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Global Tax News

Dear clients and friends,

Below please find the latest edition of our « Global Legal News », as issued by our international network RUSSELL BEDFORD.

Your attention is particularly, but not only, drawn to the first article « American banks told to ignore Europe’s dirty-money blacklist ». Once more it is obvious that Oncle Sam does want to do things his own way and the rest of the world has to align to the wishes of the empire, like it or not. Can that last ?


American banks told to ignore Europe’s dirty-money blacklist

The U.S. Treasury Department has told American banks they can ignore an updated European blacklist of dirty-money hotspots. The European Commission has added Saudi Arabia, Libya, Botswana, Ghana, Samoa, the Bahamas and the four U.S. territories of American Samoa, U.S. Virgin Islands, Puerto Rico and Guam to its blacklist of states with lax controls on terrorism financing and money laundering. The Treasury has questioned the methodology behind the list, noting it “has significant concerns about [its] substance,” and saying it didn’t expect U.S. financial institutions to take the list into account for anti-money-laundering compliance. It said the Financial Action Task Force, the global standard-setting body for combating money laundering and terrorism financing that was created by the G7 in 1989, already compiles a list of high-risk jurisdictions.

Wall Street Journal   The Independent

Google ends forced arbitration for employee disputes

Google has told staff that it would no longer force employees to settle disputes with the company in private arbitration. At the end of 2018, a group of 35 employees came together to demand Google end forced arbitration as it relates to any case of discrimination. The change will take effect on March 21st.  For contractors Google works with directly, it will remove mandatory arbitration from their contracts. Google won’t however require outside firms that employ contractors to do likewise.  Google Walkout for Real Change, the organiser behind last year’s campaign, wrote on Twitter in response to the announcement: “Collective action works. Worker power works. This is still just the beginning.” 

New York Times   Bloomberg   TechCrunch

Law firm’s LinkedIn post prompts diversity debate

A LinkedIn post announcing the latest class of partners at elite law firm Paul, Weiss led to a fevered social media debate about diversity. The new partner class is exclusively white and features only one woman. The image was taken down a week after posting and the firm said it regretted the “gender and racial imbalance” of its 2019 class, and that the class was an outlier. “We have a very good track record in terms of diversity . . . “We’ve always been ranked at the very, very top of every survey,” said Brad Karp, the firm’s chairman. The New York Times notes that Paul, Weiss is indeed more diverse at the partner level than most of its peers but nevertheless says the firm is representative of a broader pattern across bigger law firms, where the share of partners who are women and people of color is much smaller than among associates, or those starting law school.

New York Times

Lawsuits surge over website access for blind people

Organisations that have websites which can’t be navigated by people with vision impairments are being hit with lawsuits for a second or third time even after agreeing to upgrade their sites. The Americans With Disabilities Act prohibits discrimination against disabled people in all places of public accommodation – and most courts have interpreted this to include websites connected to a physical business. The number of website-access lawsuits filed in federal court reached 2,250 in 2018, almost three times the 814 filed in 2017, according to law firm Seyfarth Shaw.

Wall Street Journal

AI used to settle court dispute

In what is understood to be a world-first, a ‘robot mediator’ has helped settle a dispute in the legal system. The Canadian dispute resolution tool Smartsettle ONE settled a case regarding £2,000 in unpaid fees claimed by a trainer from a client following a personal counselling course. Mediator Graham Ross said: “Insurers might not like open bidding, which could damage their negotiation strategy, but using something like Smartsettle would allow them to bid high early, to reduce legal fees, and make secret bids.”

Legal Future

Number of blocked mergers in decline

A report from law firm Allen & Overy shows that the number of deals being blocked by regulators is falling. Last year, deals worth at least $52.2bn across the U.S., the EU, Brazil, South Africa, Australia and Turkey were either blocked or abandoned in the face of regulatory scrutiny, significantly below the $147bn that didn’t close in 2017. The drop-off in blocked deals may be partly be explained by companies giving up on a transaction before receiving a formal ruling from antitrust authorities. Transactions abandoned in the face of regulatory concerns but ahead of any formal ruling rose 38% to 22 last year, according to the report.

