Articles & Reports Archives - Page 2 of 102

NFT Risk: Connecting the dots

April 21, 2022

While most people might think of funny, pricey pieces of digital art when they hear the term ‘NFT’ (non fungible token), NFTs are being employed in an increasing number of applications, including games, music and even automobiles – Alfa Romeo announced its subcompact Tonale SUV will include an NFT that will record vehicle data, generating a certificate that can be used to assure the car has been properly maintained. In addition, NFT arts are used as collateral for financing where lenders could foreclose and own the NFT of a defaulted loan “at a darn good price”. New beneficial applications of NFTs are emerging. For instance, NFTs linked to physical art made by traditional indigenous artists can be listed on online marketplaces, offering these artists a global audience that would otherwise be inaccessible to them. The Need For NFT Risk Assessment But, as the transaction value and usage of NFTs increase, so too do the needs for the owner to fulfil obligations in, inter alia, the reporting for auditing, tax and regulatory compliance purposes, due diligence (e.g. where NFT assets are part of acquisition or merger negotiations), the avoidance of fraud, and ensuring transactional confidence. These risks became all the more tangible when the UK’s tax department, Her Majesty’s Revenue and Customs (HMRC), seized NFTs as part of a £1.4 million fraud case. Identifying these risks is obviously beneficial – the riskiness of an asset affects its validity which, in turn, impacts its value. Yet, it is far more challenging to map such risks than it would appear upon first glance. Complexities Of NFT Risk Assessment To start, a proper...

Effective, Strategic Crisis Management – Before the Crisis Happens

April 21, 2022

No one ever wants a crisis to happen. As a Legal or Compliance Officer, it is important to be ready and to prepare before it does. As John F. Kennedy said, “When written in Chinese, the word “crisis” is composed of two characters. One represents danger and the other represents opportunity.” Depending on the crisis, there are dangers or certain high-risk situations that you and the company must overcome or resolve. You can never be fully prepared for a crisis, but you can form an effective strategy to weather the storm. You have an opportunity to show your agile leadership and plan ahead before a certain crisis happens. Here are some useful tips to create a plan or strategy for a crisis that may arise in the future: 1. Ensure that you have a harmonized approach to Legal and Compliance risk and opportunity assessment and management in your company. A well-designed compliance program is based on the understanding and management of the company’s risks and opportunities. E.g. in Asia Pacific, one of the high-risk areas is a company’s interactions with external third parties. Implement a third party risk management approach to mitigate the risks and prepare for possible scenarios where a potential crisis may arise when interacting with an external third party. 2. Create a crisis management task force. Form the team depending on the crisis at hand. Your General Managers (GMs) and/or leadership teams in your company can have relevant training to know the process/procedure of what to do if a crisis occurs. E.g. develop a contingency & response plan; provide media training for certain key employees to...

Conflicts and Clarity: UK Supreme Court provides further clarity on important conflict of law issues frequently arising in cross-border claims

February 24, 2022

The recent decision in FS Cairo (Nile Plaza) LLC v Lady Brownlie (as Dependant and Executrix of Professor Sir Ian Brownlie CBE QC) [1] has provided instructive guidance on the breadth of the jurisdictional gateway for tort claims and brought further clarity regarding the conceptual differences between the ‘default rule’ and the ‘presumption of similarity’ that are often relied upon in the application and pleading of foreign law. This decision is of widespread relevance given the frequency with which these issues arise in cross-border claims. The case concerned an application to serve claims in tort and contract on an Egyptian company out of the English jurisdiction. Before permission may be given for service of a claim form outside the jurisdiction, the relevant domestic rules require that the claimant must establish that: (1) the claim falls within one of the gateways set out in paragraph 3.1 of Practice Direction (“PD”) 6B to the CPR; (2) the claim has a reasonable prospect of success; and (3) England and Wales is the appropriate forum in which to bring the claim. [2] The defendant raised two issues before the Supreme Court. The first (the “tort gateway issue“) was whether Lady Brownlie’s (the claimant’s) claims in tort satisfied the requirements of the relevant jurisdictional ‘gateway’ in the CPR. The second (the “foreign law issue“) was whether, in order to show that her claims in both contract and tort had a reasonable prospect of success, Lady Brownlie would have to provide evidence of Egyptian law. The Tort Gateway Issue Paragraph 3.1(9)(a) of PD 6B to the CPR provides that domestic jurisdiction can be assumed in...

