France & UK Continue Corporate Criminal Enforcement: SFO Issues New Corporate Guidance
Foreign regulators continue to intensify their efforts to combat bribery and corruption. France’s Anti-Corruption Agency (L’Agence française anticorruption or AFA) recently published its year-in-review for 2024, which showed a nearly ten percent increase in corruption enforcement actions. Half of the offenses involved fraud or deception and 41 percent involved “active” or “passive” corruption. More recently, on April 24, 2025, the UK Serious Fraud Office (“SFO”) issued new corporate guidance, outlining factors it will consider when determining whether to prosecute a company or enter into Deferred Prosecution Agreement (“DPA”) negotiations. Together, these developments further underscore the growing commitment of international enforcement agencies to prioritize bribery and corruption in the corporate context.
The Guidance
The Guidance identifies those factors that the SFO will weigh – including when and how a company should self-report suspected misconduct as well as what constitutes “full” cooperation – when deciding whether a DPA is appropriate. SFO DPA agreements effectively suspend prosecution for a certain period so long as the company satisfies specified conditions and requirements. SFO DPAs are available only to companies, not individuals. Benefits of DPAs and why companies prefer DPA outcomes include avoiding long and expensive trials as well as minimizing the reputational damage of a conviction while still accounting for the relevant criminal behavior.
When considering the importance of self-reporting suspected misconduct, the Guidance states that the SFO does not expect for a company to “fully investigate the matter before self-reporting.” Therefore, companies should be aware that the Guidance makes clear the SFO’s expectation that a company promptly self-report “soon after learning of that evidence” of the suspected criminal conduct. According to the Guidance, when self-reporting, a company should include: (1) “all relevant known facts and evidence concerning the suspected offences”; (2) “the individual(s) involved (both those inside and outside the organization)”; and (3) “the relevant jurisdiction(s).” Ultimately, through self-reporting, the SFO seeks information allowing it “to understand the nature and extent of the suspected offending.”
The Guidance also elaborates on what the SFO considers as constituting “full” cooperation, with cooperation being identified as a “key factor” when determining the outcome of a case as well as the fines and penalties levied. Specifically, the Guidance states that a company that self-reports, but does not exhibit the level of cooperation the SFO expects may not be eligible for a DPA, while a company that does not self-report, but “provide[s] exemplary cooperation” may still be eligible for DPA negotiations. Key indicators of meaningful cooperation include, for instance, preservation of both digital and hard copy materials, disclosure of relevant documents and information, as well as providing a comprehensive account of the suspected misconduct along with identifying all individuals involved. Importantly, even if a company opts to conduct its own internal investigation, the Guidance indicates that early engagement with the SFO is critical when establishing eligibility for a DPA negotiation.
Proactive Steps for Companies
When describing “genuine cooperation” efforts, the Guidance includes “[p]resenting a thorough analysis of the corporate’s compliance programme and procedures in place at the time of offending and how the corporate has remediated, or plans to remediate, any ongoing deficiencies.” In line with previous messaging from both U.S. and foreign enforcement authorities, the Guidance reinforces the expectation that companies maintain a robust, well resourced, and effective compliance program, including proactively evaluating and documenting their compliance efforts both before and after any potential misconduct is identified.
As companies review the Guidance and determine next steps, a strong compliance framework not only helps prevent misconduct but can also significantly mitigate the consequences in the event misconduct should occur, potentially impacting both the outcome of an investigation and the severity of fines or penalties sought. More broadly, effective and robust compliance programs help to mitigate not only bribery and corruption risks, but also money laundering, sanctions issues, human rights violations, and financial fraud risks, among others. Companies with strong compliance programs are better positioned to negotiate favorable outcomes in the event enforcement actions arise, making proactive investment in compliance crucial. To that end, in today’s dynamic regulatory and enforcement landscape, maintaining a well-designed and effective compliance program is critical for companies seeking to mitigate corruption risks.
Takeaways
The SFO’s Guidance signals a greater willingness to resolve corporate cases through DPAs provided that companies timely self-report and demonstrate meaningful cooperation.
Both the Guidance and the UK’s new Failure to Prevent Fraud Offense, emphasize the SFO’s commitment to combating corporate bribery, fraud, and corruption.
While there are similarities between the SFO’s Guidance and existing DOJ guidance around, for instance, cooperation, it will be important for companies to monitor whether further alignment or divergence emerges between UK and US enforcement practices following the current 180-day pause on FCPA enforcement.
Multinational companies should continue to evaluate, assess, and address any potential gaps regarding their compliance programs as foreign regulators, including the SFO, AFA, and the Office of the Attorney General of Switzerland to name a few, ramp up enforcement efforts around corporate bribery and corruption.
Preparing for USTR 301 Fees on Chinese Vessels
Concluding its Section 301 Investigation into “China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors,” the United States Trade Representative (USTR) issued an updated notice of action on April 17. USTR initially issued a proposed action to impose fees on Chinese vessels in the amount of $1 million or $1.5 million per port call. USTR issued the updated notice following President Donald Trump’s April 9 Executive Order 14269, “Restoring America’s Maritime Dominance” (90 Fed. Reg. 15635).
The updated fees will be imposed starting October 14. The fees are structured under four annexes, with Annex I and Annex II being particularly relevant to intermediaries, non-vessel-operating common carriers (NVOCCs), and freight forwarders. Each vessel will be charged only on the initial port call and cannot be charged more than five times per year.
Annex I: Chinese-Owned and Chinese-Operated Vessels
Vessels owned or operated by Chinese entities will be subject to fees based on their net tonnage. The fee starts at $50 per net ton in 2025 and will incrementally increase to $140 per net ton by 2028. Importantly, the fee is assessed at the first US port of entry, regardless of subsequent port calls within the United States.
Annex II: Chinese-Built Vessels
For vessels that are not Chinese-owned or Chinese-operated but are Chinese-built, fees are assessed based on the higher of two metrics:
Net Tonnage: Starting at $18 per net ton and increasing to $33 per net ton over three years.
Container-Based Fee: Starting at $120 per container and increasing to $250 per container over three years. (While the USTR was ambiguous on this point, this per-container fee is likely on a per Twenty-foot Equivalent Unit basis.)
Vessel operators are required to report the number of containers discharged at US ports or with an ultimate destination in US customs territory.
Exemptions and Fee Remissions
Certain vessels are exempt from these fees, including:
Vessels with at least 75% US ownership.
Small vessels under specific size thresholds.
Vessels engaged in short sea shipping (voyages under 2,000 nautical miles).
Additionally, operators can receive fee remissions for up to three years if they order and take delivery of US-built vessels of equivalent or greater capacity within that period.
Annex III: Foreign-Built Car Carrier Vessels
For all foreign-built car carrier vessels, fees are assessed at $150 per Car Equivalent Unit capacity.
Annex IV: Liquefied Natural Gas (LNG) Vessels
One percent of vessels transporting LNG exports must be US-flagged, US-operated starting in 2028, and then in 2029, must be an increasing percentage US-built, US-flagged, and US-operated, increasing to 15% in 2047.
Annex V: Tariffs on Ship-to-Shore (STS) Cranes and Cargo-Handling Equipment from China
Finally, USTR proposed duties on STS cranes and cargo-handling equipment. Comments are due May 19.
Next Steps: Update Your Rules Tariff Terms and Conditions
To adapt to these new fees, it is crucial for freight forwarders and NVOCCs to update their rules tariff terms and conditions. By doing so, you can ensure that these fees are passed through to the appropriate parties, minimizing financial exposure and maintaining operational efficiency.
Time for Some Spring Cleaning? Ombudsman’s Determination Shows Need to Press on With GMP Equalisation
With the Pension Schemes Bill on its way in “late Spring”, now might be a good time for trustees to take stock of their trustee agendas and to brush off some items that may have been left to gather dust. A recent Pensions Ombudsman determination serves as a useful reminder that, for most schemes, GMP equalisation is not yet done and dusted.
The determination concerned a former member of a pension scheme (Mr N), who had taken a transfer out of the scheme some 30 years earlier. His complaint related to seeking a recalculation of his transferred-out benefits in light of the requirement to equalise for GMPs.
The key takeaways from Mr N’s case are that:
Trustees should continue to progress their GMP equalisation projects diligently and promptly. Don’t put off collaborating with the employer or taking professional advice. It is important to formulate and implement an appropriate methodology.
GMP implementation involves many stages and will take some time to complete. The Pensions Ombudsman (TPO) made the point that GMP equalisation is a difficult and complicated project and it is important to ensure it is carried out correctly. TPO said that although it should not be unnecessarily delayed, it is understandable that it will take a reasonable amount of time to implement. Notwithstanding TPO’s comments, trustees should bear in mind that the longer it takes to carry out GMP equalisation, the more likely trustees are going to encounter complaints from members and other beneficiaries.
Good communication with those affected by GMP equalisation projects is paramount. If a member or, indeed, former member asks for an update on progress, provide it. As trustees are painstakingly aware, it is real people who are affected by a delay in the recalculation of benefits. During a cost of living crisis in particular, the uncertainty of being in long-term financial limbo can create anxiety, even if benefit adjustments are likely to be minimal and represent an improvement. Good communication is key.
A Bit of Background
The first Lloyds case in 2018 confirmed a requirement for schemes to equalise for the effect of GMPs. This decision left a lot of unanswered questions, some of which were considered in later judgments. In particular, the November 2020 judgment (Lloyds 3) dealt with the treatment of past transfers. In Lloyds 3, the court ruled that in the case of transfers made under the cash equivalent legislation, the trustee of the Lloyds schemes remained liable for a failure to pay the correct (i.e. equalised) cash equivalent transfer value amount. Note that the position was different where the transfer from the Lloyds schemes was as a result of a bulk transfer, or was a non-statutory individual transfer under the relevant Lloyds scheme rules.
