Draft of Decree for Patent Linkage by the Mexican Government.
On February 12, 2025, the Federal Commission for Protection against Health Risks (COFEPRIS) and the Mexican Institute of Industrial Property (IMPI) published a draft of the technical collaboration mechanism between both entities, with the intention to comply with the United States-Mexico-Canada Agreement (USMCA).
It mainly establishes two “formats” that each authority will publish in their web page and specifies the information to be included in the Allopathic Medicines Gazette and information of the communication before COFEPRIS and IMPI.
It also mentions that COFEPRIS’ “format” for the technical cooperation must include the opposition format, along with the information provided by the patent owner or its licensee and/or sublicensee.
This implies that the notice and opposition opportunity will take place before COFEPRIS and not IMPI and we assume that it is going to be described in further formats or in any other law or regulation.
In conclusion, we consider that there are some positive considerations from this draft, as follows:
This was due since 2020; therefore, it is a good sign that they are moving forward.
Although there is not an express language including use patents, the wording is more positive than the current linkage regulation to include use claims, by IMPI or through litigation.
It clarifies the information to be included in both formats by each authority.
The negative aspect is that we consider that still there are no rules for an appropriate notice to the title holder. From the draft, it seems that neither the notice nor a described process. Additionally, it seems that it will take place before COFEPRIS and not IMPI, which in our view is not the best venue for a notice to be heard by the patent holder.
Definitively, at least in this publication, apparently no compliance with the USMCA of a proper notice is expressly considered.
What Every Multinational Company Should Know About … The New Steel and Aluminum Tariffs
What Has President Trump Announced?
On February 10, 2025, President Trump signed proclamations titled Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum into the United States. The proclamations cover both steel and aluminum tariffs, which will be raised to a flat 25%. In particular, the steel and aluminum proclamations establish the following tariff principles:
The Section 232 aluminum tariffs, which the Trump administration imposed in his first administration, are raised from 10 percent to 25 percent.
The Section 232 steel tariffs, which already were set at 25 percent but which contained significant carveouts for most major sources of steel products, including steel from Brazil, Canada, and South Korea, will be implemented “without exceptions or exemptions.”
All product-specific exemptions that had been granted under the prior Section 232 tariffs are eliminated.
The steel and aluminum proclamations apply not only to products previously identified in Proclamation 9705 (2018) and Proclamation 9980 (2020) but also to additional derivative steel products and derivative aluminum products to be identified in forthcoming annexes to the proclamations.
The United States will set up a process to allow U.S. industry groups and U.S. producers of steel and aluminum to request that other derivative products be added to the annexes.
The steel and aluminum proclamations include exemptions only for derivative steel products “melted and poured” in the United States and derivative aluminum products “smelted and cast” in the United States, to curb imports of minimally processed metals from other countries that circumvent the prior tariffs. In other words, derivative products that are produced from steel and aluminum that originated in the United States, which then were processed abroad into a derivative product, would be exempt from the new 25 percent tariffs.
The full impact of these tariffs will take time to work through the market. Nonetheless, the announcements sent major shock waves through the manufacturing community. To help companies sort out the potential impact of these new tariffs, this article works through the top-of-mind questions for most major aluminum and steel importers. It then provides some strategies for companies looking to manage tariff-related risks, including by buttressing supply chains and building in contractual flexibility.
Our expectation is that these are the opening salvos in a likely international trade war, not the last shot. Notably, after the issuance of the steel and aluminum proclamations, a White House official confirmed these tariffs would “stack” on any other tariffs. For example, if the currently suspended 25% increase in tariffs for Canada and Mexico are implemented, then imports of Canadian and Mexican aluminum and steel would face new 50% tariffs.
What Are the Key Open Questions and Ambiguities in the Announcement?
What products are covered? The coverage of the presidential proclamation is broad, covering all basic forms of steel and aluminum. In addition to steel and aluminum products subject to previous Section 232 duties, the proclamations will include forthcoming annexes incorporating further derivative steel and aluminum products.
How far downstream does the proclamation extend? The coverage likely extends to numerous downstream products such as pipes, tubes, and aluminum extrusions. The full list of derivative products covered by the proclamations will be listed in yet-to-be-published annexes.
How does this interact with the prior Section 232 duties imposed in President Trump’s first term? The effect of the steel and aluminum proclamations is basically to replace the prior Section 232 duties — including all their exemptions and negotiated alternative quota arrangements — with new, uniform duties under the current proclamations, including to a potentially larger set of products to be covered in the forthcoming annexes. This has the effect of both broadening the scope of the prior duties and also extending them to countries that had negotiated alternative measures to the prior Section 232 tariffs, such as by imposing quotas for exports of steel and aluminum to the United States in exchange for having the tariffs dropped. The proclamations also eliminate all the product-specific exemptions granted under both the prior Trump and Biden administrations. Thus, the proclamations represent a level-setting of the prior Section 232 tariffs, bringing everything to a uniform 25% rate for all countries and for all products.
What about the Section 301 duties? The Section 301 duties applicable to Chinese-origin products remain fully in place. Because those tariffs (recently increased by an additional 10%) cover basically all imports from China, including aluminum and steel products, the new aluminum and steel tariffs ladder on top of the Section 301 duties. Thus, there can be duties as high as 60% for Chinese aluminum and steel, in addition to the normal Chapter 1–97 tariffs, of the Harmonized Tariff Schedule of the United States (HTSUS) that generally apply to imports from all countries.
What about all the antidumping and countervailing duty orders on various steel and aluminum products? In addition to Section 232, Section 301, and standard Chapter 1–97 duties, in situations where there are antidumping or countervailing duty orders on steel or aluminum products, these duties also would be added on. Because antidumping and countervailing duty orders are placed on products from a particular country or countries, the analysis of whether such additional duties are due for steel and aluminum imports would depend on the country at issue, as well as whether the product being imported falls within the written scope of the antidumping and countervailing duty orders. But because of the large number of antidumping and countervailing duty orders, an appreciable number of products will be covered by these tariffs as well. It accordingly is essential for steel and aluminum importers to be carefully scrutinizing the potential applicability of such orders to their steel and aluminum products.
