcarbon market participants providing a custodial or depository service, where those services are providedincidentally.

What are the requirements where an incidental provider appoints an external custodian?

Interestingly there is nothing in CP 194 which suggests that an incidental provider's NTA requirements will decrease incircumstances where a separate custodian is appointed to hold the relevant financial products (separate Custodian). Infact, ASIC states in CP 194 that the proposed minimum NTA for incidental providers recognises that a lower minimumNTA is suitable for these providers, in the same way that responsible entities that appoint a separate Custodian have areduced NTA on the basis that it would otherwise be unreasonably costly.

Without any further clarity provided by ASIC, the position seems to be that incidental providers will be required to meet theNTA requirements set out in CP 194 regardless of whether a separate Custodian is appointed. As a practical example,this means that a trustee of an unregistered managed investment scheme that qualifies as an incidental provider andhas appointed a professional third party custodian will still be required to hold the incidental provider minimum NTA.

What are the other requirements proposed by CP 194?

Disclosure and reporting requirements

An incidental provider that does not have at least the NTA required of a "normal" or "non incidental" provider of a custodialor depository service (Custodian) as set out in CP 194 (and as described below in paragraph 4) is required to disclosethat it is a provider of "incidental custodial or depository services" and as such is not required to, and may not, meet thefinancial requirements applicable to Custodians generally.

Such disclosure must be provided in each Financial Services Guide relating to the custodial or depository service andany Statement of Advice which relates to financial products that involve the provision of the custodial or depository service,which is given by the incidental provider to its retail clients (if these documents are required to be given).

In addition, an incidental provider that does not meet the financial requirements applying to a Custodian will be requiredto lodge with ASIC a statement in the audit report provided on the AFS licensee’s accounts for each financial year in whichthe incidental provider was authorised to provide custodial or depository services stating that, having reviewed thefinancial statements of each related body corporate of the AFS licensee, the auditor has no reason to believe that theincidental provider did not meet part (c) of the definition of incidental custodial and depository services for the relevantfinancial year.

Cash flow projections requirements

ASIC sees cash flow projections as an important tool to identify potential risk to a business. In this regard, ASIC


proposes to introduce a requirement for longer cash flow projections for incidental providers, such that incidentalproviders will be required to prepare, amongst other things, cash flow projections based on a reasonable estimate of itsrevenue and expenses over at least 12 months. Such cash flow projections will also need to be approved at leastquarterly by the directors of the incidental provider and must be made available to ASIC on request.

A tailored audit requirement will also apply based on the cash flow projections requirement, on a corresponding basis tothat now applying to responsible entities, as set out in Class order 11/1140: Financial requirements for responsibleentities, which currently requires the lodgement of a report by a registered company auditor each financial year.

NTA liquidity requirements and reporting

ASIC propose that at least 50% of the required NTA held by an incidental provider be held in "cash or cash equivalents",with 100% being held in "liquid assets". "Cash or cash equivalents" includes short-term, highly liquid investments thatare readily convertible to known amounts of cash that are subject to an insignificant risk of changes in value and alsoincludes the value of any undertaking provided by an "eligible provider".

An incidental provider affected by this proposal will be required to report its NTA position, together with detailed workings,to ASIC as part of its annual submission of Form FS70.

New NTA requirements

CP 194 also sets out a number of other requirements which would apply to Custodians, responsible entities andoperators of IDPSs. Most notably, CP 194 seeks to increase the NTA requirements for Custodians, responsible entitiesand operators of IDPSs. Currently:

Custodians and IDPS operators that hold property or other assets of the IDPS, are required to have at all timesat least $5 million NTA; andresponsible entities that have not appointed a separate eligible Custodian to hold scheme assets are requiredto hold a minimum NTA of the greater of $5 million and 10% of the responsible entity's revenue with nomaximum NTA.

CP 194 proposes to increase the current NTA requirements to the greater of $10 million or 10% of "average revenue" inrespect of:

Custodians and IDPS operators that hold property or other assets of the IDPS, unless the operator arrangesfor the IDPS property to be held by a separate Custodian or an eligible custodian (such as an Australian ADI);andresponsible entities holding scheme property or assets (other than "special custody assets" or "Tier $500,000assets"), unless the responsible entity appoints a separate Custodian or an eligible custodian (such as anAustralian ADI).

CP 194 does not specify the NTA requirements applicable to responsible entities that appoint a separate Custodian.Given CP 194 is silent on this issue, it is assumed that the reduced NTA requirements described in Regulatory Guide166: Licensing: Financial Requirements, applicable where a responsible entity of a managed investment schemeappoints a separate Custodian, will continue to apply.

It is also worth noting that for those operators that to date have relied on the "incidental" carve-out, but which will not be aprovider of "incidental custodial or depository service" as that term is defined in CP 194, the higher NTA requirementsapplicable to Custodians will apply to those operators (meaning that such operators will now be required to hold thegreater of $10 million or 10% of "average revenue"). This may have a significant impact on those operators.

Commencement and transition period

Comments on CP 194 are due by 14 January 2013, and ASIC expect to update RG 166 to reflect any necessary changesby April 2013. ASIC proposes that the reforms be effective for new providers as of 1 July 2013 and in respect of existing


incidental providers, Custodians, responsible entities of managed investment schemes and IDPS operators, ASICproposes to implement a transition period of 12 months until 1 July 2014.

You might also be interested in...

New NTA test for CFD and FX dealersNew financial requirement for responsible entities

DisclaimerClayton Utz communications are intended to provide commentary and general information. They should not be reliedupon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arisingfrom this bulletin. Persons listed may not be admitted in all states or territories.


© 2012 Fraser Milner Casgrain LLP

Focus onInternational Trade

DECEMBER 2012

1 Bill S‐11, Safe Food for Canadians Act

2 Contact Us

Bill S‐11, Safe Food for Canadians Act

By John Blakney and Olivia Wright

On November 22, 2012, Bill S‐11, Safe Food for

Canadians Act (the Act) received royal assent.

The Act is the most recent attempt by the

Canadian government to modernize the Canada’s

food regulatory scheme administered and

enforced by the Canadian Food Inspection Agency

(CFIA). The Act aims to accomplish this through

the consolidation of the Meat Inspection Act, the

Fish Inspection Act, the Canada Agricultural

Products Act, and the food provisions of the

Consumer Packaging and Labelling Act, each of

which is to be repealed. The Food and Drugs Act

will remain unchanged and continue to operate to

provide “overarching protection for consumers

from any foods that are unsuitable for

consumption”.1

The Act, however, does more than merely

consolidate existing legislative measures. In an

effort to modernize the regulatory scheme, the

Act includes a number of new and expanded

provisions and powers, including those related

trade, both international and interprovincial, of

“food commodities”. “Food commodities” is

defined to mean food as defined in the FDA;

animals, plants and parts thereof from which food

may be derived; and anything prescribed to be a

food commodity by regulation.2

In addition to certain new prohibitions respecting

the importation of unsafe food, the Act provides

for a licensing and/or registration regime

applicable to the trade (international and/or

1 Canadian Food Inspection Agency (CFIA), “Safe Food for Canadians Act: An Overview”, available at: http://www.inspection.gc.ca/about‐the‐cfia/acts‐and‐regulations/initiatives/sfca/overview/eng/1339046165809/1339046230549 2 Bill S‐11, Safe Food for Canadians Act, s. 2

http://www.fmc-law.com/People/BlakneyJohn.aspx

http://www.fmc-law.com/People/WrightOlivia.aspx

http://www.inspection.gc.ca/about-the-cfia/acts-and-regulations/initiatives/sfca/overview/eng/1339046165809/1339046230549

fmc‐law.com MONTRÉAL OTTAWA TORONTO EDMONTON CALGARY VANCOUVER

interprovincial) in prescribed food commodities,

and related activities. While the scope of the

regime cannot be fully evaluated until such time

as regulations establishing the food commodities

to which it would apply, and any associated terms

and conditions are promulgated under the Act, it

can be expected that these provisions will

increase import control and, by holding importers

accountable for the safety of imported food,

“promote a level playing field between importers

and domestic producers.”3

In addition to the above and in an effort to

facilitate the export of food to other countries

that increasingly require that imported foods be

certified, the Act empowers the Minister to issue

export certificates.4 In so doing, the Act aims to

increase international market opportunities for

the Canadian industry.5

Contact Us

For further information, please contact a member

of our International Trade Group.

3 Supra note 1 4 Ibid, s.48 5 Supra note 1

http://www.fmc-law.com/AreaOfExpertise/International_Trade.aspx

NEWS ALERT 1

NEWSALERT January, 2013

-

SUPERINTENDENCY OF THE ENVIRONMENT: FULL OPERATION

Although Law Nº 20,417, that created the Superintendency of the Environment (“SoE”), was published in the Official Gazette on January 26, 2010, its powers and faculties were suspended until Environmental Courts start functioning, which happened last December 28th. Therefore, and from then on, the SoE will be entitled to perform the following functions:

a) Compliance Supervision1

The SoE is in charge of exclusively implementing, organizing and coordinating the supervision of the compliance with the following:

Notwithstanding the exclusivity granted to the SoE, Law Nº 20,417 does not supersede other laws that assign environmental compliance supervision powers to others agencies, which maintain their faculties in all those matters not expressly conferred to the SoE.

Within the Environmental Impact Assessment System (“EIAS”), the SoE is in charge of securing the correct functioning thereof and the compliance with appli-cable law. For example, it may require a project to be assessed within the EIAS or to change the assessment tool when it detects project segmentation. Likewise, it may require the Environmental Assessment Agency the caducity of an EAR when the project execution has not been initiated within five years or in cases where the magnitude, reiteration or effects of the infringements make it applicable.

b) SanctioningLaw Nº 20,417 contains a catalogue of infringements which are classified depend-ing on their seriousness, and respect of which the SoE may impose the following sanctions: (i) written warning, (ii) a fine up to 10,000 UTA (approximately US$10,000,000), (iii) provisional or definitive closure of facilities, and (iv) EAR revocation. Please note that in case the offender is a legal entity, its legal repre-sentative will be subsidiary liable for the payment of fines. 1 The SoE will perform its supervision faculties according to the parameters set forth by Resolution No. 769, dated November 26, 2012, that establishes “General Regulations for the Environmental Compli-ance Supervision Procedure”, available at http://www.leychile.cl/Navegar?idNorma=1046462.

If you have any questions regarding the matters discussed in this memorandum, please contact the following attorneys or call your regular Carey contact.

Rafael VergaraPartner+56 2 2928 [email protected] Juan Francisco MackennaPartner+56 2 2928 [email protected]

Alberto CardemilPartner+56 2 2928 [email protected]

Felipe MenesesAssociate+56 2 2928 [email protected]

Paulina SandovalAssociate+56 2 2928 [email protected]

Cristóbal CorreaAssociate+56 2 2928 [email protected] Paulina GálvezAssociate+56 2 2928 [email protected]

Provisions, conditions and measures under which an Environmental Appro-val Resolution (“EAR”) was granted;Measures and tools set forth by prevention and decontamination plans;The content of quality and emission standards;Management plans;Laws, regulations and norms related to the discharge of liquid waste; and,Others environmental instruments set forth by law.

i.

ii.iii.iv.v.vi.

Once a sanctioning procedure is initiated, the Superintendent may decree provi-sional measures to stop the damage to the environment or people’s health such as (i) corrective, control or safety measures, (ii) seal of equipment, (iii) monitoring program or lab tests, (iv) provisional closure of facilities (total or partial), (v) stop of works, and (vi) EAR provisional suspension. The last three measures must be previously authorized by the relevant Environmental Court.

It is worth noting that Law Nº 20,417 also set forth mechanisms and instruments to foster compliance with environmental regulations such as self-reporting (“autodenuncia”) which allows exempting or reducing the amount of fines when the offender voluntarily reports his infringement to the SoE and obliges to comply with a compliance program.

c) RegulationFinally, the SoE is in charge of issuing general regulations for the exercise of its powers and faculties and technical instructions regarding procedures, protocols and analysis methods that supervision agencies and audit companies must apply for the examination, control and measurement of quality and emission standards.