Wall Street Journal

Tech finds workers’ offensive comments

California start-up Fama, which claims to have 120 clients, including Fortune 500 companies, says it is helping firms trawl social media and internal email and messaging systems for sexist or bullying comments in an attempt to help root out bad behaviour and avoid lawsuits. The company offers to profile both interview candidates and current employees. Co-founder Ben Mones says clients are most interested in uncovering bigotry, sexism, and predisposition to violence. The firm, which scans 15,000 workers per month, says it helps uncover individuals likely to cause a rift among colleagues and expose their employers to costly lawsuits. Fama says its software identified 82,900 instances of misogyny, 40,200 instances of bigotry, 677 insinuations of violence, and 589 instances of criminal behaviour in 2018.

The Sunday Telegraph 



Money laundering allegations rock Scandinavia

Bloomberg reports on how allegations of systematic money laundering have convulsed Scandinavia. Swedbank has now been drawn into the Danske Bank money-laundering scandal, with public broadcaster SVT alleging the Stockholm-based bank may have been used to funnel billions of dollars of suspicious funds. Hans Lindblad, the director general of the Swedish National Debt Office, is worried about the consequences for the region’s entire economy if the Nordic financial industry loses the trust of the people. “I have to say that the serial greed that over and over again pops up in the form of suspicion of dishonest and greedy behaviour has to be stopped,” he said. Meanwhile, large European lenders are adding thousands of people in compliance roles in the wake of such scandals. Compliance headcount at Danske Bank has surged by about 600, ABN Amro still needs a further 400, and Rabobank wants to hire another 250, reports Bloomberg. Thorsten Poetzsch of German financial watchdog Bafin notes a greater sense of urgency among finance institutions. “The banks realise that money laundering isn’t just a question of cost but that it can threaten their very existence,” he says.

Bloomberg   Financial Times   Bloomberg   SVT

Ireland in the spotlight as UK’s professional associations seek recognition

Anna Isaac in the Telegraph considers the impact Brexit could have on the UK’s professional business services sector. She looks at the issue of recognition of professional qualifications, noting that these have hitherto been subject to an EU directive called the Mutual Recognition of Professional Qualifications (MRPQ). Ms Isaac highlights that in July last year, industry professionals wrote to the Prime Minister asking for something akin to the MRPQ directive be a top priority in Brexit planning. Ms Isaac notes that some lawyers and barristers are seeking professional recognition in Ireland to secure post-Brexit recognition in the EU. Dominic Griffiths, of law firm Mayer Brown, says: “There’s been, across professional services, a massive flurry of activity literally in the last few weeks in relation to trying to get professional recognition in Ireland. It’s incredible the number of applications made by UK solicitors to become Irish solicitors, for instance.”

The Daily Telegraph

It’s game on for new recruits

The Times looks at the use of game-based assessments in recruitment, noting that London headquartered Taylor Wessing is the first law firm in the UK to have incorporated a gamified psychometric assessment in its recruitment process. The tool can capture thousands of data points that look beyond candidates’ CVs and focus on potential talent, while identifying behavioural traits important to an organisation. With 800 applicants for 40 places on Taylor Wessing’s trainee scheme and 20 contracts, the challenge is to identify as diverse a range of talent as possible. Sarah Harte, the law firm’s graduate talent manager, says the game complements the outreach work the firm does with organisations such as Aspiring Solicitors, which helps under-represented groups to prepare for trainee applications.

