CFTC Clarifies that FX Window Forwards are Not “Swaps”
On April 9, 2025, the Markets Participants Division and the Division of Market Oversight (collectively, the “Divisions”) of the Commodity Futures Trading Commission (the “CFTC”) published a Staff Letter (the “Staff Letter”) clarifying the Divisions’ views on the regulatory treatment of certain foreign exchange products. The Divisions clarified that certain foreign exchange window forwards (“Window FX Forwards”) should be considered “foreign exchange forwards” under the CFTC’s regulations and, as a result, exempt from most CFTC regulations relating to swaps. The Divisions also clarified that package foreign exchange spot transactions that settle within T+2 are to be treated as “spot” transactions and outside the scope of most of the CFTC’s swap regulations.
Background
All “swaps” as defined in the Commodities Exchange Act and the CFTC’s regulations are subject to regulation by the CFTC. There are a number of products that either fall outside the scope of, or are otherwise exempted from, the definition of “swap” and therefore exempted from most CFTC regulations as they relate to swaps. These include “spot” transactions and “foreign exchange forwards”, among others. A spot transaction is an agreement to physically exchange currencies within the customary timeline for the relevant spot market (generally T+2). A “foreign exchange forward” is an agreement to exchange currencies at an agreed price on a specific future date.
Window FX Forwards
Window FX Forwards are transactions where the parties enter into an agreement to exchange two currencies at an agreed price on one or more dates during a set period or “window”, sometimes specific identified dates and sometimes any date within the specified window. The Window FX forward will settle on the last day of the window if the electing party does not elect an earlier date for settlement.
Market participants have been uncertain as to the regulatory treatment of Window FX Forwards because the definition of “foreign exchange forward” requires that the transaction be settled on a “specific future date.” Some market participants have been treating Window FX Forwards as “swaps” subject to CFTC regulations and others treating them as exempted “foreign exchange forwards.” The Staff Letter clarified that the Divisions interpret “specific future date” to mean a “clearly identified future date.” Since the exchange under a Window FX Forward will take place on one or more dates clearly identified upon entering into the transaction, they fall within the definition of “foreign exchange forward” and are exempt from the definition of “swap.” As a result, most regulatory requirements applicable to “swaps”, including the exchange of regulatory margin, will not apply to these transactions.
Package FX Spot Transactions
Package foreign exchange spot transactions (“Package FX Spot Transactions”) are two transactions where, in the first transaction, the parties agree to physically exchange two currencies on the next business day after the trade date (T+1) and, in the second transaction, agree to exchange the same two currencies in the opposite direction on the second following business day after the trade date (T+2). There can be variations where the parties exchange currencies on the same day they agree to the trade (T+0) under the first transaction and the next business day (T+1) for the second transaction, or a “roll” where the parties agree to exchanges over a series of consecutive days. While each transaction is documented separately, they are entered into as a “package”, meaning both parties agreeing to the first transaction is contingent on both parties agreeing to the second transaction and both transactions are priced together as a “package.” However, because each transaction is documented separately, they are separate legal obligations and performance under the second transaction is not linked to, or dependent upon, performance under the first transaction. The Staff Letter clarifies that these Package FX Spot Transactions should be treated as individual spot transactions outside the scope of the definition of “swap” and applicable CFTC regulations, provided that they are executed, confirmed and settled as individual transactions within the customary timeline for the relevant spot market (generally T+2).
What does this mean for Window FX Forwards and Package FX Spot Transactions?
As a result of being exempted or excluded from the definition of “swap” Window FX Forwards and Package FX Spot Transactions are not subject to most of the CFTC’s swap regulations. These products are not required to be traded on a registered exchange or cleared through a registered clearinghouse. Swap Dealers are not required to post or collect regulatory margin on these products, making them more affordable to market participants. It is important to note that foreign exchange forwards, and therefore Window FX Forwards, remain subject to certain trade reporting requirements and business conduct standards.
2025 ABA Antitrust Section Spring Meeting Highlights
The Antitrust Section of the American Bar Association (ABA)’s 73rd Annual Spring Meeting took place from April 2 to April 4, in Washington, D.C. At the conference, over 3,900 registrants from 70 countries, global antitrust enforcers, and practitioners gathered to discuss the latest developments in antitrust. Below are some details and takeaways from the meeting with specific perspectives for the United States, European Union, and Mexico.
Go-To Guide:
United States: Highlighted key antitrust developments, including the implementation of the revised HSR form, retention of the 2023 merger guidelines, increased focus on AI-related enforcement, and a balanced but vigilant approach to merger review.
FGS Global + Capitol Forum: Hosted discussion on “Antitrust under Trump,” highlighting expectations for enforcement.
European Union: Emphasized a shift toward supporting economic growth while maintaining strong enforcement, with continued focus on mergers, cartel enforcement, and oversight of tech markets, including AI and algorithms.
Mexico: Highlighted a focus to strengthen cross-border cooperation and align on sustainable and innovation-driven competition agendas.
United States
From a U.S. perspective, the panelists shared insights and opinions on several key topics, including the revised Hart-Scott-Rodino (HSR) form, retention of the 2023 merger guidelines, the growing national and international focus on AI, and ongoing developments in antitrust enforcement.
Hart-Scott-Rodino (HSR) Form: Panelists discussed the new HSR form, highlighting that the form would enable agencies to more efficiently identify anticompetitive mergers and quickly approve deals that benefit consumers. While some panelists expressed surprise, others supported its implementation as necessary. However, the consensus was that the form will lead to increased time and costs for filings in light of the significantly expanded information required upfront with all transactions, rather than only for deals under a substantive investigation.
Merger Guideline Retention: The current administration has announced a policy to retain the updated merger guidelines that were released in 2023—favoring continuity and only selective revisions as needed in the future based on how the guidelines are being used in practice. Panelists at the spring meeting were not surprised by the decision as ultimately they are not binding on either the DOJ or FTC. Panelists also highlighted how resource constraints, such as hiring freezes, may impact enforcement priorities, and speculated that DOJ and FTC may focus on sectors like agriculture, labor, and technology.
Artificial Intelligence (AI): Panelists noted an increased focus on AI at both the national and international level. Panelists discussed possible enforcement priorities under the current U.S. administration and the legal landscape more broadly. The discussion highlighted the use of AI in advertising, global cooperation, algorithmic pricing, state regulation, increased consumer protection scrutiny, and continuous AI innovation. A common theme throughout the discussions was the challenge of tackling the uncertainties involved in client counseling given the shifting legal environment around issues related to AI.
Antitrust Merger Enforcement: Panelists discussed the potential direction of antitrust enforcement under the current administration, noting that enforcers may adopt a more deal-friendly stance than in the past, while still being inclined to challenge certain mergers. Former officials predicted a greater openness to settlements and efficiency arguments but emphasized that scrutiny would remain strong in sectors such as agriculture, pharmaceuticals, labor, and technology. Panelists expected that with respect to merger remedies, structural ones—as opposed to behavioral commitments that are only in effect for the term of the settlement—will still be favored. However, the general consensus was while the authorities have signaled more openness to remedies, that should not be interpreted as a more permissive approach to deal evaluations in general.
