EU Pay Transparency Directive: ‘Equal Pay for Equal Work or Work of Equal Value’
The European Union’s pay transparency directive (Directive (EU) 2023/970) introduced the principle of “equal pay for equal work or work of equal value,” aiming to eliminate pay discrimination under the obligation that job roles of equal worth receive equal pay, regardless of gender.
Quick Hits
In the EU, pay transparency has been identified as a key obstacle to closing the gender pay gap. Directive (EU) 2023/970 aims to close the gender pay gap and promote fair pay practices by increasing transparency and accountability between employers and employees.
The principle of “equal value” will require employers to undertake an evaluation exercise to determine where equivalence of the respective value of roles may exist across their organisations. Employers may want to consider preparing for this now.
EU member states have a deadline of 7 June 2026 to transpose the directive into national law. Each member state has the autonomy to transpose the directive in its own way, provided the directive’s minimum requirements are met.
What Does ‘Equal Work or Work of Equal Value’ Mean?
Directive (EU) 2023/970 defines equal pay not only for identical roles but also for jobs that contribute comparably to an organisation’s success. Employers must assess job roles using objective, gender-neutral criteria. Each EU member state may derive its own methodology for determining whether two roles are of equal value, but minimum factors to consider for each role should include:
Skills—The experience, knowledge, and qualifications required.
Effort—The mental or physical exertion needed for a role.
Responsibility—The level of accountability and decision-making involved.
Working Conditions—The risks associated with the job.
New Employer Obligations Under Directive (EU) 2023/970
Under the directive, employees (and/or their representatives) have the right to request and receive information on their pay level and the average pay levels of their organisation, broken down by gender, for employees performing the same work as them or work of equal value. Within two months of a written request, employers will need to provide an employee with the requisite information.
In the first stage of the directive’s implementation, employers with 150 or more employees are required to report on the average gender pay gap (1) across the company as a whole and (2) within each category of workers who do the same work or work of equal value.
If a pay difference of 5 percent or more is uncovered, without objective justification, and is left unresolved for more than six months from the date it is reported, the organisation will be subject to a joint pay assessment (i.e., a detailed equal pay audit) which can be costly and damaging.
Next Steps
Employers may want to consider the objective criteria used to consider how categories of employees are determined, and which roles are of equal value. All employers must ensure that they are consistent and nondiscriminatory in their application of pay criteria and be prepared to demonstrate how this operates in practice. Transparency and fairness necessitate detailed records of salary structures and clear strategies to address possible pay disparities.
The directive requires greater accountability from employers to ensure fair pay practices. Maintaining compliance may require establishing job evaluation systems, transparent pay structures, and data reporting. The concept of “equal value” is complex and employers may want to prepare for this new requirement now.
The Tariff Roller Coaster: US Court of International Trade Invalidates Tariffs Imposed Under IEEPA, Only to Be Stayed by the Federal Circuit Court of Appeals
What Happened
On May 28, 2025, the US Court of International Trade (“CIT”) issued a major decision in V.O.S. Selections, Inc. v. United States invalidating two sweeping tariff programs imposed under the International Emergency Economic Powers Act (“IEEPA”) earlier this year. The decision strikes down the legal basis for key executive orders imposing tariffs on China, Canada, Mexico and dozens of other trading partners, reshaping the legal framework for future emergency-based trade actions. The court granted summary judgment in favor of both private-sector plaintiffs and a coalition of state governments, concluding that the tariff actions exceeded statutory authority under IEEPA and intruded upon Congress’s exclusive constitutional role in regulating trade.
However, less than 24 hours later, the Federal Circuit Court of Appeals issued an order administratively staying the CIT injunction while it considered an appeal on the case. Thus, notwithstanding the CIT order, the IEEPA tariffs remain in effect.
Background
IEEPA is a federal law that grants the President broad powers to regulate international commerce after declaring a national emergency in response to an unusual and extraordinary threat to the national security, foreign policy or economy of the United States. Typically, IEEPA has been used to impose sanctions on foreign states or individuals, control assets or restrict financial transactions in response to specific foreign threats. IEEPA’s authority traditionally has not been used to impose broad tariffs simply based on general economic concerns.
Since taking office in January 2025, President Trump has implemented a series of tariffs under IEEPA rather than by using traditional trade enforcement statutes such as Section 301 or Section 232 of the Trade Expansion Act of 1962.
These IEEPA tariffs include:
Trafficking tariffs: A 25 percent ad valorem duty on goods from Mexico and Canada and a 20 percent duty on goods from China, justified on grounds of transnational criminal threats and border security (see previous alert here).
Worldwide and retaliatory tariffs: A 10 percent baseline duty on all imports, with increased rates up to 50 percent for certain US trading partners, based on allegations of non-reciprocal trade policies and structural global imbalances (see previous alerts here and here).
Both types of tariffs were implemented via executive orders invoking national emergency declarations under IEEPA.
Key Legal Holdings
The CIT ruled that:
IEEPA does not authorize boundless tariff authority. The court narrowly interpreted IEEPA’s grant of power to “regulate . . . importation,” holding that it does not encompass the imposition of broad, discretionary tariffs absent a defined emergency directly tied to foreign threats.
The tariffs were ultra vires. The court found that the President’s actions exceeded the legal authority granted by Congress under IEEPA, effectively encroaching upon powers specifically reserved for Congress under Article I of the US Constitution to regulate trade.
IEEPA requires a foreign emergency nexus. The court concluded that generalized economic concerns—such as trade deficits, wage suppression abroad or retaliatory trade practices—do not meet IEEPA’s strict requirement of an “unusual and extraordinary threat” arising, outside the United States. This holding significantly narrows the executive’s discretion in declaring emergencies for trade purposes, emphasizing that the threat must be directly tied to foreign actions impacting national security or foreign policy, not merely economic competition.
