European Regulatory Timeline 2025
Following the turn of the new year, our UK Regulatory specialists have examined the key regulatory developments in 2025 impacting a range of UK and European firms within the financial services sector. The key dates have been distilled by the Proskauer team in an easy to read timeline with our commentary.
Download the 2025 European Regulatory Timeline
Michael Singh and Sulaiman I. Malik also contributed to this article.
What Might Happen with Business Immigration Under the New Trump Administration
Navigating the Future of H-1B, L-1 and O-1 Visas
As the new Trump administration takes shape, tech companies and foreign workers are keenly observing potential changes to the H-1B visa program and other related tech visas. The administration is expected to appease its opposing stakeholders by maintaining strong relationships with the tech industry while also addressing concerns from those advocating for stricter immigration policies.
H-1B and L-1 Visas: A Balancing Act
While some factions within the administration may push for a reduction in high-skilled immigration, the administration’s close ties with tech companies suggests it will likely maintain current levels of H-1B and L-1 visa issuances. The tech industry heavily relies on these visas, and any drastic reduction could disrupt business operations and innovation. However, procedural changes that we saw in the previous administration, as well as new ones, might be introduced to indirectly limit access, such as increased scrutiny during adjudications, slower processing times, increased requests for evidence, higher denial rates, and more frequent site visits.
A particular focus is expected on third-party placement firms and staffing companies, which have been accused of misusing the H-1B program. Companies that are in the outsourcing/staffing industry may face heightened scrutiny and additional requirements, especially in terms of documenting third-party worksite placements.
Buy American, Hire American: Implications and Expectations
The anticipated “Buy American, Hire American” executive order could lead to reviews of companies using large numbers of H-1B visas to determine if they are prioritizing foreign workers over U.S. citizens. This may also involve increased activity from the Department of Justice’s Immigrant and Employee Rights Section (IER), which scrutinizes whether foreign nationals are being unfairly preferred in hiring.
Geopolitical Considerations and Security Checks
The administration might impose stricter limitations on H-1B visa holders from countries perceived as unfriendly, such as China and those countries that have been designated as state sponsors of terrorism. Enhanced security and administrative checks could lead to delays for nationals from these countries, reflecting broader geopolitical concerns. The administration could also bring back its Travel Bans via executive orders, as it did previously.
Potential Revisions to Existing Policies
There is speculation about reversing USCIS’s deference policy, which has allowed USCIS adjudicators to rely on prior approvals involving the same parties and facts rather that adjudicating every visa petition from scratch. While the recent H-1B modernization rule codifies the deference policy, the administration could issue directives requiring case-by-case reviews, potentially complicating and slowing the process for employers and applicants.
Additionally, work authorization for some spouses of tech workers may disappear. The Trump administration proposed eliminating the H-4 EAD in 2021 and it may try to do this again. There have been no similar attempts at, or discussions around, rescinding L-2 work authorization.
Optional Practical Training (OPT) and STEM OPT
Previous attempts by the Trump administration to limit OPT and STEM OPT were met with resistance from the tech industry and educational institutions. Further restrictions on these programs seem unlikely in the short term because any changes would likely face significant pushback due to their importance to tech companies and universities.
Prevailing Wage and Union Advocacy
Efforts to increase prevailing wages for H-1B workers may gain traction, with heightened scrutiny on companies accused of undercutting wages through foreign hires. The incoming head of the Department of Labor could advocate for policies that favor higher prevailing wages and address union concerns.
Conclusion: Navigating Uncertainty
While the new administration may introduce challenges for high-skilled immigration, the business community’s pushback and the economic benefits of these programs could help prevent implementation of any drastic measures. Companies and foreign workers should stay informed and prepare for potential procedural changes.
GT Newsletter | Competition Currents | January 2025
United States
A. Federal Trade Commission (FTC)
1. Competitor collaboration guidelines withdrawal.
On Dec. 11, 2024, the FTC and DOJ Antitrust Division withdrew the Antitrust Guidelines for Collaborations Among Competitors. The agencies determined the Collaboration Guidelines, issued in April 2000, no longer provide reliable guidance on how enforcers assess the legality of collaborations involving competitors due to the subsequent development of Sherman Act jurisprudence, rapid evolution of technologies and business combinations, and reliance on outdated policy statements and analytical methods. The FTC voted 3-2 to withdraw the guidelines. Commissioners Andrew Ferguson and Melissa Holyoak issued separate dissents highlighting the absence of replacement guidance.
2. Trump names Andrew Ferguson as next FTC chair.
President-elect Donald Trump has named FTC Commissioner Andrew Ferguson as the next FTC chair. Sworn in on April 2, 2024, Commissioner Ferguson was one of two Republican FTC Commissioners President Biden appointed. He previously served as Virginia solicitor general, chief counsel to U.S. Sen. Mitch McConnell, and U.S. Senate Judiciary Committee counsel. Ferguson earned undergraduate and law degrees from the University of Virginia before clerking for the D.C. Circuit and U.S. Supreme Courts. The president-elect also announced his intention to nominate Mark Meador, a partner at law firm Kressin Meador Powers and former antitrust counsel to U.S. Sen. Mike Lee, as an FTC Commissioner to fill current FTC Chair Lina Khan’s seat.
B. U.S. Litigation
1. Borozny v. RTX Corp., Case No. 3:21-CV-01657 (D. Conn.).
On Jan. 3, 2025, the Honorable Judge Sarala V. Nagala initially approved a $34 million settlement for a nationwide “no-poach” class action against several aerospace companies. The proposed $34 million settlement from the principal defendant, RTX, settles claims that RTX entered into agreements with several suppliers and competitors to not hire one another’s aerospace engineers—a highly skilled profession. This civil suit ran parallel to the DOJ’s criminal case, which was dismissed by another court. If approved, the $34 million settlement from RTX would augment the $26.5 million settlement previously negotiated with other alleged conspirators.
2. 2311 Racing LLC, et al. v. National Association for Stock Car Auto Racing, LLC, Case No. 3:24-CV-886 (W.D. N.C.).