How Was This Relevant to the Case of Mr N?
Mr N had taken a transfer out of his occupational pension scheme some 30 years earlier. It seems not at all surprising that the actual details of Mr N’s benefits were no longer available, although the scheme appears to have retained a record of the transfer out. The lack of data relating to his records formed part of Mr N’s complaint, along with a lack of a plan or timetable for carrying out GMP equalisation. While the pension scheme trustee of Mr N’s former scheme had provided updates to existing members about the Lloyds decisions and the steps that the trustee was taking, it had not, understandably, provided updates to past members.
What Did The Pensions Ombudsman Decide?
TPO agreed with the opinion of his Adjudicator, which was summarised in the determination. Mr N was awarded £500 for distress and inconvenience caused by the trustee’s maladministration. But what maladministration took place?
Lack of a Plan or Timetable for Carrying out GMP Equalisation
What you might expect to form the main basis for a finding of maladministration, did not. The Adjudicator and TPO agreed that in the circumstances of Mr N’s particular scheme, the events complained about were taking place in 2023 so five years since the passing of the first Lloyds decision in 2018 and three since Lloyds 3 and that was not an unreasonable period of time to take to resolve all the issues. The Adjudicator considered all the steps the trustee had taken and was taking to deal with GMP equalisation and thought that those measures (e.g. forming a joint working group with the employer and involving professional advisers to develop and adopt an appropriate methodology), comprised appropriate actions to address the issues. The timescales involved were not considered unreasonable in the circumstances.
Lack of Past Member Records
Likewise, there was no specific criticism of the lack of complete records in relation to Mr N. The Adjudicator noted that TPR guidance does require some limited record retention in relation to past members but, again, the Adjudicator was not so concerned with the retention (or lack of retention) of records in this particular case saying that this did not amount to maladministration. Significantly TPO said that Mr N had failed to show that he incurred any loss as a result of the perceived maladministration.
In case you were wondering, TPR’s record keeping guidance requires the retention of:
member’s name
transfer terms
name of the scheme into or out of which the member has been transferred
transfer date
date of receipt or payment of money or assets.
Lack of Communication with Mr N
This is the hurdle at which the trustee fell. While the Adjudicator acknowledged that it would be difficult for the trustee to easily establish communication with all members impacted by the review, in particular those like Mr N who left the scheme many years before, he considered that it nonetheless had a responsibility to attempt to do so and that it was unclear why the trustee failed to update Mr N, specifically, on progress when it was aware that Mr N was clearly concerned about progress.
In addition, TPO opined “Mr N originally contacted the trustee to ask how the [Lloyds 1] and [Lloyds 3] judgments affected him. Having started that line of communication with the trustee, and provided contact details, the trustee agreed to keep him updated on the progress of the project. However, it did not do so. Therefore, I agree that the trustee’s failure to keep Mr N informed of progress, as it undertook both to Mr N and to TPO to do, will have caused him unnecessary distress and inconvenience.” Mr N was awarded £500 for maladministration.
Some Final Thoughts
This determination, while recognising the complexity of GMP equalisation, does highlight the likelihood that the longer it takes schemes to implement GMP equalisation, the more likely it is that schemes will receive member complaints. Trustees should knock the cobwebs off their GMP equalisation plan and consider it afresh. Outstanding issues should be analysed and addressed, and advice taken where appropriate so that trustees can move forward with good quality data ensuring that members know where they stand in relation to their benefit entitlements.
And if that wasn’t a good enough reason to revisit their GMP equalisation plan, implementation will mean that trustees are one step closer to complying with their general code requirements to keep accurate and complete data, and they will be one step closer to being dashboards ready.
A final thought. In a recent speech at the Pensions Age Conference, Patrick Coyne, Interim Director of Policy and Public Affairs, said that improving data must be the first step to innovation in pensions. He commented on feedback that the pensions industry wants to increase the use of automation and pointed out that “if the data going into the system isn’t up to scratch, you’re automating rubbish.” Enough said!
China Launches Special Campaign to “Clear Up and Rectify the Abuse of AI”
On April 30, 2025, China’s Cyberspace Administration (CAC) launched a 3-month campaign to “clear up and rectify the abuse of AI technology” including using information that infringes on others’ intellectual property rights, privacy rights and other rights. Per the Cyberspace Administration, “the first phase will strengthen the source governance of AI technology, clean up and rectify illegal AI applications, strengthen AI generation and synthesis technology and content identification management, and promote website platforms to improve their detection and identification capabilities. The second phase will focus on the abuse of AI technology to create and publish rumors, false information, pornographic and vulgar content, impersonate others, engage in online water army [paid posters] activities and other prominent issues, and concentrate on cleaning up related illegal and negative information, and deal with and punish illegal accounts, multi-channel networks (MCNs) and website platforms.”
Per the CAC, in the first phase, the focus is on rectifying six prominent problems:
First, illegal AI products by failing to perform large model filing or registration procedures. Providing “one-click undressing” and other functions that violate laws and ethics. Cloning and editing other people’s voices, faces and other biometric information without authorization and consent, infringing on other people’s privacy.
Second, teaching and selling illegal AI product tutorials and products. Teaching tutorial information on how to use illegal AI products to forge face-changing videos, voice-changing audio, etc. Selling illegal “speech synthesizers” and “face-changing tools” and other product information. Marketing, hyping, and promoting illegal AI product information.
Third, lax management of training corpus. Using information that infringes on others’ intellectual property rights, privacy rights and other rights. Using false, invalid, and untrue content crawled from the Internet. Using data from illegal sources. Failure to establish a training corpus management mechanism, and failure to regularly check and clean up illegal corpus.
Fourth, weak security management measures. Failure to establish content review, intent recognition and other security measures that are commensurate with the scale of business. Failure to establish an effective illegal account management mechanism. Failure to conduct regular security self-assessments. Social platforms are unclear about the AI automatic reply and other services accessed through API interfaces, and do not strictly control them.
Fifth, the content identification requirements have not been implemented. The service provider has not added implicit or explicit content identification to deep synthetic content, and has not provided or prompted explicit content identification functions to users. The content dissemination platform has not carried out monitoring and identification of generated synthetic content, resulting in false information misleading the public.
Sixth, there are security risks in key areas. AI products that have been registered to provide question-and-answer services in key areas such as medical care, finance, and for minors have not set up targeted industry security audits and control measures, resulting in problems such as “AI prescribing”, “inducing investment”, and “AI hallucinations”, misleading students and patients and disrupting the order of the financial market.
The second phase focuses on rectifying seven prominent problems:
First, using AI to create and publish rumors. Fabricating all kinds of rumors and information involving current politics, public policies, social livelihood, international relations, emergencies, etc., or making arbitrary guesses and malicious interpretations of major policies. Fabricating and fabricating causes, progress, details, etc. by taking advantage of emergencies, disasters, etc. Impersonating official press conferences or news reports to publish rumors. Using content generated by AI cognitive bias to maliciously guide.
Second, using AI to create and publish false information. Splicing and editing irrelevant pictures, texts, and videos to generate mixed, half-true and half-false information. Blurring and modifying the time, place, and people of the incident, and rehashing old news. Creating and publishing exaggerated, pseudo-scientific and other false content involving professional fields such as finance, education, justice, and medical care. Using AI fortune-telling and AI divination to mislead and deceive netizens and spread superstitious ideas.
Third, using AI to create and publish pornographic and vulgar content. Using AI stripping, AI drawing and other functions to generate synthetic pornographic content or indecent pictures and videos of others, soft pornographic, two-dimensional borderline images such as revealing clothes and coquettish poses, or ugly and other negative content. Produce and publish bloody and violent scenes, distorted human bodies, surreal monsters and other terrifying and bizarre images. Generate synthetic “pornographic texts” and “dirty jokes” and other novels, posts and notes with obvious sexual implications.
Fourth, use AI to impersonate others to commit infringement and illegal acts. Through deep fake technologies such as AI face-changing and voice cloning, impersonate experts, entrepreneurs, celebrities and other public figures to deceive netizens and even market for profit. Use AI to spoof, smear, distort and alienate public figures or historical figures. Use AI to impersonate relatives and friends and engage in illegal activities such as online fraud. Improper use of AI to “resurrect the dead” and abuse the information of the dead.
Fifth, use AI to engage in online water army [paid posting] activities. Use AI technology to “raise accounts” and simulate real people to register and operate social accounts in batches. Use AI content farms or AI to wash manuscripts to batch generate and publish low-quality homogeneous writing to gain traffic. Use AI group control software and social robots to like, post and comment in batches, control the volume and comments, and create hot topics to be listed.
Sixth, AI products, services and applications violate regulations. Create and disseminate counterfeit and shell AI websites and applications. AI applications provide illegal functional services, such as creative tools that provide functions such as “expanding hot searches and hot lists into texts”, and AI social and chat software that provide vulgar and soft pornographic dialogue services. Provide illegal AI applications, generate synthetic services or sell courses, promote and divert traffic, etc.
Seventh, infringe on the rights and interests of minors. AI applications induce minors to become addicted, and there is content that affects the physical and mental health of minors in the minor mode.
The original text is available here (Chinese only).
Belgium as Frontrunner on Rules to Protect Against “Strategic Lawsuits Against Public Participation” (SLAPP), What You Need to Know.
The anti-SLAPP EU Directive 2024/1069 aims to protect people taking part in the public debate against dissuasive legal proceedings brought against them. It provides various guarantees against manifestly unfounded claims or legal proceedings targeting people because of their participation in the public debate.
As a directive, it must now be transposed into national law in each Member State of the European Union. In Belgium, on 18 February 2025, the anti-SLAPP bill was tabled before the Belgian Parliament, giving interesting insights on how this EU initiative may materialize in Member States.
