On August 13, 2018, the President signed into law new legislation that will impose heightened oversight of investments by Chinese persons in U.S. businesses. The Foreign Investment Risk Review Modernization Act (FIRRMA) provides greater specificity about the types of investments that the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee of the U.S. government, may review and in turn block due to their potential threats to the national security of the U.S. The new law affects foreign direct investments from any country, but China is one of the countries it is particularly likely to affect.
The Department of Commerce, Bureau of Economic Analysis ("BEA") is currently administering a BE-120 survey, which is an updated version of the BE-120 required in 2011. This time, however, if you are a U.S. person or entity, you must complete the BE-120 survey by June 29, 2018 (for manual filing) and July 30, 2018 (using the BEA's eFile system) if the following applies to you: During fiscal year 2017, you engaged in either (a) the foreign sale or purchase of services or (b) transactions in intellectual property rights ("IP") with foreign persons involving rights to use, rights to reproduce and/or distribute, or outright sales or purchases of IP. You may only have to complete part of the survey or all of it, depending on the volume of your activity. Further, due to rules regarding rounding off dollar volume, activity under $500 is not reported. More details are available below. Deadline extensions are available by written request.
U.S. Citizenship and Immigration Services (“USCIS”) has started returning H-1B petitions to employers whose cases were not selected in the recent H-1B lottery selection process. The USCIS reported that a total of 195,000 H-1B petitions were received during this year’s qualifying filing period, which began on April 2, 2018 and ended on April 6, 2018. Employers whose H-1B petition was not selected for allocation under the 2019 Fiscal Year H-1B quota will receive their paperwork back from the agency, including the uncashed filing fee checks, by regular mail. The quota (or “cap”) applies to individuals who have never held H-1B status before or who previously worked only for an H-1B exempt employer.
With more than four (4) months left in the federal government's 2018 fiscal year, U.S. Immigration & Customs Enforcement (ICE) this week reported it had already doubled the number of audits that it conducted during the entire 2017 fiscal year. ICE, an agency within the U.S. Department of Homeland Security, is responsible for upholding the laws established by the Immigration Reform and Control Act (IRCA) of 1986, which require employers to verify the identity and work eligibility of all individuals they hire.
Imagine you are focused on the latest growth trends of your business, working hard to forecast where your next sales will come from. You're thinking about what new staff you will need to support that growth. While you are preparing for an important meeting related to a promising business prospect, a receptionist in your office notifies you that your company has just been served with a lawsuit. The notice says that you have only a few weeks to respond and you now have to set aside other business matters to assess the case, locate help, and decide on a strategy for addressing the claim in an unfamiliar legal system. For many foreign investors, facing the risk of being sued is perhaps the most daunting part of conducting business in the U.S.
The next installment of our doing business series provides an introduction to litigation in the United States. It aims to give readers some basic background of the life cycle of a lawsuit, and describes options for dealing with a dispute, whether through litigation, mediation or arbitration. Understanding what will happen, being prepared, and thinking ahead about what to do in such an event, can help a company face the claim, and also allow the primary focus to stay where it should be: moving a business forward.
Daniel J. Vecchio is a guest author and a member of GSB's Litigation Practice Group. He can be reached at firstname.lastname@example.org or at 206.816.1348.
Can a Bankruptcy Court order the sale of a vessel “free and clear” of a seaman’s maritime lien for maintenance and cure under Bankruptcy Code § 363? According to the Ninth Circuit’s recent ruling in Barnes v. Sea Hawaii Rafting, No. 16-15023 (Mar. 28, 2018), the answer is no: absent a lienor’s consent, only a court sitting in admiralty has the power to extinguish a maritime lien.