On Dec. 20, 2024, defendant National Association for Stock Car Auto Racing, LLC (NASCAR) sought to stay a preliminary injunction that prevents NASCAR from barring various racing teams who initiated an antitrust lawsuit from competing in the 2025 season. Initiated by 2311 Racing, the lawsuit alleges that NASCAR exercises monopoly power over racetracks and requires all NASCAR teams not to participate in competing events. According to 2311, NASCAR then barred its participation in the upcoming 2025 season because, among other things, 2311 would not sign contracts that require the teams to relinquish all rights to bring antitrust claims. The Honorable Judge Kenneth D. Bell granted 2311’s preliminary injunction requiring NASCAR to allow the teams to compete, which NASCAR intends to appeal in the Fourth Circuit.
3. SmartSky Networks, LLC v. Gogo Inc., Case No. 3:24-CV-01087 (W.D. N.C.).
On Dec. 17, 2024, airplane technology company SmartSky Networks, LLC brought a $1 billion lawsuit against competitor Gogo, Inc. and Gogo Business Aviation, LLC (collectively, Gogo). SmartSky alleges Gogo unfairly blocked it from selling its in-flight Wi-Fi services to private aircraft customers. According to the lawsuit, Gogo engaged in a systematic campaign to create “fear, uncertainty and doubt” about SmartSky’s allegedly superior services while falsely promoting a future Gogo alternative that never launched. As a result of this campaign, SmartSky claims it failed after nearly 10 years of trying to enter the market.
Mexico
A. COFECE discovers possible collusion in radiological material sales to the government.
COFECE’s Investigating Authority has issued a Probable Liability Opinion against several companies and individuals accused of rigging public tenders for radiological material, an illegal act under the Federal Economic Competition Law.
In Mexico, public health institutions perform more than 20 million x-rays a year. The Mexican Social Security Institute conducts approximately 19 million of these studies annually, while the Institute of Security and Social Services for State Workers conducts an additional 1.6 million.
In its announcement, COFECE highlighted that when companies agree not to compete in tenders, they not only affect public finances, but also compromise Mexicans’ access to essential medical services. COFECE further emphasized that transparency, equity, and efficiency are fundamental principles that should govern government procurement, especially in the health sector. A trial will follow.
B. COFECE investigates lack of effective competition in live entertainment events.
COFECE’s Investigating Authority (AI) has initiated an investigation into live entertainment markets to determine if there are obstacles that limit competition in these markets, which could negatively impact the millions of live entertainment event consumers.
Between 2023 and 2024, half of adults in Mexico attended live entertainment events, such as concerts, live music or dance performances, plays, and art or history exhibitions. In 2023 alone, Mexicans spent more than MEX 7 billion on online tickets for music events. This positions Mexico as the largest Latin American market for the sale of tickets to musical events and the 16th largest market worldwide.
Through its investigation, the AI seeks to identify and eliminate the barriers that prevent competition in these markets. If the AI identifies barriers to competition or essential inputs, the COFECE Plenary may order eliminating those barriers, issue recommendations and guidelines for their regulation, and/or order divestment to improve efficiency.
The Netherlands
Dutch ACM Statement
Further investigation into KPN joint venture’s acquisition of DELTA needed.
The Dutch Authority for Consumers and Markets (ACM) has decided that further investigation is required for Glaspoort’s (a joint venture of KPN and APG) acquisition of a portion of Delta Fiber Nederland’s fiber optic network. KPN is the incumbent telecommunications operator in the Netherlands, while Delta is currently KPN’s largest competitor in the fiber optic market.
According to the ACM, the acquisition may significantly reduce competition in the areas where KPN and Delta operate, potentially leading to higher prices for consumers. The ACM also points out that KPN already has a substantial market position, and the acquisition could further strengthen this position, putting smaller providers at a disadvantage. Finally, while each individual small acquisition may have a limited impact, the cumulative effect of KPN’s multiple, small acquisitions could significantly undermine competition in the long term, which may weaken smaller providers’ negotiating positions.
Before the acquisition can be finalized, Glaspoort and Delta must apply for an acquisition license – the equivalent of a Phase II or in-depth investigation in other jurisdictions – after which the ACM will continue its investigation.
Poland
A. The UOKiK President questions consortium agreements and other competitor practices accompanying tenders.
The Polish Office of Competition and Consumer Protection (UOKiK) has fined 11 geodesy and cartography companies PLN 1.8 million (approximately EUR 422,000 / USD 436,000) for bid-rigging in cartographic services contracts with the Geodesy and Cartography Agency.
The investigation found that these companies engaged in anticompetitive practices through several coordinated actions. The companies formed unnecessarily large consortia, submitted coordinated bids, and divided awarded contracts among themselves. Some participating companies performed no actual work, serving only as nominal consortium members. UOKiK determined that smaller consortia could have completed the projects independently, indicating the larger groups were formed solely to eliminate competition.
In a separate case, UOKiK has initiated antitrust proceedings against seven laundry service providers suspected of bid-rigging in hospital service contracts. The investigation uncovered evidence of potential price-fixing across multiple provinces and coordinated withdrawal of bids. During court-approved searches conducted with police assistance, investigators discovered mobile app communications showing companies exchanging specific price information to influence tender outcomes. The investigation revealed that participants strategically withdrew lower bids to ensure higher-priced bids would win, likely resulting in increased costs for hospitals and patients. This investigation remains ongoing.
Companies found engaging in bid-rigging face severe penalties under Polish law. Organizations can be fined up to 10% of their annual turnover, while individual managers may face personal fines up to PLN 2 million. These regulations apply regardless of company size, as there are no exemptions for companies with small market share. Any anti-competitive provisions in contracts are automatically void under law. Furthermore, affected parties retain the right to seek damages through private antitrust litigation. Notably, bid-rigging stands as the only form of competition-restricting agreement that may result in criminal penalties, including imprisonment.
B. The UOKiK President investigates ENEA Group’s potential abuse of dominant position in renewable energy market.
The Polish Office of Competition and Consumer Protection (UOKiK) has launched an explanatory investigation into the ENEA Group, a major Polish energy conglomerate responsible for electricity generation, distribution, and trading. The investigation focuses on ENEA Operator, the group’s distribution arm, which holds a natural monopoly in its regional distribution network.