Private and state plaintiffs had standing. The court recognized downstream economic harm (e.g., increased procurement costs, disrupted supply chains) as sufficient to establish standing, even for non-importers.
Impact and Effective Scope of the Ruling
The CIT’s judgment is nationwide in scope and normally would be immediately effective. Because the CIT invalidated the relevant executive orders and related Harmonized Tariff Schedule of the United States (HTSUS) modifications, the ruling would have had the practical effect of nullifying the challenged tariffs as a matter of law. However, the Federal Circuit’s administrative stay of the CIT injunction means that:
The tariffs remain in effect for now, pending further action by the appellate court.
The administrative stay is temporary and does not decide the appeal itself, but it preserves the status quo while the court considers the government’s full motion for a stay pending appeal.
Plaintiffs must respond to the government’s stay motion by June 5, 2025, with a reply due June 9, 2025.
Parties have been instructed to notify the Federal Circuit of any ruling on the parallel stay motion still pending before the CIT.
Unless and until the Federal Circuit denies the government’s stay request or the CIT separately lifts the stay, businesses should treat the tariffs as still in force.
Importantly, neither the CIT nor the Federal Circuit order affect product-specific tariffs imposed under other authorities, such as Section 232 of the Trade Expansion Act of 1962. Tariffs on imports of aluminum, steel and certain automotive goods remain in force and are unaffected by these rulings.
Issues Potentially to Be Raised on Appeal
The government is widely expected to appeal the CIT’s decision to the Federal Circuit. Key legal questions likely to be raised on appeal include:
Scope of IEEPA authority: Whether the phrase “regulate . . . importation” authorizes tariff actions, particularly considering precedent under the Trading with the Enemy Act. The government is likely to argue that “regulate . . . importation” within IEEPA is a broad grant of power that includes the imposition of tariffs, citing historical precedent under the Trading with the Enemy Act (e.g., United States v. Yoshida Int’l, Inc., 526 F.2d 560 (C.C.P.A. 1975)) to support a more expansive view of presidential authority during emergencies.
Use of constitutional avoidance: Whether the CIT erred by interpreting IEEPA narrowly based on the nondelegation and major questions doctrines, rather than on plain statutory text.
Justiciability of emergency declarations: Whether the judiciary may review the President’s determination that a national emergency exists for IEEPA purposes. The government may contend that the President’s determination of a national emergency for IEEPA purposes is a political question and thus generally not subject to judicial review, arguing that the CIT overstepped its bounds in scrutinizing this executive determination.
APA applicability: Whether the CIT improperly imported Administrative Procedure Act (APA) standards in reviewing executive action not subject to the APA.
Standing of non-importers: Whether downstream purchasers without direct duty liability can challenge tariff actions under 28 U.S.C. § 1581(i).
The Federal Circuit’s treatment of these issues could have long-term effects on the balance of power between Congress and the executive branch in trade law and emergency economic policy.
Next Steps for Businesses
Businesses affected by the invalidated tariffs should:
Monitor for further court action, including whether the CIT grants or denies the pending stay motion, and any orders from the Federal Circuit on the full stay request.
Adjust forward-looking import planning to reflect the possibility of the tariffs being rolled back if the stay is lifted or the appeal is denied.
Monitor CBP implementation guidance. Companies should pay close attention to forthcoming communications from US Customs and Border Protection (CBP), particularly via Cargo Systems Messaging Service (CSMS) announcements, which are typically published on the CBP website. CBP has used CSMS in the past to communicate implementation steps in response to major litigation.
Importers should proactively review their Automated Commercial Environment (ACE) accounts and coordinate closely with their customs brokers to identify affected entries, assess potential refund claims and remain responsive to any agency developments or requests for information.
The Swiss Federal Supreme Court Bans References to Animals in Plant-based Foods
On May 2, 2025, the Swiss Federal Supreme Court ruled that designations referring to animal species are not allowed to label plant-based meat substitutes (here is the official press release, in French, 2C_26/2023). The full judgment is not yet available, so we cannot provide a more in-depth analysis of the arguments of Switzerland’s supreme judges, and the information below is based solely on the press release.
In 2021, the Zurich Cantonal Laboratory banned a company from labelling its pea protein meat substitutes with names referring to animal species; the company appealed this ban, and the Administrative Court of the Canton of Zurich decided in its favor in 2022, allowing the use of references to animal meat in its products. However, in its judgment of May 2, 2025, the Federal Supreme Court upheld the appeal filed by the Federal Department of Home Affairs, annulling the first instance decision of the Zurich Administrative Court and thus ruling against the company.
According to the press release, food products destined for consumers made exclusively with vegetable proteins (i.e., those usually defined as ‘plant-based meat’) cannot be designated by names of animal species, even if these are accompanied by an indication specifying the vegetable origin of the product, such as ‘planted chicken,’ ‘chicken-like,’ ‘pork-like,’ ‘vegan pork,’ or ‘vegan chicken.’ In fact, the term ‘chicken’ refers to poultry; therefore, it cannot be used for products that do not contain a meat component, as it would be misleading for consumers. In other words, plant-based products alternative to meat must be labelled in such a way as to enable the consumer to recognize the type of foodstuff and to differentiate it from products that they aim to substitute.
China’s Supreme People’s Court Designates Generative AI Case as Typical
On May 26, 2025, China’s Supreme People’s Court (SPC) released the “Typical cases on the fifth anniversary of the promulgation of the Civil Code” (民法典颁布五周年典型案例) including one generative AI case in which the Beijing Internet Court held that an AI-generated voice infringed a dubber’s personality rights. Note that while China is not a common law country, designating a case as a Guiding Case or Typical Case is somewhat analogous to a U.S. Court marking a case as precedential in that the SPC is indicating to lower courts to adjudicate future cases in accordance with this decision.
