AFIDA Penalties Are Coming: Costs for Renewable Development May Be More Than You Think
When evaluating the all-in costs of a renewable development project, it is critical that costs associated with Agricultural Foreign Investment Disclosure Act (AFIDA) enforcement and compliance are considered. Since its enactment in 1978, AFIDA has provided for substantial penalties for the failure to file, or the late filing, of mandated reports on agricultural acreage held by an entity with an ultimate non-U.S. parent.
AFIDA reporting requirements are applicable to any non-U.S. based direct or indirect owner of agricultural land, which includes every company organized in the United States but in which a significant interest or substantial control (i.e., ten percent or more) is held by a non-U.S. parent.
A substantial percentage of renewable development in the United States is driven by companies that fall within the bounds of AFIDA’s reporting obligations, yet a small number of renewable developers appear to be current with their AFIDA reporting obligations.
Both the acquisition and disposition of agricultural land are required to be reported to the United States Department of Agriculture within 90 days of the acquisition or disposition. Stated another way, each executed lease or fee interest purchase of agricultural land, or the disposition of either, starts the clock ticking.
If AFIDA compliance reporting and potential penalties are not yet on your company’s diligence checklist, this may be about to change.
Penalties for failure to file or late-filing can be a substantial cost to renewable development. Federal regulations enable penalties of up to 25% of the fair market value of the land, as determined by the USDA.
Although penalties have been an option since AFIDA’s enactment, a review of the USDA’s annual report to Congress reveals that relatively few, and relatively small, penalties were assessed up until 2010. The USDA assessed only eight penalties for AFIDA violations between 2012-2022, although the number of filings dramatically increased during the same time period. AFIDA filings were made for 911 parcels of land in 2012, which jumped to 6,363 parcels in 2021. No penalties were assessed for AFIDA violations during the period 2015-2018 due to low levels of staffing in the office tasked with enforcing the law.
The number of AFIDA compliance and enforcement specialists at the USDA has doubled within the last year and a half, in part due to questioning of the gap in AFIDA enforcement by concerned members of the House. In response to this concern, the USDA responded by noting its increased staffing and its renewed commitment to assessing ex post penalties starting with late filings in the calendar year 2021 and going forward.
If your company acquires leasehold or fee interests in agricultural property and has a non-U.S. parent, it is very likely that Federal AFIDA reporting obligations apply. More than half of all states have similar reporting requirements as well.
If AFIDA is applicable to your business, it is critical that you engage counsel experienced in AFIDA matters to rectify any historical failures to report and establish a process for ongoing AFIDA compliance. Waiting until the final due diligence call to mention AFIDA compliance to counterparties is not your best strategy.
AFIDA in Brief:
Who Must Report?
Foreign investors who have significant interest or substantial control and acquire, dispose of, or hold an interest in U.S. agricultural land must report their holdings and transactions to the U.S. Department of Agriculture. Interests include land owned as well as land leased for ten years or more. This includes:
Foreign individuals.
Foreign organizations.
Foreign governments.
U.S. organizations – if a significant interest or substantial control is directly or indirectly held by foreign individuals, organizations, or governments.
How is Agricultural Land Defined by AFIDA?
Land exceeding 10 acres in the aggregate that has been used within the last 5 years for farming, ranching, forestry, or timber production.
Land exceeding 10 acres in which 10 percent is stocked by trees of any size, including land that formerly had such tree cover and will be naturally or artificially regenerated.
Landholding totaling 10 acres or less in the aggregate if producing annual gross receipts in excess of $1,000 from the sale of farm, ranch, forestry, or timber production.
Complying With the New “Open Banking” Regime: Primer and Fact Sheet
The Consumer Financial Protection Bureau (CFPB) finalized its “open banking” rule in late 2024. As required by Section 1033 of the Consumer Financial Protection Act, the CFPB promulgated the rule to require certain financial services entities to provide for the limited sharing of consumer data and to standardize the way in which that data is shared. The CFPB has stated that the open banking rule will “boost competition” by facilitating consumers’ ability to switch between banks and other financial service providers.
In general, the open banking rule:
Provides consumers with control over their data in bank accounts, credit card accounts, and other financial products, including mobile wallets and payment apps;
Allows consumers to authorize third-party access to consumers’ data including transaction information, account balance information, and information needed to initiate payments; and
Requires financial providers to make this information in accurate, machine-readable format and with no charge to consumers.
For more background on the history and policy of open banking, please review our prior alert.
Compliance Deadlines
Numerous comments to the proposed rule urged the CFPB to lengthen the period of time for businesses to comply with the rule. The CFPB responded to those comments by extending the original six month compliance date for the largest affected institutions to provide a 1.5 year implementation period. The table below summarizes the compliance schedule by which different sized entities must operate in compliance with the rule:
Compliance Timeline
Depository Institutions
Nondepository Institutions
1 April 2026 (~1.5 years)
At least US$250b total assets
At least US$10b in total receipts as of either 2023 or 2024
1 April 2027 (~2.5 years)
At least US$10b total assets, but less than US$250b total assets
Less than US$10b in total receipts in both 2023 and 2024 (this is the final compliance date for nondepository institutions)
1 April 2028 (~3.5 years)
At least US$3b total assets, but less than US$10b total assets
–
1 April 2029 (~4.5 years)
At least US$1.5b total assets, but less than US$3b total assets
–
1 April 2030 (~5.5 years)
Less than US$1.5b total assets, but more than US$850m (depositories holding less than US$850m are exempted from compliance)
–
Making Consumer Financial Data Available
Under the final rule, a “data provider” must provide, at the request of a consumer or a third party authorized by the consumer, “covered data” concerning a consumer financial product or service that the consumer obtained from the data provider. The rule defines data provider to include depository institutions, electronic payment providers, credit card issuers, and other financial services providers. The rule defines covered data to include transaction information, account balances, and other information to enable payments.
