Category: Global

What Every Multinational Company Should Know About … Combating Fraud in India

Fraud continues to pose significant challenges across industries worldwide. For multinational companies operating in India, the country offers enormous opportunity — but also presents distinct operational and regulatory risks that require executive-level attention and strategic oversight. These risks often are amplified by the inherent limitations of remote governance from headquarters.
In the absence of strong centralized controls, Indian subsidiaries sometimes can resemble informal, founder-led enterprises. This often stems from organizational models that grant considerable autonomy to local leadership. While such autonomy can facilitate operational agility and market responsiveness, it also introduces risk when robust oversight and internal safeguards are lacking.
Key Fraud Trends in Indian Operations
While employee misconduct remains a leading source of fraud, third-party vendor schemes and collusive practices are increasingly common, particularly in procurement and supply chain functions. Recent trends in fraud affecting Indian subsidiaries can broadly be categorized as follows:

Employee Fraud: The diversion of company funds for personal use remains the most common type of corporate fraud in India. There has been a marked increase in kickbacks from vendors, and other procurement-related misconduct, often involving mid- to senior-level employees. Conflicts of interest and unauthorized sharing of confidential company information also are frequent issues.
Misrepresentation of Information: Manipulation of financial or operational data — both internally and in regulatory disclosures — continues to mislead stakeholders. Cases of securities fraud, such as insider trading and market manipulation, are also being investigated at an increasing pace.
Bribery and Corruption: Despite ongoing anti-corruption reforms, bribery remains a persistent challenge, particularly in sectors requiring government interaction or regulatory approvals. Such activities create a threat of legal exposure, financial liabilities, and reputational damage for the parent entity.

Navigating the Legal and Regulatory Developments
India’s regulatory framework for addressing fraud has grown more rigorous in recent years. Multiple enforcement agencies, each with distinct mandates, now coordinate investigations more actively. Recent changes also have significantly expanded the reporting obligations for statutory auditors — particularly in the case of “public interest entities,” where fraud must now be reported even if discovered outside the audit process.
Private and unlisted public companies are now subject to mandatory reporting for fraud exceeding INR 10 million (approx. USD $116,600). For listed companies, additional obligations include notifying stock exchanges of forensic audits and disclosing material findings in financial statements. These developments signal heightened regulatory expectations and underscore the importance of aligning internal controls and reporting frameworks with local legal requirements.
Best Practices for Fraud Prevention
To mitigate fraud risks, multinational companies should implement a comprehensive, multilayered strategy that integrates global best practices with India-specific nuances:

Centralized Oversight: Assign a senior global executive to oversee fraud-related functions across Indian operations. This ensures visibility, consistency in controls, and centralized escalation of significant issues.
Tailored Policies and Training: Adapt global compliance policies to reflect India-specific legal obligations and cultural considerations. Provide training in local languages and tailor sessions by function and risk exposure.
Segregation of Duties: Define clear roles and introduce the “four-eyes” principle (i.e., multiple approvals) for high-risk transactions, to limit the potential for collusion and unauthorized actions.
Vendor and Partner Screening: Conduct risk-based due diligence on third-party vendors. Establish ongoing monitoring protocols and regularly exercise audit rights, especially with high-risk or high-value partners.
Secure Systems and Controls: Invest in secure systems with strong access governance to protect sensitive data and prevent unauthorized system changes.

Effectively Responding to Fraud
When fraud is suspected or identified, a disciplined, well-coordinated response that aligns with regulatory expectations is critical. Key steps include:

Independent Investigations: Engage external counsel to lead investigations, ensuring objectivity, preserving legal privilege, and producing defensible findings for internal and regulatory use.
Early Auditor Engagement: Bring in external auditors at an early stage to establish trust and ensure the investigation aligns with financial reporting obligations.
Accurate Management Representations: Implement processes to ensure subsidiary management is accurately informed of fraud-related matters. Legal counsel can assist in validating management representations to prevent misreporting.
Transparent Financial Reporting: Incorporate investigation findings into financial statements to maintain transparency and avoid complications during audits or disclosures.
Remediation and Culture Reset: Act decisively to implement corrective measures. These may include policy changes, disciplinary action, structural reforms, and renewed training efforts, demonstrating a commitment to accountability and long-term risk mitigation.

Fraud poses a multipronged challenge for multinational companies operating in India. However, by adopting a proactive, well-informed, and culturally sensitive approach, organizations can effectively navigate the complexities of the Indian market and regulatory requirements. Combining robust governance, cultural sensitivity, and regulatory compliance with a commitment to ethical practices will not only mitigate risks but also position companies for sustained success in a promising economy.
We are pleased to feature this guest article by white collar attorneys from the Law Offices of Panag & Babu, Sherbir Panag and Jaskaran Bhullar.  The authors are members of the Concilium Network (of which Foley is a founding member), a global alliance of attorneys focused on enforcement defense, investigations, and compliance. Their insights provide valuable perspective on the evolving fraud risks facing multinational companies operating in India.