As explained by the SPC:
IV. Protecting voice rights according to law and promoting the development of artificial intelligence for good – Yin v. Beijing smart technology company and others’ infringement of personality rights case
1. Basic Facts of the Case
The plaintiff, Yin XX, is a dubbing artist. He found that the works produced by others using his dubbing were widely circulated in many well-known apps. After tracing the source, the sound in the above works came from the text-to-speech product on the platform operated by the defendant, a Beijing intelligent technology company. Users can convert text into speech by entering text and adjusting parameters. The plaintiff was commissioned by the defendant, a Beijing cultural media company, to record a sound recording, and the defendant was the copyright owner of the sound recording. Later, the defendant provided the audio of the sound recording recorded by the plaintiff to another defendant, a software company, and allowed the defendant to use, copy, and modify the data for commercial or non-commercial purposes for its products and services. The other defendant only used the sound recording recorded by the plaintiff as the material for AI processing, generated the text-to-speech product involved in the case, and sold it on the cloud service platform operated by yet another defendant, a Shanghai network technology company. The defendant, the Beijing intelligent technology company, signed an online service sales contract with the defendant, a Beijing technology development company, and another defendant placed an order with the defendant, which included the text-to-speech product involved in the case. The defendant, a Beijing intelligent technology company, adopted the form of an application program interface, and directly retrieved and generated the text-to-speech product for use on its platform without technical processing. Yin filed a lawsuit in court, requesting that defendant one, a Beijing intelligent technology company, and defendant three, a software company, immediately stop infringing and apologize, and that the five defendants compensate Yin for economic and mental losses.
(II) Judgment Result
The effective judgment holds that the voice right is a personal interest and concerns the personal dignity of natural persons. For the voice processed by artificial intelligence technology, as long as the general public or the public within a certain range can identify a specific natural person based on the timbre, intonation and pronunciation style, the voice right of the natural person can extend to the AI voice. The above five defendants all used the plaintiff’s voice without the plaintiff’s permission and committed acts that infringed the plaintiff’s voice rights, constituting an infringement of the plaintiff’s voice rights. Because the infringing products involved in the case have been removed, the five defendants will no longer be ordered to bear the tort liability of stopping the infringement. Instead, based on the plaintiff’s request, the subjective fault of each defendant and other factors, the court ruled that the first defendant, a Beijing intelligent technology company, and the third defendant, a software company, apologize to the plaintiff, and the second defendant, a Beijing cultural media company, and the third defendant, a software company, compensated the plaintiff for losses.
(III) Typical significance
General Secretary Xi Jinping emphasized: “We must strengthen the research and prevention of potential risks in the development of artificial intelligence, safeguard the interests of the people and national security, and ensure that artificial intelligence is safe, reliable and controllable.” With the rapid development of artificial intelligence technology, voice forgery and imitation are becoming increasingly common, and disputes involving infringement of personality rights caused by related technologies are also increasing. my country has written “voice” protection into the Personality Rights Code of the Civil Code in the form of legislation, reflecting respect for the rights and interests of natural persons’ voices, as well as a positive response to technological development and social needs. In this case, the People’s Court determined in accordance with the law that voice, as a kind of personal right, is person-specific. Unauthorized use or permission for others to use the voice in a recording without the permission of the right holder constitutes infringement, which sets the boundaries of behavior for the application of new formats and new technologies, and helps to regulate and guide the development of artificial intelligence technology in the direction of serving the people and doing good.
(IV) Guidance on the provisions of the Civil Code
Article 1018
A natural person enjoys the right to likeness and is entitled to make, use, publicize, or authorize others to use his image in accordance with law.
The likeness is an external image of a specific natural person reflected in video recordings, sculptures, drawings, or on other media by which the person can be identified.
Article 1019
No organization or individual may infringe upon other’s rights to likeness by vilifying or defacing the image thereof, or through other ways such as falsifying other’s image by utilizing information technology. Unless otherwise provided by law, no one may make, use, or publicize the image of the right holder without his consent.
Without the consent of the person holding the right to likeness, a person holding a right in the works of the image of the former person may not use or publicize the said image by ways such as publishing, duplicating, distributing, leasing, or exhibiting it.
Article 1023
For an authorized use of another person’s name or the like, the relevant provisions on the authorized use of other’s images shall be applied mutatis mutandis.
For the protection of a natural person’s voice, the relevant provisions on the protection of the right to likeness shall be applied mutatis mutandis.
The original text, including five other Civil Code Typical Cases, can be found here (Chinese only).
Stay on Alert: CFTC Staff Reminds Registered Exchanges and Clearinghouses to Evaluate and Calibrate Their Volatility Control Mechanisms
The Commodity Futures Training Commission’s (“CFTC”) Division of Market Oversight and Division of Clearing and Risk issued an advisory (the “Staff Advisory”) reminding designated contract markets (“DCMs”) and derivatives clearing organizations (“DCOs”) of their regulatory obligations under the Commodity Exchange Act (“CEA”) and CFTC regulations to implement and consistently evaluate the efficacy of their controls designed to address market volatility. These controls—referred to as volatility control mechanisms (“VCMs”) by the Committee on Payments and Market Infrastructure and the International Organization of Securities Commissions—are especially important in today’s environment, where global events such as pandemics, wars, sanctions, political instability, and abrupt policy changes can drive extreme volatility.
The May 22 Staff Advisory reflects the most recent development in the industry related to VCMs. In September 2023, the Futures Industry Association (“FIA”) published a paper supporting VCMs, noting their effectiveness in preserving market integrity by mitigating disruptions from sudden price swings, erroneous orders, and feedback loops under stress (“FIA Best Practices”). FIA also advocated for a principles-based approach to VCM design to ensure adaptability across asset classes and changing market conditions.
