Court Strikes Down Fentanyl and Reciprocal Tariffs, but Appeals Court Temporarily Stays Impact
Key Takeaways
The U.S. Court of International Trade struck down President Trump’s fentanyl and reciprocal tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA), ruling the statute did not authorize such broad actions.
The court’s order halts future tariff collection, requires refunds of duties collected since February 2025, and has nationwide impact across all U.S. importers and ports.
The government has appealed the decision and requested a stay of the court’s order, which the Federal Circuit granted. This temporary stay pauses the unwinding of the tariffs, resulting in continued tariff collection in the interim and delayed refunds to importers.
The ruling is limited to IEEPA-based tariffs and does not affect existing or future tariffs imposed under Section 232 or Section 301 authorities.
On May 28, 2025, the U.S. Court of International Trade (USCIT) struck down the earliest and broadest of President Trump’s second term tariff actions: the tariffs imposed against Canada, Mexico and China starting in February and March (the fentanyl tariffs) and the tariffs imposed against nearly all other countries in early April (the reciprocal tariffs). These actions, together as subsequently modified, subjected most U.S. imports to additional import duties of between 10% and 25%. The court’s order wipes those executive tariff impositions off the table, eliminating prior and prospective collection, including the planned increase of the 10% reciprocal tariffs later this summer. If the opinion and order stand, all fentanyl and reciprocal duties collected since February 2025 will be refunded. The court’s order does not impact tariffs imposed under other tariff authorities like Section 232 or Section 301.
The court’s opinion, issued on May 28, impacts multiple tariff executive orders issued by the President invoking the IEEPA. The court specifically found that that statute did not authorize the President “to impose unlimited tariffs on goods from nearly every country in the world.”
On February 1, President Trump first invoked IEEPA to announce tariffs imposed on U.S. imports from Canada, China and Mexico intended to address the flow of fentanyl and its precursors from those countries crossing the U.S. border; the actions against Canada and Mexico were also intended to address migration flows from those two countries. The tariffs, set to take effect on February 4, were ultimately deferred with regard to Canada and Mexico until early March. Since that time, these tariffs have been revised on several occasions, for example, exempting U.S. imports eligible for preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA) from the fentanyl tariffs.
Later, on April 2, President Trump announced 10% tariffs on the vast majority of imports from the vast majority of countries, effective April 5; these tariffs were intended to rebalance U.S. trade flows and achieve “reciprocal” trading treatment. For certain countries, those 10% tariffs briefly increased to higher country-specific rates at 12:01 am ET on April 9, 2025. That same date, however, President Trump paused the increase in reciprocal duty tariff rates for those countries with enhanced rates above 10% for all countries other thanChina, with the higher rates deferred for 90 days (to July 8, 2025). With regard to shipments from China, President Trump announced escalating tariff rates peaking at 125%. The 125% tariffs were subsequently temporarily decreased to 10%, effective May 16, 2025, following productive negotiations between the U.S. and China; higher rates previously in effect are expected to be reimposed effective August 12.
The court’s action from May 28 eliminates the entire IEEPA tariff framework, ordering U.S. Customs and Border Protection to refund the fentanyl and reciprocal tariffs collected and cease collection of new duties. This order has national effect, thereby impacting across all U.S. importers and ports.
Although the court invalidates the tariffs and orders that the tariffs be unwound within 10 calendar days of its opinion’s issuance, the government has already appealed the court’s ruling to the U.S. Court of Appeals for the Federal Circuit and has sought a stay of the court’s order pending resolution of the appeal, which the Federal Circuit granted. This temporary stay pauses the unwinding of the tariffs, resulting in continued tariff collection in the interim and delayed refunds to importers. Whichever party prevails on appeal before the Federal Circuit will have an opportunity to seek further review by the U.S. Supreme Court.
The USCIT’s judgment is limited to the IEEPA-based tariff regimes and does not impact tariffs imposed under other legal mechanisms, for example, tariffs imposed to date or potentially imposed in the future on certain sectors under national security investigations conducted under Section 232 of the Trade Expansion Act of 1962 (such as on steel, aluminum or autos) or under Section 301 of the Trade Act of 1974 (as imposed by President Trump during his first term against certain imports from China and expanded during the Biden Administration). This opinion also does not impact future potential Section 232 actions, such as those that may be taken for pharmaceuticals, critical minerals, semiconductors and heavy trucks following the outcome of those investigations.
Stronger Workplaces for Nova Scotia Act Amendments in Effect in July and September 2025
On September 20, 2024, Nova Scotia’s Stronger Workplaces for Nova Scotia Act, which amended the Workers’ Compensation Act, the Occupational Health and Safety Act, and the Labour Standards Code, received Royal Assent. Portions of the Stronger Workplaces for Nova Scotia Act are already in effect. This article will review the changes coming into effect in July and September 2025.
Quick Hits
The Stronger Workplaces for Nova Scotia Act amends the Workers’ Compensation Act to include Section 89A, which outlines the duties of employers and employees regarding the early and safe return to work of injured workers. This change will come into effect on July 15, 2025.
Starting September 1, 2025, the act will also amend the Occupational Health and Safety Act to include psychological health and safety in the definition of “health and safety” and require employers to establish policies to prevent workplace harassment.
Employers may want to review and update their current policies on harassment, occupational health and safety, and safe return to work to comply with the new regulations and address the Nova Scotian government’s focus on preventing workplace harassment and psychological harm.
Changes Coming in July 2025
The Stronger Workplaces for Nova Scotia Act amends the Workers’ Compensation Act by adding Section 89A and changing Subsection 89(3), which provides the definitions for “alternative employment” and “suitable work,” to apply to Section 89A as well. These changes come into effect on July 15, 2025.