The anti-SLAPP bill’s stated objective is to combat the abusive use of judicial proceedings for the purpose of intimidating or silencing people expressing their opinions (journalists, academics, NGOs, etc.). Among its proposed features, two major points stand out:
Firstly, if a legal claim is brought against a person because of his/her participation in the public debate (for example if this person has expressed his/her opinion on a public subject), the judge may, during the preliminary hearing, dismiss the claim for being manifestly unfounded.
Then, in the event of abuse of procedure by a party, the judge may impose a fine of up to €25,000, damages and/or the publication of the judgment. The draft bill provides several criteria to be considered to establish whether there is an abuse of procedure.
In addition to introducing the above points for civil cases, the draft bill also caters for anti-SLAPP measures through amending the Belgian Code of Criminal Procedure.
At this stage it is still only a draft bill that has not yet been adopted by the Belgian Parliament and may hence be subject to further changes, and once adopted, subject to future case law and doctrinal developments. Still, it is likely to have a significant impact on companies operating in sectors subject to public opinion’s pressure such as health, food, construction, consumer products and heavy industry. This draft bill (if adopted) will indeed provide a solid means of defense for NGOs and other players active in the public debate and already exercising noticeable policy and legal activism.
China’s Supreme People’s Court and Supreme People’s Procuratorate Issue Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property Infringement
On April 24, 2025, China’s Supreme People’s Court (SPC) and Supreme People’s Procuratorate (SPP) jointly issued the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property Infringement (关于办理侵犯知识产权刑事案件适用法律若干问题的解释). The Interpretation clarifies trademark crimes, patent counterfeiting, copyright crimes, trade secret misappropriation, and common issues arising in IP crimes (e.g., heavier or reduced sentences). The Interpretation is effective as of April 26, 2025.
A translation follows. The original text is available here (Chinese only).
In order to punish crimes of infringement of intellectual property rights in accordance with the law and maintain the socialist market economic order, in accordance with the relevant provisions of the Criminal Law of the People’s Republic of China, the Criminal Procedure Law of the People’s Republic of China and other laws, and in combination with judicial practice, we hereby explain several issues concerning the application of law in handling criminal cases of infringement of intellectual property rights as follows:
Article 1: Where a person uses a trademark identical to a registered trademark on the same kind of goods or services without the permission of the registered trademark owner, any of the following circumstances shall be deemed to be “the same kind of goods or services” as provided for in Article 213 of the Criminal Law:
(1) The names of the goods actually produced and sold, or the names of the services actually provided by the actor are the same as the names of the goods or services approved for use by the right holder’s registered trademark;
(2) The commodity names are different, but the functions, uses, main raw materials, consumers, sales channels, etc. are the same or substantially the same, and the relevant public generally believes that they are the same kind of commodities;
(3) The service names are different, but the purpose, content, method, object, location, etc. of the services are the same or substantially the same, and the relevant public generally believes that they are the same type of services.
To determine “the same kind of goods or services”, a comparison should be made between the goods or services approved for use by the right holder’s registered trademark and the goods or services actually produced and sold, or the services actually provided, by the actor.
Article 2 A trademark that is identical to a counterfeited registered trademark, or that is substantially indistinguishable from a counterfeited registered trademark and sufficient to mislead the relevant public, shall be deemed a “trademark that is identical to its registered trademark” as provided for in Article 213 of the Criminal Law. A trademark that is substantially indistinguishable from a counterfeited registered trademark and sufficient to mislead the relevant public shall be deemed to be a trademark that is substantially indistinguishable from a counterfeited registered trademark and sufficient to mislead the relevant public if any of the following circumstances exists:
(1) Changing the font, uppercase and lowercase letters, or the horizontal and vertical arrangement of the characters of a registered trademark, which is basically indistinguishable from the registered trademark;
(2) Changing the spacing between words, letters, numbers, etc. of a registered trademark, which is basically indistinguishable from the registered trademark;
(3) Changing the color of a registered trademark does not affect the distinctive features of the registered trademark;
(4) merely adding to a registered trademark elements that lack distinctive features, such as the common name of the goods or model number, which do not affect the distinctive features of the registered trademark;
(5) There is basically no difference between the three-dimensional signs and the two-dimensional elements of the three-dimensional registered trademark;
(6) Other marks that are basically indistinguishable from the registered trademark and are sufficient to mislead the relevant public.
Article 3: Where a person uses a trademark identical to a registered trademark on the same kind of goods without the permission of the registered trademark owner, any of the following circumstances shall be deemed to be a “serious circumstance” as provided for in Article 213 of the Criminal Law:
(1) The amount of illegal income is RMB 30,000 or more, or the amount of illegal business is RMB 50,000 or more;
(2) counterfeiting two or more registered trademarks, with illegal gains exceeding RMB 20,000 or illegal business volume exceeding RMB 30,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 20,000 or the amount of illegal business is more than RMB 30,000;
(4) Other circumstances of a serious nature.
If a person uses a trademark identical to a registered trademark on the same kind of service without the permission of the registered trademark owner, any of the following circumstances shall be deemed to be a “serious circumstance” as provided for in Article 213 of the Criminal Law:
(1) The amount of illegal gains is RMB 50,000 or more;
(2) counterfeiting two or more registered trademarks, with the amount of illegal gains exceeding RMB 30,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is RMB 30,000 or more;
(4) Other circumstances of a serious nature.
Where a person counterfeits both a registered trademark for goods and a registered trademark for services, and the amount of illegal gains from the counterfeit registered trademark for goods is less than the standard prescribed in the first paragraph of this Article, but the total amount of illegal gains from the counterfeit registered trademark for services reaches the standard prescribed in the second paragraph of this Article, it shall be deemed as “serious circumstances” as prescribed in Article 213 of the Criminal Law.
If the amount of illegal gains or illegal business operations reaches ten times or more the standards specified in the first three paragraphs of this article, it shall be deemed as “particularly serious circumstances” as stipulated in Article 213 of the Criminal Law.
Article 4 Anyone who sells goods bearing counterfeit registered trademarks shall be deemed to have “knowingly” done so as provided for in Article 214 of the Criminal Law if any of the following circumstances exists, unless there is evidence proving that the person was truly unaware:
(1) Knowing that the registered trademark on the goods he sells has been altered, replaced or covered;
(2) Forging or altering a trademark registrant’s authorization document or knowing that the document has been forged or altered;
(3) A person who has been subject to criminal or administrative penalties for selling goods bearing counterfeit registered trademarks and then sells the same goods bearing counterfeit registered trademarks;
(4) purchasing or selling goods at prices significantly lower than the market price without justifiable reasons;
(5) after being discovered by administrative law enforcement agencies or judicial agencies to be selling goods bearing counterfeit registered trademarks, transferring or destroying infringing goods, accounting documents and other evidence, or providing false certification;
(6) Other circumstances that may be regarded as knowing that the goods are counterfeit registered trademarks.
Article 5 Where a person knowingly sells goods that are counterfeit registered trademarks and the amount of illegal proceeds is more than RMB 30,000, it shall be deemed as “a relatively large amount of illegal proceeds” as provided for in Article 214 of the Criminal Law. If any of the following circumstances exists, it shall be deemed as “other serious circumstances” as provided for in Article 214 of the Criminal Law:
(1) The sales amount is RMB 50,000 or more;
(2) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 20,000 or the amount of sales is more than RMB 30,000;
(3) The value of the goods bearing counterfeit registered trademarks that have not yet been sold reaches three times or more the sales amount standards prescribed in the first two paragraphs of this paragraph, or the sales amount of the goods that have been sold is less than the sales amount standards in the first two paragraphs of this paragraph, but the total value of the goods and the sales amount of the goods that have not yet been sold reaches three times or more the sales amount standards prescribed in the first two paragraphs of this paragraph.
If the amount of illegal proceeds, sales amount, value of goods, or the total of sales amount and value of goods reaches ten times or more of the standard specified in the preceding paragraph of this Article, it shall be deemed as “the amount of illegal proceeds is huge or there are other particularly serious circumstances” as stipulated in Article 214 of the Criminal Law.
Article 6 Forging or unauthorized manufacturing of another person’s registered trademark or selling forged or unauthorized registered trademark shall be deemed to be a “serious circumstance” as provided for in Article 215 of the Criminal Law if any of the following circumstances exists:
(1) The number of labels is more than 10,000, or the amount of illegal income is more than 20,000 yuan, or the amount of illegal business is more than 30,000 yuan;
(2) Forging, manufacturing without authorization, or selling forged or unauthorized manufacturing of two or more registered trademarks, the number of which is more than 5,000, or the amount of illegal gains is more than RMB 10,000, or the amount of illegal business is more than RMB 20,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, and committing the act again, the number of labels is more than 5,000, or the amount of illegal income is more than RMB 10,000, or the amount of illegal business is more than RMB 20,000;
(4) selling registered trademark signs illegally manufactured by others, where the number of signs that have not yet been sold reaches three times or more the standards specified in the first three items of this paragraph, or the number of signs that have been sold is less than the standards specified in the first three items of this paragraph, but the total number of signs that have not yet been sold reaches three times or more the standards specified in the first three items of this paragraph;
(5) Other serious circumstances.
If the number of labels, the amount of illegal income, and the amount of illegal business reach more than five times the standards specified in the preceding paragraph of this article, it shall be deemed as “particularly serious circumstances” as stipulated in Article 215 of the Criminal Law.
Article 7 The term “two or more registered trademarks” as used in this interpretation refers to two or more registered trademarks that identify different sources of goods or services. Although the registered trademarks are different, if they are used on the same goods or services and point to the same source of goods or services, they should not be considered as “two or more registered trademarks”.
The term “piece” of a registered trademark logo as used in this interpretation generally refers to a logo with a complete trademark image. If several logo images are printed on a tangible carrier and the logo image cannot be used independently without the tangible carrier, it shall be deemed as one logo.