A data provider’s obligations regarding covered data arise only when holding data concerning a consumer financial product or service that the consumer actually obtained from that data provider. Notwithstanding third-party obligations, merely possessing data from another data provider does not implicate the rule. The CFPB revised the definition of covered data in a manner that offers some clarity for the consumer reporting agencies (CRAs), which typically gather data for other entities for consumer credit reports.
Electronic Payments
Credit Cards
Other Products and Services
Data Provider
A financial institution, as defined in Regulation E.
A card issuer, as defined in Regulation Z.
Any other person that controls or possesses information concerning a covered consumer financial product or service that the consumer obtained from that person.
Covered Consumer Financial Product or Service
A Regulation E account.
A Regulation Z credit card.
Facilitation of payments from a Regulation E account or Regulation Z credit card.
Data Provider Interfaces
As part of the provision of data, data providers must create both consumer and developer interfaces to enable the efficient provision and exchange of consumer data. In addition to various technical requirements, data providers must also establish and maintain written policies and procedures to ensure the efficient, secure, and accurate sharing of consumer data. Data providers are prohibited from charging fees for providing this service.
Interface Requirements
Consumer Interface
Developer Interface
When to Provide Data
Data provider receives information sufficient to: (1) authenticate the consumer’s identity; and (2) identify the scope of the data requested.
Data provider receives information sufficient to: (1) authenticate the consumer’s identity; (2) authenticate the third party’s identity; (3) document the third party is properly authorized; and (4) identify the scope of the data requested.
Data Format
Machine-readable file
Standardized and machine-readable file
Interface Performance
Strict requirement to provide data
Minimum 95% success rate
Data Request Denials
Unlawful, insecure, or otherwise unreasonable requests may be denied
Unlawful, insecure, or otherwise unreasonable requests may be denied
Authorizing Third Parties
To lawfully access covered data, a third party must generally do three things, namely: (1) provide the consumer with an authorization disclosure; (2) certify that the third party complies with various restrictions on the use of the data; and (3) obtain the consumer’s express approval to access the covered data.
The rule prohibits three uses of data: (1) targeted advertising; (2) cross-selling of other products or services; and (3) selling covered data. While commenting on the proposed rule, several CRAs requested that the CFPB allow for use of covered data for internal purposes such as research and development of products. The CFPB found this reasonable and permitted “uses that are reasonably necessary to improve the product or service the consumer requested.”
Conclusion
The open banking rule establishes a robust framework for the exchange and transmission by certain entities regarding certain types of consumer data and the safeguarding of that data. Although the final rule extends the implementation deadlines beyond those originally proposed, implementation will require careful coordination among various functions of affected data providers’ businesses and by entities authorized to receive covered data.
Canada’s Competition Bureau Seeks Feedback on Proposed Environmental Claims Guidelines
Competition Bureau Canada (the Bureau) announced just before Christmas that it is seeking public comments on draft guidelines (the Guidelines) for assessing environmental claims for compliance with Canada’s Competition Act (the Act). The Act was amended in June 2024 by adding two specific provisions to existing general prohibitions for false and misleading representations and unsupported performance claims to address environmental claims. Under the recent amendments, marketing claims about the environmental benefits of a product must be based on “adequate and proper testing” conducted before the claim is made, and claims about the environmental benefits of a business or business activity must “be based on adequate and proper substantiation in accordance with an internationally recognized methodology.”
The proposed Guidelines are based on six high-level principles, aimed at ensuring that environmental claims comply with all of the Act’s provisions, including the recent amendments:
• Environmental claims should be truthful, and not false or misleading.• Environmental benefit of a product and performance claims should be adequately and properly tested.• Comparative environmental claims should be specific about what is being compared.• Environmental claims should avoid exaggeration.• Environmental claims should be clear and specific, not vague.• Environmental claims about the future should be supported by substantiation and a clear plan.
The principles outlined by the Bureau are consistent with generally accepted global principles for advertising, such as those reflected in the International Chamber of Commerce (ICC) Marketing and Advertising Commission’s Advertising and Marketing Communications Code (available at The ICC Advertising and Marketing Communications Code – ICC – International Chamber of Commerce). The Federal Trade Commission’s (FTC) Guides for the Use of Environmental Marketing Claims (the FTC Green Guides) reflect these same general principles. Similar to the FTC Green Guides, the Bureau’s proposed Guidelines are not enforceable regulatory provisions, but are intended to help businesses understand how the Bureau is likely to apply the Act to green claims.
However, the Bureau’s proposed Guidelines are more general than the FTC Green Guides and do not address specific green claims, such as “recyclable,” “compostable,” and the like. Illustrative examples in the Guidelines appear to focus on general substantiation principles (e.g., is substantiation suitable, appropriate, and relevant to a marketing claim) rather than specific thresholds (e.g., a “substantial majority” threshold (60%) for unqualified “recyclable” claims as in the FTC Green Guides). Unlike the EU directive on green claims adopted last spring (EU 2024/825), which prohibits certain “generic environmental benefit claims” (e.g., “green,” “eco-friendly,” “biodegradable”), neither the Guidelines nor the Act’s provisions bar specific claims or mandate independent certification of claims. And finally, like the FTC Green Guides, the Guidelines are intended to promote truthful advertising to foster a fair and competitive marketplace, not to advance environmental policy.
