https://www.arnoldporter.com/en/rss/perspectivesNews & Perspectives | Arnold & Porteren{CE9071DB-66F7-42CC-A65E-77ADC1403898}https://www.biosliceblog.com/2026/05/virtual-and-digital-health-digest-april-2026/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comEmma Elliston, Ph.D.https://www.arnoldporter.com/en/people/e/elliston-emmaemma.elliston@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comHeba Jalilhttps://www.arnoldporter.com/en/people/j/jalil-hebaheba.jalil@arnoldporter.comTue, 26 May 2026 00:00:00 -0500{58A2C33E-A810-4904-87EE-879314B6763A}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/time-to-learn-the-canadian-two-stepBenjamin Mintzhttps://www.arnoldporter.com/en/people/m/mintz-benjaminbenjamin.mintz@arnoldporter.comJustin Imperatohttps://www.arnoldporter.com/en/people/i/imperato-justinjustin.imperato@arnoldporter.comReverse vesting orders (RVOs) have become a significant restructuring mechanism in Canadian insolvency proceedings, allowing unwanted liabilities and assets to be transferred into a separate &ldquo;ResidualCo&rdquo; while preserving the debtor&rsquo;s core business, licenses, and tax attributes for acquisition by a purchaser. In <em>In re Iovate Health Sciences International Inc.</em>, the U.S. Bankruptcy Court for the Southern District of New York recognized and enforced a Canadian RVO under Chapter 15, holding that the structure did not violate U.S. public policy, that creditors were sufficiently protected, and that nonconsensual third-party releases approved in Canada could be enforced in the U.S. despite the Supreme Court&rsquo;s <em>Purdue Pharma</em> decision limiting such releases in Chapter 11 cases. The decision is notable for providing one of the first detailed U.S. analyses of RVOs and for reinforcing the growing view that Chapter 15 proceedings permit broader cross-border restructuring tools than those available under domestic Chapter 11 practice.Tue, 26 May 2026 00:00:00 -0500<p> </p> <p>Reverse vesting orders (RVOs) have emerged in Canada as an important restructuring tool for debtors. Instead of a traditional sale, debtors&rsquo; <em>unwanted</em> liabilities and assets are reverse vested out of the debtor company into a newly created entity, &ldquo;ResidualCo,&rdquo; leaving the clean, viable business and its assets in the debtor company for the purchaser to acquire. RVOs have sparked fierce debate. Critics argue they can be used unfairly to shed pension obligations, environmental liabilities, and employee claims in ways that prejudice stakeholders, allowing purchasers to cherry-pick assets to the detriment of creditors.</p> <p>In <em>In re Iovate Health Sciences International Inc.</em>,[[N:Case No.25-11958 (MG), ECF No. 108 (Bankr. S.D.N.Y. May 12, 2026) (<em>Iovate</em>).]] one of the first published opinions to analyze the enforceability of Canadian RVOs in the U.S. under Chapter 15 of the U.S. Bankruptcy Code (the Bankruptcy Code), the U.S. Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) granted Iovate Health Sciences International Inc.&rsquo;s (in its capacity as the authorized foreign representative, the Foreign Representative) motion to recognize and enforce an RVO approved by the Ontario Superior Court of Justice (the Canadian Court) in the Iovate debtors&rsquo; Canadian insolvency proceedings.</p> <p>The Bankruptcy Court did several notable things in <em>Iovate</em> when it enforced the Iovate RVO. First, it held that the Iovate RVO did not violate U.S. public policy and that creditor interests had been sufficiently protected in the Canadian insolvency proceedings. Second, it held that the Iovate RVO transaction did not necessitate review under Bankruptcy Code section 363(b),[[N:Bankruptcy Code section 363(b) provides, among other things, that court approval must be obtained before a debtor may sell assets outside of the ordinary course of business. See 11 U.S.C. &sect; 363(b).]] although the Bankruptcy Court did grant section 363(m) good faith purchaser protections to the Purchaser (as defined below).[[N:Bankruptcy Code section 363(m) provides that if a sale of estate property is authorized by the bankruptcy court, and that authorization is later reversed or modified on appeal, the reversal or modification does not affect the validity of the sale to a good faith purchaser, unless the appellant obtained a stay of the sale pending appeal.]] Finally, it recognized nonconsensual third-party releases approved by the Canadian Court in the Iovate RVO, notwithstanding the Supreme Court&rsquo;s decision in <em>Harrington v. Purdue Pharma L.P.</em>[[N:603 U.S. 204 (2024).]] which held that nonconsensual third-party releases in Chapter 11 plans are not permitted. These notable aspects from <em>Iovate</em> will be addressed below, along with a discussion on the implications of the decision. But first, we discuss reverse vesting orders, generally, and provide background from the Iovate Canadian insolvency proceeding.</p> <h2>Background on Reverse Vesting Orders and <em>Iovate</em></h2> <p>Section 11 of the Canadian Companies&rsquo; Creditors Arrangement Act (CCAA) confers broad authority on Canadian courts to &ldquo;make any order that it considers appropriate in the circumstances.&rdquo;[[N:R.S.C. 1985, c. C-36, &sect; 11.]] From CCAA section 11, RVOs have emerged in Canadian insolvency practice in the last decade. RVOs employ a reverse vesting structure whereby the debtor cancels all existing shares and issues new shares to a designated purchaser. The purchaser agrees to accept preferred assets and liabilities, while certain excluded assets and liabilities are vested into a newly formed ResidualCo. The purchased company, holding only the assumed assets and liabilities as desired by the purchaser, may then exit the Canadian insolvency proceeding with the ResidualCo being added as a debtor to the proceeding.</p> <p>The Bankruptcy Code does not afford debtors and asset purchasers any parallel to RVOs. In cases under Chapter 11 of the Bankruptcy Code, the primary mechanism for asset sales is section 363, which works in the opposite direction from an RVO &mdash; the debtor transfers assets out to a purchaser free and clear of liens and claims, with liabilities (other than expressly assumed ones) staying behind in the estate. There&rsquo;s no statutory equivalent to the Canadian RVO structure where the liabilities are transferred out and the purchaser acquires the existing corporate shell with its licenses, tax attributes, and regulatory history intact. One could, theoretically, construct a plan that creates a ResidualCo entity, vests unwanted liabilities into it, and distributes the cleaned-up debtor&rsquo;s equity to a purchaser, thereby economically replicating the RVO structure. Nothing in the Bankruptcy Code expressly prohibits this approach, though engaging in the plan process would decrease the speed at which the sale may occur, potentially resulting in the depreciation of the entity and its assets.</p> <p>In recent years, some U.S. companies have tried to employ a similar process in advance of a bankruptcy filing, the so-called Texas two-step, which is a corporate restructuring maneuver that uses Texas&rsquo; divisive merger statute[[N:See Tex. Bus. Orgs. Code &sect;&sect; 10.001 <em>et seq.</em>]] to shield solvent companies from mass tort liability. In the first step, a parent company uses a Texas divisive merger to split into two entities &mdash; one retaining the valuable assets and the other bearing the tort liabilities. In the second step, that liability-burdened entity commences a Chapter 11 bankruptcy case, which automatically stays all litigation against that liability-burdened spinoff.[[N:Bankruptcy courts have treated the Texas two-step with increasing skepticism, particularly after the Third Circuit&rsquo;s rulings in the Johnson &amp; Johnson (J&amp;J) talc litigation. The Third Circuit held that J&amp;J&rsquo;s specially created subsidiary, LTL Management, was not eligible for bankruptcy protection because it was not in genuine financial distress &mdash; reasoning that good faith requires distress that is immediate, imminent, and apparent. After J&amp;J refiled with an estimated $61.5 billion settlement offer, the Bankruptcy Court for the District of New Jersey again dismissed the case as filed in bad faith, and the Bankruptcy Court for the Southern District of Texas subsequently rejected J&amp;J&rsquo;s third attempt as recently as March 2025, reaffirming that bankruptcy laws are for distressed businesses rather than a liability management tool for solvent corporations. By contrast, other users of the strategy &mdash; most notably Georgia-Pacific&rsquo;s Bestwall entity, which offloaded asbestos liabilities in 2017 &mdash; have as yet survived in other circuits but have to date not achieved a successful confirmed plan. On the legislative front, a bipartisan group of lawmakers introduced the Ending Corporate Bankruptcy Abuse Act in July 2024, which was reintroduced in December 2024, and would instruct courts to presume bad faith in Texas two-step filings and prohibit extending the automatic stay to non-bankrupt affiliates &mdash; though the bill has yet to advance.]] In addition, the debtor entity may be able to extend the stay to apply to all non-debtor affiliates.</p> <p>Iovate Health Sciences International Inc. and its affiliated debtors commenced insolvency proceedings in Canada on September 5, 2025.[[N:The insolvency proceedings were initially commenced under Canada&rsquo;s Bankruptcy and Insolvency Act (BIA). The BIA proceedings were later converted to a CCAA proceeding by order of the Canadian Court on October 31, 2025.]] The Canadian Court appointed KSV Restructuring Inc. (the Monitor) as independent monitor and approved a Sale and Investment Solicitation Process (SISP) conducted by the Monitor with the assistance of a sales agent. The SISP proceeded and later the Monitor selected the bid submitted by 1001542267 Ontario Inc. (the Purchaser), a newly formed entity, as the superior bid. The Purchaser&rsquo;s winning bid was implemented through a Subscription Agreement (the Subscription Agreement), dated April 2, 2026, between the Purchaser and Xiwang Iovate Holdings Company Limited (the Purchased Company).</p> <p>The parties structured the sale as a reverse vesting transaction whereby the Purchaser subscribed for and acquired 100 new common shares in the Purchased Company, while all existing shares were cancelled for no consideration. Certain identified &ldquo;Excluded Assets,&rdquo; &ldquo;Excluded Contracts,&rdquo; and &ldquo;Excluded Liabilities&rdquo; (collectively, Excluded Property) were vested out to a newly formed ResidualCo, leaving the Purchased Company holding only the preferred assets and liabilities that the Purchaser wished to retain.</p> <p>The reverse vesting structure was necessitated by the debtors&rsquo; possession of non-transferable regulatory licenses required to import goods and sell products in Canada, US$114 million in non-capital losses eligible to be carried forward only if retained by the existing entity, and contracts that could be maintained more efficiently through the existing legal entity than through an asset sale. The Canadian Court approved the Iovate RVO on April 16, 2026, including the Subscription Agreement and third-party releases in it, finding that the structure satisfied all applicable CCAA requirements and produced an economic outcome at least as favorable as any available alternative.</p> <p>The Foreign Representative filed a Chapter 15 petition in the Bankruptcy Court to prevent the Iovate debtors&rsquo; stakeholders and judgment creditors from commencing or proceeding with actions in the U.S. that would disrupt Iovate&rsquo;s restructuring process. The Foreign Representative obtained recognition of the Canadian CCAA proceeding as a foreign main proceeding under Bankruptcy Code section 1517, and subsequently moved for an order that: (i) recognized and enforced the Iovate RVO under Bankruptcy Code sections 1522, 1521, and 1507; or, alternatively, (ii) authorized and approved the Iovate RVO under Bankruptcy Code sections 363, 1520, and 1521.</p> <h2>The <em>Iovate</em> Decision</h2> <p>Bankruptcy Code section 1521(a)(7) gives courts broad discretion to provide to foreign representatives &ldquo;any appropriate relief that would further the purposes of chapter 15 and protect the debtor&rsquo;s assets and the interests of creditors,&rdquo;[[N:<em>In re Asbestos Corp. Ltd.</em>,674 B.R. 855, 868 (Bankr. S.D.N.Y. 2025); see 11 U.S.C. &sect; 1521(a)(7).]] including relief that would not be available in a Chapter 11 case, &ldquo;provided that such assistance is consistent with the principles of comity and satisfies fairness considerations set forth in Section 1507(b).&rdquo;[[N:<em>In re Rede Energia S.A.</em>, 515 B.R. 69, 90 (Bankr. S.D.N.Y. 2014).]] This broad grant is constrained only by the requirement in Bankruptcy Code section 1522(a) that creditor interests be &ldquo;sufficiently protected,&rdquo; and that the relief not violate U.S. public policy pursuant to Bankruptcy Code section 1506.[[N:<em>In re Cozumel Caribe S.A. de C.V.</em>, 482 B.R. 96, 113 (Bankr. S.D.N.Y. 2012).]]</p> <p>Many U.S. bankruptcy courts have, without objection, enforced Canadian RVOs without accompanying opinions explaining the court&rsquo;s reasoning.[[N:See, e.g., <em>In re Voxtur Analytics Corp.</em>, No. 25 11996 (JKS) (Bankr. D. Del. Feb. 13, 2026); <em>In re The Lion Elec. Co.</em>, No. 24-18898 (DDC) (Bankr. N.D. Ill. June 26, 2025); <em>In re Chesswood Grp.</em>, No. 24-12454 (CTG) (Bankr. D. Del. Mar. 24, 2025); <em>In re 9139249 Canada Inc.</em>, No. 24-19627 (VZ) (Bankr. C.D. Cal. Jan. 10, 2025); <em>In re Elevation Gold Mining Corp.</em>, No. 24-06359 (Bankr. D. Ariz. Dec. 30, 2024); <em>In re Endoceutics Inc.</em>, No. 22-11641 (Bankr. D. Mass. Oct. 12, 2023); <em>In re Just Energy Grp.</em>, No. 21-30823 (Bankr. S.D. Tex., Dec. 1, 2022).]] In one notable instance, though, the Delaware bankruptcy court published a decision that recognized a Canadian RVO that was presented without objection for enforcement, and cautioned against applying the decision as precedent, citing uncertainty in how the court would, in the face of an objection, view an RVO that redeems and cancels existing equity for no consideration and vests out to a ResidualCo the debtor&rsquo;s liabilities.[[N:<em>In re Goli Nutrition Inc.</em>, Case No. 10438, 2024 WL 1748460, at * 2 (Bankr. D. Del. Apr. 23, 2024) (<em>Goli Nutrition</em>) (&ldquo;I stated that I would enforce the order as there were no objections to the transaction as a whole or its structure. Notice was provided to all parties, including shareholders whose stock is being redeemed and cancelled for no consideration, and those who may hold liabilities that are being vested out to Residual Co. I must emphasize, however, that I do not know how I would rule on a similar reverse vesting transaction if there were objections. So, I cannot stress enough that the order I enter should not be cited in future motions for the proposition that U.S. courts have unconditionally approved such transactions.&rdquo;).]]</p> <p>The Bankruptcy Court enforced the Iovate RVO pursuant to Bankruptcy Code sections 1522 and 1521.[[N:In <em>Iovate</em>, one of the debtors&rsquo; creditors, TSI Group Co., Ltd., filed a limited objection to the Foreign Representative&rsquo;s motion to enforce the RVO, citing Iovate&rsquo;s failure to confirm that it would assume existing contractual agreements with TSI or pay the cure amounts owed to TSI. TSI, however, subsequently withdrew its limited objection.]] Applying Bankruptcy Code section 1522, the Bankruptcy Court held that creditor interests were sufficiently protected for two reasons. First, the Canadian Court had specifically found that no stakeholder was worse off under the Iovate RVO structure than under any available alternative. Second, the Monitor, an independent officer with court-appointed oversight authority, had conducted the SISP, ensuring objective and fair administration of the process. Critically, the Bankruptcy Court emphasized that the Iovate RVO did not extinguish any creditor&rsquo;s claim; all such claims would survive against either the reorganized principal entities or ResidualCo, with the same nature and priority as before the Iovate RVO.</p> <p>The Bankruptcy Court further held that recognition and enforcement of the Iovate RVO did not violate the public policy exception of Bankruptcy Code section 1506, which the Bankruptcy Court held should be construed narrowly to apply only to actions contrary to the &ldquo;most fundamental policies of the United States.&rdquo;[[N:<em>In re Ephedra Prods. Liab. Lit.</em>, 349 B.R. 333, 336 (S.D.N.Y. 2006) (citing H.R. Rep. No. 109&ndash;31(I), at 109, as reprinted in 2005 U.S.C.C.A.N. 88, 172).]] The Bankruptcy Court reasoned that, if even the denial of a jury trial right in a foreign proceeding does not offend U.S. public policy when a fair and impartial proceeding is offered,[[N:See id.]] then a reverse vesting structure that preserves creditor claims certainly does not rise to that level. Given its findings under Bankruptcy Code sections 1522 and 1521, the Bankruptcy Court did not determine whether recognition was also warranted under section 1507.</p> <p>The Foreign Representative had alternatively sought approval of the RVO transaction under Bankruptcy Code section 363, which applies by operation of section 1520(a)(2) to transfers of U.S.-sited property in a recognized foreign main proceeding. The Bankruptcy Court declined to conduct a section 363 analysis on two grounds. First, following <em>Goli Nutrition</em>, the Bankruptcy Court held that the issuance of new shares to the Purchaser is not a &ldquo;sale&rdquo; of property within the meaning of section 363. Unlike a stock sale, in which a debtor sells already-issued shares, the reverse vesting structure involves the issuance of newly created shares; no existing estate property is transferred to the Purchaser. Second, with respect to the transfer of Excluded Property to ResidualCo &mdash; which could potentially implicate section 363 &mdash; the Foreign Representative represented on May 6, 2026, at a hearing, that no physical assets currently located in the U.S. would constitute Excluded Property. Accordingly, no transfer of property within the territorial jurisdiction of the U.S. would occur, and Bankruptcy Code section 1520(a)(2) was not triggered. Notably, notwithstanding its declination to review the RVO transaction under section 363(b), the Bankruptcy Court held that the Purchaser was entitled to the good faith protections of section 363(m) where the Monitor confirmed that the Purchaser was unrelated to the debtors under section 36 of the CCAA, the SISP produced broad market canvassing, and there was no evidence of fraud or collusion in the bidding process.</p> <p>Finally, the Bankruptcy Court recognized nonconsensual third-party releases approved by the Canadian Court, notwithstanding the Supreme Court&rsquo;s decision in <em>Purdue</em>, which held that nonconsensual third-party releases in Chapter 11 plans are not permitted. Relying on <em>In re Credito Real, S.A.B. de C.V.</em>[[N:670 B.R. 150 (Bankr. D. Del. 2025) (<em>Credito Real</em>).]] and <em>In re Odebrecht Engenharia e Constru&ccedil;&atilde;o S.A.</em>,[[N:669 B.R. 457 (Bankr. S.D.N.Y. 2025) (<em>Odebrecht</em>).]] the Bankruptcy Court held that <em>Purdue</em>&rsquo;s holding is limited to Chapter 11 cases. According to the Bankruptcy Court, the releases here were permissible because they were narrowly tailored and limited to claims arising from or relating to the Subscription Agreement, the RVO, and the transactions contemplated by the RVO and Subscription Agreement and expressly excluded claims for fraud or willful misconduct. This scope, according to the Bankruptcy Court, was consistent with releases approved in <em>Odebrecht</em>, and the Bankruptcy Court found them properly balanced against stakeholder interests. The Bankruptcy Court also notably observed that failing to enforce the releases in the U.S. would create an unequal playing field, giving U.S.-based creditors rights that Canadian creditors did not have, thereby undermining the comity-based framework of Chapter 15.</p> <h2>Conclusion</h2> <p>The <em>Iovate</em> decision is significant in two respects. First, it is among the first published decisions to provide a full legal analysis of a reverse vesting order, building on the sparse precedent from the Delaware bankruptcy court in <em>Goli Nutrition</em> and the broader body of unpublished RVO recognition orders from courts around the country. The Bankruptcy Court&rsquo;s detailed treatment of the RVO mechanism, including its Canadian statutory basis, the approval factors, and the distinction from the Texas two-step, provides a framework that future courts and practitioners can draw upon.</p> <p>Second, the decision reinforces the post-<em>Purdue</em> consensus that is emerging in Chapter 15 cases: the Supreme Court&rsquo;s prohibition on nonconsensual third-party releases in Chapter 11 plans does not extend to Chapter 15 recognition proceedings, where the broader statutory grants in Bankruptcy Code sections 1521 and 1507 permit courts to enforce such releases when creditor interests are sufficiently protected. While <em>Iovate</em>&rsquo;s holding is consistent with <em>Credito Real</em> and <em>Odebrecht</em> and reflects a growing judicial consensus that <em>Purdue</em>&rsquo;s reasoning does not curtail the distinctly broader tools available in ancillary cross-border proceedings, we expect <em>Purdue</em>&rsquo;s applicability to Chapter 15 proceedings to be a continuing source of debate. We also expect to see, where obtaining third-party releases are critical to the success of a company&rsquo;s efforts to reorganize, more companies pursue foreign restructurings in Canada, the United Kingdom, and other locales where nonconsensual third-party releases are enforceable, with such companies thereafter attempting to obtain recognition in the U.S. under Chapter 15 to enforce those third-party releases.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{89A351EC-E722-47A2-B9A1-ED68AA0F275F}https://www.arnoldporter.com/en/perspectives/events/2026/05/navigating-antitrust-compliance-for-consumer-products-retail-companiesSonia Kuester Pfaffenrothhttps://www.arnoldporter.com/en/people/p/pfaffenroth-soniasonia.pfaffenroth@arnoldporter.comMatthew Tabashttps://www.arnoldporter.com/en/people/t/tabas-matthewmatthew.tabas@arnoldporter.comWilson D. Mudgehttps://www.arnoldporter.com/en/people/m/mudge-wilson-dWilson.Mudge@arnoldporter.comJoin Arnold &amp; Porter&rsquo;s Consumer Products &amp; Retail Industry Group for the next program in our Consumer Products &amp; Retail Navigator webinar series, focused on how to identify and avoid common antitrust traps in your pricing, contracting, and distribution practices.Thu, 21 May 2026 00:00:00 -0500<p>Join Arnold &amp; Porter&rsquo;s Consumer Products &amp; Retail Industry Group for the next program in our Consumer Products &amp; Retail Navigator webinar series, focused on how to identify and avoid common antitrust traps in your pricing, contracting, and distribution practices.</p> <p>Antitrust risk is present in many everyday business decisions, and the consequences of missteps can be severe. Government enforcers and private plaintiffs continue to scrutinize pricing practices, distribution arrangements, and contracting strategies across industries. This legal environment requires companies to build robust compliance practices into their core business operations.</p> <p>During our program, we will walk through how to avoid common antitrust traps and what to do about them, including:</p> <ul> <li>Pricing practices and common pitfalls</li> <li>Contracting practices and antitrust compliance considerations</li> <li>Distribution strategies and antitrust risk</li> <li>Best practices for mitigating antitrust exposure</li> </ul> <p>This is a practical session designed to help consumer products and retail companies identify exposure and prioritize next steps.</p>{1FD6B1FD-45D2-4079-843A-A2DE3C1D5FF8}https://www.arnoldporter.com/en/perspectives/news/2026/05/daily-journal-names-deborah-fishman-and-tom-magnani-to-2026-top-intellectual-property-lawyers-listArnold &amp; Porter partners Deborah Fishman and Tom Magnani were named to <em>Daily Journal</em>&rsquo;s list of &ldquo;Top Intellectual Property Lawyers 2026.&rdquo;Thu, 21 May 2026 00:00:00 -0500<p>Arnold &amp; Porter partners Deborah Fishman and Tom Magnani were named to <em>Daily Journal</em>&rsquo;s list of &ldquo;Top Intellectual Property Lawyers 2026.&rdquo; The annual list recognizes an outstanding group of California-based attorneys whose achievements over the past year have significantly influenced the field of intellectual property.</p> <p>Deborah, recognized on the list since 2022, was commended for her nearly 30 years of representing biopharmaceutical and medical device companies in high-stakes patent and commercial disputes, including cases exceeding $1 billion in value and matters reaching the U.S. Supreme Court. <em>Daily Journal</em> emphasized her long-standing representation of Regeneron in defending the patents protecting EYLEA, its flagship ophthalmology biologic, where Deborah and the Arnold &amp; Porter team defended nine<em> inter partes</em> review and post-grant review proceedings while simultaneously managing two Federal Circuit appeals and parallel foreign matters.</p> <p><em>Daily Journal</em> highlighted Tom, head of the firm's Technology Transactions practice and co-chair of the firm&rsquo;s Technology &amp; Media industry group and Artificial Intelligence (AI) group, for his work at the forefront of AI and intellectual property law. Tom was recognized for his representation of AI-developer Anthropic in cutting-edge copyright matters, as well as for his decades of experience navigating complex, multi-stakeholder transactions, including negotiating the deal that brought classic Peanuts television specials to Apple TV+, and representing Middle-earth Enterprises in the sale of rights to <em>The Lord of the Rings</em> and <em>The Hobbit</em>. </p>{6D2A081E-56A8-4E54-99A2-14A1E6FF3053}https://www.arnoldporter.com/en/perspectives/news/2026/05/massachusetts-lawyers-weekly-recognizes-josh-barlow-as-a-2026-leader-in-the-lawArnold &amp; Porter partner Josh Barlow has been selected as a 2026 Massachusetts Leaders in the Law honoree by <em>Massachusetts Lawyers Weekly</em>.Thu, 21 May 2026 00:00:00 -0500<p>Arnold &amp; Porter partner Josh Barlow has been selected as a 2026 Massachusetts Leaders in the Law honoree by <em>Massachusetts Lawyers Weekly</em>. The annual award celebrates attorneys throughout the state who have demonstrated exceptional legal skill, sustained professional leadership, and meaningful contributions to the communities they serve.</p> <p>Josh is a seasoned trial lawyer whose nearly two decades of litigation experience span complex commercial disputes, product liability, and antitrust matters, with a particular focus on life sciences clients. He has litigated cases to verdict before juries, judges, and arbitrators in federal and state courts across the country and in both domestic and international arbitration, bringing the same courtroom discipline to matters ranging from medical device design and manufacture to nationwide mass tort and consumer class action defense.</p> <p>His 2026 recognition builds on the successful outcome in <em>Cynosure LLC, et al. v. Reveal Lasers LLC, et al.</em>, named one of <em>Massachusetts Lawyers Weekly</em>'s 2025 Top Verdicts. Josh, and Arnold &amp; Porter partners Dipanwita Amar, Matthew Diton, Joseph Farris, and Fred Kelly tried the case and secured a unanimous jury verdict for a leading provider of medical aesthetic devices in a non-competition and trade secret case, with the court subsequently doubling the award to approximately $35 million in compensatory and punitive damages, interest, and attorneys&rsquo; fees.</p>{BF41D89D-1F3E-4FCA-8EC2-3723E0570091}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/inside-oigs-new-cia-templateGina M. Cavalierhttps://www.arnoldporter.com/en/people/c/cavalier-gina-mgina.cavalier@arnoldporter.comLisa M. Rehttps://www.arnoldporter.com/en/people/r/re-lisa-mlisa.re@arnoldporter.comJaclyn Machometahttps://www.arnoldporter.com/en/people/m/machometa-jaclynjaclyn.machometa@arnoldporter.comThe 2026 OIG Corporate Integrity Agreement (CIA) for Kinex Medical Company highlights evolving healthcare compliance expectations, emphasizing stronger compliance officer independence, enhanced board oversight, rigorous fair market value documentation, and proactive auditing and monitoring obligations. The agreement also reflects the growing role of generative AI in healthcare compliance programs, signaling that organizations must implement governance controls around AI-driven decision-making while maintaining robust documentation, training, and risk assessment processes to prepare for potential OIG CIA audits and enforcement scrutiny.Thu, 21 May 2026 00:00:00 -0500<p> <h2>Overview</h2> <p>At the Health Care Compliance Association&rsquo;s 2026 Compliance Institute on April 30, 2026, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) publicly walked through its newly modernized Corporate Integrity Agreement (CIA) template,[[N:Office of Inspector General, U.S. Dep&rsquo;t of Health &amp; Human Servs., Modernizing the Corporate Integrity Agreement (CIA) and CIA Website (presentation at Health Care Compliance Association 2026 Compliance Institute, Apr. 30, 2026).]] using the Kinex Medical Company CIA, executed on March 2, 2026, as an example.[[N:<a rel="noopener noreferrer" href="https://oig.hhs.gov/compliance/corporate-integrity-agreements/browse-cias/kinex-medical-company-llc/" target="_blank">Corporate Integrity Agreement Between the Office of Inspector General of the Department of Health and Human Services and Kinex Medical Company, LLC</a> (Mar. 2, 2026).]] The new template carries forward the seven elements of an effective compliance program that have long anchored OIG&rsquo;s guidance, while introducing substantive enhancements that signal where the agency&rsquo;s expectations are heading.</p> <p>Although a CIA technically binds only the entity that signs it, OIG has long treated the CIA as a vehicle for publicly articulating its expectations across the life sciences and healthcare industry. Together with OIG&rsquo;s updated General Compliance Program Guidance[[N:Office of Inspector General, U.S. Dep&rsquo;t of Health &amp; Human Servs., <a rel="noopener noreferrer" href="https://oig.hhs.gov/compliance/general-compliance-program-guidance/" target="_blank">General Compliance Program Guidance</a> (Nov. 2023).]] (and follow-on industry-specific guidance), the Kinex CIA offers the clearest picture to date of what OIG considers an effective compliance program. These changes offer meaningful insight into how OIG will likely measure the effectiveness of compliance programs going forward. The discussion that follows summarizes seven enhancements with broad applicability beyond entities operating under a CIA.</p> <h2>Compliance Officer: Independent Reporting Lines, Direct Board Access, and Prohibited Dual Roles </h2> <p>In the Kinex CIA, OIG substantially elevated the role of the Compliance Officer (CO) and prohibited certain conflicting job functions. Specifically, the CO must report directly to either the CEO or the Board, have direct and independent access to the Board, and possess &ldquo;sufficient stature&rdquo; to interact as an equal with other senior leaders. The CO may not lead or report to the legal or financial functions, provide legal or financial advice, or hold operational responsibility for healthcare delivery, billing and coding, claims submission, medical review, administrative appeals, or contracting. In sum, the revised structure outlined in the new CIA template reflects OIG&rsquo;s view that the CO should function as an independent senior leader, not a part-time function layered onto another role. </p> <h2>Internal Reporting: Capturing All Channels and Allowing Direct Access to Compliance</h2> <p>The Kinex CIA includes a useful window into what OIG considers the hallmarks of a functioning internal reporting system, echoing similar elements included in OIG's General Compliance Program Guidance. In particular, OIG highlights the importance of tracking a wide range of internal reports &mdash; including emails, manager escalations, and ethics inbox messages, in addition to formal complaints made to an ethics hotline. OIG also emphasizes that at least one of these channels should allow employees to reach the compliance function directly, without having to route their concerns through a supervisor or the operational chain of command, so that reports cannot be filtered or diverted before reaching compliance. </p> <h2>Board Oversight: Independent Members, Quarterly Executive Sessions, and an Independent Compliance Expert</h2> <p>The CIA now requires an entity&rsquo;s Board to include at least one independent member &mdash; meaning a non-owner, non-employee, and non-executive &mdash; closing a structural gap that allowed all-insider boards at many privately held and private equity-backed entities. The Board must also meet at least quarterly in executive session with the CO, without entity leaders, counsel, or employees present. Further emphasizing the importance of the Board&rsquo;s role in compliance, OIG formalized the Board Compliance Expert as a standard requirement: the Board must retain an independent expert to evaluate program effectiveness, and the Board must respond with a written report and an approved corrective action plan. Together, these requirements signal that Board oversight cannot rest on management&rsquo;s representations alone.</p> <h2>Arrangements With Healthcare Professionals and Organizations (HCPs): Verification That Services Are Actually Performed and Resources Actually Used</h2> <p>OIG is moving beyond paper compliance and now expects active verification that arrangements are functioning as documented. Tracking service and activity logs to confirm that parties are performing the services required, and monitoring actual use of leased space, supplies, devices, equipment, and other patient care items for consistency with the arrangement&rsquo;s terms, are key aspects of verification expected by OIG. The Kinex CIA also directs the CO to audit &mdash; not merely review &mdash; compliance with these requirements annually, and to report results to the Compliance Committee. These shifts reflect OIG&rsquo;s expectation that compliance programs answer not only whether a control exists, but whether it works.</p> <h2>Fair Market Value: Expanded Documentation and an Ongoing Reassessment Obligation</h2> <p>The new CIA template introduces more stringent standards for assessing and documenting fair market value (FMV), offering OIG's most direct guidance to date on this important topic. Through these enhancements, OIG has substantially expanded the documentation expectations around FMV determinations for arrangements with referral sources, HCPs, and customers. Entities must document the FMV amount or range, the corresponding time period, the date of completion, the parties that performed the valuation, and the names and positions of personnel involved. Importantly, entities must document FMV not only before signing or renewing an arrangement, but also during its pendency, as appropriate &mdash; meaning FMV is no longer a one-time analysis but a continuing obligation. For multi-year arrangements, entities will need new processes to revisit FMV over the life of the arrangement.</p> <h2>Risk Assessment: A Prescribed Five-Step Methodology Owned by the Compliance Committee </h2> <p>While prior CIAs required annual risk assessments, OIG&rsquo;s new model now prescribes a specific five-step methodology: identify potential risks, assess their severity, evaluate and prioritize them, develop work plans or audit plans tied to identified risk areas, and monitor the effectiveness of those plans. The Compliance Committee is responsible for implementation and oversight. The methodology transforms the risk assessment into an auditable, repeatable exercise, reflecting OIG&rsquo;s expectation that programs surface and address risks proactively rather than reactively.</p> <h2>Generative AI: Defined, Disclosed, and Represented at the Compliance Committee Table</h2> <p>For the first time, OIG expressly addressed artificial intelligence (AI) in a CIA. The new model defines Generative Artificial Intelligence (GAI) and, for organizations under a CIA, requires disclosure of whether they used GAI in connection with the compliance program or in preparing reports to OIG; if so, to explain how they used it, and to verify the accuracy of any GAI-assisted content. OIG also expects the Compliance Committee to include leaders from enumerated functional areas, including AI &mdash; recognizing AI as a compliance discipline in its own right. Even outside the CIA context, these provisions offer a useful reference point for how OIG is thinking about AI in compliance.</p> <h2>Practical Recommendations</h2> <p>The standards reflected in the new CIA template provide a helpful benchmark for self-assessment. Organizations reviewing their programs may want to consider:</p> <ul> <li>Conducting a gap assessment, to compare current structure, policies, and practices against the new template, and prioritize remediation of structural gaps in reporting lines, Board composition, or dual-hatted CO responsibilities.</li> <li>Enhancing internal reporting mechanisms, to ensure the program covers reports through any channel; consider eliminating requirements that employees raise concerns with a supervisor first, and update the disclosure records to capture investigation outcomes, remedial actions, and any external referrals, to the extent the forms do not already.</li> <li>Further empowering the CO, in order to reinforce structural safeguards to support the independence and authority of the CO, consistent with applicable OIG guidance, including appropriate reporting lines and Board access (such as executive sessions), clear separation from operational responsibilities, and formalization through a written charter, while also underscoring the Board&rsquo;s oversight role.</li> <li>Moving from review to verification for arrangements with HCPs, including by assessing whether current tracking systems confirm, on an ongoing basis, that parties are performing the services required and that leased space, equipment, and supplies are being used as the arrangement contemplates; enhancing those systems as needed; and treating FMV as a continuing obligation rather than a one-time analysis.</li> <li>Developing an AI governance policy, to align with the increasing focus on the use of AI in compliance functions, including appropriate validation practices and consideration of AI expertise at the Compliance Committee level. </li> <li>Investing in compliance infrastructure, to sustain core compliance activities, support proactive risk assessment, and embed compliance as a core business function.</li> </ul> <p style="text-align: center;">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <p>For questions about this Advisory, please contact the authors.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{386AD988-3E3D-4C38-BCC1-FA6BA4F887BA}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/supreme-court-leaves-price-anderson-act-split-in-placeLauren Danielhttps://www.arnoldporter.com/en/people/d/daniel-laurenlauren.daniel@arnoldporter.comBurden H. Walkerhttps://www.arnoldporter.com/en/people/w/walker-burden-hburden.walker@arnoldporter.comElise M. Henryhttps://www.arnoldporter.com/en/people/h/henry-eliseelise.henry@arnoldporter.comSam Kleinmanhttps://www.arnoldporter.com/en/people/k/kleinman-samuelsam.kleinman@arnoldporter.comOn Monday, the Supreme Court rejected a plea to decide a critical question regarding the Price-Anderson Act (the PAA), the federal statute that governs suits stemming from public radiation exposure from nuclear facilities.&nbsp;Wed, 20 May 2026 00:00:00 -0500<p>On Monday, the Supreme Court rejected a plea to decide a critical question regarding the Price-Anderson Act (the PAA), the federal statute that governs suits stemming from public radiation exposure from nuclear facilities. Last year, in <em>Mazzocchio v. Cotter Corp.</em> the Eighth Circuit held that plaintiffs in nuclear public liability suits may rely on state-law tort standards of care rather than upon the federal nuclear-safety regulations that five other courts of appeal have held provide the exclusive standard of care in such cases.[[N: <em>Mazzocchio v. Cotter Corp.</em>, 120 F.4th 565 (8th Cir. 2024).]] Rather than resolving this split in authority, the Supreme Court denied the defendant&rsquo;s petition for certiorari, leaving the Eighth Circuit&rsquo;s precedent, and the circuit split, in place for now.[[N: <em>Cotter Corp. v. Mazzocchio</em>, No. 24-1001 (U.S. May 18, 2026) (cert. denied).]] As a practical matter, the lingering uncertainty over the governing Price-Anderson standard may incentivize plaintiffs to test the waters in other circuits, and consequently, may risk a chilling of the Trump administration&rsquo;s efforts to <a href="/en/perspectives/blogs/environmental-edge/2025/02/trump-admin-fed-cir-set-to-jumpstart-nuclear-energy">jumpstart</a>&nbsp;investment in the nuclear industry.[[N: See, e.g., Lauren Daniel <em>et al.</em>, &ldquo;Trump Administration, Federal Circuit Set to Jumpstart Investments in Nuclear Industry,&rdquo; <em>Environmental Edge</em> (Feb. 14, 2025).]]</p> <p>As <a href="/en/perspectives/advisories/2024/11/eighth-circuit-creates-circuit-split-under-price-anderson-act">discussed</a>&nbsp;in Arnold &amp; Porter&rsquo;s analysis of the Eighth Circuit case,[[N: Lauren Daniel and Sam Kleinman, &ldquo;Eighth Circuit Creates Circuit Split Under Price-Anderson Act, the Statute Government Tort Suits Against Nuclear Operators&rdquo; (Nov. 8, 2024).]] <em>Mazzocchio</em> arose from claims by Missouri residents that radioactive materials associated with legacy U.S. nuclear activities contaminated local areas and resulted in cancers.[[N: <em>Mazzocchio</em>, 120 F.4th at 567.]] The defendants in the case moved to dismiss on the grounds that the complaint did not adequately allege violations of federal nuclear radiation-dose standards, which all prior circuits to consider the issue had held to be a necessary element of a public liability claim against nuclear operators.[[N: Id. at 569.]] Specifically, because the Atomic Energy Act gives the federal government exclusive authority over nuclear safety, several courts of appeals had previously held that federal regulations define the exclusive standard of care applicable in these types of suits.[[N: Id.]] These courts have also worried that a jury should not, in applying open-ended state-law standards governing negligence, decide &ldquo;permissible levels of radiation exposure&rdquo; or &ldquo;the adequacy of safety procedures at nuclear plants&rdquo; where the federal government has already brought ample scientific expertise to bear through notice-and-comment rulemaking.[[N: E.g., <em>In re Hanford Nuclear Reservation Litig.</em>, 534 F.3d 986, 1003 (9th Cir. 2008).]] The <em>Mazzocchio</em> district court disagreed, however, concluding that plaintiffs could also look to state law in defining the applicable standard of care. Recognizing the split of opinion on the subject, the district court certified the question for interlocutory appeal.[[N: <em>Mazzocchio v. Cotter Corp</em>, 2023 WL 5831960 (E.D. Mo. Sept. 8, 2023).]]</p> <p>The Eighth Circuit affirmed the district court&rsquo;s judgment.[[N: <em>Mazzocchio</em>, 120 F.4th at 569.]] Looking to the Price-Anderson Act&rsquo;s instruction that state law supplies the substantive rules for decision unless inconsistent with the PAA, the court concluded that state-law tort standards were not displaced merely because they concerned nuclear safety.[[N: Id.]] The decision squarely conflicts with decisions from other circuits holding that federal law supplies the exclusive standard of care.[[N: <em>In re TMI Litig. Cases Consol. II</em>, 940 F.2d 832, 859 (3d Cir. 1991); <em>accord O&rsquo;Conner v. Commonwealth Edison Co.</em>, 13 F.3d 1090, 1105 (7th Cir. 1994); <em>Nieman v. NLO, Inc.</em>, 108 F.3d 1546, 1551-53 (6th Cir. 1997); <em>Roberts v. Fla. Power &amp; Light Co.</em>, 146 F.3d 1305, 1308 (11th Cir. 1998); <em>Hanford</em>, 534 F.3d at 1003.]]</p> <p>That split made <em>Mazzocchio</em> an obvious candidate for Supreme Court review. Rule 10 of the Supreme Court&rsquo;s rules consider the existence of a split of authority amongst circuit courts on an important question of federal law a key criterion for certiorari. One of the defendants filed a petition for review, and, as it often does on questions of the interpretation of federal statutes, the Supreme Court asked for the views of the Solicitor General.</p> <p>In April 2026, the United States filed a response recommending that the Supreme Court deny certiorari. The government&rsquo;s recommendation was surprising, however, because the brief largely agreed with the petitioners. The government agreed, for example, that the Eighth Circuit decision is wrong and that federal law preempts the application of state law standards of care in PAA suits.[[N: Brief for the United States as Amicus Curiae, <em>Cotter Corp. v. Mazzocchio</em>, No. 24-1001 (U.S. Apr. 9, 2026), at 12.]] The government also agreed with the petitioners that the Eighth Circuit&rsquo;s decision created a split amongst the courts of appeals. Ultimately, however, the government thought the Supreme Court could wait and review the question at a later time, when it is clearer whether the applicable state-law standards actually differ from the relevant federal standards and whether any such difference would make a practical difference to the outcome in the <em>Mazzocchio </em>case.[[N: Id. at 20.]]</p> <p>The Supreme Court agreed with the United States&rsquo; recommendation and denied certiorari and provided no reasoning. Though the denial does not necessarily signal agreement with the Eighth Circuit, it nonetheless carries real consequences for nuclear litigation and the nuclear industry as a whole. The Solicitor General&rsquo;s tack also suggests the administration is grappling with significant tension and complexity in pursuing its nuclear agenda. Plaintiffs now have additional leeway to test whether <em>Mazzocchio</em> can be extended beyond its facts to additional theories of state-law liability, to apply <em>Mazzocchio</em> in circuits that have not yet opined on the question, and/or to test whether the composition of circuits that ruled on the question years ago (in some cases decades ago) might drive a divergence from prior precedent today. That dynamic is likely to persist until the Supreme Court takes up the question in a later case, perhaps after final judgment in <em>Mazzocchio</em> or after another court of appeals weighs in.</p> <p>For nuclear industry operators, the Supreme Court&rsquo;s denial exacerbates legal and business risk. While the relevant Price-Anderson Act claims refer specifically to &ldquo;nuclear incidents,&rdquo; the statutory definition of such claims is expansive and has been interpreted as extending to any claims alleging property damage or personal injury as a result of exposure to nuclear material. Without the shield of federal permit compliance as a complete defense in tort, even nuclear facilities with minimal permitted radiation emissions could be susceptible to burdensome suits. And it is possible that exposure claims with little evidence could be leveraged into suits designed to test these issues. Defendants in Price-Anderson Act cases should continue to preserve the federal-standard-of-care argument early and clearly, even in jurisdictions where the issue appears settled. Defendants should also develop the record on why allowing state-law radiation-safety duties would conflict with the federal nuclear regulatory scheme, particularly where plaintiffs seek to impose obligations different from those established by federal regulators. </p> <p>Arnold &amp; Porter has successfully defended Price-Anderson Act suits and helped clients navigate the political complexity associated with operating nuclear facilities. As always, we will continue to monitor developments in litigation affecting the nuclear industry. </p> <p>&nbsp;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{34B288BD-4392-4286-9671-8506AF7BC497}https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.dailyjournal.com%2Farticles%2F391607-california-supreme-court-hears-i-gilead-tenofovir-cases-i-weighs-scope-of-duty-to-innovate&data=05%7C02%7CShelby.Mitchell%40arnoldporter.com%7Cf1211dfd23df4a93ad0208deb6b0d0e9%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639149067747740615%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=4Q1w3M6cBkoHhAnYKqWFdaojgQwragqYtZqj%2FdFkfUY%3D&reserved=0Jocelyn A. Wiesnerhttps://www.arnoldporter.com/en/people/w/wiesner-jocelyn-ajocelyn.wiesner@arnoldporter.comTommy Huynhhttps://www.arnoldporter.com/en/people/h/huynh-tommytommy.huynh@arnoldporter.comWed, 20 May 2026 00:00:00 -0500{0BDFD68E-14B4-4DE8-A8B4-365E31AD98EC}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/05/judah-prero-discusses-new-mexicos-pfas-reporting-requirement-with-chemical-watch-news-insightJudah Prero, Arnold &amp; Porter Environmental counsel and former Assistant State Attorney General at the Maryland Department of the Environment, was quoted in the <em>Chemical Watch News &amp; Insight</em> article, &ldquo;Industry braces for New Mexico PFAS product labelling requirements.&rdquo;Tue, 19 May 2026 00:00:00 -0500<p>Judah Prero, Arnold &amp; Porter Environmental counsel and former Assistant State Attorney General at the Maryland Department of the Environment, was quoted in the<em> Chemical Watch News &amp; Insight</em> article, &ldquo;Industry braces for New Mexico PFAS product labelling requirements.&rdquo; The article discusses industry reaction to New Mexico&rsquo;s final rule implementing its PFAS restriction law and examines how manufacturers are preparing for the state&rsquo;s new PFAS product reporting and labeling requirements ahead of 2027 compliance deadlines. </p> <p>Judah noted that companies increasingly view PFAS reporting obligations as an unavoidable part of the regulatory landscape, particularly as more states adopt similar frameworks. Referencing existing requirements in Minnesota, he explained that while companies are becoming accustomed to PFAS reporting, implementation has proven challenging in practice due to evolving filing systems and delayed deadlines. </p> <p>Judah also emphasized that manufacturers are closely watching whether New Mexico aligns its reporting framework with existing state programs to minimize duplicative compliance burdens. He observed that industry is hoping states adopt consistent reporting standards so companies can leverage the same data submissions across multiple jurisdictions.</p>{743A25BD-1278-43B6-A1DA-FB7D551F2318}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/05/jonathan-martel-discusses-epa-guidance-on-aftermarket-diesel-sensor-removal-with-inside-epaJonathan Martel, co-chair of Arnold &amp; Porter&rsquo;s Environmental practice group and a former attorney at the U.S. Environmental Protection Agency&rsquo;s (EPA) Office of General Counsel, was quoted in the <em>Inside EPA</em> article &ldquo;DOJ, EPA Appear Split Over Legality Of Aftermarket Diesel Sensor Removal,&rdquo; which examines questions surrounding EPA guidance on diesel exhaust fluid (DEF) sensor removal and the government&rsquo;s ongoing enforcement posture in aftermarket diesel tampering cases.&nbsp;Tue, 19 May 2026 00:00:00 -0500<p>Jonathan Martel, co-chair of Arnold &amp; Porter&rsquo;s Environmental practice group and a former attorney at the U.S. Environmental Protection Agency&rsquo;s (EPA) Office of General Counsel, was quoted in the <em>Inside EPA</em> article &ldquo;DOJ, EPA Appear Split Over Legality Of Aftermarket Diesel Sensor Removal,&rdquo; which examines questions surrounding EPA guidance on diesel exhaust fluid (DEF) sensor removal and the government&rsquo;s ongoing enforcement posture in aftermarket diesel tampering cases. </p> <p>Jonathan disagreed that EPA and DOJ are &ldquo;split&rdquo; on the issue, but noted that EPA&rsquo;s recent public statements have created &ldquo;mixed messages&rdquo; regarding the agency&rsquo;s position. He added that EPA&rsquo;s guidance is intended to encourage manufacturers to transition from direct DEF quality sensors to alternative NOx-based monitoring systems, rather than abandoning emissions controls altogether. </p> <p>He also observed that aftermarket software replacing DEF sensors with effective NOx-based monitoring systems &ldquo;would likely have a good defense to a tampering allegation,&rdquo; while cautioning that EPA&rsquo;s messaging may have contributed to confusion about the scope of permissible modifications.</p> <p><a rel="noopener noreferrer" href="https://insideepa.com/daily-news/doj-epa-appear-split-over-legality-aftermarket-diesel-sensor-removal?0=ip_login_no_cache%3D0b31b6ae46ce4f8882e9cbe4a534bcc8" target="_blank">Read the full article</a>.</p>{2C589747-8522-4176-A43D-57AA1D39679B}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/05/claire-reade-discusses-us-china-trade-dynamics-and-trump-xi-summit-with-bbc-and-al-jazeeraClaire Reade, Arnold &amp; Porter senior counsel and former Assistant U.S. Trade Representative for China Affairs, recently spoke with <em>BBC</em> and <em>Al Jazeera</em> to discuss the realistic prospects for U.S.-China trade negotiations ahead of the Trump-Xi summit.Mon, 18 May 2026 00:00:00 -0500<p>Claire Reade, Arnold &amp; Porter senior counsel and former Assistant U.S. Trade Representative for China Affairs, recently spoke with <em>BBC</em> and <em>Al Jazeera</em> to discuss the realistic prospects for U.S.-China trade negotiations ahead of the Trump-Xi summit.</p> <p>Appearing on the <em>BBC</em>, Claire noted that China is unlikely to make major concessions or alter the status quo. &ldquo;China is working very hard to ensure that it becomes independent of other countries, including the United States, in its development,&rdquo; she said. Meanwhile, Trump would benefit from positive press if he could negotiate additional trade openings with China, according to Claire.</p> <p>Speaking to <em>Al Jazeera</em>, Claire emphasized the broader strategic tensions shaping the relationship, noting that &ldquo;China does not trust the U.S.&rdquo; and views the relationship through the lens of &ldquo;long-term global competition,&rdquo; dynamics she said significantly constrain the scope of any potential agreement.</p> <p>In discussing possible outcomes of the summit, Claire suggested that China may ease restrictions on certain U.S. imports or purchase additional American goods, rather than pursue substantive structural reforms. She further explained that China would only ease restrictions on U.S. technology imports if doing so did not &ldquo;interfere with China&rsquo;s strategic plans to eliminate dependence on U.S. technology over the longer term.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://vimeo.com/1193305322/e244e94bba?share=copy&amp;fl=sv&amp;fe=ci" target="_blank">Watch the full<em> BBC</em> interview</a>.</p> <p><a rel="noopener noreferrer" href="https://www.aljazeera.com/amp/economy/2026/5/15/after-trumps-pledge-to-open-up-china-low-expectations-for-summit-deal" target="_blank">Read the full <em>Al Jazeera</em> article</a>.</p>{EFA35525-73FE-41CB-8D6A-008F06F83C70}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/president-trump-signs-executive-order-mandating-fixed-price-contracting-in-federal-procurementKristen E. Ittighttps://www.arnoldporter.com/en/people/i/ittig-kristen-ekristen.ittig@arnoldporter.comAmanda J. Sherwoodhttps://www.arnoldporter.com/en/people/s/sherwood-amandaamanda.sherwood@arnoldporter.comAdrienne K. Jacksonhttps://www.arnoldporter.com/en/people/j/jackson-adrienne-kadrienne.jackson@arnoldporter.comOn April 30, 2026, President Trump signed an Executive Order (EO) titled &ldquo;Promoting Efficiency, Accountability, and Performance in Federal Contracting,&rdquo; directing executive branch agencies to make fixed-price contracts the default and preferred method of federal procurement. But the EO not only establishes a priority for fixed-price contracts; it mandates renegotiation of the 10 largest existing cost-type contracts at each agency within 90 days. This advisory covers the EO&rsquo;s key terms and likely impacts, highlighting what remains to be seen regarding the impacts on federal contractors.Mon, 18 May 2026 00:00:00 -0500<h2>Overview</h2> <p>On April 30, 2026, President Trump signed an <a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2026/04/promoting-efficiency-accountability-and-performance-in-federal-contracting/" target="_blank">Executive Order</a> (EO) titled &ldquo;Promoting Efficiency, Accountability, and Performance in Federal Contracting,&rdquo; directing executive branch agencies to make fixed-price contracts the default and preferred method of federal procurement. But the EO not only establishes a priority for fixed-price contracts; it mandates renegotiation of the 10 largest existing cost-type contracts at each agency within 90 days. This advisory covers the EO&rsquo;s key terms and likely impacts, highlighting what remains to be seen regarding the impacts on federal contractors.</p> <h2>Background</h2> <p>Federal procurement is accomplished through a spectrum of contract types falling along a risk-allocation continuum: whereas fixed-price contracts place performance risk primarily on the contractor by requiring delivery of defined outcomes for a set price, cost-reimbursement contracts shift financial risk to the government by guaranteeing recovery of contractors&rsquo; allowable incurred costs plus a profit fee. In recognition of these different risk structures, the Federal Acquisition Regulation (FAR) requires the contracting officer, when selecting and negotiating contract type, to &ldquo;consider contract terms, risks (e.g., technical, performance, delivery), and pricing.&rdquo; FAR 16.102.[[N: When describing the FAR throughout, this advisory refers to the Revolutionary FAR Overhaul (RFO).&nbsp; Previously, FAR 16.101 required agencies to consider &ldquo;the degree and timing of the responsibility assumed by the contractor for the costs of performance&rdquo; and &ldquo;the amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals&rdquo; in selecting a fixed price or cost reimbursement contract type. The RFO simplifies this provision to the quoted text.]]</p> <p>The EO describes cost-reimbursement contracting as a source of &ldquo;unpredictable costs, bloated overhead, and weak performance incentives,&rdquo; and states that a review of FY24 spending identified approximately $120 billion obligated on cost-reimbursement consulting contracts alone. Against that backdrop, the EO positions fixed-price contracting &mdash; with its emphasis on clearly defined outcomes, predictable timelines, and profit tied to performance &mdash; as the preferred model for driving contractor accountability and budget discipline.</p> <h2>Key Provisions of the Executive Order</h2> <h3>1. Fixed-Price Contracting as the Mandatory Default (Section 2(a))</h3> <p>The EO requires all federal agencies to utilize fixed-price contracts as the default contract type for future procurements. This obligation applies whether an agency is contracting on its own behalf or on behalf of another agency, including in interagency acquisition arrangements.</p> <h3>2. Written Justification and Approval Thresholds for Non-Fixed-Price Contracts (Section 2(b))</h3> <p>The EO requires that any use of a non-fixed-price contract &mdash; including cost-reimbursement, time and materials (T&amp;M), labor-hour, or any other non-fixed price contract &mdash; must be justified in writing by the contracting officer. Where the value of a non-fixed-price contract (or the non-fixed-price portion of a hybrid contract) exceeds specified thresholds, written agency head approval is required before award:</p> <ul> <li>Department of Defense): $100 million</li> <li>The National Aeronautics and Space Administration: $35 million</li> <li>Department of Homeland Security: $25 million</li> <li>All other agencies: $10 million</li> </ul> <p>Agency heads may delegate this approval authority to non-career employees within the agency. The approval requirements do not apply to: (i) contracts supporting responses to emergencies, major disasters, or contingency operations (as defined in FAR Part 2); or (ii) contracts for research and development or pre-production development for major systems acquisition (governed by FAR Parts 34-35). The EO acknowledges that cost-reimbursement contracting remains appropriate in those limited contexts, but directs that it should be the exception rather than the rule.</p> <h3>3. Renegotiation Mandate for Existing Non-Fixed-Price Contracts (Section 2(c))</h3> <p>Within 90 days of the Order (~July 29, 2026), each agency must review its ten largest non-fixed-price contracts by dollar value and, to the maximum extent practicable and consistent with law, seek to modify, restructure, or renegotiate those contracts to incorporate fixed prices and performance-based incentives. The same exemptions for R&amp;D/major systems and emergency contracts apply. Agencies contracting on behalf of other agencies must include contracts held in that capacity when compiling their list.</p> <h3>4. Semi-Annual Reporting to OMB (Section 2(d))</h3> <p>Agency heads must report semi-annually to the Office of Management and Budget (OMB) Director the number, value, and written justifications for all non-fixed-price contracts approved by the agency. The first report is due no later than 90 days from the date of the Order (~July 29, 2026). In addition to detailing approved exceptions, the first report must identify broader opportunities for moving existing non-fixed-price contracts toward fixed-price arrangements.</p> <h3>5. FAR Amendments and Training (Section 3)</h3> <p>Within 45 days of the Order (~June 14, 2026), the OMB Director must issue implementation guidance to all agencies. Within 120 days of the Order (~August 28, 2026), the Administrator for Federal Procurement Policy must: (i) propose, in coordination with the FAR Council, amendments to the FAR to codify fixed-price contracting as the default federal procurement policy; and (ii) develop, in coordination with Defense Acquisition University and the Federal Acquisition Institute, a training program for contracting and program personnel on the formation, use, negotiation, and management of fixed-price contracts. Pending FAR amendments, agencies are directed to use applicable FAR deviations to the maximum extent practicable.</p> <h2>Key Implications and Takeaways for Federal Contractors</h2> <h3>A. Immediate Risk of Attempted Contract Renegotiation</h3> <p>The EO instructs federal agencies to attempt to renegotiate large, cost-type contracts within 90 days. Of course, such existing contracts remain binding unless modified; the government cannot unilaterally change an existing cost-type contract to fixed-price. Contractors who receive government outreach seeking a renegotiation will have to choose whether to engage with their government customer or seek to enforce the terms of their contracts as-written, and potentially face the risk of a termination or non-renewal should the agency be unwilling to continue on a cost reimbursement basis.</p> <p>Recognizing these barriers, the EO requires only that agencies seek to renegotiate &ldquo;to the maximum extent practicable and consistent with law.&rdquo; Contractors have legal and contractual arguments against unilateral modifications (especially of this significance), and agencies generally cannot impose conversion without consent. Nonetheless, the government will have significant leverage over contractors that depend on ongoing program funding, renewals, options, or follow-on awards.</p> <h3>B. New Award Strategy Considerations and Shifting Risk </h3> <p>The new presumption in favor of fixed price procurements is in tension with past procurement practice, which recognized that cost-type contracts make sense in a variety of procurements. Previously, agencies exercised their discretion to select the contract type that would provide the greatest incentive for efficient and economical performance, given the specific circumstances of each individual procurement. That analysis turns on factors , including the degree of cost uncertainty, the complexity of the requirement, the contractor&rsquo;s ability to estimate costs with reasonable confidence at award, and the administrative burden of contract oversight. Agencies selected firm-fixed-price contracts when the scope was well-defined, performance risk was well-understood, and the contractor could price the work with confidence. In turn, agencies pursued cost-reimbursement arrangements where those conditions did not hold: where the work was technically uncertain, where the government could not define the requirement with sufficient precision, or where requiring contractors to absorb performance risk they could not reasonably quantify would either deter competition or produce artificially inflated bids.</p> <p>By mandating fixed-price contracting as the default, the EO places a categorical thumb on the scale for a single contract type regardless of whether the underlying requirement supports it at a time when the government&rsquo;s acquisition workforce, which has seen significant cuts, may be hard-pressed to craft the definitive work statements required for fixed price efforts. For complex developmental services, emerging technology acquisitions, and requirements that are inherently difficult to scope in advance, the result of the EO's mandate may be either poorly structured fixed-price contracts with inadequately defined deliverables or discouraging qualified contractors from competing at all. </p> <p>Practically, the written justification process created by the EO may function as a vehicle for documenting the contract type analysis that contracting officers should already be performing. But the institutional pressure to avoid non-fixed-price contracts risks distorting procurement decisions, pushing agencies toward fixed-price structures on requirements that are not a good fit. And critically, the EO&rsquo;s apparent assumption that fixed-price contracting is inherently a cost-saving measure is not necessarily, or even often, true. Requiring contractors to bid a firm-fixed price on poorly scoped or ambiguous requirements will necessarily lead to inclusion of strategic amounts to cover contingent risks that contractors cannot rule out, with the resulting bids reflecting not the expected cost of performance, but the contractor&rsquo;s best assessment of the amount required to cover its own risk.[[N: The so-called firm-fixed-price risk premium includes the spread between what a contractor would bid under a well-structured cost-reimbursement arrangement (estimated costs plus a negotiated fee) and what it must bid under a fixed-price vehicle to cover the full distribution of cost outcomes, including adverse scenarios. Depending on the nature, duration, and technical complexity of the work, this premium can be substantial.]] A well-administered cost-reimbursement contract on such ambiguous or undefined requirements could therefore actually cost the government less, something the EO seems to ignore. Forcing ill-defined requirements to be bid as firm-fixed price may also serve as a barrier to competition, particularly for small businesses, which may be unable to accept the large potential downside risks of fixed price contracting vehicles.</p> <h3>C. Impact on Contractor Proposal Development</h3> <p>Any broad shift from issuing solicitations on a cost basis to fixed-price requirements will necessarily result in contractors assuming greater risk, which merits additional contractor diligence during the bid and proposal development process. Bid and proposal teams should evaluate whether the scope of work is sufficiently well-defined to support firm-fixed-price pricing, whether performance-based incentive structures are achievable, and how to price risk appropriately. Engage with the procuring agency actively to question any ambiguities in contract scope, and craft proposals to cabin risk where possible. Underpricing risk in a rush to win work on a fixed-price vehicle carries material financial consequences that can be difficult to recover.</p> <p>By corollary, the government may find that the EO results in contractors , including a premium corresponding to this increased risk in their prices &mdash; ironically causing bids to go up, contrary to the EO&rsquo;s apparent intention. This means that the government's intended savings from eliminating cost overruns on a cost-type contract may simply be replaced by higher base prices on the fixed-price vehicle &mdash; with the additional disadvantage that the fixed price provides no mechanism for the government to benefit if actual costs come in below the contract price.</p> <h3>D. A Future Surge in REAs?</h3> <p>Another potential result of the EO could very well be a delayed reckoning with the true scope and costs of a procurement in the form of requests for equitable adjustment (REAs) and contract disputes. Fixed-price contracts contain a Changes clause (FAR 52.243-1) that entitles a contractor to an equitable adjustment when the government orders a change within the general scope of the contract. This, however, turns on whether the government has adequately defined and cabined the scope of work at the time of award. Where the scope is well-defined, the Changes clause operates as intended: discrete, government-directed changes give rise to discrete, quantifiable adjustments. Where the scope is poorly defined, and the boundaries of the original contract are contested from the outset, disputes will inevitably arise over whether work is included in the original scope or is a &ldquo;change.&rdquo;</p> <h2>Conclusion</h2> <p>The EO has broad ambitions, but how much it will change procurement in practice remains to be seen. Fixed-price contracting is already the norm for well-defined requirements, and agencies remain able to justify cost-type vehicles when the work genuinely warrants them. The renegotiation mandate may be a more immediate and concrete consequence: contractors holding large cost-reimbursement, T&amp;M, or labor-hour contracts should prepare strategies should they receive agency outreach in the near term.</p> <p>Arnold &amp; Porter's Government Contracts practice is available to assist clients in assessing their exposure and navigating renegotiation discussions. If you have questions about this Advisory, please contact a member of our Government Contracts Practice Group or your existing Arnold &amp; Porter contact.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{F0E4B4BE-55F4-4F1C-A615-00989F653AD4}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/agri-stats-settlementRobert J. Katerberghttps://www.arnoldporter.com/en/people/k/katerberg-robert-jrobert.katerberg@arnoldporter.comSonia Kuester Pfaffenrothhttps://www.arnoldporter.com/en/people/p/pfaffenroth-soniasonia.pfaffenroth@arnoldporter.comJavier Ortega Alvarezhttps://www.arnoldporter.com/en/people/o/ortega-alvarez-javierjavier.ortega@arnoldporter.comOn May 7, 2026, the DOJ and several states reached a proposed settlement with Agri Stats, alleging that its meat industry benchmarking reports facilitated unlawful information sharing among competitors and enabled price coordination. The settlement imposes detailed restrictions on how competitively sensitive data may be collected, aggregated, aged, and distributed, reflecting the DOJ&rsquo;s clearest guidance to date on the limits of permissible benchmarking and signaling a more aggressive enforcement approach toward industry information exchanges.Mon, 18 May 2026 00:00:00 -0500<p> <p>On May 7, 2026, the Antitrust Division of the U.S. Department of Justice (DOJ), along with several states, reached a settlement (<a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1439906/dl?inline" target="_blank">Proposed Settlement</a>) with Agri Stats, Inc., to resolve allegations that Agri Stats&rsquo; meat industry reports amounted to an impermissible exchange of information among competitors aimed at facilitating price fixing. Agri Stats is a data-sharing and consulting company engaged in the collection of prices, output, and costs from growers and processors in the broiler chickens, turkeys, and pork industries. The Proposed Settlement follows prior settlements between private plaintiffs and Agri Stats in related lawsuits alleging price-fixing of broiler chickens and turkeys.[[N:Uncontested Motion For Preliminary Approval of Settlement, <em>In re Broiler Chicken Antitrust Litigation</em>, No. 1:16-cv-08637 (N.D. Ill. Mar. 31, 2026); Unopposed Motion For Preliminary Approval of Settlement, <em>In re Turkey Antitrust Litigation</em>, No. 19-cv-08318 (N.D. Ill. Mar. 31, 2026).]]</p> <p>The Proposed Settlement imposes a number of conduct restrictions on what data Agri Stats may collect and report, how that data must be aggregated and aged before it can be shared, who may purchase its reports and on what terms, and how compliance with all of these obligations will be monitored and enforced going forward. Taken together, these commitments represent the DOJ&rsquo;s most detailed articulation to date of the boundaries between permissible benchmarking and unlawful information sharing among competitors, and carry significant implications for companies across industries who participate in or operate similar data-sharing arrangements.</p> <h2>Information Exchange Safe Harbors Withdrawal and Subsequent Guidance </h2> <p>As we previously wrote about,[[N:<a href="https://www.arnoldporter.com/en/perspectives/advisories/2023/02/no-safe-harbors-doj-signals-increased-scrutiny" target="_self">No Safe Harbors: DOJ Signals Increased Scrutiny of Information Exchanges</a>.]] in February 2023, DOJ and the Federal Trade Commission (FTC) withdrew two guidance documents that had provided a set of safe harbors to industry, including a safe harbor for competitor information exchange programs (collectively, the &ldquo;Safe Harbor Guidelines&rdquo;).[[N:Press Release, Dep&rsquo;t of Justice, <a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements" target="_blank">Justice Department Withdraws Outdated Enforcement Policy Statements</a>.]] According to then-Principal Deputy Assistant Attorney General Doha Mekki, who had previewed the withdrawal during a speech, the Safe Harbor Guidelines were &ldquo;outdated&rdquo; and &ldquo;no longer reflected market realities.&rdquo;[[N:<a rel="noopener noreferrer" href="https://www.justice.gov/opa/speech/principal-deputy-assistant-attorney-general-doha-mekki-antitrust-division-delivers-0#_ftnref12" target="_blank">Prepared Remarks of Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division at GCR Live: Law Leaders Global 2023</a> (Feb. 2, 2023) (Mekki Remarks).]] </p> <p>The withdrawn Safe Harbor Guidelines had offered industry a set of conditions that if followed would tend to reduce antitrust risk when sharing competitively sensitive information: (1) the survey must be managed by a third party; (2) the information provided is relatively old; (3) the information is aggregated to protect the identity of the underlying sources; and (4) a sufficient number of sources are aggregated to prevent competitors from linking particular data to an individual source. Although the withdrawn guidance was addressed specifically to healthcare industry participants, the guidance was often applied by enforcers and courts to information exchanges more broadly and provided companies in any sector a set of readily-identifiable and clear conditions to follow when exchanging information. </p> <p>Over the proceeding years since the withdrawal of the Safe Harbor Guidelines, the DOJ filed a series of statements of interest in antitrust cases across multiple industries, each giving insight into the legal framework that ultimately underpins the Proposed Settlement&rsquo;s specific prohibitions and requirements. For example, DOJ filed a statement of interest in a private litigation related to information sharing and benchmarking among pork producers and Agri Stats, arguing that aggregating data in and of itself does not provide a safe harbor from liability.[[N:<a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1371806/dl" target="_blank">Statement of Interest</a>, <em>In re Pork Antitrust Litigation</em>, No. 0:18-cv-01776-JRT-JFD (D. Minn. Oct. 1, 2024).]] DOJ also filed a statement of interest in a private litigation related to information sharing and benchmarking among frozen potato product producers, arguing that the central question courts should answer is whether the exchange would tend to suppress competition, even if data is aggregated, anonymized, or backward-looking.[[N:<a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1429466/dl?inline" target="_blank">Statement of Interest</a>, <em>In re Frozen Potato Products Antitrust Litigation</em>, No. 1:24-cv-11801 (N.D. Ill. Feb. 27, 2026).]]</p> <h2>The Agri Stats Proposed Settlement</h2> <p>The DOJ, along with the states of California, Minnesota, North Carolina, Tennessee, Texas, and Utah, sued Agri Stats in 2023, alleging that Agri Stats facilitated the exchange of competitively sensitive information, such as price, output, and costs, among meat processing companies. The exchange of information itself is the alleged violation of the Sherman Act, rather than being used as circumstantial evidence of a price-fixing conspiracy. The Proposed Settlement, which is the clearest articulation of what enforcers will consider permissible industry benchmarking among competitors, sets forth a series of commitments and requirements by which Agri Stats must abide to continue reporting information regarding meat processing. Specifically, the Proposed Settlement requires Agri Stats to:[[N:Press Release, <a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-requires-agri-stats-end-exchange-competitively-sensitive-information" target="_blank">Justice Department Requires Agri Stats to End Exchange of Competitively Sensitive Information Among Nation&rsquo;s Largest Meat Processors that Suppressed Competition and Increased Prices for Decades</a> (May 7, 2026).]]</p> <ul> <li><strong>Stop providing any sales reports or non-public pricing information available only to producers</strong>. According to DOJ, meat processors had systematically used these data to identify opportunities to increase prices. The Proposed Settlement, however, expressly carves out and allows continued price reports by Express Markets Inc., a subsidiary of Agri Stats. DOJ stated in its press release that Express Markets&rsquo; reports did not raise the same concerns because that pricing information was less detailed and available to all interested parties, not just meat processors.</li> <li><strong>Stop reporting production, cost, and labor data at either the company or facility level</strong>. According to DOJ, access to competitors&rsquo; data at this granular level had allowed meat processors to adjust pricing and output.</li> <li><strong>Make information that Agri Stats distributes available to all interested domestic purchasers on reasonable and non-discriminatory terms</strong>. According to DOJ, this will eliminate information asymmetry and increase market transparency.</li> <li><strong>Adhere to restrictions on the timeliness of the information that Agri Stats shares</strong>. According to DOJ, the availability of near-current data allowed competing meat processors to better understand market dynamics, facilitating collusion in almost real time. The Proposed Settlement generally requires that reported information be based on data that is at least 45 days old on average, and at least 90 days old for certain data related to production decisions.</li> <li><strong>Comply with certain metrics to ensure that reported data is not dominated by one or a few participants</strong>. The Proposed Settlement generally requires that no single contributor account for more than 70% of the data reflected in a report, and that each reported statistic contain data from at least three contributors.</li> </ul> <p>The Proposed Settlement also requires the appointment of a Monitor to oversee Agri Stats&rsquo; compliance with the settlement, requires Agri Stats to establish an antitrust compliance program, and gives DOJ and the plaintiff states the right to inspect Agri Stats&rsquo; records to ensure compliance with the settlement. </p> <h2>Looking Ahead</h2> <p>Companies involved in benchmarking and other information exchange programs, both those that contribute data and those that receive reports, will benefit from carefully considering how data is collected and reported within their relevant market to avoid being involved in conduct that may be considered to harm competition. Notably, the prohibitions and requirements outlined in the Proposed Settlement are stricter than the withdrawn Safe Harbor Guidelines in some ways, but more permissive in others. For example, the Proposed Settlement allows certain reported information to be based on data that is only 45 days old and from only three contributors, as opposed to the 90-day and minimum of five contributors requirements in the Safe Harbor Guidelines. </p> <p>Companies will need to take into consideration conditions and dynamics of the specific market when assessing the risk posed by participating in information exchange programs. But the Proposed Settlement offers three general takeaways: (1) aggregated and anonymized data does not in itself create a presumption of legality &mdash; instead, reported data must be formatted in a way that does not allow recipients to infer the identity of contributors; (2) limiting reports to purely historical data is still advisable, but what qualifies as historical may vary based on specific market conditions; and (3) sellers and buyers must both be given unconditioned access to reports to avoid market asymmetry.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{001F66AA-E992-447C-B84C-B102238F533C}https://www.arnoldporter.com/en/perspectives/events/2026/05/arnold-porter-at-the-accountants-liability-2026-conferenceVeronica E. Callahanhttps://www.arnoldporter.com/en/people/c/callahan-veronica-rendnveronica.callahan@arnoldporter.comAdrien K. Andersonhttps://www.arnoldporter.com/en/people/a/anderson-adrien-kadrien.anderson@arnoldporter.comEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comKathleen Reillyhttps://www.arnoldporter.com/en/people/r/reilly-kathleenkathleen.reilly@arnoldporter.comDavid B. Schwartzhttps://www.arnoldporter.com/en/people/s/schwartz-david-bdavid.schwartz@arnoldporter.comStephanna F. Szotkowskihttps://www.arnoldporter.com/en/people/s/szotkowski-stephannastephanna.szotkowski@arnoldporter.comArnold &amp; Porter is co-chairing the annual Accountants&rsquo; Liability Conference, the premier CLE event for the profession, bringing together SEC and PCAOB leadership, Big Four and mid-market accounting firms, and outside counsel to discuss enforcement trends, audit litigation, and emerging issues.Thu, 14 May 2026 00:00:00 -0500<p>Arnold &amp; Porter&rsquo;s Securities Enforcement &amp; Litigation practice is co-chairing the annual <a rel="noopener noreferrer" href="https://cle.ali.org/catalog/product.xhtml?eid=71310" target="_blank">Accountants&rsquo; Liability Conference</a>, the premier CLE event for the profession, bringing together SEC and PCAOB leadership, Big Four and mid-market accounting firms, and in-house counsel to discuss enforcement trends, audit litigation, and emerging issues. Veronica Callahan will serve as co-chair, and includes our <em>Chambers</em>-ranked auditor and accountants&rsquo; liability team alongside a cross-practice group of attorneys from our privacy, cybersecurity, white collar, and digital assets and cryptocurrency groups, reflecting the increasingly multidisciplinary nature of the risks facing the accounting profession today.</p> <p>Arnold &amp; Porter Speakers:</p> <ul> <li><strong>Veronica Callahan</strong>&nbsp;&mdash; Conference Co-Chair; Moderator, &ldquo;Global and Domestic Events and Their Impact on the Accounting Profession&rdquo;; Moderator, Keynote Fireside Chat with PCAOB leadership</li> <li><strong>Adrien Anderson</strong> &mdash;&nbsp;Moderator, &ldquo;Crypto and Predictions Markets&rdquo;</li> <li><strong>Eun Young Choi</strong> &mdash;&nbsp;Panelist, &ldquo;Crypto and Predictions Markets&rdquo;</li> <li><strong>Kathleen Reilly</strong> &mdash;&nbsp;Moderator, &ldquo;Private Credit and the Accounting Industry&rdquo;; Moderator, &ldquo;PCAOB Inspection Program&rdquo;</li> <li><strong>David Schwartz</strong> &mdash;&nbsp;Panelist, &ldquo;Data Privacy and Related Issues Challenging the Accounting Profession&rdquo;</li> <li><strong>Stephanna Szotkowski</strong> &mdash;&nbsp;Moderator, &ldquo;AI and the Accounting Profession&rdquo;</li> </ul>{38D42D3D-7E11-4A50-8D06-4CF163280D6D}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/dod-extends-foreign-ownership-control-or-influence-disclosure-requirementsNancy L. Perkinshttps://www.arnoldporter.com/en/people/p/perkins-nancy-lnancy.perkins@arnoldporter.comAmanda J. Sherwoodhttps://www.arnoldporter.com/en/people/s/sherwood-amandaamanda.sherwood@arnoldporter.comDustin Veseyhttps://www.arnoldporter.com/en/people/v/vesey-dustindustin.vesey@arnoldporter.com<p>On May 6, 2026, the U.S. Department of Defense (DOD) <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/05/07/2026-09067/defense-federal-acquisition-regulation-supplement-mitigating-risks-related-to-foreign-ownership" target="_blank">published a proposed rule</a> that would extend the current prohibition on awarding classified contracts to a company subject to foreign ownership, control, or influence (FOCI), absent satisfactory FOCI-mitigation measures, to awards of noncommercial defense contracts valued at $5 million or more, regardless of whether the work requires access to classified information.[[N: Although the proposed rule generally excepts solicitations for commercial DOD contracts, a designated senior DOD official may determine that a commercial contract &ldquo;involves a risk or potential risk to national security because of sensitive data, systems, or processes,&rdquo; and for that reason incorporate the new DFARS clause imposing FOCI restrictions.]] To effectuate this new prohibition, the proposed rule would require all contractors bidding on and performing such defense contracts &mdash; and subcontractors whose subcontracts are valued at $5 million or more &mdash; to submit to the Defense Counterintelligence and Security Agency (DCSA) information regarding any relationships maintained by the contractor with foreign persons, which DOD may use in its evaluation of bids submitted to competitive procurements. </p> <p>Companies interested in working with the DOD should carefully review the proposed rule and consider what the proposed disclosure obligations mean for their business.</p> <h2>Background</h2> <p>This proposed rule implements Section 847 of the National Defense Authorization Act for Fiscal Year 2020 (FY20 NDAA), which instructed the Secretary of Defense to &ldquo;improve the process and procedures for the assessment and mitigation of risks related to foreign ownership, control, or influence (FOCI) of contractors and subcontractors doing business with the Department of Defense.&rdquo; The Joint Explanatory Statement that accompanied the FY20 NDAA explains Section 847&rsquo;s purpose as follows:</p> <p style="margin-left: 40px;">The conferees are concerned by the growing threat to the integrity of the defense industrial base from strategic competitors, like the Russian Federation, the People&rsquo;s Republic of China, and their proxies, seeking to gain access to sensitive defense information or technology through contractors or subcontractors. The conferees recognize that there are existing efforts underway to understand and mitigate some of these risks as directed by several pilot programs &hellip;. However, the acquisition community must have greater visibility into all cleared and uncleared potential contractors and subcontractors seeking to do business with the Department. The Department must ensure that contractors and subcontractors do not pose a risk to the security of sensitive data, systems, or processes such as personally identifiable information, cybersecurity, or national security systems.</p> <p>To operationalize the above mandates, Section 847 specifically requires the DOD to promulgate new clauses in the Defense Federal Acquisition Regulation Supplement (DFARS) to extend FOCI disclosure and mitigation requirements to nonclassified, noncommercial defense contracts valued at $5 million or more. (Contractors working on classified contracts are already subject to restrictions on beneficial ownership and FOCI disclosure and mitigation procedures.)</p> <h2>Disclosure Requirements</h2> <p>Consistent with Congress&rsquo; direction, the proposed rule would establish a new DFARS section 240.27X, Mitigation of Risks Related to Beneficial Ownership or Foreign Ownership, Control, or Influence, that imposes requirements on contractors bidding on DOD applicable contracts, those awarded such contracts, and subcontractors performing similarly valued subcontracts under such contracts.</p> <p>First, the rule would require solicitations for noncommercial DOD contracts valued at $5 million or more to require offerors to submit Standard Form 328 (SF-328) &mdash; the Certificate Pertaining to Foreign Interests &mdash; and all required associated documents to DCSA. The SF-328 requires the offeror to report all FOCI that may exist with respect to the company. For example, the SF-328 asks, among other things:</p> <ul> <li>Does any foreign person(s), directly or indirectly, own, beneficially own, or subscribe to 5 percent or more of the outstanding shares of any class of stock, participation interest, units, or total capital commitment for your organization?</li> <li>Do any foreign persons serve as a member of your organization&rsquo;s governing body, or hold a management position?</li> <li>Does your organization have any contracts, agreements, understandings, grants, side letters, or arrangements with a foreign person(s)?</li> <li>During your organization&rsquo;s last fiscal year, did it derive 5 percent or more of its total revenue, net income, tuition, gifts, or endowments from any single foreign person?</li> </ul> <p>For any question to which an offeror responds &ldquo;Yes,&rdquo; the offeror must submit additional documentation, as outlined in the SF-328. </p> <p>In addition to submitting the SF-328, the proposed rule requires offerors to provide contact information for each &ldquo;beneficial owner&rdquo; of the business in the <a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.dcsa.mil%2FSystems-Applications%2FNational-Industrial-Security-System-NISS%2F&amp;data=05%7C02%7CShelby.Mitchell%40arnoldporter.com%7Cab68c63495324a54fc6808deb1e7b49b%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639143805890559517%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=JGeysX0aIisLJMfTw9s3GkQbmK7yYkJqY29CQDjQeRM%3D&amp;reserved=0" target="_blank">National Industrial Security System</a> (NISS). A &ldquo;beneficial owner&rdquo; is any individual or entity who, directly or indirectly, ultimately owns or controls the business. By submitting an offer under solicitations containing this new clause, offerors will represent that they have submitted the SF-328 to DCSA and beneficial owner contact information to NISS and that the information is current, accurate, and complete.</p> <p>Second, the disclosure obligation does not end at bid submission &mdash; the proposed DFARS clause also requires contractors to provide updates to their FOCI and beneficial ownership disclosures to DCSA throughout the life of the contract whenever a change to such information occurs. Furthermore, in relation to subcontracts exceeding $5 million, prime contractors must flow down the reporting obligation and ensure the subcontractor is listed as &ldquo;eligible&rdquo; in the NISS prior to award and for the duration of performance. If a change renders the subcontractor subject to FOCI during contract performance, the contractor is responsible for ensuring that the change is reported and any mitigation is effectuated. </p> <h2>Impact on Evaluations and Mitigation Requirements</h2> <p>Based on information provided in the SF-328 and associated documentation or any update furnished to DCSA, DCSA will determine whether the offeror or contractor is under FOCI by considering whether a &ldquo;foreign interest&rdquo; has the power, directly or indirectly, to:</p> <ul> <li>Direct or decide matters affecting the management or operations of that company in a manner that may result in a risk or potential risk to national security or potential compromise of sensitive data, systems, or processes</li> <li>Otherwise control or influence the business or management of the contractor in a manner that could adversely affect its ability to perform the contract or subcontract</li> </ul> <p>&ldquo;Foreign interest&rdquo; is defined broadly to include: any foreign government, agency of a foreign government, or representative of a foreign government; any form of business enterprise or legal entity organized, chartered, or incorporated under the laws of another country; and any person who is not a citizen or national of the United States.</p> <p>The proposed DFARS clause requires the DOD contracting entity to, before making award and based on input from DCSA, determine whether the offeror &ldquo;poses a risk or potential risk of compromise to national security &hellip; related to FOCI or beneficial ownership,&rdquo; and if so, determine whether such risk may be mitigated. To be eligible for contract award, the offeror must agree at the time of award to implement any risk mitigation strategy prescribed by the DOD contracting entity within 90 days of award. Relatedly, if the DOD&rsquo;s contracting entity determines an already-performing contractor is under FOCI based on an update provided to DCSA, the contractor must similarly implement a risk mitigation strategy within 90 days of DOD identifying the risk. Only by implementing such a mitigation strategy &mdash; or being found to have no FOCI or beneficial ownership risks &mdash; can an offeror receive or maintain &ldquo;eligible&rdquo; status in the NISS. </p> <p>A contracting officer may not award, modify, or exercise an option or otherwise extend a contract, task order, or delivery order unless the offeror or contractor has an &ldquo;eligible&rdquo; status in NISS. Neither may a prime contractor award or maintain a subcontract in excess of $5 million without ensuring the subcontractor maintains &ldquo;eligible&rdquo; status in NISS. </p> <h2>Conclusion</h2> <p>The proposed rule&rsquo;s expansion of beneficial ownership and FOCI information disclosure and mitigation requirements are designed to protect sensitive DOD information from foreign influence. By requiring detailed assessments of beneficial ownership information to detect FOCI early in the contracting process, DOD will be better equipped to establish mitigation measures that help reduce the risk of foreign adversaries gaining access to sensitive defense-related information and intellectual property. But these changes also have broad implications for federal defense contractors.</p> <p>First, defense contractors that have not already been subject to DCSA&rsquo;s FOCI screening for classified contracts should prepare and have ready for disclosure detailed information about their beneficial ownership and foreign operations. Second, mitigation strategies will not be optional when they are required by DOD. Offerors and contractors must be prepared to work with the DOD contracting entity to mitigate the risk of FOCI or risk losing contracts (and even subcontracts). Third, obligations will not end upon submission of an offer. Contractors will need to stay vigilant throughout the life of a contract, keep DOD informed of pertinent changes to beneficial ownership and FOCI information, and monitor compliance of their subcontractors. Fourth, defense contractors may reasonably conclude that a high risk of FOCI may reduce their competitiveness for future contracts with DOD (even in the commercial sphere). As such, companies may wish to consider the potential follow-on effects of any future foreign ventures or partnerships.</p> <p>Comments on the proposed rule are due on or before July 6, 2026. Please contact any author of this Advisory or your Arnold &amp; Porter relationship attorney if you would like to submit comments, have questions about the proposed rule, or to seek further guidance or advice.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>Thu, 14 May 2026 00:00:00 -0500{DD1B4AC2-6035-4F4F-8F86-314E849B2AFA}https://www.biosliceblog.com/2026/05/mhra-launches-consultation-on-modernising-the-definition-of-gene-therapy-medicinal-products/Libby Amos-Stonehttps://www.arnoldporter.com/en/people/a/amos-libbylibby.amos-stone@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comHeba Jalilhttps://www.arnoldporter.com/en/people/j/jalil-hebaheba.jalil@arnoldporter.comThu, 14 May 2026 00:00:00 -0500{F4FA4A10-8BEE-4603-8F61-09D3D55D5C8F}https://www.arnoldporter.com/en/perspectives/events/2026/05/10-months-later-updates-on-us-stablecoin-lawkevin.toomey@arnoldporter.comPanelists Justin Skidmore and Kevin Toomey will look back at the first 10 months of the GENIUS Act in the U.S., covering obligations across reserves, disclosures, certifications, licensing, and AML.Wed, 13 May 2026 00:00:00 -0500<p>In the conference&rsquo;s opening session, Kevin Toomey (Partner, Chair of Financial Services, Arnold &amp; Porter) and his co-panelist Justin Skidmore (Associate General Counsel, Paxos) will look back at the first 10 months of the GENIUS Act in the U.S., covering obligations across reserves, disclosures, certifications, licensing, and AML. Further conference details here:&nbsp;<a rel="noopener noreferrer" href="https://www.americanconference.com/payment-stablecoins-law-licensing-compliance/agenda/" target="_blank">Agenda | Payment Stablecoins: Law, Licensing &amp; Compliance</a></p>{253B27F3-0752-4CB2-AD79-FD2CBCA39BB0}https://www.arnoldporter.com/en/perspectives/news/2026/05/us-chamber-of-commerce-and-brazilian-national-confederationArnold &amp; Porter Senior International Policy Advisor and Global Law &amp; Public Policy Practice Co-Chair Ambassador Tom Shannon received the inaugural Brazil&ndash;U.S. Industry Award in the Institutional Diplomacy category.&nbsp;Wed, 13 May 2026 00:00:00 -0500<p>Arnold &amp; Porter Senior International Policy Advisor and Global Law &amp; Public Policy Practice Co-Chair Ambassador Tom Shannon received the inaugural Brazil&ndash;U.S. Industry Award in the Institutional Diplomacy category. Presented jointly by the U.S. Chamber of Commerce and the Brazilian National Confederation of Industry (CNI), the award recognizes his outstanding leadership and enduring commitment to strengthening the bilateral relationship between the United States and Brazil.</p> <p>The first edition of the Brazil&ndash;United States Industry Awards recognized Brazilian and U.S. leaders and institutions that contribute to strengthening the economic relationship between the two countries, with emphasis on actions related to productive integration, innovation, industrial transformation, and institutional cooperation. Honorees were recognized across three categories: Brazil&ndash;United States Economic Integration, Innovation and Industrial Transformation, and Institutional Diplomacy.</p> <p>Ambassador Shannon brings to Arnold &amp; Porter more than 35 years of diplomatic experience, during which he became one of the most influential figures in shaping the strategic partnership between Brazil and the United States. He served in Bras&iacute;lia as Special Assistant and later as U.S. Ambassador to Brazil from 2010 to 2013, and held senior positions at the State Department and the National Security Council, where he played a central role in expanding cooperation in security, trade, investment, and academic exchange between the two nations. At Arnold &amp; Porter, he continues to advance the bilateral relationship as a cornerstone of 21st-century prosperity.</p>{4B03054E-73FB-497C-93AA-E2D0687083FC}https://claandrise.swoogo.com/2026CLARISERegConferencecamille.heyboer@arnoldporter.comWed, 13 May 2026 00:00:00 -0500{E4FE4347-5E60-455F-8F4B-7831F3021143}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/05/david-kerschner-and-rachel-forman-talk-digital-product-liability-with-law360Arnold &amp; Porter Product Liability Litigation partner David Kerschner and counsel Rachel Forman were quoted in the recent <em>Law360</em> article, &ldquo;What To Watch For As Meta Stares Down NM Injunction Trial,&rdquo; discussing the product liability implications of <em>New Mexico v. Meta Platforms Inc. et al.</em> as the second-phase proceedings begin.Tue, 12 May 2026 00:00:00 -0500<p>Arnold &amp; Porter Product Liability Litigation partner David Kerschner and counsel Rachel Forman were quoted in the recent <em>Law360</em> article, &ldquo;What To Watch For As Meta Stares Down NM Injunction Trial,&rdquo; discussing the product liability implications of <em>New Mexico v. Meta Platforms Inc. et al.</em> as the second-phase proceedings begin.</p> <p>David highlighted that, regardless of success on appeal, any decision awarding injunctive relief may encourage plaintiffs to bring more lawsuits.</p> &ldquo;You could see in the future plaintiffs&rsquo; lawyers in more traditional product liability cases using that as kind of a marker on ways that they think companies should be acting,&rdquo; he said. <p>Rachel also noted that there&rsquo;s an ongoing debate over whether nuisance claims are the right avenue for addressing product liability claims.</p> <p>&ldquo;This is not a traditional product case where plaintiffs are proving a specific design defect; they just have to show in this case that the design change is necessary to get the relief and abate the public harm,&rdquo; she said.</p> <p>She added that ordering Meta to make broad changes would likely have implications for non-public nuisance product liability cases, with &ldquo;the potential to dictate what design features digital platforms have.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://www.law360.com/articles/2472811/what-to-watch-for-as-meta-stares-down-nm-injunction-trial" target="_blank">Read the full article</a> (subscription required).</p>{9157B6BA-F0CA-4E59-8F95-6A2CADA62464}https://www.arnoldporter.com/en/perspectives/news/2026/05/arnold-porter-secures-complete-victory-for-nrco-in-lng-project-arbitrationArnold &amp; Porter secured a complete victory for NRCO Engineering, S.A. in an ICDR arbitration in Houston arising from a cross-border liquefied natural gas (LNG) supply venture in Eastern Europe.Tue, 12 May 2026 00:00:00 -0500<p>Arnold &amp; Porter secured a complete victory for NRCO Engineering, S.A. in an ICDR arbitration in Houston arising from a cross-border liquefied natural gas (LNG) supply venture in Eastern Europe. NRCO is owned by Ovik Mkrtchyan, an engineer and businessman from Uzbekistan who founded Gor Investment Limited, a global enterprise focused on advancing sustainable, innovative technologies. The tribunal found a Texas energy company and its president liable for breach of contract and ordered them to pay all damages, attorneys&rsquo; fees, and interest that NRCO requested.</p> <p>The dispute arose from an LNG project to supply natural gas to Bulgaria. The underlying transaction involved multiple energy-infrastructure components, including potential supply strategies through Poland and Lithuania, equity participation in an energy company, project development obligations, and a performance security bond connected to a European gas pipeline. Following a five-day final hearing, the tribunal awarded NRCO the complete relief it sought. The tribunal also rejected the Respondents&rsquo; equitable and other defenses, finding that the president of the Texas energy company had spread false and disparaging information about Mr. Mkrtchyan that caused harm to him and his family in Uzbekistan.</p> <p>The arbitration team was led by litigation partner Ryan Hartman, who is co-chair of the firm&rsquo;s Energy and Infrastructure group, with Sally Pei and Volodymyr Ponomarov, in close collaboration with John Bellinger, who leads the firm&rsquo;s Global Law and Public Policy practice. The victory adds to Arnold &amp; Porter&rsquo;s deep experience representing clients in complex energy, infrastructure, and cross-border disputes.</p>{E742E53D-0A0A-4BF9-8236-7F152117324D}https://www.linkedin.com/feed/update/urn:li:activity:7460675803694034945/Bart.Wasiak@arnoldporter.comTue, 12 May 2026 00:00:00 -0500{2C1AC752-106C-4A47-859B-8F0511F38725}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/05/judge-joseph-greenaway-jr-shares-appellate-tips-and-insights-in-law360Judge Joseph A. Greenaway Jr., Arnold &amp; Porter partner who formerly served as a judge on both the U.S. Court of Appeals for the Third Circuit and the U.S. District Court for the District of New Jersey, was quoted in the <em>Law360</em> article, &ldquo;Know 'The Record Below': Appellate Pros Talk Argument Prep,&rdquo; following his participation in a panel discussion on preparing for oral arguments at the 2026 Third Circuit Bench and Bar Conference in Hershey, Pennsylvania.Mon, 11 May 2026 00:00:00 -0500<p>Judge Joseph A. Greenaway Jr., Arnold &amp; Porter partner who formerly served as a judge on both the U.S. Court of Appeals for the Third Circuit and the U.S. District Court for the District of New Jersey, was quoted in the <em>Law360</em> article, &ldquo;Know 'The Record Below': Appellate Pros Talk Argument Prep,&rdquo; following his participation in a panel discussion on preparing for oral arguments at the 2026 Third Circuit Bench and Bar Conference in Hershey, Pennsylvania.</p> <p>Drawing on his decades of experience, Judge Greenaway emphasized the importance of mastering the trial court record, understanding the governing case law, and developing a clear appellate strategy when preparing for oral argument.</p> <p>&ldquo;The record below is so important,&rdquo; Judge Greenaway said, noting that appellate advocates must have an &ldquo;intimate understanding&rdquo; of both the factual record and the applicable legal standards.</p> <p>Judge Greenaway also discussed the challenges appellate lawyers face in persuading courts to overturn lower court decisions, observing that &ldquo;the statistics bear out that appellate courts are loath to overturn.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://www.law360.com/articles/2474641/know-the-record-below-appellate-pros-talk-argument-prep-" target="_blank">Read the full article</a> (subscription required).</p>{8CF2F2A5-4D02-470D-8F5E-2625310CD7D0}https://www.biosliceblog.com/2026/05/draft-uk-medical-device-amending-regulations-key-proposals-and-mhra-call-for-evidence/eleri.abreo@arnoldporter.comMon, 11 May 2026 00:00:00 -0500{75702DDF-2FFE-460C-8A17-7C88E9D5221E}https://www.arnoldporter.com/en/perspectives/news/2026/05/aron-estaver-returns-to-arnold-porter-as-investment-management-partner-in-san-francisco<strong>SAN FRANCISCO, May 8, 2026</strong> &mdash; Arnold &amp; Porter announced today that Aron Estaver has rejoined the Investment Management team of the Corporate &amp; Finance practice as a partner, affiliated with the firm&rsquo;s San Francisco office.&nbsp;Fri, 08 May 2026 00:00:00 -0500<p><strong>SAN FRANCISCO, May 8, 2026</strong> &mdash; Arnold &amp; Porter announced today that Aron Estaver has rejoined the Investment Management team of the Corporate &amp; Finance practice as a partner, affiliated with the firm&rsquo;s San Francisco office.</p> <p>Ellen Kaye Fleishhacker, Arnold &amp; Porter Global Co-Chair and Co-Lead of the firm&rsquo;s Investment Management practice group, said: &ldquo;Aron brings a strong skill set and deep familiarity with our clients and practice, making him a valuable addition to the Investment Management team. His combination of sound judgment, technical depth, and client-oriented approach are hard to come by, and we are pleased to welcome him back to build on his previous 14 years with the firm.&rdquo;</p> <p>Jonathan Hughes, head of Arnold &amp; Porter&rsquo;s San Francisco and Silicon Valley offices, added: &ldquo;Aron&rsquo;s return reflects the momentum the firm has built in Northern California and our commitment to deepening our capabilities on the West Coast. His deep knowledge, combined with his experience in this market, positions us well to continue serving clients who are central to this region&rsquo;s economy.&rdquo;</p> <p>Aron&rsquo;s practice &mdash;&nbsp;which spans over 20 years &mdash;&nbsp;primarily focuses on advising U.S. and non-U.S. fund sponsors regarding the structuring and ongoing operation of private investment funds. He works with sponsors pursuing a broad range of investment strategies, including private equity, venture capital, credit, hedge, real estate, and infrastructure. He also regularly advises on the formation and operation of secondary funds, funds-of-funds, co-investment vehicles, joint ventures, separately managed accounts, and other bespoke fund structures. Aron&rsquo;s work includes both sponsor-side structuring and negotiating investor-facing documentation, as well as upper-tier sponsor arrangements. In addition, Aron regularly represents institutional investors, sovereign wealth funds, family offices, and high net worth investors regarding their private fund investments. He also has significant experience advising clients on regulatory, registration, and compliance matters applicable to investment advisers, commodity pool operators, and commodity trading advisors, including matters involving federal and state securities regulators. He works closely with tax, regulatory, employment, litigation, and other transactional colleagues to support client needs, and has experience handling related general corporate and transactional matters.</p> <p>In joining the firm, Aron said: &ldquo;Having spent well over a decade at Arnold &amp; Porter, returning to the firm&rsquo;s Investment Management team feels like a natural homecoming. I look forward to resuming work with my former colleagues, growing the practice, and advising clients on private investment fund-related matters.&rdquo;</p> <p>Prior to rejoining Arnold &amp; Porter, Aron was of counsel in the Private Funds Group at an Am Law 100 law firm. Aron holds a B.A. from Brandeis University and a J.D. from Vanderbilt University Law School. </p> <h3>About Arnold &amp; Porter</h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{D9971440-175F-4009-A92E-EC474B458044}https://www.arnoldporter.com/en/perspectives/news/2026/05/san-francisco-business-times-recognizes-ellen-kaye-fleishhackerGlobal Co-Chair of Arnold &amp; Porter, Ellen Kaye Fleishhacker, has been named one of the Most Influential Women in Bay Area Business by the <em>San Francisco Business Times</em>.&nbsp;Fri, 08 May 2026 00:00:00 -0500<p>Global Co-Chair of Arnold &amp; Porter, Ellen Kaye Fleishhacker, has been named one of the Most Influential Women in Bay Area Business by the <em>San Francisco Business Times</em>. The award honors trailblazing leaders who are shaping industries, championing mentorship and community impact, and redefining leadership across the region.</p> <p>Ellen is a seasoned transactional lawyer and law firm leader who brings clear-headed and practical judgment to help both clients and the firm address complex matters. She has been part of the firm's top leadership since January 2021, when she became Co-Managing Partner, and was subsequently named Global Co-Chair. Under her leadership, Arnold &amp; Porter has continued to thrive as a place where clients can obtain world-class regulatory, litigation, and transactional solutions for their most complex challenges. </p> <p>Her profile in the <em>San Francisco Business Times</em> noted early in her career, a mentor recognized potential in her that she had not yet seen in herself, and that his encouragement led her to pursue both law school and business school &mdash; a decision that shaped her career and sense of what was possible.</p> <p>Ellen has also supported and enhanced the firm&rsquo;s deep commitment to excellence in the practice of law and client service, a commitment to collegiality and collaboration, a diverse, equitable, and inclusive culture, and a dedication to pro bono service.</p>{D34508A2-55EC-4D30-8F8A-D9F4F258491C}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/capital-snapshotEugenia E. Piersonhttps://www.arnoldporter.com/en/people/p/pierson-eugenia-eEugenia.Pierson@arnoldporter.comAllison Jarushttps://www.arnoldporter.com/en/people/j/jarus-allisonallison.jarus@arnoldporter.comPeter E. Duysharthttps://www.arnoldporter.com/en/people/d/duyshart-peterpeter.duyshart@arnoldporter.comEmily Crawfordhttps://www.arnoldporter.com/en/people/c/crawford-emilyemily.crawford@arnoldporter.comEmily Mahaffyhttps://www.arnoldporter.com/en/people/m/mahaffy-emilyemily.mahaffy@arnoldporter.comDylan L. Kelemenhttps://www.arnoldporter.com/en/people/k/kelemen-dylan-ldylan.kelemen@arnoldporter.comOur Legislative &amp; Public Policy team is pleased to provide the May 2026 edition of Capital Snapshot, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions. This month&rsquo;s edition of the Capital Snapshot contains a review of the landscape of the 119th Congress, including upcoming congressional schedules and key dates, and recently-announced retirements, resignations, vacancies, and candidacies.Fri, 08 May 2026 00:00:00 -0500<p>Our Legislative &amp; Public Policy team is pleased to provide the May 2026 edition of Capital Snapshot, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions. This month&rsquo;s edition of the Capital Snapshot contains a review of the landscape of the 119th Congress, including upcoming congressional schedules and key dates, and recently-announced retirements, resignations, vacancies, and candidacies. We also share updates pertaining to the FY 2026 and FY 2027 federal funding and the appropriations processes, including updates related to funding the DHS for FY 2026. Our team also provides comprehensive updates on the latest on trade and tariffs. Furthermore, we share some salient legislative and policy updates across a variety of additional key policy areas, including: (1) defense; (2) tax; (3) financial services; (4) artificial intelligence; (5) technology; (6) data privacy; (7) health care; (8) education; and (9) energy and environment. Additionally, we provide an overview and outlook of the upcoming 2026 midterm elections in November, as well as an update to our detailed rundown of various redistricting efforts across the country ahead of the midterms. Our team also takes a look at current public opinion polling on President Trump&rsquo;s job performance and policy priorities, and assesses economic factors and conditions that could impact the future political landscape in an election year.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{5BBDAA01-467B-4890-852B-9CDB2C779CB4}https://www.arnoldporter.com/en/perspectives/events/2026/05/in-the-room-former-officials-on-national-security-and-other-enforcement-issuesHenry D. Almondhttps://www.arnoldporter.com/en/people/a/almond-henry-dhenry.almond@arnoldporter.comJohn P. Barkerhttps://www.arnoldporter.com/en/people/b/barker-john-pjohn.barker@arnoldporter.comJohn B. Bellinger, IIIhttps://www.arnoldporter.com/en/people/b/bellinger-john-bjohn.bellinger@arnoldporter.comEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comRachel F. Cottonhttps://www.arnoldporter.com/en/people/c/cotton-rachel-frachel.cotton@arnoldporter.comBurden H. Walkerhttps://www.arnoldporter.com/en/people/w/walker-burden-hburden.walker@arnoldporter.comTirzah S. Lollarhttps://www.arnoldporter.com/en/people/l/lollar-tirzah-stirzah.lollar@arnoldporter.comSoo-Mi Rheehttps://www.arnoldporter.com/en/people/r/rhee-soomisoo-mi.rhee@arnoldporter.comChristian D. Sheehanhttps://www.arnoldporter.com/en/people/s/sheehan-christianchristian.sheehan@arnoldporter.comNicholas L. Townsendhttps://www.arnoldporter.com/en/people/t/townsend-nicholas-lnicholas.townsend@arnoldporter.comRonald D. Leehttps://www.arnoldporter.com/en/people/l/lee-ronald-dRonald.Lee@arnoldporter.comAmbassador Barbara A. Leafhttps://www.arnoldporter.com/en/people/l/leaf-barbara-abarbara.leaf@arnoldporter.comLegal risk for contractors and cross-border businesses is not driven solely by statute or regulation &mdash; it is shaped by geopolitics, Administration and congressional priorities, and enforcement discretion.Thu, 07 May 2026 00:00:00 -0500<p>Legal risk for contractors and cross-border businesses is not driven solely by statute or regulation &mdash; it is shaped by geopolitics, Administration and congressional priorities, and enforcement discretion. The regulators and prosecutors enforcing export controls, foreign investment restrictions, False Claims Act, and sanctions laws, have new priorities, new tools, and new targets &mdash; which may change against the background of the upcoming midterms. Adding to this complexity, the rapid advancement of artificial intelligence has introduced a new frontier of national security concern, for which regulators are grappling with how existing frameworks apply &mdash; and where new enforcement mechanisms may be needed. Today&rsquo;s enforcement environment is moving quickly, with up-to-the-minute developments affecting global trade, national security, AI governance, and cross-border operations in ways that demand close attention.</p> <p>Join us for a half-day, in-person program where Arnold &amp; Porter's national security practitioners &mdash; many of whom are former senior officials of the Department of Justice, the Intelligence Community, and the Department of State &mdash; along with our Export Control, CFIUS, Congressional Investigations and False Claims Act teams will give you their views on these priorities, tools, and targets and what it means for your organization right now.</p> <h2>Agenda and Speakers</h2> <strong>The Algorithmic Arms Race: AI Exposing Hidden Vulnerabilities</strong><br /> Eun Young Choi | Partner<br /> <br /> <strong>The Shifting National Security Landscape</strong><br /> John B. Bellinger, III | Partner<br /> Ambassador Barbara A. Leaf | Senior International Policy Advisor<br /> Ronald D. Lee | Senior Counsel<br /> <br /> <strong>After the Midterms: Congressional Investigations</strong><br /> Rachel F. Cotton | Partner<br /> <br /> <strong>False Claims Act Frontiers: Cybersecurity, Tariffs &amp; Impact of Changes at DOJ</strong><br /> Burden H. Walker | Partner<br /> Henry D. Almond | Partner<br /> Tirzah S. Lollar | Partner<br /> Christian D. Sheehan | Partner<br /> <br /> <strong>Export Controls, Sanctions &amp; National Security Enforcement</strong><br /> Eun Young Choi | Partner<br /> John P. Barker | Partner<br /> Soo-Mi Rhee | Partner<br /> Nicholas L. Townsend | Partner<br />{4819BE43-D98A-46D4-BADC-252F3FD3AB3E}https://www.arnoldporter.com/en/perspectives/events/2026/05/digital-assets-the-genius-actChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comAnthony Raglanihttps://www.arnoldporter.com/en/people/r/raglani-anthonyanthony.raglani@arnoldporter.comThis session will address the GENIUS Act and its implications and explore recent developments in the digital asset sector and related opportunities and potential challenges for banking institutions.Thu, 07 May 2026 00:00:00 -0500<p>Chris Allen and Anthony Raglani from Arnold &amp; Porter&rsquo;s Financial Services group will present at the New Jersey Bankers Association&rsquo;s (NJBankers) 120th annual conference in New Orleans, LA. Their session will address the GENIUS Act and its implications. Their discussion will also explore recent developments in the digital asset sector. Finally, the session will also consider emerging opportunities and potential challenges for banking institutions.</p>{927DB4DD-D7CF-4B8B-B066-B81D1819D0E0}https://www.arnoldporter.com/en/perspectives/news/2026/05/food-and-drug-law-institute-recognizes-elizabeth-trentacost-as-a-rising-starArnold &amp; Porter senior associate Elizabeth Trentacost has been named a Rising Star by the Food and Drug Law Institute (FDLI) at its annual conference.Thu, 07 May 2026 00:00:00 -0500<p>Arnold &amp; Porter senior associate Elizabeth Trentacost has been named a Rising Star by the Food and Drug Law Institute (FDLI) at its annual conference. FDLI is a nonprofit membership organization that offers education, training, publications, and professional engagement opportunities in the field of food and drug law.</p> <p>The Rising Star award honors members who "exhibit commitment to the food and drug community and have demonstrated remarkable talents at an early stage of their careers in FDA-regulated fields." Elizabeth was recognized for her leadership on complex pharmaceutical compliance and litigation matters and her commitment to mentorship and community engagement within the field.</p> <p>Elizabeth counsels life sciences and consumer products companies on a broad range of FDA regulatory, compliance, enforcement, and strategic matters. She routinely advises on medical product applications and strategy, product development, submissions to and engagement with FDA, good clinical practices, post-marketing issues, and FDA policy development.</p>{674C0B1C-99F8-4EA4-913E-B47F3F0E8E7D}https://www.biosliceblog.com/2026/05/the-law-commission-of-england-wales-announces-a-review-of-a-potential-new-class-actions-regime/Libby Amos-Stonehttps://www.arnoldporter.com/en/people/a/amos-libbylibby.amos-stone@arnoldporter.comNicola Chesaiteshttps://www.arnoldporter.com/en/people/c/chesaites-nicolanicola.chesaites@arnoldporter.comKatya Farkashttps://www.arnoldporter.com/en/people/f/farkas-katyakatya.farkas@arnoldporter.com Thu, 07 May 2026 00:00:00 -0500{3FF2CEE7-7267-4762-845E-A53C66CD5DB3}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/washington-supreme-court-limits-remedy-of-nonjudicial-foreclosureRhys W. Heftahttps://www.arnoldporter.com/en/people/h/hefta-rhysrhys.hefta@arnoldporter.comKari L. Larsonhttps://www.arnoldporter.com/en/people/l/larson-kari-lKari.Larson@arnoldporter.comChristian Scarletthttps://www.arnoldporter.com/en/people/s/scarlett-christianchristian.scarlett@arnoldporter.comOn April 30, 2026, the Washington Supreme Court published a decision in the case of<em> Vargas v. RRA CP Opportunity Trust 1</em> that may have significant ramifications for residential and commercial real estate lenders in the State of Washington.Thu, 07 May 2026 00:00:00 -0500<p>On April 30, 2026, the Washington Supreme Court published a decision in the case of<em> Vargas v. RRA CP Opportunity Trust 1</em> that may have significant ramifications for residential and commercial real estate lenders in the State of Washington. In responding to questions certified to it by the United States District Court for the Western District of Washington, the court built upon a line of precedent, including the landmark <em>Bain v. Metro. Mortg. Grp., Inc.</em>,[[N: 175 Wn.2d 83, 92-93, 285 P.3d 34 (2012).]] to conclude that only a &ldquo;holder&rdquo; of a negotiable instrument, as contemplated by the Uniform Commercial Code (UCC), can satisfy the prerequisites for conducting a nonjudicial trustee&rsquo;s sale of a property under the Washington Deed of Trust Act (DTA). While the case in question arose in the context of a home equity line of credit (HELOC) and a section of the DTA specific to one-to-four unit residential properties, the logic of the court&rsquo;s decision in <em>Vargas</em> would appear to extend to commercial financing as well, with substantial implications for a broad range of transactions. At a fundamental level, the decision in <em>Vargas</em> appears to eliminate the remedy of nonjudicial foreclosure for deeds of trust securing credit agreements, bond indentures, derivative instruments, guaranties, and other non-promissory note debt instruments, as well as deeds of trust securing promissory notes evidencing construction loans, lines of credit and similar facilities with varying principal amounts, and any other promissory note that, inadvertently or by design, does not satisfy the strict criteria for a negotiable instrument under the UCC.</p> <h2>Facts of the <em>Vargas</em> Case</h2> <p>Briefly, Gabriel Marquez Vargas obtained both a mortgage loan and a HELOC to finance the acquisition of a home in 2005. The HELOC had a 60-month draw period followed by a 180-month repayment period. In 2011, shortly following the expiration of the draw period, Marquez Vargas defaulted on the repayment of the HELOC. After several assignments of the HELOC and the deed of trust securing it, Real Time Resolutions Inc. (RTR), the servicer of the debt on behalf of RRA CP Opportunity Trust 1 (RRA), executed a beneficiary declaration confirming that RRA was the &ldquo;holder&rdquo; of the HELOC agreement. Such a declaration is a prerequisite to commencing a nonjudicial trustee&rsquo;s sale under the DTA with respect to residential properties containing one to four units.[[N: See RCW 61.24.030, which reads &ldquo;It shall be requisite to a trustee&rsquo;s sale: &hellip; (7)(a) That, for residential real property of up to four units, before the notice of trustee&rsquo;s sale is recorded, transmitted, or served, the trustee shall have proof that the beneficiary is the holder of any promissory note or other obligation secured by the deed of trust. A declaration by the beneficiary made under the penalty of perjury stating that the beneficiary is the holder of any promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection.&rdquo;]] Marquez Vargas sued in federal court to block the sale.</p> <h2>Certified Questions</h2> <p>The District Court certified two questions to the Washington Supreme Court as follows:</p> <p style="margin-left: 40px;">&ldquo;(1) Whether a typical HELOC agreement that has a closed draw period and specified maturity date is a negotiable instrument under Article 3 of Washington&rsquo;s Uniform Commercial Code? &hellip;</p> <p style="margin-left: 40px;">(2) Whether an alleged beneficiary under the Deed of Trust Act satisfies the requirement to show that it is &lsquo;the holder of any promissory note or other obligation secured by the deed of trust,&rsquo; [RCW][[N: The Revised Code of Washington is referred to throughout this text as RCW.]] 61.24.030(7)(a), by executing a declaration under penalty of perjury attesting that it is the holder of a HELOC agreement?&rdquo; [A footnote contained in the quotation has been omitted].</p> <p>The Washington Supreme Court answered &ldquo;No&rdquo; to both of these questions.</p> <h2>The Washington Supreme Court&rsquo;s Analysis</h2> <p>The court noted that the DTA does not include a definition of &ldquo;Holder,&rdquo; and then cited its own precedent, most notably <em>Bain</em>, for the proposition that the UCC is the appropriate source for this definition. </p> <p>The UCC definition of &ldquo;Holder&rdquo; is set forth in UCC 1-201(21)(A)[[N: Codified in Washington at RCW 62A.1-201(21).]] as:</p> <p style="margin-left: 40px;">&ldquo;&lsquo;Holder&rsquo; with respect to a negotiable instrument, means:</p> <p style="margin-left: 40px;">(A) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.&rdquo;</p> <p>In this connection, the court notes the fact that the definition of Holder, while found in the general definitions section in Article 1 of the UCC, is used only in connection with negotiable instruments. As such, the court introduces the UCC definition of &ldquo;Negotiable Instrument&rdquo; from UCC 3-104(a)[[N: Codified in Washington at RCW 62A.3-104.]] as follows:</p> <p style="margin-left: 40px;">&ldquo;[a]n unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:</p> <p style="margin-left: 40px;">(1) Is payable to bearer or to order at the time it is issued or first comes into possession of a holder;</p> <p style="margin-left: 40px;">(2) Is payable on demand or at a definite time; and</p> <p style="margin-left: 40px;">(3) Does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor, (iv) a term that specifies the law that governs the promise or order, or (v) an undertaking to resolve in a specified forum a dispute concerning the promise or order.&rdquo;</p> <p>The court&rsquo;s opinion discussed at length the history and function of negotiable instruments, the UCC principles countenancing a bifurcation between the ownership of a negotiable instrument and the right to enforce it, and its own recent precedent on the concept of &ldquo;holder&rdquo; under the DTA and the legislative history of amendments to the DTA in response to that precedent, among other things. Ultimately, though, the court&rsquo;s decision turned on the straightforward definitional proposition that only a negotiable instrument can have a &ldquo;holder.&rdquo; As such, we will focus on that portion of the court&rsquo;s analysis here.</p> <p>The HELOC in question in <em>Vargas</em> did not constitute &ldquo;[a]n unconditional promise or order to pay a fixed amount of money,&rdquo; because the principal amount of the HELOC was variable and dependent on whether the borrower requested and received advances. While the principal amount of the HELOC was in fact fixed at the time of the default, by virtue of the draw period having expired, the court rejected the argument that this rendered the HELOC a negotiable instrument. Since it was not a negotiable instrument when made, and since the payment terms were not ascertainable solely from the four corners of the document, it could never be a negotiable instrument. The court cited a prior appellate decision for the proposition that &ldquo;[n]egotiability is determined from the face, the four corners, of the instrument at the time it is issued without reference to extrinsic facts.&rdquo;[[N: <em>Bucci v. Nw. Tr. Servs., Inc.</em>, 197 Wn. App. 318, 329, 387 P.3d 1139 (2016), itself citing early sources as set out in full in <em>Vargas</em>.]]</p> <p>Because the HELOC in <em>Vargas</em> could not satisfy the criteria for negotiability necessary to be classified as a negotiable instrument under the UCC, the beneficiary of the deed of trust securing the HELOC could never make the declaration that it was the &ldquo;holder&rdquo; of the obligation secured by the deed of trust as required under RCW 61.24.030. By extension, the beneficiary could never satisfy the prerequisite for a trustee&rsquo;s sale under the DTA. The beneficiary in <em>Vargas</em>, then, would appear to be left with the option of pursuing a judicial foreclosure instead.</p> <h2>Implications</h2> <p>The application of <em>Vargas</em> in the residential context is quite clear, as any deed of trust securing a HELOC or similar residential or consumer debt instrument in Washington will no longer be susceptible to nonjudicial foreclosure. But that does not appear to be the end of the likely far-reaching application of this decision. While the court, responding to the specific questions certified by the trial court, focused on the beneficiary declaration requirement of RCW 61.24.030(7)(a), which is only applicable to one-to-four unit residential properties, it is important to note that the DTA defines the beneficiary for all purposes, residential and commercial, as &ldquo;the <em>holder</em> of the instrument or document evidencing the obligations secured by the deed of trust, excluding persons holding the same as security for a different obligation.&rdquo;[[N: RCW 61.24.005(2) (emphasis added).]] The court cited <em>Bain</em> for the proposition that &ldquo;holder&rdquo; for purposes of the DTA should be defined in accordance with the UCC, and the decision in <em>Bain</em> turned on this very definition of beneficiary, and whether a party that was not the holder of a note had the power to direct a trustee to commence a nonjudicial foreclosure. <em>Vargas</em> appears to simply extend the reasoning in <em>Bain</em> by looking not just to the identity of the purported holder but to the nature of the instrument purported to be held. There is no reason to think that this definitional analysis would be limited to the usage of &ldquo;holder&rdquo; in the narrow residential context of RCW 61.24.030(7)(a) when the definition of &ldquo;beneficiary&rdquo; applies to the entirety of the DTA.</p> <p>Assuming that the logic of <em>Vargas</em> will extend to commercial transactions as well, there would appear to be a number of broad classes of indebtedness and other obligations in Washington traditionally secured by deeds of trust that would likely not qualify as negotiable instruments under the UCC. These would include deeds of trust securing:</p> <ul> <li>Credit agreements containing broad covenants and other obligations and with no separate promissory note</li> <li>Bond indentures, derivative instruments, letters of credit, guaranties, indemnities, private liens, and other non-promissory note debt instruments</li> <li>Construction loans, lines of credit, multiple advance notes, and other instruments that, by their nature, provide for a variable principal amount that cannot be specified at the inception of the instrument</li> <li>Registered notes, which are transferable only by recordation in a centrally maintained registry and are therefore not negotiable</li> <li>Notes that contain additional nonpayment obligations that are not permitted under UCC 3-104(a)(3)</li> <li>Notes that broadly defer to a loan agreement or other separate document for full payment terms</li> </ul> <p>The most apparent option available to a lender holding one of the above instruments is a judicial foreclosure of the deed of trust as a mortgage under RCW 61.12 (Washington&rsquo;s judicial foreclosure statute). While a full analysis of the positives and negatives of judicial foreclosures in Washington is beyond the scope of this Advisory, there are certain drawbacks to this approach. The cost and time necessary to complete a judicial foreclosure and resulting sheriff&rsquo;s sale of the property will generally be greater, and this can be expected to be exacerbated if the judiciary and sheriffs&rsquo; offices become burdened by increased volume as a result of <em>Vargas</em>. Perhaps more notably, borrowers in Washington are entitled to a one-year right of redemption following completion of the sale &mdash; meaning the borrower may reacquire the property by paying the outstanding debt as of the time of sale, plus interest, taxes, and certain assessments &mdash; even if the property has been sold to a third party. With very limited exceptions, the owner of the property during the redemption period is not entitled to recompense for any additional investment made into the property during that interim period.[[N: See RCW 6.23.020.]] This is a significant drawback to judicial foreclosure for properties that require operational or capital investment, or for ongoing construction projects that require additional funds for completion. </p> <p>Another potential option that lenders may consider is seeking the appointment of a general receiver with power of sale. Under RCW 7.60, a court may appoint a general receiver to &ldquo;take possession and control of substantially all of a person&rsquo;s property with authority to liquidate that property &hellip;&rdquo;[[N: RCW 7.60.015.]] Subject to the court&rsquo;s approval, any such sale would be made free and clear of liens and rights of redemption pursuant to RCW 7.60.260. Again, a full analysis of the positives and negatives of such an approach is beyond the scope of this Advisory, but it seems likely that lenders confronting the realities of a judicial foreclosure following <em>Vargas</em> will find receivership to be an attractive option.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{B37D1102-5F38-48CC-B78A-C397828B2587}https://www.biosliceblog.com/2026/05/eu-ai-act-omnibus-provisional-deal-announced-initial-reflections-for-life-sciences-companies/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comCamille Vermosenhttps://www.arnoldporter.com/en/people/v/vermosen-camillecamille.vermosen@arnoldporter.comThu, 07 May 2026 00:00:00 -0500{CC9C5E28-2A73-4E88-89A7-15AFE036D701}https://www.biosliceblog.com/2026/05/eu-implements-new-rules-on-uniform-procedural-requirements-for-notified-body-assessments/Fabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comChristopher Bateshttps://www.arnoldporter.com/en/people/b/bates-christopherchristopher.bates@arnoldporter.comWed, 06 May 2026 00:00:00 -0500{92645F12-B2B4-47C6-A24A-5B4E1D5086DB}https://www.arnoldporter.com/en/perspectives/advisories/2026/05/four-things-to-know-about-the-cfpbs-final-ruleAmber A. Hayhttps://www.arnoldporter.com/en/people/h/hay-amber-aamber.hay@arnoldporter.comAnthony Raglanihttps://www.arnoldporter.com/en/people/r/raglani-anthonyanthony.raglani@arnoldporter.comKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comKara Ramseyhttps://www.arnoldporter.com/en/people/r/ramsey-karakara.ramsey@arnoldporter.comGeorge Eichelbergerhttps://www.arnoldporter.com/en/people/e/eichelberger-georgeGeorge.Eichelberger@arnoldporter.comThe CFPB&rsquo;s May 2026 final rule revises the Section 1071 small business lending data collection framework under Regulation B by significantly narrowing the scope of institutions, borrowers, transactions, and data points subject to reporting requirements. The rule raises reporting thresholds, excludes certain categories of lending such as merchant cash advances and agricultural loans, and streamlines required data collection obligations, while signaling that the CFPB may expand the framework incrementally through future rulemakings. Financial institutions should evaluate whether they remain covered by the revised rule, continue monitoring ongoing litigation challenging Section 1071 implementation, and assess the operational and compliance implications ahead of the January 1, 2028 compliance date.Wed, 06 May 2026 00:00:00 -0500<p> <p>On May 1, 2026, the Consumer Financial Protection Bureau (CFPB) published a final rule[[N:91 Fed. Reg. 23530 (May 1, 2026).]] (the Final Rule) revising the CFPB&rsquo;s small business lending data collection regime under section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1071). Section 1071 amended the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect and report data on credit applications by small, women-owned, and minority-owned businesses. The Final Rule narrows, but does not rescind, the small business lending data collection regime established by the CFPB&rsquo;s May 2023 final rule (the 2023 Final Rule),[[N:88 Fed. Reg. 35150 (May 31, 2023).]] which since its adoption has been the subject of ongoing litigation in three federal courts. In making these changes, the CFPB has sought to limit the rule as much as possible to what is strictly required by statute.</p> <p>Pointing to the gradual evolution of data collection under the Home Mortgage Disclosure Act (HMDA) over the past 50 years, the CFPB concluded that long-term data collection under Section 1071 should commence with a focus on core lending products, lenders, small businesses, and data points, with future expansions reserved for subsequent notice-and-comment rulemakings. In doing so, the CFPB concluded that the 2023 Final Rule&rsquo;s expansive approach to coverage was not conducive to the long-term success of the Section 1071 framework.[[N:91 Fed. Reg. at 23532 (&ldquo;The Bureau believes in retrospect that the approach it took in the 2023 final rule&mdash;a broad initial coverage of lenders, products, small businesses and data points&mdash;was not conducive to the long-term success of the data collection regime under section 1071.&rdquo;).]]</p> <p>The Final Rule is effective June 30, 2026, with a compliance date of January 1, 2028, and a one-year grace period running through December 31, 2028.</p> <p>Below are four key points about the Final Rule for consideration by financial institutions.</p> <p><strong>1.&nbsp; Fewer Institutions Will Be Required to Report Data to the CFPB</strong></p> <p>The Final Rule raises the origination threshold for being a &ldquo;covered financial institution&rdquo; tenfold, increasing it to 1,000 covered credit originations (rather than 100) in each of the two preceding calendar years, and separately excludes Farm Credit System (FCS) lenders from coverage altogether. These changes are expected to reduce substantially the number of community banks, credit unions, and other smaller institutions subject to the rule.</p> <p><strong>2.&nbsp; Fewer Borrowers Will Qualify as &ldquo;Small Businesses&rdquo; That Trigger Reporting Obligations</strong></p> <p>The Final Rule lowers the gross annual revenue threshold in the definition of &ldquo;small business&rdquo; from $5 million or less to $1 million or less, narrowing the universe of borrowers whose applications trigger the Final Rule&rsquo;s data reporting requirement.[[N:Id. at 23532, 23556-58; see also 12 C.F.R. &sect; 1002.106(b).]] The threshold remains subject to the existing five-year inflation adjustment set forth under Regulation B.</p> <p><strong>3.&nbsp; Three New Kinds of Excluded Transactions That Do Not Require Data Reporting</strong></p> <p>The Final Rule adds three new categories of transactions to the list of &ldquo;excluded transactions&rdquo; under 12 C.F.R. &sect; 1002.104(b) that do not require data reporting:</p> <ul> <li><strong>Merchant cash advances (MCAs)</strong>. MCAs are agreements under which a small business receives a lump-sum payment in exchange for the right to receive a percentage of the small business&rsquo; future sales or income up to a ceiling amount.[[N:91 Fed. Reg. at 23539, 23541; see also 12 C.F.R. &sect; 1002.104(b)(7).]] The CFPB notably declined to take a categorical position on whether MCAs constitute &ldquo;credit&rdquo; under ECOA, instead deferring the question pending further market analysis and case-law development.[[N:91 Fed. Reg. at 23539.]]</li> <li><strong>Agricultural lending</strong>. Agricultural lending is generally defined as lending to fund the production of crops, fruits, vegetables, and livestock, or to fund the purchase or refinance of capital assets such as farmland, machinery and equipment, breeder livestock, and farm real estate improvements.[[N:91 Fed. Reg. at 23542-43; see also 12 C.F.R. &sect; 1002.104(b)(8).]] The CFPB cited existing data collection by the Farm Credit Administration, the U.S. Department of Agriculture&rsquo;s Farm Service Agency, and Community Reinvestment Act reporting as already providing meaningful visibility into agricultural lending.[[N:91 Fed. Reg. at 23543.]]</li> <li><strong>Small dollar business credit</strong>. Small dollar business credit is defined to be credit in an amount of $1,000 or less, subject to inflation adjustment.[[N:Id. at 23544-45; see also 12 C.F.R. &sect; 1002.104(b)(9).]]</li> </ul> <p><strong>4.&nbsp; A Streamlined Set of Required Data Points</strong></p> <p>The Final Rule limits required data collection to the data points specifically enumerated in Section 1071, plus a limited subset necessary to facilitate collection of those statutory items.[[N:91 Fed. Reg. at 23532, 23558.]] Accordingly, the Final Rule eliminates several discretionary data points that the 2023 Final Rule had required, including: (1) application method, (2) application recipient, (3) denial reasons, (4) pricing information, and (5) number of workers.[[N:Id. at 23532, 23558-62.]] In addition, the Final Rule revises the format for collecting demographic information about principal owners and the business ownership status data point to align with Executive Order 14168.[[N:Exec. Order No. 14168, 90 Fed. Reg. 8615 (Jan. 30, 2025); see also Final Rule, 91 Fed. Reg. at 23531-32, 23564-67.]]</p> <h2>Three Practical Takeaways</h2> <p>First, financial institutions should reassess their status against the new institutional and small business thresholds to determine whether the CFPB&rsquo;s small business lending data collection requirements still apply to them. Many institutions covered by the 2023 Final Rule &mdash; particularly community banks, credit unions, and FCS lenders &mdash; may now fall outside the rule entirely, while others may move in or out of coverage as origination volumes shift across calendar years.</p> <p>Second, institutions that remain covered should continue their Section 1071 implementation work rather than scaling it back. The CFPB has signaled that the Final Rule represents the first phase of an incremental, HMDA-style framework, and future rulemakings may reintroduce some of the products, lenders, or data points removed by the Final Rule.[[N:See Final Rule, 91 Fed. Reg. at 23531 (the CFPB &ldquo;should approach the section 1071 data collection regime as a longer-term project akin to HMDA&rdquo;); see also id. at 23541 (MCAs), 23552 (FCS lenders), 23559 (application method) (each indicating possible future reconsideration).]] Institutions that had begun to implement the rule but are now no longer covered should nonetheless retain the work that has been done in preparation for possible future changes.</p> <p>Third, the Final Rule does not necessarily moot the pending litigation challenging the 2023 Final Rule in <em>Texas Bankers Association v. CFPB</em>,[[N:<em>Texas Bankers Ass&rsquo;n v. CFPB</em>, No. 7:23-CV-00144 (S.D. Tex.); see also <em>Texas Bankers Ass&rsquo;n v. CFPB</em>, No. 24-40705 (5th Cir.).]] <em>Monticello Banking Co. v. CFPB</em>,[[N:<em>Monticello Banking Co. v. CFPB</em>, No. 6:23-CV-00148-KKC (E.D. Ky.).]] and <em>Revenue Based Finance Coalition v. CFPB</em>.[[N:<em>Revenue Based Fin. Coal. v. CFPB</em>, No. 1:23-CV-24882-DSL (S.D. Fla.).]] Institutions should continue to monitor those cases for developments that may affect the new Final Rule.</p> <p style="text-align: center;">* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; * &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <p>If you would like to discuss the Final Rule or how it may affect your institution, please contact any of the authors of this Advisory or your usual Arnold &amp; Porter contact.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{56E8AFD3-BA90-47E5-8953-275D0494CB0B}https://www.arnoldporter.com/en/perspectives/news/2026/05/arnold-porter-expands-european-antitrust-litigation-team-with-addition-of-partner-nicola-chesaites<strong>LONDON and WASHINGTON, D.C.</strong>, May 5, 2026 &mdash; Arnold &amp; Porter announced today that Nicola Chesaites has joined the firm&rsquo;s Antitrust/Competition litigation practice as a partner, resident in London.&nbsp;Tue, 05 May 2026 00:00:00 -0500<p><strong>LONDON and WASHINGTON, D.C., May 5, 2026</strong> &mdash; Arnold &amp; Porter announced today that Nicola Chesaites has joined the firm&rsquo;s Antitrust/Competition litigation practice as a partner, resident in London. </p> <p>Kathleen Harris, head of Arnold &amp; Porter&rsquo;s London office, said: &ldquo;Nicola is widely recognized as a leading competition litigator and for her skill in navigating complex litigation risk and strategic advisory work. Her arrival strengthens our robust competition and commercial litigation practices. She will be a great addition to Arnold &amp; Porter&rsquo;s London team.&rdquo;</p> <p>Niels Christian Ersb&oslash;ll, Global Co-Chair of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice group and head of the Brussels office, added: &ldquo;Nicola&rsquo;s unique dual qualification as both a barrister and a Belgian advocate will be a significant asset, enhancing our ability to support clients across the UK and EU in their cross-border antitrust matters and interconnected litigation, regulatory, and transactional needs. We are delighted to welcome her to the firm.&rdquo;</p> <p>Nicola is a UK-qualified barrister and a Belgian advocaat with more than 17 years of experience in competition damages litigation, collective (class) actions under the UK&rsquo;s private enforcement regime, and complex European Union litigation. She has represented claimants and defendants before the English courts and the UK Competition Appeal Tribunal, and appeared before the EU General Court and Court of Justice on behalf of corporates and EU institutions in a range of EU law disputes ranging from banking resolution, trade, sanctions, pharmaceuticals, and transportation disputes.</p> <p>In joining the firm, Nicola said: &ldquo;As regulatory regimes evolve and with the increase in private enforcement of competition law in Europe, and the rapid growth in collective actions in the UK, litigation risk is increasingly complex for clients active in multiple markets. Arnold &amp; Porter&rsquo;s integrated platform and global footprint make it an ideal environment for my practice and I look forward to collaborating with colleagues in Europe and globally to provide clients with advice on their antitrust, regulatory, and litigation risks.&rdquo;</p> <p>Nicola holds an LL.M. from the College of Europe, an LL.B. from the University of Westminster, and a License in French Law from Universit&eacute; Paris X Nanterre.</p> <h3>About Arnold &amp; Porter</h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{C0812EAD-1B12-4CE6-AD1F-3360F2FAE3BC}https://www.arnoldporter.com/en/perspectives/news/2026/05/arnold-porter-advises-d-e-shaw-ventures-on-openai-anthropic-investmentsArnold &amp; Porter recently advised D. E. Shaw Ventures, the D. E. Shaw group&rsquo;s venture capital and growth equity arm, on investments in OpenAI and Anthropic.Tue, 05 May 2026 00:00:00 -0500<p>Arnold &amp; Porter recently advised D. E. Shaw Ventures, the D. E. Shaw group&rsquo;s venture capital and growth equity arm, on investments in OpenAI and Anthropic.</p> <p>Most recently, the firm counseled D. E. Shaw Ventures on its Series C investment in OpenAI. This investment was part of the $122 billion financing round, co-led by D. E. Shaw Ventures, which valued OpenAI at $852 billion post-money and closed on March 31, 2026. Arnold &amp; Porter previously advised D. E. Shaw Ventures in an investment ahead of OpenAI&rsquo;s $6.6 billion tender offer, which was completed in October 2025.</p> <p>The firm also recently represented D. E. Shaw Ventures in connection with its role as a co-lead in Anthropic&rsquo;s $30 billion Series G financing round, which valued Anthropic at $380 billion post-money and closed on February 12, 2026.</p> <p>The Arnold &amp; Porter team counseling D. E. Shaw Ventures on the OpenAI investment was led by partner Marina Richter and included partners Stephanie Coutu and Ed Deibert, senior counsel Joel Greenberg, senior attorney Stacie Jeong, senior associate Trevor Schmitt, and associate Anna Cardoso. Partner Reuven Graber and counsel Kathleen Wechter provided tax advice.</p> <p>The Arnold &amp; Porter team counseling D. E. Shaw Ventures on the Anthropic investment was led by partner Marina Richter and included partner Stephanie Coutu, counsel Peter Danias, senior attorney Stacie Jeong, and associate Anna Cardoso. Partners Deborah Curtis and Debbie Feinstein provided regulatory and antitrust advice, respectively.</p>{7F22A90B-A201-4C52-9195-7960232ADB55}https://www.arnoldporter.com/en/perspectives/news/2026/05/arnold-porter-defeats-class-certification-in-the-us-district-courtArnold &amp; Porter has secured another victory for Epoch Everlasting Play, LLC in a consumer products lawsuit over its Calico Critters toy line.Mon, 04 May 2026 00:00:00 -0500<p>Arnold &amp; Porter has secured another victory for Epoch Everlasting Play, LLC in a consumer products lawsuit over its Calico Critters toy line. On May 4, 2026, Judge Wright of the U.S. District Court for the Central District of California denied with prejudice a renewed motion for class certification, eliminating all class claims in the case and barring any future class certification motion.</p> <p>Plaintiffs alleged that the Calico Critters products are hazardous and sought to halt sales and obtain full refunds for California purchasers under the state&rsquo;s Unfair Competition Law. Judge Wright held that the plaintiffs could not satisfy Rule 23&rsquo;s adequacy requirement, finding that the named plaintiff&rsquo;s lack of standing to seek injunctive relief, as previously determined by the U.S. Court of Appeals for the Ninth Circuit, created a conflict with absent class members who might still pursue such relief. </p> <p>This decision builds on an appellate victory from September 2025, in which the U.S. Court of Appeals for the Ninth Circuit, on interlocutory appeal under Rule 23(f), vacated the district court&rsquo;s initial order granting class certification. </p> <p>The Arnold &amp; Porter team was led by partners James Speyer, Ian Hoffman, and William Perdue; senior counsel Eric Rubel; senior associate Henry Morris; and associate Zach Woodward.</p>{8F3991DD-98E9-4213-A48F-7FE927DB8869}https://www.arnoldporter.com/en/perspectives/news/2026/05/arnold-porter-advises-brazil-on-landmark-5b-global-bond-offeringArnold &amp; Porter advised the Federative Republic of Brazil on its landmark &euro;5 billion global bond offering, which closed on April 23, 2026.Mon, 04 May 2026 00:00:00 -0500<p>Arnold &amp; Porter advised the Federative Republic of Brazil on its landmark &euro;5 billion global bond offering, which closed on April 23, 2026.</p> <p>The transaction, the largest international bond issuance in Brazil&rsquo;s history, also marks the country&rsquo;s return to the euro market, with its first euro-denominated bond offering since 2014.</p> <p>The offering comprised three tranches: &euro;2 billion of 4.000% Global Bonds due 2030, &euro;1.5 billion of 4.875% Global Bonds due 2033, and &euro;1.5 billion of 5.500% Global Bonds due 2036. All three series were listed on the London Stock Exchange and admitted to trading on its International Securities Market.</p> <p>Arnold &amp; Porter regularly advises Brazil on its sovereign financings, including its US$4.5 billion bond offering in February 2026, its <a href="/en/perspectives/news/2025/12/arnold-porter-advises-brazil-on-two-bond-issuances">US$2.25 billion bond offering</a>&nbsp;in December 2025, and its <a href="/en/perspectives/news/2025/06/arnold-porter-advises-brazil-on-us2-75-billion-bond-issue">US$2.75 billion bond offering</a>&nbsp;in June 2025.</p> <p>The team was led by partner Greg Harrington, counsel Carlos Pelaez, senior associate Mateo Morris, and associate Remila Jasharllari.</p> <p><em>*Bruno Woicik, a visiting attorney from Brazil, also assisted the team. Mr. Woicik is admitted to practice law only in Brazil and is not engaged in the practice of law in any U.S. jurisdiction.</em></p>{41B10E16-FC4E-407B-B588-6D116764DFEE}https://www.arnoldporter.com/en/perspectives/publications/2026/04/virtual-digital-health-digestAllison W. Shurenhttps://www.arnoldporter.com/en/people/s/shuren-allison-wallison.shuren@arnoldporter.comAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comAbeba Habtemariamhttps://www.arnoldporter.com/en/people/h/habtemariam-abebaAbeba.Habtemariam@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comMonique Nolan, M.D., J.D.https://www.arnoldporter.com/en/people/n/nolan-moniquemonique.nolan@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comJacqueline L. Degannhttps://www.arnoldporter.com/en/people/d/degann-jacquelinejackie.degann@arnoldporter.comCasey Brouhardhttps://www.arnoldporter.com/en/people/b/brouhard-caseycasey.brouhard@arnoldporter.comEmma Elliston, Ph.D.https://www.arnoldporter.com/en/people/e/elliston-emmaemma.elliston@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comBrianna Morigneyhttps://www.arnoldporter.com/en/people/m/morigney-briannabrianna.morigney@arnoldporter.comKatherine Rohdehttps://www.arnoldporter.com/en/people/r/rohde-katherinekate.rohde@arnoldporter.comLily Caohttps://www.arnoldporter.com/en/people/c/cao-lilylily.cao@arnoldporter.comHeba Jalilhttps://www.arnoldporter.com/en/people/j/jalil-hebaheba.jalil@arnoldporter.comMickayla A. Stogsdillhttps://www.arnoldporter.com/en/people/s/stogsdill-mickaylamickayla.stogsdill@arnoldporter.comKatie Brownhttps://www.arnoldporter.com/en/people/b/brown-katiekatie.brown@arnoldporter.comCaroline Oliverhttps://www.arnoldporter.com/en/people/o/oliver-carolinecaroline.oliver@arnoldporter.com<p>This digest covers key virtual and digital health regulatory and public policy developments during March and early April 2026 from the United States, United Kingdom, and European Union.</p> <h2>In this issue, you will find the following:</h2> <h3>U.S. News</h3> <ul> <li><a href="#Health Care Fraud And Abuse Updates">Health Care Fraud and Abuse Updates</a></li> <li><a href="#FDA Updates">FDA Updates</a></li> <li><a href="#Provider Reimbursement Updates">Provider Reimbursement Updates</a></li> <li><a href="#Privacy and AI Updates">Privacy and Artificial Intelligence (AI) Updates</a></li> <li><a href="#Policy Updates">Policy Updates</a></li> </ul> <h3>U.S. Featured Content </h3> <p>This month&rsquo;s edition covers a dynamic landscape at the intersection of health care compliance, technology regulation, and federal policy. On the enforcement front, two notable health care fraud cases, including a Florida pharmacy scheme and a $46 million telemedicine fraud, underscore the government&rsquo;s continued focus on Medicare abuse. In the regulatory arena, the U.S. Food and Drug Administration (FDA) made headlines by rejecting a deregulatory artificial intelligence (AI) petition from Harrison.ai, reaffirming that premarket review remains essential for AI-powered radiology devices, while simultaneously seeking fresh input on digital health technologies in clinical investigations. Meanwhile, federal health agencies are pushing forward on digital health integration as the Centers for Medicare and Medicaid Services (CMS) launched its Health Tech Ecosystem initiative, introduced the ACCESS model for enhanced digital health reimbursement, and announced the LEAD accountable care model, all while the U.S. Department of Health and Human Services (HHS) restructured its health information technology (IT) offices to sharpen focus on interoperability. On Capitol Hill, lawmakers introduced a wave of AI-related legislation from Sen. Blackburn&rsquo;s TRUMP AMERICA AI Act to bills addressing AI chatbots in professional services and biodata standardization, signaling that Congress is actively grappling with how to govern artificial intelligence across health care and beyond.</p> <h3>EU and UK News</h3> <ul> <li><a href="#Regulatory Updates">Regulatory Updates</a></li> <li><a href="#Privacy Updates">Privacy Updates</a></li> <li><a href="#IP Updates">IP Updates</a></li> <li><a href="#Product Liability Updates">Product Liability Updates</a></li> </ul> <h3>EU/UK Featured Content </h3> <p>Regulatory activity in the EU and UK over the past month has focused on accelerating the alignment of digital, AI, and life sciences regulatory frameworks, alongside increasing scrutiny of data governance and market readiness for emerging technologies.</p> <p>At the EU level, work to simplify and streamline EU AI-related legislation has advanced, with the Council of the European Union and European Parliament having adopted their positions on the European Commission&rsquo;s (EC) Digital Omnibus reforms, and now entering trilogue negotiations on the final text. In parallel, MedTech Europe published its response to the EC consultation on the simplification of the EU AI rules as part of the Digital Omnibus, calling for clearer integration between the AI Act and other sectoral legislation, as well as extended implementation timelines. Separately, the European Data Protection Board (EDPB) and European Data Protection Supervisor (EDPS) issued a joint opinion on the proposed European Biotech Act, emphasizing the need for clearer safeguards, harmonized legal bases for processing clinical data, and strong protections when health and genetic data are used in biotech and AI contexts.</p> <p>In the UK, developments have focused on the role of AI-enabled innovation within the health care system. A new parliamentary inquiry into personalized medicine and AI will examine ongoing challenges and barriers to National Health Service (NHS) adoption of new technologies, including procurement, digital infrastructure limitations, and system fragmentation. At the same time, the Medicines and Healthcare products Regulatory Agency (MHRA) has secured multi year funding to expand its AI Airlock Program to support the development of more ambitious AI medical devices. These initiatives signal a continued policy commitment to embedding digital and AI driven innovation into health care delivery and to strengthening the regulatory environment required to support safe deployment at scale.</p> <h2>U.S. News</h2> <h3><a name="Health Care Fraud And Abuse Updates">Health Care Fraud And Abuse Updates</a></h3> <p><a rel="noopener noreferrer" href="https://www.justice.gov/usao-sdca/pr/federal-jury-finds-mother-and-daughter-guilty-medicare-fraud-scheme-and-payment" target="_blank">Florida Mother-Daughter Duo Convicted of Health Care Fraud</a>. On March 26, 2026, Cindy Justice, owner and president of PureScience Rx, a Florida pharmacy, and her daughter, Ashleigh Davis, operations manager at PureScience Rx, were convicted by a grand jury for health care fraud, payment of illegal kickbacks, and conspiracy to commit other offenses. </p> <p>The defendant allegedly paid a telemarketing call center to target Medicare beneficiaries and facilitate medically unnecessary prescriptions, including for drugs that were not FDA-approved or supported by medical evidence. In some instances, prescriptions were issued using stolen provider identities. The scheme resulted in Medicare paying more than $4.9 million on the fraudulent claims.</p> <p><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/telemedicine-company-owner-pleads-guilty-46m-medicare-fraud-scheme" target="_blank">Telemedicine Company Owner Pleads Guilty in $46 Million Medicare Fraud Scheme</a>. On March 27, 2026, Christopher Harwood, owner of telemedicine company TelevisitMD, pleaded guilty to conspiracy to commit health care fraud and wire fraud in connection with a $46.2 million Medicare scheme.&nbsp;</p> <p>The defendant allegedly targeted Medicare beneficiaries through aggressive telemarketing practices and paid physicians to approve orders for medically unnecessary orthotic braces and genetic tests without legitimate telehealth encounters or meaningful patient relationships. Harwood and his co-conspirators then sold the signed orders to durable medical equipment suppliers and laboratories, including entities he owned, which billed Medicare for the unnecessary items. Medicare paid approximately $17.9 million on the fraudulent claims, and Harwood personally received more than $10 million.</p> <h3><a name="FDA Updates">FDA Updates</a></h3> <p><strong>FDA Rejects Deregulatory AI Proposal</strong>. On April 1, 2026, FDA replied to a petition submitted by Rubrum Advising on behalf of Harrison.ai. In the petition, Harrison.ai requested that FDA partially exempt certain class II radiology computer-aided detection, diagnosis, triage, and notification devices from 510(k) premarket notification requirements when manufacturers met specified conditions, including having prior 510(k) clearances and implementing post-market oversight measures. FDA formally denied the petition, concluding that it did not show that premarket review is unnecessary to assure safety and effectiveness. FDA was not persuaded by the petition&rsquo;s arguments and rejected the claim that a manufacturer&rsquo;s prior 510(k) clearance demonstrates &ldquo;proficiency in processes&rdquo; that would justify exempting future devices, noting that many other aspects of AI development may not translate across indications, modalities, or device types. FDA also stated the proposal would improperly let manufacturers determine what post-market controls are sufficient &ldquo;in lieu of FDA review and clearance,&rdquo; which is &ldquo;neither consistent with the statute nor in the best interest of public health.&rdquo; After reviewing public comments and applying the four established factors for Class II exemption, FDA found that the devices still present meaningful risks, that the characteristics necessary for safe and effective performance are not yet well established across all uses, and that changes could materially affect safety, effectiveness, or even classification. FDA acknowledged the petition&rsquo;s proposals, reiterated its commitment to innovative approaches for digital health regulation, and pointed manufacturers toward Predetermined Change Control Plans as a more appropriate pathway to reduce regulatory burden while maintaining oversight.</p> <h3><a name="Provider Reimbursement Updates">Provider Reimbursement Updates</a></h3> <p><strong>CMS Proposes Telehealth Waivers for New Innovation Center Models</strong>. CMS continues to incorporate telehealth waivers in Innovation Center models, emphasizing that such flexibilities can promote continuity of care and support broader access for Medicare beneficiaries. Most recently, CMS proposed incorporating waivers in the Long-term Enhanced ACO Design (LEAD) Model and the Comprehensive Care for Joint Replacement Expanded (CJR-X) Model.</p> <p>The <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/lead" target="_blank">LEAD Model</a> is a 10-year voluntary ACO model that will launch after the existing ACO model, ACO Realizing Equity, Access, and Community Health (REACH) Model concludes at the end of 2026. According to the recently published <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/files/lead-rfa.pdf" target="_blank">Request for Applications</a> (RFA), the LEAD Model will incorporate a &ldquo;telehealth benefit enhancement&rdquo; similar to the one included in ACO REACH, in which CMS will waive the rural geographic component of originating site requirements and allow the originating site to include a beneficiary&rsquo;s home. CMS also will waive the interactive telecommunications system requirement for certain asynchronous dermatology and ophthalmology telehealth services, allowing for digital images to be transmitted to a practitioner and evaluated outside of a real-time interaction.</p> <p>Additionally, in the fiscal year (FY) 2027 inpatient prospective payment system (IPPS) <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/04/14/2026-07203/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-ipps-and" target="_blank">proposed rule</a>, CMS proposed a nationwide expansion of the CJR Model, which ran from 2016 through 2024. Under the proposed mandatory CJR-X Model, hospitals would be accountable for the cost and quality of care related to lower extremity joint replacement procedures for the period beginning with hospital admission through 90 days post-discharge. Like the CJR Model, CMS proposes that the CJR-X Model will waive the rural geographic component of originating site requirements and allow the originating site to include a beneficiary&rsquo;s home. Furthermore, CMS proposes to create a new set of HCPCS codes to describe evaluation and management services furnished to CJR-X beneficiaries in their home via telehealth. According to CMS, the telehealth waivers will &ldquo;maximize the opportunity to improve the quality of care and efficiency for episodes of care in CJR-X.&rdquo;</p> <p>In both the LEAD Model RFA and the FY27 IPPS proposed rule, CMS recognized that broad Medicare telehealth waivers are currently in effect, pursuant to the Consolidated Appropriations Act, 2026. But because these waivers are not permanent, CMS concluded that model-specific waivers would &ldquo;guarantee&rdquo; telehealth services can continue for model beneficiaries, even if the broad telehealth waivers expire.</p> <h3><a name="Privacy and AI Updates">Privacy and AI Updates</a></h3> <p><strong>Information Sought on the Use of Digital Health Technologies in Clinical Investigations</strong>. On March 31, 2026, FDA issued a <a rel="noopener noreferrer" href="https://www.govinfo.gov/content/pkg/FR-2026-03-31/pdf/2026-06184.pdf" target="_blank">Request for Information</a> (RFI) regarding the use of digital health technologies (DHTs)[[N: &ldquo;Digital Health Technologies&rdquo; or &ldquo;DHTs&rdquo; are defined by the FDA as &ldquo;systems that use computing&nbsp;platforms, connectivity, software, and/or sensors for health care and related uses.&rdquo;]] in clinical investigations for drugs and biological products. The FDA previously issued guidance in this area in 2023, providing recommendations on ways to facilitate the use of DHTs in clinical investigations, including using DHTs to collect data for clinical investigation endpoints (<a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2023/12/22/2023-28262/digital-health-technologies-for-remote-data-acquisition-in-clinical-investigations-guidance-for" target="_blank">2023 DHT Guidance</a>). In the new RFI, the FDA explains that significant technological advancements have been made since 2023, including in sensors, such as those present in smartwatches and mobile phones, which may be customized for clinical investigations. DHTs are being designed to perform interactive clinical tests of patient functions, such as dynamometers to measure strength, apps to measure coordination and fine motor skills, and accelerometers to measure balance. In light of these developments, the agency is seeking fresh input focused on four specific questions:</p> <ul> <li>What regulatory challenges do DHT manufacturers, sponsors, or other interested parties face regarding the use of DHTs in clinical investigations of drugs and biological products?</li> <li>What opportunities are there for [the FDA&rsquo;s Center for Drug Evaluation and Research] and [the Center for Biologics Evaluation and Research] to support and facilitate the adoption of DHTs in clinical investigations of drugs and biological products?</li> <li>What areas of guidance would support the use of DHTs in clinical investigations?</li> <li>What specific DHT-related topics, such as digitally derived endpoints in certain disease areas, would benefit from discussion in a public workshop?</li> </ul> <p>The RFI states that information and comments received in response to these questions will inform the FDA&rsquo;s development of guidance documents, as well as other FDA activities to support the appropriate use of DHTs in clinical investigations of drugs and biological products.</p> <p>The deadline for submitting responses to the RFI is <strong>June 1, 2026</strong>. </p> <h3><a name="Policy Updates">Policy Updates</a></h3> <p><strong>HHS Continues To Prioritize AI and Digital Health Tools Across Agency Activities</strong>. HHS continues to prioritize integration of AI and digital health technologies across agencies&rsquo; priorities and programming. On April 9, 2026, CMS held &ldquo;Health Tech Ecosystem: Live! <em>First Wave Launch</em>,&rdquo; during which the agency highlighted digital health tools from 50 <a rel="noopener noreferrer" href="https://www.cms.gov/files/document/hte-first-wave-launch-mvps.pdf" target="_blank">companies</a> that have met the Minimum Viable Product requirements deadline for the <a rel="noopener noreferrer" href="https://www.cms.gov/health-technology-ecosystem/categories" target="_blank">Health Tech Ecosystem</a> pledge. One of the agency&rsquo;s initiatives includes allowing patients to share their medical records with their providers via QR code in an effort to &ldquo;Kill the Clipboard.&rdquo;</p> <p>Additionally, the FDA is soliciting additional information from companies interested in participating in its new <a rel="noopener noreferrer" href="https://www.fda.gov/news-events/press-announcements/fda-launches-tempo-first-its-kind-digital-health-pilot-expand-access-chronic-disease-technologies" target="_blank">Technology-Enabled Meaningful Patient Outcomes pilot</a> for digital health devices, which will likely inform the FDA&rsquo;s approach to regulating AI. Through the pilot, FDA will exercise &ldquo;appropriate&rdquo; enforcement discretion with regard to some medical device regulations so that devices can receive Medicare reimbursement under CMS&rsquo; <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/access" target="_blank">Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model</a>, which will offer enhanced reimbursement for digital health technologies that improve clinical outcomes. On April 13, 2026, CMS announced the participation of 150 <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/access-model-accepted-applicants" target="_blank">companies</a> in the upcoming launch ACCESS model and extended the deadline for applications until May 15, 2026.</p> <p>On March 31, 2026, CMS released a <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/lead" target="_blank">Request for Applications</a> for its recently announced <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/lead" target="_blank">Long-term Enhanced ACO Design model</a>, which will launch as a 10-year voluntary model beginning on January 1, 2027. The LEAD model aims to attract more providers, including independent practices and rural providers, to participate in accountable care organizations. According to the RFA, the model will incorporate the use of certified interoperable electronic health records; a telehealth benefit enhancement; and a Tech Enabler Initiative to identify opportunities to enhance patient care navigation, condition management, and connections with community-based services.</p> <p><strong>Reorganization of the Office of the National Coordinator for Health Information Technology</strong>. On March 31, 2026, HHS <a rel="noopener noreferrer" href="https://www.hhs.gov/press-room/hhs-health-tech-leadership-deliver-data-liquidity-affordability-ai-enabled-health-care-system.html" target="_blank">announced</a> a restructuring of the Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (ASTP/ONC) in an effort to align a &ldquo;focus on nationwide health IT interoperability and data liquidity.&rdquo; Under the restructuring, ASTP/ONC will now be the Office of the National Coordinator for Health Information Technology. Additionally, the offices of the HHS Chief Technology Officer (CTO), HHS Chief Artificial Intelligence Officer (CAIO), and HHS Chief Data Officer (CDO) will be moved to the Office of the Chief Information Officer (OCIO). The <a rel="noopener noreferrer" href="https://www.hhs.gov/sites/default/files/fy-2027-budget-in-brief.pdf" target="_blank">president&rsquo;s FY27 budget request</a> would provide $50 million in funding to ONC to prioritize advancing interoperability and coordination between health IT stakeholders, including updating payment policies. Of note, ASTP/ONC was funded at $69 million in FY26.</p> <p><strong>CMS Delays Prior Authorization Implementation for Two Services Under WISeR Model</strong>. On April 6, 2026, CMS filed a <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/04/06/2026-06616/medicare-program-delayed-implementation-of-certain-prior-authorization-for-select-services-for-the" target="_blank">notice</a> delaying the implementation of prior authorization for two services under the <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/wiser" target="_blank">Wasteful and Inappropriate Service Reduction (WISeR) model</a>, including Deep Brain Stimulation for Essential Tremor and Parkinson&rsquo;s Disease and Percutaneous Image-Guided Lumbar Decompression for Spinal Stenosis.</p> <p>On March 27, 2026, a group of 35 House Democrats sent a <a rel="noopener noreferrer" href="https://delbene.house.gov/uploadedfiles/final_fy27_wiser_repeal_-_signed_v._2.pdf" target="_blank">letter</a> to House Appropriations Labor-Health and Human Services (L-HHS) Subcommittee leadership urging the subcommittee to include language in its upcoming FY27 L-HHS appropriations bill to repeal the WISeR Model and prohibit implementation of other models testing prior authorization in traditional Medicare. The lawmakers also expressed concern about incentives for the model&rsquo;s contractors to deny care for Medicare beneficiaries.</p> <p><strong>Senator Marsha Blackburn Releases Discussion Draft of AI Legislative Package</strong>. On March 18, 2026, Sen. Marsha Blackburn (R-TN) released a <a rel="noopener noreferrer" href="https://www.blackburn.senate.gov/services/files/15AAEA28-5403-480D-8720-5E4C2D6F2A9A" target="_blank">discussion draft</a> of The Republic Unifying Meritocratic Performance Advancing Machine Intelligence by Eliminating Regulatory Interstate Chaos Across American Industry (TRUMP AMERICA AI) Act. According to the <a rel="noopener noreferrer" href="https://www.blackburn.senate.gov/2026/3/technology/blackburn-releases-discussion-draft-of-national-policy-framework-for-artificial-intelligence/3b3b6458-b6c7-478b-9859-374949586765" target="_blank">press release</a>, the legislation is intended to codify President Trump&rsquo;s December 2025 AI-related <a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2025/12/eliminating-state-law-obstruction-of-national-artificial-intelligence-policy/" target="_blank">executive order</a>; it does not include broad state preemption, unlike past legislative attempts to implement state preemption. Instead, the TRUMP AMERICA AI Act opts for a narrow preemption of state laws that contradict provisions in the legislation. The legislative package combines several pieces of existing bipartisan legislation sponsored or cosponsored by Sen. Blackburn, including the Kids&rsquo; Online Safety Act (KOSA, <a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/senate-bill/1748" target="_blank">S. 1748</a>) and the NO FAKES Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/senate-bill/1367" target="_blank">S. 1367</a>).</p> <p><strong>Congress Considers AI in Health Care and Biotechnology</strong>. In March, Members of Congress introduced multiple bills at the intersection of AI, health care, and biotechnology, including the following:</p> <ul> <li>On March 19, 2026, Reps. Kevin Mullin (D-CA), Debbie Dingell (D-MI), Doris Matsui (D-CA), Darren Soto (D-FL), Rashida Tlaib (D-MI), Jennifer McClellan (D-VA), and Kim Schrier (D-WA) <a rel="noopener noreferrer" href="https://kevinmullin.house.gov/2026/03/19/lawmakers-introduce-bill-to-stop-ai-chatbots-from-impersonating-doctors-lawyers-licensed-professionals/" target="_blank">introduced</a> the CHATBOT Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7985" target="_blank">H.R. 7985</a>), which would prohibit AI chatbots from providing unauthorized professional advice related to &ldquo;covered professions&rdquo; in the health care, financial services, legal, accounting, and other industries. The bill would increase liability for AI companies whose chatbots mislead users or provide harmful guidance, including additional enforcement authority under the Federal Trade Commission.</li> <li>On March 12, 2026, Sens. Todd Young (R-IN) and Ben Ray Lujan (D-NM) and Reps. Ro Khanna (D-CA) and Jay Obernolte (R-CA) <a rel="noopener noreferrer" href="https://www.young.senate.gov/newsroom/press-releases/young-colleagues-introduce-bill-to-ensure-american-leadership-in-ai-and-biotech/" target="_blank">introduced</a> the AI-Ready Bio-Data Standards Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/senate-bill/4069" target="_blank">S. 4069</a>/<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7907" target="_blank">H.R. 7907</a>). The legislation would direct the National Institute of Standards and Technology to create a national framework for standardizing biological datasets. Additionally, the bill would codify shared priorities of the National Security Commission on Emerging Biotechnology and the Trump administration&rsquo;s <a rel="noopener noreferrer" href="https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf" target="_blank">AI Action Plan</a>, including investing in AI-enabled biosecurity and building datasets for genomic sequencing.</li> <li>On March 4, 2026, Reps. Obernolte, Khanna, Rich McCormick (R-GA), and Jake Auchincloss (D-MA) <a rel="noopener noreferrer" href="https://obernolte.house.gov/media/press-releases/obernolte-khanna-mccormick-auchincloss-introduce-bipartisan-cloud-lab-act" target="_blank">introduced</a> the Cloud Labs to Advance Biotechnology (LAB) Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7801" target="_blank">H.R. 7801</a>), which would direct the National Science Foundation to establish a national network of advanced, cloud-enabled laboratories to generate high-quality biological data through AI.</li> </ul> <h2>EU and UK News</h2> <h3><a name="Regulatory Updates">Regulatory Updates</a></h3> <p><span style="text-decoration: underline;"><strong><a href="https://assets.publishing.service.gov.uk/media/69c6aa9878ca1aa5a63609f5/COM_2025_1023_EU_MDR_EU_IVDR_Explanatory_Memorandum.pdf">UK Government Publishes Explanatory Memorandum on Proposed EU MDR and IVDR Reforms</a></strong></span>. The UK government&rsquo;s Department of Health and Social Care has published a memorandum explaining the European Commission&rsquo;s proposal to amend Regulation (EU) 2017/745 (MDR) and Regulation (EU) 2017/746 (IVDR). The memorandum notes that compliance with the current regulations involves high and often disproportionate compliance costs and delays, in part due to regulatory complexity. It explains that the proposed reforms aim to streamline processes, support innovation, and ensure smoother market functioning. Under the EC&rsquo;s proposal, certain software-based devices will move to a lower risk class, meaning less stringent standards will apply, and it will become easier for manufacturers to seek authorization to implement planned and regular changes to software. Obligations of manufacturers of AI-based devices, where such devices are classified as high-risk under the EU AI Act, will also be reduced. The memorandum touches on UK aspects of the reforms, noting that the MDR and IVDR will apply in Northern Ireland via the Windsor Framework. It confirms that, currently, CE marked devices will be recognized in Great Britain without additional checks until June 2030 (though indefinite recognition is currently the subject of public consultation, as we have previously reported on).</p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/nhs-patients-and-british-businesses-to-benefit-from-historic-changes-to-medicines-access-following-pharmaceutical-partnership-with-usa" target="_blank">New UK-U.S. Pharmaceutical Arrangement Includes MedTech</a></strong></span>. On April 2, 2026, the UK and U.S. finalized the <a rel="noopener noreferrer" href="https://www.gov.uk/government/publications/uk-us-arrangement-on-pharmaceutical-trade-and-pricing/arrangement-between-the-united-states-of-america-and-the-united-kingdom-on-pharmaceutical-pricing-html#iv--promoting-mutually-beneficial-trade-and-investment-between-the-united-states-and-the-united-kingdom" target="_blank">landmark pharmaceutical partnership</a> announced in December, which aims to give NHS patients faster access to innovative medicines while making the UK the first country in the world to secure zero tariff access for its pharmaceutical exports to the U.S. for at least three years. It has been confirmed that no additional U.S. tariffs will apply to UK HealthTech products for at least three years, providing welcome certainty for manufacturers. However, a notable imbalance remains, with HealthTech exports still subject to a 10% tariff, compared with the new zero tariff treatment for pharmaceuticals. Industry groups have stated they will continue to press officials on both sides of the Atlantic to address this discrepancy. Building on this agreement, the MHRA and FDA have also announced a <a rel="noopener noreferrer" href="https://www.gov.uk/government/news/uk-and-us-deepen-regulatory-cooperation-on-medical-devices-building-on-wider-pharmaceutical-partnership" target="_blank">deepening of regulatory cooperation</a> on medical devices, including exploring future mutual recognition mechanisms to reduce duplication, streamline approval pathways, and accelerate access to safe, cutting edge medical technologies for patients in both countries, while maintaining independent, world class safety standards. </p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.team-nb.org/wp-content/uploads/2026/03/Team-NB-PositionPaper-MDR-IVDR-revision-impact-on-the-sector-20260302.pdf" target="_blank">Team-NB Publishes Position Paper on Revisions of the EU Medical Devices and In Vitro Diagnostics Regulations</a></strong></span>. On March 2, 2026, Team-NB (the European association of notified bodies) published a position paper on the EC proposals to amend the MDR and the In Vitro Diagnostic Regulation 2017/746 (see our <a href="/en/perspectives/advisories/2026/02/the-eu-medical-device-shake-up">February 2026 Advisory</a>&nbsp;for details on the proposals). Team-NB supports certain of the proposed measures, including increased digitalization (e.g., electronic documentation and labeling), earlier regulatory dialogue, and measures to support innovation (e.g., regulatory sandboxes for innovative technologies and combined studies). However, it identifies several concerns, in particular, reduced regulatory scrutiny (e.g., extended expiry dates) and implementation challenges in light of multiple ongoing regulatory initiatives. The position paper contributes to the ongoing legislative discussions on the revision of the MDR and IVDR.</p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.consilium.europa.eu/en/press/press-releases/2026/03/13/council-agrees-position-to-streamline-rules-on-artificial-intelligence/?utm_source=brevo&amp;utm_campaign=AUTOMATED%20-%20Alert%20-%20Newsletter&amp;utm_medium=email&amp;utm_id=3318" target="_blank">Council of the European Union</a> (Council) and <a rel="noopener noreferrer" href="https://www.europarl.europa.eu/news/en/press-room/20260323IPR38829/artificial-intelligence-act-delayed-application-ban-on-nudifier-apps" target="_blank">European Parliament</a> Each Adopt Their Position on the European Commission Proposal to Simplify the EU AI Rules</strong></span>. The proposal, part of the EU&rsquo;s Digital Omnibus package, is aimed at simplifying the implementation of harmonized rules on AI under the EU AI Act. Both the EC and the European Parliament propose amendments to streamline various requirements, reduce administrative burdens, and provide more proportionate application of AI rules across EU Member States. Both institutes support the introduction of fixed application dates for high-risk AI tools: December 2, 2027, for standalone high-risk systems and August 2, 2028, for high-risk systems embedded in products subject to EU sectoral legislation. The EC&rsquo;s position reinstates key compliance safeguards, including mandatory registration of AI systems deemed exempt from high-risk classification and the strict necessity standard for processing sensitive data for bias detection. The Council also requires the EC to issue guidance to support operators of high-risk AI systems in meeting their obligations while minimizing compliance burdens. The European Parliament favors a lighter application of AI Act obligations for products already regulated under sectoral laws (e.g., for medical devices). Interinstitutional negotiations between the European Parliament, the Council, and the European Commission (&ldquo;trilogue negotiations&rdquo;) will now commence to agree on the final form of the law.</p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/mhra-expands-ai-airlock-programme-with-a-36-million-funding-boost-over-three-years?utm_medium=email&amp;utm_campaign=govuk-notifications-topic&amp;utm_source=5edf5538-ec86-4e51-8e09-d301ffa741e0&amp;utm_content=daily" target="_blank">UK MHRA Expands AI Airlock Program</a></strong></span>. The MHRA has secured a &pound;3.6 million funding uplift to expand its AI Airlock program, the UK&rsquo;s first regulatory sandbox for AI as a medical device. Since its launch in 2024, the program has identified several areas where AI medical devices raise new regulatory challenges. Following the completion of its second phase, the Department of Health and Social Care has committed &pound;1.2 million per year over the next three years (2026-2029), allowing the program to move beyond the constraints of annual budgeting. This will enable the program to support more ambitious, longer-term testing models and strengthen the development of sustainable regulatory pathways for future AI medical technologies. </p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://committees.parliament.uk/work/9659/innovation-in-the-nhs-personalised-medicine-and-ai/news/212387/innovation-in-the-nhs-personalised-medicine-and-ai-inquiry-launched/" target="_blank">UK Parliament Launches Inquiry Into NHS Personalized Medicine and AI Innovation</a></strong></span>. The House of Lords Science and Technology Committee has opened an inquiry into innovation in the NHS, using personalized medicine and AI as case studies to understand why the health service struggles to adopt cutting-edge life sciences technologies. The inquiry will examine the scientific and technological foundations of personalized medicine, including developments in genomics, biotechnology, and AI-driven analytics, and will explore the research infrastructure needed to support their development and validation. It will assess gaps between early-stage research, clinical trials, and NHS-wide delivery, including procurement challenges, clinical pathway constraints, interoperability bottlenecks, and the role of regulators and clinical bodies. The committee will also consider whether regulatory and appraisal frameworks are appropriate and proportionate for AI-based and personalized technologies, as well as how NHS structural fragmentation contributes to uneven adoption. In addition, the inquiry will explore issues including the high cost of personalized treatments, the clinical academic workforce, and clinical trials infrastructure needed for rapid implementation across the NHS.