Article 8 Whoever commits the crime of counterfeiting registered trademarks as provided for in Article 213 of the Criminal Law and also sells goods bearing the counterfeit registered trademarks, and where such a crime is constituted, he shall be convicted and punished for the crime of counterfeiting registered trademarks in accordance with the provisions of Article 213 of the Criminal Law.
If a person commits the crime of counterfeiting registered trademarks as stipulated in Article 213 of the Criminal Law and sells goods that he knows are counterfeit registered trademarks of others, and the crime is constituted, he shall be punished for multiple crimes.
Article 9 Any of the following circumstances shall be deemed as “counterfeiting another’s patent” as provided for in Article 216 of the Criminal Law:
(1) Forging or altering another person’s patent certificate, patent document or patent application document;
(2) Marking the patent number of another person on the products or product packaging manufactured or sold without permission;
(3) Using another’s patent number in a contract, product manual, advertisement or other promotional materials without permission, causing others to mistakenly believe that the invention, utility model or design is that of another.
Article 10 Anyone who counterfeits another person’s patent shall be deemed to be a “serious circumstance” as provided for in Article 216 of the Criminal Law if any of the following circumstances exists:
(1) The amount of illegal income is more than RMB 100,000 or the amount of illegal business operations is more than RMB 200,000;
(2) causing direct economic losses of more than RMB 300,000 to the patentee;
(3) counterfeiting two or more patents of others, with illegal gains exceeding RMB 50,000 or illegal business volume exceeding RMB 100,000;
(4) Having been subject to criminal or administrative penalties for counterfeiting another person’s patent within two years, he again commits the act, and the amount of illegal gains is more than RMB 50,000 or the amount of illegal business is more than RMB 100,000;
(5) Other serious circumstances.
Article 11: Any act of infringing upon copyright or rights related to copyright without obtaining authorization from the copyright owner, producer of audio or video recordings, or performer, or forging or altering authorization documents, or exceeding the scope of the authorization, shall be deemed as “without the permission of the copyright owner”, “without the permission of the producer of audio or video recordings”, or “without the permission of the performer” as stipulated in Article 217 of the Criminal Law.
A natural person, legal person or unincorporated organization that signs a work or audio or video product in a usual manner as provided for in Article 217 of the Criminal Law shall be presumed to be the copyright owner or audio or video producer, and shall have corresponding rights in the work or audio or video product, unless there is evidence to the contrary.
In cases where there are many types of works, audio and video products involved and the rights holders are scattered, if there is evidence that the works, audio and video products involved were illegally published, copied and distributed, or disseminated to the public through information networks, and the publishers, copy distributors, and information network disseminators cannot provide relevant evidence materials for obtaining permission from the copyright owner, audio and video producer, or performer, it can be determined as “without the permission of the copyright owner”, “without the permission of the audio and video producer”, or “without the permission of the performer” as stipulated in Article 217 of the Criminal Law. However, this does not apply if there is evidence that the rights holder has waived his rights, the copyright of the works involved or the relevant rights of the audio and video products and performers are not protected by China’s Copyright Law, or the protection period of the rights has expired.
Article 12 The act of reproducing and distributing, or reproducing for the purpose of distributing, a work or audio or video recording without the permission of the copyright owner or the owner of rights related to the copyright shall be deemed as “reproduction and distribution” as stipulated in Article 217 of the Criminal Law.
Without the permission of the copyright owner or the owner of rights related to the copyright, providing works, audio and video products, or performances to the public by wired or wireless means so that the public can obtain them at a time and place of their choice shall be deemed as “dissemination to the public through an information network” as stipulated in Article 217 of the Criminal Law.
Article 13 Where an act of infringing upon copyright or copyright-related rights as provided for in Article 217 of the Criminal Law is carried out, and the amount of illegal proceeds is RMB 30,000 or more, it shall be deemed as “a relatively large amount of illegal proceeds” as provided for in Article 217 of the Criminal Law; where any of the following circumstances exists, it shall be deemed as “other serious circumstances” as provided for in Article 217 of the Criminal Law:
(1) The amount of illegal business operations is more than RMB 50,000;
(2) Having been subject to criminal or administrative punishment for committing an act specified in Articles 217 and 218 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 20,000 or the amount of illegal business is more than RMB 30,000;
(3) copying and distributing another person’s work or audio or video recording, where the total number of copies is 500 or more;
(4) disseminating to the public through information networks other people’s works, audio and video recordings or performances, the total number of which is 500 or more, or the number of which is downloaded more than 10,000 times, or the number of which is clicked more than 100,000 times, or disseminating through a membership system with more than 1,000 registered members;
(5) The amount or quantity does not reach the standards specified in Items 1 to 4 of this paragraph, but reaches more than half of two or more of the standards.
If a person knowingly provides others with devices or components mainly used to circumvent or destroy technical measures, or provides technical services for others to circumvent or destroy technical measures, and the amount of illegal gains or illegal business reaches the standards prescribed in the preceding paragraph, he shall be held criminally liable for the crime of copyright infringement.
If the amount or quantity reaches more than ten times the corresponding standards stipulated in the first two paragraphs of this article, it shall be deemed as “the illegal proceeds are huge or there are other particularly serious circumstances” as stipulated in Article 217 of the Criminal Law.
Article 14: If a person knowingly sells infringing copies as provided for in Article 217 of the Criminal Law, and the amount of illegal proceeds is RMB 50,000 or more, he shall be deemed to have committed the “huge amount of illegal proceeds” as provided for in Article 218 of the Criminal Law. If any of the following circumstances exists, he shall be deemed to have committed the “other serious circumstances” as provided for in Article 218 of the Criminal Law:
(1) The sales amount is more than RMB 100,000;
(2) Having been subject to criminal or administrative punishment for committing an act specified in Article 217 or Article 218 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 30,000 or the amount of sales is more than RMB 50,000;
(3) selling another person’s work or audio or video recording, where the total number of copies is more than one thousand;
(4) The value of the infringing copies that have not yet been sold or the number of infringing copies that have not yet been sold is more than three times the standards set forth in the first three items of this paragraph; or the value or number of infringing copies that have been sold is less than the standards set forth in the first three items of this paragraph, but the total value or number of infringing copies that have not yet been sold is more than three times the standards set forth in the first three items of this paragraph.
Article 15 Whoever commits the crime of copyright infringement as provided for in Article 217 of the Criminal Law and also sells the infringing copies, and this constitutes a crime, shall be convicted and punished for the crime of copyright infringement in accordance with the provisions of Article 217 of the Criminal Law.
If a person commits the crime of copyright infringement as provided for in Article 217 of the Criminal Law and knowingly sells the infringing copies of others’ works, and this constitutes a crime, he shall be punished for multiple crimes.
Article 16: Obtaining commercial secrets by means of illegal copying or other means shall be deemed as “theft” as provided for in Article 219, paragraph 1, item 1 of the Criminal Law; obtaining commercial secrets by means of unauthorized or unauthorized use of computer information systems or other means shall be deemed as “electronic intrusion” as provided for in Article 219, paragraph 1, item 1 of the Criminal Law.
Article 17: Infringement of trade secrets under any of the following circumstances shall be deemed to be a “serious circumstance” as provided for in Article 219 of the Criminal Law:
(1) causing losses of more than RMB 300,000 to the owner of the rights of the trade secrets;
(2) The amount of illegal gains from infringement of trade secrets is more than RMB 300,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Article 219 or Article 219-1 of the Criminal Law within two years, he commits the act again, causing losses or illegal gains of more than RMB 100,000;
(4) Other circumstances of a serious nature.
If the infringement of trade secrets directly leads to the bankruptcy or closure of the rights holder of the trade secrets due to major operational difficulties, or the amount is more than ten times the standard specified in the preceding paragraph of this article, it shall be deemed as “particularly serious circumstances” as stipulated in Article 219 of the Criminal Law.
Article 18 The “amount of loss” for infringement of trade secrets as provided for in this Interpretation shall be determined in the following manner:
(1) Where the business secrets of the right holder are obtained by improper means and have not yet been disclosed, used or allowed to be used by others, the amount of loss may be determined based on the reasonable licensing fee for the business secrets;
(2) If a person obtains the right holder’s trade secrets by unfair means and then discloses, uses or allows others to use the trade secrets, the amount of loss may be determined based on the loss of profits caused by the right holder’s infringement. However, if the amount of loss is lower than the reasonable license fee for the trade secrets, it shall be determined based on the reasonable license fee;
(3) If a person violates the obligation to keep confidentiality or the right holder’s request to keep business secrets confidential and discloses, uses or allows others to use the business secrets in his possession, the amount of loss may be determined based on the loss of profits caused by the right holder due to the infringement;
(4) Where a person knowingly obtains, discloses, uses or allows others to use a trade secret by improper means or in violation of the obligation to keep the trade secret or the right holder’s requirement to keep the trade secret, but still obtains, discloses, uses or allows others to use the trade secret, the amount of loss may be determined based on the loss of profits caused by the right holder due to the infringement;
(5) If a trade secret has become known to the public or has been lost due to an act of infringing a trade secret, the amount of loss may be determined based on the commercial value of the trade secret. The commercial value of a trade secret may be determined based on a combination of factors such as the research and development costs of the trade secret and the benefits of implementing the trade secret.
The loss of profits caused by infringement of the rights holder specified in the second to fourth items of the preceding paragraph can be determined by multiplying the total number of product sales reductions caused by the infringement by the reasonable profit of each product of the rights holder; if the total number of product sales reductions cannot be determined, it can be determined by multiplying the sales volume of the infringing products by the reasonable profit of each product of the rights holder. If the trade secret is used for other business activities such as services, the amount of loss can be determined based on the reasonable profit reduced by the rights holder due to infringement.