FGS Global + Capitol Forum: Panel Discussion
Alongside the ABA’s Antitrust Section of the Spring Meeting, FGS Global + Capitol Forum separately presented a panel discussion “Antitrust under Trump” on April 2, 2025, where leaders from the DOJ and FTC spoke.
Highlights from the panel include noting the return of grants of early termination of the HSR waiting period. Regulators noted that the revised HSR form gives regulators additional information sooner in the review process, enabling them to grant early termination where warranted.
The panel suggested the second Trump administration’s antitrust enforcement would be similar to the first Trump administration. Thus far there has been an interest in Big Tech and censorship, as well as other priorities focused on where Americans spend their money: housing, healthcare, insurance, transportation, food, groceries, and entertainment. Authorities also noted a continued interest in labor markets, seeking to protect Americans as consumers and workers.
FTC Chair Ferguson noted his goals of promoting certainty and clarity so that businesses can plan appropriately, noting that he kept the 2023 merger guidelines for that reason.
Assistant Attorney General Slater noted that in contrast to the Biden administration, the FTC and DOJ will be more amenable to remedies in merger cases. The agencies will support remedies where they are confident the proposed remedy will be successful. As a time saving suggestion, regulators noted an openness to parties proposing a remedy contemporaneously with HSR filing (fix it first).
The FTC’s non-compete ban is currently stayed. Ferguson dissented, and it is not his priority, but authorities noted that many non-compete agreements would not meet a rule of reason standard. Those non-competes would still be challenged as needed.
European Union (EU)
With respect to enforcement practice in the EU, both by the European Commission and European nations, delegates noted a subtle shift in prioritization and enforcement practice. Agencies acknowledged the role they should play to encourage economic growth. In fringe events, senior officials from the European Commission recognized that they could do more to give guidance and to facilitate collaboration, especially where it potentially supports growth. They cited steps already taken to listen to industry and the professional community as examples of how they are part of a solution. However, there was no suggestion that their commitment to enforcement would be diluted in the forthcoming year.
Merger Control: Representatives of the European agencies argued that their enforcement practice has been highly targeted over the years and that their interventions have increased growth through competition, rather than the opposite. There also remains a desire within the EU to tackle those transactions that fall below filing thresholds but nevertheless give rise to potential competition concerns. The agencies indicated that they remain committed to addressing this issue.
Cartel Enforcement: The European Commission highlighted that cartel enforcement continues to remain a priority. The European Commission reported reducing its reliance on leniency applications, though its pipeline of cases remains strong due to an improved ability to identify suspected breaches of law through technology. The European Commission is deploying new technology to screen evidence and to identify potential breaches, and it has recently commenced investigations using these tools.
Technology Market Enforcement: The agencies additionally mentioned that enforcement within technology markets will remain a priority. Despite the adoption of bespoke regulation (e.g. the Digital Markets Act), European agencies continue to see antitrust enforcement as evolving. AI and algorithms are areas the agencies are monitoring closely.
Throughout the meeting, European agencies emphasized their desire to continue collaborating with their peers across the Atlantic. Generally, they underscored the desire to continue collaboration efforts in connection with individual cases.
Lastly, there were some identifiable differences, particularly with respect to ex ante regulation of digital platforms. This is one area that may be debated between the agencies in the months to come.
Mexico
Andrea Marvan, chair of Mexico’s competition authority, attended the meeting and engaged in discussions with officials from the U.S. FTC and the National Association of Attorneys General to explore avenues for strengthening cross-border cooperation in fostering fair and dynamic markets.
Additionally, Marvan connected with European leaders, including Teresa Ribera, executive vice-president for a Clean, Just, and Competitive Transition at the European Commission, and Olivier Guersent, director-general for Competition at the European Commission. During this discussion, the group focused on aligning agendas to promote innovation and competition through sustainable practices.
Marvan emphasized the importance of international collaboration across the board to assist in driving competition policies that benefit consumers and empower micro, small, and medium-sized enterprises.
Holly Smith Letourneau, Nicole Ring, and Manish Das contributed to this article.
Digital Policy: Highlights of the German Coalition Agreement 2025
The newly published German Coalition Agreement 2025 (CA 2025), German language version available here, outlines a digital agenda of the new German government, aimed at strengthening Germany’s position as a leader in digital innovation, data protection, and technological sovereignty. This GT Alert provides an overview of key digital policy areas that the CA 2025 addresses, highlighting the new government’s priorities and potential implications for businesses operating in Germany.
1. Data Protection
The coalition emphasizes the importance of harmonizing and simplifying data protection standards while promoting innovation and economic growth. Key measures include:
Simplification for SMEs and Non-Commercial Activities: The new government plans to leverage the GDPR’s flexibility to simplify compliance for small and medium-sized enterprises (SMEs). On an EU level, the coalition wants to exclude SMEs, non-commercial organizations, and “low risk activities” from the GDPR’s scope (lines 2103 et seqq.).
Centralized Oversight: The Federal Data Protection Commissioner would be empowered (and renamed) to oversee data protection, data usage, and information freedom, consolidating responsibilities for greater efficiency (lines 2248 et seqq.).
Opt-out Instead of Consent: Burdensome consent requirements would be replaced by opt-out solutions “in accordance” with EU laws (lines 2096 et seqq.).
2. Data Sharing
The CA 2025 promotes a culture of data sharing to foster innovation while safeguarding individual rights. Highlights include:
Public Money, Public Data: Commitment to making data from publicly funded institutions openly accessible, with robust data trustee mechanisms to foster trust and quality (lines 2243 et seqq.).
Comprehensive Data Framework: Aim to develop modern regulations on data access and data economy for promoting data ecosystems in a comprehensive framework (lines 2238 et seqq.).
3. Online Platforms and Social Networks
The coalition underscores the need for fair competition and user protection, particularly from disinformation, in the digital space.
Platform Regulation: General commitment to supporting the EU’s Digital Services Act and Digital Markets Act to ensure platforms address systemic risks like disinformation and remove illegal content (line 2285).
Transparency and Accountability: Online platforms would be required to comply with existing obligations on transparency and content moderation. Even stricter liability for user content is being considered (lines 3926 et seqq.).
Possible Bot Identification Measures: The introduction of mandatory bot identification provisions for digital players is “being considered” (lines 2290 et seqq.).
4. Digital Infrastructure
The coalition prioritizes expanding Germany’s digital infrastructure to support economic growth and digital transformation.
Data Center Hub: The coalition aims to make Germany Europe’s leading data center hub, with a focus on energy-efficient operations and integration into district heating systems (lines 2192 et seqq.).
Nationwide Fiber Optic Rollout: The new government commits to accelerating the deployment of fiber-optic networks and ensuring high-speed internet access for all households (lines 2201 et seqq.).
Mobile Coverage and Satellite Technology: Efforts would be made to enhance mobile network coverage and explore satellite technology for underserved areas (lines 2201 et seqq., 2279 et seqq.).
5. Public Sector Digitalization
The coalition envisions a user-centric, fully digital public administration.