The FIA Best Practices recommended that DCMs implement robust, flexible controls such as circuit breakers, price bands, and pre-trade risk checks that are tailored to their specific markets and trading conditions. For DCOs, the Staff Advisory underscores the potential impact of VCMs on clearing functions, particularly around variation margin and settlement pricing during volatile periods. DCOs must exercise discretion in ensuring settlement prices reflect market reality when normal pricing methods are disrupted, and should transparently communicate such deviations to clearing members and end-users.
In November 2023, the CFTC’s Global Markets Advisory Committee (“GMAC”), chaired by Acting Chairman Caroline Pham, played a pivotal role in advancing these best practices. Composed of a broad cross-section of market infrastructures, participants, end-users, and regulators, GMAC recommended that the CFTC leverage the FIA Best Practices to deepen its understanding of exchange-level risk controls and as a foundation for engagement with global regulators and international standard setters.
In line with this recommendation, the Staff Advisory reinforces that DCMs and DCOs are expected to fulfill their existing responsibilities and incorporate best practices to maintain fair, orderly, and resilient markets during times of elevated volatility.
The Staff Advisory is available here. FIA’s Best Practices is available here.
Syria-ous Changes for Middle East Business? The United States, UK, and Europe Relax Sanctions on Syria
In a significant shift in international policy, the United States, European Union, and United Kingdom have each taken steps to ease sanctions on Syria, aiming to support the country’s reconstruction and political transition following the fall of the Assad regime.
United States Actions
On May 23, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 25 (GL 25), authorizing certain transactions otherwise prohibited under the Syrian Sanctions Regulations (31 C.F.R. Part 542). That move represents a major policy shift aimed at facilitating reconstruction and humanitarian efforts in Syria.[1] In parallel, the U.S. Department of State issued a waiver of sanctions under the Caesar Syria Civilian Protection Act. Together, those developments signal a coordinated effort to promote economic stabilization while maintaining leverage over the Syrian government’s conduct.
Scope of Authorized Transactions
GL 25 authorizes U.S. persons to engage in a broad range of transactions involving Syria that were previously prohibited. Specifically, the license allows transactions that involve the Government of Syria and certain blocked persons, including individuals and entities named in the annex to GL 25, as well as entities that are owned 50 percent or more by such persons. The license covers services, investment, and dealings involving Syrian-origin petroleum and petroleum products, among other activities. Notably, this license lifts longstanding restrictions on financial transactions and investment, which could enable U.S. companies to reenter the Syrian market under certain conditions.
Concurrently Issued Measures
The easing of OFAC sanctions is part of a wider package of measures. In coordination with GL 25, the U.S. Department of State issued a 180-day waiver of certain sanctions under the Caesar Act, providing additional relief intended to stimulate activity in key sectors such as infrastructure, agriculture, and healthcare.
The Financial Crimes Enforcement Network (FinCEN) issued guidance relaxing restrictions under Section 311 of the USA PATRIOT Act, allowing U.S. financial institutions to maintain correspondent accounts for the Commercial Bank of Syria. These measures are designed to operate in tandem and provide meaningful openings for financial and commercial reengagement, subject to oversight and compliance measures.
Limitations and Conditions
Despite the breadth of the new authorizations, the relief measures are not unconditional. The U.S. government has emphasized that continued implementation of GL 25 and related actions will depend on the Syrian government’s conduct going forward. Specifically, the U.S. has tied future sanctions relief to Syria’s demonstrated commitment to protecting ethnic and religious minorities and ceasing support to designated terrorist organizations. The U.S. intends to monitor these commitments closely, and the status of GL 25 may be revisited if conditions on the ground deteriorate or if the Syrian government fails to uphold its obligations.
Export Control Considerations
Importantly, while GL 25 eases certain economic sanctions, it does not affect the application of U.S. export control restrictions over the country. Items subject to the Export Administration Regulations (EAR) generally remain prohibited for export or reexport to Syria, unless specifically authorized by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). This includes both items classified under specific Export Control Classification Numbers (ECCNs) and those designated as EAR99. Likewise, exports of U.S. Munitions List items and related defense services remain subject to the International Traffic in Arms Regulations (ITAR), administered by the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC). Companies considering transactions involving Syria should therefore make sure that they obtain appropriate licenses from those agencies before exporting to Syria.
European Union Measures
On May 28, 2025, the Council of the European Union adopted a series of legal acts lifting all economic restrictive measures on Syria, with the exception of those based on security grounds.[2] This move formalizes the political decision announced on May 20, 2025, and aims to support the Syrian people in rebuilding a new, inclusive, pluralistic, and peaceful Syria.[3] As part of this approach, the Council removed 24 entities from the EU list of those subject to the freezing of funds and economic resources, including banks such as the Central Bank of Syria and companies operating in key sectors for Syria’s economic recovery. However, the EU has extended the listings of individuals and entities linked to the Assad regime until June 1, 2026, and introduced new restrictive measures under the EU Global Human Rights Sanctions Regime, targeting individuals and entities responsible for serious human rights abuses.
United Kingdom Developments
On April 24, 2025, the UK government published the Syria (Sanctions) (EU Exit) (Amendment) Regulations 2025,[4] which took effect on April 25, 2025. These regulations partially suspend a number of significant sanctions that have been in place for over a decade, reflecting developments in the political situation in Syria following the fall of the Assad regime in December 2024. The UK has lifted sanctions on several Syrian government agencies, including the Ministry of the Interior, the Ministry of Defense, and the General Intelligence Service, as well as the police, air force, military, and state-run media. Additionally, the UK has pledged up to £160 million in support for Syria in 2025, providing lifesaving assistance and supporting agriculture, livelihoods, and education programs to help Syrians rebuild their lives. The United Kingdom is expected to adopt additional legal measures to ease Syrian sanctions, mirroring recent actions by the U.S. and EU.