The remedial expenses incurred by the right holder of the trade secret to mitigate the losses to business operations or business plans or to restore the security of computer information systems or other systems should be included in the losses caused to the right holder of the trade secret.
Article 19 The “amount of illegal gains” from infringement of trade secrets as provided for in this Interpretation refers to the value of property or other property benefits obtained by disclosing or allowing others to use trade secrets, or the profits obtained by using trade secrets. Such profits can be determined by multiplying the sales volume of the infringing products by the reasonable profit of each infringing product.
Article 20: If a foreign institution, organization or individual steals, spies on, buys or illegally provides commercial secrets and the circumstances specified in Article 17 of this Interpretation exist, it shall be deemed as “serious circumstances” as specified in Article 219 of the Criminal Law.
Article 21 In criminal proceedings, if a party, defender, litigation agent or non-party applies in writing for confidentiality measures to be taken with respect to evidence or materials concerning commercial secrets or other commercial information that needs to be kept confidential, necessary confidentiality measures shall be taken, such as organizing the litigation participants to sign a confidentiality commitment letter, based on the circumstances of the case.
Anyone who violates the requirements of the confidentiality measures in the preceding paragraph or the confidentiality obligations stipulated by laws and regulations shall bear corresponding responsibilities in accordance with the law. Anyone who discloses, uses or allows others to use commercial secrets accessed or obtained in criminal proceedings without authorization shall be held criminally liable in accordance with the law if a crime is constituted.
Article 22 Anyone who knowingly commits a crime of intellectual property infringement by another person and commits any of the following acts shall be treated as a co-offender, except where otherwise provided by law or judicial interpretation:
(1) Providing assistance in producing or manufacturing the main raw materials, auxiliary materials, semi-finished products, packaging materials, machinery and equipment, labels and logos, production technology, formulas, etc. for the production or manufacture of infringing products;
(2) Providing loans, funds, accounts, licenses, payment settlement and other services;
(3) Providing production or business premises or transportation, warehousing, storage, express delivery, mailing and other services;
(4) Providing technical support such as Internet access, server hosting, network storage, and communication transmission;
(5) Other circumstances of assisting crimes of infringement of intellectual property rights.
Article 23: Where any of the following circumstances exist in the commission of a crime of infringement of intellectual property rights, a heavier punishment shall generally be imposed as appropriate:
(1) Mainly engaged in infringement of intellectual property rights;
(2) counterfeiting registered trademarks of goods or services such as emergency and disaster relief supplies or epidemic prevention materials during major natural disasters, accidents, disasters, or public health incidents;
(3) Refusing to hand over illegal gains.
Article 24: Where a crime of infringement of intellectual property rights exists and any of the following circumstances exists, a lighter punishment may be given in accordance with law:
(1) Those who plead guilty and accept punishment;
(2) the right holder has obtained forgiveness;
(3) Obtaining the right holder’s business secrets by improper means but not disclosing, using or allowing others to use them.
If the circumstances of the crime are minor, prosecution may be waived or criminal punishment may be exempted in accordance with the law. If the circumstances are significantly minor and the harm is not serious, they shall not be treated as crimes.
Article 25: Those who commit crimes of infringement of intellectual property rights shall be sentenced to a fine in accordance with the law by taking into account the amount of illegal gains from the crime, the amount of illegal business, the amount of losses caused to the right holder, the number of infringing and counterfeit goods and the social harm, etc.
The amount of the fine is generally determined to be between one and ten times the amount of the illegal income. If the amount of the illegal income cannot be ascertained, the amount of the fine is generally determined to be between 50% and one time the amount of the illegal business. If both the amount of the illegal income and the amount of the illegal business cannot be ascertained, if a sentence of less than three years of fixed-term imprisonment, criminal detention or a fine is imposed, the amount of the fine is generally determined to be between RMB 30,000 and RMB 1 million; if a sentence of more than three years of fixed-term imprisonment is imposed, the amount of the fine is generally determined to be between RMB 150,000 and RMB 5 million.
Article 26 If an organization commits any of the acts specified in Articles 213 to 219 of the Criminal Law, the organization shall be sentenced to a fine, and the directly responsible supervisors and other directly responsible persons shall be punished in accordance with the conviction and sentencing standards prescribed in these Interpretations.
Article 27 Except in special circumstances, goods with counterfeit registered trademarks, illegally manufactured registered trademark signs, infringing copies, and materials and tools mainly used to manufacture goods with counterfeit registered trademarks, registered trademark signs or infringing copies shall be confiscated and destroyed in accordance with the law.
If the above-mentioned items need to be used as evidence in civil or administrative cases, they may be destroyed upon application by the right holder after the civil or administrative case is concluded or after the evidence is fixed by means of sampling, photographing, etc.
Article 28 The “amount of illegal business” referred to in this interpretation refers to the value of the infringing products manufactured, stored, transported, and sold by the perpetrator in the process of committing an act of infringement of intellectual property rights. The value of the infringing products that have been sold shall be calculated according to the actual sales price. The value of the infringing products that have not yet been sold shall be calculated according to the actual sales average price of the infringing products that have been ascertained. If the actual average sales price cannot be ascertained, it shall be calculated according to the marked price of the infringing products. If the actual sales price cannot be ascertained or the infringing products have no marked price, it shall be calculated according to the market median price of the infringed products.
The “value of goods” referred to in this interpretation shall be determined in accordance with the value of the unsold infringing intellectual property rights products stipulated in the preceding paragraph.
The “sales amount” referred to in this interpretation refers to all illegal income obtained by and owed to the person from the sale of infringing products during the process of committing acts of infringement of intellectual property rights.
The “amount of illegal income” referred to in this interpretation refers to the total illegal income obtained by and owed to the perpetrator after selling products that infringe intellectual property rights, minus the purchase price of raw materials and products sold; if services are provided, minus the purchase price of products used in the service. If a person makes a profit by charging service fees, membership fees or advertising fees, the fees collected shall be deemed as “illegal income”.
Article 29: Where intellectual property rights infringement is committed multiple times and has not been dealt with but should be prosecuted according to law, the amounts and quantities involved in conviction and sentencing shall be calculated cumulatively.
For products that have been completed but have not yet been affixed with counterfeit registered trademark logos or have not yet been fully affixed with counterfeit registered trademark logos, if there is evidence that the product will counterfeit another person’s registered trademark, its value will be included in the amount of illegal business operations.
Article 30 Where a people’s court accepts a criminal private prosecution case involving infringement of intellectual property rights in accordance with law, and where a party is unable to obtain evidence due to objective reasons but is able to provide relevant clues when filing a private prosecution and applies to the people’s court for the evidence, the people’s court shall obtain the evidence in accordance with law.
Article 31 This interpretation shall come into force on April 26, 2025.
The Renaissance of HVDC for a Low Carbon Future
In this, the first of a series of two articles, we explore the resurgence of high voltage DC transmission technology and its relevance in a world that is transitioning to renewable power and adopting electric vehicles and heating and reducing its reliance on fossil fuels.
In this article we consider the benefits of the technology and some of the challenges it creates for investors, regulators and policy makers. In the second article we will look at how investments in HVDC transmission projects might be structured, including by examining examples of projects that have been successfully implemented.
Introduction
Anyone who has read a little history or seen the 2017 film The Current War knows that George Westinghouse’s alternating current (AC) won the late nineteenth century battle against Thomas Edison’s purportedly safer direct current (DC) alternative—the evidence is plain to see in our own homes. Ultimately, in 1892 the Edison Electric Light Company merged with its main AC competitor, Thomson-Houston, to form General Electric.[1]
A principal reason for AC’s early success was that transmission of electricity over significant distances is inefficient at low voltages: the energy wasted as heat in a conductor is proportional to the square of the current; and, for any given quantity of power transmission, the current is inversely proportional to voltage. Therefore, the higher the voltage the lower the energy losses become.
High transmission voltages are therefore desirable, with lower voltages at the point of use for safety reasons. A hundred odd years ago there was no efficient solution to convert DC from low to high voltage. AC on the other hand could be easily stepped up in voltage using a simple and cheap transformer, which has no moving parts. The invention of the induction motor also allowed AC to be used to power heavy industrial machinery, although DC still had many advantages over AC, such as being easier to use for railways and to control variable speed, asynchronous motors.
DC’s renaissance
More recently, over the past few decades, DC systems and in particular high voltage DC (HVDC) have enjoyed a renaissance, owing to their offering a number of benefits. HVDC transmission involves purely reactive power with no reactive power component and associated losses, which ultimately limits the length of high voltage AC power lines. HVDC transmission lines are technically the only viable solution for submarine or terrestrial buried electrical cables longer than a few tens of kilometers because of the capacitance of the insulated cables (which have to be charged and discharged each cycle, causing significant energy losses).
DC transmission also allows two asynchronous AC transmission grids (e.g., operating at different frequencies in different territories) to be interconnected. For the same reason, HVDC is typically also used to connect offshore wind farms, with the additional advantage that wind turbine generators can operate asynchronously with the onshore grid and, as such, at an optimum level of efficiency for any given wind condition.
Photovoltaic panels are only capable of directly producing DC output, and an inverter therefore has to be used to generate a three-phase high voltage AC output which is synchronised with the transmission grid. The same is true of storage batteries and other non-traditional power generation sources that do not use spinning generators.
Inverters use high-power, solid-state devices (typically, insulated gate bipolar transistors (IGBTs)) which switch on and off in a modulated configuration, controlled by sophisticated electronics, to produce a sinusoidal output which can be stepped up via a transformer to high voltage AC (HVAC) for transmission. Similar conversion devices can be configured to step-up the lower voltage DC output of a solar panel array or battery energy storage system directly to HVDC suitable for transmission or indeed to convert HVAC to HVDC.