Importantly, the Guidelines are geared to promotional and marketing representations made to the public, not representations made exclusively for another purpose, such as representations to investors or shareholders. Where the same representations are made to the public and to investors or shareholders in Canada, however, the business must be mindful of the principles of the Guidelines. Businesses interested in sharing information to Canadians about the environmental benefits of their products, services, processes, and operations should be mindful of the Guidelines. For those who wish to weigh in on the draft Guidelines, the deadline for comments is February 28, 2025.
FDA Releases Draft Guidance for Low-Moisture Ready-to-Eat Foods
Earlier this week FDA published a draft guidance titled Establishing Sanitation Programs for Low-Moisture Ready-to-Eat Human Foods and Taking Corrective Actions Following a Pathogen Contamination Event. (See publication notice at 90 Fed. Reg. 1052 (January 7, 2025)). Examples of low-moisture, ready-to-eat (LMRTE) foods include powdered infant formula, peanut butter, nut butters, powdered drink mixes, chocolate, medical foods in powdered and paste forms, processed tree nuts, milk powders, powdered spices, snack foods such as chips and crackers, granola bars, and dry cereal.
The draft guidance is intended to help manufacturers/processers of LMRTE human foods comply with 21 CFR part 117 (Current Good Manufacturing Practice (CGMP), Hazard Analysis, and Risk-Based Preventive Controls (HARPC) for Human Food) and, in the case of infant formula manufacturers, the requirements in 21 CFR part 106. In particular, the draft guidance provides FDA’s current thinking regarding:
Establishing and implementing a sanitation program and environmental monitoring program
Conducting root cause investigations following a pathogen contamination event
Applying a sanitizing treatment when remediating a pathogen contamination event
Taking steps to identify affected food; and
The limitations of relying solely on a product testing program to verify that pathogen contamination has been eliminated
The draft guidance includes a discussion of CGMPs necessary to control pathogens in LMRTE foods. Controlling water and maintaining a dry production site is a key feature of FDA’s recommended approach. The draft guidance notes that cleaning— removing residue from a food contact surface (FCS) — is distinct from sanitizing treatments (designed to kill pathogens) and that in dry processing conditions, cleaning and sanitizing is usually done sequentially. The draft guidance cautions that “material flush techniques,” which clean a FCS by pushing product or other materials (e.g., hot oil) through the FCS, are ineffective methods to kill pathogens.
Among the points raised in its discussion of HARPC components applicable to a sanitation program, the draft guidance recommends the identification of Salmonella spp. as a hazard requiring a preventive control for products which are exposed to the environment before packaging and which are not treated. Similarly, the draft guidance recommends the identification of Cronobacter spp. as a hazard in the case of powdered infant formula products exposed to the environment before packaging that do not receive a kill step or other control measure.
In its discussion of preventive control step verification activities and root cause analysis, the draft guidance expresses a strong preference for identifying pathogens using whole genome sequencing (WGS) because of its much greater specificity and ability to discriminate between different pathogenic strains. Where WGS is not used, FDA recommends maintaining samples so that they can be characterized by WGS later if necessary (e.g., in a root cause investigation following a contamination event).
The draft guidance also indicates in several sections that finished product testing has limitations and should not be solely relied upon for verification of preventive controls or identifying affected food. Finished product testing will be particularly ineffective at identifying hazards which are present at low levels and which are unevenly distributed.
Comments to the draft guidance should be submitted by May 7, 2025.
FDA’s Fresh Take on Use of “Healthy” in Food Labeling
Overview
On December 19, 2024, the US Food and Drug Administration (FDA) issued a new final rule titled “Food Labeling: Nutrient Content Claims; Definition of Term ‘Healthy.’” The rule revises regulations that govern when food products may be labeled as “healthy” and when a derivative term (e.g., “health,” “healthful,” or “healthier”) may be used to make a claim about the product’s nutritional content. Broadly, the new final rule adopts the regulatory approach spelled out in the FDA’s September 29, 2022, proposed rule.
These amendments represent the first significant changes to “healthy” labeling requirements in 30 years. In its new scheme, the FDA attempts to bring labeling requirements in line with 21st century advances in nutrition science that have resulted in new federal dietary guidelines. To do so, the FDA places newfound emphasis on food products’ umbrella food groups as opposed to individual nutrients.
In addition to changes in nutrition science, changes in US culture and dietary patterns prompted the amendments. The FDA describes the changes as part of its contribution to a government-wide initiative to address the “ever-growing crisis of preventable, diet-related chronic diseases in the U.S.” (such as cardiovascular disease, diabetes, and obesity) that “requires immediate action.” The FDA states that the crisis disproportionately affects certain racial and ethnic minority groups and the disadvantaged. The FDA anticipates that the amendments will advance health equity by helping consumers identify foods that can be the foundation of a healthy diet. The updated criteria allow affordable, accessible, and nutrient-dense foods associated with disparate cultural traditions and found within varied food groups and subgroups to bear the “healthy” claim, including frozen, canned, dried, and other shelf-stable products.
The FDA will begin to enforce these new regulations in February 2028, but manufacturers can start using a “healthy” claim in accordance with the new requirements as soon as the rule enters into effect on February 25, 2025.
In Depth
BACKGROUND
In 1990, Congress enacted the Nutrition Labeling and Education Act, which had three primary objectives:
To enable consumers to make informed decisions about their dietary choices by providing them with relevant nutritional information.
To standardize definitions for claims related to food products’ nutritional content.
To encourage manufacturers to produce and market food products with greater nutritional value.