It is in the exercise of this function that the SoE has issued Resolution No. 844, dated December 14, 2012, which establishes “General Rules on the Information to be Provided regarding Conditions, Obligations and Measures established by an Environmental Approval Resolution”. This resolution imposes an EAR holder the obligation to inform the compliance with monitoring, measurements, analysis, studies, audits, and in general any information aimed at the following up of a project2.

2 Available at http://www.leychile.cl/Navegar?idNorma=1047590.

NEWS ALERT 2

NEWSALERT January, 2013

This memorandum is provided by Carey y Cía. Ltda. for educational and informational purposes only and is not intended and should not be construed as legal advice.

Carey y Cía. Ltda.Isidora Goyenechea 2800, 43rd Floor Las Condes, Santiago, Chile.www.carey.cl

Single Purpose Commercial Prepaid Cards and Their Implementing Practices in Shanghai

01.10.13

By Jay Si

In September 2012, the Ministry of Commerce (“MOFCOM”) issued the Administrative Measures on Single

Purpose Commercial Prepaid Cards (Tentative) (“Single Purpose Cards Measures”), which took effect on Nov. 1,

2012, and provide the basic principles on the issuance and regulation of Single Purpose Commercial Prepaid

Cards (“Single Purpose Cards”). While MOFCOM is responsible for the general administration of Single Purpose

Cards nationwide, more detailed implementation work would be carried out by MOFCOM’s local counterparts,

especially those at the provincial level. Consequently, different places may have different policies to implement

the Single Purpose Cards Measures. This article will discuss the key provisions of the Single Purpose Cards

Measures and the corresponding implementation practices in Shanghai.

MOFCOM’s definition for Single Purpose and Multiple Purposes Cards

According to the Single Purpose Cards Measures, Single Purpose Cards refer to the prepaid cards that can only

be redeemed (i) with the card issuer, (ii) within a corporate group where the card issuer is the ultimate parent

company that absolutely controls each group member (the “Group Issuer”), or (iii) within a franchise under one

single brand where the card issuer owns or has the exclusive right of the registered trademark or the franchise

logo under the brand (the “Brand Issuer”). From MOFCOM’s perspective, if a prepaid commercial card can be

accepted and redeemed with any enterprise outside of the aforesaid scope, such a prepaid card would be

deemed a “Multiple Purpose Commercial Prepaid Card” (“Multiple Purpose Card”) and subject to the payment

processing license regulation by the People’s Bank of China (“PBOC”).

Eligible industries According to the Single Purpose Cards Measures, enterprises engaging in the businesses of (i) retail, (ii) hotel

and catering and (iii) residential services are subject to the Single Purpose Card Measures. The above three

categories of businesses are further illustrated and divided into the subordinate subcategories of businesses, as

set forth in the following chart:

Retail Comprehensive Retail Department store, supermarket, grocery store and convenience store

Specialty Retail Food, beverage, tobacco products, textile, garment, daily necessities, cultural and sports goods and equipment, pharmaceutical & medical devices, automobile, components & accessories, motorcycle, components & accessories, motor fuel, home appliance & electronic products, hardware, furniture and interior

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In implementation, Shanghai MOFCOM requires that any company which wants to issue a Single Purpose Card

must have in its business scope at least one of the above subcategory businesses, and the cards issued can only

be accepted and redeemed for the exact subcategory businesses within those subcategory businesses. In

addition, particularly for a Brand Issuer, the registered trademark for the franchise within which Single Purpose

Cards are accepted and redeemed also needs to be registered on the relevant services or the underlying

products relating to at least one of the above subcategory businesses.

Card Issuers The Single Purpose Cards Measures provide four categories of card issuers: (i) Group Issuer, (ii) Brand Issuer,

(iii) Large Scale Issuer and (iv) Other Issuer.

A Group Issuer refers to a parent company of a corporate group which issues a Single Purpose Card that can be

accepted and redeemed by this parent company and other group members within the corporate group. The group

members should be subject to the “absolute controlled” by the parent company, i.e. the parent company should,

directly or indirectly, own more than 50 percent of the equity share of each group member. The Group Issuer

must be a company registered in China.

A Brand Issuer refers to a card issuer that (i) owns a registered trademark or a corporate logo, (ii) is exclusively

licensed to use a corporate logo or a registered trademark (since usually a corporate logo is a trademark, we only

cover trademarks in this article, and do not separately discuss corporate logos). The cards issued by a Brand

Issuer can be used in its franchise members, i.e. the licensee or sub-licensee of the trademark. If a Brand Issuer

is exclusively licensed to use a trademark in China, it can issue cards nationwide. However, if a Brand Issuer is

only exclusively licensed to use a trademark in Shanghai, the Brand Issuer is only allowed to issue cards within

Shanghai. According to Shanghai MOFCOM, if a card issuer wants to issue cards as a Brand Issuer, the card

issuer must firstly get approval from the local MOFCOM for its franchise operation under the Chinese franchise

regulation and have the trademark license properly recorded with the China Trademark Office before it can claim

to become a Brand Issuer. However, given the considerable time and efforts that will be required to get the

franchise approval and trademark license registration by the time of filing for card issuance, the existing card

decorative materials

Non-Store Retail and Others Retail

Online sale, mail order, TV sales, sale of second hand goods and fuel retail for daily use

Hotel & Catering Hotel Tourist hotel and hotels in general

Catering Dinner service, fast food, beverage & cold drink, food distribution service

Residential Services Residential Service Home service, laundering & dyeing service, hair & beauty care, bathing service, health care and marriage service

Repair Motor vehicle repair & maintenance, computer and office equipment repair, home appliance repair and repair for other daily products

Other services Cleaning

issuers do not need to have the franchise approval and the trademark license registration certificate. Rather, the

relevant official receipt by the relevant authorities of the application for the franchise operation or the trademark

license will be sufficient.

A Large Scale Issuer refers to a card issuer whose Single Purpose Cards can only be used with its own business

and whose Single Purpose Cards issuance satisfies one of the following two conditions:

Business revenue in last year exceeds RMB 5 million; or

Registered capital of the card issuer is more than RMB 1 million, and the card issuer is incorporated within

one year.

Other Issuers refer to a card issuer whose Single Purpose Cards can only be used within its own business and

cannot satisfy either of the above conditions.

Card Sellers Within a company group or franchise system, there usually can only be one card issuer, but there may be more

than one company actually selling the cards to consumers. According to the Single Purpose Cards Measures, a

Card Seller refers to an enterprise designated by a Group Issuer or a Brand Issuer to be responsible for sale and

management of the cards, such as card selling, charging, lost-report managing, replacing and returning for

refund, etc. The Single Purpose Cards Measures further provide that a Card Seller must be a member of the

corporate group or the franchise group. The Single Purpose Cards Measures do not specify whether a non-group

member can sell cards on behalf of the Group Issuer or the Brand Issuer. In addition, the Single Purpose Cards Measures are silent on whether a Large Scale Issuer or Other Issuers are allowed to designate a third party to be

its Card Seller.

According to Shanghai MOFCOM, a Group Issuer or Brand Issuer is allowed to designate a non-group member

as its Card Seller, and a Single Issuer is also permitted to designate a third party to sell cards on its behalf,

provided that the card issuers must be ultimately responsible for the cards sold.

Fund management The Single Purpose Cards Measures provide strict rules on the management of advances collected through card

selling.

Advances Balance

To control the risk, a card issuer is only allowed to sell Single Purpose Cards up to a certain amount. The fund

received as a result of selling Single Purpose Cards is referred to as “Advances”, and the balance of received

Advances minus the price of goods/service already purchased using cards is referred to as “Advances Balance”.

For a Group Issuer, the Advances Balance cannot exceed 30 percent of the total business revenues of the entire

group in last year. For a Brand Issuer, a Large Scale Issuer or an Other Issuer in the business of retail or hotel

and catering, the Advances Balance cannot exceed 40 percent of its revenue of the main businesses in last year.

For a Brand Issuer, a Large Scale Issuer or an Other Issuer in the business of residential services, the Advances

Balance cannot exceed its revenue of the main businesses in last year. For a Brand Issuer, a Large Scale Issuer

or an Other Issuer that has been established for less than one year, the Advances Balance cannot exceed 200

percent of its registered capital.

Advances Deposit

A card issuer is required by the Single Purpose Card Measures to deposit certain Advances in a depositary

account with a commercial bank at the choice of the card issuer. So far, according to Shanghai MOFCOM, they

accept only four commercial banks to be eligible depositary banks, which are Bank of China, Industrial and

Commercial Bank of China (“ICBC”), Shanghai Pudong Development Bank, and China Minsheng Bank. It implies

that, for the time being, a card issuer can only open a depositary account in one of the four banks.

For a Group Issuer, the funds deposited in its depositary account should not be less than 30 percent of the

Advances Balance as of the last previous quarter. For a Brand Issuer, the funds deposited in its depositary

account should not be less than 40 percent of the Advances Balance as of the previous quarter. For a Large

Scale Issuer, the funds deposited in the depositary account should not be less than 20 percent of the Advances

Balance as of the previous quarter.

Alternatives to Advance Deposit

Alternatively, according to the Single Purpose Cards Measures, a card issuer can choose to purchase guarantee

insurance, bank guarantee or other commercial guarantee in lieu of the advance deposit mentioned above.

According to Shanghai MOFCOM, the effective term of such insurance or guarantee should be one year, and the

insured or guaranteed amount should be at least 40 percent of the estimated total Advances Balance in the

coming year. For a company that issues Single Purpose Cards for the first time, it should estimate its Advances

Balance with reference to other card issuers in the same industry. So far, Shanghai MOFCOM only accepts (i)

guarantee insurance provided by Bank of China Insurance and Ping’An Insurance, (ii) bank guarantee provided by ICBC, and (iii) commercial guarantee provided by China National Investment and Guaranty. In addition, the

templates of agreements with insurance companies, banks, or commercial guarantors are provided by MOFCOM

online. Card issuers must follow the standard form of such templates, and are not allowed to substantially modify

the terms of such templates.

Use of the Advances

A card issuer can only use the Advances in its main businesses and should not use the Advances to invest in real

estate, equity share or securities, or loan the Advances to a third party. However, according to Shanghai

MOFCOM, a Group Issuer is allowed to lend the advances to other group members.

Card issuance Some general principles

A card issuer must include its company name, contact information, card number, service regulations, notes, and

etc. in the card. If the card issuer is a Group Issuer, it also needs to add the name of the corporate group; and if

the card issuer is a Brand Issuer, the corporate logo or trademark must be included in the card.

A card issuer or seller must inform a purchaser of its articles or rules on use of the card, which should contain the

following contents:

Name, category and function of the card;

How to purchase, fund, use and return the card, and if it is a Registered Card (defined below), how to report

loss and transfer;

Charge items and standards;

Rights and obligations of the parties concerned;

Principles of dispute resolution and liabilities for breach; and

Other matters required by applicable laws.

Upon a purchaser’s request, a card issuer or seller must sign a card purchase agreement with the purchaser. The

agreement should also cover the above content. However, if the purchaser does not require, such an agreement

may be exempted.

Under the Single Purpose Measures, a card issuer or seller is mandatorily required to provide card return service

according to the card articles or card purchase agreement. It implies that a card issuer or seller cannot simply

reject cards returned by purchasers, but it can set forth conditions in advance in the card articles or card

purchase agreement. If so, purchasers should meet such conditions in order to return the cards. Although

allowing the card issuer or seller to have card return conditions, the Single Purpose Cards Measures impose

some mandatory requirements for card return handling. For example, the purchaser needs to provide his/her

identification card, and the card issuer or seller must refund the remaining balance in the card to the purchaser’s

own bank account and record the bank account information.

Registered Card vs. Unregistered Card

The Single Purpose Cards Measures divides cards into two categories: Registered Card and Unregistered Card,

but do not provide the definition for either category. Literally speaking, a Registered Card bears a purchaser’s

name, and thus if the purchaser loses this card, he/she can report the loss and get a new card. An Unregistered

Card does not carry the purchaser’s information and everyone who gets the card can use and fund the card. If an

Unregistered Card is lost, the purchaser cannot report the loss and get a new card.