Restructuring Government Bureaucracy: The new government promises to reduce administrative staff in general and, in particular, wants to reduce the total number of federal authorities (lines 1811 et seqq.). At the same time, a new federal ministry for digitization and state modernization would be created (line 4564), which underscores the coalition’s focus on digitization topics.
Simplifying Administrative Processes: The new government intends to eliminate unnecessary formalities to simplify administrative processes for businesses (lines 339 et seqq., 1798 et seqq., 2171 et seqq.). Particularly, with the adoption of a new general clause, the written form requirement is to be abolished “wherever possible” (lines 2177 et seqq.). Administrative processes would be streamlined and automated, with a focus on eliminating the need for physical paperwork (lines 2155 et seqq.).
“One Stop Shop” for Administrative Services: The coalition aims to enable straightforward digital administrative services via a central platform (one-stop shop). A centralized platform would enable German citizens to access government services digitally, with mandatory digital identities for all citizens (lines 1802 et seqq.).
“Once Only” Approach for Citizens: Intergovernmental data sharing commitments would ensure that citizens have to provide their data only once to the government (lines 2080 et seqq.).
Public Procurement: Consolidated procurement platforms would standardize public procurement (especially of IT services) and help reduce dependence on “monopolistic” suppliers (lines 2075 et seqq.).
6. Digital Sovereignty
The coalition aims to reduce Germany’s dependencies on non-European technologies and to strengthen its digital autonomy.
Open Source and Open Standards: The new government aims to promote open-source solutions and define open interfaces to enhance interoperability and security, without providing many details (lines 2139 et seqq., 2172 et seqq.).
Strategic Investments: Funding would be directed towards key technologies such as cloud computing, artificial intelligence (AI), and cybersecurity (lines 108 et seqq.).
7. Artificial Intelligence (AI)
AI is positioned as a cornerstone of Germany’s digital strategy.
Investments in AI and Cloud Technology: The coalition promised “massive” investments in AI and cloud technologies, without going into further detail (line 108).
“AI Gigafactory” in Germany: The coalition aims to establish at least one European “AI gigafactory” in Germany (lines 2193 et seqq., 2509 et seqq.).
Regulatory Framework: The new government wants the EU AI Act implemented in a way that fosters innovation while addressing ethical and safety concerns (lines 2256 et seqq.). Particularly, burdens on the economy resulting from the technical and legal specifications of the AI Act would be removed (lines 2268 et seqq.).
Copyright Balance: The coalition plans to ensure fair remuneration for creators in generative AI development, mandate fair revenue sharing on streaming platforms, and enhance transparency in content usage (lines 2824 et seqq.).
Conclusion
The German CA 2025 sets a vision for digital transformation, emphasizing the streamlining of regulatory and administrative hurdles, infrastructure development, and technological sovereignty. While many details remain unclear, businesses should prepare for regulatory changes and explore opportunities arising from the new government’s focus on innovation and digitization. As these policies take shape, staying informed and proactive will be key to navigating the evolving digital landscape in Germany.
Navigating the New DOJ Data Security Program Compliance
On January 8, 2025, the U.S. Department of Justice (“DOJ”) issued its final rule to implement Executive Order 14117 aimed at preventing access to Americans’ bulk sensitive personal data and government-related data by countries of concern, including China, Cuba, Iran, North Korea, Russia, and Venezuela (the “Data Security Program” or “DSP”). The DSP sets forth prohibitions and restrictions on certain data transactions that pose national security risks. The regulations took effect on April 8, 2025, with additional compliance requirements for U.S. persons taking effect by October 6, 2025.
On April 11, 2025, the DOJ issued a compliance guide, along with a list of Frequently Asked Questions (FAQs) to assist entities with understanding and implementing the DSP. The DOJ also announced a 90-day limited enforcement period from April 8 to July 8, 2025, focusing on facilitating compliance rather than enforcement, provided that entities are making good faith efforts as outlined in the 90-day policy.
By July 8, 2025, entities must be fully compliant with the DSP, as the DOJ will begin enforcing the provisions more rigorously. By October 6, 2025, compliance with all aspects of the DSP, including due diligence, audit requirements, and specific reporting obligations, will be mandatory.
SCOPE OF THE DSP
The DSP applies to U.S. persons and entities engaging in transactions that provide access to Covered Data to Countries of Concern or Covered Persons.
Countries of Concern: The DSP has initially listed China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia and Venezuela as countries of concern. The Attorney General, along with the Secretary of State and the Secretary of Commerce, may amend such countries based on guidelines in the DSP.
Covered Persons: The DSP defines Covered Persons as entities or individuals associated with a Country of Concern, including those who are substantially owned, organized, or primarily operating within these countries, as follows:
An entity that is 50% or more owned by a Country of Concern
An entity that is organized or chartered under the laws of a Country of Concern
An entity that has its primary place of business in a Country of Concern
An entity that is 50% or more owned by a Covered Person
A foreign person, as an individual, who is an employee or contractor of a Country of Concern
A foreign person, as an individual, who is primarily a resident in the territorial jurisdiction of a country of concern
Any entity or individual that the Attorney General designates as a Covered Person subject to broad discretion set forth in the DSP
Covered Data: The DSP regulates transactions involving two primary categories of data: U.S. sensitive personal data and U.S. government-related data.
U.S. Sensitive Personal Data – applies to data that meets the “bulk” thresholds, including:
Human ‘omic Data: This includes human genomic, epigenomic, proteomic, and transcriptomic data.
Biometric Identifiers: These are measurable physical characteristics or behaviors used to recognize or verify an individual’s identity, such as facial images, voice prints, retina scans, and fingerprints.
Precise Geolocation Data: This identifies the physical location of an individual or device to within 1,000 meters.
Personal Health Data: This includes data that indicates, reveals, or describes an individual’s physical or mental health condition, healthcare provision, or payment for healthcare.
Personal Financial Data: This includes data about an individual’s financial accounts, transactions, and credit history.
Covered Personal Identifiers: These are combinations of listed identifiers, such as government ID numbers, financial account numbers, device identifiers, demographic or contact data, advertising identifiers, account authentication data, network-based identifiers, and call-detail data.
Bulk Thresholds – The “bulk” threshold is calculated from a collection or set of U.S. Sensitive Personal Data, in any format, regardless of whether the data is anonymized, pseudonymized, de-identified, or encrypted, over a 12-month period, whether it is one data transfer or over multiple transfers.
100+ U.S. persons
1,000+ U.S. persons
10,000+ U.S. persons
100,000+ U.S. persons
Human genomic data
– Biometric Identifiers – Human ‘omic data (other than human genomic data) – Precise geolocation data (1,000 US devices)
– Personal health data – Personal financial data
Covered personal identifiers
U.S. Government-Related Data – The DSP applies to the following categories of government related data:
Precise Geolocation Data: For locations designated by the Attorney General as posing a heightened risk of exploitation by a country of concern.
Sensitive Personal Data Linked to Government Employees: Data marketed as linked or linkable to current or former U.S. government employees or officials, including military and intelligence personnel.
COVERED TRANSACTIONS
Transactions are categorized as Prohibited, Restricted, or Exempt and receive varying degrees of restrictions.
Prohibited Transactions: Fully banned transactions include:
Data Brokerage: The sale, licensing, or similar commercial transactions involving the transfer of data from a provider to a recipient who did not collect or process the data directly is prohibited.
