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Dr. Thomas Weibel joins Leaders in Law as the exclusive Civil Procedural member in Switzerland

Leaders in Law, the leading platform in its field, is delighted to welcome Dr. Thomas Weibel as our exclusively recommended & endorsed Civil Procedural expert in Switzerland. Dr Thomas’s office is located in Zurich.

Thomas Weibel advises and represents clients before state courts and arbitral tribunals. His practice focuses on complex national and transnational commercial disputes, recognition and enforcement of foreign judgments, injunctive relief, and white collar crime. Thomas publishes and lectures on a regular basis on national and international civil procedure law as well as Swiss inheritance law. He is editor in chief for civil procedure law for a periodical on Swiss case law.

If you require any assistance in this area, please use the contact details provided in Thomas’s profile below or contact us at info@leaders-in-law.com & we will put you in touch.

Europe and UK’s Response – Critical Raw Materials Supply Chains

“To solve global warming, we have to fully electrify the entire economy, including the transportation fleet. There are currently 1.3 billion cars on the planet. By mid-century, that will be close to 3 billion, just light duty cars. To make all of those electric vehicles, as opposed to internal combustible engine, you’ll need more than $5 trillion worth of cobalt, nickel, lithium and copper. That’s incremental, in addition to all the demand for those materials, for just business as usual activities.” CEO Kurt House, KoBold.

This is just one of the many similar public statements from governments, business owners and investors drawing attention to the scale of the task ahead to transition societies and industries to a world where energy needs will depend less on fossil fuels and more on green energy and, as will be seen, is the focus of recent western government actions and policies.  Cobalt, nickel, lithium and copper are in relatively abundant supply. But that is not the case with other minerals, such as rare earths. Without these particular “critical raw materials” there will be no large-scale development of the magnets that will power the EVs and wind turbines which are crucial to the success of green energy policies in the western world.

China has dominated the global mining production of REE, the processing of REE into RE metals and alloys, and the manufacture of permanent magnets for the last 20 or so years.  Whilst China’s share of the world’s REE mining has declined in recent years, it still manufactures around 90% of all NdFeB metals and magnets. In 2018 China supplied the EU with 98.5% and the USA with 95.2% of their respective imports of RE metals and alloys.

The creation of resilient non-Chinese rare earth to magnet supply chains (NCSC) is now the focus of many western governments to reduce their reliance on Chinese imports.

What are “rare earth elements” and “permanent magnets”?

Rare earth elements (REE) are a group of 17 chemical elements that occur together in the periodic table. They are very difficult to mine because they are rarely found in economically extractable concentrations.

REE and metals and alloys that contain them are used in many everyday devices such as batteries, smart phones, catalytic converters, magnets, fluorescent lighting and much more. They also play an essential role in defence electronics in precision-guided weapons and communications equipment.

They are considered to be “critical raw materials” (CRM) because of their “critical” importance, in particular to the production of the magnets that power electric vehicles (EVs) and wind turbines.

A “permanent magnet” is an object made from material that is magnetized and creates its own persistent magnetic field – an everyday example is the simple “fridge” magnet. The strongest, lightest and most commercially available permanent magnet is the NdFeB magnet formed by neodymium (Nd) iron, and boron with praseodymium (Pr) and other REE. This is the magnet most commonly used in motors for hybrid vehicles, EVs and wind turbines.

The global demand for NdFeB magnets is projected to double this decade. The European Commission’s long-term outlook is, “In addition to rapidly rising demand driven by electric vehicles and energy storage, demand for rare earths critical for products like wind turbines could increase ten-fold by 2050”.

Western governments’ actions and initiatives.

A key objective of the establishment and maintenance of resilient CRM supply chains into the west is to ensure that the necessary components for the manufacture of the equipment and infrastructure that is crucial to achieving the transition to sources of greener energy, is increasingly independent of, and less reliant on, China.

Government support for the REE industry in general and NCSC in particular is essential if the private sector is to be able to economically produce the crucial components for the EV and wind turbine sectors. Support will need to come in many forms, including grants, tax allowances, debt financing and equity investment.

Over the last 12 months or so several western governments have announced initiatives and policies in relation to CRM which are necessary to transition to an energy system which is substantially less dependent on fossil fuels.