Under the following circumstances, a purchaser needs to provide his/her identification card and contact

information to the card issuer or seller:

If the purchaser wants to purchase a Registered Card; or

If the purchaser wants to purchase Unregistered Cards at the value of RMB 10,000 or more in one time.

For an individual, the identification card refers to the resident ID card, passport, or residence certificate (known as

Hukou in China), etc. For an enterprise or other organization, the identification card refers to the business license,

tax registration certificate, or organization code certificate, etc. A card issuer or seller must keep the purchaser’s

information for more than five years, and ensure the confidentiality of such information.

The maximum value of a Registered Card is RMB 5,000, and the maximum value of an Unregistered Card is

RMB 1,000. A Registered Card should be permanently valid, and the valid term of an Unregistered Card should

not be less than three years. However, if an Unregistered Card expires but still has balance in the account, the

card issuer or seller should activate or replace the card for the cardholder.

In the following situations, bank transfer rather than cash payment should be used to purchase Single Purpose

Cards:

An enterprise or other organization purchases cards with the value of RMB 5,000 or more in one time;

An individual purchases cards with the value of RMB 50,000 or more in one time; or

A purchaser purchases cards through other means off-site.

©1996-2013 Davis Wright Tremaine LLP. ALL RIGHTS RESERVED. Attorney Advertising. Prior results do not guarantee a similar outcome.

According to Shanghai MOFCOM, “bank transfer” refers to the payment through bank accounts. Payment via a

Multiple Purpose Card is not acceptable, while credit card payment is allowed.

Post-filing Vs. Pre-filing According to the Single Purpose Cards Measures, a Group Issuer or Brand Issuer should file card issuance with

MOFCOM’s local counterparts at provincial level, a Large Scale Issuer should file card issuance with MOFCOM’s

local counterparts at city level (such cities consist of administrative districts), and an Other Issuer should file card

issuance with MOFCOM’s local counterpart at county level.

The Single Purpose Cards Measures further provide that the filing should be completed within 30 days after the

issuance of the cards. However, Shanghai MOFCOM requires beyond the above provision that the filing should

be done 15 working days before the issuance of the cards. In addition, Shanghai MOFCOM also requires that

companies that had already issued Single Purpose Cards before the release of the Single Purpose Cards

Measure complete the filing before Jan. 29, 2013.

Based upon the above, it is clear that Shanghai MOFCOM in its implementation of the Single Purpose Cards

Measures adds some more requirements for its local regulation purpose. We assume that the local counterpart of

the MOFCOM at other provinces will have their own implantation policies to reflect their own local regulatory

demand. Therefore, we highly suggest that Single Purpose Cards issuers should not rely only on the black letters

of the Single Purpose Prepaid Cards Measures but should consult with the MOFCOM local counterparts which

have jurisdiction on them before they plan for their own Single Purpose Cards businesses.

Disclaimer

This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform

our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for

specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

Retrial Ruling of the Supreme People’s CourtSettles the Disputes on the Jurisdiction over JointTort Cases: Litigation or ArbitrationBy King & Wood Mallesons on January 7, 2013

By Harry Liu and Qiu yue King and Wood Mallesons’ Dispute Resolution Group Shanghai Office

As an alternative dispute resolution mechanism, arbitration has been increasingly widelychosen as the dispute resolution method by parties to the commercial contracts. A signatoryto the arbitration clause may bring litigation jointly against the other party to the arbitrationclause and non-signatories to such arbitration clause. It remains uncertain in judicial practicewhether courts have jurisdiction over such joint tort disputes despite of the arbitrationclause. The Supreme People’s Court’s view towards the issue also has shifted back and forth.The retrial ruling lately handed down by the Supreme People’s Court after confirmed by itsjudicial committee gave a clearer answer to the question, which will definitely have a

demonstration effect on the judicial practice in the future.

I. Overview of the Previous Cases

During performance of the contract, a party’s deceit or other breach of the contract may also amount to tort.In such cases, the other party would rather initiate a tort claim in court than resort to arbitration pursuant tothe arbitration clause in the contract, while the breaching party tends to insist on arbitration. Can thebreaching party compel arbitration against the non-breaching party? The Supreme People’s Court has givenconfirmative answer in the Summary of the Second National Working Conference on Foreign-relatedCommercial and Maritime Trials. It is emphasized by the Supreme People’s Court that in case there is aneffective arbitration agreement between the parties to a foreign-related commercial contract providing thatall disputes arising out of or in connection with the contract are to be settled through arbitration, the people’scourt shall not exercise jurisdiction over the lawsuit brought by the plaintiff disregarding the fact that thecause of action was tort.

However, the abovementioned Summary did not specifically address the issue whether the people’s court hasjurisdiction over the cases brought jointly against a party to the contract and a non-contractual party for atort arising out of the conclusion and performance of the contracts. Since it is not uncommon that contractclaim and tort claim duplicate, there has been considerable number of cases in which objection to thejurisdiction of courts was raised. The people’s courts tend to hold two opposite positions when dealing withsuch disputes over jurisdiction. One side holds the view that courts have no jurisdiction over the disputesbetween the signatories to the arbitration clause, but can exercise jurisdiction over the disputes between the

chinalawinsight.com/…/retrial-ruling-of… 1/4

plaintiff and non-signatory defendant. The opposing side contends that arbitration cannot solve the disputescompletely and appropriately given that arbitration agreement won’t be able to bind non-signatories to thearbitration agreement, i.e., the joint tortfeasors. No consensus has been reached in judicial practice withrespect to this issue. Published cases have shown inconsistent opinions by the Supreme People’s Court onsuch issue.

In the appeal case of Light Industry and Textiles Company of Jiangsu Material Group (“Textiles Company”)against (Hong Kong) Top Capital Holding Ltd. (“Top Capital Company”) and (Canada) Prince DevelopmentLtd. (“Prince Company”) for relief in tort, the Supreme People’s Court adopted the first position as mentionedabove. In specific, even if the case involves a non-signatory to the arbitration agreement, the parties’legitimate interests and rights can still be protected because the plaintiff can bring an independent legal actionagainst the non-signatory in court when the arbitral tribunal has no jurisdiction over the third party. In thiscase, Textiles Company signed on the sales contracts of used generators respectively with Top CapitalCompany and Prince Company, both contracts have an arbitration clause. Textiles Company lodged a lawsuitagainst Top Capital Company and Prince Company to seek relief for tort of deceit under the disguise ofcontracts. The Supreme People’s Court held that given the fact that the parties expressly agreed in thecontracts to submit their disputes to arbitration, such agreements shall be binding on the parties unlessconfirmed to be void by relevant authorities. All the parties in this case shall be bound by the arbitrationclauses set forth in the contracts. The disputes arising from the contracts shall be submitted for arbitration,while courts have no jurisdiction over such disputes.

In the appeal case of WP International Development Company (“WP Company”) v. Songmei Acetic Acid Co.,Ltd. (“Songmei Company”) and Jilin Chemical Co., Ltd. (“Jihua Company”) on the disputes over thejurisdiction of tort liability actions decided on May 10th, 2005 (“WP Company Case”), the Supreme People’sCourt took the second stance stated above and rejected the Jihua Company’s jurisdiction objection on thebasis that the arbitration clause cannot govern the indispensable joint tort disputes between the signatory andnon-signatory parties. In this case, WP Company signed a Joint Venture Contract with Jihua Company andagreed to establish a joint venture named Songmei. WP Company alleged that Songmei Company colludedwith Jihua Company during production process and took measures such as increasing prices of the resources,absorbing unreasonable costs for other companies, faking losses etc. to deceive WP Company. Therefore, WPCompany sued Jihua Company and Songmei Company jointly as defendants, requesting the two companies tobear shared liability for compensation. The Supreme People’s Court held that the lawsuit of WP Companyagainst Jihua Company and Songmei Company is an indispensable joint tort action, and concluded that thecourt has jurisdiction over the case because the arbitration clause between WP Company and Jihua Companycannot govern the indispensable joint-tort action among the three parties in this case.

II. Retrial Ruling of the Supreme People’s Court

(i) Background of the Case

In the present case, a Chinese ship building company (“Ship Yard”) signed a Ship Building Contract with aforeign shipping company (“Ship Owner”), in which Ship Yard undertook to build ships for the Ship Owner.The parties agreed in the Ship Building Contract that any disputes arising out of or in connection with thecontract shall be submitted for arbitration in England and the arbitration will take place in London. The ShipYard signed the Supply Contract with a foreign ship equipment supply company (“Equipment Company”) inwhich the Equipment Company is obligated to provide ship equipments to the Ship Yard. The SupplyContract provides that any disputes arising out of or in connection with the Supply Contract shall besubmitted for arbitration in Paris. After the Ship Yard installed the equipment, one of the EquipmentCompany’s affiliated companies in China (“Service Company”) provided commissioning service to the ShipYard at the direction of the Equipment Company.


Subsequently, the Ship Yard sought relief jointly against the Ship Owner, the Equipment Company and theService Company in court with the cause of action of commercial deceit. The Ship Yard, the EquipmentCompany and the Service Company raised objection to the jurisdiction of the court of first trial, arguing thatthe court has no jurisdiction over any disputes arising out of or in connection with the Ship Building Contractand the Supply Contract, including tort disputes, because there exist valid arbitration clauses both betweenthe Ship Owner and the Ship Yard and between the Equipment Company and the Ship Yard.

(ii) The Rulings of the Court of First Instance and the Court of Second Instance

The court of first instance held that the arbitration clause between the Ship Owner and the Ship Yard and thearbitration clause between the Equipment Company and the Ship Yard are not binding because the clausescannot cover all the disputes of the case. The current case is a tort dispute. Given that the place where the tortoccurred falls under the territorial jurisdiction of the court of first instance, therefore, the court of firstinstance has jurisdiction over the case.

The court of second instance held that the court of first instance has jurisdiction over the case because it isthe court of the place where the tortious actions occurred. The claim of the appellants that the disputes shallbe submitted for arbitration in compliance with the arbitration agreements was denied, as the courtmaintained that the arbitration agreements have no binding effects on the tort disputes among all the parties.

(iii) The Reasoning and Decision of the Supreme People’s Court

The Ship Owner, the Equipment Company and the Service Company disagreed with the ruling of court of thesecond instance and applied for retrial with the Supreme People’s Court. Recently, the Supreme People’sCourt has delivered the retrial ruling and upheld the decision of the court of second instance.

The Supreme People’s Court concluded that the Ship Yard provided prima facie evidence to allege that theShip Owner and the Equipment Company maliciously conspired to supply used equipments and the ServiceCompany installed the equipments with the knowledge of the defects, and that the three defendants’ wrongfulactions amounted to a joint tort as they infringed the legitimate interests of the Ship Yard by taking advantageof the contracts. Based on the above claims and requests, it is held that the tort action jointly against the ShipOwner, the Equipment Company and the Service Company shall be construed as indispensable joint action.Due to the fact that the Supply Contract between the Equipment Company and the Ship Yard is not binding onthe Ship Owner, whereas the Ship Building Contract between the Ship Owner and the Ship Yard does not bindthe Equipment Company, and that both the arbitration agreements have no binding effect on one of the jointdefendants, the Service Company, which is not a party to either of the contracts. In this regard, thearbitration agreements cannot bind all the parties involved in the joint tort disputes in this case. Based on thediscussion and decision of the judicial committee of the Supreme People’s Court, it is decided that the originalcourt has jurisdiction over the case.

III. Influence of the Retrial Ruling

The ruling of the Supreme People’s Court reemphasized its stance in the case of WP Company, i.e, thearbitration agreement between the parties has no binding effect on the joint-tort disputes between a signatoryand a non-signatory to the arbitration agreement and the court can exercise its jurisdiction over such tortcases. The stance the Supreme People’s Court took in the retrial showed its tendency to protect the interestsof the infringed parties, and has a significant value as a reference for similar jurisdiction objections. Thedecision being made after discussions and decision of the judicial committee further proves that SupremePeople’s Court intends to emphasize the jurisdiction of courts over such cases. On the other hand, the retrialruling would probably be utilized by the party seeking to avoid arbitration. The party can circumvent thearbitration clauses by means of bringing tort claims, as the court will not examine the legality, genuineness


and relevance of the evidence when deciding whether to accept the lawsuit or not. In order to make up thereason for court to exercise jurisdiction, the party seeking to avoid arbitration only needs to provide primafacie evidence to prove the existence of a joint tort. As long as such evidence is submitted, the court will beable to exercise jurisdiction over the disputes in tort between the plaintiffs and all the defendants regardlesswhether there is a valid arbitration clause between the parties.