The investigation stems from allegations that ENEA Operator may have provided unfair advantages to renewable energy installation (OZE) applications from its own group companies and select third-party businesses. Following these concerns, UOKiK conducted searches at three ENEA Group facilities. Complaints UOKiK received indicate that ENEA Operator may have shown preferential treatment by issuing connection approvals to certain entities that failed to meet formal requirements or by disregarding the chronological order of application submissions. These practices allegedly resulted in other entities being unfairly denied network connections for their renewable energy installations.
UOKiK suspects that this preferential allocation of connection capacity may have depleted available capacity at crucial balancing nodes, leading to the rejection of other companies’ connection requests due to claimed technical limitations. This issue is particularly significant because network access is fundamental for participation in the electricity trading market.
The investigation is examining whether these actions constitute an abuse of dominant market position, particularly regarding the selective restriction of access to essential infrastructure, discriminatory access conditions, or intentional delays in providing access. Additionally, UOKiK is investigating potential illegal agreements between ENEA Operator and the entities receiving preferential treatment for renewable energy installations.
Should the investigation yield sufficient evidence, UOKiK may initiate formal antitrust proceedings against the involved parties. Under Polish law, companies found to have abused their dominant position face fines of up to 10% of their previous year’s turnover. This penalty may extend to entities exercising decisive influence over the company engaged in such practices. Furthermore, any anti-competitive contractual provisions are automatically void, and affected parties maintain the right to pursue damages through court proceedings.
Italy
Italian Competition Authority (ICA)
1. ICA launches investigation into alleged cartel in copper cable manufacturing industry.
On Dec. 3, 2024, ICA opened an investigation against the Italian main copper cable producers for an alleged restrictive competition agreement aimed at coordinating prices and commercial conditions for producing and selling low-voltage copper cables in violation of Article 101 TFEU.
The proceeding started after a company submitted an application for leniency that disclosed the cartel to benefit from a reduced penalty.
The leniency applicant provided evidence to ICA about price coordination between the different parties. According to the applicant, this coordination started in 2005 when the parties aligned their list prices and initial discounts. Later, in 2008, they created a shared system within their association to adjust prices when copper costs changed. The system included a common way to calculate copper prices. This made the copper component a fixed price that was the same for all producers in the association.
2. Investigation against Booking.com (Italy) closed for allegedly abusing dominant position.
On Dec. 17, 2024, ICA closed its investigation against Booking.com S.r.l. (Italy), Booking.com B.V., and Booking.com International B.V. (Booking) for alleged abuse of dominant position after it accepted Booking’s proposed commitments.
ICA had initiated the proceedings because of Booking’s potentially abusive conduct that allegedly limited Italian hotel facilities’ autonomy to differentiate their rates between Booking.com and other online sales channels by adhering to certain programs Booking promoted, such as the Partner Preferiti and Preferiti Plus programs, which give search result visibility advantages in exchange for higher commissions, and the so-called Booking Sponsored Benefit, which allows Booking to apply – without the hotels’ consent – a discount to align the offer on its platform with the best among those available online.
The group submitted a commitment package that would seek to ensure that prices facilities charge on online sales channels, other than booking.com, would not be taken into account at any stage of its operation and program promotions. In addition, greater transparency around the Preferred Partner, Preferred Plus, and Booking Sponsored Benefit program operations allows facilities to make informed decisions regarding the costs and benefits of participating in them. According to ICA, Booking’s commitments are suitable both for removing competitive concerns and for ensuring the commercial autonomy of Italian hotel facilities.
3. ICA imposed penalties exceeding EUR 2 million on Hera S.p.A. and ComoCalor S.p.A. for excessive and unjustified district heating prices.
Between May and June 2023, ICA initiated three proceedings into the networks of Ferrara (operated by Hera S.p.A.), Como (operated by ComoCalor S.p.A.), and Parma and Piacenza (operated by Iren Energia S.p.A.) to investigate whether and to what extent the three companies had passed on an excessive and unjustified burden to the users of district heating networks between 2021 and 2022, when there had been natural gas price increases.
On Nov. 26, 2024, ICA stated that the conduct that Hera S.p.A. and ComoCalor S.p.A. engaged in from Jan. 1-Dec. 31, 2022, consisting of applying unjustifiably burdensome prices to district heating users, constitutes abusive conduct of their dominant position.
ICA imposed a penalty of EUR 1,984,736 on Hera S.p.A. and EUR 286,600 on ComoCalor S.p.A., arguing that the companies prevented consumers from benefiting from available and affordable renewable sources to produce an essential good (heat), and imposed prices that were unfair in relation to costs (including a fair return on investment).
ICA found no violations related to the Parma and Piacenza networks that Iren Energia S.p.A. operates.
European Union
A. European Commission
1. European Commission fined Pierre Cardin and Ahlers EUR 5.7 million for limiting cross-border clothing sales.
The European Commission fined Pierre Cardin and its licensee Ahlers EUR 5.7 million for violating EU antitrust rules. Pierre Cardin, a French fashion house, licenses its trademark to third parties for producing and distributing clothing branded with its name. Ahlers was Pierre Cardin’s largest licensee of clothing in the EEA during the relevant period. Between 2008 and 2021, both companies participated in anti-competitive agreements and coordinated practices that safeguarded Ahlers from competition within its licensed EEA area. This included preventing other licensees from selling Pierre Cardin clothing outside their territories or to low-price retailers. The Commission calculated the fines based on the severity, geographic scope, and duration of the infringement, with Pierre Cardin receiving a EUR 2,237,000 fine and Ahlers being fined EUR 3,500,000.
2. European Commission approves Nvidia’s acquisition of Run:ai.
The European Commission has unconditionally approved Nvidia’s below-threshold acquisition of Run:ai, concluding that it raises no competition concerns. This decision follows a referral by the Italian Competition Authority under Article 22 of the EU Merger Regulation (EUMR), which allows member states to request deal reviews that fall below national turnover thresholds, following concerns about Nvidia’s potential “super-dominance” in the advanced GPU market.