U.S. Doubles Tariffs on Steel and Aluminum

Effective June 4, 2025, the Trump Administration doubled the Section 232 tariffs on the imports of steel and aluminum from 25% to 50% from all countries, except the United Kingdom. The U.K. is exempted from the increased tariffs because of the U.S.-U.K. Economic Prosperity Deal reached on May 8, 2025. These increased tariffs apply to steel and aluminum imports, as well as the steel and aluminum content of certain derivative steel and aluminum products. 
Although the announcement came via social media on May 29, the formal Proclamation was published on the White House website on the evening of June 3. The Proclamation’s implementation by Customs was further clarified by several simultaneously published messages. The Proclamation Adjusting U.S. Imports of Aluminum and Steel inverts the stacking order originally created by the April 29, 2025 Executive Order. The new Proclamation and Customs guidance clarifies that Section 232 steel and aluminum tariffs do not stack on top of the IEEPA Fentanyl tariffs as it pertains to Canada and Mexico. 
The Proclamation and Customs message reminds importers that derivative articles of steel and aluminum, which are subject to Section 232 tariffs on the value of their steel and aluminum, will also be subject to reciprocal tariffs on their non-steel and aluminum value.
Interestingly, both the steel and aluminum Customs guidance messages provide an exemption or 0% tariff for steel or aluminum articles or derivative products that are (a) cast and poured (for steel) or (b) smelt and cast (for aluminum) in the United States. Mill certifications and other Country of Origin documentation will be critical for the implementation of these tariffs.
Other noteworthy tariff developments: As a development to our prior blog on the Court of International Trade’s decision finding that the President’s IEEPA tariffs are illegal. On May 29, after the U.S. filed an appeal in the Court of Appeals for the Federal Circuit and motioned for a stay of the remedy, the Federal Circuit temporarily granted the stay. A similar process will likely occur if and when the U.S. Supreme Court considers the CIT’s decision. So the IEEPA tariffs will remain in effect, likely until all appeals are exhausted. 

New Serious Invasion of Privacy Tort in Australia for Privacy Comes Into Effect

In late 2024, the Australian Government enacted a series of reforms to the Privacy Act 1988 (Cth). The new statutory tort for serious invasion of privacy was introduced and passed under the Privacy and Other Legislation Amendment Act 2024 (the Act). On June 10, 2025, the statutory tort for serious invasion of privacy took effect. 
The Act, as introduced, outlined a range of measures to protect the privacy of individuals with respect to their personal information, including expanding the Information Commissioner’s powers, facilitating information sharing in emergency situations or following eligible data breaches, requiring the development of a Children’s Online Privacy Code, providing protections for overseas disclosures of personal information, introducing new civil penalties, and increasing transparency about automated decisions that use personal information.
Under the Act, individuals can now sue for intentional or reckless invasions of privacy that are “serious” and breach a reasonable expectation of privacy, where the public interest in the individual’s privacy outweighs any countervailing public interest. Individuals are not required to show damages. The Act includes a broad exemption for news publications, current affairs or documentaries, as well as commentary or opinion on those topics. Furthermore, the statutory tort does not apply where public interest in freedom of expression outweighs the interest in privacy.
The catalyst for the Act was in response to increasing public concern over the misuse of personal information in an increasingly digital era, and it is the most significant development in protecting the personal information of Australians.
Organizations will need to assess current and future data processing activities and assess litigation risk associated with business activities that may give rise to serious invasions of privacy.

Full Cost Recovery Proposed for Application Fees Under Australia’s Mandatory Merger Clearance Regime

In Brief
The Australian Treasury and the Australian Competition and Consumer Commission (ACCC) has released a consultation paper in which it proposes a full cost recovery regime for application fees under Australian’s new mandatory merger clearance regime. 
The Australian Government is consulting briefly about the proposed fee structure prior to finalising its position and publishing a fees legislative instrument (which it expects to do before 30 June 2025).
The 2025/26 fees for the main substantive assessment are proposed to be as follows:

Phase 1 assessment: AU$56,800
Phase 2 assessment: AU$952,000

Additional detail about the proposed fees across all types of applications is set out below.
The Government considers that its approach “reflects the resources required by the ACCC to efficiently carry out an assessment, and will ensure businesses that propose mergers for assessment, rather than taxpayers, bear the cost they impose on the community to assess that risk”, and stated that “the fees will also ensure the ACCC is adequately resourced to undertake its expert administrative decision-making role and can efficiently administer the new system.”
The Approach Taken by the Government
The Government noted that under the present informal clearance regime, the operational cost of merger control incurred by the ACCC is funded through consolidated revenue by taxpayers generally and is not imposed on the merger parties based on cost recovery principles.
In its consideration for the 2024/25 Budget, the Government made the decision to change this approach to a full cost-recovery model. The model will impose separate fees for each type of review, in order that they are scaled to the complexity, and in all likelihood competition law risk, associated with each type of review.
The approach taken has been based on five design principles aimed at “appropriately captur[ing] the costs to deliver the ACCC’s key regulatory merger activities while ensuring the overall fees system is efficient, equitable and transparent for parties and the ACCC to navigate.” In brief, the design principles are:

To align costs with fees: the fee structure will be based on the complexity of review to ensure that it is the merger parties, not the public, that bear the cost of assessment – particularly intensive assessment;
To promote equity and competition: the fee structure will be based on complexity of review while providing for exemptions in appropriate instances (e.g. for small businesses), in order that the fees are not a barrier to merger activity;
To promote efficiency and effectiveness: the fees will be set at a level that reflects the minimum and efficient resourcing necessary for the ACCC to carry out the assessment;
To minimise regulatory and administrative burden: clarity will be provided to parties about the fee rates and reasons for them; and
To ensure transparency and accountability: the ACCC will report on the operation of the regime (including the numbers of applications, waivers, Phase 1 and 2 determinations, timeline extensions etc), and will carry out annual reviews/consultations regarding fees. 

The Proposed Fee Structure
The full set of fees are set below and in the consultation paper as follows:

Type of Review
Fee in 2025‑26
Description of Activity

Notification Waiver Application
AU$8,300(50)
An application that seeks a waiver from the requirement to notify a merger to the ACCC.

Notification (Phase 1 Assessment)
AU$56,800(201)
The review of all notified mergers commences in Phase 1 and incurs a fee.