</p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.medtecheurope.org/resource-library/medtech-europes-response-to-the-public-consultation-on-the-digital-omnibus/" target="_blank">MedTech Europe Publishes Position Paper on the EC&rsquo;s Proposal to Simplify the EU AI Rules</a></strong></span>. The position paper was submitted in response to the EC consultation on the Digital Omnibus package. While MedTech Europe supports the European Commission&rsquo;s objective of improving regulatory coherence and simplifying EU digital legislation, it calls for greater clarity and targeted adjustments to ensure that the framework functions effectively for the medical technology sector. In particular, MedTech Europe calls for: (1) greater alignment with the MDR and the IVDR in relation to risk management, ensuring that AI related obligations do not duplicate or conflict with existing sector specific frameworks; (2) explicit confirmation that investigational devices under the MDR and devices used in performance studies under the IVDR are not considered &ldquo;placed on the market&rdquo; or &ldquo;put into service&rdquo; under the AI Act, to avoid such devices being subject to AI Act obligations; (3) a harmonized designation pathway for notified bodies, covering both the AI Act and sectoral medical device legislation; and (4) a longer transition period for the application of high-risk AI system obligations, extending the implementation timeline to two years, to allow sufficient time for the development of standards and guidance, and notified body capacity necessary for effective compliance. </p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/faster-care-for-patients-less-admin-for-nhs-staff-and-new-ai-skills-for-key-industries-as-barnsley-tech-town-takes-next-big-step" target="_blank">UK Government Launches AI Pilots in Barnsley</a></strong></span>. The UK government has launched two AI pilot schemes in Barnsley, making it the UK&rsquo;s first &ldquo;tech town.&rdquo; The schemes are aimed at improving NHS services and strengthening local AI and digital capacity. The first pilot centers on an &pound;800,000 AI Upskilling Challenge Fund to provide targeted AI training to small- and medium-sized enterprises and residents who may lack digital confidence, with organizations invited to pitch for funding to deliver the training. The second pilot establishes a &ldquo;Healthcare Living Lab&rdquo; at Barnsley Hospital NHS Foundation Trust, to trial AI tools designed to cut waiting lists, reduce missed appointments, support clinical decision‑making, and ease administrative pressures on NHS staff. The initiatives are intended to form a blueprint for wider national adoption and are intended to reflect the government&rsquo;s commitment to ensuring that the benefits of AI reach local communities and key industries across the UK.</p> <h3><a name="Privacy Updates">Privacy Updates</a></h3> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.edpb.europa.eu/our-work-tools/our-documents/edpbedps-joint-opinion/edpb-edps-joint-opinion-32026-proposal-european_en" target="_blank">European Data Protection Board and European Data Protection Supervisor Issue Joint Opinion 3/2026 on the European Commission Proposal for a Biotech Act</a></strong></span>. While the EDPB and EDPS broadly support the objectives of the EC proposal, they identify significant data protection concerns. In particular, they welcome the introduction of a harmonized legal basis under the General Data Protection Regulation (EU) 2016/679 (GDPR) for processing clinical trial data, which is intended to reduce fragmentation across EU Member States, but call for greater clarity on the scope and application of the legal basis, including more detailed protocol-level documentation, and clearer conditions for the further use of clinical trial data for scientific research.</p> <p>The EDPB and EDPS also highlight important uncertainties around the allocation of controller roles between sponsors and investigators, and the scope of long-term data retention requirements. They further emphasize that, while regulatory sandboxes may allow for derogations from EU clinical trial requirements, this does not alter the application of existing obligations under the GDPR. The same applies to AI use and biotech data initiatives, which should be accompanied by appropriate safeguards, particularly where health and genetic data are involved. While non-binding, the Joint Opinion is expected to carry significant weight in the legislative negotiations. Find more details on the Joint Opinion in our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/03/edpb-edps-joint-opinion-on-the-european-biotech-act-proposal-key-data-protection-implications-for-pharma-and-life-sciences/" target="_blank">March 2026 BioSlice Blog</a>.</p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://health.ec.europa.eu/latest-updates/frequently-asked-questions-european-health-data-space-2026-03-26_en" target="_blank">European Commission Publishes FAQ Guidance on EHDS Regulation Implementation</a></strong></span>. The EC has published guidance on frequently asked questions on the European Health Data Space (EHDS). The guidance explains that the aims of Regulation (EU) 2025/327 (EHDS Regulation) are to allow patients to have greater control over their health data, ensure secure cross border data sharing, and support health care delivery. The guidance also covers the relationship of the EHDS regulation with other areas of EU law, such as data protection, medical devices, and clinical trials.</p> <h3><a name="IP Updates">IP Updates</a></h3> <p>EU and UK Copyright and AI Policy Developments. Following the UK government&rsquo;s consultation on copyright and AI, which we reported on in our January 2025 Digest, the House of Lords Communications and Digital Committee published its report on March 6, 2026, followed by the UK government&rsquo;s report and impact statement on March 18, 2026. At the EU level, the European Parliament adopted the &ldquo;Voss Report&rdquo; on March 10, 2026. Although the copyright and AI landscape remains largely unchanged with no immediate reform to copyright law, there are some notable takeaways:</p> <ul> <li>Text and data mining exception: The UK government confirmed that a broad commercial text and data mining exception with an opt-out mechanism is no longer its preferred option and intends to gather further evidence before a final position is reached.&nbsp;</li> <li>Licensing models: A licensing-first approach draws consistent support across the EU and the UK, with the Lords Report recommending a model focused on consent and fair remuneration and the Voss Report calling for a sector-based voluntary licensing process.&nbsp;</li> <li>Transparency: The Lords Report proposes a mandatory transparency framework with granular disclosures on training data enforced by a designated regulator. Meanwhile, the Voss Report advocates itemized lists of all copyrighted works used in training, regardless of the place of training.&nbsp;</li> <li>Labeling: There is cross-jurisdictional consensus that AI developers, service providers, and platforms should be legally required to label wholly AI-generated content.&nbsp;</li> <li>Life sciences sector: The UK government expressly referenced the option of a focused exception for science and research to facilitate AI-driven research and accelerate drug discovery.&nbsp;</li> </ul> <p>The copyright and AI landscape await more definitive policy direction.</p> <p><span style="text-decoration: underline;"><strong><a rel="noopener noreferrer" href="https://www.search-for-intellectual-property.service.gov.uk/GB2583455/documents" target="_blank">Fresh Doubts Over Patentability of AI-related Inventions in the UK</a></strong></span>. On March 27, 2026, the UK Intellectual Property Office (UKIPO) published an <a rel="noopener noreferrer" href="https://www.search-for-intellectual-property.service.gov.uk/GB2583455/documents" target="_blank">Examination Report</a> in relation to the patent application (GB2583455) that was the subject of the Supreme Court judgment in <em>Emotional Perception AI Limited v. Comptroller General of Patents, Designs and Trade Marks</em> [2026] UKSC 3, as covered in our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/04/virtual-and-digital-health-digest-february-2026/" target="_blank">February 2026 Digest</a>. The report confirms that the UKIPO will fully re-examine patentability, and expressed concerns over the application of the &ldquo;intermediate step,&rdquo; particularly in the analysis of &ldquo;mixed-type inventions.&rdquo; In its assessment that the invention lacks the necessary technical character and inventive step, the report casts new doubt on the UK&rsquo;s approach to patentability of AI-related and computer-implemented inventions. The applicant, Emotional Perception AI Limited, has until April 27, 2026 to provide its reply.</p> <h3><a name="Product Liability Updates">Product Liability Updates</a></h3> <p><span style="text-decoration: underline;"><strong>UK Government Launches Consultations on <a rel="noopener noreferrer" href="https://www.gov.uk/government/consultations/product-regulation-the-uks-new-product-safety-framework/the-uks-new-product-safety-framework" target="_blank">New Product Safety Framework</a> and <a rel="noopener noreferrer" href="https://www.gov.uk/government/consultations/product-regulation-market-surveillance-and-enforcement-framework/the-uks-new-core-product-regulation-market-surveillance-and-enforcement-framework" target="_blank">Market Surveillance Rules</a></strong></span>. The UK government has launched two consultations on reforms to the product safety regime, with a strong emphasis on addressing risks arising from digital and AI‑enabled technologies. The first consultation sets out proposals for a new, modernized product safety framework, designed to ensure regulation keeps pace with increasingly complex digital products and connected devices. It highlights that traditional safety models are no longer adequate for technologies featuring software updates, connectivity, data driven functionality, or AI enabled behavior, and invites views on how the regime should identify and manage novel harms linked to digital features and AI enabled products. The second consultation focuses on strengthening the UK&rsquo;s market surveillance and enforcement framework, proposing to consolidate dispersed enforcement powers into a single statutory instrument, introduce civil monetary penalties as an alternative to criminal prosecution, and ensure regulators have the tools needed to respond effectively to the challenges of digital supply chains and online marketplaces. Both consultations are open until June 23, 2026, and feedback can be submitted for the new <a rel="noopener noreferrer" href="https://ditresearch.eu.qualtrics.com/jfe/form/SV_b9DVcTjEyjYMtIq" target="_blank">product safety framework</a> and for the <a rel="noopener noreferrer" href="https://ditresearch.eu.qualtrics.com/jfe/form/SV_2sj9KKWh8lX1L9A" target="_blank">market surveillance and enforcement consultation</a>.</p> <p><span style="font-size: small;"><em>Amalia White is employed as a trainee solicitor at Arnold &amp; Porter&rsquo;s London office. Amalia is not admitted to the practice of law.<br /> Jack Chisem is employed as a paralegal at Arnold &amp; Porter&rsquo;s London office. Jack is not admitted to the practice of law.<br /> </em></span></p> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>Fri, 01 May 2026 00:00:00 -0500{1683D9B9-1BAD-4BC7-B553-4991938719EC}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/china-compliance-update-anti-corruption-spring-2026John Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comSiyi Guhttps://www.arnoldporter.com/en/people/g/gu-siyisiyi.gu@cn.arnoldporter.com<p>Anti-corruption continued to be a major focus for Chinese regulators in 2026, with the Supreme People&rsquo;s Court publishing its first new judicial interpretations of China&rsquo;s corruption and bribery regulations in a decade. Official statistics provided further evidence of regulators&rsquo; continued emphasis on both administrative and criminal anti-corruption enforcement.</p>Fri, 01 May 2026 00:00:00 -0500<p> <p>Anti-corruption continued to be a major focus for Chinese regulators in 2026, with the Supreme People&rsquo;s Court publishing its first new judicial interpretations of China&rsquo;s corruption and bribery regulations in a decade. Official statistics provided further evidence of regulators&rsquo; continued emphasis on both administrative and criminal anti-corruption enforcement.</p> <h2>New Judicial Interpretation on Corruption and Bribery</h2> <p>On April 10, 2026, China&rsquo;s Supreme People&rsquo;s Court (SPC) and Supreme People&rsquo;s Procuratorate (SPP) issued the <a rel="noopener noreferrer" href="https://www.court.gov.cn/fabu/xiangqing/497181.html" target="_blank">Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Corruption and Bribery (II)</a> (Interpretation (II), <span>关于</span><span>办理贪污贿赂刑事案件适用法律若干问题的解释（二）</span>), which will come into effect on May 1, 2026. This is a significant development, with the prior interpretation of the criminal law of bribery released by the SPC and SPP in 2016. It also follows a series of other developments in China&rsquo;s anti-corruption regulatory framework, including revisions to the PRC Criminal Law, Anti-Unfair Competition Law, and Supervision Law.[[N:For further analysis of the revised Supervision Law, see <a href="https://www.arnoldporter.com/en/perspectives/advisories/2026/03/china-anticorruption-2025-year-in-review" target="_self">China Anti-Corruption: 2025 Year in Review</a>. For further analysis of the AUCL, see <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/07/china-compliance-update-summer-2025" target="_self">China Compliance Update &mdash; Summer 2025</a>.]]</p> <p>The Interpretation (II) provides further clarifications of the provisions of China&rsquo;s Criminal Law that relate to crimes of corruption, with a focus on crimes in the private sector and &ldquo;entity crimes,&rdquo; meaning crimes that carry liability for companies, public institutions, government agencies, and other organizations.</p> <h2>Lowered Thresholds For Non-State Functionaries</h2> <p>One of the key elements of the Interpretation (II) is lowering the monetary thresholds for four crimes relating to non-state functionaries, bringing the thresholds for these crimes in line with the thresholds for similar crimes relating to state functionaries. &ldquo;State functionaries&rdquo; is a term referring not only to government officials, but which also includes other individuals who perform public duties in state-owned enterprises and public institutions.[[N:See Article 93 of the PRC Criminal Law.]]</p> <p>According to Article 8 of the Interpretation (II):</p> <ul> <li>The standards for conviction and sentencing for Accepting Bribes by Non-State Functionaries (<span>非国家工作人</span><span>员受贿罪</span>, Article 163) shall be the same as the standards for Accepting Bribes (<span>受</span><span>贿罪</span>).[[N:The definition of &ldquo;Accepting Bribes&rdquo; requires that the party accepting a bribe is a state functionary.]] The monetary thresholds of this crime were previously two to five times higher than the thresholds for Accepting Bribes.</li> <li>The standards for conviction and sentencing of Offering Bribes to Non-State Functionaries (<span>对非国家工作人员行贿罪</span>, Article 164) shall be the same as the standards for Offering Bribes (<span>行</span><span>贿罪</span>) and Offering Bribes by Entities (<span>单位行贿罪</span>).[[N:The definitions for these crimes also include the requirement that the recipient of the bribes is a state functionary.]] The monetary thresholds for these crimes were originally two times higher than the thresholds for Offering Bribes.</li> <li>The monetary thresholds for Embezzlement (<span>职务侵占罪</span>, Article 271) and Misappropriation of Funds (<span>挪用</span><span>资金罪</span>, Article 272) were also lowered to align with those of Corruption (<span>贪污罪</span>) and Misappropriation of Public Funds (<span>挪用公款罪</span>). The elements of these crimes are the same, although the latter two offenses refer to conduct by state functionaries.</li> <li>Notably, Article 8 also requires a comprehensive overview of the nature and circumstances of the crimes when dealing with crimes relating to non-state functionaries, in order to ensure that the crimes, liabilities, and sentencing are proportionate.</li> </ul> <p>These adjustments to the interpretation of the Criminal Law are intended to provide private companies the same level of legal protection as government agencies and state-owned enterprises, in order to ensure a positive business environment. This is consistent with recent enforcement and legislative trends for Chinese regulators.[[N:For additional analysis of recent anti-corruption enforcement trends in China&rsquo;s public and private sectors, see <a href="https://www.arnoldporter.com/en/perspectives/blogs/enforcement-edge/2026/01/china-compliance-update-december-2025" target="_self">China Compliance Update &mdash; December 2025</a>.]] For example, the <a rel="noopener noreferrer" href="http://www.npc.gov.cn/npc/c2/c30834/202312/t20231229_433988.html" target="_blank">12th Amendment to the Criminal Law</a>, which took effect on March 1, 2024, expanded the scope of application of three crimes of corruption, which previously were limited to individuals from state-owned enterprises, to include individuals from the private sector.</p> <h2>Revised Standards For Entity Crimes and Key Sectors</h2> <p>The Interpretation (II) also clarifies the judicial standards for conviction and sentencing for entity crimes relating to corruption. Article 2 of Interpretation (II) states the following regarding the crime of Offering Bribes to Entities (<span>对单位行贿罪</span>, Article 391):</p> <ul> <li>The monetary thresholds increase from RMB 100,000 (US$14,286) to RMB 200,000 (US$28,571) for crimes committed by individuals and from RMB 200,000 (US$28,571) to RMB 400,000 (US$57,142) for crimes committed by entities.</li> <li>Clarifies that the monetary thresholds for &ldquo;serious conditions&rdquo; under the Criminal Law are RMB 2,000,000 (US$285,714) for crimes committed by individuals and RMB 4,000,000 (US$571,428) for crimes committed by entities.</li> </ul> <p>Articles 2 and 4 of the Interpretation (II) also flag multiple key sectors for which the monetary thresholds for crimes of corruption will be lowered, including finance, food and drug, social security (including the state-run medical insurance program), and healthcare, among others.</p> <ul> <li>The monetary thresholds of Offering Bribes to Entities are RMB 100,000 (US$14,286) for crimes committed by individuals, and RMB 200,000 (US$28,571) for crimes committed by entities within these key sectors. The monetary thresholds in all other sectors are RMB 200,000 (US$28,571) for crimes committed by individuals, and RMB 400,000 (US$57,142) for crimes committed by entities as discussed above.</li> <li>The monetary thresholds of Offering Bribes by Entities are RMB 100,000 (US$14,286) within these key sectors, while the monetary thresholds for all other sectors are RMB 200,000 (US$28,571).</li> </ul> <p>These provisions highlight the regulators&rsquo; heightened focus on these key sectors. This interpretation is also consistent with the revisions in the <a rel="noopener noreferrer" href="http://www.npc.gov.cn/npc/c2/c30834/202312/t20231229_433988.html" target="_blank">12th Amendment to the Criminal Law</a>, that misconduct in these key sectors will be considered as aggravating factors for the crime of Offering Bribes and subject to more severe penalties.&nbsp;</p> <h2>Anti-Corruption Enforcement</h2> <p>Enforcement data published by regulators further highlighted the government&rsquo;s continued focus on anti-corruption:</p> <ul> <li>The SPC <a rel="noopener noreferrer" href="http://lianghui.people.com.cn/2026/n1/2026/0316/c461827-40682955.html" target="_blank">reported</a> on March 16, 2026 that Chinese courts nationwide adjudicated 36,000 cases (40,000 individuals) relating to duty-related crimes[[N:Duty-related crimes refer to a category of criminal charges under the PRC Criminal Law that relate to Government Officials (GO) or non-GO managerial personnel performing public duties. Duty-related crimes involve the misuse of one&rsquo;s official role to engage in misconduct, including but not limited to bribery, corruption, and embezzlement.]] in 2025, representing a 22.4% year-on-year increase.</li> <li>The SPP <a rel="noopener noreferrer" href="http://lianghui.people.com.cn/2026/n1/2026/0316/c461827-40682956.html" target="_blank">reported</a> on March 16, 2026 that in 2025, disciplinary inspection commissions at all levels transferred cases implicating 30,500 individuals to procuratorates for criminal investigation, representing at 10.8% year-on-year increase. Among these cases, 29,000 individuals were eventually prosecuted, representing a 20.5% year-on-year increase.</li> <li>The Central Commission for Discipline Inspection of the Communist Party of China (CCDI) <a rel="noopener noreferrer" href="https://www.ccdi.gov.cn/toutiaon/202604/t20260422_486590.html" target="_blank">reported</a> on April 23, 2026 that in the first quarter of 2026, commissions for discipline inspection nationwide initiated 245,000 investigations into government officials for corruption-related issues.</li> </ul> <p>Chinese regulators also continued to emphasize enforcement against both paying and accepting bribes, as reflected in enforcement data published by the SPC, SPP, and CCDI:</p> <ul> <li>In 2025, Chinese courts adjudicated 2,724 cases (3,235 individuals) of paying bribes, representing a 10.1% year-on-year increase. Chinese procuratorates prosecuted 3,292 individuals for paying bribes, representing a 7.3% year-on-year increase.</li> <li>In the first quarter of 2026, commissions for discipline inspection nationwide initiated investigations into 9,066 individuals for paying bribes, 983 of which were transferred to procuratorates for criminal investigation.</li> </ul> <p>For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/white-collar-defense-and-investigations" target="_self">White Collar Defense &amp; Investigations</a> practice group.</p> <p><em>* Zhewen Zhang contributed to this Blog</em>.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{FAEC1D50-8A65-4C9B-93AD-6E1D926CBEEA}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/audits-are-here-how-should-you-preparePaul W. Sweeney, Jr.https://www.arnoldporter.com/en/people/s/sweeney-jr-paul-wpaul.sweeney@arnoldporter.comSheena Thomashttps://www.arnoldporter.com/en/people/t/thomas-sheenasheena.thomas@arnoldporter.comAlyssa T. Calceranohttps://www.arnoldporter.com/en/people/c/calcerano-alyssaalyssa.calcerano@arnoldporter.com<p>The California Privacy Protection Agency&rsquo;s Executive Director Tom Kemp recently stated that the agency&rsquo;s new Audits Division will begin conducting audits assessing companies&rsquo; compliance with California data privacy laws this year.</p>Fri, 01 May 2026 00:00:00 -0500<p> <p>The California Privacy Protection Agency&rsquo;s (CalPrivacy) Executive Director Tom Kemp recently stated that the agency&rsquo;s new Audits Division will begin conducting audits assessing companies&rsquo; compliance with California data privacy laws this year.[[N:Allison Grande, <a rel="noopener noreferrer" href="https://www.law360.com/articles/2464170/calif-privacy-audits-starting-this-year-agency-s-head-says" target="_blank">Calif. Privacy Audits Starting This Year, Agency&rsquo;s Head Says</a>, LAW360 (Apr. 10, 2026).]]</p> <h2>What Is the Role of the New Audits Division?</h2> <p>CalPrivacy was established in 2020 by the <a rel="noopener noreferrer" href="https://www.caprivacy.org/annotated-cpra-text-with-ccpa-changes/#section1" target="_blank">California Privacy Rights Act</a> (CPRA), which amended the California Consumer Privacy Act (CCPA).[[N:Cal. Civ. Code &sect;&sect; 1798.100-1798.199.100.]] The agency is responsible for implementing and enforcing both statutes.</p> <p>The CPRA required CalPrivacy to &ldquo;appoint a Chief Privacy Auditor to conduct audits of businesses to ensure compliance&rdquo; with the CCPA and CPRA.[[N:Id. &sect; 1798.199.40(f).]] Accordingly, in February 2026, CalPrivacy formed the new Audits Division, led by Chief Privacy Auditor Sabrina Boyson Ross.[[N:<a rel="noopener noreferrer" href="https://privacy.ca.gov/2026/02/california-privacy-protection-agency-names-sabrina-boyson-ross-as-chief-auditor/" target="_blank">California Privacy Protection Agency Names Sabrina Boyson Ross as Chief Auditor and Forms New Audits Division</a>, PRIVACY.CA.GOV (Feb. 3, 2026).]] Ross joined CalPrivacy after serving in senior privacy and policy leadership roles, most recently serving as the Director of Public Policy at Meta.[[N:Id.]]</p> <p>The newly formed Audits Division, announced February 3, 2026, has been described by Executive Director Kemp as the &ldquo;point folks&rdquo; for cybersecurity audit certifications[[N:See The Privacy Advisor Podcast, <a rel="noopener noreferrer" href="https://privacyadvisorpodcast.libsyn.com/california-privacy-enforcement-in-2026-a-discussion-with-calprivacys-tom-kemp" target="_blank">California privacy enforcement in 2026: A discussion with CalPrivacy&rsquo;s Tom Kemp</a>, IAPP, at 00:22:50-00:25:06 (Feb. 6, 2026).]] and is responsible for developing and applying privacy compliance audit procedures and examining businesses&rsquo; practices for compliance gaps.[[N:California Privacy Protection Agency Names Sabrina Boyson Ross as Chief Auditor and Forms New Audits Division, supra note 5.]] It will also be responsible for processing risk assessment attestations under Article 10 of the new CCPA regulations, as well as the cybersecurity audit certifications under Article 9.</p> <h2>When Should You Expect Audits To Start?</h2> <p>As directed by the CPRA, CalPrivacy created annual cybersecurity audit requirements[[N:Cal. Code Regs. tit. 11, art. 9 (2026) (hereinafter CCPA Regs.).]] for &ldquo;businesses whose processing of consumers&rsquo; personal information presents significant risk to consumers&rsquo; privacy or security.&rdquo;[[N:Cal. Civ. Code &sect; 1798.185(a)(14)(A).]] Although these audit requirements formally took effect January 1, 2026, initial cybersecurity audit certifications are not due until 2028 to 2030, depending on the business&rsquo;s annual gross revenue in the preceding year.[[N:CCPA Regs. &sect; 7121(a)(1)-(3).]]</p> <p>While this statutory deadline may appear to afford organizations ample time to complete their first cybersecurity audits, Executive Director Kemp&rsquo;s recent announcement of audits beginning this year indicates otherwise.</p> <p>Kemp has acknowledged that although audit certifications will not be due until at least 2028, CalPrivacy expects that &ldquo;by nature, people are just doing cybersecurity audits anyway&rdquo; given that &ldquo;other regimes and other regulations&rdquo; impose similar requirements.[[N:The Privacy Advisor Podcast, supra note 7, at 00:22:14-00:22:58, 00:23:11-00:24:00.]]</p> <p>Other states do have laws requiring cybersecurity audits. New York, for example, imposes cybersecurity program and audit-type obligations on financial services entities,[[N:See 23 NYCRR 500.]] and a number of states have adopted insurance data security laws modeled on the <a rel="noopener noreferrer" href="https://content.naic.org/sites/default/files/model-law-668.pdf" target="_blank">National Association of Insurance Commissioners Model Law</a>. However, California&rsquo;s regulations uniquely extend cybersecurity audit certification obligations to any qualifying business across sectors.</p> <p>In other words, do not treat this delayed certification deadline as a grace period: the Audits Division is here and expects your cybersecurity audit practices to be underway now.</p> <h2>What Will Be the Focus of These Audits?</h2> <p>CalPrivacy has not explicitly identified the initial focus of its audits, but Executive Director Kemp has stated that the division &ldquo;may pre-announce a thematic audit in an area.&rdquo;[[N:Matt Fleischer-Black, <a rel="noopener noreferrer" href="https://www.cslawreport.com/print_issue.thtml?uri=cyber-security-law-report/content/vol-12/no-9-mar-4-2026" target="_blank">CalPrivacy Director Discusses New Audits Division and Other 2026 Actions to Come</a>, Cybersecurity L. Rep. (Mar. 4, 2026).]] Businesses can expect the division to focus on areas of recent concern to the Enforcement Division, including the frustration of consumers&rsquo; exercise of their CCPA rights &mdash; the rights to access, correct, delete, and opt-out of the sale and sharing of personal data &mdash; and failure to comply with privacy policy requirements. In a recent panel discussion, representatives from the bipartisan Consortium of Privacy Regulators &mdash; including Michael Macko, Deputy Director of Enforcement for CalPrivacy, and Stacey Schesser, Supervising Deputy Attorney General for the California Department of Justice &mdash; cited other key priorities as including chatbot-related practices, surveillance pricing, the use of data in large language models, and practices surrounding sensitive data, including non-HIPAA covered health data.[[N:See <a rel="noopener noreferrer" href="https://iapp.org/conference/iapp-global-summit/agenda/state-collaboration-on-privacy" target="_blank">IAPP Global Summit 2026 Conference Agenda</a>, IAPP.]]</p> <p>Audits can be expected to include review of information about the business&rsquo;s cybersecurity program, information systems, and use of service providers or contractors.[[N:See CCPA Regs. &sect; 7122(b) (requiring businesses to make such information available to auditors).]] Auditors may also conduct interviews but will expect that facts relevant to the audit be based on more than attestations by business management.[[N:See id. &sect; 7122(d) (explaining that audits cannot &ldquo;rely primarily on assertions or attestations by the business&rsquo;s management&rdquo;).]]</p> <h2>Could These Audits Lead to Enforcement Action?</h2> <p>The Audits Division will complement the Enforcement Division of CalPrivacy, and businesses should understand that violations discovered by the Audits Division could be referred to the Enforcement Division.[[N:Matt Fleischer-Black, supra note 14.]]</p> <p>Companies referred to the Enforcement Division for noncompliance could face significant fines. Recent enforcement actions included fines ranging from <a href="https://www.arnoldporter.com/en/perspectives/blogs/enforcement-edge/2025/05/cppa-brings-second-enforcement-action" target="_self">$345,178</a> to $1.35 million.[[N:See <a rel="noopener noreferrer" href="https://cppa.ca.gov/announcements/2025/20250930.html" target="_blank">Nation&rsquo;s Largest Rural Lifestyle Retailer to Pay $1.35M Over CCPA Violations</a>, PRIVACY.CA.GOV (Feb. 3, 2026).]] And these fines could get even higher. In the panel discussion referenced above, Deputy Director Macko commented that there may be a risk that fines under the CCPA could become the &ldquo;cost of doing business,&rdquo; hinting at CalPrivacy&rsquo;s interest in increasing fines to ensure they maintain deterrent value. </p> <h2>Audits Are Here &mdash; How Should You Prepare?</h2> <p>With these audits imminent, companies should consider immediately doing the following:</p> <p style="margin-left: 40px;"><strong>Determine whether the cybersecurity audit regulations apply to your organization</strong>. For-profit businesses &ldquo;doing business in California&rdquo;[[N:Cal. Civ. Code &sect; 1798.140(d)(1) (defining &ldquo;business&rdquo; under the CCPA).]] whose processing activities present a &ldquo;significant risk to consumers&rsquo; privacy or security&rdquo; are subject to the regulations.[[N:CCPA Regs. &sect; 7120(a).]] Notably, the audit requirements are not limited to only those businesses based in California. A business presents a &ldquo;significant risk&rdquo; if, in the preceding calendar year, it met either of the following:</p> <ul style="margin-left: 40px;"> <li>Generated annual gross revenue exceeding $25 million and either (1) processed the personal information of 250,000 consumers or households, or (2) processed the sensitive personal information of 50,000 or more consumers[[N:Id. &sect; 7120(a)(2).]]</li> <li>Derived 50% or more of its annual revenues from selling or sharing consumers&rsquo; personal information[[N:Id. &sect; 7120(a)(1).]]</li> </ul> <p style="margin-left: 40px;"><strong>Structure readiness work for privilege protection</strong>. Cybersecurity audit documentation may be discoverable in data breach and other litigation and is not automatically covered by attorney-client privilege. Although the CCPA regulations only require that businesses produce audit certification, not production of the underlying audit reports, those reports could nonetheless be subject to subpoenas from CalPrivacy or other regulators, either before or after certification. While understanding those risks, it is also important to recognize that early documentation could be instrumental in demonstrating commitment to strong cybersecurity policies and will not only be useful in any pre-certification audits, but can also serve as the basis for later CCPA required audits.[[N:See id. &sect; 7123(f) (allowing businesses to utilize prior cybersecurity audits for purposes of certification, so long as they meet all requirements).]] Companies should consider engaging outside counsel to direct the initial readiness assessment and establish a privilege framework before generating documentation.</p> <p style="margin-left: 40px;"><strong>Confirm whether cybersecurity program ownership meets audit standards</strong>. Most companies subject to the regulations will already have a cybersecurity program with designated owners. The CCPA requires that such &ldquo;qualified individuals&rdquo; be identified in the audit report[[N:Id. &sect; 7123(e)(6).]] and companies should understand that auditors may assess whether those individuals have sufficient expertise and authority, and whether their roles, responsibilities, and reporting lines are formally documented. Companies should review their program governance against these criteria and close any gaps in documentation now.</p> <p style="margin-left: 40px;"><strong>Evaluate substantive program components</strong>. The CCPA regulations set out 18 cybersecurity program components[[N:Those 18 components can be found in <a rel="noopener noreferrer" href="https://cppa.ca.gov/regulations/pdf/ccpa_updates_cyber_risk_admt_appr_text.pdf" target="_blank">Article 9 of the CCPA regulations</a>, section 7123(c)(1) through (c)(18).]] that the audit may assess depending on whether the auditor deems them &ldquo;applicable to the business&rsquo;s information system.&rdquo; However, even components outside of those 18 could be assessed by an auditor.[[N:CCPA Regs. &sect; 7123(d) (&ldquo;Nothing in this section prohibits a cybersecurity audit from assessing components of a cybersecurity program that are not set forth in subsections (b) or (c).&rdquo;).]] Businesses should comprehensively evaluate their cybersecurity policies and controls against each component, identify gaps, and document the operation of effective controls.</p> <p style="margin-left: 40px;"><strong>Consider whether to engage an independent auditor</strong>. The CCPA regulations require businesses to retain a &ldquo;qualified, objective, independent professional&rdquo; auditor.[[N:Id. &sect; 7122(a).]] This could be an internal or external auditor so long as they are impartial and objective.[[N:Id. &sect; 7122(a)(2).]] While a formal auditor is not necessarily required at this early stage, businesses might consider identifying potential auditors now to prepare for future audit requirements.</p> <p style="margin-left: 40px;"><strong>Coordinate readiness with Article 10 risk assessments</strong>. The cybersecurity audit certification required by Article 9 is distinct from the separate risk assessment obligation under Article 10,[[N:CCPA Regs. art. 10.]] which similarly requires businesses whose processing activities present a &ldquo;significant risk to consumers&rsquo; privacy&rdquo;[[N:CCPA Regs. &sect; 7150(a). Please note, however, that the definition of &ldquo;significant risk&rdquo; for risk assessment purposes is different from the definition for cybersecurity audits. See id. &sect; 7150(b).]] to conduct and document privacy risk assessments and to submit an annual attestation that the required assessments have been conducted.[[N:See CCPA Regs. &sect; 7157.]] As with the audit regime, CalPrivacy may request the underlying risk assessments on demand.[[N:Executive Director Kemp has stated that compliance for risk assessments, &ldquo;actually begins now, January 1, 2026.&rdquo; The Privacy Advisor Podcast, supra note 7, at 00:21:11-00:21:42.]] Although the triggers and deliverables differ, much of the underlying readiness work (mapping processing activities, identifying controls, and documenting rationales) supports both regimes, and companies should coordinate accordingly.</p> <p>Organizations that have questions about conducting cybersecurity audits, or about the CCPA more generally, may contact any of the authors of this Advisory or their usual Arnold &amp; Porter contact. Our <a href="https://www.arnoldporter.com/en/services/capabilities/practices/privacy-cybersecurity-data-strategy" target="_self">Privacy, Cybersecurity &amp; Data Strategy team</a> would be pleased to assist with any questions about privacy compliance and enforcement.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{A4BA00E1-C0E5-4AF6-85B9-0A310FAC58D8}https://www.arnoldporter.com/en/perspectives/events/2026/04/beyond-the-basics-mortgage-lending-secured-by-leaseholds-condominiums-and-complex-collateralKari L. Larsonhttps://www.arnoldporter.com/en/people/l/larson-kari-lKari.Larson@arnoldporter.comChristian Scarletthttps://www.arnoldporter.com/en/people/s/scarlett-christianchristian.scarlett@arnoldporter.comArnold &amp; Porter partner Kari Larson and counsel Christian Scarlett will be presenting at the 38th Annual RPTE National CLE Conference.Thu, 30 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter partner Kari Larson and counsel Christian Scarlett will be presenting at the <a rel="noopener noreferrer" href="https://rptecleconference.com/" target="_blank">38th Annual RPTE National CLE Conference</a> on &ldquo;Beyond the Basics: Mortgage Lending Secured by Leaseholds, Condominiums and Complex Collateral.&rdquo; This session will examine diligence, underwriting, and loan documentation considerations in mortgage lending involving unique asset classes and property interests, including hospitality, data centers, senior housing, ground leaseholds, and condominiums. Attendees will gain practical insights into identifying key risks, conducting effective diligence, and applying best practices in loan documentation to enhance deal certainty when closing complex transactions.</p>{D7DC4B67-163B-4C97-AA81-1931E0951121}https://www.arnoldporter.com/en/perspectives/events/2026/04/deal-to-dispute-managing-risk-in-ma-and-commercial-transactionsRandall H. Millerhttps://www.arnoldporter.com/en/people/m/miller-randall-hrandy.miller@arnoldporter.comCarmela T. Romeohttps://www.arnoldporter.com/en/people/r/romeo-carmela-tcarmela.romeo@arnoldporter.comAngela R. Vicarihttps://www.arnoldporter.com/en/people/v/vicari-angela-rangela.vicari@arnoldporter.comDavid J. Weinerhttps://www.arnoldporter.com/en/people/w/weiner-david-jdavid.weiner@arnoldporter.comWe invite you to join us for a practical webinar on managing litigation risk in commercial transactions.Thu, 30 Apr 2026 00:00:00 -0500<p>We invite you to join us for a practical webinar on managing litigation risk in commercial transactions. Our partners will explore common sources of post-signing and post-closing disputes, including:</p> <ul> <li>Earn-outs, milestone provisions, and other contingent payment structures</li> <li>Damages limitations and how they are applied across jurisdictions</li> <li>Pre-judgment interest considerations</li> <li>Lessons from recent case law developments</li> <li>Enforceability of letters of intent and other preliminary agreements</li> <li>Representations and warranties, and fraud-related claims</li> <li>Assignment pitfalls in asset transfers and commercial contracts</li> <li>Emerging risks arising from business-side use of generative AI tools in commercial decision-making</li> </ul> <p>This program is designed for in-house counsel, litigators, corporate and transactional attorneys, compliance professionals, and business leaders involved in structuring, negotiating, overseeing, or litigating commercial transactions.</p>{2F6E4281-7E3B-4351-BBC1-566D87E8A14F}https://www.arnoldporter.com/en/perspectives/news/2026/04/lacca-recognizes-arnold-porter-as-a-top-international-law-firm-for-latin-americas-largest-banksArnold &amp; Porter was recognized as a top international law firm for Latin America's largest banks in <em>Latin American Corporate Counsel Association</em> (<em>LACCA</em>)'s latest research into &ldquo;Who represents Latin America's biggest banks?&rdquo; <em>LACCA</em>'s report presents the &ldquo;banks that make up this year&rsquo;s top 100 &ndash; as well as their preferred external counsel.&ldquo;Thu, 30 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter was recognized as a top international law firm for Latin America's largest banks in <em>Latin American Corporate Counsel Association</em> (<em>LACCA</em>)'s latest research into &ldquo;Who represents Latin America's biggest banks?&rdquo; <em>LACCA</em>'s report presents the &ldquo;banks that make up this year&rsquo;s top 100 &ndash; as well as their preferred external counsel.&ldquo;</p> <p><em>LACCA</em> highlighted the firm's recent work advising ten of Latin America&rsquo;s largest banks across Brazil, Costa Rica, Mexico, Panama, and Peru. The recognition demonstrates the firm's commitment to providing strategic counsel for some of Latin America's most significant financial institutions.</p> <p>The firm&rsquo;s Corporate &amp; Finance team has handled cutting-edge transactional work and represented numerous private-sector corporations, financial institutions, and individuals in a broad range of transactions across Latin America, work complemented by Arnold &amp; Porter&rsquo;s leading international disputes practice and renowned regulatory experience.</p>{0FA2D11E-FEC7-49CE-8E9F-45C68C922E4F}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/forbes-highlights-arnold-porter-on-tariff-refund-litigation-and-consumer-class-actionsLori Leskin, head of Arnold &amp; Porter&rsquo;s consumer products practice, was quoted in the <em>Forbes</em> article, &ldquo;Consumers Won&rsquo;t See Tariff Refunds. Smart Retailers Will Turn Them Into Price Cuts,&rdquo; examining the legal and business implications of $166 billion in tariff refunds owed to U.S. importers following a Supreme Court ruling invalidating Trump-era tariffs.Thu, 30 Apr 2026 00:00:00 -0500<p>Lori Leskin, head of Arnold &amp; Porter&rsquo;s consumer products practice, was quoted in the <em>Forbes</em> article, &ldquo;Consumers Won&rsquo;t See Tariff Refunds. Smart Retailers Will Turn Them Into Price Cuts,&rdquo; examining the legal and business implications of $166 billion in tariff refunds owed to U.S. importers following a Supreme Court ruling invalidating Trump-era tariffs.</p> <p>Lori emphasized the growing legal and reputational risks for businesses navigating tariff refunds, as well as increasing pressure from consumers demanding price relief. However, she noted that consumers seeking relief through class actions may face significant hurdles in proving their claims. She explained that plaintiffs will struggle to establish a consistent link between tariffs and price increases, given the wide variation in how companies absorbed or passed on tariff costs. &ldquo;Every company has eaten the impact of the tariff situation differently,&rdquo; Lori said. &ldquo;There&rsquo;s so many things that explain why prices go up, that it&rsquo;s going to be very hard for a consumer to be able to establish consistency across an entirety of a class.&rdquo;</p> <p>The article also quotes from the Arnold &amp; Porter advisory, &ldquo;<a href="/en/perspectives/advisories/2026/03/the-next-wave-of-tariff-litigation">The Next Wave of Tariff Litigation: Consumer Class Actions</a>,&rdquo; which was authored by Lori, Brandon Neuschafer, and Elie Salamon, highlighting the expanding scope of potential litigation and warning that manufacturers, distributors, and logistics companies &mdash; not just retailers &mdash; could face exposure. &ldquo;The initial wave of consumer class action complaints demonstrates that plaintiffs are not limiting their theories to explicit tariff line-items. The broader argument &mdash; that any company that passed through tariff costs must return corresponding refunds &mdash; has potentially sweeping implications for businesses.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://www.forbes.com/sites/pamdanziger/2026/04/29/consumers-wont-see-tariff-refunds-smart-retailers-will-turn-them-into-price-cuts/" target="_blank">Read the full article</a>. </p>{576BF98B-3430-4C78-ACCB-6E49BBF98872}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/china-compliance-update-life-sciences-spring-2026John Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comSiyi Guhttps://www.arnoldporter.com/en/people/g/gu-siyisiyi.gu@cn.arnoldporter.comIn 2026, Chinese regulators have continued their focus on anti-corruption enforcement in the life sciences industry. In addition to long-standing priorities, such as fraud against China&rsquo;s state-run medical insurance program, regulators appear to be paying greater attention to investigator-initiated studies and patient programs in 2026. This Advisory summarizes recent regulatory developments and enforcement actions.Thu, 30 Apr 2026 00:00:00 -0500<p>In 2026, Chinese regulators have continued their focus on anti-corruption enforcement in the life sciences industry. In addition to long-standing priorities, such as fraud against China&rsquo;s state-run medical insurance program, regulators appear to be paying greater attention to investigator-initiated studies and patient programs in 2026. This Advisory summarizes recent regulatory developments and enforcement actions.</p> <h2>Medical Insurance Fraud: Enforcement and Regulatory Developments</h2> <p>Statistics issued by Chinese regulators in 2026 show that fraud against the state-run medical insurance program remained a primary focus of both administrative and criminal enforcement:[[N:&nbsp;For further analysis of enforcement actions targeting medical insurance fraud in 2025, see C<a href="/en/perspectives/advisories/2025/09/chinese-regulators-enforcement-against-medical-insurance-fraud">hinese Regulators Continue Enforcement Actions Against Medical Insurance Fraud</a>.]]</p> <ul> <li>The National Healthcare Security Administration (NHSA), which is responsible for the state-run medical insurance program, <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/3/16/art_7_19918.html" target="_blank">reported</a> on March 16, 2026 that 3,776 cases involving medical insurance were jointly investigated by the NHSA and police, and 10,357 criminal suspects were arrested. In addition, 1,626 entities (e.g., hospitals and pharmacies) were verified to have engaged in medical insurance fraud, and a total of RMB 34.2 billion (US$4.75 billion) of medical insurance funds were recovered.</li> <li>The Supreme People&rsquo;s Court (SPC) reported that a total of 1,433 criminal cases relating to medical insurance fraud were adjudicated in 2025. These cases implicated 2,807 individuals and represented a year-on-year increase of 24%.</li> <li>The Supreme People&rsquo;s Procuratorate (SPP) reported that a total of 5,256 individuals were prosecuted in 2025 for crimes relating to the state-run medical and social insurance programs.&nbsp;</li> </ul> <p>In February, the NHSA published the <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/2/13/art_173_19681.html" target="_blank">Implementing Rules on the Regulations on Supervising and Administering the Use of Medical Insurance Funds</a> (Implementing Rules, 医疗保障基金使用监督管理条例实施细则), which came into effect on April 1, 2026. The Implementing Rules clarified the requirements of the <a rel="noopener noreferrer" href="https://www.gov.cn/gongbao/content/2021/content_5591403.htm" target="_blank">Regulations on Supervising and Administering the Use of Medical Insurance Funds</a> (Regulations, 医疗保障基金使用监督管理条例), which came into effect on May 1, 2021, providing detailed procedures and guidelines for regulators to carry out enforcement actions. Like the Regulations, the Implementing Rules focus on potential misconduct by individuals and institutions who utilize state-run medical insurance funds, such as patients, hospitals, and pharmacies. </p> <p>Also in February, the NHSA released the <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/2/2/art_104_19556.html" target="_blank">Notice on Strengthening the Supervision of Medical Insurance Funds in 2026</a> (Notice, 国家医疗保障局关于做好2026年医疗保障基金监管工作的通知), which sets forth an array of regulatory approaches for tackling misconduct relating to medical insurance. The Notice discusses multiple measures to reduce medical insurance fraud, including enhancing the use of electronic tracking systems (such as UIDs) to prevent the illegal resale of products purchased with medical insurance funds, and strengthening unannounced inspections of the use of medical insurance funds. The NHSA also published case studies of unannounced inspections, which will be discussed in detail below.[[N: These unannounced inspections are carried out by the NHSA and provincial healthcare security administrations, and target healthcare institutions, medical insurance administrations, and other agencies providing medical insurance services. Issues identified during the inspections may result in administrative penalties, and may be transferred to other regulators, such as disciplinary inspection commissions, for further action.]]</p> <h2>Corporate Liability and Cooperation Credit</h2> <p>In March and April, the NHSA published several case studies of enforcement actions relating to bribery in the health care industry. Although some of the cases showed fact patterns familiar from prior NHSA case studies, such as manufacturers&rsquo; sales representatives or distributors&rsquo; personnel paying kickbacks to HCPs in return for sales and collection of HCPs&rsquo; prescription data, a few points stood out:[[N: For further analysis of enforcement cases published by the NHSA in January 2026, see <a href="/en/perspectives/advisories/2026/03/china-life-sciences-2025-year-in-review">China Life Sciences: 2025 Year in Review</a>.]]</p> <p>In one case, a distributor was fined RMB 250,000 (US$35,714) for bribery by an entity after its actual controller was found to have paid kickbacks to multiple HCPs at two hospitals. This may signal an increased focus by Chinese regulators on bringing charges against corporations. </p> <p>In a second case, the NHSA noted that although two pharmaceutical manufacturers were both found to have paid bribes to an HCP, the companies&rsquo; level of cooperation affected their penalties. Both companies had &ldquo;credit evaluations&rdquo; performed by the Qinghai Health Security Administration. One company proactively corrected its misconduct and remedied the negative impact of its misconduct before its credit evaluation was finalized and therefore did not receive any penalty. The second company failed to take remedial action, received a credit evaluation result of &ldquo;Seriously Dishonest,&rdquo; and was debarred from public procurement in Qinghai Province for three years. This case is notable in part because it shows that the NHSA is actively enforcing the updated credit evaluation system according to the revisions published in May 2025.[[N: For further analysis of the credit evaluation process and the May 2025 revisions to the process, see <a href="/en/perspectives/advisories/2025/06/china-compliance-update-life-sciences-summer-2025">China Compliance Update: Life Sciences &mdash; Summer 2025 | Advisories | Arnold &amp; Porter.</a>]] This case also demonstrates one of the key elements of the May 2025 update, that companies can avoid negative credit evaluations and the resulting penalties by proactively remediating misconduct.</p> <p>Chinese regulators are also taking increasingly aggressive measures to enforce the credit evaluation system throughout the supply chain. Manufacturers may be subject to credit evaluations not only for their third parties&rsquo; misconduct, but the misconduct of their third parties&rsquo; contractors and vendors, as shown by a model case published by the NHSA in January 2026.[[N: For further details of the model cases published by the NHSA in January 2026, see <a href="/en/perspectives/advisories/2026/03/china-life-sciences-2025-year-in-review">China Life Sciences: 2025 Year in Review | Advisories | Arnold &amp; Porter</a>.&nbsp;]]</p> <p>These regulatory trends demonstrate the importance of companies carefully monitoring their distributors and other third parties, and taking timely remedial action if any misconduct is found.</p> <h2>Unannounced NHSA Inspections: Investigator Initiated Studies and Public Procurement</h2> <p>As noted above, in February and March 2026 the NHSA published three case studies of unannounced inspections. Although the NHSA did not disclose what, if any, action was taken as a result of these inspections, these case studies provide valuable insights into the regulators&rsquo; focus in conducting these enforcement actions.</p> <ul> <li><strong>Clinical Trials</strong>. One <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/3/20/art_14_19964.html" target="_blank">case study</a> discussed an Investigator Initiated Study (IIS) using a drug covered by China&rsquo;s state-run medical insurance program. A significant increase in the drug&rsquo;s sales at the hospital where the IIS was carried out drew NHSA inspectors&rsquo; attention. The inspection subsequently identified irregularities with the IIS:&nbsp; <ul> <li>The pharmaceutical company paid HCPs for services that appeared to lack clinical value. <ul> <li>The IIS was designed for each patient to have follow-up visits once every two months for two years, for a total of 12 follow-up visits. However, the IIS was also designed to study late-stage cancer patients who were expected to survive 3-4 months. No patient completed any follow-up visits.&nbsp;</li> <li>It appears that no useful clinical data was generated from the IIS. The NHSA inspector did not identify any published work product relating to this IIS, and the clinical data generated from the IIT did not appear to have been utilized to obtain approval for additional indications.</li> <li>Despite these issues, the manufacturer still paid the HCPs&rsquo; service fees relating to the IIS.&nbsp;</li> </ul> </li> <li>IIS relating to the drug accounted for 25% of the total contemporaneous IIS undertaken by the hospital. Many of the other IIS relating to this drug had vague or broad clinical designs.</li> <li>The pharmaceutical company had previously invested heavily in clinical trials relating to the drug but did not appear to have produced a proportionate number of academic publications, nor were these prior trials used to support applications for new indications.</li> </ul> </li> <li><strong>Public Procurement</strong>. Two of the other case studies related to procurement issues.&nbsp; <ul> <li>In <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/2/26/art_14_19733.html" target="_blank">one case</a>, the inspector discovered that an individual engaged in bid rigging by setting up multiple pharmaceutical distributors and using these entities to participate in a hospital tender. Some of these distributors were found to be shell companies, and their legal representatives were found to have almost no substantive responsibilities.</li> <li>In <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/3/17/art_14_19924.html" target="_blank">the second</a> case, the inspection discovered that during the tendering process, HCPs&rsquo; evaluations of the medical consumables under consideration for procurement were manipulated to favor manufacturers who had a &ldquo;long-standing cooperative relationship&rdquo; with the hospital. <ul> <li>The original ratings of the consumables appeared to have been modified multiple times.&nbsp;</li> <li>The HCPs who participated in the tender evaluation recalled that the HCP who led the process indicated that they should &ldquo;prioritize&rdquo; one manufacturer.</li> </ul> </li> </ul> </li> </ul> <h2>Enforcement: Patient Programs, Disease Awareness, and Industry Associations</h2> <p>A January administrative decision published by the Shanghai Administration for Market Regulation is notable for targeting HCPs&rsquo; participation in a disease awareness program.</p> <ul> <li>A consulting company was engaged by a pharmaceutical company to provide a patient health management platform and carry out disease awareness activities. As part of this work, the consulting company invited HCPs who had prescribed the pharmaceutical company&rsquo;s product to lecture at disease awareness activities and paid service fees to the HCPs.</li> <li>The AMR found that when carrying out the patient program, 18 disease awareness activities did not take place. The consulting company nevertheless paid service fees totaling RMB 25,000 (US$3,472) to HCPs for these activities.&nbsp;</li> <li>The consulting company was found to have provided improper benefits to HCPs and was fined RMB 100,000 (US$13,889).</li> </ul> <p>This case stands out from the majority of published AMR enforcement matters, which typically relate to sales personnel or third parties providing benefits to HCPs in return for sales, HCPs&rsquo; participation in promotional activities, and sponsorships. Following on the August 2025 enforcement actions against employees of a pharmaceutical company for improper operation of the company&rsquo;s patient assistance programs,[[N: For further analysis of the news report in August 2025, see <a href="/en/perspectives/advisories/2025/09/chinese-regulators-enforcement-against-medical-insurance-fraud">Chinese Regulators Continue Enforcement Actions Against Medical Insurance Fraud</a>.]] this case may indicate that Chinese regulators are paying increased attention to the operation of patient programs, including disease awareness programs.</p> <p>The first quarter of 2026 has also seen multiple enforcement actions targeting academic and industry associations, including multiple high-ranking officials from national and provincial associations in the healthcare industry having been placed under investigation. For example, the CCDI <a rel="noopener noreferrer" href="https://www.ccdi.gov.cn/yaowenn/202602/t20260206_474240.html" target="_blank">announced</a> on February 6, 2026 that the Vice General Secretary of the China Association For Pharmaceutical Equipment, Qianhe Di (遆倩鹤), is being investigated for serious violations of laws and regulations. These enforcement actions appear to reflect efforts to actively implement the January 14, 2026 <a rel="noopener noreferrer" href="https://www.ccdi.gov.cn/toutiaon/202601/t20260114_469908.html" target="_blank">Announcement of the Fifth Plenary Session of the 20th Central Commission for Discipline Inspection of the Communist Party of China</a> ( 中国共产党第二十届中央纪律检查委员会第五次全体会议公报), which stated in part that in 2026, the CCDI will &ldquo;further rectify corruption in key areas including finance, state-owned enterprises, energy, education, academic and industry associations, development zones, and bidding (深化整治金融、国企、能源、教育、学会协会、开发区和招标投标等重点领域腐败).&rdquo;</p> <p>These enforcement actions show the need for companies operating in China to ensure that all public-facing activities, including patient programs, maintain a high level of compliance, and underscore the need for companies to conduct adequate due diligence and monitoring on their partnerships with academic associations.</p> <p>For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="/en/services/capabilities/practices/life-sciences-and-healthcare-regulatory">Life Sciences</a>&nbsp;or <a href="/en/services/capabilities/practices/white-collar-defense-and-investigations">White Collar Defense &amp; Investigations</a>&nbsp;practice group.</p> <p><em>*Zhewen Zhang contributed to this Blog.</em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{F32419EB-27D9-408E-8153-CF4AA8CCAACE}https://www.arnoldporter.com/en/perspectives/news/2026/04/women-and-diversity-in-law-awards-recognize-kathleen-harris-as-law-firm-leader-of-the-yearHead of Arnold &amp; Porter's London office Kathleen Harris has been named Law Firm Leader of the Year &ndash; International Law Firm at the Women and Diversity in Law Awards 2026, which honor outstanding women leaders and practitioners across the UK legal profession, as well as legal teams and businesses driving meaningful change.Wed, 29 Apr 2026 00:00:00 -0500<p>Head of Arnold &amp; Porter's London office Kathleen Harris has been named Law Firm Leader of the Year &ndash; International Law Firm at the Women and Diversity in Law Awards 2026, which honor outstanding women leaders and practitioners across the UK legal profession, as well as legal teams and businesses driving meaningful change.</p> <p>The Law Firm Leader of the Year &ndash; International Law Firm award recognizes UK-based women in leadership positions within international law firms who are &ldquo;exceptional leaders, setting and delivering on strategic goals while also ensuring the business operates ethically and with integrity, guided by purpose and values, including a demonstrable commitment to furthering diversity and inclusion.&rdquo; </p> <p>Kathleen is recognized internationally as a leader in her field and is regularly instructed by companies and individuals on a range of high-profile regulatory and criminal matters. She heads the firm&rsquo;s London office, which serves a diverse range of clients across 17 practice areas, acting as a bridge between the firm's international network spanning Europe, the U.S., and Asia. Kathleen also serves as Co-Chair of Arnold &amp; Porter's Diversity &amp; Inclusion Committee, reflecting the firm's broader commitment to building a more inclusive profession.</p>{17EB6A63-F3E8-4D1E-A266-08A0292D46DB}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/earn-outs-and-other-forms-of-contingent-considerationThomas Yadlonhttps://www.arnoldporter.com/en/people/y/yadlon-thomasthomas.yadlon@arnoldporter.comTracy A. Beltonhttps://www.arnoldporter.com/en/people/b/belton-tracy-atracy.belton@arnoldporter.com<p>In our July 2024 Advisory regarding Trifecta Multimedia Holdings Inc. v. WCG Clinical Services LLC, we noted the importance, in the earn-out context, of distinguishing between extra-contractual statements that may be treated as actionable representations and those that may be dismissed as mere &ldquo;puffery,&rdquo; and we highlighted the significance of clear anti-reliance language in acquisition agreements. Two more recent Delaware decisions &mdash; the Court of Chancery&rsquo;s post-trial opinion in Camaisa v. Pharmaceutical Research Associates, Inc. and the Delaware Supreme Court&rsquo;s decision in Fortis Advisors LLC v. Johnson &amp; Johnson &mdash; bear on those same subjects and, in the case of Fortis, make Delaware&rsquo;s position on anti-reliance language particularly clear. The decisions also implicate several other recurring questions in contingent consideration disputes, including efforts-based covenants and the limits of the implied covenant of good faith and fair dealing. We summarize the background of these cases and our principal takeaways below.</p>Wed, 29 Apr 2026 00:00:00 -0500<p> <p>In our July 2024 Advisory regarding <em><a href="https://www.arnoldporter.com/en/perspectives/advisories/2024/07/delaware-chancery-court-provides-guidance-in-trifecta" target="_self">Trifecta Multimedia Holdings Inc. v. WCG Clinical Services LLC</a></em>, we noted the importance, in the earn-out context, of distinguishing between extra-contractual statements that may be treated as actionable representations and those that may be dismissed as mere &ldquo;puffery,&rdquo; and we highlighted the significance of clear anti-reliance language in acquisition agreements. Two more recent Delaware decisions &mdash; the Court of Chancery&rsquo;s post-trial opinion in <em>Camaisa v. Pharmaceutical Research Associates, Inc.</em>[[N:<em>Camaisa v. Pharmaceutical Research Associates, Inc.</em>, C.A. No. 2019-0561-NAC, 2025 WL 3049891 (Del. Ch. Oct. 28, 2025).]] and the Delaware Supreme Court&rsquo;s decision in <em>Fortis Advisors LLC v. Johnson &amp; Johnson</em>[[N:<em>Johnson &amp; Johnson v. Fortis Advisors LLC</em>, No. 490, 2024, 2026 WL 89452 (Del. Jan. 12, 2026).]] &mdash; bear on those same subjects and, in the case of Fortis, make Delaware&rsquo;s position on anti-reliance language particularly clear. The decisions also implicate several other recurring questions in contingent consideration[[N:Contingent consideration in a transaction can take various forms, including earn-outs, milestones payments, contingent value rights and other variations. While the cases covered in this alert specifically involved contingent consideration framed as earn-outs and milestones, the analysis and takeaways included herein would apply generally to most if not all forms of contingent consideration.]] disputes, including efforts-based covenants and the limits of the implied covenant of good faith and fair dealing. We summarize the background of these cases and our principal takeaways below.</p> <h2><em>Camaisa</em> </h2> <p><em>Camaisa</em> arose out of the acquisition by Pharmaceutical Research Associates, Inc. (PRA), a clinical research organization (CRO) of Parallel 6, Inc. (P6), a cloud-based technology company, via merger, where the maximum transaction consideration consisted 80% of cash up-front and 20% of a revenue-based earn-out that ultimately was not achieved. Following the earn-out failure, the representative of the former stockholders of P6 and former CEO of P6, Allan Camaisa (Camaisa), filed suit on behalf of the former stockholders against PRA alleging fraud and breach claims. </p> <h3>Fraud </h3> <p>P6&rsquo;s fraud claim was based on an alleged representation made by a PRA senior executive during a pre-signing conference call (the Call) that P6 would be permitted to continue to operate its business autonomously during the earn-out period and continue selling to PRA&rsquo;s other CRO competitors. P6 attributed the failure to achieve the earn-out on the opposite actually occurring &ndash; following the transaction closing, P6 was required to operate with PRA on an integrated basis and could not sell to other CRO competitors. </p> <p>Notably, the transaction agreement contained a standard integration clause providing that the agreement superseded all other understandings among the parties with respect to the subject matter, but did not contain an anti-reliance clause from P6 disclaiming reliance on extra-contractual statements made by the buyer, PRA. It also included a fraud override clause which preserved the ability of either party to make fraud claims notwithstanding any other provisions in the agreement. The court noted that the inclusion of an anti-reliance clause could have resolved the fraud claim at the pleading stage in favor of PRA. </p> <p>The elements of a fraud claim in Delaware are as follows: (1) a false representation, (2) the maker of such representation&rsquo;s knowledge of or belief in its falsity or reckless indifference to its truth, (3) an intention to induce action based on the representation, (4) reasonable reliance by the recipient on the representation, and (5) damages. The court found that P6&rsquo;s fraud claim failed under both the first and fourth prongs. </p> <p>With respect to the first prong, the court found that the plaintiff had failed to prove the existence of an actionable false statement made on the Call by a preponderance of the evidence. The court emphasized that there was no contemporaneous record that would conclusively establish exactly what was said, and how. In the absence of such record, the court looked extensively at the surrounding circumstantial evidence including, among other things, the statements made internally within PRA in relation to P6&rsquo;s prospective operations, as well as the actual behavior of the respective parties on relevant operational matters. Of particular note, the court factored in the unequivocally negative statements Camaisa made during negotiations regarding the desirability and value of an earn-out as a seller,[[N:For example, Camaisa characterized earn-outs as &ldquo;plain stupid&rdquo; in writing to a colleague, and testifying that at his first two sold companies, &ldquo;I had no earnout. I knew better. No earnout.&rdquo; <em>Camaisa</em>, 2025 WL 3049891, at *3, *10.]] effectively indicating that in light of Camaisa&rsquo;s hostility to earn-outs, the court would have expected him to (at minimum) document any promise made that would make accepting an earn-out less &ldquo;stupid.&rdquo; The court also observed that the alleged representation was inconsistent with the covenant in the transaction agreement that allowed PRA broad discretion over the post-closing operation of the P6 business,[[N:The court referenced Section 2.7(h) of the transaction agreement, which provides that &ldquo;(i) Parent and its Affiliates will be entitled to effect the integration of the Surviving Corporation and its business, assets and personnel with Parent and its Affiliates, (ii) Parent and its Affiliates shall have the right to direct the overall operations and strategy of the business of the Surviving Corporation and may make all management decisions with respect to the Surviving Corporation and its business (including all decisions with respect to the research, development, marketing and sale of its products and services&hellip;)&rdquo; Id. at *5-6.]] and noted that the legal doctrine under Delaware caselaw[[N:Id. at *14 (citing <em>Paperless Solutions Group, Inc. v. MIB Group, Inc.</em>, 2025 WL 1466603, at *4 (Del. Super. May 21, 2025) at *3 (citing <em>Chapter 7 Trustee Constantino Flores v. Strauss Water Ltd.</em>, 2016 WL 5243950, at *6 (Del. Ch. Sept. 22, 2016)).]] that a party cannot prove justifiable reliance where the contract contradicts an allegedly inducing misrepresentation provided evidence that P6 did not justifiably rely on the alleged representation in this instance. </p> <p>The court went on to determine that even if plaintiff had successfully proven the existence of an actionable false statement, the fraud claim would necessarily fail because P6 could not have justifiably relied on it. </p> <p>Noting that the analysis of whether there is an actionable representation and reliance is &ldquo;bound up together,&rdquo; the court indicated that the inconsistency of the alleged representation with the provision providing broad discretion to PRA for post-closing operations strongly factored against finding reliance, as did Camaisa&rsquo;s starkly unfavorable views regarding the value of earn-outs and his sophistication and prior experience. Similarly, certain actions of the parties that were noted to have factored against finding a false representation were also noted to affect reliance. One factor bearing only on reliance was the court&rsquo;s evaluation of the evidence on <em>how</em> the statements were made, and that because Camaisa viewed the statements as having been made in the manner of a salesperson taken together with P6&rsquo;s description of the general tenor of the call, such statements could be viewed to be &ldquo;non-actionable puffery&rdquo; that could not support a fraud claim, citing to <em>Trifecta</em>. </p> <h3>Breach </h3> <p>P6 also alleged that PRA breached the earn-out anti-frustration covenant in the merger agreement, which provided that PRA would &ldquo;not knowingly take (or knowingly cause any of its controlled Affiliates to take) any action for the <em>primary purpose</em> of preventing the achievement of the Contingent Consideration&rdquo; [emphasis added]. The court noted that proving a breach of the primary purpose standard is a heavy burden, referencing that in a prior case with substantially identical language, the court had determined that a buyer could &ldquo;take actions &hellip; knew would frustrate [an earnout], so long as the action has some other primary purpose.&rdquo;[[N:Id. at *16, citing <em>Fortis Advisors LLC v. Medtronic Minimed, Inc.</em>, 2024 WL 3580827, at *5 (Del. Ch. July 29, 2024).]] In practice, this standard affords buyers significant operational flexibility, even where their actions foreseeably impair earn-out performance.</p> <p>Evaluating several alleged violations by PRA under this high standard where PRA took actions during the earn-out period that would ordinarily be expected to adversely affect P6 sales, the court determined that PRA did not violate the covenant and had legitimate business purposes for all of them. For example, during the relevant earn-out period, PRA did scale back P6&rsquo;s inclusion in new proposals. However, the court found that such practices were driven by poor performance of P6&rsquo;s products and related customer complaints, and were not primarily motivated to avoid the earn-out. The other alleged covenant breach violations failed under similar analyses.</p> <h2><em>Auris</em></h2> <p>Auris arose out of Johnson &amp; Johnson&rsquo;s (J&amp;J) 2019 acquisition of Auris Health, Inc. (Auris), a medical robotics company having two product platforms at various stages of development at the time of the transaction. The transaction consideration consisted of approximately 60% of cash up-front and 40% in contingent earn-outs tied to ten milestone events &mdash; eight based on regulatory milestones and two based on net sales. The regulatory milestones were each expressly conditioned on obtaining &ldquo;510(k) premarket notification&rdquo; from the Food and Drug Administration (FDA), a specific and relatively streamlined regulatory pathway. Following the failure of all 10 earn-out milestones, Fortis Advisors LLC (Fortis), acting as the representative of Auris&rsquo; former stockholders, filed suit against J&amp;J alleging fraud, breach of contract, and breach of the implied covenant of good faith and fair dealing.</p> <p>Fortis prevailed in certain of its breach and fraud claims in the Chancery Court decision, which decision was appealed by J&amp;J and largely affirmed by the Delaware Supreme Court.</p> <h3>Fraud</h3> <p>At the Chancery Court, Fortis asserted fraud claims based on a number of statements which the Chancery Court characterized as either true or non-actionable &ldquo;puffery&rdquo; statements of the type that commercial parties routinely make as part of deal-making courtship, including that: (1) Auris&rsquo; and J&amp;J&rsquo;s competing products were &ldquo;complementary&rdquo;; (2) &ldquo;Auris had J&amp;J&rsquo;s &lsquo;resources at [its] sails&rsquo; to develop [Auris&rsquo; products]&rdquo;; (3) &ldquo;J&amp;J would spend &ldquo;multiples&rdquo; of what Auris alone could devote to its technology&rdquo;; (4) &ldquo;[Auris&rsquo; product] was a &lsquo;priority&rsquo;&rdquo;; (5) &ldquo;J&amp;J would &ldquo;retain [Auris&rsquo;] leadership / team by creating a semi-autonomous model&rdquo;; (6) &ldquo;J&amp;J would be &lsquo;deferential&rsquo; to [the Auris CEO];&rdquo; and (7) &ldquo;unlike in prior mergers, it was going to &lsquo;do Silicon Valley well &hellip; this time.&rsquo;&rdquo;[[N:<em>Fortis Advisors LLC v. Johnson &amp; Johnson</em>, C.A. No. 2020-0881-LWW, 2024 WL 4048060 (Del. Ch. Sept. 4, 2024).]] These findings were not appealed by Fortis, and were referenced without further discussion in the Supreme Court decision.</p> <p>The Chancery Court did, however, find J&amp;J liable for common law fraud with respect to one of Fortis&rsquo; fraud claims. During negotiations, a senior executive of J&amp;J told Auris that there was such a &ldquo;high certainty&rdquo; of achieving a proposed $100 million regulatory milestone that J&amp;J viewed it as an &ldquo;effective up front&rdquo; payment. However, the court found that J&amp;J (and specifically, J&amp;J&rsquo;s deal team) was aware at the time that a patient in its clinical study of a different device needed to achieve the milestone had recently died, prompting the FDA to open a for-cause investigation that could threaten substantial delay, none of which was disclosed to Auris until after closing. The Chancery Court described this fraud theory as &ldquo;being markedly different than the other [fraud claims]&rdquo; but did not provide a substantive explanation as to the basis for the distinction. The Supreme Court found no clear error in the Chancery Court&rsquo;s finding.</p> <p>Similar to Camaisa, the merger agreement in Auris contained a standard integration clause but no anti-reliance clause in favor of the buyer, J&amp;J. In its holding, the Supreme Court reinforced that an integration clause cannot serve to waive fraud liability and that only an unmistakable anti-reliance clause would suffice. As part of its holding, the court rejected J&amp;J&rsquo;s argument that a (fairly typical) exclusive remedy provision in the indemnity could suffice where an integration clause could not, reasoning that allowing for such a clause to eliminate extra-contractual fraud liability would render the one-way non-reliance provision in favor of Auris superfluous. </p> <h3>Breach </h3> <p>The merger agreement required J&amp;J to use &ldquo;commercially reasonable efforts&rdquo; to achieve the various regulatory milestones. As is typical in acquisition agreements containing the type of product development earn-out milestones included in <em>Fortis</em>/<em>Auris</em>, &ldquo;commercially reasonable efforts&rdquo; was specifically defined and required J&amp;J to expend efforts and resources &ldquo;consistent with [its] usual practice &hellip; with respect to priority medical device products of similar commercial potential at a similar stage in product lifecycle.&rdquo; The agreement also specified 10 factors that J&amp;J could take into account in setting its level of efforts, which included safety and efficacy issues, development and commercialization risks, competitiveness, intellectual property positioning, the likelihood or difficulty of obtaining regulatory approvals, other regulatory issues, and expected profitability. Finally, the agreement prohibited J&amp;J from taking any action with the intention of avoiding any earn-out payment or &ldquo;based on taking into account the cost of making any&rdquo; earn-out payment (the No Intentional Avoidance Provision). </p> <p>The Chancery Court found, and the Supreme Court affirmed, that J&amp;J breached this efforts obligation. On appeal, it was uncontested that both J&amp;J and Auris understood that J&amp;J&rsquo;s orthopedic surgical robot, Velys, was the only comparable &ldquo;priority&rdquo; device. Most importantly for the court&rsquo;s analysis, it determined that J&amp;J&rsquo;s commercially reasonable efforts obligations <em>first</em> were required to be consistent with J&amp;J&rsquo;s usual practice for &ldquo;priority&rdquo; devices, and <em>then only within that lens</em> could the 10 factors be considered. Any alternate reading, the court reasoned, would render the &ldquo;priority&rdquo; contractual language superfluous or internally inconsistent. In effect, the court treated the &ldquo;priority&rdquo; designation as a binding benchmark rather than a general reference point, significantly limiting the buyer&rsquo;s ability to justify deviations based on broader business considerations. Accordingly, a sufficiently adverse result on any of the 10 factors would not permit J&amp;J to override the contractually agreed priority baseline specification. Several of J&amp;J&rsquo;s post-closing actions with respect to one of Auris&rsquo; products were determined to have breached the merger agreement efforts obligation under this standard, including (1) J&amp;J holding an internal technological competition between Auris&rsquo; device and another surgical robot J&amp;J was developing in a joint venture shortly after closing to determine which product would remain operative going forward, which was inherently problematic given the possibility of an Auris&rsquo; device loss and also resulted in significant resource drain and time delay, (2) the combination of the Auris product with another J&amp;J product to prop up the J&amp;J product&rsquo;s issues, (3) changes in the regulatory approval strategy taken by J&amp;J which negatively affected timing, and (4) changes to employee incentives that were disaligned with the achievement of the earn-out milestones.[[N:The Chancery Court found that J&amp;J satisfied the standard with respect to Auris&rsquo; other product line.]] </p> <p>The Supreme Court also referenced the Chancery Court&rsquo;s finding that J&amp;J knew that certain of its post-closing actions would likely cause an earn-out failure, and on at least one occasion selected a course of action noting a &ldquo;good overall value case&rdquo; factoring in that contingent payments would not need to be made. The court used a similar analysis to rebut the proposition that actions taken within the discretion provided to J&amp;J through the &ldquo;ten factors&rdquo; would negate breaches of No Intentional Avoidance Provision, indicating that if actions taken on the basis of any of the &ldquo;ten factors&rdquo; could override such provision, then the provision was superfluous.</p> <h3>Implied Covenant of Good Faith and Fair Dealing</h3> <p>After the merger closed, the FDA informed J&amp;J that one of the relevant Auris&rsquo; products would no longer be eligible for regulatory approval through the 510(k) clearance and would instead need to proceed through a different and somewhat more onerous regulatory route. This distinction was critical because the earn-out milestones were expressly conditioned on obtaining 510(k) clearance. The Chancery Court, invoking the implied covenant of good faith and fair dealing, held that J&amp;J was required to use commercially reasonable efforts to pursue the alternate regulatory approval and to treat such pathway as the functional equivalent of the 510(k) clearance specified in the contract.</p> <p>The Supreme Court reversed on this point. The court noted that the implied covenant of good faith and fair dealing is a limited gap-filler that is designed to enforce the parties&rsquo; reasonable expectations in unforeseeable circumstances that they failed to address in their contract, and that it cannot be used to rewrite or renegotiate terms that have become undesirable for either party. The Supreme Court held that there was no gap to fill in this case &mdash; the merger agreement repeatedly and expressly conditioned each regulatory milestone specifically (and only) on 510(k) premarket notification. Especially in light of the sophistication of the parties and the regulated industry, the risk that the FDA might require a different pathway was foreseeable. Other provisions of the merger agreement acknowledged the possibility of FDA developments affecting the route, timing, and cost of approval, further confirming that this category of risk was considered by the parties. While declining to apply the implied covenant, the Supreme Court&rsquo;s reversal did not disturb J&amp;J&rsquo;s obligations with respect to the remaining milestones: because an alternative regulatory path could serve as the predicate for future 510(k) submissions, J&amp;J remained bound by its express efforts obligations to pursue 510(k) clearance for the other, later, milestones. Put another way, the Supreme Court determined that implicit in the later milestones was an obligation to obtain <em>any</em> regulatory approval that would allow them to be achieved, irrespective of what the initial milestone did or did not contemplate. </p> <h2>Key Takeaways</h2> <ul> <li>These cases reinforce a critical takeaway from our <em>Trifecta</em> alert: that buyers should include explicit anti-reliance provisions in addition to standard integration clauses. The Delaware Supreme Court has eliminated any ambiguity as to whether any other clause in the agreement will suffice for the same purpose, and only a clear statement will do.</li> <li>There is little clear guidance as to what constitutes &ldquo;puffery&rdquo; versus an actionable representation, creating uncertainty for parties engaging in pre-signing discussions. While we have not seen a court frame the analysis in these terms, it essentially appears to be an &ldquo;I know it when I see it&rdquo; test. Given that it is impractical and unlikely for buyers and sellers to <em>entirely avoid</em> extra-contractual discussions in relation to their expectations for post-closing operations, beyond a general word of caution to buyers that their reassurances could become actionable representations under the &ldquo;right&rdquo; circumstances, the lack of predictability on this point reinforces our first takeaway. Having a clear and unequivocal anti-reliance clause should provide vital protection against later claims arising from such statements. <br /> <ul> <li>This also reinforces that, for sellers, statements made during negotiations that are central to their decision to proceed are best protected by being expressly incorporated into the purchase agreement. </li> </ul> </li> <li>Buyers should be cautious in relying on broad statements of operational discretion providing an effective commercial override of the primary obligation to use their efforts to achieve a particular result. In <em>Fortis</em>/<em>Auris</em>, it is unclear to what extent the &ldquo;priority&rdquo; product designation was the main reason why the override was disallowed, or whether it would have also been disallowed under a general efforts standard for a regular (non-priority) product. The same reasoning used by the Supreme Court in seeking to avoid superfluous provisions could have also been applied to a non-priority efforts level. </li> <li>Negotiators for buyers should be cautious about agreeing to a particular reference band of efforts (e.g., such as &ldquo;priority&rdquo;), and understand that the contractual term could be interpreted under a standard of strict literalism. In evaluating particular efforts levels, the court in <em>Fortis</em>/<em>Auris</em> gave significant weight to the &ldquo;priority&rdquo; product designation and there was only one other example reference point to compare that standard against. An equally concerning scenario would be where the buyer agreed to treat the product as a &ldquo;priority&rdquo; or &ldquo;highest priority&rdquo; <em>without</em> any further definition, and a court could frame the analysis in any way that <em>it</em> would hypothetically view such a designation.[[N:A court may be presented with industry-based information for the term, but in the absence of clear facts indicating that there was an industry standard for the term, the court would have enormous interpretive discretion on the point.]] It would be risky to assume that a term included as a reference point in the agreement would be considered a form of industry &ldquo;puffery&rdquo; by a court.</li> <li>The &ldquo;primary purpose&rdquo; standard in anti-frustration covenants sets a high bar for sellers and affords buyers substantial flexibility, even where their actions foreseeably impair the earn-out. Given the impact of the provision, counsel to selling parties would be well-served to specifically highlight this clause to their client, and ideally provide an example fact pattern or two, so they have a clear understanding of the clause&rsquo;s implications before agreeing to it. </li> <li>The implied covenant of good faith and fair dealing will not be used to reallocate risks that were foreseeable at the time of contracting, and will not be used to &ldquo;paint over contractual provisions that one side later regrets.&rdquo;</li> </ul> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{25C09776-C0A3-4E38-A2DC-281689685FBC}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/hhs-tries-again-to-improve-availability-of-innovative-devices-in-medicareThomas A. Gustafson, Ph.D.https://www.arnoldporter.com/en/people/g/gustafson-thomas-aThomas.Gustafson@arnoldporter.comPhilip R. Desjardinshttps://www.arnoldporter.com/en/people/d/desjardins-philip-rphilip.desjardins@arnoldporter.comBobby McMillinhttps://www.arnoldporter.com/en/people/m/mcmillin-bobbybobby.mcmillin@arnoldporter.comMonique Nolan, M.D., J.D.https://www.arnoldporter.com/en/people/n/nolan-moniquemonique.nolan@arnoldporter.com<p>On April 23, 2026, the Centers for Medicare &amp; Medicaid Services and the U.S. Food and Drug Administration (FDA) announced a plan to create a new pathway to expedite Medicare coverage for certain medical devices designated by the FDA as breakthrough devices (the Announcement). Devices travelling the new Regulatory Alignment for Predictable and Immediate Device pathway, which would in effect be run jointly by the two agencies, are expected to experience fewer delays between FDA market authorization and Medicare national coverage determinations than at present, as long as they meet certain requirements.&nbsp;</p>Tue, 28 Apr 2026 00:00:00 -0500<p> <h2>Introduction</h2> <p>On April 23, 2026, the Centers for Medicare &amp; Medicaid Services (CMS) and the U.S. Food and Drug Administration (FDA) announced a plan to create a new pathway to expedite Medicare coverage for certain medical devices designated by the FDA as breakthrough devices (the Announcement).[[N:See <a rel="noopener noreferrer" href="https://www.fda.gov/news-events/press-announcements/cms-and-fda-announce-rapid-coverage-pathway-accelerate-patient-access-life-changing-medical-devices" target="_blank">FDA News Release</a> and <a rel="noopener noreferrer" href="https://www.cms.gov/newsroom/press-releases/cms-fda-announce-rapid-coverage-pathway-accelerate-patient-access-life-changing-medical-devices" target="_blank">CMS Press Release</a> (Apr. 23, 2026).]] Devices travelling the new Regulatory Alignment for Predictable and Immediate Device (RAPID) pathway, which would in effect be run jointly by the two agencies, are expected to experience fewer delays between FDA market authorization and Medicare national coverage determinations than at present, as long as they meet certain requirements. </p> <p>The two agencies would work closely together with sponsors earlier in the development process to align regulatory and coverage expectations in advance and to facilitate use by CMS of evidence generated for FDA review.[[N:CMS and FDA have previously attempted to more closely align their respective reviews as a means to facilitate a quicker access to medical technology following FDA authorization, for example, under the Parallel Review Pilot Program and Program for Parallel Review of Medical Devices.]]</p> <p>This announcement anticipates publication in the Federal Register of a formal proposal detailing the pathway sometime &ldquo;soon.&rdquo; The proposal would be open for comments for 60 days and followed by a final notice. The agencies expect to launch the new pathway at the time the final notice is published, but the agencies have not provided any information about when that will be. </p> <p>While the details available at present are incomplete, the following sections provide a high-level summary of the expected RAPID proposal and attempts to place this initiative in the context of a number of related proposals.</p> <h2>Summary of the RAPID Coverage Pathway </h2> <p>According to the Announcement, breakthrough devices eligible for the RAPID pathway would include Class III devices and certain Class II devices that participate in the FDA Total Product Life Cycle Advisory Program (TAP). In addition, the devices would need to be the subject of an Investigational Device Exemption (IDE) study enrolling Medicare beneficiaries and investigating clinical health outcomes agreed to by FDA and CMS. </p> <p>The forthcoming RAPID coverage pathway proposal is likely to be most beneficial for high risk, evidence intensive breakthrough devices, particularly Class III products, which require PMA approval and target serious or life threatening conditions, many of which are common in the Medicare population. These include therapies and diagnostic tools where FDA review already depends on prospective IDE studies with meaningful clinical endpoints. For these technologies, RAPID may offer the greatest value by reducing the longstanding lags between FDA market authorization and Medicare coverage determinations, provided sponsors are willing to engage early with both agencies and generate evidence that satisfies FDA safety and effectiveness standards as well as CMS&rsquo; reasonable and necessary coverage criteria.</p> <p>The pathway may also benefit a subset of Class II breakthrough devices,[[N:As of this writing, the agencies have not provided details on which Class II devices would be eligible.]] but only where those products participate in FDA&rsquo;s (TAP) program, making TAP a critical gateway for such devices. For these devices, RAPID may provide a benefit that builds on the early, frequent FDA engagement already offered under TAP by formally including CMS in those discussions, particularly around endpoint selection, study design, and Medicare relevant outcomes. In practice, CMS&rsquo; inclusion will likely make RAPID participation of most benefit for complex Class II technologies, such as novel diagnostics or device enabled therapies, while reinforcing TAP&rsquo;s role as the FDA mechanism for identifying Class II devices whose risk profile and clinical impact justify intensified attention. </p> <p>The agencies expect that on the same day an eligible device receives FDA market authorization, CMS will issue a proposed National Coverage Determination (NCD) for the device, which will trigger a 30-day comment period. A final NCD may follow very shortly, which <em>could</em> enable Medicare coverage and payment in as little as two months following market authorization (versus a year or more at present). </p> <p>The agencies note that CMS will continue to offer multiple pathways for coverage of devices, including the existing NCD process, so sponsors presumably will continue to be able to avail themselves of the existing pathways if RAPID appears unnecessary or too cumbersome for a particular device. </p> <p>The agencies give no suggestion that the standards used by FDA for market authorization or those employed by CMS for coverage will change. </p> <h2>Related Proposals</h2> <p>The RAPID pathway proposal marks CMS&rsquo; third attempt to address concerns about coverage of breakthrough devices. In early 2021, near the end of the first Trump administration, CMS issued regulations setting up the Medicare Coverage for Innovative Technologies (MCIT) program. MCIT would have expedited coverage for all breakthrough devices, but it was never implemented. CMS replaced it with the narrower Transitional Coverage for Emerging Technologies (TCET) program, which tied coverage to the Coverage with Evidence Development pathway. TCET has been little used. The current announcement indicates that the TCET pathway will be &ldquo;paused for new candidates&rdquo; as CMS concentrates on implementing the RAPID program. </p> <p>In Congress, policies that would bring greater certainty to the coverage prospects for breakthrough devices have received broad, bipartisan support. As recently as April 21, 2026, a bipartisan group of 82 lawmakers wrote to Secretary Kennedy and CMS Administrator Oz <a rel="noopener noreferrer" href="https://d12t4t5x3vyizu.cloudfront.net/yakym.house.gov/uploads/2026/04/Quill-Letter-L32954-CMS-coverage-of-breakthrough-medical-devices-Version-2-04-21-2026-@-09-15-AM.pdf" target="_blank">expressing support</a> for &ldquo;comprehensive Medicare coverage of breakthrough medical device technologies.&rdquo;</p> <p>In September 2025, the House Ways and Means Committee advanced H.R. 5343, the &ldquo;Ensuring Patient Access to Critical Breakthrough Products Act&rdquo; by a vote of 37-3. The legislation would create a four-year transitional coverage period during which breakthrough devices would be covered and impose a requirement to issue final coverage decisions during that time, provided certain procedural requirements are met. The <a rel="noopener noreferrer" href="https://www.cbo.gov/publication/61903" target="_blank">Congressional Budget Office has estimated</a> the total cost of the legislation to be just under $1 billion over 10 years, though the administration&rsquo;s advancement of RAPID could lower the costs depending upon its final form.</p> <p>In the proposed rule updating Medicare&rsquo;s Inpatient Prospective Payment System (IPPS) for FY27, CMS has proposed changing the payment provisions applicable to certain new technologies to remove favorable treatment for breakthrough devices.[[N:91 Fed Reg 19457-19459, April 14, 2026.]] At present, breakthrough devices are deemed to automatically meet an otherwise applicable requirement to demonstrate substantial clinical improvement in order to qualify for New Technology Add-on Payments under the IPPS and Transitional Pass-Through Payments under Medicare&rsquo;s Outpatient Prospective Payment System (OPPS). These proposals, if adopted, would mean sponsors of breakthrough devices, in order to secure either of these special payment provisions, would have to provide evidence that their products met the improvement criterion on the same basis as devices without breakthrough designation. Note that these proposals affect payment, as distinct from the RAPID pathway, which would address coverage. </p> <h2>Proposals and Comment Opportunities</h2> <p>RAPID will likely be well received by industry and seen as a constructive step toward reducing longstanding delays between FDA market authorization and Medicare coverage for breakthrough devices, but the devil will be in the details. Specifications of many important aspects of the RAPID pathway have not yet been made available, and we expect great interest to attach to the details of how the IDE studies will be set up and followed (for instance, whether coverage may be removed at a later time if studies do not support long-term coverage and how devices newly covered under the RAPID pathway will fit in the existing Medicare payment systems, just to name a few considerations). We anticipate that stakeholders will closely scrutinize CMS&rsquo; plans for and execution of the pathway, particularly with respect to timelines, operational accountability, and coordination with existing payment policies. Stakeholders are also likely to object vociferously to removal of the special provisions favoring breakthrough devices under the IPPS and the OPPS. </p> <p>Interested parties will be able to comment on both the forthcoming proposed RAPID notice and the IPPS Proposed Rule for FY27, which takes effect January 1, 2027. The comment window on the IPPS Proposed Rule is already open, and comments are due June 9, 2026. Arnold &amp; Porter&rsquo;s regulatory and reimbursement team will be following developments in this area, and we are available to consult about the proposals and possible comments.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{95CC94B0-B707-4368-9090-9E39ACCFF029}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/implementing-the-genius-act-fincen-and-ofac-proposeAmber A. Hayhttps://www.arnoldporter.com/en/people/h/hay-amber-aamber.hay@arnoldporter.comAnthony Raglanihttps://www.arnoldporter.com/en/people/r/raglani-anthonyanthony.raglani@arnoldporter.comKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comErik Walshhttps://www.arnoldporter.com/en/people/w/walsh-erikerik.walsh@arnoldporter.comPaul Limhttps://www.arnoldporter.com/en/people/l/lim-paulpaul.lim@arnoldporter.com<p>The U.S. Department of the Treasury&rsquo;s (Treasury) Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) recently issued a joint proposed rulemaking (Proposal) that would implement the anti-money laundering and sanctions program requirements of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).[[N: Treasury, <a rel="noopener noreferrer" href="https://home.treasury.gov/news/press-releases/sb0435" target="_blank">Treasury Proposes Rule to Implement the GENIUS Act&rsquo;s Requirements to Counter Illicit Finance</a> (Apr. 8, 2026).]] If adopted as proposed, the new program requirements would apply to &ldquo;permitted payment stablecoin issuers&rdquo; (PPSIs) as defined by the GENIUS Act and would become effective 12 months after publication of the final rule. In addition to seeking general comments on the Proposal, FinCEN and OFAC posed nearly 60 specific questions on which they solicited feedback. Comments are due by June 9, 2026.</p> <p>The Proposal, which follows an advance notice of proposed rulemaking in the fall of 2025,[[N: GENIUS Act Implementation, 90 Fed. Reg. 45159 (Sept. 19, 2026).]] would impose five general categories of obligations on PPSIs, as discussed below.</p> <h2>Written Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Compliance Program</h2> <p>The AML/CFT program would include policies and procedures (including a mandatory risk assessment process), independent testing, ongoing training, and designation of an AML/CFT Officer. The Proposal largely mirrors the proposed revisions to existing BSA/AML program requirements for most financial institutions (including banks and broker dealers) recently issued by FinCEN, including the formalization of the risk-assessment requirement, the incorporation of the previous fifth &ldquo;pillar&rdquo; (Customer Due Diligence) into the &ldquo;policies and procedures&rdquo; pillar, and the redesignation of the program&rsquo;s title from &ldquo;BSA/AML&rdquo; to &ldquo;AML/CFT.&rdquo; PPSIs would also be subject to the due-diligence and enhanced due-diligence requirements applicable to certain private banking and correspondent accounts under the USA PATRIOT Act, as well as any &ldquo;Special Measures&rdquo; that FinCEN imposes under Section 311 of that Act. The AML/CFT program would require board-level (or similar) approval.</p> <p>Significantly, the Proposal would adopt FinCEN&rsquo;s new approach to supervision and enforcement, whereby neither FinCEN nor the relevant prudential regulator would take a significant enforcement or major supervisory action against a PPSI for an AML/CFT program violation unless the failure constituted &ldquo;a significant or systemic failure to maintain that program.&rdquo;</p> <h2>Suspicious Activity Reporting</h2> <p>PPSIs would be required to file suspicious activity reports (SARs) to advise law enforcement of suspected violations of law. Notably, the requirement would apply only to transactions occurring on the PPSI&rsquo;s primary market (i.e., transactions in which the PPSI is directly involved), not to transactions occurring on the secondary market for the PPSI&rsquo;s stablecoin offering. A $5,000 threshold would apply.</p> <h2>Recordkeeping; Information Sharing</h2> <p>PPSIs would be subject to recordkeeping requirements similar to those of other financial institutions, including the Recordkeeping Rule and the Travel Rule (regarding certain funds transfers and the conveyance of payment details to other institutions, respectively). Certain cross-border transfers of assets, as well as certain extensions of credit, would also be covered. A five-year retention period would apply.</p> <p>PPSIs would also be expressly covered by sections 314(a) and (b) of the USA PATRIOT Act. Section 314(a) requires institutions to provide certain information to FinCEN upon request. Section 314(b) permits institutions, on a voluntary basis, to share information among themselves to assist with identifying and reporting possible money laundering or terrorist activity.</p> <h2>Effective Sanctions Compliance Program</h2> <p>PPSIs would be required to adopt and maintain a sanctions compliance program with five key elements:</p> <ul> <li>Senior management and organizational commitment (including that the program be fully integrated in the PPSI&rsquo;s payment stablecoin operations and apply to all payment stablecoin activity; allow for sufficient authority, autonomy, and resources; and routinely provide updates and testing reports to senior management and other appropriate personnel).</li> <li>Periodic holistic sanctions-related risk assessments, updated as circumstances warrant, to be used to inform and update the PPSI&rsquo;s sanctions compliance program.&nbsp;</li> <li>Risk-based internal controls to identify and take appropriate action in response to payment stablecoin transactions (on both primary and secondary markets) that would violate U.S. sanctions laws.&nbsp;</li> <li>Independent testing/auditing with appropriate accountability, resources, expertise, and authority.</li> <li>Ongoing risk-based training tailored to the institution and its relevant personnel and stakeholders. Standard OFAC recordkeeping and reporting requirements would apply.</li> </ul> <h2>Ability To Block, Freeze, and Reject Certain Specified or Impermissible Transactions</h2> <p>PPSIs would be required to have &ldquo;technical capabilities, policies, and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations.&rdquo; Such capability would need to include the ability to comply with any &ldquo;lawful order.&rdquo; As with the sanctions compliance program, and unlike the proposed SARs rule, this requirement covers both a PPSI&rsquo;s primary and secondary markets.</p> <h2>Takeaways</h2> <p>Although the Proposal incorporates new material such as the formalized risk-assessment process and the mandatory sanctions compliance program, in many ways it adheres to existing regulations and supervisory expectations. However, FinCEN has had to tailor existing regulations significantly to adapt the Proposal to the unique circumstances of PPSIs and payment stablecoins, and industry participants should take particular note of the technical aspects of the Proposal and offer feedback where appropriate. Also, in addition to numerous questions about the Proposal&rsquo;s specific provisions, FinCEN has asked for comments on how, for PPSIs that are subsidiaries of financial institutions, the proposed requirements will or will not integrate effectively into existing organizational AML/CFT programs, and has also asked whether any of the Proposal&rsquo;s provisions should be extended to foreign payment stablecoin issuers.</p> <p>If you have any questions regarding the Proposal or need assistance in determining whether to comment on the Proposal, please contact any of the authors of this Advisory or your usual firm contact.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>Tue, 28 Apr 2026 00:00:00 -0500{EC24A63E-F12A-4665-AE5F-53D09508669A}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/doj-announces-controlled-substances-act-scheduling-changesHoward Sklamberghttps://www.arnoldporter.com/en/people/s/sklamberg-howardhoward.sklamberg@arnoldporter.comMichelle F. Gillicehttps://www.arnoldporter.com/en/people/g/gillice-michellemichelle.gillice@arnoldporter.comBurden H. Walkerhttps://www.arnoldporter.com/en/people/w/walker-burden-hburden.walker@arnoldporter.comElizabeth Trentacosthttps://www.arnoldporter.com/en/people/t/trentacost-elizabethelizabeth.trentacost@arnoldporter.comNataniel Tsaihttps://www.arnoldporter.com/en/people/t/tsai-natanielnataniel.tsai@arnoldporter.com<p>On April 23, 2026, the U.S. Department of Justice (DOJ), in conjunction with the Drug Enforcement Administration, announced that pursuant to President Trump&rsquo;s December 18, 2025, Executive Order &ldquo;Increasing Medical Marijuana and Cannabidiol Research,&rdquo; issuance of a final rule by way of Attorney General order that immediately placed both FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act (CSA). Previously, marijuana products were placed on Schedule I of the CSA, which generally limited its use to tightly controlled research. DOJ did not institute this change through notice and comment rulemaking but instead under 21 U.S.C. 811(d)(1) which allows the attorney general to reschedule substances to carry out the United State&rsquo;s obligations under the Single Convention on Narcotic Drugs.&nbsp;</p>Mon, 27 Apr 2026 00:00:00 -0500<p> <p>On April 23, 2026, the U.S. Department of Justice (DOJ), in conjunction with the Drug Enforcement Administration (DEA), <a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-places-fda-approved-marijuana-products-and-products-containing-marijuana" target="_blank">announced</a> that pursuant to President Trump&rsquo;s December 18, 2025, <a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2025/12/increasing-medical-marijuana-and-cannabidiol-research/" target="_blank">Executive Order</a> &ldquo;Increasing Medical Marijuana and Cannabidiol Research,&rdquo; issuance of a final rule by way of Attorney General <a rel="noopener noreferrer" href="https://www.justice.gov/opa/media/1437441/dl" target="_blank">order</a> (Order) that immediately placed both U.S. Food and Drug Administration (FDA)-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act (CSA). Previously, marijuana products were placed on Schedule I of the CSA, which generally limited its use to tightly controlled research. DOJ did not institute this change through notice and comment rulemaking but instead under 21 U.S.C. 811(d)(1) which allows the attorney general to reschedule substances to carry out the United State&rsquo;s obligations under the Single Convention on Narcotic Drugs. </p> <h2>Scope of the Order </h2> <p>The Order applies to marijuana (as defined in 21 CFR 1308.11(d)(23)), marijuana extracts (as defined in 21 CFR 1308.11(d)(58)), and naturally derived delta<span>‑</span>9<span>‑</span>THC only to the extent those substances are (a) in an FDA<span>‑</span>approved product or (b) subject to a qualifying &ldquo;state medical marijuana license&rdquo; (i.e., a state or territorial license to manufacture, distribute, and/or dispense marijuana or marijuana-containing products for medical purposes).</p> <p>The Order repeatedly notes that unlicensed bulk marijuana and other non<span>‑</span>covered marijuana remain in Schedule I, emphasizing that maintaining &ldquo;unlicensed bulk marijuana&rdquo; (and related materials used to make FDA<span>‑</span>approved products) in Schedule I supports U.S. treaty compliance and quota requirements. Likewise, the Order does not affect hemp&rsquo;s status[[N:Please see our <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/12/major-changes-to-federal-regulation-of-hemp-derived-products" target="_self">December 2025 Advisory</a> discussing the major changes to federal regulation of hemp-derived products as part of the Continuing Resolution and Appropriations Package (H.R. 5371).]] (because hemp is excluded from &ldquo;marijuana&rdquo;), and it does not reschedule marijuana/THC products that were already rescheduled out of Schedule I in prior actions. The Order also does not apply to synthetically derived THC products, which remain in Schedule I. </p> <h2>DEA Registration Requirements </h2> <p>For entities handling marijuana exclusively in the form of an FDA<span>‑</span>approved drug product, the Order summarizes typical Schedule III requirements, including DEA registration, recordkeeping/reporting, security, inventories, prescription controls (and notes that activity not authorized by the CSA/regulations may trigger administrative/civil/criminal sanctions).</p> <p>The Order amends 21 C.F.R. &sect; 1301.13 to require DEA to establish an expedited review process for entities holding state medical marijuana licenses seeking registration as marijuana manufacturers, distributors, and/or dispensers. Applicants must submit proof of the state medical license, and DEA &ldquo;shall&rdquo; register unless registration would be inconsistent with the public interest factors in 21 U.S.C. &sect; 823 and treaty obligations (including quota requirements). Critically, registrations will not be approved for marijuana activities that are used for recreational/non-medical purposes. This, in effect, leaves all recreational marijuana as remaining on Schedule I for now. The Order calls for DEA to process all applications submitted within 60 days of publication of the Order within six months.</p> <h2>Scientific Research Clarification</h2> <p>The Order clarifies that researchers may obtain marijuana or marijuana-derived products from a state licensee for use in scientific research, provided that the researcher is registered with the administration to conduct research with marijuana under 21 CFR. 1301.13 and the state licensee from whom the researcher obtained the marijuana held a valid federal registration at the time of the transfer. Previously, DEA-registered researchers were limited to obtaining marijuana for research from a DEA-registered bulk manufacturer. The Order further provides that DEA &ldquo;shall not treat the use of state-licensed marijuana products in federally registered research as a basis for adverse action against a researcher's registration.&rdquo;</p> <h2>Tax and Import/Export Implications</h2> <p>Under 26 U.S.C. &sect; 280E, a cannabis business that made unapproved Schedule 1 cannabis products could not deduct certain business expenses from federal taxes. The Order notes that 26 U.S.C. &sect; 280E applies to businesses &ldquo;trafficking&rdquo; in Schedule I or II controlled substances and states that, as a consequence of the Order, holders of state medical marijuana licenses would no longer be subject to &sect; 280E&rsquo;s deduction disallowance (while also stressing that nothing in the rule constitutes a determination of federal tax liability and advising consultation with tax counsel). The Order also &ldquo;encourages&rdquo; the Secretary of the Treasury to consider retrospective relief for prior taxable years for qualifying state licensees (again, not presented as a binding tax determination).</p> <p>The Order also states that 21 C.F.R. &sect; 1312.30 has been amended to allow for import/export permits for covered Schedule III marijuana categories (FDA<span>‑</span>approved products and state<span>‑</span>licensed medical marijuana) by adding them to the list of non<span>‑</span>narcotic Schedule III&ndash;V substances requiring permits. This will allow, for the first time, marijuana to be imported and exported internationally. </p> <h2>Next Steps and Implications for Industry </h2> <p>DOJ also separately announced that it was going to expedite ongoing rulemaking to fully remove marijuana from Schedule I and place it into Schedule III. The Biden administration previously undertook a notice of proposed rulemaking to reschedule marijuana, but the DEA is terminating those proceedings and moving forward with its current expedited rulemaking process. DOJ will hold administrative hearings beginning on June 29, 2026, regarding the proposed rescheduling of marijuana. </p> <p>The changes brought by the Order are some of the most significant changes in the regulation of marijuana so far this century, though, as noted above, DOJ and DEA are seeking to make further changes as well. Arnold &amp; Porter will continue to monitor any new legislation or regulatory rulemaking related to hemp products. If you have any questions about this Advisory or would like more information, please reach out to one of the authors or your existing Arnold &amp; Porter contacts.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{8E67FA61-792F-4737-873C-770B4164B665}https://www.arnoldporter.com/en/perspectives/news/2026/04/the-legal-500-2026-recognizes-arnold-porters-new-york-private-wealth-capabilitiesThe inaugural edition of <em>The Legal 500</em> Private Client Guide has recognized Arnold &amp; Porter's Private Client Services team in the New York: Private Wealth category.&nbsp;Fri, 24 Apr 2026 00:00:00 -0500<p>The inaugural edition of <em>The Legal 500</em> Private Client Guide has recognized Arnold &amp; Porter's Private Client Services team in the New York: Private Wealth category. <em>The Legal 500</em> noted that Arnold &amp; Porter&rsquo;s Private Client Services team &ldquo;counsels clients on a full range of estate planning, tax, business organization and succession planning matters.&rdquo;</p> <p><em>Legal 500</em> highlighted Sarah Constantine in New York and Thomas Richardson in Washington, D.C. as key advisers within the group. They added that the team &ldquo;regularly advises clients relating to their cross-border assets, both in terms of foreign investment in U.S. assets and U.S. interests in foreign trusts and investments.&rdquo;</p> <p>Arnold &amp; Porter's Private Client Services team provides an interdisciplinary approach to addressing the complex needs of wealthy individuals and families regarding their businesses, investments, wealth succession planning, and philanthropic activities. The group counsels clients on a wide variety of issues relating to estate planning, tax, real estate, family disputes, business organization, and succession planning, and has extensive experience in the creation and operation of family offices for the purposes of wealth preservation and asset protection planning.</p>{036D5442-BF5F-4C06-942D-C0765AF5C531}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/john-schmidt-speaks-to-global-competition-review-on-uk-approval-of-manx-telecom-saleJohn Schmidt, Arnold &amp; Porter Antitrust partner, was quoted in the recent Global Competition Review article, &ldquo;U.K. conditionally approves sale of Manx Telecom to CVC-backed joint venture,&rdquo; discussing the conditions attached to the sale of a critical supplier of telecoms services to the British government.Fri, 24 Apr 2026 00:00:00 -0500<p>John Schmidt, Arnold &amp; Porter Antitrust partner, was quoted in the recent <em>Global Competition Review</em> article, &ldquo;U.K. conditionally approves sale of Manx Telecom to CVC-backed joint venture,&rdquo; discussing the conditions attached to the sale of a critical supplier of telecoms services to the British government.</p> <p>John explained that the decision reflects the U.K. government&rsquo;s unsurprising use of its National Security and Investment Act (NSIA) powers to &ldquo;maximise outcomes&rdquo; in the interest of national security, noting that intervention can occur even where a transaction does not present clear national security risks. </p> <p>His comments highlight how Manx Telecom&rsquo;s role as a critical supplier to government services prompted the imposition of conditions &mdash; rather than a prohibition &mdash; demonstrating the government&rsquo;s preference for tailored remedies in sensitive infrastructure deals.</p> <p>He further emphasized that telecoms and other assets linked to public-sector functions will continue to face heightened scrutiny, with the case illustrating the broad and flexible application of the U.K.&rsquo;s screening regime to mitigate perceived risks while allowing transactions to proceed.</p> <p><a rel="noopener noreferrer" href="https://globalcompetitionreview.com/gcr-fic/article/uk-conditionally-approves-sale-of-manx-telecom-cvc-backed-joint-venture" target="_blank">Read the full article </a>(subscription required).</p>{8FE5856A-D46B-452D-B5BF-CD3CEF3744C4}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/doj-prioritizes-antitrust-enforcement-against-large-health-systemsWilliam Hallett Efronhttps://www.arnoldporter.com/en/people/e/efron-william-hallettwilliam.efron@arnoldporter.comSam Sullivanhttps://www.arnoldporter.com/en/people/s/sullivan-samsam.sullivan@arnoldporter.comStephen P. Driscollhttps://www.arnoldporter.com/en/people/d/driscoll-stephen-pstephen.driscoll@arnoldporter.comIn what is now a trend, on March 26, 2026, the United States Department of Justice Antitrust Division (DOJ) filed an antitrust lawsuit against The New York and Presbyterian Hospital challenging its contracting practices with commercial health insurers (or payors). The lawsuit alleges that the hospital system used its market power to contractually restrict payors from offering health plans featuring lower-cost rival hospitals. The complaint is very similar to one filed by the DOJ and the State of Ohio against OhioHealth, the largest hospital system in central Ohio, in February.&nbsp;This Advisory analyzes the allegations in both complaints and provides takeaways for health systems as they navigate the current antitrust enforcement environment.Fri, 24 Apr 2026 00:00:00 -0500<p> </p> <p>In what is now a trend, on March 26, 2026, the United States Department of Justice Antitrust Division (DOJ) filed an antitrust lawsuit against The New York and Presbyterian Hospital challenging its contracting practices with commercial health insurers (or payors). The lawsuit alleges that the hospital system used its market power to contractually restrict payors from offering health plans featuring lower-cost rival hospitals. The complaint is very similar to one filed by the DOJ and the State of Ohio against OhioHealth, the largest hospital system in central Ohio, in February. Both cases allege that the defendant hospital system&rsquo;s restrictions prevent payors from introducing &ldquo;budget-conscious plans&rdquo; to the relevant markets, including through narrow networks and tiering. These enforcement actions make clear that the DOJ Antitrust Division is focused on certain payor contracting practices of large health systems, including &ldquo;all or nothing&rdquo; and anti-steering provisions, even when those systems face meaningful local competition.&nbsp;</p> <p>This Advisory analyzes the allegations in both complaints and provides takeaways for health systems as they navigate the current antitrust enforcement environment.</p> <h2>The New York and Presbyterian Hospital Case</h2> <p>The government alleges that The New York and Presbyterian Hospital (NYP), which operates eight hospitals in the New York area, is the largest and most powerful hospital system in Manhattan and throughout New York City.[[N:<em>United States v. The New York and Presbyterian Hospital</em>, Complaint &para;&para; 3, 8, No. 26-cv-2480 (S.D.N.Y. Mar. 26, 2026).]] The complaint asserts that NYP uses its market power over payors to extract high reimbursement rates and that NYP&rsquo;s prices are substantially higher than those of its competitors, even though its major competitors offer similarly high-quality healthcare.[[N:Id. &para;&para; 10-11.]]</p> <p><strong><em>The Contractual Restrictions</em></strong>: The complaint asserts that NYP leverages its market power to effectively force the major payors offering commercial insurance to patients in New York City to contract with it on an &ldquo;all-or-nothing&rdquo; basis. This, the government explains, means that the payor must include all of NYP&rsquo;s hospitals (including associated outpatient facilities and other healthcare services) in its networks if it wants to have any NYP facilities or services in its network.[[N:Id. &para; 11. In another paragraph in the complaint, the government alleges that NYP effectively forces payors to include NYP in &ldquo;almost all&rdquo; networks for commercial insurance products. Id. &para; 25.]] The complaint further asserts that NYP requires that it be featured at the most favored level of benefits in each plan, regardless of how NYP&rsquo;s prices compare to its competitors.[[N:Id. &para; 25.]] These restrictions, the government alleges, deter payors accounting for a dominant majority of commercial health insurance business in New York City from introducing budget-conscious plans that exclude or charge more for access to NYP&rsquo;s hospitals.[[N:Id. &para; 26.]] The complaint&rsquo;s allegations describe the tools that payors can use to create such plans, including narrow networks, tiering, centers of excellence, and site-of-service steering.[[N:Id. &para;&para; 19-23. As alleged in the complaint, narrow network plans incentivize providers to offer competitive prices in exchange for the added patient volume from being in a more limited network; tiered network plans use broad networks but reward members with lower out-of-pocket expenses if they choose cost-effective providers in a preferred tier; centers of excellence incentivize patients to seek specific services from designated providers that offer better value within a broad network; and site of service steering encourages patients to have procedures done at a lower-cost facility like an ambulatory surgery center rather than a hospital.]]</p> <p><strong><em>Relevant Markets</em></strong>: As is typical in antitrust cases involving hospital markets, the alleged relevant product market is the sale of inpatient general acute care (GAC) hospital services to commercial payors and their members.[[N:Id. &para; 27.]] The government claims two relevant geographic markets: the borough of Manhattan and the area comprising the boroughs of the Bronx, Brooklyn, Manhattan, and Queens (the Four-Borough Market).[[N:Id. &para;&para; 31, 33.]] The government alleges that NYP, with six hospitals in New York City and four in Manhattan, including its two flagship facilities, is by far the largest hospital system in both markets.[[N:Id. &para;&para; 3, 8, 37. (&ldquo;Its two flagship facilities are New York-Presbyterian/Columbia University Irving Medical Center and New York-Presbyterian/Weill Cornell Medical Center.&rdquo;)]] The government alleges that NYP&rsquo;s competitors in Manhattan and New York City include three academic medical centers: Mount Sinai (with six hospitals in NYC, including four in Manhattan); NYU Langone (with three hospitals in NYC, including two in Manhattan); and Northwell (with six hospitals in NYC, including two in Manhattan).[[N:Id. &para; 9.]] The complaint assesses the alleged relevant geographic markets using the hypothetical monopolist test (HMT) and asserts that both markets satisfy the HMT.[[N:Id. &para;&para; 32, 36.]] The government argues that in hospital markets, this means that payors would be forced to accept a price increase from a theoretical owner of all hospitals in the alleged relevant market for at least one hospital, since payors would not be competitive selling commercial health plans to area individuals and employers that did not include any hospitals in that market.[[N:Id. &para;&para; 32, 36.]]</p> <p><strong><em>Market Power</em></strong>: The complaint alleges that NYP has market power in both relevant markets and that its 2024 share of inpatient GAC hospital discharges was over 30% in Manhattan and over 25% in the Four-Borough Market.[[N:Id. &para; 37.]] The government asserts that payors must have NYP as a participant in at least some of their provider networks to have successful health insurance products and that NYP exerts this leverage in payor negotiations to impose the contractual restrictions at issue (despite payors&rsquo; attempts to negotiate their removal).[[N:Id. &para;&para; 39-40.]] The government further asserts that the plan restrictions insulate NYP from price competition and NYP is therefore unconcerned by rivals&rsquo; offering lower prices, as evidenced by testimony from NYP&rsquo;s most senior contracting executive that its rivals&rsquo; offering of lower prices to payors &ldquo;has no relevance to me.&rdquo;[[N:Id. &para; 38.]]</p> <p><strong><em>Anticompetitive Effects</em></strong>: The government asserts that the plan restrictions help NYP maintain supracompetitive prices for inpatient GAC services and make it difficult for other hospitals to win patients and market share from NYP by offering lower prices or better value.[[N:Id. &para;&para; 42, 55.]] The complaint alleges that NYP&rsquo;s restrictions deter the emergence of innovative and money-saving health insurance products, resulting in reduced choice of plans, higher healthcare costs, and less competition for high-quality healthcare.[[N:Id. &para;&para; 7, 55.]] The government asserts that NYP recognizes that the plan restrictions benefit its bottom line, pointing to additional testimony from NYP&rsquo;s most senior contracting executive that &ldquo;[n]otwithstanding national and local trends to the contrary, [NYP] retained the Hospitals&rsquo; &hellip; terms and conditions that protect against administrative erosion of rates of payment or steerage away from the Hospitals.&rdquo;[[N:Id. &para; 43.]] The government also highlights an NYP analysis, which allegedly concludes that the introduction of tiered plans alone would reduce profits by hundreds of millions of dollars, and other forms of steerage would also cause that same outcome.[[N:Id. &para; 44.]] In addition, the complaint separately details the alleged effects of the plan restrictions on outpatient services, providing examples of how the restrictions prevent rival providers from competing on price and protect NYP&rsquo;s high prices for such services.[[N:Id. &para;&para; 47-48.]]</p> <p><strong><em>Causes of Action and Relief Sought</em></strong>: The government is seeking a declaration that NYP&rsquo;s contractual restrictions violate Section One of the Sherman Act. It is also seeking to enjoin NYP from (1) enforcing any provision in any agreement that restricts a payor from informing members about financial incentives to use any healthcare provider;[[N:The complaint (unlike the OhioHealth case) does not contain any allegations that NYP restricts payors from informing members about the price of healthcare services.]] (2) engaging in other conduct replicating the effects of its plan restrictions; or (3) retaliating against payors for offering budget-conscious plans.[[N:Id.]]</p> <h2>The OhioHealth Case</h2> <p>The government alleges that OhioHealth, which owns or manages 16 hospitals in the state, is the dominant hospital system in Columbus.[[N:<em>United States v. OhioHealth Corp.</em>, Complaint &para;&para; 7-8, 11, No. 2:26-cv-207 (S.D. Ohio Feb. 20, 2026).]] The complaint asserts that OhioHealth&rsquo;s market power, evidenced in part by its &ldquo;high market share,&rdquo; allows it to charge payors much higher rates than its competitors despite the fact that it does not generally provide higher quality services.[[N:Id. &para;&para; 9-11.]]</p> <p><strong><em>The Contractual Restrictions</em></strong>: Similar to the NYP complaint, the government asserts that OhioHealth restricts payors accounting for at least 85% of commercial health insurance in the Columbus area from offering budget-conscious plans by effectively forcing them to include OhioHealth in all networks for all commercial insurance products and requiring that it be featured at the most favored level of benefits in each network regardless of price.[[N:Id. &para;&para; 31-33.]] Unlike the NYP complaint, the government alleges that OhioHealth&rsquo;s contractual restrictions prevent payors from providing patients with truthful information about the prices of healthcare services by limiting the dissemination of such information or setting other burdensome requirements on its disclosure.[[N:Id. &para; 34.]] The government alleges that these price transparency restrictions act &ldquo;effectively as gag rules.&rdquo;[[N:Id. &para; 34.]]</p> <p><strong><em>The Relevant Markets</em></strong>: As in the NYP case, the government alleges that the relevant product market is the sale of inpatient general acute care (GAC) hospital services to commercial payors and their members.[[N:Id. &para; 38. In both cases, the government alleges that defendants&rsquo; conduct also affects outpatient and other services, but neither asserts claims based on such other markets or defines a relevant market other than inpatient GAC services.]] The government again claims two relevant geographic markets, which it alleges pass the HMT: the Central Columbus area, which comprises two counties and most of the city of Columbus, and a broader 10-county area not larger than the Columbus Metropolitan Statistical Area.[[N:Id. &para;&para; 42, 44-47.]] In the Central Columbus area, the government alleges there are only three systems: OhioHealth, with six area hospitals, including its flagship hospital; Ohio State, which operates a &ldquo;leading regional academic medical center&rdquo; and another area hospital; and Mount Carmel, which operates five area hospitals and holds a majority joint-venture interest in a sixth.[[N:Id. &para; 8, &para; 10, &para; 44.]]</p> <p><strong><em>Market Power and Anticompetitive Effects</em></strong>: The government alleges that OhioHealth has market power in GAC services in both markets. In the broader Columbus MSA, the government asserts these three systems control more than 85% of inpatient GAC discharges.[[N:Id. &para; 48.]] The complaint alleges that OhioHealth&rsquo;s share of inpatient GAC discharges and hospital beds in both markets is over 35%.[[N:Id. &para; 49.]] As in the NYP case, the government asserts that payors must include OhioHealth in at least some of their provider networks to have viable insurance products and are therefore forced to agree to the alleged contractual restrictions.[[N:Id. &para;&para; 50-51.]] The complaint alleges anticompetitive effects similar to those alleged in the NYP case, including that the restrictions deter rival hospitals from competing for patients by lowering rates or investing in quality improvements.[[N:Id. &para;&para; 31, 35.]] Additionally, the government alleges that the price transparency restrictions prevent payors &ldquo;even from informing patients that lower-cost options are available.&rdquo;[[N:Id. &para; 3. The government also alleges that the restrictions, which apply to all services it sells to payors (e.g., physician services, labs, imaging, etc.), also impact competition across those services. The complaint against NYP differs, though, in that it contains more detailed allegations regarding harm involving outpatient services. Id. &para; 53.]]</p> <p><strong><em>Causes of Action and Relief Sought</em></strong>: The government is seeking essentially the same relief as in the NYP case. However, the case against OhioHealth also alleges a claim under Ohio&rsquo;s antitrust statute, the Valentine Act, and seeks a declaration that this state law has also been violated.</p> <h2>Takeaways and What to Watch</h2> <ul> <li>These cases show that the DOJ Antitrust Division is prioritizing enforcement regarding the payor contracting practices of large health systems, including &ldquo;all or nothing&rdquo; or anti-steering provisions, even when such systems face significant local competition. Indeed, as the NYP complaint states, NYP&rsquo;s competitors include three major health systems, all of which are academic medical centers and operate multiple hospitals in the alleged relevant markets. Similarly, the complaint against OhioHealth describes it as the dominant area system while alleging that it faces competition from two area systems that appear to collectively account for a much larger share of the Central Columbus market than OhioHealth.[[N:As referenced above, the complaint alleges that OhioHealth has a market share of over 35% in the Central Columbus market and there are only two other systems (which presumably account for all of the remaining share).]]</li> <li>Similar to the Federal Trade Commission&rsquo;s (FTC) approach to analyzing hospital mergers, the complaints focus on bargaining dynamics between local hospitals and payors.[[N:While the FTC is the antitrust agency predominantly responsible for reviewing hospital mergers, including those involving non-profit health systems, the FTC does not generally have jurisdiction to pursue alleged anticompetitive <em>conduct</em> of non-profits. Accordingly, these actions are brought by the DOJ. ]] A key allegation in both cases is that payors &ldquo;must have&rdquo; NYP and OhioHealth, respectively, as participants in at least some of their provider networks to sell viable health insurance products. This, according to the government, is what enables the defendants to impose the contractual restrictions at issue. As the cases go forward, evidence regarding payors&rsquo; ability to construct marketable provider networks in the relevant areas with or without NYP or OhioHealth and their respective significant competitors is likely to be an important issue in assessing the competitive effects of the challenged conduct. The &ldquo;must have&rdquo; issue is particularly notable in the case against NYP where the defendant&rsquo;s market shares in both relevant markets are alleged to be below the 35% threshold usually required to show market power in a rule of reason case. </li> <li>As is often the case in antitrust enforcement actions, ordinary course business documents and party testimony can play a central role in litigation. In the complaint against NYP (and unlike the complaint against OhioHealth), the DOJ prominently featured such evidence in support of its allegations regarding the contractual restrictions, market power, and anticompetitive effects. </li> <li>These lawsuits are significant developments, but not the first of their kind. Federal and state antitrust enforcers have brought antitrust actions in the past relating to similar contracting practices of alleged dominant health systems. For example, in 2016, the DOJ and the State of North Carolina sued Atrium Health (then Carolinas HealthCare System) challenging alleged &ldquo;anti-steering&rdquo; and price transparency provisions.[[N:U.S. Dep&rsquo;t of Justice, <a rel="noopener noreferrer" href="https://www.justice.gov/archives/opa/pr/justice-department-and-north-carolina-sue-carolinas-healthcare-system-eliminate-unlawful" target="_blank">Justice Department and North Carolina Sue Carolinas Healthcare System to Eliminate Unlawful Steering Restrictions</a>, June 9, 2016.]] The matter resulted in a 2018 settlement barring Atrium&rsquo;s use of such provisions in the market at issue.[[N:<em>United States v. The Charlotte-Mecklenburg Hosp. Auth., d/b/a Carolinas Healthcare System</em>, Proposed Final Judgment, 83 Fed. Reg. 63,674 (Dec. 11, 2018).]] Also in 2018, the California Attorney General filed a suit against Sutter Health on the basis of alleged restrictions, including purported &ldquo;all-or-nothing&rdquo; contracting, and &ldquo;anti-incentive&rdquo; provisions punishing plans for placing Sutter facilities on inferior tiers or otherwise incentivizing away from them.[[N:<em>People of the State of California v. Sutter Health</em>, Complaint, No. CGC-18-565398 (Cal. Super. Ct. Mar. 29, 2018).]] The consolidated settlement of that action and a related class action involved a $575 million payment.[[N:Att&rsquo;y Gen. of Cal., <a rel="noopener noreferrer" href="https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-final-approval-575-million-settlement-sutter" target="_blank">Attorney General Bonta Announces Final Approval of $575 Million Settlement with Sutter Health Resolving Allegations of Anti-Competitive Practices</a>, Aug. 27, 2021.]]</li> <li>In other contexts, anti-steering provisions have been upheld by the courts. Perhaps most notably, in <em>Ohio v. American Express</em>, the Supreme Court found, when analyzing alleged restraints in the credit card market, that &ldquo;there is nothing inherently anticompetitive about Amex&rsquo;s antisteering provisions,&rdquo; noting that such provisions stem negative externalities and can promote interbrand competition.[[N:<em>Ohio v. Am. Express Co.</em>, 585 U.S. 529, 553 (2018).]] As these cases proceed, it will be important to watch how the courts evaluate the instant alleged restrictions in the context of the healthcare industry.</li> <li>State Attorneys General are continuing to occupy an increasingly prominent and active role in the antitrust landscape, including through enforcement actions, new pre-merger notification laws, and pending legislation. However, states have long prioritized antitrust matters involving healthcare providers, particularly since these matters focus on local markets. While the number of state laws requiring notification for healthcare transactions is increasing,[[N:At least 15 states have enacted healthcare transaction review laws requiring prior notice or approval of material healthcare transactions. See, e.g., Cal. Health &amp; Safety Code &sect; 127500 et seq.; Ind. Code &sect; 25-1-8.5-1 et seq.; Mass. Gen. Laws ch. 6D, &sect; 13; N.Y. Pub. Health Law &sect;&sect; 4550-4552; Or. Rev. Stat. &sect; 415.500 et seq.; Wash. Rev. Code &sect; 19.390 et seq.]] there is nothing new about states partnering with the FTC or DOJ to challenge a merger or conduct in the hospital setting (as was done in the OhioHealth matter).</li> </ul> <p> </p> <p>Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/antitrust-competition">Antitrust/Competition</a> team includes former senior government antitrust enforcers who possess deep experience with healthcare services matters. If you have any questions regarding conduct or mergers in this space, please contact the authors or any of their colleagues in the firm&rsquo;s Antitrust practice group.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{CB0DB606-A902-4328-9372-C4923271BE65}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/proactive-strategies-for-commercial-indemnification-disputes-managing-recurring-risksDaniel L. Reisnerhttps://www.arnoldporter.com/en/people/r/reisner-daniel-ldaniel.reisner@arnoldporter.comSamuel Lonerganhttps://www.arnoldporter.com/en/people/l/lonergan-samuelsamuel.lonergan@arnoldporter.comRebecca Maller-Steinhttps://www.arnoldporter.com/en/people/m/maller-stein-rebeccarebecca.maller-stein@arnoldporter.comContractual indemnification claims arising out of an underlying third-party tort or contract claim are a recurring business risk for entities that are parties to commercial contracts. These types of indemnification claims &mdash; which can involve indemnification for both liability attributable to the underlying action as well as associated defense costs spent &mdash; span many industries, including telecommunications, electronics, life sciences, pharmaceuticals, consumer products, real estate, and financial services. With careful planning and consideration, practitioners can avoid costly litigation or, when necessary, adeptly prosecute or defend these complex disputes.Fri, 24 Apr 2026 00:00:00 -0500<p>Contractual indemnification claims arising out of an underlying third-party tort or contract claim are a recurring business risk for entities that are parties to commercial contracts. These types of indemnification claims &mdash; which can involve indemnification for both liability attributable to the underlying action as well as associated defense costs spent &mdash; span many industries, including telecommunications, electronics, life sciences, pharmaceuticals, consumer products, real estate, and financial services. With careful planning and consideration, practitioners can avoid costly litigation or, when necessary, adeptly prosecute or defend these complex disputes.</p> <h2>Early Pre-Litigation Assessments Can Be Crucial</h2> <p>A pre-litigation case assessment can be especially valuable when a party is considering whether to assert or how to respond to an indemnification claim because it enables counsel to assess at an early stage the relevant facts, contractual language, potential claims and defenses, likely exposure, and business implications before positions harden. The goal of a good pre-litigation case assessment is to give the client options, not consequences, so that decisions about whether to pursue, narrow, resolve, or resist an indemnification demand are informed, deliberate, and aligned with legal and business objectives.[[N: Early counsel involvement is becoming increasingly important as artificial intelligence (AI) becomes ubiquitous. Non-lawyer employee use of AI tools to test legal theories or develop strategy on their own may create discoverable, non-privileged materials that increase both litigation and business risk.]] A thorough pre-litigation assessment involving a third-party claim also allows a potential indemnitor with the right to defend the third-party claim to determine whether it should assume the defense, merely provide assistance, or simply monitor the litigation. </p> <h2>Notice, Prejudice, and Tender of the Defense</h2> <p>The underlying contract governs numerous issues that arise upon an indemnifiable third-party claim and merit evaluation and investigation by any indemnitor or indemnitee. Among other things: the content, timing, and procedure of any required notice of the third-party claim; the effect of insufficient or late notice on whether the indemnitor is prejudiced in its ability to defend the claim; and the need, if any, to formally &ldquo;tender&rdquo; the defense of the third-party claim to the indemnitor, are all issues that are often governed by the underlying contract and could affect any ultimate contractual indemnification action. </p> <h2>Reservation of Rights While Proceeding with Indemnification</h2> <p>An indemnitor may wish to participate in or assume the defense of a third-party claim without conceding that indemnification is owed. Express reservation-of-rights language helps avoid later arguments based on waiver, ratification, acquiescence, or admission. Amendments, notice letters, defense-assumption correspondence, and interim cost-sharing arrangements should therefore specify which rights are preserved and whether any interim payments are subject to reimbursement if indemnification is later found to be unwarranted. </p> <h2>Other Pre-Litigation Considerations</h2> <p>Indemnitees must also consider whether their contracts contain any threshold requirements before a third-party indemnity claim becomes ripe, because some indemnification provisions do not apply automatically when an underlying claim is filed. Instead, the indemnitee may be required to establish that the indemnitor breached a representation, warranty, covenant, or other contractual obligation and that the third-party claim arose from that breach. In that scenario, evaluating the strength of an indemnification claim will require analysis of the same core elements as a breach of contract claim. </p> <h2>Application of Contractual Damages Limitations to Indemnification Obligations </h2> <p>Counsel should not assume that a contract&rsquo;s general damages limitations apply to indemnification claims in the same manner as to ordinary breach of contract claims. Some agreements carve indemnification out of otherwise applicable exclusions or caps, while others expressly subject indemnity to them. The analysis should begin with the contract&rsquo;s terms, including whether indemnification is treated as an exclusive remedy, whether it is excluded from general limitations-on-liability provisions, and whether particular categories of loss are expressly included or excluded. Because this issue can materially affect exposure, especially where the underlying claim includes multiple categories of damages or fee-shifting, it should be assessed by counsel early in any indemnification analysis.</p> <h2>Third-Party Claim</h2> <p>The nature of the underlying third-party claim will dictate the complexity and scope of the indemnification dispute. For example, many commercial indemnification disputes are premised on third-party patent infringement actions, and will require an analysis of a substantial (and sometimes complicated) underlying record in order to properly litigate indemnification obligations. </p> <p>In patent disputes that require litigation, plaintiffs seeking indemnification will generally require complex expert opinions, including a technical expert to assess the third-party infringement allegations and determine whether the indemnitor&rsquo;s products were accused; a litigation expert to assess the reasonableness of attorneys&rsquo; fees spent in the underlying action; and a damages expert to assess damages for any liability from the third-party action. A damages expert may also need to opine on the proper allocation of damages where numerous suppliers&rsquo; products are the subject of the third-party infringement allegations.</p> <h2>Threshold Defenses</h2> <p>Indemnitors subject to indemnification litigation frequently raise threshold defenses such as standing and the statute of limitations to avoid reaching the merits of the dispute.</p> <h3>Standing Issues: Understand the Relevant Corporate Entities</h3> <p>If your company has merged or is the product of a merger or other business combination since signing the relevant indemnification clause, identify and verify the correct contractual indemnitee prior to filing suit. Ahead of any such merger, assess any requirements for assignment of contractual rights to ensure that the proper entity has the right to enforce indemnity rights under the relevant agreement. </p> <h3>Statute of Limitations: Identify the Correct Accrual Date and Limitations Period</h3> <p>The statute of limitations can present many challenges for multinational companies, including choice of law and borrowing statutes. </p> <p>First, confirm the date of accrual of the indemnification claim. This date can depend on whether the contract indemnifies for liability or loss incurred as a result of that liability. A claim based on a contract that indemnifies for loss will accrue on the date the loss is paid. A claim based on indemnification for liability will accrue on the date the judgment is fixed or finally resolved. There can be disputes when contracts appear to cover both, as well as over whether a claim is fixed by a judgment or requires resolution of an appeal. </p> <p>Second, determine the applicable limitations period. The law specified in a choice of law provision may not predetermine the limitations period if the plaintiff files in a jurisdiction where it is not a resident. For example, under New York&rsquo;s borrowing statute, CPLR 202, a New York court will apply the shorter of New York&rsquo;s 6-year statute of limitations for breach of contract or borrow the applicable limitations period of the state of the plaintiff&rsquo;s residence. At least in New York, the First Department has held that the plaintiff&rsquo;s principal place of business (instead of state of incorporation) governs the limitations period of the plaintiff&rsquo;s residence.[[N: <em>See, e.g., Andes Petroleum Ecuador Ltd. v. Occidental Petroleum Co.</em>, 213 A.D.3d 403, 403 (1st Dep&rsquo;t 2023); <em>Brinckerhoff v. JAC Holding Corp.</em>, 263 A.D.2d 352, 353 (1st Dep&rsquo;t 1999).]]</p> <h2>Privilege and At-Issue Waiver: Understand Risk and Benefits</h2> <p>In some states, filing an indemnification action may trigger an implied at-issue waiver over privilege governing the underlying litigation.[[N: <em>Compare, e.g., Pamida, Inc. v. E.S. Originals</em>, 281 F.3d 726 (8th Cir. 2002) (applying Nebraska law) (finding at-issue waiver) <em>with Bovis Lend Lease, LMB, Inc. v. Seasons Contracting Corp.</em>, No. 00 CIV. 9212 (DF), 2002 WL 31729693, at *16 (S.D.N.Y. Dec. 5, 2002) (applying New York law) (rejecting at-issue waiver claim).]] For example, the indemnitor may argue that it requires privileged information from the third-party litigation to defend against the indemnification claim. Be sure to assess the applicable law to determine whether filing an indemnity suit may effect a waiver and, if so, consider whether this waiver could benefit your client (e.g., allowing your client to explain litigation or strategy decisions in the underlying litigation without the limitations governing the attorney-client privilege). </p> <h2>Takeaways</h2> <p>Third-party contractual indemnification disputes often blend contract interpretation with technical evidence, litigation strategy, and complex damages analysis. Conducting an early pre-litigation case assessment; evaluating and closely following contractual terms regarding any notice, tender, and threshold requirements; understanding the governing accrual date and limitations period; and building a strong factual and expert record, improve odds of success.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{716F2A73-681B-4BB3-B1AF-AA1F5F58BD77}https://www.arnoldporter.com/en/perspectives/events/2026/04/competition-bootcamp-webinar-for-inhouse-life-sciences-lawyersJohn M. Schmidthttps://www.arnoldporter.com/en/people/s/schmidt-johnjohn.schmidt@arnoldporter.comAlastair Brownhttps://www.arnoldporter.com/en/people/b/brown-alastairalastair.brown@arnoldporter.com Zeno J. Fredianihttps://www.arnoldporter.com/en/people/f/frediani-zenozeno.frediani@arnoldporter.comLudovica Pizzettihttps://www.arnoldporter.com/en/people/p/pizzetti-ludovicaludovica.pizzetti@arnoldporter.comFollowing the success of our bootcamp in November, Arnold &amp; Porter is excited to deliver an updated version of the session as a webinar.Thu, 23 Apr 2026 00:00:00 -0500<p>Following the success of our bootcamp in November, Arnold &amp; Porter is excited to deliver an updated version of the session as a webinar. This online bootcamp will be a practical refresher for in-house lawyers navigating the evolving competition law environment in the pharmaceutical space.</p> <h2>Topics</h2> <ul> <li><strong>Contract Pitfalls</strong> &ndash; Examples of clauses that raise red flags in commercial agreements, and practical tips for handling them</li> <li><strong>M&amp;A Filing Requirements</strong> &ndash; What you need to know about merger control and national security/foreign direct investment filings, including the latest focus on &ldquo;killer acquisitions&rdquo; and other less traditional types of deals</li> <li><strong>Enforcement Trends</strong> &ndash; A spotlight on current EU and UK investigations, with a particular emphasis on pricing and disparagement cases</li> <li><strong>Private Enforcement</strong> &ndash; How the rise in follow-on damages claims is reshaping the litigation landscape, and what in-house teams can do to prepare</li> </ul>{84F9307B-0AF9-4B38-99D3-731C05E6CD4B}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/sec-staff-extends-section-16a-filing-deadline-for-directorsSara Adlerhttps://www.arnoldporter.com/en/people/a/adler-sarasara.adler@arnoldporter.comJoel I. Greenberghttps://www.arnoldporter.com/en/people/g/greenberg-joel-ijoel.greenberg@arnoldporter.com<p>On April 17, 2026, the Division of Corporation Finance issued a <a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/no-action-interpretive-exemptive-letters/division-corporation-finance-no-action/tower-semiconductor-ltd-041726" target="_blank">no-action letter</a> to Tower Semiconductor Ltd., an Israeli foreign private issuer (Tower), extending until May 29, 2026 the date through which Tower&rsquo;s directors and officers may fail to file required Section 16(a) reports without leading the Division of Corporation Finance to recommend enforcement action to the SEC. The Division had previously granted no-action relief for failures to file until April 20, 2026. The new no-action position was based on several facts set forth in Tower&rsquo;s no action <a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/no-action/tsem-no-action-request-041526.pdf" target="_blank">request letter</a>, including the impact of the continuing war among Israel, Lebanon, and Hezbollah, as Tower&rsquo;s &ldquo;headquarters, management, parent company and largest fabrication facility (Fab 2) are all located less than 20 miles away from the Israel-Lebanon border, which continues to suffer rocket fires, missile strikes and air raid sirens from Lebanon.&rdquo; The request letter also noted that wartime restrictions in Israel, especially where Tower&rsquo;s headquarters, management, and Fab 2 are located, remain ongoing, as do severe disruptions to communications and infrastructure. These conditions continue to impair Tower&rsquo;s ability to collect, verify, and assist its directors and officers in reporting the required information, including disruptions to notary services required for Form ID, due to rocket strikes and other collateral consequences of military operations in the region.</p> <p>The Division&rsquo;s response states that: &ldquo;This no-action position is available for directors and officers of any other foreign private issuer with a class of equity securities registered under Exchange Act Section 12 that is organized and headquartered in Israel or any other foreign jurisdiction in the geographical region directly affected by the conflict described in your letter, provided they can represent that their ability to comply with the March 18, 2026 filing deadline mandated by the Holding Foreign Insiders Accountable Act has been materially affected by the direct effects of the conflict.&rdquo;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>Thu, 23 Apr 2026 00:00:00 -0500{324CE017-4E38-4053-B3D2-ADE1315121C3}https://www.arnoldporter.com/en/perspectives/events/2026/04/transferring-data-safely-national-security-privacy-and-emerging-sovereign-rightsEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comDeborah A. Curtishttps://www.arnoldporter.com/en/people/c/curtis-deborahdeborah.curtis@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comJami Vibberthttps://www.arnoldporter.com/en/people/v/vibbert-jamijami.vibbert@arnoldporter.comCross-border data flows in the life sciences sector sit at the crossroads of national security enforcement, evolving privacy law, and a new generation of sovereign data rights claims &mdash; creating compliance complexity that few organizations are fully prepared for.Wed, 22 Apr 2026 00:00:00 -0500<p>Cross-border data flows in the life sciences sector sit at the crossroads of national security enforcement, evolving privacy law, and a new generation of sovereign data rights claims &mdash; creating compliance complexity that few organizations are fully prepared for. Featuring former national security officials, a privacy law specialist, and an intellectual property lawyer with extensive emerging technology experience, this session translates a rapidly shifting legal landscape into actionable insight. Whether your concern is clinical trial data, genomic and biomarker research, drug compound formulas, APIs, or joint ventures with foreign partners &mdash; together, this panel will offer practical guidance for companies navigating this rapidly evolving and high-consequence landscape.</p> <p>We invite you to join us and to come with questions!</p> <h3>Save the Date</h3> <strong>Part III: Supply Chain, National Security, and Tariffs</strong><br /> Wednesday, July 22<br /> 11 a.m.-noon ET<br /> <br /> <p><em>Information and details to follow</em></p>{B32675C2-4014-4E50-9B29-2CC028ADAAE7}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/implementing-the-genius-actEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comDavid F. Freeman, Jr.https://www.arnoldporter.com/en/people/f/freeman-david-fDavid.Freeman@arnoldporter.comAmber A. Hayhttps://www.arnoldporter.com/en/people/h/hay-amber-aamber.hay@arnoldporter.comAnthony Raglanihttps://www.arnoldporter.com/en/people/r/raglani-anthonyanthony.raglani@arnoldporter.comKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comAdrien K. Andersonhttps://www.arnoldporter.com/en/people/a/anderson-adrien-kadrien.anderson@arnoldporter.comJames Moeshttps://www.arnoldporter.com/en/people/m/moes-jamesjames.moes@arnoldporter.com<section class="text-token-text-primary w-full focus:outline-none [--shadow-height:45px] has-data-writing-block:pointer-events-none has-data-writing-block:-mt-(--shadow-height) has-data-writing-block:pt-(--shadow-height) [&amp;:has([data-writing-block])&gt;*]:pointer-events-auto R6Vx5W_threadScrollVars scroll-mb-[calc(var(--scroll-root-safe-area-inset-bottom,0px)+var(--thread-response-height))] scroll-mt-(--header-height)" dir="auto" data-turn-id="cba6ba6a-ac66-4ae3-a515-e728bbfc2e67" data-testid="conversation-turn-1" data-scroll-anchor="false" data-turn="user"></section><section class="text-token-text-primary w-full focus:outline-none [--shadow-height:45px] has-data-writing-block:pointer-events-none has-data-writing-block:-mt-(--shadow-height) has-data-writing-block:pt-(--shadow-height) [&amp;:has([data-writing-block])&gt;*]:pointer-events-auto [content-visibility:auto] supports-[content-visibility:auto]:[contain-intrinsic-size:auto_100lvh] R6Vx5W_threadScrollVars scroll-mb-[calc(var(--scroll-root-safe-area-inset-bottom,0px)+var(--thread-response-height))] scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]" dir="auto" data-turn-id="request-WEB:6fbef7a1-bb2f-450e-bf83-105d556ed7cb-2" data-testid="conversation-turn-2" data-scroll-anchor="false" data-turn="assistant"> <div class="text-base my-auto mx-auto pb-10 [--thread-content-margin:var(--thread-content-margin-xs,calc(var(--spacing)*4))] @w-sm/main:[--thread-content-margin:var(--thread-content-margin-sm,calc(var(--spacing)*6))] @w-lg/main:[--thread-content-margin:var(--thread-content-margin-lg,calc(var(--spacing)*16))] px-(--thread-content-margin)"> <div class="[--thread-content-max-width:40rem] @w-lg/main:[--thread-content-max-width:48rem] mx-auto max-w-(--thread-content-max-width) flex-1 group/turn-messages focus-visible:outline-hidden relative flex w-full min-w-0 flex-col agent-turn"> <div class="flex max-w-full flex-col gap-4 grow"> <div data-message-author-role="assistant" data-message-id="c47634e6-5abe-4a19-ad00-d563ed7f87a1" dir="auto" data-message-model-slug="gpt-5-3" class="min-h-8 text-message relative flex w-full flex-col items-end gap-2 text-start break-words whitespace-normal outline-none keyboard-focused:focus-ring [.text-message+&amp;]:mt-1" data-turn-start-message="true" tabindex="0"> <div class="flex w-full flex-col gap-1 empty:hidden"> <div class="markdown prose dark:prose-invert w-full wrap-break-word light markdown-new-styling"> <p data-start="0" data-end="1169">The FDIC&rsquo;s April 2026 proposed rule implements key provisions of the GENIUS Act by establishing a comprehensive, principles-based regulatory framework for payment stablecoin issuance and related activities by FDIC-supervised institutions. The proposal would limit permitted payment stablecoin issuers to core functions like issuance, redemption, reserve management, and custody, while imposing strict requirements on reserves, liquidity, capital, risk management, and operational resilience. It also prohibits paying interest or yield on stablecoins, restricts certain activities like rehypothecation and extending credit, and mandates clear redemption rights, disclosures, and robust reporting and audit obligations. Additionally, the rule clarifies that stablecoin reserve deposits are insured only at the issuer level (not pass-through to holders) and aligns with broader interagency efforts to create a unified federal regulatory regime for stablecoins, with public comments invited on key design questions such as capital standards, redemption timelines, and the scope of permissible activities.</p> </div> </div> </div> </div> </div> </div> </section>Wed, 22 Apr 2026 00:00:00 -0500<p> </p> <p>On April 7, 2026, the Federal Deposit Insurance Corporation (FDIC) issued a notice of proposed rulemaking (the Proposal) to implement key provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act) applicable to FDIC-supervised institutions, including permitted payment stablecoin issuers (PPSIs) and insured depository institutions (IDIs) engaged in related custodial or safekeeping services.[[N:FDIC, <a rel="noopener noreferrer" href="https://www.fdic.gov/news/press-releases/2026/fdic-approves-proposal-implement-genius-act-requirements-and-standards" target="_blank">FDIC Approves Proposal to Implement GENIUS Act Requirements and Standards</a> (Apr. 7, 2026).]] </p> <p>The Proposal would amend Part 350 of the FDIC&rsquo;s regulations to establish a principles-based regime addressing issuance, reserves, liquidity, capital, risk management, and custody. It also clarifies that deposits held as payment stablecoin reserves would be insured to the PPSI (not on a pass-through basis to holders), and that tokenized deposits remain subject to existing deposit insurance frameworks. </p> <p>The Proposal is part of a broader interagency effort under the GENIUS Act &mdash; alongside parallel rulemakings by the Office of the Comptroller of the Currency (OCC), the U.S. Department of the Treasury (Treasury), and the National Credit Union Administration &mdash; to implement a unified federal framework for payment stablecoin regulation. For an overview and analysis of the OCC&rsquo;s recently proposed rule, please see our Advisory, <a href="https://www.arnoldporter.com/en/perspectives/advisories/2026/03/implementing-the-genius-act-the-occ-proposes-comprehensive-rulemaking" target="_self">Implementing the GENIUS Act: The OCC Proposes Comprehensive Rulemaking Governing Payment Stablecoins Issuance</a>, along with earlier posts in Arnold &amp; Porter&rsquo;s series of Advisories on the evolving digital asset landscape.</p> <p style="text-align: center;">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <h2>PPSI Requirements</h2> <p>The Proposal establishes proposed prudential and operational requirements for PPSIs, including limitations on permissible activities; restrictions on yield and other prohibited conduct; requirements relating to reserves, liquidity, and redemptions; capital and operational resilience standards; risk management expectations; and custodial requirements. Each of these areas is discussed in greater detail below. </p> <h3>Permissible and Prohibited Activities</h3> <p>Consistent with the GENIUS Act, the Proposal would limit PPSIs to a narrow set of core activities: issuing and redeeming payment stablecoins, managing reserve assets relating to the issuance or redemption of payment stablecoins, and providing custodial or safekeeping services of payment stablecoin assets.[[N:&sect; 350.2(a)(1)-(4).]] A PPSI could also engage in activities that directly support these core activities,[[N:&sect; 350.3(a)(5).]] as well as incidental activities that are authorized by the FDIC.[[N:&sect; 350.3(a)(6). Beyond the core, direct support, and FDIC-approved incidental activities, the Proposal would also allow PPSIs to act as principal or agent with respect to any payment stablecoin and to assess fees associated with purchasing or redeeming payment stablecoins and pay fees to facilitate customer transactions. &sect; 350.3(a)(7)-(9).]] The Proposal would also prohibit PPSIs, directly or through implication, from misrepresenting payment stablecoins as legal tender, covered by FDIC deposit insurance, or as being backed by the U.S. government. Consistent with the statute, the Proposal also would prohibit PPSIs from pledging or rehypothecating reserve assets (outside of certain narrow exceptions, including satisfying margining requirements relating to reserves and redemption events), and providing credit to customers for the purchase of payment stablecoins.[[N:&sect;&sect; 350.3(b)(1)-(3), (5)-(8).]]</p> <h3>Payment Stablecoin Yield</h3> <p>The Proposal would prohibit a PPSI from paying any form of interest or yield &mdash; whether in cash, tokens, or other consideration &mdash; to payment stablecoin holders solely in connection with the holding, use, or retention of such payment stablecoin.[[N:&sect; 350.3(b)(4).]] Consistent with the OCC&rsquo;s approach to this issue, the Proposal includes a presumption that certain compensation arrangements with affiliates or &ldquo;related third parties&rdquo;[[N:Related third parties would include any person offering to pay interest or yield to payment stablecoin holders as a service, and any person that the PPSI issues payment stablecoins on the person&rsquo;s behalf or under the person&rsquo;s branding. &sect; 350.3(b)(4).]] constitute prohibited indirect yield payments. A PPSI would be presumed to violate the prohibition if the PPSI, or any affiliate or related third party, has a contract to pay interest or yield to payment stablecoin holders. PPSIs may rebut the presumption by submitting written materials demonstrating that the contract or agreement is not prohibited and does not evade the prohibition. While the Proposal effectively would prohibit many forms of indirect arrangements to pay yield to payment stablecoin holders, certain aspects of the rule provision are ambiguous (for example, the interpretation of which agreements are <em>solely</em> in connection with holding, use, or retention of payment stablecoins) and the FDIC, like the OCC under its rule proposal, would possess considerable discretion to determine forms of indirect payment arrangements that could be viewed as acceptable notwithstanding the general prohibition. In enforcing this prohibition, the FDIC may look to its former practices during the period in which Regulation Q was in effect and prohibited banks from paying interest on demand deposit accounts, which gave rise to the use of &ldquo;earnings credits.&rdquo;[[N:Regulation Q was repealed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. See 12. U.S.C. &sect; 5301 et seq.]] This issue has attracted significant attention, from the banking and digital asset sectors alike, since the enactment of the GENIUS Act, and we expect this to continue as the FDIC&rsquo;s and OCC&rsquo;s rule proposals are further considered and finalized. </p> <h3>Reserve Assets Composition, Management, and Disclosure</h3> <p>Consistent with the GENIUS Act, the Proposal would require PPSIs to maintain identifiable reserves fully backing outstanding payment stablecoins on at least a one-to-one basis: the aggregate fair value of reserves would, at all times, be required to meet or exceed their total outstanding issuance value.[[N: &sect; 350.4(a)(1). A PPSI may issue multiple brands of distinct payment stablecoin but, under the Proposal, would be required to maintain required reserves with assets that can be separately identified as backing a particular brand of distinct payment stablecoin and each brand of payment stablecoin would need to independently comply. &sect; 350.4(c).]] PPSIs would be required to monitor issuance and redemption activity for ongoing compliance[[N:&sect; 350.4(a)(2).]] and notify the FDIC in writing upon determining or having reasonable grounds to suspect a reserve shortfall.[[N:&sect; 350.4(i)(1).]] The FDIC may then direct the PPSI to: suspend or reduce issuance, take measures to restore reserve levels consistent with the terms of the PPSI&rsquo;s written restoration plan, or commence an orderly redemption of the payment stablecoin.[[N:&sect; 350.4(i)(1)(i)-(iii).]]</p> <p>The Proposal would limit eligible reserve assets to the following categories:</p> <ul> <li>U.S. coins and currency, including Federal Reserve notes</li> <li>Funds in an account with a Federal Reserve Bank</li> <li>Demand deposits withdrawable upon request at an IDI or insured shares at an insured credit union (including any foreign branches, agents, or correspondent banks of an IDI)</li> <li>Treasury bills, notes, or bonds with a remaining maturity of 93 days or less</li> <li>Overnight repurchase agreements backed by eligible Treasury securities</li> <li>Overnight reverse repurchase agreements collateralized by Treasury securities (tri-party, centrally cleared through an SEC-registered clearinghouse, or bilateral with an adequately creditworthy counterparty)</li> <li>Securities issued by an investment company registered with the SEC or a registered government money market fund invested solely in eligible assets[[N:&sect; 350.4(e).]]</li> </ul> <p>Pledging, rehypothecating, or reusing reserve assets would be permitted only to satisfy margin obligations for investments in required reserves, satisfy standard custodial service obligations, or create liquidity for redemptions through the sale of eligible Treasury securities in qualifying repurchase agreements.</p> <p>The Proposal also would implement reserve asset diversification requirements and require a PPSI to limit its total exposure to any single eligible financial institution &mdash; regardless of reserve asset type and across all brands of payment stablecoins issued &mdash; to no more than 40% of its reserve assets. [[N:&sect; 350.4(f). Given the narrow scope of eligible reserve assets, the Proposal does not include extensive asset diversification requirements beyond this counterparty concentration limit.]] PPSIs would be required to publish monthly reports on the composition of reserves, and a registered public accounting firm would examine the report and issue its findings to the audit committee (or Board of Directors), and the PPSI would be required to publish the report on its website.[[N:&sect; 350.4(g).]] The CEO and CFO would also be required to certify the accuracy of the monthly report to the FDIC. </p> <h3>Liquidity and Redemptions </h3> <p>Under the Proposal, a PPSI would be required to publicly disclose its redemption policy with clear and conspicuous procedures for timely redemption.[[N:&sect; 350.5(a)-(b).]] &ldquo;Timely&rdquo; in this regard generally would mean no later than two business days following a valid redemption request, with exceptions for discretionary limits that may be imposed only by the FDIC. To that end, for &ldquo;significant redemption requests&rdquo; &mdash; aggregate requests exceeding 10% of outstanding issuance value within a single 24-hour period &mdash; the PPSI would be required to immediately notify the FDIC and may request an extension of the general timeframe for redemption requests.[[N:&sect; 350.5(c).]] The FDIC, in its discretion, may grant or deny any such requests. Notably, the proposed framework for responding to significant redemption events under the Proposal is somewhat more flexible than the OCC&rsquo;s corresponding proposal, which would require an automatic extension of the redemption period to seven days upon the occurrence of such events, which extended redemption period could be lifted only by the OCC in its discretion. </p> <p>At a minimum, a PPSI&rsquo;s redemption policy must include:</p> <ul> <li>The minimum number of payment stablecoins the PPSI will redeem, which may not exceed one payment stablecoin</li> <li>The timeframe for redemption of payment stablecoins</li> <li>A statement that discretionary limitations on timely redemptions may only be imposed by the FDIC</li> <li>An explanation of the circumstances under which the redemption period may be extended</li> <li>Clear instructions on how a payment stablecoin holder can redeem[[N:&sect; 350.5.]]</li> </ul> <h3>Capital Requirements</h3> <p>Under the Proposal, regulatory capital for PPSIs would consist of two capital elements: common equity tier 1 capital (e.g., common stock, retained earnings, and accumulated other comprehensive income, or AOCI, as reported under GAAP) and additional tier 1 capital (generally consistent with noncumulative perpetual preferred stock classified as equity under GAAP).[[N:&sect; 350.8. These elements are generally consistent with the FDIC&rsquo;s capital framework for banks under 12 CFR part 324. While the capital framework for banks also permits tier 2 capital elements, the FDIC is not proposing to adopt tier 2 capital elements for PPSIs.]] The Proposal would establish an initial minimum capital requirement for a <em>de novo</em> period (generally three years), with a floor of $5 million that the FDIC may elect to increase by order.[[N:&sect; 350.9.]] The Proposal does not establish any specific minimum capital amount or ratio that must be maintained by a PPSI for ongoing operations, nor does it propose a framework for determining a minimum capital requirement; rather, a PPSI would be required to determine appropriate capital levels based on the level and nature of its risk exposures, including on- and off-balance sheet exposures. The FDIC is seeking comment on the appropriateness of this framework. </p> <p>In addition to the proposed capital requirements, PPSIs would also need to maintain an operational backstop of highly liquid assets &mdash; U.S. currency, demand deposits at an IDI, or eligible Treasury securities &mdash; sufficient to fund ongoing operations during a business disruption.[[N:&sect; 350.9(b).]] The backstop amount would be calculated quarterly based on the total expenses over the four most recent quarters and must be held separately from reserve assets.[[N:The FDIC would retain authority to impose individual capital or operational backstop requirements in response to significantly increased operational risk or excessive volatility in issuance or redemptions. Before imposing additional requirements, the FDIC would notify the PPSI and the PPSI&rsquo;s board and management would generally have 30 days to respond. &sect; 350.10.]]</p> <p>If a PPSI fails to meet the minimum capital requirement or maintain sufficient backstop assets at the end of a quarter, it would need to notify the FDIC in writing and describe its proposed remediation measures.[[N:&sect; 350.9(c).]] If the FDIC determines those measures are not viable, it may direct the PPSI to issue additional capital instruments or acquire additional liquid assets, suspend or reduce issuance of payment stablecoins, execute an orderly redemption of all outstanding payment stablecoins, or take other appropriate action.</p> <h3>Risk Management Procedures</h3> <p>The Proposal would also implement the GENIUS Act&rsquo;s risk management requirements through principles-based operational, technology, and compliance standards calibrated to the nature and complexity of a PPSI&rsquo;s activities.[[N:&sect; 350.6.]]</p> <p>The Proposal sets forth principles-based operational risk management standards calibrated to the nature, complexity, and risk of a PPSI&rsquo;s activities.[[N:&sect; 350.6(a).]] Key operational and managerial requirements would include:</p> <ul> <li>Internal controls and information systems providing clear lines of authority, effective risk assessment, accurate financial and regulatory reporting, and procedures to monitor, safeguard, and control assets</li> <li>An independent internal audit function with adequate monitoring of internal controls, qualified personnel, and testing and documentation</li> <li>Interest rate risk management controls appropriate for the PPSI&rsquo;s size and complexity and the nature of its assets and liabilities</li> <li>Asset growth monitoring and controls commensurate with risk management capabilities</li> <li>Arms-length standards for transactions with insiders or affiliates</li> <li>Liquidity risk monitoring and management appropriate to the PPSI&rsquo;s business model and risk profile</li> </ul> <p>The Proposal also sets forth information technology and security requirements, including risk assessments, controls over systems integrity and smart contracts, periodic independent testing, incident response programs, private key management, and business continuity planning &mdash; recognizing the 24/7 nature of blockchain networks.[[N:&sect; 350.6(b).]]</p> <p>Finally, the Proposal would implement the anti-money laundering (AML) and economic sanctions compliance programs certification requirements of the GENIUS Act. A PPSI would be required to file an initial AML and economic sanctions compliance certification with the FDIC within 180 days of approval, with annual certifications due each April 1 thereafter. [[N:&sect; 350.6(c).]] We note that Treasury, through the Financial Crimes Enforcement Network (FinCEN), separately has proposed a rule to further implement the GENIUS Act&rsquo;s requirements regarding AML and economic sanctions compliance and measures to counter illicit finance.[[N:FinCEN, <a rel="noopener noreferrer" href="https://www.fincen.gov/news/news-releases/treasury-proposes-rule-implement-genius-acts-requirements-counter-illicit" target="_blank">Treasury Proposes Rule to Implement the GENIUS Act&rsquo;s Requirements to Counter Illicit Finance</a> (Apr. 8, 2026).]]</p> <h3>Examination, Supervision, and Reporting </h3> <p>The Proposal provides that the FDIC will fulfill its examination responsibilities under the GENIUS Act consistent with the examination timelines established for the parent IDI under &sect; 337.12 of the FDIC&rsquo;s regulations, which generally require examinations at least once every 12 months (extendable to 18 months under conditions).[[N:&sect; 350.7(a).]] The scope of each examination will include an assessment of the nature of the PPSI&rsquo;s operations and financial condition; the financial, operational, technological, and other risks associated with the payment stablecoin; and the PPSI&rsquo;s systems for monitoring and controlling those risks. Under the Proposal, PPSIs must, upon FDIC request, grant prompt and complete access to all officers, directors, employees, agents, and relevant books, records, or documents of any type, including distributed ledgers.[[N:&sect; 350.7(b).]]</p> <p>Under the Proposal&rsquo;s multi-tiered reporting framework, PPSIs would submit a confidential weekly report to the FDIC and quarterly reports of financial condition.[[N:&sect; 350.7(g)-(h).]] PPSIs with more than $50 billion total outstanding issuance value would also need to submit publicly available audited annual financial statements.[[N:&sect; 350.7(j). The Proposal would provide flexibility for non-public entities by permitting the audit to be performed in accordance with generally accepted auditing standards or PCAOB auditing standards. &sect; 350.7(j)(1).]]</p> <h2>Custodian Requirements</h2> <p>The Proposal also establishes regulatory requirements for FDIC-supervised entities &mdash; including insured state nonmember banks, insured state-licensed branches of foreign banks, insured state savings associations, and PPSIs for which the FDIC is the primary regulator &mdash; that provide custodial or safekeeping services for payment stablecoin reserves, payment stablecoins used as collateral, or private keys used to issue payment stablecoins.[[N:&sect; 350.7(j). The Proposal would provide flexibility for non-public entities by permitting the audit to be performed in accordance with generally accepted auditing standards or PCAOB auditing standards. &sect; 350.7(j)(1).]]</p> <p>Custodians would be required to treat payment stablecoin reserves, payment stablecoins used as collateral, private keys, cash, and other property as belonging to the customer and not to the custodian, and take appropriate steps to protect customer property from the claims of the custodian&rsquo;s (and any sub-custodian&rsquo;s) creditors.[[N:&sect; 350.103(a)-(b).]] Custodians would be required to &ldquo;maintain control&rdquo; of customer property, meaning that no other party, including the customer or any custodian affiliate, can control or transfer the payment stablecoin or payment stablecoin reserve without the custodian&rsquo;s affirmative consent.[[N:&sect; 350.103(c).]] Sub-custody is permitted if consistent with applicable law and subject to adequate safeguards and internal controls for oversight of the sub-custodian&rsquo;s compliance.[[N:&sect; 350.103(c)(1).]]</p> <p>Custodians would generally be prohibited from commingling customer assets with their own and would need to separately account for and segregate customer property.[[N:&sect; 350.104(a).]] Three exceptions would apply to the segregation requirement: (1) holding customer property in an omnibus account with other customers&rsquo; assets, provided reserves remain identifiable; (2) holding cash reserves in the form of a deposit liability; and (3) withdrawing customer property to cover routine operational charges such as commissions, taxes, or storage fees.[[N:&sect; 350.104(b)(1)-(3).]]</p> <h2>Deposit Insurance for Payment Stablecoins </h2> <p>The FDIC proposes to amend its deposit insurance rules for payment stablecoins. First, the Proposal would clarify that deposits held as reserves for a payment stablecoin would be insured as corporate deposits of the owner (i.e., the PPSI), but would not be insured on a pass-through basis.[[N:&sect; 330.11(a)(3). All deposits maintained by a PPSI at an IDI would be added together for purposes of the FDIC&rsquo;s deposit insurance limit.]] Second, the Proposal clarifies the treatment of tokenized deposits under the FDI Act by amending its deposit insurance rules to clarify that the application of deposit insurance to deposits does not depend upon the technology or recordkeeping used to record a bank&rsquo;s deposit liabilities.[[N:Specifically, &sect; 330.1(e) would be amended to provide expressly that an IDI&rsquo;s choice of technology or recordkeeping utilized to record deposit liabilities is not relevant to the FDIC&rsquo;s determination of deposit insurance coverage.]]</p> <h2>Comment Period and Next Steps</h2> <p>Given the breadth of the Proposal, a wide range of FDIC-supervised institutions and market participants will need to consider whether the Proposal serves their operational and compliance interests. Comments are due 60 days after publication in the Federal Register. Key areas for comment identified in the Proposal include:</p> <ul> <li><em>Permissibility clarification process</em>: Whether a formal process for clarifying the scope of permissible activities is appropriate</li> <li><em>Yield prohibition</em>: Whether the FDIC&rsquo;s proposed interpretation and implementation of the interest and yield prohibition in Section 4(a)(11) of the GENIUS Act is appropriate</li> <li><em>Credit prohibition</em>: Whether prohibiting PPSIs from extending credit to customers for the purchase of payment stablecoins is appropriate, and whether alternatives would better achieve the act&rsquo;s objectives</li> <li><em>Multi-brand issuance</em>: How to appropriately manage reserve assets for PPSIs that issue multiple payment stablecoin brands, including whether each PPSI should be limited to one brand or whether separate-subsidiary approaches would be preferable</li> <li><em>Redemption timelines</em>: Whether two business days is the appropriate standard for &ldquo;timely&rdquo; redemption, and whether 10% of outstanding issuance value within 24 hours is the appropriate threshold for a significant redemption request</li> <li><em>Capital and backstop requirements</em>: Whether additional objective capital requirements or ratios should be established by regulation, including whether there should be any deductions from regulatory capital for PPSIs</li> <li><em>Diversification requirements</em>: Whether additional limitations on specific reserve asset categories or other concentration restrictions are appropriate</li> <li><em>Custodian reporting</em>: Whether custodians should be subject to revised or new reporting requirements under Subpart B, including whether to revise Schedule RC-T.</li> <li><em>Deposit insurance</em>: Whether additional amendments to the deposit insurance pass-through rules are needed to address tokenized deposit arrangements</li> </ul> <p style="text-align: center;">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <p>If you would like to discuss the FDIC&rsquo;s Proposal or determine whether to comment, please contact any of the authors of this Advisory or your usual firm contact.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{25BEB3E5-0792-4CE3-8055-0834F32ADF28}https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcustom.cvent.com%2FF9E449D691AE483080DAC6296EBC2854%2Ffiles%2Fevent%2F1676fe47e61b4258b842043f6264f1e3%2F163bc58237f642c88e456105fadb35bc.pdf&data=05%7C02%7CJennifer.Omasta%40arnoldporter.com%7C21003ce35fb34446917408dea4743aeb%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639129016296252127%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=ocP8tozqVvWzx4rilzA1S6ty%2BcaJpK08M3qHH00STxI%3D&reserved=0Sarah.Grey@arnoldporter.comWed, 22 Apr 2026 00:00:00 -0500{DE84F8CF-762E-4C87-A65B-9C84E4D51CDD}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/inside-epa-cites-arnold-porter-advisory-on-european-union-pfas-restrictionsA recent <em>Inside EPA</em> article, &ldquo;Lawyers Urge U.S. Industry Comments On Broad EU PFAS Restriction,&rdquo; cited the Arnold &amp; Porter advisory, &ldquo;ECHA Committees Advance Broad PFAS Restriction Under REACH,&rdquo; which was authored by senior counsel Lawrence Culleen; counsels Tom Fox and Judah Prero; and senior attorney Camille Heyboer.Tue, 21 Apr 2026 00:00:00 -0500<p>A recent <em>Inside EPA</em> article, &ldquo;<a rel="noopener noreferrer" href="https://insideepa.com/pfas-news/lawyers-urge-us-industry-comments-broad-eu-pfas-restriction?0=ip_login_no_cache%3D8b62fad3891eca2351ccfd9699f9860b" target="_blank">Lawyers Urge U.S. Industry Comments On Broad EU PFAS Restriction</a>,&rdquo; cited the Arnold &amp; Porter advisory, &ldquo;<a href="/en/perspectives/advisories/2026/03/echa-committees-advance-broad-pfas-restriction-under-reach">ECHA Committees Advance Broad PFAS Restriction Under REACH</a>,&rdquo; which was authored by senior counsel Lawrence Culleen; counsels Tom Fox and Judah Prero; and senior attorney Camille Heyboer.