最高人民法院再审裁定厘清共同侵权案件诉讼与仲裁之争

China Law Insight

King & Wood Mallesons

40th Floor, Office Tower A Beijing Fortune Plaza 7 Dongsanhuan Zhonglu Chaoy ang District Beijing 1 00020, China

Phone: +86 1 0 587 8 5588Fax: +86 1 0 587 8 557 7E-mail: [email protected]


NEWS DETAIL 21/11/2012 MINISTER OF TRADE REGULATION ON EXPORT BENCHMARK PRICES OF MINING PRODUCTS THAT ARE SUBJECT TO EXPORT TAX The Minister of Trade issued, in May 2012, Regulation No. 33/M-DAG/PER/5/2012 concerning Rules and Procedures for the Determination of Export Benchmark Prices of Mining Products That Are Subject to Export Duties. The regulation is the implementation regulation of related provisions of Government Regulation No. 55 of 2008 concerning Export Duties on Export Goods, and of Minister of Finance Regulation No. 75/PMK.011/2012 concerning Determination of Export Goods That Are Subject to Export Duties and the Export Duty Tariffs. Basically, this Minister of Trade’s regulation stipulates the following:

The Minister of Trade delegates the authority to determine the export benchmark prices (Harga Patokan Ekspor or “HPE”) to the Director General;

The HPE will be used for the determination by the Minister, of the export prices for the calculation of the Export Duties.

The HPE is to be determined on the basis of: a. highest average price in the international market; b. highest average FOB (free on board) price; c. highest average price prevailing in the domestic market; or d. highest average price of the respective mining product in the importer’s country. All of the above should be prices that prevail in the latest period before the determination of the HPE. The list of the mining products that are subject to export duties is attached to the regulation. This regulation has been effective as of 28 May 2012. (By: Anita Karina Sungkono)

© ABNR 2008 - 2013

Financial Markets Amendment Act 2013 and Amendment Decree adopted and published Definitieve versies Wijzigingswet en Wijzigingsbesluit financiële markten 2013 gepubliceerd

Financial Markets Amendment Act 2013 and Amendment Decree adopted and published / Definitieve versies Wijzigingswet en Wijzigingsbesluit financiële markten 2013 gepubliceerd 28 December 2012

This newsletter is sent by NautaDutilh

Financial Markets Amendment Act 2013 and Amendment Decree adopted and published Just before the end of this year, the final versions of the Amendment Act financial markets 2013 (Wijzigingswet financiële markten 2013, the "Amendment Act") and the Amendment Decree financial markets 2013 (Wijzigingsbesluit financiële markten 2013, the "Amendment Decree") are published. The Amendment Act was published in the Bulletin of Acts and Decrees (Staatsblad) on 13 December 2012. The Amendment Decree was published today.

The Amendment Act and the Amendment Decree introduce new or additional rules regarding the following topics:

The mandatory product approval process; The oath / solemn affirmation for the financial sector (or what is often referred to as the "banker's oath"); The ban on commission payments; The provision of services document (dienstverleningsdocument); The scope of the knowledge and experience test in respect of execution-only services; Obligations for offerors of mortgage loans; Requirements with respect to professional competences of advisors with client contact; Dispute resolution (including the internal complaints procedure); The prohibition on direct or indirect investments in cluster munitions; The content of the integrity test.

Draft versions of the Amendment Act and Amendment Decree were already published earlier this year, in which all of the above topics were included.

Especially the draft version of the Amendment Decree that was published in May received a large number of responses from various market parties. In addition, concerns have been expressed regarding the fact that the final text of the Amendment Decree was not forthcoming. Since the publication of the draft version of the Amendment Decree in May this year, the Dutch Ministry of Finance published two letters in which the most important changes to the Amendment Decree were announced, namely the following letters:

Top

1. the letter of the Ministry of Finance dated 13 September 2012 regarding several of the topics referred to above (we also refer to our newsletter dated 18 September 2012);

2. the letter of the Dutch Ministry of Finance dated 27 November 2012 regarding the amended introduction of the oath / solemn affirmation for the financial sector. In this letter, the Ministry already announced that as of 1 January 2013, the oath / solemn affirmation will only apply to persons that are subject to suitability testing (geschiktheidstoetsing) by the Dutch Financial Markets Authority (Autoriteit Financiële Markten) and the Dutch Central Bank (De Nederlandsche Bank), such as policymakers and members of the supervisory board. The Ministry will undertake additional research before it will introduce the oath / solemn affirmation for other employees of financial institutions. The final Amendment Decree does indeed not contain the oath/solemn affirmation for other employees of financial institutions (in contrast with the draft Amendment Decree).

Most of the rules referred to above will enter into force as of 1 January 2013. However, the following rules will enter into force on a later date:

Cluster munitions - 1 April 2013: The sanction of an administrative penalty for breach of the prohibition on (supporting) investments in cluster munitions may only be imposed by the regulator as of this date. However, the prohibition itself will enter into force on 1 January 2013.

Provision of services document - 1 July 2013: The obligation to have a provision of services document in a standard format will apply as of 1 July 2013. However, the general additional transparency requirements will already apply as of 1 January 2013.

Professional competences - 1 January 2014: The new requirements with respect to professional competences of advisors with client contact will enter into force as of 1 January 2014. However, a transitional regime applies to advisors which operate on the basis of the appropriate license on 31 December 2013 and which on that date meet with the professional competences requirements. Those advisors must meet the new professional competences requirements as of 1 July 2015.

Contact

Larissa Silverentand (T + 31 20 71 71 716) [email protected]

Pim Rank (T +31 20 71 71 864) [email protected]

Rosemarijn Labeur (T + 31 20 71 71 453) [email protected]

Frans van der Eerden (T + 31 20 71 71 697) [email protected]

Bart Bierman (T +31 20 71 71 870) [email protected]

Pim Heemskerk (T +31 20 71 71 576) [email protected]

Corporate Advisory

Select Committee reports back on companylaw changes

the criminalisation of breaches of certain directors' duties;new regulation of amalgamations and schemes of arrangement for companies subject to theTakeovers Code (Code); andthe requirement for New Zealand resident directors.

Proposed Amendments

19 Dec 2012

Significant company law changes moved one step closerlast week when the Commerce Committee (Committee)reported back on the Companies and Limited PartnershipsAmendment Bill (Bill).

The Bill proposes important amendments to the Companies Act 1993 (Companies Act)and the Limited Partnerships Act 2008 including:

Simpson Grierson made submissions on the draft Bill in September. In this FYI wesummarise our submissions and the Committee's response.

Criminalisation of directors' duties

The Bill proposes criminal liability for knowingly breaching directors' duties to act in goodfaith (section 131 Companies Act) and not to cause a substantial risk of serious loss tothe company's creditors (section 135 Companies Act).

Our submissions expressed concern that these amendments introduced criminalsanctions for activities which did not involve dishonesty. We questioned whether theapplication of criminal sanctions to breaches of directors' duties would generate sufficientsocial benefit (in terms of deterrence) to offset the costs inherent in the risk aversebehaviours that would result.

The Committee remains in favour of imposing criminal sanctions for egregious breaches

simpsongrierson.com/…/latest-publicat… 1/5

of directors' duties. It has, however, acknowledged the need to maintain a balancebetween encouraging positive entrepreneurial behaviour and imposing clear and effectivesanctions on behaviour that crosses a criminal threshold. The Committee has askedofficials to give consideration to the drafting of these new offences to ensure that balanceis obtained. We are looking forward to engaging with officials in this process.

Amalgamations and arrangements affecting Code companies

The Bill aims to ensure that shareholders of companies subject to the Code will not bedisadvantaged if a change of control is effected under the Companies Act. This aim isachieved by prohibiting Code companies from using long-form amalgamations underPart 13 of the Companies Act. The Bill also proposes more rigorous voting thresholdsand additional judicial oversight for court-approved schemes of arrangement,amalgamations, and compromises under Part 15 of the Companies Act.

We opposed these amendments, which we believe provide an unnecessary additionallayer of protection for minorities, the rights of whom are already adequately protected bythe Companies Act. The Committee has agreed with the provisions of the Bill asoriginally drafted, with some minor modifications, despite our reservations.

New Zealand resident directors

The Committee has rejected the concept of New Zealand resident agents for companieswithout New Zealand directors. The Bill originally required all companies to have a NewZealand resident director or agent. This would provide an identifiable individual in NewZealand who is connected to the company and could be questioned about the affairs ofthe company. We submitted that it would be difficult for companies to find an agent willingto take on the liability set out in the Bill (and that those companies which did find onewould be faced with significant costs).

The Committee has now recommended that the requirement to have a New Zealandagent be omitted. Instead it suggests that companies should be required to have at leastone director who lives in New Zealand, or who lives in a country with which New Zealandhas reciprocal enforcement arrangements. The list of "reciprocal enforcement" countrieshas not been provided yet.

Liability will now only be imposed on those persons who are, in practice, responsible forthe company's activities (the directors). This change has merit. However, if the list ofreciprocal enforcement countries does not include all of New Zealand's main tradingpartners, the Bill could discourage quite legitimate business activities.

Other legislative amendments

The Bill also includes additional requirements which were not included in the previous


Significant change

draft. Prior to incorporation, companies must provide information to the CompaniesRegistrar relating to their ultimate holding company. Companies and limited partnershipsmust also provide the date and place of birth of (respectively) directors and partners.

The Bill represents a significant change to fundamental aspects of New Zealand'scorporate landscape. We remain concerned that the proposed amendments maydamage New Zealand's deserved reputation as an easy and efficient place to conductbusiness. We will continue to press for appropriate changes before the Bill passes intolaw.

If you are concerned about the impact of the Bill upon your business or would like todiscuss any aspect of the new legislation, please contact us.


AUTHORS

Shelley CaveConsultant - Corporate & CommercialDDI: +64 9 977 5260Mobile: +64 21 660 090Email: [email protected]

Peter HintonPartner - Corporate & CommercialDDI: +64 9 977 5056Mobile: +64 21 446 866Email: [email protected]

Don HolborowPartner - Corporate & CommercialDDI: +64 4 924 3423Mobile: +64 29 924 3423Email: [email protected]

Kevin JaffePartner - Corporate & CommercialDDI: +64 9 977 5057Mobile: +64 21 987 430Email: [email protected]

Michael PollardPartner - Corporate & CommercialDDI: +64 9 977 5432Mobile: +64 21 400 852Email: [email protected]

Robert McLeanPartner - Corporate & CommercialDDI: +64 9 977 5077Mobile: +64 21 987 050Email: [email protected]

Stephen WardPartner - Corporate & CommercialDDI: +64 4 924 3418Mobile: +64 21 987 056Email: [email protected]

James HawesSenior Associate - Corporate & CommercialDDI: +64 9 977 5448Mobile: +64 21 826 994Email: [email protected]

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DECEMBER 2012 COMPETITION LAW ALERT

::: AUTHORS ::: Competition Laws In ASEAN: A South-East Asian Perspective

Introduction The last decade has witnessed the introduction of competition law legislation in several nations of the Association of Southeast Asian Nations (ASEAN). The introduction of a nation-wide competition policy and law by 2015 is a prerequisite for the ASEAN Member States in fulfilment of the goals of the 2007 ASEAN Economic Blueprint, to incubate a culture of fair business competition for enhanced regional economic performance. This article

1 aims

to give a broad overview of the competition law landscape in the ASEAN region. ASEAN trade and investment ASEAN is an economic group that comprises the 10 countries of Southeast Asia. ASEAN was established in 1967 and is one of the developing world’s most dynamic regional associations. ASEAN has been among the fastest growing regions of the world and accounts for approximately 6% of all world trade. ASEAN plays a significant role given its geostrategic importance due to the strategic location of its member countries, the large share of global trade that pass through the region and its dynamic growing population. Foreign direct investment into the ASEAN has been progressively rising and has created a single market of more than 600 million people, making it the world’s ninth largest economy. A more liberalised trade and investment regime in ASEAN will enhance their free economies and create a favorable trade and investment climate in the region. Competition laws and policies are considered vital to the process of ASEAN liberalisation, to ensure that the ASEAN markets are kept open to new entrants and that anti-competitive behaviour does not distort fair competition. It is with this view that the ASEAN member states are endeavouring to introduce a nation-wide competition policy and law by 2015. Competition law in ASEAN The ASEAN economies are diverse in terms of their economic development as well as their institutional and commercial policy environments. Nevertheless most of the ASEAN economies have liberalised and deregulated their economies in order for their economies to be attractive to foreign investment. Despite the variations in the economic, political and legal climate ASEAN nations have welcomed the introduction of competition laws in an attempt to promote cross border co-operation and openness in their economies. Another factor responsible for the introduction of competition law in ASEAN include the bilateral and regional trade agreements signed that are consistent with the WTO policies which attempt to limit anti-competitive practices. Competition law is also viewed as a means to reduce administrative and regulatory barriers and introduce regulatory predictability, which increase competitiveness in economies and promote economic growth.