Phase 2 Assessment
AU$952,000(8.5)

An additional fee will be charged for mergers that proceed to Phase 2.
The ACCC anticipates that only a small number of mergers will proceed to a more in-depth consideration of the competition issues in a Phase 2 assessment.

Public Benefits Application
AU$401,000(1.5)

Notifying parties may also seek ACCC approval of an acquisition on public benefit grounds.
If a notifying party makes an application for a public benefits review, an additional fee will be payable, reflecting the further assessment undertaken by the ACCC to determine whether the acquisition should be approved because the likely public benefits will outweigh the likely public detriments.

Interestingly, the consultation paper also sets out the “estimated volume of applications” expected by Treasury and the ACCC in the 2025/26 year – which are the numbers we have inserted in brackets in the above table.
Time will tell how realistic these numbers will prove to be – noting that they account for the ‘voluntary’ period for making applications from 1 July 2025 and the first six months of operation of the mandatory regime.
The quite high costs associated with the Phase 2 and Public Benefit Reviews (which Treasury and the ACCC expect to be in single digits in terms of numbers of applications) reflect the likely complexity of these matters and the likely use of:

The ACCC’s compulsory document and information gathering powers under section 155 of the Competition and Consumer Act, as well as the potential use of oral examinations under this power;
The potential need to use quantitative analysis to inform the ACCC’s assessment, and the need for the ACCC to source data from multiple sources to undertake that analysis (again potentially via compulsory notices); 
The likely need to use both internal and external economic (including expert economists), industry and legal advisers to inform the ACCC’s assessment of the proposed acquisition – including any remedies proposed by the merger parties; and 
In the case of public benefit reviews, the likely need by the ACCC to undertake consumer, industry and economic engagement to ‘test’ the veracity of the public benefit claims – over and above the ‘pure’ competition analysis.

Exemptions, Future Changes (Indexation) and Reviews
As per the design principles, a fee exemption will be available for acquisitions made by small businesses so that fees are “not a disproportionate burden for those businesses” – small businesses having an aggregated turnover of less than AU$10 million.
Once the fees are set mid-year, they will then be indexed annually at the beginning of each financial year. The ACCC will also review its processes and costs estimate and the fees will be adjusted if required, so that that the charges reflect the cost of providing activities.
The Government finally noted that the costs associated with reviews of ACCC determinations under the mandatory merger clearance regime by the Australian Competition Tribunal will be subject to a separate Government consultation and decision.
The Government’s consultation paper can be found here. 

Proposed Retaliatory US Taxes Would Impact Cross-Border Transactions

Executive Summary

Retaliatory tax provisions contained in H.R. 1, the “One Big Beautiful Bill Act” that recently passed the US House of Representatives, if enacted, would drastically impact common cross-border transactions, including US operations of foreign multinational groups and inbound investments. 
New Code Section 8991 targets “applicable persons” with respect to countries that have adopted “unfair foreign taxes,” defined to include the undertaxed profits rule tax under the Organisation for Economic Co-operation and Development’s (OECD) Pillar 2, digital services taxes, diverted profits taxes, and other taxes identified by the US secretary of the treasury. 
Applicable persons would initially see their US tax rates increase by five percentage points, and these rates would increase by an additional five percentage points annually until they reach 20 percentage points higher than applicable statutory rates. 
US subsidiaries of applicable persons would be subject to a modified version of the base erosion and anti-abuse tax (BEAT) in Code Section 59A, referred to as the “Super BEAT.” 
Common cross-border transactions would be drastically impacted by this new Code section if it were enacted.

