Walking the North Korean Tightrope
On September 21, 2017, President Trump issued an Executive Order (yet to be numbered) (“EO”) imposing additional sanctions on North Korea. It took effect the next day. The general press has quoted Treasury Secretary Mnuchin as stating: “Foreign financial institutions are now on notice that going forward they can choose to do business with the United States or North Korea, but not both.” These latest changes raise the specter for even more caution on the part of companies conducting international business. The question every CFO at every company should ask is – is our due diligence program as good as it needs to be? If not, your funds could get seized and dealing with the Dept. of Justice in these types of cases can be quite challenging. The government often has information the private sector does not possess and, if your due diligence program is not deemed sufficient, you stand little chance of getting those funds released. Given the current climate, you can bet getting funds released related to the North Korea sanctions is going to be even more difficult!
The new Executive Order is broadly worded to include any person who is determined: Continue reading “Walking the North Korean Tightrope”
The Only Thing Certain is Uncertainty
By Frida P. Glucoft and David S. Rugendorf
Workplace immigration law has been the focal point of increased anxiety and uncertainty because of various changes proposed by Executive Order. Discussions have heated up considerably in the offices of human resources professionals and personnel managers, in the break room, around the water cooler, as well as in the news media and on social media. Because the changes have not come in the form of formal regulatory changes through legislation, which require a prescribed notice and comment period (though those may soon be on the way), changes in enforcement priorities and how existing laws are interpreted create an unclear path about who will be impacted and when the new Executive Order priorities will be instituted.
What are these new priorities? At present they are best explained in Executive Order 13788. Continue reading “The Only Thing Certain is Uncertainty”
New Partnership Audit Regime and Partnership M&A Transactions
Background:
Congress has changed the way partnership[1] audits will be conducted in the future. Beginning with tax years starting on or after January 1, 2018, audits will still be done at the partnership level; however unlike current practice where adjustments and additional tax payments are made at the partner level, under the new rules the adjustments and additional tax payments will in many cases now be done at the partnership level with the payments made in the year the tax audit is finalized. The changes were made to make it easier for the IRS to audit partnerships.
The new rules raise a number of unanswered questions in the M&A arena all of which require a significant rethinking of the way partnership M&A transactions are structured and documented. There are likely to be significant differences in the responses to the Open Issues set out below between a transaction involving a LLC, which would survive as a separate legal entity after the acquisition, and a limited partnership which would terminate and not exist as a separate legal entity after the acquisition as it would only have one member. Continue reading “New Partnership Audit Regime and Partnership M&A Transactions”
Solar Flare-up with China
Two actions took place at the end of last week which heighten concerns that a trade war with China could be ever more likely. First, there was the preliminary decision in the solar panels 201 case. Then, we had the additional sanctions imposed by the President on North Korea.
The 201 solar panel case began when Suniva Inc. and SolarWorld Americas Inc. filed their cases before the International Trade Commission (“ITC”) in April and May 2017. These actions are, of course, in addition to the antidumping and countervailing duties currently being imposed on these products from China. Continue reading “Solar Flare-up with China”
Lawful Permanent Residence: How Not to Lose It
U.S. Customs and Border Protection Officers at ports of entry to the U.S. routinely question returning lawful permanent residents (“green card” holders) about the length of time spent outside the U.S.A. and the nature of their activities abroad. Generally, an absence from the U.S.A. of six months or longer will result in further inquires and requests for documentation to establish the individual’s intent to retain lawful permanent residence status.
A U.S. “green card” allows the holder to reside in the U.S. as an immigrant as long as the holder’s status does not change. However, that status may be lost if the “green card” holder is deemed to have abandoned his or her U.S. residence or if the individual lacks the requisite ties to the U.S. while living abroad.
The question of whether a “green card” holder has retained his or her status in the U.S. arises when the individual departs from the U.S. for lengthy periods of time usually exceeding one year. The determination of retention of U.S. residence depends upon the circumstances surrounding the individual’s departure and his or her ties to the U.S. Among other factors considered in evaluating retention of U.S. residence are the following: Continue reading “Lawful Permanent Residence: How Not to Lose It”
Effects of the Shortened T+2 Settlement Cycle
By Blake Baron
In March 2017, the United States Securities and Exchange Commission (the SEC) adopted amended Rule 15c6-1(a) which shortens the standard trade settlement cycle for most broker-dealer securities transactions from three business days (known as T+3) to two business days, (known as T+2). On Tuesday, September 5, 2017, the amended rule went into effect.
What Does the Change Apply To?
