$1M Tax Fraud Case Against Seneca Man
$1M Tax Fraud Case Against Seneca Man. A federal grand jury in Greenville has indicted Marion Keith Sheriff, a 60-year-old from Seneca, on four counts of filing false tax returns. Court documents and testimony reveal that Sheriff ran a landscaping business in the Upstate and is accused of failing to report over $1 million in […]
U.S. Budget Bill Targets Foreign Companies with New Tax Hikes: What French Businesses Need to Know
The One Big Beautiful Bill Act (OBBBA) was passed by the U.S. House of Representatives on May 22, 2025, by a narrow vote of 215-214. OBBBA includes a new U.S. tax provision that could significantly increase taxes on foreign companies and investors—especially those from countries like France that have implemented digital services taxes or other similar measures. The new bill introduces a new section to the U.S. Internal Revenue Code Section 899.
What Is Section 899?
Section 899 is a proposed tax provision that would raise U.S. tax rates on foreign individuals and companies from countries the U.S. deems to have “unfair” tax policies. These include:
Digital Services Taxes (DST)
Diverted Profits Taxes (DPT)
Undertaxed Profits Rules (UTPR) under the global minimum tax framework
How Would the Tax Work?
The U.S. tax rate would increase by 5 percentage points in the first year.
It would rise by an additional 5 points each year, up to a maximum of 20 percentage points above the standard rate.
These increases would apply on top of existing U.S. tax rates, including:
21% corporate tax
30% withholding tax on certain income
Other applicable individual and corporate taxes
Who Is Affected?
Countries likely to be labeled as “discriminatory” include France, Germany, the UK, Japan, South Korea, and others that have adopted DSTs or UTPRs. In total, more than 30 countries could be impacted.
DST in France
France currently has a Digital Services Tax (DST) in place that applies to major U.S. technology companies and other large digital firms. Introduced in 2019, the French DST targets revenues generated from digital services such as:
Online advertising
Digital platforms
Intermediation services involving user data
Despite international negotiations aimed at replacing such taxes with a global framework (like the OECD’s Pillar One), France has maintained its DST. As of 2025, French Finance Minister Éric Lombard confirmed that the tax remains in force and is not being used as a bargaining chip in trade discussions with the U.S.
This continued application of the DST is one of the key reasons France could be classified as a “discriminatory foreign country” under the proposed U.S. Section 899, potentially subjecting French companies to higher U.S. tax rates.
Why Is the U.S. Doing This?
The U.S. government argues that certain foreign tax policies unfairly target American companies—especially tech giants. Section 899 is designed to:
Counteract foreign digital taxes
Protect U.S. economic interests
Strengthen the U.S. position in global tax negotiations
Economic Impact
According to estimates, this provision could generate $116 billion in revenue over 10 years. Legal experts describe it as a major shift in U.S. international tax policy, introducing new risks for foreign investors.
When Would It Take Effect?
Although passed by the U.S. Congress, OBBBA is now being reviewed and must be passed by the U.S. Senate and then signed by President Trump to become law. Unless the Senate passes OBBBA as drafted, any amendments of the bill would have to be returned to the House for approval of the changes, or a conference committee of both chambers formed to reconcile differences.
The additional taxes would apply 180 days after a country enacts a DST, DPT, or UTPR.
What Should French Companies Do?
If your business operates in the U.S. or has American subsidiaries, now is the time to:
Monitor the legislative process of OBBBA and Section 899
Assess your U.S. tax exposure
Review your international tax strategy
Consult with cross-border tax advisors
Oregon Expands Tax Court Access: HB 2119 Grants Associational Standing to Membership Organizations
On May 28, 2025, Oregon Gov. Tina Kotek signed HB 2119 into law. Having received strong support in the Oregon legislature, the law allows for associational standing in state tax cases—that is, membership organizations now have statutory standing to seek declaratory relief on their members’ behalf in the Oregon Tax Court. Associational standing may be granted for matters involving any number of state and local tax issues, including personal income, property, corporate excise, etc.
HB 2119 codifies Oregon’s requirements for associational standing, which mirror the long-standing federal three-prong test established in the U.S. Supreme Court case Hunt v. Wash. State Apple Advert. Comm’n.1 To have associational standing there must be an adverse impact on at least one of the association’s members, the issue must be germane to the association’s purpose, and the matter must not require the direct participation of the impacted member or members.
HB 2119 is relatively simple, but it brings a significant change to Oregon. Under the prior rule, only affected taxpayers could challenge a tax law for their individual harm and the resolution of a single issue could take more than a decade. Once a challenge reached the General Division of the Oregon Tax Court, the petitioner would also be required to pay the tax they were disputing. This process created an impediment for businesses and individuals to bring otherwise worthy tax challenges. Associational standing may help members share the burdens of litigation and speed up the resolution of tax questions and reduce burdens on the court system.
The passage and implementation of HB 2119 follow several years of advocacy by organizations such as Oregon Business and Industry and the Smart Growth Coalition. The new law may help taxpayers address and seek clarity on Oregon tax issues.
1 432 U.S. 333 (1977).
California Provides Additional Guidance on Mandatory Climate Disclosures
On May 29, 2025, the California Air Resources Board delivered a presentation that provided additional details concerning the soon-to-be implemented mandatory climate disclosures. Perhaps most significantly, the California regulator gave additional guidance on which companies will be subject to the law. Specifically, the California Air Resources Board stated that they planned to rely upon the tax code’s interpretation of “doing business in California” to determine whether a company needed to make the regulatory disclosure. So, in practical terms, this means that sales in California of $735,019 or more, or owning real property in California worth more than $73,502 or paying employees in California more than $73,502, would constitute “doing business in California” for purposes of complying with the mandatory climate disclosure (subject to the other statutory requirements–e.g., meeting the revenue threshold of either $1 billion or $500 million, depending upon the type of disclosure).