</p> <p>The article discusses a broad proposed restriction on PFAS under consideration in the European Union and the ongoing public consultation process, and highlights the role of industry engagement as EU regulators advance toward the potential adoption of sweeping limits on PFAS use.</p> <p>As quoted in the article, the Arnold &amp; Porter authors emphasized that &ldquo;companies that produce PFAS, and those that rely on PFAS, can no longer afford to merely monitor regulatory developments; they must be driven to critically evaluate their PFAS use across their products and operations, and consider participating in the ongoing consultation process.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://insideepa.com/pfas-news/lawyers-urge-us-industry-comments-broad-eu-pfas-restriction?0=ip_login_no_cache%3De357448f95c18ae54669f0b947e00ec1" target="_blank">Read the full article</a>.</p>{C7FF1B95-5A79-4805-851A-4478DCCD9EB0}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/export-controls-for-startupsTrevor G. Schmitthttps://www.arnoldporter.com/en/people/s/schmitt-trevor-gtrevor.schmitt@arnoldporter.comBell Johnsonhttps://www.arnoldporter.com/en/people/j/johnson-bellbell.johnson@arnoldporter.comU.S. export controls have expanded significantly in recent years, creating growing compliance risks &mdash; and potential strategic advantages &mdash; for startups in high-tech sectors. A new white paper by Arnold &amp; Porter attorneys Trevor Schmitt and Bell Johnson, in collaboration with Michael Hochberg, explains how these regulations impact everything from hiring to product design and investment decisions. It also offers practical guidance on embedding compliance early to mitigate risk and turn regulatory obligations into a competitive edge.Tue, 21 Apr 2026 00:00:00 -0500<p> <p>Over the last decade, the United States has dramatically expanded the scope and enforcement of export controls, driven by heightened geopolitical competition, rapid technological advancement, and national security concerns. For startups operating in high-growth, high-technology sectors, U.S. export controls and sanctions laws now present both <strong>material compliance risk</strong> and a potential <strong>source of strategic advantage</strong> if addressed early.</p> <p>Arnold &amp; Porter attorneys <strong>Trevor Schmitt</strong> and <strong>Bell Johnson</strong> have partnered with technology entrepreneur and strategist <strong>Michael Hochberg</strong> to develop a new white paper addressing one of the most frequently misunderstood &mdash; and increasingly consequential &mdash; areas of risk for early stage companies.</p> <p>The white paper explains how export controls now affect a wide range of startup activities &mdash; from hiring and cloud infrastructure to product design, investor diligence, and international collaboration &mdash; and why overlooking these issues can create serious legal, commercial, and exit risks. At the same time, it offers a pragmatic framework for building compliance into a company&rsquo;s structure early, turning what is often viewed as a burden into a potential competitive advantage.</p> <p>Read the full guide, <a rel="noopener noreferrer" href="https://www.arnoldporter.com/-/media/files/perspectives/publications/2026/04/export-control-for-startups-article.pdf?rev=fae5001b453945d8ad0d23e7197c6576&amp;hash=586FDA5BC9460837C78F46CF22B6B3AC" target="_blank">Compliance as a Catalyst: Turning Export Control Into Competitive Edge</a>.&nbsp;</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{7B6749CF-85AB-48DC-86A1-5B6142B3BA9E}https://www.arnoldporter.com/en/perspectives/news/2026/04/arnold-porter-welcomes-white-collar-partner-eric-snyder-in-new-york<strong>NEW YORK, April 17, 2026</strong> &mdash; Arnold &amp; Porter announced today that Eric Snyder has joined the firm&rsquo;s White Collar Defense &amp; Investigations practice as a partner, resident in New York.Fri, 17 Apr 2026 00:00:00 -0500<p><strong>NEW YORK, April 17, 2026</strong> &mdash; Arnold &amp; Porter announced today that Eric Snyder has joined the firm&rsquo;s White Collar Defense &amp; Investigations practice as a partner, resident in New York.</p> <p>Marcus Asner, co-chair of the firm&rsquo;s White Collar Defense &amp; Investigations practice, said: &ldquo;Eric is an exceptionally talented trial lawyer with a strong record of client successes. He has a business-focused perspective that complements our platform well. Eric&rsquo;s diverse experience makes him a natural fit with our cross-practice and multi-jurisdictional regulatory teams, particularly at a time of increasing enforcement activity and client demand in areas such as trade and tariffs, healthcare, and international finance.&rdquo;</p> <p>Eric is a veteran trial lawyer, representing companies and individuals in a wide range of complex white collar and civil litigation matters, including cases and investigations involving healthcare fraud, tariffs and tax fraud, campaign finance violations, money laundering, Bank Secrecy Act matters, wire, securities and commodities fraud, antitrust, economic espionage, and racketeering claims. Over the course of his career, Eric has served as lead counsel in more than thirty jury trials and argued multiple appeals before the Second Circuit. Before entering private practice, Eric spent 16 years as a federal prosecutor and trial lawyer, including eight years as an Assistant United States Attorney in the Southern District of New York (SDNY). He has also been a trial attorney in the Criminal Division of the U.S. Department of Justice and an Assistant District Attorney in Manhattan. </p> <p>In joining the firm, Eric said: &ldquo;In today&rsquo;s enforcement environment, clients need a team that understands the full regulatory and business landscape. Arnold &amp; Porter&rsquo;s premier white collar practice and exceptionally deep regulatory bench offers strategic, integrated counsel, and I&rsquo;m delighted to be joining the firm.&rdquo; </p> <p>Eric holds both a B.S. and a J.D. from New York University.</p> <p>Eric joins a number of Arnold &amp; Porter colleagues who are SDNY alumni, including Marcus Asner, Eun Young Choi, William Hoffman, Michael Kim Krouse, Nancy Milburn, Michael Rogoff, Craig Stewart, and Baruch Weiss.</p> <h3>About Arnold &amp; Porter</h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{0E91A929-6FA7-42DE-BD49-A984BD8267E9}https://www.arnoldporter.com/en/perspectives/news/2026/04/managing-ip-americas-awards-recognize-arnold-porterArnold &amp; Porter was honored with two awards at the <em>Managing IP</em> Americas Awards, which recognize firms&rsquo; outstanding intellectual property achievements over the past year.&nbsp;Fri, 17 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter was honored with two awards at the <em>Managing IP</em> Americas Awards, which recognize firms&rsquo; outstanding intellectual property achievements over the past year. The firm received an Impact Case of the Year award, was named Copyright Firm of the Year (West), and was shortlisted in several regional, national, and individual categories.</p> <p>Arnold &amp; Porter earned an Impact Case of the Year award for its work in <em>Bartz v. Anthropic</em>, defending against copyright infringement claims brought by a class of book authors. The Arnold &amp; Porter team, led by Doug Winthrop and Joe Farris, secured a favorable ruling that &ldquo;the company&rsquo;s use of purchased and scanned books for AI training constituted fair use &mdash; the first such ruling by a U.S. court on generative AI model training.&rdquo;</p> <p>Arnold &amp; Porter&rsquo;s recognition as Copyright Firm of the Year (West) reflects the firm&rsquo;s success in the Anthropic case and its record of handling complex, high-stakes cases across jurisdictions, advising clients on all aspects of copyright law, and protecting their legal and financial interests worldwide.</p> <p><em>Managing IP</em> Americas Awards 2026 also named the firm and the following partners as finalists in these categories:</p> <ul> <li>United States &ndash; National: Firm of the Year: Copyright</li> <li>United States &ndash; Regional &ndash; Northeast: Firm of the Year: Trademark Disputes</li> <li>United States &ndash; Regional &ndash; Northeast: Firm of the Year: Trademark Prosecution</li> <li>United States: Practitioner of the Year (IP Transactions): Thomas A. Magnani</li> <li>United States: Trademark Prosecutor of the Year &ndash; Northeast: Paul Llewellyn</li> <li>United States: Copyright Practitioner of the Year &ndash; West: Douglas Winthrop</li> <li>United States: Patent Litigator of the Year &ndash; DC Metro: Matthew Wolf</li> </ul>{15960D0C-19A9-422C-A158-F9B5CFFEFAEF}https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fplus.lexis.com%2Fapi%2Fpermalink%2F84aa865f-2f76-4082-a1f0-7df2a3bf0c4c%2F%3Fcontext%3D1530671&data=05%7C02%7CPamela.Brown%40arnoldporter.com%7C8ea6b1d8036f44c96fca08de9f0fe557%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639123087818136751%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=VjSOp63rPm63lX6rc%2FdB3PPBjxOiRO8bTPmVrDZQ4S4%3D&reserved=0Judah Prerohttps://www.arnoldporter.com/en/people/p/prero-judahjudah.prero@arnoldporter.comJulia F. Kindlonhttps://www.arnoldporter.com/en/people/k/kindlon-julia-fjulia.kindlon@arnoldporter.comFri, 17 Apr 2026 00:00:00 -0500{A5B70E8C-DEB1-4036-80A7-806A0442DF17}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/the-midterm-elections-are-coming-prepare-now-for-congressional-investigationsRachel F. Cottonhttps://www.arnoldporter.com/en/people/c/cotton-rachel-frachel.cotton@arnoldporter.comMark Epleyhttps://www.arnoldporter.com/en/people/e/epley-markmark.epley@arnoldporter.comPaul J. Fishmanhttps://www.arnoldporter.com/en/people/f/fishman-paul-jpaul.fishman@arnoldporter.comDavid Hibeyhttps://www.arnoldporter.com/en/people/h/hibey-daviddavid.hibey@arnoldporter.comCatherine A. Brandonhttps://www.arnoldporter.com/en/people/b/brandon-catherine-aCatherine.Brandon@arnoldporter.comOlivia H. Winklerhttps://www.arnoldporter.com/en/people/f/foster-oliviaolivia.winkler@arnoldporter.comIf Democrats regain control of either chamber of Congress in the 2026 midterm elections, we anticipate a substantial increase in congressional investigations beginning in early 2027. Congressional committees wield powerful investigative tools that can expose institutions and individuals to legal, reputational, political, and market risk.Thu, 16 Apr 2026 00:00:00 -0500<p>If Democrats regain control of either chamber of Congress in the 2026 midterm elections, we anticipate a substantial increase in congressional investigations beginning in early 2027. Congressional committees wield powerful investigative tools that can expose institutions and individuals to legal, reputational, political, and market risk.</p> <p>Based on recent public statements by Democratic leaders and letters from Democratic ranking members who are likely to become committee chairs, we expect that a future Democratic majority will likely focus its oversight substantially on private-sector actors &mdash; particularly companies that:</p> <ul> <li>Have engaged substantially with the Trump administration</li> <li>Have received significant government contracts or regulatory benefits during this administration</li> <li>Have participated in controversial administration-backed initiatives</li> <li>Operate in industries central to affordability debates, such as health care, housing, and utilities</li> <li>Relate to consumer protection or concern emerging technologies, such as AI or crypto platforms</li> </ul> <p>Although Democratic committees may inundate the executive branch with demands, the Trump administration will almost certainly resist complying. As a result, committees will be motivated to seek information directly from private entities as a way to more quickly get the information that they seek. </p> <h2>Oversight as the Primary Tool for Congressional Committees in Divided Government</h2> <p>In a divided government, major legislation is unlikely to pass. As a result, oversight investigations become congressional committees&rsquo; principal vehicle for fact finding, driving headlines, supporting or discrediting policy, and advancing political narratives. In the next Congress, committees will be eager to use oversight tools to frame narratives heading into the 2028 presidential cycle.</p> <p>A Democratic House majority would almost certainly prioritize investigations tied to alleged Trump administration cronyism/corruption, cost-of-living and affordability issues, health care, consumer protection, and emerging technologies. Democratic ranking members have already started laying the foundation for such investigations with public and non-public letter requests.[[N: For example, recent Democratic ranking members&rsquo; letters relate to whether the president <a rel="noopener noreferrer" href="https://oversightdemocrats.house.gov/imo/media/doc/20260109letter_to_usoilandgasexecutivesrevenezuela.pdf" target="_blank">consulted oil companies about the military operation in Venezuela</a>, <a rel="noopener noreferrer" href="https://democrats-waysandmeans.house.gov/sites/evo-subsites/democrats-waysandmeans.house.gov/files/evo-media-document/az-drug-deal-25.12.16-final-sig.pdf" target="_blank">pharmaceutical pricing deals with the White House</a>, <a rel="noopener noreferrer" href="https://oversightdemocrats.house.gov/imo/media/doc/garcia_to_instacart_re_pricing.pdf" target="_blank">algorithm use in rising grocery prices</a>, <a rel="noopener noreferrer" href="https://democrats-financialservices.house.gov/uploadedfiles/01.14.2026_ltr_sec_rfcryptoe.pdf" target="_blank">the dismissal of crypto enforcement cases</a>, and <a rel="noopener noreferrer" href="https://democrats-judiciary.house.gov/sites/evo-subsites/democrats-judiciary.house.gov/files/evo-media-document/2025.08.20.pallone-raskin-to-ellison-paramount-skydance-re-merger.pdf" target="_blank">alleged actions to curry favor to win merger approvals</a>.]]</p> <p>Even corporate entities that are not themselves the focus of congressional inquiries may be drawn into these investigations, including as document sources or fact witnesses. Multiple committees may assert overlapping jurisdiction, leading to parallel demands.</p> <h2>Congressional Authority: What Companies Should Understand</h2> <h3><strong>Scope of Committee Investigative Authority</strong></h3> <p>Congress&rsquo; investigative authority is as broad as its jurisdiction under the Constitution to make laws. Courts have consistently recognized that Congress may compel testimony and documents from private parties so long as the inquiry is tied to a valid legislative purpose.</p> <p>Key features relevant to companies:</p> <ul> <li>Committees can issue subpoenas for documents or testimony, including via hearing or deposition. (Only committees have subpoena authority &mdash; individual members and ranking members acting independently of the committee chair do not.)</li> <li>Most House committee rules authorize the chair to issue subpoenas unilaterally.</li> <li>Subpoenas can be burdensome, including demanding documents on sensitive and wide-ranging subjects over a lengthy time period.</li> <li>Investigations need not allege wrongdoing to compel production.</li> </ul> <p>Unlike executive branch investigations, congressional investigations are not governed by firm rules like the Federal Rules of Civil Procedure. Committees set their own rules, which vary and are often more flexible than those to which litigators are accustomed. And of course, there is no neutral arbiter in Congress to adjudicate when committee requests are improper, overly burdensome, or require the production of potentially privileged material.</p> <h3><strong>Enforcement Mechanisms</strong></h3> <p>Counsel for corporate recipients of congressional demands typically negotiate scope and timing. However, if a company refuses to comply, Congress has some enforcement tools:</p> <h4>Criminal Contempt of Congress</h4> <p>Congress may vote to hold a witness in contempt and refer the matter to the U.S. Attorney for the District of Columbia for prosecution.[[N: 2 U.S.C. &sect; 194.]] The specter of criminal liability is a powerful incentive to cooperate with congressional investigations. It is worth noting, however, that a contempt vote requires political will and floor time. As a result, Congress has infrequently pursued contempt, and only a handful of individuals have been held in contempt in recent years. Furthermore, the U.S. Department of Justice (DOJ) may exercise discretion in prosecution and has declined to prosecute at various times, particularly related to executive branch disputes. And, of course, in the current political climate, the Trump administration&rsquo;s DOJ may be less likely to prosecute based on a referral from a Democratic committee chair.</p> <h4>Civil Enforcement</h4> <p>The House or Senate may authorize a civil lawsuit seeking a court order to enforce a subpoena. Although such litigation has been uncommon, the Democrats initiated litigation on several occasions to enforce subpoenas after they regained the House majority in the 2018 midterm elections. If they similarly prevail in 2026, a Democratic House majority may again be willing to pursue litigation to further their oversight agenda.</p> <h4>Political Tools</h4> <p>Congress can also hold hearings, issue public reports, and use media attention to highlight a company&rsquo;s refusal to cooperate in an effort to raise the political and reputational costs of noncompliance.</p> <h4>Practical Steps To Consider Now</h4> <p>Congressional investigations pose legal risks that differ meaningfully from those in civil litigation or regulatory enforcement. For example, documents produced to Congress can be disclosed, subpoena enforcement is political as well as legal, and reputational exposure often precedes formal findings. Given these risks, companies that anticipate the potential for congressional interest should begin preparing now.</p> <ul> <li>Identify a core response team, including outside counsel experienced in congressional investigations, internal subject matter experts, and communications professionals.&nbsp;</li> <li>Identify sensitive subject areas that may be topics of congressional interest. Consider preliminary, privileged reviews of the existing record on those topics to assess risk and to inform legal and communications strategy.&nbsp;</li> <li>Evaluate Hill relationships (particularly with current ranking members and other representatives with local ties to existing corporate operations or personnel) and consider strategic outreach.&nbsp;</li> <li>Incorporate the prospect of congressional investigations into the company&rsquo;s public relations and marketing strategies.&nbsp;</li> <li>Refresh relevant personnel on best practices in internal and external communications, including with respect to public statements, contact with reporters, application of the attorney-client privilege, and written or oral discussions with government personnel.&nbsp;</li> <li>Talk to your congressional investigations counsel about the potential risks and appropriate planning steps given your company&rsquo;s profile.</li> </ul> <h2>Conclusion</h2> <p>A Democratic House majority will significantly expand investigative activity affecting the private sector. Do not wait for a public letter alleging wrongdoing and demanding testimony or documents. Companies that actively prepare will be better positioned to manage the legal and reputational dimensions of congressional scrutiny.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{572997EB-739B-4864-8C6A-463EA6D068D0}https://www.arnoldporter.com/en/perspectives/events/2026/04/ai-in-finance-summit-nyKathleen Reillyhttps://www.arnoldporter.com/en/people/r/reilly-kathleenkathleen.reilly@arnoldporter.comAaron F. Minerhttps://www.arnoldporter.com/en/people/m/miner-aaron-faaron.miner@arnoldporter.comOn April 16, 2026, Arnold &amp; Porter partners Kathleen Reilly and Aaron Miner will speak at the AI in Finance Summit NY, taking place in New York, NY, offering insights on the use of artificial intelligence in financial services and the associated legal, regulatory, and compliance risks.&nbsp;Wed, 15 Apr 2026 00:00:00 -0500<p>On April 16, 2026, Arnold &amp; Porter partners Kathleen Reilly and Aaron Miner will speak at the <a rel="noopener noreferrer" href="https://ny-ai-finance.re-work.co/" target="_blank">AI in Finance Summit NY</a>, taking place in New York, NY, offering insights on the use of artificial intelligence in financial services and the associated legal, regulatory, and compliance risks. The summit brings together industry leaders, technologists, and financial institutions&nbsp;&mdash; including representatives from JPMorgan, Barclays, and Visa &mdash;&nbsp;to explore the practical deployment of AI across a range of financial services applications.</p> <p><strong>AI Adoption Under Scrutiny: Legal &amp; Compliance Risks for Financial Institutions</strong></p> <p>In this session, Kate and Aaron will offer a legal and enforcement-focused perspective on AI risk management in the financial sector, addressing preservation and discoverability of AI prompts and outputs, privilege risks highlighted in emerging case decisions, exposure created by employee use, and data governance concerns. The discussion will also cover disclosure obligations, supervisory expectations, and practical governance measures institutions should implement now as AI adoption accelerates.</p>{CB9F4703-B1D7-45BB-9DAB-CA12CF212342}https://www.arnoldporter.com/en/perspectives/events/2026/04/an-insiders-guide-to-life-sciences-enforcement-one-year-into-the-new-administrationBenjamin C. Mizerhttps://www.arnoldporter.com/en/people/m/mizer-benjamin-cbenjamin.mizer@arnoldporter.comLisa M. Rehttps://www.arnoldporter.com/en/people/r/re-lisa-mlisa.re@arnoldporter.comHoward Sklamberghttps://www.arnoldporter.com/en/people/s/sklamberg-howardhoward.sklamberg@arnoldporter.comBurden H. Walkerhttps://www.arnoldporter.com/en/people/w/walker-burden-hburden.walker@arnoldporter.comThis webinar will provide an insider&rsquo;s account of how such investigations are handled within DOJ and HHS &mdash; from initiating an investigation to the filing of a complaint or indictment through the resolution of the matter &mdash; and how the policies, priorities, and procedures for investigating and enforcing violations of the False Claims Act, the Food, Drug, and Cosmetic Act, and other relevant statutes have shifted over the Administration&rsquo;s first year.&nbsp;&nbsp;Wed, 15 Apr 2026 00:00:00 -0500<p>The first year of the Trump Administration has brought significant changes to the Department of Justice (DOJ) and the Department of Health and Human Services (HHS), the two federal agencies with primary responsibility for investigating and enforcing alleged violations of federal law arising from the life sciences industry. This webinar will provide an insider&rsquo;s account of how such investigations are handled within DOJ and HHS &mdash; from initiating an investigation to the filing of a complaint or indictment through the resolution of the matter &mdash; and how the policies, priorities, and procedures for investigating and enforcing violations of the False Claims Act, the Food, Drug, and Cosmetic Act, and other relevant statutes have shifted over the Administration&rsquo;s first year. </p>{5188005A-38F0-4543-93AA-0AC54C44369A}https://www.arnoldporter.com/en/perspectives/news/2026/04/globest-recognizes-ali-krimmer-as-a-women-of-influence-rising-starArnold &amp; Porter Real Estate partner Ali Krimmer has been named to <em>GlobeSt.com</em>'s 2026 "Rising Star" list as part of its Women of Influence awards, which &ldquo;recognize female commercial real estate professionals for their remarkable achievements, including their personal impact on the market and contributions driving the industry to new heights.&rdquo;&nbsp;Wed, 15 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter Real Estate partner Ali Krimmer has been named to <em>GlobeSt.com</em>'s 2026 "Rising Star" list as part of its Women of Influence awards, which &ldquo;recognize female commercial real estate professionals for their remarkable achievements, including their personal impact on the market and contributions driving the industry to new heights.&rdquo; The Rising Star list highlights women who &ldquo;demonstrate determination to rise to the top early in their careers and are on track to become high achievers in the industry.&rdquo;</p> <p>Ali advises private equity groups, hotel operators, institutional investors, developers, family offices, and opportunity funds on acquisitions, financings, and dispositions of lodging and hospitality properties, shopping centers, raw land, condominium projects, office buildings, and mixed-use projects located throughout the United States. Ali also represents investment banks, debt funds, and institutional lenders in the origination, restructuring, and workouts of mortgage and mezzanine loans. </p>{466EA70D-D740-42B0-AB88-577C5B43B2CC}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/sec-approves-nasdaq-proposal-to-expand-trading-hoursSara Adlerhttps://www.arnoldporter.com/en/people/a/adler-sarasara.adler@arnoldporter.comJoel I. Greenberghttps://www.arnoldporter.com/en/people/g/greenberg-joel-ijoel.greenberg@arnoldporter.comOn April 10, 2026, and consistent with its previous approval of similar proposals by other national exchanges (24X and NYSE Arca), the SEC approved the Nasdaq Stock Market (Nasdaq) proposal to extend its trading hours for NMS stocks and exchange-traded products (ETPs) from 16 hours a day, five days a week, to 23 hours a day, five days a week.Wed, 15 Apr 2026 00:00:00 -0500<p>On April 10, 2026, and consistent with its previous approval of similar proposals by other national exchanges (24X and NYSE Arca), the SEC <a rel="noopener noreferrer" href="https://www.sec.gov/files/rules/sro/nasdaq/2026/34-105199.pdf" target="_blank">approved</a> the Nasdaq Stock Market (Nasdaq) proposal to extend its trading hours for NMS stocks and exchange-traded products (ETPs) from 16 hours a day, five days a week, to 23 hours a day, five days a week. The extended hours are meant to address a growing interest in trading during overnight hours, particularly among investors located in other time zones, and to compete with trading platforms that provide access to markets for digital assets on a 24/7 basis.</p> <p>Currently, Nasdaq has three daily weekday trading sessions: (1) a Pre-Market Hours session from 4:00 AM to 9:30 AM ET; (2) a Regular Market Hours session from 9:30 AM to 4:00 PM ET; and (3) a Post-Market Hours session from 4:00 PM to 8:00 PM ET. During the current Pre-Market and Post-Market sessions, Nasdaq offers more limited trading functionality than it does during the Regular Market Hours session, and trading during that period is subject to different regulation.[[N: For example, outside of &ldquo;regular trading hours,&rdquo; only certain aspects of the SEC&rsquo;s Regulation National Market System (NMS) apply. In addition, Nasdaq does not offer certain order types during these trading sessions, such as unpriced orders and pegged orders, and liquidity tends to be lower than during regular trading hours.]] In addition, Nasdaq members must disclose to customers that extended hours trading involves material risks. </p> <p>Going forward, Nasdaq will conduct trading 23 hours per day, five days per week in two trading sessions: (1) the separate Pre-Market Hours, Regular Market Hours, and Post-Market Hours sessions will be combined into a Day Session (commencing at 4:00 AM ET and ending at 8:00 PM ET); and (2) a new Night Session, commencing at 9:00 PM ET and ending at 4:00 AM ET the next calendar day. Between 8:00 PM and 9:00 PM ET on each weekday, Nasdaq will pause trading to conduct maintenance, testing, and to process those corporate actions, such as mergers, stock splits, and dividends, that will become effective the following trading day. The pause will also allow for market participants to process and clear trades before proceeding to a new trading day. The trading week will commence with a Night Session on Sunday nights at 9:00 PM ET, and will end at the conclusion of the Day Session on Friday. On a day when Nasdaq is closed for business, the closure will be effective as of 8:00 PM ET on the calendar day prior to the closure date, and the market will reopen at 9:00 PM ET on the closure date, unless the closure date is a Friday, in which case the market will reopen on Sunday evening at 9:00 PM ET. On a day when Nasdaq closes the market early, it will resume trading at 9:00 PM ET on the same calendar day, unless again, the early closure date is a Friday, in which case the trading will resume on Sunday evening at 9:00 PM ET.</p> <p>During the Day Session, all existing requirements, procedures, behaviors, and processes, including those governing the opening and closing crosses, halts, routing, order types, attributes, times-in-force, order entry protocols, connectivity, market data, etc., all will continue in their current form, with minor conforming changes.[[N: For example, order type availability and behavior in the Pre-Market Hours of 4:00 AM to 9:30 AM ET will remain the same, and limits on order type availability in Post-Market trading will continue to apply.]] The Night Session will be similar to the existing Post-Market Hours and Pre-Market Hours trading sessions, in that it will feature limited functionality (to reflect that only certain rules of Regulation NMS apply) and reduced trading activity. In addition, only limit orders (which would be subject to limit order protection to prevent orders at prices outside of pre-set standard limits) would be permitted during the Night Session, and unpriced orders would not be permitted. However, the Night Session will differ from Post-Market Hours and Pre-Market Hours trading in several respects, including: (1) that a separate Night Session port will be required; (2) specified trading halt rules will apply;[[N: During the Night Session, if the primary listing market, including Nasdaq when Nasdaq is the primary listing market, determines to halt trading, or delay commencement of trading, in one of its listed securities in accordance with such primary listing market&rsquo;s rules (e.g., with regard to material corporate actions with respect to a particular security (i.e., corporate actions that may affect a stock price, stock additions and subtractions, and similar actions) or material news announcements), Nasdaq will halt trading, or delay the commencement of, trading (as applicable), in such security until&nbsp;trading resumes on the primary listing market for the security. Further, if trading in a security is halted by the primary listing market, including Nasdaq when Nasdaq is the primary listing market, before the commencement of the Night Session and continuing into the Night Session, or during the Night Session, Nasdaq will halt trading in the security until trading resumes on the primary listing market for the security.]] and (3) additional risk disclosures will be required. The proposal also includes various conforming, clarifying, and non-substantive changes. </p> <p>The following aspects of Nasdaq&rsquo;s trading system and procedures will not change when trading equities and ETPs on a 23/5 basis commences (as described below): (1) listing rules; (2) membership rules; (3) rules of conduct; (4) market maker obligations; (5) ranking, display, priority, and decrementation rules; (6) disciplinary rules and enforcement; (7) opening and closing crosses; and (8) clearly erroneous protections. </p> <p>Nasdaq will not commence operation of the Night Session prior to a filing of a proposed rule change to confirm that it is able to comply with its obligations during the Night Session and that the Equity Data Plans (effective national market system plans that govern the collection, consolidation, processing, and dissemination of equity market data for NMS stocks and oversee securities information processors) are prepared to collect, consolidate, process, and disseminate quotation and transaction information during the Night Session.</p> <p>Nasdaq will address any impact of the new rules on its schedule of credits and fees, and its incentive programs, in a subsequent rule filing.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{9CFF82F2-7941-481B-90D5-4320A0AA0218}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/supreme-court-narrows-secondary-copyright-liability-in-coxThomas A. Magnanihttps://www.arnoldporter.com/en/people/m/magnani-thomas-atom.magnani@arnoldporter.comRyan M. Nishimotohttps://www.arnoldporter.com/en/people/n/nishimoto-ryan-mryan.nishimoto@arnoldporter.comHaley Marie Loughranhttps://www.arnoldporter.com/en/people/l/loughran-haley-mhaley.loughran@arnoldporter.com In <em>Cox Communications, Inc. v. Sony Music Entertainment</em>,<span>&nbsp;the Supreme Court significantly narrowed the standard for contributory copyright infringement. This will have profound implications for a wide range of online businesses, including generative artificial intelligence (AI) companies and social media networks.</span>Wed, 15 Apr 2026 00:00:00 -0500<p>In <em>Cox Communications, Inc. v. Sony Music Entertainment</em>, the Supreme Court significantly narrowed the standard for contributory copyright infringement. This will have profound implications for a wide range of online businesses, including generative artificial intelligence (AI) companies and social media networks. </p> <h2>Background: <em>Sony</em> and <em>Grokster</em> Framework</h2> <p>The Supreme Court&rsquo;s recent decision in Cox builds on two foundational cases governing when service providers may be held secondarily liable for copyright infringement committed by their users. In <em>Sony Corp. of America v. Universal City Studios, Inc.</em>, the Court held that the distributor of the Betamax video tape recorder could not be held liable simply because the device could be used to infringe, given that it was also &ldquo;capable of substantial noninfringing uses.&rdquo; 464 U.S. 417, 456 (1984). In <em>Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.</em>, by contrast, the Court recognized liability where a technology provider, a file-sharing software company, affirmatively induced infringement by promoting and marketing its product as a tool to infringe copyrights. 545 U.S. 913, 941 (2005). Together, these cases distinguish between neutral products or services and those designed or promoted for infringement. <em>Cox</em> reinforces &mdash; and sharpens &mdash; this distinction. </p> <h2>The <em>Cox</em> Decision</h2> <p>In <em>Cox</em>, the Court reversed a decision that imposed contributory copyright liability on an internet service provider based on its knowledge that some subscribers were repeatedly using its service to infringe copyrighted works. The Court held that a service provider is contributorily liable only if it intended its service to be used for infringement, and intent can be shown only where the provider affirmatively induced infringement or offered a service tailored to infringement. </p> <p>Per the Court, a provider induces infringement where it actively encourages infringement through specific acts, such as marketing or promoting the service for infringing uses. A service is tailored to infringement where it is not &ldquo;capable of &lsquo;substantial&rsquo; or &lsquo;commercially significant&rsquo; noninfringing uses.&rdquo; Mere knowledge that users are infringing, even coupled with insufficient action to prevent the infringement, is not enough.</p> <p>Sony argued that the Digital Millennium Copyright Act&rsquo;s (DMCA) safe harbor for online service providers would be rendered meaningless if internet service providers (ISPs) faced no secondary liability for knowingly continuing to serve infringing subscribers because there would be nothing for the safe harbor to protect against. The Court rejected that argument, explaining that the DMCA does not itself impose liability but rather creates defenses from liability for providers who meet its requirements. Critically, the DMCA expressly provides that failure to qualify for the safe harbor does bear adversely on a provider&rsquo;s separate defense that its conduct is not infringing in the first place.</p> <p>Applying these principles to the facts, the Court emphasized that the record did not support a finding of intent. There was no evidence that Cox induced infringement &mdash; it did not promote or market its internet service as a tool for infringement. To the contrary, Cox had policies prohibiting infringement and took steps such as sending warnings, suspending service, and, in some cases, terminating subscribers. Nor was Cox&rsquo;s service tailored to infringement: providing internet access is &ldquo;capable of substantial or commercially significant noninfringing uses&rdquo; and widely used for lawful purposes. The Court rejected the lower court&rsquo;s reliance on Cox&rsquo;s knowledge of repeated infringement and its alleged failure to more aggressively terminate users, reiterating that knowledge alone &mdash; or knowledge coupled with inaction &mdash; does not establish contributory liability.</p> <h2>Implications for AI Companies and Digital Service Providers</h2> <p>The holding in Cox has potentially significant implications for providers of digital tools that can be used lawfully or unlawfully, including AI developers. Where users employ an AI tool to generate infringing outputs and plaintiffs seek to hold the developer secondarily liable for that conduct, Cox reinforces that offering a service capable of substantial lawful uses does not by itself establish contributory liability.</p> <p>As with internet access in Cox and the video tape recorder in Sony, AI platforms and similar general purpose tools have substantial lawful uses. If a provider offers a tool with substantial legitimate uses and does not market, design, or otherwise steer it toward infringement, the fact that some users may employ it to reproduce or generate substantially similar versions of copyrighted material should not, by itself, establish contributory liability. The Court&rsquo;s rejection of liability based on knowledge alone further underscores that awareness of user misuse is not enough; the inquiry instead focuses on whether the provider encouraged infringement or offered a service incapable of substantial noninfringing uses.</p> <p>At the same time, <em>Cox</em> makes clear that contributory liability remains possible where a provider&rsquo;s conduct goes beyond neutral provision of a service. Inducement remains a viable basis for liability where a provider promotes or markets its service for infringing uses or otherwise affirmatively encourages such activity. Similarly, a service may give rise to liability if it is incapable of substantial or commercially significant noninfringing uses. As a result, product design choices, internal and external messaging, and how a service is presented to users will be critical considerations in assessing liability risk, as these factors bear directly on whether a provider induced infringement or offered a service whose lawful utility is merely incidental.</p> <h2>Implications for Copyright Owners</h2> <p>For copyright owners, the decision narrows the path to secondary liability claims against service providers. The decision forecloses the theory &mdash; previously recognized in the Fourth Circuit &mdash; that knowledge of infringement coupled with a failure to take stronger enforcement action is sufficient to establish contributory liability. After <em>Cox</em>, copyright owners must show that a provider affirmatively induced infringement or offered a service incapable of substantial noninfringing uses, a standard that will be difficult to meet as applied to most general-purpose platforms and technologies. </p> <p>However, the Court did not disturb inducement liability, and copyright owners may still focus on product design, marketing, internal communications, and other evidence showing that a provider encouraged infringement or designed its service in a way that makes infringement its defining or intended function. If an AI company were to promote infringing uses or build workflows specifically for unauthorized reproduction of protected expression, copyright owners would still have a meaningful path to argue contributory liability. <em>Cox </em>narrows the scope of contributory liability, but it does not eliminate liability where a provider can be shown to have affirmatively encouraged infringement or offered a service incapable of substantial noninfringing uses.</p> <h2>Concurrence</h2> <p>In a concurrence, Justice Sotomayor, joined by Justice Jackson, agreed that Cox was not liable but sharply criticized the majority for artificially limiting secondary liability to inducement and tailoring theories. In their view, <em>Grokster </em>expressly preserved other common-law theories of secondary liability, including aiding and abetting, and the majority forecloses them without adequate explanation &mdash; and in so doing renders the DMCA safe harbor effectively obsolete. Applying aiding-and-abetting principles, Justice Sotomayor concluded that Cox nonetheless lacked the requisite intent because it knew only which connection was used to infringe, not which specific user among potentially many was responsible. The majority&rsquo;s two-prong framework remains controlling, but the concurrence leaves open the possibility that future plaintiffs may pursue aiding-and-abetting theories in appropriate cases. </p> <h2>Bottom Line</h2> <p><em>Cox</em> clarifies &mdash; and in the Fourth Circuit, corrects &mdash; the standard for holding service providers liable for users&rsquo; infringing conduct, reinforcing that knowledge and inaction alone cannot establish contributory liability. For AI and other technology companies, the decision strengthens defenses for services with substantial lawful uses. For copyright owners, viable claims will continue to center on inducement and whether a service is incapable of substantial noninfringing uses. The key considerations going forward will be how a service is promoted, what internal and external evidence shows about a provider&rsquo;s intent, and whether the service&rsquo;s lawful utility is genuine and substantial &mdash; not simply whether it can be turned to infringing ends by some users.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{4B46BCDE-40D5-4B0E-B2EC-F34B88E29DE0}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/cpsc-notification-requirementsEric A. Rubelhttps://www.arnoldporter.com/en/people/r/rubel-eric-aEric.Rubel@arnoldporter.comMichelle F. Gillicehttps://www.arnoldporter.com/en/people/g/gillice-michellemichelle.gillice@arnoldporter.comS. Michael Gentinehttps://www.arnoldporter.com/en/people/g/gentine-s-michaelmike.gentine@arnoldporter.comJessica L. Wanghttps://www.arnoldporter.com/en/people/w/wang-jessica-ljessica.wang@arnoldporter.comJessica D. Gilberthttps://www.arnoldporter.com/en/people/g/gilbert-jessicajessica.gilbert@arnoldporter.comKelsie Sicinskihttps://www.arnoldporter.com/en/people/s/sicinski-kelsiekelsie.sicinski@arnoldporter.comThe U.S. Consumer Product Safety Commission (CPSC or the Commission) is a small federal agency with a big job: protecting consumers from unreasonable risks of injury associated with the use of thousands of types of consumer products.Wed, 15 Apr 2026 00:00:00 -0500<p>The U.S. Consumer Product Safety Commission (CPSC or the Commission) is a small federal agency with a big job: protecting consumers from unreasonable risks of injury associated with the use of thousands of types of consumer products. The most recent appropriation for CPSC was for fiscal year (FY) 2024 for $150.975 million, and since then the agency has been funded through Continuing Resolutions. While a current employee count is not available, the FY 2026 budget request calls for salaries for 459 full-time employees (FTEs), down from about 545 employees in FY 2024. CPSC is tiny by federal government standards in terms of budget and employees, and the agency uses safety data submitted by companies pursuant to the notification requirements under Section 15 of the Consumer Product Safety Act (CPSA), detailed below, to help carry out the agency&rsquo;s mandate.</p> <p>The Commission has submitted for FY 2026 a budget request of $135 million, which is almost $16 million &mdash; or about 10% &mdash; lower than its FY 2025 funding level.4 CPSC&rsquo;s FY 2026 Performance Budget Request to Congress notes that the reduced funding level aligns with a proposal in President Trump&rsquo;s FY 2026 Budget to reorganize and transfer the functions of the CPSC to a division of the U.S. Department of Health and Human Services. Transfer of CPSC&rsquo;s functions would take an act of Congress, and CPSC&rsquo;s Budget Request recognizes that transfer would be &ldquo;[c]ontingent upon enactment of authorizing legislation.&rdquo; As of this writing, no full appropriations bill has been enacted for FY 2026, and most of the federal government, including CPSC, continues to be operating on a Continuing Resolution.&nbsp;</p> <p>Congress created CPSC as an independent commission, which means that it does not report to the President either directly or through any department or agency of the federal government. By statute, the CPSC can have up to five Commissioners, one of whom serves as Chair, and only three of whom can be from the same political party. CPSC&rsquo;s Chair and Commissioners are appointed by the President for seven-year terms with the advice and consent of the Senate.&nbsp;</p> <p>At the time of this writing, the Commission has only one Commissioner, Acting Chairman Peter Feldman (Republican). In May 2025, President Trump removed CPSC&rsquo;s three Democratic Commissioners without citing cause.7 The remaining Commissioner, Republican Douglas Dziak, resigned in August 2025 after voting, with Feldman, to delegate virtually all Commission authority to the Chairman, thereby attempting to address the Commission&rsquo;s loss of a quorum. The legality of the delegation has not, to date, been addressed by a court. Feldman&rsquo;s term ends in October 2026, and he could serve for up to an additional year without being renominated by the President and confirmed by the Senate.&nbsp;</p> <p>This Desk Reference first explains the reporting requirements imposed by Section 15 of the CPSA, including the broad scope of CPSC&rsquo;s jurisdiction, and then discusses routes to a product safety recall, reporting and recall trends, and civil and criminal penalties for late reporting.</p>{3FAA058D-17AB-4631-9C47-54E25DA52597}https://www.law.com/2026/04/15/ai-products-and-the-challenges-of-consumer-fraud-class-actions/?slreturn=20260415121021david.kouba@arnoldporter.comWed, 15 Apr 2026 00:00:00 -0500{D12ED3CD-EA3E-4754-8716-CDB9D75865D7}https://www.arnoldporter.com/en/perspectives/publications/2026/04/antitrust-agency-insights-developments-at-the-us-antitrust-enforcement-agencies-first-quarter-2026Sonia Kuester Pfaffenrothhttps://www.arnoldporter.com/en/people/p/pfaffenroth-soniasonia.pfaffenroth@arnoldporter.comMatthew Tabashttps://www.arnoldporter.com/en/people/t/tabas-matthewmatthew.tabas@arnoldporter.comSummer Perezhttps://www.arnoldporter.com/en/people/p/perez-summersummer.perez@arnoldporter.comIn the first quarter of 2026, the U.S. antitrust agencies, the U.S. Department of Justice, Antitrust Division (DOJ), and the Federal Trade Commission (FTC or Commission), signaled a continued focus on enforcement relating to the sharing of competitively-sensitive information as well as a renewed focus on the importance of guidance addressing how competitors may collaborate without running afoul of the antitrust laws.Wed, 15 Apr 2026 00:00:00 -0500<h2>Letter From the Editors</h2> <h3>Antitrust Agencies&rsquo; Focus on Competitor Collaborations</h3> <p>In the first quarter of 2026, the U.S. antitrust agencies, the U.S. Department of Justice, Antitrust Division (DOJ), and the Federal Trade Commission (FTC or Commission), signaled a continued focus on enforcement relating to the sharing of competitively-sensitive information as well as a renewed focus on the importance of guidance addressing how competitors may collaborate without running afoul of the antitrust laws.</p> <p>On February 23, 2026, the DOJ and FTC jointly announced a public inquiry seeking input on potential new guidance governing collaborations among competitors to replace long-standing guidance withdrawn at the end of the previous administration.[[N: Press Release, DOJ, <a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-and-federal-trade-commission-seek-public-comment-guidance-business" target="_blank">Justice Department and Federal Trade Commission Seek Public Comment for Guidance on Business Collaborations</a> (Feb. 23, 2026).]] The joint inquiry aims to develop guidance concerning &ldquo;the range of collaborations utilized to drive innovation and promote competition in the modern economy.&rdquo;[[N: Id.]] Some of the specific areas of inquiry on which the agencies are seeking input include joint licensing agreements, conditional dealing, algorithmic pricing, information and data sharing, and labor collaborations. </p> <p>The agencies last issued joint collaboration guidance in April 2000 with the Antitrust Guidelines for Collaborations Among Competitors (the 2000 Guidelines).[[N: FTC and DOJ, <a rel="noopener noreferrer" href="https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf" target="_blank">Antitrust Guidelines for Collaborations Among Competitors</a> (April 2000).]] The 2000 Guidelines were withdrawn in December 2024.[[N: FTC and DOJ, <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/v250000collaborationguidelineswithdrawalstatement.pdf" target="_blank">Justice Department and Federal Trade Commission Withdraw Guidelines for Collaboration Among Competitors</a> (Dec. 11, 2024).]] The agencies at the time explained that the 2000 Guidelines failed to reflect significant case law on competitor collaborations and did not address the competitive effects of modern business combinations or rapidly evolving technologies such as artificial intelligence and algorithmic pricing.[[N: Id.]]</p> <p>Current leadership at both agencies has emphasized the need for clear guidance to provide businesses with the predictability and direction they need to collaborate and grow while avoiding anticompetitive conduct that risks raising prices or stifling innovation. FTC Chair Andrew Ferguson, who dissented from the withdrawal of the 2000 Guidelines in 2024,[[N: <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/collaborations-guidance-withdrawal-ferguson_-statement.pdf" target="_blank">Dissenting Statement of Commissioner Andrew N. Ferguson Regarding the Withdrawal of the Antitrust Guidelines for Collaborations Among Competitors</a> (Dec. 11, 2024).]] stated that the decision &ldquo;left millions of businesses in the dark,&rdquo; arguing that &ldquo;in an everchanging economy, businesses need transparency and predictability from enforcers more than ever.&rdquo;[[N: Press Release, DOJ,<a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-and-federal-trade-commission-seek-public-comment-guidance-business" target="_blank"> Justice Department and Federal Trade Commission Seek Public Comment for Guidance on Business Collaborations</a> (Feb. 23, 2026).]] More recently, DOJ Acting Assistant Attorney General (AAG) Omeed Assefi agreed that clear guidance is needed: &ldquo;Replacing the withdrawn guidelines is key to promoting certainty, allowing American businesses to work together effectively and lawfully, and enabling the private antitrust bar to enhance compliance in this area.&rdquo;[[N: Id.]] Acting AAG Assefi underscored that &ldquo;procompetitive collaborations are not only permissible but also encouraged in a complex and dynamic economic environment.&rdquo;[[N: Id.]]</p> <p>The call for clear collaboration guidance comes as the federal antitrust agencies maintain a focus on information-sharing between competitors. The DOJ recently filed two statements of interest in cases involving a third-party benchmarking service. On March 25, 2026, the DOJ filed a statement of interest in <em>In re Turkey Antitrust Litigation</em>, a case alleging that turkey producers illegally exchanged confidential price data through a platform called Agri Stats and used the information to cut the supply of birds and raise prices to artificially high levels.[[N: <a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1432836/dl?inline" target="_blank">Statement of Interest of the United States of America</a>, <em>In re Turkey Antitrust Litigation</em>, No. 1:19-cv-08318 (N.D. Ill. Dec 19, 2019), Dkt. No. 1730.]] The complaint included a rule-of-reason claim based on an alleged conspiracy to exchange competitively sensitive information. The DOJ took no position on the merits. The DOJ&rsquo;s statement rejected defendants&rsquo; suggestion that plaintiffs must provide evidence of individualized or non-aggregated data exchanged by competitors, emphasizing that such proof is unnecessary where the circumstances as a whole indicate a tendency for anticompetitive harm. The DOJ further disagreed with defendants&rsquo; contention that an information‑exchange claim requires direct econometric evidence of market‑wide price increases through a &ldquo;before‑and‑after&rdquo; regression analysis, reasoning that such a requirement would improperly heighten the standard for what qualifies as direct evidence and improperly discount the indirect method of proof, which does not require proof of direct anticompetitive effects.</p> <p>On February 27, 2026, the DOJ filed a statement of interest in <em>In re Frozen Potato Products Litigation</em>, a case alleging that producers of frozen potato products harmed consumers by exchanging competitively sensitive information through Circana&rsquo;s benchmarking service PotatoTrack.[[N: <a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1429466/dl" target="_blank">Statement of Interest of the United States of America</a>, <em>In re Frozen Potato Products Antitrust Litigation</em>, No. 1:24-cv-11801 (N.D. Ill. Nov. 15, 2024), Dkt. No. 266.]] The DOJ took no position on the merits but argued that concerted action may exist where competitors share information with the mutual expectation of reciprocity, regardless of whether a third party facilitated the information exchange. The statement also pushed back on the idea that, where the exchanged information is aggregated and backward-looking, it is incapable of generating anticompetitive effects. With respect to the plaintiffs&rsquo; standalone information-sharing claim, the DOJ articulated a position that, in theory, indirect evidence may be used to show the defendants collectively have market power and that the alleged information sharing is likely to harm competition, even without proof of an agreement to fix prices. In both statements, the DOJ reiterated that there is no special legal presumption that an information exchange is reasonable, other than the preponderance of the evidence standard applicable to all elements of the claim.</p> <p>These statements of interest by the DOJ continue a trend across both the first Trump and Biden administrations of the DOJ using amicus briefs and statements of interest to clarify its positions on information sharing. The DOJ has argued that information sharing alone can violate Section 1, even without proof of an agreement to fix prices; and information exchanges that report only aggregated data can violate the antitrust laws, even where the information is not linked to specific competitors.[[N: <a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1371806/dl" target="_blank">Statement of Interest of the United States</a>, <em>In re Pork Antitrust Litigation</em>, No. 0:18-cv-01776-JRT-JFD (D. Minn. June 28, 2018), Dkt. No. 2616.]] For a standalone information-sharing claim, DOJ has stated that regardless of whether an agreement can be inferred under a plus-factors-style analysis, a distinct theory of concerted action is available when parties manifest acceptance of an invitation for collective action.[[N: <a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1404496/dl" target="_blank">Statement of Interest of the United States</a>, <em>In re Granulated Sugar Antitrust Litigation</em>, No. 0:24-md-03110-JWB-DTS (D. Minn. Jun. 7, 2024), Dkt. No. 415.]] With regards to algorithmic pricing, the DOJ has argued that even when not binding, competitors&rsquo; joint use of pricing algorithms can have anticompetitive effects by creating a baseline for competitive decisions and can &ldquo;distort the competitive process by maximizing price increases, minimizing price decreases, aligning prices among competitors, creating price floors, discouraging discounts, or increasing sellers&rsquo; pricing power.&rdquo;[[N: <a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1376121/dl" target="_blank">Brief for the United States as Amicus Curiae in Support of Plaintiffs-Appellants</a>, <em>Richard Gibson, et al. v. Cendyn Group, LLC, et al.</em>, No. 24-3576 (9th Cir. Jun. 7, 2024), Dkt. No. 28.1.]] While these statements are not necessarily determinative of future guidance, they offer insight into how the agencies are likely to approach issues such as algorithmic collusion, benchmarking, and information exchanges among competitors.</p> <p>Despite the uncertainty in this area, there are measures companies can undertake to mitigate risk. Companies should conduct due diligence on all software and platforms that involve sharing competitively sensitive information outside the organization, especially to any competitor companies. For any benchmarking services, companies should evaluate what inputs are used by the software or platform and consider whether the output data implicates independent decision-making. Lastly, companies should consider seeking antitrust counsel to advise on ways to manage risk and ensure that antitrust compliance programs account for the agencies&rsquo; current approach.</p> <h3>FTC to Litigate Merger Challenges Exclusively in Federal Court</h3> <p>In recent remarks at George Mason University&rsquo;s Antonin Scalia Law School Antitrust Symposium, FTC Chair Ferguson stated that the agency will pursue merger challenges exclusively in federal court, abandoning its longstanding practice of authorizing staff to seek a preliminary injunction in federal court while initiating proceedings before the FTC&rsquo;s in-house administrative law judges.[[N: See David Hatch, <a rel="noopener noreferrer" href="https://pipeline.thedeal.com/article/0000019c-9f22-d717-a1fe-bf6bd8ab0000/deal-news/regulation/ftc-favors-pharmaceutical-divestitures-over-grocery-remedies" target="_blank">FTC Favors Pharmaceutical Divestitures Over Grocery Remedies</a>, <em>The Deal</em> (Feb. 27, 2026); Ilana Kowarski, <a rel="noopener noreferrer" href="https://content.mlex.com/#/content/1715039/us-ftc-chairman-commits-to-bringing-deal-challenges-only-in-federal-courts" target="_blank">US FTC chairman commits to bringing deal challenges only in federal courts</a>, <em>MLex</em> (Feb. 20, 2026); Matthew Perlman, <a rel="noopener noreferrer" href="https://www.law360.com/competition/articles/2444452" target="_blank">FTC Chair Wants Merger Cases Filed Only In Fed. Court</a>, <em>Law360 </em>(Feb. 20, 2026).]] This two-track approach involves the FTC simultaneously seeking a preliminary injunction in federal court to temporarily stop deals from closing, while also litigating the merits in its in-house administrative tribunal.</p> <p>Chair Ferguson&rsquo;s position was previewed in the FTC&rsquo;s December 2025 decision to challenge Henkel AG &amp; Co.&rsquo;s proposed acquisition of Liquid Nails exclusively in federal court without simultaneously pursuing an administrative court proceeding.[[N: Press Release, FTC, <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/12/ftc-sues-stop-loctite-liquid-nails-construction-adhesive-merger" target="_blank">FTC Sues to Stop Loctite, Liquid Nails Construction Adhesive Merger</a> (Dec. 11, 2025).]] In his speech, Chair Ferguson justified this shift by pointing to increased institutional credibility and the ability to avoid constitutional challenges to the FTC&rsquo;s administrative process.[[N: See, e.g., <em>Intuit, Inc. v. Fed. Trade Comm&rsquo;n</em>, No. 24-60040, 2026 WL 787527 (5th Cir. Mar. 20, 2026) (finding that the 1914 FTC Act involves private rights that must be adjudicated in an Article III court).]] &ldquo;There&rsquo;s a lot more credibility in the agency&rsquo;s enforcement when the final determiner of whether the law has been violated is not the person making the accusation,&rdquo; Chair Ferguson said. &ldquo;No man ought to sit in judgement of his own case.&rdquo;[[N: See David Hatch, <a rel="noopener noreferrer" href="https://pipeline.thedeal.com/article/0000019c-9f22-d717-a1fe-bf6bd8ab0000/deal-news/regulation/ftc-favors-pharmaceutical-divestitures-over-grocery-remedies" target="_blank">FTC Favors Pharmaceutical Divestitures Over Grocery Remedies</a>, <em>The Deal</em> (Feb. 27, 2026); see also Matthew Perlman, <a rel="noopener noreferrer" href="https://www.law360.com/competition/articles/2444452" target="_blank">FTC Chair Wants Merger Cases Filed Only In Fed. Court</a>, <em>Law360</em> (Feb. 20, 2026).]] He contrasted this approach with that of the DOJ, which relies solely on the federal courts to resolve merger challenges. Chair Ferguson stated that the FTC should do the same: &ldquo;My view is we ought to just litigate this in federal court, both to avoid the constitutional challenges every time you bring a merger case ... and to align with the standard that the Department of Justice has to comply with in order to get an injunction of a merger.&rdquo;[[N: Matthew Perlman, <a rel="noopener noreferrer" href="https://www.law360.com/competition/articles/2444452" target="_blank">FTC Chair Wants Merger Cases Filed Only In Fed. Court</a>, <em>Law360</em> (Feb. 20, 2026).]]</p> <p>FTC preliminary injunction proceedings have long looked much like full trials on the merits. As a practical matter, Chair Ferguson also acknowledged that the preliminary injunction decision is usually the &ldquo;end of the question,&rdquo; because merging companies often abandon deals if temporarily enjoined.[[N: Id.]] The FTC often will abandon its administrative proceeding if it loses its request for a preliminary injunction.[[N: See, e.g., Commission Order Returning Matter to Adjudication and Dismissing Complaint, <em>In the Matter of Tempur Sealy International, Inc. and Mattress Firm Group Inc.</em>, Docket No. 9433 (April 11, 2025); Order Returning Matter to Adjudication and Dismissing Complaint, <em>In the Matter of GTCR BC Holdings, LLC and Surmodics, Inc.</em>, Docket No. 9440 (Nov. 21, 2025).]] Even when both the preliminary injunction and administrative complaints are issued simultaneously, a full administrative trial on the merits can take a year or more before an initial decision is reached (and even longer for an appeal to the full Commission).</p> <p>It remains to be seen whether the change will have a meaningful impact on the timelines for resolving merger challenges and the FTC&rsquo;s likelihood of success in federal court. For example, timelines for permanent injunction proceedings in federal court can vary significantly depending on the court&rsquo;s schedule and docket. Even though the standard for a court to issue a preliminary injunction under Section 13(b) of the FTC Act is different than finding that a transaction violates Section 7 of the Clayton Act,[[N: Under Section 13(b) of the FTC Act, the FTC can obtain an injunction &ldquo;&#91u&#93pon a proper showing that, weighing the equities and considering the Commission&rsquo;s likelihood of ultimate success, such action would be in the public interest.&rdquo; 15 U.S.C. &sect; 53(b); see <em>FTC v. H.J. Heinz Co.</em>, 246 F.3d 708, 714 (D.C. Cir. 2001) (&ldquo;Congress intended this standard to depart from what it regarded as the then-traditional equity standard.&rdquo;). Conversely, the DOJ is entitled to seek preliminary injunctions under Section 15 of the Clayton Act. See 15 U.S.C. &sect; 53(b). The statutory authority for the DOJ does not enumerate a specific preliminary injunction standard, unlike Section 13(b) of the FTC Act does for the FTC. See Antitrust Modernization Commission, <a rel="noopener noreferrer" href="https://govinfo.library.unt.edu/amc/report_recommendation/chapter2.pdf" target="_blank">Report and Recommendations</a>, at 142 (2007). Therefore, courts normally hold the DOJ to the common law standard to which private plaintiffs are held, which requires a likelihood of success on the merits. Id.]] courts generally have approached preliminary injunctions carefully and focused on the FTC&rsquo;s likelihood of success, suggesting that the standard may not vary significantly in practice. Importantly, however, the change is intended to counter the perception that the FTC is using its process to stop deals, rather than giving the parties a fair shake with a neutral arbiter. Finally, while the impact on specific deals may be unclear, the change may give fodder to arguments that the FTC&rsquo;s antitrust enforcement program should be combined with the DOJ&rsquo;s,[[N: See Press Release, Mike Lee Senator for Utah, <a rel="noopener noreferrer" href="https://www.lee.senate.gov/2020/11/sen-lee-introduces-one-agency-act-to-streamline-antitrust-enforcement" target="_blank">Sen. Lee Introduces One Agency Act to Streamline Antitrust Enforcement</a> (Nov. 19, 2020) (&ldquo;It&rsquo;s clear that our current dual agency antitrust enforcement arrangement isn&rsquo;t&nbsp;working. The Justice Department is more politically accountable, and its structure is better suited to decisive enforcement.&rdquo;).]] if there is no difference in the merger challenge procedures. </p> <h3>FTC/DOJ Staff Updates</h3> <h4>AAG Gail Slater and DAAG Mark Hamer Step Down</h4> <p>DOJ AAG Gail Slater stepped down on February 12, 2026. Slater had served in the role since March 2025. Deputy AAG (DAAG) for litigation and civil enforcement Mark Hamer left his role on February 9, 2026. </p> <p>Acting AAG Omeed A. Assefi now oversees the Antitrust Division. Dina Kallay continues to serve as DAAG for international, policy, and appellate matters, and Chetan Sanghvi remains in charge of economic analysis. Acting AAG Assefi named Nicole Sarrine as Acting DAAG for civil conduct matters and Charlie Beller as Acting DAAG for mergers. Daniel Glad was promoted to DAAG for criminal enforcement, a position which was previously held by Acting AAG Assefi.</p> <h4>David MacNeil Nominated as an FTC Commissioner</h4> <p>On January 13, 2026, Trump nominated the founder and CEO of automobile accessories-maker WeatherTech, David MacNeil, to a seat on the Commission. If confirmed, MacNeil will take over the Commissioner seat previously held by Melissa Holyoak, who stepped down in November and is now the First Assistant U.S. Attorney for the District of Utah pending confirmation to serve as the U.S. Attorney for the District of Utah. At present, there are only two members of the Commission, Chair Ferguson and Commissioner Mark R. Meador, who are both Republicans.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2026/01/nominations-sent-to-the-senate-078c/" target="_blank">Read the White House Press Release</a></li> </ul> <h3>FTC Cases and Proceedings</h3> <h4>Alcon Terminates Proposed Acquisition of LENSAR Following FTC Investigation</h4> <p>Following an FTC investigation, Alcon, Inc. and Alcon Research, LLC abandoned the proposed purchase of LENSAR, Inc. on March 16, 2026. According to the FTC, the deal would have merged two providers of laser systems used in femtosecond laser-assisted cataract surgery, known as FLACS. According to the FTC, the FTC&rsquo;s American Competition Enforcement Division (comprised of competition enforcement attorneys located in the FTC&rsquo;s regional offices) identified competitive concerns with the transaction.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/03/ftc-stops-proposed-merger-leading-cataract-surgery-device-makers?utm_source=govdelivery" target="_blank">Read the FTC Press Release&nbsp;</a></li> </ul> <h4>FTC Finalizes Consent Order in Boeing Acquisition of Spirit AeroSystems</h4> <p>On February 17, 2026, the FTC finalized a consent order involving Boeing&rsquo;s $8.3 billion acquisition of Spirit AeroSystems. Boeing will sell Spirit&rsquo;s aerostructures units that supply Airbus to Airbus, and its Subang, Malaysia operation to CTRM. The consent order addresses the FTC&rsquo;s concerns that the acquisition would give Boeing the ability and incentive to raise the cost of or degrade Airbus&rsquo; access to inputs for its competing commercial aircraft, in addition to giving Boeing the ability and incentive to limit rival military aircraft companies&rsquo; access to Spirit&rsquo;s aerostructure products and technologies. Following a public comment period, the Commission voted 2-0 to approve the final order.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/02/ftc-finalizes-consent-order-boeing-spirit-acquisition" target="_blank">Read the Press Release</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/2410098c4826boeingspiritmodifiedorder.pdf" target="_blank">Read the Finalized Consent Order</a>&nbsp;</li> </ul> <h4>FTC Partially Settles PBM Enforcement Challenge</h4> <p>The FTC and pharmacy benefit manager (PBM) Express Scripts reached a settlement on February 4, 2026 in the administrative proceeding where the FTC alleged that the three largest PBMs engaged in anticompetitive and unfair rebating practices that artificially inflated the list price of insulin drugs. As part of the settlement, Express Scripts agreed to a variety of conditions, including that it will stop listing preferred drugs at the high wholesale acquisition cost rather than lower cost versions on its standard formularies and offer access to Trump Rx&rsquo;s direct-to-consumer platform as part of its standard offerings. In addition, Express Scripts will establish a standard offering for plan sponsors where the out-of-pocket costs for patients are based on the net cost of a drug, rather than the list price. It will also provide full access to its Patient Assurance Program to all individuals if insulin is on a formulary, unless the plan sponsor chooses to opt out. Other changes include offering a standard benefit design that allows plan sponsors to transfer off of rebates or spread pricing, and delinking drug manufacturers&rsquo; payouts from list prices in standard benefits. On March 23, 2026, FTC staff and PBM Caremark jointly moved to withdraw the matter from adjudication for the purpose of allowing the Commission to consider a proposed settlement, which was filed under seal. PBM respondent Optum and FTC staff filed a joint motion to extend the stay of the administrative proceeding on April 13, 2026 to provide time for settlement discussions to progress.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/02/ftc-secures-landmark-settlement-express-scripts-lower-drug-costs-american-patients?utm_source=govdelivery" target="_blank">Read the Press Release</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/d09437caremarkproporder-esiresps.pdf" target="_blank">Read the Settlement</a></li> </ul> <h4>Proposed FTC Order Requires Divestitures in Sevita&rsquo;s Acquisition of BrightSpring</h4> <p>On January 30, 2026, the FTC reached an agreement that conditioned Sevita Health&rsquo;s $835 million acquisition of BrightSpring Health Services Inc.&rsquo;s community-living business on the sale of more than 100 intermediate care facilities (ICF). The FTC&rsquo;s complaint alleged that the acquisition would lead to a reduction in the quality of ICF services, including a reduced incentive to improve facilities, staffing levels and training, care standards, safety protocols, and individualized services. The Commission vote was 2-0.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/2510060sevitacomplaintfin.pdf" target="_blank">Read the Complaint</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/2510060SevitaDecisionOrder.pdf" target="_blank">Read the Proposed Consent Order</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-takes-action-prevent-anticompetitive-healthcare-services-merger" target="_blank">Read the Press Release</a></li> </ul> <h4>FTC Appeals Ruling in <em>FTC v. Meta</em> Lawsuit Challenging Acquisitions of Instagram and WhatsApp</h4> <p>After a ruling in favor of Meta in the <em>FTC v. Meta</em> lawsuit, the FTC filed an appeal with the D.C. Circuit Court that targeted both the facts and the law of U.S. District Judge James E. Boasberg&rsquo;s November decision. FTC Bureau of Competition Director Daniel Guarnera stated that &ldquo;Meta has maintained its dominant position and record profits for well over a decade not through legitimate competition, but by buying its most significant competitive threats,&rdquo; and that &ldquo;[t]he Trump-Vance FTC will continue fighting its historic case against Meta.&rdquo;</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-appeals-ruling-meta-monopolization-case" target="_blank">Read the Press Release</a> </li> </ul> <h4>FTC Wins Preliminary Injunction To Block Edwards/JenaValve Merger</h4> <p>On January 9, 2026, Judge Rudolph Contreras in the U.S. District Court for the District of Columbia granted the FTC&rsquo;s request for a preliminary injunction in the agency&rsquo;s challenge to the proposed acquisition of medical device startup JenaValve Technology, Inc. (JenaValve) by Edwards Lifesciences Corporation (Edwards). Despite arguments from Edwards and JenaValve that the merger would benefit high-risk patients, the court agreed with the FTC that the proposed merger would harm competition in a specialized cardiac device market where no product has yet received clearance from the U.S. Food and Drug Administration. The parties abandoned the transaction shortly thereafter.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/statement-ftc-victory-halting-anticompetitive-medical-device-deal" target="_blank">Read the Press Release</a></li> <li><a href="/en/perspectives/advisories/2026/02/ftc-antitrust-enforcement-development-pipeline-deals">Read the Arnold &amp; Porter Client Advisory</a> </li> </ul> <h3>FTC Policy</h3> <h4>FTC Endorses Florida Court Decision Ending the ABA&rsquo;s Role as Sole Accrediting Agency </h4> <p>On March 31, 2026, FTC staff endorsed the Florida Supreme Court&rsquo;s decision to amend Rule 4-13.2, which had required that applicants graduate from an American Bar Association (ABA)-accredited school to be eligible to take the Florida Bar exam. The court designed its rule change to &ldquo;create the opportunity for additional entities to carry out an accrediting and gatekeeping function.&rdquo; In a letter to the court, FTC staff claimed that the ABA standards for law school accreditation impose an elitist model of legal education, driving up the cost of legal education and thereby limiting the supply of lawyers. The letter acknowledged that when it strikes the right balance, accreditation can be procompetitive. However, according to the FTC staff, ABA accreditation served the interests of lawyers and law school faculty who dominate the ABA, while injuring consumers of legal services and saddling law students with high costs.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/03/ftc-endorses-florida-supreme-court-action-eliminating-abas-bar-admission-monopoly" target="_blank">Read the Press Release</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/FloridaABALetterFinal.pdf" target="_blank">Read the Letter</a></li> </ul> <h4>FTC Launches Healthcare Task Force</h4> <p>On March 20, 2026, Chair Ferguson announced the formation of a Healthcare Task Force by the FTC&rsquo;s Bureaus of Competition, Consumer Protection, and Economics, as well as the Office of Policy Planning and Office of Technology. The Healthcare Task Force will lead targeted enforcement and advocacy initiatives focused on key priorities, devise agency-wide strategies on investigations, institute a proactive and strategic approach to identifying amicus and statement of interest opportunities, and identify emerging issues and new priority areas for enforcement and advocacy. The Healthcare Task Force&rsquo;s mandate will include seeking to expand its membership to agency and law enforcement partners with relevant expertise and complementary roles, including the U.S. Department of Health and Human Services and the U.S. Department of Justice.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/03/ftc-chairman-andrew-n-ferguson-launches-healthcare-task-force" target="_blank">Read the Press Release</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/Memorandum-Ferguson-re-Healthcare-Task-Force.pdf" target="_blank">Read the Memorandum</a> </li> </ul> <h4>FTC Chair Ferguson Issues Warning Letters to Law Firms</h4> <p>On January 30, 2026, Chair Ferguson issued a letter to 42 law firms for their purported participation in an outside diversity, equity, and inclusion program, which he characterized as &ldquo;potentially anticompetitive collusion.&rdquo; The letter reminds law firms of the FTC&rsquo;s view that collusion in hiring practices, including through competitors coordinating on the personal characteristics of their candidate pools and sharing sensitive information about pay and benefits, can violate the antitrust laws.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/2026-01-29-warning-letter-diversity-lab.pdf" target="_blank">Read the Warning Letter (Template)</a> </li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/federal-trade-commission-chairman-andrew-n-ferguson-issues-warning-letters-law-firms-anticompetitive" target="_blank">Read the Press Release</a> </li> </ul> <h3>DOJ Cases and Proceedings</h3> <h4>DOJ Sues New York-Presbyterian Hospital for Allegedly Anticompetitive Healthcare Contracts</h4> <p>On March 26, 2026, the DOJ and the U.S. Attorney&rsquo;s Office for the Southern District of New York together filed a lawsuit against New York-Presbyterian Hospital under Section 1 of the Sherman Act. The complaint alleges that New York-Presbyterian&rsquo;s contracts with health insurance companies unlawfully denied patients the choice of insurance plans that prioritized its lower-cost competitors &mdash; claims that are similar to those in the DOJ&rsquo;s case against OhioHealth that we discuss below. According to the DOJ, these unlawful restrictions insulate New York-Presbyterian from price competition, limiting its rival hospitals from competing for patients based on lower prices or better value, and prevent the development of budget-conscious plans. </p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-sues-new-york-presbyterian-hospital-anticompetitive-contracts-increase" target="_blank">Read the Press Release</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1432831/dl?inline" target="_blank">Read the Complaint</a></li> </ul> <h4>DOJ Reaches Settlement With Live Nation During Trial</h4> <p>On March 9, 2026, the DOJ reached a settlement with Live Nation midway through a trial over claims of unlawful monopolization for tying ticket sales to the use of its venues. State plaintiffs, Arkansas, South Dakota, and Nebraska, also settled their claims. The settlement calls for Live Nation to offer a standalone version of Ticketmaster&rsquo;s ticketing technology system that online ticketing rivals can use themselves. It also requires the divestiture of exclusive long-term booking agreements that Live Nation controls for at least 13 amphitheaters and implements a cap on certain ticketing service fees. It also directed a settlement fund of more than $280 million to be used for state claims. More than 30 states and the District of Columbia are still actively litigating the case.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.law360.com/articles/2450319/attachments/1" target="_blank">Read the Term Sheet</a> </li> </ul> <h4>DOJ Sues OhioHealth for Allegedly Anticompetitive Healthcare Contracts</h4> <p>On February 20, 2026, the DOJ and the Attorney General of Ohio together filed a civil antitrust lawsuit challenging OhioHealth Corporation&rsquo;s (OhioHealth) allegedly anticompetitive contract restrictions that force Ohio patients to pay higher prices for healthcare. The complaint alleges that OhioHealth uses its market power in the Columbus, Ohio region to protect its dominance and maintain its high prices by preventing health plans from offering insurance coverage that includes lower-cost hospitals and other providers. According to DOJ and the Attorney General of Ohio, OhioHealth&rsquo;s contracts also allegedly prevent insurers from even informing patients about lower-cost options.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1428276/dl" target="_blank">Read the Complaint</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-sues-ohiohealth-anticompetitive-healthcare-contracts-increase-costs-ohio" target="_blank">Read the Press Release</a> </li> </ul> <h4>DOJ and USPS Make First-Ever Whistleblower Payment </h4> <p>On January 29, 2026, the DOJ announced the first monetary award issued under the Antitrust Whistleblower Rewards Program, launched last July in coordination with the U.S. Postal Service. DOJ will award the whistleblower $1 million for reporting antitrust and fraud violations by EBLOCK Corporation (EBLOCK), an online used vehicle auction platform. EBLOCK and DOJ resolved the resulting charges through a Deferred Prosecution Agreement, under which EBLOCK agreed to pay a $3.28 million penalty.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/antitrust-division-and-us-postal-service-award-first-ever-1m-payment-whistleblower-reporting" target="_blank">Read the Press Release</a></li> <li><a href="/en/perspectives/blogs/enforcement-edge/2026/02/check-is-in-the-mail">Read the Arnold &amp; Porter Client Advisory</a> </li> </ul> <h4>DOJ Requires Divestitures in Reddy Ice/Arctic Glacier Deal</h4> <p>On January 30, 2026, the DOJ reached a deal to allow Reddy Ice, the largest packaged ice producer in the U.S., to move ahead with its planned $126 million acquisition of rival Arctic Glacier, conditioned on the sale of assets in five geographic areas to fix potential overlaps. The DOJ said the proposed acquisition would have further consolidated an already-concentrated industry, especially for retail chains that sell packaged ice, along with airlines and airline caterers.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1426116/dl?inline" target="_blank">Read the Complaint</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1426121/dl?inline" target="_blank">Read the Proposed Final Judgment</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-requires-reddy-ice-divest-assets-proceed-proposed-acquisition-arctic" target="_blank">Read the Press Release</a> </li> </ul> <h4>DOJ Requires Divestiture in the Columbus McKinnon/Kito Crosby Deal</h4> <p>On January 29, 2026, the DOJ reached a deal requiring Columbus McKinnon Corp. to sell its power chain hoist and chains businesses in order to complete the company&rsquo;s $2.7 billion purchase of Kito Crosby Ltd. from funds managed by KKR. The DOJ said the buyer and target are two of the country&rsquo;s leading manufacturers of electric chain hoists and overhead lifting chains used for material handling.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1425946/dl?inline" target="_blank">Read the Complaint</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1425951/dl?inline" target="_blank">Read the Competitive Impact Statement</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1425956/dl?inline" target="_blank">Read the Proposed Final Judgment</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-requires-columbus-mckinnon-divest-assets-proceed-acquisition-kito-crosby" target="_blank">Read the Press Release</a> </li> </ul> <h4>DOJ Requests Court Approval of HPE/Juniper Settlement</h4> <p>On January 5, 2026, the DOJ requested court approval for its settlement that would end a challenge of Hewlett Packard Enterprise&rsquo;s (HPE) acquisition of a networking equipment rival Juniper Networks, despite objections raised by State AGs who intervened over allegations of improper lobbying influence. U.S. District Judge P. Casey Pitts held oral argument on the motion for entry of proposed final judgment on March 23, 2026, hearing from attorneys for DOJ, HPE, and the State Intervenors.</p> <h3>DOJ Policy</h3> <h4>DOJ Files Statement of Interest in Turkey Price-Fixing Case</h4> <p>On March 25, 2026, the DOJ filed a statement of interest in <em>In re Turkey Antitrust Litigation</em>, whose complaint alleges a rule of reason claim based on an alleged conspiracy to exchange competitively sensitive information, and a per se claim based on an alleged conspiracy to fix prices by restraining the supply of turkey products. The DOJ&rsquo;s statement argues that the defendants&rsquo; summary judgment motion misconstrues the scope of the per se rule by asking the court in a price-fixing case to recognize an intermediate category of &ldquo;hybrid&rdquo; restraints between vertical and horizontal agreements. The statement also contended that the defendants mischaracterize several legal standards applicable to information-exchange claims: &ldquo;Contrary to their arguments, competitors&rsquo; exchanges of competitively sensitive information are not &lsquo;presumptively lawful;&rsquo; can be anticompetitive even if they do not consist of individual competitors&rsquo; information; and do not require direct econometric evidence of market wide price increases.&rdquo;</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1432836/dl?inline" target="_blank">Read the Statement of Interest</a></li> </ul> <h4>DOJ Files Statement of Interest in Frozen Potato Price-Fixing Case</h4> <p>On February 27, 2026, the DOJ filed a statement of interest in <em>In re Frozen Potato Products Litigation</em>, a case arising from allegations that producers of frozen potato products, such as frozen French fries and hash browns, harmed consumers by exchanging competitively sensitive information with each other through Circana&rsquo;s benchmarking service PotatoTrack. The statement recommended that the court reject a motion to dismiss claims brought by potato purchasers, reasoning that courts should not assume these information-sharing arrangements are harmless, and should instead carefully examine whether the practice actually hurts consumers by facilitating concerted decision-making. </p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1429466/dl?inline" target="_blank">Read the Statement of Interest</a> </li> </ul> <h4>DOJ Files Statement of Interest in Florida No-Poach, Wage-Fixing Conspiracy Case</h4> <p>On February 27, 2026, the DOJ filed a statement of interest in <em>John Herzog, et al. v. Fluor Federal Services, Inc., et al.</em>, a case where defendant contractors and subcontractors allegedly agreed to fix their workers&rsquo; wage ranges and prevented a site inspector from moving to another subcontractor due to a no-poach agreement. The statement argues that companies cannot escape per se liability for such violations just because they involve a vertical relationship, such as between contractors and subcontractors, instead of direct competitors, and encourages the court to look past the labels and judge whether the alleged conspiracy restrains the defendants&rsquo; competition over employees and their wages.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1429456/dl?inline" target="_blank">Read the Statement of Interest</a> </li> </ul> <h4>DOJ and USPTO File Statement of Interest in Patent Infringement Suit</h4> <p>On February 27, 2026, the DOJ and the U.S. Patent and Trademark Office (USPTO) filed a statement of interest in <em>Collision Communications Inc. v. Samsung Electronics Co., et al.</em>, a patent infringement lawsuit wherein Collision moved for a permanent injunction blocking Samsung from &ldquo;further infringing&rdquo; on one of its cellular patents. Though filed in the case, the DOJ and USPTO made clear that &ldquo;the United States does not take a position on the outcome of these questions on the evidence before the Court in the instant case, or on the ultimate question of whether the Court should exercise its discretion to issue an injunction here.&rdquo; Instead it was to &ldquo;provide the views of the Antitrust Division and the USPTO on considerations relevant to assessing whether a non-practicing patentee has demonstrated irreparable harm and the inadequacy of monetary damages to compensate for the harm of continuing infringement.&rdquo; The statement explained that unduly limiting patentees&rsquo; ability to seek injunctive relief to block patent infringement undermines the incentive to innovate. It further stated that non-practicing patentees should not be categorically denied the opportunity for injunctive relief and, under certain circumstances, such patentees can demonstrate irreparable harm and the inadequacy of monetary damages to compensate for the harm of continuing infringement.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/atr/media/1429386/dl?inline" target="_blank">Read the Statement of Interest</a></li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/justice-department-and-us-patent-and-trademark-office-file-statement-interest-reaffirming" target="_blank">Read the Press Release</a> </li> </ul> <h3>Interagency Initiatives</h3> <h4>FTC and DOJ Seek Public Comment on the HSR Form Following Vacatur of New HSR Form By District Judge</h4> <p>On March 25, 2026, the FTC and DOJ launched a joint public inquiry requesting public comment on the effectiveness of the updated HSR form, which had been in place since February 2025. A federal district court vacated the updated HSR form on February 12, 2026. U.S. District Judge Jeremy D. Kernodle said that the FTC had not shown the costs on merging companies outweigh the claimed benefits of dramatically increasing the amount of information that must be provided upfront when giving notice of a transaction. On March 19, 2026, the U.S. Court of Appeals for the Fifth Circuit denied the FTC&rsquo;s motion for a stay pending appeal, so the FTC is now accepting HSR filings using the Form and Instructions that were in place before February 10, 2025. In the joint request for public comment, the agencies seek to ensure that the requirements of the updated form do not impose burdens on filers that outweigh the usefulness of the information provided to the FTC and DOJ. The FTC stated that it &ldquo;continues to believe that the prior, nearly 50-year-old form is insufficient to review modern mergers and acquisitions.&rdquo; Regardless of the outcome of the litigation challenging the updated form, the FTC is considering engaging in a new rulemaking process. The agencies are accepting comments until May 26, 2026.</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/03/federal-trade-commission-department-justice-seek-public-comment-premerger-notification-report-form" target="_blank">Read the Press Release</a></li> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/2026.03.25-HSR-RFI.pdf" target="_blank">Read the Request for Public Comment</a></li> <li><a rel="noopener noreferrer" href="https://www.uschamber.com/assets/documents/Opinion-Chamber-of-Commerce-v.-FTC-E.D.-Tex.pdf" target="_blank">Read the District Court Opinion</a> </li> </ul> <h4>FTC and DOJ Seek Public Comment for Guidance on Business Collaborations</h4> <p>On February 23, 2026, the FTC and the DOJ launched a joint public inquiry regarding potential additional guidance on collaborations among competitors. The joint inquiry seeks input on the value and potential content of guidance concerning the range of collaborations utilized to drive innovation and promote competition in the modern economy. The previous 2000 Antitrust Guidelines for Collaborations Among Competitors explained how the FTC and DOJ analyzed various antitrust issues raised by such collaborations. The 2000 Guidelines were withdrawn in December 2024. The agencies are accepting comments until April 24, 2026. </p> <ul> <li><a href="https://www.ftc.gov/news-events/news/press-releases/2026/02/federal-trade-commission-department-justice-seek-public-comment-guidance-business-collaborations" target="_blank">Read the Press Release </a></li> </ul> <h3>Agency Speeches and Statements</h3> <h4>International DAAG Kallay Delivered Speech at CSIS LeadershIP 2026 Event</h4> <p>On March 25, 2026, DAAG for International, Policy and Appellate Dina Kallay delivered remarks at the Center for Strategic and International Studies (CSIS) LeadershIP 2026 event. DAAG Kallay focused on the role that a robust intellectual property regime plays in promoting innovation and competition and what the DOJ has done to usher in &ldquo;the Golden Age of American Innovation.&rdquo; DAAG Kallay discussed the need to ensure that proper market power analysis applies to intellectual property and how to protect parties&rsquo; rights to seek judicial redress in patent cases. DAAG Kallay noted that potential antitrust liability could reduce innovators&rsquo; incentives to invest in innovation and participate in procompetitive standards-development activities, as well as deter protected petitioning activity. </p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/speech/fueling-innovation-antitrust-and-intellectual-property-support-american-technological" target="_blank">Read the Speech</a> </li> </ul> <h4>Acting AAG Assefi Delivered Remarks at George Washington Law School</h4> <p>On March 23, 2026, in remarks at George Washington Law School, Acting AAG Omeed Assefi emphasized the DOJ&rsquo;s continued focus on &ldquo;America First antitrust,&rdquo; which is focused on &ldquo;enforcing the law against the lawbreakers, getting out of the way of law-abiding businesses, and ultimately ensuring the free market supports the American Dream.&rdquo;</p> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/speech/its-not-personal-sonny-its-strictly-business-aggressive-enforcement-protect-free-market" target="_blank">Read the Speech</a> </li> </ul> <h4>FTC Commissioner Meador Delivers Keynote Address at Antitrust for Digital Markets Forum</h4> <p>On March 23, 2026, FTC Commissioner Meador spoke at the Antitrust for Digital Markets Forum about what the speed of market change means for antitrust enforcement. Commissioner Meador acknowledged the pace of innovation can make enforcement difficult, but he reiterated that the speed of technological change can also amplify competitive harm. Commissioner Meador cited AI as an example that has the potential to transform industries but also to raise familiar competition concerns: new technologies being used to facilitate unlawful agreements, efforts to unduly restrict access to critical data inputs and compute resources, and the leveraging of a dominant position to limit entry opportunities. Commissioner Meador also emphasized that &ldquo;remedies remain an essential part of the merger-enforcement toolkit,&rdquo; an approach that stands in contrast to the prior administration&rsquo;s skepticism toward remedies. </p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/Antitrust-for-Digital-Markets-Forum-Meador.pdf" target="_blank">Read the Speech</a> </li> </ul> <h4>DOJ Acting Criminal DAAG Addresses GCR Live: Cartels 2026</h4> <p>On March 3, 2026, Acting DAAG of Criminal Enforcement Daniel Glad delivered keynote remarks at the Global Competition Review (GCR) Live: Cartels 2026 Conference. Acting DAAG Glad emphasized DOJ&rsquo;s focus on individual accountability and that general deterrence only works if the people making those decisions understand the personal consequences, including the prospect of serving prison time. Further, Acting DAAG Glad stated that the risks and consequences of detection are no less severe when it comes to procurement collusion and cartel offenses, as seen through the work of the Procurement Collusion Strike Force, an interagency partnership including U.S. Attorneys&rsquo; Offices, the FBI, and multiple federal Inspectors General. Acting DAAG Glad touted the burgeoning success of the DOJ&rsquo;s new Whistleblower Rewards Program, which creates &ldquo;another lane in the leniency race&rdquo; where employees, former employees, consultants, and market participants are incentivized alongside companies to report cartel behavior.</p> <ul> <li> <a rel="noopener noreferrer" href="https://www.justice.gov/opa/speech/acting-deputy-assistant-attorney-general-daniel-glad-delivers-keynote-global-competition" target="_blank">Read the Speech</a> </li> </ul> <h4>FTC Chair Ferguson Speaks at George Mason Law Review Antitrust Symposium</h4> <p>On February 20, 2026, FTC Chair Ferguson delivered remarks at George Mason University&rsquo;s Antonin Scalia Law School Antitrust Symposium about the agency&rsquo;s openness to negotiating remedies, though he cautioned of a high bar for remedies in some industries. Proponents of remedies in some industries would be required to show more evidence that a proposed divestiture will solve competitive concerns, whereas with pharmaceutical mergers, &ldquo;it&rsquo;s actually a much higher rate of success at divesting particular business lines or particular assets if you can find the right buyer,&rdquo; he explained. Chair Ferguson detailed other aspects of his agenda, including his plan to reduce reliance on adjudication of mergers through the FTC&rsquo;s administrative proceedings in favor of litigating transactions exclusively in federal court.</p> <h4>FTC Chair Ferguson and Commissioner Meador Deliver Remarks at Workshop on Noncompete Agreements</h4> <p>On January 27, 2026, the FTC held a workshop titled, Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements. Chair Ferguson defended the FTC&rsquo;s departure from noncompete rulemaking efforts during the Biden administration in favor of case-by-case enforcement. During separate remarks, FTC Commissioner Mark Meador approached the topic through the lens of affordability, which has been &ldquo;one of [his] biggest priorities as an FTC Commissioner since day one.&rdquo; He reiterated that when pursued for the wrong reasons and directed at the wrong workers, non-competes suppress wages and thereby make everything less affordable. Like Chair Ferguson, Commissioner Meador advocated for a case-by-case analysis because &ldquo;all non-compete agreements aren&rsquo;t created equal.&rdquo;</p> <ul> <li> <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/Transcript-Moving-Forward-Protecting-Workers-from-Anticompetitive-Noncompete-Agreements-1-27-26.pdf" target="_blank">Read the Workshop Transcript</a> </li> </ul> <h4>FTC Commissioner Meador Delivers Keynote Address at Concurrences Tech Antitrust Conference</h4> <p>On January 15, 2026, FTC Commissioner Meador addressed an audience in Silicon Valley on the issue of &ldquo;acqui-hires,&rdquo; wherein individuals are offered payouts for purportedly abandoning their startups and, in return, join some of the most dominant firms in the tech sector. Commissioner Meador stated that from a competition enforcement perspective, this dynamic is particularly problematic because, as a procedural matter, firms may be attempting to structure such hiring arrangements to avoid formal premerger notification review under the HSR Act. These dynamics reinforce the importance of looking past formal transaction structure and asking whether the deal harms innovation and access to specialized talent, which is &ldquo;critical for the startup economy and winning the AI race in the right way.&rdquo;</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/meador-concurrences-keynote.pdf" target="_blank">Read the Speech</a></li> </ul> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{6DE8480F-05BF-4727-BF74-4215DB59FA4D}https://www.arnoldporter.com/en/perspectives/news/2026/04/arnold-porter-secures-appellate-victory-in-second-circuitArnold &amp; Porter recently secured an appellate victory in the U.S. Court of Appeals for the Second Circuit, resulting in the reinstatement of a USD $655.5 million judgment on behalf of American citizens and their families who were killed or injured in terrorist attacks in Israel carried out by agents of the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA).&nbsp;Tue, 14 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter recently secured an appellate victory in the U.S. Court of Appeals for the Second Circuit, resulting in the reinstatement of a USD $655.5 million judgment on behalf of American citizens and their families who were killed or injured in terrorist attacks in Israel carried out by agents of the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA). The ruling marked the culmination of a more than 20-year legal battle and reinforces the principle that U.S. courts will hold accountable those who provide material support for acts of international terrorism against American citizens.</p> <p>On March 30, 2026, the Second Circuit granted plaintiffs&rsquo; motion to recall its prior mandate and affirmed the district court&rsquo;s original judgment against the PLO and the PA in <em>Waldman v. Palestine Liberation Organization</em>. The decision follows the U.S. Supreme Court&rsquo;s 2025 ruling in <em>Fuld v. PLO</em>, which held that the Promoting Security and Justice for Victims of Terrorism Act (PSJVTA) does not violate the Fifth Amendment&rsquo;s Due Process Clause.</p> <p>In its decision, the Second Circuit determined that all relevant considerations &mdash; including the intervening change in governing law, judicial economy, fairness to plaintiffs who filed suit more than two decades ago, and the interest of finality &mdash; supported reinstating the original jury verdict entered after a seven-week trial. </p> <p>The Arnold &amp; Porter team was led by partners Kent A. Yalowitz and Allon Kedem.</p>{AFCFD9B5-DB86-492D-8D8E-750F95EC185C}https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.eli.org%2Fsites%2Fdefault%2Ffiles%2Ffiles-pdf%2F22nd%2520Annual%2520Western%2520Boot%2520Camp%2520Agenda.pdf&data=05%7C02%7CJennifer.Omasta%40arnoldporter.com%7C21003ce35fb34446917408dea4743aeb%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639129016296220786%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=ry1p8uY2yaTXSC5voHuXw0CKWNo8vxEJUkxG9NDV%2FmI%3D&reserved=0Tue, 14 Apr 2026 00:00:00 -0500{1EEEBB40-E30F-4D3A-A8F3-09817608BC7D}https://www.arnoldporter.com/en/perspectives/news/2026/04/arnold-porter-relocates-chicago-office-to-300-n-lasalleArnold &amp; Porter today announced that it is relocating its Chicago office to new, cutting-edge space located at 300 North LaSalle, on Monday, April 13.Mon, 13 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter today announced that it is relocating its <a href="/en/offices/chicago">Chicago office</a>&nbsp;to new, cutting-edge space located at 300 N. LaSalle, on Monday, April 13. The move reflects the firm&rsquo;s continued growth and commitment to serving clients in Chicago and surrounding areas.</p> <p>The firm has occupied its current space in the heart of Chicago&rsquo;s Loop District since it first entered the market in 2001. The office is now home to more than 50 attorneys, serving sophisticated clients across a broad range of industries and practice areas.</p> <p>The new office features advanced technology and thoughtfully designed workspace to enhance collaboration and client service. &ldquo;The office has more than doubled in size over the past decade,&rdquo; said Tyler Nurnberg, head of the Chicago office. &ldquo;The move positions us to continue that momentum and meet the evolving needs of clients and our legal team.&rdquo;</p> <p>Located on the north bank of the Chicago River &mdash; a vibrant neighborhood that has undergone a substantial overhaul in recent years &mdash; the new office provides convenient access for clients while offering modern amenities and infrastructure aligned with the firm&rsquo;s forward-looking approach. Arnold &amp; Porter remains committed to expanding in key markets and investing in spaces that foster innovation and excellence in legal service.</p> <p>Arnold &amp; Porter&rsquo;s new Chicago office is located at:<br /> 300 N. LaSalle Dr., Suite 3500<br /> Chicago, Illinois 60654</p>{A5899CF9-20D6-4D67-931A-F3AEE5161376}https://www.arnoldporter.com/en/perspectives/news/2026/04/india-business-law-journal-recognizes-pallavi-mehta-wahi-in-2026-international-a-listArnold &amp; Porter partner Pallavi Mehta Wahi, head of both Arnold &amp; Porter&rsquo;s India practice and the Seattle office, has been named to <em>India Business Law Journal</em>&rsquo;s 2026 International A-List, marking her eighth consecutive year on the list.&nbsp;Mon, 13 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter partner Pallavi Mehta Wahi, head of both Arnold &amp; Porter&rsquo;s India practice and the Seattle office, has been named to <em>India Business Law Journal</em>&rsquo;s 2026 <a rel="noopener noreferrer" href="https://law.asia/india-international-lawyers-2026/" target="_blank">International A-List</a>, marking her eighth consecutive year on the list. The International A-List recognizes &ldquo;the most recommended foreign lawyers for India-related legal matters.&rdquo; Pallavi also serves as the firm&rsquo;s chair of Western U.S. Strategic Growth.</p> <p>The 2026 list reflects a broader shift in how Indian clients engage international counsel, seeking not only legal expertise, but also responsiveness, commercial judgment, and cultural fluency. Drawing on testimonials from Indian nominators and referees, the list highlights how international lawyers are helping shape the legal frameworks of India's global expansion by structuring landmark transactions, managing cross-border risk, and setting the standards by which India-related work is done worldwide.</p> <p><em>India Business Law Journal</em> noted that Bharat Anand, Delhi-based senior partner at Khaitan &amp; Co, described Pallavi as "a force of nature" and "an unparalleled law leader" who plays a "pivotal role at the ultimate decision-making table&rdquo; on highly sensitive India-related matters.</p>{7C1122B5-7092-45AF-9898-377EE4BB21E9}https://www.arnoldporter.com/en/perspectives/news/2026/04/four-arnold-porter-lawyers-named-to-law360s-2026-editorial-advisory-boardsFour Arnold &amp; Porter lawyers were recently named to <em>Law360</em>&rsquo;s 2026 Editorial Advisory Boards in the areas of Compliance, Government Contracts, Health Care, and Product Liability.Mon, 13 Apr 2026 00:00:00 -0500<p>Four Arnold &amp; Porter lawyers were recently named to <em>Law360</em>&rsquo;s 2026 Editorial Advisory Boards in the areas of Compliance, Government Contracts, Health Care, and Product Liability.</p> <p><em>Law360</em>&rsquo;s Editorial Advisory Boards provide feedback on its coverage and produce expert insight on how to shape the publication&rsquo;s future coverage.</p> <p>The following lawyers were named to the publication&rsquo;s 2026 Editorial Advisory Boards:</p> <ul> <li><strong>Frank Cruz-Alvarez</strong> was named to <em>Law360</em>&rsquo;s Product Liability Editorial Board. Frank, a partner in the firm&rsquo;s Litigation - Product Liability and Mass Tort practice group, is a trial lawyer with more than 20 years of experience representing companies and individuals in a variety of complex domestic and international disputes. He has represented numerous Fortune 100 companies, serving in several capacities from pretrial counselor to trial and appellate counsel, and is regularly retained to provide strategic advice to trial teams, and briefs and argues complex issues in high-stakes trials and appeals.&nbsp;</li> <li><strong>Kristen Ittig</strong> was named to <em>Law360</em>&rsquo;s Government Contracts Editorial Board. Kristen, a partner in the firm&rsquo;s Government Contracts practice group, counsels and represents clients in government contracts matters, including compliance counseling, bid protests, investigations, audits and self-disclosures, claims and disputes, terminations, and other issues impacting government contractors and federal grantees. She advises companies on negotiation of bespoke funding agreements and assists companies in designing and implementing effective compliance programs.&nbsp;</li> <li><strong>Liz Lindquist</strong> was named to <em>Law360</em>&rsquo;s Compliance Editorial Board. Liz, a partner in the firm&rsquo;s Life Sciences and Healthcare Regulatory practice group, counsels clients on a broad range of federal and state regulatory, fraud and abuse, and compliance matters. Liz routinely assists multinational companies with sensitive internal investigations and government enforcement matters, and she has particular experience advising clients on complex pharmaceutical market access and price calculation and reporting issues that overlap with other business-critical substantive areas, including federal contracting, international trade, and SEC compliance obligations.</li> <li><strong>Allison Shuren</strong> was named to <em>Law360</em>&rsquo;s Health Care Editorial Board. Allison, co-chair of the firm&rsquo;s Life Sciences &amp; Healthcare Regulatory practice, is a recognized leader in healthcare, advising a wide range of healthcare, life science, and digital health clients on regulatory, compliance, and False Claims Act enforcement. A primary focus of Allison&rsquo;s practice is compliance with health regulatory requirements, especially the healthcare fraud and abuse laws. Clients seek her counsel on complex business arrangements plan, key transactions, and high-stakes government investigations.&nbsp;</li> </ul>{AF98B3E9-006B-41CC-805A-551F3218C13C}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/capital-snapshot-april-2026Eugenia E. Piersonhttps://www.arnoldporter.com/en/people/p/pierson-eugenia-eEugenia.Pierson@arnoldporter.comAllison Jarushttps://www.arnoldporter.com/en/people/j/jarus-allisonallison.jarus@arnoldporter.comPeter E. Duysharthttps://www.arnoldporter.com/en/people/d/duyshart-peterpeter.duyshart@arnoldporter.comEmily Crawfordhttps://www.arnoldporter.com/en/people/c/crawford-emilyemily.crawford@arnoldporter.comEmily Mahaffyhttps://www.arnoldporter.com/en/people/m/mahaffy-emilyemily.mahaffy@arnoldporter.comDylan L. Kelemenhttps://www.arnoldporter.com/en/people/k/kelemen-dylan-ldylan.kelemen@arnoldporter.comOur Legislative &amp; Public Policy team is pleased to provide the April 2026 edition of Capital Snapshot, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions.&nbsp;Mon, 13 Apr 2026 00:00:00 -0500<p>Our Legislative &amp; Public Policy team is pleased to provide the April 2026 edition of Capital Snapshot, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions. This month&rsquo;s edition of the Capital Snapshot contains a review of the landscape of the 119th Congress, including upcoming congressional schedules and key dates, and recently-announced retirements, resignations, vacancies, and candidacies. We also share updates pertaining to the FY 2026 and FY 2027 federal funding and the appropriations processes, including the ongoing partial DHS government shutdown. Our team also provides comprehensive updates on the latest on trade and tariffs. Furthermore, we share some salient legislative and policy updates across a variety of additional key policy areas, including: (1) defense; (2) tax; (3) financial services; (4) artificial intelligence; (5) technology; (6) data privacy; (7) health care; (8) education; and (9) energy and environment. Additionally, we provide an overview and outlook of the upcoming 2026 midterm elections in November, as well as an update to our detailed rundown of various redistricting efforts across the country ahead of the midterms. Our team also takes a look at current public opinion polling on President Trump&rsquo;s job performance and policy priorities, and assesses economic factors and conditions that could impact the future political landscape in an election year.</p>{2DB77233-B1DD-44BF-8C96-1DF45D3E6E5B}https://www.americanbar.org/groups/antitrust_law/resources/newsletters/private-algorithmic-pricing-litigation/samuel.milucky@arnoldporter.comMon, 13 Apr 2026 00:00:00 -0500{ACD9BD50-21CD-41B5-81E6-F1DE75EF68B7}https://www.arnoldporter.com/en/perspectives/events/2026/04/a-guide-to-plaintiffs-litigation-playbookJulie B. du Ponthttps://www.arnoldporter.com/en/people/d/du-pont-julie-bjulie.dupont@arnoldporter.comDaniel S. Pariserhttps://www.arnoldporter.com/en/people/p/pariser-daniel-sdaniel.pariser@arnoldporter.comRachel Lyons Formanhttps://www.arnoldporter.com/en/people/f/forman-rachelrachel.forman@arnoldporter.comJocelyn A. Wiesnerhttps://www.arnoldporter.com/en/people/w/wiesner-jocelyn-ajocelyn.wiesner@arnoldporter.comArnold &amp; Porter partners Daniel Pariser and Julie du Pont and counsel Rachel Forman and Jocelyn Wiesner will discuss the intersection of emerging medical device technologies, regulations, and litigation risks; new trends and plaintiffs&rsquo; favorite tactics in medical device litigation; as well as company best practices for mitigating those risks.Thu, 09 Apr 2026 00:00:00 -0500<p>The global medical device market is continuing to grow, especially with the use of AI-enabled devices for on real-time diagnostic imaging, clinical decision support, and patient monitoring via wearable devices. With that growth, comes litigation from the plaintiffs&rsquo; bar who are increasingly looking to device manufacturers over other parties to recover for alleged injuries sustained by their clients.</p> <p>Arnold &amp; Porter partners Daniel Pariser and Julie du Pont and counsel Rachel Forman and Jocelyn Wiesner will discuss the intersection of emerging medical device technologies, regulations, and litigation risks; new trends and plaintiffs&rsquo; favorite tactics in medical device litigation; as well as company best practices for mitigating those risks. Whether your medical device company has a large or limited product liability litigation portfolio or is using or plans to use artificial intelligence/machine learning for its medical devices, this presentation will enable the company&rsquo;s entire legal team &mdash; not only the litigators &mdash; to spot issues and mitigate risks before litigation begins and defend against filed claims.</p>{0BA0B9C9-ABE2-478C-8B51-08547DC0B7EA}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/ambassador-barbara-leaf-speaks-to-pbs-newshour-bloomberg-tv-cnbc-on-iran-ceasefireArnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf recently appeared on <em>PBS NewsHour</em>, <em>Bloomberg TV</em>, and <em>CNBC</em> to discuss the temporary ceasefire between the U.S and Iran, as well as the ripple effects of the conflict throughout the Middle East.Thu, 09 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf (Amb. Leaf) recently appeared on <em>PBS NewsHour</em>, <em>Bloomberg TV</em>, and <em>CNBC</em> to discuss the temporary ceasefire between the U.S and Iran, as well as the ripple effects of the conflict throughout the Middle East.</p> <p>Amb. Leaf cautioned that the ceasefire amounted to a &ldquo;fragile truce&rdquo; and noted that regional partners in the Gulf viewed the arrangement as unstable and at high risk of escalation. She highlighted unresolved issues, including whether or not Lebanon was included in the ceasefire and ongoing military strikes across the region, as key sources of volatility. &ldquo;Hold tight to giddy optimism,&rdquo; she said.</p> <p>Amb. Leaf commented that the success of the ceasefire primarily hinges on the reopening of the Strait of Hormuz. &ldquo;Everyone wants the <em>status quo ante</em>,&rdquo; she said, referring to the recognition of the Strait of Hormuz as a vital passageway of international commerce that should remain open. She also called the dismantling of Iran&rsquo;s nuclear program and removal from Iran of its stockpile of enriched uranium &ldquo;critical&rdquo; for judging the long-term success of the military campaign. </p> <p>While the ceasefire is a sign of progress in ending the conflict, Amb. Leaf pointed out that the agreement plays into Iran&rsquo;s perception of victory. &ldquo;The Iranian regime is trumpeting that it essentially defeated the U.S. and Israel&rdquo; merely by surviving, and, in doing so, weaponizing its hold on the Strait of Hormuz.</p> <p>She concluded by emphasizing the importance of negotiated outcomes and called for a coordinated, multilateral approach to sustain pressure on Iran and shape a more stable regional order.</p> <p><a rel="noopener noreferrer" href="https://www.pbs.org/newshour/show/former-u-s-officials-analyze-chances-fragile-iran-ceasefire-can-hold" target="_blank">Watch the full <em>PBS NewsHour</em> interview.</a></p> <p><a rel="noopener noreferrer" href="https://www.bloomberg.com/news/videos/2026-04-09/barbara-leaf-maintaining-free-hormuz-trade-key-for-us-video" target="_blank">Watch the full <em>Bloomberg TV </em>interview.</a></p> <p><a rel="noopener noreferrer" href="https://www.msn.com/en-us/news/world/hold-tight-to-giddy-optimism-barbara-leaf-on-fragile-iran-us-ceasefire/vi-AA20twqe" target="_blank">Watch the full <em>CNBC</em> interview.</a> </p>{5E4F09DE-BAFD-4527-B67B-33F020FDCA33}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/lee-cortes-and-lisa-re-discuss-intensifying-medicare-advantage-scrutiny-with-law360Arnold &amp; Porter White Collar Defense &amp; Investigations partner Lee Cortes and Life Sciences &amp; Healthcare Regulatory partner Lisa Re were quoted in the recent <em>Law360</em> article, &ldquo;The Uncertain Impact Of Medicare Advantage Scrutiny,&rdquo;&nbsp;Thu, 09 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter White Collar Defense &amp; Investigations partner Lee Cortes and Life Sciences &amp; Healthcare Regulatory partner Lisa Re were quoted in the recent <em>Law360</em> article, &ldquo;The Uncertain Impact Of Medicare Advantage Scrutiny,&rdquo; discussing the mounting litigation and regulatory activity against Medicare Advantage Organizations (MAOs). </p> <p>Lisa, former Assistant Inspector General for Legal Affairs at the U.S. Department of Health and Human Services Office of Inspector General, said she expects the federal government&rsquo;s recent success in securing several large settlements from MAOs to both reinforce their interest in the area and &ldquo;move the needle toward compliance.&rdquo; </p> <p>&ldquo;The government resources tend to follow the money, so I&rsquo;m not surprised by the scrutiny in this area,&rdquo; she noted. </p> <p>Lee added that, even after the several recent settlements, litigation may remain a relevant tool for Medicare Advantage enforcement. He also highlighted that the growing popularity of Medicare Advantage makes it difficult to predict exactly how enforcement strategies will develop. </p> <p>&ldquo;The thing about Medicare Advantage is it&rsquo;s so broad, and it does keep evolving,&rdquo; he said. &ldquo;So I think it is one of those time-will-tell kind of scenarios, given that it just continues to become a bigger and bigger part of the system itself.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://www.law360.com/healthcare-authority/articles/2459445?" target="_blank">Read the full article</a> (subscription required).</p>{95FDA318-3B4F-4E0E-8AF1-4929AEDDBF4F}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/executive-order-establishes-new-diversity-restrictions-and-requirementsKristen E. Ittighttps://www.arnoldporter.com/en/people/i/ittig-kristen-ekristen.ittig@arnoldporter.comJoshua F. Alloyhttps://www.arnoldporter.com/en/people/a/alloy-joshua-fjoshua.alloy@arnoldporter.comThomas A. Pettithttps://www.arnoldporter.com/en/people/p/pettit-thomasthomas.pettit@arnoldporter.comSam Callahanhttps://www.arnoldporter.com/en/people/c/callahan-samsam.callahan@arnoldporter.comSamantha Zipperhttps://www.arnoldporter.com/en/people/z/zipper-samanthasamantha.zipper@arnoldporter.comKristina Lorchhttps://www.arnoldporter.com/en/people/l/lorch-kristinakristina.lorch@arnoldporter.comOn March 26, 2026, President Donald Trump issued Executive Order 14398, Addressing DEI Discrimination by Federal Contractors &mdash; the latest executive order targeting diversity, equity, and inclusion practices in the U.S. government and federal government contracting. The EO targets &ldquo;racially discriminatory DEI activities&rdquo; by requiring new contract terms that appear intended to strengthen government enforcement mechanisms.&nbsp;Thu, 09 Apr 2026 00:00:00 -0500<p>On March 26, 2026, President Donald Trump issued <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/03/31/2026-06286/addressing-dei-discrimination-by-federal-contractors" target="_blank">Executive Order 14398, Addressing DEI Discrimination by Federal Contractors</a> (hereinafter, the order or EO) &mdash; the latest executive order targeting diversity, equity, and inclusion (DEI) practices in the U.S. government and federal government contracting. The EO targets &ldquo;racially discriminatory DEI activities&rdquo; by requiring new contract terms that appear intended to strengthen government enforcement mechanisms. </p> <p>The order is part of the administration&rsquo;s <a rel="noopener noreferrer" href="https://www.whitehouse.gov/fact-sheets/2026/03/fact-sheet-president-donald-j-trump-addresses-dei-discrimination-by-federal-contractors/" target="_blank">broader</a> <a href="/en/perspectives/advisories/2026/03/state-department-issues-final-mexico-city-policy">efforts</a>&nbsp;to limit (or eliminate) DEI initiatives in federal government and procurement, including by federal contractors and subcontractors in all aspects of their operations. On January 21, 2025, President Trump<a href="/en/perspectives/advisories/2025/01/trump-administration-rescinds-certain-equal-employment"> issued a similar order</a> rescinding previous executive actions relating to equal employment opportunity and affirmative action based on race and sex in federal employment and government contracting.</p> <h2>Applicability</h2> <p>The EO applies to &ldquo;contracts and contract-like instruments&rdquo; issued by &ldquo;executive departments and agencies, including independent establishments subject to&rdquo; the Federal Property and Administrative Services Act (FPASA). FPASA is a federal statute which grants the president certain powers to establish federal contracting requirements. The phrase &ldquo;contracts and contract-like instruments&rdquo; covers procurement contracts and potentially other types of agreements, such as other transaction agreements (OTAs) and concession contracts; while it might also be construed as applying to grants, they are not subject to the FPASA and thus are arguably outside the scope of the EO.</p> <h2>The EO&rsquo;s Requirements</h2> <p>The EO requires that within 30 days (i.e., by April 25, 2026) covered agencies must amend existing contracts and ensure new contracts include provisions prohibiting prime contractors and subcontractors from engaging in &ldquo;racially discriminatory DEI activities,&rdquo; which the order broadly defines as &ldquo;disparate treatment based on race or ethnicity in the recruitment, employment (e.g., hiring, promotions), contracting (e.g., vendor agreements), program participation, or allocation or deployment of an entity&rsquo;s resources.&rdquo; The order defines &ldquo;program participation&rdquo; as &ldquo;membership or participation in, or access or admission to: training, mentoring, or leadership development programs; educational opportunities; clubs; associations; or similar opportunities that are sponsored or established by the contractor or subcontractor.&rdquo;</p> <p>The new EO&rsquo;s prohibitions appear to extend beyond contractors&rsquo; existing legal obligations. Title VII of the Civil Rights Act of 1964 already prohibits employers from engaging in racially discriminatory employment policies and practices,&nbsp;and 42 U.S.C &sect; 1981 prohibits intentional race discrimination in connection with contracts. However, the new EO does not reference current federal anti-discrimination laws, and its broad scope suggests it might intend to discourage or prohibit even lawful DEI activities. For example, the EO&nbsp;(and subsequent contract clauses implementing the EO)&nbsp; could be construed to prohibit a contractor&rsquo;s donations to a race-specific nonprofit, offer of a race-specific scholarship, or engagement in other activities that might not give rise to an actionable legal discrimination claim but are nevertheless intentionally directing resources or benefits to individuals, groups, or companies based on race or ethnicity. The wide reach of &ldquo;racially discriminatory DEI activities&rdquo; to include &ldquo;allocation or deployment of an entity&rsquo;s resources&rdquo; could conceivably cover any contractor activity or expenditure.</p> <p>Under Section 3 of the order, contractors must certify that they do not engage in racially discriminatory DEI activities and give the government relatively broad audit and investigation rights, including requiring contractors to &ldquo;furnish all information and reports, including providing access to books, records, and accounts, as required by the contracting agency pursuant to the [EO], for purposes of ascertaining compliance with this clause.&rdquo; Compliance is expressly identified as &ldquo;material to the Government&rsquo;s payment decisions for purposes of&rdquo; the False Claims Act (FCA). </p> <p>The EO provides new enforcement mechanisms and consequences for noncompliance, including contract cancellation or termination and suspension and debarment, in addition to more traditional FCA remedies (such as treble damages). Although the order states that agencies &ldquo;may&rdquo; take any of those actions, Section 4 of the EO appears to make those enforcement actions mandatory, stating that &ldquo;contracting agencies <em>shall</em> &hellip; cancel, terminate, suspend, or cause to be cancelled, terminated, or suspended, any contract or contract-like instrument, or any portion or portions thereof, for failure of the contractor or subcontractor to comply with the clause&rdquo;[[N: Emphasis added.]] and &ldquo;take appropriate action to suspend and debar contractors or subcontractors&rdquo; who do not comply.</p> <p>Additionally, the EO requires prime contractors and subcontractors to report &ldquo;known or reasonably knowable conduct [by lower tier subcontractors] that may violate&rdquo; the prohibition on &ldquo;racially discriminatory DEI activities.&rdquo; This can be read to increase the prime contractor&rsquo;s obligation to oversee subcontractor compliance. Further, the EO requires contractors to &ldquo;inform the contracting department or agency if a subcontractor sues the contractor and the suit puts at issue, in any way, the validity of this clause.&rdquo;</p> <p>The order vests the Office of Management and Budget with the responsibility for issuing additional guidance to contracting agencies. The order requires agencies to review their implementation of Section 3 within 120 days and provide their findings to the Assistant to the President for Domestic Policy. Additionally, the Federal Acquisition Regulatory Council (hereinafter, FAR Council) must, within 60 days, amend the FAR to include Section 3&rsquo;s requirements in federal procurement, solicitations, and contracts and remove any provisions that &ldquo;conflict or are inconsistent with&rdquo; Section 3 and publish &ldquo;deviation and interim guidance&rdquo; under FAR subpart 1.4. </p> <h2>Takeaways</h2> <p>The EO focuses on exclusively &ldquo;racially discriminatory DEI activities&rdquo; and does not address discrimination based on sex, disability status, or veteran status. While the Equal Employment Opportunity Commission&nbsp;has recently taken action to limit women&rsquo;s initiatives at commercial companies, the order focuses on race and ethnicity and not on programs that favor women-owned businesses.</p> <p>Government contractors should be mindful of the employment-related implications of the EO. The order explicitly calls out disparate treatment based on race and ethnicity in recruitment, hiring, promotions, allocation of resources, and program participation as &ldquo;racially discriminatory DEI activities.&rdquo; The order further specifies that violative &ldquo;program participation&rdquo; by employer-contractors is wide ranging, from access to training and mentoring to participation in clubs and associations. This means that activities such as policies encouraging interviewers to hire racially diverse candidates, seeking to maintain a set proportion of diverse personnel at varying levels of management, and even hosting company clubs or mentorship programs with participation premised in any way on race or ethnicity, could be seen as violative conduct. According to the EO, violators risk not only contract suspension or termination, but also potential further enforcement action such as an FCA action brought by the Attorney General. </p> <p>Given this risk landscape, government contractors can undertake several preliminary actions to understand their enforcement risk. Specifically, contractors should:</p> <ul> <li>Identify and maintain continuous oversight of affirmative action, DEI, and related policies and programs to determine whether they violate the order&rsquo;s prohibition on disparate treatment based on race or ethnicity</li> <li>Review subcontractor agreements and subcontractor oversight procedures to enable early detection of noncompliance at any subcontractor tier, including adding necessary flow down terms in subcontracts</li> <li>Identify any state or local government-mandated contracting diversity requirements that may conflict with the EO&rsquo;s prohibitions</li> <li>Address any noncompliant policies, which may require revising or revoking such policies, while considering the risks of noncompliance with provisions in existing contracts</li> <li>Engage with contracting officers to understand how the order will be implemented in existing contracts</li> </ul> <p>President Trump&rsquo;s executive order is also <a href="/en/perspectives/blogs/major-questions-an-administrative-law-and-regulatory-blog/2026/03/federal-contractors-face-new-compliance-risks-litigation-possibilities">subject to litigation risks</a>. Federal appellate courts have upheld a narrow view of the authority FPASA grants to the president, and the order&rsquo;s justification that DEI policies &ldquo;cause inefficiencies, waste, and abuse within entities that engage in such practices&rdquo; may not withstand judicial scrutiny. Further, the FAR Council is in the midst of efforts to overhaul the FAR, which indicates further regulatory changes are on the horizon. Each individual agency may have its own FAR deviations, so there may be inconsistencies among the agencies, as well.</p> <p>Arnold &amp; Porter will continue to monitor developments in this area. For questions about the executive order or other government contracting or labor and employment issues, please contact the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="/en/services/capabilities/practices/government-contracts">Government Contracts</a>&nbsp;or <a href="/en/services/capabilities/practices/labor-and-employment">Labor &amp; Employment</a>&nbsp;practice groups.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{4C56F3B5-EFB6-4B7F-A9DF-116DC7CC2086}https://www.arnoldporter.com/en/perspectives/events/2026/04/what-us-startups-need-to-know-about-the-uk-eu-gdprjames.castro-edwards@arnoldporter.comThis practical webinar is designed for companies considering or planning to enter or that have recently established themselves in the UK or EU markets.Wed, 08 Apr 2026 00:00:00 -0500<p>Early-stage U.S. life sciences and technology companies often underestimate the requirements that UK and EU data protection laws impose on their operations. This practical webinar is designed for companies considering or planning to enter or that have recently established themselves in the UK or EU markets. We will provide a clear, actionable overview of key data protection requirements and highlight common pitfalls companies encounter during early-stage expansion.</p> <p>Topics will include:</p> <ul> <li>When the UK GDPR and EU GDPR apply to companies with no physical presence in Europe</li> <li>The documentation and governance structures required under the GDPR &ldquo;accountability&rdquo; principle</li> <li>Employee and customer data rights and the strict deadlines for responding to requests</li> <li>Safeguards required when transferring personal data between the UK/EU and the United States</li> <li>Data breach notification obligations and reporting timelines</li> <li>Rules governing electronic marketing and website cookies</li> <li>Potential penalties for non-compliance, including fines of up to 4% of global turnover</li> <li>Recent enforcement trends among UK and EU regulators</li> <li>Key differences emerging between UK and EU privacy regimes following Brexit</li> </ul>{B234E150-D6A1-4950-B4AE-47E7D9A27D7B}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/douglas-pelley-talks-401k-fiduciary-rules-with-investopediaArnold &amp; Porter Tax counsel Douglas Pelley was recently quoted in the <em>Investopedia</em> article, &ldquo;What the Death of the Biden-Era Fiduciary Rule Means for Your 401(k) Rollover,&rdquo; discussing how a Texas federal court&rsquo;s vacating the &ldquo;Retirement Security Rule&rdquo; impacts consumers rolling over 401(k)s, as well as those advising them.&nbsp;Wed, 08 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter Tax counsel Douglas Pelley was recently quoted in the <em>Investopedia</em> article, &ldquo;What the Death of the Biden-Era Fiduciary Rule Means for Your 401(k) Rollover,&rdquo; discussing how a Texas federal court&rsquo;s vacating the &ldquo;Retirement Security Rule&rdquo; impacts consumers rolling over 401(k)s, as well as those advising them. </p> <p>Doug explained that rules proposed by prior administrations generally aimed to expand the definition of fiduciary and broaden obligations for advisors during one-time 401(k) rollover transactions. </p> <p>&ldquo;Historically, a one-off rollover discussion between a financial institution and a participant was not treated as fiduciary,&rdquo; he said. &ldquo;The Department of Labor tried to move the definition under their various proposals, but they were unsuccessful in doing so, and the courts struck down those regulations multiple times.&rdquo;</p> <p>Following the Court&rsquo;s decision, fiduciary standards will revert to the original Employee Retirement Income Security Act (ERISA) guidelines. </p> <p>Doug also highlighted that even if advisors are subject to other regulations, such as the Securities and Exchange Commission&rsquo;s Regulation Best Interest, those regulations &ldquo;may not be as stringent&rdquo; as fiduciary standards.</p> <p><a rel="noopener noreferrer" href="https://www.investopedia.com/new-rules-change-guidance-on-retirement-rollovers-why-you-might-need-to-exercise-more-caution-11940881" target="_blank">Read the full article</a>. </p>{D78DE49E-4F05-47DA-8A91-742214127315}https://www.arnoldporter.com/en/perspectives/news/2026/04/arnold-porter-wins-dismissal-of-consumer-class-action-against-stanley-drinkwareArnold &amp; Porter secured dismissal for Pacific Market International LLC, the maker of Stanley drinkware, in a consolidated consumer class action alleging that the company failed to disclose the use of lead in its popular tumblers.Wed, 08 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter secured dismissal for Pacific Market International LLC, the maker of Stanley drinkware, in a consolidated consumer class action alleging that the company failed to disclose the use of lead in its popular tumblers.</p> <p>In its decision, the U.S. District Court for the Western District of Washington held that plaintiffs failed to allege &ldquo;a specific and plausible risk of harm&rdquo; associated with the small lead pellet used to seal the vacuum insulation layer at the base of the product. The court had previously dismissed an earlier version of the complaint on similar grounds and found that the amended pleading did not cure the deficiencies identified in that ruling.</p> <p>Emphasizing the absence of any plausible allegation of harm, the court concluded that &ldquo;without sufficient allegations to show that the lead in the Stanley cups could pose actual harm to consumers, the apparent need for disclosure is a moot proposition.&rdquo;</p> <p>The dismissal was recognized with a shout-out by <em>The American Lawyer</em>&rsquo;s <a rel="noopener noreferrer" href="https://www.law.com/litigationdaily/2026/04/09/litigator-of-the-week-runners-up-and-shout-outs/?slreturn=20260414160851" target="_blank">Litigator of the Week column</a>.</p> <p>The Arnold &amp; Porter team was led by partners James F. Speyer, E. Alex Beroukhim, Pallavi Mehta Wahi, and Ashley E. Gammell; counsel Elie Salamon; and associates Owen Connolly and Nina Leviten.</p>{9F91BB96-F76E-450D-B0F6-CBB16B966576}https://www.arnoldporter.com/en/perspectives/publications/2026/04/the-chemical-compound-q1Lawrence E. Culleenhttps://www.arnoldporter.com/en/people/c/culleen-lawrence-elawrence.culleen@arnoldporter.comBrandon W. Neuschaferhttps://www.arnoldporter.com/en/people/n/neuschafer-brandon-wbrandon.neuschafer@arnoldporter.comJudah Prerohttps://www.arnoldporter.com/en/people/p/prero-judahjudah.prero@arnoldporter.comCamille Heyboerhttps://www.arnoldporter.com/en/people/h/heyboer-camillecamille.heyboer@arnoldporter.comKatrina R. Umsteadhttps://www.arnoldporter.com/en/people/u/umstead-katrinakatrina.umstead@arnoldporter.comThis edition of our quarterly newsletter on chemical regulatory developments provides updates on litigation, regulatory, legislative, and policy developments of importance to our clients.Tue, 07 Apr 2026 00:00:00 -0500<p>This edition of our quarterly newsletter on chemical regulatory developments provides updates on litigation, regulatory, legislative, and policy developments of importance to our clients. The newsletter focuses on actions affecting chemical substances that are the subject of ongoing regulatory activity or scrutiny by federal, state, and international authorities, as well as developments in related litigation. These include, among others, per- and polyfluoroalkyl substances (PFAS) and other chemicals of concern to the U.S. Environmental Protection Agency (EPA or the Agency) under the Toxic Substances Control Act (TSCA), EPA pesticide actions under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as well as emerging regulatory frameworks in the United States and abroad. Check here each quarter for a curated presentation of the most important developments affecting chemical manufacturers, importers, processors, and users. </p> <h2>Table of Contents</h2> <ul> <li><span style="font-size: 24px;"><a href="#Federal Legislative Updates">Federal Legislative Updates</a></span></li> <li><span style="font-size: 24px;"><a href="#Federal Regulatory Updates">Federal Regulatory Updates</a></span></li> <li><span style="font-size: 24px;"><a href="#Federal Litigation Updates">Federal Litigation Updates</a></span></li> <li><span style="font-size: 24px;"><a href="#State Regulatory Updates">State Regulatory Updates</a></span></li> <li><span style="font-size: 24px;"><a href="#International Developments">International Developments</a></span></li> </ul> <p> </p> <h2><a name="Federal Legislative Updates"></a>Federal Legislative Updates</h2> <h3>Congress Considers TSCA Reform (Again)</h3> <p>In the first quarter of 2026, both the House Energy and Commerce Committee Subcommittee on Environment and the Senate Environment and Public Works Committee published discussion drafts of legislation to extend EPA&rsquo;s authorization to collect fees under TSCA as well as make substantive changes to TSCA. Absent legislation to extend EPA&rsquo;s fee authority, it will expire on September 30, 2026. The House <a rel="noopener noreferrer" href="https://d1dth6e84htgma.cloudfront.net/H_R_Discussion_Draft_of_Legislation_to_Modernize_the_Toxic_Substances_Control_Act_1_3f4f956a9a.pdf" target="_blank">discussion draft</a> was released on January 15, 2026, and a hearing on the discussion draft was held on January 22. The Senate <a rel="noopener noreferrer" href="https://www.epw.senate.gov/public/_cache/files/3/e/3ebd3914-227d-4fd9-a42e-bcfef771fb41/604D9D93720DE5F6F01FDF7D435AE0A465FFD09ED10FEF061CAF175299AF69B4.toxic-substances-control-act-fee-reauthorization-and-improvement-act-discussion-draft.pdf" target="_blank">discussion draft</a> was released on February 26 and a hearing on the discussion draft was held on March 4. </p> <p>While the discussion drafts differ significantly in scope and content, they would both make significant changes to TSCA section 5, which governs EPA&rsquo;s review of new chemical substances and significant new uses of chemical substances. For example, both bills provide for accelerated review of certain categories of chemical substances, including substances eligible for inclusion in the Safer Choice program, and limit suspensions of review periods for TSCA section 5 notices. </p> <p>The House discussion draft would also allow for the use of significant new use rules (SNURs) in lieu of TSCA section 5 orders. With respect to other sections of TSCA, among other changes, the House discussion draft would replace the requirement under TSCA section 6(a) that EPA regulate chemical substances &ldquo;to the extent necessary&rdquo; so that they no longer present unreasonable risk with a requirement that EPA regulate &ldquo;in order to minimize, to the extent reasonably feasible,&rdquo; unreasonable risk, would allow for judicial review of unreasonable risk determinations under TSCA section 6 upon completion of the relevant risk evaluation, and would alter the action that may be sought through a petition under TSCA section 21. The Senate discussion draft would codify with modifications the low volume and low release and exposure regulatory exemptions from the requirements of TSCA section 5, would create a new &ldquo;stewardship authorization pathway&rdquo; to allow for the accelerated commercialization of new chemical substances under certain conditions, and would also alter the action that may be sought through a petition under TSCA section 21 and the standard to be applied by EPA when considering whether to grant such a petition. </p> <p>Both discussion drafts were developed by the Republican majorities on the respective committees, and Democrats expressed numerous concerns about the drafts during the hearings in the House Subcommittee on the Environment and Senate Environment and Public Works Committee. Therefore, the prospects of true TSCA reform during the current Congress are unclear. If the parties are unable to reach an agreement on substantive revisions to TSCA prior to the expiration of EPA&rsquo;s fee authority, it is possible that Congress may opt for a clean extension of this authority.</p> <h3>Democrats Reintroduce Broad PFAS Ban Legislation</h3> <p><a rel="noopener noreferrer" href="https://www.congress.gov/119/crec/2026/03/19/172/50/CREC-2026-03-19-pt1-PgS1370.pdf" target="_blank">Senator Durbin (D-IL)</a> and <a rel="noopener noreferrer" href="https://mccollum.house.gov/sites/evo-subsites/mccollum.house.gov/files/evo-media-document/mccoll_014_xml.pdf" target="_blank">Representative McCullom (D-MN-04)</a> have introduced legislation that, among other provisions, would ban certain uses of PFAS &mdash; such as in carpets, textiles, and food packaging &mdash; as soon as one year after enactment and would ultimately require the phase out of all non-essential uses of PFAS within 10 years. The legislation would also prohibit releases of PFAS above detectable levels within 10 years and require EPA to establish a federal PFAS reporting requirement. Senator Durbin and Representative McCullom introduced similar legislation in the 118th Congress, but it never progressed out of the relevant Senate and House Committees. Our March 2026 <a href="/en/perspectives/blogs/environmental-edge/2026/03/congress-considers-broad-pfas-legislation">blog post</a>&nbsp;discusses this legislation in greater detail.</p> <h2><a name="Federal Regulatory Updates"></a>Federal Regulatory Updates</h2> <h3><strong>General</strong></h3> <h4>EPA Announces PFAS Coordinating Group</h4> <p>On February 6, <a rel="noopener noreferrer" href="https://www.epa.gov/newsreleases/trump-epa-highlights-major-year-one-pfas-actions-combat-risks-and-make-america-healthy" target="_blank">EPA announced the establishment of a PFAS &ldquo;coordinating group&rdquo;</a> as part of a broader update on PFAS-related actions during the first year of the second Trump Administration. Per the announcement, this coordinating group will be supported by leadership from the Office of the Administrator and the Office of Water and &ldquo;represent senior technical and policy leaders from across EPA program offices and regions.&rdquo;</p> <p>According to EPA, the coordinating group is intended to &ldquo;ensure the continued sharing of research, innovation, and actions to accelerate the cleanup of PFAS contamination and protect human health and the environment.&rdquo; EPA also stated in this announcement that it will &ldquo;further&rdquo; PFAS-related actions under TSCA, the Safe Drinking Water Act, the Clean Air Act, and the Clean Water Act. However, EPA did not provide any specifics about these future regulatory actions or when it intends to take such actions. </p> <h4>EPA Reaffirms Animal Testing Phase-Out Commitment</h4> <p><a rel="noopener noreferrer" href="https://www.epa.gov/newsreleases/administrator-zeldin-gets-epa-back-track-eliminate-animal-testing-after-biden-admin" target="_blank">EPA announced a renewed commitment to phasing out mammalian testing by 2035</a>, consistent with its obligations under TSCA Section 4(h) to &ldquo;reduce and replace&rdquo; the use of vertebrate animals in TSCA testing. Concurrently with that announcement, EPA&rsquo;s New Chemicals Program released a &ldquo;<a rel="noopener noreferrer" href="https://www.epa.gov/system/files/documents/2026-01/508-skin-irritation-decision-framework_final.pdf" target="_blank">Decision Framework for Hazard Identification of Skin Irritation and Corrosion</a>.&rdquo; The framework describes the New Chemicals Program&rsquo;s commitment to prioritizing New Approach Methodologies (NAMs) in the development of skin irritation and corrosion hazard data for TSCA Section 5 new chemicals submissions. </p> <p>The guidance states that the New Chemicals Program will prioritize data in the following order: (1) data from &ldquo;human cell-based tissue model NAMs&rdquo; demonstrated to be &ldquo;reproducible&rdquo; and &ldquo;relevant to skin irritation/corrosion&rdquo;; (2) data from &ldquo;other skin irritation/corrosion NAMs&rdquo; demonstrated to be &ldquo;reproducible&rdquo; and providing information on &ldquo;mechanisms of toxicity relevant to skin irritation/corrosion&rdquo; and (3) data from in vivo tests. EPA indicated that it will continue to expand the use of NAMs across its chemical evaluation programs while maintaining compliance with statutory and regulatory requirements, and noted that some animal testing may still be required in certain circumstances.</p> <h3><strong>TSCA</strong></h3> <h4>EPA Provides Update on Expiring TSCA Confidentiality Claims</h4> <p>On January 5, <a rel="noopener noreferrer" href="https://www.epa.gov/chemicals-under-tsca/epa-provides-update-expiring-confidential-business-information-claims-under" target="_blank">EPA announced the process it intends to use to address expiring confidential business information (CBI) claims</a> under TSCA. Under TSCA, most CBI claims expire ten years after submission, and the first claims submitted following the 2016 Lautenberg Act amendments are scheduled to expire beginning in June 2026.</p> <p>EPA indicated that it will notify submitters of expiring claims by posting a list of affected submissions on its TSCA CBI website and by sending direct notifications through the Central Data Exchange (CDX) platform. Companies seeking to maintain confidentiality of information must submit substantiated extension requests electronically through CDX at least 30 days prior to the expiration date. EPA also stated that it will review extension requests and either grant or deny continued protection; if no timely request is submitted, EPA may disclose the information without further notice.</p> <p>The announcement provides initial implementation details for TSCA&rsquo;s CBI &ldquo;sunset&rdquo; provisions and signals the start of a recurring review process for confidentiality claims. Companies with TSCA submissions should evaluate whether existing claims remain necessary and ensure that systems are in place to monitor EPA notices and submit timely extension requests to avoid potential public disclosure of previously protected information.[[N: For additional discussion of EPA&rsquo;s process for expiring TSCA CBI claims and associated compliance considerations, see <a href="/en/perspectives/blogs/environmental-edge/2026/01/your-expiring-tsca-confidentiality-claims">Arnold &amp; Porter Environmental Edge Blog: <em>You Snooze, You Might Lose &mdash; Your Expiring TSCA Confidentiality Claims</em></a>.]]</p> <h4>EPA Releases Final Risk Evaluations for 1,3-Butadiene and 5 Phthalates</h4> <p><a rel="noopener noreferrer" href="https://www.epa.gov/newsreleases/epa-announces-intent-regulate-nearly-one-dozen-13-butadiene-uses-protect-american" target="_blank">1,3-Butadiene</a>. On December 31, 2025, EPA announced the availability of its final risk evaluation for 1,3-butadiene under TSCA Section 6. 1,3-butadiene is a gas used in the manufacture of products including tires, adhesives, sealants, and paints and coatings. EPA determined that 1,3-butadiene presents an unreasonable risk of injury to human health under certain conditions of use, based on the weight of scientific evidence. Specifically, EPA found that the identified risks are driven by workplace inhalation exposures under 11 industrial conditions of use, including manufacturing, processing, and disposal activities. EPA did not identify unreasonable risk to consumers, the general population, or the environment. EPA&rsquo;s next step with respect to 1,3-butadiene is the development of a proposed risk management rule under TSCA section 6(a). </p> <p><a rel="noopener noreferrer" href="https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/phthalates" target="_blank">5 Phthalates</a>. On January 6, EPA announced the release of the final risk evaluations for five phthalates: (1) butyl benzyl phthalate (BBP); (2) dibutyl phthalate (DBP); (3) dicyclohexyl phthalate (DCHP); (4) di(2-ethylhexyl) phthalate (DEHP); and (5) diisobutyl phthalate (DIBP). These substances are used as plasticizers, as well as in other applications such as adhesives, sealants, paints, and coatings. EPA&rsquo;s risk evaluations identified unreasonable risk to workers from all 5 phthalates and unreasonable risk to the environment from BBP, DBP, DEHP, and DIBP. EPA did not identify unreasonable risk to consumers or to the general population from any of these 5 phthalates, and also concluded that cumulative exposure to these phthalates does not contribute to unreasonable risk. Under TSCA section 6, EPA is now required to propose rules to mitigate the unreasonable risks it identified from these 5 phthalates.</p> <h4>EPA Proposes Compliance Date Extensions for TSCA Section 6(a) Rules for Perchloroethylene, Carbon Tetrachloride</h4> <p>On March 27, EPA <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/03/27/2026-05977/perchloroethylene-pce-and-carbon-tetrachloride-ctc-regulation-under-the-toxic-substances-control-act" target="_blank">proposed</a> extensions of certain compliance dates under the TSCA section 6(a) risk management rules for perchloroethylene (PCE) and carbon tetrachloride (CTC). Specifically, EPA is proposing to extend the compliance dates under these risk management rules relevant to initial exposure monitoring, compliance with the existing chemicals exposure limit (ECEL) and respiratory protection requirements, and implementation of exposure control plans. Under this proposal, companies engaged in activities subject to the workplace chemical protection program (WCPP) provisions of the risk management rules for PCE and CTC would have to complete initial exposure monitoring by June 21, 2027 and would have to comply with the ECEL and provide appropriate respiratory protection, among other requirements, by September 20, 2027. Companies subject to the PCE risk management rule would have to establish and implement an exposure control plan by December 20, 2027. EPA is not currently proposing to change the deadline for establishing and implementing an exposure control plan for CTC, which would remain December 3, 2027. EPA is accepting public comment on the proposed rule through April 27, 2026. </p> <p>While EPA is proposing to extend these compliance deadlines, the existing deadlines remain in effect until the extension is finalized. Certain of the proposed deadlines have already passed, while others may pass before EPA finalizes a deadline extension, assuming it ultimately chooses to do so. Thus, concurrent with this proposal, EPA published statements suggesting that it did not intend to enforce the existing deadlines for <a rel="noopener noreferrer" href="https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/risk-management-perchloroethylene-pce" target="_blank">PCE</a> or <a rel="noopener noreferrer" href="https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/risk-management-carbon-tetrachloride" target="_blank">CTC</a>, except if necessary to protect human health or the environment. </p> <h4>EPA Proposes to Extend Reporting Deadline for Health and Safety Data for 16 Chemicals</h4> <p>On March 30, EPA <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/03/30/2026-06066/reporting-deadline-extension-for-the-health-and-safety-data-reporting-rule-under-toxic-substance" target="_blank">published</a> a rule proposing to extend for a third time the deadline under a December 13, 2024, rule for reporting of health and safety data associated with 16 chemical substances from May 22, 2026, to May 22, 2027. In this proposal, EPA explains that it intends to extend the reporting deadline because it is &ldquo;considering a proposal to modify the scope&rdquo; of the December 13, 2024, rule and has determined that the current May 22, 2026, deadline is therefore unfeasible. EPA did not provide any additional details about the modifications it is considering. EPA is accepting public comment on the proposed extension through April 29, 2026.</p> <p>The underlying reporting rule under TSCA section 8(d) requires manufacturers (including importers) to submit to EPA data from unpublished health and safety studies regarding the following substances: 4,4-Methylene bis(2-chloraniline); 4-tert-octylphenol(4-(1,1,3,3-Tetramethylbutyl)-phenol); acetaldehyde; acrylonitrile; benzenamine; benzene; bisphenol A; ethylbenzene; hydrogen fluoride; n-(1,3-Dimethylbutyl)-N&rsquo;-phenyl-p-phenylenediamine (6PPD); 2-anilino-5-[(4-methylpentan-2-yl) amino]cyclohexa-2,5-diene-1,4-dione (6PPD-quinone); naphthalene; styrene; tribomomethane (bromoform); triglycidyl isocyanurate; and vinyl chloride. EPA is collecting these data to inform potential future actions under TSCA section 6.</p> <h3><strong>FIFRA</strong></h3> <h4>President Trump Issues Executive Order to Ensure Supply of Glyphosate-Based Herbicides</h4> <p>On February 18, 2026, President Trump issued <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/02/23/2026-03628/promoting-the-national-defense-by-ensuring-an-adequate-supply-of-elemental-phosphorus-and" target="_blank">Executive Order 14387: Promoting the National Defense by Ensuring an Adequate Supply of Elemental Phosphorus and Glyphosate-Based Herbicides</a>. Citing the Defense Production Act, this executive order highlighted the importance of glyphosate-based herbicides, noting that there is &ldquo;no direct one-for-one chemical alternative&rdquo; and &ldquo;[l]ack of access to glyphosate-based herbicides would critically jeopardize agricultural productivity.&rdquo; The executive order further noted that &ldquo;any major restrictions in access to glyphosate-based herbicides would result in economic losses for growers and make it untenable for them to meet growing food and feed demands.&rdquo; The executive order delegates to the Secretary of Agriculture authority to take action to ensure &ldquo;a continued and adequate supply&rdquo; of glyphosate-based herbicides. This order comes ahead of an October 1, 2026, deadline for EPA to complete its review of many currently registered pesticide active ingredients, including glyphosate, to ensure that they continue to meet the standard for registration under the Federal Insecticide, Fungicide, and Rodenticide Act.</p> <h4>EPA Proposes Revisions to Pesticide Registration Notice 98-10</h4> <p>On January 5, EPA announced a <a rel="noopener noreferrer" href="https://www.epa.gov/pesticides/epa-seeks-public-comment-proposed-guidance-pesticide-registrants-improve-efficiencies" target="_blank">draft Pesticide Registration Notice (PR Notice 2026-NEW)</a> that would update and, when finalized, supersede PR Notice 98-10, which has governed notifications, non-notifications, and minor formulation amendments since 1998.[[N: For additional discussion of EPA&rsquo;s proposed revisions to PR Notice 98-10 and their potential implications for pesticide registrants, see <a href="/en/perspectives/advisories/2026/01/could-life-be-getting-a-little-simpler-for-pesticide-registrants">Arnold &amp; Porter Advisory: <em>Could Life Be Getting a Little Simpler for Pesticide Registrants?</em></a>.]]</p> <p>The draft guidance is intended to clarify and expand the types of registration changes that may be made through streamlined processes, including notification and non-notification, rather than requiring formal amendment and prior EPA approval. EPA indicated that the revisions are designed to align with statutory and regulatory developments since 1998 and to improve the efficiency of registration updates for pesticide products.</p> <p>Among other changes, the draft PR Notice would expand the scope of permissible modifications to labeling and formulation that may be made through notification, allow certain changes to be implemented immediately upon EPA&rsquo;s receipt of a notification (including for antimicrobial products), and clarify procedures for updating confidential statements of formula and non-FIFRA label elements.</p> <h3><strong>EPCRA</strong></h3> <h4>EPA Adds PFHxS-Na to TRI</h4> <p>On February 23, 2026, the Environmental Protection Agency, <a rel="noopener noreferrer" href="https://www.epa.gov/newsreleases/epa-expands-toxic-chemical-reporting-strengthening-transparency-pfas-pollution" target="_blank">finalized a rule adding sodium perfluorohexanesulfonate (PFHxS-Na) to the Toxics Release Inventory </a>(TRI). EPA added PFHxS-Na to TRI pursuant to a provision of the National Defense Authorization Act for Fiscal Year 2020, which provides that PFAS shall be added to TRI upon the occurrence of certain triggering events. The addition of PFHxS-Na to TRI occurred after the EPA&rsquo;s Integrated Risk Information System (IRIS) program <a rel="noopener noreferrer" href="https://iris.epa.gov/document/&amp;deid=363894" target="_blank">finalized</a> a toxicity value for PFHxS-Na in 2025. Under EPA&rsquo;s final rule, businesses in industries subject to TRI reporting must begin tracking and reporting use or release of PFHxS-Na. Such businesses are subject to TRI reporting requirements if they manufacture (including import), process, or otherwise use at least 100 pounds of PFHxS-Na annually. </p> <p>The first reporting period began January 1, 2026, and the first reports will be due to EPA by July 1, 2027. With this action, the number of PFAS substances tracked by TRI rises to 206, reflecting the continued expansion of PFAS reporting obligations for regulated entities.</p> <h2><a name="Federal Litigation Updates"></a>Federal Litigation Updates</h2> <h3><strong>TSCA Litigation:</strong></h3> <h4>Ninth Circuit Hears Oral Argument in TSCA PBT Rule Challenge</h4> <p>On March 3, the U.S. Court of Appeals for the Ninth Circuit heard oral argument in Yurok Tribe et al. v. EPA (No. 21-70670), a challenge to EPA&rsquo;s rule under TSCA Section 6(h) addressing persistent, bioaccumulative, and toxic (PBT) chemicals, including decabromodiphenyl ether (decaBDE). Petitioners &mdash; including the Yurok Tribe, Alaska Community Action on Toxics, Consumer Federation of America, and Center for Environmental Transformation &mdash; are seeking remand of the rule, while EPA is defending its approach.</p> <p>During oral argument, the court&rsquo;s questions focused primarily on statutory interpretation, including the meaning of &ldquo;practicable&rdquo; under TSCA Section 6(h) and whether EPA may consider the factors identified in TSCA Section 6(c)(2), such as costs and benefits, when promulgating rules under TSCA section 6(h). Judges also questioned how EPA defines and applies &ldquo;practicable,&rdquo; including what constraints exist on the agency&rsquo;s discretion under this standard and how concepts such as feasibility and reasonableness should be evaluated.</p> <p>The court also explored EPA&rsquo;s treatment of recycling and disposal pathways in developing the TSCA section 6(h) rule, including the agency&rsquo;s reliance on Resource Conservation and Recovery Act (RCRA) requirements for waste management and its conclusions regarding the cost and feasibility of testing for decaBDE in recycling and wastewater contexts. Petitioners challenged EPA&rsquo;s evidentiary support for these determinations, while EPA maintained that its approach reflects reasonable cost and feasibility considerations.</p> <p>A decision is expected in the coming months following the court&rsquo;s consideration of the parties&rsquo; briefs and oral argument.</p> <h4>Ninth Circuit Hears Oral Argument in Litigation Regarding TSCA Section 21 Petition for Regulation of Fluoride in Drinking Water</h4> <p>Also on March 3, the Ninth Circuit heard oral argument in <em>Food and Water Watch et al. v. EPA</em> (No. 25-384), an appeal by EPA from a Northern District of California decision directing EPA to promulgate a rule under TSCA section 6(a) regulating fluoride in drinking water. </p> <p>This litigation stems from a 2016 petition under TSCA section 21, which allows persons to petition EPA to initiate certain actions under TSCA, including the issuance of a TSCA section 6(a) risk management rule. EPA denied the petition in early 2017 and the petition submitters challenged that denial in the Northern District of California. After more than seven years and two bench trials, the Northern District of California in <em>Food &amp; Water Watch, Inc. v. EPA</em> (No. 17-cv-02162-EMC) issued a decision in September 2024 finding that the petitioners had demonstrated that fluoride in drinking water presents an unreasonable risk to health and ordering EPA to take action under TSCA to address such risk. </p> <p>EPA appealed the Northern District of California&rsquo;s decision, arguing that the court incorrectly considered evidence beyond what was presented in the petition when reaching its decision and raising for the first time on appeal an argument that the plaintiffs lacked standing. During oral argument, the Ninth Circuit raised questions about EPA&rsquo;s newly presented standing argument, as well as about the District Courts&rsquo;s approach to hearing the challenge to EPA&rsquo;s denial of the TSCA section 21 petition. </p> <p>While this litigation involves a specific chemical substance and condition of use, the Ninth Circuit&rsquo;s decision on EPA&rsquo;s appeal is likely to have broad impacts on how TSCA section 21 is interpreted and used as a mechanism to set EPA priorities for regulating chemical substances under TSCA. </p> <h4>Third Circuit Denies Stay and Allows TCE Rule Litigation to Proceed</h4> <p>In February 2026, the U.S. Court of Appeals for the Third Circuit issued an order in <em>United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy Allied Industrial and Service Workers International Union, AFL-CIO v. EPA</em> (No. 20-1055), advancing litigation challenging EPA&rsquo;s TSCA Section 6 rule regulating trichloroethylene (TCE). The court denied pending motions to stay the rule and rejected EPA&rsquo;s request to hold the case in abeyance while the agency considers potential revisions to the rule. The litigation involves multiple industry and environmental petitioners and is expected to address EPA&rsquo;s risk management approach, including prohibitions and exemptions under the final TCE rule. Opening briefs in this case are due on April 14. </p> <h4>Fifth Circuit Schedules Oral Argument in Asbestos Rule Challenge</h4> <p>The U.S. Court of Appeals for the Fifth Circuit has scheduled oral argument for the week of June 1, 2026, in <em>Texas Chemistry Council v. EPA</em> (No. 24-60193), which challenges EPA&rsquo;s TSCA Section 6 risk management rule for chrysotile asbestos.</p> <p>The litigation involves industry &mdash; as well as labor union and public health organization &mdash; challenges to EPA&rsquo;s final rule, which imposes prohibitions and restrictions on the manufacture, processing, distribution, and use of chrysotile asbestos. Petitioners are expected to raise issues related to EPA&rsquo;s risk determinations and the scope of the agency&rsquo;s regulatory authority under TSCA.</p> <h3><strong>FIFRA Litigation:</strong></h3> <h4>Environmental Groups Challenge EPA Registration of Pesticides Containing Fluorinated Compounds</h4> <p>In late 2025 and January 2026, environmental groups filed petitions for review in the Ninth Circuit challenging EPA&rsquo;s registration of two pesticides: isocycloseram and cyclobutrifluram. EPA registered isocycloseram and cyclobutrifluram in November 2025 for use as a broad-spectrum insecticide and nematicide/fungicide, respectively. The petitions for review do not provide specifics as to the arguments that petitioners will raise, but do indicate that they are bringing claims under FIFRA as well as the Endangered Species Act. </p> <p>Both of these pesticides contain a single fluorinated compound. While not mentioning these pesticides by name, EPA has published a <a rel="noopener noreferrer" href="https://www.epa.gov/ingredients-used-pesticide-products/pesticides-containing-single-fluorinated-carbon" target="_blank">webpage</a> regarding &ldquo;Pesticides Containing a Single Fluorinated Carbon,&rdquo; which notes that single fluorinated compounds do not meet the definition of &ldquo;PFAS&rdquo; established by EPA&rsquo;s Office of Pollution Prevention and Toxics in the 2023 TSCA section 8(a)(7) PFAS reporting rule. </p> <p>Opening briefs in the challenge to EPA&rsquo;s registration of isocycloseram, <em>Center for Biological Diversity et al. v. EPA</em> (No. 26-289), are due in July 2026, while the briefing schedule in the challenge to EPA&rsquo;s registration of cyclobutrifluraum, <em>Farmworker Justice et al. v. EPA</em> (No. 25-8118), has not yet been set. </p> <h2><a name="State Regulatory Updates"></a>State Regulatory Updates</h2> <p>States continue to advance regulatory frameworks governing PFAS in products, with Minnesota and New Mexico implementing reporting requirements and broader restrictions that will take effect over the coming years.</p> <h3><strong>Minnesota</strong></h3> <p>Minnesota&rsquo;s <a rel="noopener noreferrer" href="https://www.revisor.mn.gov/statutes/cite/116.943" target="_blank">PFAS statute</a> (Minn. Stat. &sect; 116.943), known as Amara&rsquo;s Law, establishes phased prohibitions and reporting requirements for products containing intentionally added PFAS.</p> <p>As of January 1, 2025, the law prohibits the sale, offer for sale, or distribution in Minnesota of 11 categories of products containing intentionally added PFAS, including carpets and rugs, cleaning products, cookware, cosmetics, dental floss, fabric treatments, juvenile products, menstruation products, textile furnishings, ski wax, and upholstered furniture. Beginning January 1, 2032, a broader prohibition will apply to products containing intentionally added PFAS unless the Minnesota Pollution Control Agency (MPCA) determines that the use is currently unavoidable. MPCA held a <a rel="noopener noreferrer" href="https://www.pca.state.mn.us/sites/default/files/c-pfas-rule3-04.pdf" target="_blank">webinar</a> on February 26, 2026, providing an update on its development of regulations to implement that &ldquo;currently unavoidable use&rdquo; process, and accepted public comments on its <a rel="noopener noreferrer" href="https://www.pca.state.mn.us/sites/default/files/c-pfas-rule3-05.pdf" target="_blank">proposed rule concepts</a> through March 29, 2026. MPCA will now consider these public comments as it develops proposed rule language. </p> <p>Additionally, the law requires manufacturers of products sold or distributed in Minnesota to submit initial reports to MPCA by July 1, 2026, with updates due by February 1 each year thereafter. MPCA&rsquo;s <a rel="noopener noreferrer" href="https://www.pca.state.mn.us/air-water-land-climate/reporting-pfas-in-products" target="_blank">PFAS Product Reporting Information System for Manufacturers (PRISM)</a> is now live ahead of that reporting deadline. </p> <p>Concurrently with MPCA&rsquo;s efforts to implement Amara&rsquo;s Law, the Minnesota House of Representatives is considering a <a rel="noopener noreferrer" href="https://www.revisor.mn.gov/bills/94/2026/0/HF/4257/versions/0/pdf/" target="_blank">bill</a> that would delay the reporting requirement to July 1, 2027, and also exempt certain &ldquo;currently unavoidable uses&rdquo; from both the reporting requirement and the January 1, 2032 prohibition. These uses include uses of PFAS in motor vehicles, semiconductors, electricity generation, distribution, and storage equipment, and PFAS required in order to meet standards established by Federal agencies such as the Federal Aviation Administration and the Department of Defense.</p> <h3><strong>New Mexico</strong></h3> <p>New Mexico&rsquo;s <a rel="noopener noreferrer" href="https://www.nmlegis.gov/Sessions/25%20Regular/final/HB0212.pdf" target="_blank">Per- and Poly-Fluoroalkyl Substances Protection Act</a> establishes phased product prohibitions and manufacturer reporting requirements for products containing intentionally added PFAS. The prohibitions begin on January 1, 2027, for products including food packaging and cookware, on January 1, 2028, for products including cleaning products, fabric treatments, cosmetics, and textiles, and on January 1, 2032, for all other uses unless determined to be &ldquo;currently unavoidable uses.&rdquo; In addition to these prohibitions, the law directs the New Mexico Environmental Improvement Board (EIB) to adopt rules requiring reporting of intentionally added PFAS in products.</p> <p>This law also provides the EIB with discretionary authority to adopt rules imposing labeling requirements for intentionally added PFAS in products. The EIB <a rel="noopener noreferrer" href="https://www.env.nm.gov/wp-content/uploads/2026/03/2026-03-23-COMMS-New-Mexico-approves-labeling-of-PFAS-in-consumer-products-Final.pdf" target="_blank">approved</a> such labeling rules on March 23, 2026. While the final regulations have not yet been published, if consistent with the <a rel="noopener noreferrer" href="https://www.env.nm.gov/opf/wp-content/uploads/sites/13/2026/03/NMEDs-Attachment-A-Final-Proposed-Rule-Clean-and-Redlined.pdf" target="_blank">text</a> submitted to the EIB by the New Mexico Environment Department in March 2026, the labeling requirements would go into effect on January 1, 2027, and would apply to almost all products containing intentionally added PFAS, including most categories of products that are exempt from the law&rsquo;s prohibitions and reporting requirements. </p> <h2><a name="International Developments"></a>International Developments</h2> <h3><strong>United Kingdom Publishes First PFAS Plan</strong></h3> <p>On February 3, the United Kingdom published its first <a rel="noopener noreferrer" href="https://www.gov.uk/government/publications/pfas-plan/pfas-plan-building-a-safer-future-together" target="_blank">PFAS Plan</a>, outlining actions to better understand the sources of PFAS exposure, encourage a transition away from PFAS through regulation, and address existing exposure to PFAS. The plan identifies several priority areas, including efforts to better understand &ldquo;the extent and impact of PFAS in the environment&rdquo; through monitoring and analyses of the historic use of PFAS, consideration of further restrictions on the use of PFAS and statutory limits for PFAS in the public water supply to reduce ongoing exposure to PFAS, and development of guidance for addressing legacy PFAS contamination.</p> <h3><strong>ECHA Risk Assessment Committee &amp; Socio-Economic Committee Advance PFAS Restriction Proposal</strong></h3> <p>In March 2026, two European Chemicals Agency&rsquo;s (ECHA) committees <a rel="noopener noreferrer" href="https://echa.europa.eu/nl/-/echa-s-socio-economic-analysis-committee-agrees-its-draft-opinion-on-pfas-restriction-proposal" target="_blank">advanced their evaluations of a proposed EU-wide restriction on PFAS</a>. ECHA&rsquo;s Committee for Risk Assessment (RAC) adopted its <a rel="noopener noreferrer" href="https://echa.europa.eu/documents/10162/d6aac737-e665-cbae-58c8-17780de44bd5" target="_blank">final opinion</a> on the risks posed by PFAS, while the Committee for Socio-Economic Analysis (SEAC) agreed its <a rel="noopener noreferrer" href="https://echa.europa.eu/documents/10162/9ecfb76d-6e69-c047-3228-16c78e42897f" target="_blank">draft opinion</a> on the proposal. SEAC is accepting public comments on its draft opinion through May 25, 2026. </p> <p>The opinions are part of ECHA&rsquo;s review of a proposal submitted by several EU member states to restrict the manufacture, placing on the market, and use of PFAS across a wide range of applications. RAC evaluates risks to human health and the environment, while SEAC assesses the socio-economic impacts of a potential restriction, including the availability of alternatives. The final RAC opinion supports a broad EU-wide PFAS restriction. The draft SEAC opinion similarly supports a comprehensive PFAS restriction, with certain exemptions where justified based on factors including the availability of alternatives. You can read more about the RAC opinion and draft SEAC opinion in our <a href="/en/perspectives/advisories/2026/03/echa-committees-advance-broad-pfas-restriction-under-reach">advisory</a>.</p> <p>After the close of the public consultation on the SEAC draft opinion, the committee will adopt a final opinion, expected by the end of 2026. Following completion of the committees&rsquo; review, the European Commission will consider the opinions and may propose a restriction for consideration by EU member states.</p> <h3><strong>EU &ldquo;One Substance, One Assessment&rdquo; Framework Enters into Force</strong></h3> <p>On January 5, 2026, the European Union announced the entry into force of <a rel="noopener noreferrer" href="https://environment.ec.europa.eu/news/new-rules-streamlining-chemical-assessments-enter-force-2026-01-05_en" target="_blank">new rules designed to streamline chemical assessments</a> across EU legislation, commonly referred to as the &ldquo;one substance, one assessment&rdquo; (OSOA) framework. The new framework is intended to make chemical assessments more consistent, transparent, and efficient across sectors, including with respect to products such as toys, food, pesticides, and biocides.</p> <p>The OSOA framework aims to reduce duplication of assessments across EU regulatory regimes by improving coordination among EU agencies and clarifying the allocation of scientific and technical responsibilities. It also introduces a common data platform on chemicals, which will serve as a centralized hub for information collected under various EU laws and is expected to become operational within the next several years.</p> <p>In addition, the framework establishes a monitoring and outlook system intended to better identify emerging chemical risks through the use of data collection and early-warning tools. These measures are intended to support earlier identification of potential hazards and enable more timely regulatory action.</p> <h3><strong>Canada Finalizes Prohibitions and Restrictions on DP, DBDPE, certain PFAS, HBCD, and PBDEs</strong></h3> <p>In December 2025, <a rel="noopener noreferrer" href="https://www.canada.ca/en/health-canada/services/chemical-substances/latest-news/2025.html" target="_blank">Canada finalized the Prohibition of Certain Toxic Substances Regulations, 2025</a> under the Canadian Environmental Protection Act, 1999 (CEPA), which will come into force on June 30, 2026. The regulations repeal and replace the prior 2012 framework and expand prohibitions and restrictions on several classes of substances.</p> <p>The regulations introduce new prohibitions on the manufacture, use, sale, and import of certain flame retardants, including Dechlorane Plus (DP) and decabromodiphenyl ethane (DBDPE), as well as products containing those substances. In addition, the regulations strengthen existing restrictions on PFAS, including PFOS, PFOA, and long-chain perfluorocarboxylic acids (LC-PFCAs), as well as flame retardants hexabromocyclododecane (HBCD) and polybrominated diphenyl ethers (PBDEs). Revisions to the restrictions on these chemical substances include the removal or narrowing of certain exemptions.</p> <p>The regulations include limited, time-limited exemptions and permit provisions to facilitate transition to alternatives for certain uses. The updated framework reflects Canada&rsquo;s broader effort to align with international obligations and to reduce environmental and human exposure to substances that may be persistent or bioaccumulative.</p> <p>The new requirements may affect manufacturers, importers, and downstream users of products containing these substances, including by creating the need to assess supply chains and phase out restricted chemicals ahead of the June 2026 effective date.</p> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{43265B28-56C7-47C8-9BED-43D1B8425A5D}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/trade-winds-shift-for-pharmaLynn Fischer Foxhttps://www.arnoldporter.com/en/people/f/fischer-fox-lynnlynn.fischerfox@arnoldporter.comEva Temkinhttps://www.arnoldporter.com/en/people/t/temkin-evaeva.temkin@arnoldporter.comCatherine A. Brandonhttps://www.arnoldporter.com/en/people/b/brandon-catherine-aCatherine.Brandon@arnoldporter.comThis Advisory explains how recent U.S. trade policies, particularly new tariffs and related measures targeting pharmaceuticals and ingredients, are reshaping global pharma supply chains, pricing, and contracting strategies while outlining key legal and operational considerations for companies navigating this shifting landscape.Mon, 06 Apr 2026 00:00:00 -0500<p>On April 2, 2026, President Trump signed a <a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2026/04/adjusting-imports-of-pharmaceuticals-and-pharmaceutical-ingredients-into-the-united-states/" target="_blank">proclamation</a> implementing tariffs on certain pharmaceutical products pursuant to Section 232 of the Trade Expansion Act of 1962 (<a rel="noopener noreferrer" href="https://www.law.cornell.edu/uscode/text/19/1862" target="_blank">19 U.S.C. &sect; 1862</a>). The action imposes tariffs of 100% on &ldquo;patented pharmaceuticals,&rdquo; which includes active pharmaceutical ingredients and key starting materials (ingredients). However, there are also numerous exceptions and preferential treatment provisions, which mean that many pharmaceutical products will not be subject to tariffs or will be subject to lower tariff rates. The new duties will go into effect on July 31, 2026 for 17 large pharmaceutical companies named in the proclamation; however, most of those companies have tariff exemptions based on agreements with the administration, per the proclamation.[[N: The named companies include AbbVie, Amgen, AstraZeneca, Bristol Myers Squibb, Boehringer Ingelheim, Eli Lilly, EMD Serono, Genentech, Gilead, GlaxoSmithKline and ViiV Healthcare Company, Johnson &amp; Johnson, Merck Sharp &amp; Dohme, Novartis, Novo Nordisk, Pfizer, Regeneron Pharmaceuticals, and Sanofi. Manufacturers with executed agreements with Commerce relating to Section 232 tariffs are listed in Annex II of the proclamation.&nbsp;]] The tariffs are set to go into effect for all other companies on September 29, 2026.</p> <p>Whether an imported drug or input will be subjected to tariffs &mdash; and at what rate &mdash; appears to be based on: (1) the patent status of drug product involved; (2) the specific company importing the drug; (3) the country of origin; and (4) whether an exception applies. The proclamation begins with the blanket imposition of 100% tariffs on all &ldquo;patented pharmaceuticals and associated ingredients&rdquo; but then provides that:</p> <ul> <li>Lower tariff rates will be imposed on imports from certain countries that have reached agreements with the United States on tariffs.</li> <li>Lower tariffs will be imposed on imports &ldquo;for companies&rdquo; that have plans &ldquo;approved by the Secretary, to onshore production&rdquo; of patented pharmaceuticals.</li> <li>Tariffs will not be imposed on imports &ldquo;for companies&rdquo; that have signed agreements with the administration to on-shore investments and to provide so-called &ldquo;most favored nation&rdquo; pricing.</li> <li>Conditional exemptions may be granted for a long list of certain specialty drug products, including orphan drugs (with only orphan indications), &ldquo;fertility treatments,&rdquo; cell and gene therapies, antibody drug conjugates, and other specialty pharmaceutical products as identified by the Secretary of Commerce, if certain conditions are met.</li> </ul> <p>To determine correct tariff rates and avoid compliance concerns, importers will need to focus on country of origin, as well as patent status and Orange/Purple Book listing (described further below), intended use in the United States (for ingredients as well as to determine qualification for the specialty drug exceptions for certain uses), and whether the product otherwise qualifies for the specialty drug exceptions.</p> <h2>Scope of &ldquo;Patented Pharmaceuticals&rdquo; Captured by the Proclamation</h2> <p>A pharmaceutical product (as well as an ingredient for such product) will be considered a &ldquo;patented pharmaceutical article&rdquo; and so in scope for tariffs only if it is subject to a valid, unexpired U.S. patent, and listed in the U.S. Food and Drug Administration&rsquo;s (FDA&rsquo;s) Orange Book or Purple Book.[[N:&nbsp;<a rel="noopener noreferrer" href="https://www.whitehouse.gov/wp-content/uploads/2026/04/Pharmaceuticals-Imports-ANNEXES-I-II-III-IV.pdf" target="_blank">Annex I (A)(1)</a>]] Thus, it appears that many drugs will fall outside the scope of the proclamation. Specifically, many older, off-patent drugs will generally not meet the patent criteria. Similarly, drugs marketed under the OTC Monograph, which are not listed in the Orange or Purple Books, should not be subject to tariffs.</p> <p>It appears that the tariff status of ingredients, <em>i.e.</em>, imported active pharmaceutical ingredients (API) and other &ldquo;key starting materials,&rdquo; will also depend on the patent status and Orange/Purple Book listing status of the finished drug product for which the imports will be used. In certain cases, this could mean that imports of identical API or key inputs may be subject to different tariffs based on intended use in the United States. This may prove challenging to implement, for example, if the precise use of an ingredient is not known at the time of import, or if the finished drug product ultimately may be subject to a use-based specialty drug exemption.</p> <h2>Generics and Biosimilars Not Subject to Tariffs for Now</h2> <p>As anticipated based on various <a rel="noopener noreferrer" href="https://truthsocial.com/@realDonaldTrump/posts/115267512131958759" target="_blank">prior </a><a rel="noopener noreferrer" href="https://truthsocial.com/@realDonaldTrump/posts/115267512131958759" target="_blank">communications</a> from President Trump and other administration officials, the new tariffs will not apply to &ldquo;generic pharmaceuticals and their associated ingredients, including biosimilar products, at this time.&rdquo; &ldquo;Generic pharmaceutical articles&rdquo; are defined as &ldquo;FDA-approved pharmaceutical articles, and associated ingredients, that are not subject to a valid, unexpired U.S. patent and are off exclusivity.&rdquo;[[N:&nbsp;<a rel="noopener noreferrer" href="https://www.whitehouse.gov/wp-content/uploads/2026/04/Pharmaceuticals-Imports-ANNEXES-I-II-III-IV.pdf" target="_blank">Annex I (A)(1)</a>]] The definition of &ldquo;generic &ldquo; drug may also encompass branded products that have lost patent and regulatory exclusivities. Such products would generally not be expected to be subject to tariffs in the first instance, as they would fall outside the definition of captured &ldquo;patented pharmaceutical products.&rdquo; As further defined, however, generic pharmaceutical articles also refers to pharmaceutical products and their ingredients as approved in a &ldquo;qualifying application&rdquo; under: (1) section 505(j) of the Federal Food, Drug, and Cosmetic Act (FDCA) for generic drugs; (2) section 505(b)(2) of the FDCA for follow on drugs; (3) section 351(k) of the Public Health Service Act for biosimilars; or (4) section 505(t) for the FDCA and 42 U.S.C. &sect; 1320f-1(e)(2)(B)(ii), for authorized generic drug or biological products. It appears the tariff relief with respect to this last category (authorized generics) applies only to goods that are &ldquo;imported by a generic or biosimilar manufacturer.&rdquo;</p> <p>In addition, the relief offered to generics and biosimilars may be time-limited. The proclamation directs the Secretary of Commerce to provide a report within one year with an opinion as to whether the president should take action to adjust imports of generic products. Thus, the risk of tariffs on generics and biosimilars in the future remains a possibility. The Trump administration may rely on the threat of tariffs on generic products to leverage future negotiations with generic drug makers, as well as countries that export significant volumes of generic drugs, such as India.</p> <h2>Lower Tariff Rates for Countries with Agreements</h2> <p>Consistent with previously announced deals with the European Union (EU), Japan, Korea, Switzerland, and Liechtenstein, the tariff rate on products from those countries will be 15%. Pursuant to a deal with the United Kingdom (UK), products from the UK will only be subject to 10% tariffs. The proclamation states that the tariff rate on UK-origin products will be reduced to zero when the UK completes a drug pricing agreement with the United States, the framework for which was originally <a rel="noopener noreferrer" href="https://ustr.gov/about/policy-offices/press-office/press-releases/2025/december/us-government-announces-agreement-principle-united-kingdom-pharmaceutical-pricing" target="_blank">announced</a> in December 2025. On April 2, 2026, the United States Trade Representative (USTR) issued a statement announcing that the UK deal had been finalized, meaning the tariff on UK-origin products will likely be set at zero when the tariffs are imposed. </p> <p>Other countries are in the process of negotiating deals with the Trump administration. Many of those deals include commitments to zero tariffs on generic drugs but do not include provisions related to patented drugs. For example, the recently announced <a rel="noopener noreferrer" href="https://www.whitehouse.gov/briefings-statements/2026/02/united-states-india-joint-statement/" target="_blank">framework</a> for a deal with India provides that India will &ldquo;receive negotiated outcomes with respect to generic pharmaceuticals and ingredients.&rdquo; Thus, it appears that patented products from India and other countries may be subject to the higher 100% tariff rate.</p> <h2>Preferential Treatment for Companies with Most Favored Nation (MFN) and/or Onshoring Agreements </h2> <p>The proclamation provides significant tariff benefits to companies that sign agreements with the administration to onshore investments and to provide so-called &ldquo;most favored nation&rdquo; pricing for certain products. The products of companies that agree to &ldquo;onshoring plans approved by the Secretary of Commerce&rdquo; will be subject to a 20% tariff rate until April 2, 2030. The proclamation provides for the Secretary of Commerce to establish criteria for onshoring plans, and the U.S. Department of Commerce will provide a pathway through which companies can seek approval for such plans to secure future tariff benefits. The plans are subject to monitoring and reporting and may be subject to retroactive tariff increases if terms are not met.