Human ‘Omic Data: Transactions involving access to bulk human ‘omic data (genomic, epigenomic, proteomic, and transcriptomic data) or human biospecimens from which such data could be derived are prohibited.
Restricted Transactions: Subject to the exemptions below, these transactions are types of agreements, which are allowed under the DSP subject to stringent security and compliance requirements:
Vendor Agreements: Agreements where a person provides goods or services to another person, including cloud-computing services, in exchange for payment or other consideration. These transactions must comply with security requirements to prevent unauthorized access to covered data.
Employment Agreements: Agreements where an individual performs work directly for a person in exchange for payment or other consideration. This includes board service and executive-level arrangements.
Investment Agreements: Agreements where a person gains direct or indirect ownership of a U.S. legal entity or real estate. Passive investments, such as publicly traded securities, are excluded. These transactions must adhere to security measures and due diligence requirements.
Exempt Transactions: categories exempt from regulation under the DSP include:
Personal communications
Information or informational materials
Travel
Official business of the U.S. Government
Financial services
Corporate group transactions
Transactions required or authorized by U.S. federal law or international agreements, or necessary for compliance with federal law
Investment agreements subject to CFIUS action
Telecommunications services
Drug, biological product and medical authorizations
Other clinical investigations and post-marketing surveillance data
90-DAY LIMITED ENFORCEMENT PERIOD AND “GOOD FAITH EFFORTS” TO COMPLY
During the DOJ’s 90-day limited enforcement period from April 8 to July 8, 2025, the DOJ will focus on facilitating compliance rather than prioritizing enforcement actions, provided entities are making good faith efforts to comply. Good faith efforts include compliance activities described in this first 90-day policy, including:
Conducting internal reviews of sensitive data access.
Reviewing datasets for DSP applicability.
Renegotiating vendor agreements.
Transferring products to new vendors.
Conducting due diligence on new vendors.
Negotiating transfer provisions with foreign counterparts.
Adjusting employee roles or locations.
Evaluating investments from countries of concern.
Renegotiating investment agreements.
Implementing CISA Security Requirements.
LIABILITY
Violations of the DSP can lead to significant civil and/or criminal penalties, including fines up to $377,700 (adjusted for inflation) or twice transaction’s value. Intentional or willful violations can result in fines up to $1,000,000, imprisonment for up to 20 years, or both.
COMPLIANCE TIMELINE
April 8, 2025: DSP regulations take effect.
July 8, 2025: Full compliance with DSP required.
October 6, 2025: Compliance with all DSP aspects, including audits and reporting, as may be required.
ACTIONABLE ITEMS
Companies should complete the following:
Assess Data Holdings: Conduct thorough audits to identify sensitive personal data and government-related data and determine if it meets the DSP’s bulk thresholds (this includes information collected and transferred via online tracking technologies).
Review and Update Contracts: Amend contracts to cease prohibited transactions and ensure compliance with restricted transaction terms. This includes including provisions prohibiting unauthorized data brokerage.
Develop Compliance Programs for Restricted Transactions: Establish a comprehensive data compliance program by October 6, 2025.
Implement Security Measures: Apply organizational, system, and data-level security measures, using technologies like data minimization, encryption, masking, and privacy-enhancing technologies.
Conduct Annual Audits: Perform annual audits to assess DSP compliance, in line with the DSP requirements, and retain them for at least 10 years.
Prepare for Annual Reporting: Ensure records are being generated in anticipation of providing timely submission of annual reports for entities engaged in restricted transactions involving cloud-computing services in which 25% or more of its equity is owned, directly or indirectly, by a country of concern or a covered person,
Monitor Transactions: Regularly monitor data transactions and report any violations to the DOJ within 14 days.
Train Employees: Implement training programs to ensure understanding and compliance with DSP regulations.
CONCLUSION
The DSP signifies a significant effort to protect U.S. sensitive personal and government-related data from foreign threats. Compliance is a legal necessity and a strategic measure to safeguard business operations and reputation. By understanding the DSP’s scope and implementing the steps outlined in this alert, businesses can ensure they are well-prepared to meet compliance requirements.
EUON Publishes Nanopinion on Enhancing the Regulatory Application of NAMs to Assess Nanomaterial Risks in the Food and Feed Sector
On April 8, 2025, the European Union (EU) Observatory for Nanomaterials (EUON) published a Nanopinion entitled “A Qualification System to Accelerate Development and Regulatory Implementation of New Approach Methodologies (NAMs)” by Andrea Haase, Ph.D., German Federal Institute for Risk Assessment (BfR), Shirin M. Usmani, Ph.D., BfR, Irene Cattaneo, European Food Safety Authority (EFSA), Maria Chiara Astuto, EFSA, and Francesco Cubadda, Ph.D., National Institute of Health (ISS). The authors explain how the NAMs4NANO project, funded by EFSA, enhances the regulatory application of NAMs for assessing nanomaterial risks in the food and feed sector. The authors propose to establish three qualification programs, covering NAMs for nanomaterial physicochemical characterization; characterization of nanomaterials in relevant biological fluids; and toxicity screening. According to the authors, the proposed system has been tested initially for one selected model as an example that can be applied to investigate nanomaterial uptake and transport across intestinal barrier, and to evaluate the nanomaterial effects on barrier integrity. The authors note that more case studies are currently ongoing to qualify selected NAMs in the forthcoming implementation plan of the qualification system. The authors invite key stakeholders to collaborate on relevant case studies that can be used to test the qualification system.
What Are the Key Takeaways for Managing HMRC In a UK Restructuring Plan (Rps) and Beyond?
Much will depend on the specifics of a company’s financial position, but there are some themes from the OutsideClinic and Enzen judgments that are helpful – and arguably so even beyond the context of RPs for a company’s managing its relationship with HMRC.
Is HMRC in or out of the money?
In OutsideClinic HMRC had reservations about the valuation evidence put forward by the plan company in support of its position that administration was the relevant alternative. Under the RP HMRC stood to recover 5p in the £ but nil in the relevant alternative – HMRC was therefore out of the money.
The valuation evidence was based on certain assumptions in respect of the recoverability of book debts which if those turned out to be inaccurate would have entitled HMRC to a distribution in the alternative – meaning it would have been in the money. It was acknowledged by the plan company that it would only take a “relatively small shift” in the assumptions for this to be the case.
Recognising the likelihood of HMRC being an in the money creditor on a contested application the parties negotiated an improved outcome for HMRC – funded by the plan investors – which would not impact the returns to other creditors.
Take Away
HMRC is different to other creditors given its secondary preferential status, and its voice as a creditor that is potentially in the money, where there is a prospect (even small) of it being paid in the relevant alternative should be listened to. This voice may in fact be louder now, following the Court of Appeal confirming in Thames Water that the views and treatment of out of the money creditors can be relevant when considering whether a plan is fair – particularly so given the elevated status that HMRC has on insolvency.
Recognising HMRC’s role
HMRC has preferential status on an insolvency such that its claims for certain tax liabilities rank ahead of other claims as preferential claims. That status does not exist on an RP where a plan company is free to ignore the statutory order of priorities (provided it can be justified).