Section 89A essentially codifies an employer’s and employee’s duties and the actions when an employee is injured and returns to work. It states,
(1) The employer of an injured worker shall co-operate in the early and safe return to work of the worker by
(a) contacting the worker as soon as practicable after the injury occurs and maintaining communication throughout the period of the worker’s recovery and impairment;
(b) attempting to provide suitable work that is available and, where possible, restores the worker’s pre-injury earnings;
(c) giving the [Workers’ Compensation] Board such information as the Board may request concerning the worker’s return to work; and
(d) doing such other things as may be prescribed by the regulations.
(2) An injured worker shall co-operate in the worker’s early and safe return to work by
(a) contacting the employer as soon as practicable after the injury occurs and maintaining communication throughout the period of the worker’s recovery and impairment;
(b) assisting the employer, as may be required or requested, to identify suitable work that is available and, where possible, restores the worker’s pre-injury earnings;
(c) giving the Board such information as the Board may request concerning the worker’s return to work; and
(d) doing such other things as may be prescribed by the regulations.
(3) Where, in the opinion of the Board, an employer fails or refuses to comply with subsection (1), the Board may impose a penalty on the employer not exceeding the total of
(a) the full amount or capitalized value, as determined by the Board, of any compensation payable to a worker of the employer in respect of injuries that occurred to the employer’s workers during the period of non-compliance; and
(b) any other expenditures made by the Board in respect of injuries that occurred to the employer’s workers during the period of non-compliance.
(4) Where, in the opinion of the Board, a worker fails or refuses to comply with subsection (2), the Board may suspend, reduce, terminate or withhold the worker’s compensation during the period of non-compliance.
The definitions of “alternative employment” and “suitable work” in Subsection 89(3) are the following:
“Alternative employment” means employment that is comparable to the worker’s pre-injury work in nature, earnings, qualifications, opportunities and other aspects.
“Suitable work” means work which the worker has the necessary skills to perform, is medically able to perform and which does not pose a health or safety hazard to the worker or any coworkers.
However, only “suitable work” is used in Section 89A and not “alternative employment.” So, based on Subclause 89A(1)(b) the employer only needs to attempt to provide work which the worker has the necessary skills to perform, is medically able to perform, and does not pose a health or safety hazard to the worker or others, but does not need to be comparable to the worker’s pre-injury work.
Both employers and employees must follow Section 89A, or else the Workers’ Compensation Board of Nova Scotia can issue penalties against them. If an employer runs into issues where an employee is not communicating while recovering from their injuries or is not assisting in finding suitable work, it could remind the employee of his or her obligations under Subsection 89A(2) and that the Board could suspend, reduce, terminate, or withhold the employee’s compensation.
Changes Coming in September 2025
The act’s amendments to the OHSA focus on physical and psychological health and safety, and preventing harassment in the workplace. These changes come into effect on September 1, 2025.
The first change is that the act adds the definition of “health and safety” to Section 3 of the OHSA, which includes both physical and psychological health and safety. This could have significant impacts throughout the OHSA, as every mention of “health and safety” now includes psychological health and safety. For example, Section 13(1)(a) and Section 17(1)(a) state that employers and employees respectively shall take every precaution that is reasonable in the circumstances to ensure the health and safety of persons or themselves at or near the workplace, which now includes psychological health and safety.
The second change by the act adds Subsection (4) to Section 13 to the OHSA. Section 13 prescribes the employer’s precautions and duties, and Subsection (4) will add the following:
(4) Every employer shall, in accordance with the regulations, establish and implement a policy respecting the prevention of harassment in the workplace.
While it is not yet clear what employers need to include in this policy, we anticipate the Nova Scotia Occupational Health and Safety Division releasing the regulations and a companion guide by mid-summer 2025, to be in force by September 1, 2025.
We further anticipate the definition of harassment in the regulation to be similar to the language in the Workers’ Compensation General Regulations, which states,
“workplace harassment or bullying” means a single significant occurrence or a course of repeated occurrences of objectionable or unwelcome conduct, comment or action in the workplace that, whether intended or not, degrades, intimidates or threatens, and includes all of the following, but does not include any action taken by an employer or supervisor relating to the management and direction of a worker or the workplace:
(i) workplace harassment or bullying that is based on any personal characteristic, including, but not limited to, a characteristic referred to in clauses 5(1)(h) to (v) of the Human Rights Act,
(ii) inappropriate sexual conduct, including, but not limited to, sexual solicitation or advances, sexually suggestive remarks or gestures, circulating or sharing inappropriate images or unwanted physical contact.
Employers with comprehensive harassment policies may not need to make any changes until the regulations are out; however, if they do not have such policies yet, they may want to begin drafting them.
Impact of These Changes
Employers may want to consider what impact the Stronger Workplaces for Nova Scotia Act will have on their workplaces and review their current harassment, occupational health and safety, and safe return to work policies, especially because the Nova Scotian government is taking harassment and psychological harm in the workplace seriously.
Big Law Redefined: Immigration Insights Episode 14 | Transferring Employees to Canada – What Corporate Employers Need to Know [Podcast]
In this episode of the Immigration Insights series on Greenberg Traurig’s Big Law Redefined podcast, host Kate Kalmykov, co-chair of GT’s Global Immigration & Compliance Practice, is joined by Canadian immigration attorney Sergio Karas to discuss the basics and complexities of corporate immigration to Canada.
They address the do’s and don’ts of cross-border work, key visa categories, business visitor vs. work permit rules, and common mistakes companies make.