Acting in line with these objectives, the FDA adopted regulations in 1994 that created enforceable standards for manufacturers to follow when labeling their food products as “healthy” or a related derivative term (e.g., “health” or “healthful”). These regulations apply specifically to labeling that uses the term “healthy” or the like to imply that consumption of a food product comports with healthy dietary practices. These claims are distinct from those referring to a food product’s special dietary functions or effects on a consumer’s bodily structures.
The criteria established by the 1994 regulations focus on whether food products contain certain enumerated levels of nine individual nutrients, such as protein, cholesterol, and saturated fat. Although many stakeholders continue to support this approach, the FDA has concluded that it is difficult to reconcile with advances in nutrition science over the past three decades.
According to the FDA, nutrition science has evolved to take a more holistic view of diet, focusing on an individual’s consumption of synergistic, foundational food groups (foods that, because of their overall nutrition profiles, can be the “foundation” or “building blocks” of a healthy dietary pattern) – e.g., vegetables, fruits, whole grains, fat-free and low-fat dairy, lean game meat, and seafood with no added ingredients – rather than on pure nutrient intake. The FDA argues that under the 1994 regulations, foods that are now widely considered to be healthy cannot be labeled as such. For example, manufacturers have likely been unable to include “healthy” on a salmon food product’s packaging because of the fish’s high fat content. Similarly, some foods that could previously carry the “healthy” claim, such as white bread and heavily sweetened cereal and yogurt, will no longer qualify. In addition to salmon, newly qualifying foods will include nuts and seeds, olive oil, and some peanut butters and canned fruits and vegetables.
KEY CONCEPTS
In place of individual nutrients, the FDA has centered its new criteria on the five food groups recommended in the current federal dietary guidelines: vegetables, fruits, grains, fat free or low-fat dairy, and proteins (e.g., lean meat, seafood, eggs, beans, peas, lentils, nuts, and seeds). The FDA applies some nuances to these groups. Vegetable or fruit pastes, purees, and powders may qualify if they represent a mere change in the food product’s form. Likewise, the FDA intends to consider plant-based dairy alternatives as members of the dairy group when they have similar nutritional content to true dairy products.
Under the “food group equivalent” (FGE) system carried over from the 2022 proposed rule, a “healthy” nutrient content claim generally must contain a certain amount of food from at least one of the food groups or subgroups recommended by the federal dietary guidelines and also must fall below specific nutrient limits for added sugars, sodium, and saturated fat. For example, one FGE for a vegetable food is established as a half cup equivalent. The exact amount of a vegetable product that would satisfy this criterion may vary based on its preparation. To illustrate, both one cup of raw spinach and a half cup of cooked green beans equal half cup equivalents, and thus each would individually constitute one FGE.
These FGEs form the basis of the FDA’s new labeling criteria. In total, there are six scenarios where a food product may carry a “healthy” claim:
Single Ingredient Exception: Food products with only ingredients from the five food groups and water.
Individual Food: Consumed in quantities of greater than 50 grams, contains one or more FGE. Includes oil-based products and those less than 50 grams if they meet FGE and nutrient requirements per 50 grams.
Mixed Food Product: Contains one or more FGE, with at least one quarter FGE from two food groups. Example: one quarter vegetable FGE and three quarters protein FGE.
Main Dish Product: Serving contains two or more FGEs, with at least one half FGE from two food groups. FGEs can be aggregated.
Meal Product: Serving contains three or more FGEs, with at least one half FGE from three food groups. FGEs can be aggregated.
Low-Calorie Beverages: Coffee, tea, and water with fewer than five calories per serving. FDA may exercise discretion in labeling these as “healthy.”
Manufacturers that ultimately decide to make a “healthy” claim for a qualifying food product must also follow new bookkeeping requirements. The final rule establishes that in situations where a food’s ability to qualify under the “healthy” criteria is not obvious from its nutritional label, manufacturers must maintain written records establishing the same. The form these records take may vary based on a manufacturer’s preferences, but they must be kept for at least two years after a product’s introduction to the market.
The FDA stresses that manufacturers whose products fail to meet the above criteria still have an array of valid marketing options at their disposal. Indications of a product’s low sodium content, for example, would still be acceptable in a variety of circumstances. The FDA also intends to engage in consumer education efforts so that failure to meet the listed criteria is not equated to a product’s being “unhealthy.”
NEXT STEPS
Manufacturers can begin to use a “healthy” claim in accordance with the new requirements as soon as the rule enters into effect on February 25, 2025. The FDA intends to create and publish additional resources to aid manufacturers in determining FGE amounts before the regulation’s compliance date in February 2028. The FDA stated that these resources may include guidance documents, FAQs, direct responses to questions, or online webinars.
The agency also announced an intent to publish a proposed rule on front-of-package nutrition labeling, which may include a “healthy” symbol to designate qualifying food products.
Henry Fisher contributed to this article.
Pumping the Brakes? Outlook for State and Federal Vehicle, Engine, and Equipment Emissions Standards
With the start of the second Trump administration just over a week away, there are many uncertainties with respect to how the new administration will regulate vehicle, engine, and equipment emissions, and the steps the second Trump administration may take to roll back emission standards set during the Biden administration. However, one thing is certain, there will be changes; and those changes are likely to impact how industry develops new mobile source products, meets emission standards, invests in new technologies, and considers any federal rollbacks of the mobile source obligations set by California and adopted by other states that implement California’s mobile source rules.