Would the USMCA allow us to avoid these duties by importing first into Canada or Mexico? Merely transshipping products through a third country, such as Canada or Mexico, does not alter the tariffs to be paid on that product if it eventually comes into the U.S. customs territory. Further, the steel and aluminum proclamations impose a new U.S. melt-and-pour requirement for steel and a smelting requirement for aluminum in order to claim an exemption from the Section 232 tariffs.
Can we avoid the tariffs by doing a moderate amount of processing before importing the steel and aluminum? This would depend on whether the processing is sufficient to take the product out of the HTS classifications listed in the forthcoming annexes of derivative steel/aluminum products.
Are the trade courts likely to strike this measure down? The imposition under Section 232 of aluminum and steel tariffs in the first Trump administration was appealed to both the Court of International Trade and the Court of Appeals for the Federal Circuit. The end result was that the prior use of Section 232 to invoke national security grounds to impose tariffs to protect the U.S. aluminum and steel industries was upheld. While a challenge to the new proclamations is likely, these precedents will make it difficult for such a challenge to succeed.
Don’t these special tariffs violate the WTO Agreements? WTO agreements will not provide relief from these tariffs for steel and aluminum importers. Several countries have already brought a WTO challenge or indicated that they will be doing so soon. But the WTO’s dispute resolution process has been effectively brought to a standstill in recent years, as multiple U.S. administrations have blocked appointments of panelists to the WTO’s Appellate Body, which is the final stage of any dispute resolution. Also, WTO dispute resolution takes years to finish.
Will major importing countries negotiate a resolution to these tariffs? It is likely that they will try. Australia already has indicated it will seek to negotiate an alternative to the imposition of the tariffs. Australia is viewed as being better positioned than most countries for such a resolution because it maintains a trade deficit with the United States, whereas other major steel and aluminum exporters to the United States have trade surpluses. That said, it would not make sense to eliminate the prior settlements through the new imposition of aluminum and steel tariffs if the end goal were to put something similar back in place. Because the U.S. aluminum and steel industries were viewed as having their relief undermined by prior negotiated alternative provisions, as well as the grant of hundreds of product-specific exemptions, it is expected that negotiated alternatives to the tariffs will be much more difficult to achieve this time around.
How will we get clarity regarding the scope of these new tariffs? The new Section 232 tariffs are to go into effect on March 12, 2025. Additional information — including the publication of the annexes — will need to be provided so these tariffs can be applied. We expect that the publication of the proclamations in the Federal Register will provide at least some further clarification as to the scope of the measures — including the annexes — as well as subsequent guidance from U.S. Customs & Border Protection.
Are there any other trade- or tariff-related measures we need to be monitoring? Yes. Speaking from the Oval Office, President Trump said the steel and aluminum tariffs were “the first of many” to come. In particular, he said his international trade team would be meeting over the next four weeks to discuss potential new tariffs on cars, chips, pharmaceuticals, and other goods. He already has imposed 10-percent tariffs on Chinese-origin imports (on top of the existing Section 301 duties from the first Trump administration, which apply to around half of all goods imported from China and impose tariffs up to 25 percent). He has threatened tariffs of up to 25 percent on all goods from Canada and Mexico, which are currently suspended for 30 days to give negotiators time to work out an agreement to address unauthorized immigration and illegal trafficking in fentanyl and other drugs. And he has threatened reciprocal tariffs, which would raise U.S. tariff rates on any products from countries that impose higher tariffs on the same goods when exported from the United States. Finally, he also has vowed to raise U.S. tariffs still further on any country that retaliates against the U.S. tariffs.
What Should Our Company Do to Cope With These Potentially Costly New Duties?
Gather information on importing patterns to determine tariff-related vulnerability. Importers should gather information regarding their steel and aluminum products, and their importing patterns related to those products, to pinpoint tariff-related risks and vulnerabilities. Supply chain mapping, the process of documenting all suppliers and the flow of goods and products in a supply network, can be an important tool for importers looking to gain proper insight into their network. A clear picture of one’s supply chain allows importers to identify tariff-saving opportunities and to proactively address pressure-points creating vulnerabilities.
Gather contracts and determine tariff-related flexibility. Global trade dynamics necessitate flexible supply chain contracts for both suppliers and purchasers. The starting point is to identify goods facing high tariff rates and to gather all of your supply- and sell-side contracts and determine how they handle tariff-related risks for these goods. In general, when it comes to tariff-related risks, these contracts generally fall into two buckets: (1) ones that contain no provision relating to tariffs or that contain pricing-related provisions, which may indirectly allocate risks relating to tariffs but not provide any real flexibility to deal with unexpected tariff changes; and (2) ones that include clear tariff-related provisions. To the extent possible, in any situation where your company bears tariff-related risks (generally, where your company has agreed to act as the importer of record), you want to be in the posture of moving contracts toward the second scenario.
Look for ways to update supply-side contracts for supply chain flexibility and sharing of risk. Fixed-price contracts typically assign cost risk to the seller. If tariffs increase costs, suppliers cannot unilaterally demand price adjustments unless the contract allows for cost-sharing mechanisms. An example of price adjustment protection language would be as follows: Supplier reserves the right to adjust prices to reflect the impact of any tariffs, duties, or similar governmental charges imposed after the date of this proposal. These adjustments will be calculated to ensure fair allocation of the increased costs. Supplier will provide advance notice of any such adjustments along with documentation supporting the changes.
Look for ways to update sell-side contracts for allowing surcharges and pricing flexibility. Sellers wanting to protect themselves and to have added flexibility should seek to include price adjustment rights in their contracts. Some contracts tie prices to commodity indexes, mitigating the impact of sudden market changes. If a supplier anticipates tariff risks, an indexed pricing structure may provide some protection.