Kate and Sergio emphasize the need for careful planning, accurate documentation, and understanding the differences between US and Canadian immigration systems.
If your business is involved with Canadian immigration, you won’t want to miss this discussion!
Supreme Court Stays Order That Had Paused Termination of Temporary Protected Status for Venezuelans
On May 19, 2025, the Supreme Court of the United States issued an unsigned order granting the Trump administration’s application to stay a lower court’s order temporarily halting the rescission of Temporary Protected Status (TPS) designation for Venezuela. The Supreme Court’s order allows the administration to resume implementation of rescission actions while court challenges continue through the appeals process.
Quick Hits
The Supreme Court’s stay of a district court order has permitted the Trump administration to resume rescission of the TPS designation for Venezuela, as outlined in Secretary of Homeland Security Kristi Noem’s previous determinations.
Benefits under the 2023 TPS designation for Venezuela may now be subject to revocation, affecting work authorization and protection from removal for Venezuelan TPS beneficiaries; protections under the 2021 TPS designation will remain in place until September 10, 2025.
Although the Supreme Court’s order reinstates the rescission actions, it leaves open the possibility of further legal challenges regarding the validity of immigration documents (i.e., EADs, Forms I-797, Notices of Action, and Forms I-94) issued with October 2, 2026, expiration dates.
Background
The TPS designation provides temporary status to foreign nationals in the United States who are unable to return to their home countries due to an event or circumstance present in those countries. The secretary of homeland security may designate a foreign country for TPS due to temporary conditions such as ongoing armed conflicts, environmental disasters, epidemics, or other extraordinary and temporary conditions that prevent nationals from safely returning to their countries. During the designated TPS period, TPS beneficiaries are protected from removal and may apply for work and travel authorization.
In 2021, Venezuela was initially designated for TPS, and in October 2023, Venezuela was redesignated for TPS—an expansion of the program that provided additional relief for citizens of Venezuela who met qualifying criteria. The 2021 and 2023 designations were most recently extended by the Biden administration for eighteen months, to October 2, 2026.
On January 28, 2025, Secretary of Homeland Security Kristi Noem cancelled the extension of the 2021 and 2023 TPS designations for Venezuela. On February 3, 2025, Secretary Noem terminated the 2023 TPS designation entirely, ending temporary legal protections for beneficiaries under the 2023 designation on April 7, 2025.
On March 31, 2025, Judge Edward Chen of the U.S. District Court for the Northern District of California issued a nationwide order postponing Secretary Noem’s cancellation of the eighteen-month extension for the 2021 and 2023 TPS designations and the termination of the 2023 TPS designation, pending a final decision on the merits in the case. Both the district court and the U.S. Court of Appeals for the Ninth Circuit rejected applications by the Trump administration to stay this temporary order.
Analysis and Impact
The Supreme Court’s order is narrow in scope in that it effectively reverses the lower court’s temporary pause on the rescission of TPS for Venezuela and does not address the merits of the TPS rescission itself.
The U.S. Department of Homeland Security (DHS) may now proceed with its revocation of TPS for Venezuela, as outlined in Secretary Noem’s previous determinations. However, legal challenges to these actions will continue to proceed through the courts and may again reach the Supreme Court to directly decide on the legality of DHS’s actions.
Immediate impacts for TPS Venezuela beneficiaries include the following:
Beneficiaries under the 2023 designation may now be subject to revocation of TPS benefits and removal from the United States.
EADs under the 2023 designation with expiration dates of April 2, 2025, may no longer be valid as proof of work authorization.
Beneficiaries under the 2021 designation continue to have TPS benefits in place through September 10, 2025.
Only EADs under the 2021 designation with expiration dates of September 10, 2025, March 10, 2024, or September 9, 2022, are automatically extended through September 10, 2025.
To the extent that Secretary Noem’s rescission of TPS designation purports to invalidate immigration documents, including EADs, already issued to TPS Venezuela beneficiaries with validity until October 2, 2026, the Supreme Court’s order expressly states that such a purported invalidation remains subject to legal challenge. However, absent further court decisions or DHS policy changes, the prior rescissions of TPS designation for Venezuela are reinstated, and any EADs or other documents with a validity expiration date of October 2, 2026, may no longer be valid.
We expect DHS to provide further clarification as to how it intends to proceed with the implementation of its revocation of TPS for Venezuela, including updated guidance related to I-9 verification.
Federal Court Halts Broad Swath of Tariffs, Ruling Trump Lacks Authority Under IEEPA
On May 28, 2025 the little-known federal Court of International Trade issued its ruling in two challenges — one brought by 12 states attorneys general and one by private companies — to President Trump’s authority to issue tariffs using the International Emergency Economic Powers Act (IEEPA).
No prior president has used IEEPA to support tariffs, as IEEPA has historically been viewed as only a sanctions authority. In a unanimous per curiam opinion, the three-judge panel of the court invalidated using IEEPA to support tariffs under Article I, Section 8, clauses 1 and 3 of the Constitution, which assign to Congress “the exclusive powers to ‘lay and collect Taxes, Duties, Imposts, and Excises’ and to ‘regulate Commerce with foreign Nations.’”
After an extensive review of Congress’ delegation of trade authorities dating back to 1916, the court quotes IEEPA’s provision that its “authorities ‘may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared… and may not be exercised for any other purpose.’” The court held that IEEPA does not delegate Congress’ power to the President “in the form of authority to impose unlimited tariffs on goods from nearly every country in the world.”
Concluding that IEEPA does not authorize any of the “Worldwide, Retaliatory, or Trafficking Tariff Orders,” the court found that narrowly tailored relief was inappropriate as “if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all.”