</p> <p>Companies that enter into onshoring plans and also sign MFN agreements with the Trump administration receive a zero tariff rate for &ldquo;pharmaceuticals and associated ingredients until January 20, 2029.&rdquo; The <a rel="noopener noreferrer" href="https://www.whitehouse.gov/fact-sheets/2026/04/fact-sheet-president-donald-j-trump-bolsters-national-security-and-strengthens-u-s-supply-chains-by-imposing-tariffs-on-patented-pharmaceutical-products/" target="_blank">White House Fact Sheet</a> accompanying the proclamation indicated that the Department of Health and Human Services (HHS) would provide a pathway for additional companies to enter into MFN pricing deals.</p> <h2>Exemptions for Specialty Drugs</h2> <p>The proclamation provides conditional exemptions for certain specialty drug products. Specifically, the proclamation provides that tariff rate will be zero for:</p> <ul> <li>Drugs &ldquo;where all approved indications are designated as orphan pursuant to the Orphan Drug Act, 21 U.S.C. 360aa et seq. and its implementing regulations&rdquo;&nbsp;</li> <li>Nuclear medicines&nbsp;</li> <li>Plasma-derived therapies</li> <li>Fertility treatments&nbsp;</li> <li>Cell and gene therapies</li> <li>Antibody drug conjugates&nbsp;</li> <li>Medical countermeasures related to chemical, biological, radiological, and nuclear threats or</li> <li>Other specialty pharmaceutical products to be identified by the Secretary of Commerce in consultation with the USTR and HHS </li> </ul> <p>Many of these categories may prove hard to define, making operationalization key. In addition, these exemptions are not automatic. The exemptions will be available to imports from &ldquo;jurisdictions that [have] a current or forthcoming trade and security framework agreement&rdquo; with the United States or for products where the Secretary has determined, in consultation with the Secretary of HHS, an urgent U.S. health need.</p> <p>While the status of framework agreements with various countries is in flux, the countries with deals would appear to include all EU member states, Japan, Korea, UK, and Switzerland, as well as multiple other countries. India has signed a joint statement with the United States, indicating that it plans to conclude an agreement, which would imply that the enumerated specialty drugs from India would also be eligible for the zero-tariff rates.</p> <h2>U.S.-Made API Further Manufactured or Packaged Abroad Not Subject to Tariffs</h2> <p>The proclamation provides that &ldquo;U.S.-origin products&rdquo; will be exempt from tariffs. The specific tariff language included in the Annex provides for no additional tariffs on &ldquo;pharmaceutical products with an active pharmaceutical ingredient packaged in dosage form that is a product of the United States.&rdquo; This language indicates that finished drug products manufactured abroad from U.S.-origin API will not be subject to any additional duties if the finished products are imported into the United States. This may be an important provision for companies that rely on packaging or manufacturing operations outside the United States.</p> <h2>Drug Products and Ingredients Not Subject to Section 232 Remain Exempt from Certain Other Special Tariff Measures</h2> <p>Pharmaceutical products and ingredients have been exempted from many of the other tariff measures imposed by President Trump in his second term. The ingredients and drug product that had been excluded from those tariffs, including the temporary 10% tariffs recently imposed pursuant to Section 122 of the Trade Act of 1974, continue to be exempt from those other tariffs. Thus, generic and biosimilar products that are exempted from the April 2, 2026, Section 232 action also remain exempt from the 10% Section 122 tariffs as well. However, the exemption from other tariffs could be modified in the future as the Trump administration takes actions to replace tariffs overturned by the Supreme Court.</p> <p>Arnold &amp; Porter&rsquo;s Trade and Life Sciences practices are available to provide companies with in-depth guidance on navigating these complex tariffs and associated compliance requirements (including country-of-origin determinations), as well as advising companies on strategies to mitigate tariff impacts or seek tariff reductions or exemptions through onshoring and MFN agreements.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{0B1A6341-35F9-41E7-9A98-9F369D79B788}https://www.arnoldporter.com/en/perspectives/news/2026/04/lacca-recognizes-arnold-porterArnold &amp; Porter was featured in <em>Latin American Corporate Counsel Association</em> (<em>LACCA</em>)&rsquo;s latest research into &ldquo;Who represents Latin America&rsquo;s biggest companies 2025.&rdquo;Thu, 02 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter was featured in <em>Latin American Corporate Counsel Association</em> (<em>LACCA</em>)&rsquo;s latest research into &ldquo;Who represents Latin America&rsquo;s biggest companies 2025.&rdquo; <em>LACCA</em>&rsquo;s report presents the top 100 companies in Latin America, as well as which law firms have been confirmed as their external counsel. The firm&rsquo;s Latin America offering includes advising clients on corporate and finance, international trade, tax, litigation, financial services, white collar, sanctions, lobbying, antitrust, and other key areas. </p> <p>Arnold &amp; Porter partner Carlos Lobo said: &ldquo;Being included in this year&rsquo;s <em>LACCA</em> list underscores the firm&rsquo;s commitment to delivering high-level strategic counsel to many of Latin America&rsquo;s leading companies. Drawing on more than 40 years of experience in Latin America, we are uniquely positioned to support clients across a wide range of matters, combining deep regional knowledge with a multidisciplinary, globally integrated approach.&rdquo;</p> <p>Partner Chris Willott added: &ldquo;<em>LACCA</em>&rsquo;s acknowledgment highlights the strength of our Latin America practice and the firm&rsquo;s sustained investment in broadening the capabilities we offer to clients across the region.&rdquo;</p> <p>The firm&rsquo;s Corporate &amp; Finance team has handled cutting-edge transactional work and has represented numerous private sector corporations, financial institutions, and individuals in a broad range of transactions across the Latin America region, which work is complemented by Arnold &amp; Porter&rsquo;s leading international disputes practice and renowned regulatory experience.</p>{880DC8B6-5CFD-47D8-8587-B56347800CA9}https://www.arnoldporter.com/en/perspectives/news/2026/04/global-arbitration-review-recognizes-arnold--porters-excellence-in-international-arbitration<em>Global Arbitration Review </em>(<em>GAR</em>) named Arnold &amp; Porter to its 2026 &ldquo;GAR 100&rdquo; list, which highlights the top 100 leading international arbitration practices worldwide.Thu, 02 Apr 2026 00:00:00 -0500<p><em>Global Arbitration Review</em> (<em>GAR</em>) named Arnold &amp; Porter to its 2026 &ldquo;GAR 100&rdquo; list, which highlights the top 100 leading international arbitration practices worldwide. <em>GAR</em> ranks firms based on multiple factors, including research, data, and the overall work the firm has completed in the field.</p> <p><em>GAR</em> describes Arnold &amp; Porter&rsquo;s International Arbitration practice as a global, investment arbitration powerhouse coupled with a broadening commercial arbitration portfolio, with a collective value of over $26 billion in dispute. The practice, which is described by clients as &ldquo;world class&rdquo; and chaired by &ldquo;clear and convincing leader&rdquo; Maria Chedid, includes other senior figures such as Paolo Di Rosa, Whitney Debevoise, Patricio Gran&eacute; Labat, M&eacute;lida Hodgson, David Reed, Anton Ware, Jun Hee Kim, and &Aacute;lvaro Nistal, as well as next generation leaders such as Sally Pei, Katelyn Horne, John Muse-Fisher, Bart Wasiak, Joel Dahlquist, and Peter Schmidt.</p> <p><em>GAR</em> noted that the firm earned its spot on this year&rsquo;s list through standout work for South Korea, Panama, Bulgaria, among others, along with new mandates from Uruguay and successful outcomes for Ecuador, El Salvador, and Thailand. Clients praised the group&rsquo;s &ldquo;awesome track record of successful outcomes,&rdquo; &ldquo;excellent knowledge of international investment arbitration,&rdquo; and its overall &ldquo;top‑notch legal assistance.&rdquo;</p> <p>Arnold &amp; Porter&rsquo;s International Arbitration team has secured a larger number of <a href="/-/media/files/brochures_additional-practice-info/ia-positive-rulings.pdf?sc_lang=en&amp;rev=57fac8fac6c641099b39a26126043e65&amp;hash=AA840E1616CF0C28B7B149AEFBCE9743">positive defense outcomes</a>&nbsp;for sovereign states in investor-state arbitrations than any other firm in the world. The team also has a strong record on behalf of investors, securing some of the largest damages awards in ICSID history. The team is also a leader in the commercial arbitration space, where it is known for handling sensitive, complex, and high-stakes technical disputes under all major arbitral rules, especially in the energy, technology, and life sciences sectors, and is widely acclaimed for its oral argument and cross-examination skills in hearings. With highly ranked leading practitioners based in eight offices globally, the team offers clients a practice of exceptional depth and scope.</p>{6726E87C-1CA8-4758-AE69-848F5C2F4687}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/04/cara-koss-discusses-wealth-tax-planning-strategies-in-barronsCara Koss, Arnold &amp; Porter partner who leads the firm&rsquo;s Private Client Services team, was quoted in the recent <em>Barron&rsquo;s</em> article, &ldquo;Wealth Taxes Can Be Skirted. 5 Smart Tips for the Rich,&rdquo; which examines how high-net-worth individuals are responding to proposed state-level wealth taxes and explores a range of estate planning strategies shaping wealth management in response to shifting tax policy.Thu, 02 Apr 2026 00:00:00 -0500<p>Cara Koss, Arnold &amp; Porter partner who leads the firm&rsquo;s Private Client Services team, was quoted in the recent <em>Barron&rsquo;s</em> article, &ldquo;Wealth Taxes Can Be Skirted. 5 Smart Tips for the Rich,&rdquo; which examines how high-net-worth individuals are responding to proposed state-level wealth taxes and explores a range of estate planning strategies shaping wealth management in response to shifting tax policy.</p> <p>Cara highlighted the practical implications of state tax proposals targeting high-net-worth individuals, noting that relocation remains a key consideration for those affected. &ldquo;The one benefit of being a state proposal is that the obvious solution is to get out of that state,&rdquo; she said, adding that many clients have already moved away from high-tax jurisdictions.</p> <p>She also emphasized the importance of careful planning when establishing residency in a new state, observing that jurisdictions apply varying standards and enforcement approaches. Cara further noted that while federal wealth tax proposals continue to be discussed, advisors are not currently treating them as an immediate concern, cautioning against overreacting to proposals that may not advance.</p> <p>In addition, Cara pointed to evolving legislative tactics that may limit tax planning opportunities, emphasizing the continued need for diligence as proposals advance.</p> <p><a rel="noopener noreferrer" href="https://www.barrons.com/articles/wealth-taxes-saving-for-rich-11d6cd06" target="_blank">Read the full article</a> (subscription required).</p>{96C00DE1-CEBC-432F-BF92-F721631BC328}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/dol-guidance-on-plan-investment-in-alternative-assetsUri Horowitzhttps://www.arnoldporter.com/en/people/h/horowitz-uriUri.Horowitz@arnoldporter.comDouglas S. Pelleyhttps://www.arnoldporter.com/en/people/p/pelley-douglas-sDouglas.Pelley@arnoldporter.comKathleen Wechterhttps://www.arnoldporter.com/en/people/w/wechter-kathleenkathleen.wechter@arnoldporter.comKathryn Geoffroyhttps://www.arnoldporter.com/en/people/g/geoffroy-kathrynkathryn.geoffroy@arnoldporter.com<p>On March 30, 2026, the U.S. Department of Labor proposed a new rule relating to the selection of investment options for participant-directed individual account plans such as 401(k) plans, including options with exposure to alternative assets (Proposed Rule). Under a safe harbor in the Proposed Rule, if fiduciaries consider six key factors when choosing designated investment alternatives, their decisions would be presumed prudent under the Employee Retirement Income Security Act of 1974. &ldquo;Designated investment alternatives&rdquo; are the investment options into which plan participants and beneficiaries may direct their account assets. The Proposed Rule responds to Executive Order 14330, issued on August 7, 2025 and discussed in our August 2025 Advisory, which&nbsp; addressed access to alternative asset investments in employer-sponsored defined contribution plans. Notably, the Proposed Rule does not require or restrict any specific type of investment (except those that are otherwise illegal), but rather focuses on the selection process. This guidance has been long-awaited by providers of alternative asset investments, but the safe harbor applies to all investments.</p>Thu, 02 Apr 2026 00:00:00 -0500<p> <p>On March 30, 2026, the U.S. Department of Labor (DOL) proposed a new rule relating to the selection of investment options for participant-directed individual account plans such as 401(k) plans, including options with exposure to alternative assets (Proposed Rule). Under a safe harbor in the Proposed Rule, if fiduciaries consider six key factors when choosing designated investment alternatives, their decisions would be presumed prudent under the Employee Retirement Income Security Act of 1974 (ERISA). &ldquo;Designated investment alternatives&rdquo; are the investment options into which plan participants and beneficiaries may direct their account assets. The Proposed Rule responds to Executive Order 14330, issued on August 7, 2025 and discussed in our <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/advisories/2025/08/executive-order-on-alternative-assets-in-401k-plan" target="_blank">August 2025 Advisory</a>, which addressed access to alternative asset investments in employer-sponsored defined contribution plans. Notably, the Proposed Rule does not require or restrict any specific type of investment (except those that are otherwise illegal), but rather focuses on the selection process. This guidance has been long-awaited by providers of alternative asset investments, but the safe harbor applies to all investments. </p> <p>At a high level, the proposed selection process reflects the ERISA &ldquo;procedural prudence&rdquo; standard that courts have generally endorsed. While the Proposed Rule introduces some nuance particularly around liquidity and valuation of non-publicly traded assets, the framework generally aligns with current best practices. </p> <p>The following is a brief summary of the six factors fiduciaries must consider as part of the safe harbor:</p> <ol> <li><strong>Performance</strong>. The fiduciary must consider a reasonable number of similar investment alternatives and determine that the risk-adjusted expected returns, net of fees, furthers the plan&rsquo;s purpose by enabling participants to maximize risk-adjusted return on investment. </li> <li><strong>Fees</strong>. Fees and expenses of designated investment alternatives must be appropriate. Fiduciaries should take into account expected returns net of fees. Fiduciaries are not required to select designated investment alternatives with the lowest fees and expenses, and may, in some circumstances, select higher-fee alternatives which provide greater value in the form of benefits, features, or services (for example, lifetime income or diversification benefits).</li> <li><strong>Liquidity</strong>. The designated investment alternatives must have sufficient liquidity to meet the needs of the plan. Liquidity needs are considered at the individual participant level (e.g., asset reallocations to other designated investment alternatives, retirement, separation from service, or financial hardship) and at the plan level (e.g., plan terminations and changes in plan recordkeepers or investment providers). Where a designated investment alternative is not a mutual fund, an example in the Proposed Rule indicates that a fiduciary may satisfy this requirement by obtaining a written representation from the designated investment alternative&rsquo;s manager that it maintains a liquidity risk management program substantially comparable to those required of mutual funds. </li> <li><strong>Valuation</strong>. Providers of designated investment alternatives must have adopted adequate measures to ensure that they can be timely and accurately valued. Plan fiduciaries selecting non-publicly traded designated investment alternatives may rely on asset valuations based on generally recognized fair value procedures under U.S. GAAP, provided those valuations result from an independent process free of conflicts. This area of the Proposed Rule is especially complex. </li> <li><strong>Performance Benchmarks</strong>. Designated investment alternatives must have a meaningful benchmark to compare the designated investment alternative returns, net of fees. A &ldquo;meaningful benchmark&rdquo; is an investment strategy, index, or other comparator that has similar mandates, strategies, objectives, and risks to the designated investment alternative. Fiduciaries may rely on a benchmark created by a prudently selected independent investment advice fiduciary. While there is no presumption or preference against new or innovative designated investment alternatives, the Proposed Rule advises plan fiduciaries to identify the best possible comparators to a new or innovative product design while also scrutinizing its potential value proposition.</li> <li><strong>Complexity</strong>. Fiduciaries must determine whether they have the skills, knowledge, experience, and capacity to comprehend a designated investment alternative, considering its complexity. If they do not, fiduciaries must seek assistance from a qualified investment advisor in evaluating the designated investment alternative.</li> </ol> <h2>Initial Takeaways</h2> <ul> <li>The Proposed Rule emphasizes the importance of robust procedural prudence when assessing potential investment options and the benefits of using third-party advisors. </li> <li>Providers of alternative assets seeking to offer interests to retirement plans should review their programs in light of the Proposed Rule&rsquo;s safe harbor factors. Most 401(k) investment lineups today consist of mutual funds and collective investment trusts, for which liquidity and valuation are generally straightforward. Bringing alternative investments into this space will require the financial services industry to develop products that adequately address these more complex liquidity and valuation considerations.</li> <li>Whether the proposed safe harbor is satisfied is inherently a factual question. If the Proposed Rule is adopted, it remains to be seen how effectively the safe harbor protects fiduciaries in the litigation context.</li> <li>The Proposed Rule does not address other fiduciary considerations, including the duty to monitor investment alternatives, the duty of loyalty, and the &ldquo;prohibited transaction&rdquo; rules. </li> <li>Plan governance is critically important for fiduciaries considering investments which are, or include, alternative investments. </li> </ul> <p>The comment period for the Proposed Rule ends 60 days after the date it is published in the Federal Register. This Proposed Rule leaves many questions outstanding, and we expect that there will be significant comment and engagement with the Proposed Rule from interested parties across the non-publicly traded industry. We will provide further updates as this process develops and the regulations are finalized.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{C9D56D73-4F3E-406A-8E11-8082B3309A86}https://www.arnoldporter.com/en/perspectives/advisories/2026/04/fincen-proposes-rule-on-aml-whistleblower-programMichael Kim Krousehttps://www.arnoldporter.com/en/people/k/michael-kim-krousemichael.krouse@arnoldporter.comKathleen Reillyhttps://www.arnoldporter.com/en/people/r/reilly-kathleenkathleen.reilly@arnoldporter.comKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comErik Walshhttps://www.arnoldporter.com/en/people/w/walsh-erikerik.walsh@arnoldporter.comTal R. Machneshttps://www.arnoldporter.com/en/people/m/machnes-tal-rTal.Machnes@arnoldporter.comPaul Limhttps://www.arnoldporter.com/en/people/l/lim-paulpaul.lim@arnoldporter.com<p>On April 1, 2026, the Financial Crimes Enforcement Network (FinCEN) published a Notice of Proposed Rulemaking (NPRM) to establish a comprehensive framework for its whistleblower award and protection program (Whistleblower Program), as mandated under the Anti<span>‑</span>Money Laundering Act of 2020 (AMLA) and the Anti<span>‑</span>Money Laundering Whistleblower Improvement Act of 2022 (Whistleblower Improvement Act). The proposed rule, when finalized, would formalize incentives and anti<span>‑</span>retaliation safeguards intended to encourage individuals to submit whistleblower tips on money laundering, sanctions violations, and other illicit activity.&nbsp;</p>Thu, 02 Apr 2026 00:00:00 -0500<p> <p>On April 1, 2026, the Financial Crimes Enforcement Network (FinCEN) published a Notice of Proposed Rulemaking (NPRM) to establish a comprehensive framework for its whistleblower award and protection program (Whistleblower Program), as mandated under the Anti<span>‑</span>Money Laundering Act of 2020 (AMLA) and the Anti<span>‑</span>Money Laundering Whistleblower Improvement Act of 2022 (Whistleblower Improvement Act). The proposed rule, when finalized, would formalize incentives and anti<span>‑</span>retaliation safeguards intended to encourage individuals to submit whistleblower tips on money laundering, sanctions violations, and other illicit activity. </p> <p>Given the heightened incentives for external reporting under the proposed rule, financial institutions should reassess and strengthen their whistleblower policies, escalation frameworks, and training to promote internal escalation of potential issues through established reporting channels, thereby reducing the risk that such issues are first disclosed outside the institution. </p> <h2>Background</h2> <p>In January 2021, Congress enacted the AMLA, which significantly revised the existing whistleblower provisions under the Bank Secrecy Act (BSA). In December 2022, Congress enacted the Whistleblower Improvement Act, which, among other things, established a minimum award for a qualifying whistleblower report and expanded the reportable activity qualifying for an award to include violations of U.S. sanctions.[[N:For additional information regarding the whistleblower program under the AMLA, please see our <a href="https://www.arnoldporter.com/en/perspectives/publications/2021/11/amla-and-whistleblowers-considerations">November 2021 Advisory</a>.]] </p> <p>The proposed rule would fully implement the enhanced whistleblower program codified under the AMLA and the Whistleblower Improvement Act, including: </p> <ul> <li>Procedures for whistleblowers to share information about potential violations in a timely and secure manner</li> <li>Eligibility criteria for whistleblower awards</li> <li>Awards of 10% to 30% of collected monetary penalties for individuals whose tip leads to a successful enforcement action</li> <li>Protections for whistleblowers</li> </ul> <p>The proposed rule also follows FinCEN&rsquo;s <a href="https://www.arnoldporter.com/en/perspectives/blogs/enforcement-edge/2026/02/fincen-launches-new-whistleblower-webpage" target="_self">launch of the new whistleblower webpage</a> in February 2026, which provides a centralized, user-friendly interface for individuals to confidentially submit whistleblower tips. </p> <h2>What Financial Services Companies Are Covered by the Proposed Rule?</h2> <p>The proposed rule is intended to facilitate whistleblower reporting of potential violations of &ldquo;covered statutes,&rdquo; which include the BSA, International Emergency Economic Powers Act (IEEPA), Trading with the Enemy Act (TWEA), and Foreign Narcotics Kingpin Designation Act (Kingpin Act). Accordingly, any entity with obligations under the covered statutes may be subject to the proposed rule. </p> <p>The primary population of covered entities are those subject to the BSA, including banks, money services businesses, broker-dealers, digital asset firms, insurance companies, and other financial institutions. In addition, entities with obligations under IEEPA, TWEA, and the Kingpin Act could be subject to the proposed rule if suspected of a violation by a whistleblower. According to the NPRM, approximately 1.8 million entities across 20 different industries may ultimately be subject to the proposed rule. </p> <h2>Key Definitions</h2> <p>Generally, a whistleblower is eligible for an award under the proposed rule if the whistleblower voluntarily provides original information to the employer of the whistleblower, the U.S. Department of the Treasury (Treasury), or the U.S. Department of Justice (DOJ) that leads to the successful enforcement of a covered action or related action.</p> <h3>What Information Is Eligible for an Award?</h3> <p>The term &ldquo;original information&rdquo; is defined to include information that is (1) derived from the independent knowledge or independent analysis of a whistleblower; (2) not already known to the Treasury or DOJ from any other source; (3) not exclusively derived from publicly available sources; and (4) provided to the Treasury or DOJ for the first time. </p> <p>&ldquo;Independent knowledge&rdquo; means any factual information that is not exclusively obtained from publicly available sources. &ldquo;Independent analysis&rdquo; is also broadly defined to include the evaluation of information, including information that may be generally known or available to the public, by the whistleblower in a manner that results in material insights into or interpretations of the significance of such information that are not generally known or available to the public. </p> <p>This expansive scope increases the likelihood that a wide range of internal observations, analytical insights, and non<span>‑</span>public assessments may qualify for awards.</p> <h3>Who Can Be a Whistleblower?</h3> <p>Under the proposed rule, the term &ldquo;whistleblower&rdquo; means any individual who provides information relating to a violation of a covered statute to the Treasury, DOJ, or to the employer of the individual, including as part of the job duties of the individual.</p> <p>It should be noted that the proposed rule recognizes individuals as whistleblowers even when their disclosures are made to their employer, including as part of the job duties, rather than directly to FinCEN. According to the NPRM, if a whistleblower first submits original information to their employer and later reports that same information within a &ldquo;reasonable time&rdquo; to FinCEN, FinCEN will consider the original information to have been reported by the whistleblower, even if the employer provides the whistleblower&rsquo;s information to the Treasury or DOJ. Moreover, the NPRM notes that, for certain roles within an organization, the individual must wait 120 days from when they obtained the original information before providing it to FinCEN in order to be eligible for an award, which is designed to encourage strong internal audit and compliance programs. These individuals include, among others, individuals who obtained the original information because they principally perform audit or compliance responsibilities. The definition of whistleblower reinforces that whistleblowing can &mdash; and often should &mdash; begin internally, underscoring the importance of maintaining effective reporting channels and escalation process.</p> <h2>Takeaways</h2> <p>In light of the proposed rule, financial institutions &mdash; and other institutions with obligations under the BSA and other covered statutes &mdash; should reassess and, if necessary, strengthen their existing policies, procedures and reporting frameworks related to whistleblowers and internal reporting. This is especially critical now as strengthening these processes may help an organization avoid or reduce a potential award under the FinCEN whistleblower program.</p> <p>For example, financial institutions and other entities should: </p> <ul> <li><strong>Prepare for heightened regulatory scrutiny</strong>. As FinCEN and DOJ may increasingly rely on whistleblower<span>‑</span>generated leads, institutions should anticipate greater visibility by banking and non-banking authorities into their AML and sanctions compliance operations. This shift underscores the importance of ensuring that existing controls, documentation practices, and investigative processes are robust and capable of withstanding regulatory inquiry. Institutions may also wish to proactively evaluate whether potential gaps or longstanding compliance issues could attract renewed attention in an environment driven by external tips.</li> <li><strong>Review and update internal whistleblower policies and procedures</strong>. Given the nature of the proposed rule, it is important to ensure financial institutions encourage employees to report internally before those employees report information externally. Clear communications from senior executives of reporting channels, protections, and anti<span>‑</span>retaliation measures can promote better compliance cultures, encourage timely internal escalation, and reduce external reporting. Institutions should also periodically test anonymous reporting tools and ensure all internal reports are properly captured and evaluated.</li> <li><strong>Prioritize comprehensive training</strong>. Employees should receive periodic, role<span>‑</span>specific training on how to handle whistleblower reports and the anti<span>‑</span>retaliation protections available to whistleblowers. Legal, human resources, anti-money laundering teams, and any individuals who may ultimately receive whistleblower reports (such as top executives or board members) should also be trained on ambiguities in the new framework and how to avoid common pitfalls. Middle management, who are often the first recipients of employee concerns, should be equipped to recognize internal reports and ensure they are escalated through the proper channels.</li> <li><strong>Avoid taking actions that might be deemed to impede an individual from reporting</strong>. The proposed rule notifies employers and other individuals that they cannot take any action to impede an individual from communicating directly with Treasury or DOJ about potential violations. Organizations may want to consider confidentiality language in standard template separation and other agreements with employees, as well as training on how to avoid concerns about impeding communications.</li> </ul> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{186AE688-A374-4D18-9A6A-28F07DA38E01}https://www.arnoldporter.com/en/perspectives/news/2026/04/daily-journal-recognizes-douglas-winthropArnold &amp; Porter Intellectual Property partner Doug Winthrop has been named to the <em>Daily Journal</em>&rsquo;s 2026 &ldquo;Leading Commercial Litigators&rdquo; report. The annual feature profiles attorneys who have built careers handling &ldquo;bet-the-company&rdquo; cases.Wed, 01 Apr 2026 00:00:00 -0500<p>Arnold &amp; Porter Intellectual Property partner Doug Winthrop has been named to the <em>Daily Journal</em>&rsquo;s 2026 &ldquo;Leading Commercial Litigators&rdquo; report. The annual feature profiles attorneys who have built careers handling &ldquo;bet-the-company&rdquo; cases.</p> <p>In his profile,<em> Daily Journal</em> highlighted Doug&rsquo;s 35 years of experience &ldquo;navigating some of the most consequential commercial disputes in the country.&rdquo; Doug also reflected on his path into law and how early mentorship shaped his approach, including &ldquo;looking at problems from multiple angles, thinking hard and early about arguments and approaches that will resonate, doggedly pursuing a strategy and, at the same time, being willing to reassess strategic choices as necessary.&rdquo;</p> <p>Doug also discussed his recent representation of Anthropic in defending against copyright infringement claims brought by a class of book authors. He led the Arnold &amp; Porter team in securing a favorable ruling that &ldquo;the company&rsquo;s use of purchased and scanned books for AI training constituted fair use &mdash; the first such ruling by a U.S. court on generative AI model training.&rdquo;</p>{DF6099E8-7C7D-4B6B-A788-BB87EF9CB4F4}https://www.reuters.com/practical-law-the-journal/litigation/cannabis-product-liability-claims-2026-04-01/Daphne O'Connorhttps://www.arnoldporter.com/en/people/o/oconnor-daphnedaphne.oconnor@arnoldporter.comAdrienne D. Boydhttps://www.arnoldporter.com/en/people/b/boyd-adrienneadrienne.boyd@arnoldporter.comDavid A. Kerschnerhttps://www.arnoldporter.com/en/people/k/kerschner-david-adavid.kerschner@arnoldporter.comWed, 01 Apr 2026 00:00:00 -0500{7F359BF3-D0A2-4966-A1C6-297E2F91106F}https://www.biosliceblog.com/2026/04/virtual-and-digital-health-digest-february-2026/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comSofia Holmquisthttps://www.arnoldporter.com/en/people/h/holmquist-sofiasofia.holmquist@arnoldporter.comHeba Jalilhttps://www.arnoldporter.com/en/people/j/jalil-hebaheba.jalil@arnoldporter.comWed, 01 Apr 2026 00:00:00 -0500{8C34B135-E253-4D06-8A13-2ACFA72ACCBA}https://www.biosliceblog.com/2026/04/navigating-ivd-regulation-in-clinical-trials-a-comparative-eu-and-uk-guide/Fabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comWed, 01 Apr 2026 00:00:00 -0500{8A07E42A-95D1-4A31-9358-D3D4D16E98C1}https://www.americanbar.org/events-cle/mtg/web/456815203/stacey.halliday@arnoldporter.comWed, 01 Apr 2026 00:00:00 -0500{1DDC0ED5-8A56-4A7D-A375-5E33F2EC8603}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/anti-corruption-report-quotes-daniel-bernstein-on-evolving-compliance-risks-in-contractsDaniel Bernstein, Arnold &amp; Porter White Collar Defense &amp; Investigations counsel, was recently quoted in the <em>Anti-Corruption Report</em> article, &ldquo;Compliance Reps and Warranties: Definitions and Goals,&rdquo; the first in a four-part series examining the role of compliance representations and warranties in managing legal and regulatory risk.Tue, 31 Mar 2026 00:00:00 -0500<p>Daniel Bernstein, Arnold &amp; Porter White Collar Defense &amp; Investigations counsel, was recently quoted in the <em>Anti-Corruption Report</em> article, &ldquo;Compliance Reps and Warranties: Definitions and Goals,&rdquo; the first in a four-part series examining the role of compliance representations and warranties in managing legal and regulatory risk.</p> <p>Daniel noted that compliance representations and warranties &ldquo;are a form of legal protection and risk allocation,&rdquo; as well as an &ldquo;expression of a company&rsquo;s values and of what matters to a company.&rdquo; </p> <p>&ldquo;They are an indication of what the company and its stakeholders care about,&rdquo; he said.</p> <p>Daniel further discussed how, as laws and regulations change, &ldquo;long-term contracts or old contracts where companies are using representations and warranties made a long time ago&rdquo; can become outdated. For example, a counterparty or supply chain link &ldquo;that was not on people&rsquo;s radar screens when a contract was entered into may now pose a problem.&rdquo; Cross-border transactions can give rise not only to anti-corruption risks (including under the FCPA) but also to emerging sanctions and other risks, he observed.</p> <p>Daniel recommended that companies periodically assess the compliance representations they are making and receiving. He added that mechanisms may be available to adapt to evolving risks, even in older contracts. </p> <p><a rel="noopener noreferrer" href="https://www.anti-corruption.com/" target="_blank">Read the full article</a> (subscription required).</p>{B6454EAD-0280-459D-918E-E48107A152AB}https://www.arnoldporter.com/en/perspectives/news/2026/03/mergerlinks-ranks-dan-kracov-among-top-healthcare-lawyers-in-north-americaDan Kracov, chair of Arnold &amp; Porter&rsquo;s Global Life Sciences Industry group, has been named one of <em>MergerLinks</em>&rsquo; Top Healthcare Lawyers in North America, ranking fourth in its FY 2025 league table, which recognizes leading healthcare M&amp;A advisors based on independently verified deal volume and value.Tue, 31 Mar 2026 00:00:00 -0500<p>Dan Kracov, chair of Arnold &amp; Porter&rsquo;s Global Life Sciences Industry group, has been named one of <em>MergerLinks</em>&rsquo; Top Healthcare Lawyers in North America, ranking fourth in its FY 2025 league table, which recognizes leading healthcare M&amp;A advisors based on independently verified deal volume and value.</p> <p>Dan focuses his practice on helping pharmaceutical, biotechnology, medical device, and diagnostic companies navigate challenges related to the development, approval, and marketing of FDA-regulated products. He regularly conducts product and compliance-related government and internal investigations, develops global corporate compliance programs, and performs due diligence in financings, mergers, and acquisitions.</p>{84FC72A0-E60E-4FFD-B3BB-C0DCA2D29BC8}https://womensenergynetwork.glueup.com/event/wen-dc-powering-the-conversation-today-s-energy-priorities-175742/emily.orler@arnoldporter.comTue, 31 Mar 2026 00:00:00 -0500{8A6BA757-2219-4EBE-9B3F-4EAA6082A0DC}https://www.arnoldporter.com/en/perspectives/events/2026/03/your-website-is-under-scrutiny-navigating-legal-and-regulatory-compliance-risksRaqiyyah Pippinshttps://www.arnoldporter.com/en/people/p/pippins-raqiyyahraqiyyah.pippins@arnoldporter.comWilliam Hallett Efronhttps://www.arnoldporter.com/en/people/e/efron-william-hallettwilliam.efron@arnoldporter.comJami Vibberthttps://www.arnoldporter.com/en/people/v/vibbert-jamijami.vibbert@arnoldporter.comTommy Huynhhttps://www.arnoldporter.com/en/people/h/huynh-tommytommy.huynh@arnoldporter.comStyna Taohttps://www.arnoldporter.com/en/people/t/tao-stynastyna.tao@arnoldporter.comJoin Arnold &amp; Porter's Consumer Products &amp; Retail Industry Group for the next program in our Consumer Products &amp; Retail Navigator webinar series, focused on the legal risks present on your company's website and what to do about them.Mon, 30 Mar 2026 00:00:00 -0500<p>Join Arnold &amp; Porter's Consumer Products &amp; Retail Industry Group for the next program in our Consumer Products &amp; Retail Navigator webinar series, focused on the legal risks present on your company's website and what to do about them.</p> <p>Your website is your most visible compliance surface, and regulators, plaintiffs' firms, and consumers are all paying attention. State attorneys general (AGs) are coordinating privacy enforcement efforts targeting website tracking practices, and plaintiffs are finding new ways to bring related claims. The Federal Trade Commission and state AGs are bringing enforcement actions regarding subscriptions and &ldquo;junk fees,&rdquo; and numerous states are enacting new laws in these areas. Amid these developments, the threat of class actions also looms. This legal environment is reshaping how companies design their digital experience.</p> <p>During our program, we will walk through the key legal risks on your website and what to do about them, including:</p> <ul> <li>Tracking technologies, privacy notices, and evolving implementation expectations</li> <li>Website terms and conditions and related enforceability considerations</li> <li>ADA accessibility and website compliance risks</li> <li>Recurring subscriptions and other negative option programs</li> <li>Fee disclosures and price advertising</li> </ul> <p>This is a practical session designed to help consumer products and retail companies identify exposure and prioritize next steps.</p>{DE3EC594-62AF-4FCA-BF4C-4D8769ABE35C}https://www.arnoldporter.com/en/perspectives/publications/2026/03/virtual-and-digital-health-digest-march-2026Allison W. Shurenhttps://www.arnoldporter.com/en/people/s/shuren-allison-wallison.shuren@arnoldporter.comAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comNancy L. Perkinshttps://www.arnoldporter.com/en/people/p/perkins-nancy-lnancy.perkins@arnoldporter.comMonique Nolan, M.D., J.D.https://www.arnoldporter.com/en/people/n/nolan-moniquemonique.nolan@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comCasey Brouhardhttps://www.arnoldporter.com/en/people/b/brouhard-caseycasey.brouhard@arnoldporter.comJacqueline L. Degannhttps://www.arnoldporter.com/en/people/d/degann-jacquelinejackie.degann@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comSofia Holmquisthttps://www.arnoldporter.com/en/people/h/holmquist-sofiasofia.holmquist@arnoldporter.comHeba Jalilhttps://www.arnoldporter.com/en/people/j/jalil-hebaheba.jalil@arnoldporter.comKatherine Rohdehttps://www.arnoldporter.com/en/people/r/rohde-katherinekate.rohde@arnoldporter.comMickayla A. Stogsdillhttps://www.arnoldporter.com/en/people/s/stogsdill-mickaylamickayla.stogsdill@arnoldporter.comBrianna Morigneyhttps://www.arnoldporter.com/en/people/m/morigney-briannabrianna.morigney@arnoldporter.comLily Caohttps://www.arnoldporter.com/en/people/c/cao-lilylily.cao@arnoldporter.comAishwarya Grandhehttps://www.arnoldporter.com/en/people/g/grandhe-aishwaryaaishwarya.grandhe@arnoldporter.comCaroline Oliverhttps://www.arnoldporter.com/en/people/o/oliver-carolinecaroline.oliver@arnoldporter.comThis digest covers key virtual and digital health regulatory and public policy developments during February and early March 2026 from the United States, United Kingdom, and European Union.Mon, 30 Mar 2026 00:00:00 -0500<p>This digest covers key virtual and digital health regulatory and public policy developments during February and early March 2026 from the United States, United Kingdom, and European Union.</p> <p>In this issue, you will find the following:</p> <h3>U.S. News</h3> <ul> <li><a href="#Health Care Fraud And Abuse Updates">Health Care Fraud and Abuse Updates</a></li> <li><a href="#Provider Reimbursement Updates">Provider Reimbursement Updates</a></li> <li><a href="#Privacy and AI Updates">Privacy and Artificial Intelligence (AI) Updates</a></li> <li><a href="#Policy Updates">Policy Updates</a></li> </ul> <h3>U.S. Featured Content</h3> <p>Over the past month, U.S. developments have highlighted a converging focus on telehealth fraud enforcement and artificial intelligence (AI)-driven healthcare innovation. The U.S. Department of Justice (DOJ) continued to target telemedicine-enabled Durable Medical Equipment (DME) schemes involving alleged kickbacks, sham physician relationships, and medically unnecessary orders, reinforcing scrutiny under the Anti-Kickback Statute and False Claims Act. In parallel, policymakers advanced a more risk-based approach to AI oversight, including Senate proposals to streamline U.S. Food and Drug Administration (FDA) regulation and state-level pilots like Utah&rsquo;s AI-enabled prescription renewal program. Federal agencies also accelerated digital health adoption, with the U.S. Department of Health and Human Services (HHS) promoting &ldquo;clinical AI,&rdquo; the Centers for Medicare &amp; Medicaid Services (CMS) launching a Medicare App Library, and the administration&rsquo;s Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative signaling expanded use of AI to detect fraud, alongside ongoing legislative efforts on cybersecurity and digital health policy.</p> <h3>EU and UK News</h3> <ul> <li><a href="#Regulatory Updates">Regulatory Updates</a></li> <li><a href="#Privacy Updates">Privacy Updates</a></li> <li><a href="#IP Updates">IP Updates</a></li> </ul> <h3>EU/UK Featured Content</h3> <p>February 2026 saw a period of substantial regulatory activity across both the UK and EU, particularly in relation to AI governance, medical technologies, and data protection. In the UK, the policy landscape continued to evolve with initiatives affecting the regulation of medical devices, clinical research, and AI deployment. Key developments included the Medicines and Healthcare products Regulatory Agency&rsquo;s (MHRA) consultation on the indefinite recognition of CE-marked medical devices, record levels of medical device testing, and the Prescription Medicines Code of Practice Authority&rsquo;s (PMCPA) revised guidance on the use of social media. AI remained a major focus in the UK, with the UK government&rsquo;s response to the consultation on the AI Management Essentials tool, increased industry involvement in the UK AI Security Institute&rsquo;s alignment program, and feedback relating to governmental research on AI adoption across UK businesses. Additional international collaboration efforts included UK engagement at the India AI Impact Summit and an expanded science and technology partnership with Japan, as well as the launch of the first-ever AI Strategy for UK Research and Innovation.</p> <p>At the EU level, regulatory activity centered predominantly on data protection, with the adoption of several important outputs from the European Data Protection Board (EDPB) and European Data Protection Supervisor (EDPS). These included a joint opinion on the European Commission&rsquo;s proposed Digital Omnibus amendments, a report following public consultation on anonymization and pseudonymization, and the publication of the EDPB&rsquo;s 2026-2027 work program. These developments indicate a renewed emphasis on maintaining high standards of data protection while ensuring clarity for organizations navigating complex digital and AI-driven ecosystems.</p> <p>In parallel, the UK implemented major reforms to its domestic data protection framework through the Data (Use and Access) Act 2025, which entered into force this month. Together, these UK and EU developments highlight a regulatory environment increasingly focused on the safe deployment of advanced technologies, the strengthening of data protection safeguards, and the continued modernization of medical device oversight.</p> <h2>U.S. News</h2> <h3><a name="Health Care Fraud And Abuse Updates">Health Care Fraud And Abuse Updates</a></h3> <p><strong>DOJ Pursues Medically Unnecessary Telemedicine Schemes Across the U.S.</strong> Recently, four different individuals were sentenced for their roles in Medicare Fraud schemes, demonstrating DOJ&rsquo;s continued interest in DME fraud enforcement. In all four cases, the individuals allegedly used telemedicine companies to order medically unnecessary DME, which resulted in fraudulent claims to Medicare.</p> <p>On February 26, 2026, Reinaldo Wilson, owner of two New Jersey-based telemedicine companies, <a rel="noopener noreferrer" href="https://www.justice.gov/usao-nj/pr/chiropractor-sentenced-43-months-prison-149-million-health-care-fraud-and-kickback" target="_blank">was sentenced to prison and ordered to pay restitution for orchestrating a Medicare fraud scheme</a>. As a part of the scheme, Wilson&rsquo;s companies allegedly paid illegal kickbacks to providers to sign orthotic brace orders for Medicare beneficiaries who had no clinical need. The signed orders were then sold to marketing companies, which resold them to brace suppliers that submitted over $56 million in Medicare claims. Wilson then allegedly attempted to conceal the fraud by establishing a successor company in a third party&rsquo;s name while retaining actual control.</p> <p>In another case, on March 6, 2026, Kartik Bhatia, an Illinois man, <a rel="noopener noreferrer" href="https://www.justice.gov/usao-ma/pr/illinois-man-sentenced-two-years-prison-durable-medical-equipment-scheme" target="_blank">was sentenced to prison for conspiring to defraud Medicare of over $2 million through a scheme involving medically unnecessary orthotic braces</a>. Bhatia&rsquo;s DME company allegedly paid telemarketing companies for orders, shipped braces that beneficiaries neither needed nor requested, and used physician signatures on orders from doctors who had no treating relationship with those patients. Similar to Wilson, Bhatia opened a second company to conceal his continued fraudulent conduct. </p> <p>Additionally, on March 6, 2026, Dr. Scott Taggart Roethle, a Kansas anesthesiologist, was <a rel="noopener noreferrer" href="https://www.justice.gov/usao-edmo/pr/kansas-doctor-sentenced-3-years-prison-8-million-medicare-fraud" target="_blank">sentenced to prison and ordered to pay restitution for his role in a telemarketing scheme</a> where overseas call centers collected Medicare beneficiary information. Roethle then signed fraudulent DME prescriptions without examining patients or establishing treating physician relationships, falsely certifying medical necessity. Medicare paid out at least $8 million based on his orders. </p> <p>In another case, Georgia chiropractor, Teflyon Cameron, <a rel="noopener noreferrer" href="https://www.justice.gov/usao-nj/pr/chiropractor-sentenced-43-months-prison-149-million-health-care-fraud-and-kickback" target="_blank">was sentenced on March 9, 2026, after pleading guilty to conspiracy to commit health care fraud and conspiracy to violate the Federal Anti-Kickback statute</a>. In addition to using marketing call centers and telemedicine companies to order medically unnecessary DME, Cameron and her co-conspirators allegedly entered sham contractual arrangements designed to disguise kickback payments to a clinical laboratory on a per-beneficiary lead basis. The scheme resulted in over $14.9 million in Medicare losses.</p> <h3><a name="Provider Reimbursement Updates">Provider Reimbursement Updates</a></h3> <p><strong>CMS Issues Request for Information on AI Tools for Medicare Plan Selection</strong>. On February 24, CMS issued a <a rel="noopener noreferrer" href="https://sam.gov/workspace/contract/opp/570eab65b31b4c93b556185df473266c/view" target="_blank">Request for Information</a> (RFI) seeking input from companies developing artificial intelligence tools that could assist Medicare beneficiaries in evaluating health plan options. The agency noted that approximately 70 million Medicare beneficiaries currently evaluate coverage options across Medicare.gov, Medicare Plan Finder, and the Medicare Call Center, but that these tools may be difficult to navigate or subject to extended wait times.</p> <p>CMS expressed its interest in AI solutions that can provide personalized plan recommendations, real-time conversational support, predictive analytics, accessible decision-support tools, and call center automation to help beneficiaries make informed coverage decisions. The RFI seeks information on companies&rsquo; existing AI tools, pricing models, and experience working with Medicare plan selection, coverage guidance, or beneficiary support systems. Respondents must not be affiliated with or owned by insurance carriers, health plans, or any entity with a financial incentive to steer beneficiaries toward specific plans or carriers. </p> <p>CMS stated that following this RFI, it anticipates issuing formal solicitations for &ldquo;AI Tools for Medicare Experience Modernization,&rdquo; subject to funding availability and agency priorities. Responses to the RFI are due by March 31, 2026.</p> <h3><a name="Privacy and AI Updates">Privacy and AI Updates</a></h3> <p><strong>Senate Health Committee Recommends Streamlined FDA Regulation of Digital Health Technologies</strong>. On February 17, 2026, Senate Health Committee Chair Bill Cassidy (R‑LA) released a <a rel="noopener noreferrer" href="https://www.help.senate.gov/imo/media/doc/fda_report.pdf" target="_blank">paper</a> titled &ldquo;Patients and Families First: Building the FDA of the Future.&rdquo; The paper describes various proposed reforms to modernize FDA procedures through the use of AI powered tools. It recommends that the FDA focus AI regulation on AI uses that directly influence regulatory submissions or risk-benefit assessments, in cases where risk-mitigation safeguards are not already in place, and expand its internal AI expertise by hiring qualified specialists as well as building partnerships with external AI experts. The paper cautions against regulating clinical decision support tools, which often integrate AI to analyze patient data and produce in-house data.</p> <p><strong>Utah Partners With AI-Native Health Platform to Establish an AI Prescription Renewal Program</strong>. The Office of Artificial Intelligence Policy within the Utah Department of Commerce is facilitating a partnership between Utah and the AI-native healthcare startup Doctronic to provide the first state-approved AI system to autonomously renew certain prescription medications. The plan is for a <a rel="noopener noreferrer" href="https://commerce.utah.gov/2026/01/06/news-release-utah-and-doctronic-announce-groundbreaking-partnership-for-ai-prescription-medication-renewals/" target="_blank">pilot program</a>, pursuant to Utah&rsquo;s <a rel="noopener noreferrer" href="https://commerce.utah.gov/ai/agreements/" target="_blank">regulatory sandbox framework</a>, allowing the state to temporarily modify or suspend regulatory requirements, including telehealth requirements, while gathering empirical evidence to use for regulatory decision-making. The prescription renewal platform will be available only for patients with chronic conditions who are physically present in Utah, but may be used to renew prescriptions for a wide range of commonly prescribed medications. Doctronic&rsquo;s AI system will evaluate renewal based on prescription history and clinical questions designed to detect contraindications, adverse effects, or changes in condition. If any risk is detected, the system will flag the request and escalate it to a physician for human review. Utah intends to make the findings of the pilot program public in an effort to inform future AI policy.</p> <h3><a name="Policy Updates">Policy Updates</a></h3> <p><strong>HHS&rsquo; ASTP/ONC Holds 2026 Annual Meeting and Launches EHIgnite Challenge</strong>. On February 11-12, 2026, HHS&rsquo; Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (ASTP/ONC) held its <a rel="noopener noreferrer" href="https://www.astpannualmeeting.com/en/" target="_blank">2026 Annual Meeting</a> focusing on health IT policy and technology. The meeting prioritized the administration&rsquo;s directives to lower healthcare costs through leveraging tools in AI and other healthcare infrastructure. During the keynote presentation, Assistant Secretary for Technology Policy and National Coordinator for Health IT, Dr. Thomas Keane, <a rel="noopener noreferrer" href="https://www.hhs.gov/press-room/tefca-americas-national-interoperability-network-reaches-nearly-500-million-health-records-exchanged.html" target="_blank">highlighted</a> recent ASTP/ONC accomplishments, including &ldquo;leading the Department-wide push to unlock clinical AI.&rdquo;&nbsp;</p> <ul> <li>The agency recently issued a <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2025/12/23/2025-23641/request-for-information-accelerating-the-adoption-and-use-of-artificial-intelligence-as-part-of" target="_blank">Request for Information</a> seeking comments on the adoption and use of AI as part of clinical care. The deadline to submit comments was February 23, 2026.</li> <li>ASTP/ONC also launched the <a rel="noopener noreferrer" href="https://healthit.gov/astp-onc-challenges-and-winners/" target="_blank">EHIgnite Challenge</a>, which solicits health IT developers to create tools or platforms to &ldquo;transform&rdquo; electronic health information into actionable and usable information for clinical care and patient engagement. Submissions for proposals for Phase 1 are due by May 13, 2026.&nbsp;<span style="font-size: 13px;"></span></li> </ul> <p><strong>FDA Hires New Director for Digital Health Center of Excellence</strong>. The FDA has <a rel="noopener noreferrer" href="https://www.statnews.com/2026/02/19/fda-appoints-new-digital-health-center-director/" target="_blank">reportedly</a> hired Dr. Rick Abramson as the agency&rsquo;s new director of FDA&rsquo;s Digital Health Center of Excellence. Abramson was most recently a contracted consultant in the Office of the FDA Commissioner until his appointment to this new role. He was also formerly the Chief Medical Officer at a subsidiary of Harrison.ai.</p> <p><strong>CMS Launches Medicare App Library</strong>. On February 23, 2026, CMS <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/health-technology-ecosystem/overview/medicare-app-library" target="_blank">launched</a> a new Medicare App Library as part of the agency&rsquo;s Digital Health Tech Ecosystem. The library will compile vetted &ldquo;health apps,&rdquo; such as mobile and web applications, technology-enabled care services, digital health platforms, and care delivery tools, that are compliant with CMS&rsquo; Aligned Networks and Health Insurance Portability and Accountability Act. These apps must meet one of three use cases, including &ldquo;killing the clipboard,&rdquo; conversational AI assistants, and diabetes and obesity prevention and management. The agency is also requiring that vetted apps include a feature for digital identity verification through ID.me or CLEAR, which the agency has recently rolled out for identity verification for Medicare.gov accounts.</p> <p><strong>Trump Administration Announces Efforts To Address Health Care Fraud</strong>. On February 25, 2026, Vice President J.D. Vance, HHS Secretary Robert F. Kennedy Jr., and CMS Administrator Dr. Mehmet Oz <a rel="noopener noreferrer" href="https://www.cms.gov/newsroom/press-releases/trump-administration-prioritizes-affordability-announcing-major-crackdown-health-care-fraud" target="_blank">announced</a> the CRUSH initiative, which includes an <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/02/27/2026-03968/request-for-information-rfi-related-to-comprehensive-regulations-to-uncover-suspicious-healthcare" target="_blank">RFI</a> seeking input on strategies to strengthen CMS&rsquo; ability to respond and prevent fraud, waste, and abuse in Medicare, Medicaid, the Children&rsquo;s Health Insurance Program, and the Health Insurance Marketplace. Secretary Kennedy noted that the initiative and related strategies aim to replace older methods with AI tools to identify fraud and prevent improper payments. Responses to the RFI are due by March 30, 2026. Feedback may be used to inform an upcoming CRUSH proposed rule.</p> <p><strong>Senate Markup Includes Health Care Cybersecurity Bill</strong>. On February 26, 2026, the Senate HELP Committee held a <a rel="noopener noreferrer" href="https://www.help.senate.gov/hearings/s-1602-s-1558-s-3747-s-1782-s-1552-s-3315" target="_blank">markup</a> of four bills, including the Health Care Cybersecurity and Resiliency Act of 2025 (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/senate-bill/3315" target="_blank">S. 3315</a>). The bill is led by HELP Chairman Cassidy (R-LA), Sen. Maggie Hassan (D-NH), Sen. John Cornyn (R-TX), and Sen. Mark Warner (D-VA). Chairman Cassidy emphasized the necessity to safeguard patients and ensure providers can provide care without disruption, referencing the Change Healthcare cyberattack in 2024. The bill passed out of committee, as amended, by a vote of 22-1.</p> <p><strong>House Markup of Kids Online Safety Bills</strong>. On March 5, 2026, the House Energy and Commerce Committee held a markup of eight bills, including three bills related to protecting minors online: the Kids Internet and Digital Safety (KIDS) Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7757" target="_blank">H.R. 7757</a>), Sammy&rsquo;s Law (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/2657" target="_blank">H.R. 2657</a>), and the App Store Accountability Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/3149" target="_blank">H.R. 3149</a>) &mdash; all of which were approved, largely along party lines. The Children and Teens&rsquo; Online Privacy Protection Act (COPPA 2.0, <a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/6291" target="_blank">H.R. 6291</a>) also was on the agenda, but Chairman Brett Guthrie (R-KY) announced mid-markup that the committee would postpone consideration to allow Republican and Democratic staff more time to negotiate a bipartisan agreement.</p> <h2>EU and UK News</h2> <h3><a name="Regulatory Updates">Regulatory Updates</a></h3> <p><strong><a rel="noopener noreferrer" href="https://www.pmcpa.org.uk/about-us/media/news/revised-social-media-guidance-published/" target="_blank">PMCPA Publishes Revised Guidance for the Use of Social Media</a></strong>. The PMCPA has issued revised guidance on the use of social media, reflecting the rising number of code breaches linked to online activity and the growing complexity of digital engagement. The update replaces the 2023 version with a redesigned, web based format that includes Q&amp;As, practical examples, and links to PMCPA cases, making it easier for companies to navigate the rules in an evolving social media environment. Notably, the guidance introduces expanded sections on clinical trial recruitment, responding to misinformation, news for an investor audience/the media, pharmacovigilance responsibilities, and engaging with influencers. For more details on the guidance, read our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/02/uk-pmcpa-publishes-revised-guidance-for-the-use-of-social-media/" target="_blank">February 2026 BioSlice Blog</a>.</p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/mhra-launches-a-consultation-on-indefinite-recognition-of-ce-marked-medical-devices" target="_blank">MHRA Consultation on Indefinite Recognition of CE-Marked Medical Devices</a></strong>. The MHRA has launched a consultation seeking views on proposed changes to the recognition of EU CE marked medical devices in Great Britain, as part of wider efforts to protect patient access to safe and effective medical technologies and refine the UK&rsquo;s post Brexit regulatory landscape. The proposals include: (1) extending the existing transitional arrangements for devices certified under the former Medical Devices Directive to align with the EU&rsquo;s transition timelines under the Medical Devices Regulation 2017/745 (EU MDR), (2) the indefinite recognition of devices compliant with the EU MDR and the In Vitro Diagnostic Medical Devices Regulation 2017/746 (EU IVDR), and (3) a proposed international reliance route for devices that comply with the EU MDR or EU IVDR but are classified at a higher risk level under UK MDR 2002. For more details, read our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/02/mhra-launches-targeted-consultation-on-indefinite-recognition-of-ce%e2%80%91marked-medical-devices/" target="_blank">February 2026 BioSlice Blog</a>. In the meantime, the MHRA has published an <a rel="noopener noreferrer" href="https://assets.publishing.service.gov.uk/media/6718b88738149ce9d09e3894/Infographic_-_Devices_transition_timeline.pdf" target="_blank">infographic</a> of the current timelines in place for placing CE-marked medical devices on the Great Britain market. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/uk-medical-device-testing-hits-record-high-as-mhra-backs-growth-in-brain-and-ai-technology" target="_blank">UK Medical Device Testing Hits Record High</a></strong>. The MHRA has announced that UK medical device testing reached a record high in 2025, with a 17% rise in approved clinical investigations. This growth has been driven by investments in neurotechnology and a surge in AI-powered medical devices. These developments form part of the MHRA&rsquo;s broader work to promote innovation and remove barriers for smaller companies, including initiatives such as a fee waiver pilot, early market access to promising devices, and enhanced support for high-impact technologies. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/collections/digital-mental-health-technology#bsi-standard" target="_blank">MHRA Sponsors a New Standard on Clinical Studies for Digital Mental Health Technologies</a></strong>. The MHRA has sponsored the British Standards Institute to develop a standard providing recommendations for performing clinical studies to generate clinical evidence for digital mental health technologies. The MHRA intends for the standard to apply to the pre-market phase and to the real-world data collection in the early implementation, post-market phase. The standard is likely to include factors such as controls, sample characteristics, safety, effectiveness, and engagement end points, as well as follow up periods. A public consultation on a draft will take place in mid-2026.</p> <p><strong><a rel="noopener noreferrer" href="https://internationalaisafetyreport.org/publications" target="_blank">The International AI Safety Report 2026 Published</a></strong>. Released on February 3, 2026, the report, which was led by Turing Award winner Yoshua Bengio and authored by over 100 international experts, provides a scientific assessment of general-purpose AI capabilities, focusing on three key questions: (1) what can general-purpose AI do today, (2) what emerging risks does it pose, and (3) how can those risks be mitigated. The report seeks to support policymakers in addressing the difficulties of gathering and evaluating evidence on the risks associated with rapidly developing and increasingly capable AI systems, a challenge described as the &ldquo;evidence dilemma.&rdquo; It highlights that performance remains uneven and &ldquo;jagged,&rdquo; with capabilities varying widely across tasks and contexts, as AI systems that deliver in controlled settings such as pre deployment evaluations often perform less effectively in real world conditions. In order for general purpose AI to reach its full potential, the report emphasizes the need to prioritize the effective management of risks such as malicious use, malfunctions, and systemic disruption. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/consultations/ai-management-essentials-tool/outcome/guidance-for-using-the-ai-management-essentials-tool-government-response" target="_blank">UK Government Publishes Response to Consultation on AI Management Essentials (AIME) Tool</a></strong>. In November 2024, the UK government sought feedback on AIME, a self-assessment tool that distils key principles from existing AI governance frameworks to help businesses establish robust governance and management practices for AI development and use. The consultation outcome was published on February 6, 2026. An analysis of 65 responses indicated that organizations view AIME as a valuable foundation for AI governance, although concerns were raised regarding its complexity for non expert users, particularly small and medium enterprises (SMEs) that struggled to operate under the tool&rsquo;s size and occupation agnostic approach. This feedback will inform both the refinement of the tool and the development of further guidance focused on the foundational governance measures necessary to support responsible AI deployment, with a specific emphasis on improving accessibility for SMEs. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/openai-and-microsoft-join-uks-international-coalition-to-safeguard-ai-development" target="_blank">OpenAI and Microsoft Join AI Security Institute&rsquo;s Flagship Alignment Project</a></strong>. Contributions from OpenAI and Microsoft have increased the total funding available through the UK AI Security Institute&rsquo;s initiative to more than &pound;27 million, supporting international research that aims to enhance the international reliability and safety of AI systems. The project combines funding for research, access to compute infrastructure and ongoing academic mentorship to drive progress on alignment. The first Alignment Project grants have been awarded to 60 projects from across eight countries, with a second round expected to open later this year.</p> <p><a rel="noopener noreferrer" href="https://www.gov.uk/government/publications/ai-adoption-research/ai-adoption-research#executive-summary" target="_blank"><strong>UK Government Publishes Analysis of Research on AI Adoption</strong></a>. Consistent with the ambitions set out in the January 2025 AI Opportunities Action Plan to embed AI across the UK economy, the government conducted research to assess the use of AI among UK businesses. The study, published on February 13, 2026 and based on 3,500 interviews (weighted to reflect business size and sector), indicates that AI adoption remains modest, with only 16% of businesses using at least one AI technology and many citing a lack of identified need and limited AI skills as key barriers. Businesses reported the greatest difficulties when implementing agentic AI, while natural language processing and text generation presented comparatively fewer barriers. For organizations that raised ethical concerns, these concerns were regarded as the most significant obstacle to adoption, followed by high costs and regulatory uncertainty. While the research demonstrates varying levels of trust in AI systems, most organizations remain willing to explore new technologies, with 75% of businesses reporting that AI has increased workforce productivity. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/uk-to-champion-how-ai-can-supercharge-growth-unlock-new-jobs-and-improve-public-services-at-ai-impact-summit-in-india" target="_blank">UK and International Partners Support Commitment To AI at India AI Impact Summit</a></strong>. The UK government, together with international partners, has engaged in discussions on the potential for AI to drive growth, create new jobs, improve public services, and deliver benefits globally. These discussions form part of the UK&rsquo;s broader collaboration with India to advance shared priorities in science, technology, and innovation. The New Delhi <a rel="noopener noreferrer" href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=2231208&amp;v=4&amp;reg=3&amp;lang=2" target="_blank">Declaration</a> on AI, presented at the India AI Impact Summit, seeks to build an inclusive, accessible and efficient global AI framework. The declaration has been endorsed by 92 countries, including the UK, and is expected to be signed at an international summit later this year. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/uk-and-japan-strengthen-science-and-technology-ties" target="_blank">UK and Japan Strengthen Science and Technology Partnership</a></strong>. On February 3, 2026, the UK and Japan announced a package of life sciences and technology collaborations, placing a strong emphasis on developing treatments for rare genetic diseases. The projects include an &pound;11 million investment into drug manufacturing in the UK, undertaking joint quantum technologies research to address challenges in drug discovery, and a multi-year strategic partnership to establish a national pilot focused on transforming screening for rare diseases. </p> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/bold-bet-on-ai-to-keep-uk-at-forefront-of-science-and-research-breakthroughs-from-healthcare-to-better-public-services" target="_blank">First-Ever AI Strategy for UK Research and Innovation</a></strong>. On February 19, 2026, the UK government announced the first-ever AI Strategy for the UK&rsquo;s largest public research funder: UK Research and Innovation (UKRI). The investment is intended to ensure AI delivers &ldquo;cutting-edge science and research efforts&rdquo; in the UK. Under the new strategy, UKRI will provide up to &pound;137 million as part of the government&rsquo;s AI for Science Strategy to back AI-enabled scientific discovery starting with drug discovery and new treatments. It will also help to deliver &pound;36 million to upgrade the University of Cambridge&rsquo;s &ldquo;DAWN&rdquo; supercomputer supporting breakthroughs in areas like healthcare and environmental modelling.</p> <h3><a name="Privacy Updates">Privacy Updates</a></h3> <p><strong><a rel="noopener noreferrer" href="https://www.legislation.gov.uk/ukpga/2025/18/contents" target="_blank">Implementation of UK Data (Use and Access) Act</a></strong>. The Data (Use and Access) Act 2025 (DUAA) represents the UK&rsquo;s first major reform of data protection law since leaving the EU. On February 5, 2026, most of the data protection provisions of the DUAA came into force. The reforms expand the use of automated decision-making capabilities, but this does not apply to special categories of data such as health information. The new standard for international transfers has changed from ensuring UK General Data Protection Regulation (GDPR) protections are &ldquo;not undermined&rdquo; to requiring protection that is &ldquo;not materially lower&rdquo; than UK standards. For more details, see our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/02/uks-data-use-and-access-act-what-life-sciences-companies-need-to-know/" target="_blank">February 2026 BioSlice Blog</a> and <a href="/en/perspectives/advisories/2025/05/the-data-use-and-access-bill">May 2025 Advisory</a>.</p> <p><strong><a rel="noopener noreferrer" href="https://www.edpb.europa.eu/our-work-tools/our-documents/edpbedps-joint-opinion/edpb-edps-joint-opinion-22026-proposal_en" target="_blank">EDPB and EDPS Issue Joint Opinion on the European Commission&rsquo;s Proposal To Amend the Digital Legislation (Digital Omnibus)</a></strong>. The joint opinion, adopted on February 10, 2026, follows a formal consultation by the Commission on its proposal for a Digital Omnibus. (See our <a href="/en/perspectives/publications/2025/12/virtual-and-digital-health-digest">December 2025 Digest</a>.) While supporting the efforts to reduce compliance burdens, the EDPB and EDPS stress that simplification must not weaken key safeguards of the EU GDPR. In particular, the EDPB and EPDS urge the European Parliament and Council of the European Union not to adopt: (1) the amended definition of personal data, which would assess identifiability based on the means reasonably available to the specific company, which, according to the joint opinion, could narrow the GDPR&rsquo;s scope and create legal uncertainty, and (2) the proposal to include an exhaustive list of permitted cases for automated decision-making, whereas currently fully automated decision-making is prohibited. At the same time, the EDPB and EPDS support: (1) raising the threshold for personal data breach notifications to cases &ldquo;likely to result in a high risk&rdquo; to individuals&rsquo; rights, and (2) the development of EU-level Data Protection Impact Assessment (DPIA) tools, provided supervisory authorities retain primary responsibility. Further details on the joint opinion and Commission proposal can be read in our <a href="/en/perspectives/advisories/2026/02/eu-digital-omnibus-what-the-proposed-reforms-mean-for-pharma-and-medtech">February 2026 Advisory</a>. </p> <p><strong><a rel="noopener noreferrer" href="https://www.edpb.europa.eu/system/files/2026-02/edpb-report-stakeholder-event-anonymisation-pseudonymisation_en.pdf" target="_blank">EDPB Publishes Report on Results of Public Consultation on Anonymization and Pseudonymization</a></strong>. The report summarizes the feedback received during an event held in December 2025 to support the preparation of EDPB guidelines on anonymization and pseudonymization, following the Court of Justice of the European Union (CJEU) judgment in Case C 413/23 P. In that judgment, the CJEU clarified how identifiability must be assessed when determining whether pseudonymized data qualify as personal data. (See our <a href="https://www.biosliceblog.com/2025/10/virtual-and-digital-health-digest-october-2025/">October 2025 Digest</a>&nbsp;and <a href="https://www.biosliceblog.com/2025/09/cjeu-clarifies-the-concept-of-pseudonymised-data/">September 2025 BioSlice Blog</a>.) Participants, who were mainly companies, highlighted the need for further guidance on joint controllership scenarios, controller-to-controller/third-party data sharing, and on specific contexts such as clinical trials. Participants also requested clarification on when data processing agreements are required, the concept of &ldquo;means reasonably likely to be used&rdquo; to identify individuals, and the safeguards that can limit re-identification risks. Debate also arose on topics such as whether online identifiers should always be treated as personal data and whether a separate legal basis under Article 6 GDPR is required when transmitting pseudonymized data.</p> <p><strong><a rel="noopener noreferrer" href="https://www.edpb.europa.eu/our-work-tools/our-documents/strategy-work-programme/edpb-work-programme-2026-2027_en" target="_blank">EDPB Publishes Its Work Program for 2026-2027</a></strong>. The work program aims to facilitate compliance with the EU GDPR and sets out the actions that the EDPB plans to undertake over the next two years. Key actions of the EDPB include developing guidance on AI, telemetry, and diagnostic data; further guidance on data anonymization; and developing guidelines on the interplay between the AI Act and the GDPR, as previously announced by the EDPB. The EDPB also expects to adopt guidance on data pseudonymization and on data processing for research purposes. In addition, the EDPB plans to publish practical templates to support SMEs, including templates for DPIAs, legitimate interest assessments, records of processing activities, and privacy notices and policies. The EDPB also intends to issue opinions on standard and ad-hoc contractual clauses.</p> <h3><a name="IP Updates">IP Updates</a></h3> <p><strong><a rel="noopener noreferrer" href="https://caselaw.nationalarchives.gov.uk/uksc/2026/3?query=Emotional+Perception+AI+Limited+Comptroller+General+Patents%2C+Designs+and+Trade+Marks" target="_blank">UK Supreme Court Decision in <em>Emotional Perception AI Limited v. Comptroller General of Patents, Designs and Trade Marks</em></a></strong>. On February 11, 2026, the UK Supreme Court handed down its much-anticipated judgment in <em>Emotional Perception AI Limited v. Comptroller General of Patents, Designs and Trade Marks</em> [2026] UKSC 3. Following the approach endorsed by the Enlarged Board of Appeal of the European Patent Office (EPO) in its <em><a rel="noopener noreferrer" href="https://www.epo.org/en/boards-of-appeal/decisions/g190001ex1" target="_blank">G1/19</a></em> decision, the UK Supreme Court firmly rejected the long-standing <em><a rel="noopener noreferrer" href="https://caselaw.nationalarchives.gov.uk/ewca/civ/2006/1371?query=Aerotel+Ltd+Telco+Holdings+Ltd%3B+Macrossan%E2%80%99s+Application+%5B2006%5D+EWCA+Civ+1371." target="_blank">Aerotel</a></em> four-step test for assessing patentability in the UK for failing to be a good-faith implementation of the European Patent Convention (EPC). In doing so, the UK Supreme Court has now, at least in part, aligned the UK&rsquo;s approach to computer-implemented inventions with the EPO.</p> <p>The UK Supreme Court has also confirmed that Artificial Neural Networks constitute a &ldquo;program for a computer&rdquo; and thereby fall within the exclusion to patentability under Article 52(2)(c) EPC. Whether the claimed subject matter falls within that exclusion depends on the application of the &ldquo;any hardware&rdquo; approach endorsed in <em>G1/19</em>, according to which an application will not be excluded from patentability if it embodies or involves physical hardware within the subject matter of the claims. Applying the <em>G1/19</em> decision has also introduced an &ldquo;intermediate step&rdquo; in the UK, whereby elements not contributing to (or interacting with) the invention&rsquo;s technical character are excluded when subsequently considering the novelty and inventive step. </p> <p>This decision represents a major shift in the UK approach to patentability of AI-related and computer-implemented inventions.</p> <p><span style="font-size: small;"><em> Mickayla Stogsdill is employed as a senior policy specialist at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Mickayla is not admitted to the practice of law.<br /> Aishwarya Grandhe is employed as a policy specialist at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Aishwarya is not admitted to the practice of law.<br /> Caroline Oliver is employed as a policy specialist at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Caroline is not admitted to the practice of law.<br /> Amalia White is employed as a trainee solicitor at Arnold &amp; Porter&rsquo;s London office. Amalia is not admitted to the practice of law.<br /> Jack Chisem is employed as a paralegal at Arnold &amp; Porter&rsquo;s London office. Jack is not admitted to the practice of law.<br /> </em></span></p> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{FB40DE6B-D26B-4315-A6B5-3245CC682AE4}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/iflr-features-annette-becker-in-qaCorporate &amp; Finance partner Annette Becker was recently interviewed by <em>International Financial Law Review </em>and featured in the article, &ldquo;Arnold &amp; Porter M&amp;A partner on Seattle&rsquo;s evolving deal market.&rdquo;Fri, 27 Mar 2026 00:00:00 -0500<p>Corporate &amp; Finance partner Annette Becker was recently interviewed by <em>International Financial Law Review</em> and featured in the article, &ldquo;Arnold &amp; Porter M&amp;A partner on Seattle&rsquo;s evolving deal market.&rdquo; In the Q&amp;A, Annette discussed the Pacific Northwest&rsquo;s increasingly sophisticated deal landscape, the firm&rsquo;s integrated platform, and key trends shaping M&amp;A activity.</p> <p>Annette noted that, over the course of her career, she has watched Seattle evolve into one of the most sophisticated deal markets in the country. </p> <p>&ldquo;Companies in this region demand a fully integrated platform across corporate, finance, regulatory and litigation, with real depth in each. That combination creates exactly the kind of work Arnold &amp; Porter is built to handle,&rdquo; she said. &ldquo;The firm&rsquo;s regulatory depth and experience are particularly relevant given how central government approvals and risk allocation are to transactions.&rdquo; </p> <p>Annette also explored how AI is reshaping M&amp;A transactions, the legal considerations in acquisitions involving AI companies, and the intersection of healthcare and technology, among other topics.</p>{9A9B5C4A-3D83-4A45-838D-968F446A12C1}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/echa-committees-advance-broad-pfas-restriction-under-reachLawrence E. Culleenhttps://www.arnoldporter.com/en/people/c/culleen-lawrence-elawrence.culleen@arnoldporter.comTom Foxhttps://www.arnoldporter.com/en/people/f/fox-tomTom.Fox@arnoldporter.comJudah Prerohttps://www.arnoldporter.com/en/people/p/prero-judahjudah.prero@arnoldporter.comCamille Heyboerhttps://www.arnoldporter.com/en/people/h/heyboer-camillecamille.heyboer@arnoldporter.com<p>The European Chemicals Agency (ECHA) is accepting public comments through May 25, 2026 on a draft opinion from its Committee for Socio-Economic Analysis (SEAC) supporting EU-wide restrictions on per- and polyfluoroalkyl substances (PFAS). The consultation on the SEAC draft opinion was announced on March 26, 2026, concurrent with the release of the ECHA Committee for Risk Assessment&rsquo;s final opinion similarly supporting EU-wide PFAS restrictions.&nbsp;</p>Fri, 27 Mar 2026 00:00:00 -0500<p> <p> <p>The European Chemicals Agency (ECHA) is accepting public comments through May 25, 2026 on a draft opinion from its Committee for Socio-Economic Analysis (SEAC) supporting EU-wide restrictions on per- and polyfluoroalkyl substances (PFAS). The consultation on the SEAC draft opinion was announced on March 26, 2026, concurrent with the release of the ECHA Committee for Risk Assessment&rsquo;s (RAC) final opinion similarly supporting EU-wide PFAS restrictions. </p> <p>The opinions mark a significant step toward a market-wide, class-based restriction under the EU&rsquo;s Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) . </p> <h2>Background</h2> <p>As discussed in our <a href="https://www.arnoldporter.com/en/perspectives/blogs/environmental-edge/2023/02/five-key-features-of-eus-proposed-pfas-restrict" target="_self">February 2023 Advisory</a> and <a href="https://www.arnoldporter.com/en/perspectives/blogs/environmental-edge/2025/08/new-far-reaching-proposal-by-the-eu-to-restrict-pfas" target="_self">August 2025 Blog</a>, the restriction proposal &mdash; originally submitted in January 2023 by authorities in Denmark, Germany, the Netherlands, Norway, and Sweden &mdash; applied broadly to PFAS as a class, which is estimated to include more than 10,000 distinct substances. It is uncertain precisely how many commercially active PFAS are in distribution and use in the EU.</p> <p>The proposal reflects a shift from the substance-specific regulatory approach generally taken when implementing restrictions under REACH, in favor of a broad, class-based approach, based on what are presumed to be shared characteristics of PFAS, such as persistence and environmental accumulation. The approach is intended, in part, to avoid substitution with structurally similar PFAS, and to address concerns regarding the presence or persistence of certain PFAS in environmental media and human tissues.</p> <p>The proposed restriction would apply to the manufacture, placing on the market (including import), and use of PFAS in substances, mixtures, and articles across a wide range of sectors, subject to limited exceptions, which will for the most part be time-limited.</p> <h2>Key Features of the Committee Opinions</h2> <h3>RAC Supports a Broad Restriction</h3> <p>RAC concludes that PFAS pose risks to human health and the environment due to their persistence, mobility, and potential to accumulate over time. RAC also finds that an EU-wide restriction on manufacture, use, and placing on the market is the most appropriate measure to address those risks. A comprehensive restriction, RAC has estimated, could reduce PFAS emissions by approximately 96% over a 30-year period.</p> <h3>Derogations Are Expected, With Additional Controls</h3> <p>The proposal contemplates derogations (exemptions) for uses where suitable alternatives are not yet available, including in some medical, industrial, and technical applications. These are mostly foreseen as time-limited, although a few time-unlimited derogations or exclusions from scope of the restriction may ultimately be included. RAC emphasizes that such derogations would result in continued PFAS emissions. Thus, RAC further recommends additional measures be taken to minimize such emissions, including:</p> <ul> <li>Site-specific PFAS management plans and emissions monitoring </li> <li>Supply chain communication and reporting</li> <li>Labeling and instructions for safe use and disposal</li> </ul> <p>RAC also supports extending reporting obligations to importers of PFAS-containing products and calls for emissions reporting to ECHA.</p> <h3>SEAC Also Supports a Restriction With Use-Specific Derogations</h3> <p>SEAC&rsquo;s draft opinion similarly supports EU-wide action but concludes that a full, immediate ban would likely not be proportionate (balanced when risks and benefits are considered), given current technical and economic constraints (including the limited availability of alternatives in certain applications). Thus, SEAC favors a framework combining a general prohibition with use-specific derogations, where justified by the availability of alternatives and broader socio-economic considerations.</p> <p>SEAC also supports, in principle, the need for additional risk mitigation measures where derogations are provided, as identified by RAC, but indicates that further information is needed to assess the proportionality of certain risk management measures and notes concerns with the enforceability of certain measures proposed by RAC.</p> <h3>Emissions Minimization Is a Central Objective</h3> <p>Both committees emphasize the need to minimize PFAS emissions, including where uses will continue under derogations.</p> <p>RAC, in particular, applies an approach under which releases should be minimized, reflecting concerns for the persistence of PFAS and the difficulty of remediation. This focus suggests that any final restriction may include operational obligations &mdash; such as monitoring, reporting, labeling, and supply chain communication &mdash; in addition to use restrictions.</p> <h3>Broad Scope and Sectoral Impacts</h3> <p>The proposal applies across a wide range of sectors, including electronics, textiles, medical devices, packaging, and energy systems. Consequently, impacts will likely vary considerably by industry. For example, sectors such as medical devices and semiconductors, including the manufacture of semiconductors, have been identified as areas where PFAS may remain necessary for certain applications due to technical performance standards and safety requirements.</p> <p>For such uses, the proposal contemplates longer, time-limited derogations &mdash; potentially extending up to 12 years from implementation &mdash; where alternatives are not yet available. As noted above, continued use in these sectors would likely be subject to additional requirements, including emissions monitoring, reporting, and supply chain communication. Interim derogations are also foreseen for uses in a further eight sectors identified during evaluation (printing applications, sealing applications, machinery applications, &ldquo;other&rdquo; medical applications, military applications, explosives, technical textiles, and broader industrial uses). Evaluation of use in these sectors to date has not progressed to the point where SEAC is able to assess the proportionality of the restriction and potential derogations.</p> <h2>Process and Next Steps</h2> <p>ECHA has initiated a 60-day consultation on SEAC&rsquo;s draft opinion, open until May 25, 2026.</p> <p>Following the consultation:</p> <ul> <li>SEAC is expected to finalize its opinion by the end of 2026.</li> <li>ECHA will transmit both committee opinions to the European Commission.</li> <li>The European Commission will prepare a draft amendment to Annex XVII of REACH for consideration by EU Member States, followed by scrutiny of the European Parliament and Council. </li> </ul> <p>The final regulation will define the scope of restrictions, transition periods, and any exemptions or derogations.</p> <h2>Implications</h2> <p>The committee opinions confirm continued, forward movement toward broad, class-based PFAS restrictions in the EU. Companies that supply and use PFAS must carefully assess their PFAS use across supply chains, including in various formulations, articles, and components of complex goods. This will be a challenge where transparency within the supply chain concerning the chemical content of manufactured products is limited by trade secrecy and related concerns.</p> <p>Derogations and transition periods introduce uncertainty especially with regard to timing and scope of eventual restrictions. This uncertainty is particularly concerning in specific high-technology sectors where substitution remains challenging. The committees&rsquo; emphasis in their opinions on emissions minimization suggests that compliance may require enhanced monitoring, reporting, and supply chain coordination, accompanied by continuing, dedicated efforts to identify technical feasible alternatives and address product reformulation.</p> <p>As we have seen on other occasions when REACH requirements have limited use of specific chemistries presenting potential health or environmental concerns, the EU&rsquo;s approach is likely to influence regulatory developments in other jurisdictions, including among the parties to treaties such as the Stockholm Convention. There is potential for considerable overlap between a broad REACH PFAS restriction and other restrictions of substances &mdash; e.g., under EU packaging and waste, greenhouse gas, and persistent organic pollutants legislation, as well as environmental risk assessments required in certain sectors, e.g., medicines. Navigating these regulations will likely present a significant challenge for companies in many sectors.</p> <h2>Key Takeaways</h2> <p>The March 2026 ECHA announcement represents an important milestone in the EU&rsquo;s effort to restrict PFAS under REACH. While key elements of the proposal remain under development, the overall direction of travel is clear.</p> <p>Companies that produce PFAS, and those that rely on PFAS, can no longer afford to merely monitor regulatory developments; they must be driven to critically evaluate their PFAS use across their products and operations, and consider participating in the ongoing consultation process. </p> <p>We will continue to monitor developments and provide updates as they emerge.</p> </p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{D7515F97-D2F7-46C3-873C-B76E76FB64BE}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/ambassador-barbara-leaf-discusses-iran-negotiations-on-bloomberg-tvArnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf appeared on <em>Bloomberg TV</em> to discuss recent developments in negotiations with Iran.Thu, 26 Mar 2026 00:00:00 -0500<p>Arnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf appeared on <em>Bloomberg TV</em> to discuss recent developments in negotiations with Iran.</p> <p>Amb. Leaf described the current state of discussions as &ldquo;very confusing,&rdquo; citing inconsistent public statements from U.S. leadership and conflicting Iranian responses on progress. She noted that while formal negotiations have not yet begun, communication channels through intermediaries &mdash; including Pakistan and Turkey &mdash; appear to be open, with Iran engaging indirectly if not directly with the United States.</p> <p>She also addressed uncertainty surrounding Iran&rsquo;s leadership, observing that recent disruptions within the government have complicated who to negotiate with. &ldquo;What is clear is there is a consolidation of the hardliners,&rdquo; Amb. Leaf said, adding that despite leadership changes, the nature of the regime remains unchanged.</p> <p>Turning to the situation in the Strait of Hormuz, Amb. Leaf emphasized that &ldquo;military means alone are not going to solve the problem.&rdquo; She underscored the importance of diplomatic engagement to ensure the reopening and security of this critical global energy corridor, noting that such efforts would require coordination among NATO allies and Gulf states.</p> <p><a rel="noopener noreferrer" href="https://www.bloomberg.com/news/videos/2026-03-24/former-diplomat-warns-military-alone-won-t-solve-crisis-video" target="_blank">Watch the full interview</a>.</p>{55BE7E3B-6C0E-43B5-9048-E3F625CE467F}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/agencies-capital-proposals-seek-to-reduce-regulatory-burdenRichard M. Alexanderhttps://www.arnoldporter.com/en/people/a/alexander-richard-mrichard.alexander@arnoldporter.comRobert C. Azarowhttps://www.arnoldporter.com/en/people/a/azarow-robert-crobert.azarow@arnoldporter.comChristopher DeCrescehttps://www.arnoldporter.com/en/people/d/decresce-christopherChris.DeCresce@arnoldporter.comDavid F. Freeman, Jr.https://www.arnoldporter.com/en/people/f/freeman-david-fDavid.Freeman@arnoldporter.comAmber A. Hayhttps://www.arnoldporter.com/en/people/h/hay-amber-aamber.hay@arnoldporter.comAnthony Raglanihttps://www.arnoldporter.com/en/people/r/raglani-anthonyanthony.raglani@arnoldporter.comKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comErik Walshhttps://www.arnoldporter.com/en/people/w/walsh-erikerik.walsh@arnoldporter.comKara Ramseyhttps://www.arnoldporter.com/en/people/r/ramsey-karakara.ramsey@arnoldporter.comGeorge Eichelbergerhttps://www.arnoldporter.com/en/people/e/eichelberger-georgeGeorge.Eichelberger@arnoldporter.comPaul Limhttps://www.arnoldporter.com/en/people/l/lim-paulpaul.lim@arnoldporter.comOn March 19, 2026, the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) issued the long-awaited re-proposal to implement the Basel III Endgame framework, along with two other related proposals (collectively, the Proposals) intended to modernize the regulatory capital rules based on a &ldquo;comprehensive, bottom-up review of the capital framework.&rdquo;Thu, 26 Mar 2026 00:00:00 -0500<p>On March 19, 2026, the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) issued the long-awaited re-proposal to implement the Basel III Endgame framework, along with two other related proposals (collectively, the Proposals) intended to modernize the regulatory capital rules based on a &ldquo;comprehensive, bottom-up review of the capital framework&rdquo;:[[N: Federal Reserve, <a rel="noopener noreferrer" href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20260319a.htm" target="_blank">Agencies request comment on proposals to modernize the regulatory capital framework and maintain the strength of the banking system</a> (Mar. 19, 2026).]]</p> <ol> <li>A proposal that would modify the U.S. standardized approach in the capital rules applicable to all banking organizations, with a subset of the new rule applicable to Category III and IV firms (the Standardized Approach Proposal)[[N: OCC, Federal Reserve, and FDIC,&nbsp;<a rel="noopener noreferrer" href="https://www.federalreserve.gov/aboutthefed/boardmeetings/files/npr-standardized-approach-20260319.pdf" target="_blank">Notice of Proposed Rulemaking: Regulatory Capital Rules: Regulatory Capital and Standardized Approach for Risk-weighted Assets</a> (Mar. 19, 2026) (hereinafter Standardized Approach Proposal).]]</li> <li>A proposal that would revise the risk-based capital requirements applicable to the largest, most internationally active firms and to firms with significant trading activity (generally Category I and II firms) (the Basel III Endgame Proposal)[[N: OCC, Federal Reserve, and FDIC,&nbsp;<a rel="noopener noreferrer" href="https://www.federalreserve.gov/aboutthefed/boardmeetings/files/npr-expanded-risk-based-proposal-20260319.pdf" target="_blank">Notice of Proposed Rulemaking: Regulatory Capital Rule: Category I and II Banking Organizations, Banking Organizations with Significant Trading Activity, and Optional Adoption for Other Banking Organizations</a> (Mar. 19, 2026) (hereinafter Basel III Endgame Proposal).]]</li> <li>A proposal issued by the Federal Reserve alone that would revise the calculation of the capital surcharge for global systemically important banking organizations (GSIBs) (the GSIB Surcharge Proposal)[[N: Federal Reserve, <a rel="noopener noreferrer" href="https://www.federalreserve.gov/aboutthefed/boardmeetings/files/npr-gsib-20260319.pdf" target="_blank">Notice of Proposed Rulemaking: Regulatory Capital Rule: Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies; Systemic Risk Report (FR Y-15)</a> (Mar. 19, 2026) (hereinafter GSIB Surcharge Proposal).]]</li> </ol> <p>This Advisory discusses the key elements of these proposals, with a particular focus on the Standardized Approach Proposal, along with key takeaways for banks and other industry participants. </p> <h2>Key Elements of the Standardized Approach Proposal</h2> <p>The Standardized Approach Proposal would recalibrate both the definition of capital and the measurement of risk-weighted assets in ways that may reduce overall capital requirements for many Category III and IV firms (generally U.S. banking organizations with at least $100 billion in total assets and foreign banking organizations with at least $100 billion in combined U.S. assets) while increasing sensitivity to market conditions and introducing more differentiated risk weights across asset classes.[[N: See Standardized Approach Proposal at 11.]]</p> <p>The Standardized Approach Proposal would also modernize regulatory capital and the standardized approach for all banking organizations, including:</p> <ul> <li>Changes to risk-based capital treatment of certain exposure categories</li> <li>Changes to promote mortgage origination and servicing by organizations in a risk-appropriate manner</li> <li>Introduction of a loan-to-value-based approach for assigning risk weights to certain residential mortgage exposures</li> <li>Modification of the definition of regulatory capital by removing the threshold-based deduction for mortgage servicing assets (MSAs) for all banking organizations (including banking organizations that apply the community bank leverage ratio framework)</li> <li>Reduction of the risk weight applicable to corporate and &ldquo;other&rdquo; exposures</li> <li>Changes to dollar-based regulatory thresholds to reflect inflation and to ensure that such thresholds preserve, in real terms, their intended application over time</li> </ul> <h3>Definition of Regulatory Capital</h3> <h4>Mortgage Servicing Assets</h4> <p>The definition of regulatory capital would be modified by eliminating the current deduction threshold for MSAs[[N: &ldquo;Under the current capital rule, covered banking organizations must deduct from common equity tier 1 capital amounts of MSAs that exceed 25 percent of the banking organization&rsquo;s common equity tier 1 capital.&rdquo; Standardized Approach Proposal at 17.]] and instead applying a 250% risk weight.[[N: Id. at 14, 16.]]</p> <p>This proposed change is intended to support mortgage origination activity while maintaining risk sensitivity. It would apply across banking organizations subject to the capital rule, including those operating under the community bank leverage ratio framework.[[N: &nbsp;Id. at 15.]]</p> <h4>Accumulated Other Comprehensive Income</h4> <p>Category III and IV firms would be required to include most accumulated other comprehensive income in common equity tier 1 capital, thereby eliminating the current opt-out option.[[N: Id. at 15, 19.]] This change would be phased in over five years.[[N: Id. at 15, 21-22.]]</p> <p>Because accumulated other comprehensive income reflects unrealized gains and losses &mdash; primarily on available-for-sale securities &mdash; this aspect of the Standardized Approach Proposal would make capital ratios more sensitive to interest rate movements and market conditions.[[N: Id. at 20.&nbsp;]]</p> <h3>Revisions To Risk-Weighted Assets</h3> <h4>Corporate and &ldquo;Other&rdquo; Exposures</h4> <p>The risk weight for corporate exposures would be reduced from 100% to 95%, and a 90% risk weight would be assigned to assets not otherwise specifically assigned a different treatment.[[N: Id. at 13, 35.]] The Agencies estimate that these changes would reduce risk-weighted assets by approximately 7% for corporate exposures and 10% for other assets.[[N: Id. at 129-130.]]</p> <h4>Residential Mortgage Exposures&nbsp;</h4> <p>For residential mortgage exposures, a more risk-sensitive framework would be introduced based on characteristics of the underlying loans, including loan-to-value ratios and whether repayment depends on property-generated cash flows (e.g., rental payments).[[N: Id. at 23-33.]] Lower-risk loans may receive risk weights as low as 25%, while higher-risk loans may receive risk weights up to 110%.[[N: Id. at 33.]]</p> <p>The Agencies estimate that this change would reduce mortgage risk-weighted assets by approximately 30%.[[N: Id. at 129-130.]]</p> <h3>Commitments and Off-Balance Sheet Exposures</h3> <p>The definition of &ldquo;commitment&rdquo; would be revised to clarify that contractual arrangements for future extensions of credit, asset purchases, or credit substitutes constitute commitments regardless of whether they are unconditionally cancelable.[[N:&nbsp;Id. at 38.]]</p> <p>In addition, current maturity-based credit conversion factors would be replaced with a generally applicable 40% conversion factor,[[N: Id.at 42.]] which would eliminate maturity-based structuring incentives.</p> <h3>Securitization and Risk Transfer</h3> <p>A revised standardized approach would be introduced for securitization exposures and would expand recognition of certain credit risk mitigation techniques, including guarantees and eligible prepaid credit protection arrangements.[[N: Id. at 47-113.]]</p> <p>The Agencies estimate that these changes would reduce risk-weighted assets for securitization exposures by approximately 18% and may support broader use of securitization and risk transfer strategies.[[N: Id. at 129-130.]]</p> <h3>Estimated Impact of the Standardized Approach Proposal</h3> <p>The Agencies estimate that the Standardized Approach Proposal would reduce aggregate risk-weighted assets by approximately 8.6% for covered depository institutions and 8.8% for covered holding companies.[[N: Id. at 129-130.]]</p> <p>After taking into account the inclusion of accumulated other comprehensive income, the Standardized Approach Proposal is estimated to decrease common equity tier 1 capital requirements by approximately 6.4% and 4.8%, respectively.[[N: Id. at 120-121.]]</p> <p>For Category III and IV firms specifically, the Agencies estimate reductions in risk-weighted assets of approximately 9% to 10%, with corresponding reductions in common equity tier 1 requirements of approximately 3% to 5% after accumulated other comprehensive income effects.[[N:&nbsp;Id. at 123.]]</p> <p>The impact will vary across institutions. Firms with significant mortgage portfolios may experience comparatively greater reductions in risk-weighted assets, while firms with substantial securities portfolios may face increased capital volatility. Institutions with significant commitment-based activities may see more mixed effects.</p> <h2>Basel III Endgame Proposal</h2> <p>The Basel III Endgame Proposal would restructure the risk-based capital framework for Category I and II firms by replacing the current dual-calculation requirement with a single set of risk-based capital ratios calculated under a new &ldquo;expanded risk-based approach.&rdquo;[[N: Basel III Endgame Proposal at 18.]] Under the existing framework, Category I and II firms must calculate two sets of risk-based capital ratios: one using the U.S. standardized approach (which generally applies to all U.S. banking organizations) and one using the advanced approaches (which rely on firms&rsquo; internal models).[[N: Id.]] The proposal would eliminate the advanced approaches entirely on the grounds that the expanded risk-based approach, bolstered by the stress capital buffer requirement, provides more robust and consistent requirements.[[N: Id.]] The expanded risk-based approach would include standardized risk-weighting methodologies for credit, equity, and operational risks that are designed to improve consistency across large banking organizations while better capturing the risk characteristics of various exposures.[[N: Federal Reserve, Board Memorandum on <a rel="noopener noreferrer" href="https://www.federalreserve.gov/aboutthefed/boardmeetings/files/board-memo-basel-gsib-standardized-approach-20260319.pdf" target="_blank">Basel III Endgame proposal, GSIB surcharge proposal, and standardized approach proposal</a>, at 6 (Mar. 19, 2026) (hereinafter Board Memo).]]</p> <p>The Federal Reserve estimates that the Basel III Endgame Proposal, standing alone, would increase common equity tier 1 capital requirements for Category I and II firms by approximately 1.4%, driven primarily by higher requirements for trading activities, which would be largely offset by decreased requirements for traditional lending activities.[[N:&nbsp;Id. at 10.]]</p> <h2>GSIB Surcharge Proposal</h2> <p>The GSIB Surcharge Proposal, issued by the Federal Reserve, would revise the methodology used to calculate the additional risk-based capital buffer requirement that applies to GSIBs. The proposal is designed to improve the measurement of systemic risk and better align surcharges with each GSIB&rsquo;s systemic risk profile.[[N: GSIB Surcharge Proposal at 11.]] The GSIB Surcharge Proposal is expected to decrease common equity tier 1 capital requirements for GSIBs by approximately 3.8%, reflecting the updated coefficients used in the surcharge formula and a revised short-term wholesale funding calculation.[[N: Board Memo at 10.]]</p> <h2>Key Takeaways</h2> <ul> <li>The proposed changes are strikingly different from the last proposal for Basel III capital rule changes in 2023, which was heavily criticized over concerns that it would result in higher capital requirements that would ultimately result in less available credit for small businesses and lower-income families.[[N:&nbsp;See, e.g., <a rel="noopener noreferrer" href="https://www.federalreserve.gov/SECRS/2024/February/20240209/R-1813/R-1813_011624_156900_343476632430_1.pdf" target="_blank">The Cost of Implementing the Basel III Endgame Framework: Higher Bank Capital Rules Will Hurt Small Businesses and Middle Class Borrowers the Most</a>.]] The new proposal, on the other hand, is expected to have the opposite effect and, according to Vice Chair Bowman, &ldquo;would reduce incentives for traditional lending activities &mdash; like mortgage origination, mortgage servicing, and lending to businesses &mdash; to migrate outside of the regulated banking sector.&rdquo;[[N:&nbsp;See Federal Reserve, <a rel="noopener noreferrer" href="https://www.federalreserve.gov/newsevents/pressreleases/bowman-statement-20260319.htm" target="_blank">Statements on Bank Capital Proposals by Vice Chair for Supervision Michelle W. Bowman</a> (Mar. 19, 2026).]]</li> <li>The newly proposed capital reform package represents the most consequential recalibration of post-crisis prudential standards in over a decade, with meaningful implications for bank merger activity and capital markets. The proposals would lower aggregate common equity tier 1 capital requirements for banks of all sizes. For merger and acquisition activity, lower required capital ratios directly compress the regulatory friction that has historically made large bank combinations expensive to execute &mdash; acquirors must maintain capital adequacy throughout the deal process, and easing those thresholds effectively widens the universe of financially viable merger transactions, particularly among mid-size regionals seeking scale. For the largest firms, the modest increase from revised Basel III calculations would be more than offset by a recalibrated GSIB surcharge, freeing balance sheet capacity that could just as readily be deployed toward strategic acquisitions as toward organic lending. On the capital-raising front, the proposals could potentially unleash billions of dollars for lending, share buybacks, and dividends &mdash; but this dynamic cuts both ways: banks that previously needed to access equity markets to satisfy elevated buffers will face reduced urgency to dilute shareholders, which may actually reduce primary equity issuance even as it improves secondary market valuations.</li> <li>The Agencies are eager to receive comments to understand the public&rsquo;s view of the proposals.[[N: See, e.g., Federal Reserve Joint Press Release, <a rel="noopener noreferrer" href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20260319a.htm" target="_blank">Agencies request comment on proposals to modernize the regulatory capital framework and maintain the strength of the banking system</a> (Mar. 19, 2026); FDIC, <a rel="noopener noreferrer" href="https://www.fdic.gov/news/speeches/2026/statement-chairman-travis-hill-risk-based-capital-proposals" target="_blank">Statement by Chairman Travis Hill on Risk-Based Capital Proposals</a> (Mar. 19, 2026).]]Overall, there is general support for the proposals, or at least for seeking comment on the proposals, but Federal Reserve leadership is not completely aligned. Federal Reserve Governor Michael Barr issued a statement opposing the proposals, referring to the &ldquo;significant reductions in capital requirements&rdquo; under the proposals as &ldquo;unnecessary and unwise.&rdquo;[[N:Federal Reserve, <a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.federalreserve.gov%2Fnewsevents%2Fpressreleases%2Fbarr-statement-20260319.htm&amp;data=05%7C02%7CTheresa.Denson%40arnoldporter.com%7Cc8e293625b3a42dd8d0b08de8b612c05%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639101446648957112%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=b8JicFgW84Ck2orOO1XFGt9nXVPQ6S59kvhLrZiV6vk%3D&amp;reserved=0" target="_blank">Statement on Bank Capital Proposals by Governor Michael S. Barr</a> (Mar. 19, 2026).]]&nbsp;In the main press release of the Agencies, it is acknowledged that the proposals in the aggregate would modestly decrease the amount of overall capital in the banking system, but &ldquo;capital levels would still be substantially higher than they were before the financial crisis.&rdquo;[[N:&nbsp;See Federal Reserve Joint Press Release, <a rel="noopener noreferrer" href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20260319a.htm" target="_blank">Agencies request comment on proposals to modernize the regulatory capital framework and maintain the strength of the banking system</a> (Mar. 19, 2026).]] It will be important for the public to provide comments to support a cost-benefit analysis in adopting final rules.&nbsp;</li> </ul> <p>Comments on the three proposed rules are due by June 18, 2026.[[N: Id.]] Given the scope of the proposed changes and their interaction with other ongoing rulemakings, affected institutions may wish to begin assessing the potential implications for capital planning, balance sheet composition, and product strategy.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{943680AA-5C83-4211-8C1E-14390ADDE448}https://www.arnoldporter.com/en/perspectives/news/2026/03/the-legal-500-emea-2026The 2026 edition of <em>The Legal 500 Europe, Middle East, and Africa (EMEA) </em>recognized one Arnold &amp; Porter lawyer and two practice areas, highlighting the firm&rsquo;s international competition and EU regulatory work.&nbsp;Wed, 25 Mar 2026 00:00:00 -0500<p>The 2026 edition of <em>The Legal 500 Europe, Middle East, and Africa (EMEA)</em> recognized one Arnold &amp; Porter lawyer and two practice areas, highlighting the firm&rsquo;s international competition and EU regulatory work. The guide, which provides annually benchmarked coverage of leading law firms and lawyers in more than 80 countries, again recognized the firm&rsquo;s strong capabilities in these areas.</p> <p><em>The Legal 500 EMEA</em> noted that Arnold &amp; Porter&rsquo;s competition practice in Belgium is &ldquo;well-versed in advising clients in the life sciences and technology sectors, particularly with regard to merger control matters.&rdquo; Clients described the team as &ldquo;extremely knowledgeable, strategic in their thinking, very well connected with regulators,&rdquo; and &ldquo;well‑versed not only in European competition law but also in the competition laws and practices of various countries.&rdquo;</p> <p><em>Legal 500 </em>also distinguished partner Fabien Roy as a &ldquo;Leading Partner,&rdquo; noting his arrival at Arnold &amp; Porter further strengthened the firm&rsquo;s life sciences regulatory capabilities, with his extensive experience navigating complex EU medical device and pharmaceutical regulatory frameworks.</p> <p>The practice areas recognized in <em>The Legal 500 EMEA</em> are:</p> <ul> <li>Belgium&mdash;Competition: EU and global</li> <li>Belgium&mdash;EU Regulatory: Pharma, medical devices and biotech</li> </ul> <p>The following lawyer was ranked as &ldquo;Leading Partner&rdquo;:</p> <ul> <li>Fabien Roy&mdash;EU Regulatory: Pharma, medical devices and biotech</li> </ul>{5EBE9A3B-23CF-4C24-907A-DDFB54B7DC1C}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/lori-leskin-comments-on-wave-of-tariff-related-consumer-litigationLori Leskin, Co-Chair of Arnold &amp; Porter&rsquo;s Consumer Products practice, was quoted in the <em>&nbsp;</em>article, &ldquo;FedEx, Costco, UPS Are Main Targets for Consumer Tariff Refunds,&rdquo; discussing a growing wave of consumer class actions seeking refunds of tariff-related charges following the U.S. Supreme Court decision invalidating certain tariffs.Wed, 25 Mar 2026 00:00:00 -0500<p>Lori Leskin, Co-Chair of Arnold &amp; Porter&rsquo;s Consumer Products practice, was quoted in the <em>Bloomberg Law</em> article, &ldquo;FedEx, Costco, UPS Are Main Targets for Consumer Tariff Refunds,&rdquo; discussing a growing wave of consumer class actions seeking refunds of tariff-related charges following the U.S. Supreme Court decision invalidating certain tariffs.</p> <p>The lawsuits, many of which target companies such as FedEx, UPS, and Costco, center on whether businesses improperly retained tariff-related fees or passed on price increases to consumers. Plaintiffs argue unjust enrichment, while companies have taken varied approaches to addressing potential refunds.</p> <p>Lori emphasized that these cases are still in their early stages and will depend heavily on the individual facts. She noted that differences in how companies handled tariff costs could significantly affect litigation outcomes, stating that &ldquo;facts will matter enormously&rdquo; and that &ldquo;every company has eaten the impact of the tariff situation differently.&rdquo;</p> <p>She also highlighted potential challenges for plaintiffs seeking class certification in cases where companies did not explicitly tie price increases to tariffs. Lori explained that variability in pricing factors could make it difficult to establish common evidence across a proposed class, observing that there are &ldquo;so many things that explain why prices go up&rdquo; and that plaintiffs must show consistent, class-wide proof.</p> <p><a rel="noopener noreferrer" href="https://news.bloomberglaw.com/in-house-counsel/fedex-costco-ups-are-main-targets-for-consumer-tariff-refunds?context=search&amp;index=0" target="_blank">Read the full article</a> (subscription required).</p>{CB87E9DD-21E7-4022-90C1-7DC978A2DF54}https://www.biosliceblog.com/2026/03/cjeu-rules-on-gdpr-access-rights-and-abuse-of-rights-what-the-brillen-rottler-judgment-means-for-life-sciences-companies/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comCamille Vermosenhttps://www.arnoldporter.com/en/people/v/vermosen-camillecamille.vermosen@arnoldporter.comWed, 25 Mar 2026 00:00:00 -0500{06E4B784-5F52-4D41-B86F-10EFDF544815}https://www.arnoldporter.com/en/perspectives/events/2026/03/government-enforcement-trendsLisa M. Rehttps://www.arnoldporter.com/en/people/r/re-lisa-mlisa.re@arnoldporter.comAllison W. Shurenhttps://www.arnoldporter.com/en/people/s/shuren-allison-wallison.shuren@arnoldporter.comPaula Ramerhttps://www.arnoldporter.com/en/people/r/ramer-paulapaula.ramer@arnoldporter.comColin M. O'Brienhttps://www.arnoldporter.com/en/people/o/obrien-colincolin.obrien@arnoldporter.comIn this one-hour CLE, we will share timely updates on federal and state enforcement trends that directly affect health systems and providers.Tue, 24 Mar 2026 00:00:00 -0500<p>In this one-hour CLE, we will share timely updates on federal and state enforcement trends that directly affect health systems and providers. This session will help the legal division anticipate areas of heightened government scrutiny, understand the implications of recent enforcement actions, and strengthen proactive compliance strategies. Participants will leave with insights to better advise business leaders, manage risk, and align internal practices with evolving regulatory expectations.</p> <p>For more information please email <a href="mailto:sarah.alcock@arnoldporter.com">sarah.alcock@arnoldporter.com</a>&nbsp;or <a href="mailto:tara.hanley@arnoldporter.com">tara.hanley@arnoldporter.com</a></p> <p>CLE credit is pending.</p>{78FED57E-0905-4B37-A0E2-DF29BFCC1F7C}https://www.arnoldporter.com/en/perspectives/news/2026/03/sheila-boston-receives-american-bar-associationsThe American Bar Association (ABA) Commission on Women in the Profession has named Arnold &amp; Porter partner Sheila S. Boston as one of five recipients of its 2026 Margaret Brent Women Lawyers of Achievement Award.&nbsp;Tue, 24 Mar 2026 00:00:00 -0500<p>The American Bar Association (ABA) Commission on Women in the Profession has named Arnold &amp; Porter partner Sheila S. Boston as one of five recipients of its 2026 Margaret Brent Women Lawyers of Achievement Award. The award recognizes women lawyers &ldquo;who have achieved professional excellence in their area of specialty and have actively paved the way to success for others.&rdquo;</p> <p>ABA commended Sheila as &ldquo;a seasoned trial lawyer and litigation strategist who defends clients from the initiation of a case through trial and resolution.&rdquo; The organization also noted she is active in bar associations and currently serves as vice president of the Federal Bar Council. She previously served as president of the New York City Bar Association, for which she was the first woman of color to hold the role.</p> <p>Established in 1991, the award is named for Margaret Brent, the first woman lawyer in America. Past honorees include U.S. Supreme Court justices, legislators, scholars, civil rights activists, and corporate lawyers. Winners are selected based on &ldquo;their professional accomplishments and their role in opening doors of opportunity for other women lawyers.&rdquo;</p> <p>The 2026 award recipients will be honored at a ceremony on August 2 during the ABA Annual Conference in Chicago.</p>{DD0AE47E-3AD0-43D7-8A09-090756D8AC3F}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/second-circuit-limits-pre-judgment-asset-freezes-in-contract-casesjames.herschlein@arnoldporter.com<p>Plaintiffs in commercial disputes often face a troubling issue: no matter how strong their case may be on the merits, will there be assets available to collect? As the saying goes, an uncollectable judgment is not worth the paper it is printed on. What if it appears that the defendant does not have sufficient assets to pay a likely judgment or &mdash; even worse &mdash; that the defendant is liquidating and dissipating assets? Can the plaintiff obtain a temporary restraining order to freeze the defendant&rsquo;s assets and stop a liquidation/dissipation?</p>Tue, 24 Mar 2026 00:00:00 -0500<p> <p>Plaintiffs in commercial disputes often face a troubling issue: no matter how strong their case may be on the merits, will there be assets available to collect? As the saying goes, an uncollectable judgment is not worth the paper it is printed on. What if it appears that the defendant does not have sufficient assets to pay a likely judgment or &mdash; even worse &mdash; that the defendant is liquidating and dissipating assets? Can the plaintiff obtain a temporary restraining order to freeze the defendant&rsquo;s assets and stop a liquidation/dissipation?</p> <p>The U.S. Court of Appeals for the Second Circuit recently answered this question in the negative, holding that, absent some security interest in specific assets, a plaintiff suing for money damages from a contract breach is not entitled to an injunction freezing defendants&rsquo; assets. In <em>Leadenhall Capital Partners LLP v. Advantage Capital Holdings LLC</em>, No. 24-2647 (2d Cir. Mar. 23, 2026), the plaintiffs, lenders under a loan and security agreement, accelerated approximately $600 million in debt after discovering alleged deficiencies in the borrowers&rsquo; collateral. They sued both the borrowers and affiliated guarantors for breach of contract; the borrowers had pledged (or promised to pledge) specific assets, but the guarantors provided no liens or security interests. The U.S. District Court for the Southern District of New York granted a preliminary injunction freezing the assets of the borrowers and the guarantors. Significantly, the district court based its decision to enjoin the guarantors because &ldquo;the guarantors guaranteed performance of all the borrowers&rsquo; obligations to [plaintiff],&rdquo; including to acquire and pledge sufficient collateral to secure the debt.</p> <p>On appeal, the Second Circuit vacated the injunction as it applied to the guarantors, but affirmed the injunction against the borrowers. Relying on the Supreme Court&rsquo;s decision in <em>Grupo Mexicano De Desarrollo, S.A. v. Alliance Bond Fund, Inc.</em>, 527 U.S. 308 (1999), the Court held that a federal court lacks equitable authority to freeze a defendant&rsquo;s assets in advance of judgment where the plaintiff asserts only a claim for money damages and has no lien or equitable interest in those assets. The Court emphasized that the lenders held a security interest in the borrowers&rsquo; collateral but had no such interest in the guarantors&rsquo; assets, nor did the guarantors pledge collateral. Accordingly, the lenders were unsecured creditors as to the guarantors and could not obtain a pre-judgment asset freeze of the guarantors&rsquo; assets based solely on a contract claim.</p> <p>The Court further rejected the argument that the lenders&rsquo; request for &ldquo;specific performance&rdquo; (i.e., requiring the guarantors to provide collateral or preserve assets) created an equitable interest. The Court held that the relief sought was, in substance, a demand for payment of money due under a contract &mdash; &ldquo;quintessentially&rdquo; legal relief &mdash; and therefore insufficient to support equitable relief. The Court also declined to affirm on the alternative basis of a state-law order of attachment, noting that such relief requires a separate showing and factual findings that were not made by the district court.</p> <h2>Key Takeaways for Commercial Parties</h2> <p>This decision reinforces a critical limitation for commercial litigants: <em>absent a lien or identifiable equitable interest in specific property, a plaintiff seeking money damages for breach of contract generally cannot freeze a counterparty&rsquo;s assets before judgment</em>. Even strong evidence of default, insolvency risk, or asset dissipation will not, by itself, justify a pre-judgment injunction in federal court. The ruling underscores the continuing force of <em>Grupo Mexicano</em> and the sharp distinction between legal claims for payment and equitable claims tied to specific property.</p> <p>For lenders and commercial contracting parties, the case highlights the importance of <em>structural protections at the contracting stage</em>. If asset preservation is a priority, parties should consider obtaining <em>security interests, collateral pledges, or other mechanisms that create a direct property interest in specific assets</em>, rather than relying on guarantees alone. Absent such a security interest, the Second Circuit recognized some second-best options: creditor plaintiffs do &ldquo;have an &lsquo;arsenal&rsquo; of options available to them, including &lsquo;<em>bankruptcy, fraudulent conveyances, and preferences</em>&rsquo;&rdquo; or, alternatively, litigants could consider <em>state-law attachment remedies</em>, such as New York&rsquo;s attachment provisions set forth in CPLR 6201, and whether plaintiff can make the necessary evidentiary showing.</p> <p>In short, the <em>Leadenhall</em> decision underscores that <em>creditor equitable remedies are largely determined at the time of contracting &mdash; not after default</em>.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{25F19276-4772-4FC3-8E71-09840B84D4FE}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/standardizing-state-level-liquidationsBenjamin Mintzhttps://www.arnoldporter.com/en/people/m/mintz-benjaminbenjamin.mintz@arnoldporter.comJustin Imperatohttps://www.arnoldporter.com/en/people/i/imperato-justinjustin.imperato@arnoldporter.com<p>Small- and medium-sized enterprises (SMEs) are the backbone of the American economy, and the approximately 30 million SMEs in the U.S. have accounted for nearly two-thirds of new private sector jobs in recent decades. Some of these SMEs may, regrettably, encounter financial distress and need to liquidate to pay their creditors. Often, federal bankruptcy cases can be too expensive for SMEs. Moreover, some SMEs in the cannabis industry may be precluded from utilizing the federal bankruptcy process. An assignment for the benefit of creditors (ABC), a voluntary, company-initiated state law alternative to liquidation under the U.S. Bankruptcy Code (the Bankruptcy Code), has emerged as an attractive alternative to bankruptcy because it is often more flexible, faster, and cheaper than bankruptcy, yielding higher returns for creditors.</p>Tue, 24 Mar 2026 00:00:00 -0500<p> <p>Small- and medium-sized enterprises (SMEs) are the backbone of the American economy, and the approximately 30 million SMEs in the U.S. have accounted for nearly two-thirds of new private sector jobs in recent decades. Some of these SMEs may, regrettably, encounter financial distress and need to liquidate to pay their creditors. Often, federal bankruptcy cases can be too expensive for SMEs. Moreover, some SMEs in the cannabis industry may be precluded from utilizing the federal bankruptcy process. An assignment for the benefit of creditors (ABC), a voluntary, company-initiated state law alternative to liquidation under the U.S. Bankruptcy Code (the Bankruptcy Code), has emerged as an attractive alternative to bankruptcy because it is often more flexible, faster, and cheaper than bankruptcy, yielding higher returns for creditors.</p> <p>Unfortunately, state laws addressing ABCs vary appreciably from jurisdiction to jurisdiction and often lack detail and concrete guidance for the distressed SMEs who might benefit from the process. These material variations in this often underdeveloped area of state law, among other reasons, may cause ABCs to be underutilized. Recently, however, the Uniform Law Commission (ULC), a body of commissioners charged with studying and reviewing the laws of states to determine which might benefit from greater uniformity and who drafted laws such as the Uniform Commercial Code, approved the Uniform Assignment for the Benefit of Creditors Act (the UABC),[[N:See <a rel="noopener noreferrer" href="https://www.uniformlaws.org/committees/community-home?communitykey=b7e5e644-b4b2-44eb-acbc-019859883add" target="_blank">Uniform Law Commission, Assignment for the Benefit of Creditors Act</a>.]] designed to standardize ABC procedures and bring uniformity across the country to the ABC process to promote its use.</p> <p>This article describes the varied state-law landscape that propelled the ULC to draft and ultimately adopt the UABC, and then summarizes some of the key substantive and mechanical features of conducting ABCs under the UABC, including descriptions of the benefits and limitations of liquidating through an ABC.</p> <h2>The Existing ABC Landscape</h2> <p>In an ABC, a financially distressed company (the Assignor) transfers, or assigns, its assets to a third-party fiduciary (the Assignee) pursuant to an assignment agreement. The Assignee is then charged with liquidating those assets and distributing the proceeds to the Assignor&rsquo;s creditors in an orderly manner based on the priorities established under applicable law. ABCs may be governed by state statutory law, common law, or a mix of both, and the applicable law and the amount of court oversight imposed on the process varies depending on the state in which the Assignor commences the ABC.</p> <p>Several states have statutory schemes governing the ABC process, ranging in coverage from significantly detailed procedural and substantive law, including provisions relating to notice, avoidance, priority, and claims adjudication,[[N:See, e.g., Fla. Stat. Ch. 727.101-727.116; N.Y. Debt &amp; Cred. Law &sect;&sect; 1-24; N.J. Stat. Ann. &sect;&sect; 2A:19-1 to 2A:19-49.]] to statutory provisions that do nothing more than authorize ABCs, without legislating specifics concerning the ABC process. On one hand, for example, Florida&rsquo;s ABC statute takes a maximalist approach, detailing the procedures that must be followed to initiate an ABC, providing a clear priority scheme and rules for the claims process, and granting the Assignee certain avoidance powers. Delaware&rsquo;s ABC statute, on the other hand, takes a minimalistic approach, leaving much of the detail of the process to the parties with the expectation that the parties will set out more detail in the assignment agreement. Other states, including California and Illinois, partially or completely leave ABCs to common law. States that provide for ABCs are also divided on whether to require court supervision over the ABC process. States such as Delaware, Florida, Michigan, and Minnesota require a court-supervised process. Other states, such as California and Illinois, allow ABCs to proceed wholly out of court.</p> <p>The UABC tries to address these material variations in often underdeveloped state ABC laws, thereby, hopefully, providing uniformity and consistency across jurisdictions and making ABCs a more attractive alternative to liquidating through bankruptcy.</p> <h2>The UABC</h2> <p>The UABC does not require court supervision over the ABC process, although it does allow the enacting state the discretion to select an appropriate court (the Identified Court) to hear and resolve disputes arising out of the ABC. The ULC&rsquo;s adoption of this approach should afford SMEs the ability to maneuver through an ABC in a more efficient, faster, and less expensive manner than they otherwise would be able to liquidate in bankruptcy or in a judicially supervised ABC, creating more value for their creditors.</p> <p>The out-of-court liquidation process under the UABC begins with an assignment agreement by the Assignor and Assignee. That concept is not particularly unique. It is somewhat unique, however, that the UABC sets forth the minimum qualifications for an Assignee to serve in that role and the minimum contents of the assignment agreement.</p> <p>While the UABC flexibly allows any individual or entity to serve as the Assignee, to do so, the Assignee must be disinterested, meaning neither the Assignee nor its affiliates or insiders may be creditors, affiliates, or insiders of the Assignor. The UABC also addresses the minimum contents for the assignment agreement, and provides that it must: (1) contain the name and address of the Assignor and Assignee; (2) transfer, or provide for the transfer, to the Assignee of all of, not just some of, the Assignor&rsquo;s property (that is eligible for assignment);[[N:Some of the Assignor&rsquo;s property, such as executory contracts, governmental licenses, or permits, may not be susceptible to assignment.]] (3) describe the assigned assets; (4) provide for distribution of the proceeds of the liquidated assigned assets; (5) describe the Assignee&rsquo;s fees; and (6) include a representation by the Assignor, under penalty of perjury, that all of its eligible property has been assigned.[[N:Notably, the UABC provides that assets not specifically described in the assignment agreement will still be assigned to the Assignee if the Assignee relies in good faith on the Assignor&rsquo;s representation that it has assigned all of its assets.]] Of course, the assignment agreement may and often should address other additional issues, such as the maintenance of insurance during the ABC and dissolution of the Assignor following completion of the ABC.[[N:The assignment agreement may not vary many provisions of the UABC. Indeed, the Assignor and Assignee may not disclaim the Assignee&rsquo;s duty to take reasonable care or its fiduciary duties. However, the UABC does allow the assignment agreement to establish standards by which the Assignee may administer the assignment estate and comply with its fiduciary duties, provided those standards are not manifestly unreasonable.]]</p> <p>The UABC goes on to identify the duties imposed on the Assignor and the Assignee following the effective date of the assignment. Generally, the Assignor must, among other things, cooperate with the Assignee during the administration of the assignment estate, inform the Assignee about its creditors and employees and how to contact them, identify the Assignor&rsquo;s assets, and designate a representative to be available in case other documents need to be executed for the ABC. The UABC imposes more significant, substantive duties on the Assignee by designating the Assignee as a fiduciary with several core fiduciary duties,[[N:The UABC provides that the Assignee will be personally liable to the assignment estate for a breach of fiduciary duty. If, however, the Assignee has relied in good faith on a source expected to be reliable (such as a report, the Assignor, or a professional or expert), the Assignee will not be liable.]] including the duty of loyalty (which includes the duty to manage the assignment in good faith), the duty to maximize distributions, and the duty to wind up the ABC in a manner compatible with the best interests of the assignment estate and creditors. The Assignee also has other enumerated duties, including: (1) segregating funds of the assignment estate; (2) maintaining appropriate business records; (3) paying the assignment estate&rsquo;s administrative expenses from unencumbered assets; (4) providing to creditors every six months a summary of the assignment estate&rsquo;s assets, liabilities, and expenses; and (5) providing a final accounting to creditors after the ABC concludes.</p> <p>The Assignee&rsquo;s duties come with specific, substantive powers, including, among other things, the power to: (1) operate the Assignor&rsquo;s business and preserve the assignment estate; (2) incur debt and pay expenses related to the ABC; (3) assert any claim or defense relating to the estate that the Assignor could have asserted; (4) continue any litigation and settle any claim; (5) engage professionals; (6) collect on and dispose of assets of the assignment estate; (7) redeem collateral for any secured obligation; (8) abandon an assigned asset; and (9) if a creditor who filed a proof of claim could have avoided a transfer or the incurrence of an obligation by the Assignor under applicable voidable transactions law, the Assignee has the exclusive power to avoid that transfer or obligation for the benefit of the assignment estate,[[N:The creditor&rsquo;s individual right to pursue an avoidance action is displaced should the creditor file a proof of claim. This is a significant difference from many common law approaches to ABCs, where creditors often retain their own avoidance rights. The Assignee, though, may not avoid transfers that would otherwise be preferences under section 547 of the Bankruptcy Code.]] subject to certain defenses the target of the claim may assert.</p> <p>The Assignee also must establish a claims bar date that is between 90 and 210 days after the effective date of the assignment agreement, ensuring that the claims resolution process moves forward in a reasonably expeditious manner, and a clear process for creditors to submit proofs of claim. Creditor proofs of claim, in turn, must contain certain specific pieces of information to enable the Assignee to properly evaluate the claim, including, among other things, the amount of the claim, the nature of the claim, the assets securing the claim (if any), and copies of records upon which the claim is based. Creditors should note, however, that submitting a claim constitutes the creditor&rsquo;s consent to the jurisdiction of an Identified Court, if judicial intervention is sought.</p> <p>Eventually, the Assignee must make distributions to creditors on account of their claims, and under the UABC must do so pursuant to the following general priority scheme:</p> <ul> <li>First, unless otherwise agreed with the creditor, secured creditors receive the proceeds of their collateral if they hold an unavoidable perfected security interest in collateral consisting of assigned assets.</li> <li>Second, payment of the Assignee&rsquo;s fees, the fees of the Assignee&rsquo;s professionals, and other administrative expenses of the ABC.</li> <li>Third, payment of claims entitled to priority under federal law.</li> <li>Fourth, payment of wages, salaries, and commissions earned up to a fixed period,[[N:The suggested period is 180 days, but the enacting state may choose a different period.]] before the ABC was made in an amount equal to the greater of (1) the amount allowed as a priority claim under the Bankruptcy Code and (2) the amount allowed as a priority claim under applicable non-bankruptcy law.</li> <li>Fifth, payment of other unsecured claims entitled to priority.</li> <li>Sixth, payment of unsecured claims not entitled to priority.</li> <li>Seventh, payment of late-filed claims.</li> <li>Eighth, if proceeds remain, payment as provided in the assignment agreement.[[N:The assignment agreement may provide that such excess funds shall be distributed to the holders of equity interests in the Assignor, but the UABC does not command that result.]]</li> </ul> <p>Secured creditors with unavoidable liens perfected prior to the ABC should note that, based on the priority scheme established by the UABC, Assignees may attempt to negotiate for secured creditors to subordinate all or a portion of their liens to the expenses of the assignment estate, not unlike what debtors do in bankruptcy when requesting use of cash collateral to fund operations and impose a professional fee carve out. To properly consider such a request from the Assignee, secured creditors should ask for a budget and may want to consider requiring certain milestones that the Assignee must meet to continue using the secured creditors&rsquo; cash collateral.</p> <h2>Conclusion</h2> <p>The ULC approved the UABC on October 20, 2025, and recommended it for enactment in all the states. Since then, Nebraska has enacted the UABC, and state legislators in Alabama, Arizona, Utah, Iowa, Oklahoma, Colorado, and West Virginia have introduced the UABC into their respective state legislatures. Continued adoption across the country will promote uniformity, predictability, and consistency, with more developed case law, and ultimately make the ABC process a more attractive option in a distressed SMEs toolkit.</p> <p>Indeed, liquidating SMEs through an ABC may be the most advantageous strategy where the goals are to accomplish one or more of the following: (1) wind down the SME quickly and in a manner designed to minimize negative publicity, (2) limit potential liability for directors and management by largely eliminating their responsibilities in connection with the winding down of the SME and the disposition of its assets,[[N:The Assignor&rsquo;s commencement of an ABC would not limit potential liability for directors and management that relates to actions or omissions from the pre-assignment effective date period, e.g., pre-assignment effective date breaches of fiduciary duties.]] (3) replace the high administrative expenses and burdens that would ordinarily arise in a bankruptcy case[[N:In liquidating Chapter 11 cases, debtors must file monthly operating reports, pay U.S. Trustee fees, and their counsel and other professional advisors must seek and obtain Court approval for the payment of their fees. In addition, official committees of unsecured creditors may be appointed in Chapter 11 cases, and the fees of committee counsel and their advisors are paid from the debtor&rsquo;s estate. Chapter 7 cases have their own administrative expenses and burdens. Chapter 7 debtors&rsquo; estates are overseen by a Chapter 7 trustee who will investigate the conduct and affairs of the debtor and its management, and whose fees and counsel fees will be paid from the debtor&rsquo;s estate.]] for the materially less administrative expenses and burdens associated with ABCs, and (4) provide the SME with the ability to hand-select the person or entity charged with liquidating it.</p> <p>Of course, ABCs are not without their disadvantages and limitations. For example: (1) Ipso facto clauses that are common in contracts and provide that the contract will terminate upon the occurrence of an insolvency event are enforceable in an ABC, while they are not enforceable in bankruptcy, (2) ABCs do not provide for an automatic stay similar to the one the Bankruptcy Code so provides, meaning creditors may continue collection actions during the ABC process, (3) anti-assignment provisions in contracts that prohibit assignment without counter-party consent are enforceable in an ABC, but not in bankruptcy, (4) Assignees may not sell assets in an ABC &ldquo;free and clear&rdquo; of all liens and claims without consent from secured lenders, or full payoff, unlike in a bankruptcy where such sales free and clear of all liens and claims are permitted, provided one of certain conditions is satisfied,[[N:Creditors should note that, in connection with the Assignee&rsquo;s disposition of assets, the UABC provides that a good faith transferee from the Assignee of an assigned asset obtains the rights the Assignee had in the asset and takes the asset free of the Assignee&rsquo;s lien and free of any other subordinate security interests or liens.]] and (5) unsecured debt is not discharged in an ABC; instead, unsecured claimants retain their claims against the assignment estate and, because there are no &ldquo;free and clear&rdquo; sales, the acquiring entity may be subject to successor liability claims from unsecured claimants, among others.</p> <p>In many instances &mdash; e.g., where the SME&rsquo;s most valuable assets are contracts that may not be monetized because they contain anti-assignment provisions or are subject to termination upon an insolvency event (like the commencement of a bankruptcy or an ABC) &mdash; ABCs may not be the most advantageous path to maximizing value for creditors. Distressed SMEs (and their secured lenders) should, however, consider the increased viability of ABCs as efficient, cost-effective alternatives to liquidating under either Chapter 7 or Chapter 11 of the Bankruptcy Code in certain instances where the advantages of the ABC process outweigh its limitations.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{3432318A-15BF-4EB8-BB68-154EF2AFA71D}https://www.arnoldporter.com/en/perspectives/news/2026/03/arnold-porter-relocates-san-francisco-officeArnold &amp; Porter is pleased to announce that its San Francisco office has relocated to Four Embarcadero Center.&nbsp;Mon, 23 Mar 2026 00:00:00 -0500<p>Arnold &amp; Porter is pleased to announce that its San Francisco office has relocated to Four Embarcadero Center. Effective Monday, March 23, this strategic move enhances the firm&rsquo;s client offerings and supports continued growth in Northern California and along the West Coast.</p> <p>&ldquo;Our new location at Four Embarcadero Center reflects both the evolution and the momentum of our San Francisco office,&rdquo; said Jonathan Hughes, head of the firm's San Francisco and Silicon Valley offices. &ldquo;This space is designed to strengthen collaboration, deepen client engagement, and position our team for continued growth in one of the nation&rsquo;s most dynamic legal and business markets.&rdquo;</p> <p>Since opening in 2008, Arnold &amp; Porter&rsquo;s San Francisco office has played a central role in advising companies on local, national, and cross-border matters across litigation, regulatory, and transactional practices. Serving some of California&rsquo;s most active industries, clients range from early-stage start-ups to FORTUNE 50 companies.</p> <p>Located in the heart of the Financial District and steps from the waterfront, the new space provides an energetic, multi-functional environment for clients and the firm&rsquo;s West Coast team, underscoring Arnold &amp; Porter&rsquo;s ongoing commitment to clients in the Bay Area.</p> <p><strong>Arnold &amp; Porter&rsquo;s new office is located at:</strong><br /> Four Embarcadero Center, 14th Floor<br /> San Francisco, California 94111</p>{5E8D07BC-DCF4-4A96-9088-3B197597187E}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/dol-reinstates-historic-five-part-fiduciary-testDouglas S. Pelleyhttps://www.arnoldporter.com/en/people/p/pelley-douglas-sDouglas.Pelley@arnoldporter.comKathleen Wechterhttps://www.arnoldporter.com/en/people/w/wechter-kathleenkathleen.wechter@arnoldporter.com<p>On March 17, 2026, the U.S. Department of Labor (DOL) adopted a Final Rule defining who is a fiduciary under the Employee Retirement Income Security Act of 1974, as amended (ERISA). The DOL confirmed in the regulatory release that it is returning to the historic &ldquo;five-part test&rdquo; (first adopted in 1975) for purposes of determining who is an ERISA fiduciary, while also keeping in effect Prohibited Transaction Exemption 2020-02 (PTE 2020-02) (which provides an exemption for certain otherwise impermissible transactions involving plans subject to ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended (Code)). This Final Rule ends many years of uncertainty under the fiduciary and prohibited transaction rules and is viewed as welcome news for the financial services industry. Understanding whether or not a financial institution and its employees and agents are acting in a fiduciary capacity for purposes of ERISA or the Code is critical from a compliance and risk management perspective. This is because a person or entity acting as an ERISA fiduciary is restricted by the prohibited transaction rules and related exemptions and, in the case of interactions with a plan subject to ERISA, also subject to strict statutory fiduciary duties.</p>Mon, 23 Mar 2026 00:00:00 -0500<p> <p>On March 17, 2026, the U.S. Department of Labor (DOL) adopted a Final Rule defining who is a fiduciary under the Employee Retirement Income Security Act of 1974, as amended (ERISA). The DOL confirmed in the regulatory release that it is returning to the historic &ldquo;five-part test&rdquo; (first adopted in 1975) for purposes of determining who is an ERISA fiduciary, while also keeping in effect Prohibited Transaction Exemption 2020-02 (PTE 2020-02) (which provides an exemption for certain otherwise impermissible transactions involving plans subject to ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended (Code)). This Final Rule ends many years of uncertainty under the fiduciary and prohibited transaction rules and is viewed as welcome news for the financial services industry. Understanding whether or not a financial institution and its employees and agents are acting in a fiduciary capacity for purposes of ERISA or the Code is critical from a compliance and risk management perspective. This is because a person or entity acting as an ERISA fiduciary is restricted by the prohibited transaction rules and related exemptions and, in the case of interactions with a plan subject to ERISA, also subject to strict statutory fiduciary duties.</p> <p>The Final Rule is the culmination of a 15-plus-year-long regulatory battle over who should be treated as a fiduciary for purposes of ERISA. Prior administrations made multiple efforts to redefine, and generally expand, the scope of who is an ERISA fiduciary, all of which were met with intense industry opposition and/or litigation. For background, see our <a href="https://www.arnoldporter.com/en/perspectives/advisories/2024/05/final-investment-advice-fiduciary-rule" target="_self">May 2024 Advisory</a>. The current action by DOL to officially reinstate the five-part test was specifically driven by a recent federal district court decision to vacate DOL&rsquo;s 2024 proposal to expand fiduciary status (the vacatur was a follow up to a July 2024 finding by the district court that the 2024 proposal likely conflicts with ERISA under the landmark <em>Loper Bright</em> Supreme Court decision which overturned <em>Chevron</em> deference to agency interpretations).</p> <p>DOL&rsquo;s decision to reinstate the five-part test, along with its decision not to revoke PTE 2020-02 (although the DOL did renounce the preamble to PTE 2020-02 as &ldquo;no longer reliable&rdquo;), provides financial institutions with a level of regulatory stability and useful tools to structure their businesses and manage risk that has been lacking for many years. Banks, trust companies, investment advisors, and others in the financial services industry who provide services to ERISA plans and IRAs will want to review their policies, procedures, and employee training as they take into account how the Final Rule may impact their business practices and/or provide opportunities to expand their services to ERISA plans and IRAs.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{D6E51030-985A-474A-B6D2-01838CBFA57A}https://www.nycbar.org/cle-offerings/artificial-intelligence-ma-and-antitrust-emerging-trends-lawyers-need-to-know/EunYoung.Choi@arnoldporter.comFri, 20 Mar 2026 00:00:00 -0500{5899EF44-3E16-405F-9BA3-8E8C597AC177}https://www.nycbar.org/cle-offerings/artificial-intelligence-ma-and-antitrust-emerging-trends-lawyers-need-to-know/javier.ortega@arnoldporter.comFri, 20 Mar 2026 00:00:00 -0500{936A2000-11D8-41FC-8187-3044F228F9B7}https://www.nycbar.org/cle-offerings/artificial-intelligence-ma-and-antitrust-emerging-trends-lawyers-need-to-know/david.emanuelson@arnoldporter.comFri, 20 Mar 2026 00:00:00 -0500{7FA69914-4D6E-4B3A-9864-E49B1FA807B0}https://www.nycbar.org/cle-offerings/artificial-intelligence-ma-and-antitrust-emerging-trends-lawyers-need-to-know/william.efron@arnoldporter.comFri, 20 Mar 2026 00:00:00 -0500{15AC5787-4A5E-4A82-BD4A-E64E52106018}https://www.nycbar.org/cle-offerings/artificial-intelligence-ma-and-antitrust-emerging-trends-lawyers-need-to-know/wayne.janke@arnoldporter.comFri, 20 Mar 2026 00:00:00 -0500{C0D6061B-8135-4C61-B1AA-F7622E5D6948}https://www.arnoldporter.com/en/perspectives/news/2026/03/chambers-europe-2026The 2026 edition of <em>Chambers Europe</em> recognized Arnold &amp; Porter as a leading firm in four practice areas and ranked eight lawyers. <em>Chambers Europe</em> highlights the top lawyers and law firms across Europe, providing in-depth analysis and market intelligence for law firm clients and legal professionals.Thu, 19 Mar 2026 00:00:00 -0500<p>The 2026 edition of <em>Chambers Europe</em> recognized Arnold &amp; Porter as a leading firm in four practice areas and ranked eight lawyers. <em>Chambers Europe</em> highlights the top lawyers and law firms across Europe, providing in-depth analysis and market intelligence for law firm clients and legal professionals.</p> <p>The firm&rsquo;s Life Sciences practice was recognized in Belgium, the Netherlands, and Europe-wide, including with Band 1 recognitions in the Netherlands and Europe-wide. <em>Chambers</em> noted that clients report Arnold &amp; Porter is &ldquo;very thorough, knowledgeable, and excellent partners to the clients.&rdquo; Clients also highlighted the firm stands out for its &ldquo;ability to find solutions&rdquo; and &ldquo;deep subject matter knowledge paired with great business sense.&rdquo; <em>Chambers</em> itself commended both the firm&rsquo;s European Competition and Life Sciences practices for their &ldquo;strong reputation&rdquo; and &ldquo;notable work.&rdquo;</p> <p>The following practices were recognized by <em>Chambers Europe</em>:</p> <ul> <li>Competition: EU (Belgium)</li> <li>Life Sciences (Europe-wide)*</li> <li>Life Sciences (Netherlands)*</li> <li>Life Sciences: EU (Belgium)</li> </ul> <p>The following lawyers were recognized by <em>Chambers Europe</em>:</p> <ul> <li>Niels Ersb&oslash;ll&mdash;Competition: EU (Belgium)</li> <li>Axel Gutermuth&mdash;Competition: EU (Belgium)</li> <li>Charlotte Mallorie&mdash;Corporate and Commercial Litigation (UK)</li> <li>Alexander Roussanov&mdash;Life Sciences: EU (Belgium)</li> <li>Fabien Roy&mdash;Life Sciences: EU (Belgium)</li> <li>John Schmidt&mdash;Competition Law (UK)</li> <li>Carla Schoonderbeek&mdash;Life Sciences (Netherlands)*</li> <li>Jane Wessel&mdash;Competition Law: Private Enforcement: Claimant (UK)&nbsp;</li> </ul> <p><em>*Denotes Band 1 ranking</em></p>{A5ED52C1-39CC-400F-9B5B-9339FE44F100}https://www.arnoldporter.com/en/perspectives/news/2026/03/christian-scarlett-joins-arnold-porterArnold &amp; Porter announced today that Christian Scarlett has joined the firm&rsquo;s Real Estate practice as counsel, resident in Seattle, continuing the firm&rsquo;s West Coast expansion.Thu, 19 Mar 2026 00:00:00 -0500<p>Arnold &amp; Porter announced today that Christian Scarlett has joined the firm&rsquo;s Real Estate practice as counsel, resident in Seattle, continuing the firm&rsquo;s West Coast expansion.</p> <p>Christian advises clients on a range of commercial real estate transactions, including financings, acquisitions, joint ventures, and development projects. He represents lenders on mortgage and mezzanine loan originations, construction financings, bridge loans, syndications, securitizations, restructurings, and workouts. He counsels secondary market participants on the purchase and sale of whole loans, senior and subordinate notes, and loan participations. Christian also advises owners, developers, and borrowers across various asset classes and industries, including hospitality, office, multifamily, retail, industrial, data center, and agribusiness.</p> <p>Christian earned his J.D. from New York University School of Law and his B.A., <em>summa cum laude</em>, from Rutgers University. </p>{F1ED0273-EE23-480E-8320-B06842233E44}https://www.biosliceblog.com/2026/03/edpb-edps-joint-opinion-on-the-european-biotech-act-proposal-key-data-protection-implications-for-pharma-and-life-sciences/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comCamille Vermosenhttps://www.arnoldporter.com/en/people/v/vermosen-camillecamille.vermosen@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comThu, 19 Mar 2026 00:00:00 -0500{9543E11A-0F25-4EB3-B066-160B63F3A25E}https://globalcompetitionreview.com/hub/class-actions-hub/2025/article/supreme-court-provides-welcome-guidance-collective-proceedings-cat-and-court-of-appeal-oddssamuel.milucky@arnoldporter.comWed, 18 Mar 2026 00:00:00 -0500{7244CEC9-4839-4ED2-880D-949841AA1C8C}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/ambassador-barbara-leaf-discusses-iran-conflict-on-ms-nowArnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf appeared on <em>MS Now</em> to discuss the ongoing conflict in Iran and its implications for political and economic stability in the Middle East and around the globe.Mon, 16 Mar 2026 00:00:00 -0500<p>Arnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf (Amb. Leaf) appeared on <em>MS Now</em> to discuss the ongoing conflict in Iran and its implications for political and economic stability in the Middle East and around the globe.</p> <p>Addressing Iran&rsquo;s response to recent U.S. and Israeli strikes, Amb. Leaf said Tehran&rsquo;s actions were largely predictable following the 12-day war last June and suggested Iran has been preparing for a second phase of confrontation. She also noted that efforts to disrupt Gulf stability&mdash;and the global economy&mdash;would be &ldquo;very difficult to defend against.&rdquo;</p> <p>Amb. Leaf also questioned the Trump Administration&rsquo;s rationale for the strikes, citing inconsistent messaging about the threat posed by Iran&rsquo;s nuclear program, which she said had &ldquo;disappeared completely&rdquo; from their communications. She added that efforts to eliminate the nuclear program and the highly enriched uranium believed to be stored in Iran would be difficult to accomplish through military strikes.</p> <p>She concluded by calling attention to the absence of any attempt at a diplomatic solution prior to the operation, stating: &ldquo;What was missing was a sustained and serious diplomatic negotiating effort.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://www.ms.now/ana-cabrera-reports/watch/special-envoy-witkoff-u-s-can-take-russia-at-their-word-when-they-say-they-aren-t-helping-iran-2491590211675" target="_blank">Watch the full interview</a>.</p>{70431CB6-C3CB-4230-BF2F-07D5840C0488}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/what-chinas-amended-drug-regulations-meanJohn Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comAlex Wanghttps://www.arnoldporter.com/en/people/w/wang-alexalex.wang@cn.arnoldporter.com<p>On January 27, 2026, China&rsquo;s State Council published the amended Implementing Regulations of the Drug Administration Law, which will take effect on May 15, 2026. These regulations are a significant update to China&rsquo;s regulatory system for pharmaceuticals and are intended to foster a more innovation-friendly and flexible ecosystem while strengthening drug regulation.</p>Mon, 16 Mar 2026 00:00:00 -0500<p> </p> <p>On January 27, 2026, China&rsquo;s State Council published the amended <a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.nmpa.gov.cn%2Fxxgk%2Ffgwj%2Fflxzhfg%2F20260127172639127.html&amp;data=05%7C02%7CTheresa.Denson%40arnoldporter.com%7Ce2eedebbcadb4454339308de834657fc%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639092535323498949%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=4Cd3HcqdfLaTQ%2B716%2FxCMd1smkSoQ8qSLQqkJmHsQUI%3D&amp;reserved=0" target="_blank">Implementing Regulations of the Drug Administration Law</a> (the Regulations), which will take effect on May 15, 2026. These regulations are a significant update to China&rsquo;s regulatory system for pharmaceuticals and are intended to foster a more innovation-friendly and flexible ecosystem while strengthening drug regulation.</p> <p>This Advisory summarizes the key updates and provisions in the Regulations, including market and data exclusivity, a new process for changing the sponsor of a clinical trial, segmented manufacturing, commercialization of pre-approval batches, online drug sales, and labels and package inserts. </p> <h2>Market and Data Exclusivity</h2> <p>The Regulations introduce market exclusivity of up to two years for qualifying pediatric medicines and up to seven years for qualifying orphan drugs. To qualify for market exclusivity, marketing authorization holders (MAHs) of orphan drugs must ensure a stable supply. Failure to maintain supply may result in the termination of exclusivity, encouraging the establishment of reliable distribution chains.</p> <p>The Regulations also establish a data protection regime designed to safeguard undisclosed trial data and other data independently generated and submitted by MAHs for drugs containing novel chemical entities (NCEs) and other eligible products.[[N:<span>The Regulations indicate that there may be other drugs which are eligible for data protection, but this concept of &ldquo;other eligible products&rdquo; is not defined in the Regulations.]]</span>&nbsp;During the data exclusivity period, which may extend up to six years from the date of marketing authorization, other drug registration applications relying on such protected data will not be approved without the MAH&rsquo;s consent unless the applicants provide independently obtained data.</p> <p> </p> <table> <tbody> <tr> <td style="background-color: #548dd4;">&nbsp;</td> <td style="background-color: #548dd4;"><strong><span style="font-size: 16px;">Scope&nbsp;</span></strong></td> <td style="background-color: #548dd4;"> <p><span style="font-size: 16px;"><strong>Exclusivity Period</strong>&nbsp;</span></p> </td> </tr> <tr> <td rowspan="2" style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Market Exclusivity</span></td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">New pediatric drugs, pediatric medicines using novel dosage forms or specifications, and medicines with expanded pediatric indications</span></td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Up to two years</span></td> </tr> <tr> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Orphan drugs</span></td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Up to seven years</span></td> </tr> <tr> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Data Exclusivity</span></td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Medicinal products containing NCEs and other eligible products</span></td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">Up to six years</span></td> </tr> </tbody> </table> <p>&nbsp;</p> <p>China&rsquo;s National Medical Products Administration (NMPA) is expected to issue detailed requirements for implementing market exclusivity and data exclusivity periods. Research-driven pharmaceutical companies are likely to gain additional advantages from the extended protections provided by these exclusivity measures when launching their products in the Chinese market.</p> <h2>Changes to Clinical Trial Sponsors</h2> <p>Under the current regulatory framework, changing the sponsor of a clinical trial typically needs to be submitted with other major amendments, lacking an independent filing process. The approval process for such changes can take as long as 60 days. For the first time, the Regulations introduce an independent administrative approval channel specifically for changes to clinical trial sponsors, reducing the approval timeline to 20 working days. This new mechanism improves flexibility and efficiency in managing sponsor transitions, particularly benefiting pharmaceutical transactions by reducing approval-related uncertainties and speeding up deal timelines.</p> <p>This provision means that regulatory authorities will evaluate the qualifications of the new sponsor as part of the approval process. Further guidelines from the NMPA are expected to detail the required documentation and define the scope of the review for sponsor changes.</p> <h2>Segmented Manufacturing</h2> <p>The Regulations permit &ldquo;segmented production&rdquo; under specific conditions, including: (1) innovative drugs with special requirements for processes, facilities, or equipment; (2) drugs identified by relevant State Council departments as clinically urgent; (3) drugs urgently needed to respond to public health emergencies or national reserves; and (4) other drugs as specified by the national drug regulator.</p> <p>Under segmented toll manufacturing arrangements, MAHs are obligated to establish an integrated quality assurance system covering the entire production process and all manufacturing sites. MAHs shall remain responsible for supplier certification, change management, batch release, and overall compliance. Moreover, blood products, narcotic drugs, psychotropic substances, toxic drugs for medical use, and precursor chemicals used in drug manufacturing may not be manufactured through outsourced facilities.</p> <p>Although the implementation of segmented production in a cross-border context remains unclear, these new regulations offer an opportunity for multinational companies to work with local partners and regulators to explore outsourcing opportunities in China.</p> <h2>Commercialization of Pre-Approval Batches</h2> <p>The Regulations provide that commercial-scale batches of products manufactured prior to obtaining a drug marketing authorization, whether in China or overseas, provided they meet the release requirements for marketed drugs, may be sold after the marketing authorization is obtained. This includes: (1) commercial-scale batches that have passed Good Manufacturing Practice (GMP) compliance inspections; and (2) commercial-scale batches of new drugs, orphan drugs, drugs in short supply, or other drugs urgently needed for clinical use, manufactured after passing the relevant GMP compliance inspections.</p> <p>These provisions allow certain products manufactured prior to approval (including domestically produced and imported drugs) to be marketed following marketing approval. This facilitates earlier market entry for products and helps ensure a stable market supply.</p> <h2>Online Drug Sales</h2> <p>The Regulations require third-party platforms facilitating online drug sales to establish robust quality management systems for online drug sales. These platforms must set up dedicated management departments, employ pharmaceutical professionals and other relevant specialists, and formulate and implement systems for drug quality management and distribution oversight. Additionally, third-party platform operators are obligated to review the qualifications of MAHs and drug distributors applying to operate on the platform, inspect the drug information displayed, and manage drug-related sales conducted on the platform.</p> <p>In China, with the rapid growth of e-commerce, online drug sales are also increasing. These provisions reflect regulators&rsquo; efforts to enhance oversight of online drug transactions. Pharmaceutical companies collaborating with third-party online platforms should likewise strengthen their compliance review of such platforms.</p> <h2>Labels and Package Inserts</h2> <p>Compared to the existing regulations on drug labels and package inserts, the Regulations require MAHs to provide accessible formats of drug labels and package inserts, such as audio, large print, Braille, or electronic versions. In addition, the Regulations specify that the content of electronic versions of drug package inserts must be consistent with the package inserts approved by the NMPA and have the same legal effect as the printed versions. The Regulations also note that audio and Braille versions of drug labels and package inserts should be provided for reference purposes. </p> <p>These provisions aim to promote the safe and accessible use of medications by individuals with disabilities and elderly populations. Pharmaceutical companies are advised to proactively develop new drug labels and package inserts to ensure compliance with the revised regulatory standards.</p> <h2>Conclusion</h2> <p>The Regulations mark a significant step forward in enhancing China&rsquo;s pharmaceutical regulatory framework, reflecting the government&rsquo;s dual focus on encouraging innovation and ensuring patient safety. These updates present both opportunities and challenges for international pharmaceutical companies operating in China. As the Chinese pharmaceutical market continues to grow and innovate, companies that prioritize regulatory compliance, foster partnerships with local stakeholders, and adapt to new market dynamics will be well-positioned for sustainable success. Remaining vigilant in implementing these new provisions will not only help mitigate risks but also enable companies to seize the opportunities presented by one of the world&rsquo;s most dynamic healthcare markets.</p> <p>If you have any questions about the above topics, please feel free to contact the authors of this Advisory or other members of Arnold &amp; Porter&rsquo;s Life Sciences teams.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{9B4F5075-23A7-47B7-93B2-3763EF1ED089}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/sec-staff-issues-holding-foreign-insiders-accountable-act-faqsSara Adlerhttps://www.arnoldporter.com/en/people/a/adler-sarasara.adler@arnoldporter.comJoel I. Greenberghttps://www.arnoldporter.com/en/people/g/greenberg-joel-ijoel.greenberg@arnoldporter.com<p>The staff of the SEC&rsquo;s Division of Corporation Finance has issued the <a rel="noopener noreferrer" href="https://www.sec.gov/about/divisions-offices/division-corporation-finance/holding-foreign-insiders-accountable-act-frequently-asked-questions" target="_blank">responses</a> described below to frequently asked questions relating to the initial Section 16(a) filing obligations of directors and officers of foreign private issuers with a class of equity securities registered under Section 12 of the Exchange Act (FPIs) under the Holding Foreign Insiders Accountable Act.</p>Mon, 16 Mar 2026 00:00:00 -0500<p>The staff of the SEC&rsquo;s Division of Corporation Finance has issued the <a rel="noopener noreferrer" href="https://www.sec.gov/about/divisions-offices/division-corporation-finance/holding-foreign-insiders-accountable-act-frequently-asked-questions" target="_blank">responses</a> described below to frequently asked questions relating to the initial Section 16(a) filing obligations of directors and officers of foreign private issuers with a class of equity securities registered under Section 12 of the Exchange Act (FPIs) under the Holding Foreign Insiders Accountable Act.</p> <ul> <li>All Forms 3, 4, and 5 must be filed via EDGAR unless a hardship exception has been obtained under Regulation S-T Rule 202 (which would permit a paper submission).</li> <li>EDGAR filings must be made by 10:00 p.m. (Washington, D.C. time) on the due date.</li> <li>A person who was serving as a director or officer of an FPI as of December 18, 2025 must file a Form 3 on March 18, 2026, unless he or she is no longer a director or officer on that date. </li> <li>A person who became a director or officer of an FPI after December 18, 2025 but before March 18, 2026, must file a Form 3 by the later of March 18, 2026 or the date that is 10 days after he or she became a director or officer.[[N:A Form 4 must be filed before the end of the second business day following the day on which a purchase or sale subject to reporting occurs. This means that a director or officer of an FPI who purchased or sold equity securities of the FPI on March 18, 2026 or shortly thereafter would be required to file a Form 4 before his or her Form 3 is due.]]</li> <li>A person who was a director or officer of an FPI at the time its initial Section 12 registration statement became effective (after December 18, 2025 but before March 18, 2026) must file a Form 3 on March 18, 2026.</li> <li>Exchange Act Rule 16a-2(a) requires a director or officer to report on Form 4 certain transactions that occurred within six months prior to the director or officer becoming subject to Section 16 solely as a result of the issuer registering a class of equity securities pursuant to Exchange Act Section 12.[[N:Under Exchange Act rule 16a-2(a), a transaction(s) carried out by a director or officer in the six months prior to such person becoming subject to Section 16 shall be subject to Section 16 and reported on the first required Form 4 only if the transaction(s) occurred within six months of the transaction giving rise to the Form 4 filing obligation and the person became subject to Section 16 solely as a result of the issuer registering a class of equity securities pursuant to Section 12 of the Exchange Act. This filing requirement does not apply to a person who became a director or officer after the time the issuer registered equity securities under Section 12 of the Exchange Act.]] If an FPI had a class of equity securities registered under Section 12 prior to March 18, 2026, then its directors and officers would not be required to report transactions effected prior to March 18, 2026. However, if a director or officer of an FPI becomes subject to Section 16 because the FPI registers a class of equity securities under Section 12 on or after March 18, 2026, then such director or officer must report certain transactions effected prior to March 18, 2026 on his or her first Form 4 filing.</li> </ul> <p>As is always the case with staff interpretations, these FAQs are not rules, regulations, or statements of the SEC, and have no legal force or effect.</p> <p>&nbsp;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{9A48D00A-C23E-40B3-A841-42BCA3468E57}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/most-favored-nation-drug-pricingSamuel Lonerganhttps://www.arnoldporter.com/en/people/l/lonergan-samuelsamuel.lonergan@arnoldporter.comCarmela T. Romeohttps://www.arnoldporter.com/en/people/r/romeo-carmela-tcarmela.romeo@arnoldporter.comSarah E. Pratherhttps://www.arnoldporter.com/en/people/p/prather-sarahsarah.prather@arnoldporter.comSeth M. Engelhttps://www.arnoldporter.com/en/people/e/engel-seth-mseth.engel@arnoldporter.com<p>The Trump administration&rsquo;s most-favored nation agreements with major pharmaceutical companies and recent initiatives by the Centers for Medicare &amp; Medicaid Services &mdash; including the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) model, proposed GUARD (Guarding U.S. Medicare Against Rising Drug Costs) model, and proposed GLOBE (Global Benchmark for Efficient Drug Pricing) model &mdash; seek to bring the prices that the U.S. federal and state governments pay for pharmaceuticals in line with international pricing by using such pricing information as a benchmark for government drug pricing. These initiatives may implicate existing agreements between U.S. drug manufacturers and their international partners in a number of ways.&nbsp;</p>Mon, 16 Mar 2026 00:00:00 -0500<p> </p> <h2>Introduction</h2> <p>The Trump administration&rsquo;s most-favored nation (MFN) agreements with major pharmaceutical companies and recent initiatives by the Centers for Medicare &amp; Medicaid Services (CMS) &mdash; including the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) model, proposed GUARD (Guarding U.S. Medicare Against Rising Drug Costs) model, and proposed GLOBE (Global Benchmark for Efficient Drug Pricing) model &mdash; seek to bring the prices that the U.S. federal and state governments pay for pharmaceuticals in line with international pricing by using such pricing information as a benchmark for government drug pricing. These initiatives may implicate existing agreements between U.S. drug manufacturers and their international partners in a number of ways. </p> <p>As an initial matter, the government&rsquo;s initiatives may impose new obligations on drug manufacturers participating in Medicaid and Medicare to provide the U.S. government with international net pricing information that reflects confidential rebates and other price concessions for sales of certain products in certain foreign countries. Existing international agreements &mdash; such as licensing, royalty, commercialization, and distribution agreements &mdash; between U.S. drug manufacturers and their partners may not contemplate access to detailed transaction-level international net pricing data. Such data also may raise competition law considerations and be subject to confidentiality obligations in a foreign jurisdiction and/or under the international partners&rsquo; contracts with third parties. </p> <p>The advent of international reference pricing in the U.S. may also raise other commercial contracting considerations, given that international product launches and pricing may become more impactful on broader profitability considerations. Existing agreements may not contemplate the increased interplay between U.S. and international pricing and marketing strategies or may not have been negotiated with this scenario in mind. Indeed, international marketing decisions by U.S. drug manufacturers and/or their international partners may be subject to commercially reasonable efforts (CRE) provisions that were negotiated in advance of the U.S. government&rsquo;s recent initiatives.</p> <p>This Advisory discusses general contract interpretation principles under New York and Delaware law and common contractual provisions to provide a general framework for analyzing how existing contracts between U.S. drug manufacturers and international partners may be implicated by CMS&rsquo;s MFN models.[[N:The Advisory provides a general analysis under New York and Delaware law and does not relate to any specific agreement, manufacturer, or international partner. As always, the rights and obligations of a party under a contract will be subject to the specific terms of that contract and the governing law. This Advisory also does not address European Union competition law and antitrust rules (e.g., Article 101 TFEU) or data confidentiality concerns.]] </p> <h2>Background</h2> <p><strong>GLOBE and GUARD</strong>. If finalized, manufacturers of qualifying products would be required to participate in CMS&rsquo;s proposed MFN models, GLOBE and GUARD, which incorporate international reference pricing into Medicare Parts B and D, respectively.[[N:CMS proposes to begin GLOBE on October 1, 2026 and GUARD on January 1, 2027. See <a rel="noopener noreferrer" href="https://www.govinfo.gov/content/pkg/FR-2025-12-23/pdf/2025-23702.pdf" target="_blank">Global Benchmark for Efficient Drug Pricing (GLOBE) Model</a>, 90 Fed. Reg. 60244-336 (Dec. 23, 2025); <a rel="noopener noreferrer" href="https://www.govinfo.gov/content/pkg/FR-2025-12-23/pdf/2025-23705.pdf" target="_blank">Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model</a>, 90 Fed. Reg. 60338-429 (Dec. 23, 2025).]] Under both models, CMS would determine international benchmarks by looking at drug prices in 19 reference countries.[[N:The 19 countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.]] The default international benchmark calculation, which would be performed by CMS, would be based on international drug pricing data available in the public domain (e.g., list prices, ex-factory prices, or retail prices).[[N:CMS intends to collect such information from the three sources: IQVIA&rsquo;s MIDAS database, Eversana&rsquo;s NAVLIN database, and/or GlobalData&rsquo;s Price Intelligence (POLI) database.]] A manufacturer may voluntarily submit to CMS international drug <em>net pricing</em> data that takes into account confidential rebates and discounts, as the basis for an alternative benchmark.[[N:90 Fed. Reg. 60273; 90 Fed. Reg. 60378, 60382, 60384.]] The international benchmark would be the greater of the alternative calculations (as a higher benchmark results in a lower rebate amount). A manufacturer&rsquo;s data submissions must capture &ldquo;every transaction that is made directly to health care entities, distributors, wholesalers, or other international purchasers&rdquo; in the reference countries, even if the manufacturer did not make the sales.[[N:90 Fed. Reg. 60293; 90 Fed. Reg. 60371.]] A manufacturer must also certify the completeness and validity of the data it submits.[[N:90 Fed. Reg. 60295-96; 90 Fed. Reg. 60377-78.]]</p> <p><strong>GENEROUS</strong>. Under GENEROUS, the MFN price will be calculated as the second lowest net price among eight reference countries.[[N:The eight countries are: the United Kingdom, France, Germany, Italy, Canada, Japan, Denmark, and Switzerland.]] Similar to the proposed Medicare models, manufacturer-reported net price data must account for price concessions.[[N:See CMS, <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/files/generous-rfa.pdf" target="_blank">GENEROUS Model Request for Applications from Applicable Manufacturers</a>, Feb. 27, 2026, at 15 (GENEROUS Model RFA). However, there may be differences in the data submission requirements under GENEROUS and the proposed GLOBE and GUARD models.]] As a general matter, participation in GENEROUS is voluntary for drug manufacturers that participate in Medicaid, although CMS asserts that manufacturers that entered into MFN agreements with the Trump administration &ldquo;will participate in the GENEROUS Model after certain terms are finalized.&rdquo;[[N:See CMS, GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model, Frequently Asked Questions (<a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/generous" target="_blank">CMS GENEROUS Webpage</a>). CMS has also stated that it &ldquo;may, at its discretion, waive or modify the applicability of other CMMI Models &#91i.e., GLOBE and GUARD&#92 or Model requirements&rdquo; for manufacturers that participate in GENEROUS. GENEROUS Model RFA at 20. GENEROUS began the manufacturer application process on January 1, 2026, id. at 4, and the pre-implementation period ends on April 30, 2026. Id. at 10, 20; see CMS GENEROUS Webpage.]] </p> <h2>Common Contractual Provisions</h2> <p>As a general matter, contracts between sophisticated parties represented by counsel will be enforced as written by New York and Delaware courts, as both states have a strong public policy favoring the freedom of contract, where the parties&rsquo; intent is clear based on plain and unambiguous language. These courts typically will not rewrite unambiguous terms nor introduce new terms that the parties did not bargain for at the negotiating table. </p> <p>Several common contractual provisions could become relevant when analyzing whether existing contracts between U.S. drug manufacturers and international partners allow for a U.S. manufacturer to obtain net pricing data and/or appropriately influence international marketing strategies. </p> <ul> <li><strong>Audit Provisions</strong>. Contractual provisions related to audit rights, reporting obligations, and/or recordkeeping requirements typically allow for review (or require the reporting) of an international partner&rsquo;s books and records. Such provisions may permit a U.S. drug manufacturer to obtain (at least some level of) international pricing data, depending on the specific contractual language, although contractual obligations may differ from the U.S. government&rsquo;s net price reporting requirements. Audit provisions also may not require the sharing of records (or limit the scope of the records to be shared in terms of the records themselves and/or the time period). Similarly, audit rights may be narrow in scope and limited to specific purposes, which may affect whether a manufacturer could rely on such rights (or the data shared as a result of such rights) to report net pricing information to the U.S. government. </li> <li><strong>Cooperation Clauses</strong>. A cooperation clause may require contracting parties and third parties, such as licensees and sublicensees, to cooperate as a general matter and take specified actions to achieve contract objectives. These provisions are often limited in scope. Even where cooperation clauses require data sharing, the obligation may be limited to summary data, which may not satisfy U.S. drug manufacturers&rsquo; data submission needs. Whether a U.S. manufacturer could rely on a cooperation clause to influence international marketing strategy will depend on the specific contract language. </li> <li><strong>Renegotiation Clauses</strong>. A renegotiation clause may provide for &ldquo;renegotiation&rdquo; of contract terms by the parties or require the parties to work together in good faith to amend the contractual terms in a specified situation, such as a change in circumstances or the law or to address a gap in the contract. If present and depending on the circumstances, a renegotiation clause may allow for amending the contract terms for a U.S. drug manufacturer to obtain international drug pricing information and/or influence international marketing strategies. Such a renegotiation, however, very well may implicate other contractual terms or agreements. </li> <li><strong>Force Majeure Clauses</strong>. Generally, a force majeure clause relieves a party from its contractual obligations when that party&rsquo;s performance has been prevented by circumstances beyond its control.[[N:<em>Stroud v. Forest Gate Dev. Corp.</em>, 2004 WL 1087373, at *5 (Del. Ch. May 5, 2004) (&ldquo;Force majeure clauses are, as a general matter, drafted to protect a contracting party from the consequences of adverse events beyond that party&rsquo;s control.&rdquo;); see also <em>Constellation Energy Servs. of New York, Inc. v. New Water St. Corp.</em>, 146 A.D.3d 557, 558, 46 N.Y.S.3d 25, 27 (2017) (&ldquo;Force majeure clauses are to be interpreted in accord with their purpose, which is &lsquo;to limit damages in a case where the reasonable expectation of the parties and the performance of the contract have been frustrated by circumstances beyond the control of the parties&rsquo;&rdquo; (citation omitted)).]] The application of a force majeure clause in the present scenario raises a few considerations. <em>First</em>, the terms of force majeure provisions may vary, but often the terms will only <em>excuse a party&rsquo;s performance</em> under the contract. <em>Second</em>, force majeure clauses typically require that the force majeure triggering event be beyond the invoking party&rsquo;s control and not the result of that party&rsquo;s voluntary actions.[[N:<em>Team Mktg. USA Corp. v. Power Pact, LLC</em>, 41 A.D.3d 939, 942, 839 N.Y.S.2d 242 (2007); <em>Stroud</em>, 2004 WL 1087373, at *5.]] The voluntary nature of the new data obligations would be an important factor to consider. <em>Third</em>, financial hardship, including rendering performance under the contract unprofitable, ordinarily will not constitute a force majeure event.[[N:<em>Route 6 Outparcels, LLC v. Ruby Tuesday, Inc.</em>, 88 A.D.3d 1224, 1226, 931 N.Y.S.2d 436, 438 (2011); <em>Macalloy Corp. v. Metallurg, Inc.</em>, 284 A.D.2d 227, 227, 728 N.Y.S.2d 14, 14 (2001); <em>VICI Racing, LLC v. T-Mobile USA, Inc.</em>, 763 F.3d 273, 288 (3d Cir. 2014).]] </li> <li><strong>Termination Clauses</strong>. Termination provisions often provide that one or both parties can terminate the contract under specified circumstances. The terms and scope of each will be unique to the agreement at issue, and unilateral termination may result in a substantial contractually defined penalty, such as having to compensate the other party. A narrow or restrictive termination provision may not permit outright contract termination by the drug manufacturer in the current scenario. </li> </ul> <p>As noted, a party&rsquo;s rights and obligations will vary greatly depending on the specific contractual terms and law governing the relevant agreement(s). We routinely help clients assess their contractual rights and obligations under commercialization and other agreements and are here to help.