This alert describes the persons who would be subject to the changes contained in Code Section 899, the consequences of being subject to this proposed new Code section, and some of the impacts this provision would have on certain cross-border transactions. 
Summary of Code Section 899
Applicability 
Code Section 899 imposes retaliatory taxes on “applicable persons” resident in “discriminatory foreign countries,” which are defined as countries that impose unfair foreign taxes (UFTs). A list of discriminatory foreign countries would be published quarterly by the US Department of the Treasury. The “applicable persons” subject to increased taxes include individuals and corporations resident in discriminatory foreign countries, as well as foreign corporations more than 50% (by vote or value) owned directly or indirectly by such applicable persons (unless such majority-owned corporations are publicly held). Subsidiaries of US-parented multinational groups would generally not be applicable persons.
Three categories of taxes are identified as “per se” UFTs: undertaxed profits rule taxes imposed pursuant to the OECD’s Pillar 2, digital service taxes, and diverted profits taxes. The following countries have adopted these taxes: 
Undertaxed Profits Rule Taxes
Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Indonesia, Ireland, Italy, Japan, Lichtenstein, Luxembourg, Macedonia, Netherlands, New Zealand, Poland, Portugal, Romania, Slovenia, South Korea, Spain, Sweden, Thailand, Turkey, and the United Kingdom.2 
Digital Service Taxes
Austria, Canada, France, Guinea, Italy, Nepal, Rwanda, Sierra Leone, Spain, Tunisia, Turkey, Uganda, the United Kingdom, and Zimbabwe.3 
Diverted Profits Taxes
Australia and the United Kingdom.4 
In addition to the foregoing categories of per se UFTs, the US secretary of the treasury may identify as UFTs other taxes that are “discriminatory,” “extraterritorial,” or “enacted with a public or stated purpose indicating the tax will be economically borne, directly or indirectly, disproportionately by US persons.” However, certain categories of taxes, including value-added taxes, goods and services taxes, and sales taxes, are exempted from being classified as UFTs. When a country repeals all of its UFTs, it generally will cease to be a discriminatory foreign country, and persons associated with that country generally will cease to be applicable persons.
Retaliatory Tax Provisions
The retaliatory tax provisions in Code Section 899 mainly fall into two categories: (1) increased rates of US tax on applicable persons, and (2) a more stringent version of the BEAT currently contained in Code Section 59A, referred to as the “Super BEAT.”
Increased Rates of US Tax on Applicable Persons
The rates of US tax to which applicable persons are subject would be increased five percentage points each year, most likely beginning in 2026, until the rates reach a maximum of 20 percentage points above the current statutory rates (determined without regard to any treaty). The applicable US tax rates that would be subject to increase include (1) the 30% withholding tax on passive US-source income (e.g., dividends, interest, rent, and royalties), (2) the 21% corporate income tax, and (3) the 30% branch profits tax imposed on the nonreinvested earnings of a US trade or business conducted by a foreign corporation. Income tax rates applicable to individual applicable persons would also increase, but only for dispositions of US real property interests that are treated as US trade or business income under the US “FIRPTA” rules.
Income that is currently statutorily exempt from US tax—such as US-source interest income that qualifies for the “portfolio interest” exemption—would, generally speaking, remain exempt from US tax; however, Code Section 899 expressly overrides the US tax exemption for sovereign wealth funds and other foreign governmental entities contained in Code Section 892. 
In the case of applicable persons that qualify for a zero or reduced rate of tax pursuant to an income tax treaty, the increased tax rate to which the applicable person is subject would initially be five percentage points above the applicable treaty rate, although the rate would climb five percentage points each year until it reached 20 percentage points above the maximum statutory rate (determined without regard to a treaty). Importantly, Code Section 899 would apply to income that is currently subject to a reduced rate under a treaty, thereby treating domestic statutory exemptions (like the portfolio interest exemption, mentioned above) different from reductions in an applicable tax rate pursuant to a treaty.5
The Super BEAT
In addition to the current BEAT in Code Section 59A, which was adopted as part of the 2017 Tax Cuts and Jobs Act, Code Section 899 would impose a modified “Super BEAT” on US corporations that are more than 50% owned (by vote or value, directly or indirectly) by applicable persons.
Several aspects of the Super BEAT would make it more likely for targeted companies to be liable for the BEAT. First, certain thresholds that limit the applicability of the regular BEAT would be removed. The current BEAT only applies to US subsidiaries (1) of multinational groups with gross receipts of at least US$500 million, and (2) whose “base erosion” payments—i.e., deductible payments to related foreign persons—exceed 3% of total deductions (or 2% in the case of certain financial firms). These thresholds would not apply under the Super BEAT, potentially subjecting US companies to the Super BEAT despite not being part of large multinational groups or making significant related-party payments.
Second, the Super BEAT would include several other modifications to the current BEAT:

An increase in the BEAT tax rate from 10% to 12.5%;
An additional limitation on using credits to offset BEAT liability;
An expansion of the definition of base erosion payments to include payments on which US tax was already imposed or withheld as well as certain payments that would be base erosion payments but for the fact that they are required to be capitalized; and
An elimination of the exception under the standard BEAT for intercompany payments using the “service cost method.”6 

The new Super BEAT would potentially both increase the tax liability of current BEAT taxpayers and subject additional US companies to the BEAT.
Application to Common Cross-Border Transactions
Direct Operation in the United States

A non-US company that operates directly or through a flow-through entity or branch in the United States (Non-US Opco) generally earns income effectively connected with a US trade or business (ECI) and may also be subject to the branch profits tax on that income (subject to the provisions of an applicable tax treaty). See Figure 1.
Under Code Section 899, if Non-US Opco is an applicable person, the rate of US federal income tax to which it is subject would potentially increase over four years to as high as 41% (based on the current federal 21% statutory rate of income tax), and the rate of US branch profits tax to which its earnings are subject would potentially increase to as high as 50% (based on the current 30% statutory rate of the branch profits tax). Non-US Opco’s new combined US federal tax rate resulting from the interaction of US corporate income tax and the branch profits tax would potentially be as high as 70.5%, up from 44.7% under current law.
Operations in the United States Through a Corporate Subsidiary

A domestic corporate subsidiary of a multinational group (US Sub) is generally subject to US corporate income tax on its worldwide income and, if the gross receipts and base erosion thresholds are satisfied, may also currently be subject to the BEAT. See Figure 2. The removal of the gross receipts and base erosion thresholds may cause US Sub to become subject to the Super BEAT when it otherwise would not have been subject to the current BEAT. In addition, the rate of tax imposed under the Super BEAT will increase from 10% to 12.5%, an increase over the regular BEAT tax rate. 
Further, dividends that US Sub pays to a non-US parent will be subject to an increased rate of US withholding tax if the parent is an applicable person. Even though the dividends may currently qualify for a reduced (or zero) rate under an applicable tax treaty, the maximum applicable US withholding tax rate would potentially increase to as high as 50% (based on the current 30% statutory rate). 
Passive Investment in the United States

A non-US person that passively invests in the United States (Non-US Investor) generally earns passive US-source income (e.g., dividends, interest, rent, or royalties) that is subject to a US federal withholding tax of 30% (subject to reduction under an applicable tax treaty). See Figure 3. If Non-US Investor is an applicable person, the rate of US federal withholding tax to which it is subject under Code Section 899 would potentially increase the withholding tax rate to as high as 50% (based on the current 30% statutory rate). If Non-US Investor currently benefits from a reduced (or zero) treaty rate, the increased rate will begin at five percentage points above the treaty rate. If Non-US Investor is a foreign governmental entity that currently benefits from the Code Section 892 exemption, the new US tax rates to which Non-US Investor will be subject will be determined without regard to that exemption. 
It is more likely that a US blocker corporation through which Non-US Investor holds (directly or indirectly) ECI-generating investments (US Blocker Corporation) will be subject to the new Super BEAT than the current BEAT. However, proceeds from the liquidation of a US blocker corporation received by Non-US Investor should generally remain exempt from US tax.
Financing Investment in the United States