A recent ruling from the European Court of Justice influenced the European Commission’s review; the case invalidated its previous approach to Article 22 EUMR. In its recent assessment, the European Commission determined that the acquisition would not impair competition, as Nvidia would not have the incentive to make its GPUs less compatible with competitors’ software. The European Commission also found Run:ai’s position in the software market for GPU orchestration to be not significant, with sufficient alternative providers available.
B. ECJ Decision
Preliminary CJEU ruling in ongoing proceedings between Tallinna and KIA Auto.
The Court of Justice of the European Union (CJEU) provided a preliminary ruling on the interpretation of Article 101(1) TFEU (the EU’s cartel prohibition provision), following questions from the Administrative Regional Court of the Republic of Latvia. The case involved Tallinna Kaubamaja Grupp AS and KIA Auto AS, which were fined for a vertical agreement that imposed restrictions on car warranties. The national competition authority determined that this agreement hindered access to the Latvian market for independent repairers and restricted independent spare parts manufacturers. The CJEU stated that Article 101(1) TFEU should be interpreted to mean that a national competition authority does not need to demonstrate the existence of concrete and actual competition-restricting effects when investigating an agreement that imposes restrictions on car warranties. It is sufficient to establish the existence of potential competition-restricting effects, provided they are sufficiently appreciable. Now the proceedings shall resume, and the national court will have to evaluate if the Latvian competition authority’s decision demonstrated sufficiently appreciable effects on competition.
Alan W. Hersh, Rebecca Tracy Rotem, Sarah-Michelle Stearns, Miguel Flores Bernés, Hans Urlus, Robert Hardy, Chazz Sutherland, Gillian Sproul, Manish Das, Robert Gago, Filip Drgas, Anna Celejewska-Rajchert, and Ewa Głowacka also contributed to this article.
J-1 Exchange Visitors From 30+ Countries No Longer Subject to Two-Year Foreign Home Residency Requirement
The Department of State (DOS) revised the J-1 Skills List, which lists home countries to which foreign nationals are subject to a two-year foreign home residency requirement.
The 37 countries that have been removed from the J-1 Skills List are: Albania, Algeria, Argentina, Armenia, Bahrain, Bangladesh, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Dominican Republic, Gabon, Georgia, Guyana, India, Indonesia, Kazakhstan, Laos, Malaysia, Mauritius, Montenegro, Namibia, Oman, Paraguay, Peru, Romania, Saudi Arabia, South Africa, South Korea, Sri Lanka, Thailand, Trinidad and Tobago, Turkey, United Arab Emirates, and Uruguay.
This change applies retroactively. J nonimmigrant exchange visitors who were subject to the two-year foreign residency requirement based upon the Skills List at the time of their admission to the United States in J status will no longer be subject to the residency requirement if their country has been eliminated from the list.
This change is particularly impactful for professionals who often face significant career disruptions and personal hardships due to the two-year foreign home residency requirement. Exempted individuals will be able to pursue further training and employment in the U.S. without disruption.
The elimination of this requirement for certain countries may make the United States a more attractive destination for top talent.
The change, however, does not affect individuals who are subject to the two-year requirement on other grounds, such as government funding or physicians in the United States for graduate medical training.
J-1 visas are work-and-study-based exchange visitor programs established by DOS. The Skills List that became part of that program was established to identify countries with a shortage of certain skills and then ensure that those who gained those skills in the United States would return to their home countries to ensure that knowledge and skills gained during the exchange program would be shared with the individual’s home country. From time to time, DOS revises the list to ensure it is accurately accomplishing the goal that foreign nationals return to their home country when most needed. In this revision, DOS is updating the countries included on the Skills List, but not updating the skills listed.
CJEU Orders the European Commission to Pay Damages for Data Transfers to the U.S.
On January 8, 2025, the General Court of the Court of Justice of the European Union (“CJEU”) issued its judgment in the case of Bindl v Commission (Case T-354/22), ruling that the European Commission (the “Commission”) must pay damages to a German citizen whose personal data was transferred to the U.S. without adequate safeguards.
Background
The case concerned the Commission’s website for the “Conference on the Future of Europe,” which offered users the ability to register for events by signing in using their Facebook account, among other sign-in options.
The claimant, a citizen living in Germany, alleged that selecting this option caused his personal data—including his IP address and browser details—to be transferred to U.S.-based Meta Platforms, Inc. In addition, the claimant asserted that his personal data had been transferred to Amazon Web Services via the Amazon CloudFront content delivery network used on the website. He argued that the transfer posed risks, as the U.S. did not ensure an adequate level of data protection under EU law and that the data could potentially be accessed by U.S. intelligence services. At the time of the transfer in March 2022, the Commission had not yet finalized a new adequacy decision regarding the U.S., following the invalidation of the EU-U.S. Privacy Shield Framework by the CJEU in the Schrems II case.
The claimant sought €400 in damages for the non-material harm he allegedly suffered due to the transfers and €800 for an alleged infringement of his right of access to information. He also sought a declaration that the Commission acted unlawfully in failing to respond to his request for information and annulment of the data transfers.
Anyone who believes the European Union (through one of its institutions) is responsible for non-contractual liability can file a claim for damages. For such liability to apply, three conditions must be met: (1) a serious violation of a law that gives rights to individuals; (2) actual damage; and (3) a direct connection between the unlawful actions and the harm caused.
The Findings
The General Court issued a mixed ruling in this case:
The General Court dismissed the claim regarding the transfer of data to Amazon Web Services, finding insufficient evidence that the transfer had occurred unlawfully. During one of the individual’s connections to the website in question, the General Court found that data was transferred to a server in Munich, Germany, rather than the U.S. In the case of another connection, the individual was responsible for redirecting the data via the Amazon CloudFront routing mechanism to servers in the U.S. Due to a technical adjustment, the individual appeared to be located in the U.S.
The General Court also rejected the claims related to the alleged infringement of the claimant’s right to access information, ruling that no harm had been demonstrated.
Further, the General Court dismissed the annulment application as inadmissible and found no need to adjudicate the claim of failure to act.