</p> <h2>Commercially Reasonable Efforts</h2> <p>CRE clauses are typically used to contractually obligate one or more parties&rsquo; efforts and often are either outward facing (i.e., requiring such efforts to be commensurate with comparable companies in the industry), inward facing (i.e., using the party&rsquo;s action in similar circumstances as the benchmark), or left undefined. Drug manufacturers and their international partners may wish to review their existing agreements&rsquo; CRE provisions in connection with these new programs, as the applicability of a CRE provision to any particular circumstance will depend on the terms of the applicable contract(s). </p> <p><em>First</em>, CRE provisions pertaining to product introduction and marketing efforts are often limited in geographic scope. In light of CMS&rsquo;s MFN models, a product&rsquo;s overall profitability would no longer be a simple matter of tallying the profits from individual countries, but instead, it would be a story of interdependence, where the marketing strategy and product pricing in one international country could influence that product&rsquo;s profitability in the United States. In light of this, there may be a tension between maximizing a product&rsquo;s overall profitability and a CRE obligation that requires the use of CRE to introduce or maximize the profitability of a product in a particular international market. As such, contracting parties may wish to assess the geographic scope of relevant CRE provisions as well as the information and factors that can be considered in the context of such clauses and determine whether existing contracts contain potentially inconsistent CRE obligations. </p> <p><em>Second</em>, the specific contractual language at issue will inform whether a CRE provision could be read as requiring (or not requiring) a manufacturer to use commercially reasonable efforts to obtain international data from its international partners. </p> <h2>Takeaways</h2> <p>In sum, the U.S. government&rsquo;s recent initiatives to use international reference pricing to lower government drug costs in the U.S. will likely implicate the terms and interpretation of existing licensing, commercialization, royalty, distribution, and other agreements between U.S. drug manufacturers and international partners. To prepare for the new programs, contracting parties may wish to consider doing the following:</p> <ul> <li>Analyze the terms of existing agreements that may be relevant to obtaining net pricing data and appropriately influencing international marketing strategies.</li> <li>Assess the applicability and implications of CRE provisions in existing agreements.</li> <li>Consider including terms in new commercial agreements that take into account the potential need or desire to obtain net pricing data and have influence over international marketing strategies (consistent with applicable competition laws, which are outside the scope of this Advisory).</li> <li>Track and monitor any developments or changes to CMS&rsquo;s proposed GLOBE and GUARD models, as well as to the GENEROUS model as CMS continues implementation.</li> </ul> <p style="text-align: center;">* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <p>Arnold &amp; Porter is tracking developments impacting life sciences companies and the Complex Litigation practice group routinely counsels clients on commercial contracting considerations and related matters. Our team is here to help with any questions you may have.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{10D0B05B-9377-480A-9259-B32DEDE88797}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/state-department-issues-final-mexico-city-policySamuel Wittenhttps://www.arnoldporter.com/en/people/w/witten-samuel-msamuel.witten@arnoldporter.comSusan Kopfhttps://www.arnoldporter.com/en/people/k/kopf-susansusan.kopf@arnoldporter.comAllissa Pollardhttps://www.arnoldporter.com/en/people/p/pollard-allissaallissa.pollard@arnoldporter.comSam Callahanhttps://www.arnoldporter.com/en/people/c/callahan-samsam.callahan@arnoldporter.comKristina Lorchhttps://www.arnoldporter.com/en/people/l/lorch-kristinakristina.lorch@arnoldporter.com<p> <p>On February 26, 2026, the U.S. Department of State (State Department) implemented three new rules that have significant implications for U.S. foreign assistance. One of the rules &mdash; Protecting Life in Foreign Assistance &mdash; implements a January 2025 Presidential Memorandum reinstating and expanding the Mexico City Policy, which generally prohibits funding recipients from providing or promoting abortions as a method of family planning. The State Department also has implemented two other final rules imposing additional policy constraints on funding recipients: (1) the Combating Gender Ideology in Foreign Assistance rule and (2) the Combating Discriminatory Equity Ideology in Foreign Assistance Rules.&nbsp;</p> </p>Fri, 13 Mar 2026 00:00:00 -0500<p> <p> <p>On February 26, 2026, the U.S. Department of State (State Department) implemented three new rules that have significant implications for U.S. foreign assistance. One of the rules &mdash; <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/01/27/2026-01519/protecting-life-in-foreign-assistance" target="_blank">Protecting Life in Foreign Assistance</a> (PLFA) &mdash; implements a January 2025 <a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2025/01/memorandum-for-the-secretary-of-state-the-secretary-of-defense-the-secretary-of-health-and-human-services-the-administrator-of-the-united-states-for-international-development/" target="_blank">Presidential Memorandum</a> reinstating and expanding the Mexico City Policy (Policy), which generally prohibits funding recipients from providing or promoting abortions as a method of family planning. The State Department also has implemented two other final rules imposing additional policy constraints on funding recipients: (1) the <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/01/27/2026-01516/combating-gender-ideology-in-foreign-assistance" target="_blank">Combating Gender Ideology in Foreign Assistance</a> rule and (2) the <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/01/27/2026-01517/combating-discriminatory-equity-ideology-in-foreign-assistance-rules" target="_blank">Combating Discriminatory Equity Ideology in Foreign Assistance Rules</a>.</p> </p> <p>The State Department refers to these three new rules collectively as the &ldquo;Promoting Human Flourishing in Foreign Assistance (PHFFA) Policy.&rdquo; Together, the rules establish new policy conditions intended to ensure that U.S. foreign assistance does not support the promotion of abortion-related activities abroad, &ldquo;discriminatory equity ideology,&rdquo; or &ldquo;gender ideology.&rdquo;</p> <p>The rules do so by creating &ldquo;award terms&rdquo; that the State Department generally must include in grants, cooperative agreements, and certain other foreign assistance instruments. Once incorporated into an award, these terms require recipients &mdash; including foreign NGOs, U.S. NGOs, international organizations, and, in some cases, foreign governments &mdash; to refrain from specified activities, ensure separation between funded programs and prohibited activities, and flow these requirements down to subrecipients. The rules become binding on recipients only when included in the applicable funding instrument, and the State Department retains discretion to waive or tailor the conditions in particular circumstances.</p> <p>All three rules were published on January 27, 2026 and became effective on February 26, 2026. This Advisory examines the three new rules, focusing on the PLFA as the structural model for the other rules and then briefly discussing some key requirements of the gender and diversity rules.</p> <h2>Background</h2> <p>First announced by President Ronald Reagan at the 1984 International Conference on Population, the Mexico City Policy prohibits recipients of certain U.S. global health funds from using funds to perform or promote abortion as a method of family planning. Some form of the Policy has been in effect for each Republican presidential administration and rescinded in each Democratic presidential administration over the last 40 years.</p> <p>In its earlier incarnations, the Policy applied only to foreign NGOs, requiring foreign NGOs that wanted to receive U.S. global family planning assistance funds to certify that they would not perform or promote abortion as a method of family planning. The first Trump administration expanded this requirement, tying it to the receipt of global health assistance funds generally. The second Trump administration&rsquo;s new rule goes even further, tying these requirements to all non-military foreign assistance &mdash; and also broadens the type of entities subject to the rule.</p> <h2>The New Rule: Protecting Life in Foreign Assistance</h2> <p>The PLFA rule establishes a new &ldquo;award term&rdquo; for &ldquo;grants, cooperative agreements, and voluntary contributions&rdquo; of U.S. &ldquo;foreign assistance&rdquo; funds. This award term &ldquo;must generally be included in all foreign-assistance solicitations and all resulting awards&rdquo; for &ldquo;foreign nongovernmental organizations, international organizations, and United States nongovernmental organizations.&rdquo; By contrast, the award term &ldquo;may but need not be included in whole or in part, as applicable, in agreements with foreign governments and parastatals &hellip; and agreements with bilateral governments if the Department of State assesses such term is appropriate for that agreement.&rdquo; The award term will be incorporated into grants and cooperative agreements when new funds are added to existing awards and into new awards.</p> <p>&ldquo;Foreign assistance&rdquo; is defined broadly to include any federal funding disbursed by the State Department under Title III of the Department of State, Foreign Operations, and Related Programs Appropriations Act or its &ldquo;International Narcotics Control and Law Enforcement,&rdquo; &ldquo;Nonproliferation, Anti-Terrorism, Demining and Related Programs,&rdquo; &ldquo;Peacekeeping Operations,&rdquo; and &ldquo;International Organizations and Programs&rdquo; headings. The PLFA does not apply to military assistance and funding provided outside of these named authorities.</p> <p>The rule applies only to federal financial assistance &mdash; i.e., grants, cooperative agreements, and voluntary contributions. The rule notes, however, that the administration is separately preparing (but has not yet finalized) a <em>contractual</em> term that &ldquo;all U.S. government departments and agencies&rdquo; will be required to include in certain foreign assistance contracts.</p> <p>The new rule differs significantly from prior versions of the Policy. First, the rule expands the scope of entities that are required to agree to the PLFA award term beyond foreign NGOs. In addition to foreign NGOs, the rule applies to U.S. NGOs, international organizations, and foreign governments and parastatals. The following provides a breakdown of the requirements that apply to each of these entities:</p> <ul> <li><strong>U.S. NGOs</strong>: To receive U.S. non-military foreign assistance funds, U.S. NGOs must agree that, for their activities taking place outside the United States, they will not use the funds to provide abortions as a method of family planning.[[N:The PLFA defines &ldquo;abortion as a method of family planning&rdquo; as &ldquo;abortion, except, provided that the abortion is lawful under local law&mdash;(i) If the pregnancy is the result of an act of rape or incest; or (ii) In the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless an abortion is performed.&rdquo; 2 C.F.R. &sect; 602.20(a)(2). The PLFA defines &ldquo;promot[ion of] abortion as a method of family planning&rdquo; to include committing resources to increase the availability or use of abortion as a method of family planning, operating a service-delivery site that provides counseling on the benefits or availability of abortion, and providing advice that abortion is an option in family planning, among other enumerated examples. Id. &sect; 602.20(a)(4)(i).]] They must also ensure that their foreign assistance-funded overseas service locations are physically and financially separated from abortion-related activities. Beyond this, U.S. NGOs may not provide or promote abortion within the scope of any &ldquo;program, project or activity&rdquo; that receives U.S. foreign assistance funds. This requirement flows down to any of the U.S. NGOs&rsquo; subsequent recipients of funding that are derived from U.S. foreign assistance funds. U.S. NGOs are expressly not prohibited from using non-federal funds to provide financial support to organizations that provide abortion-related services outside the United States.</li> <li><strong>Foreign NGOs and International Organizations</strong>: The new rule provides that any foreign NGO or international organization that &ldquo;receives or implements&rdquo; a U.S. foreign assistance grant or cooperative agreement must agree that, for the duration of the award, it will not, outside the United States, &ldquo;provide or promote abortion as a method of family planning, or provide financial support to any other foreign NGO or IO that engages in such activities.&rdquo; The restrictions are thus broader than for U.S. NGOs, in that the restrictions are not confined to the foreign-assistance funds themselves, but instead restrict the organization&rsquo;s activities so long as they receive some covered funding.</li> <li><strong>Foreign Governments and Parastatals</strong>: The new rule provides that foreign governments and parastatals are not, by default, subject to the same funding constraints as U.S. or foreign NGOs, given foreign policy considerations. However, the PLFA permits the U.S. government to make awards to foreign governments and parastatals contingent on the recipient&rsquo;s agreement to not use foreign assistance award funds to provide or promote abortion as a method of family planning. In the event that this requirement is included in a funding instrument, the foreign government or parastatal recipient will be required to place any foreign assistance funds provided under the award in a &ldquo;segregated account&rdquo; to guarantee that such funds will not be used for abortion-related activity.</li> <li><strong>Subrecipients of U.S. Foreign Assistance Funds</strong>: Unlike previous iterations of the Policy, the new rule provides that the restrictions apply to all recipients, including subrecipients, of the impacted U.S. foreign assistance funds. In other words, U.S. and foreign NGOs, foreign governments, and parastatals who receive the impacted U.S. foreign assistance funds will be required to &ldquo;flow down&rdquo; the new rule&rsquo;s award terms to subrecipients of those funds.</li> </ul> <p>Second, the PLFA expands the categories of funds that trigger the Policy&rsquo;s requirements from global health funds to &ldquo;all non-military foreign assistance.&rdquo; The new rule defines &ldquo;non-military foreign assistance&rdquo; funds broadly, to include global health assistance, humanitarian assistance, civil society and democracy programs, migration and refugee assistance, and voluntary foreign assistance contributions to international organizations.</p> <p>Third, the new rule also provides for waiver of these requirements. The new rule permits the Secretary of State to waive inclusion of the award term if such waiver &ldquo;is necessary for national security or foreign policy purposes.&rdquo; The State Department has issued a <a rel="noopener noreferrer" href="https://www.state.gov/wp-content/uploads/2026/02/PHFFA-Implementation-Information-and-FAQ-EXTERNAL-2.pdf" target="_blank">Frequently Asked Questions</a> document outlining the waiver process. Successful waivers will show that the waiver is &ldquo;necessary to continue or provide an activity critical to the foreign policy of the United States, that the implementing partner at issue is the only or best provider of services within the scope of work, that the requested scope of the waiver is narrowly tailored to the justification, and that the partner has made a good faith effort to comply with the policy as a whole.&rdquo; The requesting entity must submit a waiver request through its relevant federal assistance team stakeholder to <a rel="noopener noreferrer" href="mailto:PHFFA_waivers@state.gov" target="_blank">PHFFA_waivers@state.gov</a>. The federal assistance team&rsquo;s request on behalf of the entity seeking waiver must include:</p> <ul> <li>Key information, including the scope of and justification for the proposed waiver</li> <li>The relevant assistance bureau&rsquo;s national security and/or foreign policy justification for the waiver, &ldquo;articulated at both the entity and award level&rdquo;</li> <li>The waiver policy</li> <li>The criteria for a waiver</li> </ul> <h2>Key Takeaways</h2> <p>The funding restrictions in the PLFA rule are not self-executing but rather must be incorporated into a particular funding instrument to be enforceable. But organizations should carefully review award documents &mdash; and any cross-referenced standard award provisions &mdash; to determine whether these conditions apply and should remain attentive to later amendments or funding modifications that could introduce the rule&rsquo;s requirements into existing agreements. Per the State Department&rsquo;s Frequently Asked Questions document, the &ldquo;presumptive action&rdquo; for violations of the PHFFA, which includes the PLFA, is immediate termination of the award.</p> <p>NGOs will also need to understand their subrecipients&rsquo; operations, locations, and facilities to determine and ensure their compliance with the Policy&rsquo;s new flow-down requirements. The State Department&rsquo;s guidance indicates compliance-related costs may be allowable depending on the award term and are &ldquo;generally&rdquo; allowable under grants. Specifically, if a recipient must physically and financially separate from other entities, its &ldquo;compliance-related costs are generally allowable under a grant or cooperative agreement.&rdquo; These costs could include &ldquo;the use of separate facilities, personnel, and accounting records.&rdquo;</p> <p>Finally, the rule may be challenged in litigation on constitutional, statutory, or other bases, and affected parties should monitor litigation that could potentially affect the rule&rsquo;s enforceability.</p> <h2>Brief Overview of the Other PHFFA Rules</h2> <p>In addition to the PLFA rule, the State Department issued rules imposing other policy-based restrictions. These rules&rsquo; structure and scope mirror those of the PLFA, including the flow down of the rules&rsquo; award terms, as applicable, to subrecipients of foreign assistance.</p> <p><strong>The Gender Rule</strong>. The rule on Combating Gender Ideology in Foreign Assistance (the Gender Rule) prohibits foreign aid recipients subject to the rule&rsquo;s new award term from promoting &ldquo;gender ideology&rdquo; outside the United States. &ldquo;Gender ideology&rdquo; is defined as &ldquo;ideology that replaces the biological category of sex with an ever-shifting concept of self-assessed gender identity.&rdquo;</p> <p>The Gender Rule award term, once implemented in an agreement, prevents the recipient from &ldquo;promot[ing] gender ideology, or provid[ing] financial support to&rdquo; any foreign NGO or international organization that promotes gender ideology. To &ldquo;promote gender ideology&rdquo; covers a broad range of activities, including:</p> <ul> <li>Public information campaigns on gender identity</li> <li>Drag performances</li> <li>Lobbying foreign governments for gender identity-based legal protections</li> <li>Promoting social transition (e.g., counseling, pronoun usage, gender identity curricula)</li> <li>Providing or promoting gender-affirming medical care (referred to in the Gender Rule as &ldquo;sex<span>‑</span>rejecting procedures&rdquo;) (including puberty blockers, cross-sex hormones, and surgeries)</li> </ul> <p>Similar to the PLFA rule, the restrictions on U.S. NGOs are slightly narrower. U.S. NGOs are prohibited from providing gender-affirming medical care outside of the United States. They are also prohibited from promoting &ldquo;gender ideology&rdquo; within any U.S.-funded program, though they may use non-federal funds to engage in such work, as long as they maintain the required physical and financial separation from foreign-assistance activities.</p> <p>Foreign governments and parastatals subject to the new award term would be prohibited from using foreign assistance award funds to provide or promote restricted activities. If the foreign government or parastatal recipient engages in those activities with their own funds, they will be required to place any foreign assistance funds in a &ldquo;segregated account&rdquo; to guarantee that such funds will not be used for prohibited activities.</p> <p><strong>The Diversity Rule</strong>. The rule on Combating Discriminatory Equity Ideology in Foreign Assistance Rules (the Diversity Rule) creates an award term that, once incorporated in an agreement, would prohibit &ldquo;promot[ing] discriminatory equity ideology, engag[ing] in unlawful DEI-related discrimination, or provid[ing] financial support to&rdquo; any foreign NGO or international organization that conducts such activities outside the United States. &ldquo;Discriminatory equity ideology&rdquo; is defined as &ldquo;an ideology that treats individuals as members of preferred or disfavored groups, rather than as individuals, and minimizes agency, merit, and capability in favor of generalizations.&rdquo;</p> <p>Federal aid recipients need to be aware of potential conflicts between the requirements of the Gender and Diversity Policies with federal, state, and local laws where they operate.</p> <p>By staying informed and working with a trusted legal team, you can minimize uncertainty and ensure that your organization continues to meet regulatory obligations despite ongoing policy shifts. In particular, if you receive a notice from a government agency regarding any of these issues, Arnold &amp; Porter has a cross-disciplinary team dedicated to ensuring compliance and preparing for any developments that may follow. We are also monitoring litigation that may challenge the rules and affect their enforceability.</p> <p>Arnold &amp; Porter will continue to monitor developments in this area. For questions about these rules and related issues, please contact the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/global-law-and-public-policy" target="_self">Global Law &amp; Public Policy</a>, <a href="https://www.arnoldporter.com/en/services/capabilities/practices/administrative-law-and-regulatory-litigation" target="_self">Administrative Law &amp; Regulatory Litigation</a>, <a href="https://www.arnoldporter.com/en/services/capabilities/practices/tax-exempt" target="_self">Tax Exempt</a>, and <a href="https://www.arnoldporter.com/en/services/capabilities/practices/government-contracts" target="_self">Government Contracts</a> practice groups.</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{0533500D-450A-41B9-A4E0-548E0AF76599}https://www.arnoldporter.com/en/perspectives/events/2026/03/life-sciences-transactions-bootcampEwan Townsendhttps://www.arnoldporter.com/en/people/t/townsend-ewanewan.townsend@arnoldporter.comGeorge Jenkinshttps://www.arnoldporter.com/en/people/j/jenkins-georgegeorge.jenkins@arnoldporter.comTom Wilsonhttps://www.arnoldporter.com/en/people/w/wilson-tomtom.wilson@arnoldporter.comLewis Popehttps://www.arnoldporter.com/en/people/p/pope-lewislewis.pope@arnoldporter.com<p>A practical and interactive bootcamp designed to equip junior and mid-level lawyers in the life sciences industry&nbsp;with a clear understanding of the key commercial and legal points involved in:</p> <ul> <li>Licensing agreements</li> <li>Manufacturing agreements</li> <li>Distribution agreements</li> </ul> <p>Taking each clause at a time, we will highlight essential points to consider when drafting and negotiating these critical commercial contracts.</p> -plus guest speakers from industry<br /> <br />Thu, 12 Mar 2026 00:00:00 -0500{873B812C-A301-4308-AD10-EA8D41B4E64B}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/fda-issues-guidance-on-responding-to-fda-form-483sHoward Sklamberghttps://www.arnoldporter.com/en/people/s/sklamberg-howardhoward.sklamberg@arnoldporter.comElizabeth Trentacosthttps://www.arnoldporter.com/en/people/t/trentacost-elizabethelizabeth.trentacost@arnoldporter.comLily Caohttps://www.arnoldporter.com/en/people/c/cao-lilylily.cao@arnoldporter.com<p>In March 2026, the U.S. Food and Drug Administration (FDA or the Agency) issued the draft guidance for industry, Responding to FDA Form 483 Observations at the Conclusion of a Drug CGMP Inspection. The draft guidance provides FDA&rsquo;s current approach on how human and animal drug manufacturers should structure and submit written responses to FDA Form 483 observations issued at the close of an FDA inspection that evaluated conformity with current good manufacturing practices (cGMPs). It also outlines FDA&rsquo;s expectations for the organization, content, and timing of written responses, as well as recommended approaches for investigations, corrective actions, and communications with the Agency. Comments on the draft guidance are due by May 8, 2026.</p>Thu, 12 Mar 2026 00:00:00 -0500<p>In March 2026, the U.S. Food and Drug Administration (FDA or the Agency) issued the draft guidance for industry, Responding to FDA Form 483 Observations at the Conclusion of a Drug CGMP Inspection.[[N:U.S. Food and Drug Administration, Responding to FDA Form 483 Observations at the Conclusion of a Drug CGMP Inspection: Draft Guidance for Industry (Mar. 2026).]] The draft guidance provides FDA&rsquo;s current approach on how human and animal drug manufacturers should structure and submit written responses to FDA Form 483 observations issued at the close of an FDA inspection that evaluated conformity with current good manufacturing practices (cGMPs).[[N:The draft guidance is also intended for drug or biologic-led combination product manufacturers.]] It also outlines FDA&rsquo;s expectations for the organization, content, and timing of written responses, as well as recommended approaches for investigations, corrective actions, and communications with the Agency. Comments on the draft guidance are due by May 8, 2026.[[N:U.S. Food and Drug Administration, Responding to FDA Form 483 Observations at the Conclusion of a Drug CGMP Inspection; Draft Guidance for Industry, 91 Fed. Reg. 11325 (Mar. 9, 2026).]]</p> <p>Although the guidance implicitly communicates that responding to an FDA Form 483 is voluntary (which, technically, it is), establishments should consider a response to be mandatory. The Form 483 response is the establishment&rsquo;s opportunity to respond to what FDA observed in the inspection, to outline plans for remediation and corrective action, and sets the tone for further engagement with FDA and how seriously the establishment takes the observations received. Indeed, FDA emphasizes that a written 483 response &ldquo;may be the primary or a key component in FDA&rsquo;s review when evaluating whether subsequent Agency action is warranted.&rdquo;[[N:Guidance at 3.]]</p> <p>Below, we provide an overview of the draft guidance, beginning with a brief background on FDA Form 483 observations and the role of written responses, followed by a discussion of FDA&rsquo;s recommendations regarding the structure and timing of responses, investigation and CAPA expectations, and strategies for addressing inspectional observations.</p> <h2>Background</h2> <p>FDA investigators will issue a Form 483 at the conclusion of an FDA inspection if they observe conditions that, in their judgment, may constitute violations of the Federal Food, Drug, and Cosmetic Act or FDA regulations (e.g., the cGMP requirements in 21 CFR Parts 210 and 211). A Form 483 lists inspectional observations but does not represent FDA&rsquo;s final conclusions regarding compliance.</p> <p>FDA has long encouraged companies to respond promptly and thoroughly to such observations. FDA recommends submitting a written response within 15 business days of the issuance of the Form 483. Responses received after this timeframe will be considered untimely and the agency may not consider them when it classifies the inspection and determines whether to pursue compliance action, such as a warning letter and/or import alert. </p> <h2>Recommended Structure and Content of a Response</h2> <p>The draft guidance provides detailed recommendations for the format and content of a written response. FDA encourages submissions that are clear, organized, and comprehensive. Per FDA, responses should generally include:</p> <ul> <li>Identification of the establishment submitting the response, including the facility name, address, and FDA Establishment Identifier</li> <li>A copy of the issued Form 483</li> <li>Identification of the response preparer and the signatory (who should be a member of executive management with authority to allocate resources and implement corrective actions)</li> <li>Any authorization letters if the company retained consultants or outside counsel[[N:In our experience, sometimes firms consult outside counsel for advice but do not include counsel in discussions with FDA. In that case, requiring disclosure of a confidential relationship with outside counsel would raise serious questions about attorney-client privilege. Firms should consult their counsel before disclosing a confidential relationship.]]</li> <li>Any associated global investigation plans and reports</li> <li>An executive summary of all remediation activities with a detailed description of each observation and remediation activities, including: <ul> <li>A patient- and product-focused risk assessment of observations, with an assessment of inventory and distributed drugs within expiry and possible effects on safety, identity, strength, quality, and purity of potentially affected drugs</li> <li>A detailed investigation report with scope, summary, list of associated drugs and lot numbers, identified root causes and related systemic issues, corrective and preventative action (CAPA) plan, a summary of completed actions, including interim actions, and a planned effectiveness evaluation</li> <li>Signed attachments related to the associated observation, including documents, pictures, video, diagrams, or data</li> </ul> </li> </ul> <p>Notably, the draft guidance recommends that companies may include an executive summary table to organize remediation information. FDA indicates that this type of summary can facilitate its review by providing a concise overview of corrective actions and implementation timelines.</p> <table> <tbody> <tr> <td style="text-align: left; vertical-align: top;"><strong><span>FDA Form 483 Observation Number or Other Item Related to Inspection (e.g., discussion item)</span>&nbsp;</strong></td> <td style="text-align: left; vertical-align: top;"><strong><span>General Category/System</span>&nbsp;</strong></td> <td style="text-align: left; vertical-align: top;"><strong><span>Summary</span>&nbsp;</strong></td> <td style="text-align: left; vertical-align: top;"><strong><span>CAPA Number</span>&nbsp;</strong></td> <td style="text-align: left; vertical-align: top;"><strong><span>Target Date</span>&nbsp;</strong></td> <td style="text-align: left; vertical-align: top;"><strong><span>Current Progress of Remediations</span>&nbsp;</strong></td> </tr> <tr> <td style="text-align: left; vertical-align: top;"><span>1., 1a., etc. (include brief descriptive name)</span></td> <td style="text-align: left; vertical-align: top;"><span>Facility, equipment, etc.</span></td> <td style="text-align: left; vertical-align: top;"><span>Brief summary of issue and CAPA&nbsp;</span></td> <td style="text-align: left; vertical-align: top;"><span>CAPA number, if applicable</span></td> <td style="text-align: left; vertical-align: top;"><span>Target date, including any interim actions taken</span></td> <td style="text-align: left; vertical-align: top;"><span>Substantive summary of status, including (1) to be initiated; (2) in-progress; or (3) completed. Describe any issues that may influence timing of completion&nbsp;</span></td> </tr> </tbody> </table> <p>&nbsp;</p> <h2>Investigations and Root Cause Analysis</h2> <p>The guidance emphasizes that responses should demonstrate that the establishment has thoroughly evaluated the observations and their underlying causes. FDA recommends that manufacturers develop a comprehensive investigation plan, including a scientifically justified scope and methodology. Investigations should assess whether the deficiencies identified affect other drugs, processes, or facilities and should identify any systemic issues that may require broader remediation. The response should include details regarding the investigation, including: scope and methodology; root cause analysis; identification of affected products or batches; and actions taken to prevent recurrence. FDA also notes that companies may need to expand the scope of investigations if additional information indicates that similar issues may exist elsewhere in the manufacturing process.</p> <h2>CAPA Plans and Effectiveness Checks</h2> <p>The draft guidance emphasizes the importance of developing a CAPA plan during, or immediately after, the close of an inspection to address issues underlying the observations. CAPA plans should include: corrective actions addressing root causes identified during the investigation; preventative actions designed to prevent recurrence; implementation timelines and deliverables; and effectiveness evaluations to verify that the corrective measures successfully resolve the issue. FDA recommends that effectiveness evaluations go beyond routine testing and demonstrate that the underlying problem has been fully addressed.</p> <h2>Interim Reporting and Ongoing Communication</h2> <p>When corrective actions cannot be completed within the initial response period, FDA encourages companies to provide interim updates and establish a communication plan for all ongoing remediation activities. This plan should include milestone deliverables and follow-up reports describing progress on remediation activities and the status of commitments made in the initial response, as well as what information would be included in these reports.</p> <h2>Addressing Scientific or Technical Disagreements</h2> <p>The draft guidance also acknowledges that companies may disagree with certain inspectional observations. In such cases, FDA recommends addressing the disagreement with the FDA representative during the inspection. In the event that a disagreement is not resolved before FDA issues a Form 483, companies should describe the contested facts in the Form 483 response, and provide scientific data or other supporting evidence explaining the company&rsquo;s position. The response should reference applicable statutes, regulations, or guidance to support the company&rsquo;s interpretation.</p> <h2>Key Takeaways</h2> <p>Through the draft guidance, FDA is communicating more explicit expectations about the substance and quality of a Form 483 response. Establishments may be accustomed to performing some of the recommended activities and providing some of the recommended information, as a best practice. Now, FDA is formally recommending elements that comprise a more uniform and extensive response to a Form 483, perhaps to globally elevate the quality and comprehensiveness of responses. Although the guidance does not create new legal requirements, manufacturers should review FDA&rsquo;s guidance and consider whether their firm&rsquo;s approach to Form 483 responses is aligned with FDA&rsquo;s, and consider these recommendations when strategizing the scope of a Form 483 response and associated CAPAs. </p> <p>For more information or to discuss FDA&rsquo;s recommendations, please reach out to the Arnold &amp; Porter authors.&nbsp;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{5D425979-056D-4A37-B90F-40D4CB83DC31}https://www.arnoldporter.com/en/perspectives/events/2026/03/the-american-bar-associations-criminal-justice-section-white-collar-crime-institutePaul J. Fishmanhttps://www.arnoldporter.com/en/people/f/fishman-paul-jpaul.fishman@arnoldporter.comGiselle J. Joffrehttps://www.arnoldporter.com/en/people/j/joffre-giselle-jgiselle.joffre@arnoldporter.comLisa M. Rehttps://www.arnoldporter.com/en/people/r/re-lisa-mlisa.re@arnoldporter.comBurden H. Walkerhttps://www.arnoldporter.com/en/people/w/walker-burden-hburden.walker@arnoldporter.comBaruch Weisshttps://www.arnoldporter.com/en/people/w/weiss-baruchbaruch.weiss@arnoldporter.com<p>On March 11 &ndash; March 13, 2026, Arnold &amp; Porter partners will speak at the <a rel="noopener noreferrer" href="https://events.americanbar.org/event/55b10d13-e5d8-4722-8493-12269ec0db2a/summary" target="_blank">ABA Criminal Justice Section&rsquo;s White Collar Crime Institute</a> in San Diego, offering perspectives on evolving enforcement priorities, False Claims Act defense, ethics and rule of law challenges, and consumer protection developments. Our team will join leading practitioners and government officials to examine the most pressing issues shaping today&rsquo;s white collar landscape.</p> <p>Throughout the conference, we will share key takeaways and timely analysis on<em> <a href="/en/perspectives/blogs/enforcement-edge">Enforcement Edge</a></em>, highlighting emerging enforcement trends, practical defense strategies, and what these developments mean for companies, boards, and compliance professionals navigating heightened regulatory scrutiny.</p> <p><strong>Paul Fishman</strong> &ndash; &ldquo;ETHICS &ndash; REDUX Threats to the Rule of Law&rdquo; (March 13, 2026)<br /> The panel will explore the professional and ethical obligations of the white collar community to confront the challenges to the rule of law and the criminal justice system.</p> <p><strong>Giselle Joffre</strong> &ndash; &ldquo;Defending False Claims Act Cases&rdquo; (March 11, 2026)<br /> Panelists will cover topics such as potential FCA liability related to executive orders, DOJ&rsquo;s Cyber Fraud Initiative, cooperation credit policies, and the latest constitutional challenges to the FCA&rsquo;s <em>qui tam</em> provisions.</p> <p><strong>Lisa Re</strong> &ndash; &ldquo;Stark Law, Anti-Kickback and EKRA Enforcement Developments&rdquo; (March 11, 2026)<br /> This panel session will review the basic prohibitions and exceptions under the Stark Law, the Anti-Kickback Statute, the Eliminating Kickbacks in Recovery Act (&ldquo;EKRA&rdquo;), and the relationship between these statutes and claims under the False Claims Act.</p> <p><strong>Burden Walker</strong>&nbsp;&ndash; &ldquo;Protecting the American Consumer: Trump Administration Consumer Protection Priorities&rdquo; (March 11, 2026)<br /> The panel will explore the consumer protection priorities of the Department of Justice, Federal Trade Commission, and Food and Drug Administration during the second Trump administration.</p> <p><strong>Baruch Weiss</strong> &ndash; &ldquo;Significant Legal Developments in the Regions &ndash; Northeast Region&rdquo; (March 11, 2026)<br /> Panelists will highlight new developments and trends in each region of the United States to better inform attorneys of strategies and arguments used in litigating white collar cases.</p>Wed, 11 Mar 2026 00:00:00 -0500{EE0B54B9-485C-4B01-B661-5F25BFC0994E}https://www.arnoldporter.com/en/perspectives/events/2026/03/advancing-ai-adoption-in-manufacturing-under-the-existing-fda-ema-frameworksHoward Sklamberghttps://www.arnoldporter.com/en/people/s/sklamberg-howardhoward.sklamberg@arnoldporter.comAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comElizabeth Trentacosthttps://www.arnoldporter.com/en/people/t/trentacost-elizabethelizabeth.trentacost@arnoldporter.comIn this webinar, experts from Arnold &amp; Porter and Lachman Consultants examine the existing regulatory framework and FDA and EMA positions on AI in cGMP use-cases.Wed, 11 Mar 2026 00:00:00 -0500<p>As organizations deploy artificial intelligence (AI) across current good manufacturing practices (cGMP) platforms, uncertainty and a lack of AI-specific regulations are slowing adoption. Yet regulatory silence is not a prohibition. Although existing regulations do not specifically address AI, the established U.S. and EU regulatory frameworks, including 21 CFR parts 210 and 211 and EudraLex Volume 4, are sufficiently flexible to accommodate AI-enabled approaches, when implemented thoughtfully. Within this structure, AI is not a regulatory exception, but a GMP control that must be justified, governed, and defended like any other.</p> <p>In this webinar, experts from Arnold &amp; Porter and Lachman Consultants examine the existing regulatory framework and FDA and EMA positions on AI in cGMP use-cases. Drawing on Annex 22 (EMA draft guidance on AI in GMP), FDA&rsquo;s draft guidance on AI to support regulatory decision-making, and the joint FDA-EMA Guiding Principles of Good AI Practice as reference points, we will analyze how regulators are framing expectations for AI across the product lifecycle, with a particular focus on manufacturing applications.</p> <p>We will explore practical implementation considerations, using cGMP flexibility, ICH Q9 (Quality Risk Management) and ICH Q10 (Pharmaceutical Quality System) as the operational backbone. Key topics will include defining context of use, calibrating validation effort, managing model evolution, and preserving human authority and oversight, using mechanisms that regulators recognize. Throughout, the discussion will be guided by the questions that a manufacturing facility may face in a regulatory inspection or engagement with respect to AI, such as the decisions AI influences, how risk proportionality is demonstrated, who holds authority for model changes and decision making, and how quality is protected.</p>{98007CB3-033D-44F7-9822-77D2155EEB44}https://www.arnoldporter.com/en/perspectives/events/2026/03/hot-topics-in-advertising-law-the-nad-and-drug-and-medical-device-promotionRaqiyyah Pippinshttps://www.arnoldporter.com/en/people/p/pippins-raqiyyahraqiyyah.pippins@arnoldporter.comWilliam Hallett Efronhttps://www.arnoldporter.com/en/people/e/efron-william-hallettwilliam.efron@arnoldporter.comTheresa M. Househttps://www.arnoldporter.com/en/people/h/house-theresa-mtheresa.house@arnoldporter.comJami Vibberthttps://www.arnoldporter.com/en/people/v/vibbert-jamijami.vibbert@arnoldporter.comClaire W. Dennishttps://www.arnoldporter.com/en/people/d/dennis-claireclaire.dennis@arnoldporter.comJoin BBB National Programs and Arnold &amp; Porter for an exclusive in-person educational and networking event.Wed, 11 Mar 2026 00:00:00 -0500<p>Join BBB National Programs and Arnold &amp; Porter for an exclusive in-person educational and networking event on March 11, 2026, at Arnold &amp; Porter&rsquo;s New York office. As advertising and promotional practices in the life sciences industry face increased scrutiny from the FDA, FTC, and private litigants, this &ldquo;Hot Topics&rdquo; program will provide tips on managing risks in product promotion while exploring how the National Advertising Division (NAD) helps companies hold competitors accountable.</p> <p>Participate in this lunch-and-learn session focused on key issues in medical product promotion, including:</p> <ul> <li>Claim substantiation requirements</li> <li>Partnerships with Key Opinion Leaders and influencers</li> <li>Artificial intelligence in advertising and promotion</li> <li>Privacy considerations and risks, including with respect to text messaging and online tracking</li> <li>Automatically renewing subscriptions and other negative option programs</li> <li>Consumer reviews and endorsements</li> <li>Addressing competitor noncompliance</li> <li>Using the NAD process to challenge competitor claims</li> <li>Talent-influencer agreements/best practices</li> </ul> <p>Please note that no virtual option is available, and capacity is limited. Register by March 2, 2026. This event is invite-only and exclusive to corporate representatives. For inquiries, contact <a href="mailto:events@bbbnp.org?subject=NY%20Roundtable%20on%20Pharma%20and%20Medtech%20Promotion">events@bbbnp.org</a>.</p> <p>We look forward to your participation!</p>{E7AD81FE-4674-4994-8845-2F14C454F810}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/eun-young-choi-discusses-sdny-ai-privilege-ruling-with-global-investigations-reviewEun Young Choi, Arnold &amp; Porter White Collar Defense &amp; Investigations partner and former Deputy Assistant Attorney General in the National Security Division at the U.S. Department of Justice, was quoted in the <em>Global Investigations Review</em> article, &ldquo;Landmark AI ruling could &lsquo;pop the balloon&rsquo; of attorney-client privilege,&rdquo; discussing a recent U.S. District Court for the Southern District of New York decision addressing when legal privilege protects AI-generated content.&nbsp;Wed, 11 Mar 2026 00:00:00 -0500<p>Eun Young Choi, Arnold &amp; Porter White Collar Defense &amp; Investigations partner and former Deputy Assistant Attorney General in the National Security Division at the U.S. Department of Justice, was quoted in the <em>Global Investigations Review</em> article, &ldquo;Landmark AI ruling could &lsquo;pop the balloon&rsquo; of attorney-client privilege,&rdquo; discussing a recent U.S. District Court for the Southern District of New York decision addressing when legal privilege protects AI-generated content. </p> <p>Eun Young explained that companies should understand how and in which jurisdictions their employees are using AI tools, as government authorities in some countries may have easier access to AI data than others. AI data stored on U.S. servers, for example, may be accessible to U.S. government agencies even when the company is headquartered outside the U.S. </p> <p>&ldquo;You have to look at every single instance in which third-party AI tools and models may be integrated into the applications that are being used, because each touch point is a new way that the data could be placed at risk,&rdquo; she said. </p> <p>She also noted that courts will continue to examine this issue across a wide range of contexts, including criminal cases like this one and employment disputes, internal investigations, and civil litigation.</p> <p>&ldquo;It&rsquo;s only the first in what will be many new scenarios that courts will have to grapple with in the years to come,&rdquo; Eun Young said. &ldquo;Not even years &ndash; months to come.&rdquo; </p> <p><a rel="noopener noreferrer" href="https://globalinvestigationsreview.com/just-anti-corruption/article/landmark-ai-ruling-could-pop-the-balloon-of-attorney-client-privilege" target="_blank">Read the full article</a> (subscription required). </p>{8D9ED067-BDE0-4196-A775-A492E91A3DFE}https://www.arnoldporter.com/en/perspectives/news/2026/03/arnold-porter-represents-esteve-in-finalizing-its-acquisition-of-tersera-ist-unitArnold &amp; Porter recently advised ESTEVE in completing its acquisition of TerSera Therapeutics LLC&rsquo;s Infusion Specialty Therapies (IST) business unit, including two specialty medications: Prialt^&reg; (ziconotide intrathecal infusion) and Quzyttir&reg; (cetirizine hydrochloride injection).&nbsp;Wed, 11 Mar 2026 00:00:00 -0500<p>Arnold &amp; Porter recently advised ESTEVE in completing its acquisition of TerSera Therapeutics LLC&rsquo;s Infusion Specialty Therapies (IST) business unit, including two specialty medications: Prialt^&reg; (ziconotide intrathecal infusion) and Quzyttir^&reg; (cetirizine hydrochloride injection). </p> <p>With this transaction, ESTEVE has obtained worldwide rights for Quzyttir^&reg; in all territories (except for China) and consolidated its rights for Prialt^&reg; worldwide.</p> <p>The Arnold &amp; Porter team included partners Tracy Belton, Wayne Janke, and Jeremy Willcocks and senior associates Colleen Couture and Alexus Williams. Partners Kristin Hicks and Liz Lindquist and senior associates Sunha Cha, Phillip DeFedele, and Jonathan Trinh assisted with healthcare regulatory matters. Partners Debbie Feinstein and Bill Efron and counsel Barbara Wootton assisted with U.S. antitrust matters. Partners Zeno Frediani and John Schmidt assisted with international antitrust matters. Counsel Kathleen Wechter and senior associate Kathryn Geoffroy assisted with employee benefits and labor matters. Partner Laurie Abramowitz and associate Sean Kavanaugh assisted with tax matters. Senior counsel Sheryl Gittlitz assisted with finance matters. Counsel Nancy Perkins assisted with CFIUS and data privacy matters. Partner Soo-Mi Rhee and senior associate Junghyun Baek assisted with export control and sanctions matters. Partner Bobby McMillin assisted with legislative and public policy matters. Partner Carmela Romeo and senior associate Sarah Prather assisted with litigation matters. Associates Ally Krenos and Alexis Sabet also assisted in the transaction.</p>{603AB242-58A7-4E7F-989E-D6A8087784A6}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/lessons-from-johnson-and-johnson-v-fortisAngela R. Vicarihttps://www.arnoldporter.com/en/people/v/vicari-angela-rangela.vicari@arnoldporter.comRebecca Maller-Steinhttps://www.arnoldporter.com/en/people/m/maller-stein-rebeccarebecca.maller-stein@arnoldporter.com<p>In January 2026, the Delaware Supreme Court issued a significant decision in <em>Johnson &amp; Johnson v. Fortis Advisors LLC</em>, a high‑stakes dispute arising from a $5.75 billion acquisition of medical‑robotics company Auris Health, Inc. The deal included up to $2.35 billion in contingent earnouts tied to U.S. Food and Drug Administration (FDA) regulatory milestones for Auris&rsquo; iPlatform and Monarch robotic-assisted surgical devices (RASDs). None of the milestones were achieved following a change in the FDA&rsquo;s required clearance pathway for certain RASDs, and the former stockholders of Auris (through plaintiff Fortis Advisors) sued Johnson &amp; Johnson for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p>Wed, 11 Mar 2026 00:00:00 -0500<p> <p>In January 2026, the Delaware Supreme Court issued a significant decision in <em>Johnson &amp; Johnson v. Fortis Advisors LLC</em>, a high<span>‑</span>stakes dispute arising from a $5.75 billion acquisition of medical<span>‑</span>robotics company Auris Health, Inc. The deal included up to $2.35 billion in contingent earnouts tied to U.S. Food and Drug Administration (FDA) regulatory milestones for Auris&rsquo; iPlatform and Monarch robotic-assisted surgical devices (RASDs). None of the milestones were achieved following a change in the FDA&rsquo;s required clearance pathway for certain RASDs, and the former stockholders of Auris (through plaintiff Fortis Advisors) sued Johnson &amp; Johnson (J&amp;J) for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud.</p> <p>After a 10-day trial and post<span>‑</span>trial judgment from the Delaware Court of Chancery exceeding $1 billion, the Delaware Supreme Court (the Court) affirmed most of the Court of Chancery&rsquo;s findings at trial, including breach of the &ldquo;commercially reasonable efforts&rdquo; clause (CRE) in the parties&rsquo; merger agreement and fraud in the inducement. The Court reversed only on the implied covenant of good faith and fair dealing claim, holding that because the contract explicitly conditioned earnouts on 510(k) clearance, once FDA required a De Novo pathway instead of 510(k) clearance for iPlatform&rsquo;s first indication, the implied covenant did not require J&amp;J to pursue the alternative pathway to meet the first regulatory milestone.</p> <p>The Court remanded for recalculation of the interest award after removing the Milestone 1 payment from the damages calculation.</p> <h2>Key Holdings</h2> <p>Despite reversing the Court of Chancery on only one claim, the Court made a number of key holdings in its decision:</p> <ul> <li><strong>Breach of Implied Covenant (Reversed)<br /> </strong>The Court held that the earnout provisions repeatedly conditioned payment of regulatory milestones on obtaining 510(k) premarket clearance. Therefore, the risk that FDA might require an alternative regulatory pathway for approval was foreseeable and was allocated in the contract to Auris&rsquo; stockholders. The implied covenant did not apply because it is relevant only where, unlike here, there is a contractual &ldquo;gap&rdquo; to fill.<br /> <br /> The Court&rsquo;s reversal on the merits of the good faith and fair dealing finding, however, changed the result only with respect to the first regulatory milestone. As to subsequent regulatory milestones, the Court held that J&amp;J remained obligated to use CRE to pursue 510(k) approval, including by seeking De Novo approval for an initial indication where necessary to facilitate 510(k) clearance for subsequent indications.</li> <li><strong>Breach of Commercially Reasonable Efforts (Affirmed)<br /> </strong>The Court upheld detailed factual findings supporting the trial court&rsquo;s holding that J&amp;J breached its inward‑facing CRE obligation for the remaining iPlatform regulatory milestones, which required J&amp;J to devote efforts commensurate with its own &ldquo;priority medical devices&rdquo; (MVP). Although J&amp;J had discretion in how to meet its obligation to exercise CRE, the trial court held that J&amp;J&rsquo;s discretion was not &ldquo;free floating.&rdquo; For example, the Court affirmed that J&amp;J was not &ldquo;permitted to prioritize commercialization, product differentiation, or short-term profitability at the expense of achieving the milestones.&rdquo; According to the Court, J&amp;J&rsquo;s conduct in launching &ldquo;Project Manhattan,&rdquo; an internal competition between iPlatform and J&amp;J&rsquo;s pre-existing RASD &ldquo;Verb&rdquo; device, merging the Auris and Verb teams in a way that hindered development of iPlatform, abandoning Auris&rsquo; MVP regulatory strategy, and altering prior incentives for employees based on achieving regulatory milestones (among other things) collectively constituted a breach of J&amp;J&rsquo;s affirmative obligation to exercise CRE to achieve each regulatory milestone.</li> <li><strong>Fraud in the Inducement (Affirmed)<br /> </strong>Although the trial court determined that certain of J&amp;J&rsquo;s alleged misstatements were &ldquo;the sort of fluffy platitudes made during negotiations that no rational prospective investor would find material,&rdquo; it also held that one of Fortis&rsquo; fraud theories was &ldquo;markedly different than the others.&rdquo; Specifically, the Court affirmed the finding that J&amp;J fraudulently induced Auris to accept a $100 million &ldquo;Soft Tissue Ablation Milestone&rdquo; by stating that there was such a &ldquo;high certainty&rdquo; of achieving the milestone that J&amp;J viewed it as an &ldquo;&lsquo;effective&rsquo; up front payment.&rdquo;<br /> <br /> The Court determined that this statement actively concealed certain facts, including J&amp;J&rsquo;s knowledge of (1) a patient death in a study of a separate device, (2) an FDA for‑cause investigation, and (3) expected delays as a result.The Court rejected J&amp;J&rsquo;s argument that the agreement&rsquo;s &ldquo;standard&rdquo; integration clause barred Fortis&rsquo; fraud claim. Because the merger agreement contained an asymmetric anti-reliance provision in which only J&amp;J disclaimed reliance on extra-contractual representations, Auris was not barred from relying on extra‑contractual statements by J&amp;J.</li> </ul> <h2>Key Takeaways</h2> <p>There are a number of key takeaways from this decision for pharma, med-tech, device, and other life sciences companies that are parties to agreements with earnouts:</p> <ol> <li><strong><em>Highly fact-intensive and science-based earnout disputes often rise and fall with the trial court&rsquo;s factual determinations</em></strong>. The Delaware Supreme Court applies a high burden to overturning factual findings and is likely to defer to the trial court.</li> <li><strong><em>Bespoke CRE factors will be read as part of the agreement as a whole</em></strong>. Although the agreement at issue in Fortis included 10 CRE factors that J&amp;J could consider to &ldquo;calibrate&rdquo; its efforts, these negotiated factors were subject to what the Court identified as a priority medical device &ldquo;baseline&rdquo; and the parties&rsquo; inclusion of a prohibition against J&amp;J taking any action with the intent of avoiding an earnout payment.</li> <li><strong><em>The implied covenant of good faith and fair dealing cannot be used to impose obligations that were foreseeable when the contract was executed</em></strong>. Delaware courts will not loosely apply the implied covenant to impose unexpressed duties where a foreseeable shift in the regulatory landscape transpires after closing.&nbsp;</li> <li><strong><em>Anti-reliance provisions matter</em></strong>. A standard integration clause with a one-way anti-reliance provision by which only the buyer disclaims reliance will not operate to bar a fraud claim by a seller.&nbsp;</li> </ol> </p> <p><span>&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p> <p>&nbsp;</p>{3F87B2CA-7EEC-4BE6-8FE6-2A23BC03E8AC}https://www.arnoldporter.com/en/perspectives/events/2026/03/policy-briefing-status-of-federal-permitting-reform-and-implications-for-infrastructure-energyEthan G. Shenkmanhttps://www.arnoldporter.com/en/people/s/shenkman-ethan-gethan.shenkman@arnoldporter.comBree Raumhttps://www.arnoldporter.com/en/people/r/raum-breebree.raum@arnoldporter.comAre you prepared for the new policy, regulatory, and litigation landscape that successful congressional action on permitting reform could bring?Tue, 10 Mar 2026 00:00:00 -0500<p>Are you prepared for the new policy, regulatory, and litigation landscape that successful congressional action on permitting reform could bring?</p> <p>As Congress and the administration pursue policy changes to environmental review, agency coordination, and project-approval timelines, permitting reform has emerged as a central issue shaping the future of infrastructure, energy, manufacturing, and critical-minerals development. Recent legislative proposals, executive actions, and judicial developments exhibit renewed interest in policy reform, alongside renewed political challenges to finding a bipartisan solution. These renewed efforts signal a potentially significant shift in how major projects are reviewed, approved, and challenged.</p> <p>Our policy briefing, led by key congressional policy advisors and expert litigators, will provide a high-level discussion of:</p> <ul> <li>Key elements of congressional federal permitting reform proposals and areas of bipartisan alignment</li> <li>Implications for NEPA reviews, agency coordination, and project timelines</li> <li>Risks and opportunities for infrastructure, energy, and industrial project developers</li> <li>How federal and state permitting legislation may interact</li> <li>Strategic considerations for stakeholders navigating an evolving permitting landscape</li> </ul>{8D5DAFB4-096E-4326-8CF5-912F8687A4FF}https://www.arnoldporter.com/en/perspectives/events/2026/03/antitrust-2026-and-beyond-a-global-outlook-on-competition-enforcement-part-4Laura Shoreshttps://www.arnoldporter.com/en/people/s/shores-lauralaura.shores@arnoldporter.comDaniel B. Asimowhttps://www.arnoldporter.com/en/people/a/asimow-daniel-bdaniel.asimow@arnoldporter.comAlastair Brownhttps://www.arnoldporter.com/en/people/b/brown-alastairalastair.brown@arnoldporter.com Join members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world.Tue, 10 Mar 2026 00:00:00 -0500<p>Join members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world. We will examine the most significant antitrust developments of 2025, assess how the new U.S. administration has reshaped enforcement priorities, and analyze how international antitrust authorities are expanding their reach. For businesses operating globally, these converging forces are creating a regulatory environment that is more complex, more fragmented, and demands closer attention than ever.</p> <p>Featuring partners and counsel from our U.S., London, and Brussels offices, this series will provide a forward-looking assessment of where antitrust enforcement is headed across key areas, including mergers, cartel and criminal enforcement, and litigation. Our lawyers will offer practical insights to help businesses understand recent developments, anticipate risks, align strategy, and navigate competition issues in 2026 and beyond.</p> <h2>Part IV: Antitrust Litigation &mdash; Preparing for the Next Wave of Disputes</h2> <p>In the final session, Arnold &amp; Porter&rsquo;s antitrust litigators will analyze key litigation trends shaping the antitrust landscape. The panel will discuss recent case law, evolving theories of harm, and the potential impact of regulatory and enforcement shifts on private and government litigation. With insights from both U.S. and European perspectives, this program will help businesses prepare for future disputes and navigate increasingly complex antitrust litigation risks.</p>{1A00D4E6-1D10-4296-85D6-4CFBFC9B2AB6}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/judah-prero-quoted-in-bloomberg-law-on-epa-chemical-policy-signalsJudah Prero, Arnold &amp; Porter Environmental counsel and former Assistant State Attorney General at the Maryland Department of the Environment, was recently quoted in the <em>Bloomberg Law</em> article, &ldquo;EPA&rsquo;s Paused Chemical Lawsuits Offer Path to Regulatory Overhaul.&rdquo;&nbsp;Tue, 10 Mar 2026 00:00:00 -0500<p>Judah Prero, Arnold &amp; Porter Environmental counsel and former Assistant State Attorney General at the Maryland Department of the Environment, was recently quoted in the <em>Bloomberg Law</em> article, &ldquo;EPA&rsquo;s Paused Chemical Lawsuits Offer Path to Regulatory Overhaul.&rdquo; The article examines how the Environmental Protection Agency (EPA) is signaling potential shifts in chemical policy through litigation over Biden-era regulations and notes that tracking the positions the agency takes and the requests it makes in ongoing cases may offer insight into the policies the Trump Administration is working toward.</p> <p>Judah explained that ongoing court challenges to several Toxic Substances Control Act (TSCA) rules &mdash; including those addressing risk determinations, worker protections, and chemical exposure limits &mdash; are providing a window into how the agency may revise its regulatory approach while litigation proceeds.</p> <p>Among the potential changes Judah highlighted is uncertainty about how EPA may regulate workplace exposures, including the possibility of moving away from reliance on Integrated Risk Information System (IRIS) toxicity values for certain chemicals. He also discussed how the EPA may interpret TSCA as allowing the agency to exclude certain uses and exposure pathways from risk evaluations and, in some cases, defer regulation to other EPA programs or to other federal agencies.</p> <p><a rel="noopener noreferrer" href="https://news.bloomberglaw.com/environment-and-energy/epas-paused-chemical-lawsuits-offer-path-to-regulatory-overhaul?context=search&amp;index=0" target="_blank">Read the full article</a> (subscription required).</p>{E1F7D2DF-03DD-4F57-9D16-DE09E0580388}https://www.arnoldporter.com/en/perspectives/news/2026/03/natalie-sinzig-joins-arnold-porters-intellectual-property-technology-practice-in-san-franciscoArnold &amp; Porter announced today that Natalie Sinzig has joined the firm&rsquo;s Intellectual Property &amp; Technology practice as counsel in San Francisco.&nbsp;Mon, 09 Mar 2026 00:00:00 -0500<p>Arnold &amp; Porter announced today that Natalie Sinzig has joined the firm&rsquo;s Intellectual Property &amp; Technology practice as counsel in San Francisco. </p> <p>Natalie is an accomplished IP litigator with significant experience leading high-stakes patent, trade secret, and copyright disputes across a broad range of technologies. Her practice spans complex matters involving AI and machine learning, medical devices, solar panels, wireless networks, radio frequency identification systems, semiconductors, batteries, and digital mobile radios. </p> <p>With over a decade of experience, Natalie has handled matters in both state and federal courts as well as before the Patent Trial and Appeal Board. She has successfully guided clients through all phases of litigation &mdash; from pre-suit investigations and discovery through trial strategy and post-trial proceedings &mdash; delivering favorable outcomes in high-value matters. She also publishes thought leadership on IP and cybersecurity matters impacting technology companies.</p> <p>Prior to joining Arnold &amp; Porter, Natalie was a partner in the IP Litigation group at a top-ranked Am Law 100 firm, where she managed critical aspects of motion practice, witness preparation, expert strategy, and trial execution in complex technology disputes by translating highly technical subject matter into compelling courtroom narratives. </p> <p>Natalie earned her J.D. from the University of California, Berkeley, School of Law, where she received a Law &amp; Technology Certificate. She also holds a B.A., <em>magna cum laude</em>, from the University of California, Berkeley.</p>{70E1B868-C1DD-41DB-885E-B0460350F881}https://www.arnoldporter.com/en/perspectives/news/2026/03/arnold-porter-continues-west-coast-expansion<strong>SEATTLE, March 9, 2026</strong> &mdash; Arnold &amp; Porter announced today that Rhys Hefta, a lawyer with over 15 years of experience in Seattle, has joined the firm&rsquo;s Real Estate practice as a partner, resident in Seattle.&nbsp;Mon, 09 Mar 2026 00:00:00 -0500<p><strong>SEATTLE, March 9, 2026</strong> &mdash; Arnold &amp; Porter announced today that Rhys Hefta, a lawyer with over 15 years of experience in Seattle, has joined the firm&rsquo;s Real Estate practice as a partner, resident in Seattle. </p> <p>The firm&rsquo;s Seattle office serves as a hub for regulatory, litigation, and transactional work across key practices, including real estate, as well as class actions, complex commercial litigation, corporate transactions, employment disputes, technology transactions, and healthcare and hospital matters. With Rhys&rsquo; arrival, Arnold &amp; Porter&rsquo;s team in the heart of downtown Seattle has increased to 36 attorneys and staff since opening the office in July 2025. Building on this steady and purposeful growth, the firm expects to continue expanding its team in the region. </p> <p>Pallavi Mehta Wahi, Arnold &amp; Porter Chair of Western U.S. Strategic Growth and head of the Seattle office, said: &ldquo;Rhys is an excellent lawyer with deep experience and strong credentials. He has grown an impressive practice in real estate financing focused on sophisticated transactions for lender and borrower clients and is an analytical, thoughtful, strategic adviser. I am confident he will be instrumental in supporting our Real Estate team as we continue to grow on the West Coast and in Seattle.&rdquo;</p> <p>Rhys has a broad real estate finance practice, advising clients across a range of real estate asset classes, including office, hospitality, retail, multifamily, industrial/logistics, and senior housing. He represents commercial real estate lenders &mdash;&nbsp;from life insurance companies to Wall Street investment banks and foreign financial institutions &mdash;&nbsp;and counsels them on loan originations, structuring, purchases and sales, securitizations, syndications, joint ventures, workouts, and restructurings. He regularly advises lenders on complex senior and subordinate financings, multi‑state portfolio deals, and transactions involving mezzanine debt and preferred equity. In addition, Rhys advises landlord and tenants on commercial leasing matters and assists owners in negotiating asset, property management, and franchise agreements.</p> <p>In joining the firm, Rhys said: &ldquo;Arnold &amp; Porter&rsquo;s Real Estate group, which actively advises an array of clients on finance, agribusiness, joint venture, and development matters, is an excellent fit for my practice. I am pleased to be joining my new colleagues, both in Seattle and across the firm&rsquo;s well-established real estate platform, and to be part of a regulatory platform of Arnold &amp; Porter&rsquo;s stature in Seattle.&rdquo; </p> <p>Rhys holds a J.D. from Columbia Law School, where he was a Harlan Fiske Stone Scholar, and a B.A. from the University of Washington, <em>cum laude</em>. </p> <h3>About Arnold &amp; Porter</h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{1A566552-E648-4645-9C1C-98440D580F40}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/sec-exempts-insiders-of-certain-fpis-from-section-16-reportingSara Adlerhttps://www.arnoldporter.com/en/people/a/adler-sarasara.adler@arnoldporter.comJoel I. Greenberghttps://www.arnoldporter.com/en/people/g/greenberg-joel-ijoel.greenberg@arnoldporter.com<p>The Holding Foreign Insiders Accountable Act (HFIAA) amended Exchange Act Section 16(a) to require directors and officers of foreign private issuers with a class of equity securities registered under Section 12 of the Exchange Act (FPIs) to file Section 16 reports. On February 27, 2026, the SEC adopted amendments, described <a href="https://www.arnoldporter.com/en/perspectives/advisories/2026/03/sec-adopts-final-rules-reflecting-the-requirements-of-the-holding-foreign-insiders-accountable-act">here</a>, to various rules and forms to reflect those requirements. The HFIAA also authorized the SEC to grant exemptions from Section 16 reporting requirements if it determines that the laws of a foreign jurisdiction apply substantially similar requirements. On March 5, 2026, the SEC exercised such authority by issuing the <a rel="noopener noreferrer" href="https://www.sec.gov/files/rules/exorders/2026/34-104931.pdf" target="_blank">order</a> described below.</p>Mon, 09 Mar 2026 00:00:00 -0500<p>The Holding Foreign Insiders Accountable Act (HFIAA) amended Exchange Act Section 16(a) to require directors and officers of foreign private issuers with a class of equity securities registered under Section 12 of the Exchange Act (FPIs) to file Section 16 reports. On February 27, 2026, the SEC adopted amendments, described <a href="https://www.arnoldporter.com/en/perspectives/advisories/2026/03/sec-adopts-final-rules-reflecting-the-requirements-of-the-holding-foreign-insiders-accountable-act">here</a>, to various rules and forms to reflect those requirements. The HFIAA also authorized the SEC to grant exemptions from Section 16 reporting requirements if it determines that the laws of a foreign jurisdiction apply substantially similar requirements. On March 5, 2026, the SEC exercised such authority by issuing the <a rel="noopener noreferrer" href="https://www.sec.gov/files/rules/exorders/2026/34-104931.pdf" target="_blank">order</a> described below.</p> <p>The order exempts from the reporting requirements of Section 16(a) the directors and officers of any FPI that is: (i) incorporated or organized in one of the following &ldquo;qualifying jurisdictions&rdquo;: Canada; Chile; the European Economic Area (EEA)[[N:As of the date of the order, the EEA consists of the 27 member states of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden) as well as Iceland, Liechtenstein, and Norway. ]]; the Republic of Korea; Switzerland; or the United Kingdom, and (ii) subject to specified &ldquo;qualifying regulations&rdquo; of a qualifying jurisdiction (which need not be the same as the jurisdiction in which it is incorporated)[[N:Canada&rsquo;s National Instrument 55-104 &ndash; Insider Reporting Requirements and Exemptions (supported by National Instrument 55-102 &ndash; System for Electronic Disclosure by Insiders (SEDI) and companion policies); Articles 12, 17, and 20 of the Chilean Securities Market Law and General Rule No. 269; Article 19 of the European Union Market Abuse Regulation (Regulation (EU) No. 596/2014, as amended by Regulation (EU) No. 2024/2809) (including, as applicable, implementing legislation and regulations adopted by the European Union&rsquo;s member states) and as incorporated into the domestic law of each European Economic Area state; Article 173 of the Republic of Korea Financial Investment Services and Capital Markets Act and Article 200 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; Article 56 of the Listing Rules and implementing directives of SIX Swiss Exchange as approved by the Swiss Financial Market Supervisory Authority; and Article 19 of the United Kingdom Market Abuse Regulation (Regulation (EU) No. 596/2014), as it forms part of United Kingdom domestic law pursuant to the European Union (Withdrawal) Act 2018. The term &ldquo;qualifying regulations&rdquo; includes any successor regulations that are materially the same as the regulations set forth above. Note that the SEC may reassess and modify the order if there are future changes to the qualifying regulations or other relevant changes in the jurisdiction of incorporation sufficiently material such that the qualifying regulations are no longer substantially similar to the requirements of Section 16(a).]].</p> <p>The exemption granted by the order is subject to the following conditions: (i) any director or officer seeking to rely on the exemption must be required to report their transactions in the issuer&rsquo;s securities under the applicable qualifying regulation;[[N:Directors and officers who are not required to report their transactions under the applicable qualifying regulation cannot rely on this exemption and remain subject to the filing requirements of Section 16(a).]] and (ii) any report filed pursuant to a qualifying regulation must be made available in English to the general public within no more than two business days of its public posting. If an English version of the report cannot be filed through an appropriate regulator&rsquo;s (or listing venue&rsquo;s) online database, then the report may be made publicly available on the relevant company&rsquo;s website.</p> <p>The SEC may exercise its exemptive authority from time to time to extend exemptive relief to the directors and officers of FPIs incorporated or organized, and subject to regulation, in other jurisdictions that set forth requirements substantially similar to Section 16(a) requirements. Any such relief would be granted in separate SEC orders.&nbsp; &nbsp;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{5C256261-0012-442D-B999-937FA26192D2}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/two-weeks-after-scotus-rulingHenry D. Almondhttps://www.arnoldporter.com/en/people/a/almond-henry-dhenry.almond@arnoldporter.comJ. David Parkhttps://www.arnoldporter.com/en/people/p/park-j-daviddavid.park@arnoldporter.comLynn Fischer Foxhttps://www.arnoldporter.com/en/people/f/fischer-fox-lynnlynn.fischerfox@arnoldporter.comClaire E. Readehttps://www.arnoldporter.com/en/people/r/reade-claireclaire.reade@arnoldporter.comBrian Bombassarohttps://www.arnoldporter.com/en/people/b/bombassaro-brianbrian.bombassaro@arnoldporter.comKang Woo Leehttps://www.arnoldporter.com/en/people/l/lee-kang-wookangwoo.lee@apks.com Archana Rao Vasahttps://www.arnoldporter.com/en/people/v/vasa-archana-raoarchana.vasa@arnoldporter.comEllie Farrinhttps://www.arnoldporter.com/en/people/f/farrin-ellieellie.farrin@arnoldporter.comLogan Davishttps://www.arnoldporter.com/en/people/d/davis-loganlogan.davis@arnoldporter.comCaitlin A. Kovalkoskihttps://www.arnoldporter.com/en/people/k/kovalkoski-caitlin-acaitlin.kovalkoski@arnoldporter.com<p>Two weeks on from the Supreme Court&rsquo;s decision invalidating President Trump&rsquo;s tariffs, importers still do not have clarity on how to claim tariff refunds. However, there has been some encouraging movement from the lower courts and potentially from U.S. Customs and Border Protection (CBP). </p> <p>On Monday, March 2, 2026, the U.S. Court of Appeals for the Federal Circuit in <em>V.O.S. Selections, Inc. v. Trump</em> issued a mandate returning the case to the U.S. Court of International Trade (CIT). The Federal Circuit issued the order over objections from the U.S. Department of Justice (DOJ), which argued that the court should allow 90 days to give the &ldquo;political branches an opportunity to consider options.&rdquo; The Federal Circuit&rsquo;s action allowed the CIT to begin taking steps to implement the decision invalidating the tariffs and to consider the process for providing importers with refunds.&nbsp; </p> <p>The CIT acted quickly after receiving the mandate from the Federal Circuit, ruling in a related case, <em>Atmus Filtration, Inc. v. United States</em>, that refunds were due to importers and directing CBP to take action.</p> <p>On March 4, in a somewhat unexpected order issued from the bench during a motion hearing (on a motion that was actually withdrawn prior to the hearing), CIT Senior Judge Richard Eaton found that all importers of record whose entries were subject to the duties invalidated in the Supreme Court&rsquo;s <em>V.O.S. Selections decision </em>are entitled to the benefit of that decision, and ordered U.S. Customs and Border Protection (CBP) to take immediate action. The CIT order required that: </p> <ul> <li>All unliquidated entries entered subject to IEEPA duties invalidated by the Supreme Court decision must be liquidated without regard to those duties; and</li> <li>Any liquidated entries for which liquidation is not yet final must be reliquidated without IEEPA duties</li> </ul> <p>In response to the CIT&rsquo;s Order, the DOJ made an immediate oral motion to suspend the Order and to allow time for the government to appeal. Judge Eaton immediately denied the motion.&nbsp; Instead of appealing, however, on March 6 the U.S. government filed a declaration from a CBP official that provided some details on how the agency might issue tariff refunds. The CBP declaration notes the &ldquo;unprecedented volume of refunds&rdquo; and explains that CBP&rsquo;s existing procedures and technology are not well-suited to the refund task. </p> <p>Following a closed-door status conference on Friday, March 6, Judge Eaton issued orders suspending his March 4 order requiring CBP to begin paying refunds immediately. In addition, Judge Eaton issued an order requiring CBP to provide a status update on their refund process efforts by Thursday, March 12.</p> <p>CBP&rsquo;s declaration does not specifically commit to providing refunds, and we note that the U.S. government may still decide to challenge the CIT&rsquo;s order directing refunds. However, CBP&rsquo;s declaration in response to the refund order provides some indication of how the agency plans to proceed with refunds. The declaration states, &ldquo;CBP is confident that it can develop and implement new ACE functionality that will streamline and consolidate refunds and interest payments on an importer basis, rather than issuing 53,173,939 separate entry-specific refunds with multiple payments going to the same importer.&rdquo;&nbsp; The declaration notes that CBP anticipates a process that will require importers to file declarations listing their duties paid, which would be verified by CBP, followed by Treasury issuing refunds electronically. The CBP filing is limited to the potential procedures the government could use to process refunds, and does not indicate the government&rsquo;s position on a range of issues, including whether it believes that importers would be required to file their own court cases challenging the tariffs in order to be eligible for refunds, or how the government might approach liquidated entries (though the declaration suggests the refund procedures could apply at liquidation or as part of a reliquidation process). </p> <p>Arnold &amp; Porter&rsquo;s trade and tariff refund team continues to monitor developments and can advise clients on the necessary steps to protect their refund rights while these proceedings are pending.&nbsp; </p> <p>For related Arnold &amp; Porter updates on tariff refunds, see:</p> <ul> <li><a href="https://www.arnoldporter.com/en/perspectives/events/2026/03/scotus-tariff-decision-refunds-impacts-and-strategic-considerations">SCOTUS Tariff Decision &ndash; Refunds, Impacts, and Strategic Considerations</a></li> <li><a href="https://www.arnoldporter.com/en/perspectives/advisories/2026/03/the-next-wave-of-tariff-litigation">The Next Wave of Tariff Litigation: Consumer Class Actions</a></li> <li><a href="https://www.arnoldporter.com/en/perspectives/advisories/2026/02/scotus-tariff-decision-impacts-and-next-steps">SCOTUS Tariff Decision Impacts and Next Steps</a></li> </ul> <p><em>*Sally Alghazali contributed to this Advisory. Ms. Alghazali is admitted only in Minnesota; practicing law in Washington, DC during the pendency of her application for admission to Washington, DC Bar and under the supervision of lawyers of the firm who are members in good standing of the State Bar.</em></p> <p><em><div class="pull-quote pull-quote__secondary"> <div class="pull-quote__secondary-container pull-quote__secondary-container--light-blue"> <div class="pull-quote__quote-container pull-quote__quote-container--secondary"> <div class="pull-quote__quote">Questions About the SCOTUS Tariff Decision?</div> <div class="pull-quote__attribution">The Supreme Court’s ruling on tariff authority marks a pivotal shift in trade policy. As potential refund pathways develop for tariffs already paid, our International Trade team is actively tracking changes and advising clients on potential next steps. Contact us to explore strategies tailored to your business.</div> </div> </div> <div class="pull-quote__image" style="background-image: url('/-/media/images/homepage-tiles/horizontals/2026/gettyimages2207393977-tarrifs-850x320px.jpg?rev=3c596f7b0f504b989ad790680241d56a&amp;hash=17973B96BAC517C453624569F3533712');"></div> </div> </em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>Mon, 09 Mar 2026 00:00:00 -0500{F8D7C528-10B8-4B1C-ABAB-EB28B4E69E45}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/implementing-the-genius-act-the-occ-proposes-comprehensive-rulemakingEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comDavid F. Freeman, Jr.https://www.arnoldporter.com/en/people/f/freeman-david-fDavid.Freeman@arnoldporter.comAmber A. Hayhttps://www.arnoldporter.com/en/people/h/hay-amber-aamber.hay@arnoldporter.comAnthony Raglanihttps://www.arnoldporter.com/en/people/r/raglani-anthonyanthony.raglani@arnoldporter.comKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comAdrien K. Andersonhttps://www.arnoldporter.com/en/people/a/anderson-adrien-kadrien.anderson@arnoldporter.comJames Moeshttps://www.arnoldporter.com/en/people/m/moes-jamesjames.moes@arnoldporter.comOn February 25, 2026, the Office of the Comptroller of the Currency (OCC) issued a Notice of Proposed Rulemaking (Proposal) to implement a comprehensive federal payment stablecoin regulatory regime for OCC-supervised entities under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).&nbsp;This Advisory provides an overview of the OCC&rsquo;s Proposal and its potential implications if adopted as proposed. First, we discuss the Proposal&rsquo;s scope and licensing and registration requirements.Mon, 09 Mar 2026 00:00:00 -0500<p>On February 25, 2026, the Office of the Comptroller of the Currency (OCC) issued a <a rel="noopener noreferrer" href="https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-3.html" target="_blank">Notice of Proposed Rulemaking</a> (Proposal) to implement a comprehensive federal payment stablecoin regulatory regime for OCC-supervised entities under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The Proposal marks a pivotal step in implementing the GENIUS Act and follows recent narrower rules proposed by the Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) to establish application procedures for entities subject to FDIC and NCUA supervision that may seek approval to become permitted payment stablecoin issuers (PPSIs).[[N: <em>See</em> FDIC, <em><a rel="noopener noreferrer" href="https://www.fdic.gov/news/press-releases/2025/fdic-approves-proposal-establish-genius-act-application-procedures-fdic" target="_blank">FDIC Approves Proposal to Establish GENIUS Act Application Procedures for FDIC-Supervised Institutions Seeking to Issue Payment Stablecoins</a></em> (Dec. 16, 2025); <em>see also</em> NCUA, <em><a rel="noopener noreferrer" href="https://ncua.gov/newsroom/press-release/2026/ncua-proposes-rule-permitted-payment-stablecoin-issuer-applications" target="_blank">NCUA Proposes Rule for Permitted Payment Stablecoin Issuer Applications</a></em> (Feb. 11, 2026).]]</p> <p>This Advisory provides an overview of the OCC&rsquo;s Proposal and its potential implications if adopted as proposed. First, we discuss the Proposal&rsquo;s scope and licensing and registration requirements. Second, we summarize the proposed regulatory environment and ongoing requirements for licensed entities, including standards applicable to PPSIs and custodians, and provide an overview of the key areas for comment during the 60-day comment period. </p> <p>This Advisory is part of a series by Arnold &amp; Porter covering the evolution of the digital asset landscape in the U.S. For information about the adoption of stablecoin legislation, including an overview and analysis of the GENIUS Act, please see our <em><a href="/en/perspectives/advisories/2025/07/new-stablecoin-legislation-analyzing-the-genius-act">What You Need to Know About the New Stablecoin Legislation</a></em> Advisory.</p> <h2>The Proposed Rule</h2> <p>The Proposed Rule would create a new OCC regulation &mdash; to be codified as 12 C.F.R. Part 15 &mdash; and would also amend existing OCC regulations under Parts 3, 6, 8, and 19. Among other things, the Proposal seeks to establish risk management, capital, liquidity, and custody requirements, bring issuers of payment stablecoins into the OCC&rsquo;s existing enforcement framework, and develop standards for payment stablecoin activities conducted by OCC-supervised entities under the GENIUS Act. The Proposal would also establish standards regarding reserve asset composition and diversification, redemption policy requirements and mechanics, and custody of payment stablecoins. The breadth of the OCC&rsquo;s proposed regulatory framework signals that institutions considering entry into the payment stablecoin market will face robust licensing and ongoing regulatory compliance obligations.</p> <h3>Scope, Applicability, and Licensing and Registration Requirements </h3> <p>The Proposal would apply to national banks, federal savings associations, and federal branches, and, in each case, their subsidiaries, as well as nonbank entities that are approved as federal qualified payment stablecoin issuers (FQPSIs) (including certain nonbank entities, uninsured national banks, and federal branches), certain state qualified payment stablecoin issuers (SQPSIs), and foreign payment stablecoin issuers registered with the OCC.[[N: <a rel="noopener noreferrer" href="https://www.occ.gov/news-issuances/news-releases/2026/nr-occ-2026-9a.pdf" target="_blank">Regulations on Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency: Notice of Proposed Rulemaking</a>, &sect; 15.1.]] The Proposal clarifies that, notwithstanding the broader statutory definition of &ldquo;permitted payment stablecoin issuer,&rdquo; proposed Part 15 would apply only to entities within the OCC&rsquo;s supervisory jurisdiction. The OCC would exercise its enforcement authority under Section 5 of the GENIUS Act using the OCC&rsquo;s existing enforcement framework.[[N: The Proposal would incorporate payment stablecoin issuers into the OCC&rsquo;s existing enforcement structure by amending Part 19.]]</p> <p>The Proposal also identifies several GENIUS Act provisions as self-executing &mdash; particularly those addressing federal preemption and exclusive OCC supervision of federal qualified issuers &mdash; and therefore does not propose to codify those provisions. The OCC requests comments on whether codification would promote clarity.</p> <h3>Approval to Issue&nbsp;&mdash; Application Procedures and Requirements</h3> <p>If adopted, the Proposal would require any insured national bank, federal savings association, or insured federal branch that seeks to issue payment stablecoins through a subsidiary to file an application and receive prior OCC approval before issuing payment stablecoins.[[N: &sect; 15.30.]] Nonbank entities, uninsured national banks, and uninsured federal branches likewise would be required to obtain OCC approval before issuing payment stablecoins. The OCC proposes that applications include information sufficient for it to assess the entity&rsquo;s financial condition and resources, compliance capabilities, and redemption policies; the competence, experience, and integrity of directors, officers, and principal shareholders; and its ability to operate in a safe-and-sound manner.</p> <p>The OCC would determine whether the application is &ldquo;substantially complete&rdquo; and render a decision within 120 days of that determination. The OCC could deny an application only if the applicant&rsquo;s activities would be unsafe or unsound based on statutory factors. </p> <h3>State and Foreign Issuers</h3> <p>State issuers generally are not subject to OCC supervision, but the Proposal establishes a mechanism to bring large state-chartered issuers into the federal framework. SQPSIs exceeding $10 billion in &ldquo;outstanding issuance value&rdquo; must transition to federal oversight within 360 days unless granted a waiver.[[N: &sect; 15.15.]] The Proposal would define &ldquo;outstanding issuance value&rdquo; to mean the total consolidated par value of all of a payment stablecoin issuer&rsquo;s payment stablecoins, and would include the combined total par value of different brands of payment stablecoin issued by the payment stablecoin issuer (e.g., those issued under a white label arrangement).[[N: &sect; 15.2. The OCC notes the proposed definition of &ldquo;outstanding issuance value&rdquo; would only include payment stablecoins issued by the issuer and the issuer&rsquo;s consolidated subsidiaries.&nbsp; It would not include payment stablecoins issued by the issuer&rsquo;s non-consolidated affiliates.]]</p> <p>Waiver determinations hinge on state regime comparability and supervisory history. Although state issuers that do not meet the $10 billion threshold would not be supervised by the OCC or subject to federal regulation, the GENIUS Act nonetheless imposes federal requirements on all state regimes: state regulators must certify the state&rsquo;s regulatory regime meets the standards of federal legislation and the certification will be reviewed by the Stablecoin Certification Review Committee.[[N: GENIUS Act, &sect; 4(c) (12 U.S.C. 5903(c)). The Secretary of Treasury will serve as Chair of the Committee and the Chair of the Federal Reserve Board and the Chair of the FDIC shall serve as members. 12 U.S.C. 5901(27).]]</p> <p>Foreign payment stablecoin issuers would generally be prohibited from issuing payment stablecoins in the U.S., unless the issuer meets certain requirements.[[N: &sect;&sect; 15.31-32.]] Namely, the foreign payment stablecoin issuer must be subject to, and in compliance with a comparable foreign regulatory regime, as determined by the Secretary of the Treasury. The Proposal contemplates that Treasury will evaluate whether the foreign regime provides standards that are substantially similar to, and at least as robust as, the U.S. federal framework in key areas, including:</p> <ul> <li>Reserve requirements (e.g., high-quality liquid assets held on at least a 1:1 basis)</li> <li>Redemption rights and timelines</li> <li>Prudential supervision and examination authority</li> <li>Capital, liquidity, and risk management standards</li> <li>Bank Secrecy Act (BSA), Anti-Money Laundering (AML), and sanctions compliance obligations</li> <li>Enforcement tools and insolvency protections</li> </ul> <p>If a foreign regime is deemed comparable, the Proposal would require foreign payment stablecoin issuers to register with the OCC if their stablecoins are offered or made available to U.S. persons through a digital asset service provider.[[N: &sect; 15.32.]] Registration would require submission of, among other things, organizational and ownership information, details regarding the foreign supervisory authority, reserve composition and custody arrangements, and BSA/AML and sanctions compliance programs.</p> <p>Additionally, foreign payment stablecoin issuers would be required to hold sufficient U.S.-based reserves to meet U.S. customer liquidity demands, submit to U.S. jurisdiction, commit to comply with U.S. &ldquo;lawful orders&rdquo; (including, but not limited to, orders requiring the seizure, freezing, burning, or prevention of transfer of payment stablecoin), and comply with reporting and examination requirements.[[N: &sect; 15.31.]]</p> <h2>Regulatory Environment and Ongoing Requirements</h2> <p>The Proposal represents the first detailed articulation of the regulatory environment in which permitted payment stablecoin issuers (PPSIs) will be required to operate, and it covers a broad range of prudential and operational obligations. This section of the Advisory provides an overview of the proposed regulatory requirements, including permissible and prohibited activities, including the prohibition on interest or yield payments by PPSIs to holders of payment stablecoins; reserve asset composition and diversification requirements; capital requirements; and standards for safeguarding payment stablecoins and reserve assets that would apply to custodians. </p> <h3>Permissible Activities</h3> <p>The Proposal mirrors Section 4(a)(7) of the GENIUS Act, which addresses permissible activities. Specifically, PPSIs would be authorized to engage in:</p> <ul> <li>The issuance and redemption of payment stablecoins&nbsp;</li> <li>Management of reserves, including purchasing and holding permissible reserve assets&nbsp;</li> <li>Custodial or safekeeping services for payment stablecoins and reserves&nbsp;</li> <li>Acting as principal or agent with respect to payment stablecoins&nbsp;</li> <li>Activities that directly support these core functions&nbsp;</li> </ul> <p>The Proposal would also expressly permit PPSIs to assess fees associated with purchasing or redeeming stablecoins and to pay transaction fees on distributed ledgers.[[N: &sect; 15.10(a)(1)-(8).]]</p> <h3>Interest and Yield Prohibition</h3> <p>Consistent with Section 4(a)(11) of the GENIUS Act, the Proposal would prohibit payment of interest or yield by PPSIs to holders &ldquo;solely in connection with the holding, use, or retention&rdquo; of payment stablecoins.[[N: &sect; 15.10(c)(4).]] However, the Proposal also includes a rebuttable presumption that certain compensation arrangements with &ldquo;affiliates&rdquo; or &ldquo;related third parties&rdquo; constitute prohibited indirect yield payments (whether paid in tokens, cash, or other forms of consideration). Specifically, the OCC would presume that a PPSI is paying a yield, within the scope of the prohibition, if the PPSI has a contract, agreement, or other arrangement with an affiliate or related third party to pay interest or yield to such affiliate or third party, or the affiliate or related third party, or the related third party&rsquo;s affiliate, has a contract, agreement, or other arrangement to pay interest or yield to a holder of a payment stablecoin issued by the PPSI &ldquo;solely in connection with the holding, use, or retention of payment stablecoins.&rdquo;[[N: <em>Id.</em>]] &ldquo;Affiliates&rdquo; would be defined to mean a person that controls, is controlled by, or is under common control with another person.[[N:&nbsp;<span style="line-height: 115%;">&sect; 15.2.]]</span></p> <p> For purposes of the prohibition, a &ldquo;related third party&rdquo; would mean &ldquo;a person offering to pay interest or yield to payment stablecoin holders as a service, and any person that the issuer issues payment stablecoins on the person&rsquo;s behalf or under the person&rsquo;s branding.&rdquo;[[N: &sect; 15.10(c)(4)(ii).]] PPSIs may rebut the presumption by submitting written materials demonstrating the arrangement is not an evasion.</p> <p>The Proposal also implements the GENIUS Act&rsquo;s statutory prohibition on pledging, rehypothecating, or reusing reserve assets.[[N: &sect; 15.10(c)(5).]] Consistent with the statute, the Proposal would codify exceptions to the prohibition for the purpose of satisfying margin obligations, for standard custodial services, or to create liquidity to meet redemption demands through overnight repurchase agreements backed by short-term Treasuries. The Proposal would also deem certain repurchase agreement transactions pre-approved by rule, provided they satisfy statutory maturity and clearing conditions.</p> <h3>Reserve Assets Composition and Management</h3> <p>Consistent with the GENIUS Act, the Proposal would require that reserve assets be identifiable, separately held, and never commingled with corporate assets.[[N: &sect; 15.11.]] Reserve assets would be required to have, at all times, a total fair value equal to or exceeding outstanding issuance value. PPSIs would also need to demonstrate the operational capability to access and monetize reserve assets, commensurate with the risk profile and business model of the relevant PPSI. </p> <p>The Proposal would codify the GENIUS Act&rsquo;s statutory list of permissible assets,[[N: &sect; 15.11(b).]] including:</p> <ul> <li>U.S. coins and currency and Federal Reserve balances&nbsp;</li> <li>Demand deposits held at insured depository institutions (or held at foreign branches or correspondent banks of an insured depository institution)&nbsp;</li> <li>Treasury securities with less than 93-day maturity</li> <li>Money received from overnight repurchase agreements and reverse repurchase agreements backed by eligible Treasuries that comply with clearing and other enumerated requirements</li> <li>Government money market funds invested solely in eligible assets&nbsp;</li> <li>Certain tokenized forms of the foregoing&nbsp;</li> </ul> <p>PPSIs with over $25 billion in outstanding issuance would be required to maintain at least 0.5% of reserves (capped at $500 million) as insured deposits or insured shares at an insured depository institution.[[N: &sect; 15.11(d).]] The OCC invites comment on whether additional &ldquo;similarly liquid Federal Government-issued assets&rdquo; should be approved under the Proposal.</p> <p>The OCC&rsquo;s proposed definition of &ldquo;money&rdquo; expands on the GENIUS Act&rsquo;s definition to expressly include &ldquo;monetary value,&rdquo; in addition to any medium of exchange that the OCC has determined is currently authorized or adopted by a domestic or foreign government, including a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries.[[N: &sect; 15.2.]] Further, in an effort to promote clarity and uniformity regarding whether particular assets qualify as &ldquo;money,&rdquo; the OCC would provide public confirmation that a &ldquo;medium of exchange&rdquo; meets the definition of &ldquo;money.&rdquo; The OCC expects to issue public determinations, when appropriate, on its own volition or at the request of interested parties. </p> <h3>Reserve Asset Diversification Requirements</h3> <p>The OCC&rsquo;s Proposal presents two alternatives for reserve asset diversification requirements aimed at mitigating credit, liquidity, interest-rate and price risks, and invites public comments on which alternative to adopt in a final rule.[[N: &sect; 15.11(c)(1)-(2).]] The first is a principles-based requirement that includes a quantitative safe harbor. To qualify for the safe harbor, PPSIs would be required, on each business day, to:</p> <ul> <li>Maintain at least 10% of reserve assets as deposits or insured shares payable on demand or funds held in Federal Reserve balances for purposes of daily liquidity</li> <li>Maintain at least 30% of reserve assets as described above or in amounts receivable and due unconditionally within five days as weekly liquidity&nbsp;</li> <li>Limit exposure to any single eligible financial institution to 40% of reserve assets&nbsp;</li> <li>Limit concentration of daily liquidity at a single institution to 50%</li> <li>Maintain weighted average maturity of no more than 20 days across the total stock of reserve assets&nbsp;</li> </ul> <p>The second alternative would impose the safe harbor thresholds as mandatory quantitative requirements. The practical implications of each alternative differ significantly for PPSIs with concentrated reserve portfolios, and impacted entities should carefully consider which approach better reflects sound risk management practice before submitting comments.</p> <p>If reserves fall below required minimums, PPSIs would be required to notify the OCC and would be immediately barred from issuing new stablecoins.[[N: &sect; 15.11(g)(1)-(3).]] After 15 consecutive business days of deficiency, the issuer would be required to begin liquidation and redemption.</p> <p>To ensure effective compliance, the Proposal would require monthly public disclosures of the composition of reserve assets.[[N: &sect; 15.11(f).]] Disclosures must include, among other items, the total outstanding issuance, fair value and composition of reserves, average tenor, and geographic location of custody. The Proposal includes a form of composition report template that issuers may use to satisfy this requirement. The disclosure report must be examined monthly by a registered public accounting firm, and such examination report must be published by the issuer on its public website at the same time as the posting of its monthly composition report. In addition, the CEO and CFO of the issuer will be required to certify the accuracy of the report to the OCC.</p> <h3>Redemption </h3> <p>The Proposal would implement the GENIUS Act&rsquo;s requirement that a payment stablecoin issuer be obligated to redeem its tokens for a fixed amount of monetary value. Under the GENIUS Act, the statutory definition of a &ldquo;payment stablecoin&rdquo; hinges on this redemption obligation, and the OCC&rsquo;s Proposal accordingly treats redemption as a core consumer protection requirement.</p> <p>The OCC&rsquo;s Proposal interprets the statutory requirement that an issuer be obligated to redeem a &ldquo;payment stablecoin&rdquo; as requiring redemption in amounts of one token or more.[[N: &sect; 15.12(a)(5).]] The Proposal would define &ldquo;timely&rdquo; redemption as no later than two business days after a valid redemption request. This requirement must also be included in the PPSI&rsquo;s published redemption policy, as discussed further below. While many existing stablecoin issuers offer same-day or near-instant redemption for certain counterparties, the two-business-day outer limit provides regulatory certainty while preserving operational flexibility. Nevertheless, the Proposal would also establish a redemption gating mechanism that automatically extends the redemption period to 7 calendar days when redemption demands exceed 10% of a PPSI&rsquo;s outstanding issuance value in a 24-hour period.[[N: &sect; 15.12(c).]] This feature is designed to mitigate run risk and facilitate orderly asset liquidation, particularly where reserve assets must be monetized under stressed market conditions. Importantly, the extension would be non-discretionary once triggered, all pending and subsequent redemption requests would be subject to the extended timeline, and early redemptions during the extension period would require OCC approval to ensure fairness and orderly treatment of holders.</p> <p>The Proposal would require each PPSI to publicly disclose a clear and comprehensive redemption policy.[[N: &sect; 15.12(a).]] At a minimum, that policy must include:</p> <ul> <li>The timeframe within which the issuer will redeem payment stablecoins (subject to the regulatory maximum)</li> <li>A statement that discretionary limitations on timely redemption may be imposed only by the OCC (or, in the case of a State-qualified issuer, by the OCC, the Federal Reserve, or the relevant state regulator)</li> <li>Disclosure of the circumstances under which redemption periods may be extended</li> <li>Clear instructions on how holders may redeem</li> <li>Any minimum redemption amount (which would be required to be redeemed in any number greater than or equal to one payment stablecoin)</li> </ul> <p>In addition to adopting a formal redemption policy, the Proposal would require issuers to disclose specified information clearly and conspicuously, in plain language, and segregated from other disclosure information.[[N: &sect; 15.12(d).]] These disclosure items would include:</p> <ul> <li>The legal entity obligated to redeem&nbsp;</li> <li>That the issuer, and not an intermediary, is responsible for redemption</li> <li>A link to the monthly reserve composition report</li> <li>All fees associated with purchasing or redeeming payment stablecoins</li> </ul> <h3>Risk Management</h3> <p>The Proposal would establish principles-based operational, compliance, and risk management standards that would be tailored to the business models and risk profiles of PPSIs.[[N: &sect; 15.13.]] The requirements would, in certain instances, track supervisory standards applicable to insured banks, while tailoring them to the unique features of stablecoin issuance. The Proposal would not mandate a specific governance architecture, but emphasizes that board accountability and independent oversight are essential supervisory expectations, consistent with traditional banking standards. Issuers must also demonstrate robust liquidity and concentration risk management practices, including monitoring compliance with reserve diversification requirements and maintaining operational capability to monetize reserves rapidly.</p> <p>The Proposal envisions a targeted framework governing transactions with insiders and affiliates.[[N: &sect; 15.13(a)(6).]] If adopted, these transactions could not be excessive or expose the PPSI to material financial loss and must be conducted on &ldquo;market terms&rdquo; and documented and reviewed by the board. The &ldquo;market terms&rdquo; requirement mirrors the standard applicable to covered transactions between banks and their affiliates under Section 23 of the Federal Reserve Act and Regulation W. In other words, transactions would need to be on terms and under circumstances that are substantially the same as, or at least as favorable to the PPSI as, those prevailing for comparable transactions with unaffiliated third parties.</p> <h3>Examination and Supervision</h3> <p>The proposed examination and reporting regime would closely parallel the OCC&rsquo;s approach to other entities within its supervisory jurisdiction, while accounting for the narrower business model of PPSIs.[[N: &sect; 15.14]] PPSIs would be examined and supervised by the OCC. The rule would require annual full-scope examinations, supplemented with weekly confidential data reports, quarterly financial condition reports, and annual AML certifications.[[N: &sect; 15.14(d), (h)-(k). PPSIs with less than $1 billion outstanding issuance may qualify for extended exam cycles.]] The rule would also implement procedures for seeking OCC approval for any change in control of a PPSI.</p> <h3>Capital and Operational Backstop</h3> <p>The OCC also proposes minimum capital requirements for an initial <em>de novo</em> period of three years.[[N: &sect; 15.41(a)(1).]] During the <em>de novo</em> period, PPSIs must hold, at minimum, the greater of $5 million or the amount specified in an FQPSIs licensing or chartering conditions or specified by the OCC for SQPSIs. After the <em>de novo</em> period, PPSIs must maintain capital commensurate with the level and nature of all risks to which the PPSI is exposed.[[N: &sect; 15.41(a)(2).]]</p> <p>The Proposal would adopt a tiered capital regime that is generally consistent with the capital elements for national banks and Federal savings associations under 12 CFR Part 3. Under the Proposal, minimum capital requirements must consist of common equity &ldquo;Tier 1&rdquo; capital and &ldquo;Additional Tier 1&rdquo; capital. Although the OCC&rsquo;s capital framework for banks also permits Tier 2 capital elements, the OCC is not proposing to adopt Tier 2 capital elements for permitted payment stablecoin issuers. </p> <p>Common equity Tier 1 capital would consist of common stock instruments (par value, if any, and related surplus), retained earnings, and any accumulated other comprehensive income, all as reported under GAAP. The common stock instruments would need to meet various proposed criteria. Additional Tier 1 capital would consist of instruments that meet a different set of proposed criteria, generally consistent with noncumulative perpetual preferred stock issuances that are classified as equity under GAAP.[[N: &sect; 15.40. The Proposal does not define Tier 2 capital but refers to the description in existing banking regulations. <em>See</em> &sect; 15.41(d)(ii) (uninsured national trust banks may elect to comply with the Proposal&rsquo;s minimum capital requirements in lieu of complying with 12 CFR Part 3, but the minimum capital requirements cannot include Tier 2 capital as defined in 12 CFR 3.20(d)).]]</p> <p>Alternatively, the OCC is considering a simplified capital instrument framework for permitted payment stablecoin issuers. Under this framework, any balance sheet account that qualifies as equity under GAAP would qualify as a capital element, including common stock, retained earnings, accumulated other comprehensive income, and certain preferred stock. However, the simplified framework lacks additional requirements in the tiered framework that are intended to reduce the risk to stablecoin holders and ensure that the equity instruments are sufficiently loss absorbing. </p> <p>PPSIs would also be required to maintain an operational backstop of highly-liquid assets sufficient to cover one year of operating expenses.[[N: &sect; 15.41(b).]] The proposed backstop assets would be independent of the <em>de novo</em> or ongoing capital requirements and from any assets held as reserve assets. The amount of the operational backstop would be calculated each quarter, based on the permitted payment stablecoin issuer&rsquo;s total expenses as reported in the four most recent quarterly report. For <em>de novo</em> permitted payment stablecoin issuers, the initial requirement would be based on reasonable expense projections and adjusted each quarter based on actual amounts for that quarter.</p> <h3>Custody and Oversight of Ecosystem Participants</h3> <p>The Proposal implements Section 10 of the GENIUS Act and establishes the segregation, control, customer property, and safeguarding requirements applicable to custodians of stablecoin reserves, collateral stablecoins, and private keys.[[N: &sect;&sect; 15.20&ndash;15.23.]] Specifically, the Proposal would implement the GENIUS Act&rsquo;s custody provisions by establishing a prudential framework governing the safekeeping of payment stablecoins, private keys, and reserve assets. The framework is broadly consistent with existing supervisory expectations for banking institutions providing crypto-asset safekeeping services and is organized around three core principles.[[N: The proposed rule tracks recent interagency guidance. <em>See e.g.</em>, OCC, <em><a rel="noopener noreferrer" href="https://www.occ.gov/news-issuances/news-releases/2025/nr-ia-2025-68.html" target="_blank">Agencies Issue Joint Statement on Risk-Management Considerations For Crypto-Asset Safekeeping</a></em> (July 14, 2025).]]</p> <p>First, the Proposal would require a PPSI or custodian to demonstrate that it has exclusive control over the private keys (or equivalent access credentials) necessary to transfer payment stablecoins, such that no other party, including the customer, retains unilateral transfer capability. The Proposal would also require clear contractual delineation of the custodian&rsquo;s role, including whether services are provided in a fiduciary or non-fiduciary capacity.</p> <p>Second, customer assets would need to be clearly segregated so they are protected from the claims of the custodian&rsquo;s creditors. Specifically, the Proposal would require clear segregation of customer payment stablecoins, reserve assets backing stablecoins, and the PPSI&rsquo;s or custodian&rsquo;s proprietary assets. If adopted, PPSIs and custodians would be required under the Proposal to maintain accurate books and records sufficient to identify each customer&rsquo;s interest in the relevant digital assets and to reconcile on-chain balances with internal ledgers on a timely basis. It would also require clear, contractual delineation of the custodian&rsquo;s role, including whether services are provided in a fiduciary or non-fiduciary capacity.</p> <p>Third, the Proposal would require robust risk-management policies and procedures. Although the rule does not mandate a specific wallet architecture, it would require PPSIs and custodians to adopt key-management solutions appropriate to their risk profile and operational scale. Custody relationships involving payment stablecoins would remain fully subject to BSA and AML requirements, OFAC sanctions compliance, and suspicious activity monitoring and reporting requirements.</p> <p>In sum, covered custodians would be required to segregate and separately account for covered assets, treat them as customer property, protect them from claims by custodian creditors, and maintain possession or control of them. And, although the Proposal recognizes that PPSIs may rely on sub-custodians or technology providers to perform certain safekeeping functions, PPSIs would have ultimate responsibility for third-party oversight of custodians, infrastructure providers, and other critical service providers.</p> <h3>Comment Period and Next Steps</h3> <p>The OCC&rsquo;s Proposal reflects an effort to integrate stablecoin issuance into the federal banking supervisory framework while preserving the novel features of blockchain-based infrastructure. The breadth of the proposed requirements means that a wide range of market participants will need to assess their obligations and consider whether the Proposal as drafted serves their operational and compliance interests. Institutions should carefully evaluate the Proposal&rsquo;s licensing requirements and ongoing prudential standards when assessing entry into the regulated payment stablecoin market.</p> <p>Comments are due 60 days after publication in the Federal Register. Key areas for comment include:</p> <ul> <li><em>Diversification Standard</em>: Whether a principles-based approach with a safe harbor or mandatory quantitative requirements should be adopted</li> <li><em>Single-Brand Restriction</em>: Whether each PPSI should be limited to issuing only one brand of stablecoin, or whether white-label arrangements with multiple brands should be permitted&nbsp;</li> <li><em>Prohibition on Unsafe or Unsound Practices</em>: Whether to codify an explicit prohibition on unsafe or unsound practices to complement the OCC&rsquo;s existing examination authority</li> <li><em>Overlapping Custody Requirements</em>: How to manage potentially overlapping reserve custody obligations when different regulators implement GENIUS Act Section 10 differently for their respective supervised entities&nbsp;</li> <li><em>Tokenized Reserve Assets</em>: Whether the OCC should publish a public list of pre-approved tokenized reserve assets for transparency&nbsp;</li> <li><em>Reserve Asset Exclusions</em>: Whether stablecoin reserves should be excluded from asset thresholds that trigger different regulatory requirements (e.g., assessment fees or capital tier thresholds)&nbsp;</li> <li><em>Codification of Self-Executing GENIUS Act Provisions</em>: Whether the Act&rsquo;s self-executing preemption provisions should be codified in OCC regulations for convenience and clarity </li> </ul> <p>If you would like to discuss the OCC&rsquo;s Proposal or determine whether to comment, please contact any of the authors of this Advisory or your usual firm contact. </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{4F646FE1-2A32-42E6-AB14-21E35B6F4005}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/ambassador-barbara-leaf-appears-on-bloomberg-tv-and-trt-world-nowArnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf appeared on <em>Bloomberg TV</em> and <em>TRT World Now</em> this week to discuss the latest developments in the U.S.-Israeli-led conflict involving Iran and its broader regional implications.Fri, 06 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf (Amb. Leaf) appeared on <em>Bloomberg TV</em> and <em>TRT World Now</em> this week to discuss the latest developments in the U.S.-Israeli-led conflict involving Iran and its broader regional implications.</p> <p>In her interview with <em>Bloomberg TV</em>, Amb. Leaf addressed what she described as the current military operation's undefined objectives. &ldquo;The President surprised the American people in framing the war as regime change,&rdquo; she said, characterizing that approach as an &ldquo;open-ended proposition.&rdquo; She further observed that messaging within the Administration has lacked clarity, noting that officials have at times been &ldquo;in contradiction with each other.&rdquo; &ldquo;It is pretty muddled,&rdquo; she said of the stated aims of the conflict.</p> <p>Speaking with <em>TRT World Now</em>, Amb. Leaf emphasized this sentiment, questioning the prospect of regime change &mdash; a policy the President has criticized &mdash; as &ldquo;a vast and slippery slope,&rdquo; when there was &ldquo;no imminent threat to the United States.&rdquo;</p> <p>On the complicated regional dynamics impacted by the war, Amb. Leaf said that &ldquo;relations have been badly damaged&rdquo; among Gulf states due to Iran&rsquo;s immediate retaliatory targeting of civilian infrastructure.</p> <p>She concluded that if there are indications &ldquo;the post-Khomeini leadership is ready to have a discussion about terms for the way forward,&rdquo; which would need to exclude the continuance of their nuclear program, the President could de-escalate and wind down the offensive soon.</p> <p><a rel="noopener noreferrer" href="https://www.bloomberg.com/news/videos/2026-03-03/leaf-arab-nations-iran-relations-badly-damaged-video" target="_blank">Watch the <em>Bloomberg TV</em> interview</a>.</p> <p><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=R6Sp0AelDz8" target="_blank">Watch the <em>TRT World Now</em> interview</a>.</p>{65A07A71-288D-4EA5-9313-6E0B0800F6B0}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/the-next-wave-of-tariff-litigationLori B. Leskinhttps://www.arnoldporter.com/en/people/l/leskin-lori-blori.leskin@arnoldporter.comBrandon W. Neuschaferhttps://www.arnoldporter.com/en/people/n/neuschafer-brandon-wbrandon.neuschafer@arnoldporter.comElie Salamonhttps://www.arnoldporter.com/en/people/s/salamon-elieelie.salamon@arnoldporter.com<p>Following the United States Supreme Court&rsquo;s decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the class action plaintiff&rsquo;s bar has begun filing class actions targeting businesses they claim passed tariff-related costs on to consumers.</p>Fri, 06 Mar 2026 00:00:00 -0600<p>Following the United States Supreme Court&rsquo;s decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the class action plaintiff&rsquo;s bar has begun filing class actions targeting businesses they claim passed tariff-related costs on to consumers.</p> <p>The first wave of cases targets both logistics providers that imposed itemized tariff surcharges and consumer brands that raised prices in response to tariffs. Although untested and in their early stages, the complaints have sweeping implications on businesses across virtually every industry. Any company that imposed tariff-related fees or increased prices in response to the now-invalidated IEEPA tariffs faces new, sprawling exposure that should be evaluated promptly.</p> <h2>Supreme Court&rsquo;s IEEPA Tariff Ruling</h2> <p>On February 20, 2026, the Supreme Court held that tariffs imposed by President Trump under IEEPA exceeded presidential authority and were unlawful. <em>Learning Resources, Inc. v. Trump</em>, 607 U.S. ___, 2026 WL 477534 (Feb. 20, 2026). The ruling opened the door for importers to seek refunds from the United States for billions of dollars in IEEPA duties they paid. It has also spawned the latest wave in tariff litigation, a series of putative nationwide consumer class actions claiming that companies improperly retained IEEPA tariff-related revenue that was passed through to customers.</p> <h2>Consumer Class Action Litigation</h2> <p>Since the Supreme Court&rsquo;s ruling striking down the IEEPA tariffs last month, as of the date of this writing, at least five putative consumer class actions have already been filed in federal district courts across the country in Florida, Georgia, South Carolina, and Tennessee. <em>See</em> <em>Reiser v. Fed. Express Corp</em>., No. 1:26-cv-21328 (S.D. Fla. Feb. 27, 2026); <em>Ward v. EssilorLuxottica S.A.</em>, No. 1:26-cv-01133 (E.D.N.Y. Feb. 26, 2026); <em>Anastopoulo v. FedEx Corp.</em>, No. 2:26-cv-00753 (D.S.C. Feb. 20, 2026); <em>Anastopoulo v. FedEx Corp.</em>, No. 2:26-cv-02181 (W.D. Tenn. Feb. 20, 2026); <em>Anastopoulo v. United Parcel Serv. Inc.</em>, No. 1:26-cv-01005 (N.D. Ga. Feb. 20, 2026); <em>Anastopoulo v. United Parcel Serv. Inc.</em>, No. 2:26-cv-00754 (D.S.C. Feb. 20, 2026).</p> <p>The complaints allege that these companies unjustly enriched themselves by collecting tariff-related charges that have since been invalidated and have failed to return those funds to the consumers who bore the actual economic burden of the now-invalidated IEEPA tariffs.&nbsp;&nbsp;</p> <p>They allege that, in light of the invalidated IEEPA tariffs, retention of these funds is inequitable. Each complaint seeks certification of nationwide consumer classes.</p> <p>The complaints filed to date reveal two distinct categories of tariff pass-throughs that plaintiffs are targeting:</p> <ul> <li><strong>Explicit Line-Item Surcharges. </strong>In the FedEx and United Parcel Service cases, the companies are accused of billing customers itemized fees tied directly to IEEPA tariff duties, along with ancillary brokerage and clearance fees that plaintiffs allege would never have been charged but for the unlawful tariffs. For example, in one case, a plaintiff alleges that he was charged $36 in tariff-related fees &mdash; $21 in IEEPA duties and $15 in ancillary brokerage and clearance fees &mdash; for a single purchase of tennis shoes shipped from Germany. These cases generally assert claims for unjust enrichment and breach of shipping contracts between the companies and their customers.&nbsp;&nbsp;</li> <li><strong>Embedded Price Increases. </strong>EssilorLuxottica is accused of raising prices to offset IEEPA tariff costs. The complaint alleges that general retail price increases &mdash; publicly attributed to IEEPA tariffs &mdash; functioned as <em>de facto</em> &ldquo;tariff surcharges,&rdquo; even though not itemized separately. The complaint alleges, for example, that the price of certain Ray-Ban sunglasses held steady from September 2024 through March 2025, but then increased from $287 to $304 between March 2025 and May 2025, a period corresponding to the implementation of IEEPA tariffs. This action asserts claims for unjust enrichment and violations of state consumer protection statutes, on the ground that retention of IEEPA funds constitutes unfair, deceptive, unlawful, or unconscionable conduct.&nbsp; </li> </ul> <p>The complaints rely heavily on earnings calls, press releases, and public statements acknowledging tariff-driven price increases. Investor communications are thus likely to be closely scrutinized in future filings.&nbsp;&nbsp;</p> <p>One early strategic distinction is whether companies have publicly committed to passing through tariff refunds to customers. In the action against EssilorLuxottica, for example, the plaintiffs contrast the company&rsquo;s alleged silence with public statements by FedEx indicating that, if refunds are issued, they would be passed through to shippers and consumers. Businesses that have articulated refund commitments may therefore be positioned differently &mdash; both legally and reputationally &mdash; than those that have not.</p> <h2>Implications</h2> <p>Under the theories advanced in this early set of cases, exposure is not limited to importers and would appear to potentially apply to a wide range of businesses that:&nbsp;&nbsp;</p> <ul> <li>imposed itemized IEEPA tariff or customs surcharges </li> <li>increased prices in response to IEEPA tariffs </li> <li>publicly attributed price increases to tariffs </li> <li>filed or intend to file refund actions in the U.S. Court of International Trade or</li> <li>have not addressed how consumer-level IEEPA tariff charges would be treated if refunds are received</li> </ul> <p>Retailers, electronic commerce businesses, consumer brands, manufacturers, distributors, and logistics companies may thus all be potential targets.</p> <p>To mitigate risk, we recommend considering the following with counsel:</p> <p>Identify whether and how IEEPA-related costs were passed to customers. Quantify potential exposure and identify affected customer populations.</p> <ul> <li>If the company has filed or intends to file a refund claim, consider whether a conditional consumer refund commitment is appropriate.</li> <li>Evaluate public statements. Earnings calls, Security and Exchange Commission filings, press releases, and website statements referencing tariff-driven price adjustments may become key evidence forplaintiffs.</li> <li>Careful coordination among outside in separate proceedings will be critical, as arguments advanced in refund proceedings before the U.S. Court of International Trade may impact defenses available in related consumer class action litigation.</li> </ul> <p>The initial wave of consumer class action complaints demonstrates that plaintiffs are not limiting their theories to explicit tariff line-items. The broader argument &mdash; that any company that passed through tariff costs must return corresponding refunds &mdash; has potentially sweeping implications for businesses. As refund litigation proceeds and more companies seek recovery of IEEPA duties, further consumer class action litigation is likely to follow, pursuing yet additional novel and broad theories of recovery that may increase exposure and expand the scope of businesses potentially implicated by this new current of litigation.</p> <p style="text-align: center;">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <p>Arnold &amp; Porter has been tracking these developments and counseling clients on compliance and risk-mitigation strategies. Our team is here to help with any questions you may have.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{77DCEA51-8CBF-4233-9775-2BD3086D8E97}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/capital-snapshot-march-2026Eugenia E. Piersonhttps://www.arnoldporter.com/en/people/p/pierson-eugenia-eEugenia.Pierson@arnoldporter.comAllison Jarushttps://www.arnoldporter.com/en/people/j/jarus-allisonallison.jarus@arnoldporter.comPeter E. Duysharthttps://www.arnoldporter.com/en/people/d/duyshart-peterpeter.duyshart@arnoldporter.comEmily Crawfordhttps://www.arnoldporter.com/en/people/c/crawford-emilyemily.crawford@arnoldporter.comEmily Mahaffyhttps://www.arnoldporter.com/en/people/m/mahaffy-emilyemily.mahaffy@arnoldporter.comDylan L. Kelemenhttps://www.arnoldporter.com/en/people/k/kelemen-dylan-ldylan.kelemen@arnoldporter.comOur Legislative &amp; Public Policy team is pleased to provide the March 2026 edition of<em> Capital Snapshot</em>, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions.Fri, 06 Mar 2026 00:00:00 -0600<p>Our Legislative &amp; Public Policy team is pleased to provide the March 2026 edition of<em> Capital Snapshot</em>, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions. This month&rsquo;s edition of the Capital Snapshot contains a review of the landscape of the 119th Congress, including upcoming congressional schedules and key dates, and recently-announced retirements, resignations, vacancies, and candidacies. We also share updates pertaining to the FY26 and FY27 federal funding and the appropriations processes, including the ongoing partial DHS government shutdown. Our team also provides comprehensive updates on the latest on trade and tariffs. Furthermore, we share some salient legislative and policy updates across a variety of additional key policy areas, including: (1) defense; (2) tax; (3) financial services; (4) artificial intelligence; (5) technology; (6) data privacy; (7) health care; (8) education; and (9) energy and environment. Additionally, we provide an overview and outlook of the upcoming 2026 midterm elections in November, including the March 3rd Texas primaries, as well as an update to our detailed rundown of various redistricting efforts across the country ahead of the midterms. Our team also takes a look at current public opinion polling on President Trump&rsquo;s job performance and policy priorities, and assesses economic factors and conditions that could impact the future political landscape in an election year.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{9D7025E4-19EE-42CC-A878-749AD832E964}https://www.biosliceblog.com/2026/03/provisional-text-of-the-political-agreement-on-the-reform-to-the-eu-regulatory-framework-for-medicinal-products-is-published/Libby Amos-Stonehttps://www.arnoldporter.com/en/people/a/amos-libbylibby.amos-stone@arnoldporter.comAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comCarla Schoonderbeekhttps://www.arnoldporter.com/en/people/s/schoonderbeek-carlaCarla.Schoonderbeek@arnoldporter.comAdela Williamshttps://www.arnoldporter.com/en/people/w/williams-adelaadela.williams@arnoldporter.comHeba Jalilhttps://www.arnoldporter.com/en/people/j/jalil-hebaheba.jalil@arnoldporter.comFri, 06 Mar 2026 00:00:00 -0600{4480BAAD-377B-4580-971F-DDC8CDF89283}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/deborah-curtis-talks-with-global-investigations-review-on-bis-semiconductor-enforcementDeborah Curtis, Co-Chair of Arnold &amp; Porter&rsquo;s White Collar Defense &amp; Investigations practice, was recently quoted in the <em>Global Investigations Review</em> article, &ldquo;Applied Materials settlement a &lsquo;warning shot&rsquo; for US exporters.&rdquo;Thu, 05 Mar 2026 00:00:00 -0600<p>Deborah Curtis, Co-Chair of Arnold &amp; Porter&rsquo;s White Collar Defense &amp; Investigations practice, was recently quoted in the <em>Global Investigations Review</em> article, &ldquo;Applied Materials settlement a &lsquo;warning shot&rsquo; for US exporters.&rdquo; The article examined the Bureau of Industry and Security&rsquo;s (BIS) $252 million settlement with Applied Materials over exports tied to a restricted Chinese semiconductor company and discussed what it meant for the tech sector as Washington intensifies enforcement of sensitive technology exports.</p> <p>&ldquo;This is BIS laying down a marker that they are going to enforce semiconductor supply chain issues very, very strictly,&rdquo; Deborah said.</p> <p>&ldquo;I see this as a really rigorous enforcement action,&rdquo; she added, noting that the order signals the agency&rsquo;s intent to apply export controls law as written. &ldquo;You can&rsquo;t solve an export control issue with a customs law answer.&rdquo;</p> <p>Deborah cautioned that companies should expect increased penalties going forward. &ldquo;They&rsquo;re really going to start levying heavy penalties,&rdquo; she said.</p> <p><a rel="noopener noreferrer" href="https://globalinvestigationsreview.com/just-sanctions/article/applied-materials-settlement-warning-shot-us-exporters" target="_blank">Read the full article</a> (subscription required).</p>{C7A8F0DC-5DB9-4BDC-B771-DAE8373F8615}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/law360-features-arnold-porters-state-ag-task-forceArnold &amp; Porter&rsquo;s dedicated State Attorneys General Investigations &amp; Litigation Task Force was featured in a recent <em>Law360</em> article, &ldquo;Arnold &amp; Porter Forms Team To Tackle Scrutiny By State AGs,&rdquo; which included an interview with Commercial Litigation partner Benjamin Mizer and White Collar Defense &amp; Investigations partner Meredith Osborn.&nbsp;Thu, 05 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter&rsquo;s dedicated <a href="/en/services/capabilities/practices/white-collar-defense-and-investigations/state-attorneys-general-investigations-and-litigation">State Attorneys General Investigations &amp; Litigation Task Force</a>&nbsp;was featured in a recent <em>Law360</em> article, &ldquo;Arnold &amp; Porter Forms Team To Tackle Scrutiny By State AGs,&rdquo; which included an interview with Commercial Litigation partner Benjamin Mizer and White Collar Defense &amp; Investigations partner Meredith Osborn. </p> <p>Meredith, former Chief Trial Deputy at the City Attorney&rsquo;s Office for San Francisco, highlighted that Arnold &amp; Porter has a long history of success in single- and multi-state AG matters, and that this Task Force enables the firm to continue providing coordinated support &ldquo;in a thoughtful and integrated way.&rdquo; </p> <p>Ben, former Acting Associate Attorney General at the U.S. Department of Justice, emphasized this is an opportune time for the firm to consolidate its cross-practice state AG experience, as clients face increasing scrutiny and regulatory risk from state AGs. </p> <p>&ldquo;What&rsquo;s noteworthy now in particular is that enforcement priorities at the federal level have shifted,&rdquo; Ben said, commenting that states are focusing on areas like securities and consumer protection. </p> <p>Meredith also discussed the priority shift, noting that it&rsquo;s due, in part, to personnel movement between the federal and state levels. </p> <p>&ldquo;We&rsquo;re seeing a lot of migration now of federal enforcement into the state agencies,&rdquo; she said. &ldquo;They&rsquo;re bringing the ideas, the strategies, the priorities that they may have been &hellip; invested in at the national level, into the states now.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://www.law360.com/pulse/articles/2446044?" target="_blank">Read the full article</a> (subscription required). </p>{7DF5AC0C-BEAD-4E3C-AAD2-96B662A4F79F}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/china-anticorruption-2025-year-in-reviewJohn Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comSiyi Guhttps://www.arnoldporter.com/en/people/g/gu-siyisiyi.gu@cn.arnoldporter.com<p>Anti-corruption remained a key area of focus for Chinese regulators in 2025. This Advisory summarizes key legislative developments and major enforcement trends from the past year.&nbsp;</p>Thu, 05 Mar 2026 00:00:00 -0600<p>Anti-corruption remained a key area of focus for Chinese regulators in 2025. This Advisory summarizes key legislative developments and major enforcement trends from the past year.&nbsp;</p> <h2>Revised Supervision Law</h2> <p>On June 1, the <a rel="noopener noreferrer" href="http://www.npc.gov.cn/c2/c30834/202502/t20250205_442676.html" target="_blank">revised Supervision Law</a> (<span>中</span><span>华人民共和国监察法</span>) came into effect. The Supervision Law codifies the structure and authority of supervisory commissions, which are government agencies that regulate the conduct of individuals who carry out public duties in China, such as government officials, and the leadership and managers of state-owned enterprises (SOEs). Individuals who do not perform public duties, but who pay or facilitate the payment of bribes to individuals who do, might also be subject to supervisory commission investigations. The revised Supervision Law provides additional measures that may be taken by the supervisory commissions, such as restricting individuals&rsquo; movement for up to 24 hours to ensure their participation in an investigation. The revised law also emphasizes the protection of enterprises&rsquo; property rights and management autonomy during the investigation process.</p> <h2>Revised Anti-Unfair Competition Law</h2> <p>On June 27, China&rsquo;s National People&rsquo;s Congress (NPC) published the <a rel="noopener noreferrer" href="http://www.npc.gov.cn/c2/c30834/202506/t20250627_446247.html" target="_blank">revised Anti-Unfair Competition Law</a> (AUCL, <span>中</span><span>华人民共和国反不正当竞争法</span>), which took effect on October 15. The AUCL is China&rsquo;s major administrative law regulating commercial bribery, enforced by the Administration for Market Regulation. Key revisions include an emphasis on punishments for both the payor and payee, higher maximum fines, and an expanded scope of individual liability for the personnel of entities found to pay bribes.[[N:For further analysis of the AUCL, see <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/07/china-compliance-update-summer-2025">China Compliance Update &ndash; Summer 2025</a>.]]</p> <h2>Anti-Corruption Enforcement</h2> <p>Statistics released by Chinese authorities also reflected regulators&rsquo; continued commitment to anti-corruption enforcement:</p> <ul> <li><a rel="noopener noreferrer" href="https://www.ccdi.gov.cn/toutiaon/202601/t20260117_470450.html" target="_blank">Data from the Central Commission for Discipline Inspection of the Communist Party of China</a> (CCDI) shows that in 2025, commissions for discipline inspection nationwide initiated 1,012,000 investigations into government officials for corruption-related issues. These investigations implicated government officials at all levels, from top-tier leadership to local officials.[[N:For more details of enforcement actions targeting Chinese government officials in the life sciences industry, see <a href="https://www.arnoldporter.com/en/perspectives/blogs/enforcement-edge/2026/01/recent-enforcement-cases-in-china-life-sciences-compliance">Recent Enforcement Cases in China Life Sciences Compliance</a>.]]</li> <li><a rel="noopener noreferrer" href="https://www.spp.gov.cn/zdgz/202602/t20260203_717933.shtml" target="_blank">Data from the Supreme People&rsquo;s Procuratorate</a> (SPP) shows that from January to November 2025, 2,982 individuals nationwide were prosecuted for providing bribes, representing a year-on-year increase of 7.6%. The data also reflected regulators&rsquo; continued emphasis on punishing both those who provide and accept bribes, as evidenced by revisions to the AUCL and other laws and regulations.&nbsp;</li> </ul> <p>In December 2025, the National Audit Office published the<a rel="noopener noreferrer" href="https://www.audit.gov.cn/n5/n26/c10758168/content.html" target="_blank"> Report on the Remediation of Issues Identified in the Audit of Central Budget Execution and Other Fiscal Revenues and Expenditures for Fiscal Year 2024</a> (Audit Report, 2024<span>年度中央</span><span>预算执行和其他财政收支审计查出问题整改情况的报告</span>), which listed audit findings from the National Audit Office and corresponding remediation measures. The Audit Report noted that more than 430 cases of severe violations of the Communist Party of China&rsquo;s disciplinary regulations and other laws identified during the audit have been transferred to relevant authorities for further investigation and prosecution. These cases involved corruption and bribery in key areas, including finance, management of state-owned property, and matters relating to public welfare, such as China&rsquo;s state-run medical insurance program and healthcare system.&nbsp;</p> <p>The audit findings and remediation measures listed in the Audit Report are also aligned with the priorities shown in the model enforcement cases published by regulators. For example:</p> <ul> <li> In July 2025, the Ministry of Public Security (MPC) published <a rel="noopener noreferrer" href="https://www.mps.gov.cn/n2254098/n4904352/c10140362/content.html" target="_blank">five model criminal cases</a> of internal corporate corruption. When publishing these cases, the MPC also encouraged private companies to strengthen their internal anti-corruption controls, such as internal audits, and to establish effective governance mechanisms.</li> <li>In November 2025, the Supreme People&rsquo;s Court (SPC) and the SPP published <a rel="noopener noreferrer" href="https://www.court.gov.cn/zixun/xiangqing/482671.html" target="_blank">six model cases</a> of criminal corruption in the finance sector, such as bribery and embezzlement cases implicating government officials from financial regulators and state-owned banks.</li> <li>In December 2025, the SPC and the SPP published <a rel="noopener noreferrer" href="https://www.court.gov.cn/zixun/xiangqing/483631.html" target="_blank">five model cases</a> of criminal corruption relating to public welfare in the areas of housing security, elder care services, China&rsquo;s state-run medical insurance program, school meals, and the protection of people with disabilities.&nbsp;[[N:For more details of the five model cases published by the SPC and the SPP, see <a href="https://www.arnoldporter.com/en/perspectives/blogs/enforcement-edge/2026/01/china-compliance-update-december-2025">China Compliance Update &mdash; December 2025</a>.]]</li> </ul> <p>We expect anti-corruption to remain a focus in 2026. On January 14, 2026, the CCDI released the <a rel="noopener noreferrer" href="https://www.ccdi.gov.cn/toutiaon/202601/t20260114_469908.html" target="_blank">Announcement of the Fifth Plenary Session of the 20th Central Commission for Discipline Inspection of the Communist Party of China</a> (Announcement, <span>中国共</span><span>产党第二十届中央纪律检查委员会第五次全体会议公报</span>). The Announcement listed key areas for anti-corruption enforcement in 2026, including but not limited to SOEs, industry and academic associations, financial institutions, and public tenders.</p> <p>For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s&nbsp;<a href="/en/services/capabilities/practices/white-collar-defense-and-investigations">White Collar Defense &amp; Investigations</a>&nbsp;practice group.</p> <p><em>*Zhewen Zhang contributed to this Advisory.</em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{2FF94D3A-8B49-488C-8192-47B0BD6096C3}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/fda-issues-draft-guidanceAbeba Habtemariamhttps://www.arnoldporter.com/en/people/h/habtemariam-abebaAbeba.Habtemariam@arnoldporter.comEva Temkinhttps://www.arnoldporter.com/en/people/t/temkin-evaeva.temkin@arnoldporter.comElizabeth Trentacosthttps://www.arnoldporter.com/en/people/t/trentacost-elizabethelizabeth.trentacost@arnoldporter.com<p>The U.S. Food and Drug Administration (FDA) just issued a much-anticipated guidance on New Clinical Investigation exclusivity (also known as three-year exclusivity) for new drug applications (NDAs) and NDA supplements.[[N:FDA Guidance for Industry, New Clinical Investigation Exclusivity (3-Year Exclusivity) for Drug Products: Questions and Answers (March 2026), <a rel="noopener noreferrer" href="https://www.fda.gov/media/191368/download" target="_blank">New Clinical Investigation Exclusivity (3-Year Exclusivity) for Drug Products: Questions and Answers.</a>]] FDA&rsquo;s draft guidance is organized in a question-and-answer format that covers the statutory and regulatory eligibility criteria and provides recommendations on requests for exclusivity.&nbsp; </p> <p>For years, FDA&rsquo;s approach to three-year exclusivity demanded an understanding of policy and precedent scattered across regulatory preambles, select exclusivity determinations released under Freedom of Information Act requests, and published court opinions. This draft guidance offers a consolidated articulation of FDA&rsquo;s current three-year exclusivity policy and interpretive framework. </p> <p>Below, we provide a brief summary of FDA&rsquo;s standard for eligibility for three-year exclusivity and a discussion of several key examples.</p> <h2>Three-Year Exclusivity Framework</h2> <p>The Federal Food, Drug, and Cosmetic Act (FD&amp;C Act) and FDA regulations establish the criteria for qualifying for three-year exclusivity.[[N:The Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Amendments) established the exclusivity framework in the FD&amp;C Act. Congress&rsquo;s intent behind the law, more generally, was balancing innovation with making lower cost generic drugs available.]] An NDA or a supplemental NDA may qualify for exclusivity if it &ndash; </p> <ul> <li>Contains a previously-approved active moiety[[N:For a single-entity NDA, the active moiety must have been previously approved in another 505(b) application; for a fixed-combination drug product, each of the active moieties must have been previously approved in another 505(b) application. ]]<strong><em> and</em></strong> </li> <li>Contains reports of new clinical investigations that are &ndash; <ul> <li>not bioavailability studies</li> <li>essential to the approval of the application (or supplement) and</li> <li>conducted or sponsored by the applicant[[N:See sections 505(c)(3)(E)(iii) and (iv), and 505(j)(5)(F)(iii) and (iv) of the FD&amp;C Act; 21 CFR 314.108.]]</li> </ul> </li> </ul> <p>As suggested above, both NDAs and supplemental NDAs are eligible for exclusivity. In the case of NDA supplements (typically efficacy supplements), three-year exclusivity attaches to the changes approved in the supplement that were supported by the new clinical investigation(s) essential to the supplement's approval and conducted or sponsored by the applicant submitting the supplement. In this case, exclusivity does not cover the previously approved conditions of approval for the NDA being supplemented</p> <p>FDA considers eligibility requests on an application-by-application basis. Applicants who believe their drug product is eligible for exclusivity must submit to FDA, per 21 CFR 314.50(j), the following information, prior to approval:</p> <ul> <li>A statement that the applicant is claiming exclusivity</li> <li>A reference to the appropriate paragraph under &sect; 314.108 that supports its claim</li> <li>Information to show that the NDA contains &ldquo;new clinical investigations&rdquo; (other than bioavailability studies) that are &ldquo;essential to approval of the NDA or supplement&rdquo; and &ldquo;were conducted or sponsored by the applicant&rdquo;</li> </ul> <p>The Appendix section of the guidance provides representative language that may aid in preparing an exclusivity request.</p> <p>Mechanistically, the draft guidance lays out a process that leans heavily on FDA&rsquo;s Office of Generic Drug Policy. Specifically, the draft guidance explains that the process for making three-year exclusivity determinations involves coordination between several offices in the Center for Drug Evaluation and Research (CDER) within FDA, namely, the Office of New Drugs (OND) and the Office of Generic Drugs (OGD). The applicable review division in OND provides OGD with the exclusivity summary to aid OGD&rsquo;s eligibility determination. As needed, the Office of Generic Drug Policy may consult with CDER&rsquo;s Exclusivity Board for advice regarding a pending exclusivity matter. After OGD Policy determines that a product is eligible for three-year exclusivity, the relevant information is reflected in an update to the Orange Book. FDA updates exclusivity-related information in the Orange Book approximately every 2 weeks. </p> <h2>Areas of Clarification</h2> <p>The draft guidance addresses several foundational interpretive issues, the basic mechanisms of requesting and obtaining exclusivity, and key interpretive criteria and policy. For example, FDA delves further into the meaning of regulatory terms such as &ldquo;bioavailability study&rdquo;, &ldquo;clinical investigation,&rdquo; &ldquo;new clinical investigation,&rdquo; and &ldquo;essential to approval&rdquo;. FDA also explains what type of information the Agency expects to see in an exclusivity request, for example, to support that a clinical investigation is &ldquo;new&rdquo; or &ldquo;conducted or sponsored&rdquo; by the applicant. </p> <p>Other discussions focus on threshold eligibility issues. For instance, the guidance clarifies that studies that only administer a placebo to subjects are not typically considered to meet the definition of a clinical investigation for purposes of the exclusivity regulations and would not qualify the product for three-year exclusivity. The guidance also clarifies that the drug used in the clinical investigation need not be the same as that approved for the application to qualify for exclusivity, provided that the relevant statutory and regulatory exclusivity requirements are met.[[N:See 21 CFR 314.108 and 21 U.S.C. 355(c)(3)(E)(iii), (iv).]] For example, a clinical investigation that &ldquo;used a similar or earlier version of the drug product in development, which contains the same active moiety or combination of active moieties as the version of the drug in the approved application,&rdquo; could be eligible. </p> <p>FDA also sheds light on more niche topics that have evolved in drug development since the framework was established in the 1980s and 1990s. For example, the response to QB.8 explains that when a study involves multiple cohorts or treatment arms (at least one of which was previously relied upon to approve an application), another cohort or treatment arm may still qualify as a new clinical investigation under certain circumstances. This determination will be made on a case-by-case basis through application of a multifactorial approach to determine whether a cohort or treatment arm constitutes a distinct new clinical investigation. FDA will consider in its analysis whether there is an acceptable scientific or medical reason for the separate cohort or treatment arm; whether the separate cohort or treatment arm evaluates different patient populations and/or different drug products; and whether the separate cohort or treatment arm was prespecified in the protocol. Such a policy is intended to &ldquo;encourage efficiencies&rdquo; in clinical trial design and to incentivize sponsors to submit results from distinct cohorts or treatment arms as soon as they are available, thereby enabling new information to be included in drug labeling more quickly. </p> <p style="text-align: center;">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</p> <p>FDA&rsquo;s draft guidance provides long-awaited clarity to an area of regulatory practice that has historically required navigating multiple resources. This guidance consolidates FDA&rsquo;s policy and practice into a single document with extensive footnote references that provide the underpinnings for the Agency&rsquo;s positions. Comments on this guidance are due on May 4, 2026.</p> <p>For background on another key exclusivity pathway &ndash; five-year new chemical entity exclusivity &ndash; FDA&rsquo;s previous guidance on New Chemical Entity Exclusivity Determinations for Certain Fixed-Combination Drug Products (Oct. 2014) remains a useful resource.[[N:<a rel="noopener noreferrer" href="https://www.fda.gov/media/87932/download" target="_blank">FDA Guidance for Industry, New Chemical Entity Exclusivity Determinations for Certain Fixed Combination Drug Products Guidance for Industry (October 2014)</a>. ]] The authors are longstanding followers of exclusivity issues and are pleased to discuss any questions that may arise.&nbsp; </p> <p>&nbsp;</p>Thu, 05 Mar 2026 00:00:00 -0600{616C5D73-36F3-4226-AAEC-B64A15694727}https://www.arnoldporter.com/en/perspectives/events/2026/03/the-future-of-banking-an-inperson-financial-services-summitWe are pleased to invite you to The Future of Banking: Transactions, Regulation, and Political Insight, an in-person Financial Services Summit hosted by Arnold &amp; Porter.Wed, 04 Mar 2026 00:00:00 -0600<p>We are pleased to invite you to The Future of Banking: Transactions, Regulation, and Political Insight, an in-person Financial Services Summit hosted by Arnold &amp; Porter.</p> <p>This interactive, half-day program is designed for banking and financial services leaders navigating an increasingly complex regulatory, transactional, and political environment. The summit opens with timely panel discussions and featured conversations on cross-border and domestic transactions, private capital, workouts, enforcement and litigation trends, liquidity and capital pressures, and evolving supervisory expectations. The program will conclude with a fireside chat offering legislative perspectives on the future of banking policy.</p> <p>We hope you will join us for an afternoon of thoughtful discussion, practical takeaways, and the opportunity to connect with peers and policymakers shaping the future of the financial services industry.</p> <h2>Speakers:</h2> <p><a rel="noopener noreferrer" href="https://comms.arnoldporter.com/64/6746/landing-pages/speakers-page.asp" target="_blank">&gt;View the panelists</a></p> <p>We look forward to seeing you in New York.</p>{30C39CFA-AE28-4280-9DC2-FCA164CFE3F7}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/inside-epa-quotes-jonathan-martel-on-dojs-clean-air-act-anti-tampering-enforcement-shiftJonathan Martel, Co-Chair of Arnold &amp; Porter&rsquo;s Environmental practice group and a former attorney at the U.S. Environmental Protection Agency&rsquo;s (EPA) Office of General Counsel, was quoted in the <em>Inside EPA</em> article, &ldquo;DOJ Inconsistently Enforcing Vehicle Tampering Policy, Defendants Charge,&rdquo; which examined questions surrounding the U.S. Department of Justice&rsquo;s (DOJ) recent announcement that it would no longer pursue criminal charges under Clean Air Act (CAA) anti-tampering provisions.&nbsp;Wed, 04 Mar 2026 00:00:00 -0600<p>Jonathan Martel, Co-Chair of Arnold &amp; Porter&rsquo;s Environmental practice group and a former attorney at the U.S. Environmental Protection Agency&rsquo;s (EPA) Office of General Counsel, was quoted in the <em>Inside EPA</em> article, &ldquo;DOJ Inconsistently Enforcing Vehicle Tampering Policy, Defendants Charge,&rdquo; which examined questions surrounding the U.S. Department of Justice&rsquo;s (DOJ) recent announcement that it would no longer pursue criminal charges under Clean Air Act (CAA) anti-tampering provisions. </p> <p>Jonathan flagged that the DOJ has not publicly stated why it changed its approach, and emphasized that section 203 of the CAA suggests that Congress intended tampering to be a civil, rather than criminal, violation. </p> <p>Regarding discussions about why the DOJ might treat cases differently, Jonathan emphasized that the parties involved should press for information on the distinction. </p> <p>&ldquo;If they are being treated differently, there are two potential explanations. First, there is a problem because it is a fundamental legal principle that like cases should be treated alike, or second, they&rsquo;re really not alike and there&rsquo;s a reason why they&rsquo;re being treated differently.&rdquo; </p> <p><a rel="noopener noreferrer" href="https://insideepa.com/daily-news/doj-inconsistently-enforcing-vehicle-tampering-policy-defendants-charge" target="_blank">Read the full article.</a> </p>{3E7EE32F-5CF5-42EB-91BE-59A9BCCB8A1E}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/bloomberg-tv-interviews-claire-reade-on-supreme-courts-recent-tariffs-rulingArnold &amp; Porter senior counsel Claire Reade, former Assistant U.S. Trade Representative for China Affairs, appeared on <em>Bloomberg TV</em> to discuss the U.S. Supreme Court&rsquo;s recent ruling on the International Emergency Economic Powers Act (IEEPA) and its implications for tariffs imposed by the Trump Administration.Wed, 04 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter senior counsel Claire Reade, former Assistant U.S. Trade Representative for China Affairs, appeared on <em>Bloomberg TV</em> to discuss the U.S. Supreme Court&rsquo;s recent ruling on the International Emergency Economic Powers Act (IEEPA) and its implications for tariffs imposed by the Trump Administration.</p> <p>Claire explained that the Court&rsquo;s decision prevents the President from using IEEPA to impose tariffs but emphasized that other statutory options remain available. She observed that the Administration is likely to rely on alternative authorities that have previously withstood judicial scrutiny. &ldquo;[The President is] revving the engine on some of his other tariff tools that have been tested in the courts that will not be overturned, like the tariffs he used in his first term against China,&rdquo; Claire said. While these mechanisms require specific investigative processes, she added, &ldquo;I have no doubt that they are going to use these tools.&rdquo;</p> <p>Claire also highlighted the broader trade implications, advising that &ldquo;trading partners need to be on alert&rdquo; for potential efforts to renegotiate existing arrangements to secure more favorable terms. She noted that countries such as Brazil and India will likely benefit from this ruling for the short term, while China &ldquo;has a lot of tariffs on its goods that do not come from the statute that was overturned, so they all stay in place.&rdquo;</p> <p><a rel="noopener noreferrer" href="https://youtu.be/-BRasXaBtOM?si=KiSXNq0p25SdCfhs&amp;t=643" target="_blank">Watch the full interview.</a></p>{7063D006-E063-491B-88B1-DE12E8298157}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/china-life-sciences-2025-year-in-reviewJohn Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comAlex Wanghttps://www.arnoldporter.com/en/people/w/wang-alexalex.wang@cn.arnoldporter.comSiyi Guhttps://www.arnoldporter.com/en/people/g/gu-siyisiyi.gu@cn.arnoldporter.com<p>2025 was a year of notable developments for China&rsquo;s life sciences industry, marked by significant revisions to major legislation and regulations. Heightened regulatory scrutiny across all sectors&nbsp;&mdash; from anti-corruption to medical insurance fraud&nbsp;&mdash; led to intensified enforcement action at all levels, accompanied by the introduction of new enforcement priorities and adoption of novel regulatory approaches.</p>Wed, 04 Mar 2026 00:00:00 -0600<p>2025 was a year of notable developments for China&rsquo;s life sciences industry, marked by significant revisions to major legislation and regulations. Heightened regulatory scrutiny across all sectors&nbsp;&mdash; from anti-corruption to medical insurance fraud&nbsp;&mdash; led to intensified enforcement action at all levels, accompanied by the introduction of new enforcement priorities and adoption of novel regulatory approaches.</p> <p>This Advisory summarizes key legislative and regulatory developments as well as the major enforcement trends from 2025.</p> <h2>Finalized Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks</h2> <p>On January 10, the State Administration for Market Regulation published <a rel="noopener noreferrer" href="https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/jjjzs/art/2025/art_0cee28b1eba84820addc024b351b7bac.html" target="_blank">the Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks</a> (Compliance Guidelines, <span>医</span><span>药企业防范商业贿赂风险合规指引</span>), which compile the mainstream interpretation of China&rsquo;s anti-corruption regulatory framework, similar to the Foreign Corrupt Practices Act Resource Guide published by the U.S. Department of Justice and the U.S. Securities and Exchange Commission.[[N:For further analysis of the Compliance Guidelines, see <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/advisories/2025/01/chinese-regulators-publish-final-anti-corruption" target="_blank">Chinese Regulators Publish Final Anti-Corruption Guidelines for the Healthcare Industry.</a>]]</p> <h2>Refined Social Credit Evaluation System for Public Procurement</h2> <p>On May 20, the National Healthcare Security Administration (NHSA, <span>国家医</span><span>疗保障局</span>) published the <a rel="noopener noreferrer" href="https://www.gov.cn/zhengce/zhengceku/202506/content_7026660.htm" target="_blank">Notice on Further Refining the Drug Pricing and Procurement Credit Evaluation System</a> (Credit Evaluation Notice, <span>国家医</span><span>疗保障局办公室关于进一步完善医药价格和招采信用评价制度的通知</span>), which introduced refinements to China&rsquo;s Social Credit Evaluation System for Public Procurement.</p> <p>Established in 2020, the Social Credit Evaluation System identifies and regulates pharmaceutical companies&rsquo; &ldquo;dishonest practices&rdquo; in public procurement, such as bribery, monopolistic practices, and bid rigging, and imposes penalties for such practices, up to debarment from public procurement in all provinces. Notable updates in the Credit Evaluation Notice include expansion of the sources of information used for credit evaluations, revisions to the categories and thresholds used for evaluations, and continued emphasis on end-to-end compliance management.[[N:For further analysis of the Credit Evaluation Notice, see <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/advisories/2025/06/china-compliance-update-life-sciences-summer-2025" target="_blank">China Compliance Update: Life Sciences &mdash; Summer 2025.</a>]]</p> <h2>Finalized Whistleblower Regulation on Quality and Safety Issues of Drugs and Medical Devices</h2> <p>On May 29, the National Medical Products Administration (NMPA, <span>国家</span><span>药品监督管理局</span>), the Ministry of Finance (<span>财政部</span>), and the State Administration for Market Regulation (<span>国家市</span><span>场监督管理总局</span>) jointly released the final version of the <a rel="noopener noreferrer" href="https://www.nmpa.gov.cn/xxgk/ggtg/zhggtg/20250605145123101.html" target="_blank">Notice on Rewarding Internal Whistleblowers for Reporting on the Quality and Safety Issues of Drugs and Medical Devices</a> (Whistleblower Notice, <span>关于</span><span>对药品医疗器械质量安全内部举报人举报实施奖励的公告</span>). This program is intended to reward whistleblowers who report significant quality and safety issues relating to drugs and medical devices.[[N:For further analysis of the Whistleblower Notice, see <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/advisories/2025/06/china-compliance-update-life-sciences-summer-2025" target="_blank">China Compliance Update: Life Sciences &mdash; Summer 2025.</a>]]</p> <h2>Draft Medical Insurance Law</h2> <p>On June 27, the NPC published the <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2025/6/27/art_113_17027.html" target="_blank">Draft Medical Insurance Law</a> (<span>中</span><span>华人民共和国医疗保障法</span>(<span>草案</span>)) for public comment. The Draft Medical Insurance Law established a regulatory framework for China&rsquo;s public medical insurance system, including regulations for the operation and management of public medical insurance funds and services. When finalized, the Draft Medical Insurance Law will become China&rsquo;s first comprehensive legislation governing the public medical insurance system.</p> <p>The Draft Medical Insurance Law compiled and generally reaffirmed the regulatory regime for the public medical insurance system set forth in earlier laws and regulations. The Draft Medical Insurance Law also includes some notable developments, such as using electronic tracking systems (such as UIDs) for drugs and medical consumables to prevent illegal resale of products purchased with public medical insurance funds. These tracking systems were previously only used by regulators for quality and safety issues.</p> <p>The Draft Medical Insurance Law differentiates between &ldquo;fraud&rdquo; and &ldquo;improper use&rdquo; of public medical insurance funds. Fraud carries more severe administrative penalties and is distinguished from &ldquo;improper use&rdquo; based on whether the implicated individual or entity intended to improperly obtain medical insurance funds. Potential penalties include fines, suspension or termination of services related to public medical insurance, suspension or termination of business operations, or suspension of or limitations on the use of public medical insurance funds. Notably, these penalties are applicable to both individuals and entities, and personnel of entities engaged in misconduct can be debarred from operating businesses relating to public medical insurance for five years.</p> <p>Regulators have also taken measures to develop China&rsquo;s private medical insurance system, including by introducing the first <a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2025/12/7/art_53_18971.html" target="_blank">Commercial Health Insurance Innovative Drug List</a> (Innovative Drug List, <span>商</span><span>业健康保险创新药品目录</span>) in December 2025. The Innovative Drug List focuses on drugs that are highly innovative, have significant clinical value, and offer substantial patient benefit, but are not yet part of the National Reimbursement Drug List (NRDL). While the Innovative Drug List was published for reference, some low-cost semi-public insurance programs have begun covering drugs enrolled in the Innovative Drug List.</p> <h2>Life Sciences Enforcement &ndash; Anti-Corruption</h2> <p>Anti-corruption enforcement in the life sciences industry remained a top priority for regulators in 2025, as reflected in the <a rel="noopener noreferrer" href="https://www.nhc.gov.cn/ylyjs/zcwj/202506/1d6b05af244044a38e1852e5214a4183.shtml" target="_blank">Notice on Promulgation of the Key Points for Rectifying Misconduct in the Field of Pharmaceutical Purchase and Sales and Medical Services in 2025</a> (<span>关于印</span><span>发</span>2025<span>年</span><span>纠正医药购销领域和医疗服务中不正之风工作要点的通知</span>), which called for continued scrutiny of sales and distribution operations, as well as heightened scrutiny in critical areas such as genetic testing, patient information protection, and medical insurance claims. [[N:For further analysis of this Notice, see <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/advisories/2025/06/china-compliance-update-life-sciences-summer-2025" target="_blank">China Compliance Update: Life Sciences &mdash; Summer 2025.</a>]]&nbsp;</p> <p>In January 2026, the NHSA, which is responsible for China&rsquo;s state-run medical insurance program, published six model cases relating to bribery in the life sciences industry:</p> <p> </p> <table> <tbody> <tr> <td style="background-color: #002060; text-align: center;"><strong><span style="color: #ffffff;">No&nbsp;</span></strong></td> <td style="background-color: #002060; text-align: center;"><span style="color: #ffffff;"><strong>Summary&nbsp;&nbsp;</strong></span></td> <td style="background-color: #002060; text-align: center;"><span style="color: #ffffff;"><strong>Penalty&nbsp;</strong></span></td> <td style="background-color: #002060; text-align: center;"><strong><span style="color: #ffffff;">&nbsp;Notes</span></strong></td> </tr> <tr> <td>&nbsp;1</td> <td>&nbsp;A consulting company provided promotional and information services for a pharmaceutical distributor.<br /> <br /> Personnel from the consulting company paid kickbacks totaling RMB 35,046 (US$5,007) to a Healthcare Professional (HCP) via WeChat from January to December 2023, in return for increased sales of a drug handled by the distributor.&nbsp;</td> <td>The consulting company was found to have violated Article 7.1 of the AUCL and was fined RMB 300,000 (US$42,857).&nbsp;</td> <td>In addition to the distributor, Shanghai Pharmaceutical Centralized Bidding Procurement Management Office (上海市药事所) also initiated a credit evaluation of the product&rsquo;s manufacturer.</td> </tr> <tr> <td>&nbsp;2</td> <td>&nbsp;From 2012 to 2023, an HCP received kickbacks totaling RMB 789,110 (US$112,730) from sales representatives and sales managers from six pharmaceutical distributors in return for increased sales of their products.</td> <td>&nbsp;The HCP was sentenced to one year and eight months&rsquo; detention with two years&rsquo; probation, and was fined RMB 100,000 (US$14,286).</td> <td>The implicated distributors would have their credit scores evaluated based on these findings.</td> </tr> <tr> <td>&nbsp;3</td> <td>&nbsp;The actual controller of a medical device distributor provided kickbacks totaling RMB 8,000,000 (US$1,142,857) to a hospital director to facilitate medical device procurement, secure business opportunities, and increase business volume.</td> <td>&nbsp;Undisclosed.</td> <td>&nbsp;The medical device distributor received an &ldquo;Extremely Dishonest&rdquo; credit evaluation and was debarred from distributing products through Chongqing&rsquo;s central procurement system for five years.</td> </tr> <tr> <td>&nbsp;4</td> <td>&nbsp;From 2011 to 2020, a sales representative provided kickbacks, including (1) RMB 395,000 (US$56,429) in cash, (2) US$9,900 in cash, and (3) gold bullion to HCPs. The sales representative was also charged with bribery of entities, i.e., paying RMB 1,191,243 (US$170,178) in cash to multiple hospital clinical departments.&nbsp;</td> <td>The sales representative was sentenced to two years and six months&rsquo; detention and was fined RMB 200,000 (US$28,571).</td> <td>&nbsp;The implicated distributor would have their credit score evaluated based on these findings.</td> </tr> <tr> <td>&nbsp;5</td> <td>&nbsp;An orthopedic HCP who was also a hospital director received kickbacks from pharmaceutical and medical consumable distributors totaling RMB 2,720,548 (US$388,649).&nbsp;</td> <td>The HCP was sentenced to five years and six months&rsquo; detention, and was fined RMB 400,000 (US$57,143).</td> <td>The implicated pharmaceutical and medical consumable distributors would have their credit scores evaluated based on these findings.</td> </tr> <tr> <td>&nbsp;6</td> <td>&nbsp;From 2012 to 2022, an orthopedic HCP received kickbacks from medical device distributors totaling RMB 3,656,457 (US$522,351). The kickbacks ranged from 10% to 40% of the products&rsquo; prices.&nbsp;</td> <td>&nbsp;The HCP was sentenced to six years and six months&rsquo; detention, was fined RMB 500,000 (US$71,429), and had illegal gains of RMB 3,656,457 (US$522,351) confiscated.</td> <td>The implicated distributors would have their credit scores evaluated based on these findings.</td> </tr> </tbody> </table> <p>&nbsp;</p> <p>Key observations from these cases and other 2025 enforcement actions include:</p> <ul> <li><strong>Enforcement of the Credit Evaluation System.</strong> In addition to the use of the Credit Evaluation System as a disciplinary measure in these model cases, the NHSA also published its latest list (<a rel="noopener noreferrer" href="https://www.nhsa.gov.cn/art/2026/2/12/art_126_19659.html" target="_blank">16th series</a>) of pharmaceutical companies categorized as &ldquo;Seriously Dishonest&rdquo; and &ldquo;Extremely Dishonest&rdquo; in February 2026, which included 45 companies newly categorized as &ldquo;Extremely Dishonest.&rdquo; Provincial pharmaceutical procurement platforms have also published Letters of Apology issued by domestic and multinational pharmaceutical companies concerning findings of dishonest practices as part of the corrective measures required by the Credit Evaluation system.</li> <li><strong>Diversified enforcement targets. </strong>The six model cases included enforcement actions targeting multiple sectors of the life sciences industry, including pharmaceutical and medical device distributors, sales representatives, hospital directors, and clinical doctors. In 2025, there have also been enforcement actions targeting high-level government officials in the life sciences industry, including those who previously served in the NMPA and local and provincial health commissions, as well as domestic and multinational manufacturers.[[N:For more details of enforcement actions targeting Chinese government officials in the life sciences industry, see <a href="https://www.arnoldporter.com/en/perspectives/blogs/enforcement-edge/2026/01/recent-enforcement-cases-in-china-life-sciences-compliance">Recent Enforcement Cases in China Life Sciences Compliance.</a>]]&nbsp;</li> <li><strong>Multifaceted enforcement focus. </strong>While paying kickbacks to HCPs remains a primary area of focus, administrative decisions and court judgments published in 2025 targeted a broad range of misconduct, including free placement of medical devices, speaker fees and service fees for HCPs, and outsourced service providers. Media reports discussed investigations into manufacturers&rsquo; use of vendors to pay potentially questionable speaker and service fees, and into sales representatives&rsquo; falsification of supporting documentation for clinical trials to obtain and distribute free drugs to patients.</li> <li><strong>Increased collaboration among regulators. </strong>Multiple administrative decisions relating to commercial bribery published in 2025 suggested that, although the cases were brought by the Administration for Market Regulation, they were likely referred by other agencies, such as disciplinary inspection committees and/or people&rsquo;s procuratorates.</li> </ul> <p>2025 also saw heightened regulatory scrutiny on academic and industry associations. This is reflected in the December 2025 <a rel="noopener noreferrer" href="https://www.audit.gov.cn/n5/n26/c10758168/content.html" target="_blank">Report on the Remediation of Issues Identified in the Audit of Central Budget Execution and Other Fiscal Revenues and Expenditures for Fiscal Year 2024</a> (2024<span>年度中央</span><span>预算执行和其他财政收支审计查出问题整改情况的报告</span>), which listed findings by the National Audit Office relating to industry and academic associations administered or supervised by the central government, and the status of the corresponding remediation. For example, a healthcare-focused academic association was found to have failed to follow the government procurement process for conference services. Other issues identified included associations improperly charging pharmaceutical companies fees for brand promotion at conferences and allowing companies improper influence over training programs. The report noted that some associations acted as the organizers of the training programs in name only, without carrying out any substantive responsibilities.</p> <h2>Life Sciences Enforcement &ndash; Medical Insurance Fraud</h2> <p>2025 also saw an increase in the number of criminal and administrative enforcement actions against medical insurance fraud, which already was one of the major focus areas for Chinese regulators in recent years. The &ldquo;Hundred-Day Campaign&rdquo; launched by the NHSA in September 2025 highlighted regulators&rsquo; focus on key issues, such as falsification of prescriptions and the prescribing of drugs in excess of appropriate clinical use. Model cases published by the Supreme People&rsquo;s Court, the Supreme People&rsquo;s Procuratorate, and the NHSA in 2025 reflected the number of agencies focused on this issue, targeting not only sales representatives, but also personnel from healthcare institutions, pharmacists, patients, and other individuals. Some of these model cases also illustrated the regulators&rsquo; use of electronic tracking systems, previously introduced to address quality and safety issues, to tackle medical insurance fraud. We expect to see these enforcement actions continue in 2026.</p> <p>Regulators also began investigations into medical insurance fraud arising from the operation of patient assistance programs (PAP), as seen in a 2025 court judgment regarding a domestic manufacturer&rsquo;s operation of a PAP for a medication that had already been listed for reimbursement through the national medical insurance program.</p> <p>For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/life-sciences-and-healthcare-regulatory">Life Sciences</a> or <a href="https://www.arnoldporter.com/en/services/capabilities/practices/white-collar-defense-and-investigations">White Collar Defense &amp; Investigations</a> practice group.</p> <p><em>*Zhewen Zhang contributed to this Advisory.</em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{77C097EA-CD06-4183-8680-6D65D51656DE}https://www.arnoldporter.com/en/perspectives/events/2026/03/the-future-of-banking-an-inperson-financial-services-summitChristian D. H. Schultzhttps://www.arnoldporter.com/en/people/s/schultz-christianchristian.schultz@arnoldporter.comJohn D. Lombardohttps://www.arnoldporter.com/en/people/l/lombardo-john-dJohn.Lombardo@arnoldporter.comMichael A. Johnsonhttps://www.arnoldporter.com/en/people/j/johnson-michael-amichael.johnson@arnoldporter.comMichael Kim Krousehttps://www.arnoldporter.com/en/people/k/michael-kim-krousemichael.krouse@arnoldporter.comWed, 04 Mar 2026 00:00:00 -0600{D1F31428-BA33-404A-B498-12EEC318E6C8}https://www.arnoldporter.com/en/perspectives/events/2026/03/the-future-of-banking-an-inperson-financial-services-summitkathleen.reilly@arnoldporter.comWed, 04 Mar 2026 00:00:00 -0600{09AB32A3-8446-45A2-A1AD-400CA5CAF0BB}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/what-you-need-to-know-about-the-secs-enforcement-manual-updateVeronica E. Callahanhttps://www.arnoldporter.com/en/people/c/callahan-veronica-rendnveronica.callahan@arnoldporter.comLee M. Cortes, Jr.https://www.arnoldporter.com/en/people/c/cortes-lee-m-jrlee.cortes@arnoldporter.comChristian D. H. Schultzhttps://www.arnoldporter.com/en/people/s/schultz-christianchristian.schultz@arnoldporter.comAdrien K. Andersonhttps://www.arnoldporter.com/en/people/a/anderson-adrien-kadrien.anderson@arnoldporter.comJennifer Mouhttps://www.arnoldporter.com/en/people/m/mou-jenniferjennifer.mou@arnoldporter.comOn February 24, 2026, the U.S. Securities and Exchange Commission&rsquo;s (SEC or Commission) Division of Enforcement (Division or Enforcement) announced updates to its Enforcement Manual (Manual), last revised in 2017.&nbsp;Wed, 04 Mar 2026 00:00:00 -0600<p>On February 24, 2026, the U.S. Securities and Exchange Commission&rsquo;s (SEC or Commission) Division of Enforcement (Division or Enforcement) <a rel="noopener noreferrer" href="https://www.sec.gov/newsroom/press-releases/2026-20-secs-division-enforcement-announces-updates-enforcement-manual" target="_blank">announced updates</a> to its Enforcement Manual (Manual), last revised in 2017. For nearly two decades, the publication of the Manual has provided insight into the Division&rsquo;s investigation of potential violations of federal securities laws and regulations, as well as related decision-making. Today, it not only serves as an internal guide for Enforcement staff on the policies and procedures for conducting an investigation, but also provides the public with transparency into the full lifecycle of an enforcement matter and a critical roadmap for companies and individuals navigating an SEC inquiry.</p> <p>According to Enforcement Director Margaret Ryan, the update to the Manual seeks to provide greater clarity, ensure greater uniformity, and improve Division staff&rsquo;s work. SEC Chairman Paul Atkins called the 2026 update a &ldquo;long-overdue&rdquo; step that reflects the Division's renewed commitment to transparency, fairness, and efficiency. Below is a summary of the notable procedural changes that any company or individual navigating an SEC inquiry should understand.</p> <h2>Formal Orders of Investigation </h2> <p>The 2026 Manual incorporates and reflects the structural change to the formal order process resulting from the <a href="/en/perspectives/blogs/enforcement-edge/2025/03/sec-revokes-delegated-authority">Commission's March 2025 revocation of authority delegated</a>&nbsp;to the Enforcement Director and the Director&rsquo;s potential sub-delegation to senior officers in the Division to issue formal orders. The 2026 Manual formalizes this change by specifying the content requirements for the staff memorandum seeking a formal order: staff must succinctly describe the relevant conduct and potential violations, obtain approval from the Office of the Director, and then submit both the memorandum and the proposed formal order to the full Commission for a vote. Only upon Commission approval will the formal order and the subpoena authority it carries be issued.</p> <h2>More Predictable and Structured Wells Process</h2> <p><em>Dual Approval within the Division</em>. Staff must now obtain approval from both an Associate Director or Unit Chief <span style="text-decoration: underline;">and</span> the Office of the Director before issuing, or deciding not to issue, a Wells notice. This added layer of senior leadership review is intended to bring greater scrutiny to potential enforcement actions at an earlier stage, and signals that Wells notices will receive heightened internal vetting before issuance.</p> <p><em>Covert Criminal Investigation Carve-Out</em>. The 2026 Manual narrows the circumstances under which staff may withhold issuing a Wells notice before making a recommendation to the Commission when there is a parallel criminal investigation, limiting it to situations where the parallel investigation is &ldquo;covert.&rdquo; This change meaningfully limits staff's discretion to withhold Wells notices solely because of a parallel criminal matter, providing greater predictability for subjects of concurrent civil and criminal inquiries.</p> <p><em>Advance Oral Notice Now Expected</em>. The updated Manual enhances the standard for advance oral notice of a Wells notice from a discretionary &ldquo;may&rdquo; to an expectation that staff &ldquo;should, when feasible,&rdquo; provide oral notice before sending a written Wells notice. This shift is meaningful: companies and their counsel can now reasonably expect a Wells call in advance of a written notice, providing an earlier opportunity to engage with staff on the substance of a potential recommendation before formal submissions are due.</p> <p><em>New Guidance on Wells Submissions</em>. The Manual provides expanded guidance on what makes a Wells submission most &ldquo;helpful.&rdquo; Helpful submissions are those that accurately reflect the evidence, focus on disputed factual or legal issues, acknowledge and address evidence and precedent supporting the staff's position, raise significant legal risks or policy concerns, and, where charges are complex, may include expert reports. Submissions are generally limited to 40 pages (excluding exhibits), with video submissions capped at 12 minutes.</p> <p><em>Mandatory Rejection of Wells Submissions with Settlement Offers</em>. The 2026 Manual makes explicit that staff <span style="text-decoration: underline;">must</span> reject any Wells submission that contains or discusses a settlement offer. Settlement offers must be made in a separate document and cannot be combined with substantive Wells submissions. Respondents to an investigation should carefully segregate these communications to avoid rejection of an otherwise meritorious submission on procedural grounds.</p> <p><em>Greater Transparency into the Investigative File</em>. The updated Manual directs staff to be forthcoming with respondents about the contents of the investigative file following issuance of a Wells notice. On a case-by-case basis, staff should make reasonable efforts to allow Wells recipients to review relevant, non-privileged portions of the file, considering whether such access will facilitate the recipient&rsquo;s ability to respond meaningfully to the staff&rsquo;s proposed recommendation. </p> <p><em>Post-Wells Notice Meeting Changes</em>. The updated Manual formalizes the post-Wells notice process for meetings with a senior officer in the Division, requiring that a meeting be scheduled within 4 weeks of receipt of the Wells submission. The meeting must include a member of senior leadership at the Associate Director level or above. Respondents are still generally limited to one post-Wells notice meeting. These changes give respondents a clearer timeline and assurance of meaningful senior-level engagement.</p> <h2>Cooperation Credit</h2> <p>The 2026 Manual provides expanded and more concrete guidance on how cooperation credit is evaluated for companies. The Manual now explicitly enumerates specific examples of effective remediation, including taking appropriate action for employee misconduct, strengthening internal controls, clawing back executive compensation, making prompt corrective disclosures, hiring new financial staff, and retaining independent compliance consultants. The Manual also expressly acknowledges the possibility of zero-penalty resolutions for companies that engage in meaningful cooperation, self-policing, self-reporting, and remediation. This recognition of no-penalty outcomes underscores the Division's intent to incentivize early and substantive cooperation. Critically, the 2026 Manual also clarifies when self-reporting credit is available. Such credit is appropriate only when a company reports misconduct before staff learns of it from another source and before any imminent threat of disclosure or government investigation. </p> <p>In addition, the 2026 Manual updates the standards and procedures governing both deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs). For DPAs, the Manual clarifies that Commission approval is required and that approval must be sought from a Cooperation Committee before a DPA is recommended to the Commission. For NPAs, the Manual raises the substantive threshold from &ldquo;limited and appropriate circumstances&rdquo; to &ldquo;exceptional circumstances&rdquo; &mdash; a materially higher bar that signals the Division intends to reserve NPAs for only the most compelling cases. Like DPAs, NPAs now require Cooperation Committee approval before a recommendation is made to the Commission, and both generally will be made publicly available on the Commission&rsquo;s website.</p> <h2>Simultaneous Consideration of Settlements and Statutory Disqualifying Waivers</h2> <p>The practice of simultaneously considering settlement offers and statutory disqualification waiver requests was absent from the 2017 Manual and eliminated by former SEC Chairman Gary Gensler during the Biden administration. The updated Manual reflects the Commission's September 2025 restoration of this prior practice, permitting a settling party to request that the Commission simultaneously consider an offer of settlement and any related request for a waiver from automatic statutory disqualifications and other collateral consequences arising from the underlying enforcement action. If the Commission accepts the settlement offer but rejects the waiver request, the respondent will typically have five business days to decide whether to proceed with the accepted settlement terms. This change provides companies with greater certainty and efficiency in the settlement process by allowing them to assess the full scope of consequences, including collateral disqualifications, before committing to a resolution.</p> <h2>Formalization of the Criminal Referrals Policy </h2> <p>Pursuant to <a rel="noopener noreferrer" href="https://www.govinfo.gov/content/pkg/DCPD-202500580/pdf/DCPD-202500580.pdf" target="_blank">Executive Order 14294</a>, the Commission issued a <a rel="noopener noreferrer" href="https://www.sec.gov/files/rules/policy/34-103277.pdf" target="_blank">formal policy statement</a> in June 2025 governing referrals to the U.S. Department of Justice for potential criminal enforcement, which is now incorporated into the 2026 Manual. The Manual sets out specific factors that staff must consider when evaluating whether to refer potential violations to the DOJ or other criminal authorities, including the degree of harm, the defendant's potential gain, specialized knowledge, scienter, recidivism, and whether criminal involvement would provide meaningful additional protection to investors. Referrals must be approved at the Associate Director or Unit Chief level, and staff are generally required to notify the Director before making a referral in non-urgent matters. This formalization provides important guidance on the circumstances under which civil SEC investigations may escalate to criminal referrals.</p> <h2>Certification of Completeness in Settlement Context</h2> <p>The 2026 Manual adds additional guidance on the requirement that settling parties provide an executed Certification of Completeness of Document Production, declaring under penalty of perjury that a diligent search of files for responsive documents was conducted and acknowledging that the Commission has relied on the completeness of the production. Division staff now have a new affirmative obligation to inform individuals and entities of this requirement early in the investigation and to reiterate it upon any changes in counsel or at the commencement of settlement negotiations. Companies should be mindful that representations regarding production completeness can have significant implications, and should ensure their litigation holds and document-collection processes are robust from the outset of an inquiry.</p> <h2>Expanded Scope of Preservation Notices</h2> <p>The 2026 update broadens document preservation expectations to expressly require that preservation notices encompass communications sent or received on <span style="text-decoration: underline;">all</span> messaging platforms and applications, including personal devices such as smartphones and tablets. This explicit expansion reflects the Division's recognition that relevant business communications increasingly occur outside of traditional corporate email systems, and on platforms such as WhatsApp, iMessage, Signal, Teams, Slack, Discord, and Telegram. </p> <h2>Other noteworthy changes:</h2> <p><span style="text-decoration: underline;">Top 5 Investigation Prioritization</span>. Associate Directors and Unit Chiefs are now required to designate their &ldquo;Top 5&rdquo; priority matters each quarter, replacing the prior &ldquo;National Priority Matters&rdquo; designation.