CURRENT MONTH (November 2023)
New Zealand Steps Up Enforcement of Foreign Investment Rules
By David Quigg, Asha Stewart, and Matt Woolley, Quigg Partners, New Zealand
The New Zealand Overseas Investment Office (“OIO”) is responsible for enforcing New Zealand’s strict foreign investment rules. In recently published statistics for the year ended June 30, 2023, the OIO recorded that 114 incidents were triaged for possible breaches of New Zealand’s foreign investment rules, with eighty-six proceeding for further investigation, and in forty incidents enforcement actions were taken. Such actions include seeking court orders imposing penalties or requiring the disposal of assets.
By way of background, New Zealand’s foreign investment regime requires that consent be obtained from the OIO prior to investing in significant business assets, sensitive land, or fishing quota. If consent is not required, notification to the OIO may be required (or desirable) under the new National Security and Public Order regime. Accordingly, it is strongly recommended that advice be sought prior to any direct or indirect New Zealand investment.
Canadian Securities Administrators Publish Business Conduct Rules for Trading in OTC Derivatives
On September 28, 2023, the Canadian Securities Administrators (“CSA”), an organization of Canada’s provincial and territorial securities regulators, published Multilateral Instrument 93-101 Derivatives: Business Conduct (“93-101”).
Canada was previously the only G20 country that had not published business conduct rules for its over-the-counter derivatives market. 93-101 addresses this gap by implementing rules and standards that apply to persons qualifying as “derivatives advisors” or “derivatives dealers” operating in Canada. It takes a two-tier approach by setting out general obligations owed to all counterparties, as well as additional heightened obligations owed to counterparties qualifying as non-eligible derivatives parties.
93-101 uses a business trigger test to determine who qualifies as a “derivatives advisor” or “derivatives dealer” operating in Canada, and it provides several exemptions (including exemptions for certain foreign derivatives advisors already subject to comparable regimes in enumerated foreign jurisdictions). The intent is to broadly harmonize Canada’s regulatory approach with other International Organization of Securities Commissions jurisdictions.
93-101 has been adopted in all Canadian provinces and territories other than British Columbia. The CSA expects British Columbia to adopt substantially similar rules at a later date. 93-101 and its companion policy, Companion Policy 93-101 Derivatives: Business Conduct, are scheduled to come into force on September 28, 2024. The CSA’s notice of publication and a full copy of 93-101 may be accessed here.
Italian Beneficial Ownership Disclosure Requirements
By Gianmarco Mileni, Nunziante Magrone Studio Legale Associato
On October 9, 2023, the Register of the Ultimate Beneficial Owner came into force in Italy. All Italian companies, trusts, and other legal entities (e.g., associations, foundations) are obliged to declare their beneficial owners at the competent Companies Registry by December 11, 2023, at the latest.
Pursuant to the anti-money laundering legislation, the beneficial owner is the natural person (or persons) who ultimately owns or exercises control over a legal entity. If it is not possible to identify such person, the beneficial owner shall be deemed to be the natural person (or persons) who has the power of legal representation, who exercises the power of administration, or who manages the legal entity.
Any change in ownership must be reported within thirty days of its occurrence and, in any event, the actual ownership must be confirmed once every twelve months, with the option for companies to provide confirmation when filing annual accounts.
In the event of failure or delay in communication, penalties ranging from €103.00 to €1,032.00 per obligated party may be imposed.
Mexico’s New Restrictions on the Importation of Mineral and Petrochemical Products Related to the Hydrocarbon Industry
In late October, President of Mexico Andrés Manuel López Obrador published a decree (the “Decree”) that temporarily restricts the importation of products related to the fuel and hydrocarbons market (the “Restricted Products”). The Decree is aimed at fighting the illicit fuel market and at mitigating the negative impact that these products have on both public health and transportation vehicles.
The Restricted Products belong to a total of sixty-eight tariff classifications, which are specifically listed in the Decree. They include, among others, (a) mineral products such as petroleum oils, jet fuel or gasoline with octane number less than 87, hexane, heptane, lubricating greases, fuel oil, and kerosene; and (b) petrochemical products, hydrocarbon derivatives, methanol, butane, and biodiesel and its blends.
The restrictions will be in effect until a set of regulatory actions provided in the Decree is carried out by various government agencies in the ministries of energy and economy, as well as the country’s Revenue Administration Service.
Individuals and companies affected by the Decree are entitled to file a Constitutional Protection Action (Juicio de Amparo) before a Mexican Federal Court to challenge its effects.