However, the General Court held the Commission responsible for enabling the transmission of the claimant’s personal data―specifically, the claimant’s IP address―to Meta Platforms, Inc. via the “Sign in with Facebook” The General Court found that the Commission had not implemented appropriate safeguards to legitimize such transfer and had therefore committed a sufficiently serious breach of a rule of law that is intended to confer rights on individuals. In this case, the claimant argued that he had suffered non-material damage due to uncertainty about how his personal data, especially his IP address, was being processed. The General Court found that there was a sufficiently direct causal link between the Commission’s violation and the harm sustained by the individual. As a result, the General Court granted the complainant damages and ordered the Commission to pay €400.
An appeal addressing only legal issues may be filed within two months and ten days of receiving the General Court’s decision.
Read the judgment.
Bureaucracy Relief Act – Making it (Slightly) Easier to Do Business in Germany
On 1 January, the Fourth Bureaucracy Relief Act (Viertes Bürokratieentlastungsgesetz– “BEG IV”) came into effect. This legislation introduces significant changes to requirements around the form of contracts in Germany with the objective of simplifying certain administrative processes, among them the completion of employment contracts.
What is the status quo?
Until the end of last year, the “written form” was a standard requirement for employment contracts. In order to comply with the written form requirement as set out in Sec. 126 of the German Civil Code (Bürgerliches Gesetzbuch), the document must be signed with a “wet-ink” signature by the issuer or, in the case of a contract, by both parties on the same document. Although an employment contract can theoretically be concluded orally, the main contractual elements are required to be in written form by the Act on the Notification of Terms and Conditions of Employment (Nachweisgesetz) which provides for fines of up to EUR 2,000.00 per breach, so that is one piece of theory not worth exploring further.
What does “text form” mean?
BEG IV now aims to streamline administrative processes for employers, particularly by replacing the written form with a “text form” requirement (Section 126b of the Code) for certain matters. In contrast to written form, the text form requirement is satisfied by a legible declaration naming the declaring party made on a durable medium. The medium must enable the recipient to keep a record of and store the declaration. This allows employers to comply with that requirement by, for example,
sending the document via email or fax,
or scanning and saving it as a PDF before handing it over on a suitable medium, such as a flash drive.
What are the specific implications for employment law and HR processes?
With regard to employment law, BEG IV is particularly relevant in the following three areas:
Employment contacts
It includes an amendment to the Act on the Notification of Terms and Conditions of Employment (Nachweisgesetz), which previously required material contractual terms and variations of them to be in writing and signed by both parties.
As of 1 January, this allows employers to use text form for most employment contracts.
The changes allow the use of text form for the time limit on retirement age, which is typically included in employment contracts, but by Section 14 of the Part-Time and Limited Term Employment Act (Gesetz über Teilzeitarbeit und befristete Arbeitsverträge), this does not apply to any other time-limited employment contracts. Regular fixed term contracts must therefore still comply with the written form requirement and therefore continue to require a wet signature by both parties.
Parental leave request
BEG IV allows requests for parental leave to be submitted in text form, e.g. via email, which previously had to be submitted in written (signed) form.
Job references
Another consequence of BEG IV is that, with the employee’s clear consent, job references can now be issued in “electronic form” instead of the previously mandatory written form. Hence, job references will no longer require wet signatures. An employee offered an oral reference only can take legal action to compel the former employer to provide it in writing.
It should be noted that “electronic form” differs from text form, so it cannot be provided via a simple email or any of the other examples mentioned above. This form requires the employer to use an electronic document bearing their official “signature”, for example using DocuSign.
Consequently, as that signature can only be used by employers with adequate software and only by those employees with access to it, in addition to the need for express employee consent, this does not represent a significant simplification of HR processes so far as references are concerned.
Where will written form still be required?
While BEG IV affects a variety of instances in relation to employment law and enables employers to modernise and digitalise certain elements of their administrative processes, the written form will still be required for several important tasks. For example, notices of termination, termination agreements and post-contractual non-competition clauses must still be in written form, i.e. with a wet-ink signature. If they are not, they will simply be void and so totally ineffective at law. As mentioned above, fixed-term contracts continue to require written form as well.
Furthermore, these simplifications will not apply to employment contracts in sectors that are regularly affected by illegal work. This includes economic sectors such as catering, industrial cleaning, private security services and others listed in Sec. 2a of the Act to Combat Undeclared Work and Unlawful Employment (Schwarzarbeitsbekämpfungsgesetz). The pre-2025 requirements will continue to apply in those sectors.
What does your organisation need to do now?
In light of these new regulations, companies need to establish clear guidelines as to which form is sufficient for which task. Distinguishing between the specific requirements of written, text and electronic form is especially important. To recap:
“written” means in writing bearing one or more wet-ink signatures
“electronic” means in writing bearing an electronic signature
“text” means in writing with no specific form of agreement mandated.
Consequently, while pre-2025 processes for the issuing and completion of employment contracts remain legally effective for those employers which are happy with them, scope now exists for companies to conduct a review of their standard contract systems to determine whether they stipulate a stricter form than is now required by law.
Lutz Hoheisel contributed to this article.
Preparing for New Trump Tariffs: 10 Approaches
Here are 10 ways to avoid, mitigate, or delay the costs of new tariffs that President-elect Trump has promised for countries like China, Canada, and Mexico:
Confirming country of origin: Determine whether tariffs apply by confirming the country of origin of your imported goods. When goods have inputs from multiple countries, you must carefully apply the “substantial transformation” standard utilized by US Customs and Border Patrol (CBP) to determine country of origin.
Seeking alternative sources: If imported goods originate from a targeted country, determine whether they can be sourced from a non-targeted country at lower cost.
Confirming HTS Codes: Although tariffs were promised on “all” goods from targeted countries, historically, tariffs apply only to goods classified under certain Harmonized Tariff Schedule (HTS) subheadings. Classification is complex and errors are common, so carefully verify the HTS classification of your imports.