Gerald SINGHAM Partner Corporate [email protected] +65 6885 3644

Soumya HARIHARAN Foreign Lawyer Corporate [email protected] +65 6885 3661

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The ASEAN economic community The ASEAN Member States (AMS) have committed in the ASEAN Economic Blueprint to introduce nation-wide competition policy and law by 2015. The objective is to ensure that a level-playing-field and a culture of fair business competition are fostered for enhanced regional and economic performance in the years to come. The 10 nation members of ASEAN have committed to implement an ASEAN Economic Community (AEC) by 2015. The AEC comprises of the following key characteristics:-

(1) a single market and production base;

(2) a highly competitive economic region;

(3) a region of equitable economic development; and

(4) a region fully integrated into the global economy. One of the objectives of the AEC is to create a competitive economic region which fosters a culture of fair competition. In 2007, to give furtherance to this objective, the ASEAN Economic Ministers endorsed the establishment of the ASEAN Experts Group on Competition (AEGC) as a regional forum to discuss and co-operate on competition law and policy. The AEGC has made several efforts in the introduction of competition policy and law, through conducting programs for capacity building and enforcing outreach priorities of the newly established competition authorities. Some of the actions that the AMS have agreed to are:-

(1) endeavor to introduce a competition policy in all ASEAN Member countries by 2015;

(2) establish a network of authorities or agencies responsible for

competition policy to serve as a forum for discussing and coordinating competition policies;

(3) encourage capacity building programs/activities for ASEAN Member

Countries in developing national competition policy; and

(4) develop a regional guideline on competition policy by 2010, based on country experiences and international best practices with the view of creating fair competition environment.

Recently at the Global Competition Review Law Leaders Asia-Pacific Conference held in March in Singapore Mr Va Bá Phu, the deputy general director of Vietnam’s Competition Authority suggested that the 10 AMS consider adopting an European Union (EU) style, collective competition policy to police mergers and cartels that cross its members’ borders. Mr Phu also mentioned that his vision for ASEAN also includes a director general for competition much like the EU has established within the European Commission. Although Mr Phu admitted that his vision was purely speculative and could not be implemented before 2015, he has raised his suggestion with the other AMS and believes that such a body could assist with the

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handling of both competition and trade remedies issues throughout the region. While the competition law enforcers within several AMS have stressed the importance of improved co-operation on cases and policy, Mr Phu is the first to suggest a regional competition enforcer, which theoretically could investigate and prosecute cross-border mergers and cartels. Snapshot of competition laws in ASEAN Only five AMS have generic competition law legislation, namely Malaysia, Thailand, Vietnam, Indonesia, and Singapore.

>>>> Malaysia

The Competition Act 2010 (Malaysian Competition Act) was passed by the Malaysian Parliament in April 2010 and came into force in January 2012. It prohibits anti-competitive activities and abuses of dominance. The Malaysian Competition Act however does not govern mergers and acquisitions. The Malaysian Competition Act applies to any commercial activity, both within Malaysia and transacted outside Malaysia, that has an effect on competition in any market in Malaysia. Commercial activity regulated under the Communications and Multimedia Act 1998 and the Energy Commission Act 2001 are, however, not subject to the Malaysian Competition Act.

>>>> Thailand

The Trade Competition Act 1999 (Thai Competition Act) is the principal legislation that governs anti-competitive agreements, abuse of dominance, mergers and other unfair trade practices in Thailand. The Thai Competition Act co-exists with several sectoral laws that regulate competition in certain industries. The Trade Competition Commission (TCC), which is a part of the Ministry of Commerce is the main regulator responsible for enforcing the Thai Competition Act. The TCC and the sectoral regulatory authorities may have concurrent or overlapping powers regarding anti-competitive conduct, mergers and monopolies. The relevant statutes or regulations are not always clear as to which authority will be the enforcing authority in case of an overlap. From a transactional perspective, it is necessary to review the powers of the relevant sectoral authorities and the TCC in order to determine which regulator has the power to regulate an action, conduct or agreement in a particular industry.

>>>> Vietnam

The Law of Competition (no 27-2-4-QH11) (Vietnam Competition Act) is the main legislation that governs competition law in Vietnam. The two regulators in charge of regulating competition are the Vietnam Competition Administration Department (VCAD) which falls under the Ministry of Industry and Trade, and the Vietnam Competition Council (VCC). The Vietnam Competition Act co-exists with a number of sectoral laws that regulate competition in certain industries. Thus in addition to the VCC and VCAD, the designated sectoral regulators also have concurrent jurisdiction in regulating certain sectors.

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>>>> Indonesia

Law No. 5 of 1999 on the Prohibition of Monopoly and Unfair Business Competition Practices (Indonesian Competition Act) was introduced in March 1999 and entered into force in the year 2000. The national competition agency known as Komisi Pengawas Persaingan Usaha (KPPU) regulates competition law in Indonesia. The Indonesian Competition Act applies to any individual or entity engaging in business or commercial activities.

>>>> Singapore

The Competition Act (Singapore Competition Act) is the main Act that regulates competition law in Singapore. The Act prohibits anti-competitive agreements, decisions and practices, the abuse of dominant position and mergers and acquisitions that substantially lessen competition. The Competition Commission of Singapore (CCS) is the main competition law regulator in Singapore and is a statutory board under the Ministry of Trade and Industry. CCS has also released 13 sets of guidelines which provide useful explanations as to how CCS interprets, administers and enforces the Singapore Competition Act. It is useful to note that although CCS is the only regulator which administers and enforces the Singapore Competition Act, the sectoral laws are administered and enforced by sectoral regulators. CCS as a young competition agency has been active in its advocacy efforts to provide a robust and enlightened competition regime in Singapore. The Center for European Law and Economics recently conducted a survey to evaluate and compare the merger control systems in various jurisdictions existing worldwide. The Merger Control Index 2012 is based on the annual survey obtained from leading merger control experts. This survey also ranks CCS under various categories as a part of the review process. Singapore has obtained consistently high rankings throughout the various categories, despite being a young competition law regulator in comparison with some other jurisdictions. Some of the important observations regarding Singapore include:- (1) Leading position in peer group comparison: Singapore enjoys the

first position in the peer group comparison among the non

Organisation for Economic Co-operation and Development

(“OECD”) nations.

(2) Dynamically complete: Singapore also ranks well among those

countries that take into account dynamic factors such as entry

and innovation in the review of the proposed merger.

(3) Absence of bias: Singapore ranks amongst those countries that

do not have a national bias, i.e. those agencies that are not more

lenient toward companies of domestic origin in the merger control

assessment.

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(4) Reliable: Singapore has been well ranked among those jurisdictions

where the margin for making an error is almost negligible in clearing

mergers.

(5) Constantly improving: The CCS has been regarded as a merger

control agency that has made significant improvements with

regards to institutional efficiency.

Among the other AMS, Cambodia and Lao People’s Democratic Republic (Lao PDR) plan to introduce their competition legislation soon, whereas Myanmar, Philippines and Brunei Darussalam are yet to enact a generic competition law, as they tend to rely on sector specific regulations to achieve competition policy objectives in their domestic markets.

>>>> Cambodia

There is no generic competition law in force in Cambodia. The telecommunications sector and the banking industry are regulated by the National Information Communications Technology Development Authority and the National Bank of Cambodia.

>>>> Lao PDR

Lao PDR does not have a generic competition law but competition law is regulated by Decree 15/PMO on Trade Competition (Lao Decree). The Lao Decree generally applies to the sale of goods and services in business activities by business persons or business entities. It is important to note that the Lao Decree does not make a distinction between national and foreign business persons. The Lao Decree prohibits specific restrictive business practices such as mergers and acquisition leading to monopolisation, elimination of other business entities, collusion and arrangements and cartels with foreign business persons. The Trade Competition Commission (TCC) within the Ministry of Industry and Commerce will be responsible for the enforcement of competition law. The TCC has however not yet been established.

>>>> Myanmar

There is no generic competition law in Myanmar.

>>>> Philippines

The Philippines does not have a generic competition law, however the main sources of competition-related provisions in the Philippines are:-

(1) article XII of the 1987 Constitution;

(2) article 186 of the Revised Penal Code (Act No. 3815);

(3) article 28 of the the New Civil Code (R.A. No 386); and

(4) the Act to Prohibit Monopolies and Combinations in Restraint of

Trade (Act No 3247).

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Since competition law is currently implemented at the sectoral level, enforcement of competition law/statutes is vested with different government agencies. Some of the enforcement agencies are industry-specific.

>>>> Brunei Darussalam

Brunei Darussalam does not have generic legislation which regulates competition law but implements its competition policy on a sectoral basis. Competition-related provisions have been implemented in the telecommunications sector under the Authority for Info-communications Technology Industry of Brunei Darussalam Order 2001 (the AITI Order) and the Telecommunications Order 2001. Both the AITI Order and the Telecommunications Order apply to all commercial entities that have obtained a licence to operate as a service or infrastructure provider in the telecommunications industry.

Looking forward The existing generic competition laws in the first five ASEAN nations reflect their respective approaches to competition law and policy to meet anti-competitive practices in their domestic markets. Even among these nations, competition law regulation is continuously evolving, and constantly fine-tuned with improvements and reforms. In an increasingly globalised world, co-operation and information sharing among the ASEAN competition law regulators will assist such nations to better understand regulatory issues and best practices. The ASEAN platform thus provides its member countries with a compelling and conducive basis for cooperating in capacity building and activities in the regulation of competition law and policy. The coming years will see further regional efforts in building competition-related policy capabilities and best practices within the ASEAN community. The AEC is the natural progression for the ASEAN nations to create a cohesive ASEAN market, and to work towards the transformation of ASEAN into a single market that is highly competitive and fully integrated with the global community by 2015. Competition law and policy, being one of the important priorities in the implementation of the AEC Blueprint, will see the remaining ASEAN nations strive towards meeting the goals of the 2015 goal post. Companies active in the ASEAN region would do well to consider the dynamic competition law environment within and among the ASEAN nations, and ensure that their business practices are compliant with the respective different national competition and sectoral laws.

This article is for general information purposes only. Its contents are not intended to be legal or professional advice and are not a substitute for specific advice relating to particular circumstances. Rodyk & Davidson LLP does not accept responsibility for any loss or damage arising from any reliance on the contents of this article. If you require specific advice or have any questions, please contact the author(s) or our Editor.

Editor Claire WONG | [email protected] | +65 6885 3703

© Rodyk & Davidson LLP 2012. Limited Liability Partnership Registration No. T07LL0439G.

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1 This article was published in the International Antitrust Committee: The Newsletter (Summer 2012) by the ABA Section of International Law.

This article is for general information purposes only. Its contents are not intended to be legal or professional advice and are not a substitute for specific advice relating to particular circumstances. Rodyk & Davidson LLP does not accept responsibility for any loss or damage arising from any reliance on the contents of this article. If you require specific advice or have any questions, please contact the author(s) or our Editor.