The drive towards increased offshore wind power generation in many countries, including the UK, where generation sources are located far from where energy is required by consumers, provides a good illustration of the advantages and benefits of HVDC solutions. It would be impractical to build new transmission lines linking Scotland with England, such as the Eastern Green Links, without using subsea cables;[2] and, as noted above, HVDC is the only viable way to transmit electricity over long distances via such cables, which will necessarily have to be several hundred kilometers long.[3]
Several planned projects also involve long distance terrestrial buried HVDC cables, as the impact on the landscape is minimal once the work is completed and the land corridor restored—and there may be significant local resistance to new terrestrial overhead cables.
As the proportion of electricity generated by renewables increases, and as battery storage systems become more widespread, the arguments for using HVDC transmission more generally, as opposed to high voltage AC, become more compelling. If we take into account the future expansion of electric vehicle (EV) use and the need for fast battery charging stations, there are additional arguments in favour of HVDC systems. EV batteries require relatively low voltage but high current DC to charge rapidly. As such, a battery charging station array could in principle be supplied locally by DC or AC. There is no inherent technical requirement for AC as opposed to DC (or vice versa) and in principle either could be used with the appropriate conversion equipment; but what HVDC offers is potentially greater efficiencies and economies on a wider scale, which are discussed below.
Why use HVDC systems?
HVDC transmission systems offer a number of advantages over HVAC:
HVDC requires only two conductors, whereas HVAC needs three to support three phases, reducing costs and potentially requiring narrower land corridors.
HVDC power transmission losses may be lower than 0.3% per 100 km, which is 30% to 40% lower than losses for HVAC at an equivalent voltage, for a number of reasons:
AC suffers from a skin effect whereby only the outer part of the cable conducts current, which is avoided in DC transmission—the result is that for a given conductor size and energy losses, HVDC systems can transmit higher current over longer distances;
HVDC lines operate continuously at peak voltage (which is determined by the design of the transmission line insulators and towers, among other things), whereas HVAC is sinusoidal—and while the crests of the sine wave are naturally at peak voltage, the effective average voltage (and corresponding current) is the root mean square value (RMS), which is only 0.7 times the peak voltage; the net effect is to increase the power transmission capacity of an HVDC system relative to HVAC; and
DC carries only active power, whereas AC transfers both active and reactive power.
HVDC transmission lines/interconnectors are asynchronous, enabling connections between unsynchronised power sources, such as two grids operating at different frequencies, phases or voltages.
As noted above, HVDC is the only practical option for undersea cables longer than around 50 km.
Drawbacks of HVDC
HVDC does have certain drawbacks:
HVDC systems may be less reliable, have lower availability and be more expensive to maintain than HVAC, owing to their greater complexity;
additional complexity also increases the relative cost for shorter-distance transmission as compared with HVAC;
converter stations are required at each end of HVDC cables to convert from AC to DC and back again (assuming the source and load are AC)—these are expensive and may introduce relatively higher energy losses for shorter distance lines—but as noted above in the case of DC generation sources (such as solar) and DC loads (such as battery chargers), conversion equipment is also required if an HVAC transmission line is used; and
HVDC switching and breaker systems are more difficult to design and implement because, unlike AC which has zero current twice every cycle (at which point the circuit can be broken safely), HVDC current is continuous and a simple mechanical breaker cannot therefore be used because it would suffer potentially destructive arcing.
Weighing up the pros and cons, it is generally considered that for overhead transmission lines, HVDC transmission becomes cost effective above a minimum critical distance.
Bringing increased future reliance on renewable power generation, electrical vehicles, battery storage and heat pumps into the equation suggests that there are potential benefits in developing wide area HVDC super grids. These might help to mitigate the intermittency of renewable power sources by averaging and smoothing the outputs of geographically dispersed generation facilities.
It also seems likely that substantial investment in upgrading of transmission systems will be required to support any move towards the widespread use of electric vehicles and the adoption of heat pumps for heating in place of natural gas. Existing transmission systems are entirely inadequate and would create severe bottlenecks. The United Kingdom is already seeing the impact of planning for such changes in its “Great Grid Upgrade” through the procurement of the Eastern Green Links (EGL 1 to EGL 4) between Scotland and England, in the case of EGL3 and EGL4 reaching as far as East Anglia.
Implications for investors, regulators and policymakers[4]
Given the potential attractiveness of HVDC solutions, those responsible for investing in grid infrastructure (such as integrated utilities or unbundled network companies) may need to keep their investment programmes under review. Changes in the nature of the grid and the technologies connected to it may mean that HVDC becomes a contender to traditional AC network investments where the conditions are right, such as where power generated by non-synchronous generators (e.g., wind and solar farms) is being moved over long distances and in particular where it is impractical to build new conventional terrestrial transmission lines.
As noted above, this is already happening today in the UK. While many early links to offshore windfarms relied on AC technology, ENTSO-E’s Offshore Network Development Plan (ONDP) has adopted HVDC as a standard transmission technology, with 525 kV VSC converter technology. Following the precedent of the Eastern Green Link projects, it looks likely that 525 kV HVDC may become the standard for the significant GB offshore network investment planned in the North Sea, as well as interconnectors (for example, Neuconnect).
The EGL projects were signed off after formal reviews of their costs and benefits, conducted separately from the normal regulatory regime for the GB transmission network. This underlines that considering the full range of technologies and making optimum choices with the right long-term strategic benefits may require extraordinary action by policymakers and regulators.
Traditionally, network regulation typically aims to incentivise grid companies to do what is cheapest, but regulatory incentives are typically less effective than those from competitive markets. For example, if new technologies carry more of an operational risk than the traditional options, and grid operators believe that regulators may penalise them for investments which fail to perform, they may act in an unduly risk-averse manner and just carry on doing what they have always done, particularly if new technologies are not as well understood as traditional ones; and, at least in the short term, choice of technologies may be affected by limitations in the supply chain for HVDC equipment, and in particular cables, while traditional HVAC infrastructure is more readily available.
Everyone would agree that regulators should protect customers’ interests. However, they also need to realise that, in a world of technical change, this sometimes means innovation and taking greater risks. While penalising failure (e.g., lower asset availability) or failing to allow companies to pay to reserve supply chain capacity may feel like the right strategy in the short term, this could act to stall innovation, which in turn might be against customers’ long-term interests. Striking the right balance is therefore critical.
The NeuConnect project (which we discuss in part 2 of this article) provides a good illustration of how regulators such as Ofgem have taken a flexible approach in adapting regulatory regimes to unlock private investment in HVDC infrastructure through revenue support arrangements.
Endnotes
[1] Today, General Electric’s successor GE Vernova is once again championing DC in the form of high voltage conversion systems to support HVDC cables that can transfer electricity point-to-point or from offshore wind farms to shore—more about this below.
[2] The environmental impact of using terrestrial overhead transmission lines for the entire length of one of the Eastern Green Links would likely be prohibitive. Terrestrial underground cables are estimated by Scottish Power to cost between five and ten times as much as overhead transmission lines; however, submarine cables are also significantly more expensive than overhead transmission lines.
[3] For example, Eastern Green Link 1 (EGL1) is almost 200 km long (including 176 km of subsea cable) and when completed will link East Lothian with County Durham, allowing the transfer of 2GW of electrical power. The UK is planning a series of such links, including four Eastern Green Links, and the Western HVDC Link between Scotland and North Wales (with a capacity of 2.25 GW) was completed in 2019.
[4] Comments on regulatory aspects were kindly provided by Dan Roberts of Frontier Economics.
CNIL Publishes 2024 Annual Activity Report
On April 29, 2025, the French Data Protection Authority (the “CNIL”) published its Annual Activity Report for 2024 (the “Report”). The Report provides an overview of the CNIL’s activities in 2024, including enforcement activities and other new developments.
In particular, the Report revealed that:
In 2024, the CNIL conducted numerous inspections of private and public companies. These investigations were initiated following complaints or reports linked to current events or as part of the CNIL’s identified priority areas. The CNIL focused on a wide range of issues, including cookie compliance, cybersecurity, and the use of CCTV. In total, the CNIL adopted 303 corrective measures in 2024, including 87 sanctions, resulting in more than €55 million in fines. At the EU level, the CNIL led 12 cross-border sanction projects under the cooperation and consistency mechanisms.
The CNIL received a high volume of complaints, with a total of 17,772 complaints filed. Data breaches, particularly those that could result in the theft of banking information or identity theft, remained a major source of concern for the CNIL. More broadly, issues related to telecommunications, websites and social media generated the highest number of complaints (49% of the total complaints). These were followed by issues related to the retail sector (19%) and employment (13%).
The CNIL was notified of 5,629 personal data breach – a 20% increase compared to 2023. Beyond this increase, according to the CNIL, large-scale incidents surged, with the number of breaches affecting over one million people doubling. These attacks targeted key sectors such as Internet service providers, e-commerce, public services and healthcare platforms. One-third of the CNIL’s sanctions concerned security failings, highlighting an ongoing compliance gap. To respond to this threat, the CNIL furthered its collaborations with the French Agency for Information Security (Agence nationale de la sécurité des systèmes d’information), the Paris cyber prosecutor (J3) and Cybermalveillance.gouv.fr in an effort to contain the impact of breaches.
Building on its 2023 action plan, the CNIL published its first AI recommendations, including 12 practical guidance sheets (nine of which were finalized), with the aim of supporting privacy-friendly innovation.
As part of the CNIL’s broader commitment to sector and technological alignment, the CNIL launched a regulatory sandbox focused on the senior economy, selecting four companies for tailored support. Additional initiatives included the publication of a recommendation on designing privacy-friendly mobile apps, regional outreach to discuss GDPR implementation, and thematic webinars.