Implications for U.S. and International Businesses
These coordinated actions by the U.S., EU, and UK signal a new phase in international engagement with Syria, potentially opening avenues for businesses and investors. However, companies considering entry into the Syrian market would be well advised to exercise caution and conduct thorough due diligence to ensure compliance with the remaining sanctions and export control laws. Despite the easing of certain sanctions, stringent export control restrictions remain in place, and the relief measures are contingent upon the Syrian government’s commitment to safeguarding human rights and not providing safe harbor to terrorist organizations.
FOOTNOTES
[1] See OFAC’s press release available here.
[2] See Council’s Press Release, available here.
[3] See Council’s Press Release, available here.
[4] Available here.
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US Provides Broad Sanctions Relief to Syria
On 23 May 2025, the United States provided broad sanctions relief to Syria and the new Government of Syria under President Ahmed al-Sharaa. While speaking at an investment forum in Riyadh, President Trump announced his intentions to lift sanctions on Syria, stating that sanctions relief will “give them a chance at greatness.”
To that end, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License (GL) 25, authorizing transactions prohibited by the Syrian Sanctions Regulations (SySR), as well as transactions prohibited under certain other statutes and executive orders. Alongside GL 25, the US Department of State issued a 180-day waiver of mandatory “Caesar Act” sanctions to permit certain investments in Syria and the Financial Crimes Enforcement Network permitted US banks to maintain correspondent accounts for the Commercial Bank of Syria.
Between 2004 and 2011, the United States imposed increasingly comprehensive sanctions on Syria, prohibiting most US investment in Syria, the export of goods and services to Syria, dealings in Syrian petroleum, and transactions involving Syrian blocked parties, including “secondary sanctions” for significant dealings with the blocked Government of Syria.
Under GL 25, US persons are authorized to engage in many transactions prohibited under the SySR, including:
Transactions with 28 Syrian parties on the Specially Designated Nationals and Blocked Persons List (SDN List), including certain financial institutions, ports, oil and gas companies, airlines, and ministries. These parties are named in the Annex to GL 25. Authorization to deal with these named parties extends to the blocked entities they own at least 50% or more (collectively “Annex Parties”).
Certain transactions in Syria, provided they do not involve blocked parties that are not Annex Parties, including: new investment in Syria, the export of services to Syria, US importation and other dealings in Syrian petroleum, dealings in the property and property interests of Annex Parties, and payment transfers involving such authorized activities.
It is important to note that GL 25 does not authorize:
Transactions involving blocked parties not specifically authorized under GL 25.
Unblocking any property blocked as of 22 May 2025.
Exports, reexports, and transfers to or within Syria that require authorization under the Export Administration Regulations or International Traffic in Arms Regulations. Accordingly, the export, reexport, or transfer of defense articles and dual-use items, software, and technology remain prohibited unless authorized.
Transactions involving the Governments of Russia, Iran, or North Korea.
Sanctions relief under GL 25 became effective on 23 May 2025 and is not subject to an expiration date. OFAC can revoke GL 25 at any time or replace it with a “GL 25A” requiring the “wind down” of existing transactions by a certain date. The Treasury Department has signaled that additional sanctions relief may be forthcoming, referring to GL 25 as a “first step.”
Investment Management Client Alert May 2025
ESMA Publishes Final Reports on Liquidity Management Tools
On 15 April 2025, the European Securities and Markets Authority (ESMA) published its final reports on the Regulatory Technical Standards (RTS) and the Guidelines on Liquidity Management Tools (Guidelines). The liquidity management tools (LMTs) were significantly amended by the Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD) review. ESMA has a mandate to develop the regulatory technical standards and guidelines and initiated a consultation on this in July 2024.
The RTS are intended to specify the characteristics of the nine LMTs that have been introduced by the AIFMD review. The Guidelines, which are to be read together with the RTS, also concern the selection, activation, and adjustment of the LMTs.
The Guidelines contain a breakdown of the LMTs into three categories: quantitative-based tools (e.g., redemption suspension and restriction), anti-dilution tools (e.g., redemption fees), and other tools (e.g., separating illiquid investments into so-called side pockets). Management companies should assess which LMTs are suitable for which fund types and in which (normal or stressed) market situations and provide a number of examples.
Compared to the consultation, the RTS provide for greater flexibility in the design of the activation limits for redemption restrictions. The requirement for LMTs to be applied uniformly across all share classes has been removed (except for the case of suspension). The organizational requirements for a so-called LMT policy to be drawn up have also been removed from the Guidelines.
In principle, the European Commission has three months to adopt the RTS or submit proposals for amendments (15 July 2025). The RTS will enter into force 20 days after adoption by the European Commission, although no explicit date is specified for the applicability of the regulations in the RTS and Guidelines (the AIFMD review itself must be implemented by 16 April 2026). A 12-month transitional period applies to investment funds that already exist prior to the date of applicability of the RTS and Guidelines.
ESMA Publishes Final Report on MiFID II Best Execution Requirements
On 10 April 2025, ESMA published its final report on the RTS on best execution. The best execution requirements in the EU Markets in Financial Instruments Directive (MiFID II) were amended as part of the MiFID II review. ESMA has a mandate to develop the technical regulatory standards and initiated a consultation on this in July 2024.
Investment firms executing client orders must monitor the effectiveness of their order execution policy and arrangements and assess, among other things, whether execution venues are providing the best possible result for clients. The RTS should specify criteria to be taken into account when determining and assessing the effectiveness of the order execution policy.
The RTS stipulate that the selected trading venue must be regularly reviewed on the basis of alternative trading venues to ensure that the best possible result is achieved for the client. Compared to the consultation, the requirements for selecting the trading venue have been simplified (e.g., fewer selection criteria).
The European Commission generally has three months to adopt the RTS or submit proposals for amendments (10 July 2025). The RTS enter into force 20 days after adoption by the European Commission. The RTS are applicable 18 months after entry into force.
ESMA Consults RTS on ESG Rating Regulation
On 2 May 2025, ESMA published a consultation paper on draft RTS regarding various aspects of the European Environmental, Social, and Governance (ESG) Rating Regulation.