© Rodyk & Davidson LLP 2012. Limited Liability Partnership Registration No. T07LL0439G.

This article was also published in the Rodyk Reporter December 2012 issue

Perennial protests, industrial action and the risk to the security of energy supply By Happy Masondo, director

As the country continues to count the costs of widespread industrial action including the loss of lives of mine workers and members of the security police, the long term socio-economic effects are incalculable.

LegaL Brief | december 2012 JAnuAry 2013

Just as the transport sector reached a much

awaited resolution to the impasse between

the work force and management, strike

action in the coal industry was mooted which

prompted the minister of Public enterprises

to state: “I am deeply concerned about the

industrial action that has kicked off in the coal

sector”.

At the time of the resolution of the transport

strike action, eskom had already “lost a

day’s supply of coal”. This befalls the energy

sector during a time when the security of

power supply remains tenuous at best. “The

truth that the wave of strikes is everyone’s

problem, not just the mining industry’s, has

come home in the country’s recent sovereign

debt downgrades, which raise costs for

eskom, the municipalities and others, and in

the weakening of the rand, which heightens

inflationary pressures”. It therefore seems

ill-advised for lobby groups to be protesting

against all attempts at augmenting the less

than secure supply of energy in South Africa.

endless fractured debates

during September 2012, the South African

cabinet lifted the moratorium on the use

of hydraulic fracturing following a period

of fourteen months during which the

department of mineral resources (dmr),

through the minister, Susan Shabangu, had

imposed a moratorium on fracking in the

ecologically sensitive Karoo region. during the

period of the moratorium, the dmr is said to

have held consultations with all interested

stakeholders. At the same time a task team

was established to investigate the feasibility

of hydraulic fracturing, its impact on the

environment and whether it would in fact

create new job opportunities.

environmental groups such as the Treasure

Karoo Action Group and Greenpeace

expressed their deep felt “disappointment with

the way the government has handled this, the

secrecy around the technical task team that

was appointed, the lack of consultation and

the fact that nobody has seen the report”.4

1 “coal Strike Worries Gigaba”, Fin24, 12 October 20122 “Ibid”3 “mine the Gap”, Financial mail, 12 October 20124 “Fracking Fallout: SA Split As moratorium dropped”, cape Argus, 8 September 2012

Without expressing a view on the substance

of the arguments expressed by the

environmental groups, it would appear

that other than an assertion that hydraulic

fracturing will pollute scarce water resources,

they do not appear to offer any solutions to

the impending shortage of energy supply.

The proponents of hydraulic fracturing state

that the Karoo has the largest untapped

deposits in the world and that exploring the

Karoo for commercially feasible shale gas “has

been billed as a possible answer to easing

coal-hungry South Africa’s energy needs as

it moves from the heavy polluting electricity

production towards greener sources”.5

Shell is one of the companies hoping that

the exploration of the shale gas will produce

commercially viable quantities of gas in an

environmentally safe way to provide security

of supply of energy. Shell has also raised the

prospect of stimulating job creation across

the economy and add to the fiscus through

increased taxes.

At the core of the arguments by the

proponents of hydraulic fracturing is the

view that this process will be carried out with

extreme caution. For a period of between

two to nine years and at an estimated cost

of uS$200 million, an enormous amount

of work has to be undertaken before the

sinking of any exploration wells. In the first

instance an environmental impact assessment

and an appropriate consultation process

with communities in and around the Karoo

area have to precede any exploration of

commercially feasible shale gas.

The debate between the proponents and

opponents of hydraulic fracturing is not in the

least helpful if it does not provide options on

how the country is to deal with the shortage

of energy in the country. A failure to provide

viable solutions to the energy crisis in the

country is akin to fiddling while the country

goes into complete darkness. The energy crisis

calls for balanced debates.

Could nuclear energy not be an option?

The nuclear energy corporation of South

Africa (necsa) together with the national

nuclear regulator (nnr) have not been

spared from the wave of protest action

besetting South Africa. disgruntled Lanseria

residents presented a petition at a public

hearing meeting of the nnr and the necsa

to stop the plans of the construction of a

nuclear contamination smelter in the area. The

public hearing was convened by the nnr and

necsa to obtain the views of the community

on the planned construction. The residents of

Lanseria have asserted that they “have done

their research and have concluded that this

smelter will harm us”.6

earthlife Africa has also added its voice to the

objections of the Lanseria residents by saying

that the smelter would cause far reaching

health hazards even beyond South Africa’s

borders. Together with earthhlife Africa other

activists also made both oral and written

submissions to the nnr. The essence of the

submissions by the environmental activists

is that exposure to radiation is growing

exponentially and the proposed smelter

would add to the radiation levels in an already

contaminated environment.

necsa points out that the fears of radiation

needed to be presented to the nnr in a proper

context and thus stated that the objections

were noted but that nnr still had to take into

account all scientific information associated

with nuclear waste. The representatives of

necsa said the smelter was planned for the

disposal of the voluminous contaminated

waste at Pelindaba. According to necsa, the

disposal of the contaminated waste would

take the form of melting down, “which means

separating metals - steel and aluminum - from

the uranium”.7

necsa’s plans include the selling off of the

decontaminated metal for re-use, while the

uranium is then concentrated in a controlled

form which can be disposed of by necsa.

According to necsa the melting down process

would be conducted in an efficient and

environmentally friendly manner. necsa finds

it incredulous that the environmental activists

consider any and all radiation to be bad. necsa

concludes that “we need to make a proper

risk-benefit analysis rather than being selective

with particular scare mongering tactics”. It

is incumbent upon all stakeholders not to

lose sight of the bigger picture of security

of energy supply before they attack each

other’s ideologies. even if stakeholders do not

ultimately agree, both sides should present

balanced views. They should not sow panic.

Conclusion

The country is going through a period of

socio-economic volatility, mistrust and

combative relationships. The socio economic

and political landscape is more than just

about industrial strike action in the mining

and transport industries. The upheavals

experienced in South Africa have now

impacted on the country’s ability to borrow

money following the sovereign downgrades by

rating agencies. These types of consequences

will invariably sow panic and increase

volatility.

The country’s security of supply is at extreme

risk where eskom, the department of energy,

amongst other entities, will find it that much

harder to borrow large amounts of money

for the various infrastructure programmes

planned for in the Integrated resource Plan.

South Africa is already in an energy crisis of

great proportions. The country does not need

any more extraneous factors to exacerbate

the energy crisis.

5 “South Africa Lifts Freeze on Shale Gas exploration”, The Peninsula, 7 September 2012.6 “Lanseria resists r20m nuke smelter”, news 24, 12 October 20127 “Ibid”8 “Ibid”

TLG_JN5389

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About the Author

Happy Masondo

Title: Director office: JohannesburgDirect line: +27 (0)11 535 8264 Fax: +27 (0)11 535 8664 Switchboard: +27 (0)11 535 8000email: [email protected]

happy masondo has been a director of Werksmans Attorneys since 2009. She specialises in commercial law with a particular emphasis on contractual, statutory and regulatory matters in the construction, mining, power and technology sectors. She has extensive experience in drafting agreements specific to these sectors. These range from power purchase, connection, distribution and transmission agreements to agreements for complex construction projects and technology related agreements including those related to IT outsourcing. happy has a particular affinity for the corporate governance and procurement aspects of her work. She has bA, LLb and LLm degrees from the university of the Witwatersrand and an LLm from duke university in the uSA.

Taiwan Ministry of the Interior Plans to Open Taiwan'sConstruction Industry to Mainland Chinese Investment◎Yi-Jiun Su/Yi-Li Kuo

According to Letter No. Jin-Guan-Jheng-Cyuan-Zih 0990067043 issued by the TaiwanFinancial Supervisory Commission, dated 27 December 2010, (mainland) Chinese investorsare banned from making investments in the real estate development, construction, or realestate brokerage industry. But the Taiwan Ministry of the Interior is now contemplating andproposing opening Taiwan's construction industry to Chinese investment. However, to minimizethe deregulation's impact on the local construction industry, it is proposed that at the initialstage, Chinese investments should not exceed 10% of the total outstanding shares issued bythe construction company that is the investment target, and Chinese investors are not allowedto operate any construction company.

Meanwhile, Taiwanese investment in China's real estate development industry is subject tocertain restrictions, and Taiwanese investment in China's infrastructure construction isprohibited. However, undertaking contracts for building construction or other civil engineeringprojects is permissible.

Copyright © Lee and Li, Attorneys-at-Law, All rights reserved.

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LNG UPDATE - DECEMBER 12, 2012

Department of Energy Releases LNG ExportStudy for Public Comment; Processing of Non-FTA Export Applications to ResumeOn December 5, 2012, the Department of Energy’s Office of Fossil Energy (“DOE/FE”) released a much-anticipated study prepared by NERA Economic Consulting (“NERA”) on the potential macroeconomic impacts ofliquefied natural gas (“LNG”) exports on the U.S. economy and the feasibility of exporting a range of quantities ofLNG to the global market. DOE also announced that it would resume next year processing the 15 applicationscurrently pending before it for authorization to export LNG from the lower-48 states to non-Free Trade Agreement(“Non-FTA”) countries.1 DOE/FE had halted its review of Non-FTA applications in late 2011 to commission studieson the cumulative impact of granting new export authorizations. Together with an earlier study prepared by theU.S. Energy Information Administration (“EIA”) on how specified scenarios of increased LNG exports could affectdomestic energy markets, the NERA study will be used by DOE/FE to inform its decision-making on pending andfuture Non-FTA applications. The NERA study concludes that the U.S. is projected to gain net economic benefits from allowing LNG exportsacross all scenarios examined, which included exports of 6 Bcf/day, 12 Bcf/day, and unconstrained LNG exports.According to NERA: “The economic impacts of different limits on LNG exports were examined under each of themarket scenarios. Export limits were set at levels that ranged from zero to unlimited in each of the scenarios.Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports.Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNGexports increased. In particular, scenarios with unlimited exports always had higher net economic benefits thancorresponding cases with limited exports.”

DOE/FE has made both the NERA study and the EIA study (together called the “2012 LNG Export Study”) part ofthe administrative record for each of the 15 pending Non-FTA application proceedings, and invites public commenton both studies, with comments received also becoming part of the record for each pending proceeding. Thedeadline for filing initial comments is January 24, 2013, and reply comments are due February 25, 2013.Commenters are instructed to limit their comments to the factors addressed by the reports, including domesticenergy consumption, production and prices, and macroeconomic factors such as gross domestic product, welfareanalysis, consumption, U.S. economic sector analysis, and LNG export feasibility analysis. Commenters shouldbe aware that the findings and conclusions of the EIA and NERA studies have not been adopted by DOE/FE, butwill be considered by DOE in making its determination about whether a proposed export application satisfies theNatural Gas Act’s public interest standard.2

DOE/FE will resume the processing of the pending applications after conducting its own evaluation of the studiesand the public comments received. DOE/FE has confirmed that it will first act upon those applications for whichthe Federal Energy Regulatory Commission pre-filing environmental review process has commenced, in the orderwhich DOE/FE received the applications. DOE/FE will then act upon the rest of the pending applications and anynew applications received. The order of precedence for pending applications is:

1. Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC2. Lake Charles Exports, LLC3. Dominion Cove Point LNG, LP4. Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC5. Cameron LNG, LLC6. Jordan Cove Energy Project, L.P.7. LNG Development Company, LLC (d/b/a Oregon LNG)8. Cheniere Marketing, LLC 9. Excelerate Liquefaction Solutions I, LLC10. Carib Energy (USA) LLC11. Gulf Coast LNG Export, LLC12. Southern LNG Company, L.L.C.

bakerbotts.com/…/20121212LNG-Dep… 1/2

13. Gulf LNG Liquefaction Company, LLC14. CE FLNG, LLC15. Golden Pass Products LLC To comment on the 2012 LNG Export Study or ask questions, contact the professionals identified on the sidebar. 1 Non-FTA countries are those countries with which the U.S. does not have a free trade agreement requiring national treatment for trade innatural gas. DOE/FE reviews Non-FTA applications on their individual merits to determine whether they satisfy the Natural Gas Act’s publicinterest standard. By comparison, the Natural Gas Act deems to be in the public interest authorizations for exports to countries that do havesuch an agreement with the U.S. The U.S. currently has such free trade agreements with 18 countries; however, the only such countries thatcurrently import significant quantities of LNG are South Korea, Singapore, Chile and the Dominican Republic. The processing ofapplications for FTA authorizations was not suspended and is not subject to the procedures applicable to Non-FTA applications discussedherein.2 Issues considered by DOE/FE under the Natural Gas Act’s public interest standard typically include the extent of the domestic need for thenatural gas proposed to be exported, national security concerns about domestic gas supply, promotion of free trade and competition, andenvironmental impacts. DOE/FE may also consider any other factor deemed relevant with respect to the application before it. Accordingly,DOE/FE’s public interest determination may encompass more than just the subjects addressed by the 2012 LNG Export Study.