The CNIL also increased its outreach on youth data protection, focusing on issues such as access to harmful content, parental monitoring, cyberbullying and media literacy. It conducted 84 in-person actions targeting minors. Workshops were held in schools, public events and fairs, alongside the release of youth-friendly resources like the “Your Data, Your Rights” campaign, created in collaboration with the data protection authority of South Korea. The CNIL also expanded partnerships with television broadcast channels and the Ministry of Education, reinforcing its role in digital citizenship education. Beyond youth, the CNIL organized 173 awareness-raising activities nationwide targeting intergenerational audiences, persons with disabilities and families. Among others initiatives, the CNIL published a guide on cyber threats for families and organized workshops for seniors.
Download a copy of the Report (only available in French).
Mexico’s Federal Executive Proposes Reforms to Competition Law
On April 24, 2025, Mexico’s Federal Executive sent the Senate a draft decree that aims to reform, add, and repeal several provisions of the Federal Competition Law (the Initiative to reform) to initiate the legislative process.
The Initiative to reform proposes amendments that are divided into four main areas: (i) organic configuration and adjustment of the National Antimonopoly Commission’s powers; (ii) strengthening the Commissions’ powers and improving antitrust procedures; (iii) regulatory adjustments; and (iv) adjustments in telecommunications and broadcasting matters.
(i) Changing the National Antitrust Commission’s Organizational Configuration and Attributions
The initiative proposes eliminating the Federal Economic Competition Commission (COFECE) and creating the National Antimonopoly Commission as a decentralized public agency attached to the Ministry of Economy. The new Commission would have legal personhood, management autonomy, and technical and operational independence.
The Commission’s structure would include a plenary composed of five commissioners the Federal Executive appoints in a staggered manner and that the Senate of the Republic ratifies. The Commission would maintain separation between the investigation and sanction functions.
(ii) Strengthening Powers and Improving Procedures to Combat Monopolies
The Initiative to reform would strengthen the Commissions’ investigative and sanction tools to combat monopolistic practices, as well as illicit concentrations. The main measures include:
Absolute Monopolistic Practices: Article 53 would be amended to sanction anticompetitive information exchanges without the need for a prior agreement.
Concentrations: The timeframe for investigating unlawful concentrations would increase from one to three years, and monetary thresholds would decrease to make more transactions reportable.
Collective Actions: The Initiative to reform specifies that these would be exercised once the administrative resolution is final.
Immunity and Fine Reduction Programs: The terms and benefits would change to encourage early cooperation by the entities under investigation.
Penalties and Enforcement Measures
In addition, the reform would strengthen enforcement measures and sanctions. For example, fines would increase for impeding verification visits ($22,628,000 MXN) and for failure to cooperate in appearances ($3,394,200.00 MXN).
Economic sanctions would become proportional to the damage caused. Examples of penalty increases include penalties of up to 20% of a company’s income for absolute monopolistic practices, 15% for committing relative monopolistic practices or illicit concentrations, and up to 10% for closing a transaction without obtaining an authorization from the authority when this was required.
(iii) Regulatory Adjustments
The Initiative to reform proposes adjustments to update legal references and elevate various regulatory provisions and the organic statute of the former COFECE to the status of law. Among the main adjustments are the following:
Verification and Qualification Procedures
The Initiative to reform proposes to make law the Procedure for Verification of Compliance with Obligations, which seeks to dissuade companies from neglecting to report transactions that may affect competition. This procedure would allow the National Antimonopoly Commission to verify that companies comply with their legal obligations and prevent mergers from taking place without prior supervision, which may result in anticompetitive effects.
In addition, the Qualification Procedure, which establishes criteria to determine whether certain information should be excluded from a file due to protected communications between a company and its defense counsel, would be made law. This seeks to guarantee the protection of confidential information and strengthen companies’ legal security, while ensuring that investigations are conducted in a fair and transparent manner. Strengthening of Investigative Powers
The Initiative to reform seeks to improve the procedures for investigating, notifying concentrations, and issuing opinions, with the objective of making them clearer, faster, and more efficient. Among the improvements are:
More Robust Investigations: The Investigating Authority would receive additional tools, such as inspection procedures, surveys, and data collection, in order to obtain relevant information. This would allow for the timely identification of anticompetitive practices.
Notification of Concentrations: Deadlines for investigating illicit concentrations would extend from one to three years, and monetary thresholds would decrease to make more transactions notifiable (the lowest threshold is $837,236,000 MXN in asset accumulation). This is especially relevant in digital markets, where acquisitions may be complex and difficult to track.
Definitions and Key Concepts
The Initiative to reform expands and specifies the elements that the National Antimonopoly Commission must consider when determining the existence of substantial power, and related markets. These include:
Substantial Power: More detailed criteria would be established to identify whether a company has the ability to fix prices, restrict supply, or exclude competitors without other agents being able to counteract these actions.
Related Markets: The Initiative to reform introduces a clearer definition of this concept that considers the interactions between markets that may influence competition. This is particularly relevant in sectors such as digital, where companies generally operate in multiple, interconnected markets.
These clarifications seek to ensure that the Commission’s investigations and resolutions are technically sound and in line with international best practices.
Transparency
The Initiative to reform aims to reinforce the principle of transparency by ordering the stenographic versions of the Plenary of the National Antimonopoly Commission’s sessions be published.
In addition, the reform proposes that the Plenary’s resolutions be drafted in the citizens’ language, facilitating consumers and companies’ understanding.
(iv) Changes in Telecommunications and Broadcasting
The Initiative to reform includes provisions to regulate cross participation in telecommunications and broadcasting, in compliance with Article 28 of the Mexican Constitution. The National Antimonopoly Commission would impose limits on the concentration of frequencies and concessions and would order the divestiture of assets when necessary to guarantee competition. The procedures related to preponderance would coordinate with the agency in charge of telecommunications and broadcasting policies.
In addition, it states that the legal acts that the Federal Telecommunications Institute (IFT) has issued in matters of economic competition, preponderance, and asymmetric regulation would continue to be effective.
General Impact
The Initiative to reform seeks to consolidate a more robust legal framework to combat anticompetitive practices, strengthen the state’s control over the economy, and promote fairer and more competitive markets.
The National Antimonopoly Commission may be operational by July 1.
Achieving this goal might depend on two key factors:
1.
Congress’ approval of the proposed amendments without significant debate; and
2.
The president’s appointment of the five new commissioners, followed by Senate ratification.
Considering the majority in Congress, these objectives are potentially achievable.
Navigating the 2025 Tariff Landscape: A Practical Guide for Small and Midsize Business Owners
Big Picture Messages from the Panel
The U.S. has entered a new era of trade protection with significant tariffs now in place:
Tariff application has “paused” for 90 days, but consensus was that the trade agreement process could take six to 18 months, rather than 90 days. There’s a lot of complexity to trade negotiations.
The U.S.-China process of de-coupling started well before the change in tariff policy and will likely be a long-term trend. Tariffs are merely playing a part in accelerating or shaping the evolution. Plan accordingly.
Don’t be afraid to negotiate better terms with suppliers. They usually don’t want to lose your business and can help play a part in a cost-management solution.
Better managed companies are taking advantage of the uncertainty. Never waste a good crisis!
They are using the cover of tariffs to raise prices 5% to 10%, to extend payment terms to net 60 or even 90 days, and to use their capital resources flexibly (factoring, use of revolving credit, etc.).
They are also using the cover of tariffs to improve internal performance, such as trimming unproductive staff or divesting from underperforming product lines.
Healthy balance sheets also are allowing them to make favorable acquisitions, sometimes at favorable multiples.
Our panelists estimated that about 20% of the small/midsized businesses they see are in a position to act proactively. They put themselves in this position intentionally, to be ready for a downturn. That’s a good position to be in!
As a businessowner, you’re likely feeling the effects already. Costs are up, supply chains are strained, and planning for the future has become more challenging. While there are hints of potential de-escalation, for now these tariffs are a business reality you need to navigate.
Why Your Business Is Particularly Vulnerable
Small and midsized businesses face unique challenges in this environment:
Less negotiating power with suppliers
Tighter financial resources to absorb higher costs
Limited capacity to quickly change supply chains
The impacts you’re likely experiencing include:
Higher costs for imported materials and goods
Supply chain disruptions and inventory problems
Pressure on your competitive pricing
Difficulty making long-term business plans
Potential loss of export markets due to retaliatory tariffs
Practical Strategies to Protect Your Business
1. Make Your Supply Chain More Resilient
Find alternative suppliers
Look for options in countries not heavily affected by tariffs.
Understand Country of Origin (COO) rules when evaluating new suppliers.
Consider that the lowest price may not mean the lowest total cost when tariffs are added.
Consider moving production closer to home
Evaluate if moving production to nearby countries (Mexico, Canada) makes financial sense.
Look into bringing some manufacturing back to the U.S.
Be realistic about challenges like finding skilled workers and higher costs.
Use Foreign Trade Zones (FTZs) strategically
These special zones let you store, modify, and re-export goods without immediate tariff payments.
Decide whether you can improve cash flow by deferring or eliminating tariffs on goods you’ll eventually re-export.
Explore “tariff engineering”
Minor modifications to your products or component sourcing might qualify for lower tariff rates.
Work with experts (customs brokers, trade attorneys) to do this properly.
2. Strengthen Your Financial Position
Cut costs where possible
Look for efficiencies throughout your business to offset tariff-related expenses.
Focus on areas that won’t impact your product quality or customer experience.
Protect against currency swings
If you do international business, consider currency hedging strategies.
Talk to your financial advisor about extending hedging timeframes given the current volatility.
Manage your cash flow aggressively
Keep enough cash reserves to handle unexpected cost increases.
Try to negotiate better payment terms with suppliers.
Use data to optimize your inventory levels.