M&A activity mostly back to boom times across Asia Pacific

January 18, 2022

One clear sign that the Covid-19 crisis may have been both less impactful than first feared and also now ending is that mergers and acquisition (M&A) activity is returning to normal in the Asia Pacific. A year ago, most businesses were contemplating the frighteningly uncertain prospect of what to do if the pandemic continued in 2021. Many Asia Pacific companies simply decided to push on as normal and either begin new M&A deals or finalize those that were set on pause. According to EY, in the first half of 2021 M&A values in the region increased to US$535 billion, up from US$284b in the same period in 2020, The region has counted more than 50 deals valued over US$1b so far this year, an increase of almost five times year-on-year. The EY report pointed to the technology sector as the leader of M&A deal activity, accounting for a third (28%) of the cumulative deal value in the first half of 2021, with deal value increasing by 88% year-on-year. The advanced manufacturing and mobility sectors were also active this year. According to a Mergermarket report, in 2020 Asia Pacific M&A deal volume decreased by a nominal 4%, compared to the global decline of 14%. The report said rising consumer confidence led these trends and the region retains a positive GDP outlook. Eversheds Sutherland Head of International M&A Asia Charles Butcher said the pandemic in 2020 had an obvious activity-suppressing impact early on with many investors adopting a precautionary, “wait and see” approach regarding M&A activity. “By the second half of 2020 we were already seeing the market adapting in terms...

Vietnam’s M&A Landscape in 2021: A Q&A with Sesto Vecchi of Russin & Vecchi

January 18, 2022

Can you give us a general overview of the current M&A landscape in Vietnam? Interestingly, despite a severe business lockdown between May and November 2021, Vietnam saw a steady stream of smaller M&A activity. Some involved transactions in the pipeline and many of them simply continued. They revolved around existing business activities, renewable energy, fintech and industrial real estate. The moving party was normally foreign. The reason, we suppose, was that the downturn and the immediate problems it caused resulted in Vietnamese companies searching for foreign investors to increase their stake. How has Covid-19 impacted M&A in Vietnam? According to a report by the Corporate Investment and Mergers & Acquisitions Center (CMAC), in 2020 the value of M&A in Vietnam was estimated to have fallen by about 49% year-on-year to US$3.5 billion due to Covid-19. Most of the M&A activity that year was in the real estate, finance-banking, industry and retail sectors, and that was before the strong negative impact of Covid, so the lockdown may have been affected by financial factors or normal economic factors. We are yet to see the updated report for 2021. Generally, however, new M&A activities in the south of Vietnam were almost frozen during mid-2021 due to the strict lockdown in Ho Chi Minh City and other nearby provinces and only now is M&A slowly recovering. It is expected that the M&A volume in 2021 will stay at about the 2020 level. What are some trends emerging within M&A activities in Vietnam? To the extent that one can perceive trends, renewable energy, education, fintech and industrial real estate all seem to have strong...

Artificial Intelligence & Personal Information Protection in Korea

November 10, 2021

The rapid development of artificial intelligence (AI) promises plenty of benefits and opportunities but also comes with risks when processing personal information. These risks include: Large-scale data processing: the extensive learning data used in AI development likely involves a variety of personal and sensitive information; Complexity and lack of transparency: the methods used in processing personal information to develop and operate AI services are complex, which makes it difficult for data subjects to know how their personal information is processed; Automation and uncertainty: the difficulty in predicting the results of data processing in automated services can lead to unexpected consequences such as privacy infringement, social discrimination and bias. A recent controversy in South Korea about AI and personal information protection involved “Lee Luda,” an AI chatbot service released on December 23, 2020. Lee Luda was quickly shut down due to complaints about its inappropriate use of personal information. For example, the providers of Lee Luda were accused of directly copying user conversations from another website they serviced without consent. Although the service providers claimed they had consent to collect and use personal information, their stated purpose for collecting and using the data – “service development” – was considered to be too abstract. To address the many issues, South Korean regulators are strengthening the safety and integrity of AI-related personal information processing. For example, the Ministry of Science and ICT released its “People-centered National Artificial Intelligence Ethical Guidelines,” while the Personal Information Protection Commission released the “Guidelines for Protecting Personal Information Processed by Automated Methods” along with the “Artificial Intelligence Personal Information Protection Self-Checklist.” This article provides an overview of...

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