As a result, the challenged orders were permanently enjoined nationwide, allowing 10 calendar days for orders to be issued. The Trump Administration immediately filed for a motion to stay and appealed the order to the Court of Appeals for the Federal Circuit. The ruling halts the collection of the duties that were based on IEEPA under Executive Orders 14193, 14194, 14195 (the “Trafficking Tariffs”), and 14257 (the “Worldwide and Retaliatory Tariffs”) and all their amendments.
The “Trafficking Tariffs” are those imposed on Canada, Mexico, and China and the “Worldwide and Retaliatory Tariffs” are the global 10% ad valorem and the “reciprocal” global tariff schedule. It also reinstates de minimis treatment for shipments valued at less than $800. The ruling may also require refunding tariffs already paid.
Tariffs based on other authorities, including Section 232 tariffs on automobiles, aluminum, and steel, and Section 301 tariffs on China, remain in effect.
The ruling will likely throw a wrench into ongoing trade negotiations with dozens of countries, even while it is under appeal. In addition to the substantive ruling on IEEPA authority, both the nationwide injunction and the request for a stay pending appeal could make their way swiftly to the Supreme Court’s so-called “shadow docket” for emergency relief.
In addition, Congress may seek to ratify the tariffs, or the administration may seek to reinstate the tariffs using other delegated authorities. The ruling is unlikely to bring an end to the volatility that has surrounded the tariffs since they were imposed in April, and long-term planning around tariffs will continue to be challenging.
UK Cross-Government Review of Sanctions Implementation and Enforcement
On 15 May 2025, the UK government published a policy paper summarising findings from a cross-government review of sanctions implementation and enforcement. The Foreign, Commonwealth and Development Office led the review in collaboration with insights from external sanctions experts, as well as key sanctions departments and agencies, including HM Treasury, the Department for Business and Trade, the Department for Transport, HM Revenue and Customs (HMRC) and the National Crime Agency.
Anyone involved in advising on or implementing sanctions programs should take note of the content of these findings, as they illustrate where the United Kingdom’s sanctions implementation agencies will be focusing over the next few years.
The aim of the review was to identify further steps to improve and facilitate compliance, increase the deterrent effect of enforcement and invigorate the cross-government toolkit. The UK government has committed to implementing the review conclusions summarised below in the financial year 2025–2026:
Compliance
Targeted Guidance and Enhanced Outreach
The UK government will create additional guidance for, and increase engagement with, sectors with lower levels of sanctions awareness.
Engagement sessions conducted during the review highlighted variable levels of sanctions awareness within different sectors, with smaller businesses less able to access specialist advice.
Clearer and More Accessible Guidance
Sanctions guidance will be better organised, modern and searchable, with read across clearly signposted by posting comprehensive updates to sanctions pages and statutory guidance on GOV.UK.
Single Sanctions List
A single sanctions list incorporating the UK Sanctions List and the Consolidated List of Financial Sanctions Targets will be created. The list will aid industry in screening for designated persons, especially those targeted with non-financial designations, ensuring vital notifications do not go missed.
Ownership and Control
Guidance will be created to further clarify ownership and control obligations. Industry input highlighted the complexities of ownership and control determinations, involving complex due diligence and significant legal costs. Alignment with international partners on ownership will also be an area the UK government will focus on building.
Deterrence
Publication of Enforcement Information
It is vital that the consequences of sanction breaches are clear for effective deterrence. Sanctions enforcement actions will be published regularly for “teachable moments.”
Sanctions Enforcement Strategy
A government-wide sanctions enforcement strategy will be published to detail the range of enforcement outcomes available for non-compliance.
Penalty Settlement System
Currently, the United Kingdom does not have powers to agree to early settlements for sanctions cases beyond HMRC’s compound penalties. The UK government has committed to developing an early civil settlement scheme for breaches of financial sanctions.
Fast-Track Penalties
An accelerated civil penalty process for certain financial sanctions breaches will be developed to allow more resources and time to be given to the most complex, serious and deliberate of breaches.
Toolkit
Making It Easier to Report Suspected Breaches
Moving forward, reporting requirements will become clearer, with the potential for a single reporting point for suspected breaches. The aim is to avoid confusing reporting and potentially misdirected information.
Whistle-Blower Protections
Currently, to qualify for whistle-blower protection, a worker would need to make a disclosure to an employer, a legal advisor or a “prescribed person” under the Public Interest Disclosure (Prescribed Persons) Order 2014 (the Order). The UK government is committed to updating the Order to prescribe relevant government departments in relation to financial, transport and certain trade sanctions.
Future Commitments
The UK government has committed to exploring other areas to go further and deeper to improve sanctions enforcement and implementation depending on resourcing and emerging priorities.
Conclusion
These efforts aim to ensure the United Kingdom’s sanctions are robust, clear and effectively support foreign policy and national security goals.
Disclosure in England and Wales: A Duty to Use Technology
It is not enough that we do our best; sometimes we must do what is required. This famous line attributed to Britain’s defining war time leader, Sir Winston Churchill, serves as a reminder to parties litigating through the English and Welsh courts that the use of technology is central to the discovery process – it is no longer optional.
Whether parties are operating under either of the two regimes that govern disclosure in England and Wales (Part 31 and Practice Direction (PD) 57AD of the Civil Procedure Rules (CPR)), the disclosure process is a central component that seeks to ensure transparency and fairness. However, burgeoning data volumes have increasingly necessitated the use of technology. This is why PD 57AD, which is the newer of the two regimes and in operation in the Business and Property Courts, places technology on the front line by obligating the parties’ legal representatives to use it.