A non-US company that lends to a US resident borrower (Non-US Lender) generally earns US-source interest income that may be (1) ECI (potentially also subject to the branch profits tax), (2) subject to a statutory 30% US withholding tax, (3) eligible for a reduced rate of withholding provided by an applicable tax treaty, or (4) eligible for an exemption from withholding under the portfolio interest exemption, depending on the nature and extent of its US activities. See Figure 4. As discussed above, if Non-US Lender is an applicable person and treats the interest income as ECI, it could potentially be subject to US corporate income tax at rates as high as 41%, with an additional branch profits tax as high as 50%. If the interest income of Non-US Lender is not otherwise ECI, the rate of US federal withholding tax to which it is subject would potentially increase to as high as 50% (based on the current 30% statutory rate), although the portfolio interest exemption would potentially still be available. Importantly, the portfolio interest exemption is not available to banks extending credit in the ordinary course of business, so the differential impact of Code Section 899 on treaty-based reductions or exemptions from US withholding tax on interest may impact bank lenders more than unrelated nonbank lenders that may be eligible for the portfolio interest exemption. 
In response to these increased tax rates, Non-US Lender likely would consider increasing the rate of interest it charges US borrowers in order to maintain the margin it makes above its own borrowing costs, or request to be grossed up by the relevant US borrower for the increased taxes under the rationale that Code Section 899 is a change in applicable law. A US borrower may argue that the impact of Code Section 899 is expected at the time a new loan agreement is entered into and depends on Non-US Lender’s jurisdiction of organization (and on laws, rules, or practices implemented by the government of such jurisdiction), which is outside of the borrower’s control, but that argument may result in Non-US Lender pricing in a risk that is out of the control of both parties.
Conclusion
The retaliatory tax provisions in Code Section 899, if enacted, would have a significant and potentially negative impact on a wide variety of cross-border transactions, including US operations of foreign multinational groups (whether conducted directly or through a domestic subsidiary) and ordinary course inbound investments. The proposal is now under consideration in the US Senate, where changes to the H.R. 1 are likely. Regarding Code Section 899 in particular, the US Senate is expected to balance concerns about the impact of Code Section 899 on foreign direct investment, the value of the US dollar, and interest rates, against the possibility that the proposed Code provision could help US companies by persuading countries with UFTs to modify or repeal those taxes. 
There is still an opportunity for interested stakeholders to help shape this discussion and the outcome of the proposal. Please contact any of the authors of this alert for further information about Code Section 899 and how you can impact the policy debate in Congress.

Footnotes

1 Section 899 is not currently a section of the Internal Revenue Code of 1986, as amended (the Code). References to Code Section 899 herein are to such section as proposed in the House-passed version of H.R. 
2 Bloomberg Tax: OECD Pillar Two GloBE Rules – Status and Effective Dates Roadmap, as of 6 June 2025. 
3 Bloomberg Tax: Digital Service Taxes and Other Unilateral Measures Roadmap, as of 5 June 2025. This list does not include countries that have adopted similar taxes such as “significant economic presence” or “SEP” taxes, which the US secretary of the treasury could deem discriminatory under Code Section 899.
4 Tax Foundation, International Tax Competitiveness Index 2024, as of 21 October 2024.
5 The application of Code Section 899 may be different where an applicable income tax treaty provides that interest income be taxed only in the lender’s jurisdiction, as opposed to providing for a reduced withholding tax rate.
6 H.R. 1 would make several changes to the regular BEAT, including reducing the applicable rate (which was set to increase to 12.5%) to 10.1%.

Supreme Court Rejects Minimum Contacts Requirement to Subject Foreign States to Suits in the U.S. Under FSIA

On June 5, 2025, in a unanimous decision authored by Justice Alito, the United States Supreme Court held that the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. §§1330, 1602 et seq., does not require a plaintiff to prove a foreign state has made “minimum contacts” with the United States sufficient to satisfy the personal jurisdiction test set forth in International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Applying a strict textualist approach, the Supreme Court ruled that personal jurisdiction over a foreign state-defendant exists whenever (1) an exception to foreign sovereign immunity applies and (2) the defendant has been properly served. CC/Devas (Mauritius) Limited, et. al., v. Antrix Corp. Ltd., et. al., No. 23-1201 , 605 U.S. __ (2025).[1]
Devas arose out of a commercial arbitration between two India-based companies, decided in India under Indian law. Antrix Corp. Ltd. (Antrix) is an Indian government-owned entity and is the commercial arm of Indian Space Research Organization. Antrix signed a satellite-leasing agreement with Devas Multimedia Private Ltd. (Devas), a privately owned Indian company organized to develop satellite-based telecommunications technology. Under the agreement, Antrix was to build and launch a new satellite network into geostationary orbit, and Devas was to use the leased satellite capacity to provide multimedia broadcasting services in India. The agreement contained an arbitration provision. After Antrix terminated the agreement with Devas, citing the contract’s force majeure clause, Devas commenced arbitration, and the panel ruled for Devas, awarding $562.5 million in damages and interest.
Three years later, after successfully confirming the award in the United Kingdom and France, Devas petitioned the United States District Court for the Western District of Washington to confirm the award. Devas relied on the arbitration exception to the FSIA. See 18 U.S.C. §1605(6) (providing, among other bases, an exception to foreign state’s immunity where an action is brought to confirm an award made pursuant to an agreement to arbitrate between the foreign state and a private party, and the award is governed by a treaty of the United States, calling for the recognition and enforcement of arbitral awards). The necessary treaty for the enforcement and recognition of the award, of course, is the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which the United States is a signatory.
Antrix opposed the confirmation proceeding on multiple grounds, but the District Court confirmed the award and entered a $1.29 billion judgment against Antrix. On appeal, a Ninth Circuit panel found that personal jurisdiction was lacking and therefore reversed the District Court’s order.[2] The Ninth Circuit panel did not question whether the FSIA’s statutory requirements for personal jurisdiction were satisfied but, bound by the Circuit precedent, the panel explained that FSIA also requires a traditional minimum contacts analysis.
The Supreme Court stated that the legal question being addressed is straightforward. The relevant statute, FSIA’s personal-jurisdiction provision, 28 U.S.C. §1330(b), provides:
(b) Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title.