The materials in this document are made available by Baker Botts L.L.P. for informational purposes only and are not legal advice. The transmission and receipt of information contained inthe document do not form or constitute an attorney-client relationship. If these materials are inconsistent with the rules governing attorney communications in a particular jurisdiction, andthe materials result in a client contact in such jurisdiction, Baker Botts may be prohibited from assuming representation of the client contact.

Under the rules of certain jurisdictions, this communication may constitute ‘Attorney Advertising’.

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© 2012 Baker Botts L.L.P. All Rights Reserved./2

Economic Sanctions Alert 7 January 2013

See note below about Hogan Lovells

Iran sanctions developments The United States and other countries continue to impose new sanctions against Iran. On 2 January 2013, the President signed into law the National Defense Authorization Act of 2013, which contains a new Iran sanctions measure called “The Iran Freedom and Counter-Proliferation Act,” expanding the extra-territorial scope of the U.S. sanctions. On 26 December 2012, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule amending the Iranian Transactions and Sanctions Regulations (ITSR) to implement certain provisions of Executive Orders from 30 July and 9 October, as well as certain provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA). The European Union (EU) also has implemented new sanctions against Iran, expanding the scope of EU restrictions. This alert summarizes key developments under U.S. sanctions (EU restrictions will be outlined in a separate alert). Global companies must continue to assess their international operations in light of increasingly broad sanctions against Iran. 1. New Iran Sanctions under the Iran Freedom and Counter-Proliferation Act The new sanctions represent a further expansion of the extra-territorial measures that the U.S. government has been imposing under the Iran Sanctions Act, as amended by CISADA and more recently the ITRA, as well as the measures imposed by section 1245 of NDAA from 31 December 2011 and several Executive Orders issued by the President. The new measures essentially target non-U.S. companies (foreign owned, with no U.S. nexus) by expanding the types expanding the types of sanctionable activities that involve Iran. A number of the new measures will become effective as of 1 July 2013 (i.e., within 180 days from the enactment). We note that non-U.S. entities that are owned or controlled by U.S. persons already are subject to the full set of restrictions under the ITSR as of 9 October 2012 so these new sanctions do not represent additional restrictions on U.S. companies and their non-U.S. subsidiaries. Some of the provisions, however, could have a significant impact on their non-U.S. competitors. In summary, the new sanctions:

Contacts

Jeanne Archibald Partner, Washington, D.C. [email protected] +1 202 637 5740

Anthony V. Capobianco Partner, Washington, D.C. [email protected] +1 202 637 2568

Lourdes CatrainPartner, [email protected]+32 2 505 0933

Aleksandar Dukic Partner, Washington, D.C.

[email protected]

+1 202 637 5466

Ajay Kuntamukkala Partner, Washington, D.C.

[email protected]

+1 202 637 5552

Louise LambPartner, London

[email protected]

+44 20 7296 5770

Target Iran’s energy, ports, shipping, and ship-building sectors as entities of proliferation concern and authorize the President to designate persons and entities who operate a port in Iran or are part of those sectors, which would trigger the blocking of their property and their inclusion on OFAC’s list of Specially Designated Nationals and Blocked Persons (SDNs).

•

Target persons or entities who provide significant financial, material, technological or other support, or goods/services in support of any Iranian SDNs or any person determined to operate a port or to be a part of the energy, shipping, or shipbuilding sectors in Iran.

•

Impose restrictions on persons determined to be selling, supplying, or transferring to or from Iran certain commodities and materials, including those relevant for Iran’s ship-building and nuclear sectors such as graphite, aluminum, steel, and coal, as well as software for integrating industrial processes (the restrictions extend to financial institutions determined to be conducting or facilitating a significant financial transaction for the sale, supply, or transfer of such materials).

•

Target those who provide underwriting services, insurance or reinsurance, as of 1 July 2013, to persons or entities (i) engaging in any activity with respect to Iran for which sanctions have been imposed under U.S. law, either under the ITSR or the various extra-territorial measures; (ii) who are Iranian SDNs; or (iii) with respect to which sanctions have been imposed for engaging in activities targeted under this new legislation (e.g., such as operation of a port or activities in the energy, shipping or shipbuilding sectors in Iran), with a certain exception (i.e., “safe harbor”) for those who exercise due diligence to ensure that they do not enter into a contract to provide insurance/reinsurance for a prohibited activity or to a prohibited person. As a result of this very broad measure, which essentially makes non-U.S. insurers/reinsurers subject to the same restrictions as U.S. insurers/reinsurers, the insurance/reinsurance industry globally will be subject to extensive U.S. sanctions against Iran and could result in exposure for those non-U.S. insurers/reinsurers that are determined by the U.S. government to have engaged in a sanctionable activity. Essentially, non-U.S. insurers/reinsurers will be prohibited from providing coverage for any Iran-related activities that are prohibited under the ITSR, resulting in a much broader set of restrictions that apply to non-U.S. insurer/reinsurers compared to their customers (e.g., non-U.S. insureds). By targeting the provision of insurance/reinsurance by non-U.S. entities, the U.S. government is trying to further restrict Iran’s ability to conduct commercial activities globally because Iranian entities should find it increasingly difficult to obtain insurance from non-U.S. insurers, as they could face exposure under U.S. law for activities as of 1 July 2013.

•

Impose restrictions on non-U.S. financial institutions that facilitate a significant financial transaction on behalf of an Iranian SDN, irrespective of the currency at issue. This is a significant expansion of the reach of U.S. sanctions as

•

Robert D. Kyle Partner, Washington, D.C.

[email protected]

+1 202 637 5494

Beth Peters Partner, Washington, D.C.

[email protected]

+1 202 637 5837

Stephen F. Propst Partner, Washington, D.C.

[email protected]

+1 202 637 5894

T. Clark Weymouth

Partner, Washington, D.C.

[email protected]

+1 202 637 8633

H.P. Goldfield Senior International Advisor,

Washington, D.C.

[email protected]

+1 202 637 580

Eric B. GillmanAssociate, Washington, D.C.

[email protected]

+1 202 637 4659

foreign banks previously were not subject to restrictions under the ITSR on dealings with SDNs when no U.S. currency was involved. Designate the Islamic Republic of Iran Broadcasting (IRIB) and its President as human rights abusers for their broadcasting of forced televised confessions and “show” trials, resulting in the blocking of their assets and preventing other entities from doing business with the IRIB.

•

Require the President to identify those who are engaged in the diversion of goods intended for the people of Iran (including misappropriation of proceeds from the sale or resale of such goods) and impose sanctions against such designated persons/entities.

•

We note that new sanctions provide for a “humanitarian exception” from the aforementioned restrictions on dealings in property or interests in property of designated Iranian port operators or entities designated for engaging in shipping and other activities targeted by these new sanctions. That exception relates to any person who conducts or facilitates a transaction for the sale of agricultural commodities, food, medicine or medical devices to Iran or for the provision of humanitarian assistance to the people of Iran. As such, U.S. companies will be able to deal with designated port operators and/or shipping companies in Iran in connection with shipments of food, medicine or medical devices authorized pursuant to OFAC’s specific or general license. 2. Amendments to OFAC Regulations and New General Licenses OFAC amended the ITSR on 26 December 2012. Of most interest are the provisions that relate to the implementation of section 218 of ITRA and section 4 of Executive Order 13628 that extended, as of 9 October 2012, the broad set of Iran-related restrictions to non-U.S. entities that are owned or controlled by U.S. persons. As previously reported, OFAC reissued the Iran regulations in their entirety on 22 October 2012 (for more information, please see our alert: New OFAC regulations on Iran.) Specifically, OFAC amendments as of 26 December 2012:

Include a new “wind down” general license (section 560.555) authorizing a non-U.S. entity owned or controlled by a U.S. person to engage in “all transactions ordinarily incident and necessary to the winding-down of transactions” that were prohibited for such non-U.S. entities as of 9 October 2012, with some conditions/limitations as follows:

•

This general license is limited to the activities during the 9 October 2012—8 March 2013 period.

◦

This general license does not authorize transactions that involve a U.S. person or occur in the United States.

◦

Reexports of goods, software or technology subject to U.S. law are not authorized by this general license (i.e., any transaction prohibited by section 560.205 for foreign entities dealing in items subject to U.S. law is

◦

not covered by this general license). Only Iranian financial institutions that are blocked solely under ITSR can be involved in transactions conducted pursuant to this general license (Iranian banks targeted under different sanctions programs, for example those banks with (NPWMD) tag on the SDN list, cannot be involved in the activities covered by this general license).

◦

Include a new general license (section 560.556) that equalizes the legal position of a U.S. person and a non-U.S. entity owned or controlled by a U.S. person (e.g., a U.S. company’s foreign-incorporated subsidiary) for purposes of eligibility for reliance on other general licenses that exist in the ITSR. Specifically, this general license authorizes a non-U.S. entity owned or controlled by a U.S. person to engage in transactions authorized by general licenses in the ITSR that are available to U.S. persons, subject to the same conditions and requirements that apply to the U.S. persons as set forth in a particular general license. For example, a non-U.S. subsidiary that wants to sell food or certain medical supplies to Iran could rely on the general license for exportation of such goods that is available for U.S. persons, provided that the non-U.S. subsidiary complies with all the conditions of such general license, including payment terms and other requirements set forth in the general license.

•

Do not expand on the definition from sec. 218 of ITRA regarding what constitutes a foreign entity “owned or controlled” by a U.S. person (the regulations mirror the statutory definition).

•

Clarify that if a transaction is exempt under the ITSR for a U.S. person, the same exemption would be available to a non-U.S. entity owned or controlled by a U.S. person provided that such non-U.S. entity satisfies all the requirements of the exemption (for example, a non-U.S. subsidiary could rely on the travel exemption or informational materials exemption to the same extent as the exemption applies to a U.S. parent company). U.S. Securities and Exchange Commission (SEC) has yet to confirm that exemptions under the ITSR will be considered as “specific authorization” for purposes of the carve-out from mandatory reporting under subsection (r)(1)(D)(iii) (SEC has confirmed that general licenses in the ITSR and specific licenses issued by OFAC are considered as “specific authorization for purposes of that reporting carve-out).

•

Clarify that the ITRA’s exemption for “certain natural gas projects” relates to the Shah Deniz natural gas field in the Azerbaijan sector of the Caspian Sea and related pipeline projects to bring that gas from Azerbaijan to Turkey and Europe

•

As a result, non-U.S. entities owned or controlled by a U.S. person are not prohibited from engaging in activities related to the Shan Deniz project.

◦

However, OFAC noted in the preamble to the rule that this exemption will not apply in the event that the

◦

President makes a certification to Congress regarding the increase of Iranian entity’s share of the project or that an Iranian entity has assumed an operational role in the project.