Many have speculated that the new administration will take aim at the U.S. Environmental Protection Agency’s (EPA’s) emission standards issued for model year 2027 and later light- and medium-duty vehicles and the new greenhouse gas emission standards set for heavy-duty highway vehicles finalized by the Biden administration in the spring of 2024. Whether there will be a full-scale rollback of those standards or more measured changes is unclear. However, any changes to the federal standards would require a new EPA rulemaking which could take a year or more to accomplish, leaving regulated industry facing uncertainty going into 2026 with respect to the specific standards that will apply for the 2027 model year.
Perhaps more clear is that the change in administration will almost certainly effect at least some of California’s mobile source rules. Under Section 209 of the Clean Air Act, states are preempted from adopting or enforcing emissions standards for new vehicles and engines. However, Section 209 of the Clean Air Act allows California to request that the EPA waive this preemption so that California can enforce more stringent standards in the state. Under Section 209 of the Clean Air Act, unless the EPA finds certain limited grounds for denial it must grant California’s waiver request. Section 177 of the Clean Air Act also allows other states to adopt California’s mobile source standards.
While EPA has never denied a waiver request from California, in the first Trump administration, EPA withdrew California’s waiver for its Advanced Clean Cars I rule. That waiver was subsequently reinstated by the Biden administration, followed by a deluge of litigation related to EPA’s overall waiver authority since then. For example, on December 16, 2024, the Supreme Court denied certiorari in the State of Ohio et al. v. EPA where the joining states argued that the Clean Air Act’s preemption waiver provision violated “equal sovereignty”. While the Supreme Court declined to take on the constitutionality of EPA’s waiver authority in that case, similar challenges may be raised in the future, given that EPA has recently approved a number of new waiver requests and is set to approve the remaining outstanding waiver requests in the coming days.
Regardless of the waiver-related litigation, the Trump administration is likely to withdraw at least some of the EPA’s recently approved waiver requests, which would remove California’s and the states proceeding under the authority of Section 177 to enforce rules covered by the waiver once the waiver is withdrawn.
Currently, there are two California rules awaiting EPA waiver approval or authorization:
In-Use Locomotive regulation
Advanced Clean Fleets regulation
The Trump administration is expected to deny any waivers that remain pending after taking office, which would make those rules unenforceable in California and in the other states that have adopted the California rules. In particular, the Advanced Clean Fleets regulation faces ongoing litigation and industry pushback, which will be difficult for California to overcome if that waiver is denied.
EPA has also recently approved waivers for six additional California rules:
Advanced Clean Cars II regulations
Heavy-Duty Omnibus Low NOx regulations
Small Off-Road Engines (SORE) Amendments
Commercial Harbor Craft Amendments
Transport Refrigeration Unit (TRU) Amendments
In-Use Off-Road Diesel-Fueled Fleet Amendments
How the Trump administration will address these recently issued waiver approvals is less certain. If the first Trump term is any indication, it is likely that all or some of these recently issued waivers will be withdrawn, triggering protracted litigation and industry uncertainty. During Trump’s first term, following the withdrawal of the Advanced Clean Cars I rule waiver, the California Air Resources Board (CARB) entered into voluntary agreements with certain auto manufacturers that imposed alternative greenhouse gas standards as a stopgap while the waiver withdrawal was litigated and to help provide some regulatory certainty for automakers while the state of the regulations was in flux. CARB also indicated that it would retroactively enforce the Advanced Clean Cars I rule if the waiver was later reinstated. This could serve as a playbook for CARB during Trump’s second term if a number of the above waivers are denied or withdrawn. For example, with respect to the Heavy-Duty Omnibus Low NOx regulations, CARB previously entered an agreement with certain manufacturers that sets alternative standards for those parties in an effort to achieve regulatory certainty and stave off protracted challenges. Under that agreement, manufacturers also agreed not to challenge certain CARB regulations including the Advanced Clean Trucks regulation.
While uncertainty remains with respect to how the new administration will address vehicle, engine, and equipment emission standards and requirements, there will be changes that may require regulated industry to adjust current compliance, production, and investment plans, particularly with respect to electric and other zero-emission technologies, related infrastructure, and supply chain arrangements.
Navigating Change: OSHA’s 2024 Wrap-Up and a Look Ahead to 2025
In the latest episode of Greenberg Traurig’s Workplace Safety Review podcast, co-hosts Adam Roseman and Joshua Bernstein provide a comprehensive wrap-up of the significant OSHA developments from 2024 and explore what’s on the horizon for 2025. They delve into the impacts of administrative changes, including the Supreme Court’s Loper Bright decision, which overturned Chevron deference, and how it may affect OSHA litigation.
Their discussion highlights key regulatory updates, like the proposed heat stress and lockout/tagout standards, and examines the potential implications of the Kenrick Steel case challenging the constitutionality of the Occupational Safety and Health Review Commission.
As the Trump administration prepares to take office, the hosts consider the prospective leadership and policy direction under Secretary of Labor nominee Lori Chavez-DeRemer and the next OSHA head.
HHS OCR Proposes Significant Modifications to HIPAA Security Rule
Overview
The US Department of Health and Human Services (HHS) Office for Civil Rights (OCR) announced on December 27, 2024, and published in the Federal Register on January 6, 2025, a Notice of Proposed Rulemaking (NPRM) proposing extensive modifications to the HIPAA Security Rule. If finalized, these would be the first modifications of the Security Rule since 2013 and could entail significant additional compliance obligations and costs for HIPAA covered entities and business associates (collectively, regulated entities). For reference, a redline of the existing language of the Security Rule with the NPRM’s proposed modifications is available here.