The Supreme Court stated that since district courts have subject-matter jurisdiction under subsection (a) when any of the FSIA’s immunity exceptions applies, and service under Section 1608 is made when a plaintiff complies with the FSIA’s specialized service-of-process rules, Section 1330(b) makes personal jurisdiction automatic. Quoting a California district court’s decision from 2012, the Supreme Court said that “subject matter jurisdiction plus service of process equals personal jurisdiction” in the FSIA context. The Supreme Court observed that Section 1330(b) does not contain any references to “minimum contacts” and declined to add what Congress left out. The Supreme Court also went on to say that nothing in the 1982 Gonzalez Corp. decision, on which the Ninth Circuit relied, nor in the legislative history of the FSIA, supports an additional “minimum contacts” requirement for personal jurisdiction. Indeed, the relevant House Report states in relevant part that “[t]he immunity provisions … prescribe the necessary contacts which must exist before our courts can exercise personal jurisdiction.” Devas, at 12 (citing H.R. Rep. No. 94-1487, p. 13 (1976)).
The Supreme Court declined to address Antrix’s alternative arguments of why the Ninth Circuit’s decision reversing recognition of the award should be affirmed. Namely, Antrix argued that the minimum contacts analysis was required under the Due Process Clause, that the claims at issue do not fall within the FSIA’s arbitration exception, and that the suit should have been dismissed under forum non conveniens. The Supreme Court said the Ninth Circuit did not address these arguments and remanded the matter for Antrix to litigate these contentions in the Ninth Circuit.
Devas demonstrates the Supreme Court’s continued interest in issues of international arbitration and the Court’s lack of hesitancy in recognizing that enforcement of a foreign arbitral award in the U.S. against a foreign state would rarely satisfy the “minimum contacts” test from International Shoe, and that a reliance on the straightforward text of the statute to demonstrate existence of personal jurisdiction is sufficient. Other arguments raised by Antrix present interesting issues that may come back to the Supreme Court at some point in the future.

[1] This case was decided together with No. 24-17, Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., et. al.
[2] This case presented a complicated dispute in that after Devas obtained the judgment in the District Court but before it could collect on any assets of India in the United States, an Indian corporate la-law tribunal found that Devas had procured the Devas-Antrix agreement by fraud and appointed an Indian Government official to seize control of Devas and wind down its affairs. Devas shareholders and an American subsidiary successfully intervened in the U.S. proceedings, obtained post-judgment discovery of Antrix’s assets in the U.S. and registered the judgment issued by the Western District of Washington in the Eastern District of Virginia, where Antrix held executable assets.

New FCPA Guidance By DOJ

The Department of Justice recently announced new guidelines for investigations and enforcement of the Foreign Corrupt Practices Act (FCPA) (here and here). As we reported in February, President Trump issued an Executive Order, that: (1) pauses enforcement of the FCPA for an 180-day period; (2) directs the DOJ to issue revised guidance around FCPA enforcement, consistent with the administration’s national security and foreign affairs interests; (3) calls for the DOJ to review all open and pending FCPA investigations and enforcement matters, taking appropriate action as aligned with the Order’s objectives; as well as (4) contemplates the DOJ reviewing prior enforcement actions to determine if “remedial measures” are appropriate.
Recent remarks by the Head of the DOJ’s Criminal Division and the DOJ’s new FCPA guidance provide greater clarity and foreshadow future enforcement priorities.
New FCPA Guidance
The DOJ has now issued new Guidance “to ensure that FCPA investigations and prosecutions are carried out in accordance with President Trump’s directive by (1) limiting undue burdens on American companies that operate abroad and (2) targeting enforcement actions against conduct that directly undermines U.S. national interests.”
The Guidance directs prosecutors to:

Target individual wrongdoing rather than “attribute nonspecific malfeasance to corporate structures.”
Accelerate investigation timelines, conducting and concluding investigations with maximum efficiency.
Consider broader impacts throughout the investigation, including “potential disruption to lawful businesses and the impact on a company’s employees.”

The Guidance also sets forth certain criteria to aid prosecutors in determining whether to initiate or pursue FCPA matters, including the following key factors, which align with recent directives and revised corporate enforcement priorities announced by the DOJ (we discussed here and here).

Total Elimination of Cartels and Transnational Criminal Organizations (TCOs)

The Guidance reinforces that a “primary consideration” for the DOJ in determining whether to proceed with an FCPA matter is the nexus between alleged misconduct and cartel and TCO activity. Specifically, the Guidance sets forth the following factors for prosecutors to weigh regarding the alleged misconduct: (1) whether the misconduct “is associated with the criminal operations of a Cartel or TCO”; (2) if the misconduct “utilizes money launderers or shell companies that engage in money laundering for Cartels or TCOs”; or (3) whether the misconduct “is linked to employees of state-owned entities or other foreign officials who have received bribes from Cartels or TCOs.”