We note that the new “wind down” general license will practically mean that certain authorized activities by non-U.S. subsidiaries with the Government of Iran (or entities owned/controlled by it) that take place during the 9 October 2012—8 March 2013 period should not trigger the SEC reporting requirement. Specifically, in light of SEC’s interpretation that includes OFAC’s general licenses as “specific authorization” by a government agency for purposes of an exemption from reporting under subpart (r)(1)(D)(iii) (for activities involving the Government of Iran or entities owned/controlled by it), certain activities that are eligible for and comply with the “wind down” general license also should not trigger the SEC reporting requirements, even though they may be performed by a non-U.S. affiliate of the issuer. However, please note that activities undertaken by non-U.S. subsidiaries prior to 9 October 2012 could still trigger the SEC reporting requirements, as well as activities undertaken after 9 October 2012 that trigger the reporting requirement under a different part of section 219 (i.e., beyond subpart (1)(D)(iii)), even if they are performed under the “wind down” general license or a specific license issued by OFAC. Please let us know if you have any questions regarding these new developments. About Hogan Lovells Hogan Lovells is an international legal practice that includes Hogan Lovells US LLP and Hogan Lovells International LLP. For more information, see www.hoganlovells.com

Disclaimer This publication is for information only. It is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. So that we can send you this email and other marketing material we believe may interest you, we keep your email address and other information supplied by you in a database. The database is accessible by all Hogan Lovells offices, which includes offices both inside and outside the European Economic Area (EEA). The level of protection for personal data outside the EEA may not be as comprehensive as within the EEA.

To stop receiving email communications from us please click here. © Hogan Lovells 2013. All rights reserved. Attorney advertising.

Government Contracts AdvisoryJANUARY 3, 2013

SBA Final Rule Creates More SBIR And STTROpportunities for Businesses Partially Owned byVenture Capital Companies, Hedge Funds andPrivate Equity Firms

The Small Business Administration (“SBA”) recently issued a final rule to amend itsregulations governing eligibility for the Small Business Innovation Research (“SBIR”)and Small Business Technology Transfer (“STTR”) programs. This rule implementsprovisions of the National Defense Authorization Act for Fiscal Year 2012. Specifically,the rule revises the affiliation rules for participants in the SBIR and STTR programs andpermits participation in the SBIR program by concerns that are majority-owned bymultiple venture capital operating companies, private equity firms or hedge funds. Therule also makes changes to the regulations with respect to size protests. See 77 Fed.Reg. 76215, Dec. 27, 2012. This final rule makes significant changes to the proposedrule previously issued by the SBA. See 77 Fed Reg. 28520-30, May 15, 2012.

The final rule allows concerns that are majority-owned by multiple venture capitaloperating companies, hedge funds or private equity firms (“investment companies”) toparticipate in the SBIR program, as long as no single investment company owns morethan 50 percent of the concern. In order to be eligible, the investment company must

have a place of business in the U.S. and be incorporated in the U.S. Furthermore, concerns that are majority-owned bymultiple investment companies must register with SBA on or before the date they submit a response to an SBIRsolicitation and these concerns must indicate in their SBIR proposals that they have completed this registration. Unlikethe proposed rule, however, the final rule does not allow concerns that are majority-owned by multiple investmentcompanies to participate in the STTR program.

The final rule modifies the affiliation rules solely for the SBIR and STTR programs. Currently, investment companieswould not be eligible to participate in the SBIR program, because the concern would be considered to be affiliated withnot only the investment companies, but also the other companies owned by these investment companies. SBA’s finalrule provides that a concern is an affiliate of an individual, concern, or entity that owns or has the power to control morethan 50 percent of the concern’s voting stock. However, SBA may find a concern an affiliate of an individual, concern, orentity that owns or has the power to control 40 percent or more of the voting equity, based upon the totality of thecircumstances. If no individual, concern, or entity is found in control, SBA will deem the Board of Directors to be incontrol of the concern.

With respect to size protests for SBIR and STTR contracts, the final rule amends the regulations to state that SBA or thecontracting officer/funding agreement officer may file a protest at any time, as long as it is not premature. SBA will notaccept a size protest until the awardee has been selected and notified of the award, which is consistent with SBA’scurrent practice for its contracting programs. This rule is effective on January 28, 2013.

Contacts

For additional information,please contact:

Richard B. Oliver213.243.6169

Augustin D. Orozco213.243.6152

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McKenna Long & Aldridge LLP (MLA) is an international law firm with more than 575 attorneys and public policy advisors in 13 offices and 11 markets.The firm is uniquely positioned at the intersection of law, business and government, representing clients in the areas of complex litigation, corporate law,energy, environment, finance, government contracts, health care, infrastructure, insurance, intellectual property, private client services, public policy, real

estate, and technology. To further explore the firm and its services, go to mckennalong.com.

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© 2013 MCKENNA LONG & ALDRIDGE LLP, 303 PEACHTREE STREET NE, ATLANTA, GA, 30308. All Rights Reserved.

*This Advisory is for informational purposes only and does not constitute specific legal advice or opinions. Such advice and opinions are provided by the firm only uponengagement with respect to specific factual situations. This communication is considered Attorney Advertising.

Mobile app developers faced new scrutiny atstate and federal levels this December, withapp makers removing apps and taking actionto respond. On December 6, 2012, CaliforniaAttorney General Kamala Harris filed suitagainst Delta Air Lines after its failure toinclude a privacy policy within its mobileapp.1 A few days later, the Federal TradeCommission (FTC) issued a report titled“Mobile Apps for Kids: Disclosures Still NotMaking the Grade,” which concluded thatindustry has made little or no progress inimproving privacy disclosures in children’smobile apps since the FTC issued its lastreport on this topic in February 2012.2 Thereport also signaled that the FTC haslaunched multiple non-public investigations to“address the gaps between companypractices and disclosures” and determinewhether these entities in the mobile appmarketplace have violated the Children’sOnline Privacy Protection Act (COPPA)3 orengaged in unfair or deceptive trade practicesin violation of the FTC Act.4 Thesedevelopments parallel the growth of mobiledevices generally and make clear the

importance of addressing privacyconsiderations in the mobile space.

In the Delta complaint, Attorney GeneralHarris alleged that Delta’s “Fly Delta” appviolated the California Online PrivacyProtection Act (CalOPPA)5 and California’sUnfair Competition Law6 by collectingpersonally identifiable information7 withoutan applicable privacy policy. CalOPPA requiresoperators of commercial websites to“conspicuously” post on their websites, andoperators of online services to makereasonably accessible, a privacy policy thatinforms consumers about the categories ofpersonal information collected by theoperators and the categories of third partieswith which the data is shared. California’sUnfair Competition Law prohibits individualsand entities from committing unlawful, unfair,or fraudulent business acts and practices.Attorney General Harris has taken theposition that CalOPPA applies to mobile apps,and that a privacy policy for a mobile app isnot reasonably accessible to consumers underthat statute if it is not available to consumers

within the app itself.8 The complaint againstDelta alleged that Delta did not make aprivacy policy available to consumers withinthe “Fly Delta” app and, furthermore, thatDelta’s website privacy policy neithermentioned the “Fly Delta” app nor disclosedseveral types of personally identifiableinformation that it collected.9 AttorneyGeneral Harris has asserted that violations ofCalOPPA may result in penalties of up to$2,500 per app download.

The FTC’s survey of children’s apps for itsDecember 2012 FTC staff report examined thesubstance of privacy disclosures, movingbeyond its prior report, which focused moreon the presence of disclosures. This newqualitative emphasis likely brings greaterchallenges for early-stage companies withlimited resources.

The FTC expressed concern that a majority ofsurveyed apps shared children’s information(including device IDs) with third parties, orincluded interactive features such asadvertising, the ability to make in-app

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WSGR ALERT

DECEMBER 2012

MOBILE APPS FACE HEIGHTENED PRIVACY ENFORCEMENT:POLICIES AND PRACTICES SCRUTINIZED

Continued on page 2...

1 State of California v. Delta Air Lines, Inc., Case No. CGC-12-526741 (Cal. Sup. Ct., complaint filed Dec. 6, 2012), available athttp://oag.ca.gov/system/files/attachments/press_releases/Delta%20Complaint_0.pdf.

2 The December 2012 FTC report is titled “Mobile Apps for Kids: Disclosures Still Not Making the Grade” and is available athttp://www.ftc.gov/os/2012/12/121210mobilekidsappreport.pdf. The February 2012 FTC report is titled “Mobile Apps for Kids: Current Privacy Disclosures are Disappointing” and isavailable at http://www.ftc.gov/os/2012/02/120216mobile_apps_kids.pdf.

3 Children’s Online Privacy Protection Act (COPPA), 15 U.S.C. §§ 6501-6506. COPPA applies to operators of websites and online services (including mobile apps) that are directed tochildren or from which the operator collects or maintains personal information from users that it has actual knowledge are under 13 years of age. COPPA requires such operators to,among other things, provide detailed notice to parents and obtain verifiable consent prior to collecting, using, or disclosing personal information from children under the age of 13. TheFTC has taken the position that COPPA applies to mobile apps.

4 FTC Act, 15 U.S.C. §§ 41-58.5 California Online Privacy Protection Act (CalOPPA), Cal. Bus. & Prof. Code §§ 22575-22579.6 Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq.7 According to the complaint against Delta, the personally identifiable information collected by the “Fly Delta” app included, among other data, the user’s geo-location, photographs, fullname, telephone number, and email address.

8 An open question is whether CalOPPA is preempted by the Airline Deregulation Act. 49 U.S.C. §§ 40101 et seq.9 CalOPPA provides that a commercial website or online service operator is in violation of CalOPPA if the operator fails to post its privacy policy within 30 days after being notified ofnoncompliance. When Attorney General Harris filed suit against Delta, more than 30 days had passed since she had served a warning letter to Delta.

purchases, or links to social media serviceswithout disclosing these practices toparents.10 Both 2012 FTC staff reportsexamined the number of children’s apps withprivacy disclosures and found that mostsurveyed apps failed to provide anyinformation about the data collected throughthe app.11 The most recent report urgedplayers in the app ecosystem (i.e., app stores,app developers, and third parties that interactwith apps) to develop accurate privacydisclosures for children’s apps, includingdisclosing the presence of interactivefeatures. The report also expressed the viewthat companies should make privacydisclosures available prior to the download ofan app.12 In addition, the FTC urged themobile app industry to develop “bestpractices” to protect privacy, including thethree key principles from the FTC’s March2012 final consumer privacy report:13 (1)adopting a “privacy-by-design” approach tominimize risks to personal information, (2)providing consumers with simpler and morestreamlined choices about relevant datapractices, and (3) providing consumers withgreater transparency about how data is

collected, used, and shared.In light of regulators’ increased privacyenforcement against players in the mobileapp marketplace, mobile app developers canexpect to face continued close scrutiny oftheir practices. Given this enforcement focus,understanding how an app collects, uses, anddiscloses information is increasinglyimportant. Formulating disclosures thataccurately reflect data practices in a mannerthat is simple, easy to understand, andaccurate poses significant challengesgenerally, but especially in mobile.

Attorneys in Wilson Sonsini Goodrich &Rosati’s privacy and data security practiceroutinely assist clients with all aspects oftheir information practices. If you have anyquestions regarding mobile app privacy,please contact Lydia Parnes [email protected] or (202) 973-8801, TracyShapiro at [email protected] or (415) 947-2042, Matt Staples at [email protected] or(206) 883-2583, Gerry Stegmaier [email protected] or (202) 973-8809, orSharon Lee at [email protected] or (650) 849-3307.

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Mobile Apps Face Heightened Privacy Enforcement . . . Continued from page 1...

10 FTC staff found that 59 percent of surveyed apps transmitted some information from a user’s mobile device back to the developer or to a third party. In addition, of those apps, alltransmitted a device ID to the app developer or, more typically, to a third party.

11 The February 2012 report stated that 16 percent of surveyed apps provided parents with a link to a privacy disclosure before app download. The December 2012 report stated that thispercentage had increased only slightly, from 16 percent to 20 percent.

12 In February 2012, California Attorney General Kamala Harris and the operators of the leading mobile application platforms entered into an agreement in which those operators—Amazon, Apple, Google, The Hewlett-Packard Company, Microsoft, and Research in Motion—agreed to, among other things, provide means in their app marketplaces for appdevelopers to make available privacy policies for all apps prior to download. See https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-secures-global-agreement-strengthen-privacy.

13 The FTC’s March 2012 final privacy report is titled “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers” and is available athttp://www.ftc.gov/os/2012/03/120326privacyreport.pdf.

This WSGR Alert was sent to our clients and interestedparties via email on December 21, 2012.

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