</p> <p><span style="text-decoration: underline;">Quarterly Case Review</span>. The Manual formalizes a quarterly case review structure at all supervisory levels, from staff attorneys up through the Director, requiring written investigative plans, regular status updates, and active monitoring of investigation timelines and resource allocation.</p> <p><span style="text-decoration: underline;">Consolidated Audit Trail Data</span>. The 2026 Manual explicitly incorporates the Consolidated Audit Trail (a comprehensive database tracking the full lifecycle of customer orders across all U.S. equity and options markets) as an investigative tool alongside traditional Blue Sheet requests, particularly in insider trading and market manipulation investigations.</p> <p><span style="text-decoration: underline;">NDAA Statute of Limitations</span>. The Manual now incorporates the expanded statute of limitations provisions enacted by the National Defense Authorization Act (NDAA) for Fiscal Year 2021, clarifying that the five-year limitations period to bring an action is extended to ten years for disgorgement for violations requiring scienter, and also for certain equitable remedies, including bars, suspensions, and cease and desist orders.</p> <p><span style="text-decoration: underline;">Expanded Scope of Termination Letters</span>. The updated Manual broadens the circumstances under which staff should issue termination letters to include not only named parties and Wells recipients, but also parties who made significant document productions and issuers whose securities were implicated in an insider trading investigation. This expansion reflects the Division's interest in providing closure to those who participated meaningfully in an investigation, even if they were never formally named as potential defendants.</p> <p><span style="text-decoration: underline;">Stronger Emphasis on Whistleblower Confidentiality and BSA Restrictions</span>. The updated Manual includes stronger, more explicit guidance on the handling of whistleblower-identifying information and Bank Secrecy Act materials, including Suspicious Activity Reports (SARs). Staff must now periodically search the Financial Crimes Enforcement Network database in connection with their investigations, and heightened procedures govern the segregation, storage, and disclosure restrictions applicable to SAR materials.</p> <h2>Conclusion</h2> <p>The 2026 Enforcement Manual updates represent the most comprehensive revision of the Division's investigative playbook in nearly a decade, and their significance extends well beyond internal procedure. For companies and individuals under investigation, the changes offer meaningful opportunities: clearer standards for cooperation credit (including the possibility of no-penalty resolutions), a more structured and transparent Wells process, and greater access to the investigative record. At the same time, the enhanced oversight requirements, formalized criminal referral criteria, and expanded document preservation obligations underscore that the Division is committed to rigorous, senior-level scrutiny at every stage of the enforcement process. The Division's commitment to annual updates going forward means the Manual will continue to evolve, making it an essential reference for any company or individual navigating a securities enforcement inquiry. Companies should carefully monitor these developments, engage proactively, and cooperate meaningfully with Division staff from the earliest stages of an investigation.</p> <p>Arnold &amp; Porter continues to monitor policy shifts at U.S. market regulators as a result of the change in presidential administration. Please reach out to the authors of this Advisory or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="/en/services/capabilities/practices/securities-enforcement-and-litigation">Securities Enforcement &amp; Litigation</a>&nbsp;and <a href="/en/services/capabilities/practices/white-collar-defense-and-investigations">White Collar Defense &amp; Investigations</a>&nbsp;practice groups.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{E54969DE-4F90-42CC-BBF4-1528A162EA0D}https://www.arnoldporter.com/en/perspectives/events/2026/03/arnold-porters-2026-life-sciences-future-forumPlease join Arnold &amp; Porter for our annual Life Sciences Future Forum, a day designed for legal and business leaders from companies across the pharmaceutical and biotechnology sectors.Tue, 03 Mar 2026 00:00:00 -0600<p>Please join Arnold &amp; Porter for our annual Life Sciences Future Forum, a day designed for legal and business leaders from companies across the pharmaceutical and biotechnology sectors.</p> <p>This full-day program provides an in-depth look at the issues shaping the life sciences landscape in the coming year. Our renowned, multidisciplinary team will provide insights on the most significant developments in the field, as well as how anticipated policy and enforcement shifts may affect companies in 2026.</p> <p>The forum will feature a series of presentations and panel discussions led by Arnold &amp; Porter partners &mdash; including former senior government officials &mdash; covering topics such as:</p> <ul> <li>Emerging regulatory and policy priorities</li> <li>Drug pricing and tariff developments</li> <li>Evolving compliance and enforcement expectations</li> <li>Trends in commercial, product liability, and IP litigation</li> <li>The outlook for biopharma transactions and collaborations</li> <li>Antitrust and consumer protection considerations in a dynamic deal environment</li> <li>Key developments in privacy, data use, and IP protection</li> </ul> <p>A networking reception will follow the program.</p>{533229C0-4E34-42BA-AFE0-F40B7D00578B}https://www.arnoldporter.com/en/perspectives/news/2026/03/global-banking-markets-2026-recognizes-arnold-porter-in-liability-management-deal-of-the-yearArnold &amp; Porter was recognized twice at the <em>Global Banking &amp; Markets</em> Latin America &amp; Caribbean Awards 2026 for the firm&rsquo;s work advising the Republic of Colombia on two market-leading transactionsTue, 03 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter was recognized twice at the <em>Global Banking &amp; Markets</em> Latin America &amp; Caribbean Awards 2026 for the firm&rsquo;s work advising the Republic of Colombia on two market-leading transactions:</p> <ul> <li>&ldquo;Liability Management Deal of the Year&rdquo; for a total return swap and related tender offer, in which the aggregate notional amount of the swap totaled the Swiss franc equivalent of US$9.3 billion, and&nbsp;</li> <li>&ldquo;Debt Deal of the Year &ndash; Colombia&rdquo; for the Republic&rsquo;s &euro;4.1 billion bond issue, the then largest ever issue of Euro-denominated bonds by a Latin American issuer.</li> </ul> <p><em>Global Banking &amp; Markets</em>&rsquo; Deal of the Year awards recognize &ldquo;the most innovative and ground-breaking deals from sovereigns, corporates and financial institution issuers.&rdquo;</p> <p>The liability management transaction was previously recognized at the <em><a href="/en/perspectives/news/2026/01/latinfinance-recognizes-arnold-porter-for-advising-republic-of-colombia-and-republic-of-el-salvador"><em>LatinFinance</em> Deals of the Year Awards</a></em>, where it received &ldquo;Sovereign Liability Management Deal of the Year.&rdquo; </p> <p>The Arnold &amp; Porter team for the total return swap was led by partner Gregory Harrington and counsel Arturo Caraballo, and included senior associate Mateo Morris and associate Noel Abdala-Arata. Partner David Sausen and senior associate Lauren Olaya advised on tax matters. The Arnold &amp; Porter team for the bond issue was led by partner Gregory Harrington and counsel Carlos Pelaez, and included senior associates Valentina Garzon and Mateo Morris. Partner Simon Firth advised on certain U.K./EEA matters, while partner David Sausen and associate Sean Kavanaugh advised on U.S. tax matters.</p> <p>Arnold &amp; Porter has represented the Republic of Colombia on global finance matters for more than two decades. The winners were recognized at an awards ceremony in Miami on February 26. </p>{B9937244-4D7E-4383-BD45-DB1DD895E835}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/benjamin-mizer-and-lisa-re-talk-2026-fca-enforcement-with-compliance-weekArnold &amp; Porter Commercial Litigation partner Benjamin Mizer and Life Sciences &amp; Healthcare Regulatory partner Lisa Re were quoted in the recent <em>Compliance Week</em> article, &ldquo;False Claims Act enforcement themes for 2026,&rdquo; discussing what the U.S. Department of Justice&rsquo;s record $6.8 billion in FCA recoveries in 2025 signal for the year ahead.&nbsp;Tue, 03 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter Commercial Litigation partner Benjamin Mizer and Life Sciences &amp; Healthcare Regulatory partner Lisa Re were quoted in the recent <em>Compliance Week</em> article, &ldquo;False Claims Act enforcement themes for 2026,&rdquo; discussing what the U.S. Department of Justice&rsquo;s record $6.8 billion in FCA recoveries in 2025 signal for the year ahead. </p> <p>Ben, former Acting Associate Attorney General at the DOJ, highlighted that a record number of qui tam cases were filed by whistleblowers in the 2025 fiscal year, allowing the administration to bolster enforcement without additional capabilities. </p> <p>&ldquo;These suits can serve as a force multiplier for the Department, because it can benefit from the relators&rsquo; suits without expending the resources to intervene,&rdquo; he said. </p> <p>Lisa, former Assistant Inspector General for Legal Affairs at HHS Office of Inspector General, emphasized that understanding the administration&rsquo;s policy priorities and closely scrutinizing related programs to ensure compliance with federal laws is vital for organizations that receive federal funding to minimize risk. </p> <p>&ldquo;Just as critical is fostering a culture of compliance, encouraging employees to raise concerns and ensuring that hotline complaints are promptly, thoroughly, and consistently investigated and resolved,&rdquo; she said.</p> <p><a rel="noopener noreferrer" href="https://www.complianceweek.com/regulatory-enforcement/false-claims-act-enforcement-themes-for-2026/36512.article" target="_blank">Read the full article </a>(subscription required). </p>{554DBA2B-E0EB-4461-A873-359D632E6ADA}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/howard-sklamberg-quoted-in-pink-sheetHoward Sklamberg, Arnold &amp; Porter Life Sciences &amp; Healthcare Regulatory partner and former Deputy Commissioner for Global Regulatory Operations and Policy at the U.S. Food and Drug Administration (FDA), was quoted in the recent <em>Pink Sheet</em> article, &ldquo;US FDA Use of &lsquo;Potential Official Action Indicated&rsquo; Flag Raises Concerns About Facility-Based CRLs,&rdquo; examining the FDA&rsquo;s increasing use of pOAI status in connection with drug application reviews.Tue, 03 Mar 2026 00:00:00 -0600<p>Howard Sklamberg, Arnold &amp; Porter Life Sciences &amp; Healthcare Regulatory partner and former Deputy Commissioner for Global Regulatory Operations and Policy at the U.S. Food and Drug Administration (FDA), was quoted in the recent <em>Pink Sheet</em> article, &ldquo;US FDA Use of &lsquo;Potential Official Action Indicated&rsquo; Flag Raises Concerns About Facility-Based CRLs,&rdquo; examining the FDA&rsquo;s increasing use of pOAI status in connection with drug application reviews.</p> <p>The article explores concerns among industry stakeholders about the FDA&rsquo;s use of the interim pOAI inspection designation as a basis for issuing facility-related Complete Response Letters (CRLs). </p> <p>Howard explained that the pOAI designation provides the FDA with added flexibility in managing application reviews and facility compliance matters. &ldquo;If you want to look at it on the bright side, you can say flexibility is not a bad thing,&rdquo; he told <em>Pink Sheet</em>, noting that the agency may benefit from having additional tools to address complex manufacturing issues without immediately resorting to formal enforcement classifications.</p> <p>However, he highlighted a key trade-off, observing that if the FDA relies on pOAI rather than formal OAI classifications, &ldquo;it can make decisions much more flexibly and without facing the consequences as much,&rdquo; which could reduce the procedural discipline that previously accompanied facility-based approval decisions.</p> <p><a rel="noopener noreferrer" href="https://insights.citeline.com/pink-sheet/compliance/us-fda-use-of-potential-official-action-indicated-flag-raises-concerns-about-facility-based-crls-3JLUE3CW6BEIFOKQRZ5C4FKFOM/" target="_blank">Read the full article</a> (subscription required).</p>{6C2B4FAB-CF35-4515-A071-F4A8EF9734FE}https://www.arnoldporter.com/en/perspectives/news/2026/03/arnold-porter-advises-corstasis-in-sale-to-esperionArnold &amp; Porter recently advised Corstasis Therapeutics Inc., a privately-held, commercial-stage biopharmaceutical company, in its definitive agreement to be acquired by Esperion Therapeutics, Inc., a publicly traded biopharmaceutical company.Tue, 03 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter recently advised <a rel="noopener noreferrer" href="https://www.esperion.com/news-releases/news-release-details/esperion-therapeutics-and-corstasis-therapeutics-announce" target="_blank">Corstasis Therapeutics Inc.</a>, a privately-held, commercial-stage biopharmaceutical company, in its definitive agreement to be acquired by Esperion Therapeutics, Inc., a publicly traded biopharmaceutical company.</p> <p>As part of the deal, Esperion, through a subsidiary, will acquire all outstanding Corstasis stock in exchange for an upfront payment of $75 million in cash, and Corstasis shareholders will be eligible to receive a total of up to an additional $180 million upon the attainment of certain regulatory and commercial milestones, as well as royalties on sales of certain products.</p> <p>The transaction is expected to close in the second quarter of 2026, subject to customary closing conditions.</p> <p>The Arnold &amp; Porter team was led by Lowell Dashefsky, co-head of the firm's Private Equity and Life Sciences Transactions practices, and partner Wayne Janke.</p>{85F4903B-05A4-42F5-A705-E9FE69DED35D}https://www.arnoldporter.com/en/perspectives/publications/2026/03/uk-economic-crime-enforcement-newsletterKathleen Harrishttps://www.arnoldporter.com/en/people/h/harris-kathleenkathleen.harris@arnoldporter.comSean Curranhttps://www.arnoldporter.com/en/people/c/curran-seansean.curran@arnoldporter.comMaya Paunranahttps://www.arnoldporter.com/en/people/p/paunrana-mayamaya.paunrana@arnoldporter.comMelissa Dameshttps://www.arnoldporter.com/en/people/d/dames-melissamelissa.dames@arnoldporter.comChristopher J. Ladusanshttps://www.arnoldporter.com/en/people/l/ladusans-christopherchris.ladusans@arnoldporter.comAshley D. Collinshttps://www.arnoldporter.com/en/people/c/collins-ashley-dashley.collins@arnoldporter.comJoy S. Weehttps://www.arnoldporter.com/en/people/w/wee-joyjoy.wee@arnoldporter.com<p>In our first edition of the Enforcement Newsletter for 2026, we consider the following updates relating to economic crime and regulation in the United Kingdom (UK)</p>Tue, 03 Mar 2026 00:00:00 -0600<p>In our first edition of the Enforcement Newsletter for 2026, we consider the following updates relating to economic crime and regulation in the United Kingdom (UK):</p> <ul> <li>Governmental and Legislative: <ul> <li>The launch of a &ldquo;British FBI&rdquo; with the creation of the National Police Service (NPS)&nbsp;</li> <li>The UK&rsquo;s new Anti-Corruption Strategy&nbsp;</li> <li>Creation of a reward scheme for whistleblowers, to tackle tax fraud</li> </ul> </li> <li>Serious Fraud Office (SFO): <ul> <li>Ending of the prosecution of former employees at London Mining PLC</li> <li>Issuing updated corporate compliance guidance</li> <li>Reaffirming its commitment to jointly tackle crime with the U.S. Department of Justice (DOJ)</li> <li>Launching an investigation into a $28 million crypto scheme</li> </ul> </li> <li>Financial Sanctions: <ul> <li>The Office of Financial Sanctions Implementation (OFSI) has announced changes to its enforcement powers</li> <li>The UK has moved to a single list for sanctions designations</li> <li>Mikhail Fridman, sanctioned billionaire, is bringing an Investor State Dispute Settlement (ISDS) arbitration claim against the UK government</li> </ul> </li> <li>The Financial Conduct Authority (FCA) takes on a new supervisory anti-money laundering role.</li> </ul> <p>By way of social commentary, we consider Sir Brian Leveson&rsquo;s review and recommendations to alleviate the growing backlog of criminal trials. </p> <h2>UK Government Updates</h2> <h3>UK to Launch a &ldquo;British FBI&rdquo; with the Creation of the National Police Service </h3> <p>On January 26, 2026, the Home Secretary announced significant reforms to policing, including the creation of a new National Police Service dubbed the &ldquo;British FBI.&rdquo; The NPS will be established to tackle serious and complex crimes, including fraud, organized crime, and counter-terrorism. The plan for this new policing structure coincides with announcements of key personnel changes within the SFO, most notably the Director, Nick Ephgrave, who announced his early retirement from the role. This has prompted renewed speculation regarding the SFO&rsquo;s structure and independence. The reforms have been set out in the Home Office&rsquo;s White Paper &lsquo;From Local to National: A New Model for Policing&rsquo;, asserting that the NPS will:</p> <ul> <li>Offer clearer leadership across the police service by issuing strategy, policy, and guidance in place of the various existing bodies with overlapping remits</li> <li>Establish stronger nationwide standards on data, technology, and training, so that the public receives a more consistent service across the country</li> <li>Deliver services to support local forces, such as a centralized procurement system for equipment and technology, and a new national forensics service; and</li> <li>Combine the intelligence, technology, and staff from existing agencies to improve the fight against serious crime, freeing up local police forces so they can serve their local communities</li> </ul> <p>A key part of the reforms is an increased use of technology. The government will invest &pound;115 million in police technology, significantly increasing the number of live facial recognition vans available to police forces and introducing Artificial Intelligence (AI) tools to identify suspects from Closed-Circuit Television (CCTV) and mobile phone footage. Police.AI, a new national center devoted to AI, will also be established.</p> <p>The SFO is conspicuously absent from the White Paper announcing the reforms. When Ephgrave, Director of the SFO, announced on January 15, 2026, that he would be stepping down at the end of March, midway through his tenure, commentators were quick to wonder whether this should be taken as a sign that the SFO might not remain an independent agency. Indeed, such speculation has surrounded the SFO for years, including questions over whether it would be subsumed into the National Crime Agency (NCA), although under the new policing reforms, the NCA will now be merged with the new NPS.</p> <p>The former Metropolitan Police officer&rsquo;s legacy as the first non-lawyer Director of the SFO will be marked by his proactive, swifter approach to law enforcement. In his first three months as Director, the SFO conducted more dawn raids than in the three years prior. Ephgrave also oversaw the investigation and charging of individuals in relation to the Axiom Ince law firm collapse, in just 15 months, a feat described in the SFO&rsquo;s press release on his retirement as the fastest in the SFO&rsquo;s history. Investigations opened under Ephgrave were more focused on smaller domestic fraud cases, representing a shift in priorities away from the SFO&rsquo;s historic investigations into large global corporates. This creates more overlap with the work of other enforcement agencies, so a merger might become a realistic prospect, perhaps with the new NPS or the CPS.</p> <p>An interim Director will assume leadership of the SFO from the end of March until a successor is found. With 26 known ongoing investigations and prosecutions, questions remain about the SFO&rsquo;s future and its role in the UK&rsquo;s enforcement landscape, which is set to change significantly with the establishment of the NPS.</p> <h3>The UK's Anti-Corruption Strategy 2025</h3> <p>On December 8, 2025, the UK government announced its Anti-Corruption Strategy, which sets out a five-year plan to tackle financial crime. This new strategy of 123 commitments for government agencies represents the next progression from the previous 2017-2022 framework. The government has been steadily increasing its pursuit of economic crime with successive developments since 2010, starting with the Bribery Act, then the seminal &lsquo;failure to prevent&rsquo; offenses (with the most recent addition to these, the &lsquo;failure to prevent fraud&rsquo; offense, introduced by the Economic Crime and Corporate Transparency Act 2023 (ECCTA), which came into force in September 2025), and on the horizon in 2026 is the major Crime and Policing Bill.</p> <p>These reflect the government&rsquo;s concerns that anti-corruption measures are needed now more than ever. In the 2025 Transparency International&rsquo;s Global Corruption Perceptions Index, the UK&rsquo;s score fell again to its lowest since the index underwent a major revamp in 2012, now sitting at 20th in the world. The NCA estimates that over &pound;100 billion in illicit cash is laundered every year through the UK or through UK corporate structures. </p> <p>The central tenets of the strategy are:</p> <h5>1. Combating corrupt actors and their funds</h5> <p>The Strategy sets out a 5-step process to identify, triage, disrupt/investigate, prosecute, and ultimately administer justice against fraud actors. The expansion of the City of London Police&rsquo;s pilot Domestic Corruption Unit (DCU) nationwide will help empower this agency to investigate corruption nationwide, stepping up enforcement. The increased presence of the DCU will be supported by an additional &pound;15 million in funding. Further, technology is highlighted as being central to future investigations across enforcement bodies. The DCU will use AI to assist in its investigations, and the SFO is piloting a prototype AI corruption investigation assistant. </p> <h5>2. Addressing pressing vulnerabilities in the UK</h5> <p>The second section aims to tackle extant structural weaknesses in the UK political and financial landscape. A key area highlighted to be at risk is football clubs and agents. Having been explicitly identified as high risk for money laundering for the first time in the summer of 2025, the sector has been under increased scrutiny from a financial crime perspective. In the Anti-Corruption Strategy, the government has pledged to support the new Independent Football Regulator (established by the Football Governance Act 2025) to strengthen its anti-corruption capabilities. </p> <h5>3. Looking outwards: tackling corruption globally</h5> <p>The Strategy has a renewed focus on combating international financial crime, particularly that being facilitated through the UK financial system. The UK has established itself as a global leader in combating corruption. It will host a major international conference, the Countering Illicit Finance Summit, in June 2026 to bring together like-minded governments and organizations such as major banks, with a shared interest in tackling fraud. This follows the Countering Illicit Finance Campaign, which was launched in November 2024. Corruption does not respect borders; an effective anti-corruption strategy demands transnational cooperation. Crown Dependencies and Overseas Territories will also be required to introduce enhanced registers of beneficial ownership transparency. The Strategy is also explicit in its intention to expand the use of sanctions. The government shows no signs of slowing its use of targeted restrictions and asset freezes.</p> <p>The new Strategy signifies that the government and its enforcement bodies have heightened expectations around compliance and are bolstering this with a more coordinated and hands-on approach to surveillance and enforcement. Businesses and firms should use this as an opportunity to prompt:</p> <ul> <li>A review of existing anti-corruption and anti-money laundering frameworks, to ensure they are robust, comprehensive, and align with the new requirements</li> <li>A risk assessment of areas of exposure and potential risk areas in the future</li> <li>The testing of controls and screening processes, as third-party systems cannot always be relied upon; and</li> <li>A refresh of whistleblowing and internal investigation frameworks, and audits to confirm that adequate training and SOPs are accessible to employees</li> </ul> <h3>UK Government Announces Reward Scheme for Whistleblowers to Tackle Tax Fraud in 2025 Budget</h3> <p>In a previous edition of our Enforcement Newsletter, we <a href="/en/perspectives/publications/2025/06/uk-economic-crime-group-enforcement-update">reported</a>&nbsp;on HM Revenue &amp; Customs&rsquo; (HMRC) announcement of a new whistleblower reward scheme inspired by similar schemes operated by tax authorities in the United States and Canada. Late last year, the UK Government confirmed the rollout of HMRC&rsquo;s &lsquo;Strengthened Reward Scheme&rsquo; in the Autumn Budget, asserting that such measures were part of an overall effort to &ldquo;close the tax gap&rdquo; and expose high-value tax evasion.</p> <p>Individuals who provide HMRC with information where tax valued over &pound;1.5 million is subsequently recovered, could now receive between 15% to 30% of the additional tax collected as a reward (excluding penalties and interest). This metric is akin to the one adopted by the Internal Revenue Service (IRS) in the United States (U.S.), which is known to pay substantial sums to whistleblowers. Unlike certain other Budget measures, the Strengthened Reward Scheme operates with immediate effect. </p> <p>HMRC has provided a list of specific circumstances in which individuals will not be eligible to receive a reward, which includes:</p> <ul> <li>Civil servants who obtained the information while employed</li> <li>Individuals who are required by law to disclose, or not disclose, the information</li> <li>The reward might lead, directly or indirectly, to the funding of illegal activity</li> <li>Individuals acting on behalf of someone else</li> <li>The information is from someone who would not have been eligible for a reward themselves</li> <li>Individuals who submit anonymous reports</li> </ul> <p>The information reported must also be &ldquo;new&rdquo; to HMRC; i.e., if the information an individual provides is already known to HMRC or could have been identified through routine processes, no reward will be offered. </p> <p>Importantly, to avoid tipping off those engaged in the illicit activities, individuals making a report to HMRC must not try to find out more about the activity, tell anyone they are making a report, or encourage anyone to commit a crime to obtain further information. </p> <p>It remains to be seen how effective the new scheme will be in achieving HMRC&rsquo;s goal of clamping down on tax evasion, particularly as the focus is on high-value fraud, and any reward payment will ultimately be subject to HMRC&rsquo;s discretion. </p> <p>Looking ahead, the government estimates that the first rewards will be paid in 2027/2028, and that around &pound;225 million of additional tax will be collected as a result of the scheme by the 2030/2031 tax year. </p> <p>The forecasted recovered tax revenues are likely to lead to expectations that HMRC will administer higher rewards to whistleblowers, in contrast to the modest sums paid under its previous incentive model (which average less than &pound;1 million per year).</p> <p>The enhanced HMRC reward scheme is certainly a shift in the UK&rsquo;s efforts to detect and deter serious tax fraud and displays greater alignment with the IRS model. The operation of the scheme will have important implications for corporates with the new measures potentially acting as an incentive to employees of large companies to report allegations directly to HMRC. In response, it will be critical for corporates to review their existing whistleblowing and non-retaliation policies, ensuring that effective internal reporting structures are in place to address employee concerns and undertake remedial action where appropriate.</p> <h2>SFO Updates</h2> <h3>SFO to Drop Prosecutions for Alleged Bribery at London Mining PLC</h3> <p>The SFO has ended its prosecution of two former employees of London Mining PLC and a consultant who assisted the company. The investigation was first announced in 2016, and it now appears that disclosure issues have resulted in the case being dropped ten years later.</p> <p>In 2023, Graeme Hossie, the former CEO of London Mining, and Rachel Rhodes, the former CFO, were charged with two counts of corruption: one from 2009 and 2012, and the other from 2010 to 2014. A consultant for the business, Ariel Armon, was charged with one count of corruption for the latter period. It was alleged that London Mining paid $7 million through Armon to overcome administrative hurdles affecting its operations in Sierra Leone.</p> <p>However, in December 2025, after extensive preparation for the trial and a confirmed trial date of April 2026, the SFO requested to vacate the trial, as a result of the discovery of more than half a million documents that should have been provided to the defendants by the SFO as part of its disclosure process. Subsequently, the SFO concluded that there was no longer a realistic prospect of conviction. As a result, the SFO offered no evidence against the defendants, and they were formally acquitted on February 12, 2026.</p> <p>At the same time, the SFO announced that the disclosure issues in this case related to its prior evidence review software and that around 20 cases were being reviewed for similar issues. This new review is separate from another review of disclosure issues for the same software relating to how keyword searches were conducted, under which the SFO is reviewing the safety of 66 convictions. It is understood that only three of these convictions remain under review, and of those already reviewed, there is no material that casts doubt on them. </p> <p>This is not the first time that the SFO has faced case-ending failures in its disclosure obligations, with the prior collapse of the case against individuals related to Serco and the overturning of convictions in respect of Unaoil. Following these cases, the SFO disclosure process was subject to a number of independent reviews and reports aimed at improving SFO disclosure. Nonetheless, it appears that lessons have not been fully learned, with the current collapse of the London Mining case and the prospect of up to 20 other cases facing similar issues.</p> <h3>SFO Publishes Updated Corporate Compliance Guidance</h3> <p>The SFO has issued updated guidance setting out when, how, and why the agency may evaluate a company&rsquo;s compliance program. The guidance identifies three key stages at which compliance programs are likely to be relevant to the SFO: (i) when deciding whether to prosecute, (ii) when determining whether to offer a Deferred Prosecution Agreement (DPA) and on what terms, and (iii) when making sentencing submissions following a guilty plea or conviction. </p> <p>On November 26, 2025, the SFO confirmed that its &ldquo;refreshed&rdquo; guidance outlines six scenarios in which prosecutors may assess a compliance program, emphasizing that all evaluations will be conducted on a case by case basis. Importantly, the guidance reiterates that the existence of policies, procedures, and controls alone does not mean a compliance program is effective; prosecutors will examine how these measures operate in practice.</p> <p>For the first time, the SFO has also set out the criteria that will be used to determine whether a company had &ldquo;reasonable procedures&rdquo; in place to prevent fraud, a statutory defense to the new corporate offense of failing to prevent fraud, which came into force in September. While the burden of proving reasonable procedures rests with the company seeking to rely on the defense, the SFO may nonetheless review a compliance program during an investigation to assess the likelihood of the defense succeeding should a prosecution be brought.</p> <p>The Home Office published guidance in 2024 setting out the overarching principles that companies must follow in order to rely on the reasonable procedures defense. The SFO&rsquo;s updated publication supplements this by clarifying how the agency will approach compliance assessments in practice.</p> <p>The previous iteration of the SFO&rsquo;s corporate compliance guidance already identified five scenarios in which a compliance program may be reviewed, including: assessments of whether prosecution is in the public interest; consideration of whether a DPA is appropriate; whether to impose monitorship obligations as part of a DPA; and claims that a company had &ldquo;adequate procedures&rdquo; in place to prevent bribery under the Bribery Act 2010. Compliance programs may also be evaluated when the SFO is considering appropriate sentencing submissions following convictions for failing to prevent bribery or fraud.</p> <p>The SFO notes that information about a company&rsquo;s compliance program may be obtained from a &ldquo;variety of sources&rdquo; using the agency&rsquo;s investigatory powers, including compelled document production under section 2 notices and suspect interviews conducted under the Police and Criminal Evidence Act 1984 (PACE).</p> <p>The revised guidance also provides responses to several frequently asked questions. Notably, the SFO confirms that there is no &ldquo;formal guidance or interpretation&rdquo; of what constitutes adequate procedures under the Bribery Act or reasonable procedures under ECCTA beyond the statutory principles already published. It adds that &ldquo;external sources may assist&rdquo; companies in assessing the effectiveness of their compliance program, pointing to guidance issued by the U.S. DOJ and the French Anti Corruption Agency as relevant for companies with a U.S. or French nexus.</p> <p>The updated guidance is the latest step in the SFO&rsquo;s broader refresh of its corporate enforcement approach. It follows the agency&rsquo;s revised corporate prosecution guidance issued jointly with the Crown Prosecution Service (CPS) earlier in 2025, as well as updates to the SFO&rsquo;s corporate cooperation guidance released earlier the same year. </p> <h3>SFO and DOJ Reaffirm Commitment to Joint Working to Tackle Crime</h3> <p>Last year, the UK&rsquo;s SFO and the U.S. DOJ reaffirmed their commitment to deepening cross border cooperation in the fight against financial crime. Following a high level meeting in June 2025, SFO Director Nick Ephgrave and Head of the DOJ&rsquo;s Criminal Division Matthew Galeotti committed to strengthening long standing operational ties and aligning enforcement priorities in areas such as fraud, bribery, and corruption.</p> <p>The discussions focused on the DOJ&rsquo;s updated white collar crime enforcement strategy, with both agencies emphasizing their shared interest in encouraging voluntary self disclosure from corporations and reducing delays in large, multi jurisdictional investigations. The goal, both parties noted, is to deliver swifter and more effective justice, particularly as cross border criminal schemes grow in sophistication and scale. </p> <p>The meeting also followed the DOJ&rsquo;s broader recalibration of its corporate enforcement approach, including new policy documents issued in 2025 that place greater emphasis on fraud enforcement, voluntary cooperation, and clearer incentives for corporate self reporting. These policy shifts are broadly aligned with the SFO&rsquo;s recent updates to its own cooperation and compliance guidance, which similarly aim to promote transparency, reduce investigatory timelines, and enhance collaboration with international partners. </p> <p>Following the meeting, Ephgrave highlighted the damaging impact that fraud, bribery, and corruption have on individuals and economies, reaffirming the agencies&rsquo; &ldquo;long standing commitment to working together wherever possible to tackle this threat.&rdquo; He described the engagement as a &ldquo;significant milestone&rdquo; in strengthening the SFO&rsquo;s international enforcement strategy. </p> <p>Galeotti echoed these sentiments, emphasizing the importance of coordinated strategies and shared enforcement tools to protect market integrity and secure justice for victims. He noted that the Criminal Division and SFO &ldquo;have been partners in this fight for many years&rdquo; and expressed a clear intention to deepen that partnership further. </p> <p>The renewed alignment between the SFO and DOJ signals a renewed intention towards greater transatlantic cooperation, particularly in areas involving complex fraud and corporate misconduct, and underscores the strategic importance both agencies place on collaborative enforcement in a globalized economy. It will be interesting to see whether this momentum continues under the eagerly anticipated change in SFO directorship. </p> <h3>SFO Announces Investigation into $28 million Crypto Scheme</h3> <p>The SFO has launched an investigation into Basis Markets, a $28 million crypto investment scheme, marking the agency&rsquo;s first foray into investigating cryptocurrency fraud. On November 20, 2025, the SFO issued a public appeal for assistance with the investigation, asking investors to provide information relating to the collapse of Basis Markets. As part of the investigation two men have been arrested on suspicion of multiple fraud and money laundering offenses.</p> <p>The investigation stems from Basis Markets raising approximately $28 million through two fundraising rounds in November and December 2021, with the apparent intention of creating a &ldquo;crypto hedge fund.&rdquo; In June 2022, investors were informed that proposed regulatory changes in the United States prevented the project from progressing. The SFO now alleges that the representations made to investors were fabrications intended to disguise the misappropriation of investor funds.</p> <h5>A Turning Point for Crypto Enforcement</h5> <p>For several years, victims of cryptocurrency related fraud have lacked avenues for redress. The SFO&rsquo;s action in this case signals a notable shift, indicating a greater willingness and operational capacity to investigate complex crypto based misconduct. </p> <p>The agency has emphasized its commitment to expanding its cryptocurrency expertise and pursuing individuals or entities that misuse digital assets to defraud investors. This broader enforcement posture reflects the increasing scale and sophistication of crypto related financial crime, as well as the need for more robust regulatory and investigative tools. </p> <p>It is, however, notable that the SFO has taken a substantial amount of time to launch this investigation, more than three years after the collapse of Basis Markets. This likely reflects the time needed for the agency to build its internal capabilities and understanding of cryptocurrencies, as well as the complexity of such investigations.</p> <h5>Implications for the Digital Asset Sector</h5> <p>The Basis Markets investigation underscores several key risks in the crypto ecosystem:</p> <ul> <li>Overreliance on opaque, &ldquo;proprietary&rdquo; technology: Fraudulent schemes often rely on claims of advanced bots or algorithmic strategies that are difficult for investors to verify</li> <li>High pressure fundraising models: Rapid capital raises through non-fungible tokens or token sales can circumvent traditional due diligence safeguards</li> <li>Regulatory blind spots: Fraudsters exploit gaps between national jurisdictions, particularly where crypto products are cross border</li> </ul> <p>More broadly, the case aligns with increasing regulatory focus on digital assets in the UK, reflecting an emerging enforcement trend aimed at restoring confidence in the sector. Firms operating in this space are likely to face heightened scrutiny, particularly where their business models rely on untested or unverifiable technology.</p> <h5>Conclusion</h5> <p>The SFO&rsquo;s investigation into Basis Markets represents an important milestone in the UK&rsquo;s approach to policing cryptocurrency related fraud. As the agency continues to develop its technical expertise, crypto asset businesses should anticipate a more assertive enforcement landscape, reflecting a broader regulatory shift aimed at safeguarding investors and strengthening confidence in the digital asset sector.</p> <h2>Financial Sanctions Updates</h2> <h3>OFSI Announces Changes to its Enforcement Powers</h3> <p>On January 29, 2026, OFSI published its Consultation Response regarding reforms to its enforcement processes. Giles Thomson, the Director of OFSI, confirmed that such initiatives are intended to reduce the number of cases being pursued simultaneously (prioritizing the most serious cases, cases in support of specific wider objectives, and those highlighting vulnerabilities in particular sectors) and to expedite the process for those that are investigated. </p> <p>Key changes include:</p> <ul> <li>OFSI will publish a new case assessment matrix for the purpose of increasing the transparency of its penalty processes.</li> <li>The statutory penalty maximums will be increased, albeit subject to effecting legislation being passed. The previous cap of the higher of &pound;1 million or 50% of the value of the breach will be replaced so that maximum penalties will become the higher of &pound;2 million or the full value of the breach.&nbsp;</li> <li>The discount available for voluntary disclosure will be capped at a maximum of 30% for all cases, regardless of severity. Previously, &ldquo;serious&rdquo; cases could obtain a discount of up to 50%.</li> <li>OFSI is introducing a negotiated Settlement Scheme. Parties who agree to its terms, including waiving the right to ministerial review and to appeal OFSI&rsquo;s decision, will benefit from a 20% discount to their baseline penalty figure, as long as they settle within 30 business days.&nbsp;</li> <li>OFSI will also launch an Early Account Scheme (EAS) that allows parties to provide a full and complete account of potential breaches, accompanied by all relevant materials and evidence. The EAS participation discount will be up to 20%. Importantly, parties will still benefit from this discretionary discount to their baseline penalty regardless of whether they choose to contest or settle thereafter.</li> </ul> <p>The new discounts introduced (for the Settlement Scheme and EAS), together with the voluntary disclosure discount, can be compounded, meaning that cooperative and eligible subjects could potentially reduce their penalty by up to 70%, though the EAS and voluntary disclosure discounts are subject to OFSI&rsquo;s discretion. </p> <p>These reforms to OFSI&rsquo;s enforcement powers demonstrate a renewed appetite on the regulator&rsquo;s part to fiercely police sanctions breaches using both enhanced rewards to encourage self-disclosure and cooperation, and more severe punishments to promote compliance through deterrence. The doubling of the statutory penalty maximums is especially notable - with the specter of harsher fines soon to be at OFSI&rsquo;s disposal, now more than ever, firms need to be closely reviewing their sanctions compliance.</p> <h3>UK Moving to a Single List for Sanctions Designations</h3> <p>On January 28, 2026, the UK Sanctions List became the single, authoritative list for UK sanctions designations. Previously, sanctions designations were set out in two lists:</p> <ul> <li>The UK Sanctions List, published by the Foreign, Commonwealth and Development Office (FCDO), a comprehensive list of persons placed under sanctions through regulations made under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) (including financial, immigration, trade or transport sanctions); and&nbsp;</li> <li>The Consolidated List of Asset Freeze Targets, published by OFSI, which only issued details on those subject to financial sanctions.&nbsp;</li> </ul> <p>The change is a joint initiative by the FCDO, OFSI, and HM Treasury, originally announced in October 2025. It follows industry feedback that having a single sanctions list would avoid duplication of effort, minimize the risk of errors, and simplify screening checks of sanctioned persons. </p> <p>However, the &lsquo;Russia: list of persons named in relation to financial and investment restrictions&rsquo;, which sets out the entities subject to specific sectoral financial and investment restrictions, remains a separate list and will not be combined with the UK Sanctions List. Similarly, the FCDO has clarified that the UK Debarment List and list of proscribed terrorist organizations will remain unaffected by these changes. </p> <p>The Government has published guidance to help businesses and the public interpret and prepare for the upcoming changes to the sanctions lists. Businesses that use these lists should (if they have not already):</p> <ol> <li>Ensure any screening systems (whether internal or third party) using the OFSI Consolidated List are shifted to the UK Sanctions List; and</li> <li>Ensure any systems that utilize the &lsquo;OFSI Group ID&rsquo; as an identifier are updated to use the UK Sanctions List &lsquo;Unique ID&rsquo;, which is the identifier now assigned to newly designated persons (designated persons prior to January 28 will still retain valid and usable historic OFSI Group ID identifiers on the UK Sanctions List, although Unique IDs can equally be used).</li> </ol> <p>Alongside these changes, the search tool on the UK Sanctions List is being updated to make it more user-friendly. The upgrades will include new search capabilities, such as fuzzy logic search (which returns relevant results even if the spelling is not exact), ranked search results, highlighted matches, and improved downloads. The new search tools were activated in January 2026, and OFSI&rsquo;s most recent enforcement action against Bank of Scotland PLC, announced January 26, 2026, exemplifies their pressing need. OFSI fined Bank of Scotland &pound;160,000 for various breaches of the UK&rsquo;s Russia sanctions regime, namely dealing with funds and making funds available to a designated person. The crucial factor that caused the breaches was the Bank&rsquo;s failure to recognize its customer&rsquo;s designated status, due to their UK passport containing a spelling variation of their name. This fine and the changes to the Sanctions List search tools indicate that OFSI will not tolerate errors in sanctions screening due to transliteration, which are especially common when converting Russian into English, as an excuse for inadvertent sanctions non-compliance. </p> <p>Businesses need to be proactive in their sanctions compliance. Companies should therefore ensure their internal policies, procedures, and screening processes (whether internal or through third parties) are up to date to these changes and, more broadly, working comprehensively and accurately. OFSI&rsquo;s penalty publication notice against Bank of Scotland warns that OFSI expects firms to &ldquo;assess and employ appropriate resources to enhance the effectiveness&rdquo; of their screening apparatus, such as commercial list providers and enriched screening systems, to avoid mistakes in the first instance. Contractual terms and agreements must also be reviewed to ensure they reflect the amalgamation of the Consolidated List into the UK Sanctions List. Recent enforcement action by OFSI has highlighted that lack of familiarity with the inner workings of the regime is not a defense.</p> <h3>UK Facing ISDS Arbitration Claim Brought by Sanctioned Billionaire, Mikhail Fridman</h3> <p>In November 2025, the UK publicly acknowledged that it is facing an arbitration brought by Mikhail Fridman, who has been a designated person under the UK&rsquo;s Russia sanctions regime since March 15, 2022. The Minister of State for Trade Policy, Chris Bryant, announced the arbitration in response to a question in Parliament, but the exact details of the case and claim have not been revealed.</p> <p>The basis for Fridman&rsquo;s designation is his position as co-founder and main shareholder of the Alfa Group. The Alfa Group is a major business enterprise with interests in critical Russian industries, including oil, gas, and banking. This includes Alfa Bank, Russia&rsquo;s largest non-state bank, which has been sanctioned in its own right by the UK, EU, and U.S. While Fridman was originally sanctioned for his connections to Vladimir Putin, the grounds for his designation were amended in 2023 to focus on his position within the Alfa Group, and its role in contributing to the Russian economy and state. </p> <p>Fridman&rsquo;s case against the UK has been brought under ISDS rules, and these proceedings mark the second-ever case of this kind the UK has faced. The basis of Fridman&rsquo;s claim is not known, but it is likely that he is arguing that the UK&rsquo;s decision to sanction him violates the terms of the UK-Russia Bilateral Investment Treaty. The ISDS legal mechanism is a form of dispute resolution that is built into many international investment treaties and trade agreements, which was originally intended to give private investors a route to international arbitration for unfair treatment by states. However, there are concerns that ISDS proceedings can simply empower high-net-worth individuals to drag states into expensive, drawn-out cases which expend national funds, and such concerns are being voiced with growing urgency globally. </p> <p>The UK is not the only state facing legal challenges from Fridman regarding his sanctioned status. Luxembourg is facing a $16 billion investment treaty claim related to assets frozen in the country under EU sanctions, which is being overseen by a United Nations Commission on International Trade Law (UNCITRAL) tribunal. Cyprus was also threatened with an investment treaty claim in May 2024 by the same Fridman-affiliated entity, ABH Holdings, but no formal proceedings have been initiated. Ukraine alone is subject to three cases brought by Fridman. </p> <p>This new case is important in that it signifies a novel way for wealthy individuals to challenge their designations through a legal route that operates entirely outside the domestic sanctions framework, bypassing OFSI and the Office of Trade Sanctions Implementation (OTSI) &ndash; the regulatory bodies with authority over most sanctions regulations. However, the impact of ISDS judgments on the sanctions sphere is uncertain. Even if Fridman obtains a favorable ISDS outcome, any award would still need to be enforced in the UK courts, leading to further litigation and delay before a resolution. The UK could also follow in the steps of the EU, whose new sanctions measures in July 2025 explicitly prohibit member state courts from enforcing the decisions of investor-state tribunals if they relate to EU sanctions regulations. </p> <h2>FCA Update</h2> <h3>FCA to Take On New Supervisory Anti-Money Laundering Role</h3> <p>On October 21, 2025, HM Treasury published its Consultation response announcing the UK Government&rsquo;s decision that the FCA will become the Single Professional Services Supervisor (SPSS) as part of reforms to the anti-money laundering (AML) and counter-terrorism financing (CTF) supervision regime. </p> <p>The present AML/CTF supervisory framework consists of three public sector supervisors (the FCA, the Gambling Commission, and HMRC), together with 22 private-sector professional body supervisors responsible for overseeing the legal and accountancy sectors, such as the Solicitors Regulation Authority (SRA). </p> <p>The FCA will take over supervising firms that undertake activities covered by the Money Laundering Regulations (MLRs) as Legal Service Providers, Accountancy Service Providers, and Trust and Company Service Providers. The creation of the SPSS does not affect firms&rsquo; existing obligations under the MLRs, and firms with compliant, and robust AML / CTF controls should not need to make adjustments. The Consultation Response notes that the FCA will take a &ldquo;risk-based approach&rdquo; across approximately 60,000 regulated firms, focusing its resources proportionately on firms&rsquo; risk profiles. Further, the FCA will be given, in relation to its new role and extended responsibilities, powers for enforcement action to be set out in legislation, and funding to employ and train expert staff, as well as invest in new technology.</p> <p>HM Treasury confirmed in the Consultation Response its intention for the FCA to develop specific expertise in &ldquo;the particularities of each sector it supervises&rdquo;, having noted that some respondents to the Consultation argued such sector-specific knowledge would be required. Indeed, critics of the SPSS reform have highlighted that while the FCA is seasoned in financial services regulation, it does not have the specialist knowledge and experience to supervise law firms effectively. Client confidentiality and legal privilege are two thorny areas with which the FCA is unfamiliar, unlike the SRA. The Law Society has been especially vocal, expressing concern that, given the complexity of the AML regime, a single professional services supervisor may not be suitable. One criticism is that the newly proposed system may lead to regulatory overlap. Law firms will be regulated by the FCA for AML / CTF purposes but remain under the supervision of the SRA for professional conduct. However, episodes of misconduct rarely fit neatly into one of these; AML breaches are likely to simultaneously raise professional conduct issues. </p> <p>Whatever the final status of this regulatory shake-up, firms are unlikely to see material differences for a while, as the changes cannot be implemented until legislation is passed, funding is arranged, and a detailed transition and delivery plan is drawn up. Firms should stay abreast of any developments as they come &ndash; at the time of writing, HM Treasury is currently considering feedback on a Consultation which closed on December 24, 2025, regarding proposals on the key duties, powers, and accountability mechanisms for the FCA&rsquo;s new supervisory role.</p> <h2>Social Commentary</h2> <h3>Leveson Review Recommends Radical Changes to the Crown Court Process</h3> <p>After years of a growing backlog of criminal trials in the Crown Courts, Sir Brian Leveson conducted an independent review and made recommendations to the Government to alleviate the issues, with the intention of increasing efficiency while retaining the fairness and transparency that must be the hallmark of our criminal justice system. </p> <p>The current backlog has been building rapidly over recent years, with Ministry of Justice data showing nearly 80,000 cases awaiting trial in the Crown Court and hearings already calendared for 2030. This creates a long wait for justice for victims, witnesses, and defendants alike. </p> <p>The Leveson review was issued in two parts, with the first dealing with systemic and overarching problems, while the second part deals with more technical matters, such as efficiency in case progression, the use of AI, and ways to incentivize more effective inter-agency cooperation.</p> <p>Part one of the Leveson review provides 45 recommendations, across numerous topics, which, if wholly implemented, are estimated to save approximately 9,000 sitting days in the Crown Court each year, making a significant dent in the current backlog. However, many of the recommendations are contingent upon increased spending, which is yet to be agreed by the Government. </p> <p>The recommendations include:</p> <ul> <li>The increased use of alternative resolution mechanisms, preventing cases from reaching the courts at all</li> <li>The creation of a new Crown Court Bench Division, which would hear certain cases before a judge and two magistrates, without a jury&nbsp;</li> <li>The rebalancing of cases between the Magistrates&rsquo; Court and the Crown Court, removing the right of defendants charged with certain offenses to opt to have their case heard by the Crown Court; and</li> <li>The option for defendants to choose a trial by judge alone, avoiding certain jury trials</li> </ul> <p>These changes would reduce the number of cases retained for the Crown Court but would place some of that burden on other parts of the criminal justice system. In respect of the creation of the Crown Court Bench Division, this requires the implementation of an entirely new division and the recruitment of new judges and magistrates. Removing certain jury trials, particularly for complex fraud cases, is expected to shorten trial lengths, allowing specialist judges to deal with such complex issues that can be difficult for layperson juries to understand and fairly assess.</p> <p>Part two of the Leveson review then provides more than 130 recommendations, with a focus on more specific issues that can be implemented without legislative intervention. This includes recommendations to increase the use of remote hearings as a way to improve efficiency.</p> <p>While many of the recommendations provide for substantial change to the Crown Court process, it is clear that the size of the backlog and its rate of growth require radical rather than incremental changes. However, this will require substantial financial investment after years of underfunding and commitment of other resources. The Government announced on February 24, 2026, increased funding for courts and on February 25, 2026, introduced the new Courts and Tribunals Bill, which would take forward some of the Leveson review recommendations. It will remain to be seen what shape the reforms ultimately take and whether the recommendations have been appropriately risk-assessed.</p> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{807185E5-0E08-4576-BF6E-C4FDA8C20A63}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/sec-adopts-final-rules-reflecting-the-requirements-of-the-holding-foreign-insiders-accountable-actSara Adlerhttps://www.arnoldporter.com/en/people/a/adler-sarasara.adler@arnoldporter.comJoel I. Greenberghttps://www.arnoldporter.com/en/people/g/greenberg-joel-ijoel.greenberg@arnoldporter.com<p>As discussed in our December 30, 2025 <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/12/holding-foreign-insiders-accountable-act">alert</a>, the Holding Foreign Insiders Accountable Act (HFIAA) amended Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act) to require officers and directors of foreign private issuers with equity securities registered under Section 12 of the Exchange Act (FPIs) to disclose their beneficial ownership of, and transactions in, the equity securities of those FPIs by filing Forms 3, 4 and 5 on the same basis as officers and directors of domestic issuers. The initial reports are required to be filed on March 18, 2026. On February 27, 2026, the SEC adopted final <a rel="noopener noreferrer" href="https://www.sec.gov/files/rules/final/2026/34-104903.pdf" target="_blank">amendments</a> to various forms and rules to implement that requirement.</p>Tue, 03 Mar 2026 00:00:00 -0600<p>As discussed in our December 30, 2025 <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/12/holding-foreign-insiders-accountable-act">alert</a>, the Holding Foreign Insiders Accountable Act (HFIAA) amended Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act) to require officers and directors of foreign private issuers with equity securities registered under Section 12 of the Exchange Act (FPIs) to disclose their beneficial ownership of, and transactions in, the equity securities of those FPIs by filing Forms 3, 4 and 5 on the same basis as officers and directors of domestic issuers. The initial reports are required to be filed on March 18, 2026. On February 27, 2026, the SEC adopted final <a rel="noopener noreferrer" href="https://www.sec.gov/files/rules/final/2026/34-104903.pdf" target="_blank">amendments</a> to various forms and rules to implement that requirement, as described below.</p> <ul> <li>Exchange Act Rule 3a12-3(b), which previously exempted securities registered by an FPI from the provisions of Section 16, was amended to provide exemptions from Section 16(b) and Section 16(c) only.[[N:Exchange Act Rule 16a-3(g)(1) requires Section 16 reporting persons to report on Form 4 &ldquo;all transactions not exempt from Section 16(b)&rdquo; as well as certain transactions that are exempt from Section 16(b) by SEC rule. Exchange Act Rule 16a-3(f)(1) requires Section 16 reporting persons to report on Form 5 transactions not previously reported on Form 4 or eligible for deferred reporting pursuant to SEC rule, including certain transactions exempt from Section 16(b). The HFIAA requires directors and officers of FPIs to file Section 16 reports while maintaining an exemption from Section 16(b)&rsquo;s short-swing profit disgorgement provision for their transactions. However, directors and officers of FPIs should not view the language in Rule 16a-3(g)(1) and (f)(1), or similar language in Instructions to Forms 4 and 5, as exempting them from reporting transactions otherwise required by Section 16(a). ]]</li> <li>Exchange Act Rule 16a-2, which identifies the persons subject to Section 16, was amended to provide that holding 10% or more of an FPI&rsquo;s equity securities does not by itself subject the holder to the requirements of Section 16(a) and related rules.</li> <li>Instructions to Form 3 were amended to include directors and officers of FPIs as subject to the requirement to file the form.</li> </ul> <p>The adopting release notes that some FPIs have a two-tier board structure, with a supervisory (non-management) board and a management board. For certain Form 20-F items, the term &ldquo;board of directors&rdquo; refers only to the supervisory or nonmanagement board. However, that bright-line definition does not apply to the determination of whether a person is a &ldquo;director&rdquo; of an FPI for purposes of Section 16(a); that is a factual determination based on Exchange Act Section 3(a)(7), which defines a director as &ldquo;any director of a corporation or any person performing similar functions with respect to any organization, whether incorporated or unincorporated.&rdquo; In many cases, some or all of the members of an FPI&rsquo;s management board will be &ldquo;executive officers[[N:Under Exchange Act Rule 16a-1(f), the term &ldquo;officer&rdquo; means an issuer&rsquo;s &ldquo;president, principal financial officer, principal accounting officer (or, if there is no such accounting officer, the controller), any vice-president of the issuer in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the issuer. Officers of the issuer&rsquo;s parent(s) or subsidiaries shall be deemed officers of the issuer if they perform such policy-making functions for the issuer. In addition, when the issuer is a limited partnership, officers or employees of the general partner(s) who perform policy-making functions for the limited partnership are deemed officers of the limited partnership. When the issuer is a trust, officers or employees of the trustee(s) who perform policy-making functions for the trust are deemed officers of the trust.&rdquo;]]&rdquo; subject to the new Section 16(a) filing requirements without regard to whether they are also &ldquo;directors.&rdquo;</p> <p>Technical amendments were also made to the Section 16 forms to include an optional field for a foreign trading symbol, a postal code, and a country code as part of the address of the reporting person. Section 16 reporting persons will continue to be required to enter the issuer&rsquo;s name and ticker or trading symbol on Forms 3, 4 and 5. However, the forms will now also include an optional field to allow for the listing of a second trading symbol for FPIs with trading in both U.S. and non-U.S. markets. Where a Section 16 reporting person of an FPI holds shares that are traded in both U.S. and non-U.S. markets, they should include both trading symbols. Where shares only have a foreign trading symbol, a Section 16 reporting person of an FPI could either enter the foreign trading symbol in the first mandatory box (Box 3 of Form 3 and Box 2 of Form 4 and Form 5) if allotted space allows or enter &ldquo;none&rdquo; in that first trading symbol box and enter the foreign trading symbol in the second box (Box 3a. of Form 3 and Box 2a. of Form 4 and Form 5).</p> <p>The HFIAA also amended Section 16(a) to authorize the SEC to conditionally or unconditionally grant exemptions from the reporting requirements of Section 16(a) if it determines that the laws of a foreign jurisdiction apply substantially similar requirements to the relevant person, security, or transaction. The SEC did not exercise that exemptive authority in the new rule but may consider doing so in a separate rulemaking or order.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{AED214D5-2CC6-4F98-B6D8-6915ADC37639}https://www.arnoldporter.com/en/perspectives/advisories/2026/03/bis-announces-252-5-million-settlement-with-applied-materials-over-allegedJohn P. Barkerhttps://www.arnoldporter.com/en/people/b/barker-john-pjohn.barker@arnoldporter.comDeborah A. Curtishttps://www.arnoldporter.com/en/people/c/curtis-deborahdeborah.curtis@arnoldporter.comSoo-Mi Rheehttps://www.arnoldporter.com/en/people/r/rhee-soomisoo-mi.rhee@arnoldporter.comNicholas L. Townsendhttps://www.arnoldporter.com/en/people/t/townsend-nicholas-lnicholas.townsend@arnoldporter.comRonald D. Leehttps://www.arnoldporter.com/en/people/l/lee-ronald-dRonald.Lee@arnoldporter.comTrevor G. Schmitthttps://www.arnoldporter.com/en/people/s/schmitt-trevor-gtrevor.schmitt@arnoldporter.comJunghyun Baekhttps://www.arnoldporter.com/en/people/b/baek-junghyunjunghyun.baek@arnoldporter.comBell Johnsonhttps://www.arnoldporter.com/en/people/j/johnson-bellbell.johnson@arnoldporter.comAdrienne K. Jacksonhttps://www.arnoldporter.com/en/people/j/jackson-adrienne-kadrienne.jackson@arnoldporter.comOn February 11, 2026, the U.S. Department of Commerce&rsquo;s Bureau of Industry and Security (BIS) announced a $252.5 million civil settlement with Applied Materials, Inc. (AMAT) and its Korean subsidiary, Applied Materials Korea (AMK). The settlement resolves allegations that the companies violated the Export Administration Regulations (EAR) by reexporting controlled semiconductor manufacturing equipment to a restricted Chinese entity without the required authorization.Tue, 03 Mar 2026 00:00:00 -0600<p>On February 11, 2026, the U.S. Department of Commerce&rsquo;s Bureau of Industry and Security (BIS) <a rel="noopener noreferrer" href="https://www.bis.gov/media/documents/2026.02.11-amat-settlement-documents-combined.pdf" target="_blank">announced</a> a $252.5 million civil settlement with Applied Materials, Inc. (AMAT) and its Korean subsidiary, Applied Materials Korea (AMK). The settlement resolves allegations that the companies violated the Export Administration Regulations (EAR) by reexporting controlled semiconductor manufacturing equipment to a restricted Chinese entity without the required authorization.</p> <p>This enforcement action is one of the largest BIS penalties to date. It underscores the BIS&rsquo;s continued focus on semiconductor technology, supply-chain routing, and end-user controls, particularly with respect to China. BIS cited evidence of active evasion following a 2020 &ldquo;is informed&rdquo; letter, concluding that the company had attempted to bypass U.S. export controls through a purported third-country &ldquo;substantial transformation&rdquo; process &mdash;&nbsp;a legal theory that BIS soundly rejected. Notably, the U.S. government appears to have stopped short of pursuing criminal charges, despite the company&rsquo;s disclosures regarding grand jury subpoenas.</p> <p>According to BIS, between November 2020 and July 2022, AMAT and AMK allegedly engaged in 56 prohibited reexports or attempted reexports of U.S.-origin ion implanter equipment, classified under Export Control Classification Number (ECCN) 3B991, from South Korea to Semiconductor Manufacturing International Corporation (SMIC) and its subsidiaries. BIS placed SMIC and six of its subsidiaries on the Entity List in December 2020, triggering a license requirement for exports, reexports, or in-country transfers of all items subject to the EAR. </p> <p>BIS determined that AMAT implemented a &ldquo;dual-build&rdquo; production and routing process in which partially manufactured equipment and associated components were shipped from the United States to South Korea for assembly and testing, and subsequently forwarded to SMIC in China without the required BIS licenses. According to BIS, AMAT would partially produce ion implanting equipment at its U.S. facilities before sending those items, along with additional U.S.-origin and foreign-origin components, to AMK in South Korea. AMK would then assemble the components into the ion implanting equipment, conduct testing, and ultimately ship the equipment to SMIC. In AMAT&rsquo;s view, the overseas assembly (dual-build) in South Korea would effect a &ldquo;substantial transformation,&rdquo; such that the finished tools would be treated as foreign-made and thus potentially outside U.S. jurisdiction or eligible for de minimis status. </p> <p>BIS, however, rejected this argument and concluded that the equipment remained U.S.-origin, and therefore subject to the EAR, regardless of the foreign assembly process. Specifically, BIS determined that AMAT began production of the equipment in the United States and shipped the equipment, along with the necessary components, to South Korea to complete production. As a result, all the items were subject to the EAR, and the additional testing and assembly abroad did not result in the assembled equipment&rsquo;s being considered foreign-origin or otherwise removed from EAR jurisdiction. </p> <p>&ldquo;BIS deems that U.S.-origin items or items physically located in the United States on which production begins in the United States are not rendered &lsquo;foreign-made&rsquo; when the items are exported and then undergo further assembly and testing in a foreign country when &hellip; those activities outside the United States involved little or no foreign-origin parts that were shipped to the foreign location from a non-U.S. location.&rdquo; </p> <h2>Settlement Terms </h2> <p>The total value of the transactions at issue was approximately $126 million. Under the settlement, AMAT agreed to pay a civil penalty of approximately $252.5 million &mdash; the statutory maximum (twice the value of the underlying transaction) and the second-largest civil penalty imposed by BIS to date. The settlement also imposes significant compliance obligations, including: (i) completion of two internal audits of AMAT&rsquo;s export compliance program covering China-related semiconductor equipment transactions; (ii) submission of audit findings and certifications to BIS; (iii) continuation of enhanced export compliance training; and (iv) maintenance of internal reporting mechanisms for export-related concerns. The settlement further includes a suspended denial of export privileges for a three-year period, which may be activated if AMAT fails to meet its payment or compliance obligations. The U.S. Department of Justice and Securities and Exchange Commission have closed their related investigations without action, providing AMAT with regulatory closure beyond the BIS component. </p> <h2>Key Takeaways</h2> <ul> <li><strong>BIS has formally rejected &ldquo;substantial transformation&rdquo; as relevant under the EAR</strong>. BIS&rsquo;s enforcement action makes clear that applying a substantial transformation framework to reexport will not shield transactions from EAR obligations, and BIS views substantial transformation as a Customs-only doctrine, not for use in export-control jurisdiction.&nbsp;</li> <li><strong>BIS remains highly focused on semiconductor manufacturing equipment</strong>. This case follows BIS&rsquo;s pattern of increasing scrutiny on high-precision semiconductor tools, particularly those that may enable advanced fabrication at China-based facilities.&nbsp;</li> <li><strong>Reexports and &ldquo;modular assembly&rdquo; pathways are under the microscope</strong>. In this settlement, BIS highlighted how U.S.-origin controlled modules, even when combined with non-U.S. components or assembled overseas, remain subject to the EAR. Dual-build or refurbished models may preserve U.S. status of the final tool; third-country assembly will not, by itself, remove EAR jurisdiction, especially when dealing with Entity List end-users.</li> <li><strong>Entity List transactions continue to pose elevated risk</strong>. Because SMIC and affiliates have been on the Entity List since late 2020, any shipment, direct or indirect, may trigger heightened scrutiny and licensing requirements. </li> </ul> <p>For questions about this settlement or other export control matters, contact the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="/en/services/capabilities/practices/national-security/export-control-and-sanctions">Export Control &amp; Sanctions</a>&nbsp;group. </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{2E67D191-4A17-4782-9E10-945E86EFE50C}https://www.arnoldporter.com/en/perspectives/events/2026/03/scotus-tariff-decision-refunds-impacts-and-strategic-considerationsHenry D. Almondhttps://www.arnoldporter.com/en/people/a/almond-henry-dhenry.almond@arnoldporter.comLynn Fischer Foxhttps://www.arnoldporter.com/en/people/f/fischer-fox-lynnlynn.fischerfox@arnoldporter.comJ. David Parkhttps://www.arnoldporter.com/en/people/p/park-j-daviddavid.park@arnoldporter.comBurden H. Walkerhttps://www.arnoldporter.com/en/people/w/walker-burden-hburden.walker@arnoldporter.comAre you prepared for the shifting trade landscape following the Supreme Court&rsquo;s decision striking down tariffs imposed under the International Emergency Economic Powers Act (IEEPA)?Mon, 02 Mar 2026 00:00:00 -0600<p>Are you prepared for the shifting trade landscape following the Supreme Court&rsquo;s decision striking down tariffs imposed under the International Emergency Economic Powers Act (IEEPA)?</p> <p>On February 20, the Court held 6-3 in <em>Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc.</em> that IEEPA does not authorize the President to impose revenue-raising tariffs, invalidating approximately $180 billion in duties collected to date.</p> <p>In response, the administration has terminated the IEEPA tariffs and imposed new temporary tariffs under Section 122 of the Trade Act of 1974, while signaling additional investigations under Sections 301 and 232 that could result in further tariff actions. These developments present immediate compliance and strategic considerations for importers and multinational companies.</p> <p>Our speakers will discuss:</p> <ul> <li>The Court&rsquo;s reasoning and its implications for presidential trade authority</li> <li>Refund considerations and potential proceedings before CBP and the Court of International Trade</li> <li>The scope of the new Section 122 tariffs, including key exclusions</li> <li>Anticipated Section 301 and Section 232 investigations</li> <li>Strategic considerations in an evolving tariff environment</li> </ul>{30A109B8-1192-46B4-8D45-7BEC6B1F9F65}https://www.arnoldporter.com/en/perspectives/news/2026/03/arnold-porters-melissa-weberman-named-a-2026-ai-visionaryArnold &amp; Porter counsel Melissa Weberman, who leads the firm&rsquo;s eDiscovery &amp; Data Analytics (eData) group, was recently named a 2026 &ldquo;AI Visionary&rdquo; by Relativity.Mon, 02 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter counsel Melissa Weberman, who leads the firm&rsquo;s eDiscovery &amp; Data Analytics (eData) group, was recently named a 2026 &ldquo;AI Visionary&rdquo; by Relativity. The annual list recognizes &ldquo;changemakers who are using AI to reshape the legal landscape&rdquo; while &ldquo;promoting both innovation and ethical practice.&rdquo;</p> <p>Melissa advises clients on complex discovery and information governance issues, with a focus on using technology defensibly to improve efficiency and accuracy. As leader of the firm&rsquo;s eData group, she oversees the integration of advanced analytics and AI-driven tools into discovery and investigations, helping ensure they are implemented in practical and responsible ways. She also plays a key role in evaluating and implementing the firm&rsquo;s legal technology platforms more broadly, guiding how new tools are selected and deployed across matters to deliver measurable value to clients.</p>{5067C5BC-4317-4656-A693-1458D4463043}https://www.arnoldporter.com/en/perspectives/news/2026/03/crains-new-york-business-names-sheila-boston-melida-hodgson-and-jami-vibbertArnold &amp; Porter partners Sheila Boston, M&eacute;lida Hodgson, and Jami Vibbert have been named to <em>Crain&rsquo;s New York Business</em>&rsquo;s 2026 edition of &ldquo;Notable Women in Law.&rdquo;Mon, 02 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter partners Sheila Boston, M&eacute;lida Hodgson, and Jami Vibbert have been named to <em>Crain&rsquo;s New York Business</em>&rsquo;s 2026 edition of &ldquo;Notable Women in Law.&rdquo; The annual list recognizes women attorneys in the New York legal community who are both &ldquo;trailblazers and torchbearers, redefining success in the legal profession.&rdquo; </p> <p>Sheila Boston was recognized by <em>Crain&rsquo;s</em> as a seasoned trial lawyer and litigation strategist who has built a distinguished career in product liability and complex commercial litigation with &ldquo;significant multidistrict litigation experience in mass tort actions.&rdquo; The publication noted that she was the first woman of color to serve as president of the New York City Bar Association, holding the role from May 2020 to May 2022. </p> <p>M&eacute;lida Hodgson, an investor-state and commercial arbitration practitioner and arbitrator, was included for her three decades of experience practicing at the intersection of international arbitration and sovereign obligations. <em>Crain&rsquo;s</em> recognized M&eacute;lida for securing a favorable award for the Republic of Panama in an arbitration initiated by Spain-based Sacyr SA related to the expansion of the Panama Canal.</p> <p>Jami Vibbert, chair of the firm&rsquo;s Privacy, Cybersecurity &amp; Data Strategy group, was commended by <em>Crain&rsquo;s</em> for helping clients navigate global data protection, privacy, and cybersecurity concerns across industries, including life sciences, healthcare, financial services, media, and technology. With deep knowledge of a range of global data protection issues, Jami defends clients in privacy and cyber enforcement, litigation (including wiretapping litigation), incident response, and compliance. </p>{A7B9E4C0-CA6F-4387-8373-2B6D9BF9938B}https://www.arnoldporter.com/en/perspectives/news/2026/03/arnold-porter-strengthens-state-attorneys-general-investigations-litigation-practice<strong>NEW YORK and WASHINGTON, D.C., March 2, 2026</strong> &mdash; Clients face increasing scrutiny and regulatory risk from state attorneys general (AGs), who have aggressively sought to fill the gap left by diminished federal enforcement. In recognition of the increased investigation and litigation activity by state AGs, Arnold &amp; Porter has formed a dedicated State Attorneys General Investigations &amp; Litigation Task Force, a multidisciplinary team led by former state and federal government prosecutors and enforcers that will advise and defend clients facing increasingly complex, high-stakes investigations and litigation involving state AGs.Mon, 02 Mar 2026 00:00:00 -0600<p><strong>NEW YORK and WASHINGTON, D.C., March 2, 2026</strong> &mdash; Clients face increasing scrutiny and regulatory risk from state attorneys general (AGs), who have aggressively sought to fill the gap left by diminished federal enforcement. In recognition of the increased investigation and litigation activity by state AGs, Arnold &amp; Porter has formed a dedicated <a href="/en/services/capabilities/practices/white-collar-defense-and-investigations/state-attorneys-general-investigations-and-litigation">State Attorneys General Investigations &amp; Litigation Task Force</a>, a multidisciplinary team led by former state and federal government prosecutors and enforcers that will advise and defend clients facing increasingly complex, high-stakes investigations and litigation involving state AGs.</p> <p>&ldquo;For many years, we have helped clients stay ahead of the curve with strategic, proactive counsel that mitigates risk,&rdquo; said Benjamin Mizer, former Acting Associate Attorney General at the U.S. Department of Justice. &ldquo;This Task Force helps us coordinate our deep bench of litigators and regulatory attorneys with first-hand knowledge of some of the nation&rsquo;s most active state AGs. Having been on both sides of the table, our team understands how state AGs think and what drives their decision-making. This group has the experience, relationships, and insight to help guide clients through these complex challenges and understands the nuances of state-level enforcement.&rdquo; </p> <p>&ldquo;Regulated entities increasingly find themselves facing conflicting enforcement demands, caught between federal and state authorities who take opposing views of compliance obligations,&rdquo; added Meredith Osborn, former Chief Trial Deputy at the City Attorney&rsquo;s Office for San Francisco. &ldquo;Arnold &amp; Porter has guided clients caught in these kinds of dilemmas, and today&rsquo;s changing enforcement landscape is the perfect time to concentrate that expertise in a targeted State AG Task Force.&rdquo;</p> <p>Arnold &amp; Porter has a long history of success in single- and multi-state AG matters, often resolving investigations favorably and discreetly before they escalate, as well as aggressively litigating in state court when necessary. Having forged significant relationships with many state AGs, the group helps clients proactively identify issues, provide guidance to avoid inquiries and litigation, anticipate where investigators may focus their efforts, and devise effective, practical measures to limit our clients&rsquo; exposure. The Task Force will also monitor state regulatory and litigation developments to keep clients ahead of emerging enforcement trends nationwide. </p> <p>Collectively, the team brings decades of experience advising on government investigations and litigation across a broad swath of industries, including the pharmaceutical and healthcare, financial services, energy, consumer products, and many other industries. </p> <h3>About Arnold &amp; Porter</h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{40DBA55D-118F-4135-A0EF-97765F6A6FA3}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/03/cbc-news-interviews-ambassador-barbara-leaf-on-us-israeli-military-strikes-against-iranArnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf was interviewed by <em>CBC News </em>to discuss the latest developments following coordinated U.S. and Israeli military strikes against Iran and the broader implications for the Middle East.Mon, 02 Mar 2026 00:00:00 -0600<p>Arnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf (Amb. Leaf) was interviewed by <em>CBC News</em> to discuss the latest developments following coordinated U.S. and Israeli military strikes against Iran and the broader implications for the Middle East.</p> <p>Amb. Leaf observed that the conflict &ldquo;can morph in very unexpected directions,&rdquo; while emphasizing that diplomatic options may still remain viable. She described the region as being in a &ldquo;state of high plasticity&rdquo; following the transformative events of 2024, including the collapse of Syria&rsquo;s regime, the significant weakening of Hezbollah, and sustained pressure on Iran &mdash; developments that have collectively reshaped the regional landscape.</p> <p>Amb. Leaf further commented on U.S. policy considerations, stating that the President appears prepared to deploy &ldquo;massive U.S. firepower, presence, and engagement&rdquo; for a &ldquo;short, sharp, decisive purpose,&rdquo; but has made clear that he does not support prolonged involvement. She cautioned against open-ended objectives, describing regime change as &ldquo;a hugely slippery slope&rdquo; and characterizing the conflict as &ldquo;a war of opportunity, a war of choice, without well-defined goals.&rdquo;</p> <p>Reflecting on historical precedent, Amb. Leaf noted that the United States does not have &ldquo;a good track record of regime creation in the Middle East,&rdquo; adding that the American public is not interested in an extended military engagement. &ldquo;The shadow of Iraq hangs over us,&rdquo; she said.</p> <p><a rel="noopener noreferrer" href="https://www.cbc.ca/player/play/video/9.7110502" target="_blank">Watch the full interview</a> (Amb. Leaf joins at 17:20).</p>{A4A1A292-3067-49E6-A0EC-06888484D956}https://www.biosliceblog.com/2026/03/virtual-and-digital-health-digest-newsletter/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comShama Aktarhttps://www.arnoldporter.com/en/people/a/aktar-shamashama.aktar@arnoldporter.comEmma Elliston, Ph.D.https://www.arnoldporter.com/en/people/e/elliston-emmaemma.elliston@arnoldporter.comMon, 02 Mar 2026 00:00:00 -0600{A07F18FE-1152-45B9-9DBB-A797A11EA7C6}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/bbc-world-news-interviews-ambassador-barbara-leaf-on-potential-us-strike-against-iranArnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf was interviewed by <em>BBC World News</em> to discuss the Trump administration&rsquo;s military buildup in the Middle East and the possibility of a U.S. strike against Iran.Fri, 27 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter Senior International Policy Advisor and former U.S. Ambassador Barbara Leaf was interviewed by <em>BBC World News</em> to discuss the Trump administration&rsquo;s military buildup in the Middle East and the possibility of a U.S. strike against Iran.</p> <p>Ambassador Leaf described the situation as &ldquo;exceptionally dynamic,&rdquo; noting that significant uncertainties remain, including &ldquo;whether Trump is going to let diplomacy play out any further.&rdquo; She observed that while the contours of a potential agreement are unclear, any deal would ostensibly focus on Iran&rsquo;s nuclear program, even as broader U.S. concerns persist regarding ballistic missiles and Iran&rsquo;s regional proxy activities.</p> <p>Addressing the scope of possible military action, Ambassador Leaf said it is difficult to assess whether President Trump is contemplating a limited strike or &ldquo;a decapitation strike&rdquo; targeting Iran&rsquo;s leadership, citing &ldquo;contradictory messaging from the administration.&rdquo;</p> <p>She cautioned that the substantial deployment of U.S. military assets to the region may heighten the risk of escalation, warning that &ldquo;having marshalled so much military kit into the region, [the President] has essentially forced himself to use it.&rdquo;</p>{BD6E98AD-46D4-41A4-84A4-23539B19C1C3}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/eu-digital-omnibus-what-the-proposed-reforms-mean-for-pharma-and-medtechAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comCamille Vermosenhttps://www.arnoldporter.com/en/people/v/vermosen-camillecamille.vermosen@arnoldporter.comOn November 19, 2025, the European Commission introduced two proposals aimed at simplifying and streamlining various digital and data laws across the European Union (EU). The Digital Omnibus on AI Regulation Proposal sets out amendments to the EU AI Act (Regulation (EU) 2024/1689), while the more comprehensive Digital Omnibus Regulation Proposal includes changes to several EU regulations, including but not limited to the GDPR (Regulation (EU) 2016/679), ePrivacy Directive (2002/58/EC), EU Data Act (Regulation (EU) 2023/2854), and NIS2 Directive ((EU) 2022/2555) (together Proposals).Thu, 26 Feb 2026 00:00:00 -0600<p>On November 19, 2025, the European Commission introduced two proposals aimed at simplifying and streamlining various digital and data laws across the European Union (EU). The <a rel="noopener noreferrer" href="https://digital-strategy.ec.europa.eu/en/library/digital-omnibus-ai-regulation-proposal" target="_blank">Digital Omnibus on AI Regulation Proposal</a> sets out amendments to the EU AI Act (Regulation (EU) 2024/1689), while the more comprehensive <a rel="noopener noreferrer" href="https://digital-strategy.ec.europa.eu/en/library/digital-omnibus-regulation-proposal" target="_blank">Digital Omnibus Regulation Proposal</a> includes changes to several EU regulations, including but not limited to the GDPR (Regulation (EU) 2016/679), ePrivacy Directive (2002/58/EC), EU Data Act (Regulation (EU) 2023/2854), and NIS2 Directive ((EU) 2022/2555) (together Proposals).</p> <p>Following the publication of the Proposals, Arnold &amp; Porter shared an initial <a href="https://www.biosliceblog.com/2025/11/digital-omnibus-the-european-commission-published-its-proposal-to-amend-the-gdpr-ai-act-data-act-and-other-related-frameworks/">blog post</a>&nbsp;highlighting key considerations for Life Sciences companies. In this more in-depth contribution, we take a comprehensive look at the proposed amendments across the EU AI, digital and data regulatory framework. This advisory analyses the practical implications for pharmaceutical and MedTech companies and assesses the views expressed by the EDPB and EDPS in their Joint Opinions (on the <a rel="noopener noreferrer" href="https://www.edpb.europa.eu/our-work-tools/our-documents/edpbedps-joint-opinion/edpb-edps-joint-opinion-12026-proposal_en" target="_blank">Digital Omnibus on AI Regulation Proposal</a> and the broader <a rel="noopener noreferrer" href="https://www.edps.europa.eu/system/files/2026-02/edpb_edps_jointopinion_202602_digitalomnibus_en.pdf" target="_blank">Digital Omnibus Regulation Proposal</a>). We also offer practical recommendations to help companies navigate what comes next.</p> <h2>EU AI Act</h2> <p>Through the <a rel="noopener noreferrer" href="https://digital-strategy.ec.europa.eu/en/library/digital-omnibus-ai-regulation-proposal" target="_blank">Digital Omnibus on AI Regulation Proposal</a> (AI Omnibus Proposal or Proposal) the European Commission proposes to simplify and streamline several procedures. These include:</p> <ul> <li><em>To facilitate compliance with data protection laws: allowing AI providers and deployers to process <span style="text-decoration: underline;">special categories of personal data for bias detection and correction</span>, subject to data protection laws and safeguards</em></li> <p>The AI Omnibus Proposal introduces a new Article 4a to the EU AI Act, permitting, on an exceptional basis, the processing of special category personal data (which includes data concerning health) for <em>bias detection and mitigation</em> within the context of high-risk AI systems. Such processing is contingent upon stringent requirements and safeguards, including demonstrating that the intended objective cannot reasonably be accomplished with alternative data, implementing robust technical and organizational security measures, and ensuring the deletion of the data once the bias-related purposes have been achieved.</p> <p>The Proposal also contemplates extending this provision, under specified conditions, to other AI systems beyond those designated as high-risk.</p> <p> In their <a rel="noopener noreferrer" href="https://www.edpb.europa.eu/our-work-tools/our-documents/edpbedps-joint-opinion/edpb-edps-joint-opinion-12026-proposal_en" target="_blank">Joint Opinion</a>, the EDPB and EDPS support the establishment of a dedicated legal basis for bias detection and mitigation in principle, yet express reservations regarding the scope of extension to AI systems outside the high-risk category. They underscore the importance of adhering to a strict necessity and proportionality standard.</p> <p><strong>Practical impact</strong>: For Life Sciences companies, where reliance on health data may be essential to identify and remediate bias in AI systems, the Proposal could provide a clearer legal basis for limited bias-related processing activities involving special categories of personal data. Nonetheless, an application of this provision will likely be narrowly interpreted and subject to rigorous scrutiny by the EU competent authorities, necessitating careful justification and the implementation of comprehensive safeguards.</p> <li><em>Targeted changes clarifying the <span style="text-decoration: underline;">interplay between the EU AI Act and other EU legislation</span> and adjusting the EU AI Act&rsquo;s procedures to improve its overall implementation and operation</em></li> <p>The AI Omnibus Proposal clarifies how the EU AI Act is intended to apply alongside existing EU product legislation, in particular the frameworks governing medical devices and <em>in vitro</em> diagnostic devices (IVDs) under the Medical Device Regulation (MDR) and <em>In Vitro</em> Diagnostic Regulation (IVDR). It confirms that EU AI Act requirements for high-risk AI systems that are also regulated products should be applied within the existing conformity assessment procedures, rather than through separate or parallel certification processes (please also review <a href="/en/perspectives/advisories/2026/02/the-eu-medical-device-shake-up">our advisory on proposed changes to the MDR and IVDR</a>).</p> <p>The Proposal also streamlines the designation of notified bodies by allowing conformity assessment bodies to submit a single application and undergo a single assessment for designation under both the EU AI Act and the relevant Annex I product legislation. This is intended to simplify procedures and support more efficient implementation of the EU AI Act in regulated sectors. </p> <p><strong>Practical impact</strong>: For manufacturers of AI-enabled medical devices and IVDs, these changes should reduce duplication and regulatory complexity by enabling a single, integrated conformity assessment (please note that further simplification for high-risk AI systems regulated under the MDR and IVDR is also expected, as further detailed in our advisory above). This may also help accelerate the availability of suitably designated notified bodies, making early standards planning and engagement with notified bodies even more important.</p> <li><em>Expanding <span style="text-decoration: underline;">AI regulatory sandboxes and real-world testing</span> to support key European industries</em></li> <p>The AI Omnibus Proposal broadens the framework for testing AI systems by strengthening regulatory sandboxes and expanding opportunities for testing in real-world conditions. In particular, it enables the AI Office to establish EU-level sandboxes and introduces additional governance clarifications.</p> <p>The Proposal also extends the possibility to conduct real-world testing outside formal sandbox environments, including for high-risk AI systems subject to Annex I product legislation, such as medical devices. Under the current framework, real-world testing is mainly available for the Annex III use cases. </p> <p>In their Joint Opinion, the EDPB and EDPS support the development of EU-level sandboxes but emphasize the need for greater legal certainty, including clear involvement of data protection authorities and well-defined cooperation mechanisms under the GDPR.</p> <p><strong>Practical impact</strong>: For regulated and safety-critical sectors, including the Life Sciences sector, these changes could provide a clearer and more flexible legal framework for piloting, validating and refining AI systems in real operational environments. In particular, the extension of real-world testing to Annex I products may facilitate performance validation, bias assessment, data collection and iterative improvement of clinically relevant AI models before or alongside market deployment. However, access to these testing pathways is likely to remain conditional on robust governance arrangements, with data protection compliance and regulator engagement acting as key prerequisites.</p> <li><em>Linking high-risk AI obligations timelines to the <span style="text-decoration: underline;">availability of standards</span></em></li> <p>The AI Omnibus Proposal introduces flexibility in the timing of the EU AI Act&rsquo;s high-risk obligations by linking their application to the availability of key support tools, such as European harmonized standards, common specifications, or European Commission guidance. Instead of automatically applying from August 2, 2026, the Chapter III requirements would start to apply only once the European Commission confirms that these measures are in place, followed by a transitional period of six months for Annex III systems and twelve months for Annex I systems integrated into regulated products, including medical devices. Long-stop dates apply in any event, with compliance required by December 2, 2027, for Annex III systems and by August 2, 2028, for Annex I systems.</p> <p>The Proposal also clarifies the treatment of legacy high-risk AI systems. Where at least one unit[[N: &rdquo;Unit&rdquo; refers to a single, identifiable instance of an AI system of a given type and model, that is placed on the market or put into service as an individual product, whether supplied as standalone software, embedded in hardware, or made available through digital means.]] has been lawfully placed on the EU market before the relevant cut-off date, additional units of the same type and model may continue to be placed on the EU market without new conformity assessment, provided the design remains unchanged. Any significant design modification would trigger full EU AI Act compliance.</p> <p>In their Joint Opinion, the EDPB and EDPS caution that delaying the application of high-risk obligations may affect fundamental rights protection and suggest that certain requirements, such as transparency obligations, should remain subject to the original timelines as currently set out in the EU AI Act.</p> <p><strong>Practical impact</strong>: These changes may ease short-term compliance pressure for legacy AI systems and align obligations more closely with the availability of standards. However, the flexibility is time-limited, excludes significant design changes, and may be narrowed during negotiations, meaning companies should continue preparing for full EU AI Act compliance well ahead of the final deadlines.</p> <li><em><span style="text-decoration: underline;">Extending regulatory simplifications</span> from SMEs to SMCs</em></li> <p>The AI Omnibus Proposal extends several regulatory simplifications currently available to small and medium-sized enterprises (SMEs) to small mid-cap companies (SMCs). These include, in particular, simplified technical documentation requirements and more tailored consideration of company size and economic capacity when determining administrative penalties. </p> <p>In their Joint Opinion, the EDPB and EDPS caution that company size should not dilute protections where AI systems pose significant risks.</p> <p><strong>Practical impact</strong>: This extension is particularly relevant for scale-up companies operating in the AI and Life Sciences space, which may fall outside the SME definition but still face comparable resource constraints for compliance.</p> <li><em><span style="text-decoration: underline;">Reframing AI literacy</span> obligations</em></li> <p>The Proposal revises the approach to AI literacy by shifting responsibility from an open-ended obligation on AI providers and deployers to a requirement for the European Commission and EU Member States to foster AI literacy through appropriate measures. </p> <p>In their Joint Opinion, the EDPB and EDPS stress that AI systems providers and deployers should not be released from their obligation to ensure that their staff have a sufficient level of AI literacy, as it helps raise ethical and social awareness on AI benefits and risks.</p> <p><strong>Practical impact: </strong>This change reduces legal uncertainty around the scope of AI literacy obligations for providers and deployers, while preserving targeted training requirements where AI systems present higher risks. In practice, companies should still expect AI literacy to be treated as a governance expectation, particularly in regulated or high-risk contexts.</p> <li><em>Greater<span style="text-decoration: underline;"> flexibility in post-market monitoring</span></em></li> <p>The AI Omnibus Proposal introduces additional flexibility in post-market monitoring by removing the requirement to follow a prescribed harmonized post-market monitoring plan. Providers would retain responsibility for monitoring system performance and risks, but with more discretion as to how this obligation is operationalized.</p> <p><strong>Practical impact:</strong> This may allow companies to design post-market monitoring processes that are better aligned with existing quality management and vigilance systems, particularly in regulated sectors such as medical devices. However, robust monitoring will remain essential, and regulators are likely to scrutinize whether alternative approaches provide equivalent oversight.</p> <li><em><span style="text-decoration: underline;">Reducing registration obligations</span> for certain Annex III use cases</em></li> <p>The Proposal reduces registration burdens for AI systems used in areas listed in Annex III where the provider has concluded, based on a documented assessment, that the system does not qualify as high-risk because it is used only for narrow, procedural or preparatory tasks.</p> <p><strong>Practical impact: </strong>This change may alleviate administrative burdens for providers of low-impact AI tools operating in high-risk sectors, such as decision-support or workflow optimization systems. At the same time, providers will need to maintain clear and well-reasoned internal documentation to substantiate non-high-risk classifications if challenged by regulators.</p> </ul> <h2>Changes to Data Protection and Cybersecurity (GDPR, ePrivacy and NIS2)</h2> <p>The<a rel="noopener noreferrer" href="https://digital-strategy.ec.europa.eu/en/library/digital-omnibus-regulation-proposal" target="_blank"> Digital Omnibus Regulation Proposal</a> (Digital Omnibus Proposal or Proposal) proposes several changes to the GDPR, ePrivacy Directive, and NIS2 Directive. These include:</p> <ul> <li><em>Intention to clarify the <span style="text-decoration: underline;">notion of personal data</span></em> </li> <p>The Digital Omnibus Proposal intends to clarify when data should be considered personal data <em>for a given company</em>, focusing on whether identification of individuals is reasonably likely in light of the means available to that specific company. Under the Proposal, information would not be considered personal data for a particular company where that company cannot identify the individual, taking into account the means reasonably likely to be used by it. The Proposal further specifies that such information would not become personal data for that company merely because a potential subsequent recipient has the means reasonably likely to identify the individual. The clarification is presented as codifying CJEU case law, in particular the EDPS v. SRB judgment (see <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2025/09/cjeu-clarifies-the-concept-of-pseudonymised-data/" target="_blank">our blog on this judgment for more</a>)[[N: <span style="line-height: 115%;">Judgment of the Court of Justice of 4 September 2025, EDPB v SRB, C-413/23 P, ECLI:EU:C:2025:645.]]</span>, and as aiming to reduce over-classification of data as personal data where identification is only theoretical or would require disproportionate effort.</p> <p>In their Joint Opinion, the EDPB and EDPS express serious reservations, considering that the proposed wording goes beyond a targeted codification of case law and would significantly narrow the concept of personal data. They emphasize that the definition lies at the core of EU data protection law and caution that selectively incorporating elements of a single judgment, while omitting the broader CJEU jurisprudence, risks undermining rather than enhancing legal certainty. They also warn that the &ldquo;negative&rdquo; formulation (defining what is<em> not</em> considered personal data) may create confusion and potentially incentivize attempts to circumvent the scope of the GDPR. For these reasons, they urge the co-legislators not to adopt the proposed amendment.</p> <p><strong>Practical impact: </strong>For Life Sciences and MedTech companies handling large datasets (e.g., clinical, real-world, or sensor data), the proposed clarification could, if adopted, strengthen arguments that certain pseudonymized or indirectly identifiable datasets fall outside the GDPR in the hands of companies that lack reasonably likely means of re-identification. This may reduce compliance burdens in low-risk scenarios and support more flexible data-sharing models within research and innovation ecosystems. However, in light of the strong reservations expressed by the EDPB and EDPS and the likely continued interpretative debate (including forthcoming guidance on pseudonymization and anonymization), the extent to which the Proposal would deliver greater legal certainty remains unclear.</p> <li><em>Targeted flexibility for <span style="text-decoration: underline;">scientific research</span> of personal data</em></li> <p>The Proposal introduces a harmonized definition of &ldquo;scientific research&rdquo; to address national fragmentation and legal uncertainty. For an activity to fall within the scope of this definition, it must contribute to existing knowledge or apply it in novel ways, aim to advance society&rsquo;s general knowledge and wellbeing, and adhere to relevant ethical standards. The Proposal clarifies that research does not lose its qualification merely because it also pursues commercial interests. The Proposal also confirms that further processing for scientific research purposes is to be considered compatible with the initial purpose, with the aim of ensuring more consistent application of research-related derogations across the EU.</p> <p>In addition, the Proposal introduces a new transparency derogation for scientific research. It extends the existing exemption (applicable where data are not obtained directly from the data subject) to certain cases of direct collection, where providing information proves impossible or would involve a disproportionate effort, or would seriously impair the research objectives, subject to the safeguards of Article 89(1) GDPR.</p> <p>In their Joint Opinion, the EDPB and EDPS welcome the objective of harmonization but call for a more precise delineation of the concept. In their view, scientific research should explicitly require a methodological and systematic approach, autonomy and independence, and verifiable and transparent results. They recommend moving references to innovation and commercial interests to the recitals. They also stress that compatibility of further processing must be clearly distinguished from the separate requirement of a valid legal basis under Article 6 GDPR.</p> <p><strong>Practical impact:</strong> These clarifications may benefit pharmaceutical and MedTech companies engaged in clinical research, post-market surveillance, and real-world evidence generation by reducing fragmentation and facilitating secondary use of data across the EU. The confirmation of compatibility for further research processing creates clearer pathways for data reuse, provided safeguards under Article 89 GDPR are respected and a valid legal basis under Article 6 (and, where applicable, Article 9(2)) GDPR is identified. The new transparency exemption may also be relevant in secondary research or certain clinical trial contexts, for example, where contact details are no longer retained or where individual notification would seriously impair the research, subject to strict conditions and safeguards.</p> <li><em><span style="text-decoration: underline;">Legitimate interest and AI-related processing</span> (including residual special category data)</em></li> <p>The Digital Omnibus Proposal addresses the use of legitimate interest as a legal basis in the context of the development and operation of AI systems. Proposed Article 88c GDPR clarifies that processing for the development and operation of AI models or systems may, in principle, be pursued on the basis of legitimate interest under Article 6(1)(f) GDPR. The Proposal also introduces specific safeguards, including an &ldquo;unconditional&rdquo; right to object and enhanced transparency obligations. In addition, it provides for a new derogation under Article 9 GDPR for the incidental and residual processing of special categories of data in the context of AI development and operation, subject to conditions and safeguards.</p> <p>In their Joint Opinion, the EDPB and EDPS acknowledge that legitimate interest may already serve as a legal basis for AI-related processing under the current GDPR and question the need for a specific new provision. They stress that controllers must continue to carry out the full three-step legitimate interest test and caution that the proposed wording may not enhance legal certainty. They also call for clearer drafting of the &ldquo;unconditional&rdquo; right to object and the transparency requirements.</p> <p>As regards the new derogation for incidental and residual processing of special categories of data, they generally welcome the objective but recommend clarifying that it applies only where such processing is genuinely incidental, alongside stronger safeguards and clearer limits.</p> <p><strong>Practical impact:</strong> For companies developing or deploying AI-driven tools (e.g., analytics or decision-support systems), the Proposal could offer greater flexibility in relying on legitimate interest, particularly where consent is impractical. The new derogation for incidental and residual processing of special categories of data may also reduce legal risk during AI training and testing phases. However, reliance on legitimate interest will continue to require a documented and case-specific balancing test, meaningful transparency, and effective objection mechanisms. Where health or other special category data are involved, strict safeguards and careful assessment of the applicability and limits of the new exemption, if adopted, will remain essential.</p> <li><em>Exemption to allow the <span style="text-decoration: underline;">processing of biometric data</span></em></li> <p>The Digital Omnibus Proposal introduces a new derogation under Article 9 GDPR permitting the processing of biometric data for the sole purpose of confirming a data subject&rsquo;s claimed identity. The exemption applies only where the biometric data, and the means necessary for verification, remain under the sole control of the data subject &mdash; for example, where biometric templates are stored locally on a device or protected by a key exclusively held by the individual. The stated objective is to facilitate secure and privacy-enhancing authentication mechanisms while maintaining appropriate safeguards.</p> In their Joint Opinion, the EDPB and EDPS welcome the limited scope of the exemption and its focus on verification (rather than identification) scenarios. However, they emphasize that processing of biometric data remains inherently high-risk and must comply with the principles of necessity and proportionality. They underline that less intrusive alternatives should be used where available and that appropriate technical and organizational safeguards must be implemented. The authorities also caution against characterizing such processing as inherently low-risk and stress that data protection risk assessments will remain necessary in practice.<br /> <br /> <strong>Practical impact: </strong>For pharmaceutical and MedTech companies, the exemption may support the deployment of biometric authentication tools in secure digital health platforms, clinical trial portals, or professional access systems, particularly where authentication mechanisms are designed to keep biometric data under the user&rsquo;s control. However, given the sensitivity of biometric and health-related data, companies will still need to conduct careful necessity assessments, implement robust security safeguards, and ensure alignment with broader GDPR obligations, including risk assessments and data minimization requirements.<br /> <br /> <li><em>Streamlining </em><span style="text-decoration: underline;"><em>Data Protection Impact Assessments</em></span> </li> <p>The Proposal seeks to further harmonize Data Protection Impact Assessment (DPIA) requirements across the EU. In particular, it introduces the development of common EDPB DPIA lists (covering both processing operations that require a DPIA and those that do not), as well as a common template and methodology for conducting DPIAs. The objective is to reduce divergent national practices and enhance legal certainty for companies operating across multiple EU Member States.</p> <p>In their Joint Opinion, the EDPB and EDPS welcome the aim of increased harmonization and simplification, noting that common EU-level DPIA lists and a shared template could significantly reduce compliance burdens and promote consistency. However, they express reservations regarding the proposed governance mechanism. In particular, they caution against granting the European Commission unilateral power to modify DPIA lists and templates prepared by the EDPB through implementing acts. They recommend that the EDPB be exclusively entrusted with the preparation and approval of common DPIA lists and templates, in order to preserve institutional independence and supervisory expertise.</p> <p>They also emphasize that the common methodology for DPIAs should be understood in a broad and practical sense &mdash; as a structured process and set of principles &mdash; rather than as a rigid checklist. This is intended to preserve flexibility across sectors and use cases, while enabling continued reliance on established risk assessment frameworks and tools.</p> <p><strong>Practical impact: </strong>For multinational pharmaceutical and MedTech companies, EU-wide DPIA lists and templates could significantly streamline compliance by reducing the need to navigate divergent national guidance and approaches. This is particularly relevant for high-risk AI systems, clinical data processing, large-scale health data analytics, and post-market surveillance activities. However, companies should anticipate that DPIAs will remain a central risk-governance instrument, subject to continued regulatory scrutiny.</p> <li><em>Simplifying personal <span style="text-decoration: underline;">data breach notification</span> obligations and setting up of a <span style="text-decoration: underline;">single-entry point</span> for reporting incidents</em></li> <p>The Proposal introduces several procedural simplifications regarding personal data breach notifications. Most notably, it raises the threshold for notifying supervisory authorities of breaches &ldquo;likely to result in a risk&rdquo; to those &ldquo;likely to result in a high risk&rdquo; to individuals&rsquo; rights and freedoms. It also extends the notification deadline from 72 to 96 hours and provides for the development of a common EU-level breach notification template and a harmonized list of circumstances indicating a high-risk breach. In addition, the Proposal introduces a new Article 23a to the NIS2 Directive, setting up a &ldquo;single-entry point&rdquo; (SEP) in order to streamline notification processes under several regulatory frameworks (e.g., GDPR, NIS2, DORA, and CER Directive). </p> <p>In their Joint Opinion, the EDPB and EDPS broadly support these changes. They consider that increasing the notification threshold and extending the deadline are unlikely to materially reduce the level of protection for data subjects, while potentially alleviating administrative burdens &mdash; especially for smaller companies. They note that supervisory authorities currently receive a very high volume of breach notifications, including minor incidents, and that a higher threshold may enable authorities to focus resources on more serious cases. At the same time, they stress that controllers must continue to document<em> all</em> personal data breaches &mdash; so supervisory authorities can verify compliance with the notification regime &mdash; and to implement appropriate measures to mitigate or remedy any adverse effects of the breach.</p> <p>However, the EDPB and EDPS again raise institutional concerns regarding the proposed role of the European Commission in reviewing and modifying the EDPB&rsquo;s common notification template and risk lists. They recommend that the EDPB retains the primary responsibility for preparing and approving these instruments. Finally, they promote the use of a SEP for reporting incidents across multiple regulatory regimes, but at the same time call for greater harmonization between GDPR breach notification timelines and parallel reporting obligations under NIS2, DORA, and other sectoral frameworks.</p> <p><strong>Practical impact: </strong>For pharmaceutical and MedTech companies &mdash; which often operate in complex IT environments and are subject to overlapping incident reporting obligations &mdash; these changes could reduce the frequency of reportable GDPR breaches and allow more time to conduct internal forensic assessments before notification. The introduction of a common EU template may also facilitate more consistent reporting across EU Member States. Nevertheless, internal detection, documentation, and remediation obligations remain unchanged, and parallel NIS2 or sector-specific reporting deadlines (often shorter) will continue to require careful coordination.</p> <li><em>Clarifying the scope of <span style="text-decoration: underline;">automated decision-making</span></em> </li> <p>The Proposal seeks to clarify Article 22 GDPR by reframing the current &ldquo;right not to be subject to&rdquo; fully automated decision-making into a provision laying down an exhaustive list of cases where such types of automated decisions are legitimate. The Proposal also clarifies the &ldquo;necessity&rdquo; test in the contractual legitimization for automated-decision making, stating that automated decision-making may be considered necessary even where a human alternative theoretically exists. </p> <p>In their Joint Opinion, the EDPB and EDPS stress that Article 22 GDPR must remain a prohibition in principle, as confirmed by recent CJEU case law.[[N:&nbsp;<span style="line-height: 115%;">&nbsp;Judgment of the Court of Justice of 7 December 2023, C-634/21, SCHUFA Holding, ECLI:EU:C:2023:957, paragraph 52.]]</span>&nbsp;They recommend maintaining wording that clearly reflects a general ban on solely automated decisions producing legal or similarly significant effects, subject only to narrowly interpreted exceptions. They caution against any formulation that could be read as permitting automated decision-making by default in contractual contexts and stress that the decision should be genuinely required for entering into or performing a contract. In particular, they emphasize that &ldquo;necessity&rdquo; must continue to be assessed strictly and in conjunction with the data minimization principle, requiring controllers to consider whether equally effective but less intrusive alternatives exist. </p> <p><strong>Practical impact:</strong> For Life Sciences companies, the practical benefit of the proposed revision of Article 22 GDPR would mainly arise in relation to non-special-category data. In such cases, reliance on the contractual legitimization for automated decision-making &mdash; where genuinely necessary for entering into or performing a contract &mdash; may provide operational flexibility, for example, in distributor management or supply chain processes. By contrast, many core sector activities involve health or other special category data. In those cases, automated decision-making may only be permitted where explicit consent has been obtained or where it is necessary for reasons of substantial public interest, and must in any event be accompanied by appropriate safeguards in accordance with Article 22(4) GDPR.</p> <li><em><span style="text-decoration: underline;">Data subject rights:</span> limitation to data subject access requests and exemption to transparency obligation</em> </li> <p>The Proposal introduces targeted amendments to certain data subject rights, with the stated aim of reducing administrative burdens and preventing misuse. In particular, it proposes to clarify Article 12(5) GDPR by further defining when access requests may be considered &ldquo;manifestly unfounded&rdquo; or &ldquo;excessive,&rdquo; and by linking the notion of abusive requests to situations where the right of access is exercised for purposes not related to data protection. The Proposal also introduces a more structured exemption from transparency obligations under Article 13 GDPR where personal data is collected directly from the data subject.</p> <p>With regard to access requests, the Proposal seeks to provide controllers with greater legal certainty when refusing or charging a reasonable fee for requests deemed abusive. By suggesting that requests not linked to data protection purposes may qualify as abusive, it attempts to address concerns about strategic or litigation-driven requests.</p> <p>In their Joint Opinion, the EDPB and EDPS support the objective of clarifying abusive requests but caution against linking the notion of abuse to the data subject&rsquo;s motives or to the exercise of rights for purposes other than data protection. They recall that the right of access serves broader fundamental rights and must not be restricted merely because it is exercised in a broader legal or commercial context. They recommend that &ldquo;abuse&rdquo; be tied to demonstrable abusive intent and that any refusal of a request be based on an objective and properly documented assessment. They also emphasize that supervisory authorities should enjoy the same level of discretion as controllers when handling complaints.</p> <p>As regards transparency, the Proposal introduces a new exemption allowing controllers, not to provide certain information where the data are <em>directly </em>collected from the data subject in situations where there are reasonable grounds to assume that the data subject already has the information, unless the controller transmits the data to other recipients or categories of recipients, transfers the data to a third country, carries out automated decision-making or the processing is likely to cause a high risk to data subject&rsquo;s rights. To apply this exemption, the personal data should be collected in the context of a <em>clear and circumscribed</em> relationship between the data subject and a controller who exercises an activity that is <em>not data-intensive</em>. </p> <p>The EDPB and EDPS broadly welcome efforts to simplify transparency obligations but stress that exemptions must remain narrowly framed and clearly defined. They express concern that concepts such as &ldquo;not data-intensive activity&rdquo; or a &ldquo;clear and circumscribed relationship&rdquo; lack precision and could lead to divergent interpretation. They recommend ensuring that data subjects retain the ability to obtain full information upon request and that any reliance on the exemption be based on objective criteria and careful documentation.</p> <p><strong>Practical impact: </strong>For pharmaceutical and MedTech companies &mdash; often subject to high volumes of access requests in litigation, employment, pharmacovigilance, and clinical research contexts &mdash; the clarification of abusive requests may provide limited relief where requests are clearly excessive or strategically abusive. However, the threshold for refusal is likely to remain high, requiring careful internal assessment and documentation.</p> <p>With respect to transparency, companies operating patient support programs, digital platforms, or healthcare professional portals may, in principle, benefit from reduced duplication of information in low-risk settings, when the criteria would be fulfilled. However, in the Life Sciences sector, processing frequently involves health data or other special categories of personal data, which is often regarded as likely to give rise to a &ldquo;high risk&rdquo; to data subjects&rsquo; rights and freedoms. In such circumstances, the proposed exemption would be difficult to rely on. Given the narrow interpretation advocated by the EDPB and EDPS, companies should therefore approach any use of the transparency exemption with caution and ensure that governance frameworks preserve the ability to provide full information where required.</p> <li><em>Changes relating to the ePrivacy Directive</em></li> <p>The Digital Omnibus Proposal introduces significant amendments to the ePrivacy Directive, primarily by integrating certain rules on the protection of terminal equipment into the GDPR. In particular, it creates a new Article 88a GDPR governing the storage of and access to <em>personal</em> data in terminal equipment, accompanied by additional exceptions to the consent requirement. These include broader exemptions for services explicitly requested by the user, audience measurement conducted solely by the provider for its own use, and certain security-related processing. The Proposal also introduces rules on automated and machine-readable indications of user preferences (e.g., browser-based signals), with the aim of addressing &ldquo;consent fatigue&rdquo; and reducing repetitive cookie banners.</p> <p>In their Joint Opinion, the EDPB and EDPS strongly support the objective of simplifying the rules and addressing consent fatigue, as well as entrusting supervision to data protection authorities to ensure regulatory consistency. However, they express concerns that splitting the regime between the GDPR (for personal data) and the ePrivacy Directive (for non-personal data) may create legal uncertainty. They recommend clearly delimiting the scope of new consent exceptions &mdash; particularly for audience measurement and security purposes &mdash; to ensure they remain to what is strictly necessary and proportional. The authorities also emphasize that automated preference signals must not default to consent, that standards should apply uniformly across relevant actors (including browsers and operating systems), and that effective enforcement powers must be ensured.</p> <p><strong>Practical impact:</strong> For pharmaceutical and MedTech companies operating patient portals, digital health applications, professional platforms, or corporate websites, the proposed changes could reduce administrative burdens associated with cookie consent management, particularly through machine-readable preference signals and certain limited consent exemptions. However, many sector activities involve the processing of health data, meaning consent will often remain necessary and any reliance on exemptions is likely to be interpreted restrictively. Companies should therefore monitor the final scope of the consent exceptions and ensure that any reliance on them is carefully assessed, particularly where tracking technologies interact with health-related or other special category data.</p> </ul> <h2>EU Data Act and broader Data Acquis reforms</h2> <p>In addition to proposing amendments to the GDPR, ePrivacy Directive, and NIS2 Directive, the Digital Omnibus Proposal introduces significant changes to the EU Data Act and the broader &ldquo;Data Acquis.&rdquo; The Proposal seeks to streamline overlapping instruments and eliminate outdated or duplicative provisions&mdash;including by repealing and consolidating elements of the Data Governance Act (Regulation (EU) 2022/868) (DGA) and the Open Data Directive (Directive (EU) 2019/1024) (ODD) into the revised EU Data Act. The overarching objective is to enhance legal certainty, reduce fragmentation, and simplify compliance obligations across the EU data regulatory framework.</p> <p>The most relevant changes for Life Sciences companies include:</p> <ul> <li><em>Enhanced protection for trade secrets in international access scenarios</em></li> <p>The Proposal also introduces an additional ground under the EU Data Act for data holders to refuse access requests involving trade secrets. In addition to the existing possibility to deny access where disclosure would be likely to cause serious economic harm, data holders would be entitled to refuse a request where there is a high risk that the trade secrets could be unlawfully accessed, used, or disclosed in a third country lacking adequate or effectively enforced legal protections. Importantly, this assessment is not limited to a formal review of the legal framework on paper, but extends to situations where a jurisdiction&rsquo;s rules may appear robust but are not meaningfully enforced in practice.</p> <p><strong>Practical impact: </strong>For pharmaceutical and MedTech companies, this amendment is particularly significant. These sectors rely heavily on proprietary data, including manufacturing processes, formulation details, device specifications, algorithms, and clinical development strategies, much of which could qualify as trade secrets and underpins long-term R&amp;D investment. Given the global nature of clinical research, manufacturing, supply chains, and partnerships, access requests may entail onward transfers or exposure in jurisdictions with uneven trade secret protection. The new refusal ground provides a more realistic and operationally workable safeguard, enabling companies to better protect sensitive technical and commercial know-how from misappropriation risks outside the EU. At the same time, it will require companies to conduct and document jurisdiction-specific risk assessments when evaluating access requests, integrating trade secret protection more closely into their EU Data Act compliance processes.</p> <li><em>Making data available in case of public emergency</em></li> <p>The Proposal amends the EU Data Act rules governing the obligation of data holders to make data available to public sector bodies in situations of &ldquo;exceptional need,&rdquo; including public emergencies. Notably, it removes the current requirement that personal data may only be shared in pseudonymized form and only where non-personal data is insufficient. Under the proposed text, personal data may be requested and, &ldquo;where possible,&rdquo; provided in pseudonymized form.</p> <p>In their Joint Opinion, the EDPB and EDPS express concern about the removal of the explicit pseudonymization safeguard. They recommend maintaining the current structure whereby non-personal data should be shared by default and personal data &mdash; limited to pseudonymized form &mdash; only where strictly necessary. They also call for clearer delineation of the circumstances under which personal data can be requested, as well as strengthened safeguards and supervisory involvement.</p> <p><strong>Practical impact: </strong>For pharmaceutical and MedTech companies holding large volumes of clinical, trial, or real-world data, the revised provisions could expand the scope of public authority access in emergency scenarios. However, given the EDPB and EDPS&rsquo; position, companies should expect continued emphasis on data minimization and pseudonymization. Robust internal procedures for assessing data access requests and documenting compliance will remain essential.</p> <li><em>Re-use of data held by public sector bodies</em></li> <p>The Proposal integrates rules from the DGA and the ODD into the EU Data Act, creating a consolidated regime for the re-use of data and documents held by public sector bodies. It aims to clarify the relationship between access regimes and reduce fragmentation.</p> <p>In their Joint Opinion, the EDPB and EDPS welcome the streamlining objective but recommend maintaining explicit provisions clarifying that the EU Data Act does not itself oblige public bodies to grant access to personal data, nor does it provide a legal basis for processing. </p> <p><strong>Practical impact: </strong>For Life Sciences companies relying on access to public health datasets, regulatory data, or public research repositories, consolidation under the EU Data Act may enhance procedural clarity. However, the re-use of personal data will remain subject to GDPR constraints, and companies should not assume that EU Data Act access equates to lawful processing without an appropriate legal basis under GDPR.</p> <li><em>Data intermediation services and data altruism organizations</em> </li> <p>The Proposal modifies the framework for data intermediation services and recognized data altruism organizations, including replacing mandatory prior notification with voluntary registration and relaxing certain governance and record-keeping requirements. </p> <p>The EDPB and EDPS acknowledge the intention to reduce administrative burden but caution that reduced transparency and oversight may undermine trust. They recommend maintaining certain safeguards, including clearer accountability, record-keeping obligations, and supervisory visibility, particularly where personal data processing is likely to pose high risks.</p> <p><strong>Practical impact: </strong>For pharmaceutical and MedTech companies participating in data-sharing ecosystems, research consortia, or patient-driven data altruism initiatives, the revised framework may reduce procedural formalities. However, due diligence obligations when engaging with intermediaries will remain critical, especially where sensitive health data is involved. Companies should verify that data-sharing partners maintain adequate safeguards, even if formal regulatory requirements are simplified.</p> <li><em>Enforcement and cooperation mechanisms</em></li> <p>As part of the broader integration of the Data Acquis into the EU Data Act, the Proposal extends the enforcement provisions in the EU Data Act horizontally and modifies cooperation mechanisms between competent authorities and data protection supervisory authorities.</p> <p>In their Joint Opinion, the EDPB and EDPS stress the need for clear delineation of responsibilities between EU Data Act authorities and GDPR supervisory authorities. They recommend explicit legal bases for information exchange and cooperation across regulatory domains to ensure consistent enforcement, particularly where personal data processing is concerned.</p> <p><strong>Practical impact: </strong>For Life Sciences companies operating cross-border data infrastructures, enforcement under the EU Data Act may increasingly intersect with GDPR supervision. Clear internal governance structures and coordinated engagement strategies with multiple authorities will be important, particularly where product data, health data, and commercial data intersect.</p> </ul> <h2>What to Expect Next and How to Prepare</h2> <p>The Proposals are now firmly in the hands of the EU co-legislators, and early negotiating positions are beginning to take shape. The European Parliament has published its first rounds of <a rel="noopener noreferrer" href="https://www.europarl.europa.eu/doceo/document/JURI-PA-784179_EN.pdf" target="_blank">amendments</a> to the <a rel="noopener noreferrer" href="https://www.europarl.europa.eu/doceo/document/CJ40-AM-784275_EN.pdf" target="_blank">Digital Omnibus</a> on <a rel="noopener noreferrer" href="https://www.europarl.europa.eu/doceo/document/JURI-PA-784179_EN.pdf" target="_blank">AI Regulation Proposal</a> &mdash; signalling parliamentary priorities across areas such as prohibited AI practices, high-risk classification, conformity assessment, and transparency obligations. On the broader Digital Omnibus Regulation Proposal, the Council's early position is beginning to emerge through reports of internal discussions. According to draft compromise texts circulated among EU governments, the Cyprus Presidency is considering the removal of the European Commission's proposed amendment to the definition of personal data in Article 4 GDPR from the legislative text itself, in response to criticism that it would unduly narrow the scope of EU data protection law. Instead, the underlying &ldquo;entity-specific identifiability&rdquo; concept would reportedly be preserved in a revised recital rather than operative text &mdash; a more cautious approach that, if confirmed, would reflect the influence of the EDPB and EDPS Joint Opinions. These positions have not yet been formally published and remain subject to change as EU Member State discussions continue.</p> <p>Formal compromise texts from both institutions are still awaited, and once each has consolidated its position, trilogue negotiations can begin &mdash; a process expected to be contentious, particularly on provisions touching fundamental rights and the scope of simplification measures.</p> <p>For pharmaceutical and MedTech companies, the message is one of cautious preparation rather than anticipatory compliance. While the Proposals could deliver meaningful benefits, many of the most significant provisions remain contested and may be substantially revised, as the Council&rsquo;s early retreat on the personal data definition already illustrates. Companies should continue building robust compliance frameworks under the current rules, monitor developments closely, and prioritize early engagement with notified bodies and regulators regardless of how negotiations conclude.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{774C6584-DEB2-4D67-A537-E4E8A8C8ECCD}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/ftc-prioritizes-hidden-fees-in-housing-rental-markets-amidst-broader-state-scrutiny-of-junk-feesWilliam Hallett Efronhttps://www.arnoldporter.com/en/people/e/efron-william-hallettwilliam.efron@arnoldporter.comKelsie Sicinskihttps://www.arnoldporter.com/en/people/s/sicinski-kelsiekelsie.sicinski@arnoldporter.comDanait Mengisthttps://www.arnoldporter.com/en/people/m/mengist-danaitdanait.mengist@arnoldporter.comNina Levitenhttps://www.arnoldporter.com/en/people/l/leviten-ninanina.leviten@arnoldporter.comThis advisory covers notable recent developments at the federal and state level regarding enforcement and regulation concerning hidden fees. It closes with takeaways for companies that advertise goods or services with mandatory fees included in the purchase price.Thu, 26 Feb 2026 00:00:00 -0600<p>On January 30, 2026, the U.S. Federal Trade Commission (FTC or Commission) announced it had taken a preliminary step toward commencing a new rulemaking related to junk fees in the rental housing market. The announcement comes on the heels of the agency&rsquo;s settlement with Greystar Real Estate Partners, resolving allegations that the company deceived consumers about monthly rent costs by adding hidden fees on top of advertised prices. Importantly, these developments are occurring amidst broader scrutiny of hidden fees by enforcers, particularly as a number of states have recently enacted junk fees laws that apply across industries. </p> <p>This Advisory covers notable recent developments at the federal and state levels regarding enforcement and regulation concerning hidden fees. It closes with takeaways for companies that advertise goods or services with mandatory fees included in the purchase price.</p> <h2>FTC Focus on Rental Housing Markets</h2> <p>In December 2025, the FTC and the State of Colorado settled their litigation against Greystar, a large multi-family rental property manager.[[N: Fed. Trade Comm&rsquo;n, <em>Greystar Agrees to Pay $24 Million and Stop Deceptive Advertising Practices as a Result of FTC and Colorado Lawsuit Alleging the Firm Deceived Consumers About Rent Prices</em> (Dec. 2, 2025), <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/12/greystar-agrees-pay-24-million-stop-deceptive-advertising-practices-result-ftc-colorado-lawsuit" target="_blank">https://www.ftc.gov/news-events/news/press-releases/2025/12/greystar-agrees-pay-24-million-stop-deceptive-advertising-practices-result-ftc-colorado-lawsuit</a>.&nbsp;]] The government alleged that Greystar misrepresented the true cost to rent its properties by displaying a deceptively low rental price that excluded several mandatory monthly fees. In addition to alleging that Greystar&rsquo;s misrepresentations violated the FTC Act, the complaint asserted that Greystar&rsquo;s alleged use of those misrepresentations to obtain consumers&rsquo; financial information during the rental application process violated the Gramm-Leach-Bliley (GLB) Act. Notably, the inclusion of a count under the GLB Act, a violation of which is treated as a violation of an FTC trade regulation rule, allowed the FTC to seek monetary relief in connection with that claim.[[N: The FTC can seek civil penalties and/or consumer redress for violations of an FTC trade regulation rule.]] The FTC could not otherwise have done so on the basis of Greystar&rsquo;s alleged violation of Section 5 of the FTC Act due to the Supreme Court&rsquo;s holding in the <em>AMG Capital Management </em>case that Section 13(b) of the FTC Act does not authorize the agency to seek equitable monetary relief.[[N: <em>AMG Capital Mgmt. v. Fed. Trade Comm&rsquo;n</em>, 593 U.S. 67, 75 (2021).]]</p> <p>To settle the case, Greystar agreed to pay $24 million. It also agreed to clearly and conspicuously display total monthly leasing prices and mandatory fees when making representations about the prices to lease its properties. In his statement about the settlement, FTC Chair Andrew Ferguson explained that since misleading pricing representations in America&rsquo;s rental markets are not limited to Greystar, he directed Commission staff to begin the process of proposing a rule to address unfair or deceptive fees in rental housing.[[N: Andrew Ferguson, <em>Concurring Statement of Chairman Andrew N. Ferguson: </em>FTC v. Greystar Real Estate Partners (Dec. 2, 2025), <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/2025.12.02-greystar-chairman-ferguson-statement.pdf" target="_blank">https://www.ftc.gov/system/files/ftc_gov/pdf/2025.12.02-greystar-chairman-ferguson-statement.pdf</a>.]]</p> <h2>FTC Commences New Rulemaking Process For Rental Housing Fees</h2> <p>On January 30, 2026, the FTC announced that it would be soliciting public comment on the need for a rule to prevent the imposition of deceptive or unfair fees on renters seeking long-term housing options. Echoing statements he made in connection with the Greystar settlement, Chair Ferguson highlighted how Americans have been &ldquo;squeezed&rdquo; by such fees and that President Trump has prioritized reducing the cost of living and affordability in the housing market.[[N: Fed. Trade Comm&rsquo;n, <em>FTC Submits Draft ANPRM Related to Rental Housing Fees to OMB for Review</em> (Jan. 30, 2026), <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-submits-draft-anprm-related-rental-housing-fees-omb-review" target="_blank">https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-submits-draft-anprm-related-rental-housing-fees-omb-review.</a>]]</p> <p>As a first step in the rulemaking process, the agency submitted a draft Advance Notice of Proposed Rulemaking (ANPRM) to the Office of Information and Regulatory Affairs (OIRA) for review.[[N: The FTC&rsquo;s press release explained that because the planned ANPRM qualifies as a &ldquo;significant regulatory action,&rdquo; review by OIRA, which is within the Office of Management and Budget, is required pursuant to two Executive Orders.&nbsp;]] ANPRMs must contain a brief description of the area of inquiry being considered, the FTC&rsquo;s objectives, and possible regulatory alternatives under consideration. Once OIRA review is completed, the FTC will publish the planned ANPRM in the Federal Register and seek public comment.[[N:&nbsp;15 U.S.C. &sect; 57a.&nbsp;]] Notably, there are many required steps thereafter under the FTC&rsquo;s consumer protection rulemaking procedures before any new rule concerning fees in rental housing markets could be issued.[[N: FTC rulemaking pursuant to Section 18 of the FTC Act (15 U.S.C. &sect; 57a), also known as Magnuson-Moss rulemaking, imposes a number of requirements in addition to those applicable to rulemaking under the Administrative Procedure Act.]] This includes the eventual issuance of a Notice of Proposed Rulemaking (NPRM) setting forth the text of the proposed rule, including any regulatory alternatives. In connection with an NPRM, the FTC must allow interested parties to make written submissions and provide the opportunity for an informal hearing.[[N:&nbsp;15 U.S.C. &sect; 57a(b)(1).]]</p> <p>While the FTC&rsquo;s submission of a draft ANPRM was somewhat expected given Chair Ferguson&rsquo;s statement from the Greystar settlement, this development is nonetheless noteworthy. During the last year of the Biden administration, then-Commissioner Ferguson dissented from a number of the agency&rsquo;s consumer protection rulemaking activities, including the FTC&rsquo;s Junk Fees rule (discussed below).[[N: Andrew Ferguson, <em>Dissenting Statement of Commissioner Andrew N. Ferguson Regarding the Unfair or Deceptive Fees Rulemaking Matter Number R207011</em> (Dec. 17, 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-junk-fees-dissent.pdf; <em>see also</em> Melissa Holyoak &amp; Andrew Ferguson, <em>Statement of Commissioner Melissa Holyoak, Joined by Commissioner Andrew Ferguson: Health Breach Notification Rule</em> (Apr. 26, 2024), <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/p205405_hbnr_mhstmt_0.pdf" target="_blank">https://www.ftc.gov/system/files/ftc_gov/pdf/p205405_hbnr_mhstmt_0.pdf</a>.]] When he was selected as Chair, Ferguson made clear that the FTC under President Trump would focus on enforcing the laws Congress has passed rather than writing them.[[N: Andrew Ferguson, <em>Dissenting Statement of Commissioner Andrew N. Ferguson Fall 2024 Regulatory Plan and Regulatory Agenda Matter Number P072104</em> (Dec. 13, 2024), <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-dissent-2024-annual-regulatory-plan-agenda.pdf" target="_blank">https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-dissent-2024-annual-regulatory-plan-agenda.pdf</a>.]]</p> <p>Fast forward to January 30th, the FTC has announced not one, but two ANPRMs, the other relating to <a href="/en/perspectives/advisories/2026/02/ftc-and-state-ags-continue-to-scrutinize-subscription-practices">recurring subscriptions</a>. When announcing that he directed staff to explore a new hidden fees rule, Ferguson explained that, notwithstanding his enforcement philosophy, he has expressed support for promulgating rules &ldquo;where such rules align with the agency&rsquo;s traditional role as a cop on the beat.&rdquo;[[N: Andrew Ferguson, <em>Concurring Statement of Chairman Andrew N. Ferguson</em>: FTC v. Greystar Real Estate Partners, <em>supra</em> note 4.]] In announcing the ANPRM, Ferguson further explained that a new rule may enhance the FTC&rsquo;s capacity to bring enforcement actions in this area.[[N: Fed. Trade Comm&rsquo;n, <em>FTC Submits Draft ANPRM Related to Rental Housing Fees to OMB for Review</em>, <em>supra</em> note 5.]] There is no doubt that a rule regarding hidden fees in rental markets (and the accompanying threat of civil penalties for violations) would give the FTC&rsquo;s powers a boost. </p> <h3>The FTC&rsquo;s Junk Fees Rule</h3> <p>This ANPRM, of course, is not the agency&rsquo;s first foray into rulemaking regarding hidden fees. The FTC&rsquo;s Rule on Unfair or Deceptive Fees, more commonly known as the Junk Fees Rule, was finalized in December 2024 and took effect in May 2025.[[N: <em>See</em> 16 C.F.R. &sect; 464.]] However, it only applies to <em>short-term </em>lodging and live-event ticketing. For those industries, the rule prohibits bait-and-switch pricing and other tactics used to hide total prices and mislead consumers about fees. The rule requires that businesses clearly and conspicuously disclose the true total price inclusive of all mandatory fees whenever they offer, display, or advertise any price of live-event tickets or short-term lodging. Some fees (such as taxes or other government charges and shipping charges) can be excluded from the total price displayed upfront, as long as they are disclosed before seeking payment.</p> <p>The final rule is much more limited in scope than the rule originally proposed, which would have applied to businesses across the economy. While then-Commissioner Ferguson voted against the rule, he made clear that his objection was not on the merits, stating instead that the time &ldquo;for rulemaking by the Biden-Harris FTC is over.&rdquo;[[N: Andrew Ferguson, <em>Dissenting Statement of Commissioner Andrew N. Ferguson Regarding the Unfair or Deceptive Fees Rulemaking</em>, <em>supra</em> note 10.]] Notably, the agency has taken enforcement action regarding alleged junk fees against companies in numerous industries not covered by the rule.</p> <h2>Recent State Regulation Regarding Hidden Fees</h2> <p>Junk fees have also been a focus for many states, which have enacted their own laws generally requiring the disclosure of mandatory fees in the advertised price of goods and services (excluding taxes and shipping). However, unlike the FTC, some state junk fee laws are broader in scope, applying to businesses across the economy (with certain exceptions). </p> <p>For example, Colorado enacted a junk fees law that took effect on January 1, 2026.[[N: H.B. 25-1090, 75th Gen. Assemb., 2d Reg. Sess. (Colo. 2025).]] The law broadly prohibits advertising the price of a product unless the total price (excluding government and shipping charges) is clearly and conspicuously disclosed as a single number. Fees that cannot be determined at the time of purchase (<em>e.g.</em>, those that depend on consumer selections) do not need to be included in the total price. Colorado&rsquo;s law contains specific provisions relating to the disclosure of mandatory service charges for food and beverage service establishments and additional fees charged by delivery network companies. Although the law is not limited to specific industries, it does exempt transactions that are governed by and comply with other price transparency laws (<em>e.g.</em>, the Truth in Lending Act). It also exempts cable and broadband internet operators compliant with applicable requirements.</p> <p>Massachusetts&rsquo;s regulation prohibiting junk fees went into effect in September 2025.[[N: 940 Mass. Code Regs. 38.00.]] It requires businesses to clearly disclose the total price of a product whenever pricing information is presented to a consumer and prior to requiring a consumer to provide their personal information. The regulation defines total price as the &ldquo;maximum price a consumer must pay for a [p]roduct, inclusive of all fees, charges, or other expenses&rdquo; (excluding government and shipping charges). Massachusetts also requires that businesses disclose the nature, purpose, and amount of any charges that may be imposed on a transaction. While broadly applicable, the regulation does not apply to air transportation, to car manufacturers or dealers that comply with other applicable laws, to health care providers, or to the advertisement or sale of credit or securities.[[N: Id.; Office of the Mass. Att&rsquo;y Gen., Guidance with Respect to Unfair and Deceptive Fees (940 CMR 38.00), <a rel="noopener noreferrer" href="https://www.mass.gov/doc/guidance-on-junk-fee-regulations-940-cmr-3800/download" target="_blank">https://www.mass.gov/doc/guidance-on-junk-fee-regulations-940-cmr-3800/download</a> (last visited Feb. 12, 2026).]]</p> <p>A number of other states have passed broad junk fees laws. Virgina&rsquo;s law, which became effective in July 2025, contains exclusions for certain fees in connection with the purchase or lease of a car, electric and gas utilities, telecommunications services, real estate broker commissions and fees, and air transportation. Cable and broadband internet providers are exempt if compliant with other applicable laws.[[N: S.B. 1212, 2025 Gen. Assemb., Reg. Sess. (Va. 2025)]] Minnesota&rsquo;s law, which became effective in January 2025, generally applies to almost all industries but contains certain exclusions similar to those in the Virginia law.[[N: H.F. 3438, 93d Leg., Reg. Sess. (Minn. 2023-2024).]] And California&rsquo;s SB 478, also known as the &ldquo;Honest Pricing Law,&rdquo; applies to the sale or lease of most goods and services that are for a consumer&rsquo;s personal use.[[N: S.B. 478, 2023 Gen. Assemb., Reg. Sess. (Cal. 2023).]] Mandatory fees charged by restaurants, bars, and other select food vendors are exempted from SB 478&rsquo;s requirements so long as the fee is clearly and conspicuously displayed wherever prices are shown.[[N: S.B. 1524, 2024 Gen. Assemb., Reg. Sess. (Cal. 2024).]] The law also does not apply to the purchase or lease of goods or services for commercial use, or to certain other specified transactions and industries that are already subject to other laws governing pricing. </p> <p>These states are not the only ones with broad junk fee laws. For example, Connecticut&rsquo;s fee disclosure law goes into effect on July 1, 2026,[[N: &nbsp;S.B. 00003, 2025 Gen. Assemb., Reg. Sess. (Conn. 2025).]] and Oregon&rsquo;s recently went into effect on January 1, 2026.[[N: S.B. 430, 83d Leg. Assemb., Reg. Sess. (Or. 2025).]]</p> <p>Importantly, states are not just regulating in this area; they are bringing cases. For example, last year, Booking Holdings Inc. paid $9.5 million to settle a lawsuit brought by the Texas Attorney General alleging that the company deceptively marketed hotel room prices to consumers by omitting mandatory fees.[[N: Press Release, Att&rsquo;y Gen. of Tex., Attorney General Ken Paxton Secures Historic $9.5 Million Settlement with Booking for Engaging in Deceptive &ldquo;Junk Fee&rdquo; Practices (Aug. 19, 2025), https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-secures-historic-95-million-settlement-booking-engaging-deceptive-junk.]] And in November of last year, the Connecticut AG filed an expanded complaint in its action against Altice/Optimum Online, alleging that the company misled Spanish-speaking consumers and collected at least $39.1 million in bait-and-switch &ldquo;Network Enhancement&rdquo; junk fees from Connecticut consumers.[[N: Press Release, Off. of the Att&rsquo;y Gen. Conn., Attorney General Tong Files Expanded Complaint Against Altice Detailing $39.1 Million in Bait-And-Switch Junk Fees Charged to Connecticut Consumers (Nov. 6, 2025), https://portal.ct.gov/ag/press-releases/2025-press-releases/attorney-general-tong-files-expanded-complaint-against-altice.]]</p> <h2>New York City Prioritizes Junk Fees</h2> <p>In January 2026, New York City Mayor Zohran Mamdani signed an executive order directing the Department of Consumer and Worker Protection (DCWP) to crack down on junk fees, including through the establishment of an interagency Citywide Junk Fee Task Force. The order directs DCWP to take any appropriate actions to combat hidden junk fees, including enforcement actions and the promulgation of rules.[[N: Zohran Mamdani, Exec. Order 09 (Jan. 5, 2026).]]</p> <h2>Takeaways</h2> <ul> <li>Federal, state, and local consumer protection enforcers have continued to prioritize the failure to adequately disclose mandatory fees in connection with advertising the price of goods, services, and rental housing. Companies should also be advised that plaintiffs&rsquo; attorneys are active in the space, enforcing state laws that ban hidden fees and state unfair trade practices statutes that incorporate FTC rules (which cannot themselves be enforced by anyone other than the FTC) in their definition of an unfair trade practice. Accordingly, companies that do not adequately disclose mandatory fees can be at risk of both government enforcement actions and class action lawsuits.</li> <li>Companies in the rental housing industry should monitor any developments with respect to the FTC&rsquo;s rulemaking process regarding hidden fees, including the publication of the ANPRM. This event (and the issuance of an NPRM) provide opportunities for comment from interested parties as the Commission considers the contours of any eventual rule that is promulgated.</li> <li>States are continuing to enact new junk fees laws. While some focus on specific industries like the FTC&rsquo;s Junk Fees Rule, others apply more broadly to companies across industries. Accordingly, companies must stay abreast of state-level regulatory developments and carefully review new laws as they consider how to advertise prices.</li> </ul> <p>Arnold &amp; Porter regularly advises companies on compliance with federal and state consumer protection laws and on disputes arising under them. The firm also helps companies participate in rulemaking proceedings. Our Consumer Protection &amp; Advertising Practice would be happy to assist with any questions you have regarding price advertising and the disclosure of fees.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{5C0486B1-8406-4901-95B6-044DCB1BC6CA}https://www.biosliceblog.com/2026/02/eu-digital-omnibus-what-the-proposed-reforms-mean-for-pharma-and-medtech/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comCamille Vermosenhttps://www.arnoldporter.com/en/people/v/vermosen-camillecamille.vermosen@arnoldporter.comThu, 26 Feb 2026 00:00:00 -0600{60A5BB49-C276-49D5-B1B7-B3F773B4DE41}https://www.arnoldporter.com/en/perspectives/publications/2026/02/virtual-and-digital-health-digestAllison W. Shurenhttps://www.arnoldporter.com/en/people/s/shuren-allison-wallison.shuren@arnoldporter.comAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comDr. Beatriz San Martinhttps://www.arnoldporter.com/en/people/s/san-martinbeatriz.sanmartin@arnoldporter.comNancy L. Perkinshttps://www.arnoldporter.com/en/people/p/perkins-nancy-lnancy.perkins@arnoldporter.comMonique Nolan, M.D., J.D.https://www.arnoldporter.com/en/people/n/nolan-moniquemonique.nolan@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comCasey Brouhardhttps://www.arnoldporter.com/en/people/b/brouhard-caseycasey.brouhard@arnoldporter.comJacqueline L. Degannhttps://www.arnoldporter.com/en/people/d/degann-jacquelinejackie.degann@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comKatherine Rohdehttps://www.arnoldporter.com/en/people/r/rohde-katherinekate.rohde@arnoldporter.comShama Aktarhttps://www.arnoldporter.com/en/people/a/aktar-shamashama.aktar@arnoldporter.comMickayla A. Stogsdillhttps://www.arnoldporter.com/en/people/s/stogsdill-mickaylamickayla.stogsdill@arnoldporter.comEmma Elliston, Ph.D.https://www.arnoldporter.com/en/people/e/elliston-emmaemma.elliston@arnoldporter.comBrianna Morigneyhttps://www.arnoldporter.com/en/people/m/morigney-briannabrianna.morigney@arnoldporter.comCaroline Oliverhttps://www.arnoldporter.com/en/people/o/oliver-carolinecaroline.oliver@arnoldporter.comThis digest covers key virtual and digital health regulatory and public policy developments during January and early February 2026 from the United States (U.S.), United Kingdom (UK), and European Union (EU).Thu, 26 Feb 2026 00:00:00 -0600<p>This digest covers key virtual and digital health regulatory and public policy developments during January and early February 2026 from the United States (U.S.), United Kingdom (UK), and European Union (EU).</p> <h2>In this issue, you will find the following:</h2> <h3>U.S. News</h3> <ul> <li><a href="#Health Care Fraud And Abuse Updates">Health Care Fraud and Abuse Updates</a></li> <li><a href="#Provider Reimbursement Updates">Provider Reimbursement Updates</a></li> <li><a href="#Privacy and AI Updates">Privacy and Artificial Intelligence (AI) Updates</a></li> <li><a href="#Policy Updates">Policy Updates</a></li> </ul> <h3>U.S. Featured Content </h3> <p>In this issue, we cover significant federal health care fraud and abuse developments, including guilty pleas and convictions in major Medicare and Medicaid schemes involving telehealth and durable medical equipment, as well as a $197 million fraud case tied to medically unnecessary orthotics. We also highlight the Centers for Medicare &amp; Medicaid Services&rsquo; (CMS&rsquo;s) release of payment rates and performance targets for the new Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model, as well as a multi-payer pledge to align on outcomes-based reimbursement for technology-supported care. In privacy and AI news, we report on the Federal Trade Commission&rsquo;s (FTC&rsquo;s) upcoming workshop on consumer harms in the data-driven economy and the National Institute of Standards and Technology&rsquo;s (NIST&rsquo;s) request for information on risks posed by &ldquo;agentic AI.&rdquo; Finally, we summarize key policy updates, including the extension of Medicare telehealth flexibilities through 2027, new federal AI initiatives and leadership appointments at the Department of Health and Human Services (HHS), congressional perspectives on AI regulation, the U.S. Food and Drug Administration (FDA) and European Medicines Agency's (EMA) guiding principles for AI in drug development, and the Advanced Research Projects Agency for Health&rsquo;s launch of a new agentic AI program focused on cardiovascular care.</p> <h3>EU and UK News</h3> <ul> <li><a href="#Regulatory Updates">Regulatory Updates</a></li> <li><a href="#Privacy Updates">Privacy Updates</a></li> <li><a href="#IP Updates">IP Updates</a></li> <li><a href="#Product Liability Updates">Product Liability Updates</a></li> </ul> <h3>EU/UK Featured Content </h3> <p>January 2026 saw significant activity as UK and EU authorities advanced major initiatives affecting the use of AI, digital technologies, data governance, and cybersecurity in healthcare and life sciences. Notable developments include EMA&rsquo;s and FDA joint principles on the use of AI across the medicinal product lifecycle, the European Commission&rsquo;s call for evidence on the proposed amendments to the Medical Devices Regulation (EU) 2017/745 (MDR) and In Vitro Diagnostic Regulation (EU) 2017/746 (IVDR), proposals to strengthen the EU Cybersecurity Act, and important data protection interventions. In parallel, UK and EU regulators continued to focus on the safe deployment of digital tools in healthcare, including new Medicines and Healthcare products Regulatory Agency (MHRA) guidance on mental health technologies and ongoing work to refine AI governance. These updates, alongside developments in Intellectual Property (IP) and product liability, signal a rapidly evolving regulatory environment that will help to shape digital innovation and compliance expectations throughout 2026.</p> <h2>U.S. News</h2> <h3><a name="Health Care Fraud And Abuse Updates">Health Care Fraud And Abuse Updates</a></h3> <ul> <li><a rel="noopener noreferrer" href="https://www.justice.gov/usao-ma/pr/florida-man-pleads-guilty-conspiracy-violate-anti-kickback-statute" target="_blank"><strong>Florida DME Owner and Manager Pleads Guilty to Conspiracy to Violate the Anti-Kickback Statute</strong></a>.&nbsp;<strong></strong>On January 30, 2026, Deane Gilmore, the owner and manager of two durable medical equipment companies, pleaded guilty to conspiring to violate the Anti Kickback Statute. Gilmore allegedly paid telemarketers and call centers on a per-order basis to collect Medicare beneficiaries&rsquo; information, which was then used to generate orders for unnecessary durable medical equipment. Over the course of the scheme, Gillmore submitted or caused to be submitted $6.5 million in claims to Medicare, of which $3 million were ultimately paid by Medicare.</li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/usao-nh/pr/repeat-health-care-fraud-offender-sentenced-defrauding-new-hampshire-medicaid" target="_blank"><strong>Florida Man Sentenced for New Hampshire Medicaid Telehealth Fraud</strong></a>.&nbsp;<strong></strong>On February 3, 2026, Erik X. Alonso was sentenced for defrauding New Hampshire Medicaid. According to court documents, beginning in March 2022, Alonso worked for a telehealth mental health provider, where he provided services billed to New Hampshire Medicaid despite his inclusion on the Medicaid exclusion list. Additionally, Alonso caused the telehealth provider to submit claims to New Hampshire Medicaid for services that were not provided. As a result of this scheme, New Hampshire Medicaid paid $173,998 in false and fraudulent claims.</li> <li><a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/former-nfl-player-convicted-197m-medicare-fraud" target="_blank"><strong>Former Professional Football Player Convicted of $197M Medicare Fraud</strong></a>. On February 3, 2026, a federal jury convicted a former professional football player, Joel Rufus French, for his role in $197 million Medicare and Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) fraud scheme. French allegedly worked with call centers to collect beneficiary information, which was routed to telemedicine providers. Those providers signed orders for medically unnecessary durable medical equipment, including orthotic braces, without examining or speaking with patients. French allegedly sold the orders to marketers and medical supply companies who submitted claims to Medicare. He also allegedly billed the CHAMPVA program for orthotic braces through durable medical equipment supply companies that he owned and managed, using false documents to conceal his ownership of the companies from Medicare.</li> </ul> <h3><a name="Provider Reimbursement Updates">Provider Reimbursement Updates</a></h3> <ul> <li> <p><strong>CMS Announces Payment Rates for ACCESS Model</strong>. As we covered in our <a href="/en/perspectives/publications/2025/12/virtual-and-digital-health-digest">December 2025 Digest</a>, in early December, CMS announced a voluntary pilot model called ACCESS, which will test an outcome-aligned payment approach in Original Medicare to &ldquo;expand access to new technology-supported care options that help people improve their health and prevent and manage chronic disease.&rdquo; Under the model, care organizations are expected to offer &ldquo;integrated, technology-supported care&rdquo; to manage beneficiaries&rsquo; qualifying conditions within one of four clinical &ldquo;tracks&rdquo;: (1) early cardio-kidney-metabolic; (2) cardio-kidney-metabolic; (3) musculoskeletal; and (4) behavioral health.</p> <p>CMS has now released the <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/files/access-payments-amts-perf-targets.pdf" target="_blank">payment amounts and performance targets</a> for model participants. Under the model, CMS will pay ACCESS participants an annual amount per enrolled beneficiary, with the maximum payment varying by beneficiary&rsquo;s &ldquo;track.&rdquo; This annual payment will be split into monthly payments, with 50% of the total withheld and reconciled at the end of the 12-month care period. If at least 50% of an ACCESS participant&rsquo;s beneficiaries meet the required clinical and patient-reported outcomes during a care period, the participant can earn the remaining payment amount.</p> <p>Separately, on February 12, CMS <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/major-health-plans-join-access-payer-pledge" target="_blank">announced</a> that several major health payers have pledged to adopt an outcomes-based payment structure &ldquo;aligned to&rdquo; the ACCESS Model. The agency stated that the payers cover 165 million Americans through Medicare Advantage, Medicaid, and private health insurance plans and expressed the pledge would help align payments across payers for &ldquo;technology-supported care&rdquo; that delivers &ldquo;measurable improvements in patient health outcomes.&rdquo; CMS also announced it is developing a set of optional &ldquo;alignment resources&rdquo; for health plans, including sample provider agreements, standardized billing codes, and outcome reporting infrastructure, which the agency expects to be available later in 2026.</p> </li> </ul> <h3><a name="Privacy and AI Updates">Privacy and AI Updates</a></h3> <ul> <li><strong>FTC Announces Workshop on Consumer Injuries and Benefits in the Data-Driven Economy</strong>. FTC has <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-host-workshop-consumer-injuries-benefits-data-driven-economy" target="_blank">announced a workshop</a> to be held on February 26 to examine &ldquo;consumer injuries and benefits that may result from the collection, use, or disclosure of consumer data.&rdquo; The FTC held a similar workshop almost a decade ago, and the plan for the upcoming event is to gather current information on, among other things, consumer privacy preferences and the impacts of data breaches on consumers. In a document summarizing findings from the <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/documents/reports/ftc-informational-injury-workshop-be-bcp-staff-perspective/informational_injury_workshop_staff_report_-_oct_2018_0.pdf" target="_blank">2017 workshop</a>, the FTC staff reported that participants emphasized medical identity theft as a serious harm resulting from data breaches or unauthorized disclosure of data. This year&rsquo;s workshop is free and open to the public and will be held in person at the FTC&rsquo;s Constitution Center at 400 7th St SW, Washington, DC 20024.</li> <li><strong>NIST AI Center Issues Request for Information on Agentic AI</strong>. On January 8, the Center for AI Standards and Innovation at NIST issued a <a rel="noopener noreferrer" href="https://www.govinfo.gov/content/pkg/FR-2026-01-08/pdf/2026-00206.pdf" target="_blank">Request for Information</a> seeking comment on information and insights on methods for measuring and improving the development and deployment of AI agent systems (which NIST defines as systems consisting of &ldquo;at least one generative AI model and scaffolding software that equips the model with tools to take on a range of discretionary actions&rdquo; that &ldquo;can be deployed with little to no human oversight&rdquo;). The Request focuses on three specific risks posed by agentic AI: (1) security risks arising from adversarial attacks, (2) security risks posed by &ldquo;models with intentionally placed backdoors,&rdquo; and (3) risks that otherwise uncompromised models may still pose a threat to &ldquo;confidentiality, availability, and integrity.&rdquo;&nbsp;<strong>The deadline for submitting responses to the NIST request is March 9, 2026.</strong></li> </ul> <h3><a name="Policy Updates">Policy Updates</a></h3> <ul> <li><strong>Medicare Telehealth Flexibilities Extended in FY 2026 Appropriations Package</strong>. On February 3, President Trump signed into law a $1.2 trillion appropriations package, <em>Consolidated Appropriations Act, 2026</em> (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7148/text" target="_blank">P.L. 119-75</a>). The package included five of the six outstanding Fiscal Year (FY) 2026 appropriations bills: Labor, Health and Human Services, and Education; Defense; Transportation, Housing and Urban Development; State-Foreign Operations; and Financial Services-General Government (FSGG), as well as a two-week continuing resolution through February 13 for the Department of Homeland Security. In addition to federal appropriations, the minibus contained several health policy items, including the extension of COVID-era Medicare telehealth flexibilities through December 31, 2027.</li> <li><strong>ACL Launches Caregiver AI Prize Competition</strong>. On February 5, the Administration for Community Living (ACL) <a rel="noopener noreferrer" href="https://acl.gov/caregiver-ai-competition" target="_blank">announced</a> the Phase 1 launch of the Caregiver AI Prize Competition, a national challenge to support the development of AI tools that strengthen caregiving and the caregiving workforce. Phase 1 will award up to $2.5 million to as many as 20 winners and includes two tracks: (1) AI tools to support family and professional caregivers, and (2) AI workforce tools to improve efficiency, scheduling, and training for home care organizations. ACL plans to host an informational webinar in March, and Phase 1 applications will be due in July, with winners announced in September.</li> <li><strong>HHS Hires New Deputy Chief Artificial Intelligence Officer</strong>. HHS has <a rel="noopener noreferrer" href="https://subscriber.politicopro.com/article/2026/02/stanford-ai-post-arman-shar-hhs-00774923" target="_blank">reportedly</a> hired Arman Sharma as the agency&rsquo;s new deputy chief artificial intelligence officer. Sharma recently graduated from Stanford University in 2024. While at Stanford, he co-authored a health economics textbook with Dr. Jay Bhattacharya, who is now the Director of the National Institutes of Health. The new hire follows HHS&rsquo;s release of its <a rel="noopener noreferrer" href="https://www.hhs.gov/programs/topic-sites/ai/strategy-implementation/index.html" target="_blank">AI Strategy</a> in early December.</li> <li><strong>E&amp;C Chairman Authors Essay on The Path for American AI Leadership</strong>. House Energy and Commerce (E&amp;C) Chairman Brett Guthrie (R-KY) recently authored an essay titled &ldquo;<a rel="noopener noreferrer" href="https://energycommerce.house.gov/posts/icymi-chairman-guthrie-essay-dominance-deployment-and-safeguards-the-path-for-american-ai-leadership" target="_blank">Dominance, Deployment, and Safeguards: The Path for American AI Leadership</a>,&rdquo; which was published in the Orrin G. Hatch Foundation&rsquo;s <em><a rel="noopener noreferrer" href="https://static1.squarespace.com/static/5e2072f645f53f254017e846/t/6962c8b2734c7314cd654341/1768081586815/2025+Hatch+Policy+Review.AI+FINAL+DIGITAL.pdf" target="_blank">2025 Hatch Center Policy Review</a></em>. In the essay, Chairman Guthrie expresses concern that America faces a threat to its leadership in AI from China. The Chairman says the committee&rsquo;s approach to regulating AI will be guided by three pillars: &ldquo;dominance, deployment, and safeguards.&rdquo; Notably, Chairman Guthrie supports the <a rel="noopener noreferrer" href="https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf" target="_blank">AI Action Plan</a> and warns against a patchwork of state AI laws and regulations.</li> <li><strong>Food and Drug Administration and European Medicines Agency Release Principles for AI Use in Drug Development</strong>. On January 14, FDA&rsquo;s Center for Drug Evaluation and Research and Center for Biologics Evaluation and Research, in collaboration with the EMA, <a rel="noopener noreferrer" href="https://www.fda.gov/about-fda/artificial-intelligence-drug-development/guiding-principles-good-ai-practice-drug-development" target="_blank">released</a> ten &ldquo;<a rel="noopener noreferrer" href="https://www.fda.gov/media/189581/download" target="_blank">Guiding Principles of Good AI Practice in Drug Development</a>.&rdquo; These principles include (1) Human-centric by design, (2) Risk-based approach, (3) Adherence to standards, (4) Clear context of use, (5) Multidisciplinary expertise, (6) Data governance and documentation, (7) Model design and development practices, (8) Risk-based performance assessment, (9) Life cycle management, and (10) Clear, essential information. The announcement comes as FDA is <a rel="noopener noreferrer" href="https://insidehealthpolicy.com/daily-news/makary-fda-plans-further-digital-health-deregulation-and-new-risk-based-ai-framework?0=ip_login_no_cache%3D4f8855f6815487d8da004533ad99d697" target="_blank">reportedly</a> developing a new regulatory framework for AI.</li> <li><strong>Advanced Research Projects Agency for Health Announces Agentic AI Program</strong>. On January 13, the Advanced Research Projects Agency for Health <a rel="noopener noreferrer" href="https://arpa-h.gov/news-and-events/arpa-h-revolutionize-cardiovascular-disease-management-clinical-agentic-ai" target="_blank">announced</a> a new research opportunity through the Agentic AI-EnableD CardioVascular CAre TransfOrmation (<a rel="noopener noreferrer" href="https://arpa-h.gov/explore-funding/programs/advocate" target="_blank">ADVOCATE</a>) program, which aims to develop an FDA-authorized agentic AI system that can provide 24/7 care for advanced cardiovascular disease management. Funding opportunities will &ldquo;support the development of clinical AI agents that can be trusted to autonomously adjust changes in appointments, medications, diet, and exercise.&rdquo; The program also aims to develop a &ldquo;supervisory&rdquo; AI agent to monitor other clinical agents to ensure safety and efficacy. Summaries for proposals are due February 27.</li> </ul> <h2>EU and UK News</h2> <h3><a name="Regulatory Updates">Regulatory Updates</a></h3> <ul> <li><strong><a rel="noopener noreferrer" href="https://www.ema.europa.eu/en/news/ema-fda-set-common-principles-ai-medicine-development-0" target="_blank">EMA and FDA issue joint principles on AI in the medicines lifecycle</a></strong>. The joint principles are intended to promote the use of AI while ensuring the safe, responsible, and reliable application throughout the lifecycle of medicines, providing broad guidance to cover all phases of a medicine, from early research and clinical trials through to manufacturing and post-market safety monitoring. The ten guiding principles set out regulatory expectations for the development and use of AI systems. Some examples include: implementing robust data governance and privacy protections, and providing clear, accessible information on intended use, performance, limitations, data sources, update processes, and explainability. Although not legally binding, the principles provide helpful insight into the aligned regulatory expectations of the EMA and FDA and are expected to inform future EU-level and national regulatory guidance, to advance good practice in medicines development.</li> <li><strong><a rel="noopener noreferrer" href="https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14808-Medical-devices-and-in-vitro-diagnostics-targeted-revision-of-EU-rules_en" target="_blank">European Commission Publishes an Open Call for Evidence on the Revisions to the EU MDR and IVDR</a></strong>. Following the publication of the European Commission&rsquo;s proposals to amend the MDR and the IVDR (the Proposals) in December 2025 (see our <a href="/en/perspectives/publications/2026/01/virtual-and-digital-health-digest">January 2026 Digest</a>), the Commission is now seeking views, through its call for evidence, on whether the Proposals adequately address implementation challenges, including by reducing administrative burdens, enhancing predictability and alignment across EU Member States in the certification process, and ensuring that regulatory requirements are proportionate and aligned with other relevant EU legislation. The feedback received will inform discussions within the European Parliament and the Council of the European Union during the negotiations on the Proposals. The call for evidence is open until March 23, 2026. See our recent <a href="/en/perspectives/advisories/2026/02/the-eu-medical-device-shake-up">Advisory</a>&nbsp;for an overview of what international companies should be preparing for and understand the impact on AI-based software.</li> <li><strong><a rel="noopener noreferrer" href="https://prod.iapp.org/news/a/edpbedps-release-joint-opinion-on-digital-ai-omnibus/" target="_blank">European Data Protection Board (EDPB) and European Data Protection Supervisor (EDPS) Issue Joint Opinion on the European Commission's Proposal to Amend the AI Act (Digital Omnibus on AI)</a></strong>. The joint opinion was adopted following a formal consultation by the Commission on its proposal for a Digital Omnibus on AI (See our <a href="/en/perspectives/publications/2025/12/virtual-and-digital-health-digest">December 2025 Digest</a>). While welcoming the efforts to reduce administrative burdens, the opinion stresses that simplification should not undermine fundamental rights or the accountability of AI system providers. In particular, the EDPB and EDPS caution against removing registration obligations for AI systems listed in Annex III of the AI Act when providers classify them as &ldquo;non-high risk,&rdquo; noting that this could weaken accountability and regulatory oversight. They also support the creation of EU-level AI regulatory sandboxes to promote innovation and help small and medium-sized enterprises, provided that Data Protection Authorities are involved in supervising the data processing activities. The EDPB and EDPS have indicated that joint guidelines on the interaction between the EU General Data Protection Regulation (EU GDPR) and the AI Act are under development and expected later in 2026.</li> <li><strong><a rel="noopener noreferrer" href="https://assets.publishing.service.gov.uk/media/69651a7699fbdc498faecd1f/impact-statement-10-year-health-plan.pdf" target="_blank">Publication of Impact Statement for 10 Year Health Plan for England</a></strong>. Building upon the announcement of the Government&rsquo;s 10 Year Health Plan in July 2025 (as described in our <a href="https://www.biosliceblog.com/2025/07/the-uk-government-has-plans-what-does-this-mean-for-the-life-sciences-sector/">blog</a>), this impact statement now explains the rationale and potential effects of digital transformation of the National Health Service (NHS). It highlights the need for digitally enabled care pathways, improved data sharing, and expanded use of digital tools. This will enhance system efficiencies, patient empowerment, and financial sustainability of the NHS. For example, the adoption of AI technologies is expected to result in operational efficiencies (e.g., reduction in reporting times and triage times), improve data quality (through standardization of reporting), and improve health outcomes (e.g., earlier diagnoses). This is particularly true as patients become increasingly accustomed to using technology to self-manage their health. Many of the digital reforms will be designed and implemented locally, meaning their full impacts will evolve over time.</li> <li><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/news/mhra-issues-new-guidance-for-people-using-mental-health-apps-and-technologies" target="_blank">MHRA publishes new guidance on the use of mental health apps and technologies</a></strong>. The MHRA has published new guidance to promote the safe and effective use of digital mental health technologies and strengthen the regulatory framework governing them. The guidance outlines five key areas to consider before using the tools, including: what the technology claims to do, who the intended audience is, the available evidence supporting its use, how personal data is collected and used, and whether it is regulated as a medical device. For those regulated as devices (for example, those that claim to diagnose, treat, or manage a mental health condition), the public can <a rel="noopener noreferrer" href="https://pard.mhra.gov.uk/" target="_blank">check</a> that the technology has the appropriate marking and has therefore met UK safety standards. A package of new online resources has also been made available, consisting of animations and real-world examples of safe, well-evidenced digital mental health technologies in practice. These resources have been tailored for the <a rel="noopener noreferrer" href="https://www.minded.org.uk/Component/Details/851389" target="_blank">general public</a> and <a rel="noopener noreferrer" href="https://www.minded.org.uk/Component/Details/851387" target="_blank">healthcare professionals</a>.</li> </ul> <h3><a name="Privacy Updates">Privacy Updates</a></h3> <ul> <li><strong><a rel="noopener noreferrer" href="https://digital-strategy.ec.europa.eu/en/library/proposal-regulation-eu-cybersecurity-act" target="_blank">European Commission Publishes Proposal to Revise and Replace the EU Cybersecurity Regulation 2019/881</a></strong>. The proposal forms part of a broader EU cybersecurity package aimed at strengthening resilience, aligns with previous plans to strengthen cybersecurity in the health sector (see also our May 2025 Digest), and is linked to the Commission's proposal to amend Directive 2022/2555 (also known as NIS2). Some measures of the proposal include (i) establishing an EU-level framework for information and communications technology (ICT) supply chain security across NIS2 sectors, including the health sector. Under that framework, the Commission could restrict or require mitigation measures for the use of ICT components from designated non-EU high-risk suppliers in certain identified key ICT assets; (ii) expanding the EU cybersecurity certification framework, including by allowing certification to cover a company&rsquo;s overall cybersecurity posture; and (iii) expanding the mandate of the European Union Cybersecurity Agency, in areas such as risk assessments, incident response, and certification. The proposal will now be reviewed by the European Parliament and the Council of the European Union.</li> <li><strong><a rel="noopener noreferrer" href="https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2026/01/updated-guidance-on-international-transfers-published/" target="_blank">Information Commissioner&rsquo;s Office (ICO) publishes updated guidance on international data transfers</a></strong>. On January 15, 2026, the ICO issued updated and simplified guidance on international data transfers to assist businesses with compliance with the UK GDPR. The guidance includes a three-part test for businesses to identify if they are making restricted transfers: (i) confirm the UK GDPR applies to the data, (ii) determine whether the transfer is to a country outside the UK, and (iii) check whether the recipient is a separate legal entity. If all three conditions are met, organizations must comply with the UK GDPR transfer regime, which may include using adequacy decisions, appropriate safeguards, or specific derogations. The guidance includes additional information on multi-layered transfers, the roles and responsibilities for controllers and processors, and a set of FAQs. The ICO has also indicated that it intends to revisit its guidance on transfer risk assessments, and its International Data Transfer Agreement and cloud services.</li> <li><strong><a rel="noopener noreferrer" href="https://ico.org.uk/about-the-ico/research-reports-impact-and-evaluation/research-and-reports/technology-and-innovation/tech-horizons-and-ico-tech-futures/ico-tech-futures-agentic-ai/" target="_blank">ICO publishes Tech Futures report on agentic AI</a></strong>. The ICO explains that emerging agentic AI systems &ndash; AI tools that can autonomously plan and act &ndash; pose novel data protection risks beyond those seen in standard generative AI. For digital health, these risks are highly relevant because agentic systems may inadvertently process special category data (including health data), scale automated decision‑making, and create complex controller/processor chains. Furthermore, the purposes for processing personal information may be set too broadly, exceeding what is necessary to achieve the aim. The ICO stresses that autonomy in AI does not absolve organizations of their accountability for responsible deployment.</li> </ul> <h3><a name="IP Updates">IP Updates</a></h3> <ul> <li><strong><a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fplus.lexis.com%2Fapi%2Fdocument%3Fcollection%3Dnews-uk%26id%3Durn%253AcontentItem%253A6HPS-BJC3-S1HG-T1P0-00000-00%26alertprofile%3D8bdeea3a-3732-4eb7-9a1b-16b099d85024%26alertresult%3D267910511%26context%3D1001073%26origin%3Dalertsemail%26sourcegroupingtype%3DG%26cite%3DLNB%2520News%252020%2F01%2F2026%252012&amp;data=05%7C02%7CEmma.Elliston%40arnoldporter.com%7Cdaa19fa5b0394171345808de58b2a990%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639045721563178522%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=zjjacecpPgw1HDfHK0NUnFKJPzrk4H3tMbYsmo39Ewk%3D&amp;reserved=0" target="_blank">Digital Europe publishes policy paper on EHDS implementation and IP protection</a></strong>.