The ESG Rating Regulation aims to contribute to the transparency and quality of ESG ratings by improving the integrity, transparency, comparability, responsibility, reliability, good governance, and independence of ESG ratings.
The draft RTS defines information that ESG rating providers should provide in applications for authorization and recognition. In addition, the draft details the measures and safeguards that should be put in place to mitigate the risks of conflicts of interest for ESG rating providers when they also engage in activities other than issuing ESG ratings. Finally, the draft proposes information that ESG rating providers should disclose to the public, rated entities, and issuers of rated entities, as well as users of ESG ratings.
ESMA will review the consultation feedback received by 20 June 2025 and plans to publish a final report in October 2025.
ESMA Publishes New Consolidated PRIIPs Q&A
On 5 May 2025, ESMA published an updated version of its Consolidated Questions and Answers (Q&A) on the PRIIPs Key Information Document (KID). Compared to the last version dated 15 March 2024, the document contains further clarifications regarding the definition of the class for the market risk measure (MRM class), the performance scenarios, and the calculation of the summary cost indicator. Regarding entry costs (e.g., issue premiums), for example, it is clarified that these are included in the assumed investment amount of EUR 10,000 (as per point 90 of Annex VI of Delegated Regulation (EU) 2017/653) and are not added on top.
BaFin Consults on “Circular on Members of the Management Board and of Administrative and Supervisory Bodies pursuant to the German Banking Act (KWG)”
On 14 May 2025, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin) published a draft of a “Circular on Members of the Management Board and of Administrative and Supervisory Bodies pursuant to the German Banking Act” (also known as the “Fit and Proper” Circular) for consultation. The final circular is intended to replace the existing “Guidance Note on Managers in accordance with the KWG, ZAG and KAGB” and the “Guidance Note on Members of Administrative and Supervisory Bodies in accordance with the KWG and KAGB”. The aim of the new circular is to summarize the currently existing individual guidance notes for the future in order to avoid duplication and to implement common European guidelines, insofar as BaFin adopts these in its administrative practice. It also contains completion and administrative instructions and takes into account requirements from the German Risk Reduction Act (Risikoreduzierungsgesetz). The consultation is open for comments until 13 June 2025.
BaFin Consults on Ordinance to Simplify Holder Control Procedures and Certain Personal Notifications
On 20 May 2025, BaFin published a draft of an “Ordinance on the Simplification of Holder Control Procedures and Certain Personal Disclosures” for consultation. This ordinance is intended to simplify the holder control procedure in relation to credit institutions, financial services institutions, insurance companies, pension funds, and insurance holding companies in accordance with the German Holder Control Regulation Ordinance (Inhaberkontrollverordnung – InhKontrollV) and in relation to other financial companies to which the InhKontrollV applies accordingly with regard to the documents (e.g., certificates of good conduct) and declarations (e.g., CVs) to be submitted. Indirect acquirers who are not at the top of the acquiring group should, as a rule, no longer have to submit any documents beyond the notification of their intention to acquire, and, in the case of holder control proceedings relating to leasing and factoring institutions in liquidation, the submission of documents may be waived if necessary. Further simplifications focus on natural persons and the documents relating to their reliability. The consultation is open for comments until 5 June 2025.
BaFin Plans Product Intervention With Regard to Trading in Turbo Certificates
BaFin announced on 21 May 2025 that it intends to restrict trading in turbo certificates by issuing a general ruling due to significant concerns for investor protection, and that it is now launching a consultation with affected market participants. Accordingly, the marketing, distribution, and sale of the products shall only be permitted under certain conditions in the future. In particular, a standardized risk warning is to be included, bonuses (e.g., reduced order fees) are no longer to be granted, and an extended appropriateness test is to be carried out. This was preceded by a market investigation by BaFin, which found that 74.2% of investors had suffered losses when trading these leveraged derivative products. The legal bases for this supervisory measure are Art. 42 of the European Markets in Financial Instruments Regulation (MiFIR) and § 15 (1), sentence 2, of the German Securities Trading Act (Wertpapierhandelsgesetz) in conjunction with Art. 42 MiFIR. Responses to the planned measure can be submitted to BaFin until 3 July 2025.
A Gap in the Market for Corruption Enforcement
This article will examine the evolving attitudes of the United Kingdom (“UK”), European Union (“EU”) and United States (“US”) toward corruption enforcement and will assess whether the UK and EU will be able to plug the potential enforcement gap created by President Trump’s recent Executive Order.
The United States
On February 10, 2025, President Trump issued an Executive Order titled, ‘Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security’ (the “EO”). As discussed in our previous article, this directs the US Department of Justice (“DOJ”) to pause enforcement of the Foreign Corrupt Practices Act (“FCPA”) for 180 days, while the Attorney General reviews the guidelines and policies governing FCPA investigations and enforcement actions.
The EO does not remove all bribery and corruption risks because, among other things and notwithstanding the temporary pause, it does not apply to civil actions brought by the US Securities and Exchange Commission, it does not repeal the FCPA, and the FCPA’s statute of limitations remains five years, which could run longer that the current enforcement pause. However, the EO, in addition to numerous other Executive Orders (which can be found here), highlights a shift in enforcement priorities under the Trump administration, the full effects of which are yet to be seen.
European Union
While the US has signalled that it is scaling back on enforcement that “actively harms American economic competitiveness,”[1] the EU is demonstrating an increased commitment to robust bribery and corruption enforcement.
On May 3, 2023, the European Commission put forward an anti-corruption package, which included a proposal for a directive focused on tackling corruption. The proposal’s explanatory memorandum described corruption as an “impediment to sustainable economic growth, diverting resources from productive outcomes”. The Council of the EU approved the general approach for the directive on June 14, 2024, and noted that the EU’s current instruments are “not sufficiently comprehensive, and the current criminalisation of corruption varies across Member States hampering a coherent and effective response across the Union.” The Council of the EU said the directive will establish “minimum rules concerning the definition of criminal offences and criminal and non-criminal penalties in the area of corruption, as well as measures to better prevent and fight corruption.”