The Times

Asda workers win equal pay claim

Tens of thousands of Asda workers have won their equal pay claim against the UK supermarket, after the Court of Appeal ruled that store workers’ roles are comparable to jobs in its warehouses. Law firm Leigh Day acts for around 30,000 shop floor workers across the big four supermarkets, including at Asda, Sainsbury’s, Tesco and Morrisons, in a claim which could result in staff receiving payments of around £8bn. Asda plans to petition the Supreme Court directly to contest the ruling. Beth Hale, general counsel at CM Murray employment solicitors, said: “The decision is really important for the future of equal pay claims as it has kept very broad the category of comparators which can be chosen by employees bringing an equal pay claim.”

City AM    Financial Times   The Times   The Guardian    

Google fine could be benchmark for GDPR penalties

Lawyers are expecting Google to appeal a €50m fine imposed by the Commission Nationale de l’Informatique et des Libertés (CNIL), France’s data regulator, for breaching General Data Regulation Protection rules as the ruling is a direct challenge to the search giant’s business model. Sonia Cissé, head of Linklaters TMT Practice in Paris and managing associate, said: “Considering the seriousness of CNIL’s findings and the broad publicity of this case a potential appeal by Google is no surprise and makes perfect sense from a legal-strategy perspective.” Ms Cissé added that Google was likely to challenge the finding on two grounds: procedural aspects relating to the competence of the French regulator, and on the facts of the case. She explained that failing to appeal against the ruling, would run the risk of the public taking the view that the company accepted it, which “would be … detrimental to Google’s image and reputation”.

Bloomberg Law   The Times

New blitz on white-collar crime

The Times’ Edward Fennell looks at the new Economic Crime Strategic Board (ECSB), chaired by UK Chancellor Philip Hammond and UK Home Secretary Sajid Javid and including representatives of solicitors, accountants and estate agents. While some critics see the board as window-dressing to disguise a lack of resources in battling an increasing volume of fraud, bribery, corruption and money laundering, others say that it marks a significant step up in the UK government’s war on financial crime. “Having two prominent cabinet ministers on the board sends out a signal that the government is now taking financial crime seriously at the highest levels,” says John Binns of BCL Solicitors.

The Times

Neurodiverse people employed by top law firm

Matt Peers, Linklaters’ global chief operating officer, explains to Management Today how simple adjustments are helping the law firm access an undervalued talent pool of people on the autistic spectrum. Last year, Linklaters engaged the services of Auticon, which places highly skilled, but underemployed, people on the autistic spectrum into the workplace. To date, the neurodiverse workers have been placed in the tech team, supporting lawyers across the business on a spot engagement basis. Mr Peers said: “The accuracy of their people and attention to detail are second to none. We’re not doing anyone a favour, we’re bringing people with some great skills into the workplace and they’re being remunerated properly.”

Management Today

Judges urged to learn emoji meanings

Felicity Gerry, QC, has suggested the UK judiciary should learn to interpret the use of emojis, saying there was a strong need for a unified judicial approach on the meaning of the digital images and that the Supreme Court should lead the way. The call comes with emojis increasingly appearing in criminal, family and employment law hearings, with it argued that judges having clarity on their meaning could help identify context in communications that would have otherwise been missed. Ms Gerry said that without a “legal emoji primer” there is a risk “emoji communications will be wrongly interpreted by lawyers leading to misdirections by judges.” Priyan Meewella at law firm Bird & Bird said: “Like any colloquial language, judges are going to require explanations for the intended meaning.”

The Times

German court dismisses patent suits against Apple

A regional court in the German city of Munich has thrown out four patent lawsuits from chip maker Qualcomm against Apple in a ruling that is the latest of a series of global patent disputes between the two companies. The court dismissed claims that Apple had infringed on its patents related to some search capabilities on the iPhone although it has not yet ruled on four further search-related patent disputes. The outcomes of the various disputes could help determine the amount of revenue the two companies must share from the iPhone.