European Union

In September 2020 the European Commission released its Critical Raw Materials Action Plan focussing on “the most pressing need, which is to increase EU resilience in the rare earths and permanent magnets value chains, as these are vital to most EU industrial ecosystem”.

United Kingdom

The UK Government does not have a critical raw materials policy as such.

On 15 March 2021 in the course of his speech to the House of Commons, the Vice-Chair of the All-Party Parliamentary Group for CRM outlined the Group’s priorities in terms of government policy including “the development of a critical mineral midstream” i.e. the production of RE metals and alloys and the manufacture of RE permanent magnets in the UK.

The UK government’s objectives are ambitious; current policy identifies 2030 as the year when:

  • offshore wind turbines will produce more than enough electricity to power every home in the country; and
  • sales of cars with internal combustion engines will be banned.

 US

In 2017 President Trump initiated a strategy to ensure secure and reliable supplies of CRM. In February this year, President Biden ordered reports within 100 days from a variety of government agencies, identifying the risks in the supply chains for CRM including REE and policy recommendations to address those risks.

Canada

In March 2021, Canada, a major resource economy, released its list of minerals considered critical for the sustainable success of Canada and “our allies”.

Australia

Another major resource economy, Australia, earlier this year released its 10-year “road map” to create more REE processing capacity as part of a broader push to make Australia one of the developed world’s linchpin suppliers of REE and other CRM.

International cooperation

The policies of EU, UK, US, Canada and Australia all acknowledge that the establishment of NCSC to meet their projected domestic REE processing and magnet manufacturing ambitions will require international cooperation and investment.

Examples of such cooperation include:

Europe

The European Raw Material Alliance (ERMA) is an alliance of organisations from the European public and private sectors covering the entire critical raw materials value chain. Its immediate objective is to increase the resilience of EU supply chains for rare earth magnets and motors, batteries, and fuel cells.

The EU’s Action Plan highlights the need to diversify sourcing of CRM from third countries requiring “strategic international partnerships and associated funding to secure a diversified supply of sustainable critical raw materials, including through undistorted trade and investment conditions, starting with pilot partnerships with Canada, interested countries in Africa and the EU’s neighbourhood”.

US – Canada

In June 2019, the US and Canadian governments agreed to develop resilient, integrated North American supply chains for CRM. A Critical Minerals Working Group has been established and Canada now participates in the US-led Energy Resource Governance Initiative.

US – Australia

In September 2019, the US and Australian governments agreed to develop a Critical Minerals Action Plan to “improve the security and supply of rare earths and other critical minerals in the United States and Australia; increase US-Australia connectivity throughout the supply chain of critical minerals; and leverage the interest of other like-minded partners to improve the health of the global critical minerals supply chain.”

US, Canada and Australia

The US, Canada and Australia have created the Critical Minerals Mapping Initiative to assist with the building of a diversified critical minerals industry.

US, UK, Canada, Australia and New Zealand – The “Five Eyes”

There have been several press reports concerning the possible expansion of the “Five Eyes” intelligence-sharing alliance into a strategic economic relationship that pools key strategic reserves such as CRM and develops NCSC amongst its members.

In its March 2021 Report, the Polar Research and Policy Initiative recommended the creation of a Five Eyes Critical Minerals Alliance with a particular focus on Greenland’s CRM deposits.

Conclusion

It is early days yet to assess the effectiveness of these policies in the development of NCSC to produce permanent magnets that will be price competitive with Chinese producers. There is considerable private sector activity around “the development of a critical mineral midstream” (with government support) but, as The Times’ editorial on 5 April warns, “[T]o reduce reliance on Beijing, the first step is to mine rare earths in new locations”, an issue we consider in the next article in this series.

Hogan Lovells to launch Office in the Irish Capital

International law firm Hogan Lovells is opening an office in the Irish capital of Dublin, it announced today.

The new office will initially focus on financial regulatory and antitrust work, with a number of the firm’s lawyers based in London, who specialise in these areas, relocating to Dublin.

Christopher Hutton, Hogan Lovells’ new Dublin office managing partner, said in a statement:

“Putting clients at the centre of everything we do is a strategic priority for the firm, and having a presence in Dublin is about doing just that. Hogan Lovells opening an office there is welcomed by our existing clients, and also presents new opportunities. I am excited to head up the firm’s new offering in Ireland.”