Incorporate procedures to regularly review new contracts and contracts coming up for renewal to incorporate tariff flexibility and tariff-sharing provisions. Regularly reviewing new contracts and contracts up for renewal allows companies the opportunity to amend their standard terms and conditions and to incorporate provisions that can lead to more flexibility and an equal tariff-sharing burden. An example of contract language to create flexibility in a tariff-changing environment would be: If new tariffs, duties, or similar government-imposed charges are introduced after contract execution, the parties will renegotiate pricing in good faith to reflect the impact of such charges.
Look for ways to create commercial leverage to share tariff-related risks. The imposition of additional tariffs can be just as devastating for sellers as it is for buyers. Look for contractual leverage points relating to contract renewals or potential expansion of purchasing patterns. Consider moving up contract renewals to combine term extensions with tariff-related risk sharing. By proactively addressing these issues in supply chain agreements, businesses can better navigate economic volatility while maintaining contractual clarity and financial stability.
Health Canada Launches FOP Labeling Awareness Initiative
As we have previously blogged about, Health Canada published front-of-pack (FOP) labeling regulations in 2022, which require warnings for most foods high in saturated fat, sugars, and/or sodium. See also Front-of-package nutrition symbol labelling guide for industry – Canada.ca. The regulations will begin to be enforced on January 1, 2026, although the warnings can be voluntarily implemented earlier and have already begun to appear on Canadian shelves.
Recently, Health Canada’s Food and Nutrition Directorate launched an initiative to bring awareness to the new warnings. The initiative aims to inform consumers of the symbol that will be used (black and white box with a magnifying glass, a “high in [X]” declaration, and the words “Health Canada”), its utility (intended to help consumers make informed health choices), and the reason why some pre-packaged foods don’t have it (e.g., the food is a fruit or vegetable or other food exempted because it offers health protection benefits).
We will continue to monitor developments on FOP labeling rules in Canada, the U.S., and other jurisdictions.
Parked: The Extension of the UK’s Sustainability Disclosure Requirements to Portfolio Managers
On 14 February 2025, the Financial Conduct Authority (the “FCA”) updated its webpage on consultation paper (CP24/8) on extending the sustainability disclosure requirements (“SDR”) and investment labelling regime to portfolio managers. In the update, the FCA confirmed that it no longer intends to do so and will continue to reflect on the feedback received and provide further information in due course.
The FCA had scheduled publishing a policy statement on this in Q2 2025, but has now stalled this, setting out they are continuing to want to ensure the extension of SDR to portfolio management delivers good outcomes for consumers, is practical for firms and supports growth of the sector.
We reported on the consultation paper here: FCA Sustainability Disclosure Requirements Consultation Paper on the Extension to Portfolio Managers now published – Insights – Proskauer Rose LLP.
Australia: Review Recommends No Increases to Wholesale Client Test, Encourages Further Review
The Parliamentary Joint Committee on Corporations and Financial Services (Committee) has been inquiring into the wholesale investor test for offers of securities, and the wholesale client test for financial products and services in the Corporations Act 2001 (Inquiry) (see our previous post). The Committee has now released its report from the Inquiry.
The Inquiry followed on from the Australian Treasury’s Managed Investment Scheme Review (see our previous post) (MIS Review) which sought feedback on whether the wholesale client thresholds remain appropriate given they have not changed since their introduction in 2001, among other matters. Treasury’s findings on the MIS Review were due to be reported to the Government in early 2024 but these have not been publicly released.
The Committee made just two recommendations:
That the government consider establishing a mechanism for periodic review of the operation of the wholesale investor and client tests; and any such mechanism include mandatory requirements for engagement and consultation with Australia’s investment industry; and
That, subject to a period of stakeholder consultation, the government amend the Corporations Act 2001 to remove the subjective elements of the sophisticated investor test and introduce objective criteria relating to the knowledge and experience of the investor.
There was much speculation about the outcome in relation to the wholesale investor/client tests, particularly given that some stakeholders, most notably the Australian Securities and Investments Commission (ASIC), advocated for the thresholds to be substantially increased.
The Committee found that “a case for raising the test thresholds has not been established at this time” and that the current thresholds remain appropriate notwithstanding the greater proportion of people meeting the thresholds.
The Committee said that it was incumbent on ASIC as the chief regulatory body for Australia’s financial system to ensure that its policy recommendations include meaningful consultation with industry stakeholders. In the Inquiry hearings, ASIC acknowledged that it had not consulted industry regarding its submission to increase the thresholds.
The Committee also encouraged the government to consider whether a broader review of the legislation regulating wholesale and retail investors and the financial markets is needed. The Committee suggested that such a review could build on the Australian Law Reform Commission’s Review of the legislative framework for corporations and financial services regulation and the Quality of Advice Review.
The Rules That Apply to Foreign Persons Purchasing Established Homes in Australia are Going to Change on 1 April 2025…. So, You May Need to Act Now
The Hon. Jim Chalmers MP, Federal Treasurer and the Hon. Clare O’Neil MP, Minister for Housing, Minister for Homelessness issued a joint media release on 16 February 2025 titled “Albanese Government clamping down on foreign purchase of established homes and land banking”.
The media release foreshadows changes to the rules that apply when a foreign person buys an established dwelling or undertakes a land development.