Wall Street Journal

Volkswagen welcomes class action legal rules

Hiltrud Werner, head of integrity and legal affairs at Volkswagen Group, has welcomed Europe’s proposal for new class action legal rules. These rules were designed in response to Volkswagen’s ‘Dieselgate’ scandal, with the aim of helping individuals mobilise against big corporations. Werner, who has been in her role for the past two years, has been working to help the company recover from the damaging Dieselgate scandal in 2015, when it was caught cheating on diesel emissions tests.

Yahoo! Finance

Social media firms face criminal sanctions over online harms

A draft of a Government White Paper suggests that social media firms will face criminal sanctions for failing to protect children from online harms, reports the Telegraph. The proposal suggests a new corporate offence is an option that could be open to a new regulator charged with ensuring online platforms remove illegal content and police harmful material. The Telegraph says the legislation is likely to be modelled on a statutory duty of care on social media firms which Culture Secretary Jeremy Wright has said he is “seriously considering.”

The Daily Telegraph

Push for gender-neutral titles in Finland

The Sunnuntaisuomalainen news syndication service reports that Finland’s National Institute for Health and Welfare (THL) has issued a recommendation that professional titles ending with “mies” (man) should be replaced by gender-neutral alternatives. For example, it suggests that the word for lawyer (literally “lawman”) should give way to the less gender-biased term for jurist.

Yle Uutiset



Arrests made over Brazilian dam collapse

Eight employees of the Brazilian mining giant Vale have been arrested as part of the criminal investigation into the collapse of a dam last month. The breach of the Feijao dam, which was used to collect mining waste, killed at least 166 people in the town of Brumadinho. The arrests were made in São Paulo, Rio de Janeiro and Belo Horizonte. Two of the arrested are Vale executives. They will all be questioned by investigators in Belo Horizonte. Meanwhile, search warrants have been issued for four people from German consultancy firm Tüv Süd. The consultant carried out an audit in September which found that the dam met legal requirements.

BBC News   Reuters   Deutsche Welle   Wall Street Journal



AU resists EU plans for migrant detention centres

The African Union has said European Union plans to stem migration with “regional disembarkation platforms” would breach international law by establishing “de facto detention centres” on African soil. One senior AU official said: “African capitals worry that this plan will see the establishment of something like modern-day slave markets, with [the best] Africans being allowed into Europe and the rest tossed back – and it is not far from the truth.”

The Guardian   EU Observer



UK on the wrong side of law over Saudi arms sales   

The House of Lords International Relations Committee has concluded that Britain is “narrowly on the wrong side” of international humanitarian law over arms sales to Saudi Arabia during the conflict in Yemen. The Committee concluded it was “highly likely” that UK weaponry had caused “significant” civilian casualties in the course of the four-year civil war. It said relying on assurances by the Saudis that they were not targeting civilians was not an “adequate way” of implementing the UK’s obligations under the international Arms Trade Treaty. Separately, a cross-party panel of British lawmakers says that Saudi Arabia is detaining female activists in inhumane conditions tantamount to torture under international and Saudi law. Panel member Crispin Blunt said detained female activists “have been treated so badly as to sustain an international investigation for torture,” while the panel’s Layla Moran said the treatment, particularly allegations of sexual harassment and threats of rape, “is inexcusable.”

Financial Times   The Guardian   The Daily Telegraph  

Former oil exec pleads guilty to 11 counts of bribery

The UK Serious Fraud Office (SFO) says a former executive at oil company Petrofac has pleaded guilty to bribery in relation to corrupt payments the group made to win contracts in Iraq and Saudi Arabia worth hundreds of millions of dollars. David Lufkin, a British national who was previously global head of sales for the company, entered his pleas at Westminster Magistrates’ Court in central London. The SFO said the charges related to the making of corrupt offers to influence the award of contracts to Petrofac worth in excess of $730m in Iraq and in excess of $3.5bn in Saudi Arabia.