In addition to potential legislative changes, on March 20, 2025, the creation of the International Anti-Corruption Prosecutorial Taskforce (the “Taskforce”) was announced. The Taskforce, which includes the UK’s Serious Fraud Office (“SFO”), the Office of the Attorney General of Switzerland and France’s Parquet National Financier, issued a Founding Statement, recognizing “the significant threat of bribery and corruption and the severe harm it causes.”[2] The Taskforce seeks to deliver a Leaders’ Group for exchanging insight and strategy, a Working Group for devising proposals for co-operation, increased best practice sharing, and a strengthened foundation to seize opportunities for operational collaboration.
United Kingdom
The UK has also taken positive action to ameliorate its corruption detection and enforcement strategy.
First, the Economic Crime and Corporate Transparency Act 2023, introduced the failure to prevent fraud offence (“FTPFO”), which means that large organizations, wherever located, can be held criminally liable if a fraud offence is committed by an “associated person” for, or on behalf of, the organisation with the intention of benefitting the organization or its clients. The SFO’s Business Plan 2025-26, emphasized that the “deployment of the failure to prevent fraud offence in September will be a landmark moment which will widen the reach and breadth of prosecutions.”[3]
Also included in the SFO Business Plan was an intention to “progress whistleblower incentivisation reform.” Whistleblower incentivization increases the likelihood of reports being made which first reduces corruption by acting as a deterrent but also aids enforcement as an information gathering tool. The Financial Conduct Authority and Prudential Regulatory Authority have previously cautioned against providing financial incentives for whistleblowers, due to concerns over entrapment, malicious reporting, the quality of reports, and the cost-effectiveness of such schemes.[4] This position is at odds with that adopted by the US where, for example, the US Department of the Treasury’s Financial Crimes Enforcement Network has implemented a whistleblower program that incentivizes individuals to report anti-money laundering or sanctions violations. A report by RUSI highlights that US incentivization schemes are so effective, “that US regulators are consistently benefiting from information provided by Canadian and UK citizens.”[5] At his first public speech as director of the SFO, Nick Ephgrave QPM attributed the UK’s change of direction to his intention to concentrate efforts on evidence gathering routes that would lead straight to the evidence and find “smoking guns.” Mr Ephgrave’s intention to adopt a US-style approach suggests the UK may be well-placed to plug any potential enforcement gap left by the US.
On April 24, 2025, the SFO published Guidance on Corporate Co-Operation and Enforcement in relation to Corporate Criminal Offending. This guidance outlines the SFO’s key considerations under the public interest stage of the Full Code Test for Crown Prosecutors when deciding whether to charge a corporate or invite it to enter negotiations for a deferred prosecution agreement. The guidance will make it simpler for corporates to report suspected wrongdoing by a direct route to the SFO’s Intelligence Division via a secure reporting portal.
Finally, on December 12, 2024, the UK Security Minister, Dan Jarvis MP MBE, announced the introduction of a pilot Domestic Corruption Unit (the “Unit”), set up by the City of London Police and the Home Office. The Unit will “bring together the different pieces of the system, such as national agencies, local forces [and] devolved policing bodies” and “lead proactive investigations, providing much needed capacity and a dedicated response in areas where previously this has been lacking”. [6]
Conclusion
The fate of bribery and corruption enforcement in the US is unclear. Instead of spearheading prosecution sand compliance efforts globally, the US appears, at least for the time being, to have taken a step back. However, since before President Trump took office, the EU and UK have been sharpening their enforcement capabilities. Therefore, while Nick Ephgrave QPM has been clear that the Taskforce was not in response to the EO, companies cannot rely on a period of relaxed enforcement on either side of the Atlantic.
[1] The White House, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security – The White House ((February 10, 2025)
[2] International Anti-Corruption Prosecutorial Taskforce, International_Anti-Corruption_Prosecutorial_Taskforce.pdf (March 20, 2025)
[3] Serious Fraud Office, SFO_2025-26__Business_Plan.pdf (April 3, 2025)
[4] Financial Conduct Authority, Prudential Regulation Authority, Financial Incentives for Whistleblowers (July, 2014)
[5] Royal United Services Institute, The Inside Track: The Role of Financial Rewards for Whistleblowers in the Fight Against Economic Crime (December, 2024)
[6] Home Office, Working with partners to defeat economic crime – GOV.UK (December 12, 2024)
EU Lifts Key Sanctions on Syria: Legal and Compliance Implications Amid Evolving Opportunities
Earlier this week, the Council of the EU adopted a series of legal instruments giving effect to what had been agreed on 20 May 2025, to significantly reduce sanctions on the Syrian Arab Republic. As a result, all EU economic restrictive measures targeting Syria have been lifted, except for those maintained on specific security-related grounds. This marks a substantial shift in the EU’s sanctions posture, intended to facilitate renewed economic engagement, support post-war reconstruction and encourage institutional re-integration, while preserving targeted measures where legal and strategic considerations continue to apply.
As part of this move, 24 entities have been removed from the EU’s list of designated persons and entities subject to asset freezes (vid. Annex II, EU Regulation Nº36/2012). These include financial institutions such as the Central Bank of Syria and commercial actors operating in strategic sectors for the country’s recovery, such as oil production and refining, cotton, telecommunications and media. The council characterises this lifting of sanctions as a principled response to a moment of historic transition, and a reaffirmation of the EU’s longstanding partnership with the Syrian people.
Read the full insight here.