Parts of the media release are extracted below:
The Albanese Government will ban foreign investors from buying established homes for at least two years and crack down on foreign land banking.……..This is all about easing pressure on our housing market at the same time as we build more homes.………We’re banning foreign purchases of established dwellings from 1 April 2025, until 31 March 2027. A review will be undertaken to determine whether it should be extended beyond this point.The ban will mean Australians will be able to buy homes that would have otherwise been bought by foreign investors.Until now, foreign investors have generally been barred from buying existing property except in limited circumstances, such as when they come to live here for work or study.From 1 April 2025, foreign investors (including temporary residents and foreign owned companies) will no longer be able to purchase an established dwelling in Australia while the ban is in place unless an exception applies.………We will also bolster the Australian Taxation Office’s (ATO) foreign investment compliance team to enforce the ban and enhance screening of foreign investment proposals relating to residential property by providing $5.7 million over 4 years from 2025–26.This will ensure that the ban and exemptions are complied with, and tough enforcement action is taken for any non‑compliance.………We’re cracking down on land banking by foreign investors to free up land to build more homes more quickly.Foreign investors are subject to development conditions when they acquire vacant land in Australia to ensure that it is put to productive use within reasonable timeframes.………
Here are some initial observations:
The consequences of contravening Australia’s foreign investment laws are serious. The media release raises a number of questions, and the full implications will naturally depend upon the precise wording of the changes.
The media release notes “The ATO and Treasury will publish updated policy guidance prior to the commencement of the changes” (i.e. before 1 April 2025).
The existing rules already tightly limit the classes of foreign buyer who can acquire established homes. Currently this is essentially limited to:
A temporary resident (or their spouse) who is going to use the dwelling as their place of residence while in Australia and who applies for and obtains approval;
A buyer who is planning to redevelop the dwelling where the redevelopment will genuinely increase Australia’s housing stock and who applies for and obtains approval; and
Foreign controlled companies who are planning to purchase an established dwelling to house an Australian based employee and who apply for and obtain approval.
It seems clear the Government is also removing the ability for foreign companies to buy established dwellings to house their Australian based staff. While the Government may allow exceptions as it has flagged in the media release, this detail is yet to be seen.
We query whether there are other alternatives to an outright ban, such as only a ban on housing below a prescribed price threshold (area by area).
It is unclear from the media release if the Government is going to change the rules applicable to holders of an Australian permanent resident visa. But we suspect changes are not proposed for holders of an Australian permanent resident visa.
The message from the media release is that where a foreign person has already acquired or intends to acquire vacant land or an established dwelling for redevelopment, the foreign person should assume there is going to be:
More active monitoring of compliance with conditions (eg vacant residential land approvals require construction of all dwellings to be completed within four years of the date of the notice of approval); and
More rapid application of existing enforcement options.
If you currently have a Foreign Investment Review Board (FIRB) approval, make sure you are in complying with the conditions and seek advice if you are not.
We query whether the Government intends to revisit the rules when a foreign person rents a residential dwelling or whether the foreshadowed changes will just apply to purchases.
If a foreign person is unable to acquire an established dwelling, then that person will need to either acquire a new dwelling or access the rental market. The changes may increase still further the demand for dwellings to rent.
If a foreign person is planning on acquiring an established dwelling, take advice and seriously consider doing so before 1 April 2025.
Foreign Investor Surcharges
All six Australian States impose transfer duty surcharges on acquisitions of residential related property acquired by a foreign person (including a foreign company or trust). Typically, the surcharge duty rate is 7% or 8% and applies in addition transfer duty at general rates.
Further, some States and the Australian Capital Territory also impose surcharge land tax on foreign persons that own residential related property.If foreign buyers are prohibited from acquiring existing homes, this may have some impact on the level of surcharge duty and surcharge land tax revenue that will be collected at a State and Territory level.
Caution on Australian Citizens Buying for Foreign Persons
There are some circumstances in which family members (say, as a spouse or adult child) who are Australian citizens or permanent residents may want to acquire and hold property for family members who are foreign. The intention may be to avoid existing FIRB restrictions as well as the above- mentioned foreign investor surcharges.
Such arrangements are high risk and caution should be exercised.
Typically, such arrangements will create a trust relationship between the “apparent purchaser” (i.e. the Australian citizen) and the “real purchaser” (i.e. the foreign person who provides the money for the purchase).
Most Australian States and Territories now require a purchaser of land to provide a declaration which sets out:
Whether the purchaser is acquiring the land for their own purposes (or on trust for another person); and
If the purchaser is acquiring as trustee for another person, whether the beneficiaries of the trust are foreign.
Further, the duties and land tax legislation in most jurisdictions will apply to such arrangements. For example, section 104T in the Duties Act 1997 (NSW) expressly captures “apparent purchaser arrangements” such as those described above for surcharge purchaser duty purposes.
We note that a written agreement is not required to create a treat relationship. A verbal agreement can suffice.
A purchaser who provides a false declaration and does not disclose they are acquiring and holding a property on trust for a foreign person may commit an offence.
There are also risks for the foreign person on whose behalf the property has been purchased. If there is a break down in the relationship between the parties, it may be difficult for the foreign person to demonstrate that they are the real owner of the property (and the party entitled to the benefit of any rents or sale proceeds).
All tax and legal risks should be fully considered if any such arrangements are contemplated.
How can we Help?
We will continue to monitor changes to the rules that apply to acquisitions of established dwellings by foreign persons in Australia and will provide a further update when the new policy is released.
Combatting Scams in Australia and the United Kingdom
In response to the growing threat of financial scams, the Australian Government has passed the Scams Prevention Framework Bill 2025. The Scams Prevention Framework (SPF) imposes a range of obligations on entities operating within the banking and telecommunications industries as well as digital platform service providers offering social media, paid search engine advertising or direct messaging services (Regulated Entities). In the first article of our scam series, Australia’s Proposed Scams Prevention Framework, we provided an overview of the SPF. In this article, we compare the SPF to the reimbursement rules adopted by the United Kingdom and consider the likely implications of each approach.
UK Model
The United Kingdom is a global leader in the introduction of customer protections against authorised push payment (APP) fraud. A customer-authorised transfer of funds may fall within the definition of an APP scam where:
The customer intended to transfer the funds to a person, but was instead deceived into transferring the funds to a different person; or
The customer transferred funds to another person for what they believed were legitimate purposes, but which were in fact fraudulent.