&nbsp;<strong></strong>Digital Europe, together with the European Federation of Pharmaceutical Industries and Associations, the European Confederation of Pharmaceutical Entrepreneurs, the European Coordination Committee of the Radiological, Electromedical and Healthcare IT Industry, and MedTech Europe, have published a joint policy paper setting out recommendations on the implementation of the European Health Data Space (EHDS) to protect intellectual property, trade secrets and commercially confidential information while enabling the secondary use of health data for research, innovation and public health. The paper states that although the EHDS offers significant opportunities for data-driven innovation and improved patient outcomes, its success depends on a governance framework that balances data accessibility with the protection of proprietary information that underpins investment and innovation. It highlights that the EHDS extends data-sharing obligations to privately held and pre-commercial datasets and warns that, in the absence of implementing acts under Article 52, divergent national approaches risk fragmentation and a loss of trust among data holders.</li> <li> <p><strong><a rel="noopener noreferrer" href="https://www.medtecheurope.org/wp-content/uploads/2026/01/safeguarding-ip-and-trade-secrets-in-the-ehds-digitaleurope-endorsed-final_-1.pdf" target="_blank">Digital Europe Policy Paper Calling for Stronger Safeguards in EHDS</a></strong>.&nbsp;<strong></strong>On January 15, 2026, Digital Europe published a policy paper with its recommendations for implementing the EHDS. While recognizing the EHDS&rsquo; potential to support research, innovation, and improved patient outcomes, the paper stresses that its success depends on a robust governance framework that safeguards intellectual property, commercially confidential information, and trade secrets.</p> <p> The paper highlights that the EHDS may require access to privately held and pre commercial datasets, including early stage Research &amp; Development, clinical trial, and device-generated data, with associated risks if proprietary information is not adequately safeguarded. It warns that inconsistent interpretation of Article 52 of the EHDS Regulation by Member States may cause fragmentation, legal uncertainty, and reduced trust among data holders. </p> <p>Key recommendations for consistent EU wide implementation guidelines include establishing specialized IP and trade secret task forces within Health Data Access Bodies to support classification of datasets and metadata by confidentiality level, and to promote structured cooperation between authorities, data holders, and rights holders.</p> <p> For healthcare companies, the EHDS presents both a significant opportunity and material compliance challenges. Industry confidence will depend on harmonized safeguards that protect sensitive information while enabling responsible secondary use of health data.</p> </li> <li> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/publications/ai-skills-for-life-and-work-patent-analysis/ai-skills-for-life-and-work-patent-analysis--2" target="_blank">AI-Related Patent Filings Quadruple in a Decade</a></strong>. On January 28, 2026, the UK government&rsquo;s AI Skills for Life and Work: Patent Analysis reported that AI-related patents grew sharply from 5.2% in 2014 to 20.3% in 2023, reinforcing the rapid pace of AI innovation and adoption. Notably, the dominant technologies remain algorithms, artificial intelligence, neural networks, and machine learning, while technologies such as deep learning and generative adversarial networks are growing quickly in prominence.</p> <p>The analysis also shows that patents now draw on a wider range of AI technologies, increasing from an average of around two AI related concepts per patent in 2014 to more than three and a half by 2023. These technologies cluster into distinct &ldquo;knowledge packages,&rdquo; some focused on developing AI itself and others on applying AI in areas such as healthcare, chemistry, and medical technology. This highlights the rising need to combine AI expertise with sector-specific knowledge.</p> <p>For healthcare companies, these findings suggest that AI will play an increasingly significant role across research, development, and clinical workflows. Life sciences corporations will likely need to prioritize cross-disciplinary talent, data capabilities, and robust IP strategies reflecting the shift from AI being optional to becoming a central driver of healthcare innovation.</p> </li> <li> <p><strong><a rel="noopener noreferrer" href="https://caselaw.nationalarchives.gov.uk/ewca/civ/2025/1633" target="_blank">UK Court of Appeal Reinstates Abbott&rsquo;s Patent Emphasizing Importance of Consistent Claim Construction</a></strong>. In the <a href="/en/perspectives/publications/2024/07/virtual-and-digital-health-digest">July 2024 digest</a>, we reported on the UK High Court&rsquo;s decision that an Abbott patent relating to continuous glucose monitoring technology was invalid for obviousness following a challenge by Dexcom, as part of a broader global dispute between the parties. On December 18, 2025, the UK Court of Appeal overturned that decision and reinstated Abbott&rsquo;s patent.</p> <p>By the time of the appeal, Abbott accepted the first instance judge&rsquo;s narrow construction of claim 1, which required (among other features) that the introducer needle be coupled to the device housing and manually inserted. However, when assessing obviousness, the judge had relied on prior art systems involving automatic insertion of an integrated sensor and sensor electronics as satisfying key integers of claim 1. Abbott successfully argued in the appeal that this amounted to applying a different interpretation to claim 1 for the purposes of obviousness and that this was flatly inconsistent with the judge&rsquo;s construction of claim 1. The Court of Appeal agreed, holding that obviousness must be assessed by reference to the claim as properly construed, and not by reference to a system that falls outside that construction. As there was no evidential basis to support a finding of obviousness on the accepted narrow construction, the appeal was allowed.</p> </li> </ul> <h3><a name="Product Liability Updates">Product Liability Updates</a></h3> <ul> <li><strong><a rel="noopener noreferrer" href="https://lawtechuk.io/ukjt/public-consultation-liability-for-ai-harms-under-the-private-law-of-england-and-wales/" target="_blank">Draft statement on liability for AI harms from the UK Jurisdiction Taskforce</a></strong>. The UK Jurisdiction Taskforce (UKJT) of Lawtech UK launched a public consultation on its draft legal statement addressing liability for AI harms under English law. Whilst the lack of an AI-specific liability regime in the UK gives a perception of legal uncertainty, the statement explains that England&rsquo;s common law system already provides a flexible framework for addressing the majority of potential physical or economic harm caused by AI. It emphasizes that AI itself cannot bear legal responsibility, so liability must be attributed to developers, users, and other human or corporate actors through established principles such as duty of care, foreseeability, and contractual allocation of risk. The statement also addressed whether vicarious liability applies to loss caused by AI, whether a professional can be liable for using or failing to use AI in the provision of their services, and whether liability attaches to false statements made by an AI chatbot. The UKJT has requested feedback on the draft statement before publication in final form. </li> </ul> <p><span style="font-size: small;"><em> Mickayla Stogsdill is employed as a senior policy specialist at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Mickayla is not admitted to the practice of law.<br /> Caroline Oliver is employed as a policy specialist at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Sonja is not admitted to the practice of law.<br /> Sophia Kim is employed as a trainee solicitor at Arnold &amp; Porter&rsquo;s London office. Sophia is not admitted to the practice of law.<br /> </em></span></p> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{18C2F83E-5DC7-4615-9B0B-5625C78677BA}https://www.arnoldporter.com/en/perspectives/events/2026/02/antitrust-2026-and-beyond-a-global-outlook-on-competition-enforcement-part-3Andre Geverolahttps://www.arnoldporter.com/en/people/g/geverola-andreandre.geverola@arnoldporter.comAxel Gutermuthhttps://www.arnoldporter.com/en/people/g/gutermuth-axelaxel.gutermuth@arnoldporter.comLudovica Pizzettihttps://www.arnoldporter.com/en/people/p/pizzetti-ludovicaludovica.pizzetti@arnoldporter.comJoin members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world.Wed, 25 Feb 2026 00:00:00 -0600<p>Join members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world. We will examine the most significant antitrust developments of 2025, assess how the new U.S. administration has reshaped enforcement priorities, and analyze how international antitrust authorities are expanding their reach. For businesses operating globally, these converging forces are creating a regulatory environment that is more complex, more fragmented, and demands closer attention than ever.</p> <p>Featuring partners and counsel from our U.S., London, and Brussels offices, this series will provide a forward-looking assessment of where antitrust enforcement is headed across key areas, including mergers, cartel and criminal enforcement, and litigation. Our lawyers will offer practical insights to help businesses understand recent developments, anticipate risks, align strategy, and navigate competition issues in 2026 and beyond.</p> <h2>Part III: Cartel and Criminal Enforcement &mdash; Emerging Risks and Global Coordination</h2> <p>Our speakers will provide an overview of the current landscape of antitrust cartel enforcement, highlighting recent investigations, policy developments, and enforcement trends in the U.S. and in Europe. The discussion will focus on current enforcement trends, changes in agency leadership and priorities, managing differences across global jurisdictions, and steps companies can take to proactively identify and mitigate emerging risks.</p> <h2>Upcoming Webinars</h2> <p><strong>Part IV: Antitrust Litigation &mdash; Preparing for the Next Wave of Disputes</strong><br /> Tuesday, March 10 | 11 a.m.-noon ET</p> <p>In the final session, Arnold &amp; Porter&rsquo;s antitrust litigators will analyze key litigation trends shaping the antitrust landscape. The panel will discuss recent case law, evolving theories of harm, and the potential impact of regulatory and enforcement shifts on private and government litigation. With insights from both U.S. and European perspectives, this program will help businesses prepare for future disputes and navigate increasingly complex antitrust litigation risks.</p> <a href="/en/people/s/shores-laura">Laura Shores</a>&nbsp;| Partner<br /> <a href="/en/people/a/asimow-daniel-b">Daniel Asimow</a>&nbsp;| Partner<br /> <a href="/en/people/b/brown-alastair">Alastair Brown</a>&nbsp;| Partner<br />{CECF015C-4113-45C6-8900-432AAF152E75}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-secures-set-aside-of-arbitral-award-for-the-republic-of-koreaArnold &amp; Porter secured a victory in English courts for the Republic of Korea in an investor-state dispute settlement (ISDS) matter arising from claims brought by U.S. hedge fund Elliott Associates, L.P., pursuant to the Free Trade Agreement between the Republic of Korea and the U.S., concerning the 2015 merger between Samsung C&amp;T and Cheil Industries.Wed, 25 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter secured a victory in English courts for the Republic of Korea in an investor-state dispute settlement (ISDS) matter arising from claims brought by U.S. hedge fund Elliott Associates, L.P., pursuant to the Free Trade Agreement between the Republic of Korea and the U.S., concerning the 2015 merger between Samsung C&amp;T and Cheil Industries.</p> <p>Elliott, which held a stake in Samsung C&amp;T, alleged that Korea unlawfully intervened in the merger through the National Pension Service (NPS), a shareholder in both companies. Elliott contended that the NPS acted as an organ of the state and improperly influenced the merger process, in breach of Korea&rsquo;s obligations under the investment treaty. The Permanent Court of Arbitration tribunal had previously issued a USD $48.5 million award in favor of Elliott.</p> <p>In August 2025, the UK Court of Appeal ruled that Korea had raised legitimate challenges to the tribunal&rsquo;s jurisdiction, remitting the case to the Commercial Court. Following a three-day hearing in December 2025, Lord Justice Foxton rendered a judgment on February 23, 2026, holding that the NPS was not a de facto organ of the state for purposes of the treaty in this context.</p> <p>Lord Justice Foxton set aside the award to the extent the tribunal found a treaty breach on the basis of its treatment of the NPS as a government body. The matter will be remitted to the tribunal to reconsider whether any actions of government organs breached the treaty, whether any such breach caused loss, and what damages, if any, should be awarded.</p> <p>This ruling follows another recent victory for the Republic of Korea in the long-running Lone Star v. Korea arbitration before the International Centre for Settlement of Investment Disputes (ICSID), in which Arnold &amp; Porter represented Korea throughout the 10-year proceedings.</p> <p>The Arnold &amp; Porter team, serving as instructing solicitors, was led by partners Jane Wessel and Charlotte Mallorie, along with partners Jun Hee Kim and Anton Ware, senior counsel Paolo Di Rosa, and attorneys from Peter &amp; Kim. Samuel Wordsworth KC, Peter Webster, and Richard Hoyle of Essex Court Chambers argued the case.</p>{BD712938-2CDE-448A-A0D3-9DB19F69BE12}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/fda-advances-a-plausible-mechanism-framework-for-rare-disease-drug-development-and-shifts-toEva Temkinhttps://www.arnoldporter.com/en/people/t/temkin-evaeva.temkin@arnoldporter.comDaniel A. Kracovhttps://www.arnoldporter.com/en/people/k/kracov-daniel-adaniel.kracov@arnoldporter.comClaire W. Dennishttps://www.arnoldporter.com/en/people/d/dennis-claireclaire.dennis@arnoldporter.comJonathan Trinhhttps://www.arnoldporter.com/en/people/t/trinh-jonathanJonathan.Trinh@arnoldporter.comOn February 23, 2026, the U.S. Food and Drug Administration (FDA) reaffirmed its commitment to facilitating the development of therapeutics for rare diseases by issuing a draft guidance on a &ldquo;plausible mechanism framework&rdquo; for individualized therapies. This draft guidance followed on the heels of an opinion piece by FDA Commissioner Makary and CBER Director Prasad that was published last week in the <em>New England Journal of Medicine</em> (<em>NEJM</em>), in which the authors declared that FDA&rsquo;s default position going forward &mdash; even for treatments for common diseases &mdash; will be one adequate and well-controlled study with confirmatory evidence. We discuss both of these developments in this advisory.Wed, 25 Feb 2026 00:00:00 -0600<p>On February 23, 2026, the U.S. Food and Drug Administration (FDA) reaffirmed its commitment to facilitating the development of therapeutics for rare diseases by issuing a draft guidance on a &ldquo;plausible mechanism framework&rdquo; for individualized therapies. This draft guidance followed on the heels of an opinion piece by FDA Commissioner Makary and CBER Director Prasad that was published last week in the <em>New England Journal of Medicine</em> (<em>NEJM</em>), in which the authors signaled that FDA&rsquo;s default position going forward &mdash; even for treatments for common diseases &mdash; will be one adequate and well-controlled study with confirmatory evidence. We discuss both of these developments below.</p> <h2>Plausible Mechanism Framework for Individualized Therapies</h2> <p>FDA&rsquo;s new draft guidance, &ldquo;Considerations for the use of the Plausible Mechanism Framework to Develop Individualized Therapies that Target Specific Genetic Conditions with Known Biological Cause&rdquo; (the Plausible Mechanism Framework Draft Guidance), introduces a framework intended to help facilitate the development and approval of &ldquo;individualized therapies,&rdquo; drugs and biological products that target a specific pathophysiologic abnormality serving as the root cause of a disease, and may include genome editing and certain RNA-based therapies.[[N: U.S. Food &amp; Drug Admin., <em><a rel="noopener noreferrer" href="https://www.fda.gov/media/191247/download" target="_blank">Considerations for the use of the Plausible Mechanism Framework to Development Individualized Therapies that Target Specific Genetic Conditions with Known Biological Cause&nbsp;&ndash;&nbsp;Draft Guidance for Industry</a></em>&nbsp;(Feb. 2026).&nbsp;]] Historically, developing these treatments has been challenging in part because randomized controlled trials often are not feasible due to very small patient populations (i.e., patients with rare and ultra-rare diseases).[[N: Id. at 3.]] The Plausible Mechanism Framework Draft Guidance lays out FDA&rsquo;s proposed thinking on a streamlined evidence generation framework for establishing substantial evidence of efficacy to support approval of these drugs. It also provides FDA&rsquo;s recommendations for clinical and non-clinical studies intended to demonstrate the safety and effectiveness of these kinds of individualized therapies, and potentially others, as well.</p> <p>The Plausible Mechanism Framework Draft Guidance was announced by Commissioner Makary in the opening remarks at FDA&rsquo;s Rare Disease Day,[[N: <em><a rel="noopener noreferrer" href="https://www.youtube.com/live/B6bGjpQVqEs" target="_blank">FDA&rsquo;s Rare Disease Day 2026&nbsp;&ndash;&nbsp;An Event for Patients</a></em>, YOUTUBE (U.S. Food &amp; Drug Admin.) (Feb. 18, 2026).&nbsp;]] in an FDA press release,[[N: U.S. Food &amp; Drug Admin., Press Release, <em><a rel="noopener noreferrer" href="https://www.fda.gov/news-events/press-announcements/fda-launches-framework-accelerating-development-individualized-therapies-ultra-rare-diseases" target="_blank">FDA Launches Framework for Accelerating Development of Individualized Therapies for Ultra-Rare Diseases</a></em> (Feb. 23, 2026).]] at a U.S. Department of Health and Human Services (HHS) press conference,[[N: <em><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=XWTO5khjaTQ" target="_blank">Advancing Innovation on Rare Disease Therapies</a></em>, YOUTUBE (U.S. Dep&rsquo;t of Health &amp; Human Servs.) (Feb. 23, 2026).]] and in an FDA Direct roundtable on X.[[N: Marty Makary (@DrMakaryFDA), X (<a rel="noopener noreferrer" href="https://x.com/DrMakaryFDA/status/2025975241328009555" target="_blank">Feb. 23, 2026 11:45 AM</a>).]] It follows a 2025 <em>NEJM</em> article on the same subject co-authored by Commissioner Makary and FDA&rsquo;s Center for Biologics Evaluation and Research (CBER) Director and FDA Chief Medical and Scientific Officer Vinay Prasad (see <a href="/en/perspectives/advisories/2025/11/fda-plausible-mechanism-pathway-and-other-initiatives-drugs-for-ultra-rare-conditions">Arnold &amp; Porter&rsquo;s previous Advisory</a>). Though originally termed a &ldquo;pathway&rdquo; by Makary and Prasad,[[N: See Vinay Prasad &amp; Martin A. Makary, <em>FDA&rsquo;s New Plausible Mechanism Pathway</em>, 393 N. ENG. J. MED. 2365 (Nov. 12, 2025).]] the Plausible Mechanism Framework Draft Guidance is clear that FDA is <em>not</em> crafting a new pathway or a new standard of review. Rather, the draft guidance establishes a framework for meeting the existing statutory standard of &ldquo;substantial evidence of efficacy&rdquo; and evidence of safety in a way that facilitates a path to approval for this narrow group of therapies for which there are too few patients to enroll enough participants in a clinical trial, or where first-in-human studies may also serve as pivotal trials to support approval.[[N: See Plausible Mechanism Framework Draft Guidance, at 1 and 3.]]</p> <p>The Plausible Mechanism Framework Draft Guidance prioritizes genome editing therapies (GEs) and RNA-based therapies (e.g., antisense oligonucleotides (ASOs) and small interfering RNAs) that are intended to treat rare, severely debilitating, or life-threatening diseases (SDLTs)) &mdash; ostensibly a narrower category than the &ldquo;serious or life-threatening&rdquo; diseases and conditions that define the scope of many of FDA&rsquo;s expedited programs.[[N: Id. at 3-4.]] And the Plausible Mechanism Framework Draft Guidance concentrates on the development of these kinds of therapies for diseases that have a well-characterized, identifiable molecular or cellular abnormality, and therapies that target the underlying abnormality, its proximal pathogenic pathway, or a well-characterized downstream or compensatory mechanism with a clear mechanistic rationale.[[N: Id. at 4.]] However, the draft guidance does not limit the plausible mechanism framework just to GEs or RNA-based therapies.[[N: Id. at 2.]] The Plausible Mechanism Framework Draft Guidance itself, the accompanying FDA press release, and CDER Director H&oslash;eg&rsquo;s comments during the HHS Press Conference all acknowledge that other kinds of therapies, including therapies for common diseases, could also leverage the plausible mechanism framework.[[N: &nbsp;Id.; <em>FDA Launches Framework for Accelerating Development of Individualized Therapies for Ultra-Rare Diseases; Advancing Innovation on Rare Disease Therapies</em> (58:40-59:18).]]</p> <p><em><strong>The Plausible Mechanism Framework</strong></em>. The Plausible Mechanism Framework Draft Guidance describes a framework centered around five key elements which, if met, FDA believes will indicate that the therapy is &ldquo;plausibly&rdquo; effective to support approval.</p> <ol> <li><span style="text-decoration: underline;">Identification of a specific genetic, cellular, or molecular abnormality with a clear connection between specific alteration and disease indication</span>. The draft guidance focuses on therapies for diseases or conditions that are caused by identifiable genetic variants for which GEs or RNA-based therapies can pinpoint the abnormality, its proximal pathogenic pathway, or some other causative mechanism &ldquo;with a clear mechanistic rationale.&rdquo;[[N: Plausible Mechanism Framework Draft Guidance, at 4.]] In practice, this means that the utility of the plausible mechanism framework will be limited to diseases or conditions with a known cause, and to therapies that target that specific cause. The Agency specifically notes that the sponsor&rsquo;s submission must &ldquo;adequately demonstrate that the improvement in outcome cannot reasonably be attributed to alternative treatments or natural variability in the disease phenotype.&rdquo;[[N: Id.]]</li> <li><span style="text-decoration: underline;">Development of a therapy that targets the underlying or proximate pathogenic biological alterations</span>. The draft guidance is focused on therapies that address the &ldquo;how&rdquo; of a disease or condition, for example, gene editing technologies that are designed to correct gene mutations and can be modified based on what targets are necessary to address.[[N: Id. at 5.]] Thus, if a sponsor develops a product that uses CRISPR technology as an example, the plausible mechanism framework suggests that the sponsor can submit a single Investigational New Drug Application (IND)/Biologics License Application (BLA) covering multiple targets within a single gene &ldquo;if the method of correction is the same between the gRNA (e.g., return to the normal/native gene sequence).&rdquo;[[N:&nbsp;Id.]]</li> <li><span style="text-decoration: underline;">Reliance on a well-characterized natural history of the disease in an untreated population</span>. The draft guidance leans heavily on well-characterized natural histories being available to inform clinical study design and as external controls. This element is crucial to FDA&rsquo;s determination of effectiveness. FDA must be able to determine that the patient&rsquo;s improvement was due to the intervention rather than a natural change in the disease or condition. As such, there are many rare diseases or conditions that will be beyond the scope of this new framework at least until the natural history of the disease or condition becomes more established.</li> <li><span style="text-decoration: underline;">Confirmation that the target was successfully drugged, edited, or both</span>. FDA will also look to the sponsor to demonstrate that the therapy had the desired effect on the patient. As mentioned, the Plausible Mechanism Framework Draft Guidance suggests that this element will require a strong understanding of the natural course of the disease. FDA also envisions in the draft guidance that confirmatory evidence may include: mechanistic or pharmacodynamic data; confirmation of target engagement based on nonclinical or clinical data; and/or exposure-response on biomarkers and clinical outcomes.[[N: Id. at 6.]]</li> <li><span style="text-decoration: underline;">Demonstration of improvement in clinical outcomes or course</span>. Showing FDA that this last key element is achieved hinges largely on the ability of the sponsor to define endpoints connected to a specific clinical outcome or change in disease course. To this end, FDA recommends that sponsors begin observational protocols as early as possible with potential study participants to allow for pilot assessments, including establishing the lead-in baseline and to facilitate identification of disease-relevant biomarkers.[[N:&nbsp;Id. at 12.]]</li> </ol> <p><em><strong>Regulatory Framework for Approval and Post-Marketing Requirements</strong></em>. The Plausible Mechanism Framework Draft Guidance maintains that, as with all drug applications, FDA approval will ultimately depend on the benefit-risk assessment of the application. How an application meets the statutory standard of safety and substantial evidence of effectiveness (and generates the specific types of evidence required) will depend on the investigational product and its intended use(s).[[N: Id. at 3-4.]] However, the Plausible Mechanism Framework Draft Guidance explains that safety will be considered &ldquo;in the context of the underlying SDLT,&rdquo; and that substantial evidence of effectiveness will be established through one adequate and well-controlled clinical investigation with confirmatory evidence.[[N: Id. at 4.]] And the draft guidance explains that, when determining whether a new individualized therapy meets the statutory standard (substantial evidence of effectiveness), the Agency will consider the clinical context of the disease and the level of unmet need, and will assess how challenging enrollment is for a clinical trial based on these facts.[[N: Id. at 5.]]</p> <p>Individualized therapies that are approved under the draft guidance&rsquo;s framework may be approved through the traditional approval pathway[[N: Id. at 6 n.17.]] or accelerated approval pathway, but in either case, FDA is expected to impose significant postmarketing commitments on sponsors of such products &mdash; both to supplement small safety data sets and to &ldquo;include collection of efficacy outcomes if there is evidence of a potential for loss of efficacy over time.&rdquo;[[N: Id. at 6.]] For instance, considering that there will be limited safety data available at the time a marketing application is submitted, the draft guidance anticipates that FDA will likely require sponsors to collect post-market safety data &mdash; though details on how this will work are not provided and the draft guidance cites only to the accelerated approval authorities for this proposition.[[N: Id.]]</p> <p>In a nod to the fact that many GEs may also be platform technologies,[[N: See U.S. Food &amp; Drug Admin., <em><a rel="noopener noreferrer" href="https://www.fda.gov/media/178938/download" target="_blank">Platform Technology Designation Program for Drug Development Guidance for Industry 11</a></em> (May 2024) (draft).]] the Plausible Mechanism Framework Draft Guidance notes that multiple product &ldquo;variants&rdquo; may be included in a single IND or BLA &mdash; and that once a product is licensed, additional GE product variants related to other mutations can be &ldquo;add[ed]&rdquo; based on a &ldquo;highly supported &lsquo;plausible&rsquo; mechanism of action.&rdquo;[[N: Plausible Mechanism Framework Draft Guidance, at 5.]] We also note that the draft guidance suggests places in which FDA may leverage data or information across product applications. For instance, the draft guidance notes that nonclinical information outside of a new drug application may be used to &ldquo;inform safety&rdquo; of an ASO.[[N: Id. at 10-11.]] And it provides that confirmatory evidence may leverage data from other clinical programs using the same or similar technologies (e.g., a program with a different genome editor version or multiple gRNAs).[[N: Id. at 9.]]</p> <p><em><strong>Designing Development Programs under the Plausible Mechanism Framework</strong></em>. &ldquo;Substantial evidence&rdquo; of efficacy historically has required two adequate and well-controlled investigations that are blinded, randomized, and placebo-controlled, and enable a direct assessment of clinical benefit,[[N: 21 U.S.C. &sect; 355(d); 21 C.F.R. &sect; 314.126(a)-(b).]] though FDA has long used flexibility to approve drugs intended to treat rare diseases based on a single trial with confirmatory evidence. (For a discussion of the Agency&rsquo;s new default policy on one adequate and well-controlled investigation with confirmatory evidence, see Part II of this Advisory). The Plausible Mechanism Framework Draft Guidance maintains that relevant study protocols should meet regulatory requirements for adequate and well-controlled studies (e.g., 21 C.F.R. Parts 314, 50, and 56). It also provides a number of recommendations related to the design and conduct of clinical studies, such as:</p> <ul> <li>Prior to treatment initiation, diagnoses should be appropriately confirmed with validated testing, and there should be evidence that the targeted genetic variant(s) play a causal role in the disease.&nbsp;</li> <li>Sponsors should carefully select doses, including through use of pharmacodynamic biomarkers as appropriate, or other available methodologies. Trials should be designed to collect outcomes data that demonstrate clinical benefit, including outcomes that can be validated by natural history studies.&nbsp;</li> <li>Biomarkers should be selected to support proof of concept, confirm target engagement, inform the need for dose escalation, and identify safety issues. They should be assessed with respect to direct measures of target engagement or primary pharmacodynamics&mdash;which FDA notes is &ldquo;likely essential.&rdquo;&nbsp;</li> <li>Safety monitoring should be informed by nonclinical findings and previously identified risks associated with &ldquo;similar products.&rdquo;[[N: Plausible Mechanism Framework Draft Guidance, at 14-17.]]</li> </ul> <p>Ultimately, results should be &ldquo;robust&rdquo; enough to exclude false signals of effectiveness that may appear among a small sample size.[[N: Id. at 6 and 12-17.]] The Plausible Mechanism Framework Draft Guidance also maintains flexibility in designing clinical development programs for these treatments, including anticipating that first-in-human studies may also serve as pivotal trials to support approval, that trials can use a disease&rsquo;s natural history data as an external control, allowing for use of &ldquo;master protocols (e.g., umbrella or platform trials)&rdquo; for studies concerning therapies for different genetic changes within the same disease.[[N: Id. at 12-17.]] Commissioner Makary also suggests that there is room for the use of Real World Evidence in the plausible mechanism framework (and more generally across drug development).[[N: Id. at 14; <em>Advancing Innovation on Rare Disease Therapies</em> (1:00:25-1:01:27).]]</p> <p>The Plausible Mechanism Framework Draft Guidance reflects similar flexibility for non-clinical data generation. It recommends that the nonclinical studies demonstrate the feasibility of the product&rsquo;s proposed route of administration, support the scientific rationale for the product&rsquo;s administration, and identify potential product risks, for instance.[[N: Plausible Mechanism Framework Draft Guidance, at 7.]] It notes that FDA may use its discretion toward nonclinical study design as well, such as exercising flexibility toward study duration, types of studies needed, and model selection, and permit sponsors to leverage data and knowledge between clinical programs using multiple gRNAs and/or editor combinations.[[N: Id. at 9.]]</p> <p>Moreover, the Plausible Mechanism Framework Draft Guidance emphasizes that chemistry, manufacturing, and controls (CMC) development will be key to approval under the plausible mechanism framework given the shorter clinical investigation phase expected for individualized therapies. The draft guidance recommends that sponsors develop CMC alongside clinical development, consider various aspects of the CMC process (e.g., scale, validation, commercial feasibility) to support the initial IND, validate the manufacturing process to support a marketing application for a drug or biologic, and ensure that all assays used for release and stability testing comply with applicable marketing application and current Good Manufacturing Practice regulations.[[N: Id. at 17-20.]]</p> <p><em><strong>Early Engagement with FDA</strong></em>. FDA recommends that sponsors interested in submitting an application based on the recommendations of the draft guidance discuss their plans with the relevant review division, including their nonclinical and CMC plans.[[N: Id. at 2, 8, and 20.]] The Agency&rsquo;s press release notes that FDA intends to prioritize regulatory flexibility to help get new treatments to patients as quickly as possible. Thus, there may be opportunities for case-by-case enforcement discretion (or other types of regulatory flexibility) that come from early conversations with FDA about methodologies for bringing innovative new therapies to market based on these new recommendations.</p> <p><em><strong>Request for Comments</strong></em>. FDA invites stakeholders to submit comments to the draft guidance by April 27, 2026.[[N: 91 Fed. Reg. 9283, 9283 (Feb. 25, 2026).]] Based on the foregoing, industry could consider submitting comments to inquire about how to design a first-in-human study as the adequate and well-controlled clinical investigation to support a marketing application, how FDA purports to examine a marketing application that includes data from a collection of diseases and/or treatments within a single trial, FDA&rsquo;s authority to approve drugs based on postmarket data, and how FDA will enforce postmarketing requirements and commitments. Some sponsors may be interested in how FDA&rsquo;s draft guidance affects their pending development programs or applications, while others that recently received Complete Response Letters might request clarity or flexibility with respect to their resubmissions.</p> <h2>Single Trial with Confirmatory Evidence Default Standard for All Drug Development Programs</h2> <p>In a February 18, 2026, <em>NEJM</em> article, Makary and Prasad announced a(nother) major policy shift impacting the implementation of the substantial evidence of efficacy requirement for drug approvals.[[N: Vinay Prasad &amp; Martin A. Makary, <em>One Pivotal Trial, the New Default Option for FDA Approval &ndash; Ending the Two-Trial Dogma</em>, 394 N. ENGL. J. MED. 815 (Feb. 2026).]] Although the article is not formal Agency guidance, the authors proclaim, &ldquo;[g]oing forward, the FDA&rsquo;s default position is that one adequate and well-controlled study, combined with confirmatory evidence, will serve as the basis of marketing authorization&rdquo; for new drugs.[[N: Id. at 816.]] Makary initially previewed FDA&rsquo;s plans to shift the default requirement to a single clinical study with confirmatory evidence in December 2025.[[N: <em>See</em> Lizzy Lawrence, <em>FDA to lower number of trials required for approval of drugs, other medical products</em>, STAT (Dec. 4, 2025).&nbsp;]]</p> <p>FDA has had the authority to approve new drugs based on a single trial with confirmatory evidence for nearly 30 years, and it has exercised that power expansively in arenas like rare disease and oncology. By making that standard the Agency&rsquo;s default policy, however, Makary and Prasad are opening the &ldquo;single trial&rdquo; standard to drugs intended to treat common diseases and conditions as well. And, crucially, they are shifting the burden onto FDA review teams to justify multiple trials whereas, until now, sponsors have had to demonstrate to FDA that they could meet the substantial evidence standard with a single trial and confirmatory evidence. </p> <h3>Origins of the Two-Trial Standard and Single-Trial Exception</h3> <p>&ldquo;Substantial evidence,&rdquo; as defined in the FD&amp;C Act, means &ldquo;evidence consisting of adequate and well-controlled investigations, including clinical investigations &hellip; on the basis of which it could fairly and reasonably be concluded ... that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended or suggested in the labeling or proposed labeling thereof.&rdquo;[[N: 21 U.S.C. &sect; 355(d)]] Through regulations and guidance, FDA has interpreted the substantial evidence requirement to generally necessitate more than one adequate and well-controlled investigation, each &ldquo;convincing on its own,&rdquo; to establish effectiveness. Multiple trials can help assuage concerns about reproducibility that can arise from a single trial, as well as potential impacts from external influences (e.g., bias and chance).[[N: See 21 C.F.R. &sect; 314.126; U.S. Food &amp; Drug Admin., <em><a rel="noopener noreferrer" href="https://www.fda.gov/media/172166/download" target="_blank">Demonstrating Substantial Evidence of Effectiveness With One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence &ndash; Guidance for Industry 2</a></em> (Sept. 2023) (draft); U.S. Food &amp; Drug Admin., <em><a rel="noopener noreferrer" href="https://www.fda.gov/media/133660/download?utm_source=chatgpt.com" target="_blank">Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products &ndash; Guidance for Industry 4</a></em> (Dec. 2019) (draft); U.S. Food &amp; Drug Admin., <em><a rel="noopener noreferrer" href="https://www.fda.gov/media/71655/download" target="_blank">Guidance for Industry &ndash; Providing Clinical Evidence of Effectiveness for Human Drugs and Biological Products 3</a></em> (May 1998).]]</p> <p>The Food and Drug Administration Modernization Act of 1997 (FDAMA), gave FDA the authority to approve a drug based on one adequate and well-controlled investigation with confirmatory evidence. It added to section 505(d) of the FD&amp;C Act that FDA, at its discretion, could &ldquo;make exception to the general requirement that there must be more than one adequate and well-controlled investigation to support an effectiveness determination&rdquo;[[N: 63 Fed. Reg. 27093, 27094 (May 15, 1998).]] to accept data from &ldquo;one adequate and well-controlled clinical investigation and confirmatory evidence&rdquo; to establish substantial evidence of efficacy.[[N: 21 U.S.C. &sect; 355(d).]] FDA has accordingly relied on that authority to approve drugs for oncology and rare diseases, for example. Indeed, roughly half of the drugs approved last year were supported by one Phase 3 study. FDA has also issued draft guidance to describe when a single adequate and well-controlled clinical investigation and confirmatory evidence may be appropriate to demonstrate substantial evidence of effectiveness (though that draft guidance reiterates that this exception does not supplant FDA&rsquo;s default view that the substantial evidence requirement generally requires two adequate and well-controlled clinical investigations).[[N: <em>Demonstrating Substantial Evidence of Effectiveness With One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence</em>, at 2.]]</p> <h3>FDA&rsquo;s New Default Policy</h3> <p>Makary and Prasad declare in their opinion piece that the Agency&rsquo;s policy going forward should be to accept the exception as the norm. FDA&rsquo;s historical reliance on the two-adequate-and-well-controlled-investigation standard is inappropriate in today&rsquo;s &ldquo;modern world,&rdquo; they assert, where &ldquo;drug discovery becomes increasingly precise and scientific.&rdquo; Rather, &ldquo;in 2026, there are powerful alternative ways to feel assured that our products help people live longer or better than requiring manufacturers to test them yet again,&rdquo; particularly &ldquo;[w]hen a drug is a game-changer, you can see the effect from space.&rdquo;[[N: <em>One Pivotal Trial, the New Default Option for FDA Approval</em>, at 815-16.]] Thus, Makary and Prasad predict that an Agency shift to a default of one adequate and well-controlled clinical investigation with confirmatory evidence will &ldquo;substantially reduce costs for sponsors,&rdquo; &ldquo;speed drugs to market,&rdquo; and potentially lower drug prices.[[N: Id. at 816.]]</p> Importantly, the authors go to lengths to assure that such a new policy would still maintain FDA&rsquo;s drug approval standard. They emphasize that approval decisions will turn on the quality of the single &ldquo;robust and sound&rdquo; study. FDA will &ldquo;carefully examine all aspects of study design with particular focus on controls, end points, effect size, and statistical protocols.&rdquo;[[N: Id.]] They encourage sponsors to ensure that the single study is &ldquo;credibl[e],&rdquo; emphasizing considerations such as &ldquo;the magnitude of the effect, the use of a contemporary control group (versus a historical one), the nature of the control group (is it the best available therapy?), the prespecification of a hypothesis, the choice of a primary end point, the concordance with biologic correlates (including evidence of alteration of an in vivo target), alignment of intermediate end points, statistical power, blinding, concealment, independent review, whether post-protocol therapy is on par with the U.S. standard of care, the use of concomitant therapy, inclusion criteria, exclusion criteria, randomization, run-in periods, how missing data are handled, and many additional factors.&rdquo;[[N: Id. at 815.]] FDA may require two adequate and well-controlled clinical studies, they explain, if data from one trial is insufficient (e.g., if an intervention &ldquo;has a nebulous, pluripotent, or nonspecific mechanism of action&rdquo; or &ldquo;affects a labile, short-term, or surrogate outcome,&rdquo; or if a trial &ldquo;has some underlying limitation or deficiency&rdquo;).[[N: Id. at 816.]] <h3>Considerations for the New Policy Going Forward</h3> <p>Once implemented, whether the impact of the new default policy will be meaningful will largely turn on whether FDA review divisions believe additional products can be approved via a single study and confirmatory evidence available at the time of approval to resolve residual questions and manage risk. While that is increasingly the case with sophisticated new modeling and other tools, the speed at which this will actually become the predominant approach is uncertain. Companies may need to be careful about relying on assumptions relating to the adequacy of a one study clinical development plan.</p> <p>Should the &ldquo;single trial&rdquo; policy follow the path paved by the &ldquo;plausible mechanism&rdquo; one, with a <em>NEJM</em> opinion piece followed by Agency guidance attempting to effectuate the policy, we may see guidance on this topic soon. There are many topics not addressed by the <em>NEJM</em> article that FDA will have to grapple with if it is to formalize a single trial policy &mdash; including that the two-trial policy is enshrined in Agency guidance and reflected in FDA&rsquo;s regulations. We will be watching to see whether, and the extent to which, FDA takes on the following topics, and likely others as well.</p> <ul> <li><em><strong>Confirmatory Evidence</strong></em>. The <em>NEJM</em> article does not address how FDA will handle the statutorily required confirmatory evidence. This will be critical if the revised policy is to take hold. Makary and Prasad state only that confirmatory evidence &ldquo;can include mechanistic science, data from a related indication, animal models, information from other drugs of the same class, real-world evidence, or a second adequate and well-controlled study.&rdquo;[[N: Id. at 815.]] Turning to prior Agency guidance to offer additional clues, FDA may look carefully at the quality and quantity of the confirmatory evidence, including whether the confirmatory evidence is appropriate to support the specific development program.[[N: See <em>Demonstrating Substantial Evidence of Effectiveness With One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence</em>, at 4.]]&nbsp;</li> <li><em><strong>Postmarketing Authorities</strong></em>. Makary and Prasad seem to rely heavily on the Agency&rsquo;s ability to impose post-market confirmatory studies if and when the Agency thinks they are warranted. But FDA&rsquo;s authorities are actually quite limited in this way. For example, FDA cannot require additional studies after a drug is approved unless specific criteria are met.[[N: See, e.g., 21 U.S.C. &sect;&sect; 355(o)(3) and 356(c).]]&nbsp;&nbsp;</li> <li><em><strong>Timing and Adherence to Prior Advice</strong></em>. If this new &ldquo;default&rdquo; is to become Agency policy, it will be critical for FDA to articulate a time frame for when the new standard will become effective. Drug developers are relying on FDA&rsquo;s two-trial standard now to design and pursue development programs, and a new default standard has the potential to seriously affect competitive scenarios in which &ldquo;first&rdquo; approvals are meaningful (for example with respect to exclusivities or priority review vouchers). It will be critical to ensure that sponsors understand the timing of this new policy and the extent to which it supersedes advice given by FDA to date.&nbsp;</li> <li><em><strong>The Status of FDA Regulations and Guidance</strong></em>. Will FDA withdraw or modify existing regulations and guidance that reflect an interpretation of the substantial evidence of efficacy requirement as demanding two clinical investigations in most cases?&nbsp;</li> <li><em><strong>The Resource Burden</strong></em>. This article comes amidst ongoing user fee negotiations at FDA. Meanwhile, it is far from clear that FDA has adequate resources to implement the new default standard, considering that this policy shifts the burden of justifying a single trial and confirmatory evidence from the drug developer to the FDA. Will user fees be adjusted accordingly?&nbsp;</li> <li><em><strong>Impacts on Reimbursement</strong></em>. With a smaller quantum of evidence for FDA approval, sponsors may still need to generate additional data for reimbursement. This may be outside of FDA&rsquo;s purview, but it will be a critical piece of the puzzle if investment is truly to be spurred.&nbsp;</li> </ul> <p>While guidance on this potential new policy has not yet been published, we believe it will be essential for sponsors to engage early with the Agency.[[N: See <em>Demonstrating Substantial Evidence of Effectiveness With One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence</em>, at 3.]]</p> <p style="text-align: center;">***</p> <p>Comments on the Plausible Mechanism Framework Draft Guidance are due on April 27, 2026. If you have any questions, would like more information, or would like to discuss submitting a comment, please reach out to one of the authors of this Advisory or your existing Arnold &amp; Porter contacts. </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{17CC7D04-FF37-43C9-8401-75D90DEB72D1}https://www.arnoldporter.com/en/perspectives/events/2026/02/extended-producer-responsibility-lessons-learned-and-whats-aheadBrandon W. Neuschaferhttps://www.arnoldporter.com/en/people/n/neuschafer-brandon-wbrandon.neuschafer@arnoldporter.comStacey Hallidayhttps://www.arnoldporter.com/en/people/h/halliday-staceystacey.halliday@arnoldporter.comJoin Arnold &amp; Porter&rsquo;s Consumer Products &amp; Retail Industry group for the next program in our Consumer Products &amp; Retail Navigator webinar series, reflecting on extended producer responsibility (EPR) laws after several years of rapid expansion in the U.S.Mon, 23 Feb 2026 00:00:00 -0600<p>Join Arnold &amp; Porter&rsquo;s Consumer Products &amp; Retail Industry group for the next program in our Consumer Products &amp; Retail Navigator webinar series, reflecting on extended producer responsibility (EPR) laws after several years of rapid expansion in the U.S. &mdash; specifically, what we have learned to date, what questions remain, and what lies ahead. This program is designed to help consumer products and retail companies assess their current EPR readiness and better understand how EPR programs are being implemented and enforced as they continue to mature.</p> <p>During the program, we will provide a practical, high-level overview of EPR fundamentals, early compliance experiences, and emerging trends shaping EPR obligations for consumer products companies and retailers, including discussion of the following:</p> <ul> <li>Fee structures and eco-modulation frameworks</li> <li>Material restrictions and sustainability considerations, including PFAS</li> <li>Navigating overlap and tension with existing state laws and requirements</li> <li>Internal tracking, reporting, and compliance infrastructure</li> <li>Applicability and reporting obligations across different business models and corporate structures</li> <li>Enforcement timelines, compliance planning, and managing risk amid rolling deadlines</li> </ul>{CB94F54A-6E28-449F-B367-371360449241}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/jonathan-martel-discusses-repeal-of-ghg-endangerment-finding-in-inside-epaJonathan Martel, co-chair of Arnold &amp; Porter&rsquo;s Environmental practice group and a former attorney at the U.S. Environmental Protection Agency&rsquo;s (EPA) Office of General Counsel, was quoted in the <em>Inside EPA</em> article, &ldquo;Critics Blast EPA&rsquo;s Legal Rationale For GHG Endangerment Finding Repeal,&rdquo; which explores the agency&rsquo;s recent final rule repealing the 2009 greenhouse gas (GHG) endangerment finding and the legal arguments surrounding the agency&rsquo;s authority under the Clean Air Act.Mon, 23 Feb 2026 00:00:00 -0600<p>Jonathan Martel, co-chair of Arnold &amp; Porter&rsquo;s Environmental practice group and a former attorney at the U.S. Environmental Protection Agency&rsquo;s (EPA) Office of General Counsel, was quoted in the <em>Inside EPA</em> article, &ldquo;Critics Blast EPA&rsquo;s Legal Rationale For GHG Endangerment Finding Repeal,&rdquo; which explores the agency&rsquo;s recent final rule repealing the 2009 greenhouse gas (GHG) endangerment finding and the legal arguments surrounding the agency&rsquo;s authority under the Clean Air Act.</p> <p>Jonathan noted that, in <em>Massachusetts v. EPA</em>, the Supreme Court was not &ldquo;addressing the meaning of air pollutant in a vacuum,&rdquo; emphasizing that the Court was considering EPA&rsquo;s authority to determine whether pollutants require an endangerment finding under Clean Air Act section 202. He explained that this creates &ldquo;tension&rdquo; with the agency&rsquo;s current characterization of <em>Massachusetts</em>.</p> <p>He also highlighted that while the Supreme Court could overturn its own precedent in <em>Massachusetts</em>, doing so is more difficult in cases involving statutory, rather than constitutional, interpretation.</p> <p>&ldquo;The idea that the Supreme Court would overrule directly <em>Massachusetts v. EPA</em> is I think subject to a higher hurdle,&rdquo; Jonathan said. </p> <p><a rel="noopener noreferrer" href="https://insideepa.com/daily-news/critics-blast-epa-s-legal-rationale-ghg-endangerment-finding-repeal" target="_blank">Read the full article.</a> </p>{00B3C7A7-4F23-4E8E-B6A7-CE54C74FFF1B}https://www.arnoldporter.com/en/perspectives/news/2026/02/human-rights-campaigns-corporate-equality-index-again-recognizes-arnold-porterArnold &amp; Porter again earned a score of 100 in the Human Rights Campaign Foundation&rsquo;s Corporate Equality Index (CEI).&nbsp;Mon, 23 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter again earned a score of 100 in the Human Rights Campaign Foundation&rsquo;s <a rel="noopener noreferrer" href="https://www.hrc.org/resources/corporate-equality-index" target="_blank">Corporate Equality Index</a> (CEI). This marks the 19th year the firm has been recognized in the CEI, a national benchmarking survey and report on corporate policies and practices related to LGBTQ+ workplace equality. With its perfect score, the firm joins 534 employers that received the distinction of &ldquo;Equality 100 Award: Leader in LGBTQ+ Workplace Inclusion,&rdquo; which recognizes top-rated CEI employers that &ldquo;reaffirmed their commitment to inclusive workplaces.&rdquo; </p> <p>Michael Daneker, Global Co-Chair of Arnold &amp; Porter, said: &ldquo;Earning a perfect score in the Corporate Equality Index again reflects the firm&rsquo;s longstanding commitment to fostering an inclusive workplace where everyone feels supported and respected. This recognition is the result of the sustained dedication of our colleagues to advancing meaningful inclusion across the firm, and we are proud to be featured in the report once again.&rdquo;</p> <p>Matt Fornataro, who co-chairs Pride, the firm&rsquo;s LGBTQ+ affinity group, added: &ldquo;We are proud to share that the firm has again earned a score of 100 in the CEI. We are especially proud that this marks almost two decades of a perfect score. This recognition acknowledges the meaningful work across the firm to advance initiatives and policies that support all professionals. We will continue strengthening a culture where inclusion is embedded in how we operate every day.&rdquo;</p> <p>The CEI recognizes leading businesses for fostering workplaces grounded in strong non-discrimination policies, inclusive and comprehensive benefits for all employees, including LGBTQ+ colleagues and their families, clear accountability for inclusion, and a visible commitment to equality. The CEI encourages organizations to keep advancing toward the highest standards of LGBTQ+ workplace inclusion.</p> <p><img alt="Human Rights Campaign Foundation 2026: Equality 100 Leader in LGBTQ+ Workplace Inclusion logo" src="/-/media/images/recognition-logos/2026/eq100_2026_color-073125.png?rev=7b5ce264bdf7401d9f79aabaa707f147&amp;hash=E17BE38E891E80252B952D5D764B1F42" width="300" height="199.91" /></p>{23390695-B1AA-4D30-80F6-A8ADD3A18F2A}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/howard-sklamberg-joins-nprs-morning-editionHoward Sklamberg, Arnold &amp; Porter Life Sciences &amp; Healthcare Regulatory partner and former Deputy Commissioner for Global Regulatory Operations and Policy at the U.S. Food and Drug Administration (FDA), was recently interviewed on <em>NPR</em>&rsquo;s &ldquo;Morning Edition,&rdquo; discussing FDA regulation of synthetic peptides as they gain popularity among wellness influencers.&nbsp;Mon, 23 Feb 2026 00:00:00 -0600<p>Howard Sklamberg, Arnold &amp; Porter Life Sciences &amp; Healthcare Regulatory partner and former Deputy Commissioner for Global Regulatory Operations and Policy at the U.S. Food and Drug Administration (FDA), was recently interviewed on <em>NPR</em>&rsquo;s &ldquo;Morning Edition,&rdquo; discussing FDA regulation of synthetic peptides as they gain popularity among wellness influencers. </p> <p>Howard noted that compounding pharmacies &ndash; where lots of patients obtain peptides, some of which aren&rsquo;t FDA-approved &ndash; are regulated differently than typical drug manufacturers. He highlighted that this increases consumer risk, particularly when products are produced in large quantities. </p> <p>&ldquo;That&rsquo;s been a longstanding challenge for FDA for many years,&rdquo; Howard noted. &ldquo;You then have to have systems in place that guarantee that the product doesn&rsquo;t have contaminants [and that] the right procedures are being used.&rdquo; </p> <p>Howard added that the marketing of some peptides as supplements classifies them as a sort of unregulated drugs, with the volume of products available becoming a &ldquo;Wild West&rdquo; for FDA regulators. </p> <p><a rel="noopener noreferrer" href="https://www.npr.org/2026/02/23/nx-s1-5716162/peptides-science-muscle-growth-longevity-wellness" target="_blank">Listen to the full interview.</a></p>{3245E358-8441-4EF2-81E8-771F956918F8}https://www.biosliceblog.com/2026/02/uk-pmcpa-publishes-revised-guidance-for-the-use-of-social-media/Libby Amos-Stonehttps://www.arnoldporter.com/en/people/a/amos-libbylibby.amos-stone@arnoldporter.comKatya Farkashttps://www.arnoldporter.com/en/people/f/farkas-katyakatya.farkas@arnoldporter.com Mon, 23 Feb 2026 00:00:00 -0600{98AB9910-289E-4FEB-B857-328A105916C9}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/scotus-tariff-decision-impacts-and-next-stepsHenry D. Almondhttps://www.arnoldporter.com/en/people/a/almond-henry-dhenry.almond@arnoldporter.comJ. David Parkhttps://www.arnoldporter.com/en/people/p/park-j-daviddavid.park@arnoldporter.comLynn Fischer Foxhttps://www.arnoldporter.com/en/people/f/fischer-fox-lynnlynn.fischerfox@arnoldporter.comClaire E. Readehttps://www.arnoldporter.com/en/people/r/reade-claireclaire.reade@arnoldporter.comBrian Bombassarohttps://www.arnoldporter.com/en/people/b/bombassaro-brianbrian.bombassaro@arnoldporter.comKang Woo Leehttps://www.arnoldporter.com/en/people/l/lee-kang-wookangwoo.lee@apks.com Archana Rao Vasahttps://www.arnoldporter.com/en/people/v/vasa-archana-raoarchana.vasa@arnoldporter.comEllie Farrinhttps://www.arnoldporter.com/en/people/f/farrin-ellieellie.farrin@arnoldporter.comLogan Davishttps://www.arnoldporter.com/en/people/d/davis-loganlogan.davis@arnoldporter.comCaitlin A. Kovalkoskihttps://www.arnoldporter.com/en/people/k/kovalkoski-caitlin-acaitlin.kovalkoski@arnoldporter.com<p>On Friday, February 20, the Supreme Court issued its decision in the consolidated cases of <em>Learning Resources, Inc. v. Trump</em> and <em>Trump v. V.O.S. Selections, Inc.,</em> holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The case challenged the Trump administration's February executive orders imposing "trafficking tariffs" on imports from China, Mexico, and Canada (targeting fentanyl and illegal immigration) and the April 2025 order imposing sweeping "reciprocal tariffs" on imports from most other countries to address trade deficits. Both the Court of International Trade (CIT) and the Court of Appeals for the Federal Circuit (CAFC) previously ruled that IEEPA does not authorize such tariffs. Approximately $160 billion to $175 billion in IEEPA tariffs have been collected to date. </p>Sat, 21 Feb 2026 00:00:00 -0600<p>On Friday, February 20, the Supreme Court issued its decision in the consolidated cases of <em>Learning Resources, Inc. v. Trump</em> and <em>Trump v. V.O.S. Selections, Inc.,</em> holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. The case challenged the Trump administration's February executive orders imposing "trafficking tariffs" on imports from China, Mexico, and Canada (targeting fentanyl and illegal immigration) and the April 2025 order imposing sweeping "reciprocal tariffs" on imports from most other countries to address trade deficits. Both the Court of International Trade (CIT) and the Court of Appeals for the Federal Circuit (CAFC) previously ruled that IEEPA does not authorize such tariffs. Approximately $160 billion to $175 billion in IEEPA tariffs have been collected to date.</p> <p>The Supreme Court decision does not address refunds of tariffs already paid; refund questions will likely be addressed by U.S. Customs and Border Protection (CBP) and the lower courts. Currently, the procedures necessary to secure a refund of the invalidated tariffs are not defined. More than 1,800 follow-on cases have been filed with the Court of International Trade since the original case.</p> <p>In response to the SCOTUS decision, President Trump issued an <a rel="noopener noreferrer" href="https://www.whitehouse.gov/presidential-actions/2026/02/ending-certain-tariff-actions/" target="_blank">executive order</a> terminating various tariff actions imposed pursuant to IEEPA. Many other Trump administration tariff actions remain in place, however, including national security-based tariffs on steel, aluminum, copper, autos and auto parts, and heavy trucks. President Trump also immediately issued a new executive order imposing 10% temporary tariffs on most imports and announced that his administration will be opening new investigations that could result in new tariff actions based on alternative statutory authority.</p> <h2>Supreme Court Ruling Striking Down IEEPA Tariffs</h2> <p>In its February 20 decision, the Supreme Court held 6-3 that IEEPA does not authorize the President to impose the challenged tariffs. Chief Justice Roberts, writing for the majority, concludes: 1) that Article I, Section 8 of the Constitution gives Congress the power to lay and collect taxes, not the President; and 2) that the statute's language authorizing the President to "regulate importation" does not clearly delegate the power to impose revenue-raising tariffs.&nbsp; </p> <p>The Court emphasized that the President has no inherent authority to impose tariffs during peacetime, and that delegating such authority requires clear congressional authorization. It further found that no President in history has used IEEPA in this manner, which strongly suggests that the statute does not grant such authority. On the statutory interpretation question, the Court found that the word "regulate" in IEEPA, as ordinarily used, means to "fix, establish, or control" or to "direct by rule or restriction," but does not include taxation. The Court reasoned that had Congress intended to convey the distinct and extraordinary power to impose tariffs, it would have done so expressly, as it consistently has in other tariff statutes.</p> <p>A three-justice plurality (Chief Justice Roberts, Justice Gorsuch, and Justice Barrett) relied on the "major questions doctrine" to support the conclusion that Congress did not delegate broad tariff power to the President in the IEEPA statute. The plurality reasoned that the Court has long expressed reluctance to read extraordinary delegations of congressional powers into ambiguous statutory text, and this principle applies with particular force to the core congressional power of the purse. The plurality also noted that no President invoked IEEPA to impose any tariffs during the statute's fifty-year existence until these cases, and this "lack of historical precedent," coupled with the breadth of authority claimed, suggests that tariffs lie beyond the President's legitimate reach. </p> <p>Justices Kagan, Sotomayor, and Jackson concurred in the finding that the tariffs are illegal but took the position that the holding could be supported based on statutory interpretation, without the need to rely on the major questions doctrine. Justices Gorsuch wrote separately in reaction to this concurring opinion and to defend the major questions doctrine as a structural safeguard against executive overreach. Barrett wrote separately to respond to Gorsuch.&nbsp; </p> <p>Justices Thomas, Kavanaugh, and Alito dissented. The dissenters argued that the word "regulate" in IEEPA's authorization to "regulate importation" is broad enough to encompass tariffs, pointing to historical uses of "regulate" in the context of foreign commerce. They also emphasized that the President's foreign affairs powers and the emergency nature of IEEPA counseled in favor of reading the statute broadly. </p> <h2>Refunds and What This Means Going Forward</h2> <p>The Court&rsquo;s opinion makes clear that IEEPA tariffs are unlawful. Thus, we expect tariffs paid pursuant to the invalidated executive orders will be refunded. However, there is significant uncertainty as to the timing and process to secure refunds. The Supreme Court&rsquo;s decision was silent as to the availability and process for refunds, and we expect that additional proceedings before the CIT and/or CAFC may be necessary before a refund process is outlined. CBP may also issue guidance, potentially as part of any further court proceedings. The administration&rsquo;s action terminating the invalidated tariffs is also silent on refunds. </p> <p>At this time, importers should take steps to gather information on their shipments and prior duty exposure and consider whether they should take any action before CBP (including potential Post Summary Corrections and/or Protests), and whether filing suit at the CIT may be appropriate. </p> <h2>Withdrawal of IEEPA Tariffs and Imposition of Section 122 Tariffs</h2> <p>In response to the Supreme Court Decision, the White House has already released two executive orders implementing changes to tariff actions. An EO titled &ldquo;<a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.whitehouse.gov%2Fpresidential-actions%2F2026%2F02%2Fending-certain-tariff-actions%2F&amp;data=05%7C02%7CLynn.FischerFox%40arnoldporter.com%7C59a69b7c3b594835195c08de715a2b9d%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639072829251490078%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=Dz0hYTflUj6T3kUdfSxKDQk26%2F5m%2FKAS7ydflv3pESA%3D&amp;reserved=0" target="_blank">Ending Certain Tariff Actions</a>&rdquo; terminated the IEEPA tariffs. The EO directs that the IEEPA tariffs &ldquo;shall no longer be in effect and, as soon as practicable, shall no longer be collected.&rdquo;&nbsp; </p> <p>The White House also issued an EO entitled &ldquo;<a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.whitehouse.gov%2Fpresidential-actions%2F2026%2F02%2Fimposing-a-temporary-import-surcharge-to-address-fundamental-international-payments-problems%2F&amp;data=05%7C02%7CLynn.FischerFox%40arnoldporter.com%7C59a69b7c3b594835195c08de715a2b9d%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639072829251515031%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=paiBE8JeIMj2MyP1hyy0uqKGlXZeVzJFmapFSgngq%2BY%3D&amp;reserved=0" target="_blank">Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems.</a>&rdquo; The new tariffs are imposed pursuant to Section 122 of the Trade Act of 1974, which allows the President to impose tariffs for 150 days to address balance of payments emergencies. Congressional approval is required for the tariffs to be extended beyond 150 days. This EO imposes a 10% tariff on most imports effective at 12:01 a.m. on February 24. President Trump has already indicated that these 10% tariffs will increase to 15%. </p> <p>The EO provides for certain exceptions to the new tariffs, which mirror the exclusions from the terminated IEEPA tariffs. This means that pharmaceuticals, semiconductor products, certain food and agriculture products, and critical minerals continue to be exempted from the additional tariffs. Similarly, as with the IEEPA tariffs on Mexico and Canada, goods qualifying for preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA) will not be subject to the new tariffs. In addition, products already subject to other Trump administration tariff actions, such as steel and aluminum, are not subject to the new 10% tariffs. </p> <p>There is also a short in transit exception to the new tariffs, for &ldquo;<em>Articles the product of any country that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States, before 12:01 a.m. eastern standard time on February 24, 2026; and (2) are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. eastern standard time on February 28, 2026.</em>&rdquo; For practical purposes, this limited exclusion means that goods that were already in transit for imminent arrival at U.S. ports will not be subject to either the terminated IEEPA tariffs or the newly imposed tariffs. The in-transit exception only applies to goods shipped via ocean freight; it likely will not apply to air freight or other forms of transportation. </p> <p>In the immediate term, importers will face lower tariffs under the current tariff regime. For many countries, the IEEPA tariffs were higher than the 10% tariffs imposed pursuant to Section 122. For example, IEEPA tariffs on the EU, Korea, and Japan were set at 15%, and imports from Vietnam and China faced 20% IEEPA duties. However, the Trump administration has made clear that it intends for the Section 122 tariffs to be a temporary action to maintain a baseline tariff while it conducts investigations that will allow it to impose higher and more permanent tariffs. Specifically, the administration has indicated that it plans to launch investigations pursuant to Section 301 of the Trade Act of 1974, as well as additional national security-based investigations pursuant to Section 232 of the Trade Expansion Act of 1962. Such investigations will likely result in additional tariffs and will be used by the administration to leverage continued negotiations with other countries. Thus, importers are likely to continue to face tariff obstacles going forward as well as increased uncertainty as new tariff mechanisms are deployed.</p> <p><em>*Sally Alghazali contributed to this Advisory. Ms. Alghazali is admitted only in Minnesota; practicing law in Washington, DC during the pendency of her application for admission to Washington, DC Bar and under the supervision of lawyers of the firm who are members in good standing of the State Bar.</em></p> <p><em><div class="pull-quote pull-quote__secondary"> <div class="pull-quote__secondary-container pull-quote__secondary-container--light-blue"> <div class="pull-quote__quote-container pull-quote__quote-container--secondary"> <div class="pull-quote__quote">Questions About the SCOTUS Tariff Decision?</div> <div class="pull-quote__attribution">The Supreme Court’s ruling on tariff authority marks a pivotal shift in trade policy. As potential refund pathways develop for tariffs already paid, our International Trade team is actively tracking changes and advising clients on potential next steps. Contact us to explore strategies tailored to your business.</div> </div> </div> <div class="pull-quote__image" style="background-image: url('/-/media/images/homepage-tiles/horizontals/2026/gettyimages2207393977-tarrifs-850x320px.jpg?rev=3c596f7b0f504b989ad790680241d56a&amp;hash=17973B96BAC517C453624569F3533712');"></div> </div> </em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{A71AEEBF-4CF5-4D32-B85C-F994DCE248BF}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/judah-prero-discusses-proposed-tsca-revisions-with-chemical-watchJudah Prero, Arnold &amp; Porter Environmental counsel and former Assistant State Attorney General at the Maryland Department of the Environment, was recently quoted in the <em>Chemical Watch</em> News &amp; Insight article, &ldquo;TSCA reform bill includes expected changes, with some surprises,&rdquo; on a draft House Republican bill proposing significant revisions to the Toxic Substances Control Act (TSCA).&nbsp;Fri, 20 Feb 2026 00:00:00 -0600<p>Judah Prero, Arnold &amp; Porter Environmental counsel and former Assistant State Attorney General at the Maryland Department of the Environment, was recently quoted in the <em>Chemical Watch</em> News &amp; Insight article, &ldquo;TSCA reform bill includes expected changes, with some surprises,&rdquo; on a draft House Republican bill proposing significant revisions to the Toxic Substances Control Act (TSCA). </p> <p>Judah noted that the proposed changes could divide opinion: "I&rsquo;m sure there are other people who would characterize this as earth-shattering and turning TSCA on its head,&rdquo; he said, further commenting that the changes put forth in the draft "are not radical.&rdquo;</p> <p>"They&rsquo;re not throwing everything out. I think there was an effort to be at least somewhat balanced, and to make targeted changes that go after lynchpin issues.&rdquo;</p> <p>Judah observed that the proposed updates to the risk management standard signal that regulators are &ldquo;not trying to get to zero risk&rdquo; when addressing existing chemicals. He also commented that notable changes proposed for the existing chemicals program are provisions that could shift workplace risk responsibilities from the EPA back to the Occupational Safety and Health Administration (OSHA).</p>{CD9B10CF-810B-4371-87CF-73291C44F697}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/treasury-department-provides-additional-information-requests-feedbackJohn P. Barkerhttps://www.arnoldporter.com/en/people/b/barker-john-pjohn.barker@arnoldporter.comJohn B. Bellinger, IIIhttps://www.arnoldporter.com/en/people/b/bellinger-john-bjohn.bellinger@arnoldporter.comCharles A. Blanchardhttps://www.arnoldporter.com/en/people/b/blanchard-charles-aCharles.Blanchard@arnoldporter.comEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comDeborah A. Curtishttps://www.arnoldporter.com/en/people/c/curtis-deborahdeborah.curtis@arnoldporter.comRonald D. Leehttps://www.arnoldporter.com/en/people/l/lee-ronald-dRonald.Lee@arnoldporter.comNicholas L. Townsendhttps://www.arnoldporter.com/en/people/t/townsend-nicholas-lnicholas.townsend@arnoldporter.comNancy L. Perkinshttps://www.arnoldporter.com/en/people/p/perkins-nancy-lnancy.perkins@arnoldporter.comTrevor G. Schmitthttps://www.arnoldporter.com/en/people/s/schmitt-trevor-gtrevor.schmitt@arnoldporter.comBell Johnsonhttps://www.arnoldporter.com/en/people/j/johnson-bellbell.johnson@arnoldporter.comDustin Veseyhttps://www.arnoldporter.com/en/people/v/vesey-dustindustin.vesey@arnoldporter.comOn February 6, 2026, the U.S. Department of the Treasury (Treasury), as Chair of the Committee on Foreign Investment in the United States (CFIUS), issued a long-awaited Request for Information (RFI) pertaining to the planned Known Investor Program aimed at facilitating reviews by CFIUS of investments by certain foreign or foreign-controlled entities (foreign investors) in U.S. businesses.&nbsp;Fri, 20 Feb 2026 00:00:00 -0600<p>On February 6, 2026, the U.S. Department of the Treasury (Treasury), as Chair of the Committee on Foreign Investment in the United States (CFIUS), issued a long-awaited <a rel="noopener noreferrer" href="https://www.federalregister.gov/documents/2026/02/09/2026-02481/request-for-information-pertaining-to-the-cfius-known-investor-program-and-streamlining-the-foreign" target="_blank">Request for Information (RFI)</a> pertaining to the planned Known Investor Program aimed at facilitating reviews by CFIUS of investments by certain foreign or foreign-controlled entities (foreign investors) in U.S. businesses. </p> <p>The Known Investor Program, the announcement of which <a href="/en/perspectives/blogs/enforcement-edge/2025/05/treasury-announces-fast-track-pilot-program">we earlier wrote about</a>, is intended to allow certain foreign investors to submit information to CFIUS (that typically would be gathered during a CFIUS investment review) in advance of a formal filing. Advance submission of the information will help CFIUS to process filings from such investors more quickly once they are received and may, in many cases, reduce the need for CFIUS to proceed to additional review periods, saving parties both time and money. Through the RFI, Treasury is seeking input from interested parties on issues it is still grappling with as it formulates the details of the Known Investor Program. </p> <p>The RFI first describes 15 criteria that CFIUS anticipates using to determine whether a given entity is eligible to participate as a foreign investor in the Known Investor Program. Criteria generally focus on a party&rsquo;s foreign status, recent prior interactions with CFIUS, relationships with select U.S. adversaries (China, Cuba, Iran, North Korea, Russia, and Venezuela), and business conducted with parties on certain U.S. sanctions and export control lists. CFIUS particularly scrutinizes: foreign entities&rsquo; ownership by U.S. adversary governments, companies, or individuals; rights held by U.S. adversary governments, companies, or individuals; whether board members and officers are located in U.S. adversary countries; and whether the foreign entity has a certain amount of its manufacturing or research and development facilities in U.S. adversary countries. Meeting the criteria is a threshold matter before an entity may submit information under the Program. The RFI then describes categories of information that CFIUS anticipates requesting from eligible participants. As previewed in the RFI, CFIUS will provide a questionnaire for eligible foreign investors to complete in order to apply to become a &ldquo;known investor&rdquo; under the program. According to the RFI, CFIUS developed the eligibility criteria and questionnaire in consultation with foreign investors who are among the most frequent repeat filers with CFIUS. </p> <p>The RFI offers foreign investors who have not already been consulted by CFIUS regarding the development of the Known Investor Program an opportunity to provide input, both by responding to 45 specific questions posed in the RFI as well as by providing additional information that might guide CFIUS in developing the program.</p> <p>The 45 specific questions posed in the RFI seek comments on whether the proposed program participant eligibility criteria should be amended or supplemented, whether the questions in the planned questionnaire should be clarified or adjusted, whether any additional categories of information should be considered, what challenges may arise in the process of collecting and providing the information requested in the questionnaire, which items may be the most time- and resource-intensive to address, and how frequently participants should be expected to update their questionnaire responses.</p> <p>Other feedback foreign investors are invited to provide includes: ways CFIUS can better communicate with parties during CFIUS reviews; ways CFIUS can increase transparency; and ways CFIUS can improve efficiency in its case review process in general, as well as regarding non-notified transactions, mitigation, and monitoring and enforcement. Foreign investors are &ldquo;encouraged to share lessons and experiences from other regulatory regimes&mdash;whether domestic or foreign&mdash;with respect to features that CFIUS should consider.&rdquo;</p> <p>Foreign investors who wish to respond to the RFI need not respond to every question; comments may provide as much or as little information as the investor would like. All written comments are due <strong><span style="text-decoration: underline;">March 18, 2026</span></strong>. </p> <p>Please contact any author of this Advisory or your Arnold &amp; Porter relationship attorney if you might be interested in submitting comments in response to the RFI or have any questions about it or related matters.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{F4081331-F4A4-40D3-9352-4A9E14FB8934}https://natlawreview.com/article/attorney-client-machine-relationship-when-ai-use-jeopardizes-privilege?ampEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comMelissa Webermanhttps://www.arnoldporter.com/en/people/w/weberman-melissamelissa.weberman@arnoldporter.comZachary A. Woodwardhttps://www.arnoldporter.com/en/people/w/woodward-zacharyzachary.woodward@arnoldporter.comAlexis C. Archerhttps://www.arnoldporter.com/en/people/a/archer-alexisalexis.archer@arnoldporter.comFri, 20 Feb 2026 00:00:00 -0600{9F94029E-6E54-480B-9A4E-F19DC3759A8B}https://www.arnoldporter.com/en/perspectives/events/2026/02/antitrust-2026-and-beyond-a-global-outlook-on-competition-enforcement-part-2Jonathan Gleklenhttps://www.arnoldporter.com/en/people/g/gleklen-jonathanjonathan.gleklen@arnoldporter.comWilliam Hallett Efronhttps://www.arnoldporter.com/en/people/e/efron-william-hallettwilliam.efron@arnoldporter.comYasmine L. Harikhttps://www.arnoldporter.com/en/people/h/harik-yasmineyasmine.harik@arnoldporter.comZeno J. Fredianihttps://www.arnoldporter.com/en/people/f/frediani-zenozeno.frediani@arnoldporter.comJoin members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world.Thu, 19 Feb 2026 00:00:00 -0600<p>Join members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world. We will examine the most significant antitrust developments of 2025, assess how the new U.S. administration has reshaped enforcement priorities, and analyze how international antitrust authorities are expanding their reach. For businesses operating globally, these converging forces are creating a regulatory environment that is more complex, more fragmented, and demands closer attention than ever.</p> <p>Featuring partners and counsel from our U.S., London, and Brussels offices, this series will provide a forward-looking assessment of where antitrust enforcement is headed across key areas, including mergers, cartel and criminal enforcement, and litigation. Our lawyers will offer practical insights to help businesses understand recent developments, anticipate risks, align strategy, and navigate competition issues in 2026 and beyond.</p> <h2>Part II: Mergers &amp; Acquisitions &mdash; Navigating Deal Risk in a Shifting Global Enforcement Environment</h2> <p>This program will examine recent U.S. and global antitrust developments affecting M&amp;A activity, with a focus on what dealmakers should expect going forward. Drawing on recent challenges and regulatory actions, our panel will discuss evolving enforcement trends, procedural and substantive risk, and the practical impact of the administration change on transaction strategy. We will also offer perspectives from both the EU and UK on cross-border transactions and coordination among competition authorities, helping companies better assess and manage global deal risk.</p> <h2>Upcoming Webinars</h2> <p><strong>Part III: Cartel and Criminal Enforcement &mdash; Emerging Risks and Global Coordination</strong><br /> Wednesday, February 25 | 11 a.m.-noon ET</p> <p>Our speakers will provide an overview of the current landscape of antitrust cartel enforcement, highlighting recent investigations, policy developments, and enforcement trends in the U.S. and in Europe. The discussion will focus on current enforcement trends, changes in agency leadership and priorities, managing differences across global jurisdictions, and steps companies can take to proactively identify and mitigate emerging risks.</p> <a href="/en/people/g/geverola-andre">Andre Geverola</a>&nbsp;| Partner<br /> <a href="/en/people/g/gutermuth-axel">Axel Gutermuth</a>&nbsp;| Partner<br /> <br /> <p><strong>Part IV: Antitrust Litigation &mdash; Preparing for the Next Wave of Disputes</strong><br /> Tuesday, March 10 | 11 a.m.-noon ET </p> <p>In the final session, Arnold &amp; Porter&rsquo;s antitrust litigators will analyze key litigation trends shaping the antitrust landscape. The panel will discuss recent case law, evolving theories of harm, and the potential impact of regulatory and enforcement shifts on private and government litigation. With insights from both U.S. and European perspectives, this program will help businesses prepare for future disputes and navigate increasingly complex antitrust litigation risks.</p> <a href="/en/people/s/shores-laura">Laura Shores</a>&nbsp;| Partner<br /> <a href="/en/people/a/asimow-daniel-b">Daniel Asimow</a>&nbsp;| Partner<br /> <a href="/en/people/b/brown-alastair">Alastair Brown</a>&nbsp;| Partner<br />{EF0F9B26-17BB-4B84-BAD5-3535DD305D1B}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/fda-announces-third-year-of-voluntary-quality-management-maturity-prototype-assessment-programHoward Sklamberghttps://www.arnoldporter.com/en/people/s/sklamberg-howardhoward.sklamberg@arnoldporter.comElizabeth Trentacosthttps://www.arnoldporter.com/en/people/t/trentacost-elizabethelizabeth.trentacost@arnoldporter.comBrianna Morigneyhttps://www.arnoldporter.com/en/people/m/morigney-briannabrianna.morigney@arnoldporter.comOn February 11, 2026, the U.S. Food and Drug Administration (FDA or the Agency) published a Federal Register notice announcing an opportunity for nine drug manufacturing establishments to participate in the third year of its Voluntary Quality Management Maturity (QMM) Prototype Assessment Protocol Evaluation Program (the Program).Thu, 19 Feb 2026 00:00:00 -0600<p>On February 11, 2026, the U.S. Food and Drug Administration (FDA or the Agency) published a Federal Register notice announcing an opportunity for nine drug manufacturing establishments to participate in the third year of its Voluntary Quality Management Maturity (QMM) Prototype Assessment Protocol Evaluation Program (the Program).[[N: Voluntary Quality Management Maturity Prototype Assessment Protocol Evaluation Program Notice, 91 Fed. Reg. 6229 (Feb. 11, 2026).]]</p> <h2>Background</h2> <p>The Program is administered by FDA&rsquo;s Center for Drug Evaluation and Research (CDER) and is open to manufacturers of CDER regulated drug products on a voluntary basis. The QMM Program is designed to &ldquo;encourage drug manufacturers to implement quality management practices that go beyond current good manufacturing practice (CGMP) requirements.&rdquo;[[N: Id.]] The Program utilizes a CDER-developed protocol assessment tool that evaluates how effectively drug manufacturers monitor and manage quality and quality systems. </p> <p>The QMM Program is a spin-off of FDA&rsquo;s Quality Metrics Program, which was proposed shortly after passage of the Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA). FDA relied on FDASIA&rsquo;s grant of authority to the agency to collect certain records in advance of or in lieu of inspections when the Agency proposed guidance for industry that would have required manufacturers to provide FDA with certain manufacturing metrics. Stakeholders strongly opposed the quality metrics program,[[N: <em>See</em> Stephen Barlas, <a rel="noopener noreferrer" href="https://pmc.ncbi.nlm.nih.gov/articles/PMC5481295/" target="_blank">Drug Industry Groups Oppose FDA &ldquo;Quality Metrics&rdquo; Plan</a>, P&amp;T (Pharmacy &amp; Therapeutics) (July 2017).]] and in response, FDA amended the guidance, shifting to a scaled-back voluntary program. In 2018, the Agency announced two pilot Quality Metrics programs, the Quality Metrics Site Visit Program[[N: 83 Fed. Reg. 30751]] and a Quality Metrics Feedback Program [[N: 83 Fed. Reg. 30748]], &ldquo;for any establishment that had a quality metrics program developed and implemented by the quality unit and used to support product and process quality improvement.&rdquo;[[N: <a rel="noopener noreferrer" href="https://www.fda.gov/drugs/pharmaceutical-quality-resources/quality-metrics-drug-manufacturing" target="_blank">Quality Metrics for Drug Manufacturing</a>, FDA (December 2025).]] Finally, in March 2022, FDA solicited comments to change the previously proposed Quality Metrics Reporting Program, which ultimately evolved into the QMM program that FDA launched in 2024. In 2024, the Program&rsquo;s first year, the Program evaluated nine establishments.</p> <h2>CY 2026 QMM Prototype Assessment Protocol Evaluation Program</h2> <p>Now, in the Program&rsquo;s third year, FDA streamlined the QMM assessment tool with a clearer, more concise rubric, using lessons learned from the 2024 Program. The tool continues to distinguish differences in maturity levels between practice areas at a single establishment, and continues to distinguish between maturity levels between establishments. </p> <p>To participate in the program, the establishment must have the following characteristics:</p> <ul> <li>The potential participant is an establishment as defined in 21 CFR 207.1 that registers with FDA under section 510 of the Federal Food, Drug, and Cosmetic Act (FD&amp;C Act) and manufactures, prepares, propagates, compounds, or processes drugs, or active pharmaceutical ingredients (APIs) used in such drugs, subject to approval or licensure under section 505 of the FD&amp;C Act or section 351 of the Public Health Service Act, or that are marketed pursuant to section 505G of the FD&amp;C Act without an approved application under section 505 of the FD&amp;C Act (often referred to as over-the-counter (OTC) monograph drug products).</li> <li>The establishment received at least one human drug surveillance inspection.</li> <li>The current inspection classification for the establishment at the time of the request to participate is No Action Indicated (NAI) or Voluntary Action Indicated (VAI).</li> <li>The establishment manufactures, prepares, propagates, compounds, or processes at least one CDER-regulated drug (API or finished drug product) that is currently in commercial distribution in the U.S.</li> <li>The establishment is willing to participate in an on-site or hybrid assessment.[[N: Voluntary Quality Management Maturity Prototype Assessment Protocol Evaluation Program Notice, 91 Fed. Reg. 6229 (Feb. 11, 2026).]]</li> </ul> <p>The Agency will choose 9 volunteer establishments for the program and will notify establishments of its decision within 60 days of receipt of their request to participate. Once selected establishments confirm their willingness to participate, the assessment will be conducted by three assessors following a pre-assessment questionnaire. The assessment team will only include CDER staff and will not include FDA staff from the Office of Inspections and Investigations. </p> <p>After the assessment, establishments will receive a QMM assessment report which scores the establishment on each practice area. The report will also highlight areas of strength and actionable opportunities for improvement. The establishment will be encouraged to select one opportunity for improvement, develop a plan to implement improvement(s), and share the improvement plan with CDER. CDER will meet with the establishment twice &mdash; at three months and six months after the assessment &mdash; to discuss the proposed plan and progress made toward the improvement goals. Additionally, CDER will solicit feedback from participating establishments to improve the QMM assessment tool and protocol. </p> <p>To participate in the CY 2025 QMM Program, manufacturers must submit a request by April 13, 2026. </p> <h2>Key Takeaways</h2> <p>Although the Program does not impose new regulatory requirements, manufacturers should think carefully about whether to participate. On the one hand, voluntary cooperation with the agency in a setting in which the agency can provide guidance for improvement could be useful. On the other hand, companies should consider whether potential release of a negative assessment under the Freedom of Information Act could paint the company in an unrepresentative light or trigger more intensive FDA scrutiny. </p> <p>If you have any questions about the content discussed in this Advisory or would like more information, please reach out to one of the authors of this Advisory or to your existing Arnold &amp; Porter contact. </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{B315346C-A33A-48E1-8D93-BEBF8F21BC52}https://www.arnoldporter.com/en/perspectives/news/2026/02/corporate-counsel-recognizes-arnold-porterArnold &amp; Porter has been shortlisted for three awards at the <em>Corporate Counsel </em>2026 Women, Influence &amp; Power in Law Awards, which &ldquo;honor in-house and law firm women leaders and allies who have demonstrated a commitment to advancing the empowerment of women in law.&rdquo;Wed, 18 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter has been shortlisted for three awards at the <em>Corporate Counsel </em>2026 Women, Influence &amp; Power in Law Awards, which &ldquo;honor in-house and law firm women leaders and allies who have demonstrated a commitment to advancing the empowerment of women in law.&rdquo;</p> <p>The following Arnold &amp; Porter team members have been named finalists in their respective categories:</p> <ul> <li> Rosa Evergreen &ndash; Collaborative Leadership &ndash; External </li> <li>Lauren Giordani &ndash; Innovative Leadership &ndash; Internal Innovation </li> <li>Pallavi Mehta Wahi &ndash; Collaborative Leadership &ndash; External </li> </ul> <p>The winners will be announced at an awards dinner in Chicago on April 14, 2026.</p>{157F527D-5052-48A4-97EA-B88E5AB2439B}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-serves-as-lead-global-antitrust-and-fdi-counsel-to-palo-alto-networksArnold &amp; Porter recently served as lead global antitrust and foreign direct investment (FDI) counsel to Palo Alto Networks in its acquisition of identity security firm CyberArk, which provides technology designed to protect credentials, secrets, and high-risk administrative accounts across enterprise and infrastructure systems.Wed, 18 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter recently served as lead global antitrust and foreign direct investment (FDI) counsel to Palo Alto Networks in its acquisition of identity security firm CyberArk, which provides technology designed to protect credentials, secrets, and high-risk administrative accounts across enterprise and infrastructure systems. The transaction, valued at approximately $25 billion in cash and stock, closed on February 11, 2026.</p> <p>The acquisition comes as Identity Security reaches a critical juncture, driven by the proliferation of AI and the growing number of machine-based digital identities that require protection.</p> <p>As lead global antitrust and FDI counsel, Arnold &amp; Porter directly handled the U.S. merger control filing, as well as both merger control and foreign investment filings in Germany and the United Kingdom. The firm coordinated additional merger control and foreign investment filings in more than a dozen countries over an eight-month period, securing unconditional clearances in all jurisdictions. </p> <p>The competition reviews addressed a range of horizontal, vertical, and conglomerate theories applicable in evolving technology markets, highlighting Arnold &amp; Porter&rsquo;s deep experience guiding clients through complex transactions at the intersection of antitrust, foreign investment, and cutting-edge technology.</p> <p>The Arnold &amp; Porter team was led by partners Jon Gleklen and Axel Gutermuth and included partners Zeno Frediani and John Schmidt; counsel Peter Danias; and associates Ewa Kontkiewicz, J&eacute;ssica Nemeth, Tim Roche, and Sara Routsi.</p>{E7A8517D-700F-4141-A203-5A6B1ED2CF02}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-bolsters-capital-markets-team-with-christopher-decresce-in-new-york<strong>NEW YORK, February 17, 2026</strong> &mdash; Arnold &amp; Porter announced today that Christopher (Chris) DeCresce has joined the firm&rsquo;s Capital Markets team of the Corporate &amp; Finance practice as a partner, resident in New York.&nbsp;Tue, 17 Feb 2026 00:00:00 -0600<p><strong>NEW YORK, February 17, 2026</strong> &mdash; Arnold &amp; Porter announced today that Christopher (Chris) DeCresce has joined the firm&rsquo;s Capital Markets team of the Corporate &amp; Finance practice as a partner, resident in New York. </p> <p>Derek Stoldt, co-chair of the firm&rsquo;s Corporate &amp; Finance group, said: &ldquo;Chris is a highly respected lawyer, with broad experience and a strong reputation that will enhance the firm&rsquo;s position and bench, particularly our capital markets and financial services practices. His experience leading complex transactions, particularly for financial institutions, complements the firm&rsquo;s existing platform and will be invaluable. We are excited to welcome him to the firm.&rdquo; </p> <p>Chris focuses his practice on capital markets and securities transactions for financial institutions. He regularly works on private equity investments, initial public offerings, debt and equity offerings, regulatory matters, and major mergers and acquisitions, often in the financial services and life sciences sectors. Chris also frequently works with FinTech and tokenization transactions, often advising cryptocurrency companies in their corporate transactions. In addition to his work in private legal practice, Chris has also served as a managing director in the investment banking group of a middle-market, financial services-focused investment bank. </p> <p>In joining the firm, Chris said: &ldquo;I&rsquo;m thrilled to join Arnold &amp; Porter&rsquo;s outstanding Capital Markets and Financial Services team. The firm&rsquo;s reputation for regulatory excellence and its collaborative, cross-disciplinary approach to complex transactions aptly align with my practice, making it an exciting place to practice law. I look forward to leveraging my experience to deliver innovative solutions and help clients achieve their strategic goals.&rdquo;</p> <p>Chris holds a J.D., <em>magna cum laude</em>, from New York Law School and a B.A., <em>cum laude</em>, from City College of the City University of New York.</p> <h3>About Arnold &amp; Porter </h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{30DEA915-01F8-4DCB-AED8-06CD0C7633EA}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/ico-publishes-guidance-on-how-to-deal-with-data-protection-complaintsjames.castro-edwards@arnoldporter.com<p>On February 12, the Information Commissioner&rsquo;s Office (ICO) <a rel="noopener noreferrer" href="https://ico.org.uk/for-organisations/how-to-deal-with-data-protection-complaints/" target="_blank">published its guidance on how to deal with data protection complaints</a>, a new requirement introduced by the <a rel="noopener noreferrer" href="https://www.legislation.gov.uk/ukpga/2025/18/contents" target="_blank">Data (Use and Access) Act 2025 (DUAA)</a>. As we previously reported, <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/02/uks-data-use-and-access-act-what-life-sciences-companies-need-to-know/#more-3940" target="_blank">most of the reforms introduced by Part 5 of the DUAA took effect on</a>&nbsp;February 5; however, the requirement for controllers to implement and maintain a complaints handling process does not come into force until June 19, 2026.</p>Tue, 17 Feb 2026 00:00:00 -0600<p>On February 12, the Information Commissioner&rsquo;s Office (ICO) <a rel="noopener noreferrer" href="https://ico.org.uk/for-organisations/how-to-deal-with-data-protection-complaints/" target="_blank">published its guidance on how to deal with data protection complaints</a>, a new requirement introduced by the <a rel="noopener noreferrer" href="https://www.legislation.gov.uk/ukpga/2025/18/contents" target="_blank">Data (Use and Access) Act 2025 (DUAA)</a>. As we previously reported, <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2026/02/uks-data-use-and-access-act-what-life-sciences-companies-need-to-know/#more-3940" target="_blank">most of the reforms introduced by Part 5 of the DUAA took effect on</a>&nbsp;February 5; however, the requirement for controllers to implement and maintain a complaints handling process does not come into force until June 19, 2026. </p> <p>The ICO guidance is intended to assist controllers in ensuring that they are ready for the changes when they take effect and makes it clear that even though the new requirements are not yet in force, the ICO considers following the guidance to be good practice. Organizations should therefore take steps to implement a data protection complaints process before the requirements become binding in four months&rsquo; time. </p> <h2>Background</h2> <p>The requirement to implement and maintain a data protection complaints process is a new obligation under S.164(A) of the Data Protection Act 2018 (DPA). <a rel="noopener noreferrer" href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.legislation.gov.uk%2Fukpga%2F2018%2F12%2Fsection%2F164A&amp;data=05%7C02%7CJennifer.Omasta%40arnoldporter.com%7Ccf3307d4b550455dcb9708de6e497fdd%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639069459138322611%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=9rtEHVb6DVMJJuho2GudaLs2gw2%2BZorckY7LPb83ctQ%3D&amp;reserved=0" target="_blank">S. 164(A) DPA</a> was inserted by Part 5, DUAA, <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/advisories/2025/07/the-data-use-and-access-act-2025-explained" target="_blank">which was granted Royal Assent on June 19, 2025</a>. However, unlike most of the provisions of Part 5 DUAA, which became binding on February 5, S.164(A) does not take effect until June 19.</p> <h2>Requirements of the DPA 2018</h2> <p>S.164(A) DPA requires that controllers take the following steps:</p> <ol> <li>Uphold data subjects&rsquo; right to complain directly to the controller if they consider that their personal data has been handled in a manner which infringes the UK GDPR or Part 3 of the DPA (which deals with law enforcement processing).</li> <li>Provide data subjects with a means of making data protection complaints, such as providing a complaint form.</li> <li>Acknowledge receipt of any data protection complaint within thirty (30) days.</li> <li> Respond to the complaint and inform the data subject of the outcome without undue delay (which includes making appropriate inquiries into the subject matter of the complaint and informing the data subject of the progress of the complaint).</li> </ol> <h2>ICO Guidance&nbsp; </h2> <p>S. 103 DUAA does not take effect until June 19, so the requirements under S.164(A) DPA have not yet come into force. However, the ICO indicates in its guidance that organizations are expected to be ready when the provisions become binding, and that it is still good practice to follow the guidance before the changes become mandatory obligations.</p> <p>The ICO provides the following guidance:</p> <p style="margin-left: 40px;"><em>Data protection law says you <strong>must</strong>:&nbsp;&nbsp;&nbsp; </em></p> <ul style="margin-left: 40px;"> <li><em>give people a way of making data protection complaints to you;</em></li> <li><em>acknowledge receipt of complaints within 30 days of receiving them;</em></li> <li><em>without undue delay, take appropriate steps to respond to complaints, including making appropriate inquiries, and keep people informed; and</em></li> <li><em>without undue delay, tell people the outcome of their complaints.</em></li> </ul> <p>A complaint may relate to any aspect of how an individual&rsquo;s personal data has been handled, and the guidance provides as follows: </p> <p style="margin-left: 40px;"><em>&ldquo;If someone considers that you've infringed data protection legislation because of the way you've handled their personal information (or the personal information of someone they're acting on behalf of), they can complain to you.&rdquo;</em> </p> <p>The guidance states that controllers must provide a means for data subjects to make complaints, which may be via a complaint form (on- or offline), email address, telephone number, online portal, live chat, social media, or in person. This does not need to be a separate tool, and controllers must still respond to complaints received from data subjects by any means other than the set process. </p> <h2>Practical Compliance</h2> <p>The requirement to implement and maintain a data protection complaints handling process is one of the few new data protection obligations introduced by the generally business-friendly DUAA. The requirement will not become binding for another 4 months, intended to give organizations sufficient time to update their policies and procedures. However, the clock is ticking. </p> <p>The new obligations are unlikely to require wholesale changes to controllers&rsquo; data protection processes and policies; however, these will need to be reviewed and amended to accommodate the new provisions. Disgruntled data subjects, whether customers or employees, are frequently motivated to escalate their complaints to negotiate a favorable settlement with a controller. An organization that has failed to implement an appropriate complaints process risks becoming the subject of a complaint to the ICO, for which they would be prima facie in breach of the DPA; valuable ammunition for a disgruntled data subject. Conversely, an organization that has already updated its processes to accommodate S.164(A) DPA is likely to be looked upon favorably in the event of an ICO investigation. Accordingly, businesses would be prudent to implement a robust data protection complaints handling process as soon as reasonably possible. In practice, they should be able to achieve this by updating their existing subject access request (DSAR) process and their website/employee privacy notices.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{A2D95D85-A7E4-4A1E-9903-60A57B7C3D52}https://www.biosliceblog.com/2026/02/mhra-launches-targeted-consultation-on-indefinite-recognition-of-ce%E2%80%91marked-medical-devices/Adela Williamshttps://www.arnoldporter.com/en/people/w/williams-adelaadela.williams@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comMon, 16 Feb 2026 00:00:00 -0600{E7B129A1-4797-4AC8-9DC2-CF34572C1993}https://www.arnoldporter.com/en/perspectives/news/2026/02/chambers-global-2026The 2026 <em>Chambers Global</em> guide has recognized Arnold &amp; Porter as a leading law firm in 34 practice areas and ranked 42 lawyers.&nbsp;Fri, 13 Feb 2026 00:00:00 -0600<p>The 2026 <em>Chambers Global</em> guide has recognized Arnold &amp; Porter as a leading law firm in 34 practice areas and ranked 42 lawyers. Using in-depth research conducted by <em>Chambers</em> researchers, the guide ranks the top lawyers and law firms in over 200 jurisdictions across the world. </p> <p>Arnold &amp; Porter was recognized by <em>Chambers</em> as an &ldquo;impressive transatlantic firm&rdquo; with &ldquo;an excellent reputation for its specialist US teams&rdquo; as well as its &ldquo;global coverage&rdquo; across the Asia-Pacific, Europe, and Latin America regions. The publication also commended the firm&rsquo;s &ldquo;impressive industry experience,&rdquo; noting that Arnold &amp; Porter&rsquo;s lawyers are &ldquo;regularly tackling sophisticated, high value cases&rdquo; for &ldquo;a host of leading multi-national companies.&rdquo;</p> <p>Arnold &amp; Porter&rsquo;s ranked practice areas in <em>Chambers Global</em> 2026 include:</p> <ul> <li>Antitrust: Cartel &ndash; USA</li> <li>Arbitration (International) &ndash; Global Market Leaders; Latin America - International Counsel</li> <li>Banking &amp; Finance (International Firms) &ndash; Brazil</li> <li>Banking &amp; Finance: Mainly Regulatory &ndash; USA</li> <li>Bankruptcy/Restructuring: Highly Regarded &ndash; USA</li> <li>Capital Markets &ndash; Latin America - International Counsel</li> <li>Capital Markets: Securitisation: ABS &ndash; USA</li> <li>Competition/Antitrust &ndash; Global: Multi-Jurisdictional; USA</li> <li>Competition/Antitrust (International &amp; Cross-Border) &ndash; USA</li> <li>Competition: EU &ndash; Belgium</li> <li>Corporate Crime &amp; Investigations &ndash; Latin America - International Counsel; USA</li> <li>Corporate Investigations/Anti-Corruption &ndash; Global: Multi-Jurisdictional</li> <li>Disputes (International &amp; Cross-Border) &ndash; USA</li> <li>Dispute Resolution: International Firms &ndash; South Korea</li> <li>Intellectual Property: Patent &ndash; USA&nbsp;</li> <li>Intellectual Property: Trademark, Copyright &amp; Trade Secrets &ndash; USA</li> <li>International Arbitration (Foreign Expertise) &ndash; USA</li> <li>International Arbitration: Investor-State Arbitration &ndash; UK</li> <li>International Arbitration: The Elite &ndash; USA</li> <li>International Trade/WTO &ndash; Asia-Pacific Region; Global Market Leaders</li> <li>International Trade: Export Controls &amp; Economic Sanctions: The Elite &ndash; USA</li> <li>International Trade: Trade Remedies &amp; Trade Policy &ndash; USA</li> <li>Investigations &amp; Enforcement (International &amp; Cross-Border) &ndash; USA</li> <li>Life Sciences &ndash; Europe-wide; Global: Multi-Jurisdictional</li> <li>Life Sciences &amp; Pharmaceutical Sector (International &amp; Cross-Border) &ndash; UK; USA</li> <li>Life Sciences: Regulatory/Compliance &ndash; USA</li> <li>Privacy &amp; Data Security: Highly Regarded &ndash; USA</li> <li>Public International Law &ndash; Global Market Leaders</li> </ul> <p>Arnold &amp; Porter&rsquo;s ranked lawyers in <em>Chambers Global</em> 2026 include:</p> <ul> <li>Reeves Anderson: Public International Law &ndash; Global Market Leaders</li> <li>Marcus Asner: Corporate Crime &amp; Investigations &ndash; Latin America, International Counsel</li> <li>John Barker: International Trade: Export Controls &amp; Economic Sanctions &ndash; USA</li> <li>John Bellinger: Public International Law &ndash; Global Market Leaders</li> <li>Lawton Camp: Capital Markets: Securitization: ABS &ndash; USA</li> <li>Maria Chedid: International Arbitration: Counsel &ndash; USA</li> <li>Henry Clinton-Davis: Employment &ndash; United Kingdom</li> <li>E. Whitney Debevoise: Capital Markets &ndash; Latin America - International Counsel; Capital Markets: Debt &amp; Equity &ndash; USA</li> <li>Paolo Di Rosa: Arbitration (International) &ndash; Global Market Leaders / Latin America - International Counsel; International Arbitration &ndash; USA; International Arbitration: Counsel &ndash; USA</li> <li>Niels Ersb&oslash;ll: Competition: EU &ndash; Belgium</li> <li>Lynn Fischer Fox: International Trade: Trade Remedies &amp; Trade Policy &ndash; USA&nbsp;</li> <li>David Freeman: Banking &amp; Finance: Mainly Regulatory &ndash; USA</li> <li>Andre Geverola: Antitrust: Cartel &ndash; USA</li> <li>Patricio Gran&eacute; Labat: Arbitration (International) &ndash; Latin America - International Counsel; International Arbitration &ndash; United Kingdom</li> <li>Axel Gutermuth: Competition: EU &ndash; Belgium; Competition: EU (Foreign Expertise) &ndash; Belgium; Competition/European Law: Lawyers Based Abroad &ndash; Germany</li> <li>Jeffrey Handwerker: Life Sciences: Regulatory/Compliance &ndash; USA</li> <li>Gregory Harrington: Banking &amp; Finance &ndash; Latin America - International Counsel / USA; Capital Markets &ndash; Latin America - International Counsel</li> <li>Amber Hay: Banking &amp; Finance: Mainly Regulatory &ndash; USA</li> <li>M&eacute;lida Hodgson: Arbitration (International) &ndash; Latin America - International Counsel; International Arbitration: Arbitrators &ndash; USA; International Arbitration: Counsel &ndash; USA</li> <li>Jun Hee Kim: Dispute Resolution: International Firms &ndash; South Korea</li> <li>Daniel Kracov: Life Sciences: Regulatory/Compliance &ndash; USA</li> <li>James Lee: Dispute Resolution: International Firms &ndash; South Korea</li> <li>Ronald Lee: Privacy &amp; Data Security: Cybersecurity &ndash; USA; Privacy &amp; Data Security: Privacy &ndash; USA</li> <li>Paul Llewellyn: Intellectual Property: Trademark, Copyright &amp; Trade Secrets &ndash; USA</li> <li>Charlotte Mallorie: Commercial and Corporate Litigation &ndash; United Kingdom</li> <li>Jonathan Martel: Climate Change &ndash; Global Market Leaders</li> <li>&Aacute;lvaro Nistal: International Arbitration &ndash; United Kingdom</li> <li>J. David Park: International Trade &ndash; South Korea; International Trade/WTO &ndash; Asia-Pacific Region; International Trade: Trade Remedies &amp; Trade Policy &ndash; USA</li> <li>Nancy Perkins: Privacy &amp; Data Security: Privacy &ndash; USA</li> <li>Christopher Petersen: Capital Markets: Debt &amp; Equity: Eastern United States &ndash; USA</li> <li>David Reed: International Arbitration &ndash; United Kingdom</li> <li>Sandra Rizzo: Energy: Electricity (Regulatory &amp; Litigation) &ndash; USA</li> <li>Beatriz San Mart&iacute;n: Intellectual Property &ndash; United Kingdom</li> <li>John Schmidt: Competition Law &ndash; United Kingdom</li> <li>John Tan: Corporate Investigations/Anti-Corruption (International Firms) &ndash; China</li> <li>Eva Temkin: Life Sciences: Regulatory/Compliance &ndash; USA</li> <li>Jami Mills Vibbert: Privacy &amp; Data Security: Healthcare &ndash; USA&nbsp;</li> <li>Anton Ware: Dispute Resolution: Arbitration (International Firms) &ndash; China</li> <li>Bart Wasiak: International Arbitration &ndash; United Kingdom</li> <li>Jane Wessel: Competition Law: Private Enforcement: Claimant &ndash; United Kingdom</li> <li>Christopher Willott: Banking &amp; Finance (International Firms) &ndash; Brazil</li> <li>Matthew Wolf: Intellectual Property: Patent &ndash; USA; Life Sciences: IP/Patent Litigation &ndash; USA</li> </ul>{F81970F2-1AD8-4CE5-82FB-579CFE754A69}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-advises-arcesium-on-acquisition-of-limina-abArnold &amp; Porter recently advised Arcesium, a global financial technology provider to the investment industry, in the acquisition of Limina AB, a Swedish technology company specializing in software solutions for the investment management industry.Fri, 13 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter recently advised Arcesium, a global financial technology provider to the investment industry, in the acquisition of Limina AB, a Swedish technology company specializing in software solutions for the investment management industry. The transaction marked the first acquisition for Arcesium, which launched as an independent company in 2015 through a joint venture between the D. E. Shaw Group and Blackstone Multi-Asset Investing, and which has since received further strategic investment from JPMorgan Chase &amp; Co.</p> <p>Arnold &amp; Porter provided strategic counsel to Arcesium across all aspects of the acquisition, from the initial letter of intent through the negotiation of a definitive acquisition agreement, and ongoing guidance on post-closing integration and other day-to-day corporate matters related to the combination.</p> <p>The Arnold &amp; Porter team was led by partner Marina Richter and included partners Laurie Abramowitz and Reuven Graber; counsel Pantea Garroussi, Joel I. Greenberg, and Kathleen Wechter; and associate Jacob Saracino.</p>{D68BCC6B-6405-4DEB-A88A-6736D7CFFAD3}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/david-caine-comments-on-federal-circuit-design-patent-dissent-in-law360David A. Caine, Arnold &amp; Porter partner in the Intellectual Property practice, was quoted in the <em>Law360</em> article, &ldquo;Design Patent Dissent Highlights Frustration Over Subjectivity,&rdquo; where he discussed Chief Judge Kimberly Moore&rsquo;s dissent in a recent Federal Circuit design patent decision, emphasizing that courts should focus on overall visual impression rather than isolated differences.Fri, 13 Feb 2026 00:00:00 -0600<p>David A. Caine, Arnold &amp; Porter partner in the Intellectual Property practice, was quoted in the <em>Law360</em> article, &ldquo;Design Patent Dissent Highlights Frustration Over Subjectivity,&rdquo; where he discussed Chief Judge Kimberly Moore&rsquo;s dissent in a recent Federal Circuit design patent decision, emphasizing that courts should focus on overall visual impression rather than isolated differences.</p> <p>&ldquo;The question is, what happens when you have small variations in designs? How do you weigh those small variations as compared to looking at the overall similarity?&rdquo; Caine said, noting that Judge Moore&rsquo;s opinion reinforces that the &ldquo;overall impression&rdquo; of a design must remain the primary inquiry.</p> <p>Caine cautioned that focusing too heavily on counting distinctions can cause courts to &ldquo;lose the forest for the trees,&rdquo; and pointed to principles of trademark law that weigh similarities more heavily than differences, suggesting parallels in how courts may approach substantial design patent similarity.</p> <p>&ldquo;There's case law in the trademark space that stands for the proposition that similarities are to be weighed more heavily than differences," he said. "There's more to it than that, but&hellip;when you're looking at the substantial similarity between, for example, two marks and the overall design of the mark, how do you view and account for, say, differences in individual elements?"</p> <p><a rel="noopener noreferrer" href="https://www.law360.com/articles/2440425/design-patent-dissent-highlights-frustration-over-subjectivity" target="_blank">Read the full article</a> (subscription required).</p>{C67EDB3D-1996-44DA-99ED-7419F917D55C}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/china-data-privacy-and-cybersecurity-2025-year-in-reviewJohn Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comSheena Thomashttps://www.arnoldporter.com/en/people/t/thomas-sheenasheena.thomas@arnoldporter.comSiyi Guhttps://www.arnoldporter.com/en/people/g/gu-siyisiyi.gu@cn.arnoldporter.com<p>In 2025, China took several notable steps to strengthen its data privacy and cybersecurity regulatory framework, finalizing compliance audit requirements, operationalizing the cross-border data transfer certification regime, and amending the Cybersecurity Law to increase penalties and expand its extraterritorial reach. This Advisory highlights the key developments and their practical implications for companies operating in or handling data from China.</p>Fri, 13 Feb 2026 00:00:00 -0600<p>In 2025, China took several notable steps to strengthen its data privacy and cybersecurity regulatory framework, finalizing compliance audit requirements, operationalizing the cross-border data transfer certification regime, and amending the Cybersecurity Law to increase penalties and expand its extraterritorial reach. </p> <p>This Advisory highlights the key developments and their practical implications for companies operating in or handling data from China.</p> <h2>Legislative &amp; Regulatory Developments</h2> <h3>1. Personal Information Protection Compliance Audit Requirements</h3> <p>On February 12, 2025, the Cyberspace Administration of China (CAC, 国家互联网信息办公室) issued the Measures for the Administration of Compliance Audits on Personal Information Protection (Audit Measures, 个人信息保护合规审计管理办法), which took effect on May 1, 2025. The Audit Measures require data processors (akin to controllers under the General Data Protection Regulation (GDPR) to assess and quantify the scale of their personal information processing activities. Personal information protection compliance audits are required in the following circumstances:</p> <ul style="margin-left: 40px;"> <li><strong>Routine audit obligations</strong>: If data processors process the personal information of more than 10 million individuals, they must conduct a personal information protection compliance audit at least once every two years. If the volume of personal information processed is below this threshold, data processors may determine a reasonable audit cycle based on their own circumstances. These audits may be conducted internally or by third parties.</li> <li><strong>Regulator-initiated audits</strong>: If data processors fall within one of the following categories, regulators (including the CAC) may require them to engage third parties to conduct personal information protection compliance audits:</li> </ul> <p style="margin-left: 120px;">a. The processing activities present material risks to individuals&rsquo; rights and interests or demonstrate serious deficiencies in security measures,</p> <p style="margin-left: 120px;">b. The processing activities may infringe the rights and interests of a large number of individuals, or</p> <p style="margin-left: 120px;">c. A personal information security incident occurs, resulting in the leakage, tampering with, loss, or destruction of personal information involving more than 1 million individuals, or more than 100,000 individuals&rsquo; sensitive personal information.</p> <p>The Audit Measures are accompanied by an annex, the Personal Information Protection Compliance Audit Guidelines (Audit Guidelines, 个人信息保护合规审计指引), which outline the substantive scope of compliance audits across 27 categories of processing activities. Audits are expected to cover, among other things, whether there is a legal basis for processing, whether individuals have been properly informed, and whether adequate technical and organizational safeguards are in place. The Audit Guidelines also provide additional focus areas for audits involving sensitive personal information or cross-border transfers. </p> <p>Separately, the Audit Measures introduce a filing obligation for data processors that process the personal information of more than one million individuals: these entities must designate a personal information protection officer (PIPO, 个人信息保护负责人) and file the relevant information with the provincial CAC.</p> <h3>2. Personal Information Protection Certification for Cross-border Data Transfer</h3> <p>On October 14, 2025, the CAC and the State Administration for Market Regulation (SAMR, 国家市场监督管理总局) jointly issued the Measures on Certification for Cross-Border Transfer of Personal Information (PIP Certification Measures, 个人信息出境认证办法), which took effect on January 1, 2026. The PIP Certification Measures operationalize the Personal Information Protection Certification (PIP Certification, 个人信息保护认证) regime as one of the three mechanisms for cross-border transfers of personal information under the Personal Information Protection Law (PIPL, 个人信息保护法), along with CAC Security Assessment (Security Assessment, 数据出境安全评估) and filing Standard Contractual Clauses (SCC Filing, 个人信息出境标准合同备案). <br /> <br /> In general terms, the Security Assessment is required for higher-risk transfers (including those by Critical Information Infrastructure Operators (CIIOs)), and transfers involving the personal information of more than 1 million individuals or sensitive personal information of more than 10,000 individuals). SCC Filing and PIP Certification are available for lower-risk transfers.</p> <ul style="margin-left: 40px;"> <li><strong>Scope of application</strong>: The PIP Certification Measures clarify that PIP Certification is applicable to non-CIIOs, data processors whose annual cross-border data transfers involve the personal information of more than 100,000 but fewer than 1 million individuals, or the sensitive personal information of fewer than 10,000 individuals.</li> <li><strong>Key procedural requirements</strong>: Before using PIP Certification as a cross-border data transfer mechanism, data processors are required to inform the affected individuals and obtain separate consent for the cross-border data transfer, and to conduct a personal information protection impact assessment (PIA) covering: <ul style="margin-left: 40px;"> <li>The legality and necessity of the transfer,</li> <li>The risks to individuals&rsquo; rights and interests,</li> <li>The obligations and safeguards on protecting personal information undertaken by overseas recipients, and whether they can ensure the security of personal information transferred overseas,</li> <li>The impact of foreign laws and policies on personal information security and individuals&rsquo; rights.</li> </ul> </li> </ul> <p style="margin-left: 40px;">PIP certification applications are submitted to CAC-approved certification institutions, which assess the applicant&rsquo;s personal data protection system through technical verification, on-site review, and ongoing supervision.</p> <ul style="margin-left: 40px;"> <li><strong>Validity and supervision</strong>: PIP Certifications are generally valid for three years. Certificates must be renewed by filing an application at least six months before expiration, and certification bodies must report issuance, renewal, revocation, and other certification status changes to the National Certification and Accreditation Information Public Service Platform (全国认证认可信息公共服务平台). During the validity period, certified data processors are subject to routine supervision by certification institutions and may also be subject to oversight and spot checks by relevant regulators, such as the CAC and SAMR.</li> </ul> <p>For more details on PIP Certification, please refer to our <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/11/china-requirements-personal-information-protection-certification">previous Advisory</a>.</p> <h3>3. Cybersecurity Law Amendments</h3> <p>On October 28, 2025, China passed amendments to the Cybersecurity Law (CSL, 中华人民共和国网络安全法), which took effect on January 1, 2026. The amendments primarily strengthen enforcement by increasing liability and penalties for non-compliance and expanding the law&rsquo;s extraterritorial reach.</p> <ul style="margin-left: 40px;"> <li><strong>Increased and newly introduced penalties</strong>: The amended CSL significantly strengthens legal liability for violations of cybersecurity obligations. Most notably, maximum fines for general violations increased fivefold, and the newly introduced category of severe violations carries fines of up to RMB 10 million (approximately USD 1.4 million), a significant escalation from the CSL&rsquo;s previously modest penalty regime.</li> <li><strong>Entities</strong>: The amended CSL differentiates general violations and severe violations, with stricter penalties for general violations and new penalties for severe violations. For general violations , the maximum fine has been increased from RMB 100,000 (USD 14,000) to RMB 500,000 (USD 70,000). For severe violations, defined as large-scale data breaches, the loss of functionality of critical information infrastructure, and other actions causing significant harm to cybersecurity, the maximum fine can reach RMB 10 million (USD 1.4 million).</li> </ul> <p style="margin-left: 60px;">Notably, where data processors fail to cease the transmission of information prohibited by laws or administrative regulations, or fail to take remedial measures and report to regulators, and such failures result in serious consequences, they may be ordered to suspend their business operations, shut down the relevant websites or applications, and/or take other measures. In some cases, data processors&rsquo; business licenses may be revoked.</p> <ul style="margin-left: 40px;"> <li><strong>Individuals</strong>: The amended CSL broadens individual liability from managerial personnel with direct responsibility to include other directly responsible personnel. Similar to the liability for entities discussed above, the amended CSL raises the penalties for individuals for general violations and introduces penalties for individuals involved in severe violations. For general violations, the maximum fine has been increased from RMB 50,000 (USD 7,000) to RMB 100,000 (USD 14,000). For severe violations, individuals may be fined up to RMB 1 million (USD 140,000).</li> </ul> <p style="margin-left: 60px;">In addition, individuals who illegally intrude into others&rsquo; networks, interfere with the normal functioning of networks, or steal network data, and who are subject to administrative or criminal penalties, may be prohibited from engaging in network security management for five years or permanently barred from taking key network operation roles.</p> <ul style="margin-left: 40px;"> <li><strong>Expanded extraterritorial application</strong>: The amendments broaden the extraterritorial scope of the CSL from overseas activities that harm critical information infrastructure in China to any overseas activities that endanger China&rsquo;s cybersecurity, thereby expanding potential application of the law to a wider group of entities and activities outside China. For example, overseas SaaS providers, cloud service providers, or data analytics companies that process China-related data outside China, or whose activities are deemed to endanger China&rsquo;s cybersecurity, may fall within the scope of the amended CSL. In practical terms, companies with no physical presence in China but that provide services to, or process data originating from, Chinese users or customers may need to assess whether their activities could be characterized as endangering China&rsquo;s cybersecurity under the amended CSL.</li> </ul> <h2> New National Standards</h2> <h3> 1. National Standard GB/T 45574 &mdash; 2025 on Sensitive Personal Information</h3> <p> Although recommended national standards (referred to as &ldquo;GB/T&rdquo; standards) are officially voluntary, they are widely regarded as reflecting regulatory expectations and are frequently referenced during enforcement and compliance assessments. In practice, companies are well-advised to treat them as the benchmark for compliance. </p> <p>The new recommended national standard Data Security Technology &mdash; Security Requirements for Processing of Sensitive Personal Information (GB/T 45574 &mdash; 2025, 数据安全技术 &mdash; 敏感个人信息处理安全要求), which took effect on November 1, 2025, further clarifies the scope of sensitive personal information and sets out detailed security and compliance requirements for its processing. <br /> <br /> Key requirements under GB/T 45574 &mdash; 2025 include:</p> <ul style="margin-left: 40px;"> <li><strong>Identification of sensitive personal information</strong>: GB/T 45574 &mdash; 2025 aligns with the framework of the PIPL and, compared with the national standard Information Security Technology &mdash; Personal Information Security Specification (GB/T 35273 &mdash; 2020, 信息安全技术 &mdash; 个人信息安全规范), adopts a more cautious and refined approach to identifying sensitive personal information. In particular, Appendix A specifies the categories of sensitive personal information: <ul style="margin-left: 40px;"> <li>Compared with GB/T 35273 &mdash; 2020, GB/T 45574 &mdash; 2025 no longer includes national ID numbers as sensitive personal information under the category of specific identity information. But photographs of the national ID cards are still classified as sensitive personal information.</li> <li>The standard also clarifies that basic physical condition information, such as body weight, height, blood type, blood pressure, and vital capacity, does not fall within the category of medical and healthcare sensitive personal information.</li> <li>In addition, financial account information is identified as sensitive personal information only where relevant elements are combined, such as account number and password, or account number together with payment or transaction details.</li> </ul> </li> </ul> <p style="margin-left: 40px;">Article 4.1 of GB/T 45574 &mdash; 2025 further provides that, when assessing whether the data constitutes sensitive personal information, the data processors should assess not only individual types of data, but also the sensitivity of the combined datasets. Where the combination of multiple types of data, if leaked or misused, has a significant impact on individuals&rsquo; rights and interests, the combined dataset should be identified and protected as sensitive personal information.</p> <ul style="margin-left: 40px;"> <li><strong>Legality of personal information collection</strong>: Collection of sensitive personal information must be conducted legally. For example, data processors should not collect sensitive personal information for any illegal use, or collect it through illegal methods such as deception or coercion. In addition, data processors should not automatically collect sensitive personal information from websites or mobile applications through technical means without obtaining separate consent (e.g., through cookies, tracking technologies, web scraping tools).</li> <li><strong>Notice and consent</strong>: Processing of sensitive personal information requires separate consent, and consent mechanisms should avoid non-transparent collection, bundled or blanket authorizations ((i.e., one &ldquo;bulk&rdquo; consent for multiple processing activities), and coercive practices. Where the processing of publicly disclosed sensitive personal information may have a material impact on individuals&rsquo; rights and interests, separate consent should be obtained.</li> <li><strong>Security measures</strong>: Data processors should adopt appropriate technical and organizational measures to safeguard the sensitive personal information they collect and process. Required practices include setting up procedures to identify and classify sensitive personal information, adopting specialized security measures for sensitive personal information (such as encryption, access control, and/or de-identification), and establishing approval processes for important processing activities involving sensitive personal information.</li> <li><strong>Other specific processing requirements</strong>: GB/T 45574 &mdash; 2025 also provides more detailed requirements for the processing of each category of sensitive personal information. Examples include: <ul style="margin-left: 40px;"> <li><strong>Biometric information</strong>: Processors are encouraged to retain only characteristic or summary data and delete original images or videos where feasible, in order to reduce sensitivity and potential harm in the event of a data breach.</li> <li><strong>Sector-specific sensitive personal information</strong>: For sensitive personal information in specific sectors (e.g., medical and healthcare information or financial account information), data processors should comply with applicable sector-specific requirements and implement enhanced, classified protection measures. Such information should, by default, be displayed in a de-identified form within products and internal systems, with full display permitted only where necessary and subject to appropriate access controls and identity verification.</li> </ul> </li> </ul> <h3> 2. National Standard GB/T 46068 &mdash; 2025 on Cross-Border Processing of Personal Information</h3> <p> The recommended national standard Data Security Technology &mdash; Security Certification Requirements for Cross-Border Processing Activity of Personal Information (GB/T 46068 &mdash;2 025, 数据安全技术 &mdash; 个人信息跨境处理活动安全认证要求) will take effect on March 1, 2026. Like GB/T 45574 &mdash; 2025, this is not legally binding, but provides a useful reference for security matters relating to cross-border data transfer and is applicable to data processors, overseas recipients, certification institutions, and regulators.<br /> <br /> Key requirements under GB/T 46068 &mdash; 2025 include:</p> <ul style="margin-left: 40px;"> <li><strong>Legally binding documentation</strong>: Cross-border data transfer activities should be supported by legally binding documents, which should, at a minimum, address the allocation of responsibilities and obligations, overseas storage arrangements, security protection measures, protection of individuals&rsquo; rights, commitments by overseas data recipients, and available remedies.</li> <li><strong>Organizational management</strong>: Data processors and overseas recipients should establish appropriate organizational structures and designate responsible personnel for cross-border data transfer:</li> <li><strong>Personal information protection organizations</strong>: Dedicated functions or organizations shall be established for personal information protection, including the prevention of unauthorized access and the mitigation of risks of data leakage, tampering, or loss. </li> <li><strong>Personal information protection officers (PIPO): </strong>officers should have appropriate professional knowledge and relevant experience in personal information protection.</li> <li><strong>Protect personal information rights</strong>: GB/T 46068 &mdash; 2025 also sets out specific requirements for data processors and overseas recipients to protect individuals&rsquo; personal information rights. For example, data processors and overseas recipients should accept requests to exercise personal information rights. Data processors and overseas recipients should also comply with obligations relating to notice and consent, provide mechanisms for individuals to exercise their rights (e.g., access), process personal information in accordance with agreed purposes and methods, refrain from unauthorized onward transfers, retain records of cross-border processing activities as required, and implement appropriate technical and organizational security measures.</li> </ul> <h2> Looking Ahead</h2> <p> Several of the developments discussed above will continue to take shape in 2026. The PIP Certification Measures and the amended Cybersecurity Law both took effect on January 1, 2026, and the cross-border processing national standard (GB/T 46068 &mdash; 2025) follows on March 1, 2026. Companies should use this period to assess their current compliance posture against these new requirements, particularly with respect to audit planning, cross-border transfer mechanisms, and PIPO designation, and to monitor for further implementing guidance from the CAC and other regulators. We will continue to track these developments and provide updates as they arise.</p> <p>For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/privacy-cybersecurity-data-strategy">Privacy, Cybersecurity &amp; Data Strategy</a> practice group.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{C0FB7A53-5653-42F3-AD2F-096540F01B5D}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/bis-licensing-requirements-for-certain-civil-uav-exportsJohn P. Barkerhttps://www.arnoldporter.com/en/people/b/barker-john-pjohn.barker@arnoldporter.comDeborah A. Curtishttps://www.arnoldporter.com/en/people/c/curtis-deborahdeborah.curtis@arnoldporter.comSoo-Mi Rheehttps://www.arnoldporter.com/en/people/r/rhee-soomisoo-mi.rhee@arnoldporter.comNicholas L. Townsendhttps://www.arnoldporter.com/en/people/t/townsend-nicholas-lnicholas.townsend@arnoldporter.comTrevor G. Schmitthttps://www.arnoldporter.com/en/people/s/schmitt-trevor-gtrevor.schmitt@arnoldporter.comJunghyun Baekhttps://www.arnoldporter.com/en/people/b/baek-junghyunjunghyun.baek@arnoldporter.comBell Johnsonhttps://www.arnoldporter.com/en/people/j/johnson-bellbell.johnson@arnoldporter.comDustin Veseyhttps://www.arnoldporter.com/en/people/v/vesey-dustindustin.vesey@arnoldporter.com<p>On January 20, 2026, the U.S. Department of Commerce&rsquo;s Bureau of Industry and Security (BIS) issued an <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.federalregister.gov%2Fdocuments%2F2026%2F01%2F21%2F2026-01059%2Fstreamlining-export-controls-for-drone-exports&amp;data=05%7C02%7CJennifer.Omasta%40arnoldporter.com%7C3c413c6a0109470138fd08de6b1d498a%7Cd22d141fae37447facfa2e1d0e5b4969%7C0%7C0%7C639065970738558083%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=t%2BW3g437NKKaAMy0kJKZ8GjlyL9kSmWEYWGMcrVXC58%3D&amp;reserved=0">interim final rule</a> (IFR) easing export control restrictions on certain civil unmanned aerial vehicle (UAV) exports. The IFR, which took immediate effect, relaxes export controls on civil UAVs (1) capable of flying for 30-60 minutes with certain stability requirements, (2) capable of a maximum range of 300 kilometers that carry lighter payloads, or (3) that incorporate certain aerosol dispensing systems, streamlining their exports to U.S. allies and partner countries.</p> <p>In issuing the IFR, BIS noted that the UAV industry has evolved significantly in recent years, with capabilities once considered sensitive now readily available to consumers at relatively low costs. The IFR updates existing restrictions to better reflect current industry conditions. BIS further noted that the changes are intended to support a strong domestic UAV industry by ensuring U.S.-manufactured UAVs and related technologies remain readily accessible to the global market, while simultaneously advancing U.S. defense industrial base objectives and broader national security interests.</p> <h2>Key Changes</h2> <p>Pursuant to the IFR, less-sensitive UAVs classified under Export Control Classification Number (ECCN) 9A012.a.1 may now be exported to countries in Country Group A:1 under Part 740 of the Export Administration Regulations (EAR) without a license. Country Group A:1 includes many U.S.-allied countries. Prior to the amendment, UAVs controlled under ECCN 9A012.a.1 could only be exported without a license to the United Kingdom, Australia, or Canada.</p> <p>ECCN 9A012.a.1 controls UAVs designed to have controlled flight out of the direct natural vision of the operator with (1) a maximum endurance greater than or equal to 30 minutes to less than one hour and (2) that are designed to take off and have stable controlled flight in wind gusts equal to or exceeding 25 knots.</p> <p>In addition, BIS expanded the availability of license exceptions for certain UAVs controlled for Missile Technology (MT) reasons. In particular, the rule impacts ECCN 9A012 UAVs that are capable of a maximum range of at least 300 kilometers as well as all ECCN 9A120 UAVs, which are those that incorporate an aerosol dispensing system/mechanism with a capacity greater than 20 liters. Previously, exporters were required to obtain a license from BIS or rely on the limited license exceptions available for MT-controlled items under &sect; 740.2(a)(5)(i). BIS amended the applicable license exception provisions to allow exporters to use License Exception Strategic Trade Authorization (STA) for the subset of ECCN 9A012 and all ECCN 9A120 UAVs described above.</p> <p>As a result, UAVs controlled for MT reasons under ECCNs 9A012 and 9A120 may now be exported without a license to destinations in Country Group A:5, which includes all A:1 destinations except Mexico and South Africa, provided the requirements of License Exception STA are met. UAVs capable of delivering at least a 500-kilogram payload to a distance of at least 300 kilometers remain ineligible for License Exception STA.</p> <h2>Conclusion</h2> <p>These EAR amendments align U.S. export controls to the current state of the UAV industry, which is transforming services, creating high-skilled jobs, and reshaping the future of aviation. Notably, relatively few of the world&rsquo;s top UAV manufacturers are U.S. companies, raising supply chain concerns and limiting commercial opportunities for U.S. UAV manufacturers. By easing restrictions, the IFR enables U.S. civil UAV manufacturers to export their qualifying UAVs more efficiently to U.S. allies and partners. </p> <p> Going forward, U.S. producers and manufacturers of civil UAVs should assess whether their products qualify under the applicable amendments and, where they do, ensure compliance by maintaining appropriate records and fulfilling any reporting requirements. Although the IFR is effective immediately, BIS will accept comments on the changes until February 19, 2026.</p> <p>Please contact any author of this Advisory or your Arnold &amp; Porter relationship attorney if you have any questions or to seek further guidance or advice.&nbsp;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>Fri, 13 Feb 2026 00:00:00 -0600{FB72D92D-6D1F-422B-BDE5-61C08F6CBF56}https://www.biosliceblog.com/2026/02/uk-government-sets-out-2026-branded-medicines-statutory-scheme-repayment-rate/Adela Williamshttps://www.arnoldporter.com/en/people/w/williams-adelaadela.williams@arnoldporter.comChristopher Bateshttps://www.arnoldporter.com/en/people/b/bates-christopherchristopher.bates@arnoldporter.comThu, 12 Feb 2026 00:00:00 -0600{AD21CC63-C7D8-4273-8F61-78CD82B078AB}https://www.world-salon.com/event/164trevor.schmitt@arnoldporter.comThu, 12 Feb 2026 00:00:00 -0600{E31E29DE-1DB8-4ECA-8A72-697375FFF0B3}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-secures-victory-for-republic-of-bulgaria-in-usd-1-1-billion-investment-arbitrationArnold &amp; Porter achieved a victory for the Republic of Bulgaria in a long-running investment arbitration initiated by ČEZ, a.s., a Czech energy utility.Wed, 11 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter achieved a victory for the Republic of Bulgaria in a long-running investment arbitration initiated by ČEZ, a.s., a Czech energy utility. In an award dated January 29, 2026, the Tribunal at the World Bank-affiliated International Centre for Settlement of Investment Disputes (ICSID) dismissed on merit all of ČEZ&rsquo;s claims. The claimant had been seeking damages of EU &euro;967 million (approximately USD $1.1 billion) plus interest, making this the largest-ever investment arbitration claim brought against Bulgaria.</p> <p>The dispute stemmed from three separate investments that the claimant had made in the Bulgarian electricity sector: a major electricity distribution and supply business; a thermal coal power plant, TPP Varna; and a biomass power plant. The claimant alleged that, through various regulatory and judicial decisions, Bulgaria breached its obligations under the Energy Charter Treaty and adversely affected the claimant&rsquo;s investments. The Tribunal rejected in full all of ČEZ&rsquo;s claims.</p> <p>This is the second consecutive victory Arnold &amp; Porter has secured on behalf of Bulgaria in investment arbitration proceedings. In 2019, the firm obtained a complete dismissal of all claims, as well as an award of all legal costs, in an arbitration filed by the State General Reserve Fund of the Sultanate of Oman.</p> <p>The recent victory also represents the 60th positive result obtained by Arnold &amp; Porter on behalf of sovereign States in investment arbitrations, out of the last 64 final awards and decisions in such arbitrations.</p> <p>The Arnold &amp; Porter team was led by partner David Reed and included senior counsel Paolo Di Rosa, partner Sally Pei, senior associates Bart Wasiak, Eliseo Puig, and Pieter de Gannon, and associates Youlia Racheva, Peter Saban, and Dianne Lake.</p>{82FE6946-3DF4-4754-932E-7683E33B6A97}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/hhs-oig-guidance-on-manufacturer-dtc-platformsJeffrey L. Handwerkerhttps://www.arnoldporter.com/en/people/h/handwerker-jeffrey-ljeffrey.handwerker@arnoldporter.comLisa M. Rehttps://www.arnoldporter.com/en/people/r/re-lisa-mlisa.re@arnoldporter.comLoreli (Lori) Wrighthttps://www.arnoldporter.com/en/people/w/wright-loreli-loriloreli.wright@arnoldporter.comIn late January 2026, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published guidance addressing the application of the federal Anti-Kickback Statute (AKS) to manufacturer direct-to-consumer (DTC) prescription drug platforms, including a Special Advisory Bulletin (SAB), a contemporaneous press release describing the guidance as &ldquo;clearing the path&rdquo; for lower-cost prescription drugs, and a Request for Information (RFI). The guidance was issued weeks before TrumpRX, a government-branded website intended to aggregate manufacturer DTC offerings, launched.Wed, 11 Feb 2026 00:00:00 -0600<h2>Executive Summary</h2> <p> In late January 2026, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published guidance addressing the application of the federal Anti-Kickback Statute (AKS) to manufacturer direct-to-consumer (DTC) prescription drug platforms, including a Special Advisory Bulletin (SAB),[[N: Office of Inspector General, U.S. Dep&rsquo;t of Health &amp; Human Services, <a rel="noopener noreferrer" href="https://oig.hhs.gov/documents/special-advisory-bulletins/11450/OIG--FINAL--Special-Advisory-Bulletin.pdf" target="_blank">Special Advisory Bulletin: Application of the Federal Anti-Kickback Statute to Direct-to-Consumer Prescription Drug Sales by Manufacturers to Patients With Federal Health Care Program Coverage</a> (Jan. 27, 2026).]] a contemporaneous press release describing the guidance as &ldquo;clearing the path&rdquo; for lower-cost prescription drugs, and a Request for Information (RFI). The guidance was issued weeks before TrumpRX, a government-branded website intended to aggregate manufacturer DTC offerings, launched.<br /> <br /> Taken together, these developments provide manufacturers with an actionable framework to launch or expand DTC platforms. The SAB clearly delineates design features that OIG views as materially reducing AKS risk, effectively offering a roadmap for compliant implementation. Importantly, OIG&rsquo;s simultaneous issuance of an RFI signals that the agency may engage in future rulemaking, potentially issuing new safe harbors. <br /> <br /> Senators Richard Durbin, Elizabeth Warren, and Peter Welch collectively sent OIG a detailed letter sharply criticizing the guidance and questioning whether the TrumpRx model &mdash; and manufacturer DTC platforms more broadly &mdash; can comply with the AKS as currently structured.[[N:&nbsp;<a rel="noopener noreferrer" href="https://www.durbin.senate.gov/imo/media/doc/durbin_hhs_oig_letter_on_trumprx.pdf" target="_blank">Letter from Senator Richard J. Durbin, Peter Welch, and Elizabeth Warren, United States Senate, to Inspector General T. March Bell, Office of Inspector General, U.S. Dep&rsquo;t of Health &amp; Human Services</a>&nbsp;(January 29, 2026).]] While congressional engagement underscores the high visibility of this policy shift, the guidance, particularly when paired with the TrumpRx initiative, reflects an enforcement posture that appears durable and will be difficult to unwind absent further regulatory or legislative action.</p> <h2>I. Background: Manufacturer DTC Platforms and Renewed Enforcement Focus</h2> <p>Manufacturer DTC prescription platforms through which patients purchase prescription drugs directly from manufacturers, often following a telehealth encounter, have expanded rapidly in recent years. These models are frequently positioned as cash-pay alternatives intended to reduce patient out-of-pocket costs, bypass traditional pharmacy benefit structures, or address access challenges.<br /> <br /> At the same time, OIG and the Department of Justice have repeatedly expressed concern that certain DTC and telehealth arrangements may improperly steer patients, compromise prescriber independence, function as vehicles for indirect remuneration tied to federally reimbursable products, or facilitate downstream federal program claims following an initial cash-pay transaction.<br /> <br /> OIG&rsquo;s January 2026 guidance articulated how it analyzes these AKS risks, particularly in light of the Trump Administration&rsquo;s policy push to promote DTC purchasing through TrumpRx. Prior OIG guidance generally addressed DTC- or telehealth-related concerns indirectly or through enforcement warnings. In contrast, the January 2026 materials prospectively outline specific structural features that OIG views as relevant to fraud and abuse risk. In doing so, OIG appears to be responding to the practical need for clarity as manufacturer-operated DTC models move from isolated pilots to more visible and scalable distribution channels.</p> <h2>II. Overview of the January 2026 OIG Materials</h2> <h3>A. SAB on DTC Platforms</h3> <p>The centerpiece of OIG&rsquo;s guidance is an SAB, issued January 27, 2026, addressing manufacturer DTC platforms and AKS risk. The SAB reiterates several foundational principles:</p> <ul style="margin-left: 40px;"> <li>The AKS is a criminal statute that broadly prohibits remuneration intended to induce or reward the purchase or ordering of items reimbursable by federal health care programs.</li> <li>There is no existing safe harbor that squarely protects manufacturer-operated DTC platforms.</li> <li>Compliance depends on a fact-specific, totality-of-the-circumstances analysis.</li> </ul> <p> The SAB then identifies a set of characteristics that, according to OIG, may &ldquo;minimize the risk of fraud and abuse&rdquo; under the AKS.</p> <h3>B. Guardrails Identified by OIG</h3> <p>OIG highlighted the following safeguards as important to reducing AKS risk:</p> <p style="margin-left: 80px;">1<em>. Independent Prescribing</em>: Patients must have a valid prescription issued by an independent, third-party prescriber.</p> <p style="margin-left: 80px;">2. <em>No Federal Health Care Program Claims</em>: Drugs purchased through the DTC platform should not be billed to Medicare, Medicaid, or other federal health care programs.</p> <p style="margin-left: 80px;">3. <em>No Cross-Marketing of Federally Reimbursable Products</em>: The DTC platform should not be used as a vehicle to market or promote other products that are reimbursable by federal health care programs.</p> <p style="margin-left: 80px;">4. <em>No Conditioning or Tying to Future Transactions</em>: DTC pricing should not be conditioned on future purchases or other remuneration.</p> <p style="margin-left: 80px;">5. <em>Program Stability</em>: Making the drug available through the DTC program for at least one full plan year may mitigate concerns about short-term loss-leader pricing designed to induce later reimbursable utilization.</p> <p style="margin-left: 80px;">6. <em>No controlled substances</em>: Prescriptions for controlled substances may not be included in the DTC program.</p> <p>Notably, OIG frames these factors as risk-reducing, not dispositive. The SAB repeatedly cautions that arrangements lacking these features, or presenting countervailing risk factors, may still violate the AKS.</p> <h3>C. Telehealth as a Heightened Risk Area</h3> <p>OIG&rsquo;s prior enforcement and guidance regarding telehealth fraud and abuse is instructive.[[N: Office of Inspector General, U.S. Dep&rsquo;t of Health &amp; Human Services, <a rel="noopener noreferrer" href="https://oig.hhs.gov/documents/root/1045/sfa-telefraud.pdf" target="_blank">Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies</a> (July 20, 2022).]] OIG&rsquo;s Telehealth Special Fraud Alert warned against arrangements involving, among other traits: limited or cursory patient interactions; prescribers directed to issue prescriptions for preselected products; and financial relationships that compromise clinical judgment. DTC models relying on telehealth prescribers may receive scrutiny, especially where prescribers are selected, paid, or otherwise influenced by manufacturers or their vendors.</p> <h2>III. OIG Request for Information: Potential Pathway to Formalizing DTC Protections</h2> <p>In parallel with issuing the SAB, OIG published an RFI seeking public input on fraud and abuse considerations related to emerging pharmaceutical distribution and pricing models, including manufacturer DTC platforms.<br /> <br /> The RFI suggests that OIG is actively evaluating whether to formalize its DTC framework through future rulemaking, such as creating a new AKS safe harbor or other regulatory protections. OIG may also need to provide additional clarity on the civil monetary penalty (CMP) beneficiary inducement statute, which the SAB does not directly address.</p> <h3>A. Scope and Focus of the RFI</h3> <p>The RFI solicits stakeholder input regarding, among other things:</p> <ul style="margin-left: 40px;"> <li>Novel manufacturer distribution models designed to lower patient out-of-pocket costs</li> <li>Cash-pay arrangements that operate outside traditional third-party reimbursement structures</li> <li>The extent to which existing AKS safe harbors and CMP beneficiary inducement exceptions adequately address these models</li> <li>Whether additional regulatory clarity is needed to promote innovation while protecting federal health care programs</li> <li>The potential role of future subregulatory guidance (including additional advisory bulletins or policy statements) to provide more timely, durable clarity for emerging issues that may not require formal notice-and-comment rulemaking</li> </ul> <p> Although not limited to DTC platforms, the timing and substance of the RFI strongly suggest that manufacturer DTC arrangements are a central focus, particularly those designed to operate without federal program reimbursement and with independent prescribing safeguards.</p> <h3>B. Near-Term Outlook</h3> <p>The RFI reinforces that OIG views manufacturer DTC platforms as a durable and evolving market structure warranting a prospective regulatory framework. In contrast to prior OIG guidance, which has historically focused on identifying suspect arrangements and enforcement risk, the RFI reflects an uncommon willingness by the agency to consider whether and how compliant DTC models can be affirmatively accommodated within the AKS framework. Comparable prospective subregulatory guidance has been rare outside of exceptional contexts &mdash; most notably, OIG&rsquo;s COVID-era guidance issued to enable rapid deployment of care models and the agency&rsquo;s 2005 patient assistance program guidance released in advance of Medicare Part D implementation.<br /> <br /> While the RFI does not commit OIG to a particular regulatory outcome or timeline, its issuance alongside the DTC SAB supports the view that OIG is laying groundwork for longer-term regulatory clarity. Any future safe harbor or formal guidance would necessarily follow notice-and-comment rulemaking and could evolve based on stakeholder feedback.</p> <p>In the interim, manufacturers that structure DTC platforms consistent with the SAB&rsquo;s framework are well positioned &mdash; both to mitigate current enforcement-risk and to anticipate potential future rulemaking.</p> <h2>IV. TrumpRx and the Political Context of the Guidance</h2> <p>TrumpRx, a government website intended to route patients to manufacturer DTC offerings, launched on February 5, 2026. HHS&rsquo;s press release describes OIG&rsquo;s guidance as &ldquo;clearing the path&rdquo; for lower-cost prescription drugs.[[N: The White House, <a rel="noopener noreferrer" href="https://www.whitehouse.gov/fact-sheets/2026/02/fact-sheet-president-donald-j-trump-launches-trumprx-gov-to-bring-lower-drug-prices-to-american-patients/" target="_blank">Fact Sheet: President Donald J. Trump Launches TrumpTx.gov to Bring Lower Drug Prices to American Patients</a> (Feb. 5, 2026).]] Thus, the guidance appears designed, in part, to articulate the conditions under which manufacturer participation in TrumpRx could proceed without immediate enforcement action.<br /> <br /> However, OIG stopped short of endorsing TrumpRx or approving any specific platform, instead reiterating that compliance turns on individual facts and circumstances.</p> <h2>V. Congressional Pushback: The Durbin/Warren/Welch Letter</h2> <h3>A. Overview of the Letter</h3> <p>On January 29, 2026, Senators Durbin, Warren, and Welch sent a detailed letter to the HHS Inspector General (Senate Letter) expressing concern that OIG&rsquo;s guidance fails to adequately address whether TrumpRx-linked DTC platforms comply with federal law, including the AKS. The letter frames the guidance as insufficiently protective, arguing that it leaves unresolved core legal and policy concerns while enabling a high-profile government initiative.</p> <h3>B. Independence of Prescribers</h3> <p>A central theme of the Senate Letter is skepticism about whether prescriptions issued through manufacturer-affiliated telehealth vendors can be considered &ldquo;independent&rdquo; for purposes of the AKS analysis set forth in the SAB. In support of that skepticism, the Senators invoke previous concerns they raised with manufacturers about DTC telehealth arrangements. Specifically, they question whether manufacturer-supported platforms create incentives favoring certain prescriptions or limit the depth of clinical encounters. <br /> <br /> The Senate Letter does not make independent factual findings regarding those arrangements, nor does it allege that the cited practices were unlawful. Instead, it asks how OIG intends to evaluate and ensure that prescriptions generated through TrumpRx-linked platforms satisfy the independence criterion articulated in the SAB and comply with the AKS.</p> <h3>C. Telehealth Fraud and Prior OIG Warnings</h3> <p>The letter explicitly mentions OIG&rsquo;s 2022 Special Fraud Alert on telehealth arrangements, noting that many characteristics flagged in that alert appear present in contemporary DTC models. The Senate Letter asks whether and how OIG will vet manufacturer-telehealth relationships, evaluate compliance with prior fraud alerts, and prevent the reemergence of telehealth schemes previously associated with fraudulent Medicare billing.<br /> <br /> In addition, the Senate Letter also raises concerns about downstream federal reimbursement &mdash; particularly for drugs that require titration or long-term maintenance therapy &mdash; as well as DTC advertising, potential steering toward preferred manufacturers or products on TrumpRx, and a lack of transparency regarding vendor relationships and potential conflicts of interest.</p> <h2>VI. Conclusion and Practical Takeaways</h2> <p>OIG&rsquo;s January 2026 guidance is the most detailed articulation yet of how it will analyze manufacturer DTC prescription drug platforms under the AKS. This guidance provides manufacturers an actionable framework to structure DTC models in a manner that mitigates AKS risk. At the same time, stakeholders should recognize the scope and limits of the current guidance and the possibility of potential future rulemaking indicated by the concurrent issuance of an RFI. The SAB focuses primarily on federal fraud and abuse considerations under the AKS and does not address all potential legal risks associated with DTC platforms. <br /> <br /> Please consult with your Arnold &amp; Porter relationship partner or any member of our <a href="https://www.arnoldporter.com/en/services/capabilities/practices/life-sciences-and-healthcare-regulatory">Life Sciences &amp; Healthcare Regulatory</a> practice for any questions about the potential limitations on the scope of this guidance. </p> <p>We will continue to monitor developments closely and are available to assist clients in assessing and structuring DTC, telehealth, and cash-pay models in light of this evolving landscape.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{98ECEE78-495D-4550-BD69-710631B998D4}https://www.arnoldporter.com/en/perspectives/events/2026/02/antitrust-2026-and-beyond-a-global-outlook-on-competition-enforcement-part-1David Emanuelsonhttps://www.arnoldporter.com/en/people/e/emanuelson-daviddavid.emanuelson@arnoldporter.comSonia Kuester Pfaffenrothhttps://www.arnoldporter.com/en/people/p/pfaffenroth-soniasonia.pfaffenroth@arnoldporter.comMatthew Tabashttps://www.arnoldporter.com/en/people/t/tabas-matthewmatthew.tabas@arnoldporter.comJoin members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world.Tue, 10 Feb 2026 00:00:00 -0600<p>Join members of Arnold &amp; Porter&rsquo;s Antitrust/Competition practice for a four-part webinar series exploring the shifting competition enforcement landscape in the United States and around the world. We will examine the most significant antitrust developments of 2025, assess how the new U.S. administration has reshaped enforcement priorities, and analyze how international antitrust authorities are expanding their reach. For businesses operating globally, these converging forces are creating a regulatory environment that is more complex, more fragmented, and demands closer attention than ever.</p> <p>Featuring partners and counsel from our U.S., London, and Brussels offices, this series will provide a forward-looking assessment of where antitrust enforcement is headed across key areas, including mergers, cartel and criminal enforcement, and litigation. Our lawyers will offer practical insights to help businesses understand recent developments, anticipate risks, align strategy, and navigate competition issues in 2026 and beyond.</p> <h2>Part I: Competition Policy Under the Trump Administration: What Has Changed &mdash; and What Hasn&rsquo;t</h2> <p>This session will examine the Trump administration&rsquo;s approach to antitrust enforcement and its implications for businesses today. Our panel will discuss which Biden-era mergers and conduct policies have been retained or abandoned, as well as how the administration&rsquo;s enforcement priorities align with or diverge from those of global competition authorities. The discussion will conclude with a look at where antitrust policy in the U.S. is headed in the coming years.</p> <h2>Upcoming Webinars</h2> <p> <strong>Part II: Mergers &amp; Acquisitions &mdash; Navigating Deal Risk in a Shifting Global Enforcement Environment<br /> </strong>Thursday, February 19 | 11 a.m.-noon ET</p> <p>This program will examine recent U.S. and global antitrust developments affecting M&amp;A activity, with a focus on what dealmakers should expect going forward. Drawing on recent challenges and regulatory actions, our panel will discuss evolving enforcement trends, procedural and substantive risk, and the practical impact of the administration change on transaction strategy. We will also offer perspectives from both the EU and UK on cross-border transactions and coordination among competition authorities, helping companies better assess and manage global deal risk.</p> <p><a href="/en/people/g/gleklen-jonathan">Jonathan Gleklen</a> | Partner<br /> <a href="/en/people/e/efron-william-hallett">William Efron</a>&nbsp;| Partner<br /> <a href="/en/people/h/harik-yasmine">Yasmine Harik</a>&nbsp;| Partner<br /> <a href="/en/people/f/frediani-zeno">Zeno Frediani</a>&nbsp;|Partner</p> <p><strong>Part III: Cartel and Criminal Enforcement &mdash; Emerging Risks and Global Coordination</strong><br /> Wednesday, February 25 | 11 a.m.-noon ET</p> <p>Our speakers will provide an overview of the current landscape of antitrust cartel enforcement, highlighting recent investigations, policy developments, and enforcement trends in the U.S. and in Europe. The discussion will focus on current enforcement trends, changes in agency leadership and priorities, managing differences across global jurisdictions, and steps companies can take to proactively identify and mitigate emerging risks.</p> <a href="/en/people/g/geverola-andre">Andre Geverola</a>&nbsp;| Partner<br /> <a href="/en/people/g/gutermuth-axel">Axel Gutermuth</a>&nbsp;| Partner<br /> <a href="/en/people/p/pizzetti-ludovica">Ludovica Pizzetti</a>&nbsp;|Counsel<br /> <p> </p> <p> <strong>Part IV: Antitrust Litigation &mdash; Preparing for the Next Wave of Disputes<br /> </strong> Tuesday, March 10 | 11 a.m.-noon ET</p> <p>In the final session, Arnold &amp; Porter&rsquo;s antitrust litigators will analyze key litigation trends shaping the antitrust landscape. The panel will discuss recent case law, evolving theories of harm, and the potential impact of regulatory and enforcement shifts on private and government litigation. With insights from both U.S. and European perspectives, this program will help businesses prepare for future disputes and navigate increasingly complex antitrust litigation risks.</p> <a href="/en/people/s/shores-laura">Laura Shores</a>&nbsp;| Partner<br /> <a href="/en/people/a/asimow-daniel-b">Daniel Asimow</a>&nbsp;| Partner<br /> <a href="/en/people/b/brown-alastair">Alastair Brown</a>&nbsp;| Partner<br />{0F76828F-F358-4FC8-A9E6-531296703321}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/cost-benefit-analysis-in-clean-air-act-rulemakingJonathan S. Martelhttps://www.arnoldporter.com/en/people/m/martel-jonathanjonathan.martel@arnoldporter.comCharlie Birkelhttps://www.arnoldporter.com/en/people/b/birkel-charliecharlie.birkel@arnoldporter.comChristopher Josephhttps://www.arnoldporter.com/en/people/j/joseph-christopherchristopher.joseph@arnoldporter.comIn recent weeks, reactions of outrage have met a policy shift tucked into the Environmental Protection Agency (EPA)&rsquo;s routine January 15, 2026 final rule amending New Source Performance Standards (NSPS) emissions standards for stationary combustion turbines and stationary gas turbines under a review of stringency that the Clean Air Act requires EPA to undertake every eight years. 91 Fed. Reg. 1,910 (Jan 15, 2026). In short, EPA explained in the preamble to the rule that its longstanding approach of comparing the costs of controlling emissions to the monetized benefits of avoided health impacts communicated greater certainty than was warranted. EPA said it would stop monetizing such benefits while it considered alternative techniques, though it would still quantify the emissions reductions regulations would achieve.Tue, 10 Feb 2026 00:00:00 -0600<p>In recent weeks, reactions of outrage have met a policy shift tucked into the Environmental Protection Agency (EPA)&rsquo;s routine January 15, 2026 final rule amending New Source Performance Standards (NSPS) emissions standards for stationary combustion turbines and stationary gas turbines under a review of stringency that the Clean Air Act requires EPA to undertake every eight years. 91 Fed. Reg. 1,910 (Jan. 15, 2026). In short, EPA explained in the preamble to the rule that its longstanding approach of comparing the costs of controlling emissions to the monetized benefits of avoided health impacts communicated greater certainty than was warranted. EPA said it would stop monetizing such benefits while it considered alternative techniques, though it would still quantify the emissions reductions regulations would achieve. <br /> <br /> The criticism has been fierce. &ldquo;Trump&rsquo;s E.P.A. Has Put a Value on Human Life: Zero Dollars,&rdquo; proclaimed <em>The New York Times</em>.[[N: Maxine Joselow, <a rel="noopener noreferrer" href="https://www.nytimes.com/2026/01/21/climate/epa-human-life-value.html" target="_blank">Trump&rsquo;s E.P.A. Has Put a Value on Human Life: Zero Dollars</a>, N.Y. Times (Jan. 21, 2026).]] A law school professor asserted that &ldquo;[t]he new, nihilistic E.P.A. position is that environmental safeguards have essentially no benefits.&rdquo;[[N: Richard L. Revesz, <a href="https://www.nytimes.com/2026/01/26/opinion/epa-air-pollution-asthma-deaths.html">The Trump Administration Now Thinks Clean Air Is Worthless</a>, N.Y. Times (Jan. 26, 2026).]] The move was called a &ldquo;dangerous abdication,&rdquo;[[N: <a rel="noopener noreferrer" href="https://www.nbcnews.com/science/environment/epa-stop-calculating-deaths-avoided-health-care-savings-air-pollution-rcna254021" target="_blank">EPA to Stop Calculating Deaths Avoided and Health Care Savings From Air Pollution Rules</a>, NBC News (source: Associated Press) (Jan. 13, 2026).]] &ldquo;morally wrong,&rdquo;[[N: Michelle A. Williams, <a rel="noopener noreferrer" href="https://www.statnews.com/2026/02/02/epa-value-statistical-life-public-health-betrayal/" target="_blank">The EPA Just Erased a Century of Public Health Progress</a>, STAT (Feb. 2, 2026).]] and &ldquo;repulsive.&rdquo;[[N: Rhian Lubin, <a rel="noopener noreferrer" href="https://www.yahoo.com/news/articles/trump-team-accused-putting-zero-152759361.html?guccounter=1" target="_blank">Trump Team Accused of Lowering the Value of a Human Life From Millions to &lsquo;Zero&rsquo; Dollars: Report</a>, Yahoo News (Jan. 21, 2026).]] The Harvard School of Public Health warned of serious health consequences.[[N: Karen Feldscher,<a rel="noopener noreferrer" href="https://hsph.harvard.edu/news/epa-will-no-longer-consider-health-related-monetary-benefits-of-reducing-air-pollution/" target="_blank"> EPA Will No Longer Consider Health-Related Monetary Benefits of Reducing Air Pollution</a>, Harvard T.H. Chan Sch. of Pub. Health (Jan. 15, 2026).]]<br /> <br /> Readers might wonder, is EPA now saying no costs for controlling air emissions can be justified? Is EPA really prepared to throw out all Clean Air Act standards because no costs or burdens are worthwhile? In short, the answer is no. Just as the current administration maintains that prior EPA rules may have exaggerated to the public the monetary benefits of its emissions regulations, the current criticism is more political than rooted in the specific law governing air pollution regulation. The administration&rsquo;s change is no doubt consequential in how EPA broadly shapes its policy priorities and objectives &mdash; and potentially ripe for scrutiny from experts in the evaluation and comparison of the costs and benefits of regulations &mdash; but it should not be confused with a rewriting of the Clean Air Act requirements for agency decision-making.<br /> <br /> EPA&rsquo;s policy shift relates to a technocratic practice of analyzing costs and benefits of all federal regulations with major impacts on the U.S. economy established by executive orders dating to the Carter and Reagan administrations, under the direction of the Office of Management and Budget (OMB). Those analyses stand quite apart from EPA&rsquo;s primary job of adopting air emissions regulations according to factors established by Congress in the text of the Clean Air Act. The Clean Air Act that Congress enacted in 1970, and comprehensively revised in 1977 and 1990, directs EPA to establish air pollution regulations without weighing industry costs against public monetized health benefits. An inherently political body, Congress perhaps understood that our society recoils from putting a price on health and life, especially in prospective regulation. <br /> <br /> We do not like the notion that &mdash; at a certain point &mdash; it costs too much for industry to bear additional costs to avoid causing people illness or death. Indeed, headlines mirroring those elicited by the Trump administration have greeted prior attempts to put a number on the value of a human life: &ldquo;What&rsquo;s a Life Worth? Under the Reagan Administration, It May Be Less Than You Thought,&rdquo; announced <em>The Washington Post</em> in 1985 when that administration&rsquo;s demands threatened workplace safety regulations.[[N: Pete Earley, <a rel="noopener noreferrer" href="https://www.washingtonpost.com/archive/lifestyle/magazine/1985/06/09/what-s-a-life-worthunder-the-reagan-administration-it-may-be-less-than-you-thought/34fcf7a3-1112-4e13-8c72-ba82ed2d19a0/" target="_blank">What&rsquo;s a Life Worth? Under the Reagan Administration, It May Be Less Than You Thought</a>, Wash. Post (June 8, 1985).]] Understanding that monetizing human health and life in this way is politically vexing and potentially disabling, Congress largely chose to avoid it. Public health studies have concluded that the Clean Air Act has achieved unparalleled public health benefits and has imposed high costs to achieve those benefits, all without requiring the kind of comparison of costs to monetized health benefits that the commentators suggest is so important. As such, EPA&rsquo;s Clean Air Act regulations have been the most litigated in the courts of appeals and Supreme Court of any environmental statute, in which cases the courts have at times emphasized the importance of cost considerations but repeatedly affirmed Congress&rsquo;s directives to draw lines without weighing costs and public health benefits. After a half-century of public health achievements, the more important question is how to move forward. As large gains have been achieved and incremental improvements come at increasing costs, and EPA grapples with reliance on the Clean Air Act to tackle climate change, the place of cost-benefit analysis in air pollution regulation warrants more transparent consideration and debate.</p> <h2> What Did EPA Do in the Turbines NSPS Final Rule? </h2> <p> New Source Performance Standards are basic federal emissions standards that EPA sets under Section 111 of the Clean Air Act for sources of air pollution. Under Section 111(b), EPA establishes a list of categories and subcategories of sources that, in the EPA Administrator&rsquo;s judgment, &ldquo;cause[], or contribute[] significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.&rdquo; In listing the categories and subcategories and the relevant pollutants, EPA is not weighing costs of emissions controls against benefits. The question is simply whether the emissions pose a danger to public health or welfare. Once EPA establishes the list, it then must set a federal &ldquo;standard of performance&rdquo; for new sources under Section 111(b), and may also set standards for existing sources under Section 111(d) that states are to implement. Key here is the definition of &ldquo;standard of performance&rdquo; to mean a standard that &ldquo;reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) has been adequately demonstrated.&rdquo;<br /> <br /> Critically, the analysis is technology-based, not health-based. The best system of emission reduction (BSER) involves comparing available technologies to determine which is &ldquo;best,&rdquo; and then deriving from that technology an &ldquo;achievable&rdquo; emissions limit. It does not involve weighing the costs of achieving the air emissions limit against the public health benefits of reducing the air pollution. (Non-air quality health and environmental impacts are a consideration in weighing technologies against each other.) Recognizing that technology advances over time, Congress directed in Section 111(b) that EPA revisit the NSPS every eight years.<br /> <br /> The U.S. Court of Appeals for the District of Columbia Circuit held soon after enactment of the Clean Air Act in <em>Portland</em> <em>Cement Ass&rsquo;n v. Ruckelshau</em>s, 486 F.2d 375, 387 (D.C. Cir. 1973), that the consideration of &ldquo;cost&rdquo; does not require EPA to prepare &ldquo;a quantified cost-benefit analysis, showing the benefit to ambient air conditions as measured against the cost of the pollution devices.&rdquo; This interpretation was authored by Judge Harold Leventhal &mdash; a titan of administrative law &mdash; who recognized that imposing such a requirement would hamstring the agency. Noting that such a strict requirement would conflict with the &ldquo;time constraints&rdquo; imposed by Congress for EPA&rsquo;s first NSPS, Judge Leventhal also identified &ldquo;[t]he difficulty, if not impossibility, of quantifying the benefit to ambient air conditions.&rdquo; Id. Overall, the Washington, D.C. Circuit has read Section 111 as giving &ldquo;EPA broad discretion to weigh different factors in setting the standard&rdquo; for stationary sources. <em>Sierra Club v. Costle</em>, 657 F.2d 298, 321 (D.C. Cir. 1981).<br /> <br /> Consistent with this precedent, when EPA published its proposed amendment to the NSPS for turbines under the Biden administration, the agency made clear that its evaluation of costs was &ldquo;not intended to constitute or approximate a benefit-cost analysis in which monetized benefits are compared to costs.&rdquo; 89 Fed. Reg. 101306, 101312 (Dec. 13, 2024). Rather, EPA considered the reasonableness of costs associated with pollution controls and their &ldquo;cost effectiveness&rdquo; by comparing &ldquo;relative costs and outcomes (effects) of two or more options.&rdquo; Id.<br /> <br /> In the January 15 final rule, EPA amended the NSPS for stationary combustion and gas turbines pursuant to an eight-year review. EPA considered various technologies available to control nitrogen oxide (NOx) and sulfur dioxide (SO2), and established new subcategories for stationary combustion turbines, created a new subcategory for such turbines used in temporary applications, and addressed emissions limits according to the statutory directives. As in the proposal, EPA did not base any change in emissions limits on a weighing of costs against health benefits, or by assigning a zero value to health benefits in any such comparison. That would have been unlawful and would have opened EPA to obvious legal challenges to the validity of the rule in court. EPA did project emissions benefits from the final rule, estimating in a table the net annual tons of NOx emissions changes, estimating a range of 15 to 296 tons of reductions in 2032. 91 Fed. Reg. at 1,962, Table 2.</p> <h2> Why Then Was EPA Addressing the Weighing of Costs Against Public Health Benefits?</h2> <p> Following the Nixon administration&rsquo;s establishment of the modern Office of Management and Budget (OMB) almost contemporaneously with enactment of the Clean Air Act in 1970, President Carter first mandated through Executive Order 12,044 that OMB oversee analysis of compliance costs of &ldquo;major rules&rdquo; promulgated by federal agencies. But it was the Reagan administration that supercharged OMB oversight of agency rulemakings and established a centralized system of review predicated on cost-benefit analysis of major rules. President Reagan issued Executive Order 12,291 soon after taking office, which required agencies to prepare a Regulatory Impact Analysis (RIA) for every &ldquo;major rule&rdquo; (those with an &ldquo;annual effect on the economy of $100 million or more&rdquo;) that described costs; benefits, &ldquo;including any beneficial effects that cannot be quantified in monetary terms&rdquo;; and the net benefits of the rule, &ldquo;including an evaluation of effects that cannot be quantified in monetary terms.&rdquo; Exec. Order 12,291, 46 Fed. Reg. 13193, &sect; 3 (Feb. 17, 1981). Executive Order 12,291 stated plainly that &ldquo;[r]egulatory action shall not be undertaken unless the potential benefits to society for the regulation outweigh the potential costs to society,&rdquo; and barred agencies from publishing proposed or final major rules until OMB finished its review. Id.&sect;&sect; 2(b), 3(f)(1). It further empowered OMB to determine whether a proposed action constituted a &ldquo;major rule&rdquo; and to send the rule back to agencies to perform additional analysis. Id. &sect;&sect; 6(a)(1), (3).</p> <p>Beginning with Executive Order 12,291, a debate has raged over the imposition of cost-benefit analysis on agency regulations &mdash; particularly those implementing environmental, health, and safety measures. President Reagan&rsquo;s OMB was criticized for lacking transparency and was viewed as imposing a deregulatory agenda by delaying agency rulemakings and emphasizing costs to industry over benefits to the public. Some advocates for regulation argued that the monetization of health and environmental benefits was inimical to those interests and fundamentally incapable of capturing their true worth.<br /> <br /> Nonetheless, cost-benefit analysis became a bipartisan proposition in 1993 when President Clinton issued Executive Order 12,866, which preserved President Reagan&rsquo;s centralized system of review within OMB&rsquo;s Office of Information and Regulatory Affairs (OIRA) while imposing some reforms like disclosure requirements and deadlines for review. Exec. Order 12,866, 58 Fed. Reg. 51, 735, &sect; 6(b) (Sep. 30, 1993). President Clinton also took steps to ameliorate anti-regulatory bias in the cost-benefit comparison by providing that it include &ldquo;both quantifiable measures . . . and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider,&rdquo; including consideration of &ldquo;distributive impacts&rdquo; and &ldquo;equity.&rdquo; President Obama likewise preserved the OMB review process and supported the use of cost-benefit analysis. See Exec. Order 13,563, 76 Fed. Reg. 3821 (Jan. 18, 2011). Notwithstanding political divisions over cost-benefit analysis, notable progressive advocates have argued that, when properly applied, the framework can be a neutral tool that effectively allocates scarce resources and increases transparency in government decision-making.[[N: See, e.g., Cass R. Sunstein, The Cost-Benefit State 10 (2002) (arguing cost-benefit analysis can be &ldquo;a real-world instrument, designed to ensure that the consequences of regulation are placed before relevant officials and the public as a whole, and to focus attention on neglected problems, while at the same time ensuring that limited resources will be devoted to areas where they will do the most good.&rdquo;).]] And in recent years, traditional political divisions over the use of cost-benefit analysis have shifted, with progressives highlighting enormous estimated benefits of clean air regulations and conservatives questioning math that supports a pro-regulatory agenda.[[N: See, e.g., Jonathan S. Gould, <a rel="noopener noreferrer" href="https://www.yalejreg.com/nc/cost-benefit-analysis-in-polarized-times-by-jonathan-s-gould/" target="_blank">Cost-Benefit Analysis in Polarized Times</a>. Yale Journal on Regulation Notice &amp; Comment Blog (Feb. 22, 2024).]]<br /> <br /> The RIA process has not been limited to the Clean Air Act or public health regulation. And it is solely an Executive Branch initiative; it is not legislative and is not judicially enforceable. If an agency fails to prepare an RIA for a regulation as specified in the executive orders, the agency is answerable to the President and the regulation may get delayed. It is not a legal defect that courts will enforce, and it does not authorize agencies to avoid otherwise mandatory statutory obligations. See Exec. Order 12,866 &sect; 10 (&ldquo;This Executive order is intended only to improve the internal management of the Federal Government and does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.&rdquo;).<br /> <br /> Nevertheless, agencies, including EPA, have dutifully prepared RIAs and in so doing have developed cost-benefit analytic techniques over the last fifty years to monetize public health benefits of regulations in order to weigh them against costs on a common metric of dollars. EPA&rsquo;s policy shift in the turbines final rule was focused on this RIA analysis mandated by Executive Order 12,866, and not part of the legal justification for the standards EPA reviewed and amended. In performing this analysis, EPA quantified the number of turbines it projected would be affected, the tons of NOx emissions that would be reduced from 2025 to 2032, a projected increase in ammonia emissions (due to technology used to control NOx emissions), and a resulting increase in fine particulate matter. EPA also qualitatively described the health impacts of the air pollutants. EPA also explained the projected costs of the emissions controls and cost savings for more efficient turbines in a high-efficiency subcategory, as well as expected small market impacts. Where EPA deviated from past practice is that the agency declined to monetize the public health benefits of NOx and fine particulate matter reductions. In particular, EPA explained that the practice of monetizing benefits of avoided health impacts achieved through reductions in air pollution has given the public a false sense of precision beyond what the underlying science can fully support. As a result, EPA announced that it is no longer monetizing fine particulate and ozone pollution benefits and will consider various techniques to characterize uncertainties in such estimates, and will seek peer review for any such new methods consistent with OMB guidance.<br /> <br /> EPA&rsquo;s current retreat from monetizing public health benefits may well be debated by technocrats with expertise in assigning dollar values to mortality and morbidity, encompassing lost life years, hospital admissions and health care system expenditures, loss of worker productivity, asthma attacks, and the like. Whether such comparisons on a common dollar metric marshal public support for or resistance to EPA regulation may also be debated. How much does it matter whether EPA explains in its final rules that regulations to reduce air pollution cost X dollars compared to Y avoided deaths, as opposed to quantifying the value of those avoided deaths in dollars? What is not debatable is that such a dollar comparison is not the basis Congress established for EPA lawfully to consider in setting NSPS emissions limits or essentially all other Clean Air Act programs.</p> <h2> How Did Congress Direct EPA to Regulate in Other Clean Air Act Programs without Cost-Benefit Analysis?</h2> <p> At the core of the Clean Air Act, dating from 1970, are the National Ambient Air Quality Standards that establish health-based ambient limits for major air pollutants that many other requirements are then designed to achieve across the country by controlling emissions from various sources. The ambient standards themselves, however, are set irrespective of weighing costs against benefits. Section 108(a) requires EPA to identify air pollutants that are emitted by &ldquo;numerous or diverse&rdquo; sources and whose presence in the atmosphere &ldquo;may reasonably be anticipated to endanger public health or welfare.&rdquo; The agency must then publish air quality &ldquo;criteria&rdquo; for each listed pollutant that will &ldquo;accurately reflect the latest scientific knowledge useful in indicating the kind and extent of all identifiable effects on public health or welfare which may be expected from the presence of such pollutant in the ambient air.&rdquo; <br /> <br /> Using these criteria, Section 109(b) instructs EPA to establish ambient concentrations for those pollutants, &ldquo;the attainment and maintenance of which &hellip; are requisite to protect the public health&rdquo; with &ldquo;an adequate margin of safety.&rdquo; EPA has set such &ldquo;primary&rdquo; national ambient air quality standards(NAAQS) for six &ldquo;criteria air pollutants&rdquo;: ozone, particulate matter, carbon monoxide, sulfur dioxide, nitrogen dioxide, and lead. (&ldquo;Secondary&rdquo; NAAQS may also be established, aimed at non-health environmental impacts.) Title I of the Clean Air Act is organized around achieving these NAAQS, with states primarily responsible for designating areas within the state as attaining or not attaining the NAAQS, and adopting State Implementation Plans to attain and thereafter maintain them. The statute includes a variety of direct federal and mandatory state programs, of which the NSPS under Section 111 is just one component, aimed at supporting states in achieving the NAAQS. Further, the NAAQS are not static, but rather Section 109(d) directs EPA to consider new scientific information and reconsider the NAAQS every five years.