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Navigating the UTPR and ISDS: Implications in the EU
Overview
The global tax landscape is experiencing a profound transformation as the OECD/G20’s Pillar Two rules are adopted. Among these, the Undertaxed Profits Rule (UTPR) has emerged as a pivotal mechanism designed to ensure that multinational enterprises are subject to a minimum effective tax rate of 15% on their global profits. For those companies operating within the European Union, the implementation of the UTPR presents both a significant compliance challenge and a strategic risk.
In this client alert, we offer an analysis of the operational framework of the UTPR, examine its potential ramifications for businesses within the EU, and explain how Investor-State Dispute Settlement (ISDS) mechanisms can play a pivotal role in resolving disputes arising from this innovative tax measure for States and multinational enterprises.
In Depth
WHAT IS THE UTPR?
The Undertaxed Profits Rules, integral to the broader Pillar Two framework, complements the Income Inclusion Rule (IIR) by addressing low-taxed profits that are otherwise not subject to taxation under the IIR. Its primary objective is to bridge gaps in the taxation of multinational enterprises, ensuring that all group entities contribute a minimum level of tax.
Under the UTPR, jurisdictions may levy top-up taxes on low-taxed income that is not otherwise captured by the IIR. This mechanism functions by reallocating taxing rights among jurisdictions, effectively serving as a safeguard against base erosion and profit shifting.
In the EU, the UTPR has been codified through the Directive on Global Minimum Taxation, which was adopted in December 2022. Member States were required to implement the directive into domestic law by December 31, 2023, with UTPR application commencing in 2025.
THE ROLE OF INVESTOR-STATE DISPUTE SETTLEMENT (ISDS)
The implementation of the UTPR raises critical questions regarding its interplay with international investment law, particularly within the framework of bilateral investment treaties (BITs), multilateral investment treaties (such as the Comprehensive Economic and Trade Agreement), and other investment agreements.
1. Understanding ISDS Protections
Tax disputes have been a longstanding component of ISDS. According to the United Nations Conference on Trade and Development, from 1987 to 2021 more than 150 ISDS cases were initiated to challenge tax measures. During this period, the proportion of ISDS cases involving tax measures doubled. Additionally, some of the most substantial ISDS awards to date, notably those stemming from the Yukos saga, have originated from investors contesting taxation measures.
ISDS mechanisms are designed to safeguard foreign investors from adverse actions by host states. They offer recourse to arbitration for claims arising from alleged breaches of investment treaty obligations, such as:
Fair and Equitable Treatment (FET): Investors might be able to challenge allegedly arbitrary or inconsistent enforcement of the UTPR as a violation of the FET standard.
Expropriation: Purportedly excessive taxation under the UTPR might be argued to constitute indirect expropriation of an investor’s assets.
Non-Discrimination: Investors might be able to allege breaches of non-discrimination clauses if the UTPR disproportionately impacts foreign entities compared to domestic businesses.
Additionally, foreign investors may seek provisional measures designed to safeguard the parties’ rights pending a definitive resolution on the merits. For instance, Article 47 of the ICSID Convention provides that “the Tribunal may […] recommend any provisional measures which should be taken to preserve the respective rights of either party.” A comparable provision exists under the UNCITRAL Arbitration Rules as well.
2. Potential Hurdles
Investors bringing claims based on the UTPR may encounter several potential hurdles.
First, the availability of a suitable treaty protecting foreign investments is not guaranteed. Despite the existence of thousands of BITs and other multilateral agreements globally, foreign investors from a particular country of origin may not enjoy protection in every jurisdiction in which they choose to invest. And even where a treaty exists, they are not all the same (as explained in more detail below) and, therefore, even where a treaty is otherwise available, it may not provide coverage. This lack of universal coverage can expose investors to significant risks, as they may find themselves without recourse to the protections typically afforded by such treaties. As a result, investors must conduct thorough due diligence to determine the existence and applicability of investment treaties in their target jurisdiction(s) to mitigate potential vulnerabilities and ensure that their investments are protected. Similarly, host States may be able to take measures to proactively address and resolve these disputes at an early stage.
Second, certain BITs incorporate a tax carve-out, thereby excluding specific protections for tax matters under the relevant treaty. While older-generation investment treaties typically lack such provisions, contemporary BITs increasingly include them. Nevertheless, even with a tax carve-out, the precise wording of these provisions, alongside the factual circumstances triggering the dispute, remains crucial. Additionally, several tribunals have adjudicated that tax carve-outs may only pertain to “bona fide taxation actions,” which adds an additional layer of complexity.
Third, BITs may impose procedural prerequisites on investors. For instance, some treaties feature a “fork-in-the-road” clause, permitting an investor to pursue claims either in domestic courts or through investment arbitration, but not both. Consequently, under certain conditions and depending on the exact language of the BIT, an investor might be precluded from initiating an ISDS claim if a domestic claim against the same tax measure has already been pursued. Conversely, other BITs mandate the exhaustion of local remedies prior to commencing arbitration.
Fourth, investors might be able to lodge ISDS claims contingent upon the specific factual matrix involved. The success of such claims will hinge on how Pillar Two and the UTPR have been implemented by a particular State and the resultant impact on foreign investors. Similarly, the specific implementation of the UTPR by States in the coming years will also be a critical factor in determining the viability of an ISDS claim. Investors may also have a viable case if the implementation of Pillar Two contravenes their legitimate expectations regarding the applicable fiscal framework and its duration. However, States may present robust defenses. BITs not only may include a tax carve-out but also might intersect with other international agreements, such as double taxation treaties. A State confronted with an ISDS claim on these grounds will likely invoke its regulatory authority, which, although not absolute, may encompass the introduction of new, good-faith tax measures. All the above are also issues for States to consider in the implementation of their UTPR-related taxation measures.