Reimbursement Requirement
A mandatory reimbursement framework was introduced on 7 October 2024 (the Reimbursement Framework) and applies to the United Kingdom’s payment service providers (PSPs). Under the Reimbursement Framework, PSPs are required to reimburse a customer who has fallen victim to an APP scam. The cost of reimbursement will be shared equally between the customer’s financial provider and the financial provider used by the perpetrator of the scam. However, PSPs will not be liable to reimburse a victim who has been grossly negligent by failing to meet the standard of care that PSPs can expect of their consumers (Consumer Standard of Caution) (discussed below), or who is involved in the fraud. Where the customer is classed as ‘vulnerable’, failure to meet the Consumer Standard of Caution will not exempt the PSP from liability.
Consumer Standard of Caution
The Consumer Standard of Caution exception consists of four key pillars:
Intervention – Consumers should have regard to interventions made by their PSP or a competent national authority such as law enforcement. However, a nonspecific ‘boilerplate’ warning will not be sufficient to shift the risk onto the customer.
Prompt reporting – Consumers, upon suspecting they have fallen victim to an APP scam, should report the matter to their PSP within 13 months of the last authorised payment.
Information sharing – Consumers should respond to reasonable and proportionate requests for information made by their PSP in assessing the reimbursement claim. Any requests for information must be limited to essential matters taking into account the value and complexity of the claim.
Involvement of police – Consumers should consent to their PSP reporting the matter to the police on their behalf. PSPs must consider the circumstances surrounding a customer’s reluctance in reporting their claim to the police before relying on this exception.
Failure to meet one or more of the above pillars will only exempt the PSP from liability where the customer has been grossly negligent. This is a higher standard of negligence than required under the common law and requires the customer to have shown a ‘significant degree of carelessness’.
Vulnerability
A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm. Personal circumstances relevant to determining whether a customer is ‘vulnerable’ include:
Health conditions or illnesses that affect one’s ability to carry out day-to-day tasks;
Life events such as bereavement, job losses or relationship breakdown;
Ability to withstand financial or emotional shocks; and
Knowledge barriers such as language and digital or financial literacy.
The Consumer Standard of Caution is not applicable to vulnerable customers. Accordingly, where the victim has been classified as a vulnerable customer, PSPs cannot avoid liability on the grounds of gross negligence for failing to meet the Consumer Standard of Caution.
Limit on Reimbursement
PSPs will not be required to reimburse amounts above the maximum level of reimbursement, which is currently £415,000 per claim.
Key Distinctions Between the SPF and the UK Model
Financial Burden of Scams
Both the UK and Australian models seek to incentivise entities to adopt policies and procedures aimed at lowering the risk of scams. By requiring PSPs to reimburse scam victims, the UK’s model shifts the economic cost of scams from customers onto PSPs. A similar purpose is achieved under the SPF, which provides for harsh financial penalties for entities that fail to develop and implement appropriate policies to protect customers against scams. However, a significant point of difference is the extent to which these financial burdens benefit victims of scams directly.
Under the UK model, a victim of an APP scam will be able to recover the full amount of their loss (up to the prescribed maximum amount) so long as:
They were not grossly negligent in authorising the payment;
They were not a party to the fraud;
They are not claiming reimbursement fraudulently or dishonestly;
The amount claimed is not the subject of a civil dispute or other civil legal action;
The payment was not made for an unlawful purpose; and
The claim is made within 13 months of the final APP scam payment.
In contrast, there is no indication that any funds paid under Australia’s SPF civil penalty provisions will be directed towards the reimbursement of victims. However, under the Scams Prevention Framework Bill 2025, where a Regulated Entity has failed to comply with its obligations under the SPF and this failure has contributed to a customer’s scam loss, the customer may be able to recover monetary damages from the Regulated Entity.
Possible Effect on Individual Vigilance
The UK’s Reimbursement Framework recognises that PSPs, as opposed to individuals, have greater resources available to combat the threat of scams. However, there is a risk that by passing the economic cost of scams onto PSPs, individuals will become less vigilant. Where an individual fails to make proper inquiries which would have revealed the true nature of the scam, they may still be eligible for reimbursement so long as they have not shown a ‘significant degree of carelessness’. With this safety net, individuals may become complacent about protecting themselves from the threat of scams.
In contrast to the UK model, individuals will continue to bear the burden of unrecoverable scam losses under Australia’s SPF unless a Regulated Entity’s breach of SPF obligations has contributed to the loss. As a result, individuals will continue to have a financial incentive to remain vigilant in protecting themselves against the threat of scams.
Scope of Framework
Australia
The SPF applies to entities across multiple industries, reflecting Australia’s ‘whole of the ecosystem’ approach to scams prevention. Upon introduction, the SPF is intended to apply to banking and telecommunications entities as well as entities providing social media, paid search engine advertising or direct messaging services. It is noted in the explanatory materials that the scope of the SPF is intended to be extended to other industries over time to respond to changes in scam trends.
The purpose of this wider approach is to target the initial point of contact between the perpetrator and victim. For example, a perpetrator may create a social media post purporting to sell fake concert tickets. Successful disruptive actions by the social media provider, such as taking down the post or freezing the perpetrator’s account, may prevent the dissemination of the fake advertisement and potentially reduce the number of individuals who would otherwise fall victim to the scam.
United Kingdom
In contrast, the UK’s Reimbursement Framework only applies to PSPs participating in the Faster Payments Scheme (FPS) that provide Relevant Accounts.
FPS
The FPS is one of eight UK payment systems designated by HM Treasury. According to the Payment Systems Regulator, almost all internet and telephone banking payments in the United Kingdom are now processed via FPS.
Relevant Account
A Relevant Account is an account that:
Is provided to a service user;
Is held in the United Kingdom; and
Can send or receive payments using the FPS,
but excludes accounts provided by credit unions, municipal banks and national savings banks.