Additionally, the California Air Resources Board noted that the detailed implementing regulations–which were required by law to be published as of July 1, 2025–are still likely months away, which renders compliance by the initial deadline of January 1, 2026 quite challenging for companies.
Companies with more than $1 billion in annual revenue but as little as $735,000 in sales in California would have to report greenhouse gas emissions to the state under a new regulatory proposal. But they may be hard-pressed to meet those new disclosure requirements by January as regulators indicated they are still months away from issuing regulations, missing a July deadline. Sydney Vergis, an assistant division chief at the California Air Resources Board, which is writing the regulations, said Thursday the agency plans to issue the rules by the “end of the year,” but declined to give a specific date during a webinar.
www.bloomberglaw.com/…
Senator Tillis Introduced a Bill Taxing Proceeds of Litigation Financing Agreements
Senator Thom Tillis introduced a bill (called the “Tackling Predatory Litigation Funding Act”) that would impose additional significant taxes on litigation funding investments. Rep. Kevin Hern (R-OH) introduced a similar bill in the House of Representatives. The bill would apply to taxable years beginning after December 31, 2025, which could include future payments related to existing arrangements.
The following is a summary discussing the key points of such proposed legislation.
General Rule: A tax equal to the highest individual rate plus 3.8% (37% + 3.8%, or 40.8% under current law) would be imposed on any qualified litigation proceeds received by a covered party.
Covered Party: A covered party for these purposes includes any third party to a civil action which receives funds pursuant to a litigation financing agreement and is not an attorney representing a party to such civil action. If the covered party is a partnership, S-corporation or other pass-thru entity, the tax would be imposed at the entity level. If a U.S. corporation is a covered party receiving qualified litigation proceeds, it would be subject to a 40.8% in lieu of the normal 21% tax. The tax also applies to tax-exempt U.S. investors and non-U.S. investors, including investors described in section 892 of the U.S. Internal Revenue Code. The tax apparently applies even if the non-U.S. investor has no connection to the United States, although we are unsure whether this was intended. There is no apparent “treaty override” so investors that benefit from a tax treaty with the United States may be able to rely on the treaty.
Qualified Litigation Proceeds: Qualified litigation proceeds mean, with respect to any taxable year, an amount equal to the realized gains, net income or other profit received by a covered party during the taxable year which is derived from, or pursuant to, any litigation financing arrangement. These gains, income or profit are not reduced by any ordinary or capital losses, which could include losses from another litigation funding investment. This definition is not limited to U.S. source litigation proceeds, so it could include proceeds from non-U.S. litigation funding investments.
Litigation Financing Agreement: A litigation financing agreement is with respect to any civil action, administrative proceeding, claim or cause of action (collectively, a “civil action”), a written agreement (A) (1) where a third party agrees to provide funds to one of the named parties or a law firm affiliated with the civil action and (2) which creates a direct or collaterized interest in the proceeds of such civil action which is based, in whole or part, on a funding-based obligation to the civil action, the appearing counsel, any contractual co-counsel or the law firm of such counsel or co-counsel and (B) that is executed with any attorney representing a party of such civil action, any co-counsel in the litigation with a contingent fee interest in the representation, any third party that has a collateral based interest in the contingency fees of the counsel or co-counsel which is related to the fees derived from representing such party or any named party in the civil action. This term can also include any agreement which, as determined by the Secretary of the Treasury, is substantially similar. We believe this definition will apply to virtually all litigation funding agreements regardless of the form of the agreement (e.g., loan, option, forward, swap etc.). For purposes of these rules, the term “civil action” may include more than one civil action.
Exceptions: Litigation funding agreement does not include: (1) any agreement under which the total amount of funds provided with respect to an individual civil action is less than $10,000, (2) any agreement under which the third party providing funds has a right to receive proceeds from the agreement that are limited to (x) repayment of principal on a loan, (y) repayment of principal plus interest as long as the interest does not exceed the greater of 7% or a rate equal to twice the average annual yield on a 30 year U.S. Treasury security or (z) reimbursement of attorney’s fees, or (3) the third party providing the funding bears a relationship as described in section 267(b) to the named party (e.g. generally includes two corporations that are members of the same controlled group or two entities that have 50% ownership overlap). We believe that these exceptions will be of only very limited use.
Withholding: The parties having control, receipt or custody of the proceeds from a civil action with respect to which such person has entered into a litigation financing agreement must withhold from such proceeds a tax equal to 50% of the applicable percentage (which would be a withholding rate of 20.4% under current law) of any payments which are required to be paid under such agreement. This withholding amount is based on any payments required to be made, which could result in over-withholding because the withheld amount is not reduced by the original amount funded. This withholding obligation appears to apply to any party in the world, even if the party has no connection to the U.S. and is making a payment to another non-U.S. person in respect of litigation that is outside of the United States. We do not know whether this extraordinarily broad scope was intended.
How Important Is It to Document Directors’ Decisions and Keep Contemporaneous Evidence? (UK)
The recent High Court case of Stacks Living Limited & Ors v Shergill & Ors (“Stacks Decision”) has further highlighted the importance of taking advice and documenting decisions following the much-publicised decision of Wright v Chappell (the “BHS Case”).