CONCLUSION
The UTPR represents a paradigm shift in international taxation, with profound implications for multinational enterprises operating in the EU and States alike. As States advance with their implementation of the UTPR, businesses and States must navigate a complex and evolving landscape of compliance obligations, risks, and opportunities.
Simultaneously, the intersection of the UTPR with international investment law underscores the critical importance of leveraging ISDS mechanisms for foreign investors to protect against the unfair or discriminatory application of these rules, and for host States to defend against such claims. By adopting proactive measures and seeking advice from counsel multinational enterprises can mitigate risks, safeguard their investments, and position themselves for long-term success in a rapidly changing tax environment. Similarly, host States can anticipate potential treaty claims raised by foreign investors and proactively address these disputes at an early stage.
EPA Proposes Updated General Clean Water Act NPDES and Construction Permits
Key Takeaways
What Happened? The U.S. Environmental Protection Agency (EPA) proposed the 2026 version of the National Pollutant Discharge Elimination System (NPDES) Multi-Sector General Permit (MSGP) for stormwater discharges associated with industrial activities. When finalized, this new permit will replace the current MSGP when it expires on February 28, 2026. In addition, EPA proposed a narrow modification to its 2022 Construction General Permit for Stormwater Discharges (CGP), to expand the list of areas eligible for coverage. EPA is currently soliciting public comment on all aspects of the proposed MSGP, as well as on the CGP modification.
Who Is Affected? In the short term, the 2026 MSGP will apply to industrial facilities from thirty different sectors where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. In the long term, EPA’s proposed action will affect industrial facilities in states that model their NPDES stormwater general permits after EPA’s MSGP. Meanwhile, the CGP modification will affect construction activities in Lands of Exclusive Federal Jurisdiction.
Next Steps? Industrial facilities covered by the existing MSGP should consider how to engage in public comment by February 11, 2025, to ensure EPA adopts a reasonable final permit with the best information available and consistent with the law. Meanwhile, entities affected by the CGP should consider submitting comments by January 13, 2025. For more information, please contact the authors.
2026 MSGP
EPA released its proposed 2026 MSGP, which authorizes stormwater discharges associated with industrial activities in jurisdictions where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. This newest version of EPA’s MSGP would take effect in February 2026, when the current 2021 MSGP expires. EPA is currently soliciting public comment on the proposed 2026 MSGP, with a comment deadline of February 11, 2025.
As with the current MSGP, the proposed coverage under the 2026 MSGP would be available in jurisdictions where EPA is the NPDES permitting authority for stormwater discharges from industrial facilities in thirty different sectors, including but not limited to: timber, chemicals, glass and cement, metals and mining, landfills, and transportation. While the proposed permit, once finalized, would immediately affect industrial facilities where EPA is the permitting authority, states implementing authorized NPDES programs could also choose to model their permits after EPA’s MSGP. This proposed permit could thus have significant short-term and long-term impacts on numerous industrial facilities.
Proposed Changes Compared to the 2021 MSGP
EPA proposed that the 2026 MSGP would differ from the current MSGP in several respects:
Considerations of Stormwater Control Measure Enhancements for Major Storms
The proposed 2026 MSGP would modify a number of considerations in the 2021 MSGP by, among other things, removing the word “temporarily” to indicate EPA’s view that “it is generally best practice to implement SCMs [stormwater control measures] on a more regular basis than just temporarily.”
The new permit also clarifies that, when evaluating whether the facility has previously experienced major storm events, the permittee must do so based on current conditions, defined as “100-year flood (the 1% -annual-chance flood) based on historical records;” and, when evaluating whether the facility may be exposed in the future to major storm and flood events, the permittee must do so based on best available data, defined as “the most current observed data and available forward-looking projections.”
The proposed 2026 MSGP also specifies that all stormwater control measures must be based on the best available data. EPA intends this requirement “to ensure stormwater control measures are resilient to withstand storms and properly manage stormwater through their lifespan to reduce pollutants in stormwater discharges.”
Water Quality-Based Effluent Limitations or Other Limitations The 2026 MSGP proposes to revise the provision on water quality-based effluent limitations to add more specific language on what discharges must not contain or result in, such as: observable deposits of floating solids, scum, sheen, or substances; an observable film or sheen upon or discoloration from oil and grease; or foam or substances that produce an observable change in color. EPA’s proposed revisions also struck the current MSGP’s vague requirement that each “discharge must be controlled as necessary to meet applicable water quality standards.” The agency likely proposed this change in anticipation of a ruling from the U.S. Supreme Court in City & County of San Francisco v. EPA, No. 23-753, a case in which the Court will decide whether EPA has the authority to impose permit requirements like the language EPA has dropped from the proposed 2026 MSGP.
Monitoring
The proposed 2026 MSGP would include a new provision requiring a majority of sectors to conduct “report-only” indicator analytical monitoring for Per- and Polyfluoroalkyl Substances (PFAS).
EPA is also proposing to shift certain sectors from “report-only” indicator monitoring to benchmark monitoring for pH, total suspended solids (TSS), and chemical oxygen demand (COD). The benchmark monitoring parameters would be based on indicator monitoring results collected under the 2021 MSGP.
The proposed 2026 MSGP sets new benchmark monitoring for ammonia, nitrate, and nitrite by operators in subsector I1.
EPA also proposes that several new subsectors conduct benchmark monitoring for various specific metals based on EPA’s industry analysis of pollutants that stem from common activities.