Effect of Single-Sector Approach
Due to the United Kingdom’s single-sector approach, different frameworks need to be developed to combat scam activity in other parts of the ecosystem. This disjointed approach may create enforcement issues where entities across multiple sectors fail to implement sufficient procedures to detect and prevent scam activities. Further, it places a disproportionate burden on the banking sector, failing to acknowledge the responsibility of other sectors to protect the community from the growing threat of scams.
Key Takeaways
While both the United Kingdom and Australia have demonstrated a commitment to adopting tough anti-scams policies, they have adopted very different approaches. Time will tell which approach has the largest impact on scam detection and prevention.
The authors would like to thank paralegal Tamsyn Sharpe for her contribution to this legal insight.
Prove It or Lose It: How USPTO’s Audit Program Inspired Canada’s Trademark Oversight
If you own a U.S. trademark registration, you have likely encountered (or will encounter) an audit by the US Patent and Trademark Office (USPTO). The audit program, launched by the USPTO in November 2017, was enacted as a tool to promote the accuracy and integrity of the Federal Trademark Register. If audited, a trademark owner is required to submit additional proofs of use, else risk having those goods and services removed from the registration, or, in some cases, risking cancelation of the registration in its entirety. Additionally, trademark owners will incur penalty fees if an audit identifies goods or services on which the mark is no longer used. In simple terms, if you don’t use it, you lose it. While no one wants to be on the receiving end of an audit, the process does have its benefits. Specifically, inaccurate registrations may block future applications for similar marks and decrease the ability of the Register to provide notice of trademark rights to third parties. Clearing the Register of “deadwood” is in keeping with a fundamental goal of the trademark laws, namely, to enable potential trademark owners to enjoy rights in marks without being blocked by unused registrations. With the audit program in place, each of these scenarios is less likely to occur. Knowing that a registration may be audited is yet another reason for owners of U.S. trademarks to ensure that a mark only covers those goods and services still in use.
It seems the USPTO’s audit program has inspired the Canadian Trademark Office (CIPO) to launch its own pilot program requiring owners of Canadian trademarks to prove use of a registered mark on all goods and services covered therein. Accordingly, owners of Canadian trademarks may be receiving more requests to “prove it or lose it.” In January 2025, the CIPO issued 100 notices to random registrants requesting they submit evidence of use of the mark, or establish exceptional circumstances to support non-use, else risk cancellation of the registration. To date, no data has been provided to indicate whether any of the 100 registrations have been canceled. Another 50 notices will be issued in both February and March. Once a “statistically significant” number of audits have been completed, phase 1 of the pilot program will end. In phase 2, the CIPO will assess whether the program should continue, and if so, under what parameters. It is unclear whether the CIPO will allow a registrant to delete only those goods and/or services not in use, or whether the registration will be canceled in full. It is also possible the CIPO will allow the trademark owner to maintain all goods and services if they are able to prove excusable non-use – something that is not allowed in an audit by the USPTO.
The goal of the Canadian audit program is similar to that of the USPTO program, namely, to declutter the Register and ensure new filings are not being blocked unnecessarily. Because the CIPO program is still in its early stages, it remains to be seen whether it will be successful. That said, because the Canadian Trademark Act did away with all use requirements for trademark applications in 2019, it seems this is a much needed check on trademark owners and a way to curb the influx of trademark filings.
If you do business in Canada and own a Canadian trademark registration, it is becoming increasingly important to monitor your use under the mark in order to avoid losing rights and incurring penalty fees.
Corporate Sustainability Obligations in the EU: France Urges the EU To Postpone the Application of Adopted EU Directives
On 20 January 2025, France published a memorandum urging the EU to modify the Corporate Sustainability Reporting Directive (Directive 2022/2464, “CSRD”), and to postpone the application of the Corporate Sustainability Due Diligence Directive (Directive 2024/1760, “CS3D”). France’s statements resonate with the series of Executive Orders aiming in the U.S. at various markets deregulations, although to a lesser degree.
The CSRD and the CS3D
Under EU law, a ‘directive’ (unlike a ‘regulation’) must be implemented by Member States into their own national legislation in order to be applicable. Member States should comply with the objectives of the directive, although they have the choice of the means to attain its objectives. Member States have a deadline to comply with this implementation obligation.
The CSRD
The CSRD entered into force on 5 January 2023 and the implementation deadline expired on 6 July 2024. France implemented it on time, but the European Commission opened infringement procedures before the Court of Justice of the European Union against 17 other Member States in September 2024. To date, the European Commission is still waiting for 8 Member States to implement the directive.
The CSRD requires EU large undertakings (“entreprises” in EU jargon), as well as EU and non-EU listed companies (excluding micro-undertakings) to report sustainability information at individual level.[1] The CSRD also provides for consolidated sustainability statements and corresponding exemptions at individual level. Moreover, non-EU undertakings with a net EU turnover above EUR 150 million are targeted if they have EU subsidiaries covered by the CSRD or branches with net EU turnover above EUR 40 million. In that case, it is up to the EU subsidiary or branch to make available the sustainability report, except if exemptions apply.
The sustainability statement is public and contains non-financial information on the social and environmental risks the company faces, and how its activities impact people and the environment. It is redacted according to the European Sustainability Reporting Standards (ESRS), and is supposed to improve the quality, consistency and comparability of sustainability information provided by companies.
The timeframe for applying the CSRD differs depending on the type of undertaking: FY 2024 for large undertakings which are public interest entities with more than 500 employees; FY 2025 for other large undertakings; FY 2026 for listed small and medium-sized undertakings (“SMEs”)[2]; and FY 2028 for non-EU undertakings with net EU turnover above EUR 150 million (through their subsidiary or branch).
For details please see our previous article here.
The CS3D
The CS3D entered into force on 25 July 2024 and the implementation deadline will expire on 26 July 2026. France has not implemented it yet.