The Duty
Specifically, under PD 57AD, a party’s legal representative is under a duty to promote the reliable, efficient, and cost-effective conduct of disclosure by using technology (paragraph 3.2(3) of PD 57AD). This duty persists until the conclusion of any proceedings and a failure to discharge this duty may result in sanctions from the court. Those sanctions may include adverse cost orders, or a failure may be dealt with as a contempt of court in appropriate cases.
To facilitate this duty, PD 57AD goes further to encourage and support the use of technology throughout the disclosure process. For example, when dealing with the exclusion of narrative documents (these are documents that are relevant only to the background of a dispute and are not readily disclosable) parties must consider using:
software or analytical tools, including technology-assisted review (TAR);
coding strategies, including to reduce duplication; and
prioritisation and workflows.
In addition, where the court orders Extended Disclosure, requiring parties to search for documents, the court may make specific provisions related to technology use. For example, the court might require parties to use certain software or analytical tools or provide for the use of data sampling.
Why Not?
Blindly applying technology, however, is not sufficient. In order to ensure that technology is used efficiently and effectively when Extended Disclosure is ordered, parties must provide the court and the other parties with information about the data in their control. This includes where and how the data is held and how they propose to process and search that data.
This information is set out in the Disclosure Review Document (DRD). The DRD is a comprehensive document that the parties must complete, seek to agree on, and keep updated. To do this, and despite any trench warfare that may be adopted elsewhere in the litigation, parties must cooperate and constructively engage with each other when it comes to completing the DRD and agreeing to the scope of the disclosure exercise.
Where parties consider the use of technology to facilitate collecting and reviewing any data beyond being reasonable, proportionate, and reliable, they are not obliged to justify its use. Instead, it is the opposite. If they decide not to use technology to aid either process, they should explain why such tools would not be used. The requirement to justify why technology is not being used applies especially if the number of documents that need reviewing is more than 50,000 and what is proposed is simply a manual review exercise.
PD 57AD: Ahead of the Curve
PD 57AD came into effect in October 2022, but it was drafted approximately five years prior to its implementation, meaning it came along well before the technological leap forward in terms of generative AI. However, PD 57AD was drafted to be forward-looking and flexible enough to accommodate technological advances.
Therefore, whilst generative AI is not specifically mentioned in the rules or the DRD, the references to technology throughout are purposefully non-exhaustive. Indeed, while AI is considered an umbrella term, many of the tools that are mentioned and that are already routinely used as part of the disclosure process utilise the machine learning element of AI. Tools, such as continuous active learning models that are used to assess which documents, compared to others, are more likely to be relevant to the underlying dispute, should be reviewed first.
Parties litigating before the English and Welsh courts should look to leverage new technologies, tools, and workflows as part of the disclosure process. In doing so, they are not doing their best – they are doing what is required.
News From Across the Pond: UK+ Regime Now Permanent
In 2021, shortly after Brexit became effective, the UK Intellectual Property Office (IPO) established the “UK+ regime” on the exhaustion of intellectual property (IP) rights with regard to the European Economic Area (EEA). After consultations with stakeholders, the UK IPO announced that this regime will be permanent.
IP rights are exhausted throughout the European Union when the IP owner or its licensee places goods in commerce anywhere in the EU. Post-Brexit, the United Kingdom became a third state, meaning that there was no exhaustion when goods were put on the UK market, then exported to the EEA. Similarly, there was no exhaustion when goods were put on the EU market, then exported to the UK. To address the latter issue, the UK unilaterally implemented the UK+ regime, which was initially planned as an interim solution. The UK+ regime ensured that, from a UK perspective, IP rights were still considered exhausted when goods were placed on the EU market and subsequently resold in the UK. Once a product had been legitimately sold in the EEA, the IP owner could not prevent its resale in the UK with reference to its IP rights. Thus, relevant goods could continue to be parallel traded into the UK, which ensured continued access to products for consumers, as UK businesses could continue to buy from EU suppliers and resell in the UK without needing permission from the IP owner.
Now that the UK+ regime is permanent, an exhaustion regime persists that is asymmetric. From the EU’s point of view, the UK is still a third state, so IP rights are not exhausted in the EEA when relevant goods are sold in the UK and subsequently exported to the EEA. Therefore, the IP owner can continue to prevent the product from being resold in any EEA state with reference to its IP rights and the lack of exhaustion, even if the product was originally sold in the UK by the IP owner itself or by its licensee. When goods are legitimately sold in the EEA and subsequently exported to the UK, however, exhaustion will occur.
Chemical Coalition Withdraws TSCA Section 21 Petition Seeking Revisions to TSCA 8(a)(7) PFAS Reporting Rule
As reported in our May 4, 2025, blog item, on May 2, 2025, a coalition of chemical companies petitioned the U.S. Environmental Protection Agency (EPA) for an amendment of the Toxic Substances Control Act (TSCA) Section 8(a)(7) rule requiring reporting for per- and polyfluoroalkyl substances (PFAS). The petitioners ask that EPA revise the reporting rule to exclude imported articles, research and development (R&D) materials, impurities, byproducts, non-isolated intermediates, and PFAS manufactured in quantities of less than 2,500 pounds (lb.). Petitioners also request that EPA remove the requirement to submit “‘all existing information concerning the environmental and health effects’ of the chemical substance covered by” the reporting rule and instead allow “robust summaries, similar to the approach adopted by the European Chemicals Agency” (ECHA). According to a May 22, 2025, letter from EPA, on May 16, 2025, the coalition withdrew its petition via email to EPA Administrator Lee Zeldin and “EPA now considers this petition closed.” After the coalition submitted its petition, EPA published an interim final rule to postpone the data submission period to April 13, 2026, through October 13, 2026. 90 Fed. Reg. 20236. Small manufacturers reporting exclusively as article importers would have until April 13, 2027, to report. According to the interim final rule, EPA is separately considering reopening certain aspects of the rule to public comment. Comments on the interim final rule are due June 12, 2025. More information on the interim final rule is available in our May 12, 2025, memorandum.
