Modern Slavery Reporting Obligations

Posted in Competition & Regulation, UK Government

The UK’s Modern Slavery Act has imposed far reaching reporting requirements on companies to produce an annual statement explaining the steps they have taken to eliminate modern slavery in their businesses, and also within their supply chains. The concept of modern slavery encompasses a range of exploitative behaviour including slavery, servitude, forced or compulsory labour, sexual exploitation, securing services from children and vulnerable people, and human trafficking. These new reporting obligations became effective as of 29 October 2015. This Alert sets out an overview of the statutory guidance published by the UK Government explaining its expectations for compliance.

By way of reminder, the Act’s reporting obligations apply to all companies that carry on some business in the UK, and that have a worldwide turnover in excess of £36m. There is no minimum threshold for the volume of turnover or activity that needs to be linked to the UK, and the turnover of any subsidiaries should be included in the calculation. Whether or not a company “carries on business in the UK” will be assessed using a common sense approach. This approach includes, but is not limited to, considering whether it has any commercial activities in the UK. That common sense approach may, however, allow non-UK companies that do not have a demonstrable business presence in the UK to fall outside of the Act’s jurisdiction. Similarly, simply having a UK subsidiary will not automatically mean that a parent company carries on business in the UK – much will depend on the degree of independence within the group organization.

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Loan Market Association’s East Africa, Nigeria and Zambia facility agreement update

Posted in East Africa, Loan Market Association

On 1 October 2015, the Loan Market Association (LMA) published a revised version of its single currency secured and unsecured term facility agreement for use in East Africa (Kenya, Tanzania and Uganda), Nigeria and Zambia. The amendments incorporate recent changes in law and market practice updates in the relevant jurisdictions. The accompanying user guide has also been updated with the relevant changes.

The facility agreement and user guide were last updated in June 2015 to incorporate Zambian law. A South African law single currency secured term facility agreement was also added and the existing South African law facility agreements were revised in June 2015.

The documents, including mark-ups, are available to members of the LMA from the LMA website.


Nigeria’s Anti-Corruption Campaign Continues as Two Key Arrests Are Made in a Widening Graft Investigation

Posted in Anti-Corruption, Nigeria

Nigerian President Muhammadu Buhari is pressing forward with his crackdown on corruption and is sending a clear message that corruption no longer will be “business as usual” in his country. During his September 28th speech before the U.N. General Assembly, President Buhari urged the international community to step up its efforts to locate and return to Nigeria millions of dollars of funds that allegedly were stolen during previous administrations and are being held in foreign bank accounts. Buhari alleges that former government officials stole around $150 billion from government coffers and repatriated those funds to foreign bank accounts. Elected in May on a pledge to address corruption, Buhari has vowed to recover the stolen money and to hold accountable those responsible.

The President appears to be delivering on his promise. According to an official at Nigeria’s Economic and Financial Crimes Commission, earlier this week, Nigeria arrested the co-chairman of local oil firm Atlantic Energy on corruption and money laundering charges. The arrest appears to be part of a widening graft investigation that also has swept up former Nigerian oil minister Diezani Alison-Madueke, who was arrested last week in London. In 2014, the governor of Nigeria’s central bank accused Ms. Alison-Madueke of misappropriating billions of dollars in oil receipts from the state-owned oil company and handing out contracts to Atlantic – an allegation that Ms. Alison-Madueke has denied.

It is unclear whether additional arrests are planned, but this could be the beginning of a broader anti-corruption dragnet.



Posted in Uncategorized

The world marketplace often seems out of reach to small businesses. Accessing foreign markets for the export of goods and services is sometimes not even on the radar for some companies and some determine that it is unattainable because the resources are not there to invest in developing the opportunities. Recognizing this, the U.S. Small Business Administration launched the State Trade and Export Promotion (STEP) Program pilot export initiative to make matching-fund awards to states to assist small businesses enter and succeed in the international marketplace. Since the initial round of founding in FY 2011, the program has awarded cooperative agreement awards with the states totaling $84.4 million. The average award to the states for FY 2015 was $435,000. Each of the 50 states, District of Columbia, Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, Commonwealth of Northern Mariana Islands and American Samoa are eligible to compete for an award and must determine how to use the funds for eligible small business concerns. An “eligible small business concern” (“STEP client”) means a small business concern that (A) has been in business for at least 1-year; (B) is operating profitably (based on operations in the United States); (C) has demonstrated understanding of the costs associated with exporting and doing business with foreign purchasers, including the costs of freight forwarding, customs brokers, packing and shipping; and (D) has a strategic plan in effect for exporting. Examples of the typical projects and awards to STEP clients include funding for foreign trade missions, advance or reimbursement of costs to participate in international trade shows, translation services (including website translations), export training registration fees, and preparation of international marketing materials. A potential STEP client should contact the individual state service provider for more information about eligibility for a STEP award in that jurisdiction.