Tariff Engineering: If imported goods originate in a targeted country and are classified under a targeted HTS subheading, consider options for modifying the goods to change their origin or HTS classification. For example, further processing in a nontargeted country might “substantially transform” the goods so they originate in a non-targeted country. Also, importing components or subassemblies, rather than finished goods, may allow you to import under HTS subheadings not subject to the tariffs.
Product exclusions: If new tariffs follow the pattern of Section 301 tariffs on Chinese goods and Section 232 tariffs on steel and aluminum, US authorities may implement a “product exclusion” process. Product exclusions, if granted upon application, exempt goods from tariffs. Applications are more likely to be granted when the targeted country is the sole source for the goods or when tariffs would harm national security.
Examining declared value: Tariff duties are a percentage of the value declared to CBP, so ensure you declare the lowest value permitted under CBP regulations. Under the “first sale rule,” you can (subject to conditions) value goods based on the price paid the first time they are sold for U.S. import, as opposed to higher prices subsequently paid to middlemen. Alternatively, if your supplier acts as the importer of record, tariffs could be based on their cost, rather than your higher sale price.
Shifting tariff costs: Contracts with “change of law” provisions may entitle you to renegotiate contracts and shift some or all tariff costs to your counterparties.
Stockpiling goods: Although only a temporary solution, new tariffs can be avoided by stockpiling imported goods prior to the tariffs’ effective date.
Bonded warehousing: Tariff payments can be delayed by storing imported goods in a bonded warehouse. Tariffs are paid when the goods are sold and leave the warehouse, instead of the time of import.
Temporary Imports: If goods will be imported only temporarily because they will be exported or incorporated into other goods for export, consider whether tariffs can be avoided through programs such as: temporary importation under bond (TIB), duty drawback, or use of a free trade zone.
New US Sanctions Target Russia’s Energy Sector
On 10 January 2025, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a package of new sanctions targeting Russia’s energy sector. In an effort to curtail Russia’s oil revenue and ability to evade US sanctions, OFAC issued: (1) a Determination authorizing sanctions on parties operating in Russia’s energy sector; (2) a Determination banning US petroleum services to Russia; and (3) blocking sanctions against oil and gas majors, vessels in the so-called “shadow fleet,” certain traders of Russian oil, Russian maritime insurers, and Russian oilfield service providers.
Operating in Russia’s Oil Sector
The new “Energy Sector” Determination broadens OFAC’s authority to block parties that operate in Russia’s “energy sector,” which OFAC will define in forthcoming regulations to broadly cover activities in Russia’s oil, nuclear, electrical, thermal, and renewable sectors.
Ban on US Petroleum Services
The “US Petroleum Services” Determination prohibits most petroleum services (directly or indirectly) to Russia from the US or by US persons, effective 27 February 2025. OFAC plans to define “petroleum services” to include services related to oil exploration, production, refining, storage, transportation, distribution, marketing, among others. OFAC confirmed this Determination does not ban all US services for maritime transportation of Russian oil, provided services comply with applicable price caps and do not involve blocked parties. FAQ 1217.
Blocking Sanctions
OFAC designated hundreds of entities, vessels, and individuals to the Specially Designated Nationals and Blocked Persons List (SDN List). Notably, these blocking sanctions targeted:
Gazprom Neft and Surgutneftegas (two of Russia’s biggest oil producers and exporters) and numerous subsidiaries.
183 vessels in the “shadow fleet” that aids Russia’s sanctions evasion, including Sovcomflot vessels previously covered by General License 93, which OFAC revoked.
A network of traders of Russian oil that are linked to the Russian government or otherwise have suspicious ownership.
Over 30 Russian oilfield service providers.
Russian maritime insurance providers, Ingosstrakh Insurance and Alfastrakhovanie.
US persons are prohibited from all dealings with parties listed on the SDN List and entities owned more than 50% by parties on the SDN List. The property interests of these parties must be blocked/frozen and reported to OFAC if they are within US jurisdiction or US person possession/control.
General Licenses
OFAC issued several General Licenses (GLs) to authorize: petroleum services for certain projects (GL 121), wind down transactions related to energy (GL 8L), certain transactions for nuclear projects (GL 115A), certain transactions involving Russian oil majors (GL 117, 118, and 119), and safety-related transactions for blocked vessels (GL 120).
Conclusion
These new sanctions increase risk and pose considerable challenges for companies with connections to Russia’s energy sector. While US companies are prohibited from providing most petroleum services to Russia, non-US companies face the risk of blocking sanctions if their operations support the broader Russian energy sector. Although OFAC intends to issue regulations and guidance that clarify these measures, businesses must assess risk now, with the assistance of counsel, to identify effected transactions and implement appropriate compliance measures.
Taking Stock of Trade Issues in 2025
The incoming U.S. Presidential administration is loudly signaling that businesses should expect changes in trade policies in 2025. Although no specific policies have yet been promulgated, the President-Elect has stated in social media outlets that broadly sweeping import tariffs may be imposed on goods from Mexico, Canada and China. Even without policy details, there are key steps many U.S. businesses should consider in advance of any specific changes.
First, any business that exports goods, services or information, should have a complete understanding of the tariff classification of what it exports, the destination of its exports and who or what receives the exports. This information will enable any business to more quickly assess the specific impact on its business that results from any new trade policy that changes requirements for U.S. exports. For example, if the new administration imposes new restrictions on a broader range of technology exports to China, a business will need to assess whether those changes may require it to change customers, or limit export destinations in order to avoid violating license requirements. That assessment will require the business to know the classification and destinations of its exports.
Second, any business should more closely watch the trade policies announced by key destination countries for its exports. For example, a number of Wisconsin manufacturers export goods to Canadian provinces, whether as part of the automotive, agricultural or other lines of businesses. As the Canadian government acts either in reaction to the U.S. policies, or on its own initiative, its actions may directly impact current imports into the U.S. Wisconsin businesses that rely upon Canadian materials or goods may seek to find alternative sources or plan for changes in costs of goods. The interplay between existing requirements of the United States-Mexico-Canada Agreement (“USMCA”) and new trade policies may create havoc in the purchase and sale of many goods.