By way of reminder (see our previous blog here), the BHS Case introduced the concept of misfeasance trading and found that a director can be liable for misfeasance trading if they continue trading in breach of their duties when the company should have gone into administration or insolvent liquidation. Notably, this claim could arise much earlier than a wrongful trading claim, bringing into sharper focus the need for directors to be very mindful of their duties.
The BHS Case provided useful lessons about steps directors ought to take, to reduce the chance of a claim against them for misfeasance trading (and therefore personal liability) including holding regular, fully documented board meetings and taking (and applying) appropriate professional advice. The Stacks Decision expands further on the importance of contemporaneous documentation and proper record keeping when approaching insolvency.
Background
The case concerned applications by the joint liquidators of two companies, Stacks Living Limited (“Stacks”) and Staffs Furnishing Limited (“Staffs”), which entered compulsory liquidation following a failure of the companies to pay national non-domestic rates tax to the Council. The companies were wholly-owned by Mr Balvinder Shergill who also acted as director. For a limited period, Miss Miranda Smith, Mr Shergill’s partner, was appointed as director of Staffs, although Miss Smith admitted to having no involvement at all in the affairs and business of Staffs.
The liquidators brought claims: i) for fraudulent trading; ii) for wrongful trading; and iii) misfeasance against both Mr Shergill and Miss Smith in respect of allegedly unexplained and/or otherwise improper or unjustified payments by the companies. The claims were opposed and Mr Shergill and Miss Smith sought to rely on s 1157 of the Companies Act 2006 (“CA 2006”) to claim relief from liability, which was rejected.
The findings against the directors
Fraudulent trading
The Court found Mr Shergill liable for fraudulent trading, due to “no real or honest belief that those debts would be discharged and no real expectation of a reduction or discount”.
The judge criticised Mr Shergill for an intention to trade through a series of phoenix companies and incurring, but not paying, the rates liability and HMRC debts.
Wrongful trading
The Court found both directors liable for wrongful trading (albeit Miss Smith for Staffs only during the period of her directorship), notwithstanding Miss Smith had no actual knowledge of the prospect of insolvent liquidation – in her capacity as a director Miss Smith ought to have enquired into the company’s financial position.
Crucially the Court found that the company could not evidence how it could pay the monies owed. In addition, despite suggestions that there was a hope of trading through difficulties, the Court noted that there was:
no evidence of any advice to support a believe of any genuine prospect of doing so, particularly where Staffs took over from the business of Stacks with no discernible shift in business plan;
no business plan, management accounts or other detailed financial or management records and no foundation on which to conclude that the business could survive; and
no evidence to support Mr Shergill’s assertions that he was acting on a genuine belief that relief was available.
Misfeasance
Company directors owe several duties to the company, including a fiduciary duty to apply the company’s assets for the proper purposes of the company and to account for their use. In this case, the liquidators identified:
several payments to Mr Shergill personally (which were labelled as “wages”, but Mr Shergill provided inconsistent oral evidence to argue that this was to pay supplies);
cash withdrawals; and
payments to certain organisations (e.g. Sky), which did not appear to be legitimate business expenditure.
The court noted that once a liquidator identifies a payment has been made, the burden of proving the payment was made for proper purposes falls upon the respondents. The directors ought to be able to rely on contemporaneous documentation to prove the origins of any payment. The Court was very critical of the quality of Mr Shergill’s oral evidence and was therefore reluctant to place much reliance on his submissions, in the absence of any documentary evidence to demonstrate that such payments were for the company’s benefit.
The court noted that non-production of documentation may be conspicuous by its absence, if it is likely that it would exist, and that the court may draw inferences from its absence.
Therefore, as Mr Shergill was unable to provide credible evidence that the withdrawals/payments were for a proper purpose, owing to a failure to keep proper records (e.g. receipts and/or contracts), the court ordered the directors to compensate the respective companies for the unexplained payments.
The Importance of Contemporaneous Evidence
In this case, the respondents adduced little to no documentary evidence to support their assertions, and the judge was heavily critical of Mr Shergill’s oral evidence, noting that it was “fundamentally inconsistent with known facts and documents”.
The Court referred to various “observations” made in previous cases regarding the importance of contemporaneous evidence, namely:
memory is “especially unreliable” when it comes to recalling past beliefs, which are revised to make them “more consistent” with present beliefs
the best approach is to place “little if any reliance” on recollections of conversations and to base factual findings on documentary evidence and known/probable facts
the importance of contemporary documentation to ascertain the motivation and state of mind of those concerned (particularly internal documents)
the value to be placed on contemporaneous evidence for credibility – it was noted in particular that lacking contemporaneous evidence may be conspicuous and lead a judge to draw negative inferences from its absence
the “fallibility” of human memory and the need for memory to be assessed alongside contemporaneous documentary evidence
Crucially, the council (a creditor in respect of the rates liabilities) had records of telephone conversations and emails, providing contemporaneous evidence in which the company acknowledged that it could not pay the rates liabilities – contrary to Mr Shergill’s version of events.
Concluding Thoughts
The case highlights the importance of contemporaneous documentation and proper record keeping by directors who may later be required to provide an explanation for past events. As noted “recollections” of conversations and “memory” are not as credible as written documentation.
We cannot comment on whether the existence of such would have changed the outcome for the respondents in this particular case, but the case does demonstrate that without contemporaneous paperwork directors will find it much harder to convince the court of the reasons for their actions.
Abigail Harcombe also contributed to this article.
