In a global economy, every supply chain should have each link inspected to ensure it has not been forged in whole or in part in a manner that involves human rights abuses. In “Is your supply chain free from human rights abuses?,” a recent piece in Outsource, our colleague Tim Wright explores what a company can do to ensure its product is not the result of slavery or other human rights abuses.
The European Commission has published its Brexit mandate with a clear focus on “citizens’ rights, the financial settlement and new external borders,” with the Commission’s chief Brexit negotiator, Michel Barnier, planning to “pay great attention to Ireland during the first phase of negotiations.” In his Next Steps toward Brexit Client Alert, Pillsbury partner Tim Wright explores some key issues including safeguarding of EU citizens, settlement of UK financial obligations, and sorting out the Irish border situation.
Software giant’s victory in “indirect use” case is cause for concern for companies worldwide.
On February 16, 2017, the High Court of Justice in the United Kingdom held that Diageo plc, a global drinks company, was liable for unauthorized use of SAP software as a result of failing to secure “Named User” licenses for its customers and sales representatives who used certain third party applications running on a Salesforce platform that accessed and exchanged data with SAP systems. While the decision does not have direct application outside the United Kingdom and may be appealed by Diageo, it is an important win by SAP and a significant cause for concern for companies licensing SAP software. The decision may embolden SAP to be even more aggressive in attempting to extract additional license and support fees from customers—which could potentially run into tens of millions of dollars for many companies—based on alleged “indirect” uses of SAP software. We encourage licensees of SAP software to get in front of this issue by undertaking an assessment of whether they are at risk for claims of indirect use by SAP.
To read the full alert on the Pillsbury site click here…
Recently, governments and rule-making bodies across Europe, the UK and globally, appear to be paying increasing attention to the need for the development of legislative and regulatory frameworks in the expanding field of artificial intelligence (AI) and robotics. With the growing use of these technologies across a wide range of industry sectors, we expect to see new laws and regulations being introduced in this area in the coming years, across a broad spectrum of legal disciplines including intellectual property rights and product liability. Discussed below are some recent developments in this area in the European Union, the United Kingdom, the United States and Japan.
European Union
The European Commission’s Legal Affairs Committee recently published a report calling for EU-wide rules governing AI and robotics[1]. Rapporteur Mady Delvaux (S&D, LU) said: “A growing number of areas of our daily lives are increasingly affected by robotics. In order to address this reality and to ensure that robots are and will remain in the service of humans, we urgently need to create a robust European legal framework”.
According to PwC’s latest biennial Global Economic Crime Survey, cyber-crime is up 20 percent since 2014 and more than half of the firms surveyed expect to become the victim of a cyber-crime in the next two years, although a third reported that they have no plan to address a cyber-incident. While we are used to seeing the big cyber-attacks make the news, an attack of any size can have a disastrous effect on a business and within the supply chain and can also have wide-reaching implications: not only for the business targeted, but all those businesses linked to it. In “Protection Planning,” an article in Logistics Business Magazine, Pillsbury partner Tim Wright discusses the steps you should be taking to proof your business from such damaging shocks.
Effective March 1, 2017, first-in-kind regulations issued by the New York Department of Financial Services (New York DFS) will begin to affect a wide array of both depository and non-depository financial institutions. The new regulations will cascade certain requirements upon these financial institutions’ third-party service providers, requiring the financial institutions to take a close look at their vendor relationships.
Who Is Covered?
The new regulations will specifically apply to “Covered Entities,” meaning any financial services firm that operates (or is required to operate) under a “license, registration, charter, certificate, permit, accreditation or similar authorization” by the New York DFS. Just to name a few, this includes banks, credit unions, insurance companies, licensed lenders and loan servicers, money transmitters, and even those operating under New York’s new virtual currency license.
“We will follow two simple rules: buy American and hire American.” While world leaders are pondering what these words from President Trump’s Inaugural Address mean for international trade, a different question looms for U.S. Government contractors—what is on the horizon as far as the Buy American Act and similar protectionist regulations?
To finish reading this article written by our Pillsbury colleagues click here.
Recently our Global Sourcing and Technology Transactions team members published a report for SCL on Issues in Global Sourcing Transactions. Their report focuses on how in an increasingly globalized world, outsourcing contracts often have multi-jurisdictional scope. Before putting pen to paper, lawyers should consider with their clients the most appropriate contract structure for the deal and due consideration should be given to areas in which issues most commonly arise, for example, parent company guarantees, limitations of liability, service level regimes and TUPE.
Click here to read the full article on the SCL website.
UK’s Industrial Strategy announced—new Government contracting approach will favour UK-based firms after Brexit.
The FCA has fined Aviva, the UK insurance group, £8.2 million for failing to have appropriate controls over its outsourced service providers. According to the FCA’s press release, the fine would have been even larger at £11.8 million but for a 30% discount due to Aviva for agreeing with the FCA to settle at an early stage.
The case related to a number of FCA Handbook breaches between 1 January 2013 and 2 September 2015, including breaches of Principles 3 and 10, the Outsourcing Chapter of SYSC and the Client Assets Sourcebook (CASS)—rules which apply whenever a firm holds or controls client money or has custody assets as part of its business. Two Aviva group companies, Aviva Pension Trustees UK and Aviva Wrap UK had outsourced the administration of client money and external reconciliations in relation custody assets to third party administrators (TPAs). In what is the first CASS case in relation to oversight failures of outsourcing arrangements, the FCA found that the Aviva companies had “failed to put in place appropriate controls over … [the TPAs] … to which they had outsourced the administration of client money and external reconciliations in relation to custody assets … [resulting] in Aviva failing to sufficiently challenge the internal controls, competence and resources of their TPAs.”