Third, any Wisconsin business that either exports or imports should regularly engage with its trade association advocacy efforts in order to ensure that critical information about the industry is timely and effectively communicated to state and federal agencies and legislators. At the same time, businesses may be able to obtain key updated information from trade association contacts to help negotiate its way through the changing trade environment.
Finally, every business must have a clear understanding of the impact of changed costs for the seller and buyer of goods if new or modified tariffs are imposed. In some industries, costs are readily passed along to the ultimate purchaser, but some purchase agreements may not easily enable transfer of the trade burden. These details will continue to thwart easy negotiation of many transactions, and may compel changes to the supply chain of the business to remain competitive.
Bridging the Gap: How AI is Revolutionizing Canadian Legal Tech
While Canadian law firms have traditionally lagged behind their American counterparts in adopting legal tech, the AI explosion is closing the gap. This slower adoption rate isn’t due to a lack of innovation—Canada boasts a thriving legal tech sector. Instead, factors like a smaller legal market and stricter privacy regulations have historically hindered technology uptake. This often resulted in a noticeable delay between a product’s US launch and its availability in Canada.
Although direct comparisons are challenging due to the continuous evolution of legal tech, the recent announcements and release timelines for major AI-powered tools point to a notable shift in how the Canadian market is being prioritized. For instance, Westlaw Edge was announced in the US in July 2018, but the Canadian launch wasn’t announced until September 2021—a gap of over three years. Similarly, Lexis+ was announced in the US in September 2020, with the Canadian announcement following in August 2022. However, the latest AI products show a different trend. Thomson Reuters’ CoCounsel Core was announced in the US in November 2023 and shortly followed in Canada in February 2024. The announcement for Lexis+ AI came in October 2023 in the US and July 2024 in Canada. This rapid succession of announcements suggests that the Canadian legal tech market is no longer an afterthought.
The Canadian federal government has demonstrated a strong commitment to fostering AI innovation. It has dedicated CAD$568 million to its national AI strategy, with the goals of fostering AI research and development, building a skilled workforce in the field, and creating robust industry standards for AI systems. This investment should help Canadian legal tech companies, such as Clio, Kira Systems, Spellbook, and Blue J Legal, all headquartered in Canada. With the Canadian government’s focus on establishing Canada as a hub for AI and innovation, these companies stand to benefit significantly from increased funding and talent attraction.
While the Canadian government is actively investing in AI innovation, it’s also taking steps to ensure responsible development through proposed legislation, which could impact the availability of AI legal tech products in Canada. In June 2022, the Government of Canada introduced the Artificial Intelligence and Data Act (AIDA), which aims to regulate high-impact AI systems. While AI tools used by law firms for tasks like legal research and document review likely fall outside this initial scope, AIDA’s evolving framework could still impact the sector. For example, the Act’s emphasis on mitigating bias and discrimination may lead to greater scrutiny of AI algorithms used in legal research, requiring developers to demonstrate fairness and transparency.
While AIDA may present hurdles for US companies entering the Canadian market with AI products, it could conversely provide a competitive advantage for Canadian companies seeking to expand into Europe. This is because AIDA, despite having some material differences, aligns more closely with the comprehensive approach in the European Union’s Artificial Intelligence Act (EU AI Act).
While US companies are working to comply with the EU AI Act, Canadian companies may have an advantage. Although AIDA isn’t yet in force and has some differences from the EU AI Act, it provides a comprehensive regulatory framework that Canadian legal tech leaders are already engaging with. This engagement with AIDA could prove invaluable to Canadian legal tech companies as AI regulation continues to evolve globally.
Canadian companies looking to leverage their experiences with AIDA for European expansion will nonetheless encounter some material differences. For instance, the EU AI Act casts a wider net, regulating a broader range of AI systems than AIDA. The EU AI Act’s multi-tiered risk-based system is designed to address a wider spectrum of concerns, capturing even “limited-risk” AI systems with specific transparency obligations. Furthermore, tools used for legal interpretation could be classified as “high-risk” systems under the EU AI Act, triggering more stringent requirements.
In conclusion, the rise of generative AI is not only revolutionizing Canadian legal tech and closing the gap with the US, but it could also be positioning Canada as a key player in the global legal tech market. While AIDA’s impact remains to be seen, its emphasis on responsible AI could shape the development and deployment of AI-powered legal tools in Canada.
5 Trends to Watch: 2025 Capital Markets
1. Strong U.S. Equity Markets, SPACs, and ETFs: The U.S. equity markets are likely to kick off the year strong, as a variety of players are expected to take advantage of the early days of the incoming presidential administration. This may lead to a flurry of deals, particularly during the first three quarters, as companies seek to capitalize on favorable conditions and the markets assess the impact of the new administration on the economy and the broader geopolitical environment.
A new wave of SPAC IPOs gained momentum in late 2024 that is likely to continue into 2025, particularly as the incoming administration takes aim at accelerating business growth through deregulation and expected tax cuts impact capital gains and losses. The decline in the PIPE market to facilitate SPAC mergers will need a robust turnaround, however, to determine if the SPAC will ultimately prove to once again be a viable vehicle for alternative entry to the public markets. Exchange-traded funds (ETFs) are also experiencing dynamic growth and change, particularly with the rise of thematic and niche ETFs that concentrate on specific trends like clean energy, technology, or emerging markets, appealing to investors interested in particular sectors or themes. As ETFs gain popularity, there is a possibility of increased regulation, with new rules potentially being introduced to ensure transparency, liquidity, and investor protection. Furthermore, innovation in product offerings, such as the creation of actively managed ETFs or those incorporating alternative assets, could provide investors with a wider array of investment options. These developments are shaping the ETF landscape by broadening the scope of investment opportunities and ensuring a more regulated market environment.
2. Regulatory Changes and Digital Assets: Republican commissioners and staff attorneys at the SEC and CFTC have signaled that, while awaiting comprehensive legislation and confirmation of the new SEC chair, they intend to reduce reliance on enforcement to mold regulatory guardrails, provide increased executive relief through no-action letters, and collaborate with industry participants in crafting rules differentiating tokens as commodities from tokens as securities. In doing so, clearer regulatory guidelines could emerge, fostering a more favorable environment for blockchain investments. Individual states such as California, on the other hand, may increase their enforcement activity in 2025.