Supply Chain Transparency: Updates on UK and EU Provisions on Forced Labour and Modern Slavery
Forced labour and modern slavery have been the subject of renewed focus across the UK and EU in recent months. Below we touch upon key issues relating to the UK Home Office’s update to its statutory guidance on the Modern Slavery Act; the EU ban on products made with forced labour due to come into force in 2027; and the conclusion of the Italian Competition Authority’s recent investigation into fashion brands for misstatements about forced labour.
Update to the UK Home Office’s Statutory Guidance on Supply Chain Transparency
In the UK, companies are subject to the reporting obligations set out in section 54 of the Modern Slavery Act 2015 (the MSA). The largest commercial organisations (those with a turnover of £36 million or more) must produce and publish an annual modern slavery and human trafficking statement (MSS). These statements should set out the steps taken in the last financial year by an organisation to ensure that slavery and human trafficking are not taking place in its business or supply chain.
In the 10 years since the MSA received Royal Assent, the world’s concept of supply chain transparency reporting has been transformed, leading to criticism that the UK’s reporting regime had not kept pace. In particular, there had been poor monitoring and enforcement of compliance with these requirements, resulting in inconsistency in the quality and effectiveness of such statements. In response to recommendations made by the House of Lords Select Committee on Modern Slavery in October 2024, the UK government published new guidance “Transparency in supply chains: a practical guide” (Guidance) at the end of March 2025. The Guidance offers practical advice to businesses and sets higher expectations on organisations for the contents of their MSS.
The new legislation has not changed the fundamental reporting requirements under section 54 MSA. However, the October 2024 report also recommended that the UK government enact “legislation requiring companies meeting the threshold to undertake modern slavery due diligence in their supply chains and to take reasonable steps to address problems”, so more onerous requirement may be on their way. Some other jurisdictions (e.g. Australia and Canada) already have more significant compulsory reporting requirements and others, e.g. the EU through the EU Corporate Sustainability Due Diligence Directive (CSDDD), are in the process of implementing them. Complying with the expectations in the new Guidance is a good basis for existing and incoming global benchmarks.
Key Points in the New Guidance
Section four provides more detail on what should be included in an MSS under each of the six areas of disclosure recommended (but not required) under section 54 MSA: (i) organisation structure, business and supply chains; (ii) organisational policies; (iii) assessing and managing risk; (iv) due diligence; (v) training; and (vi) monitoring and evaluation.
It breaks the level of detail down into two levels. Level 1 reflects the more limited content expected from an organisation reporting for the first time. Level 2 builds upon level 1 and reflects the more detailed disclosure expected from organisations reporting on an ongoing basis.
It provides examples of how it expects the reporting information to reflect a business’s current status in terms of supply chain transparency, to acknowledge areas where development or improvement is needed, and to articulate short- or long-term plans for that development. It emphasises the importance of continuous improvement, meaning that organisations need to consider how their modern slavery statements evidence progress year on year.
It expects organisations to summarise their remediation policies and processes.
It encourages businesses to describe incidents of modern slavery identified in their supply chain and remediation taken.
The new guidance introduces the concept of modern slavery “disclosures”, a term that does not feature in the MSA. This emulates other reporting regimes, such as the EU Corporate Sustainability Reporting Directive.
Organisations are encouraged to enter their MSS in the UK’s modern slavery registry (although it is voluntary).
There are signposts to the relevant parts of internationally recognised benchmarks for supply chain due diligence, namely the Organisation for Economic Co-operation and Development Due Diligence process and the United Nations Guiding Principles on Business and Human Rights.
How Should We Respond to the New Guidance?
Organisations that produce MSSs should:
Undertake a gap analysis exercise of their current MSS against the new guidance
Consider if any other documentation (for example existing modern slavery risk assessments, supplier due diligence questionnaires and policies) should be updated to align with the spirit of the new guidance
Assemble a team of internal stakeholders to assist with the preparation of the next statement and ensure sufficient time is allocated to deliver this
Consider briefing the Board (and any director signatory) in advance of seeking their approval of the statement if it is more detailed than the previous year
Many organisations that fall outside the scope of the current section 54 MSA requirement still opt to produce an annual MSS because they recognise the importance of corporate transparency (to the public, suppliers, shareholders or others). Any organisation publishing a statement on this basis should have regard to the new guidance.
EU Ban On Products Made With Forced Labour
EU Regulation 2024/3015 (the Forced Labour Regulation or FLR) entered into force on 13 December 2024 and will apply to EU member states from 14 December 2027. It prohibits individuals and businesses from importing into, making available in or exporting from the EU any product made with forced labour. “Making available” includes distance or online selling targeted at consumers in the EU. The FLR applies not just to products themselves, but to raw material and component parts, irrespective of where they originate. It is not limited to certain sectors or industries and covers the entire lifecycle of the product, as well as every person involved in its production, distribution and sale.