Safeguarding Fair Opportunities for U.S. Companies

The Guidance highlights “[e]conomic growth and expansion of U.S. business opportunities” as “critical to safeguarding U.S. national security and economic prosperity.” Going forward, prosecutors will evaluate whether the alleged corrupt activities caused harm to U.S. economic interests by considering whether the misconduct prevented U.S. entities from competing fairly or caused U.S. entities to suffer economic injury. Regarding the Foreign Extortion Prevention Act, prosecutors will consider whether demands by foreign officials for bribes directly harmed U.S. entities.

Advancing U.S. National Security

According to the Guidance, FCPA enforcement will also be refocused to prioritize cases that directly impact U.S. national security interests. The Guidance states that U.S. security largely depends on maintaining competitive advantages in strategic sectors, such as critical minerals, deep-water ports, and key infrastructure. FCPA enforcement resources will now be directed to combat bribery schemes that involve foreign officials in sectors with direct national security implications.

Prioritizing Investigations of Serious Misconduct

Notably, the Guidance also makes clear that FCPA enforcement will not target “routine business practices” or “de-minimis or low-dollar generally accepted business courtesies.” Instead, DOJ will focus on matters involving significant corruption “tied to particular individuals.” Key indicators referenced in the Guidance include substantial bribe payments, sophisticated means to obscure or hide corrupt transactions, fraudulent conduct to facilitate bribery activities, and obstruction of justice.
The Guidance cautions that the newly outlined factors are not exhaustive, and that the DOJ will continue to have prosecutorial discretion when determining, based on the totality of circumstances, whether to terminate or continue an FCPA matter. Prosecutors must also consider and weigh other applicable policies, factors, and guidance when determining whether to pursue and FCPA investigation or enforcement action.
Key Takeaways

With the focus on TCO and cartels, look for increased enforcement in Latin America. Compliance programs must adapt to a new level of sustained scrutiny across a wide variety of businesses and industries.
Look for increased enforcement by foreign regulators. “Conduct that does not implicate U.S. interests should be left to our foreign counterparts or appropriate regulators,” said the Head of the DOJ’s Criminal Division.
Despite disbanding the Corporate Enforcement Unit in the National Security Division, investigations and enforcement that directly impact U.S. national security interests will be a priority. Whether U.S. Attorneys or Main Justice will take the lead remains uncertain. Further, how national security risks and criminal corporate enforcement may marry to impact compliance, beyond, for instance, the Bank Secrecy Act, money laundering, and export controls remains unclear.
Despite the temporary pause, the FCPA is very much alive and well with new priorities, targets, and revised directives around the factors that prosecutors will consider when determining whether to pursue an FCPA investigation or enforcement matter.
Whistleblowers are on the rise according to the Head of DOJ’s Criminal Division who cited to their “continued robust tips” since the DOJ issued significant revisions to its corporate enforcement policies. Given this increase, well-designed and adequately resourced compliance programs are vital for companies to flag and remediate potential misconduct as well as navigate difficult considerations around self-disclosure. Companies should continue to evaluate their compliance programs, ensuring that their programs are equipped to effectively address and mitigate especially those high impact areas of white collar crimes identified by the DOJ (here).

Decree for the Promotion of Pharmaceutical Investment and the So-Called “Plant Requirement”

On June 2, 2025, the “DECREE to promote investment within the national territory to strengthen the development of the pharmaceutical industry and the production of health products, as well as the development of national scientific research” was published in the Official Gazette of the Federation.
This decree outlines new provisions applicable to consolidated public procurement procedures for medicines and medical devices, which will begin to be implemented in 2026 for deliveries in 2027.
The Decree aims to consolidate a strong and self-sufficient pharmaceutical industry by promoting national investment in the production of health products (medicines and medical devices) and fostering scientific research and the development of innovative products in the country.
In summary, the Decree establishes the following:

The Ministry of Health must promote the participation of companies with national investment in the production chain or those initiating the installation of related infrastructure (factories, laboratories, warehouses), as well as those conducting scientific research or innovation in health. In this regard, the Ministry of Health must issue the corresponding guidelines within 90 days following the publication of the decree.
COFEPRIS will implement measures to expedite procedures related to sanitary registrations, research protocols, import permits, and export certificates to facilitate national manufacturing.
In public procurement procedures for generic medicines, the points and percentage criterion will be applied, favoring those who demonstrate national investment in the production chain or scientific innovation activities.
A “Pharmaceutical Investment Promotion Committee” must be created, which will be formed of representatives from the Ministries of Health, Economy, and Anticorruption, and will be chaired by the Ministry of Health.
The committee’s objective is to analyze investment proposals, considering the estimated amount of public procurement, investment level, productive capacity, and degree of research in Mexico; it will also be responsible for facilitating dialogue with the industry.
Finally, the committee’s decisions on investments will be formalized in action coordination agreements between the government and interested companies, including production plants, laboratories, and scientific innovation initiatives.

Unlike the previous scheme in effect until 2008, when Article 168 of the Health Law Regulations required a manufacturing sanitary license in Mexico as a condition to obtain a marketing authorization, implying the presence of a production plant in the country, the new decree does not reestablish this “plant requirement” as an obligation to obtain a marketing authorization and eventually commercialize the medicines. However, it incorporates, adapts, and includes it in the Decree as a preferential criterion in public procurement procedures, so having a plant or investment in the national territory is not mandatory but provides advantages in public procurement procedures. It is important to note that this plant requirement established in Mexican regulation was repealed in 2008 due to a dispute arising from non-compliance with a free trade agreement between Mexico and a neighboring Central American country.
Although this measure aims to encourage national investment and strengthen the pharmaceutical industry, it may generate legal uncertainty and is inherently discriminatory and restrictive. The lack of specific and targeted guidelines contradicts the principles of fair competition, equality, and non-discrimination established in the Constitution and international treaties.
Therefore, we consider that the Agreement is subject to challenge upon its entry into force, as it contravenes various constitutional provisions, as well as several provisions and international treaties signed with Mexico’s trading partners, which include the principle of national treatment in these international instruments.
Thus, the guidelines issued by the Ministry of Health to ensure transparency, objectivity, and proportionality will be essential to avoid creating indirect barriers that affect the legality and effectiveness of public procurement processes in the health sector. We will remain vigilant.