Hogan Lovells hasn’t ruled out offering training contracts or opportunities for trainees to be seconded to the Dublin office. “We would not rule anything out if the right opportunity arises,” a spokesperson for the firm told Legal Cheek. “Staffing and recruitment [including secondments] will be driven, as always, by the needs of our clients and the business.”

Hogan Lovells is the latest law firm to set up a base in Dublin. Ashurst opened an office in Dublin earlier this month, while Dentons launched in the Irish capital last year.

Thousands of solicitors from across England and Wales registered in Ireland in the wake of the 2016 Brexit vote to maintain their EU practice rights. The Law Society of Ireland delivered a blow in the autumn when it said they won’t be entitled to qualify in Ireland unless they have a physical presence in the country.

Other international firms that opened Dublin offices in the aftermath of the Brexit referendum include DechertDLA PiperFieldfisher and Pinsent Masons. It’s likely several other firms will follow suit so they can continue to practise in Europe.

Top magic circle partner makes switch to investment banking

A top magic circle partner is making the switch from a life in law to one in investment banking.

Charlie Jacobs, the senior partner at magic circle firm Linklaters, is set to join global investment bank, JP Morgan. According to a statement by the mega-bank, Jacobs will assume the role of co-head of UK investment banking.

The somewhat unusual move to finance comes after South African-born Jacobs recently celebrated 30 years at the elite law firm. He made partner in 1999 and was elected to senior partner in 2016.

At JP Morgan, Jacobs will reportedly advise blue-chip UK companies on the challenges arising from a post-Brexit market and recovery from the COVID-19 crisis. The M&A specialist will reportedly take up his new banking gig later this summer.

A Linklaters spokesperson said:

“We can confirm that, once his term as senior partner ends, Charlie Jacobs will be taking on a new role as co-head of J.P. Morgan Cazenove’s U.K. investment banking operations. Whilst Charlie will not be starting at J.P. Morgan until later in the year, we look forward to staying in touch with him once he begins his new role.”

News of the move comes just a week after JP Morgan announced the appointment of City solicitor turned politician Chuka Umunna as its head of environmental, social and corporate governance (ESG) in c

EU Top Court Rules Unrestrained Surveillance of Phone Data Unlawful

The European Court of Justice ruled Tuesday that “general and indiscriminate transmission or retention of traffic data and location data” is banned.

The court was ruling on proceedings brought before bodies in the UK, France and Belgium dealing with these privacy and data surveillance issues.

The court found that the directive on privacy and electronic communications precludes “national legislation requiring providers of electronic communications services to carry out the general and indiscriminate transmission of traffic data and location data to the security and intelligence agencies for the purpose of safeguarding national security.”

The directive also precludes “legislative measures requiring providers of electronic communications services [and providers of access to online public communication services and hosting service providers] to carry out the general and indiscriminate retention of traffic data and location data as a preventive measure,” as these retention measures are in serious “interference” with fundamental rights guaranteed by the EU Charter.

However, where a member state is facing is a genuine and serious threat to national security, the directive does not “preclude recourse to an order requiring providers of electronic communications services to retain, generally and indiscriminately, traffic data and location data.” Provided that such an order is limited in time, is strictly necessary and is “subject to effective review either by a court or by an independent administrative body.” Strict exceptions are also made for targeted data collection on individuals believed to be involved in terrorist activities.

Finally, the court held that the directive “requires national criminal courts to disregard information and evidence obtained by means of the general and indiscriminate retention of traffic and location data in breach of EU law.”

Changes to Business Law, COVID-19

Germany’s lower and upper houses of parliament have passed the federal government’s package of measures designed to tackle the crisis surrounding the coronavirus and assist others in overcoming its economic impact.

The coronavirus pandemic is having a substantial impact on the overall economy. The Gesetz zur Abmilderung der Folgen der COVID-19-Pandemie (Act to Mitigate the Effects of the COVID-19 Pandemic) introduces major legal changes. We at the commercial law firm MTR Rechtsanwälte can report that these changes also affect business law.

The scope of the measures ranges from short-time allowance (Kurzarbeitergeld), loans and rescue funds, to changes to insolvency law and company law. In addition to preserving the business and jobs as well as ensuring liquidity, it is necessary for companies’ decision-making capacity to be maintained.