3. Divergent Landscape Continues for Climate and Human Capital Disclosures: In the United States, there may be a rollback of regulations at the federal level requiring climate risk disclosures, while international issuers will still need to comply with EU and UK rules, potentially creating disparities in disclosure requirements. Similarly, there could be less emphasis on human capital disclosures, including those related to ESG (environmental, social, and governance) criteria. Investors might also reduce their demands on issuers regarding these disclosures. Meanwhile, certain states (e.g. California, Minnesota, and New York) are continuing to move forward with their climate-risk disclosure reporting regimes. In the EU and UK, the development of sustainability laws and regulations continues at a fast pace, which could influence debt and equity capital markets transactions, including corporate disclosure, product level disclosure, and ESG due diligence obligations and ratings.
4. Revised Regulatory Framework for EU Equity Issuers: In the European Union, the recent implementation of the Listing Act is widely expected to represent a pivotal milestone for EU capital markets, aimed at streamlining access and reducing administrative burdens, particularly for well-established issuers. This legislative measure is anticipated to further enhance the European financial sector by simplifying the process for companies to access public markets, thereby creating a more dynamic and competitive environment and providing a more viable alternative to standard bank financing. By simplifying some of the complex offering and listing regulatory obstacles and facilitating easier market entry, the Act is expected to enhance liquidity and attract a broader range of issuers, including small and medium-sized enterprises, fostering innovation and economic expansion across member states. While it may take some time to fully benefit from all the regulatory changes aimed at addressing the concerns raised by practitioners in the field, the recent legislation clearly indicates that the EU seeks to strengthen its position as a leading global financial center.
5. Anticipated Tax Policy Changes Likely to Influence Investment Strategies: Potential changes in tax policies, such as adjustments to capital gains tax rates, could significantly influence investor behavior and decision-making related to asset sales and investment strategies. With the Tax Cuts and Jobs Act of 2017 set to expire in 2025, Congress may consider extending it or implementing further tax cuts. Additionally, the use of advanced real-time tax management tools is likely to become more prevalent, enabling investors to optimize their tax positions concerning capital gains and losses. These developments could collectively impact the landscape of capital gains and losses, shaping investment strategies and economic growth.
Dorothee & Rafał Sieński contributed to this article.
So What’s Going on in Belgium?
Well, a lot in fact! A number of new provisions are taking effect at the start of the new year and we have tried to summarise them for you in one little blog post. Our New Year’s gift to you!
1. Extended information obligations in the event of a transfer of an undertaking
As from 1 February 2025, changes to national Collective Labour Agreement nr. 32 bis (“CLA 32bis” – Belgium’s equivalent to TUPE) will enter into force, increasing the involvement of the new employer (transferee) in the information and consultation process.
Going forward, at the request of the employee representatives or individual employees involved in the transfer, the transferor must communicate the information required to be given as part of the process to the transferee as well. This information sharing must occur during the information and consultation process with the employee representatives or individual employees, and prior to the transfer.
In addition, the transferor must invite the transferee to introduce themselves to the employees or their representatives during the information and consultation process. This invitation must be issued in a timely manner during the information and consultation process, and in any case before the transfer. While there was previously no obligation to do this, in practice it was already quite common for the transferee to have a meeting with the employee representatives and/or the transferring employees ahead of the actual transfer date. CLA 32bis now codifies this practice. CLA 32bis does not, however, oblige the transferee to accept the invitation.
2. State and workplace pensions
State pensions
The statutory retirement age will gradually be raised from 65 to 67. A first step will be taken in February 2025 by raising the retirement age to 66.
Early retirement at a younger age remains possible, but the conditions have become stricter in recent years. From the age of 63, early retirement is possible for those with a professional career of 42 years. For those who have worked even longer, early retirement is possible as early as 60 or 61.
Workplace pensions
From 1 January 2025, the minimum return guarantee under the Workplace Pensions Act (WAP) will increase for the first time in 10 years, from 1.75 to 2.5%, due to higher government bond yields over the past two years.
This increase imposes additional financial obligations on employers, who will have to take into account the new minimum return guarantee when calculating their liabilities. If the investments of the pension vehicle are not sufficient to guarantee a 2.5% return, the shortfall will require additional financing by the employer.
3. Revision of the rules around extra-contractual liability
Up until now, so-called agents or auxiliary persons (such as employees) were protected from liability, meaning that an employee could not be held liable by a third party (such as a customer or business partner of the employer) for damages caused in the course of their work.
As from 1 January 2025, in relation to events occurring from this date, the provisions of the new Civil Code will apply and this protection for agents has been removed. Employees can now be held directly liable by a third party, even if they themselves do not have a contract with that party. Directors of companies, representatives, subcontractors and employees can also qualify as auxiliary persons under the new regime.
This means that for events occurring from 1 January 2025, a contractual party can sue an employee directly for compensation, but only if the damage has been caused by fraud, gross misconduct or repeated minor fault of the employee. This limitation does not apply however where the damage has been caused by “impairment of physical or psychological integrity” or intentional damage by the employee.
While it will be exceptional for customers to go after your employees instead of the company (deeper pockets and all) and employers will still remain liable for all errors made by employees, including minor errors, that cause damage to third parties, your employees (and directors) may wish to be protected against this possibility. The New Civil Code allows contracting parties to include provisions in their agreements with customers, suppliers and other contractors stating that their employees and other auxiliary persons will not be held liable during the performance of their contracts.
This may be something that you want to consider including in your contract templates. We will of course be happy to assist.
4. Indexation time
January is traditionally also the time where there are wage increases in a lot of sectors due to the automatic link to the index. The most notable sector in this regard is joint committee 200. Both minimum wages and actual salaries will increase by 3.58% this January.
The amount of the annual premium payable in this sector is also indexed annually. The initial amount of €250 will increase to €323.69 this year. This premium is paid during the month of June, unless it was converted into another equivalent benefit. So quite some hefty changes already for the start of the year. And with the new (national) government almost in place – optimism is a moral duty, it is inevitable there is more to come.