DHS Announces Termination of TPS for Cameroon Effective August 4, 2025

On June 4, 2025, the U.S. Department of Homeland Security (DHS) announced in the Federal Register the termination of the temporary protected status (TPS) designation for Cameroon with no further extension beyond the current expiration of June 7, 2025. The termination of TPS status for Cameroonians takes effect 60 days after publication in the Federal Register, on August 4, 2025. Consequently, more than 5,200 Cameroonian nationals currently under TPS will need to transition out of this status by the effective date.

Quick Hits

DHS announced the termination of the temporary protected status (TPS) designation for Cameroon.
The termination will impact approximately 5,200 nationals of Cameroon.
The TPS termination will be effective on August 4, 2025, which is 60 days after the publication in the Federal Register, rather than the original June 7, 2025, expiration.

Cameroon was initially designated for TPS on June 7, 2022, due to “ongoing armed conflict and extraordinary and temporary conditions” that prevented nationals from safely returning to the country. In 2023, DHS published notice that it would be extending the designation of Cameroon for TPS for eighteen months, beginning on December 8, 2023, and ending on June 7, 2025. Following consultations with relevant U.S. government agencies, DHS has determined that, despite ongoing conflicts in certain areas, due to improved safety conditions in most regions of Cameroon the country no longer meets the criteria for TPS designation. This determination has led to the termination of the TPS designation.
During the sixty-day transition period, Cameroonian TPS beneficiaries will continue to be authorized for employment. However, after this period, they face removal from the United States unless an alternative lawful immigration status is available. This termination underscores the temporary nature of TPS and the importance of periodic reviews of conditions within countries granted the TPS designation to ensure compliance with statutory requirements.
Next Steps
The Federal Register notice specifically confirms that DHS acknowledges that Cameroonian TPS beneficiaries will retain their employment authorization during the 60-day transition period. Consequently, through this Federal Register Notice (FRN), DHS is automatically extending the validity of certain employment authorization documents (EADs) previously issued under Cameroon’s TPS designation until August 4, 2025. To verify their continued employment authorization through this date, Cameroonian TPS beneficiaries can present their EADs, which should have the notation A-12 or C-19 under the category section and a “Card Expires” date of June 7, 2025.

USCIS Issues Updated Guidance on Terminated Venezuela TPS Following SCOTUS Decision

USCIS has issued updated guidance following the U.S. Supreme Court’s May 19, 2025, decision to grant the Justice Department’s emergency request to lift a March 31 California district court order halting DHS’s termination of Venezuela TPS.
The status of work authorization documents and TPS are as follows:
1. For individuals who registered under the 2023 Venezuela TPS designation, work authorization documents expired April 2, 2025, and TPS expired April 7, 2025. However, individuals who received work authorization documents or approval notices on or before Feb. 5, 2025, with an expiration date of Oct. 2, 2026, will retain TPS, and their documentation (including work authorization documents) will remain valid pending resolution of a lawsuit filed by the National TPS Alliance in California district court to prevent termination of the Venezuela TPS program.
2. For individuals who registered under the 2021 Venezuela TPS designation, work authorization documents expired March 10, 2025, and TPS is extended through Sept. 10, 2025.
Employers should review their I-9 records to determine whether they have impacted employees. 

FCA Outlines Next Steps on Potential Motor Finance Redress Scheme

On 5 June 2025, the United Kingdom’s Financial Conduct Authority (“FCA“) has published a statement (“Statement“) setting out its current thinking on the possible implementation of a redress scheme for motor finance customers who may have been affected by discretionary commission arrangements (“Redress Scheme”).
This follows the FCA’s earlier decision to pause complaint handling in light of the pending appeals to the United Kingdom Supreme Court in Hopcraft & Ors (the “Supreme Court Appeals”). In March 2025, the FCA stated that if, following the outcome of the Supreme Court Appeals, it concludes that motor finance consumers have lost out, it is likely to consult on an industry-wide consumer Redress Scheme.
In the Statement, the FCA confirms that, subject to the outcome of the Supreme Court Appeals, it is likely to consult on a Redress Scheme that would require firms to proactively assess and compensate affected customers. The FCA’s preference is for a streamlined, industry-wide solution that avoids the need for individual complaints or reliance on claims management companies.
The Statement also outlines the principles that would underpin any such scheme, including:

A focus on fair outcomes for consumers who suffered financial loss due to non-disclosure of discretionary commission arrangements;
A firm-led approach to identifying and compensating affected customers;
A commitment to efficiency and consistency, with the FCA potentially setting out a standardised methodology for redress.

The FCA has indicated that the Redress Scheme would likely operate on an opt-out basis. This means eligible consumers would automatically be included unless they actively choose not to participate. The opt-out model is intended to maximise consumer reach and reduce friction, particularly for those who may not otherwise engage with a complaint-led process.
The Supreme Court’s decision in the Supreme Court Appeals is expected in July 2025. The FCA has reiterated that it will make a final decision on whether to proceed with a Redress Scheme within six weeks of the Supreme Court’s ruling. In the meantime, the pause on complaint handling remains in place until at least 4 December 2025.
This latest development signals a potentially significant shift in the regulatory landscape for motor finance. Firms should continue to monitor the situation closely and consider how they might operationalise a redress process if required.