3. Navigate the Legal and Regulatory Landscape
Partner with experts
Work with experienced customs brokers to ensure accurate product classification.
Consider consulting with a trade attorney to understand your options.
Stay informed about International Emergency Economic Powers Act (IEEPA) developments.
Monitor policy changes
Keep an eye on updates from U.S. Customs and Border Protection.
Watch for rulings from the Court of International Trade, which handles tariff disputes.
Join industry associations that track and advocate on trade issues.
4. Adapt Your Market Strategy
Diversify your markets
Reduce dependence on regions affected by retaliatory tariffs.
Research and develop new domestic and international opportunities.
Emphasize your unique value
Double down on what makes your business special beyond just price.
Highlight quality, service, innovation, or expertise to maintain customer loyalty despite price adjustments.
Consider ethical sourcing as a differentiator
If relevant to your industry, emphasize fair trade and ethical practices.
This can attract customers willing to pay more for responsibly sourced products.
Get involved in advocacy
Join with others in your industry to voice concerns to policymakers.
Collective efforts can sometimes influence policy adjustments.
Plan for different scenarios
Develop contingency plans for various possible changes in tariff policies.
This preparation allows you to react quickly when the situation evolves.
Moving Forward
The current tariff environment is challenging but navigable. By implementing these strategies, your business can become more resilient and potentially find new opportunities amid the disruption. Stay vigilant, be proactive, and remember that adaptation is key to sustainability in today’s evolving trade landscape.
* * *
Quick Reference: Key Trade Terms
Baseline Tariff: The standard 10% tariff now applied to most imports (effective April 5, 2025)
Reciprocal Tariffs: Higher, country-specific tariffs imposed based on perceived trade imbalances
Country of Origin (COO): Rules determining where a product is considered to be made, affecting which tariffs apply
Customs Broker: Licensed professional who helps navigate import/export regulations
Automated Commercial Environment (ACE): The electronic system used by U.S. Customs for import/export processing
Court of International Trade (CIT): Federal court that handles disputes related to tariffs and trade
Foreign Trade Zones (FTZs): Designated areas where goods can be stored or modified without immediate tariff payment
Nearshoring: Moving operations to nearby countries (like Mexico or Canada)
Onshoring/Reshoring: Bringing production back to the United States
Central Bank of Ireland Updates its UCITS Q&A on Portfolio Transparency for ETFs
In a move that will be welcomed by asset managers conducting exchange-traded fund (ETF) business in Ireland, or those who are hoping to move into the Irish ETF space, the Central Bank of Ireland (the Central Bank) has moved to allow for the establishment of semi-transparent ETFs by amending its requirements for portfolio transparency.
In Ireland, ETFs are typically established as undertakings for collective investment in transferable securities (UCITS), and semi-transparent ETFs are actively managed ETFs that disclose their holdings on a periodic (less than daily) basis.
Previously, the Central Bank only authorised ETFs that published their holdings on a daily basis. This approach was evidenced by the Central Bank’s response to a previous version of its UCITS Q&A 1012 which posed the question, “I am a UCITS and am authorised by the Central Bank as an active ETF. Am I required to provide details of the holdings within my portfolio on a daily basis?”. The Central Bank stated that it would not authorise an ETF, including an active ETF or a UCITS ETF share class of a UCITS, unless arrangements were put in place to ensure that information is provided on a daily basis regarding the identities and quantities of portfolio holdings and that these arrangements must be disclosed in the prospectus of the UCITS.
This daily disclosure requirement had, in the past, been a blocker for certain asset managers wishing to enter the Irish ETF market due to concerns that having to publish holdings on a daily basis could potentially lead to other asset managers short-selling or even copying their investment strategies. On the back of this feedback, the funds industry in Ireland had petitioned the Central Bank to change their position in the hope that it would bring more active managers (i.e., traditional fund managers) to Europe.
The revised Q&A, published by the Central Bank on 17 April 2025, while retaining the ability for ETFs to publish holdings on a daily basis, now provides flexibility in that “periodic disclosures” are now permissible once the following conditions are adhered to:
Appropriate information is disclosed on a daily basis to facilitate an effective arbitrage mechanism;
The prospectus discloses the type of information that is provided in point (i);
This information is made available on a nondiscriminatory basis to authorised participants (APs) and market makers (MMs);
There are documented procedures to address circumstances where the arbitrage mechanism of the ETF is impaired;
There is a documented procedure for investors to request portfolio information; and
The portfolio holdings as at the end of each calendar quarter are disclosed publicly within 30 business days of the end of the quarter.
For asset managers who wish to stick to the status quo and continue to disclose portfolio holdings on a daily basis, they must ensure that (i) the prospectus discloses the type of information that will be provided in relation to the portfolio; and (ii) the portfolio information is made available on a nondiscriminatory basis.
Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), took a similar approach in revising its guidance in late 2024. However, the Central Bank’s updated rules are in fact more flexible than those of the CSSF in that a) they cover both active and passive ETFs and b) only “appropriate information” is required to be shared with APs and MMs of semi-transparent Irish ETFs as opposed to the requirement to disclose full portfolio holdings in Luxembourg.
These new semi-transparent ETFs will be most attractive for active asset managers who have previously been dissuaded from establishing an ETF in Ireland due to their reluctance to share their proprietary information.
Toward Digital-Ready Design Protection: The New EU Design Act
The European Union has undertaken a comprehensive modernization and harmonization of its design protection framework. The reform, commonly referred to as the “Design Act,” comprises two legislative measures: the Design Regulation (Regulation (EU) 2024/2822, which amends Regulation (EC) No 6/2002 and repeals Regulation (EC) No 2246/2002) and the Design Directive (Directive 2024/2823, which replaces Directive 98/71/EC).
The EU aims to align design protection with technological advancements, particularly in the realm of digital and animated designs. At the same time, the system is being simplified to better serve businesses and designers while strengthening enforcement mechanisms and promoting harmonization.
The Design Regulation deals with the EU Design (which is the new name for the former Community Design) and its registration, protection and enforcement, while the Design Directive sets mandatory requirements for the national designs that each Member State will need to implement into national legislation.
Key Changes at a Glance
The Design Act seeks to align EU design protection with the demands of the digital age while enhancing its accessibility and user-friendliness:
Digital and animated designs are explicitly protected in order to ensure comprehensive protection in the digital and virtual space.
For both the register for EU Designs and national Designs, protection of registered designs has been increased. A design that is registered in the EU register or a national register is deemed to be valid and is deemed to be owned by the registered owner.
Application procedures are streamlined within the EU.
Enforcement rights are strengthened.
Design owners gain new tools for legal certainty.
Specific market needs — such as component part availability— are addressed through the introduction of a repair clause, exempting repair parts from protection.
Replacement of the term “Community design” with “EU design.”
A circled D symbol (Ⓓ) can be used to indicate design protection on products.
Implementation Phases
The reforms the Design Act introduces will be implemented progressively across three phases.
Phase 1 (from May 1, 2025): Initial Practical Changes
Simplified and Unified Registration Process
The requirement for “unity of class” in multiple design applications is abolished, allowing multiple designs from different Locarno classes to be combined into a single application (capped at 50 designs per application), reducing administrative effort and costs.
(Art. 35 ff. Design Regulation/ Art. 27 Design Directive)
Updated Fee Structure
A single, unified application fee simplifies the cost structure. Renewal fees are increased but better reflect the commercial value of extended design protection. While the registration itself will not become more expensive, the renewal fees after the fifth year will increase. However, because the “unity of class” requirement is abolished, multiple applications will be more cost-efficient than before.
(Design Regulation, Annex I)
Amended Renewal Process
Registered designs must be renewed within the six-month period before expiration – this includes both the request and the fee payment.
(Art. 50d Design Regulation/ Article 32 Design Directive)
Enhanced Enforcement Powers
New rights may enable design owners to act against unauthorized 3D printing of their designs and counterfeit goods passing through the EU (transit goods), closing enforcement gaps and enhancing the overall enforcement framework.
(Art. 19 Design Regulation/ Art. 16 Design Directive)
Design Symbol Introduction
Design owners may now use the “Ⓓ” symbol to indicate protected designs, similar to trademarks (®) or copyrights (©) to deter potential infringers in the field of design law. Additional identifiers, such as registration numbers or links to the EU design register, may also be used.
(Art. 26a Design Regulation/ Art. 24 Design Directive)
Phase 2 (from July 1, 2026): Expanding the Scope of Protection
Expanded Definition of Designs
The definition of protectable designs now explicitly encompasses dynamic features such as motion, transitions, and animation – addressing the growing prominence of digital design.
(Art. 3 (1) Design Regulation; Art. 2 (3) Design Directive)
New Representation Requirements
The European Union Intellectual Property Office executive director will determine formats, numbering, and technical specifications for both static and animated design representations, ensuring clarity and consistency in registration.
(Art. 36 Design Regulation/ Art. 26 Design Directive)
Phase 3 (by Dec. 9, 2027): Market-Specific Adjustments
Introducing a Repair Clause
Component parts of complex products – where design is dictated by the appearance of the whole product and the component part used solely to restore that appearance (e.g., automotive body parts) – are excluded from design protection. However, an eight-year transitional period, ending on Dec. 9, 2032, preserves the existing protection for such parts during that time.
(Art. 20a Design Regulation/ Art. 19 Design Directive)
Conclusion
The EU’s Design Reform introduces a modernized legal framework that seeks to meet the evolving challenges of digitalization, enhance legal certainty, simplify administrative processes, and strengthen enforcement capabilities.
While EU trademark law has long been aligned across member states, design law had previously lagged behind in terms of consistency and uniformity. With the Design Act package, the EU is now taking further steps toward achieving a more coherent and fully harmonized design protection system.
Businesses and designers are encouraged to begin preparing for the phased changes now to enhance compliance and to leverage the new legal opportunities.