The aim of the CS3D is to foster sustainable and responsible corporate behaviour in companies’ operations and across their global value chains. The CS3D establishes a corporate due diligence duty. The core elements of this duty are identifying and addressing potential and actual adverse human rights and environmental impacts in the company’s own operations, their subsidiaries and, where related to their value chain(s), those of their business partners.
The CS3D applies to EU limited liability companies and partnerships with more than 1,000 employees and a net worldwide turnover of more than EUR 450 million, as well as ultimate parent companies of a corporate group that meets the thresholds on a consolidated basis, and franchisors/licensors meeting certain conditions and thresholds. It also applies to non-EU undertakings of a legal form comparable to LLCs/partnerships with a net turnover of more than EUR 450 million generated in the EU, as well as ultimate parent companies of a corporate group that meets the threshold on a consolidated basis, and franchisors/licensors meeting certain conditions and thresholds.
The timeframe for applying the CS3D differs depending on the type of undertaking: July 2027 for EU companies with more than 5,000 employees and EUR 1,500 million worldwide turnover, as well as non-EU companies with more than EUR 1,500 million turnover generated in the EU; July 2028 for EU companies with more than 3,000 employees and EUR 900 million worldwide turnover, as well as non-EU companies with more than EUR 900 million turnover generated in the EU; and July 2029 for all other companies in scope.
France’s memorandum
France’s memorandum comes in the context of criticism of both directives. Member States like Italy or Germany, as well as stakeholders, recently alleged that they would hamper the competitiveness of the EU as compared to other regions. Even certain third countries have voiced concerns over the application of the CS3D, particularly if it resulted in fines. They claim that it imposes excessive compliance costs and creates unnecessary challenges for their companies, making them reconsider their involvement in the EU market.
France sees the need for action confirmed by Mario Draghi’s report[3] of 9 September 2024 on the future competitiveness of the EU and his diagnosis of loss of competitiveness vis-à-vis its main international competitors and in particular in the absence of a level playing field.
For the French authorities, the proportionality of the CSRD framework is no longer ensured in light of the very substantial competitive challenges that EU companies are facing. Therefore, they are in favour of the urgent adoption of several modifications including;
the reduction of the number of sustainability indicators and a narrowed focus on climate objectives;
the introduction in the Accounting Directive of the notion of “mid-caps”, i.e. intermediate-sized companies positioned above current SMEs and below large companies, to which SMEs ESRS would apply;
the introduction in the CSRD of a principle of capping reporting in the subcontracting chain of large companies;
the provision in the Accounting Directive for the inclusion of fees for auditing sustainability information in the annex to the company accounts.
As a subsidiary option, France is also open to a two-year postponement of the entry into force of the provisions of the CSRD.
With respect to the CS3D, France submits that the new CS3D obligations entail a number of potential risks identified by companies and likely to affect their competitiveness, including in relation to non-EU companies not subject to these same standards. Therefore, the French authorities are in favour of an indefinite postponement of the entry into force of the CS3D, to allow the incorporation of several adjustments, among which;
the limitation of the personal scope to EU companies with more than 5,000 employees and EUR 1,500 million worldwide turnover, as well as non-EU companies with more than EUR 1,500 million turnover generated in the EU;
the application of due diligence at group level instead of subsidiary level;
the creation of a single EU supervisory authority, which would be explicitly endowed with a support and mediation role;
the deletion of additional requirements for regulated financial companies, in order to treat the latter similarly to companies in other sectors.
France’s proposal goes well beyond the two above Directives and suggests comprehensive changes to other regulatory instruments including in relation to AI, Taxonomy, Environmental Data Reporting, Banking Sector Standards, State Aid Procedures, Agricultural Aid, Securitisation Market, REACH Regulation, Biomass Installations, Waste Classification Harmonisation, Agricultural Sector Simplifications.
Conclusion
France also seems to be adopting a position of reducing, or at least simplifying, regulation (to a lesser extent than the United States), in order to enable its companies to remain competitive. This approach is not limited to the issue of sustainability, but also covers areas such as agriculture and AI, which are crucial for the coming years.
To what extent France will succeed with its initiative is open. Ultimately, the proposal requires a comprehensive regulatory simplification agenda with a broad scope to enhance EU competitiveness and alleviate administrative burdens, particularly for SMEs and mid-sized companies.
While postponement might be easily achieved, substantive changes will require EU institutions to reopen the dialogue which is feared to postpone the implementation of the directives indefinitely. On the other hand, the burdensome rules have been widely criticised and de-regulation is the buzz-word of the moment. It is not unlikely that more countries will jump on the bandwagon which would give France’s initiative further momentum.
Companies are well advised to monitor this development carefully. Until an EU level consensus is reached, national laws in France and across the EU will continue to apply. Independent initiatives by EU Member States to postpone or amend their rules could be in breach of their obligations of the Directive, which will make a national solo-action less likely.
FOOTNOTES
[1] Under the EU Accounting Directive 2013/34, micro-undertakings do not exceed the limits of at least two of the three following criteria: total balance sheet total of EUR 450,000; net turnover of EUR 900,000; or average number of 10 employees during the financial year. Large undertakings exceed at least two of the three following criteria: total balance sheet of EUR 25,000,000; net turnover of EUR 50,000,000; or average number of 250 employees during the financial year.
[2] Under the EU Accounting Directive 2013/34, small undertakings do not exceed the limits of at least two of the three following criteria: total balance sheet total of EUR 5,000,000; net turnover of EUR 10,000,000; or average number of 50 employees during the financial year of; medium-sized undertakings do not exceed the limits of at least two of the three following criteria: total balance sheet total of EUR 25,000,000; net turnover of EUR 50,000,000; or average number of 250 employees during the financial year.