A Shipboard Accident Leads to Litigation and Bankruptcy
In Barnes, the plaintiff in the court below was the captain of the vessel M/V Tehani, a 25-foot rigid hull inflatable boat used for sightseeing and snorkeling voyages out of Honokohau Harbor in Hawaii. In July 2012, a faulty fuel tank caused an explosion aboard the Tehani, and the captain suffered serious injuries requiring extensive medical treatment. Lacking insurance through his employer, the captain sued the boat’s owner, Sea Hawaii Rafting, LLC (“Sea Hawaii”), and its owner/manager, Kris Henry for maintenance and cure under federal admiralty law, and also sued the Tehani in rem. All three defendants answered the plaintiff’s complaint, and the parties proceeded to litigate for some fifteen months.
Foreign clients investing in the U.S. know there are risks of litigation and conflict that they might not anticipate when conducting business at home. One area, however, that is usually a particularly rude surprise are the U.S. laws relating to environmental matters, particularly relating to environmental contamination of land. One might think that a party not at fault for creating contamination would be safe, but that's not always the way U.S. law works when it comes to Superfund sites. These are sites around the U.S. where hazardous substances in the environment threaten human health or the environment, and clean-up is required.
Thanks to a system of “joint and several” liability, each potentially responsible party may be responsible for the entire cleanup of a site absent contributions from others. Potentially responsible parties in Michigan alone, were reported by the Michigan government to have contributed over $599 million to Superfund clean-up before 2016. Paying even a small percentage of such figures can be costly.
Our next installment in our Doing Business in the U.S. series explains the essential structure of U.S. laws governing such environmental risks. It tells you who can be held liable, and what defenses to liability are possible. It tells you how to avoid assuming liability inadvertently when investing in real estate. There is an old adage: An ounce of prevention is worth a pound of cure. These words of wisdom are particularly apt in describing how a bit of caution before investing in real estate can significantly reduce the risk of substantial liability under environmental laws. Enjoy!
The U.S. Department of Homeland Security (USDHS) recently confirmed its plans to publish a Notice of Proposed Rulemaking by June 2018 to remove from its regulations certain H-4 spouses of H-1B nonimmigrant workers as a class of noncitizens eligible for employment authorization.
The plans regarding timing were gleaned from documents the government filed on February 28, 2018, in a case pending at the D.C. Circuit Court of Appeals. That case, Save Jobs USA v. DHS, involves a challenge by a group of tech workers to the legality of the original H-4 EAD rule, which became effective on February 25, 2015.
Perhaps you have heard about some of the huge fines companies have faced after being charged with antitrust violations, such as Google’s $2.7 billion fine in June 2017, or the $26.7 million Euro judgment against one of Heineken’s subsidiaries in Greece in July 2017, or the $1.3 billion fine currently under review against Intel. Government suits are bad enough, but after them come private lawsuits from other companies affected by the same conduct. Antitrust litigation from a few ill-considered decisions of individuals in a company can take years to resolve and millions to defend. They disrupt companies and demand substantial human resources, as well. There is no doubt that avoiding antitrust violations is a much more cost effective strategy than waiting until problems occur.
Our next installment of our Doing Business in the U.S. series is a brief introduction to U.S. antitrust laws. For more information or additional training on guidance on antitrust laws, feel free to contact Don Scaramastra at email@example.com or at 206.816.1449.
Businesses and entrepreneurs on both sides of the Pacific should be aware and celebrate that just as cross-border commerce is increasing, so, too, is international judicial recognition of commercial judgments, as evidenced by recent Chinese and Washington State court rulings.
In 2017, a Chinese court, perhaps for the first time, enforced a U.S. commercial judgment. An article by Dr. Jie (Jeanne) Huang published by University of New South Wales’ China International Business and Economic Law initiative  reported on the 2017 decision, which recognized and enforced a monetary judgment from the Los Angeles County Superior Court. The case is Liu Li v. Tao Li and Tong Wu  decided by the Intermediate People’s Court of Wuhan City, China.
The International Practice Group of Garvey Schubert Barer is a cross-disciplinary group of attorneys practicing in areas ranging from business transactions, immigration, maritime, government regulatory work, transportation and logistics, and estate planning. The group members include bilingual and multicultural attorneys who are well-versed in handling these subject matters in a cross-border context. The firm’s attorneys have been actively practicing in the international arena since the early 1970s.