Not only that, but HMRC’s as a creditor is also different to other creditors. It has not chosen to trade with the company but is an “involuntary creditor” that continues regardless of whether HMRC is paid or not. HMRC cannot “opt” out of that relationship like other creditors might do.
The judge in Enzen observed that HMRC’s treatment under the Enzen plans (of which there were two) reflected:
the standing of HMRC as preferential creditor;
the commercial leverage that it is able to exert in consequence of Naysmyth and the Great Annual Savings Company; and
the inevitability of an ongoing relationship as trading continues.
Take Away
What we have seen as a consequence of these particular RPs (and those before) is judicial acknowledgement of HMRCs status as a “prominent” creditor which could be translated to – treat them differently and better than unsecured creditors.
That is all well and good, but we think it is probably fair comment to say that HMRC’s role in supporting a failing business can sometimes be seen as lacking or at least taken to be unsupportive. But perhaps now is the time for both practitioners and HMRC to reflect on their historic views.
What HMRC did demonstrate in both cases is that it was willing to engage, something that Mr Justice Norris said in Enzen was a “welcome development”. This signals a positive change, not only, we hope for RPs but also more generally.
On the flip side, if a company is prepared to recognise at an earlier point that HMRC is an involuntary and ongoing creditor in its business then surely that would help manage that relationship in a positive way (whether in the context of an RP or otherwise).
To pay or not to pay HMRC, that is the question?
What we can gauge from OutsideClinic is that although certain HMRC liabilities were unpaid for three months in 2024, its remaining 2024 liabilities were paid in full and continued to be paid during 2025.
In Enzen too, there were historic arrears but from June 2024 tax liabilities were being paid as they fell due, and current liabilities were excluded from the plan – in other words the companies did not seek to compromise those.
Take Away
Although there is no comment in the judgments about whether paying current liabilities influenced HMRC’s attitude, HMRC’s guidance makes it clear that it will consider whether other creditors are being paid when HMRC is not, and whether the company will make future payments in full, and on time, when deciding whether to support a plan,
Paying HMRC current liabilities is likely to encourage engagement and willingness to re-schedule or compromise historic liabilities. Falling further into a black hole with tax debts, not paying HMRC and trading at its expense is likely to do the opposite.
Arguably the starting point for any company requiring HMRC’s support (whether that be for an RP or a time to pay agreement) is to be able to demonstrate that at least it will be able to meet future liabilities.
Concluding Comments
We have seen a positive change in HMRC’s approach in these cases which is very encouraging, but do we as practitioners need to do the same when it comes to managing relationships with HMRC generally? That may depend on whether HMRC’s change in attitude extends beyond RPs.
If there is more of a willingness to recognise HMRC’s role as an involuntary preferential creditor in negotiations, then perhaps we will see that reciprocated by HMRC showing a greater willingness to compromise in return. However, given that the thorny relationship runs quite deep, we expect practitioners will first want to see HMRC engage more regularly in a positive manner outside of RPs, and that would be a “welcome development”.
Sustainability-Related Governance, Incentives and Competence – FCA Confirms No New Rules for Now
Background
In February 2023, the United Kingdom Financial Conduct Authority (“FCA”) published a discussion paper (DP23/1) to encourage an industry-wide dialogue on firms’ sustainability-related governance, incentives, and competence (the “Discussion Paper”).
On 2 April 2025, the FCA published a summary of the feedback received on the Discussion Paper, as well as its own responses and planned next steps. The FCA is not currently considering introducing new rules on the themes in the Discussion Paper.
Industry Feedback
The responses received by the FCA were generally positive about the importance of sustainability matters and the role of the themes outlined in the Discussion Paper. The feedback covered several areas, including:
Objectives, purpose, business model, and strategy;
Board and senior management roles;
Accountability structures;
Incentives and remuneration practices;
Investor stewardship; and
Training and competency development.
The FCA noted that a common theme across the responses was the need for new regulations (such as the Consumer Duty and Sustainability Disclosure Requirements (“SDR”)) to “bed in” before determining whether any additional rules would be needed.
In addition, some respondents cited the existing rules at the time as sufficient and some also mentioned the role of the International Sustainability Standards Board (“ISSB”) standards, and previously the Task Force on Climate-Related Financial Disclosures (“TCFD”) recommendations, in establishing a global baseline for sustainability disclosures.
FCA’s Response
The FCA welcomed the level of engagement from respondents and the importance with which they generally regarded the themes and issues in the Discussion Paper. The FCA also noted that the insights gained from the feedback have been important to assist their understanding of the current market.
The FCA drew attention to the recent introduction of rules relating to some of the themes, which many respondents recognised the importance of – in particular:
The Consumer Duty;
SDR and related labelling requirements; and
The Anti-Greenwashing Rule.
The FCA also recognised the importance of allowing time for new measures to be implemented before introducing further rules in these areas. For themes in the Discussion Paper not captured by the measures above, the FCA will continue to work with the industry to enable market-led solutions and guidance – for example, through the Climate Financial Risk Forum (CFRF) and the Adviser’s Sustainability Group (ASG).
Next Steps
Although the FCA is not currently considering introducing new rules on sustainability-related governance, incentives, and competence, it will continue to monitor market developments and promote these themes to help the sustainable finance market grow responsibly, as well as to continue to promote the UK as a leading financial centre.
What Legal Services Providers Need to Learn from OFSI’s Legal Services Threat Assessment
In its first-ever threat assessment of the UK legal sector, the UK’s Office of Financial Sanctions Implementation (OFSI) has raised red flags with regards to suspected sanctions breaches involving UK legal services providers since February 2022 (the Assessment).
Why Did OFSI Focus on Legal Services Providers?
Legal services providers play a crucial role in ensuring UK and international clients (including UK Designated Persons (DPs)) comply with UK financial sanctions. All legal services providers must ensure compliance not only with the Russian sanctions regime but also other threats to compliance relevant to the United Kingdom, including the UK’s sanctions regimes applicable to Libya, Belarus, Iran and South Sudan, amongst others.
OFSI’s Key Findings
The Assessment sets out four key findings relevant to UK legal services providers from February 2022 to present.
1. Underreporting of Breaches
OFSI found it was highly likely that UK trust and company services providers (TCSPs) may not fully disclose suspected breaches due to inconsistent detection policies and the failure to monitor clients’ sanctions status.
Since the reporting time frame of February 2022 until the publishing of this Assessment, OFSI identified that 16% of the total number of suspected breach reports received have come from the legal services sector (compared with 65% submitted by the financial services sector). 98% of these were submitted by law firms and barristers, while TCSPs and other types of legal services providers submitted only 2%. OFSI considered this as strongly suggestive that TCSPs were under-reporting.
2. Compliance Failures
OFSI stated that it was almost certain that most non-compliance by UK legal services providers has occurred due to the following:
Improper maintenance of frozen assets.
All DPs accounts, funds and resources, including those held by entities owned or controlled by DPs, must be operated in accordance with asset freeze prohibitions and OFSI licence permissions. OFSI observed legal services providers failing to adhere to asset freeze prohibitions, including delays in freezing funds belonging to DP clients and transferring frozen funds into accounts other than those specified in OFSI licences.