China Africa Joint Arbitration Centre Established in Johannesburg

Posted in International Arbitration, Trade and Investment

shutterstock_266292722Highlighting the accelerating pace of trade and investment between China and Africa, a new international arbitration center has been established to resolve commercial disputes between Chinese and African parties. The center, which will be called the China Africa Joint Arbitration Centre (CAJAC), will reportedly begin accepting cases in Johannesburg in October 2015 and has future plans to operate from China as well.

The new center is the result of an agreement between the Arbitration Foundation of Southern Africa (AFSA), Africa ADR (AFSA’s external arm), the Association of Arbitrators of Southern Africa, and the Shanghai International Trade Arbitration Centre. The China Law Society is also supporting the endeavor and intends to promote the CAJAC to legal and business interests in China as the preferred mechanism for resolving Chinese-African commercial disputes.

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Public Corruption Isn’t the Only Problem Robbing Africa of its Wealth

Posted in Uncategorized

A narrative which is now familiar to those working in Africa or who are involved in projects relating to Africa tends to enter into all discussions related to poverty and income disparity on that continent. That narrative, that the poverty and deprivation which exist on the continent are directly attributable to pervasive and debilitating government corruption, is a powerful deterrent to many outsiders who are considering involving themselves in Africa’s economies. In order to achieve a fair reading of the issue of why the common African receives less than fair reward from the continents resources, it is fair–and necessary–to question that narrative. According to the recent Report of the High Level Panel on Illicit Financial Flows from Africa(the “Report”), a panel chaired by former South African President Thabo Mbeki, there is a persuasive argument that illicit flight of capital and resources from Africa had cost the Continent about one trillion dollars over the last 50 years. More specifically, the Panel investigated “illicit financial flows” which it identified as flows of money in violation of laws in their origin, or which were illicit by virtue of their movement or use. According to the Report, abusive “transfer pricing” (the price a local African subsidiary might sell a product to its foreign parent or affiliate) is a primary tool used by multinational corporations to illicitly shift profit across different jurisdictions by taking advantage of multi-level structuring. While a transfer pricing policy is required for the complex legal structures many companies operate through, the lack of government rules or legislation or enforcement in some instances prevents allows the abuse to foster.   Without effective tools of enforcement, the international companies not only evade proper taxation, but they have a lower base rate on which to pay royalties and other profit sharing to the host government. Unfortunately, most national, provincial or state governmental bodies across Africa have so far failed to stem this gaping hole in their respective fiscal regimes. However, there are efforts to address the misuses and abuses of transfer pricing. The Africa Transfer Pricing Summit scheduled for this September was organized to provide a forum to highlight these issues and hopefully advance the discussion to close this hole through transfer pricing legislation and policies. In addition to abusive transfer pricing, the Report identified the following as methods in which some companies deprive African host countries of potential taxable cash flow: (1) trade mispricing, defined as “the falsification of the price, quality and quantity values of traded goods for a variety of purposes”; (2) misinvoicing of services and intangibles such as intra-group loans and intellectual property and management fees; and (3) unequal contracts and tax incentives between governments and the private sector, particularly in the extractive sector. Closing these gaps in revenue administration is imperative for governments as they begin to focus on launching their post-2015 development agendas.


World Bank Announces New Procurement Procedures

Posted in Uncategorized

The World Bank Board of Executive Directors approved a new Procurement Framework (Framework) for its procurement policies, regulations, and procedures on July 21, 2015. The Bank described this new Framework as “a once-in-a-generation systemic reform and culture change” and “a comprehensive modernization of the Bank’s entire procurement regime.” These changes are the result of the Bank’s first ever comprehensive review of its procurement practices. The Bank undertook this three-year review because it recognized that much has changed since its procurement guidelines were written in the 1960s and its one-size-fits-all approach is not sufficiently flexible to meet its clients’ current needs.

Changes include (1) providing more flexibility during the source selection process; (2) streamlining the Bank’s review of low-risk/ low-value contracts while increasing the Bank’s involvement in technically complex and risky contracts; (3) streamlining the process for borrowers to use Alternative Procurement Arrangements rather than the Bank’s arrangements; and (4) devoting additional attention to and revising aspects of the complaints process.