While the FLR does not impose specific due diligence obligations beyond those already provided for at EU level or in individual EU member states, it will operate in conjunction with the CSDDD when it comes into force. The FLR will be enforced by local authorities – customs and other national competent authorities – whose remit will be to prevent products made with forced labour from being imported into, exported from or made available on the EU market. The FLR provides for a Union Against Network Against Forced Labour Projects to streamline regulation and ensure information sharing and consistency. By mid-June 2026, the EU Commission is required under the FLR to publish guidance on due diligence, and on best practices for mitigating forced labour and will establish a database of products, as well as regions that pose a high risk of forced labour. The database will enable the public to submit information on breaches of the FLR. Where there is a “substantiated concern” of forced labour, the EU or national competent authority can investigate.
Decisions by the competent authorities on whether a violation of FLR has occurred (i.e., a decision on whether a product made with forced labour has been placed on the market or made available in the EU or exported from the EU) should be adopted within nine months. If there has been a violation, the competent authority has various powers, including:
Prohibiting the product from being placed on the market, or made available in the EU and from being exported
Ordering the person subject to the investigation to withdraw products already placed on the market or made available, or to remove online marketing for such products
Ordering the disposal destroy the relevant product or replace relevant component parts
The FLR provides a process for reviewing decisions of competent authorities. Businesses likely to be affected by the FLR should ensure that they have effective policies and procedures to identify and address issues of forced labour in their supply chain, to remediate issues if they arise, and a comprehensive training and audit programme. We also recommend that UK businesses ensure that these are reflected in their MSS and that careful records of supply chain due diligence are maintained so that companies can respond quickly to any investigations.
Italian Competition Authority Landmark Forced Labour Case
A recent investigation by the Italian Competition Authority highlights the breadth of ways that issues relating to modern slavery can be subject to investigation and enforcement action. In July 2024, the Italian Competition Authority (the AGCM) launched an investigation into several high-end fashion companies. According to press coverage, prosecutors in Milan identified workshops with underpaid workers, some of whom were illegal immigrants, producing leather bags that were then sold to the company and others below their retail price. The investigation was conducted under the Italian Consumer Code and considered whether the company had misled consumers in its statements about its suppliers’ working conditions.
In May 2025, the AGCM announced the closure of the investigation, without finding that a violation had occurred. As part of a settlement, the company committed to amending its ethics and social responsibility statements; introducing new supply chain due diligence and monitoring procedures; additional training internally on consumer protection laws and for suppliers on forced labour law and the ethical principles set out in the company’s Supplier Code of Conduct. It also committed to paying €2 million over 5 years to fund initiatives aimed at helping victims of labour exploitation. Other brands in the leather consumer goods industry have also been implicated in enforcement action, with reports of another fashion brand being placed under judicial administration for a year after worker abuse was discovered in its supply chain.
Companies in the UK can face similar action. In March 2024, the Competition and Markets Authority (CMA) published an open letter to businesses in the fashion retail industry, highlighting the need to consider their obligations under consumer protection law. While this primarily concerned environmental claims in the sector, the publication highlights the growing regulatory scrutiny faced by this industry. The UK authorities have a wide range of powers to investigate and prosecute individuals and businesses for misrepresentations about compliance with business human rights. Businesses could also be liable for misrepresentations by their associated persons once the UK’s new failure to prevent fraud offence comes into force on 1 September 2025.
Conclusion
In light of increased focus on forced labour issues in the UK and EU, businesses should revisit and revamp their existing risk assessments, policies and procedures relating to supply chain due diligence, transparency and monitoring. Our experts advise companies on a wide range of supply chain compliance and regulatory matters across the UK, EU and globally.
US Easing of Sanctions on Syria Creates Opportunities and Risks
What Happened
On May 23, 2025, the US Department of Treasury Office of Foreign Assets Control (OFAC) issued a general license (GL 25) broadly authorizing financial transactions previously prohibited under the Syrian Sanctions Regulations (found at 31 C.F.R. part 542).
The Bottom Line
Effective immediately, GL 25 allows US persons to engage in certain transactions with the Government of Syria and certain blocked persons following almost 50 years of comprehensive economic sanctions on Syria, most of which were imposed during ex-Syrian President Bashar Assad’s rule. GL 25 represents the first step in lifting US sanctions on Syria. Companies and individuals seeking to do business with or in Syria should carefully consider the scope and limitations of GL 25. Companies should also review internal compliance policies, and sanctions compliance covenants and obligations, to take into account the shifting sanctions landscape with respect to Syria.
Full Story
US sanctions on Syria date from Syria’s 1979 invasion of Lebanon and expanded during Syria’s civil war through a range of legislative actions and executive orders. On January 6, 2025, following the end of President Bashar Assad’s rule, OFAC issued Syria General License 24, which authorized a narrow set of transactions with Syria’s transitional government and energy sector, as well as personal remittances. On May 13, 2025, President Trump announced that the United States would lift sanctions on Syria; on May 23, OFAC issued GL 25.
As described in the press release accompanying the issuance of GL 25, the license is intended to help rebuild Syria’s economy, financial sector and infrastructure; align Syria’s new government with US foreign policy interests; and bring new investment into Syria, signaling opportunity for companies interested in investing in the rebuilding of Syria.
GL 25 authorizes transactions that would otherwise be prohibited under the US economic sanctions on Syria, including new investment in Syria, the provision of financial and other services to Syria and transactions related to Syrian-origin petroleum or petroleum products. GL 25 also authorizes all transactions with the new Government of Syria, and with certain blocked persons identified in a list appended to the license (any transactions with other blocked persons not identified in the annex remain prohibited).
GL 25 represents a significant shift in the US sanctions landscape. For international financial institutions, the reach of US sanctions, especially the secondary sanctions imposed by the Caesar Act of 2019, have been a significant sanctions compliance concern. For nearly five decades, Syria has been viewed as a comprehensively sanctioned country, with the effect that financing and commercial documentation often specifically prohibits doing business in Syria.