Breaches of specific and general OFSI licence conditions.
Receiving payment for legal services rendered to DPs, including services provided on credit, requires an OFSI licence. Specific compliance issues included billing sanctioned DPs more than the value limits set in the relevant licence or receiving payments after the relevant licence has expired.
Reporting.
OFSI encourages legal services providers to review licence reporting requirements, including making a report within 14 days of receiving payment under a general licence and providing relevant documentation that sets out the obligation under which the payment has been made.
Wind-down of Russia related operations.
Many UK legal services providers, including law firms, wound down their operations in Russia following its invasion of Ukraine and advised clients regarding the same. OFSI identified that legal services providers must ensure these activities were conducted in line with general and specific licence permissions and to report any suspected breaches which may have occurred as a result. The recent financial penalty imposed on HSF by OFSI in relation to the activities of HSF Moscow highlights these risks.
3. Complex Ownership and Control Structures
OFSI considered it was almost certain that complex corporate structures, including trusts, linked to Russian DPs and that their family members have concealed the ownership and control of assets which should have been frozen under UK financial sanctions. The Assessment encourages legal service providers to identify and report any suspected breaches, including those arising from non-designated individuals or entities dealing with frozen assets held through these complex structures.
4. Post-designation Ownership and Control Transfers
OFSI considered it likely that Russian DPs have sought to recoup frozen assets and even dissipate them beyond the reach of UK financial sanctions to non-designated individuals and entities. This generally requires the involved of other parties enabling these activities, including:
Professional enablers which provide professional services that enable criminality.
Non-professional enablers, such as family members, ex-spouses or associates.
Legal service providers need to ensure that they are not, directly or indirectly, enabling such activity by DPs or by non-professional enablers acting in support of DPs.
Intermediary Countries
Approximately 23% of the suspected breach reports identified by OFSI as involving UK legal services providers are connected to intermediary jurisdictions. The Assessment highlights a series of red flags for lawyers to look out for when dealing with jurisdictions such as: the British Virgin Islands, Guernsey, Cyprus, Switzerland, Austria, Luxembourg, United Arab Emirates and Turkey, as well as the Isle of Man, Jersey and the Cayman Islands.
Practical Steps
Legal services providers are obliged to make Suspicious Activity Reports to the National Crime Agency (NCA) under Part 7 of the Proceeds of Crime Act 2002 and the Terrorism Act 2000 if money laundering or terrorist financing activities are known or suspected. Further information about reporting to the NCA and OFSI can be found here and here.
Legal service providers should take the following steps, amongst others, to ensure compliance with the UK sanctions regime:
Monitor and identify any red flags;
Update client due diligence beyond basic ID checks to check beneficial owners and connected parties;
Screen every transaction against OFSI’s consolidated list (see here);
Complete a tailored risk assessment, incorporating the above findings, and undertake any remedial activities; and
Identify and comply with any applicable licence requirements.
Conclusion
OFSI’s Assessment builds on previous and related publications issued by OFSI and UK government partners, including the Financial Services Threat Assessment published by OFSI in February 2025 (see our corresponding alert here). OFSI encourages legal services providers to both report now and retrospectively, where appropriate and proportionate, if they suspect a breach linked to the content of this Assessment.
UAE Real Estate in 2025: AML Compliance and Investment Trends for Developers
The UAE’s real estate sector has experienced significant growth and development in recent years, becoming one of the world’s most active real estate markets. As with other developing global markets, growth may bring challenges. With the residential and commercial appeal of UAE real estate attracting buyers from around the world, one of these challenges is maintaining vigilance against money-laundering. Efforts to detect and prevent illicit flows of money remain a priority for the UAE since its removal from the FATF Grey List in April 2024. Given the influx of investment and the increasing number of high-value transactions, the UAE government has expanded its oversight and controls around the real estate sector, which impacts all industry stakeholders.
Throughout 2024, a series of regulatory updates reinforced the need for diligence across real estate purchases. Now, all regulated real estate companies must carry out enhanced due diligence for high-risk buyers, including foreign investors from jurisdictions with weak anti-money laundering (AML) controls. Know-your-client (KYC) protocols must include full verification of buyer identities and their source of funds, and company or entity purchasers must disclose their ultimate owners. Companies that fail to meet these requirements may face penalties, increased regulatory scrutiny, and potential operational restrictions.
These regulatory changes apply to real estate brokers, agents, and other businesses concluding property transactions on their customers’ behalf. While some developers may not fall directly within the UAE’s AML framework, businesses accepting cash and cryptocurrency for real estate assets must also be aware of their potential exposure to money laundering activity, as they may be liable for money laundering offences and may face operational difficulties if they are used as a conduit for criminal activity.
Continued Growth of the UAE’s Real Estate Sector
The UAE real estate market remains attractive to global investors. Key factors driving demand include strong foreign investment from Russian, Chinese, Indian, and European buyers, as well as golden visa-linked property investments with long-term residency incentives attached to purchases of over AED 2 million.
The Dubai Economic Report from the Dubai Economic Department shows that the real estate market in Dubai contributes between 5-7% to annual GDP, with 2024 set to reflect further highs. Dubai’s real estate market continues its upward trajectory, with residential prices increasing by 20.7% year-on-year as of March 2024. Off-plan sales grew 23.9%, outpacing the 15.2% rise in secondary market transactions.
Investment, Compliance, and Cryptocurrency
The question remains whether regulatory-driven due diligence and accelerating property transactions can both continue at the same rate. This is particularly relevant in the context of the sector’s shift towards digitalization. The UAE is seeing a growing trend in the use of cryptocurrency in property transactions. To enhance transparency and security with respect to these transactions, under the UAE Central Bank AML & CFT Regulations 2024, real estate transactions involving virtual assets must now be processed through a licensed virtual asset service provider, which seeks to ensure all funds are traceable and compliant with AML standards.
The Ministry of Economy has repeatedly confirmed its commitment to global AML safeguards, as well as its support for advancing real estate digitalization and broader blockchain integration. Modernization in the real estate sector may be an opportunity for the UAE authorities to show how they can enforce AML laws while maintaining investor confidence.
Key Takeaways
While the UAE has established itself as a well-regulated investment hub, the real estate sector remains attractive for investment. To stay competitive, businesses should adapt to evolving AML regulations. Those who do not may experience issues.
UK Employment Rights Bill: Amendments Employers Should Know
On Thursday, March 6, 2025, amendments to the UK government’s Employment Rights Bill were announced. The bill was laid before the UK Parliament in October 2024, but further amendments have now been made as a result of the published responses to the four statutory consultations that were commenced since then. We have summarised some of the changes below.
Quick Hits
On March 6, 2025, the UK government announced amendments to the Employment Rights Bill, which outlined updates to the bill relating to zero-hours and agency workers, changes to statutory sick pay (SSP), and expanded bereavement leave entitlements.
The amended Employment Rights Bill proposes the establishment of a Fair Work Agency with the authority to enforce employment rights and issue underpayment notices, potentially imposing penalties for unpaid wages, holiday pay, and SSP.