The newly approved Framework consists of the Procurement Policy, Directive, Procedure, and Procurement Regulations for Borrowers, which are annexes to the Framework. It replaces OP 11.00, BP 11.00, and the Procurement and Consultant Guidelines. Breaking with tradition, the Framework combines the Bank’s “red book” and “green book” into a unified set of guidelines.

The World Bank is working quickly to implement the newly approved changes. Full implementation may take years, but the initial effects should be apparent in the next few months. Borrowing organizations should expect some delays, but overall these significant changes will expedite the processing of loans. The Framework also provides flexibility to Borrowers. It will enhance opportunities for technologically advanced companies with sustainable solutions who will now be competitive for awards where they might not have been under the Bank’s traditional procurement policies. Extensive training of the Bank staff as well as the staff of borrowing entities will be critically important, but once implemented, these flexibilities may present new opportunities for well positioned companies.

Greenberg Traurig will be an important resource for those who want to take advantage of the new Procurement Framework. Additional details about the new Framework are discussed in our article, “The New World Bank Procurement Framework,” which was published in the August 5, 2015 edition of The Government Contractor (Thomson Reuters).

Entrepreneurship & President Obama’s Africa Visit

Posted in Uncategorized

During his fourth trip to the African continent as President, Barack Obama’s visits to Kenya and Ethiopia from July 23–8th made the case for increased American engagement and commercial activity there. President Obama has travelled to Africa more times during his presidency than any other sitting U.S. President. This five-day trip also made President Obama the first sitting U.S. President to visit Kenya, Ethiopia, and to address the African Union. Beyond the great fervor surrounding his visit, many African countries also presented themselves as burgeoning centers of innovation and entrepreneurship during President Obama’s visit.

President Obama attended the Sixth Annual Global Entrepreneurship Summit (GES) in Nairobi on July 25th. Attendance at the Summit also included executives from various prominent startup ventures from throughout Africa. The opportunity for such business leaders to meet at GES highlighted some interesting differences between entrepreneurial approaches and challenges in the U.S. and in some African countries. Startups in African countries can often find themselves in business environments that lack the technical, human, and even physical infrastructure upon which companies in more developed economies are able to rely. Such challenges to getting a new venture “off the ground,” however, may also present great opportunities. While Kenya’s president Uhuru Kenyatta declared his country “open and ready for business,” President Obama announced at GES an initiative to provide more than $1billion in financing from the U.S. for African entrepreneurial ventures. With such interest from Silicon Valley and the President, and with new start-up cultures emerging throughout, Africa appears poised to become a significant region for investment in the years to come.



The US-EAC Cooperation Agreement and Expanded Opportunities in Africa

Posted in East African Community (EAC)

shutterstock_167044940Since launching this blog in August 2014, many members of Greenberg Traurig’s Africa Practice have delivered a number of useful posts about the investment potential and pitfalls awaiting those of us interested in doing business in Africa. Posts about treaty regimes in many Africa countries provide useful introductions to the legal landscapes in many African jurisdictions. We have written about the potential of Africa in general to become the next “breadbasket of the world.” We similarly posted about challenges arising as a result of Africa’s growth, such as more stringent recruitment requirements for employers in Ghana. These regimes and events combine to establish what we commonly refer to as an “investment climate.” And considering such investment climate, this blog continues to provide information about traditional investment sectors such as energy and transportation. We also endeavor to highlight developments in other sectors or investment types, such as renewable energy, technology, and film. Today’s blog post seeks to continue such discourse with some details about a number of interesting and potentially growing “non-traditional” investment practices and opportunities on the African continent today.

The United States and the East African Community (EAC), a regional trade bloc, recently signed the U.S.-EAC Cooperation Agreement, which seeks to improve trade through customs facilitation between the United States and the five member countries of the EAC: Burundi, Kenya, Rwanda, Tanzania, and Uganda. This agreement represents the commitment of both the United States and the EAC to deepen their ties through trade along three objectives: Continue Reading

The Growing African Transportation Frontier: Lessons from an ABA Section of International Law Panel

Posted in African Infrastructure

shutterstock_49288360The American Bar Association Section of International Law held its 2015 Spring Meeting from April 28 to May 2, 2015, in Washington, DC.  In keeping with the theme of the meeting, “The Times They Are A-Changin’: The New Lyrics of International Law and Practice,” I served as the program chair and moderator of a panel on exciting new African transportation and infrastructure opportunities.  The panel, “The Open Road: Transparency and Compliance in the New African Transportation Frontier,” brought together an official from the World Bank Integrity Vice Presidency, a former U.S. Department of Justice attorney, and a compliance expert from a major South African law firm.  Continue Reading