[3] Mr. Draghi was the President of the European Central Bank and a former Italian Prime Minister; he was mandated by the European Commission to draft a report on the future competitiveness of the EU.
Are Employees Receiving Regular Data Protection Training? Are They AI Literate?
Employee security awareness training is a best practice and a “reasonable safeguard” for protecting the privacy and security of an organization’s sensitive data. The list of data privacy and cybersecurity laws mandating employee data protection training continues to grow and now includes the EU AI Act. The following list is a high-level sample of employee training obligations.
EU AI Act. Effective February 2, 2025, Article 4 of the Act requires that all providers and deployers of AI models or systems must ensure their workforce is “AI literate”. This means training workforce members to achieve a sufficient level of AI literacy considering various factors such as the intended use of the AI system. Training should incorporate privacy and security awareness given the potential risks. Notably, the Act applies broadly and has extraterritorial reach. As a result, this training obligation may apply to organizations including but not limited to:
providers placing on the market or putting into service AI systems or placing on the market general-purpose AI models in the Union, irrespective of whether those providers are established or located within the Union or in a third country (e.g., U.S.);
deployers of AI systems that have their place of establishment or are located within the Union; and
providers and deployers of AI systems that have their place of establishment or are located in a third country (e.g., U.S.), where the output produced by the AI system is used in the Union.
California Consumer Privacy Act, as amended (CCPA). Cal. Code Regs. Tit. 11 sec. 7100 requires that all individuals responsible for the business’s compliance with the CCPA, or involved in handling consumer inquiries about the business’s information practices, must be informed of all of the requirements in the CCPA including how to direct consumers to exercise their rights under the CCPA. Under the CCPA, “consumer” means a California resident and includes employees, job applicants and individuals whose personal data is collected in the business to business context.
HIPAA. Under HIPAA, a covered entity or business associate must provide HIPAA privacy training as well as security awareness training to all workforce members. Note that this training requirement may apply to employers in their role as a plan sponsor of a self-insured health plan.
Massachusetts WISP law (201 CMR 17.03 201). Organizations that own or license personal information about a resident of the Commonwealth are subject to a duty to protect that information. This duty includes implementing a written information security program that addresses ongoing employee training.
23 NYCRR 500. The New York Department of Financial Services’ cybersecurity requirement for financial services companies requires that covered entities provide cybersecurity personnel with cybersecurity updates and sufficient training to address relevant cybersecurity risks.
Gramm-Leach-Bliley Act and the Safeguards Rule. The Safeguards Rule requires covered financial institutions to implement a written information security program to safeguard non-public information. The program must include employee security awareness training. In 2023, the FTC expanded the definition of financial institutions to include additional industries such as automotive dealerships and retailers that process financial transactions.
EU General Data Protection Regulation (“EU GDPR”). Under Art. 39 of the EU GDPR, the tasks of a Data Protection Officer include training staff involved in the organization’s data processing activities.
In addition to the above, there are express or implied security awareness training obligations in numerous other laws and regulations including certain Department of Homeland Security contractors, licensees under state insurance laws modelled on the NAIC Insurance Data Security Model Law, and organizations that process payments via credit cards in accordance with PCI DSS.
Whether mandated by law or implemented as a best practice, ongoing employee privacy and security training plays a key role in safeguarding an organization’s sensitive data. Responsibility for protecting data is no longer the sole province of IT professionals. All workforce members with access to the organization’s sensitive data and information systems share that responsibility. And various stakeholders, including HR professionals, play a vital role in supporting that training.
2025 Global Franchise & Supply Network Report
We are pleased to present our 2025 Global Franchise & Supply Network Report detailing key legal developments, strategies and insights into the evolving landscape of franchising, licensing, distribution and supply chain management. This report explores various topics, including:
FTC Franchise Rule amendments
Noncompete covenants
Considerations when merging franchise systems
Mediation trends
Considerations for Item 18 of the FTC Franchise Rule
California’s Franchise Investment Law
Recommendations to reduce misclassification, joint employment and vicarious liability risks
Resources
Read the full report
EDPB Adopts Statement on Age Assurance, Creates AI Taskforce and Gives Recommendations at Latest Plenary Meeting
The European Data Protection Board (“EDPB”) held its latest plenary meeting on February 12, 2025. During this meeting, the EDPB: (i) adopted a statement on age assurance (the “Statement”); (ii) decided to create a taskforce on artificial intelligence (“AI”) enforcement; and (iii) adopted Recommendations 1/2025 on the 2027 World Anti-Doping Agency (“WADA”) World Anti-Doping Code (the “Recommendations”).
Through the Statement, the EDPB intends to provide specific guidance that should be taken into consideration when personal data is processed in the context of age assurance. The Statement contains ten principles that “seek to reconcile the protection of children and the protection of personal data in the context of age assurance.” The Statement is focused on how such principles apply to different online use cases and when a duty of care to protect children exists. The principles are:
Full and effective enjoyment of rights and freedoms.
Risk-based assessment of the proportionality of age assurance.
Prevention of data protection risks.
Purpose limitation and data minimization.
Effectiveness of age assurance.
Lawfulness, fairness and transparency.
Automated decision-making.
Data protection by design and by default.
Security of age assurance.
With regards to the taskforce, the EDPB made the decision to extend the scope of the existing ChatGPT taskforce to include AI enforcement.
In October 2024, the European Commission requested that the EDPB, pursuant to Article 70(1)(e) of the EU General Data Protection Regulation (“GDPR”), assess the compatibility of the WADA World Anti-Doping Code (the “Code”) and the corresponding International Standards with the GDPR. The Recommendations include the result of this assessment. The Code aims at harmonizing anti-doping policies, rules and regulations internationally and is supplemented by the eight International Standards, one of which is data protection. The Recommendations address key principles of data protection, including the roles of controller and processor, the need to identify an appropriate legal basis for the processing of personal data, ensuring that personal data is processed for specified, explicit and legitimate purposes and data subject rights.