The bill, which has passed its first and second readings in the House of Lords, is expected to become law by summer 2025, with many changes anticipated to take effect from spring 2026, subject to further consultations and amendments.
Zero Hours Measures: Extension to Agency Workers
The initial draft of the bill included complex provisions granting zero hours and low hours workers the right to a guaranteed hours contract, reasonable shift notice, and compensation for cancelled, shortened, or rescheduled shifts. Although there is no longer a proposal for an outright ban on “exploitative” zero contracts, a series of protections are set to be introduced.
Through consultation and mounting criticism by trade unions, these zero hours provisions have now been extended to include agency workers. New clauses in the bill would insert a new schedule into the Employment Rights Act 1996 which would mean that end hirers must also offer guaranteed hours to qualifying agency workers, although the minimum number of hours remains unconfirmed. Responsibility for providing guaranteed hours would be shared between employment agencies and end hirers.
Employment agencies would also be required to compensate workers for shifts cancelled or changed at short notice. This includes agency work arrangements made more than two months before the bill comes into force, as they may be eligible to recover certain backdated costs from end hirers. For arrangements made after the bill is enacted, cost recoveries would be subject to negotiation between agencies and end hirers.
Statutory Sick Pay
Statutory sick pay (SSP) has also been amended, with the original proposal to remove the lower earnings limit now scrapped during consultations.
This amendment seeks to achieve a balance whereby lower earners are excluded from the scheme, but equally are not financially better off receiving SSP than they are while at work. Therefore, workers earning less than the lower earnings limit (currently £123 per week) would have the right to SSP at 80 percent of their normal weekly earnings or the existing flat rate of SSP whichever is lower. This change would only take effect after further secondary regulations are published, likely coming into force in 2026.
The bill is also set to abolish the “waiting days” rule, meaning SSP would be payable from the first day of absence (instead of after the first three days, as is the current rule).
Fair Work Agency
It was previously stated in the bill that a Fair Work Agency (FWA) would be established. Further consultations have now expanded on this area and clarified the powers the FWA may hold, including the power to bring employment tribunal proceedings on an employee’s behalf and provide legal assistance during proceedings.
Initially, the FWA’s powers will take over specific areas that are already covered by existing enforcement agencies, with the addition of holiday pay enforcement for inaccurate records. The bill would also grant the government a broad authority to expand the FWA’s mandate to include other forms of work rights.
However, under the amended bill, the secretary of state would also gain new powers to issue underpayment notices for unpaid wages, holiday pay, and SSP. This could result in penalties of 200 percent of the sum due (capped at £20,000 per individual) being payable to the secretary of state, if the payment is not resolved within the timeframe.
The FWA is unlikely to be fully functional before Autumn 2026 at the earliest.
Right to Switch Off
There is speculation that the proposed “right to switch off,” which was featured in the original bill, may now be scrapped due to concerns that it will negatively impact business activities, however, no formal announcement has been made.
Day One Rights
New day one rights, such as for unfair dismissal, would apply from the first day of employment, although an “initial period of employment” would allow for a lighter-touch dismissal process. This period is expected to range from three to nine months, though the exact duration has not yet been announced and will be examined further in a separate consultation.
The changes to day one rights are unlikely to come into effect before Autumn 2026 at the earliest.
Bereavement Leave
Bereavement leave was set to be expanded in the original bill, as the amendments propose to grant one week of leave for all grieving employees. Further regulations are expected to set out eligibility for this leave and how the leave can be taken.
Currently, employees have a right to take two paid weeks off work for the death of a child under the age of eighteen or for pregnancy loss after twenty-four weeks of pregnancy. The bill may extend this to provide two weeks of leave for mothers and their partners who experience pregnancy loss before twenty-four weeks of pregnancy. The amendments to the bill could now mean the right could encompass a wider scope of employees who have experienced bereavements, including those who suffer pregnancy loss as a result of a miscarriage, ectopic pregnancy, molar pregnancy or termination, or unsuccessful in vitro fertilization (IVF) as a result of embryo transfer loss.
Next Steps
The bill has now progressed through its first and second readings in the House of Lords and will proceed to the committee stage on 29 April 2025. Subject to further consultations and possible amendments, the bill is expected to be given Royal Assent and to become the Employment Rights Act in the summer of 2025, with many changes expected to come into force from spring 2026. The bill will continue to undergo extensive parliamentary scrutiny before it can be passed. Consultations on most reforms are due later this year, and it is likely that more details will be addressed in secondary legislation. This topic is therefore likely to continue evolving for some time.
The current bill amendments signal a move towards enhanced agency worker protections, but they also impose substantial new responsibilities on employers, whether through day one rights, expanded leave entitlements, SSP changes, or compliance obligations under the FWA. Employers should continue to keep aware of the possible changes and may want to review their current policies and procedures to ensure their compliance with any changes.
Dutch Government Issues Draft Pay Transparency Legislation
EU member states have until 7 June 2026 to introduce local legislation implementing the Pay Transparency Directive. As per our recent blog, to date there have been very few developments on this front, but we are now starting to see the publication of draft legislation.
The Dutch government recently issued a Bill aimed at implementing the Directive (Wetsvoorstel implementatie richtlijn loontransparantie). The Bill does not include any provisions other than those that are strictly necessary to ensure compliance with the Directive – some good news for employers at least!
The Ministry of Social Affairs and Employment plans to submit the Bill in Quarter 3 of 2025 to the House of Representatives, although this timescale may be subject to change. It is currently subject to an online consultation process, which will close on 7 May 2025. The Bill is due to come into force on 7 June 2026, i.e. in line with the deadline for compliance by member states.
The Netherlands already has legislation in place that meets some of the obligations imposed by the Pay Transparency Directive, but the Bill introduces various new measures that are intended to reduce the wage gap between men and women by increasing transparency about pay and to strengthen the rights of employees who wish to exercise their right to equal pay. The transparency measures are also intended to serve as an incentive for employers to reward their staff objectively and demonstrate good employer practices. The key measures are as follows:
Pay structures: Employers must have pay structures in place that are based on objective and gender-neutral criteria. These criteria should enable the determination of the value of work and the renumeration linked to it.
Pay transparency before hiring: Job applicants will have the right to request and receive information from a (potential) future employer about their starting pay or pay range. Employers will no longer be allowed to ask applicants about their previous pay history.
Transparency of remuneration and remuneration progression policies: Employers must provide employees with easy access to the criteria used to determine their pay. Pay is defined as the compensation owed by the employer to the employee for their work, consisting of the base salary and any supplementary or variable components. Employers with 50 or more employees must also provide information with respect to the criteria used for pay progression.
Right to information: Employees will have the right to receive written information about their pay, as well as the gender-disaggregated average pay levels of employees performing equal (or equivalent) work.
Pay gap reporting obligations: Employers with 250 or more employees must report annually on any gender pay gap, whereas employers with 100 to 249 employees must report every three years. In line with the Directive, the first pay reporting date will be 7 June 2027. There is no reporting obligation for employers with fewer than 100 employees. This represents a significant change for Dutch employers, as the Netherlands does not currently require employers to carry out gender pay gap reporting.