The Tariff Roller Coaster: US Court of International Trade Invalidates Tariffs Imposed Under IEEPA, Only to Be Stayed by the Federal Circuit Court of Appeals
What Happened
On May 28, 2025, the US Court of International Trade (“CIT”) issued a major decision in V.O.S. Selections, Inc. v. United States invalidating two sweeping tariff programs imposed under the International Emergency Economic Powers Act (“IEEPA”) earlier this year. The decision strikes down the legal basis for key executive orders imposing tariffs on China, Canada, Mexico and dozens of other trading partners, reshaping the legal framework for future emergency-based trade actions. The court granted summary judgment in favor of both private-sector plaintiffs and a coalition of state governments, concluding that the tariff actions exceeded statutory authority under IEEPA and intruded upon Congress’s exclusive constitutional role in regulating trade.
However, less than 24 hours later, the Federal Circuit Court of Appeals issued an order administratively staying the CIT injunction while it considered an appeal on the case. Thus, notwithstanding the CIT order, the IEEPA tariffs remain in effect.
Background
IEEPA is a federal law that grants the President broad powers to regulate international commerce after declaring a national emergency in response to an unusual and extraordinary threat to the national security, foreign policy or economy of the United States. Typically, IEEPA has been used to impose sanctions on foreign states or individuals, control assets or restrict financial transactions in response to specific foreign threats. IEEPA’s authority traditionally has not been used to impose broad tariffs simply based on general economic concerns.
Since taking office in January 2025, President Trump has implemented a series of tariffs under IEEPA rather than by using traditional trade enforcement statutes such as Section 301 or Section 232 of the Trade Expansion Act of 1962.
These IEEPA tariffs include:
Trafficking tariffs: A 25 percent ad valorem duty on goods from Mexico and Canada and a 20 percent duty on goods from China, justified on grounds of transnational criminal threats and border security (see previous alert here).
Worldwide and retaliatory tariffs: A 10 percent baseline duty on all imports, with increased rates up to 50 percent for certain US trading partners, based on allegations of non-reciprocal trade policies and structural global imbalances (see previous alerts here and here).
Both types of tariffs were implemented via executive orders invoking national emergency declarations under IEEPA.
Key Legal Holdings
The CIT ruled that:
IEEPA does not authorize boundless tariff authority. The court narrowly interpreted IEEPA’s grant of power to “regulate . . . importation,” holding that it does not encompass the imposition of broad, discretionary tariffs absent a defined emergency directly tied to foreign threats.
The tariffs were ultra vires. The court found that the President’s actions exceeded the legal authority granted by Congress under IEEPA, effectively encroaching upon powers specifically reserved for Congress under Article I of the US Constitution to regulate trade.
IEEPA requires a foreign emergency nexus. The court concluded that generalized economic concerns—such as trade deficits, wage suppression abroad or retaliatory trade practices—do not meet IEEPA’s strict requirement of an “unusual and extraordinary threat” arising, outside the United States. This holding significantly narrows the executive’s discretion in declaring emergencies for trade purposes, emphasizing that the threat must be directly tied to foreign actions impacting national security or foreign policy, not merely economic competition.
Private and state plaintiffs had standing. The court recognized downstream economic harm (e.g., increased procurement costs, disrupted supply chains) as sufficient to establish standing, even for non-importers.
Impact and Effective Scope of the Ruling
The CIT’s judgment is nationwide in scope and normally would be immediately effective. Because the CIT invalidated the relevant executive orders and related Harmonized Tariff Schedule of the United States (HTSUS) modifications, the ruling would have had the practical effect of nullifying the challenged tariffs as a matter of law. However, the Federal Circuit’s administrative stay of the CIT injunction means that:
The tariffs remain in effect for now, pending further action by the appellate court.
The administrative stay is temporary and does not decide the appeal itself, but it preserves the status quo while the court considers the government’s full motion for a stay pending appeal.
Plaintiffs must respond to the government’s stay motion by June 5, 2025, with a reply due June 9, 2025.
Parties have been instructed to notify the Federal Circuit of any ruling on the parallel stay motion still pending before the CIT.
Unless and until the Federal Circuit denies the government’s stay request or the CIT separately lifts the stay, businesses should treat the tariffs as still in force.
Importantly, neither the CIT nor the Federal Circuit order affect product-specific tariffs imposed under other authorities, such as Section 232 of the Trade Expansion Act of 1962. Tariffs on imports of aluminum, steel and certain automotive goods remain in force and are unaffected by these rulings.
Issues Potentially to Be Raised on Appeal
The government is widely expected to appeal the CIT’s decision to the Federal Circuit. Key legal questions likely to be raised on appeal include:
Scope of IEEPA authority: Whether the phrase “regulate . . . importation” authorizes tariff actions, particularly considering precedent under the Trading with the Enemy Act. The government is likely to argue that “regulate . . . importation” within IEEPA is a broad grant of power that includes the imposition of tariffs, citing historical precedent under the Trading with the Enemy Act (e.g., United States v. Yoshida Int’l, Inc., 526 F.2d 560 (C.C.P.A. 1975)) to support a more expansive view of presidential authority during emergencies.
Use of constitutional avoidance: Whether the CIT erred by interpreting IEEPA narrowly based on the nondelegation and major questions doctrines, rather than on plain statutory text.
Justiciability of emergency declarations: Whether the judiciary may review the President’s determination that a national emergency exists for IEEPA purposes. The government may contend that the President’s determination of a national emergency for IEEPA purposes is a political question and thus generally not subject to judicial review, arguing that the CIT overstepped its bounds in scrutinizing this executive determination.
APA applicability: Whether the CIT improperly imported Administrative Procedure Act (APA) standards in reviewing executive action not subject to the APA.