Government Consultation on the Introduction of Mandatory Ethnicity and Disability Pay Gap Reporting Now Open
The UK government has launched a consultation on introducing mandatory ethnicity and disability pay gap reporting for certain employers. The consultation closes on 30 June 2025. This consultation applies to ‘large employers’ and ‘large public bodies’ who are defined are those with 250 or more employees. The responses to this consultation will be used to inform the government’s drafting of the proposed Equality (Race and Disability) Bill and ensure that the legislation gives employers a clear framework on what is required of them.
Key proposals
Large employers have been required to report their gender pay gap data since 2017 which the Government says has led to greater transparency for employers and employees. The Government plans to use a similar reporting framework for ethnicity and disability pay gap reporting, meaning that all employers with 250 or more employees will need to report any ethnicity and disability pay gaps amongst their workforces.
Employers will be required to use data from a ‘snapshot date’ of 5 April each year and report their gaps within 12 months i.e., by 4 April the following year. Employers will report their data online, in a similar way to how gender pay gaps are reported. The Equality and Human Rights Commission, which currently enforces gender pay gap reporting, be empowered to enforce ethnicity and disability pay gap reporting, too.
Employers will report ethnicity and disability pay gaps on the same measures used for gender pay gap reporting:
mean differences in average hourly pay;
median differences in average hourly pay;
pay quarters – the percentage of employees in four equally-sized groups, ranked from highest to lowest hourly pay;
mean differences in bonus pay;
median differences in bonus pay; and
the percentage of employees receiving bonus pay.
In addition to the above, the Government will also require employers to report on the overall breakdown of their workforce by ethnicity and disability and the percentage of employees who did not disclose their personal data on their ethnicity and disability.
The Government is also seeking views on whether employers should have to produce “action plans” for ethnicity and disability pay gaps (a similar proposal for gender pay gap “action plans” is currently included in the Employment Rights Bill). This would provide employers with an opportunity to explain the reasons for any pay gaps and the steps they are taking to address them.
Ethnicity Pay Gap Reporting
In relation to ethnicity pay gap reporting specifically, the Government has proposed employees self-report their ethnicity (with an option to opt out of answering; employees will not be legally required to disclose this information). Those who do wish to disclose their ethnicity should select their ethnicity from the 18 classifications used in the Government Statistical Service ethnicity harmonised standard that was used for the 2021 Census.
In order to report on ethnic pay gaps, the government has proposed that the minimum threshold should be 10 employees in any ethnic group being analysed in terms of pay. If there are fewer than 10 employees in any of the classifications, employers should combine ethnic groups together, following the guidance on ethnicity data from the Office for National Statistics to ensure groupings are as comparable as possible. Where there are smaller numbers of employees in different ethnic groups, the Government has advised that employers report a “binary classification”, for example, reporting the comparison between the largest ethnic group in the organisation and all other groups combined.
The Government is also seeking views on whether large public bodies such as universities should report on ethnicity pay difference by grade or salary bands and data relating to recruitment, retention, and progression by ethnicity.
Disability Pay Gap Reporting
The government proposes using the Equality Act 2010 definition of ‘disability’ as the basis of identifying disabled employees. The Government also proposes to make employers responsible for collecting data on disability in accordance with that definition, however, as with ethnicity pay gap reporting, employees will self-report (or can opt out of reporting) their disability status.
The Government has also proposed a binary approach to disability pay gap calculations. All disabled employees will be grouped together regardless of their disability and employers will be required to compare disabled employees with non-disabled employees. Employers will not be required to collect and publish data about different impairment types.
There should be a minimum of 10 employees in each group being compared. If there are less than 10 employees with disabilities, it is presumed that the employer will still be required to file a report explaining that they cannot publish a disability pay gap to reduce the risk of individuals becoming identifiable.
Practical implications
The introduction of mandatory ethnicity and disability pay gap reporting will be a major change for UK employers as many will not have been collecting and analysing such data to date.
The consultation does not specify when these reporting requirements will be introduced, although the Government has stated it will be publishing the draft Equality (Race and Disability) Bill this parliamentary session. The earliest the reporting requirements will be introduced is 2026 with the first reports due in 2027.
The collection of ethnicity and disability data will likely be a challenging task for employers who will need to ensure that they approach their obligations in a way that does not compromise employee privacy data protection law. Calculating the average pay of a dataset as small as 10 employees may result in individual identification being possible and its usefulness is questionable as there may be significant fluctuations if employees join or leave.
Employers may also be concerned about the potential triggering liabilities and responsibilities if employees come forward and disclose that they consider themselves to be disabled when they have not previously done so.
The full consultation document can be found here.
*Maya Sterrie, trainee in the Employment Litigation practice, contributed to this article.
Victorian Government to Extend the Temporary Off-the-Plan Duty Concession
As part of the 2025–2026 Victorian State Budget announced on 20 May 2025, the Victorian government has confirmed that it intends to extend the availability of an expanded off-the-plan stamp duty concession for a further 12-month period.
Under the expanded concession regime, purchasers are able to apply a duty concession to the purchase of apartments and townhouses (other than detached dwellings) off the plan. Prior to the temporary expansion being introduced in October 2024, which was legislated to apply for a 12-month period, purchasers were only eligible for the concession where they were buying their principal place of residence and the dutiable value was below a prescribed threshold. Under the expanded regime, the concession is available to all purchasers, including investors and foreign buyers (although the foreign additional duty regime continues to apply).
You can read our previous article on the temporary expansion of the off-the-plan duty concession here.
Once the extension passes Parliament, the expanded off-the-plan stamp duty concession will be extended for a further period of 12-months with an expiry date of 20 October 2026 (unless extended further).
The extension will come as welcome news to both purchasers and developers, particularly in the context of the Reserve Bank of Australia’s recent announcement to further ease interest rates. We remain of the view that the expanded concession should not have a time limit and should have ongoing application (as was the case prior to changes introduced by the Victorian government in 2017) so as to support confidence for investment in new housing projects, which are critical to address Victoria’s housing crisis.