Joint pay assessment: In line with the Directive, if the pay report reveals an unjustified difference of at least 5% in the average pay between female and male employees performing equal (or equivalent) work, and this difference is not rectified within six months after submitting the report, employers will be required to conduct a joint pay assessment with their employee representatives.
Measures for legal protection: The provisions on legal protection in the Directive largely align with the existing Dutch system. For example, employees in the Netherlands already have the ability to bring legal proceedings and the right to claim damages. Three new provisions are being introduced: a (further) reversal of the burden of proof in cases of non-compliance with these new transparency obligations; protection for employees against retaliation; and the possibility for a court to order an employer to pay the legal costs of the proceedings even if the employer is successful, if there were valid reasons to file the claim (in the context of equal pay claims).
Although the Bill will not come into effect until 7 June 2026, it is essential that employers start preparing now considering the scope of the upcoming changes. This is particularly important given that, starting in June 2026, the burden of proof will shift in favour of employees, placing employers at a disadvantage. Employers can take proactive steps by, for example, reviewing their current job evaluation method (or implementing one if none exists), auditing recruitment procedures, and establishing processes to monitor and analyse the pay disparity between male and female employees from the outset.
Lastly, in the Netherlands, companies with 50 or more employees are legally required to set up a works council. The works council is expected to play a key role in ensuring compliance with the upcoming pay transparency rules. Employers that meet the 50-employee threshold but have not established a works council will find themselves unable to fulfil certain obligations under the new legislation. The Dutch legislator has deliberately chosen not to provide an alternative mechanism for such situations. This means that if no works council has been established and there are 50 or more employees, it is crucial for companies to act promptly and take the appropriate steps towards the establishment of a works council.
Thailand Launches Public Hearing on Draft Act to Promote Solar Power Usage
Recently, Thailand’s Department of Alternative Energy Development and Efficiency (“DEDE”) announced that they are to hold a public hearing on the draft Act on Promotion of Solar Power Usage (the “Draft Act”).
Key takeaways
Simplification of Regulatory Processes: The Draft Act aims to promote solar PV energy system installations by simplifying regulatory procedures, reducing unnecessary expenses and complex documentation.
Benefits for Commercial and Industrial Owners: The new law will benefit commercial and industrial building owners who install solar PV systems for self-consumption, as well as developers offering build-transfer-operate services as it streamlines the regulatory procedures.
Support for Sustainable Energy Goals: The Draft Act is designed to address rising electricity prices, reduce energy costs, cut fuel imports, improve access to clean energy, lower carbon dioxide emissions, and align with Thailand’s national strategy for sustainable growth.
Draft Act to Promote Solar Power Usage
As Thailand looks to reduce energy costs for both individuals and businesses, the Draft Act intends to cut down on the procedural steps required under current legislation, which can sometimes result in unnecessary expenses and complex docuentation. Recently, the government introduced a Ministerial Regulation that eliminates the need to obtain a factory license (commonly known as a Ror. Ngor. 4) from the authorities for all solar rooftop power generation installations located outside of industrial estates, regardless of their production capacity. In contrast, the Draft Act is not limited to just rooftop solar power facilities.
In line with Thailand’s aim to be carbon neutral by 2050, the government is emphasizing the growth of renewable energy, including solar power. Despite the progress, only 15 percent of Thailand’s energy currently comes from renewable sources, indicating that there is still significant room for improvement and investment throughout the country. Based on the draft Power Development Plan (PDP) 2024–2037 which is still yet to be fully finalized, renewable energy is expected to account for 51 percent of total electricity generation, with solar energy contributing 16 percent. This marks a strong increase in the share of clean energy sources in the electricity sector from 36 percent under the PDP 2018 (Revision 1) to 51 percent.
The Thai government’s increasing measures to expand renewable energy projects and harmonize various rules and regulations represent a positive step forward in Thailand’s journey to become carbon neutral. By proactively expanding renewable energy sources in its power mix, Thailand will continue to be an attractive destination for foreign direct investment.
Potential benefits to commercial and industrial building owners
The new law in its current form should benefit commercial and industrial building owners who wish to install solar PV systems for self-consumption. Additionally, it will benefit developers offering build-transfer-operate services (such as EPC and O&M models, rather than PPA models).
As Thailand aims to address the challenges of rising electricity prices, reduce energy costs, cut down on fuel imports, improve public access to clean energy, lower carbon dioxide emissions, and align with the national strategy for sustainable and eco-friendly growth, it is anticipated that the Draft Act will support the country in achieving these goals.
Overview of the Draft Act
The Draft Act consists of the following five sections:
Section 1: General provisions
Section 2: Installation of solar power systems
Section 3: Control and disposal of solar power systems
Section 4: Administrative duties
Section 5: Penalties
Please find below a brief overview of each section of the Draft Act.
Section 1: General provisions
Section 1 of the Draft Act outlines the general provisions, emphasizing the enhanced promotion of solar power system installations in a more efficient and streamlined manner.
Section 2: Installation of solar power systems
The Draft Act applies only to solar power system installations for self-consumption. However, it allows the sale of electricity to a governmental utility (i.e., the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority, the Provincial Electricity Authority, or organizations designated by the Minister).
According to the Draft Act, if there is any sale, distribution, exchange, or provision of electricity, it must comply with the purchase rates and criteria announced by the Director-General and approved by the Minister.
It is important to note that, according to the intention of the Draft Act as announced by the DEDE in the hearing materials on 26 March 2025, all license requirements for installation of solar power systems, including an approval for grid synchronization, are exempted. However, the installer must notify the DEDE at least 30 days prior to the installation of the solar PV system.
Section 3: Control and disposal of solar power systems
To ensure the safe collection, disposal, or destruction of solar energy system equipment, such activities must follow the criteria set by the DEDE.
For businesses that are involved in the collection and/or disposal of solar energy equipment, they must be permitted by the Director-General of DEDE to carry out such activities. Further, licensed electronic waste disposal facilities are considered authorized establishments for solar energy system equipment disposal, and they must notify the Director-General and comply with the relevant criteria.
Section 4: Administrative duties
According to the Draft Act, officials have the relevant authority to access premises for inspecting the installation of solar energy systems to ensure that they are in compliance with the Draft Act. The primary objective is to ensure that the installation of solar energy systems is conducted safely and without any hazards.
Section 5: Penalties
Further, the Draft Act also details potential penalties for acts that violate the Draft Act.
Activities that do not comply with the provisions of the Draft Act can result in imprisonment of up to three years and/or fines up to THB 100,000.
Next steps
In conclusion, the Draft Act is structured into five sections: (1) general provisions; (2) installation of solar power systems; (3) control and disposal of solar power systems; (4) administrative duties; and (5) penalties.
It aims to promote efficient solar power installations, regulate the sale and distribution of electricity to the governmental utility, ensure safe disposal of solar equipment, empower officials to inspect installations for compliance, and impose penalties for violations, thereby supporting Thailand’s sustainable energy goals.
The Energy and Infrastructure team at Hunton will continue to monitor future developments to determine whether this law will expand to include or benefit developers who provide build-operate-transfer model (i.e., PPA model).
Jidapa Songthammanuphap and Joseph Willan contributed to this article