The shifting sanctions landscape with respect to Syria introduces new compliance risks for companies seeking to do business there or otherwise take part in rebuilding opportunities. Although GL 25 represents a significant easing of sanctions—such that Syria can no longer be considered a truly “comprehensively” sanctioned country—it is important to note that issuance of the general license is merely an interim step intended to provide immediate relief. While certain sanctions can be lifted by executive order, other sanctions on Syria are imposed by statute and will require Congressional action. Syria’s re-entry into the global financial system may be complicated by this variation in different sanctions authorities as institutions begin to adjust to a post-sanctions Syria.
Financial institutions and companies should carefully review internal compliance policies to take into account the changing scope of sanctions on Syria. Companies and funds seeking to invest in Syria should also consider internal compliance policies with respect to Syria, as well as existing covenants in financing and other agreements that may restrict investment or other business dealings in Syria.
China’s Supreme People’s Court Designates Record-Setting Trade Secret Case as a Typical Case
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 intellectual property case – the record-setting 640 million RMB trade secret case of June 2024. While the decision was a hollow victory as the defendant is insolvent and has not paid any damages, designation as a typical case may encourage lower courts to award higher damages in future trade secret cases. While the parties are unnamed, the plaintiff is Geely Holding Group and the defendant is WM Motor.
As explained by the SPC:
III. “Strict protection” and “high compensation” to actively create an environment that encourages innovation – Ji XX Company et al. v. Wei XX Company et al. Case of infringement of technical secrets
1. Basic Facts of the Case
Nearly 40 senior managers and technical personnel of Ji XX Company and its affiliated companies resigned and went to work for Wei XX Company and its affiliated companies, of which 30 joined the company immediately after resigning in 2016. In 2018, Ji Co. discovered that Wei Co. and the two companies used some of the above-mentioned resigned personnel as inventors or co-inventors, and applied for 12 patents using the new energy vehicle chassis application technology and 12 sets of chassis parts drawings and technical information carried by digital models (hereinafter referred to as “the technical secrets involved in the case”) that hey learned from their prior employer. In addition, the Wei EX series electric vehicles launched by Wei Co. were suspected of infringing the technical secrets involved in the case. Ji Co. filed a lawsuit with the first instance court, requesting that Wei Co. be ordered to stop the infringement and compensate for economic losses and reasonable expenses totaling 2.1 billion RMB.
2. Judgment Result
The effective judgment held that this case was an infringement of technical secrets caused by the organized and planned use of improper means to poach technical personnel and technical resources of new energy vehicles on a large scale. Through overall analysis and comprehensive judgment, Wei Co. obtained all the technical secrets involved in the case by improper means, illegally disclosed part of the technical secrets involved in the case by applying for patents, and used all the technical secrets involved in the case. Therefore, the judgment is: unless the consent of Ji Co. is obtained, Wei Co. shall stop disclosing, using, or allowing others to use the technical secrets involved in the case in any way, and shall not implement, permit others to implement, transfer, pledge, or otherwise dispose of the 12 patents involved in the case; all drawings, digital models, and other technical materials containing the technical secrets involved in the case shall be destroyed or handed over to Ji Co.; the judgment and the requirements for stopping infringement shall be notified to Wei Co. and all its employees, affiliated companies, and relevant component suppliers by means of announcements, internal company notices, etc., and the relevant personnel and units shall be required to sign a letter of commitment to maintain secrecy and not infringe, etc.; considering that Wei Co. has obvious intention to infringe, the circumstances of infringement are serious, and the consequences of infringement are serious, double punitive damages shall be applied to Wei Co.’s infringement profits from May 2019 to the first quarter of 2022, and Wei Co. shall compensate Ji Co. for economic losses and reasonable expenses of about 640 million RMB. At the same time, it is made clear that if Wei Co. violates the obligation to stop infringement determined by the judgment, it shall pay the late performance fee on a daily basis or in one lump sum.
3. Typical significance
General Secretary Xi Jinping profoundly pointed out that protecting intellectual property rights is protecting innovation. Strengthening judicial protection of intellectual property rights is an inherent requirement and important guarantee for the development of new quality productivity. In this case, the People’s Court, in accordance with the relevant provisions of the Civil Code, based on the determination of infringement of technical secrets, while applying punitive damages in accordance with the law, also actively explored the specific way to bear civil liability for stopping infringement and the calculation standard of delayed performance of non-monetary payment obligations, which promoted the renewal of intellectual property trial concepts and innovation of judgment rules, fully demonstrated the clear attitude of strictly protecting intellectual property rights and the firm stance of punishing unfair competition, and was conducive to creating a legal business environment of honest operation, fair competition, and innovation incentives.
4. Guidance on the provisions of the Civil Code
Article 179 The main forms of civil liability include:
(1) cessation of the infringement;
(2) removal of the nuisance;
(3) elimination of the danger;
(4) restitution;
(5) restoration;
(6) repair, redoing, or replacement;
(7) continuance of performance;
(8) compensation for losses;
(9) payment of liquidated damages;
(10) elimination of adverse effects and rehabilitation of reputation; and
(11) extension of apologies.
Where punitive damages are available as provided by law, such provisions shall be followed.
The forms of civil liability provided in this Article may be applied separately or concurrently.
Article 1168: Where two or more persons jointly commit an infringement and cause damage to others, they shall bear joint and several liability.
The original text, including four other Civil Code Typical Cases, can be found here (Chinese only).