Standing of non-importers: Whether downstream purchasers without direct duty liability can challenge tariff actions under 28 U.S.C. § 1581(i).
The Federal Circuit’s treatment of these issues could have long-term effects on the balance of power between Congress and the executive branch in trade law and emergency economic policy.
Next Steps for Businesses
Businesses affected by the invalidated tariffs should:
Monitor for further court action, including whether the CIT grants or denies the pending stay motion, and any orders from the Federal Circuit on the full stay request.
Adjust forward-looking import planning to reflect the possibility of the tariffs being rolled back if the stay is lifted or the appeal is denied.
Monitor CBP implementation guidance. Companies should pay close attention to forthcoming communications from US Customs and Border Protection (CBP), particularly via Cargo Systems Messaging Service (CSMS) announcements, which are typically published on the CBP website. CBP has used CSMS in the past to communicate implementation steps in response to major litigation.
Importers should proactively review their Automated Commercial Environment (ACE) accounts and coordinate closely with their customs brokers to identify affected entries, assess potential refund claims and remain responsive to any agency developments or requests for information.
Court of International Trade Sets Aside Presidential IEEPA Tariffs and Federal Circuit Postpones Nationwide Injunction
A three-judge panel of the United States Court of International Trade (“CIT”) issued a landmark decision on May 28, 2025, in V.O.S. Selections, Inc. v. United States,[1] concluding that tariffs imposed by the President under the International Emergency Economic Powers Act (“IEEPA”) exceeded the President’s statutory authority. The court vacated the challenged tariff orders and permanently enjoined their operation nationwide. However, the U.S. Court of Appeals for the Federal Circuit less than twenty-four hours later temporarily stayed the lower court’s order, pending a decision on a more permanent stay until all appeals conclude. Accordingly, the President’s tariffs are presently preserved, as the lower court’s decision has been stayed. A second decision by the D.C. District Court, a different federal court, also held the President’s IEEPA tariffs are beyond the scope of the statute and imposed a more limited injunction for two parties.[2]
These rulings do not affect other tariff measures taken by the Trump Administration, such as section 232 duties against steel and aluminum, and automobiles.
Background
Since January 2025, the President has declared several national emergencies and imposed a range of tariffs on imports from its trading partners. These included:
Worldwide and retaliatory tariffs consisting of a rate of 10 percent on all imports from all U.S. trading partners, with higher rates for certain countries, as a response to persistent U.S. trade deficits and alleged unfair trade practices.
Country-specific tariffs consisting of a 25 percent duty on Canadian and Mexican products (10 percent on Canadian oil and potash) and a 20 percent duty on Chinese products. These were implemented to address declared threats “to the safety and security of Americans, including the public health crisis of deaths due to the use of fentanyl and other illicit drugs” from international cartels, drug trafficking, and related criminal activity.
Multiple states and businesses challenged these tariffs, arguing that the President had exceeded his authority granted by IEEPA and that the actions violated important constitutional principles.
Key Legal Findings
The CIT held that IEEPA does not grant the President unlimited tariff authority. While the statute allows the President to “regulate . . . importation” in response to an “unusual and extraordinary threat” following a declared national emergency, the court held that this language does not authorize the imposition of unbounded tariffs. The court emphasized that any delegation of tariff authority to the President must be clearly limited and guided by an “intelligible principle” to avoid violating the separation of powers. The court also explained that the current tariffs are distinguishable from prior, more limited uses of emergency powers, noting that the challenged tariffs lacked meaningful limitations in scope or duration, effectively entailing unlimited Presidential authority.
The court held that the worldwide and retaliatory tariffs were unbounded by any limitation in duration or scope and, accordingly, ultra vires and contrary to law.
It also held that the country-specific tariffs failed to comply with IEEPA because the statute requires that emergency powers be exercised only to “deal with an unusual and extraordinary threat” and there is no direct connection between the tariffs and the stated threat. Rather, the tariffs were used as leverage in negotiating a solution, which the statute does not contemplate.
The D.C. District Court found that IEEPA does not support the President’s tariffs, and the implementing agency violated the Administrative Procedure Act, but declined to reach arguments specific to the President’s tariffs and IEEPA. It remains to be seen which court will ultimately have jurisdiction, as both have held that they do.
Pending Relief
Though the CIT vacated the President’s tariff orders and permanently enjoined their enforcement nationwide, the Federal Circuit’s administrative stay, pending resolution of the government’s motion to stay pending appeal, postpones the lower courts actions. The tariffs, accordingly, remain in effect for the moment. If implemented, the CIT’s decision would have far-reaching consequences for anyone dealing with merchandise exported into the United States. Practically speaking:
All tariffs imposed under the challenged executive orders would be set aside, and importers would no longer be subject to the additional duties previously in effect under these orders.
The decision indicates that the President’s authority to impose tariffs under IEEPA is not open-ended and must be exercised within clear statutory and constitutional boundaries.
The decision also signals that future attempts to use IEEPA to impose broad tariffs—especially in response to trade deficits or as general leverage—will likely face significant judicial scrutiny.
Next Steps and Key Takeaways
In addition to the Federal Circuit’s quick action to administratively stay the CIT’s order, the government has already appealed the CIT’s decision. Given the fluidity of the current situation, importers and affected parties should monitor developments closely and consult with counsel regarding the status of the ongoing litigation and any duties paid under the relevant tariffs and potential refund procedures. It is also important to recognize that IEEPA is not the sole mechanism available to the Trump Administration for imposing tariffs. Tariffs implemented on steel, aluminum, autos, and potentially future products under “Section 232” investigations are not covered by this decision.