Financial Times   Reuters

New Saudi labour rules spark nepotism fears

New labour legislation in Saudi Arabia that gives individual government ministries the ability to hire employees has led to fears about a return to favouritism, reports The National. The new law from  the Ministry of Civil Service enables ministries to hire and promote internally and lessens the power of the Jadara system which was introduced five years ago in a bid to curtail nepotism. But a ministry spokesperson said Jadara would be implemented internally and adapted accordingly.

The National



Former HR manager sues Uniqlo 

Australia-based executives at Japanese clothing company Uniqlo bullied and discriminated against a female HR manager due to her “caucasian heritage” and gender, court documents allege.  Melanie Bell, who worked at the company’s Melbourne offices as payroll and human resource information system manager, is suing her former employer for at least A$1m in lost wages plus damages; she alleges she was bullied on at least four occasions by Uniqlo chief operating officer Kenji Tsuji and was held back from pay increases, promotions and professional advancement by chief financial officer Wataru Sasaki. Uniqlo denies the majority of Ms Bell’s accusations. The company said she was “not promoted due to her performance”, and that Mr Sasaki had “actively assisted” her in building relationships with global HQ.

The Australian   News.com.au

How businesses lose control of client data

The Age‘s Emma Koehn takes a look at how businesses put customer data at risk a year on from the introduction of Australia’s notifiable data breach scheme. The information commissioner’s office has received 812 reports of cases where consumer data has been lost, stolen or accidentally disseminated to unauthorised parties. Dr Nick Patterson, a cybersecurity expert and senior lecturer at Deakin University, says the data indicate that organisations in Australia still need to conduct serious reviews of their security practices. “We ultimately want to have more education and awareness on cybersecurity in our workplaces for staff and then bolster that with the right software and hardware to detect and prevent,” he says.

The Age

Singapore to launch Asia’s first legal tech start-up accelerator

The Singapore Academy of Law has said Singapore will launch Asia’s first legal tech start-up accelerator in April. The program will be three to six months long, with experts in innovation and entrepreneurship providing mentoring support, local market knowledge, and advice on business strategies and management. Stefanie Lim, assistant director of legal productivity and innovation at the Law Society of Singapore, said that the legal industry in Singapore has so far been slow to embrace technological innovation. She notes that a general reluctance, costs for upgrades, and the lack of specialised knowledge are all hindering Singapore’s move into legal tech.

KR Asia

Chinese hotline to report gender discrimination

Female jobseekers in Dezhou, in China’s Shandong province, are being told to use an official telephone hotline to report gender discrimination. Authorities in the eastern city said employers “should not refuse to hire women or raise the job standards or requirements for women.” Jobseekers who encounter discrimination in recruitment or promotional materials should call the Women’s Rights Protection hotline on 12338, according to a statement from the city’s social security bureau.

South China Morning Post



Denmark tops global anti-corruption index

Transparency International’s 2018 Corruption Perceptions Index (CPI) is topped by Denmark. The Scandinavian country has the best anti-corruption score and scored 88 of a possible 100 points, coming ahead of New Zealand (87 points) and Finland, Singapore, Sweden and Switzerland, which all tied for third place with 85 points. Norway, the Netherlands, Canada, Luxembourg, Germany and Britain make up the rest of the top 12. The U.S. scored 71, down four points, and its ranking fell to 25th. It was the country’s first showing outside the top 20 since 2011. “The U.S. is experiencing threats to its systems of checks and balances, as well as an erosion of ethical norms at the highest levels of power,” Transparency International said. The index ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and businesspeople. More than two-thirds of countries score below 50 on this year’s CPI, with an average score of just 43.  Transparency International says most countries are failing to make serious inroads against corruption.

Wall Street  Journal   Deutsche Welle   CEO Magazine   Transparency International

Survey shows how sexual harassment is a global phenomenon

A survey of 2,560 young people aged between 14 and 21 in Brazil, Kenya, India and the UK from charity ActionAid has found that more than two-thirds of respondents had been sexually harassed over the last six months.

The Daily Telegraph

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