The US Federal Trade Commission (FTC) announced on January 28, 2020 its annual change to the jurisdictional thresholds for premerger notification under the Hart-Scott-Rodino Anti-Trust Improvements Act (“HSR”).
The HSR requires acquiring and acquired persons to file notifications with the FTC and the US Department of Justice (Antitrust Division) and observe specific waiting periods prior to consummating a covered transaction. The process allows those agencies to screen transactions for potential anticompetitive effects and challenge such transactions under US anti-trust laws, as appropriate,
The basic filing threshold will increase from the current threshold of $90 Million to $94 Million for transactions that close on or after February 27, 2020.
Cross-border commercial disputes are common in today’s interconnected global economy and can involve witnesses, documents or assets located in more than one jurisdiction. The use of a so-called “1782 Action” can be a powerful tool for Brazilian litigants in circumstances where evidentiary discovery is needed in the U.S.
Under Section 1782 of the United States Code, “Interested persons” involved in a foreign legal proceeding can apply to a U.S. District Court to obtain evidence for use in such foreign legal proceeding. A 1782 Action is commenced by the filing of an application with a U.S. District Court seeking approval of an order to compel discovery from a person or entity in the district in which the Court sits. The type of evidence that may be compelled under Section 1782 includes both documentary and testimonial evidence.
Elements of a 1782 Application
In essence, an applicant under Section 1782 needs to show that:
(1) it is an “interested person” in a foreign proceeding. The case law defines an “interested person” broadly. In fact, an interested person does not even need to be a party to the foreign proceeding;
(2) the foreign proceeding should be before a “tribunal.” In this connection, the U.S. Supreme Court has explained that the proceeding does not need to be pending. Rather, the proceeding must simply be in “reasonable contemplation” at the time the discovery is sought; and
(3) the person from whom evidence is sought is in the district of the Court before which the application has been filed. The Courts have interpreted this requirement broadly. One Court explained that mere physical presence is enough to satisfy the requirement. With respect to corporate entities, Courts have found that conducting business or having offices in the judicial district is sufficient for the purposes of a 1782 action.
Factors Considered by the Reviewing District Court
In addition to the statutory elements set forth above, the following general factors are material to a District Court considering a 1782 application:
- whether the person from whom discovery is sought is a participant in the foreign proceeding;
- the nature of the foreign tribunal, the character of the proceeding and the receptivity of the foreign court or agency to offer on a reciprocal basis judicial assistance to U.S. federal courts. In the case of Brazil, it is generally receptive to U.S. federal-court judicial assistance;
- whether the discovery request seeks to circumvent applicable discovery limits in the foreign jurisdiction. Generally, 1782 applications that seek to circumvent discovery limitations imposed by a foreign tribunal are not favored. The applicant’s adversary, however, bears the burden of proving that the application is violative of the discovery limitations imposed by the foreign tribunal; and
- whether the discovery requests are “unduly intrusive or burdensome.” The discovery sought in a 1782 application must be tailored so that the requests do not impose an unreasonable burden on the party from whom discovery is requested.
Upon receipt of a 1782 application, the Court will either grant or deny the application or ask for further briefing from the applicant’s adversary. If the Court invites the adversary to oppose/challenge the 1782 application, the applicant will be required to submit a brief in further support of the application and possibly appear for oral argument.
Andrew L. Odell and Rodrigo Sadi
On September 6, 2019 the IRS announced new procedures (Relief Procedures for Certain Former Citizens) that will enable certain individuals who relinquished their US citizenship to come into compliance with their US tax and filing obligations. The procedures are directed at so-called “accidental Americans” (i.e., citizens of a country other than the United States who could be considered US citizens under relevant provisions of US nationality laws — for example, the individual born in the US to parents temporarily in the US for study or work purposes who returns to his or her country at a young age).
The new procedures are intended to apply only to individuals who
- have not filed US tax returns as US citizens or residents;
- owe a limited amount of back taxes to the United States (not in excess of US$25,000); and
- have net assets of less than US$2MM.
Only individuals whose past non-compliance was non-willful can take advantage of the new procedures.
Benefits to qualifying “accidental Americans” : The new procedures offer relief from taxes, penalties or interest.
The IRS intends to offer an on-line webinar in the near future to provide information in connection with making a submission under the Relief Procedures for Certain Former Citizens.