Despite the superior court’s stay, the lower courts’ decisions mark a significant statement of congressional control over tariff policy and, until the appellate courts decide, a limitation on the use of IEEPA to regulate importation.
[1] https://www.cit.uscourts.gov/sites/cit/files/25-66.pdf
[2] https://www.courthousenews.com/wp-content/uploads/2025/05/contreras-blocks-certain-trump-tariffs.pdf
White House Publishes Executive Orders Aimed at Accelerating Nuclear Energy
On May 23, 2025, President Donald Trump signed four executive orders aimed at launching a “renaissance” for the U.S. nuclear energy sector. The orders announce objectives of deploying 300 GW of new nuclear energy capacity by 2050 (a fourfold increase over current levels) and having 10 large reactors under construction in the United States by 2030. To achieve these objectives, the White House is calling for reforms to the Nuclear Regulatory Commission (“NRC”), the build-out of a domestic nuclear fuel supply chain, construction of reactors on military installations, and export promotion for U.S. nuclear technologies.
Reforming the NRC
The Ordering the Reform of the Nuclear Regulatory Commission executive order criticizes the NRC for “throttling nuclear power development” by implementing multi-year licensing processes characterized by excessive risk aversion. The order and an accompanying fact sheet build on recently-enacted legislation—the Accelerating Deployment of Versatile Advanced Nuclear Energy Act of 2024, P.L. L. 118-67 (the “ADVANCE Act”)—which directed the NRC to revise its mission statement to ensure that its regulations not only ensure safety but also account for the societal benefits of nuclear energy.
The White House directive calls for a reorganization of the NRC, including reductions in force; however, the order recognizes that certain functions, such as new reactor licensing, may increase in size. The White House also directs the NRC to streamline and expedite its licensing processes in various ways, including by adopting an 18-month deadline for a final agency decision on applications to construct and operate any type of new reactor, establishing a process for high-volume licensing of microreactors and modular reactors, and eliminating “non-essential or obsolete” rules.
Additionally, the order directs the NRC to reconsider its reliance on the linear no-threshold (“LNT”) model for radiation exposure, and the “as low as reasonably achievable” (“ALARA”) standard, which is predicated on the LNT model. According to the order, the LNT and ALARA policies exemplify the NRC’s extreme risk aversion and represent a major obstacle to licensing new reactors. As part of its reconsideration, the NRC must consider adopting “determinate radiation limits,” in consultation with the Environmental Protection Agency and other agencies. Such reconsideration might lead the NRC to align its standards with the quantified “ample margin of safety” hazardous air pollution standard codified by Congress in the 1990 Clean Air Act amendments, which applies to radiation exposure from reactors.
The NRC may face pressure to address these new directives in its ongoing rulemaking to establish a risk-informed, technology-inclusive regulatory framework for advanced reactors (the so-called “Part 53” rulemaking).
Building a Domestic Fuel Supply Chain
The Reinvigorating the Nuclear Industrial Base executive order addresses a vulnerability in the U.S. nuclear sector: its dependence on imports of foreign sources of enriched uranium, particularly from Russia.
To address this import dependence, the order directs the Department of Energy (“DOE”) and the Department of Defense to make excess uranium from federal stockpiles available for commercial use where feasible. It also calls for the immediate development of domestic capabilities for uranium conversion, enrichment, and fuel fabrication—including for advanced reactor fuels such as high-assay low-enriched uranium (“HALEU”). HALEU is essential for several next-generation types of reactors.
The order also directs the DOE to prioritize the facilitation of 5 GW of power uprates to existing reactors, have construction underway on 10 new large reactors by 2030, and make resources available for restarting closed nuclear power plants.
Additionally, the White House seeks to expand the industry workforce by instructing the Secretaries of Labor and Education to establish ways of increasing participation in nuclear energy-related education and career pathways.
Deploying Reactors for (and by) the National Security Apparatus
The Deploying Advanced Nuclear Reactor Technologies for National Security order focuses on utilizing nuclear energy for national security purposes. The order calls on the Departments of Defense and Energy to utilize government sites for the development of advanced reactors.
Under the order, the Secretary of the Army is tasked with commencing operation of a reactor on a domestic military base or installation no later than September 30, 2028.
The order also establishes a 90-day deadline for the Secretary of Energy to designate DOE sites for the use and deployment of advanced reactors—with a special emphasis on powering AI infrastructure.
Finally, the order instructs the Secretary of State to implement several policies to promote exports of U.S. nuclear technologies, including “aggressively” pursuing at least 20 new agreements with other countries by January 3, 2029.
Leveraging DOE Authorities to Build “Test Reactors”
The order titled Reforming Nuclear Reactor Testing at the Department of Energy instructs the DOE to accelerate development of new reactors through pilot programs and streamlining environmental reviews. The order specifically asserts that advanced reactors that are not used for commercial electricity generation are collectively for “research purposes” and can be licensed by DOE rather than the NRC. The DOE is required to set up an expedited licensing and permitting process that will enable these “qualified test reactors” to be safely operational within 2 years of application submission and is charged with approving at least three reactors with the goal of achieving criticality in each by mid-2026.
Conclusions
The executive orders come at a time when the United States is grappling with increasing electricity demand driven by electrification, AI workloads, and the growing need for reliable, clean baseload energy. Nuclear reactors offer reliability and density, capable of supporting 24/7 operations with carbon-free power. Advanced reactors hold the promise of safer and more modular designs.