To ensure that important decisions can still be taken in times of crisis, the federal government has also strengthened the capacity of businesses, cooperatives, homeowners’ associations, as well as other associations, to act and make decisions. Moreover, stock corporations will now be able to hold virtual annual general meetings.

To ensure that companies remain able to act and make decisions, the legislation provides for new ways of conducting annual general meetings in stock corporations (Aktiengesellschaft, AG), commercial partnerships limited by shares (Kommanditgesellschaft auf Aktien, KGaA), mutual insurance companies (Versicherungsvereins a.G., VVaG), and European companies – also known as a “Societas Europaea” (SE for short) – shareholders’ meetings in limited liability companies (GmbH), general meetings and representatives’ assemblies in cooperatives, and members’ meetings in associations. In the case of the AG, KGaA, and SE, for instance, it will be possible to participate in the annual general meeting online without the need for authorization pursuant to the articles of association. The legislation also allows annual general meetings to be held remotely.

Furthermore, it will be possible to reduce the notice period to 21 days. The board of directors will be able to arrange advance payments on the net profit, even in the absence of provisions to this effect in the articles of association.

The annual general meeting is to be held within the financial year, which represents an extension to the previous eight-month deadline. Since virtual annual general meetings without compulsory attendance are uncharted territory, the risk of legal challenges will be largely excluded.

The plans also feature comparable measures to facilitate virtual meetings and decision-making mechanisms that take place outside of meetings for associations and cooperatives.

Germany’s Federal Financial Supervisory Authority, the BaFin, is also revising its supervisory role in response to the circumstances brought about by the coronavirus pandemic, including, for example, with regards to the disclosure of financial circumstances when grading creditworthiness, as well as with respect to obligations pertaining to conduct and information in securities trading.

Lawyers with experience in the field of business law can offer advice.

https://www.mtrlegal.com/en/legal-advice/business-law/corona-and-business-law.html

Alternative Investment Funds in Cyprus

Cyprus in the last few years is establishing itself as one of the top investment fund centers in Europe.

The Fund management industry is fast becoming one of the most promising sectors of Cyprus economy. The volume of funds and assets under management have shown huge increase, as assets under management have more than tripled from €2.1 billion in 2012 to €6.8 billion in June 2019.  Assets under management are expected to reach €20 billion in the next five years.

What is an Alternative Investment Fund or AIF in short?

Alternative Investment fund is joint investment agreement raising capital from a number of investors with a view to investing it in line with an investment policy for the benefit of the involved investors.

Legal framework.

Alternative Investment Funds legislation has aligned Cyprus legal and regulatory framework with the European directives on asset management enhancing transparency and investor protection.

Cyprus has introduced a new law offering more investment structuring possibilities and upgraded rules for the authorisation, on-going operations, transparency requirements and supervision of Cyprus AIFs. In addition, new rules shape the regulation on the role and responsibilities of their directors, custodians but also external managers.

AIFs that are established under domestic Cyprus fund legislation can be sold on a private placement basis or marketed to professional investors across the EU under the AIFMD passport.

An AIF can take the following legal forms and may be established with limited or unlimited duration:

  • Fixed Capital Investment Company – FCIC
  • Variable Capital Investment Company – VCIC
  •  Limited Partnership – LP
  • Common Fund – CF

A Variable Capital Investment Company (VCIC) and Fixed Capital Investment Company (FCIC) may be set-up as self-managed, or it may be externally managed. A Limited Partnership (LP) and Common Fund (CF) must always appoint an external manager.

Types of Investors.

Professional.

A professional investor is the person who has the experience and expertise to make his/her own investment decisions and assess the risks involved. The investor must also comply with the criteria prescribed in the Markets in Financial Instruments Directive.

Well-informed.

When a person is not considered a professional investor confirming in writing that he is a qualified investor aware of the risks involved with an investment in the relevant AIF. Also, a Well-informed investor has to make an investment of a minimum €125,000 or has been evaluated by a licensed bank, or an authorised investment firm or an authorised Management Company that he has the experience and knowledge in evaluating an investment opportunity.

Retail.

Any investor who not considered either professional or well-informed investor.

Types of AIF’s. There are two different types of AIF’s.

AIF with unlimited number of persons.

  • May be marketed to “retail”, or “well-informed” and/or “professional investors”
  • Freely transferable investor shares
  • Minimum capital requirements of €125,000 or €300,000 if a self-managed fund
  • Must be appointed to a global custodian
  • Can be listed on stock exchange, and AIFs marketed to retail investors can be traded
  • Depending on the investor type and the overall investment policy may fall under certain investment restrictions

AIF with limited number of persons.