The 2026 MSGP further proposes a heightened monitoring schedule for benchmark monitoring that would require operators to conduct quarterly monitoring for the first three years of permit coverage (or a minimum of twelve quarters or monitoring periods of sampling). By comparison, the current MSGP calls for benchmark monitoring only in the first and fourth year of a permittee’s permit coverage.
Finally, the schedule for impaired waters monitoring would also change to mandatory quarterly monitoring for the entire five-year permit term, a departure from the current MSGP’s requirement to conduct impaired waters monitoring only in the first and fourth years of permit coverage.
Additional Implementation Measures (AIM)
The 2026 MSGP would add to current AIM Level 1 response requirements by requiring facilities to conduct an inspection to identify the cause of a benchmark exceedance.
EPA also proposes to require operators to obtain express EPA approval of a natural background exception before discontinuing compliance with AIM. Under the current a claimed natural background exception is “automatically in place and the operator [is] not required to wait for verification from EPA to discontinue [AIM] compliance.”
The 2026 MSGP would require operators to submit an AIM Triggering Event Report to EPA anytime a facility triggers AIM at any level.
Additionally, EPA proposes required corrective action equivalent to AIM Level 1 responses when facilities discharging into impaired waterbodies detect a pollutant causing an impairment.
Public Comment
EPA welcomes, and interested parties should consider submitting, public comments on any aspect of the proposed 2026 MSGP. Additionally, EPA is requesting specific feedback on the following issues:
A host of questions pertaining to 6PPD-quinone, including how to identify sources of 6PPD-quinone in stormwater discharges and the types of best management practices permittees might implement to reduce 6PPD-quinone in their discharges;
What methods to use for PFAS indicator monitoring;
Whether EPA should include benchmark monitoring for iron and magnesium;
Whether to require PFAS-related benchmark monitoring for some or all of the sectors identified for PFAS-indicator monitoring; and
Whether to require impaired waters monitoring throughout the entire permit term, and any alternative approaches.
CGP Modification
In parallel, on December 13, 2024, EPA proposed a narrow modification to the 2022 CGP, which covers stormwater discharges from regulated construction activities in areas where EPA is the permitting authority. If adopted, the proposed modification would take effect in early 2025. EPA is currently soliciting public comments on the proposed CGP modification, with a comment deadline of January 13, 2025.
The CGP modification aims to expand the list of areas eligible for coverage to include construction projects in Lands of Exclusive Federal Jurisdiction. As the 2022 CGP failed to clarify, this proposed modification would specifically provide eligibility for all Lands of Exclusive Federal Jurisdiction without disrupting permit coverage for ongoing construction activities. The proposed CGP modification also clarifies the requirements for projects discharging to receiving waters within the Lands of Exclusive Federal Jurisdiction. Operators of such projects would follow the same requirements as used in the CGP for discharges to sensitive waters.
Next Steps
EPA is currently soliciting public comments on both proposed permits. All comments for the MSGP should be submitted to EPA by February 11, 2025, while comments for the CGP should be submitted by January 13, 2025. While EPA has not yet scheduled any public hearings, it plans to host informational webinars on the 2026 MSGP. The agency’s timetable for acting on these permits may also change after the new Trump administration takes office. For instance, new EPA personnel may modify and re-propose a version of the 2026 MSGP that better reflects the new administration’s priorities. Ultimately, engaging in public comment is an important opportunity for regulated industries to provide information and recommendations to EPA and help shape their stormwater permit obligations in years to come.
Life Science Dealmaking Trends 2025
In this series of videos, International Chair of Life Sciences Cheryl Reicin provides valuable insights on a number of trends she is seeing in Big Pharma dealmaking and M&A. She discusses 2025 deal trends, M&A drivers, patent cliff impacts, and the hottest emerging sectors.
Drivers of Big Pharma M&A
Big Pharma Patent Cliff Impacts to M&A
What are the Hottest Sectors in the Life Science Industry?
Central Nervous System (CNS) Investment Opportunities
How Do You See Big Pharmas in AI?
Preparing for a Restaurant Financing or Sale Transaction: Considerations for 2025
Go-To Guide:
Restaurant Industry Observations for 2025
The Importance of ‘Transaction Fitness’
Corporate/Company Documentation
Intellectual Property/Trademarks
Leases/Real Estate
Employees and Labor-Related Matters
Tax
Licenses & Permits
Material Contracts
Information Privacy and Security Laws
Franchising Matters
Restaurant leaders and investors enter 2025 with cautious transaction optimism. As expected, 2024 proved a challenging year for many restaurant groups. Inflation, new legislation in parts of the country (i.e., the FAST Act in California and elimination of the tip credit in some markets), cost-conscious consumers, and escalating labor and food costs kept operators scrambling on multiple fronts.
Although challenges may persist in 2025, the prevailing sentiment among some operators and investors is that the business climate will improve and transaction activity may increase.
This may serve as welcome news for restaurant businesses seeking to engage in a sale or financing process.
As we focus on our New Year’s resolutions, for those restaurant businesses contemplating a transaction in 2025, a commitment to getting your company in “transaction shape” is a worthy goal.
Continue reading the full GT Advisory.
Additional Authors: Alison R. Weinberg-Fahey, Ryan C. Bykerk, Jason B. Jendrewski, Alicia Sienne Voltmer, Ellen M. Bandel, Joseph J. Curran, Jeffrey K. Ekeberg, David A. Zetoony, Kyle C. Lennox, David W. Oppenheim, and Breton H. Permesly