To achieve the ambitious capacity growth objectives, the executive orders seek to cut regulatory red tape and leverage various federal streamlining authorities. It remains to be seen whether simultaneous, mandatory cuts of experienced staff at the regulatory agencies will impede these goals. Furthermore, funding is a key part of the puzzle for the nuclear sector, particularly for advanced reactors. In this area, developers may have concerns about recent developments in Congress. The recently passed House budget reconciliation bill significantly diminishes the DOE Loan Programs Office, which has been a key source of financing. The House bill also limits the availability of clean electricity tax credits for advanced reactors. The bill would confine tax credit eligibility to reactors for which construction commences no later the end of 2028. This is a modest reprieve from earlier, far more restrictive versions of the bill. However, developers of advanced reactors may struggle to assemble the workforce, components, and financing to break ground by that date. In addition, the House bill does not spare owners of existing reactors; it would phase out the 45U tax credit at the end of 2031.
The Angel is in the Details: Grant Agreements that Matter
Philanthropy is designed to make the world a better place, but the angel is in the details.
The relationship between donors and organizations, whether it’s a major medical institution or a small local nonprofit, are never adversarial …until they are. One of the best ways to ensure satisfaction is to clarify expectations and build a tight and clearly written agreement around a grant.
There’s no central data-base tracking litigation between grant makers and grant receivers, but common knowledge is that lawsuits are few and far between. Even so, consequences for poorly-thought-through grant agreements can be pernicious and include family or community infighting, reputational disparagement, and disillusionment with the art and science of giving.
Many donors and tax advisors focus on minimum annual distributions and look to move money fast but there are multiple ways to meet distribution requirements. Structured agreements are a blueprint for the future that help both donors and grantees navigate expectations.
Using a corporate contract template for grants can be both off-putting and insufficient. But, yes, there needs to be a set of standard clauses like terms, termination, arbitration, and indemnification (which is typically mutual) but there’s much more needed.
Here are three scenarios (there are many more) about what can go wrong:
A donor family funds a lab at a university that costs $1 million. It’s a meaningful donation for the family and they visit it periodically and talk about it with pride. The director who led the lab retires and a new director comes in with different needs and purposes. Within five years of the gift the lab is gone, and the family name has been removed – and they found out when they brought their granddaughter to see it. No one ever called them.
A couple funded a new engineering center at a day school their daughter attended. They wanted to give back to the school that supported their child and made a $3 million dollar donation on the recommendation of the Head of School. After five years there isn’t a plan or budget, and the center isn’t built. Funding paid in full has been generating interest that is not designated to the project.
Through their foundation, a family funds a new program at a cost of $500 thousand dollars, designed to educate at-risk youth over a ten-year period in the community where they built their business. After three years the organization moves the program to another site because it was not sustainable where it was. The family wants their money back.
Engaging clients in building a detailed outline that includes:
The client’s understanding and goals for the near- and long-term expectations
The organization’s goals and capacity to carry out the grant
Terms that describe the triggers for distribution meaning time and accomplishments in advance of future payments
Metrics for evaluating the grant
Details about communications expectations both internally and publicly
Contingency specifications, especially in the case of capital projects, that might include right of first refusal
Consider developing a plain language template for private foundation clients that can be adjusted to meet the criteria and expectations, in terms of time, funding distributions, and short- and long-term expectations of the investment, and to support your clients in finding their better angels.
Syria-ous Changes for Middle East Business? The United States, UK, and Europe Relax Sanctions on Syria
In a significant shift in international policy, the United States, European Union, and United Kingdom have each taken steps to ease sanctions on Syria, aiming to support the country’s reconstruction and political transition following the fall of the Assad regime.
United States Actions
On May 23, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 25 (GL 25), authorizing certain transactions otherwise prohibited under the Syrian Sanctions Regulations (31 C.F.R. Part 542). That move represents a major policy shift aimed at facilitating reconstruction and humanitarian efforts in Syria.[1] In parallel, the U.S. Department of State issued a waiver of sanctions under the Caesar Syria Civilian Protection Act. Together, those developments signal a coordinated effort to promote economic stabilization while maintaining leverage over the Syrian government’s conduct.
Scope of Authorized Transactions
GL 25 authorizes U.S. persons to engage in a broad range of transactions involving Syria that were previously prohibited. Specifically, the license allows transactions that involve the Government of Syria and certain blocked persons, including individuals and entities named in the annex to GL 25, as well as entities that are owned 50 percent or more by such persons. The license covers services, investment, and dealings involving Syrian-origin petroleum and petroleum products, among other activities. Notably, this license lifts longstanding restrictions on financial transactions and investment, which could enable U.S. companies to reenter the Syrian market under certain conditions.
Concurrently Issued Measures
The easing of OFAC sanctions is part of a wider package of measures. In coordination with GL 25, the U.S. Department of State issued a 180-day waiver of certain sanctions under the Caesar Act, providing additional relief intended to stimulate activity in key sectors such as infrastructure, agriculture, and healthcare.
The Financial Crimes Enforcement Network (FinCEN) issued guidance relaxing restrictions under Section 311 of the USA PATRIOT Act, allowing U.S. financial institutions to maintain correspondent accounts for the Commercial Bank of Syria. These measures are designed to operate in tandem and provide meaningful openings for financial and commercial reengagement, subject to oversight and compliance measures.
Limitations and Conditions
Despite the breadth of the new authorizations, the relief measures are not unconditional. The U.S. government has emphasized that continued implementation of GL 25 and related actions will depend on the Syrian government’s conduct going forward. Specifically, the U.S. has tied future sanctions relief to Syria’s demonstrated commitment to protecting ethnic and religious minorities and ceasing support to designated terrorist organizations. The U.S. intends to monitor these commitments closely, and the status of GL 25 may be revisited if conditions on the ground deteriorate or if the Syrian government fails to uphold its obligations.