  • May be marketed only to “well-informed” and/or “professional investors”
  • Cannot exceed total number of 75 investors / unit holders
  • Freely transferable investor shares, with the condition that their transfer does not result in the AIF having more than 75 investors
  • May not be required to appoint a licensed manager or a custodian in some cases
  • Assets under management do not exceed the AIFMD thresholds of €100 million (including leverage) or €500 million (5-year lock-up period without leverage)

Tax advantages of AIF in Cyprus.

  • Notional Interest Deduction (NID) for new equity may reduce taxable base for interest received by up to 80% (for company-type funds) reducing the effective tax on interest to 2.5%Tax resident funds are eligible to all benefits under a double tax treaty or the EU Directives
  • Services provided by the Investment Manager of fund are not subject to VAT
  • No withholding tax on any type of payments to non-residents
  • No subscription tax on net assets of a fund
  • Extensive network of Double Tax Treaties in place with more than 60 countries
  • Dividends received, capital gains arising from sale of property abroad, capital gains from sale of shares of foreign property companies are excluded from tax

Other advantages of AIF in Cyprus.

  • Easy to set-up, cost-efficient management and operations
  • A framework fully in line with EU directives
  • Full transparency through annual audited reports to CySEC and investors (That includes financial statements, borrowing information, acquiring portfolio information and Net Asset Value)
  • Supervised by a competent and accessible regulatory authority
  • No restrictions imposed by the Regulator on type of investments
  • Can be self-managed – subject to the approval of the Regulator
  • Can be set-up as umbrella funds with multiple compartments
  • Can be listed on Cyprus Stock Exchange and other recognised EU stock exchanges ( in case the number of investors is not limited)

Business Insolvency – New EU Rules

The EU is giving reputable bankrupt entrepreneurs a second chance, and making it easier for viable enterprises in financial difficulties to access preventive restructuring frameworks at an early stage to prevent insolvency.

The Council formally adopted today the directive on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures. This decision marks the end of the legislative procedure.

The overall objective of the directive is to reduce the most significant barriers to the free flow of capital stemming from differences in member states’ restructuring and insolvency frameworks, and to enhance the rescue culture in the EU based on the principle of second chance. The new rules also aim to reduce the amount of non-performing loans (NPLs) on banks’ balance sheets and to prevent the accumulation of such NPLs in the future. In doing so, the proposal aims to strike an appropriate balance between the interests of the debtors and the creditors.

The key elements of the new rules include:

  • Early warning and access to information to help debtors detect circumstances that could give rise to a likelihood of insolvency and signal to them the need to act quickly.
  • Preventive restructuring frameworks: debtors will have access to a preventive restructuring framework that enables them to restructure, with a view to preventing insolvency and ensuring their viability, thereby protecting jobs and business activity. Those frameworks may be available also at the request of creditors and employees’ representatives.
  • Facilitating negotiations on preventive restructuring plans with the appointment, in certain cases, of a practitioner in the field of restructuring to help in drafting the plan.
  • Restructuring plans: the new rules foresee a number of elements that must be part of a plan, including a description of the economic situation, the affected parties and their classes, the terms of the plans, etc.
  • Stay of individual enforcement actions: debtors may benefit from a stay of individual enforcement actions to support the negotiations of a restructuring plan in a preventive restructuring framework. The initial duration of a stay of individual enforcement actions shall be limited to a maximum period of no more than four months.
  • Discharge of debt: over-indebted entrepreneurs will have access to at least one procedure that can lead to a full discharge of their debt after a maximum period of 3 years, under the conditions set out in the directive.

Next steps

This formal vote marks the end of the legislative process. The directive will now be formally signed and then published in the official journal. Member states will have two years (from the publication in the OJ) to implement the new provisions. However, in duly justified cases, they can ask the Commission for an additional year for implementation.

Background

The proposal was presented by the Commission on 22 November 2016. The new rules complement the 2015 Insolvency Regulation which focuses on resolving the conflicts of jurisdiction and laws in cross-border insolvency proceedings, and ensures the recognition of insolvency-related judgments across the EU.

The European Parliament formally voted on the directive on 28 March 2019.