The new T+2 settlement cycle applies to the same securities transactions currently covered under the T+3 cycle, which the SEC states includes “transactions for stocks, bonds, municipal securities, exchange-traded funds, certain mutual funds, and limited partnerships that trade on an exchange.”
However, the new cycle does not apply to certain categories of securities, such as securities exempt from registration with the SEC due to being backed by a government or governmental institution. Continue reading “Effects of the Shortened T+2 Settlement Cycle”
International Travel Alert: Change In Policy Regarding Advance Parole Travel Document Applications
By Benjamin Lau and David Rugendorf
The U.S. Citizenship & Immigration Services has recently changed its policy regarding the adjudication of Advance Parole Travel Document applications (Form I-131).
The Advance Parole Travel Document (“Advance Parole”) is a travel authorization granted to qualified applicants of pending Form I-485 Adjustment of Status Applications. With the exception of H, K, L, and V visa holders, beneficiaries of pending Adjustment of Status Applications are prohibited from traveling internationally until they are issued an Advance Parole by the USCIS. An adjustment applicant who departs the United States before the Advance Parole is issued will have his or her adjustment of status application denied based on abandonment.
New Policy
The new USCIS policy regarding the adjudication of Advance Parole applications is that if an individual departs the United States while their Advance Parole application is pending, then the Advance Parole application will be considered abandoned and subsequently denied. This new policy affects ALL Advance Parole Travel Document applications regardless of the applicant’s underlying nonimmigrant status or whether it is an initial application or an extension. Continue reading “International Travel Alert: Change In Policy Regarding Advance Parole Travel Document Applications”
California Court of Appeal Upholds Clearly Defined Waiting Period Before Vacation Begins to Accrue
By Steven Schneider and Hilary Feybush
Building on earlier vacation policy decisions, a California Court of Appeal recently held in Minnick v. Automotive Creations, Inc. that employers may impose a clearly expressed waiting period before an employee can begin to accrue vacation time. This means that employers do not have to provide vacation pay vesting on day one of employment. While an employer cannot contract around the rule against forfeiture of wages, an employer does not do so by unambiguously providing that employees do not begin to earn vacation pay until a certain period of employment has occurred. However, once vacation pay under an employer’s policy starts to be vested and earned, it cannot be taken away.
In the Minnick case, the employer’s policy clearly expressed that no vacation time was earned during an employee’s first year of employment. The plaintiff was a former employee who had only been employed for six months. He accordingly was not paid any unused vacation in his final paycheck because he had not worked a full year. His lawyer argued that the employer’s policy violated California law because it required employees who worked less than one year to forfeit vested vacation pay. Continue reading “California Court of Appeal Upholds Clearly Defined Waiting Period Before Vacation Begins to Accrue”
NYC Updates “Ban the Box” Law
NYC Updates “Ban the Box” Law to Detail Per Se Violations and Procedures Employers Must Follow to Conduct Employment-Related Criminal Background Checks
On August 5, 2017, important updates to New York City’s Fair Chance Act went into effect. The Fair Chance Act (FCA), which regulates criminal background checks on employees and license holders, is the City’s version of a growing trend of so-called municipal “Ban the Box” laws designed to prohibit employers and agencies from denying jobs and licenses to would-be employees because of a criminal conviction(s), especially when the conviction is not directly related to the persons’ ability to perform the job.
The Fair Chance Act itself took effect on October 27, 2015 (see MSK’s prior alert here). Since then, the New York Commission on Human Rights (Commission), the agency charged with enforcing the FCA, has published revisions that further clarify the law, provide guidelines for per se violations, and detail the analysis and process for legally withdrawing conditional offers of employment based on the results of a criminal background check. It is those revisions that took effect on August 5, 2017. (Click here for a copy of the rule). Continue reading “NYC Updates “Ban the Box” Law”
Trading with China – New Reasons to Be Wary!
Today, President Trump signed into law H.R. 3364, the “Countering America’s Adversaries Through Sanctions Act”. The general press is covering this story by writing about Russia’s initial retaliation taking the form of cutting the staff authorized at the U.S. embassy in Moscow and the seizure of certain U.S. diplomatic property within Russia. When it comes to international traders, the impact on dealing with Russia, but also Iran and North Korea, takes the form of enhanced compliance efforts.
The new law will provide more in the way of direct and indirect sanctions. A direct sanction arises because the person (or company/entity) is listed by one of the relevant U.S. agencies on the appropriate blocked persons list. A secondary sanction arises because a blocked person (individual or entity) owns or has a controlling ownership in a company not otherwise listed as blocked. Of course, additional headaches exist when there is U.S. content in the good being sold, so the impact is on both exports and imports. Continue reading “Trading with China – New Reasons to Be Wary!”
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