Export Control Considerations
Importantly, while GL 25 eases certain economic sanctions, it does not affect the application of U.S. export control restrictions over the country. Items subject to the Export Administration Regulations (EAR) generally remain prohibited for export or reexport to Syria, unless specifically authorized by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). This includes both items classified under specific Export Control Classification Numbers (ECCNs) and those designated as EAR99. Likewise, exports of U.S. Munitions List items and related defense services remain subject to the International Traffic in Arms Regulations (ITAR), administered by the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC). Companies considering transactions involving Syria should therefore make sure that they obtain appropriate licenses from those agencies before exporting to Syria.
European Union Measures
On May 28, 2025, the Council of the European Union adopted a series of legal acts lifting all economic restrictive measures on Syria, with the exception of those based on security grounds.[2] This move formalizes the political decision announced on May 20, 2025, and aims to support the Syrian people in rebuilding a new, inclusive, pluralistic, and peaceful Syria.[3] As part of this approach, the Council removed 24 entities from the EU list of those subject to the freezing of funds and economic resources, including banks such as the Central Bank of Syria and companies operating in key sectors for Syria’s economic recovery. However, the EU has extended the listings of individuals and entities linked to the Assad regime until June 1, 2026, and introduced new restrictive measures under the EU Global Human Rights Sanctions Regime, targeting individuals and entities responsible for serious human rights abuses.
United Kingdom Developments
On April 24, 2025, the UK government published the Syria (Sanctions) (EU Exit) (Amendment) Regulations 2025,[4] which took effect on April 25, 2025. These regulations partially suspend a number of significant sanctions that have been in place for over a decade, reflecting developments in the political situation in Syria following the fall of the Assad regime in December 2024. The UK has lifted sanctions on several Syrian government agencies, including the Ministry of the Interior, the Ministry of Defense, and the General Intelligence Service, as well as the police, air force, military, and state-run media. Additionally, the UK has pledged up to £160 million in support for Syria in 2025, providing lifesaving assistance and supporting agriculture, livelihoods, and education programs to help Syrians rebuild their lives. The United Kingdom is expected to adopt additional legal measures to ease Syrian sanctions, mirroring recent actions by the U.S. and EU.
Implications for U.S. and International Businesses
These coordinated actions by the U.S., EU, and UK signal a new phase in international engagement with Syria, potentially opening avenues for businesses and investors. However, companies considering entry into the Syrian market would be well advised to exercise caution and conduct thorough due diligence to ensure compliance with the remaining sanctions and export control laws. Despite the easing of certain sanctions, stringent export control restrictions remain in place, and the relief measures are contingent upon the Syrian government’s commitment to safeguarding human rights and not providing safe harbor to terrorist organizations.
FOOTNOTES
[1] See OFAC’s press release available here.
[2] See Council’s Press Release, available here.
[3] See Council’s Press Release, available here.
[4] Available here.
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US Provides Broad Sanctions Relief to Syria
On 23 May 2025, the United States provided broad sanctions relief to Syria and the new Government of Syria under President Ahmed al-Sharaa. While speaking at an investment forum in Riyadh, President Trump announced his intentions to lift sanctions on Syria, stating that sanctions relief will “give them a chance at greatness.”
To that end, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License (GL) 25, authorizing transactions prohibited by the Syrian Sanctions Regulations (SySR), as well as transactions prohibited under certain other statutes and executive orders. Alongside GL 25, the US Department of State issued a 180-day waiver of mandatory “Caesar Act” sanctions to permit certain investments in Syria and the Financial Crimes Enforcement Network permitted US banks to maintain correspondent accounts for the Commercial Bank of Syria.
Between 2004 and 2011, the United States imposed increasingly comprehensive sanctions on Syria, prohibiting most US investment in Syria, the export of goods and services to Syria, dealings in Syrian petroleum, and transactions involving Syrian blocked parties, including “secondary sanctions” for significant dealings with the blocked Government of Syria.
Under GL 25, US persons are authorized to engage in many transactions prohibited under the SySR, including:
Transactions with 28 Syrian parties on the Specially Designated Nationals and Blocked Persons List (SDN List), including certain financial institutions, ports, oil and gas companies, airlines, and ministries. These parties are named in the Annex to GL 25. Authorization to deal with these named parties extends to the blocked entities they own at least 50% or more (collectively “Annex Parties”).
Certain transactions in Syria, provided they do not involve blocked parties that are not Annex Parties, including: new investment in Syria, the export of services to Syria, US importation and other dealings in Syrian petroleum, dealings in the property and property interests of Annex Parties, and payment transfers involving such authorized activities.
It is important to note that GL 25 does not authorize:
Transactions involving blocked parties not specifically authorized under GL 25.
Unblocking any property blocked as of 22 May 2025.
Exports, reexports, and transfers to or within Syria that require authorization under the Export Administration Regulations or International Traffic in Arms Regulations. Accordingly, the export, reexport, or transfer of defense articles and dual-use items, software, and technology remain prohibited unless authorized.
Transactions involving the Governments of Russia, Iran, or North Korea.
Sanctions relief under GL 25 became effective on 23 May 2025 and is not subject to an expiration date. OFAC can revoke GL 25 at any time or replace it with a “GL 25A” requiring the “wind down” of existing transactions by a certain date. The Treasury Department has signaled that additional sanctions relief may be forthcoming, referring to GL 25 as a “first step.”