<br /> <br /> Given the significance of the NAAQS in driving emissions reductions, with associated large costs to industry and public health benefits at stake, EPA&rsquo;s setting and subsequent ratcheting down of the NAAQS over the last half century has been hotly contested in EPA rulemaking and litigation challenging NAAQS revisions. In 2001, the Supreme Court definitively resolved in <em>Whitman v. American Trucking Association</em>, 531 U.S. 457 (2001), that the Clean Air Act&rsquo;s &ldquo;adequate margin of safety&rdquo; statutory directive prohibits EPA&rsquo;s consideration of costs when setting NAAQS. By statute, NAAQS are based on the &ldquo;maximum airborne concentration of a pollutant that the public health can tolerate,&rdquo; id. at 465, not a comparison of costs and monetized health benefits. The NAAQS provision requires EPA to set a standard that protects public health, regardless of any monetary or other valuation the agency might place on public health. <br /> <br /> Since the central premise of the NAAQS is that they must be set to drive down ambient air pollution to levels that are deemed safe without considering costs, other statutory programs aimed at achieving those standards likewise do not allow for weighing costs against public health benefits. After all, where Congress has directed EPA to ensure that the NAAQS are achieved, it would not make sense to impose costs that outweigh the public health benefits as a hurdle that must be cleared to impose emissions limits on particular types of sources. The costs of control options can be weighed against each other or in determining the feasibility of a particular control option, but weighing the costs against public health benefits is not relevant.<br /> <br /> Thus, like the NSPS, the statutory program in Title II of the Clean Air Act directing EPA to establish nationwide emissions standards for air pollutants from new cars, trucks, and off-road engines is fundamentally based on technological feasibility, rather than a comparison of costs and public health benefits. Section 202 does require EPA to consider the costs to industry in developing and applying the technology needed to reach a standard, and allow commensurate lead time. This cost comparison is between potential technologies, not between costs of compliance and public health benefits. See <em>NRDC v. EPA</em>, 655 F.2d 318 (D.C. Cir. 1981) (discussing costs of diesel particulate emissions control technology).<br /> <br /> Indeed, even outside of the NAAQS and supporting regulations to reduce &ldquo;criteria&rdquo; air pollutants, other Clean Air Act programs also steer clear of cost-benefit analysis as a basis for EPA standard-setting. One such program is Section 112 regulation of the many types of carcinogenic, mutagenic, and other hazardous air pollutants (HAPs), as distinct from the six criteria air pollutants. Under the 1970 statute, Section 112(a)(1) defined HAPs broadly to mean pollutants &ldquo;anticipated to result in an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness.&rdquo; For such pollutants, the original statute specified a similar approach as applies for the NAAQS: the statute directed EPA to set emissions standards for sources of HAPs to &ldquo;provide[] an ample margin of safety to protect the public health[.].&rdquo; The number and diversity of HAPs and sources of HAP emissions made this unwieldy for EPA. Too many chemicals met the statutory definition, analysis of emissions and risks for all of them was overwhelming, and many were so potent that the only acceptable standard to ensure an &ldquo;ample margin of safety&rdquo; seemed to be zero. As a result, EPA made little progress, promulgating only eight HAP standards by 1990.[[N: Mark W. Ciaravella, Regulation of Hazardous Air Pollutants Under Section 112 of the Clean Air Act Amendments of 1990, 15 Energy L.J. 485 (1994); see <em>NRDC v. EPA</em>, 824 F.2d 1146 (D.C. Cir. 1987).]]<br /> <br /> Even then, Congress&rsquo;s course correction in the 1990 amendments did not adopt cost-benefit analysis, which would have pit industry costs against monetized health benefits of reductions in serious illnesses such as cancer and birth defects. Instead, Congress listed 186 HAPs by statute, provided for additions to the list, and directed EPA to adopt standards in the first instance based on available technology to control emissions from various source categories, more similar to the NSPS and motor vehicles and engines standards. The 1990 amendments overhauled Section 112, removed the definition of hazardous air pollutant, introduced a list of HAPs, and instructed EPA to set standards at the &ldquo;maximum degree &hellip; achievable[.]&rdquo; More specifically, the amended Section 112(d) directs EPA emissions standards for the listed HAPs that must be as stringent as the best controlled similar source in each industry category. Selecting a &ldquo;maximum achievable control technology&rdquo; (MACT) does require the agency to compare costs &mdash; but only among available technologies, and not against monetized health benefits. <br /> <br /> Section 112 partially retained the &ldquo;ample margin of safety&rdquo; approach for HAPs that is similar to the &ldquo;adequate margin&rdquo; for NAAQS, but only in a follow-up requirement to address residual risk following the setting of technology-based standards. EPA has, in recent years, issued a few more stringent NESHAPs based on an ample margin of safety following residual risk review, but overall, the HAPs program remains predominantly driven by technology standards.[[N: See, e.g., National Emission Standards for Hazardous Air Pollutants: Ethylene Oxide Emissions Standards for Sterilization Facilities&mdash;Residual Risk and Technology Review, 89 Fed. Reg. 24090 (Apr. 5, 2024); New Source Performance Standards for the Synthetic Organic Chemical Manufacturing Industry and NESHAP for the Synthetic Organic Chemical Manufacturing Industry and Group I &amp; II Polymers and Resins Industry, 89 Fed. Reg. 42932 (May 16, 2024); National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units&mdash;Residual Risk and Technology Review (MATS Update), 89 Fed. Reg. 38508 (May 7, 2024).]]<br /> <br /> The phaseout of ozone-depleting substances (ODS) under Title VI of Clean Air Act is another example of a program that proceeds without cost-benefit analysis. That title required EPA to phase out chemicals &mdash; refrigerants and blowing agents &mdash; that were destroying the stratospheric ozone layer, consistent with U.S. obligations under the Montreal Protocol. This was a simple phase-out mandate, where alternative refrigerants had been developed. Under Section 606(a), EPA was empowered to accelerate the statutory phase-out schedules where scientific evidence indicates a need for faster action, technological advances make acceleration feasible, or the Montreal Protocol is modified to require faster phase-out. But the phaseout was mandatory; EPA had no power to slow the schedule in the face of high costs, or to make concessions that balance the phaseout's costs with public health benefits. Section 612 established the Significant New Alternatives Program (SNAP), which requires EPA to evaluate substitutes for ozone-depleting chemicals. Of note, Section 612(c) required EPA to promulgate rules making it unlawful to replace such ozone-depleting chemicals with a substitute that EPA determines &ldquo;may present adverse effects to human health or the environment, where the Administrator has identified an alternative to such replacement that (1) reduces the overall risk to human health and the environment; and (2) is currently or potentially available.&rdquo; Hence, even when expressly considering human health impacts, Congress&rsquo;s directive was to compare alternatives, not to weigh costs against monetized health benefits.</p> <h2> Does the Clean Air Act Require Consideration of Monetized Health Benefits Anywhere? </h2> <p> The most focused attention on comparison of costs and monetized health benefits in Clean Air Act regulation and litigation since Judge Leventhal&rsquo;s <em>Portland Cement</em> opinion in 1973 came in the Supreme Court case of <em>Michigan v. EPA</em>, 576 U.S. 743 (2015), concerning EPA regulation of hazardous air pollutants, and particularly mercury, from power plants. Given extensive other programs aimed at power plants, including the then-new acid rain program targeting sulfur dioxide emissions in the 1990 Amendments, Congress carved out a special provision to address HAPs from these plants in Section 112(n). There, Congress directed that several studies be undertaken, and then that EPA consider the results and &ldquo;shall&rdquo; regulate HAPs from power plants if it finds that &ldquo;regulation is appropriate and necessary.&rdquo; EPA determined to regulate without comparing costs and benefits, concluding that regulation was &ldquo;appropriate&rdquo; because mercury and other HAPs from power plants posed risks to human health and the environment, and controls were available to reduce the emissions; and regulation was &ldquo;necessary&rdquo; because the other regulation of power plants did not eliminate the risks. 77 Fed. Reg. 9330, 9363 (Feb. 16, 2012). Separately, in the regulatory impact analysis required by executive order, EPA calculated a cost of nearly $10 billion per year, public health benefits from HAP reductions of $4&ndash;6 million per year, and &ldquo;co-benefits&rdquo; of reducing particulate emissions at $37&ndash;90 billion per year. Id. at 9,306. <br /> <br /> The Supreme Court invalidated EPA&rsquo;s decision, holding that the &ldquo;appropriate and necessary&rdquo; test encompasses all relevant factors, and EPA, therefore, was required to consider costs among those factors. Justice Scalia&rsquo;s opinion makes the case for the technocratic logic underlying the Reagan and subsequent executive orders. The opinion emphasized not only the breadth of the &ldquo;appropriate and necessary&rdquo; language but also basic administrative law requirements to engage in &ldquo;reasoned decisionmaking,&rdquo; to follow a &ldquo;logical and rational&rdquo; process, and to act &ldquo;on a consideration of the relevant factors,&rdquo; 576 U.S. at 750 (citations omitted). Observing that &ldquo;EPA refused to consider whether the costs of its decision outweighed the benefits,&rdquo; id., Justice Scalia reasoned that &ldquo;[o]ne would not say that it is even rational, never mind &lsquo;appropriate,&rsquo; to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits&rdquo; and &ldquo;[n]o regulation is &lsquo;appropriate&rsquo; if it does significantly more harm than good.&rdquo; Id. at 752. Stating the case for cost-benefit analysis, the opinion elaborates: &ldquo;[R]easonable regulation ordinarily requires paying attention to the advantages and the disadvantages of agency decisions&rdquo; and &ldquo;reflects the reality that &lsquo;too much wasteful expenditure devoted to one problem may well mean considerably fewer resources available to deal effectively with other (perhaps more serious) problems.&rsquo;&rdquo; Id. at 752&ndash;53 (emphasis in original and citation omitted).<br /> <br /> Even with this full-throated case for cost-benefit analysis, Justice Scalia&rsquo;s opinion nevertheless stopped short of contradicting Judge Leventhal by requiring a comparison of costs and monetized health benefits. Asserting that &ldquo;[t]he Agency must consider cost&rdquo; before deciding whether regulation is &ldquo;appropriate and necessary,&rdquo; the opinion continued: &ldquo;We need not and do not hold that the law unambiguously required the Agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value. It will be up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost.&rdquo; Id. at 759. <br /> <br /> On remand, EPA proceeded to support its finding that HAP regulation of power plants was &ldquo;appropriate and necessary&rdquo; by taking into account a favorable comparison of monetized benefits at $37&ndash;90 billion (including the co-benefits of particulate reductions) against $10 billion in costs. 81 Fed. Reg. 24420 (April 25, 2016). <br /> <br /> To be sure, some eager readers of Justice Scalia&rsquo;s <em>Michigan</em> opinion have interpreted it to require some form of cost-benefit analysis &mdash; minimally, consideration of &ldquo;the advantages and the disadvantages&rdquo; &mdash; for any agency&rsquo;s rulemakings to pass muster.[[N: See, e.g., Cass R. Sunstein, <a rel="noopener noreferrer" href="https://www.bloomberg.com/opinion/articles/2015-07-07/thanks-justice-scalia-for-the-cost-benefit-state" target="_blank">Thanks, Justice Scalia, for the Cost-Benefit State</a>. Bloomberg (July 7, 2015).]] And some jurists have sought to apply <em>Michigan</em> that way.[[N: See <em>Mingo Logan Coal Co. v. EPA</em>, 829 F.3d 710, 733 (D.C. Cir. 2016) (Kavanaugh, J., dissenting) (&ldquo;[A]bsent a congressional directive to disregard costs, common administrative practice and common sense require an agency to consider the costs and benefits of its proposed actions, and to reasonably decide and explain whether the benefits outweigh the costs.&rdquo;); but see <em>Center for Biological Diversity v. EPA</em>, 141 F.4th 153, 172 (D.C. Cir. 2025) (rejecting &ldquo;a freestanding requirement that EPA balance the quantifiable costs and benefits&rdquo; in promulgating regulations under the renewable fuel standard program).]] Similarly, reactions to the Trump administration&rsquo;s recent announcement have emphasized <em>Michigan</em> and argued for the irrationality of EPA&rsquo;s sudden reversal and lopsided approach. A court may end up scrutinizing EPA&rsquo;s decision and reasoning under the Administrative Procedure Act&rsquo;s &ldquo;arbitrary and capricious&rdquo; standard, but the statutory language, structure and extensive case law make it highly unlikely that a court will conclude that monetized costs and benefits must be considered under Section 111.</p> <h2> So, What Has the Clean Air Act Achieved Without Cost-Benefit Analysis?</h2> <p> Largely sidestepping the fraught comparison of costs against monetized health benefits, the Clean Air Act has been remarkably successful at reducing air pollution. EPA&rsquo;s website touts various achievements under the Act.[[N: U.S. Env&rsquo;t Prot. Agency, <a rel="noopener noreferrer" href="https://www.epa.gov/clean-air-act-overview/progress-cleaning-air-and-improving-peoples-health" target="_blank">Progress Cleaning the Air and Improving People&rsquo;s Health</a> (Mar. 19, 2025), (last visited Jan. 28, 2026).]] According to the agency, between 1970 and 2020 combined emissions of common pollutants dropped by 78%. From the 1990 amendments to 2020, carbon monoxide fell 73%, nitrogen dioxide fell by 61%, ozone fell by 25%, sulfur dioxide fell by 91%, fine particles fell by 41% (from 2000), and lead fell by 86% (from 2010). Stationary sources now emit 1.5 million fewer tons of air pollutants per year than they did in 1990. Basically, all current-year on-road vehicles are 99% cleaner than 1970 models; several motor vehicle standards have tightened by over 90% since they were first enacted. This tremendous relief from high pre-1970 air pollution[[N: Karen Clay &amp; Edson R. Severnini, Clearing the Air: Historical Air Pollution and Health, National Bureau of Economic Research, The Reporter (No. 2, 2024), at 10&ndash;13.]] accompanied a near-tripling of U.S. GDP.[[N: Joseph E. Aldy et al., Looking Back at 50 Years of the Clean Air Act, 60 J. Econ. Literature 179, 179 (2022).]]<br /> <br /> Indeed, a 2019 review of economic literature found &mdash; despite the complexities of measuring the direct and indirect costs and benefits of the Act &mdash; &ldquo;a general consensus that the benefits of clean air legislation over the past fifty years are likely to have greatly exceeded the costs.&rdquo;[[N: Janet Currie &amp; Reed Walker,<a rel="noopener noreferrer" href="https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.33.4.3" target="_blank"> What Do Economists Have to Say about the Clean Air Act 50 Years after the Establishment of the Environmental Protection Agency?</a>, 33 J. Econ. Persp. 3, 22 (2019).]] Generally, economists have found that early compliance-cost forecasts often overshoot, and benefits sometimes cannot be fully evaluated until a program takes hold. Under the acid rain program, for example, electricity-generating units found cheaper compliance than anticipated by purchasing low-sulfur coal. And while the program&rsquo;s primary anticipated benefit was ecological (to curb the acidification of lakes in the Northeast), ultimately over ninety-five percent of the program&rsquo;s benefits were associated with human health benefits from reduced particulate matter. Such benefits might not necessarily appear in <em>ex ante</em> analysis, such as an RIA. Overall, EPA&rsquo;s technocratic comparisons in RIA analyses showing costs lower than monetized health benefits may provide political support for more stringent regulation. Likewise, EPA might prefer to avoid quantified comparisons of costs and monetized health benefits for regulatory rollbacks than those showing lost health benefits exceeding cost savings.</p> <h2> Conclusions</h2> <p> From air pollution and other environmental protection to safety regulations to tort law, unease with putting a price on health and life is not new in the law. From Judge Leventhal&rsquo;s 1973 observation of the challenges of quantifying the benefits of ambient air quality standards to Justice Scalia&rsquo;s 2015 insistence that weighing costs against benefits is fundamental to rational decision-making, there is an inherent tension between our expectation that government&rsquo;s job is to protect us against harm caused by others and a technocratic recognition that the costs of preventing all such harm might be too high. Notwithstanding the clamor over EPA&rsquo;s suspension of monetizing health benefits in its recent Clean Air Act rulemaking, Congress has directed EPA to set air pollution standards under that statute without comparing costs to monetized health benefits. Instead, the statute functions by directing EPA to set ambient standards that are safe without regard to cost, and then to set requirements for sources of pollution by comparing costs and feasibility of various technologies to achieve the standards most cost-effectively without revisiting the ambient goal. By all accounts, the statute has been spectacularly successful in protecting public health at an acceptable cost to society. To be sure, starting from a blank slate without national regulation of air pollution, it may be unsurprising that such gains could be achieved cost-effectively. As further improvements may be more incremental and come at higher costs, or involve altogether different challenges such as climate change, the weighing of costs against monetized benefits may warrant renewed consideration.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{99B03E65-AD39-418F-810F-CACB2321F827}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/2025-regulations-regarding-the-section-892-tax-exemptionDavid A. Sausenhttps://www.arnoldporter.com/en/people/s/sausen-david-adavid.sausen@arnoldporter.comSean Kavanaughhttps://www.arnoldporter.com/en/people/k/kavanaugh-seansean.kavanaugh@arnoldporter.comMJ Wanghttps://www.arnoldporter.com/en/people/w/wang-mjmj.wang@arnoldporter.com<p>On December 15, 2025, the U.S. Department of the Treasury and the Internal Revenue Service published final regulations and proposed regulations regarding the Section 892 tax exemption for foreign governments. This Advisory provides a high-level summary of the final and proposed regulations.</p>Mon, 09 Feb 2026 00:00:00 -0600<p> </p> <p>On December 15, 2025, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) published final regulations (Final Regulations) and proposed regulations (Proposed Regulations) regarding the Section 892 tax exemption for foreign governments.[[N:Unless otherwise indicated, all references to a &ldquo;Section&rdquo; refer to a section of the U.S. Internal Revenue Code of 1986, as amended (the Code).]] This Advisory provides a high-level summary of the Final Regulations and the Proposed Regulations.</p> <h2>I.&nbsp; Background</h2> <p>Under Section 892, income of foreign governments received from investments in the United States in stocks, bonds, or other domestic securities owned by such foreign governments, or financial instruments held in the execution of governmental financial or monetary policy, or interest on deposits in banks in the United States of moneys belonging to such foreign governments, is not included in gross income and is exempt from U.S. federal income tax.</p> <p>This exemption does not apply, however, to any income that is (1) derived from the conduct of any commercial activity (whether within or outside the United States), (2) received by a controlled commercial entity (a CCE) or received (directly or indirectly) from a CCE, or (3) derived from the disposition of any interest in a CCE.</p> <p>For purposes of this rule, a CCE is any entity engaged in commercial activities (whether within or outside the United States) if the foreign government (1) holds (directly or indirectly) any interest in such entity which (by value or voting interest) is 50% or more of the total of such interests in such entity, or (2) holds (directly or indirectly) any other interest in such entity which provides the foreign government with effective control of such entity.</p> <h2>II.&nbsp; Final Regulations</h2> <h3>a.&nbsp; Defining Commercial Activities</h3> <p>The Final Regulations adopt a broad definition of &ldquo;commercial activities.&rdquo; Under the Final Regulations, all activities (whether conducted within or outside the United States) that are ordinarily conducted for the current or future production of income or gain are treated as commercial activities. The Final Regulations provide that only the nature of the activity, and not the purpose or motivation for conducting the activity, is determinative of whether the activity is commercial in character. In addition, the Final Regulations provide that activities that constitute a trade or business for purposes of Section 162, or that constitute (or would constitute if undertaken in the United States) a trade or business in the United States for purposes of Section 864(b), are treated as commercial activities, unless an exception applies. Furthermore, the preamble to the Final Regulations explains that &ldquo;commercial activities&rdquo; has a different and broader meaning than &ldquo;trade or business&rdquo; under Sections 162 and 864 and, therefore, may encompass activities that do not rise to the level of a trade or business for purposes of determining the &ldquo;effectively connected income&rdquo; of a non-U.S. corporation.</p> <h4 style="margin-left: 40px;">i.&nbsp; Investing and Trading in Financial Instruments</h4> <p style="margin-left: 40px;">The Final Regulations expand the exceptions under which investing and trading in &ldquo;financial instruments&rdquo; are not treated as commercial activities by revising the definition of &ldquo;financial instrument&rdquo; to include derivatives, which the Final Regulations define in a manner substantially similar to the definition in the derivatives trading safe harbor in the proposed Treasury regulations under Section 864(b).</p> <h4 style="margin-left: 40px;">ii.&nbsp; Holding of Non-Functional Currency</h4> <p style="margin-left: 40px;">The Final Regulations clarify that the exception under which the holding of bank deposits is not a commercial activity applies to bank deposits in any currency.</p> <h4 style="margin-left: 40px;">iii.&nbsp; Receipt of Certain Fee Income</h4> <p style="margin-left: 40px;">The Treasury and the IRS rejected a commentator&rsquo;s recommendation to exclude from commercial activities the receipt of certain fee income as a passive investor in a private equity or private credit fund.</p> <p style="margin-left: 40px;">The preamble to the Final Regulations provides that, to the extent the commercial activities of a fund sponsor are attributable to a foreign government investor in a privately managed fund through a partnership, or on the basis of agency, the foreign government investor is considered to conduct commercial activity unless an exception applies (for example, the qualified partnership interest exception under the Final Regulations (the Qualified Partnership Interest Exception), discussed further below). The preamble further provides that this analysis applies without regard to whether the foreign government actually or constructively receives or otherwise shares in income labeled as a fee. The preamble also provides that the Final Regulations do not treat the receipt of any particular type of fee as alone determinative of whether a foreign government conducts commercial activities.</p> <h4 style="margin-left: 40px;">iv.&nbsp; Partnership Equity Interests</h4> <p style="margin-left: 40px;">The Final Regulations provide that merely holding or trading partnership equity interests for one&rsquo;s own account, other than as a dealer, is not, by itself, commercial activity. The preamble to the Final Regulations provides, however, that holding equity interests in a partnership results in commercial activity if the partnership conducts commercial activity that is attributed to the holder.</p> <h3>b.&nbsp; U.S. Real Property Holding Corporation (USRPHC) Per Se Rule</h3> <p>The 1988 temporary Treasury regulations under Section 892 provide that a USRPHC, including a non-U.S. corporation that would be a USRPHC if it were a U.S. corporation, is treated as engaged in commercial activity and, therefore, as a CCE, if a foreign government meets certain ownership or control thresholds with respect to that USRPHC or non-U.S. corporation (the USRPHC Per Se Rule).</p> <p>The 2022 proposed Treasury regulations under Section 892 (which the preamble to such regulations provides may be relied on for taxable years ending on or after December 28, 2022) include an exclusion from the USRPHC Per Se Rule for a corporation that is a USRPHC solely by reason of its direct or indirect ownership interest in one or more other corporations that are not controlled by the foreign government (the Minority Interest Exception). Based on this exception, a foreign government could hold such minority interests through a U.S. holding company without that U.S. holding company being treated as a CCE.</p> <p>The Final Regulations limit the USRPHC Per Se Rule to U.S. corporations. As such, a non-U.S. corporation is no longer treated as a CCE merely because it is a USRPHC. This change limits the utility of the Minority Interest Exception, which now solely benefits U.S. corporations seeking to avoid CCE status.</p> <p>Nevertheless, the Final Regulations retain the Minority Interest Exception, with certain clarifying modifications. The preamble to the Final Regulations acknowledges that the Treasury and the IRS did so in light of foreign governments&rsquo; reliance on the Minority Interest Exception in entering into long-term minority interest investments in USRPHCs through U.S. holding companies.</p> <h3>c.&nbsp; Qualified Partnership Interest Exception</h3> <p>Consistent with the 2011 proposed Treasury regulations under Section 892, the Final Regulations provide that a partnership&rsquo;s commercial activities generally are attributable to its partners. The 2011 proposed Treasury regulations include an exception under which an entity not otherwise engaged in commercial activities is not treated as engaged in commercial activities solely by reason of being a limited partner in a limited partnership. The Final Regulations expand this limited partner exception and rename it the &ldquo;Qualified Partnership Interest Exception.&rdquo;</p> <p>Under the Qualified Partnership Interest Exception, an entity that is not otherwise engaged in commercial activities will not be treated as engaged in commercial activities solely because it holds a qualified partnership interest (QPI) in a partnership. An interest may qualify as a QPI under either a general test or a safe harbor, both of which are discussed further below.</p> <p>Under the general test, an interest is a QPI if the holder (1) has limited liability, (2) does not possess the legal authority to bind, or to act on behalf of, the partnership, (3) does not control the partnership (i.e., does not directly or indirectly hold 50% or more, by vote or value, of the interests in the partnership, or otherwise have &ldquo;effective control&rdquo; of the partnership), and (4) does not have rights to participate in the management and conduct of the partnership&rsquo;s business at any time during the partnership&rsquo;s taxable year. With respect to the fourth requirement, the Final Regulations provide that such rights generally do not include participation rights with respect to monitoring or protecting the partner&rsquo;s capital investment in the partnership. The Final Regulations further provide that such rights may include oversight and supervision rights in the case of major strategic decisions, such as the admission or expulsion of a partner, the hiring or firing of key strategic personnel, amendment of the partnership agreement, dissolution, merger, or conversion of the partnership, unusual and non-ordinary course deviations from previously determined investment parameters, extension of the term of the partnership&rsquo;s governing agreement, and disposition of all or substantially all of the partnership&rsquo;s property outside of the ordinary course of the partnership&rsquo;s business.</p> <p>As noted above, the Final Regulations also adopt a safe harbor for holders of <em>de minimis</em> interests. Under this safe harbor, an interest may qualify as a QPI if, at all times during the partnership&rsquo;s taxable year, the holder (1) has limited liability, (2) does not possess the legal authority to bind, or to act on behalf of, the partnership, (3) is not the partnership&rsquo;s managing partner, managing member, or in an equivalent role under applicable law, and (4) does not own, directly or indirectly, more than 5% of either the partnership&rsquo;s capital interests or the partnership&rsquo;s profits interests.</p> <p>With respect to foreign governments that hold more than one interest in a partnership, the Final Regulations provide that, if a holder directly or indirectly holds more than one partnership interest, the interests are aggregated for purposes of the &ldquo;does not participate in the management and conduct of the partnership&rsquo;s business&rdquo; requirement.</p> <p>With respect to tiered partnerships, the Final Regulations provide that, if an upper-tier partnership holds no interest in a lower-tier partnership other than a QPI, the lower-tier partnership&rsquo;s commercial activities will not be attributed to the upper-tier partnership.</p> <h3>d.&nbsp; Inadvertent Commercial Activity Exception</h3> <p>The Final Regulations generally retain the exception under which inadvertent commercial activities do not, by themselves, cause an entity to be treated as engaged in commercial activities (the Inadvertent Commercial Activity Exception).</p> <p>With respect to the requirement that a failure to avoid conducting a commercial activity be reasonable, the Final Regulations provide examples of facts and circumstances that may be considered in determining whether a written policy or operational procedure is considered adequate.</p> <p>The 2011 proposed Treasury regulations provide that a failure to avoid commercial activity will not be considered reasonable if the entity&rsquo;s management-level employees have not undertaken reasonable efforts to establish, follow, and enforce written policies and operational procedures. The Final Regulations provide that either employees of the entity claiming the Inadvertent Commercial Activity Exception or employees of any of its controlling entities may be designated to establish, follow, and enforce the adequate written policies and operational procedures to appropriately monitor the worldwide activities of the entity claiming the Inadvertent Commercial Activity Exception.</p> <p>The Final Regulations retain a safe harbor from the 2011 proposed Treasury regulations, with certain modifications. Under this safe harbor, provided that adequate written policies and operational procedures are in place to monitor the tested entity&rsquo;s worldwide activities, the tested entity&rsquo;s failure to avoid commercial activity during the taxable year will be considered reasonable if <strong><span style="text-decoration: underline;">both</span></strong>:</p> <p style="margin-left: 40px;">(1) The value of the assets used in, or held for use in, all commercial activity does not exceed 5% of the total value of the assets reflected on the tested entity&rsquo;s balance sheet for the taxable year</p> <p style="margin-left: 40px;">(2) The income earned by the tested entity from commercial activity does not exceed 5% of the tested entity&rsquo;s gross income as reflected on its income statement for the taxable year</p> <p>To qualify for the Inadvertent Commercial Activity Exception, the commercial activity must be promptly cured. Under the 2011 proposed Treasury regulations, a cure is considered prompt if the entity engaging in inadvertent commercial activity discontinues the activity within 120 days of discovering it. The Final Regulations extend the cure period to 180 days from the date of the discovery by the employees who are responsible for monitoring and reviewing the entity&rsquo;s commercial activity.</p> <h3>e.&nbsp; Annual CCE Determination</h3> <p>The Final Regulations generally retain the annual CCE determination rule from the 2011 proposed Treasury regulations. The Final Regulations clarify that this annual determination is made by reference to the entity&rsquo;s taxable year. In addition, for purposes of determining whether an entity is engaged in commercial activities during its taxable year, the Final Regulations provide that the entity&rsquo;s activities during its immediately preceding taxable year will be taken into account to the extent relevant in characterizing the entity&rsquo;s activities in the current taxable year.</p> <p>Under the Final Regulations, if the taxable year of a corporation engaged in commercial activities is terminated as a result of an acquisition to which Section 381(a) applies (other than a complete liquidation under Section 332(a)), the acquiring corporation generally does not succeed to the distributor or transferor corporation&rsquo;s commercial activities for the acquiring corporation&rsquo;s applicable taxable year, provided that, after the acquisition, the acquiring corporation is not the entity that directly carries on those commercial activities. However, if the corporation engages in an acquisition to which Section 381(a) applies with another corporation controlled by the same foreign government, the distributor or transferor corporation&rsquo;s commercial activities will cause the acquiring corporation to be treated as a CCE for the acquiring corporation&rsquo;s taxable year in which the acquisition occurred.</p> <h2>III.&nbsp; Proposed Regulations</h2> <h3>a.&nbsp; Definition of Controlled Entity</h3> <p>The Proposed Regulations clarify that an entity that is a partnership for U.S. federal income tax purposes is not a controlled entity.</p> <h3>b.&nbsp; Acquisition of Debt</h3> <p>The Proposed Regulations provide, as a general rule, that any acquisition of debt is treated as a commercial activity unless the acquisition is characterized as an investment for purposes of Section 892 under one of two safe harbors or under a facts-and-circumstances test.</p> <p>The first safe harbor treats acquisitions of bonds or other debt securities in an offering registered under the U.S. Securities Act of 1933, as amended (the Securities Act), as an investment, provided that the underwriters of the offering are not related to the acquirer. The Treasury and the IRS request comments regarding circumstances in which this safe harbor should be extended to offerings registered under non-U.S. securities laws.</p> <p>The second safe harbor treats acquisitions of debt traded on an established securities market as an investment, provided that (1) the acquirer does not acquire the debt from the issuer or participate in negotiating the terms or issuance of the debt, and (2) the acquisition is not from a person under common management or control with the acquirer, unless that person acquired the debt as an investment. The Treasury and the IRS request comments regarding circumstances, if any, in which this safe harbor should apply to an acquisition of debt that is not traded on an established securities market.</p> <p>As mentioned above, the Proposed Regulations also provide a facts-and-circumstances test to determine whether a debt acquisition is treated as an investment. The Proposed Regulations identify eight factors to be considered:</p> <ol style="margin-left: 40px;"> <li>Whether the acquirer solicited prospective borrowers, or otherwise held itself out as willing to make loans or otherwise acquire debt at, or in connection with, its original issuance</li> <li>Whether the acquirer materially participated in negotiating or structuring the terms of the debt</li> <li>Whether the acquirer is entitled to compensation (whether or not labeled as a fee) that is not treated as interest (including original issue discount) for federal tax purposes</li> <li>The form of the debt and the issuance process, including, for example, whether the debt is a bank loan or instead a privately placed debt security pursuant to Regulation S or Rule 144A under the Securities Act</li> <li>The percentage of the debt issuance acquired by the acquirer relative to the percentages acquired by other purchasers</li> <li>The percentage of equity in the debt issuer held, or to be held, by the acquirer</li> <li>The value of that equity relative to the amount of debt acquired</li> <li>If debt is deemed to be acquired in a debt-for-debt exchange as a result of a &ldquo;significant modification,&rdquo; whether there was, at the time of acquisition of the original unmodified debt, a reasonable expectation, based on objective evidence, such as a decline in the financial condition or credit rating of the debt issuer between original issuance and the time of the acquisition of the original unmodified debt, that the original unmodified debt would default.</li> </ol> <p>The Proposed Regulations include five examples illustrating the application of the facts-and-circumstances test. The Treasury and the IRS request comments on whether additional factors or examples should be included, and in particular on the circumstances, if any, in which acquisitions of distressed debt, broadly syndicated loans, revolving credit facilities, and delayed-draw debt obligations should be treated as investments rather than commercial activities.</p> <h3>c.&nbsp; Defining Effective Control</h3> <p>As described above, a CCE includes any entity engaged in commercial activities (whether within or outside the United States) if the foreign government holds (directly or indirectly) any interest in such entity which provides the foreign government with effective control of such entity. The Proposed Regulations provide additional guidance on what constitutes &ldquo;effective control.&rdquo;</p> <p>Under the Proposed Regulations, effective control is achieved by any interest in an entity that, directly or indirectly, either separately or in combination with other interests, results in control of the operational, managerial, board-level, or investor-level decisions of the entity. The Proposed Regulations also provide, however, that mere consultation rights with respect to operational, managerial, board-level, or investor-level decisions of an entity (such as extending the term of the entity&rsquo;s investment period, change in control of the entity, or liquidation of the entity) do not alone give rise to effective control. The Proposed Regulations further provide that the determination of effective control is made considering all of the facts and circumstances related to the interests in an entity.</p> <p>The Treasury and the IRS request comments as to the circumstances, if any, in which a determination could be made that controlled entities are functionally independent of one another and therefore may be appropriately considered separately for purposes of an effective control analysis. The Treasury and the IRS also request comments as to the circumstances, if any, in which the holder of a minority equity interest in an entity should not be treated as having effective control of the entity if managerial or board-level decisions of the entity are subject to veto or &ldquo;blocking&rdquo; rights of the holder and other holders.</p> <h2>IV.&nbsp; Applicability Dates</h2> <p>The Final Regulations generally apply to taxable years beginning on or after December 15, 2025. A taxpayer may generally elect to apply the Final Regulations to certain earlier open taxable years if applied consistently.</p> <p>The Proposed Regulations will generally only apply to taxable years beginning on or after they are published in final form.&nbsp;</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{664C840E-2290-4961-97DE-4D6B85BE0F86}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/ftc-and-state-ags-continue-to-scrutinize-subscription-practicesWilliam Hallett Efronhttps://www.arnoldporter.com/en/people/e/efron-william-hallettwilliam.efron@arnoldporter.comRaqiyyah Pippinshttps://www.arnoldporter.com/en/people/p/pippins-raqiyyahraqiyyah.pippins@arnoldporter.comTommy Huynhhttps://www.arnoldporter.com/en/people/h/huynh-tommytommy.huynh@arnoldporter.comKelsie Sicinskihttps://www.arnoldporter.com/en/people/s/sicinski-kelsiekelsie.sicinski@arnoldporter.comDanait Mengisthttps://www.arnoldporter.com/en/people/m/mengist-danaitdanait.mengist@arnoldporter.comThis Advisory summarizes notable federal and state activity related to auto-renewal laws and closes with key takeaways for companies that use (or are considering using) recurring subscriptions to sell products or services.Fri, 06 Feb 2026 00:00:00 -0600<p>The U.S. Federal Trade Commission (FTC or Commission) has made clear it is prioritizing enforcement regarding deceptive billing and cancellation practices involving recurring subscriptions. On January 13, 2026, the FTC announced yet another lawsuit (this time against JustAnswer and its CEO) alleging violations of the Restore Online Shopper&rsquo;s Confidence Act (ROSCA). Then, on January 30, 2026, the FTC announced it had taken a preliminary step towards commencing a new rulemaking regarding subscriptions. This development follows a July 2025 decision by the Eighth Circuit Court of Appeals invalidating the agency&rsquo;s amended Negative Option Rule (also known as Click-to-Cancel). While certainly a headliner, the rulemaking comes at a time when companies must already be mindful of numerous new or enhanced state auto-renewal laws and the prospect of state enforcement.<br /> <br /> This Advisory summarizes notable federal and state activity related to auto-renewal laws and closes with key takeaways for companies that use (or are considering using) recurring subscriptions to sell products or services.</p> <h2>Recent FTC ROSCA Actions</h2> <p>ROSCA is the most important enforcement tool that the FTC uses in connection with negative option marketing.[[N: Negative option programs take many forms (e.g., continuity plans, auto-renewals) but each generally feature a term or condition allowing sellers to interpret a customer&rsquo;s silence or failure to take any affirmative action as acceptance of an offer.]] Enacted by Congress in 2010, ROSCA requires online sellers using a negative option feature to (1) clearly and conspicuously disclose all material terms of the transaction before obtaining consumers&rsquo; billing information; (2) obtain consumers&rsquo; express informed consent before charging them; and (3) provide simple mechanisms for consumers to stop recurring charges.[[N: 15 U.S.C. &sect;&sect; 8401-8405.]] The FTC can seek civil penalties (of up to $53,088 per violation) and consumer redress for ROSCA violations.<br /> <br /> Under Chair Andrew Ferguson, the FTC has continued to prioritize ROSCA enforcement, including through the following actions:</p> <ul style="margin-left: 40px;"> <li><strong>JustAnswer</strong>: The FTC alleges that defendants claim consumers can join the online question-and-answer service and get access to expert advice for a small fee. However, when consumers sign up to use the service, the FTC asserts that JustAnswer enrolls them in a recurring monthly subscription without consent and immediately charges them a higher monthly fee, in addition to the fee for joining.[[N: Complaint, <em>FTC v. JustAnswer LLC</em>, No. 3:26-cv-00333 (N.D. Cal. Jan. 13, 2026).]]</li> <li><strong>Instacart</strong>: In December 2025, the company agreed to pay $60 million in consumer refunds to settle allegations it engaged in false advertising and violated ROSCA by failing to adequately disclose that (1) consumers signing up for a free trial membership in Instacart+ would be automatically enrolled into a paid annual subscription program; and (2) membership fees would only be refunded under limited circumstances.[[N: <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/12/instacart-pay-60-million-consumer-refunds-settle-ftc-lawsuit-over-allegations-it-engaged-deceptive" target="_blank">Instacart to Pay $60 Million in Consumer Refunds to Settle FTC Lawsuit Over Allegations it Engaged in Deceptive Tactics</a>, Fed. Trade Comm&rsquo;n (Dec. 18, 2025).]]</li> <li><strong>Uber</strong>: Also in December 2025, the FTC, joined by 21 states and the District of Columbia, filed an amended complaint against Uber alleging it charged consumers for its Uber One subscription service without consent and made it difficult to cancel. The complaint alleges that consumers must take at least 12 different actions and navigate at least seven screens to cancel, and if they are within 48 hours of their billing date, consumers must take up to 32 actions and navigate as many as 23 screens to do so.[[N: First Amended Complaint, <em>Fed. Trade Comm&rsquo;n v. Uber Techs., Inc.,</em> No. 4:25-cv-03477-JST (N.D. Cal. Dec. 15, 2025).]]</li> <li><strong>Amazon</strong>: In September 2025, just days after the trial began, Amazon agreed to resolve the FTC&rsquo;s case in a historic settlement requiring it to pay a $1 billion civil penalty and $1.5 billion in consumer refunds. The FTC alleged that Amazon and several executives (1) used manipulative or deceptive interface designs to trick consumers into enrolling in auto-renewing Prime subscriptions; and (2) created a complex and difficult process for consumers seeking to cancel, with the goal of preventing them from doing so.[[N: <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-secures-historic-25-billion-settlement-against-amazon?_bhlid=d82afd46ca0a3705c6424a105bf3498fa6d56fff." target="_blank">FTC Secures Historic $2.5 Billion Settlement Against Amazon</a>, Fed. Trade Comm&rsquo;n (Sept. 25, 2025).]]</li> <li><strong>Chegg</strong>: In September 2025, Chegg Inc., an educational technology company, agreed to pay $7.5 million to settle allegations that it failed to provide subscribers with a simple mechanism to cancel recurring charges and continued to charge consumers after they thought they had canceled their memberships.[[N: <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/09/ed-tech-provider-chegg-pay-75-million-settle-ftc-allegations-concerning-unlawful-cancellation" target="_blank">Ed Tech Provider Chegg to Pay $7.5 Million to Settle FTC Allegations Concerning Unlawful Cancellation Practices</a>, Fed. Trade Comm&rsquo;n (Sept. 15, 2025).]]</li> <li><strong>LA Fitness</strong>: In August 2025, the FTC sued the operators of LA Fitness and other gyms, alleging they made it exceedingly difficult for consumers to cancel their gym memberships. The FTC alleges LA Fitness has required consumers wishing to cancel to either go to the gym or send a cancellation notice by mail, and that both methods are opaque and complicated. The FTC also alleges LA Fitness did not clearly inform consumers that they could cancel add-on services without affecting their gym membership.[[N: Complaint, <em>FTC v. Fitness Int&rsquo;l, LLC</em>, No. 8:25-cv-01841 (C.D. Cal. Aug. 20, 2025).]]</li> </ul> <h2>Update Regarding the Click-To-Cancel Rule</h2> <p>On January 30, 2026, the FTC announced that it had taken a preliminary step towards a new rulemaking regarding recurring subscriptions. Specifically, it submitted a draft Advance Notice of Proposed Rulemaking (ANPRM) concerning the agency&rsquo;s Negative Option Rule to the Office of Information and Regulatory Affairs (OIRA).[[N: The FTC explained that since the planned ANPRM qualifies as a &ldquo;signatory regulatory action,&rdquo; review by OIRA (which is within the Office of Management and Budget) is required pursuant to Executive Orders 12866 and 14215.]] Once such review is completed, the FTC will publish the ANPRM in the Federal Register for public comment.[[N: ANPRMs must contain a brief description of the area of inquiry being considered, the FTC&rsquo;s objectives, and possible regulatory alternatives under consideration.]]<br /> <br /> This follows the Eighth Circuit&rsquo;s decision to vacate the FTC&rsquo;s Click-to-Cancel Rule. By way of background, the FTC has an existing Negative Option Rule that is narrow and applies only to one type of negative option marketing (prenotification plans). In October 2024, under former Chair Lina Khan, the FTC amended the rule to apply to nearly all negative option programs in any media (e.g., online, phone, print). While similar to ROSCA in many respects, the amended rule would have imposed some additional and specific requirements regarding disclosures of material terms, obtaining consent, and cancellation.[[N: Negative Option Rule, 9 Fed. Reg. 90476 (Nov. 15, 2024).]] For example, the rule required clear and conspicuous disclosure of certain material terms immediately adjacent to where the consumer consents to the negative option feature, and that cancellation be as easy as signing up. It also prohibited misrepresenting any material facts made while marketing goods or services with a negative option feature. <br /> <br /> Then-Commissioner Ferguson dissented from the rule (and a number of other consumer protection rulemaking activities during the Biden administration).[[N: <a rel="noopener noreferrer" href="http://https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring" target="_blank">Federal Trade Commission Announces Final &lsquo;Click-to-Cancel&rsquo; Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships</a>, Fed. Trade Comm&rsquo;n (Oct. 16, 2024).]] Shortly after the rule was announced, multiple petitions for review were filed in appellate courts seeking to invalidate it.[[N: Petitioners&rsquo; Opening Brief, <em>Custom Commc&rsquo;ns, Inc. v. Fed. Trade Comm&rsquo;n</em>, No. 24-3137 at 31-53 (8th Cir. Feb. 18, 2025).]] As the challenge was pending, Commissioner Ferguson was selected as Chair and made clear that the FTC under President Trump would primarily be a &ldquo;cop on the beat,&rdquo; enforcing the laws Congress has passed rather than writing them.[[N: A. Ferguson, <a rel="noopener noreferrer" href="https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-dissent-2024-annual-regulatory-plan-agenda.pdf" target="_blank">Dissenting Statement of Commissioner Andrew N. Ferguson Fall 2024 Regulatory Plan and Regulatory Agenda Matter Number P072104</a> (Dec. 13, 2024).&nbsp;]] Nevertheless, the FTC defended the rule in the agency&rsquo;s appellate brief filed in March 2025.[[N: Brief of the Federal Trade Commission, <em>Custom Commc&rsquo;ns, Inc. v. Fed. Trade Comm&rsquo;n</em>, No. 24-3137 (8th Cir. Mar. 17, 2025).]] However, the Eighth Circuit vacated the rule in July 2025 based on procedural deficiencies with the rulemaking process.[[N: <em>Custom Commc&rsquo;ns, Inc. v. Fed. Trade Comm&rsquo;n</em>, 142 F.4th 1060 (8th Cir. 2025).]] The FTC did not seek rehearing or Supreme Court review of the Eighth Circuit&rsquo;s decision. <br /> <br /> On December 3, 2025, the FTC published a petition from two non-profit organizations requesting that the agency renew its rulemaking concerning the use of negative option plans. The FTC invited written comments on the petition through January 2, 2026 and explained that after receiving them, it would determine what action to take, if any, regarding the request.[[N: Petition for Rulemaking of Consumer Federation of America and the American Economic Liberties Project, 90 Fed. Reg. 55701 (Dec. 3, 2025).]]<br /> <br /> While the Commission&rsquo;s announcement of an ANPRM is a significant development, there are still many required steps under the FTC&rsquo;s rulemaking procedures before any new rule concerning subscriptions can be issued. Among other things, after receiving comments on the ANPRM and notifying certain Congressional committees, the FTC would then issue a Notice of Proposed Rulemaking (NPRM) setting forth the text of the proposed rule, including any alternatives. In connection with an NPRM, the FTC must allow interested persons to make written submissions and provide an opportunity for an informal hearing. Based on the rulemaking record, if appropriate, the Commission would then issue a final rule with a statement of basis and purpose, with statements regarding the prevalence of the acts or practices addressed by the rule, the manner and context in which they are unfair or deceptive, and the economic effect of the rule.[[N: 15 U.S.C. &sect; 57a. <span>The procedures for FTC rulemaking pursuant to Section 18 of the FTC Act, also known as Magnuson-Moss rulemaking, impose additional requirements beyond those applicable to rulemaking under the Administrative Procedure Act.</span>]]<br /> <br /> Accordingly, there will be much to follow as the rulemaking process moves forward and the Commission considers the contours of any new rule based on the record that is developed. What has become clear, however, is that the FTC under Chair Ferguson will, in fact, consider consumer protection rulemaking when it advances core agency enforcement priorities. Indeed, on the same day the FTC announced this ANPRM, it announced another ANPRM related to rental housing fees.[[N: <a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-submits-draft-anprm-related-rental-housing-fees-omb-review" target="_blank">FTC Submits Draft ANPRM Related to Rental Housing Fees to OMB for Review</a>, FTC (Jan. 30, 2026).]]</p> <h2>Recent State Regulation/Enforcement of Subscription Practices</h2> <p>Importantly, though the Eighth Circuit vacated the Click-to-Cancel Rule, many of its requirements live on in a number of new or recently enhanced state auto-renewal laws. Some such laws impose requirements on sellers even beyond what was set forth in the FTC&rsquo;s rule. </p> <p>For example, <a rel="noopener noreferrer" href="https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&amp;division=7.&amp;title=&amp;part=3.&amp;chapter=1.&amp;article=9." target="_blank">California&rsquo;s auto-renewal law</a> (CARL) is one of the strictest in the country, and includes new, strengthened requirements that went into effect in July of 2025.[[N: Automatic Renewal and Continuous Service Offers, Assembly Bill No. 2863 (Sept. 24, 2024).]] Under the law, businesses that make auto-renewal offers to consumers in California must, among other things, obtain their &ldquo;express affirmative consent&rdquo; to the auto-renewal terms. In addition, those terms and information on how to cancel must be provided to the consumer in a retainable acknowledgment. For consumers who signed up online, sellers must allow them to cancel exclusively online &ldquo;without engaging in any further steps that obstruct or delay the consumer&rsquo;s ability to terminate.&rdquo; When customers request to cancel online, businesses may offer discounts or other promotions to retain them (known as &ldquo;save&rdquo; attempts) if a &ldquo;cancel&rdquo; button is simultaneously displayed in a prominent and proximate location. Sellers must also provide between seven and 30 days&rsquo; notice of a price change to an existing subscription, along with information on how to cancel. For free or discounted trials lasting more than 31 days, businesses must notify customers three to 21 days before the trial expires. And for subscriptions that renew annually, sellers must send consumers an annual reminder prior to renewal that discloses certain key terms and how to cancel.<br /> <br /> Notably, California not only recently amended its auto-renewal law, but also actively enforces it. In August 2025, meal kit delivery company HelloFresh paid $7.5 million to settle a lawsuit brought by two California district attorney&rsquo;s offices alleging that it enrolled consumers into auto-renewing subscription plans without proper disclosure or consent; failed to provide a post-transaction acknowledgment with the subscription&rsquo;s material terms; and did not offer an easy-to-use mechanism to cancel.[[N: Carlos E. Castaneda, <a rel="noopener noreferrer" href="https://www.cbsnews.com/sanfrancisco/news/hellofresh-lawsuit-settlement-california-consumer-protection/" target="_blank">HelloFresh Agrees to $7.5M Settlement in California Lawsuit Accusing it of Misleading Customers</a> (Aug. 18, 2025).]] The case was investigated by the California Automatic Renewal Task Force (CART), a coalition of county and city enforcers that addresses complaints regarding subscriptions.<br /> <br /> Other states with new or recently updated auto-renewal laws and regulations include Colorado, Connecticut, Massachusetts, Minnesota, New York, and Utah. While there are many similarities between new subscription laws, there are certain noteworthy differences. For example, New York&rsquo;s law, which became effective in November 2025, requires that businesses either (1) obtain consumers&rsquo; advance affirmative consent to increased subscription prices; or (2) allow the consumer to cancel within 14 days after such charge and provide a pro-rata refund for the remaining term of service.[[N: N.Y. Gen. Obligations Law &sect; 5-903.]] And Massachusetts&rsquo; regulation, which took effect in September 2025, requires that for any subscription term exceeding just 31 days, sellers must provide a pre-renewal notice five to 30 days in advance of when the consumer must cancel to avoid incurring a subsequent charge.[[N: 940 CMR 38.05, Recurring Fees and Trial Offers.]] Finally, Minnesota&rsquo;s law, unlike California, does not permit save offers unless the customer affirmatively consents to receive them.[[N: MN Stat &sect; 325G.57 (2025).]]<br /> <br /> Just as California is not the only state legislating in this space, it is likewise not alone in bringing actions related to subscriptions. In October 2025, a group of 33 states announced a $4.8 million settlement with TFG Holding, Inc., an online clothing retailer, resolving allegations of deceptive advertising and billing practices, including that TFG automatically enrolled consumers into a membership program with recurring charges without consent, and then made it difficult to cancel.[[N: Press Release, Penn. Attorney General, <a rel="noopener noreferrer" href="https://www.attorneygeneral.gov/taking-action/ag-sunday-secures-settlement-valued-at-4-8-million-with-online-clothing-retailer-for-deceptive-advertising-and-billing-practices/" target="_blank">AG Sunday Secures Settlement Valued at $4.8 Million With Online Clothing Retailer for Deceptive Advertising and Billing Practices</a> (Oct. 23, 2025).]]</p> <h2>New York City Also Prioritizes Subscription &ldquo;Tricks and Traps&rdquo;</h2> <p>In early January 2026, New York City&rsquo;s new mayor, Zohran Mamdani, signed an executive order signaling the city&rsquo;s intent to use its full authorities to crack down on illegal subscription practices.[[N: Press Release, Office of the Mayor, New York City, <a rel="noopener noreferrer" href="https://www.nyc.gov/mayors-office/news/2026/01/mayor-mamdani-signs-executive-orders-to-crack-down-on-junk-fees-" target="_blank">Mayor Mamdani Signs Executive Orders to Crack Down on Junk Fees, Subscription Tricks and Traps and Save New Yorkers Money</a> (Jan. 5, 2026).]] The order provides that the Department of Consumer and Worker Protection (DCWP) will prioritize investigating and taking enforcement action against subscription-related practices that deceive consumers and consider rulemaking to combat such practices.</p> <h2>Takeaways</h2> <ul style="margin-left: 40px;"> <li>The FTC and consumer protection enforcers at the state (and now city) level are closely scrutinizing subscription practices and will not hesitate to bring cases in this area. In addition, plaintiffs&rsquo; attorneys are active in the space. Accordingly, when companies that use subscription models that are not in compliance with applicable law, they may be at risk of both government enforcement actions and class action lawsuits.</li> <li>Companies should monitor any developments with respect to the FTC&rsquo;s rulemaking process concerning the Negative Option Rule, including the publication of the ANPRM. This event (and the issuance of an NPRM) provide opportunities for comment from interested parties as the Commission considers the contours of any eventual rule that is promulgated.</li> <li>States are continuing to enact new or enhanced auto-renewal laws. While many of these laws contain similar core requirements, some differ in at least certain respects. Thus, companies must stay abreast of regulatory developments at the state level and carefully review new laws as they evaluate and update their auto-renewal compliance policies.</li> </ul> <p>Arnold &amp; Porter regularly advises companies regarding their subscription practices and disputes relating to them. We also help companies participate in rulemaking proceedings. Our <a href="https://www.arnoldporter.com/en/services/capabilities/practices/consumer-protection-and-advertising">Consumer Protection &amp; Advertising</a> practice would be happy to assist with any questions you have regarding recurring subscriptions.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{CC4E1E39-973E-46C3-82A5-40B8A84CD9C4}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/capital-snapshot-february-2026Eugenia E. Piersonhttps://www.arnoldporter.com/en/people/p/pierson-eugenia-eEugenia.Pierson@arnoldporter.comAllison Jarushttps://www.arnoldporter.com/en/people/j/jarus-allisonallison.jarus@arnoldporter.comPeter E. Duysharthttps://www.arnoldporter.com/en/people/d/duyshart-peterpeter.duyshart@arnoldporter.comEmily Crawfordhttps://www.arnoldporter.com/en/people/c/crawford-emilyemily.crawford@arnoldporter.comEmily Mahaffyhttps://www.arnoldporter.com/en/people/m/mahaffy-emilyemily.mahaffy@arnoldporter.comDylan L. Kelemenhttps://www.arnoldporter.com/en/people/k/kelemen-dylan-ldylan.kelemen@arnoldporter.comOur Legislative &amp; Public Policy team is pleased to provide the February 2026 edition of <em>Capital Snapshot</em>, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions.&nbsp;Fri, 06 Feb 2026 00:00:00 -0600<p>Our Legislative &amp; Public Policy team is pleased to provide the February 2026 edition of <em>Capital Snapshot</em>, which includes a monthly summary of the issues, events, and timelines driving federal policy and political decisions. This month&rsquo;s edition contains a review of the landscape of the 119th Congress, including upcoming congressional schedules and key dates, and recently announced retirements, resignations, vacancies, and candidacies. We also share updates pertaining to the FY 2026 and FY 2027 federal funding and appropriations processes, as well as trade and tariffs. Furthermore, we share some salient legislative and policy updates across a variety of additional key policy areas, including: (1) defense/the National Defense Authorization Act; (2) tax; (3) financial services; (4) artificial intelligence; (5) technology; (6) data privacy; (7) health care; (8) education; and (9) energy and environment. Additionally, we provide an overview and outlook of the upcoming 2026 midterm elections in November, as well as an update to our detailed rundown of various redistricting efforts across the country ahead of the midterms. Our team also takes a look at current public opinion polling on President Trump&rsquo;s job performance and policy priorities, and assesses economic factors and conditions that could impact the future political landscape in an election year.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{38E3F3D4-E069-4BBC-9AD3-DA9D0DE028EB}https://www.arnoldporter.com/en/perspectives/events/2026/02/aml-sanctions-in-2026-trends-risks-and-how-to-stay-aheadKevin M. Toomeyhttps://www.arnoldporter.com/en/people/t/toomey-kevin-mkevin.toomey@arnoldporter.comRichard M. Alexanderhttps://www.arnoldporter.com/en/people/a/alexander-richard-mrichard.alexander@arnoldporter.comChristopher L. Allenhttps://www.arnoldporter.com/en/people/a/allen-christopher-lChristopher.Allen@arnoldporter.comJohn P. Barkerhttps://www.arnoldporter.com/en/people/b/barker-john-pjohn.barker@arnoldporter.comEun Young Choihttps://www.arnoldporter.com/en/people/c/choi-eun-youngEunYoung.Choi@arnoldporter.comSean Curranhttps://www.arnoldporter.com/en/people/c/curran-seansean.curran@arnoldporter.comMichael Kim Krousehttps://www.arnoldporter.com/en/people/k/michael-kim-krousemichael.krouse@arnoldporter.comTal R. Machneshttps://www.arnoldporter.com/en/people/m/machnes-tal-rTal.Machnes@arnoldporter.comSoo-Mi Rheehttps://www.arnoldporter.com/en/people/r/rhee-soomisoo-mi.rhee@arnoldporter.comErik Walshhttps://www.arnoldporter.com/en/people/w/walsh-erikerik.walsh@arnoldporter.comPlease join Arnold &amp; Porter for our annual discussion of regulatory and enforcement trends in the year ahead for anti-money laundering and sanctions.Thu, 05 Feb 2026 00:00:00 -0600<p>Please join Arnold &amp; Porter for our annual discussion of regulatory and enforcement trends in the year ahead for anti-money laundering and sanctions. Drawing on the experiences of our Financial Services, Export Controls and Sanctions, National Security, and White Collar Defense &amp; Investigations attorneys, we will provide insights on the steps that financial institutions can take to address evolving AML and sanctions risks, navigate examinations and investigations, and successfully develop new products and services.</p> <h3>Panels</h3> <ul> <li>Sanctions Compliance in a Shifting National Security Landscape</li> <li>AML in 2026: Navigating Regulatory Changes and Enforcement Risks</li> </ul> <p><a rel="noopener noreferrer" href="https://comms.arnoldporter.com/64/6709/landing-pages/speakers.asp" target="_blank">View the Panelists</a></p>{3920F458-74D5-4B74-AE47-55CC2A37EBE9}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/adrien-anderson-comments-on-cftcs-expanding-role-in-crypto-oversight-with-bloomberg-lawAdrien Anderson, Arnold &amp; Porter senior associate and member of the firm&rsquo;s Securities Enforcement &amp; Litigation practice group, was quoted in the recent <em>Bloomberg Law</em> article, &ldquo;Congress Mulls CFTC Crypto Role as Lawyers Predict Light Touch,&rdquo; which explored potential shifts in U.S. crypto regulation and Congress&rsquo;s consideration of legislation to expand the Commodity Futures Trading Commission&rsquo;s role in overseeing digital asset markets.&nbsp;Thu, 05 Feb 2026 00:00:00 -0600<p>Adrien Anderson, Arnold &amp; Porter senior associate and member of the firm&rsquo;s Securities Enforcement &amp; Litigation practice group, was quoted in the recent <em>Bloomberg Law</em> article, &ldquo;Congress Mulls CFTC Crypto Role as Lawyers Predict Light Touch,&rdquo; which explored potential shifts in U.S. crypto regulation and Congress&rsquo;s consideration of legislation to expand the Commodity Futures Trading Commission&rsquo;s role in overseeing digital asset markets.</p> <p>The article examined how proposals to position the CFTC as a primary regulator of spot digital assets could shape enforcement priorities and market clarity, with some observers questioning whether the agency is resourced to effectively police a fast-evolving industry.</p> <p>&ldquo;The nature of the SEC&rsquo;s regulatory regime is &lsquo;register and disclose&rsquo; with a focus on transparency and investor protection, where the CFTC has a broader focus in its regulation of intermediaries and spot markets under its market integrity mandate,&rdquo; Adrien remarked on the implications of this evolving regulatory landscape.</p> <p><a rel="noopener noreferrer" href="https://www.bloomberglaw.com/bloomberglawnews/securities-law/XC11M558000000#jcite" target="_blank">Read the full article</a> (subscription required).</p>{24B6EB25-A3DA-4EFC-A2CD-08A9359F434E}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-announces-election-of-12-new-partners-5-new-counsel-1-new-managing-director<strong>WASHINGTON, D.C., February 5, 2026</strong> &mdash; Arnold &amp; Porter is pleased to announce the election of twelve new partners, five new counsel, and one new managing director.&nbsp;Thu, 05 Feb 2026 00:00:00 -0600<p><strong>WASHINGTON, D.C., February 5, 2026</strong> &mdash; Arnold &amp; Porter is pleased to announce the election of twelve new partners, five new counsel, and one new managing director. </p> <p><strong>Arnold &amp; Porter Global Co-Chair Michael Daneker</strong> said, &ldquo;We are proud to recognize this year&rsquo;s exceptional class of promotions, whose advancement reflects their dedication to excellence in legal practice, to our clients, and to the firm. The talent represented by these elevations demonstrates not only the firm&rsquo;s strengths, but our ongoing commitment to investing in and expanding client services across practices and industries.&rdquo;</p> <p><strong>Arnold &amp; Porter Global Co-Chair Ellen Kaye Fleishhacker</strong> added, &ldquo;Each of these lawyers has earned this accomplishment through their dedication, work ethic, and strong focus on client service. Together, this group reflects the depth of talent across our firm, and we are delighted to celebrate their achievements.&rdquo;</p> <h2>Partners</h2> <ul> <li><strong>Libby Amos-Stone</strong> is a member of the Life Sciences &amp; Healthcare Regulatory practice, resident in the London office. She advises clients in the sector on a broad range of regulatory issues and represents them in regulatory and product liability litigation. She earned her Higher Rights of Audience from BPP University Law School, her Post-Graduate Diploma in European Union Law from King&rsquo;s College London, <em>with distinction</em>, her LL.B. from The College of Law, <em>First Class Honours</em>, and her B.Sc. from The University of Bristol, <em>First Class Honours</em>.</li> <li><strong>Jon Boswell</strong> is a member of the Real Estate practice, resident in the Washington, D.C. office. He focuses on the representation of lenders and property owners, funds, investors, developers, operators, managers, nonprofit organizations, and energy companies in a wide range of commercial real estate transactions. He earned his J.D. from Yeshiva University, Benjamin N. Cardozo School of Law, <em>cum laude</em>, and received his B.A. from the University of Pennsylvania, <em>cum laude</em>.</li> <li><strong>Adrienne Boyd</strong> is a member of the Product Liability Litigation practice, resident in the Denver office. She represents pharmaceutical, medical device, and consumer products companies in mass tort and other complex litigation. She earned her J.D. from the University of Michigan Law School, <em>cum laude</em>, and received her B.A. from Williams College, <em>cum laude</em>.</li> <li><strong>Zeno Frediani</strong> is a member of the Antitrust/Competition practice, resident in the London office. He advises on UK and EU merger control, antitrust investigations and litigation, restrictive practices, and investment screening, with deep experience securing regulatory clearances and pragmatic solutions in complex transactional and cartel matters. He earned his Postgraduate Diploma in EU Competition Law from King's College London, his Diploma in Legal Practice from the University of Aberdeen, and his LL.B. (Hons) from the University of Aberdeen.</li> <li><strong>Corey W. Glass</strong> is a member of the Private Client Services practice group and the Tax practice, resident in the Washington, D.C. office. He advises high-net-worth individuals and their families, family offices, and closely held businesses on matters involving tax and estate planning, trust and estate administration, asset protection, and business succession planning, with a particular focus on tax-efficient multi-generational wealth transfer planning strategies. He earned his LL.M. in Taxation from Georgetown University Law Center, <em>with distinction</em>, his J.D. from Loyola Law School, Los Angeles, and his B.S. from the University of Kansas.</li> <li><strong>Katelyn Horne</strong> is a member of the International Arbitration practice, resident in the Washington, D.C. office. She advises sovereign States, State-owned entities, private companies, and prominent individuals in relation to international arbitration, public international law, and other disputes. She earned her J.D. from Columbia Law School, where she was a James Kent Scholar, and received her B.S.F.S. from Georgetown University School of Foreign Service, <em>magna cum laude</em>.</li> <li><strong>Wayne Janke</strong> is a member of the Life Sciences Transaction practice, resident in the Newark office. He advises pharmaceutical, biotech, digital health and other life sciences companies in M&amp;A, licensing, and collaboration matters, including transactions involving AI-enabled technologies and platforms. He earned his J.D. from Rutgers University and received his B.A. from Rutgers College.&nbsp;</li> <li><strong>Bobby McMillin</strong> is a member of the Legislative &amp; Public Policy practice, resident in the Washington, D.C. office. He advises life sciences manufacturers, investors, and institutions of higher education on strategies to navigate and shape public policy developments - and respond to Congressional inquiries. He earned his J.D. from the University of Georgia School of Law and received his B.A. from the University of Georgia, <em>cum laude</em>.</li> <li><strong>Anthony Raglani</strong> is a member of the Financial Services practice, resident in the Washington, D.C. office. He represents bank and nonbank financial institutions on regulatory and transactional matters before federal and state banking agencies and financial regulators. He earned his J.D. from The George Washington University Law School and received his B.B.A. from The George Washington University.&nbsp;</li> <li><strong>Daniel Raymond</strong> is a member of the Complex Litigation practice, resident in the Chicago office. He represents companies facing complex data, privacy and cybersecurity issues in litigation, regulatory and counseling matters. He earned his J.D. from the University of Illinois College of Law, <em>summa cum laude</em>, Order of the Coif, where he was a Rickert Award Winner for Excellence in Academic Achievement, a Harno Scholar, and executive editor of the <em>University of Illinois Law Review</em>. He received his B.A. from the University of Illinois at Urbana-Champaign, <em>magna cum laude</em>.&nbsp;</li> <li><strong>Declan Tansey</strong> is a member of the Tax practice, resident in the New York office. He represents tax-exempt organizations and philanthropists in a broad range of transactional, regulatory, and operational matters. He earned his J.D. from the University of Virginia School of Law and received his B.A. from the University of Virginia, <em>with highest distinction</em>.</li> <li><strong>Nicholas Townsend</strong> is a member of the National Security and Government Contracts practice, resident in the Washington, D.C. office. He has extensive experience in export controls, trade sanctions, cybersecurity, privacy, and the aerospace industry. He earned his J.D. from Harvard Law School, with honors, and received his B.A. from the University of Michigan, <em>with highest honors</em>. </li> </ul> <h2>Counsel</h2> <ul> <li><strong>Eleri Abreo</strong> is a member of the Life Sciences &amp; Healthcare Regulatory practice, resident in the London office. She is a regulatory lawyer and litigator, advising clients across a broad range of sectors, including medical devices and in vitro diagnostics, tissues &amp; cells, and blood, pharmaceuticals, foods, and cosmetics. She completed her Legal Practice Course at Cardiff University, <em>with distinction</em>, and received her Bachelor of Laws from the University of Leeds.&nbsp;</li> <li><strong>Tommy Huynh</strong> is a member of the Product Liability Litigation practice, resident in the San Francisco office. He focuses on representing pharmaceutical, medical device, and consumer product companies in product liability and mass tort litigation. He earned his J.D. from the University of California, Los Angeles, School of Law, and received his B.A. from the University of California, Berkeley, with Distinction in General Scholarship.</li> <li><strong>John Muse-Fisher</strong> is a member of the Complex Litigation practice, resident in the San Francisco office. He also practices in International Arbitration. John represents lawyers and law firms in professional responsibility and legal malpractice matters, as well as corporations and sovereign States in international arbitrations and other matters. He earned his J.D. from the University of California, Berkeley, School of Law, Order of the Coif, where he earned a certificate of specialization in international law and served as Senior Executive Editor of the <em>California Law Review</em>. He received his M.Sc. from the London School of Economics and Political Science, <em>with distinction</em>, and his B.A. from the University of California, Berkeley.</li> <li><strong>Maya Paunrana</strong> is a member of the White Collar Defense &amp; Investigations practice, resident in the London office. She acts on behalf of both corporates and individuals in relation to multi-jurisdictional investigations into bribery and corruption, fraud, and money laundering investigations, as well as prosecutions conducted by the SFO, HMRC, the FCA, and the CPS. She completed her Legal Practice Course at BPP University Law School and received her LL.B. from King's College London.</li> <li><strong>Gus Weinkam </strong>is a member of the Tax practice, resident in the New York office. He advises clients on a broad range of tax matters, including tax issues relating to domestic and cross-border mergers and acquisitions, corporate and partnership matters, real estate investments, investments by pension funds and sovereign wealth funds, and other transactional matters. He earned his LL.M. in Taxation from New York University School of Law, his J.D. from the University of Pennsylvania Carey Law School, his Certificate in Business and Public Policy from The Wharton School, The University of Pennsylvania, and his B.A. from St. Mary&rsquo;s College of Maryland, <em>summa cum laude</em>, Phi Beta Kappa.</li> </ul> <h2>Managing Director</h2> <ul> <li><strong>Brian Bombassaro</strong> is a member of the Legislative &amp; Public Policy practice, resident in Washington, D.C. He advises on legal and policy aspects of international trade, investment, and finance. He earned his J.D. from Yale Law School, his M.P.P. from Harvard University, John F. Kennedy School of Government, and his B.S.B.A. and B.A. from the University of Florida.&nbsp;</li> </ul> <h3>About Arnold &amp; Porter</h3> <p><em>Arnold &amp; Porter combines sophisticated regulatory, litigation, and transactional capabilities to resolve clients&rsquo; most complex issues. With over 1,000 lawyers practicing in 16 offices worldwide, we offer an integrated approach that spans more than 40 practice areas. Through multidisciplinary collaboration and focused industry experience, we provide innovative and effective solutions to mitigate risks, address challenges, and achieve successful outcomes.</em></p>{3AE447B5-93B4-499B-BFFD-E4CDBD4D27AD}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-advises-grandbay-on-us75-million-acquisition-financingArnold &amp; Porter recently advised the GrandBay Group, a manufacturer of personal and home care products across Latin America, on acquisition financing from Banco Multiva and Fondeo Horizonte to fund the acquisition of Blue Tissue, a Mexico-based tissue paper manufacturer.Thu, 05 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter recently advised the GrandBay Group, a manufacturer of personal and home care products across Latin America, on acquisition financing from Banco Multiva and Fondeo Horizonte to fund the acquisition of Blue Tissue, a Mexico-based tissue paper manufacturer. The financing consisted of a US$75 million senior secured term loan facility and a MX$90 million revolving credit facility, both arranged by ArtCap Advisory Services Ltd.</p> <p>The initial term loan facility, consisting of two tranches in the aggregate amount of US$50 million, supported GrandBay Group&rsquo;s acquisition of Blue Tissue and closed in May 2025. Following the successful closing of the transaction, Arnold &amp; Porter continued to advise the GrandBay Group on an additional US$25 million tranche under the senior secured term loan facility. This supplemental financing, which closed in December 2025, funded Blue Tissue&rsquo;s acquisition of a second paper mill in Mexico. Concurrently with the supplemental financing, Banco Multiva provided a MX$90 million committed revolving credit facility to support Blue Tissue&rsquo;s short-term financing needs.</p> <p>Arnold &amp; Porter led negotiations on the New York law-governed documents and collaborated closely with local counsel in Mexico to address regulatory and collateral requirements. </p> <p>The Arnold &amp; Porter team was led by counsel Arturo Caraballo.*</p> <p><em>*Mateus Maia de Souza, a visiting attorney from Brazil, assisted the team with aspects of the deal. Mr. Maia is admitted to practice law only in Brazil and is not engaged in the practice of law in any U.S. jurisdiction.</em></p> <p><em>*Ivan Serralde Loyzaga, a visiting attorney from Mexico, also assisted the team with aspects of the transaction. Mr. Serralde is admitted to practice law only in Mexico. He is not engaged in the practice of law in any U.S. jurisdiction.</em></p>{30F043B2-C2E9-4CB1-ABAD-764C363F8B6A}https://www.biosliceblog.com/2026/02/the-eu-medical-device-shake%E2%80%91up-what-international-companies-should-prepare-for/Fabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comChristopher Bateshttps://www.arnoldporter.com/en/people/b/bates-christopherchristopher.bates@arnoldporter.comEftychia Siderihttps://www.arnoldporter.com/en/people/s/sideri-eftychiaeftychia.sideri@arnoldporter.comThu, 05 Feb 2026 00:00:00 -0600{18C015EE-A504-45CB-AD23-B34B56AB476A}https://www.biosliceblog.com/2026/02/uks-data-use-and-access-act-what-life-sciences-companies-need-to-know/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comCamille Vermosenhttps://www.arnoldporter.com/en/people/v/vermosen-camillecamille.vermosen@arnoldporter.comJames Castro-Edwardshttps://www.arnoldporter.com/en/people/c/castro-edwards-jamesjames.castro-edwards@arnoldporter.comThu, 05 Feb 2026 00:00:00 -0600{40ED55F8-372B-4AFC-A090-FF0D7AC3F3C4}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/doj-and-hhs-oig-report-a-record-year-of-enforcementLisa M. Rehttps://www.arnoldporter.com/en/people/r/re-lisa-mlisa.re@arnoldporter.comLee M. Cortes, Jr.https://www.arnoldporter.com/en/people/c/cortes-lee-m-jrlee.cortes@arnoldporter.comBryan J. Borodkinhttps://www.arnoldporter.com/en/people/b/borodkin-bryanbryan.borodkin@arnoldporter.com<p style="text-align: justify;">The U.S. Department of Justice (DOJ)&rsquo;s Criminal Division Fraud Section closed 2025 with what it characterized as a &ldquo;record-setting&rdquo; year, marked by a renewed emphasis on corporate enforcement and a sharp increase in charged defendants. Nearly 75% of these defendants were charged with some form of healthcare fraud &mdash; an unmistakable signal that this remains a core enforcement priority. </p>Thu, 05 Feb 2026 00:00:00 -0600<p> The U.S. Department of Justice (DOJ)&rsquo;s Criminal Division Fraud Section closed 2025 with what it <a rel="noopener noreferrer" href="https://www.justice.gov/opa/pr/criminal-divisions-fraud-section-announces-historic-year-accomplishments" target="_blank">characterized</a> as a &ldquo;record-setting&rdquo; year, marked by a renewed emphasis on corporate enforcement and a sharp increase in charged defendants. Nearly 75% of these defendants were charged with some form of healthcare fraud &mdash; an unmistakable signal that this remains a core enforcement priority. <br /> <br /> That emphasis &mdash; discussed in the Fraud Section&rsquo;s newly released <a rel="noopener noreferrer" href="https://www.justice.gov/criminal/media/1425226/dl" target="_blank">2025 Year in Review</a> (Year in Review) &mdash; aligns closely with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG)&rsquo;s recent <a rel="noopener noreferrer" href="https://oig.hhs.gov/documents/sar/11445/Fall_2025_SAR--508.pdf" target="_blank">Semiannual Report to Congress</a> (Semiannual Report). Read together, the two reports provide a clear picture of where federal enforcement is headed &mdash;and where risk is most acute for healthcare providers, life sciences companies, managed care organizations, and digital health platforms.</p> <h2> A Record Year for the Fraud Section</h2> <p> In 2025, Fraud Section prosecutors charged 265 defendants &mdash; up 10% compared to 2024 &mdash; with aggregate estimated fraud losses exceeding $16 billion, more than double the figure reported in 2024. About one-fourth of this enforcement work was spread throughout three of the four Fraud Section litigation units &mdash; the Foreign Corrupt Practices Act Unit (FCPA Unit); the Health and Safety Unit (HSU); and the Market, Government, and Consumer Fraud Unit (MGC Unit).</p> <p> The FCPA Unit brought three corporate enforcement actions in 2025, &ldquo;including the Section&rsquo;s first corporate indictment in fifteen years.&rdquo; In that ongoing case, <em><a rel="noopener noreferrer" href="https://www.justice.gov/criminal/media/1416726/dl?inline" target="_blank">United States v. SGO Corporation Limited</a></em>, the government alleges that various foreign executives and a voting machine corporation conspired to launder more than $1 million in bribes to a Philippine election official through coded language, fraudulent contracts, and international wire transfers to conceal corrupt payments. <br /> <br /> The HSU &mdash; formed in November 2025 after DOJ absorbed the Consumer Financial Protection Bureau (CFPB)&rsquo;s criminal portfolio and prosecutors &mdash; works closely with the U.S. Food and Drug Administration (FDA) and focuses its enforcement efforts on adulterated, misbranded, or counterfeit food, drugs, and devices; transportation safety; and consumer product defects. In the few months since its formation, the HSU brought four corporate enforcement actions, charging conduct ranging from the sale of adulterated surgical crowns to the forging of FDA approval to market surgical and sterilization devices. <br /> <br /> The MGC Unit &mdash; previously known as the Market Integrity and Major Frauds Unit &mdash; is responsible for prosecuting domestic market manipulation and federal program fraud. In 2025, the MGC Unit focused on fraud that undermined national security, and, as part of a cross-agency &ldquo;Trade Fraud Task Force,&rdquo; brought its first cases against individuals and corporations engaging in trade and tariff fraud. Moreover, with an increase of 25 prosecutors from the CFPB, the MGC Unit continued to target defendants who defrauded vulnerable and elderly citizens through Ponzi and pyramid schemes.</p> <h2> Healthcare Fraud as a Central Enforcement Priority</h2> <p> But healthcare fraud dominated the Fraud Section&rsquo;s docket in 2025. Of the Fraud Section&rsquo;s 265 indicted defendants, the Health Care Fraud Unit (HCF Unit) brought charges against 194, alleging more than $15 billion in healthcare fraud losses. The HCF Unit also led the largest &ldquo;Health Care Fraud Takedown&rdquo; (Takedown) in DOJ history, securing convictions against hundreds of federal and state defendants and seizing over $245 million in cash and other assets. <br /> <br /> HHS participated extensively in this 2025 Takedown. As detailed in newly appointed HHS Inspector General T. March Bell&rsquo;s first Semiannual Report to Congress, the Takedown targeted alleged fraud schemes involving:</p> <p style="margin-left: 40px;">1. <strong>Wound Care</strong>: Medical professionals and other defendants submitted $1.1 billion in allegedly fraudulent Medicare and other healthcare benefit program claims for wound care, allegedly targeting vulnerable elderly patients, many of whom received medically unnecessary wound grafts.</p> <p style="margin-left: 40px;">2. <strong>Durable Medical Equipment Fraud</strong>: Transnational criminal organizations allegedly exploited the stolen identities of more than 1 million Medicare enrollees and healthcare providers and submitted $10.6 billion in allegedly fraudulent Medicare claims for urinary catheters and other durable medical equipment.</p> <p style="margin-left: 40px;">3. <strong>Diagnostic Testing</strong>: Medical professionals submitted $1.84 billion in allegedly false and fraudulent Medicare, Medicaid, and private insurance claims for diagnostic testing, medical visits, and treatments that were alleged to be medically unnecessary, provided in connection with kickbacks and bribes, or never provided at all.</p> <p style="margin-left: 40px;">4. <strong>Telemedicine</strong>: Medical professionals and executives submitted $1.17 billion in allegedly fraudulent Medicare claims resulting from alleged telemedicine and genetic testing fraud schemes.</p> <p style="margin-left: 40px;">5. <strong>Drug Diversion</strong>: Pharmacists and other defendants allegedly illegally diverted more than 15 million pills of prescription opioids and other controlled substances.</p> <p> In total, the collaboration between HHS-OIG and DOJ &mdash; as well as the Federal Bureau of Investigation (FBI) and other state and local law enforcement agencies &mdash; is anticipated to recover $14.6 billion through criminal resolutions and seizures. Aside from this cross-agency criminal Takedown, HHS-OIG also reported a renewed emphasis on civil enforcement, noting that its investigations led to nearly 500 False Claims Act cases between April and September 2025. <br /> <br /> Both reports highlight the government&rsquo;s continued, proactive reliance on advanced data analytics to identify and prosecute these fraud schemes. In June 2025, the Fraud Section <a rel="noopener noreferrer" href="https://www.justice.gov/opa/speech/supervisory-official-matthew-r-galeotti-delivers-remarks-regarding-health-care-fraud" target="_blank">announced</a> that it is working closely with agency partners, including HHS-OIG and the FBI, to create a Health Care Fraud Data Fusion Center, which will leverage cloud computing, artificial intelligence (AI), and advanced analytics to &ldquo;revolutionize&rdquo; how the government detects, investigates, and prosecutes emerging healthcare fraud schemes. </p> <p>HHS-OIG similarly emphasized that &ldquo;data analytics&rdquo; is a key tool to &ldquo;prevent[] or stop[] fraud schemes before they escalate.&rdquo; For example, the Semiannual Report touted the use of enhanced data analytics to flag alarming billing trends in the wound care product industry, where Medicare Part B expenditures exceeded $10 billion annually and grew by more than 600% since 2023. These findings closely track the Fraud Section prosecutions alleging billion-dollar amniotic graft and wound care fraud schemes involving kickbacks and medically unnecessary treatments.<br /> <br /> Both reports also show how the rise of AI tools and digital health platforms can be exploited to perpetrate fraud. The 2025 Takedown targeted the use of AI to fabricate patient consent and the abuse of telehealth flexibility to fraudulently prescribe medication. HHS-OIG likewise identified a sharp growth in Medicare payments for remote patient monitoring that raises serious program integrity concerns, particularly where providers lack established clinical relationships with beneficiaries. <br /> <br /> Another notable throughline in both reports is the government&rsquo;s growing emphasis on patient harm. The Fraud Section&rsquo;s Year in Review highlighted prosecutions where fraudulent conduct resulted in unnecessary infusions, adulterated medical products, illegal opioid distribution, and death. Corporate resolutions in 2025 frequently included strict compliance obligations, victim compensation, and independent monitors. HHS-OIG&rsquo;s Semiannual Report echoes this emphasis. Beyond financial recoveries, HHS-OIG emphasized its role in protecting patients from unsafe or substandard care, including a focus on enforcement actions against abusive nursing home chains and clinicians who falsified diagnoses or records. The convergence of DOJ and HHS-OIG messaging suggests that the government will continue to frame fraud not merely as a financial offense, but as conduct with direct and tangible public health consequences.</p> <h2> Looking to 2026</h2> <p> Taken together, the Fraud Section&rsquo;s Year in Review and HHS-OIG&rsquo;s Semiannual Report send a clear signal: healthcare fraud enforcement is intensifying, increasingly data-driven, and highly coordinated across agencies. Providers, payors, life sciences companies, and digital health platforms should expect continued scrutiny of high-growth billing areas, novel technologies, and arrangements that implicate the Anti-Kickback Statute or False Claims Act.<br /> <br /> The reports also underscore the importance of robust compliance programs, timely internal investigations, and &mdash; where appropriate &mdash; voluntary self-disclosure. As DOJ and HHS-OIG continue to expand their analytic capabilities and shift toward early intervention, organizations that fail to identify and remediate issues proactively may face heightened enforcement risk.<br /> <br /> For questions about healthcare fraud enforcement, please contact the authors or any member of Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/white-collar-defense-and-investigations">White Collar Defense &amp; Investigations</a> or <a href="https://www.arnoldporter.com/en/services/capabilities/practices/false-claims-act-investigations-and-defense">False Claims Act Investigations &amp; Defense</a> practice groups.<em><br /> </em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{F40F9427-11CB-4DDD-8AC7-DAD026DEF0E6}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/bloomberg-law-quotes-sarah-grey-on-irs-proposal-clarifying-clean-fuels-tax-creditArnold &amp; Porter Environmental partner Sarah Grey was recently quoted in the <em>Bloomberg Law</em> article, &ldquo;Biofuels Notch Win With IRS Proposal, Await Further Guidance,&rdquo; which covered the Internal Revenue Service&rsquo;s proposed regulations to implement the Section 45Z clean fuel production tax credit and their impact on biofuel producers.Wed, 04 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter Environmental partner Sarah Grey was recently quoted in the <em>Bloomberg Law</em> article, &ldquo;Biofuels Notch Win With IRS Proposal, Await Further Guidance,&rdquo; which covered the Internal Revenue Service&rsquo;s proposed regulations to implement the Section 45Z clean fuel production tax credit and their impact on biofuel producers.</p> <p>Sarah noted that while the proposal provides greater clarity and flexibility for industry participants, additional guidance is still needed, particularly on how climate-smart agriculture practices will be reflected in emissions calculations. </p> <p>&ldquo;We&rsquo;re a couple steps away from having more certainty on that issue,&rdquo; she said, adding that she expects forthcoming agriculture guidance to be less restrictive than the prior approach allowed for Sustainable Aviation Fuels.</p> <p><a rel="noopener noreferrer" href="https://www.bloomberglaw.com/bloomberglawnews/daily-tax-report/XEM0QELK000000" target="_blank">Read the full article</a> (subscription required).</p>{3E04707B-65CA-4DC6-ABF4-80A785DAA8E7}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/02/nancy-perkins-talks-occ-mortgage-escrow-rules-with-politicoNancy Perkins, counsel at Arnold &amp; Porter, was quoted in the recent<em> POLITICO</em> article, &ldquo;Banks, state regulators and the OCC clash over real estate escrow ruling,&rdquo; which examined competing federal and state bank regulations regarding whether nationally chartered banks must pay interest on mortgage escrow accounts.Wed, 04 Feb 2026 00:00:00 -0600<p>Nancy Perkins, counsel at Arnold &amp; Porter, was quoted in the recent <em>POLITICO</em> article, &ldquo;Banks, state regulators and the OCC clash over real estate escrow ruling,&rdquo; which examined competing federal and state bank regulations regarding whether nationally chartered banks must pay interest on mortgage escrow accounts.</p> <p>The <em>POLITICO</em> article centers on a proposed rule issued by the Office of the Comptroller of the Currency (OCC) that interprets federal banking statutes as preempting the application to national banks and federal savings banks of state laws requiring the payment of interest on funds held in escrow for real estate property taxes and insurance. The question of whether federal banking law preempts such state requirements has been highly controversial, with state banking regulators claiming the OCC&rsquo;s position to be an overreach. </p> <p>Nancy highlighted the ongoing legal uncertainty surrounding the issue, particularly in light of recent court decisions, making this an area to watch in the coming months. </p> <p>&ldquo;One thing that could come of this is a split in the circuits about how the [banking preemption] standard applies,&rdquo; she said.</p> <p><a rel="noopener noreferrer" href="https://subscriber.politicopro.com/article/2026/01/banks-state-regulators-and-the-occ-clash-over-real-estate-escrow-ruling-00757013" target="_blank">Read the full article</a> (subscription required).</p>{5467DC67-14AA-4710-8048-2DD3CBDE16E0}https://www.arnoldporter.com/en/perspectives/news/2026/02/arnold-porter-advises-panama-in-securing-jpy-denominated-financingArnold &amp; Porter recently advised the Republic of Panama and its Ministry of Economy and Finance in connection with a loan provided by Banco Bilbao Vizcaya Argentaria.Wed, 04 Feb 2026 00:00:00 -0600<p>Arnold &amp; Porter recently advised the Republic of Panama and its Ministry of Economy and Finance in connection with a loan provided by Banco Bilbao Vizcaya Argentaria. The loan is supported by a policy-based guarantee from the International Bank for Reconstruction and Development (World Bank) and a second-tier sovereign financial obligation guarantee from the Multilateral Investment Guarantee Agency (MIGA), which enabled the Republic to obtain favorable financing terms. The loan is denominated in Japanese yen in an amount equivalent to US$1.4 billion.</p> <p>The Arnold &amp; Porter team that advised Panama included counsel Arturo Caraballo, senior associate Mateo Morris, associate Lica Porcile, and partners Whitney Debevoise and Greg Harrington. Partner David Sausen and associate Lauren Olaya advised on tax matters.*</p> <p><em>*Bruno Woicik, a visiting attorney from Brazil, also assisted the team with aspects of the deal. Woicik is admitted to practice law only in Brazil. He is not engaged in the practice of law in any U.S. jurisdiction.</em></p>{1C4B457D-C2E1-4738-84E2-E35D2D89C18A}https://www.biosliceblog.com/2026/02/uk-pmcpa-releases-new-guidance-on-package-deals-key-takeaways-for-industry/Libby Amos-Stonehttps://www.arnoldporter.com/en/people/a/amos-libbylibby.amos-stone@arnoldporter.comEmma Elliston, Ph.D.https://www.arnoldporter.com/en/people/e/elliston-emmaemma.elliston@arnoldporter.comWed, 04 Feb 2026 00:00:00 -0600{6843F29E-942F-4A65-8145-41DA525A7CEA}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/the-eu-medical-device-shake-upFabien Royhttps://www.arnoldporter.com/en/people/r/roy-fabienfabien.roy@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comChristopher Bateshttps://www.arnoldporter.com/en/people/b/bates-christopherchristopher.bates@arnoldporter.comEftychia Siderihttps://www.arnoldporter.com/en/people/s/sideri-eftychiaeftychia.sideri@arnoldporter.comThe EU medical devices regulatory framework continues to evolve, with significant legislative and policy reforms progressing in 2026. For companies bringing medical devices and in vitro diagnostics (IVDs) to the EU market, the landscape remains complex and resource intensive, but meaningful changes are now on the horizon.Tue, 03 Feb 2026 00:00:00 -0600<h2>Overview </h2> <p> The EU medical devices regulatory framework continues to evolve, with significant legislative and policy reforms progressing in 2026. For companies bringing medical devices and in vitro diagnostics (IVDs) to the EU market, the landscape remains complex and resource intensive, but meaningful changes are now on the horizon.<br /> <br /> Although the EU&rsquo;s Medical Device Regulation (MDR) and <em>In Vitro</em> Diagnostic Regulation (IVDR), which came into force in 2021 and 2022 respectively, introduced stricter requirements compared to the previous Directives, such as on clinical evidence, post market surveillance, and economic operator requirements, their implementation has been challenging. The absence of grandfathering for legacy devices, limited notified body capacity, and strict rules without clear guidance have created backlogs, slowed innovation, and increased the risk of supply disruption. These pressures have prompted sustained criticism and repeated calls for reform.<br /> <br /> For non-EU manufacturers, the stakes are even higher. Requirements include appointing an EU Authorized Representative, registering in EUDAMED, and ensuring compliance with EU-specific labelling and language requirements. Failure to plan early for notified body engagement and certificate renewals can result in missed market opportunities. The complexity and cost of compliance have led some companies to reconsider EU launches altogether, underscoring the importance of proactive strategy and resource allocation. Against this backdrop, proactive planning is increasingly critical to maintaining EU market access.<br /> <br /> In March 2025, we published an <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/03/eu-medical-devices-legislation-what-you-need-to-know">Advisory</a> on the latest developments and ongoing challenges with EU medical device legislation. Since then, the European Commission has released major new proposals to amend the MDR and IVDR, alongside reforms to notified body oversight and new transparency obligations tied to the phased rollout of EUDAMED. This Advisory summarizes the most important changes manufacturers should monitor and prepare for now.</p> <h3> Proposed Changes to MDR and IVDR </h3> <p> Towards the end of 2024, the European Commission launched a public consultation on the MDR and IVDR, framed as a &ldquo;targeted evaluation&rdquo; to identify problems with the legal framework. This was launched in part due to the European Parliament adopting a resolution on the urgent need to revise the MDR and the IVDR. Since then, on September 8, 2025, the European Commission published a call for evidence on &ldquo;the targeted revision&rdquo; of the regime, with the aim of identifying methods to tackle critical issues experienced throughout the industry caused by the regulations.<br /> <br /> On December 16, 2025, the European Commission <a rel="noopener noreferrer" href="https://health.ec.europa.eu/medical-devices-sector/new-regulations_en" target="_blank">published</a> its proposals on the amendment of the MDR and IVDR, marking a pivotal moment for the EU healthcare and MedTech landscape.<br /> <br /> The proposals provide an overhaul of current requirements under the MDR and IVDR, aimed at streamlining regulatory processes, reducing administrative burden, and enhancing predictability, while maintaining patient safety and public health. For manufacturers, healthcare institutions, innovators, and industry stakeholders, the proposals signal a shift toward a more proportionate, risk-based system that supports timely access to critical technologies without compromising quality.<br /> <br /> A summary of key proposals is set out below:</p> <ul style="margin-left: 40px;"> <li><strong>Adaptive Pathways for Breakthrough and Orphan Devices</strong>: The proposals would create faster, priority assessment routes for qualifying &ldquo;breakthrough&rdquo; and &ldquo;orphan&rdquo; devices, via rolling reviews and expert panel input, enabling earlier EU market access. Notified bodies could issue certificates based on reduced pre market data and supported mandatory post market evidence generation. Expert panel involvement would be formalized, with a statutory basis for providing early scientific advice and supporting pre market evaluation. Together, these reforms aim to lower entry barriers for high innovation or high unmet need devices while maintaining a proportionate, risk based oversight approach.</li> <li><strong>Streamlined Clinical Evidence and Equivalence</strong>: The proposals would reinstate a more flexible equivalence pathway for Class IIb and III devices, allowing manufacturers to rely on existing clinical data &mdash; including peer data and published literature &mdash; without requiring contracts with other manufacturers. This would reduce the need for new, resource intensive clinical investigations being conducted for well understood technologies and enable more proportionate evidence generation aligned with device risk.</li> <li><strong>Extended Certificate Validity and Grandfathering</strong>: The proposals would allow certificates to remain valid indefinitely, with expiry applied only where a notified body identifies a justified risk based reason to limit validity. They would also enable certain legacy CE marked devices designated as orphan devices to remain on the EU market beyond the current transitional deadlines. These changes aim to reduce supply disruption, support continuity for established product portfolios, and provide non EU manufacturers with a more predictable and stable pathway for maintaining EU market access while planning longer term compliance strategies.</li> <li><strong>Revised Classification Rules (Especially Software)</strong>: At present, many software devices are classified within higher risk classes by default, often irrespective of their actual clinical impact. This has increased the need for notified body involvement and related costs. The European Commission proposes targeted revisions to the classification rules to better reflect actual risk, including reclassifying certain software and accessories into lower risk categories. Provided that a lower classification is possible (this may not be the case for the majority of software devices), manufacturers of software or accessories may be able to avoid costly assessments, reducing time and expenses.</li> <li><strong>Improved Notified Body Governance</strong>: The proposals would introduce structured notified body-manufacturer dialogue, risk based assessment approaches, remote audit options, and a formal dispute resolution mechanism. These reforms aim to increase transparency, harmonize practices across Member States, and give manufacturers clearer and earlier insight into classification, evidence expectations, and conformity assessment pathways &mdash; ultimately improving predictability and reducing procedural delays.</li> <li><strong>Regulatory Sandboxes and Digitalization</strong>: The proposals would establish EU level regulatory sandboxes to support evidence generation for innovative technologies, including AI driven and adaptive systems, by allowing controlled, real world, or simulated testing under regulatory oversight. They also introduce broader digitalization measures, such as enhanced digital declarations, clearer and more consistent cybersecurity requirements, and coordinated mechanisms for combined studies. These reforms aim to give innovators earlier clarity, more flexible evidence pathways, and a regulatory framework better suited to emerging technologies.</li> <li><strong>International Reliance</strong>: The proposals introduce new provisions that would empower the EU to enhance regulatory cooperation with other authorities. By enabling the EU to rely on trusted third-country assessments (e.g., as part of the Medical Device Single Audit Program), companies may see reduced duplication of audits or certifications for manufacturers operating across multiple markets. While this does not change the requirement for full compliance with EU regulatory obligations, it may support greater international alignment over time.</li> <li><strong>Reducing the Regulatory Burden on AI Medical Devices</strong>: The EU AI Act introduces a new regulatory framework for &ldquo;high-risk AI systems,&rdquo; which would apply to most AI medical devices. Manufacturers would need to comply with this framework in parallel with the MDR or IVDR requirements (as applicable). The proposals provide that AI medical devices, which are considered high-risk AI systems, would not need to comply with the AI Act in addition to the MDR or IVDR. AI-specific requirements may, however, be directly integrated into the EU medical device framework through Delegated or Implementing Acts. If adopted, it would represent a significant simplification of the rules for AI medical devices.</li> </ul> <h2> Next Steps</h2> <p> The proposals have been submitted to the European Parliament and Council for review. Once they have adopted their own positions on the text, negotiations to agree on a final text to be formally adopted will take place. At this stage, it is challenging to anticipate what the result of the political negotiations will be, and it is unclear when the new rules will take effect. However, please see below a potential timeline based on feedback collected from various stakeholders:<br /> <br /> <img alt="Timeline diagram of the MDR/IVDR 2.0 legislative process from 2026 to 2028, showing quarterly milestones including public feedback, Parliament and Council reviews, adoption of positions, trilogues, political agreement, and entry into force, with later timing dependent on legislative progress." src="/-/media/images/advisory-assets/2026/02/mdr-ivdr-20-graphic.png?rev=4100fcd7197843fe8f982e8ac035d8ca&amp;hash=22614AEFBCEDACE9EAC438329DEA1C69" width="984" height="258" /><br /> <br /> A <a rel="noopener noreferrer" href="https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14808-Medical-devices-and-in-vitro-diagnostics-targeted-revision-of-EU-rules_en" target="_blank">feedback</a> period has been opened, running from January 7, 2026 to March 5, 2026. All feedback received will be summarized by the European Commission and presented to the Parliament and Council with the aim of feeding into the legislative debate.<br /> <br /> Note that the MDR and IVDR have not yet been amended; therefore, the transition periods under the MDR and IVDR, as described in our previous <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/03/eu-medical-devices-legislation-what-you-need-to-know">Advisory</a>, should still be adhered to.</p> <h3> EU&rsquo;s New Implementing Regulation for Notified Bodies</h3> <p> On December 12, 2025, the European Commission introduced a draft <a rel="noopener noreferrer" href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=intcom:Ares%282025%2911081575" target="_blank">Implementing Regulation</a> to standardize the quality management and procedural protocols for notified bodies under the MDR and IVDR. <br /> <br /> The proposal directly addresses long standing pain points: opaque pricing, unpredictable timelines, and variable re certification practices across notified bodies. It would impose standardized quotation inputs (so you know exactly what information notified bodies need before they price), require detailed cost breakdowns (and justification for increases), set EU wide maximum timelines (e.g., 30 days for application review, 120 days for QMS audits, 90 days for product verification, and 15 days to issue certificates), and limit/structure &ldquo;interruptions&rdquo; during reviews to reduce serial back and forth. It also mandates notified body monitoring and public reporting on duration and costs, and codifies re certification content and clocks (60 days for notified body review; 15 days to issue renewed certificates). If adopted after <a rel="noopener noreferrer" href="https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14471-Medical-devices-uniform-application-of-the-requirements-for-notified-bodies_en" target="_blank">consultation</a> in 2026 as planned, these rules could materially improve predictability for manufacturers budgeting EU launches or MDR/IVDR certificate renewals. Please note that notified bodies are currently unhappy with the proposed timelines and are pushing to change them.)<br /> <br /> What this means for you and steps you can take:</p> <ul style="margin-left: 40px;"> <li><strong>Notified body selection becomes more strategic and more comparable</strong>. Use the forthcoming public performance and cost data to shortlist with the right designation scope and capacity for your technology class. Build these maximum timeline clocks into your internal EU launch or renewal plans and commercial commitments.</li> <li><strong>Front load your submission package</strong>. Because the proposal caps and structures review interruptions, weak or incomplete files will be riskier; invest early in technical documentation, clinical/performance evidence, and QMS readiness to avoid burning your interruption &ldquo;allowance.&rdquo;</li> <li><strong>Budget with fewer unknowns</strong>. Standardized quotations and cost variance justifications should reduce contingency buffers; still, retain some flexibility for expert panel/European Medicines Agency related pauses, which are handled separately under the draft proposal.</li> <li><strong>Plan renewals earlier</strong>. With formalized re certification content and timelines, as well as a one year advance notification trigger, align your evaluation and safety reports, risk files, and state of the art updates well ahead of expiry to stay within the 60 and 15 day notified body clocks.</li> </ul> <p> The measures would be phased in, respecting existing conformity agreements, with full annual reporting obligations commencing in 2028. The draft is currently open for public consultation until January 23, 2026, after which it will progress toward anticipated adoption in early 2026.</p> <h3> New Transparency Requirements</h3> <p> On November 27, 2025, the European Commission <a rel="noopener noreferrer" href="https://eur-lex.europa.eu/eli/dec/2025/2371/oj/eng" target="_blank">announced</a> that four critical modules of EUDAMED &mdash; the EU&rsquo;s centralized medical device and IVD database &mdash; are now fully functional, triggering a six-month transition period.</p> <p>Starting May 28, 2026, manufacturers, importers, authorized representatives, notified bodies, and national authorities must comply with various transparency obligations under both the MDR and IVDR.<br /> <br /> We have set out a compliance checklist for EU market entry in relation to these requirements: </p> <p><strong>1. Device Registration</strong></p> <ul style="margin-left: 40px;"> <li>Register all new device models in EUDAMED before placing them on the EU market.</li> <li>Include unique device identifier/device identifier (UDI-DI), model details, and relevant conformity assessment information.</li> </ul> <p> <strong>2. Economic Operator Registration</strong></p> <ul style="margin-left: 40px;"> <li>Ensure your company, authorized representative, and importers are registered in EUDAMED.</li> <li>Obtain a Single Registration Number (SRN) for each economic operator.</li> </ul> <p> <strong>3. Notified Body Certificates</strong></p> <ul style="margin-left: 40px;"> <li>Upload new certificates issued by notified bodies into EUDAMED immediately.</li> <li>Plan for uploading historical certificates still valid by 2027 for full transparency.</li> </ul> <p><strong>4. Data Verification and Maintenance</strong></p> <ul style="margin-left: 40px;"> <li>Implement internal processes for regular data verification in EUDAMED.</li> <li>Confirm that authorized representatives and importers validate your registration.</li> </ul> <p> <strong>5. Transparency and Competitive Insight</strong></p> <ul style="margin-left: 40px;"> <li>Prepare for public visibility of notified body certificates, which will be used for benchmarking.</li> <li>Consider monitoring competitor certifications for strategic positioning.</li> </ul> <p><strong>6. Operational Readiness</strong></p> <ul style="margin-left: 40px;"> <li>Allocate resources for EUDAMED data entry and compliance monitoring.</li> <li>Train regulatory and quality teams on new EU requirements and timelines.</li> </ul> <p> <strong>7. Timeline Awareness</strong></p> <ul style="margin-left: 40px;"> <li>The transition period ends May 28, 2026; full compliance for new devices is required thereafter.</li> <li>Historical certificate uploads for devices where these are still placed on the market are due in 2027.</li> </ul> <p> If you would like to discuss the current changes and how they may impact your product portfolio in the EU, please feel free to reach out to any of the authors or your existing Arnold &amp; Porter contact. You can also follow developments on our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/" target="_blank">BioSlice Blog</a>.</p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{21C39224-EB9C-4D13-A452-5375F7F3D5B1}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/ftc-antitrust-enforcement-development-pipeline-dealsMatthew Tabashttps://www.arnoldporter.com/en/people/t/tabas-matthewmatthew.tabas@arnoldporter.comRyan Z. Wattshttps://www.arnoldporter.com/en/people/w/watts-ryan-zryan.watts@arnoldporter.comSummer Perezhttps://www.arnoldporter.com/en/people/p/perez-summersummer.perez@arnoldporter.com<p>On January 9, 2026, Judge Rudolph Contreras in the United States District Court for the District of Columbia granted the Federal Trade Commission&rsquo;s (FTC) request for a preliminary injunction in the agency&rsquo;s challenge to the proposed acquisition of medical device startup JenaValve Technology, Inc. (JenaValve) by Edwards Lifesciences Corporation (Edwards). Despite arguments from Edwards and JenaValve that the merger would benefit high-risk patients, the court agreed with the FTC that the proposed merger would harm competition in a specialized cardiac device market where no product has yet received clearance from the U.S. Food and Drug Administration. The court&rsquo;s opinion, filed in redacted form on January 28, 2026, provides helpful guidance for parties considering transactions involving products in development.&nbsp;</p>Tue, 03 Feb 2026 00:00:00 -0600<p> <p>On January 9, 2026, Judge Rudolph Contreras in the United States District Court for the District of Columbia granted the Federal Trade Commission&rsquo;s (FTC) request for a preliminary injunction in the agency&rsquo;s challenge to the proposed acquisition of medical device startup JenaValve Technology, Inc. (JenaValve) by Edwards Lifesciences Corporation (Edwards). Despite arguments from Edwards and JenaValve that the merger would benefit high-risk patients, the court agreed with the FTC that the proposed merger would harm competition in a specialized cardiac device market where no product has yet received clearance from the U.S. Food and Drug Administration (FDA). The court&rsquo;s opinion, filed in redacted form on January 28, 2026, provides helpful guidance for parties considering transactions involving products in development. </p> <h2>The FTC&rsquo;s Challenge</h2> <p>On July 23, 2024, Edwards, a global cardiac device manufacturer, agreed to acquire JenaValve for $945 million. JenaValve is developing Trilogy, a transcatheter aortic valve replacement (TAVR) device to treat aortic regurgitation (AR), which affects over 100,000 Americans. </p> <p>Just one day before Edwards&rsquo; agreement to purchase JenaValve, Edwards agreed to acquire JC Medical for $115 million, plus a $25 million investment in JC Medical&rsquo;s parent company. The transaction did not trigger a filing and waiting period under the Hart-Scott-Rodino Act, and later in July 2024, Edwards closed the acquisition of JC Medical, including SOJOURN, its TAVR-AR device in development. As the FTC challenge ultimately made clear, JenaValve was not aware of Edwards&rsquo; acquisition of JC Medical. </p> <p>After a lengthy investigation, the FTC voted unanimously on August 6, 2025 to initiate an administrative proceeding to determine whether the proposed merger would substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act. On the same day, the FTC sought a preliminary injunction in the United States District Court for the District of Columbia to prevent the merger from closing before the FTC could complete its administrative proceeding.</p> <p>In its challenge, the FTC asserted that there are limited current treatments for AR, with open-heart surgery as the only FDA-approved treatment. TAVR-AR devices, such as Trilogy and SOJOURN, would allow AR to be treated through a device implanted through a catheter, without the need for open-heart surgery. The FTC alleged that JenaValve and JC Medical represented the only two companies conducting U.S. clinical trials for minimally invasive TAVR-AR devices. </p> <p>On November 18, 2025, the court held a six-day evidentiary hearing with testimony from the merging parties, third parties, and several economic and industry experts, and ultimately granted the FTC&rsquo;s request for a preliminary injunction on January 9, 2026 in a sealed order. The parties abandoned the transaction shortly thereafter. </p> <h2>The Court&rsquo;s Opinion</h2> <p>In a 107-page opinion, the court outlined its reasons for enjoining the Edwards/JenaValve transaction, holding that the deal &ldquo;would eliminate the vigorous competition in which Edwards and JenaValve currently engage,&rdquo;[[N: Op. at 3]] and reduce innovation by eliminating competition for TAVR-AR devices that are still being developed. Importantly, Judge Contreras&rsquo;s opinion lays out considerations for how courts will assess market definition as well as the competitive effects of mergers involving products in development. </p> <h3>Court Finds Pre-Commercial Products Can Constitute a Relevant Product Market </h3> <p>Section 7 of the Clayton Act prohibits acquisitions &ldquo;where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.&rdquo;[[N: 15 U.S.C. &sect; 18.]] A first step, therefore, is defining the line of commerce or relevant product market in which to analyze the transaction. Here, the court concluded that the relevant product market encompassed the research, development, and commercialization of transfemoral TAVR-AR devices, despite the fact that there are no such devices yet approved for use in the U.S. </p> <p>Under the practical indicia factors laid out in <em>Brown Shoe Co. v. United States</em>, 370 U.S. 294, 323 (1962), which are used (among other tools) to define relevant product markets, the court found that transfemoral TAVR-AR devices differ from other AR treatment options in their peculiar characteristics and uses, customers, and prices, and that the medical device industry distinguishes transfemoral TAVR-AR devices from all other AR treatments. To reach its conclusion, the court relied on expert testimony from interventional cardiologists about the interchangeability of TAVR-AR devices with other treatments and ordinary course documents on the merging parties&rsquo; pricing strategies and industry recognition. For example, JenaValve documents suggested an intent to sell Trilogy at a premium price after receiving FDA commercial approval on the assumption that Trilogy would be the only device for the treatment of AR in the U.S. In corporate presentations, JenaValve referred to AR as an &ldquo;untapped market,&rdquo; and Edwards stated that &ldquo;a dedicated AR product is needed for a unique patient population.&rdquo;[[N: Op. at 36.]] A qualitative hypothetical monopolist test also supported the court&rsquo;s relevant product market definition, albeit without limiting the market to only transfemoral devices. The court agreed with the FTC&rsquo;s economic expert that, based on testimony from physicians and defendants&rsquo; ordinary course documents, patients and physicians would not substitute another procedure or device in response to a small but significant and non-transitory increase in price, even without actual pricing data, on TAVR-AR devices, and that these treatment options should therefore be excluded from the relevant product market.</p> <p>Although the defendants argued that defining a market of pre<span>‑</span>commercial products was too speculative, the court disagreed. It held that including TAVR<span>‑</span>AR devices in the relevant product market was prudent, even though no device has yet received commercial approval, because the proposed merger would reduce Edwards&rsquo; incentives to innovate. &ldquo;In any event, courts, economists, and the Merger Guidelines do recognize that a relevant antitrust market can include products still in clinical development.&rdquo;[[N:Op. at 42.]]</p> <p>The court pointed to evidence suggesting that Edwards&rsquo; and JenaValve&rsquo;s TAVR-AR devices will be close substitutes and will compete among similar patient indications. The court also relied on the recent <em>Illumina, Inc. v. FTC</em> decision, where the Fifth Circuit found a viable antitrust market that included products in clinical trials because there was &ldquo;ongoing competition to bring additional products to market.&rdquo;[[N: 88 F.4th 1036, 1049-1050 (5th Cir. 2023).]] Here, the court found that &ldquo;there is indisputably ongoing competition&rdquo; between Edwards and JenaValve, that defendants&rsquo; TAVR-AR devices have been clinically validated, and that both devices are expected to go to market in the next few years.[[N: Op. at 44 (quoting <em>Illumina</em>, 88 F.4th at 1050).]]</p> <h3>Court Finds FTC Demonstrates Substantial Lessening of Competition Without a Presumption</h3> <p>The court found that the FTC met its prima facie burden of showing a &ldquo;reasonable probability&rdquo; that an effect of the proposed merger &ldquo;may be substantially to lessen competition.&rdquo;[[N: Op. at 49 (quoting <em>FTC v. Arch Coal Inc.</em>, 329 F. Supp. 2d 109, 116 (D.D.C. 2004)).]] The court relied on the facts and economic analyses presented by the FTC, showing the proposed merger would eliminate substantial head-to-head competition between Edwards and JenaValve.</p> <p>Importantly, the court was not convinced that the FTC was entitled to a &ldquo;short cut&rdquo; presumption of illegality simply based on market share and concentration statistics under <em>United States v. Philadelphia National Bank</em>, 34 U.S. 321, 363 (1963). The 2023 Merger Guidelines articulated the agencies&rsquo; focus on structural presumptions in merger analysis, relying heavily on <em>Philadelphia National Bank</em>. Defendants argued that if the relevant product market comprises only pre-commercial products, there are no reliable market shares on which to calculate market concentration. The court agreed, and held that the FTC did not establish that the presumption typically holds in what it called &ldquo;innovation markets,&rdquo; citing to statements by the FTC under prior administrations that belied its current argument. </p> <ul style="margin-left: 40px;"> <li>In particular, the court noted that the FTC had previously explained that competition analysis in these situations may require a different calculus: A 1996 FTC report on &ldquo;Competition Policy in the New High-Tech, Global Marketplace&rdquo; stated that &ldquo;a general causal relationship between innovation and competition&rdquo; had not been established.[[N: Op. at 52.]]</li> <li>Further, former FTC Chairman Tim Muris&rsquo; closing statement in the FTC&rsquo;s investigation of the Genzyme Corporation/Novazyme Pharmaceuticals, Inc. combination had noted that &ldquo;[f]ar from serving to protect consumer interests,&rdquo; applying the presumption in cases such as that one would &ldquo;routinely block[] mergers likely to accelerate innovation.&rdquo;[[N: Id.]]</li> </ul> <p>Ultimately, the court found that the FTC had not done enough to prove that the presumption, based on market shares and concentration statistics, should be applied to the relevant product market here, which comprised only pre-commercial products. </p> <p>Despite not benefitting from the presumption, the court found that the FTC had still met its burden to show that it was likely to be successful in showing that the proposed merger is likely to have extensive anticompetitive effects. </p> <p><em>First</em>, the court found that Edwards and JenaValve are currently the only two competitors in the TAVR-AR market in the U.S. Ordinary course documents and testimony from executives supported the conclusion that, prior to Edwards&rsquo; acquisition of JC Medical, JenaValve and JC Medical viewed each other as their closest competitors in the relevant market. Internal presentations from JC Medical referred to JenaValve as &ldquo;[o]ur closest competitor&rdquo; in the U.S. TAVR-AR market, and JenaValve similarly viewed JC Medical as its &ldquo;main competitor.&rdquo;[[N: Op. at 55.]]</p> <p><em>Second</em>, the court found that substantial evidence demonstrated that Edwards and JenaValve vigorously compete in the TAVR-AR market in the U.S. Defendants&rsquo; ordinary course documents and testimony showed that Edwards and JenaValve spur each other to increase the pace of innovation and bring a superior TAVR-AR device to patients. The court concluded that defendants compete in several areas related to their TAVR-AR products, including valve sizes, patient indications, speed to market, clinical testing, and clinical outcomes. Additionally, the court found that Edwards and JenaValve would engage in price competition once their TAVR-AR devices are commercialized.</p> <p><em>Third</em>, the court found that the proposed merger is likely to lessen the competition between Edwards and JenaValve substantially. Even at the clinical trial stage, Edwards and JenaValve were responding to competitive pressure from the other by accelerating development and enrollment in clinical trials, but that competitive pressure would not exist after the proposed merger. The court found &ldquo;the central question here is not whether Edwards would have strong incentives to develop SOJOURN if JenaValve were out of the picture, but rather, whether Edwards would be meaningfully incentivized to develop both SOJOURN <em>and</em> Trilogy if it owns the two devices.&rdquo;[[N: Op. at 67 (emphasis in original).]] Further, the court cited internal evidence indicating that Edwards anticipated setting a premium price if it owned both TAVR-AR devices.[[N: Op. at 66.]]</p> <p>Defendants advanced several arguments to overcome the FTC&rsquo;s claims of likely anticompetitive effects from the transaction, but the court rejected each in turn. For example, the court found that entry would not offset the proposed merger&rsquo;s anticompetitive effects because there was little evidence suggesting an imminent threat of new entrants to the TAVR-AR market. Defendants also argued JenaValve was a weakened competitor and that the transaction would result in meaningful efficiencies. Despite JenaValve&rsquo;s manufacturing limitations and financial constraints, the court was not convinced that these weaknesses were so severe that JenaValve would be unable to compete effectively without combining with Edwards. The court also found that defendants did not demonstrate how Edwards&rsquo; resources and capabilities would produce merger-specific and independently verifiable cost savings that would be passed on to consumers. Finally, the court found that JenaValve had feasible alternatives to an acquisition by Edwards. Indeed, JenaValve was in discussions with other strategic buyers, including one who appeared to express substantial interest in JenaValve. </p> <h2>Takeaways</h2> <p>The FTC&rsquo;s challenge to the Edwards/JenaValve transaction and the court&rsquo;s decision provides helpful guidance for parties considering potential transactions involving pre-commercial products. First, the decision recognizes the proposition from the 2023 Merger Guidelines that merging parties&rsquo; pipeline products can not only constitute a competitive overlap but also may constitute a relevant product market, even if the only products at issue are not yet sold in commerce. The factors for assessing the relevant market are likely to be similar to those for commercial products, and courts will evaluate whether overlapping products are close substitutes. Ordinary course documents and industry experts will often be key to this assessment. </p> <p>The court&rsquo;s opinion makes clear that the FTC may not benefit from a presumption of illegality for mergers combing overlapping pipeline products. This would create an additional challenge for the FTC to establish a substantial lessening of competition from the transaction. But Edwards/JenaValve shows this is not an impossible task. By relying on the merging parties&rsquo; ordinary course documents, testimony from executives, and testimony from other industry participants about ways in which they are already competing, the FTC may be able to satisfy its burden. </p> <p>This decision marks a victory for the FTC and signals its intention to enforce the antitrust laws with respect to products in development where it can develop a factual record showing that products under development compete in the form of product design and/or speed to market and will compete in the future once commercialized.&nbsp;</p> </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{575FDB02-33BF-4881-AA8C-D22BF261CCF0}https://www.arnoldporter.com/en/perspectives/advisories/2026/02/chinese-regulators-publish-new-model-casesJohn Tanhttps://www.arnoldporter.com/en/people/t/tan-johnjohn.tan@cn.arnoldporter.comSheena Thomashttps://www.arnoldporter.com/en/people/t/thomas-sheenasheena.thomas@arnoldporter.comSiyi Guhttps://www.arnoldporter.com/en/people/g/gu-siyisiyi.gu@cn.arnoldporter.comOn January 16, 2026, the Shanghai office of the Cyberspace Administration of China (Shanghai CAC) published eight model cases relating to network data security protection. These cases highlighted regulators&rsquo; continued focus on data privacy and cybersecurity, and provided practical guidance on regulators&rsquo; interpretation of key laws and regulations. This Advisory summarizes the eight cases, which span three main enforcement areas: (1) network data security; (2) cross-border transfers; and (3) personal information protection. It concludes with questions for companies to consider when assessing their compliance posture.Tue, 03 Feb 2026 00:00:00 -0600<p>On January 16, 2026, the Shanghai office of the Cyberspace Administration of China (Shanghai CAC)&nbsp;<a rel="noopener noreferrer" href="https://mp.weixin.qq.com/s/W_EDyn0NIltRWO72L7dVyA" target="_blank">published eight model cases</a> relating to network data security protection. These cases highlighted regulators&rsquo; continued focus on data privacy and cybersecurity, and provided practical guidance on regulators&rsquo; interpretation of key laws and regulations, including the Cybersecurity Law (CSL, 网络安全法), the Personal Information Protection Law (PIPL, 个人信息保护法), the Data Security Law (DSL, 数据安全法), and the <a rel="noopener noreferrer" href="https://www.gov.cn/zhengce/zhengceku/202409/content_6977767.htm" target="_blank">Regulation on Network Data Security Management</a> (Regulation, 网络数据安全管理条例). </p> <p>This Advisory summarizes the eight cases, which span three main enforcement areas: (1) network data security; (2) cross-border transfers; and (3) personal information protection. It concludes with questions for companies to consider when assessing their compliance posture.</p> <h2>Network Data Security Obligations</h2> <p>Under the CSL, DSL, the Regulation, and other relevant rules, data processors (akin to &ldquo;controllers&rdquo; under the European Union&rsquo;s General Data Protection Regulation (EU GDPR)) must implement network data security measures, including:</p> <p style="margin-left: 40px;">1. Compliance with the requirements under China&rsquo;s cybersecurity Multi-Level Protection Scheme (MLPS, 网络安全等级保护制度)[[N: China&rsquo;s MLPS requirement was first published in 2007 by China&rsquo;s Ministry of Public Security and primarily focuses on security of IT systems. Compliance with the MLPS is a requirement imposed on all network data processors according to Article 27 of the DSL and Article 23 of the CSL. Under relevant national standards and guidance, network data processors must assess and determine its own cybersecurity level (from level one to level five, with level one being the least risky), and take corresponding measures such as expert review of the self-determined level and protective measures taken by data processors, and filing of assessment reports with relevant public security authorities, based on its cybersecurity level.]]</p> <p style="margin-left: 40px;">2. Establishing network data security management systems</p> <p style="margin-left: 40px;">3. Technical measures such as encryption, backup, access control, and security authentication to protect network data from being tampered with, damaged, leaked, or illegally accessed or used</p> <p>A summary of the model cases relating to the failure to implement data security protection measures is below.</p> <table style="width: 856px; height: 730px;"> <tbody> <tr> <td style="text-align: center; vertical-align: top; background-color: #002060;"><strong><span style="font-size: 16px; color: #ffffff;">&nbsp;No.&nbsp;</span></strong></td> <td style="text-align: center; vertical-align: top; background-color: #002060;"><span style="color: #ffffff;"><strong><span style="font-size: 16px;">&nbsp;Case Summary</span></strong></span></td> <td style="text-align: left; background-color: #002060;"><strong><span style="font-size: 16px; color: #ffffff;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Penalties&nbsp;</span></strong><span style="color: #3f3f3f;">[[N: Specific fine amounts were not disclosed in the published model cases. For reference, serious violations of the CSL and DSL can result in fines up to RMB 10 million for entities and RMB 1 million for responsible individuals; serious PIPL violations can reach RMB 50 million or 5% of the prior year's revenue.]]</span></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">1</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">A company providing IT services for the logistics industry exposed the interface of its Elasticsearch database directly to the public when transmitting large volumes of internal business data. This exposed the data, including sensitive personal information, to illegal access and potential data leakage. <br /> <br /> </span></li> <li><span style="font-size: 16px;">Regulators found that the company failed to (1) conduct an assessment of its cybersecurity level; and (2) did not take technical protective measures for the relevant data in the implicated systems, such as encryption, access controls, port security strategies, or other measures.</span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate within a specified time period and was given a warning and fined.</span></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">2</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">&nbsp;A company providing Internet of Things technology services had system logs containing sensitive personal information on its servers that were improperly exposed to the public internet, leading to a data leak.</span></li> </ul> <ul> <li><span style="font-size: 16px;">Regulators found that the company failed to (1) effectively fulfill its network data security protection obligations; (2) establish a network data security management system; and (3) take appropriate technical measures to ensure data security, resulting in the data leak. </span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate the issue within a specified time period and was given a warning.<br /> </span></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">3</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">A file management center&rsquo;s systems had a security flaw that allowed anyone to look up archive information by entering an ID number, putting personal information at risk. </span></li> </ul> <ul> <li><span style="font-size: 16px;">Regulators found that the center (1) failed to effectively fulfill its primary responsibilities and obligations to implement network data security and personal information protection; (2) had an ineffective security management system; and (3) had failed to implement technical measures.<br /> </span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The center was ordered to remediate the issue within a specified time period and was given a warning.</span><br /> </td> </tr> </tbody> </table> <br /> <h2>Cross-Border Transfers of Personal Information</h2> <p>Cross-border transfers of personal information continue to be a <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/10/china-data-privacy-enforcement-cross-border-data-transfer">key enforcement area</a> for Chinese regulators in recent years. Enforcement has focused on:</p> <p style="margin-left: 40px;">1. Whether the data processor undertook one of the three mechanisms promulgated by the PIPL for the cross-border transfer of personal information, including the <a href="https://www.arnoldporter.com/en/perspectives/advisories/2025/11/china-requirements-personal-information-protection-certification">Personal Information Protection Certification</a> issued by Certification Institutions approved by Cyberspace Administration of China (CAC, 国家互联网信息办公室) (PIP Certification, 个人信息保护认证), Security Assessment performed by the CAC (Security Assessment, 数据出境安全评估), and filing the Standard Contractual Clauses (SCC Filing, 个人信息出境标准合同备案)</p> <p style="margin-left: 40px;">2. Whether the data processor completed a Personal Information Protection Impact Assessment (PIA) prior to the transfer, including assessment of the legality, legitimacy, and necessity of the purpose and method of personal information processing</p> <p style="margin-left: 40px;">3. Whether the data processor had informed the individuals and obtained separate consent prior to the transfer</p> <p>A summary of the model cases relating to cross-border transfers of personal information is below.</p> <p> </p> <table style="width: 855px; height: 434px;"> <tbody> <tr> <td style="text-align: center; vertical-align: top; background-color: #002060;"><strong><span style="font-size: 16px; color: #ffffff;">No.</span></strong></td> <td style="text-align: center; vertical-align: top; background-color: #002060;"><span style="color: #ffffff;"><strong><span style="font-size: 16px;">Case Summary</span></strong></span></td> <td style="text-align: center; vertical-align: top; background-color: #002060;"><strong><span style="font-size: 16px; color: #ffffff;">Penalties</span></strong></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">1</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="line-height: 115%; font-size: 16px;">A company in the hotel industry operated an online booking system, which transferred the personal information of Chinese citizens abroad. The company applied for CAC Security Assessment, and the CAC determined that the cross-border transfer of certain types of personal information was not necessary.</span></li> </ul> <ul> <li><span style="font-size: 16px;"><span style="line-height: 115%;">Despite the CAC&rsquo;s decision, the company failed to take effective measures and continued to unlawfully transfer personal information abroad.&nbsp;</span><br /> </span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate the issue within a specified time period and was fined.<br /> </span></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">2</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">&nbsp;A company in the property management industry operated an application for membership management, hotel booking, and hotel check-in. The personal information that the company transferred abroad included users&rsquo; accommodation information and sensitive information such as financial account information.</span></li> </ul> <ul> <li><span style="font-size: 16px;">Despite the sensitivity of the personal information transferred abroad, the company did not apply for CAC Security Assessment, conduct SCC Filing, or obtain PIP Certification. <br /> </span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate the issue within a specified time period and was given a warning.</span><br /> </td> </tr> </tbody> </table> <br /> <h2>Personal Information Protection</h2> <p>Article 22 of the Regulation provides that the collection of personal information must be necessary for providing products or services. Data processors are prohibited from collecting users&rsquo; personal information that exceeds the scope (1) necessary for providing products or services, or (2) for which data processors obtained users&rsquo; consent. Data processors are also prohibited from obtaining users&rsquo; consent through misrepresentation, fraud, coercion, or similar tactics.</p> <p>A summary of the model cases relating to personal information protection is below.</p> <p> </p> <table style="width: 859px; height: 546px;"> <tbody> <tr> <td style="text-align: center; vertical-align: top; background-color: #002060;"><strong><span style="font-size: 16px; color: #ffffff;">No.</span></strong></td> <td style="text-align: center; vertical-align: top; background-color: #002060;"><span style="font-size: 16px; color: #ffffff;"><strong>Case Summary</strong></span></td> <td style="text-align: center; vertical-align: top; background-color: #002060;"><strong><span style="font-size: 16px; color: #ffffff;">Penalties</span></strong></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"> <p><span style="font-size: 16px;">1</span></p> </td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">A company sold coffee to users through its WeChat mini-program and collected and stored related user data.</span></li> </ul> <ul> <li><span style="font-size: 16px;">However, the company&rsquo;s mini-program induced users to provide their phone numbers and register as members. In addition, the company failed its obligations of protecting personal information, had an insufficient network data security management program, and failed to adopt technical measures to secure user personal information.</span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate the issue within a specified time period and was given a warning.<br /> </span></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">2</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">A company primarily provided advertising and marketing services for applications through software development kits (SDKs).</span></li> </ul> <ul> <li><span style="font-size: 16px;">The company collected information about the users&rsquo; installed applications, without (1) adhering to its data processing rules; and (2) informing users through privacy policies or other means.<br /> </span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate the issue within a specified time period and was given a warning. Regulators required SDK operators to implement all management requirements and impose penalties on responsible individuals. <br /> </span></td> </tr> <tr> <td style="text-align: center; vertical-align: top;"><span style="font-size: 16px;">3</span></td> <td style="text-align: left; vertical-align: top;"> <ul> <li><span style="font-size: 16px;">A company operated an application providing users with hotel order inquiry services.</span></li> </ul> <ul> <li><span style="font-size: 16px;">The company&rsquo;s API interface lacked an identity verification mechanism, which allowed users to query the hotel order information of any individual using merely the order numbers, including personal information such as check-in information and payment information, risking a personal information breach.<br /> </span></li> </ul> </td> <td style="text-align: left; vertical-align: top;"><span style="font-size: 16px;">The company was ordered to remediate the issue within a specified time period and was given a warning.</span><br /> </td> </tr> </tbody> </table> <br /> <h2>Questions to Consider for Your Operations in China</h2> <p>As Chinese regulators continue to prioritize enforcement related to network data security, companies operating in China should proactively assess their compliance posture. Questions to address with internal stakeholders include:</p> <p style="margin-left: 40px;">1. Have we completed our MLPS self-assessment and filed with public security authorities where necessary?</p> <p style="margin-left: 40px;">2. For any cross-border transfers of personal information, have we completed one of the three lawful transfer mechanisms where necessary, and if there is any feedback or concern with the cross-border transfers, taken appropriate and timely remedial action?</p> <p style="margin-left: 40px;">3. Are our technical controls (e.g., encryption, access controls, identity verification) adequate for systems handling sensitive personal information?</p> <p style="margin-left: 40px;">4. Do our data collection practices align with necessity requirements, are we obtaining consent without pressure tactics or inducements, and do our privacy notices accurately describe our processing activities?</p> <p>For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold &amp; Porter&rsquo;s <a href="https://www.arnoldporter.com/en/services/capabilities/practices/privacy-cybersecurity-data-strategy">Privacy, Cybersecurity &amp; Data Strategy</a> practice group.</p> <p><em>*Zhewen Zhang contributed to this Advisory.<br /> </em></p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{8421BA0A-925B-4FA5-AC8B-61A15C50EDCA}https://www.biosliceblog.com/2026/02/is-change-on-the-horizon-for-the-uk-product-liability-regime-updated/libby.amos-stone@arnoldporter.comMon, 02 Feb 2026 00:00:00 -0600{C0188776-CECC-42B2-8931-38AD623BD1A3}https://www.arnoldporter.com/en/perspectives/news/2026/01/latinfinance-recognizes-arnold-porter-for-advising-republic-of-colombia-and-republic-of-el-salvadorArnold &amp; Porter was recognized at the annual <em>LatinFinance</em> Deals of the Year Awards for advising the Republic of Colombia on a 2025 derivatives transaction involving a total return swap provided by a consortium of global banks and a related tender offer, which won &ldquo;Sovereign Liability Management Deal of the Year.&rdquo;Fri, 30 Jan 2026 00:00:00 -0600<p>Arnold &amp; Porter was recognized at the annual <em>LatinFinance</em> Deals of the Year Awards for advising the Republic of Colombia on a 2025 derivatives transaction involving a total return swap provided by a consortium of global banks and a related tender offer, which won &ldquo;Sovereign Liability Management Deal of the Year.&rdquo; The awards ceremony, held on January 29, 2026, celebrates standout transactions and institutions in the capital markets of Latin America and the Caribbean.</p> <p>The aggregate notional amount of the return swap totaled the Swiss franc equivalent of US$9.3 billion. As part of the transaction, the consortium of banks also completed a tender offer for various series of the Republic&rsquo;s outstanding Global Bonds.</p> <p>The Arnold &amp; Porter team advising the Republic of Colombia was led by counsel Arturo Caraballo, partner Greg Harrington and senior associate Mateo Morris, with the assistance of associate Noel Abdala-Arata on general corporate matters and partner David Sausen and associate Lauren Olaya on tax matters.</p> <p><em>LatinFinance</em> also recognized Arnold &amp; Porter for advising the Comisi&oacute;n Ejecutiva Hidroel&eacute;ctrica del R&iacute;o Lempa (CEL), a public autonomous entity of the Republic of El Salvador, in connection with a US$580 million offering of notes completed in 2025, which was awarded &ldquo;Quasi-Sovereign Corporate High-Yield Bond of the Year&rdquo; during the ceremony.</p> <p>This matter was led by counsel Arturo Caraballo, partner Whitney Debevoise, and senior associate Valentina Garzon, with tax support from partner David Sausen and associate Lauren Olaya.*</p> <p><em>*Ivan Serralde Loyzaga, a visiting attorney from Mexico, also assisted the team with aspects of the transaction. Mr. Serralde is admitted to practice law only in Mexico. He is not engaged in the practice of law in any U.S. jurisdiction.</em></p>{C3678C9B-694B-43AD-9098-592ACA24D780}https://www.arnoldporter.com/en/perspectives/news/2026/01/arnold-porter-advises-israel-on-6-billion-sovereign-bond-offeringArnold &amp; Porter recently represented the State of Israel in its SEC-registered $6 billion sovereign bond offering.&nbsp;Fri, 30 Jan 2026 00:00:00 -0600<p>Arnold &amp; Porter recently represented the State of Israel in its SEC-registered $6 billion sovereign bond offering. The offering included sales of $2.25 billion of five-year bonds at 4.500%, $2 billion of 10-year bonds at 5.000%, and $1.75 billion of 30-year bonds at 5.875%. </p> <p>The transaction was completed on January 13, 2026, and the bonds were listed on the Main Market of the London Stock Exchange. Bank of America, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., and JPMorgan Chase &amp; Co. acted as Joint Book-Running Managers.</p> <p>Arnold &amp; Porter has represented Israel in a variety of areas, including numerous financing transactions. As a recognized leader in representing sovereigns in their international financial affairs, the firm has more than 30 years of experience across a wide range of financial transactions for sovereigns from Africa, Asia, Europe, Latin America, and the Middle East.</p> <p>The Arnold &amp; Porter team was led by partner David Menchel with senior associate Valentina Garzon.</p>{8B573647-7A80-424F-BE65-22691C406D40}https://www.arnoldporter.com/en/perspectives/news/2026/01/wtr-1000-2026Eleven Arnold &amp; Porter lawyers across eight practice categories were recognized in the 2026 edition of <em>World Trademark Review (WTR) 1000</em>.&nbsp;Fri, 30 Jan 2026 00:00:00 -0600<p>Eleven Arnold &amp; Porter lawyers across eight practice categories were recognized in the 2026 edition of <em>World Trademark Review (WTR) 1000</em>. The research directory annually compiles &ldquo;the top trademark professionals in key jurisdictions around the globe.&rdquo;</p> <p><em>WTR 1000</em> highlighted the firm&rsquo;s trademark enforcement and litigation capabilities, as well as its prosecution and strategy experience. The guide noted that the team &ldquo;builds lasting client relationships and delivers results that align seamlessly with commercial strategy,&rdquo; and that clients value its &ldquo;commitment to practical outcomes over profit-driven tactics,&rdquo; viewing the firm as &ldquo;a trusted go-to for top brands looking to safeguard their most valuable assets.&rdquo; </p> <p>The firm was recognized in the following practice categories by <em>WTR 1000</em> 2026:</p> <ul> <li>National: Enforcement and Litigation</li> <li>National: Prosecution and Strategy</li> <li>California: Enforcement and Litigation</li> <li>District of Columbia: Prosecution and Strategy</li> <li>Illinois: Enforcement and Litigation</li> <li>Illinois: Prosecution and Strategy</li> <li>New York: Enforcement and Litigation</li> <li>New York: Prosecution and Strategy</li> </ul> <p>The following lawyers were recognized by <em>WTR 1000</em> 2026:</p> <ul> <li>Dori Hanswirth&mdash;National: Enforcement and Litigation; Prosecution and Strategy; New York: Enforcement and Litigation; Prosecution and Strategy</li> <li>Michael Harris&mdash;Illinois: Enforcement and Litigation</li> <li>Theresa House&mdash;New York: Prosecution and Strategy</li> <li>Michael Kientzle&mdash;District of Columbia: Next Generation</li> <li>Paul Llewellyn&mdash;National: Enforcement and Litigation; Prosecution and Strategy; New York: Enforcement and Litigation; Prosecution and Strategy</li> <li>Thomas Magnani&mdash;National: Transactions and licensing; California: Prosecution and Strategy&nbsp;</li> <li>Oscar Ramallo&mdash;California: Enforcement and Litigation</li> <li>Christopher Renk&mdash;Illinois: Enforcement and Litigation</li> <li>John Rynkiewicz&mdash;District of Columbia: Prosecution and Strategy</li> <li>Matthew Salzmann&mdash;New York: Enforcement and Litigation</li> <li>Rhonda Trotter&mdash;California: Enforcement and Litigation</li> </ul>{8C1F7EBC-C227-4D30-BF7A-2A0ABEBCE193}https://www.biosliceblog.com/2026/01/virtual-and-digital-health-digest-december-2025/Alexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comSofia Holmquisthttps://www.arnoldporter.com/en/people/h/holmquist-sofiasofia.holmquist@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comFri, 30 Jan 2026 00:00:00 -0600{3C8684F9-E49C-4DBB-BA83-02C4D701AEC3}https://www.arnoldporter.com/en/perspectives/publications/2026/01/how-generative-ai-cos-can-navigate-product-liability-claimsDavid A. Kerschnerhttps://www.arnoldporter.com/en/people/k/kerschner-david-adavid.kerschner@arnoldporter.comJason A. Rosshttps://www.arnoldporter.com/en/people/r/ross-jason-ajason.ross@arnoldporter.comBrendan M. Gibbonshttps://www.arnoldporter.com/en/people/g/gibbons-brendan-mbrendan.gibbons@arnoldporter.comRachel Lyons Formanhttps://www.arnoldporter.com/en/people/f/forman-rachelrachel.forman@arnoldporter.com<p>This analysis explores the rise of product-liability litigation targeting generative AI and chatbot platforms. Rather than focusing solely on content, plaintiffs are treating chatbots as consumer products and asserting claims related to defective AI system design, failure to warn, and alleged deficiencies in safety practices. The article traces how these legal theories have evolved from social media cases to early AI litigation; examines the unsettled roles of Section 230 and the First Amendment; and highlights where traditional tort principles &mdash; such as injury, causation, and feasible alternative design &mdash; still limit these claims. We offer defense-side insights on how AI companies can evaluate risks, prepare for discovery and expert battles, and position themselves strategically as courts and regulators increasingly scrutinize AI systems through a product-liability lens.&nbsp;</p>Thu, 29 Jan 2026 00:00:00 -0600{4D5BD0B7-E6CA-4DEB-9409-F7C67321912F}https://www.arnoldporter.com/en/perspectives/news/2026/01/arnold-porter-advises-on-dual-currency-sustainability-linked-financing-in-chileArnold &amp; Porter recently advised Banco BTG Pactual Chile, as arranger, Banco Ita&uacute; Chile, as administrative agent, and the lender syndicate in connection with a dual-currency financing consisting of a US$35 million and CLP$55 billion loan to Caja de Compensaci&oacute;n de Asignaci&oacute;n Familiar La Araucana.Wed, 28 Jan 2026 00:00:00 -0600<p>Arnold &amp; Porter recently advised Banco BTG Pactual Chile, as arranger, Banco Ita&uacute; Chile, as administrative agent, and the lender syndicate in connection with a dual-currency financing consisting of a US$35 million and CLP$55 billion loan to Caja de Compensaci&oacute;n de Asignaci&oacute;n Familiar La Araucana. The proceeds of the financing will be used by La Araucana for on-lending to social loans and eligible sustainability projects.</p> <p>The Arnold &amp; Porter team was led by partner Chris Willott, with senior associate Bethany Tolentino.</p> <p><em>*Bruno Woicik, a visiting attorney from Brazil, also assisted the team. Mr. Woicik is admitted to practice law only in Brazil and is not engaged in the practice of law in any U.S. jurisdiction.</em></p>{B1786ADE-567C-43A5-8922-FDC7B34D6E37}https://www.arnoldporter.com/en/perspectives/news/2026/01/arnold-porter-secures-unanimous-supreme-court-victory-in-berk-v-choyArnold &amp; Porter was named to <em>Law360</em>&rsquo;s list of &ldquo;Legal Lions Of The Week&rdquo; after the U.S. Supreme Court ruled unanimously in favor of Arnold &amp; Porter client Harold Berk, holding that Delaware&rsquo;s affidavit of merit requirement does not apply in federal court because it conflicts with the Federal Rules of Civil Procedure.Wed, 28 Jan 2026 00:00:00 -0600<p>Arnold &amp; Porter was named to <em>Law360</em>&rsquo;s list of &ldquo;<a rel="noopener noreferrer" href="https://www.law360.com/articles/2433618/law360-s-legal-lions-of-the-week" target="_blank">Legal Lions Of The Week</a>&rdquo; after the U.S. Supreme Court ruled unanimously in favor of Arnold &amp; Porter client Harold Berk, holding that Delaware&rsquo;s affidavit of merit requirement does not apply in federal court because it conflicts with the Federal Rules of Civil Procedure.</p> <p>With its judgment on January 20, the Court overturned rulings from the district court and the Third Circuit, which dismissed Mr. Berk&rsquo;s medical negligence suit for failure to comply with Delaware&rsquo;s statute requiring plaintiffs in certain medical negligence cases to submit, at the pleading stage, an affidavit from a medical expert attesting to the merits of the claim.</p> <p>The Court&rsquo;s decision also clarifies the interaction between state procedural statutes and the Federal Rules and reaffirms that federal pleading standards control in federal court.</p> <p>&ldquo;The Court&rsquo;s ruling reflects Arnold &amp; Porter&rsquo;s strength in litigating complex issues and distilling complicated cases into a few propositions that are clear, principled, and broadly compelling,&rdquo; said Arnold &amp; Porter Appellate &amp; Supreme Court counsel Andrew Tutt, who argued the case before the Court. &ldquo;The last time the Court considered this issue, it resulted in a three-way split without a majority. In this case, the decision was unanimous.&rdquo;</p> <p>The Arnold &amp; Porter team was led by Andrew and included partner Stanton Jones, counsel Anthony Franze, senior associates Devin Adams, Sam Ferenc, Kolya Glick, and Dana Kagan McGinley, and associates Jennifer Kaplan, Jake Murphy, Katie Weng, and Jillian Williams, with assistance from appellate specialist Kathryne Lindsey*.</p> <p><em>*Not admitted to the practice of law.</em></p>{69107444-4BE8-45BC-BB12-FD3C1FE6B873}https://www.arnoldporter.com/en/perspectives/publications/2026/01/virtual-and-digital-health-digestAllison W. Shurenhttps://www.arnoldporter.com/en/people/s/shuren-allison-wallison.shuren@arnoldporter.comAlexander Roussanovhttps://www.arnoldporter.com/en/people/r/roussanov-alexanderalexander.roussanov@arnoldporter.comBobby McMillinhttps://www.arnoldporter.com/en/people/m/mcmillin-bobbybobby.mcmillin@arnoldporter.comNancy L. Perkinshttps://www.arnoldporter.com/en/people/p/perkins-nancy-lnancy.perkins@arnoldporter.comRaqiyyah Pippinshttps://www.arnoldporter.com/en/people/p/pippins-raqiyyahraqiyyah.pippins@arnoldporter.comSonja Nesbithttps://www.arnoldporter.com/en/people/n/nesbit-sonjasonja.nesbit@arnoldporter.comEleri Abreohttps://www.arnoldporter.com/en/people/a/abreo-eleri-feleri.abreo@arnoldporter.comDanait Mengisthttps://www.arnoldporter.com/en/people/m/mengist-danaitdanait.mengist@arnoldporter.comJacqueline L. Degannhttps://www.arnoldporter.com/en/people/d/degann-jacquelinejackie.degann@arnoldporter.comAna González-Lamuñohttps://www.arnoldporter.com/en/people/g/gonzalez-lamuno-anaana.lamuno@arnoldporter.comSofia Holmquisthttps://www.arnoldporter.com/en/people/h/holmquist-sofiasofia.holmquist@arnoldporter.comKatherine Rohdehttps://www.arnoldporter.com/en/people/r/rohde-katherinekate.rohde@arnoldporter.comMickayla A. Stogsdillhttps://www.arnoldporter.com/en/people/s/stogsdill-mickaylamickayla.stogsdill@arnoldporter.comBrianna Morigneyhttps://www.arnoldporter.com/en/people/m/morigney-briannabrianna.morigney@arnoldporter.com<p>This digest covers key virtual and digital health regulatory and public policy developments during December 2025 and early January 2026 from the United States, United Kingdom, and European Union.</p>Wed, 28 Jan 2026 00:00:00 -0600<p>Happy New Year, and welcome to our new readers of the Virtual and Digital Health Digest. As we enter our fourth year of publication, we look forward to continuing to provide you with an easy-to-use resource to stay current on key regulatory and public policy developments impacting virtual and digital health. We encourage you to refer to past publications to track issues over time. As always, we welcome feedback from our readers as to how the digest could be improved to meet your needs. <br /> <br /> Best regards,<br /> The Arnold &amp; Porter Team</p> <hr /> <p> <br /> This digest covers key virtual and digital health regulatory and public policy developments during December 2025 and early January 2026 from the United States, United Kingdom, and European Union.</p> <h2>In this issue, you will find the following:</h2> <h3>U.S. News</h3> <ul> <li><a href="#U.S. Health Care Fraud and Abuse Updates">Health Care Fraud and Abuse Updates</a></li> <li><a href="#U.S. Provider Reimbursement Updates">Provider Reimbursement Updates</a></li> <li><a href="#U.S. Privacy and AI Updates">Privacy and AI Updates</a></li> <li><a href="#U.S. Policy Updates">Policy Updates</a></li> <li><a href="#U.S. FTC Updates">FTC Updates</a></li> </ul> <h3>U.S. Featured Content</h3> <p> </p> <p>This month&rsquo;s issue highlights significant developments across the health care landscape, including notable enforcement actions involving a $500,000 False Claims Act settlement with a medical software company over inflated breast cancer risk scores and a $7.8 million durable medical equipment (DME) fraud scheme resulting in sentencing. We also track key regulatory and technology updates, including new guidance from the U.S. Food and Drug Administration (FDA) easing oversight of certain artificial intelligence (AI)‑enabled wearable devices and clinical decision support tools, as well as the U.S. Department of Health and Human Services&rsquo; request for information on integrating AI into clinical care. On the policy front, Congress advanced a January funding package that includes an extension of Medicare telehealth flexibilities through December 2027, while House committees and leadership continue to focus on AI‑related health policy and oversight. Additionally, the Federal Trade Commission (FTC) announced an upcoming workshop on age‑verification technologies and issued warning letters to companies over potential violations involving consumer reviews and testimonials. Together, these developments reflect ongoing federal scrutiny of health care fraud, rapid regulatory evolution around AI and digital health, and continued policymaker attention to patient access, program integrity, and emerging technologies.</p> <h3>EU and UK News</h3> <ul> <li><a href="#EU and UK Regulatory Updates">Regulatory Updates</a></li> <li><a href="#EU and UK Privacy Updates">Privacy Updates</a></li> <li><a href="#EU and UK Product Liability Updates">Product Liability Updates</a></li> </ul> <h3>EU/UK Featured Content</h3> <p> </p> <p>December 2025 saw a significant wave of regulatory, policy, and technological developments across the UK and EU that will shape the digital health landscape in 2026 and beyond. The UK advanced its focus on safe and effective AI integration in health care through the Medicines and Healthcare products Regulatory Agency&rsquo;s (MHRA) open call for evidence on AI regulation, and the publication of the AI Security Institute&rsquo;s (AISI) Frontier AI Trends Report, which underscores both the promise and risks of rapidly advancing AI capabilities. In parallel, the EU proposed substantial amendments to the Medical Devices Regulation (EU) 2017/745 (MDR) and In Vitro Diagnostic Regulation (EU) 2017/746 (IVDR) &mdash; introducing new rules for software, cybersecurity, and digital compliance &mdash; alongside publishing the first part of the Biotech Act and a new Code of Practice on transparency for AI-generated content, each reinforcing expectations for trustworthy and innovation supportive digital health ecosystems. Globally, the International Medical Device Regulators Forum&rsquo;s (IMDRF) 2026-2030 strategic plan emphasized harmonization in response to emerging technologies. Finally, product liability frameworks are also being modernized, as the UK Law Commission launched a comprehensive review of the Consumer Protection Act to ensure it adequately captures risks associated with AI-enabled technologies, including iterative updates and latent defects.</p> <h2><a name="U.S. Health Care Fraud and Abuse Updates"></a>U.S. News</h2> <h3><a name="US Health Care Fraud and Abuse Updates"></a>Health Care Fraud and Abuse Updates</h3> <p> </p> <p><strong><a rel="noopener noreferrer" href="https://www.justice.gov/usao-ma/pr/medical-software-company-agrees-pay-500000-resolve-allegations-causing-medically" target="_blank">Medical Software Company Agrees To Pay $500,000 To Resolve False Claims Act Allegations for Medically Unnecessary Breast Cancer Screenings</a></strong>. On December 15, 2025, PenRad Technologies, Inc. (PenRad), a medical software company, agreed to pay $500,000 to resolve federal and Massachusetts state False Claims Act allegations related to medically unnecessary breast cancer screenings. <br /> <br /> The settlement agreement details PenRad&rsquo;s use of the Tryer-Cusick model risk-assessment tool, which helps providers calculate a patient&rsquo;s risk of developing breast cancer and make treatment decisions. Starting in 2020, health care providers began assessing patients&rsquo; breast cancer risk using the Tyrer-Cusick risk calculator through PenRad&rsquo;s software. The Tyrer-Cusick documentation recommended enabling competing mortality in clinical settings, which typically lowers a patient&rsquo;s risk score. However, PenRad sometimes installed the Tryer-Cusick risk calculator with competing mortality disabled, leading to higher risk scores for some patients. Consequently, these patients underwent unnecessary preventative magnetic resonance imaging (MRIs). These MRIs were then billed to Medicare and Medicaid in violation of the False Claims Act. <br /> <a href="https://www.justice.gov/usao-nj/pr/connecticut-man-sentenced-30-months-imprisonment-role-78-million-health-care-fraud-and" target="_blank"><br /> <strong>Connecticut Man Sentenced for His Role in $7.8 Million Health Care Fraud and Kickback Scheme</strong></a>. On December 18, 2025, Jesse Foote, was sentenced for his involvement in a DME health care fraud and kickback scheme. From December 2017 to March 2021, Foote allegedly worked with telemarketing call centers, DME suppliers, telemedicine companies, and doctors to submit fraudulent claims to federal health care benefit programs, including Medicare and TRICARE. During this period, telemarketing call centers allegedly targeted Medicare beneficiaries, persuading them to accept orthotic braces and other DME without considering medical necessity. Providers approved these orders without any patient contact or assessment. Foote then allegedly sold the approved DME orders to individuals with whom he had a kickback arrangement. <br /> <br /> These orders were ultimately submitted to DME suppliers, including those controlled by Foote. As a result of Foote and his co-conspirators&rsquo; scheme, $7.8 million in false or fraudulent claims were submitted to federal health care programs for unnecessary DME.</p> <h3><a name="U.S. Provider Reimbursement Updates"></a>Provider Reimbursement Updates</h3> <p><strong>CMS Provides Additional Information on Reimbursement for Tech-Enabled Chronic Care Model</strong>. As we covered in our <a href="https://www.arnoldporter.com/en/perspectives/publications/2025/12/virtual-and-digital-health-digest">December 2025 Digest</a>, in early December, the Centers for Medicare &amp; Medicaid Services (CMS) announced a voluntary pilot model called Advancing Chronic Care with Effective, Scalable Solutions (ACCESS), which will test an outcome-aligned payment approach in Original Medicare to &ldquo;expand access to new technology-supported care options that help people improve their health and prevent and manage chronic disease.&rdquo; Care organizations that enroll in the model are expected to offer &ldquo;integrated, technology-supported care,&rdquo; which may include using FDA-authorized devices or software. <br /> <br /> Since then, CMS has released additional information on the reimbursement framework for participating organizations. According to the <a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/files/access-rfa.pdf" target="_blank">Request for Applications</a>, ACCESS participants will receive a &ldquo;standard per-patient payment for managing all qualifying conditions&rdquo; of a beneficiary within one of four clinical &ldquo;tracks&rdquo;: (1) early cardio-kidney-metabolic; (2) cardio-kidney-metabolic; (3) musculoskeletal; and (4) behavioral health. Full payment will be conditioned on achieving track-specific clinical outcomes, such as lowering blood pressure by 10 mmHg. To prevent duplicate payments, CMS announced that participating care organizations must not submit Medicare fee-for-service claims for beneficiaries receiving services under the model, which may limit the scope of organizations willing to participate in the model.<br /> <br /> CMS stated that payment rates and related model parameters will be announced in 2026 in advance of the April 1, 2026 application deadline.</p> <h3><a name="U.S. Privacy and AI Updates"></a>Privacy and AI Updates</h3> <p><strong>FDA Releases Guidance Indicating Relaxed Scrutiny of Certain AI-Enabled Health Wearable Devices and Clinical Decision Support Software</strong>. On January 6, 2026, the FDA released two guidance documents setting forth the agency&rsquo;s position that certain devices and software will not be subject to FDA scrutiny, provided certain criteria are met. One guidance concerns low-risk <a rel="noopener noreferrer" href="https://www.fda.gov/regulatory-information/search-fda-guidance-documents/general-wellness-policy-low-risk-devices" target="_blank">wellness devices</a>, which are products (1) &ldquo;intended for only general wellness use&rdquo; and (2) &ldquo;present a low risk to the safety of users and other persons.&rdquo; &ldquo;General wellness uses&rdquo; are uses related to &ldquo;maintaining or encouraging a general state of health or a healthy activity&rdquo; and a wellness product is considered &ldquo;low risk&rdquo; if it is not invasive or implanted, and does not involve &ldquo;an intervention or technology that may pose a risk to the safety of users and other persons if specific regulatory controls are not applied.&rdquo; The other document, a new clinical decision support <a rel="noopener noreferrer" href="https://www.fda.gov/media/109618/download" target="_blank">software guidance</a>, details the specific types of software that meet all four statutory criteria for exemption from treatment as a &ldquo;device,&rdquo; i.e., software that (1) is not intended to analyze medical images or signals from either in vitro diagnostic devices or signal acquisition systems; (2) is intended only for the purpose of &ldquo;displaying, analyzing, or printing medical information about a patient or other medical information;&rdquo; (3) is intended to support or provide recommendations to health care professionals &ldquo;about prevention, diagnosis, or treatment of a disease or condition;&rdquo; and (4) is intended to enable such professionals to independently review the basis for those software recommendations.<br /> <br /> <strong>HHS Issues RFI Regarding the Adoption of AI as Part of Clinical Care</strong>. On December 19, 2025, HHS issued a <a rel="noopener noreferrer" href="https://www.govinfo.gov/content/pkg/FR-2025-12-23/pdf/2025-23641.pdf" target="_blank">Request for Information</a> (RFI) seeking comment on its adoption and use of AI as part of clinical care. The request seeks input on how HHS and the private sector can most effectively &ldquo;integrate AI in care delivery and create new, long-term market opportunities that improve the health and well-being of all Americans,&rdquo; posing questions such as:</p> <ul style="margin-left: 40px;"> <li>&ldquo;What are the biggest barriers to private sector innovation in AI for health care and its adoption and use in clinical care?&rdquo;</li> <li>&ldquo;How can HHS best support private sector activities (e.g., accreditation, certification, industry-driven testing, and credentialing) to promote innovative and effective AI use in clinical care?&rdquo;</li> <li>&ldquo;Where have AI tools deployed in clinical care met or exceeded performance and cost expectations and where have they fallen short? What kinds of novel AI tools would have the greatest potential to improve health outcomes, give new insights on quality, and help reduce costs?&rdquo;</li> </ul> <p>The deadline for submitting responses to the HHS request is <strong>February 23, 2026</strong>.</p> <h3><a name="U.S. Policy Updates"></a>Policy Updates</h3> <p><strong>Congress Faces End-of-January Government Funding Deadline and Expiration of Health Provisions</strong>. On January 20, 2026, House and Senate appropriators released a &ldquo;minibus&rdquo; consisting of the four remaining fiscal year (FY) 2026 spending bills: <a rel="noopener noreferrer" href="https://www.appropriations.senate.gov/imo/media/doc/fy26_lhhs_jes.pdf" target="_blank">Labor-HHS-Education (L-HHS)</a>, U.S. Department of Defense, Transportation-HUD (T-HUD), and U.S. Department of Homeland Security. On January 22, 2026, the House passed the FY26 minibus, including L-HHS, Defense, and T-HUD spending bills (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7148" target="_blank">H.R. 7148</a>) by a vote of 341-88 and the FY26 Homeland Security appropriations bill (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/7147" target="_blank">H.R. 7147</a>) by a vote of 220-207. Both bills will now be sent to the Senate for consideration before federal funding expires at the end of January. <br /> <br /> The bill includes an extension of Medicare telehealth flexibilities through December 2027, and topline funding for HHS is approximately $116.6 billion, nearly the same as FY25-enacted levels. Of note, the president&rsquo;s FY26 budget request for HHS had <a rel="noopener noreferrer" href="https://www.hhs.gov/sites/default/files/fy-2026-budget-in-brief.pdf" target="_blank">proposed</a> $94.7 billion in discretionary spending for the agency.<br /> <br /> <strong><a rel="noopener noreferrer" href="https://energycommerce.house.gov/events/health-subcommittee-legislative-proposals-to-support-patient-access-to-medicare-services" target="_blank">House Energy and Commerce Health Subcommittee Discusses WISeR Model</a></strong>. On January 8, 2026, the House Energy &amp; Commerce (E&amp;C) Health Subcommittee held a hearing titled &ldquo;Legislative Proposals to Support Patient Access to Medicare Services.&rdquo; During the hearing, Subcommittee Members discussed the Ban AI Denials in Medicare Act (<a rel="noopener noreferrer" href="https://www.congress.gov/bill/119th-congress/house-bill/6361" target="_blank">H.R. 6361</a>), which would prohibit the Center for Medicare and Medicaid Innovation (CMMI) from implementing the Wasteful and Inappropriate Service Reduction (<a rel="noopener noreferrer" href="https://www.cms.gov/priorities/innovation/innovation-models/wiser" target="_blank">WISeR</a>) model and any future models that would test prior authorization, including with AI, in Medicare Part A or B. Several Democratic Members expressed concerns about AI prior authorization denials and delays of medically necessary care. Implementation of the WISeR model began on January 1, 2026, in six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington.<br /> <br /> <strong><a rel="noopener noreferrer" href="https://www.politico.com/live-updates/2026/01/08/congress/jeffries-to-meet-with-new-house-dem-ai-working-group-00715720" target="_blank">House Minority Leader Hakeem Jeffries Holds First Meeting With House Democratic AI Commission</a></strong>. House Minority Leader Hakeem Jeffries (D-NY) reportedly held a first meeting with the House Democratic Commission on AI and the Innovation Economy during the first week of the House session in 2026. Minority Leader Jeffries <a rel="noopener noreferrer" href="https://jeffries.house.gov/2025/12/09/leader-jeffries-announces-new-house-democratic-commission-on-ai-and-the-innovation-economy/" target="_blank">announced</a> the new House Democratic AI Commission in early December with Reps. Ted Lieu (D-CA), Josh Gottenheimer (D-NJ), and Valerie Foushee (D-NC) serving as co-chairs. The meeting and formation of the commission demonstrates a continued focus and priority on AI policy and regulation in the new year.<br /> <br /> <strong><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/12/ftc-announces-workshop-age-verification-technologies" target="_blank">FTC Announces Workshop on Age Verification Technologies</a></strong>. In early December, the FTC announced it will hold a workshop on age verification and estimation technologies on January 28, 2026. The workshop will bring together industry stakeholders to discuss the importance of age verification, age verification and estimation tools, the regulatory landscape, how to deploy age verification at scale, and the Children&rsquo;s Online Privacy Protection Act (<a rel="noopener noreferrer" href="https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-312" target="_blank">COPPA</a>) Rule. House E&amp;C Chairman Brett Guthrie (R-KY) and Rep. Gus Bilirakis (R-FL), who chairs E&amp;C&rsquo;s Subcommittee on Commerce, Manufacturing, and Trade, <a rel="noopener noreferrer" href="https://energycommerce.house.gov/posts/chairmen-guthrie-and-bilirakis-applaud-ftc-workshop-on-age-verification-technology" target="_blank">thanked</a> the FTC for its announcement of the workshop.</p> <h3><a name="U.S. FTC Updates"></a>FTC Updates</h3> <p><strong><a rel="noopener noreferrer" href="https://www.ftc.gov/news-events/news/press-releases/2025/12/ftc-warns-10-companies-about-possible-violations-agencys-new-consumer-review-rule" target="_blank">FTC Issues Warning Letters to 10 Companies Over Potential Violations of the Rule on the Use of Consumer Reviews and Testimonials</a></strong>. On December 22, 2025, the FTC announced that it sent warning letters to 10 companies for potentially violating the <a rel="noopener noreferrer" href="https://www.ftc.gov/legal-library/browse/rules/rulemaking-use-consumer-reviews-testimonials" target="_blank">Rule on the Use of Consumer Reviews and Testimonials</a>, which prohibits deceptive practices involving product reviews and testimonials. The rule, which took effect in October 2024, bars a range of conduct, including posting or procuring fake or misleading reviews, paying for positive or negative reviews, using undisclosed insider reviews, presenting company controlled review sites as independent, suppressing negative feedback, and buying or selling fake social media influence indicators.<br /> According to the FTC, the warning letters were prompted by consumer complaints and information submitted by the companies themselves. The letters do not constitute formal findings of wrongdoing, but rather remind recipients to ensure immediate compliance with the rule. The FTC cautioned that violations may result in federal enforcement actions and civil penalties of up to $53,088 per violation. The agency did not disclose the names of the companies that received the warnings.</p> <h2><a name="EU and UK Regulatory Updates"></a>EU and UK News</h2> <h3>Regulatory Updates</h3> <p><strong><a rel="noopener noreferrer" href="https://www.gov.uk/government/calls-for-evidence/regulation-of-ai-in-healthcare" target="_blank">UK MHRA Publishes an Open Call for Evidence on the Regulation of AI in Healthcare</a></strong>. This invites responses from both UK-based and international stakeholders. The responses gathered will help to inform the recommendations of the National Commission into the Regulation of AI in Healthcare (launched in September 2025 and discussed in the <a rel="noopener noreferrer" href="https://www.arnoldporter.com/en/perspectives/publications/2025/10/virtual-and-digital-health-digest" target="_blank">October 2025 Digest</a>) when advising the MHRA on the regulation of new AI technologies in the NHS and wider health care system. The main topics covered are: how the UK regulatory framework covering AI in health care should be improved, how issues around the safe use of AI can be addressed, and the distribution of responsibility between regulators, companies, and health care organizations. The call for evidence closes on February 2, 2026. <br /> <br /> <strong><a rel="noopener noreferrer" href="https://health.ec.europa.eu/medical-devices-sector/new-regulations_en" target="_blank">European Commission Publishes Proposals To Amend the MDR and IVDR</a></strong>. The proposal marks a significant step in the reform of the EU medical devices regulatory framework. For medical devices and biotech companies, key elements of the proposals include: (1) revised classification rules for certain software medical devices, which could fall into lower risk classes with less onerous obligations; (2) new EU and national regulatory sandboxes to support innovative digital health technologies, including software medical devices; (3) new cybersecurity safety and performance requirements; and (4) further digitalization of compliance processes, including the possibility to submit EU declarations of conformity in digital form. The proposals have been submitted to the European Parliament and the Council of the European Union for review, and a public <a rel="noopener noreferrer" href="https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14808-Medical-devices-and-in-vitro-diagnostics-targeted-revision-of-EU-rules_en" target="_blank">feedback</a> period is open from January 7 to March 5, 2026. Further details on the proposals can be read in our <a rel="noopener noreferrer" href="https://www.biosliceblog.com/2025/12/from-complexity-to-clarity-how-the-eu-commission-plans-to-overhaul-the-mdr-and-ivdr/" target="_blank">December 2025 BioSlice Blog</a>.<br /> <br /> <strong><a rel="noopener noreferrer" href="https://health.ec.europa.eu/publications/proposal-regulation-establish-measures-strengthen-unions-biotechnology-and-biomanufacturing-sectors_en" target="_blank">European Commission Publishes Proposal on the EU Biotech Act &mdash; Part 1</a></strong>. While primarily focused on the pharmaceutical sector, with a broader biotech initiative expected in 2026, the proposal includes certain elements relevant to medical device and biotech companies. These include (1) expanded EU and national regulatory sandboxes, which could extend to medical devices and novel health biotechnology products and therapies; (2) the possibility to submit a single application for authorization through the Clinical Trial Information System for combined studies (i.e. studies involving clinical trials of medicinal products alongside clinical investigations of medical devices or performance studies of in vitro diagnostic medical devices (IVDs)); (3) the possibility for AI-enabled IVDs or AI medical devices used in combined studies to be subject to a coordinated assessment for authorization; and (4) the obligation for the European Medicines Agency to issue guidance on the use of AI across the lifecycle of medicinal products. The proposal will now be discussed by the European Parliament and the Council of the European Union.<br /> <strong><br /> <a rel="noopener noreferrer" href="https://digital-strategy.ec.europa.eu/en/news/commission-publishes-first-draft-code-practice-marking-and-labelling-ai-generated-content" target="_blank">European Commission Publishes First Code of Practice on Transparency of AI-Generated Content</a></strong>. The code is intended to support companies placing AI systems on the market (AI deployers) and companies using AI systems to generate or manipulate content (AI providers) in complying with the transparency obligations under the EU AI Act, which will come into effect on August 2, 2026. The code clarifies the responsibilities imposed on AI providers and AI deployers by the EU AI Act. In particular, <em>AI providers</em> must ensure that any AI-generated or materially manipulated content is marked and detectable using layered technical measures, such as including the provenance information and watermarking. Separately, AI <em>deployers</em> must disclose the level of AI involvement in the content that has been generated or manipulated by AI where it could mislead the public, using an immediately visible indicator, with the code suggesting a linguistic acronym pending an EU-wide solution. Although voluntary, the code provides a useful guide for medical device companies on regulatory expectations. The final version of the code, which has been subject to a public consultation that is now closed, is expected to be published in 2026. <br /> <br /> <strong><a rel="noopener noreferrer" href="https://www.aisi.gov.uk/frontier-ai-trends-report/pdf" target="_blank">UK AI Security Institute (AISI) Frontier AI Trends Report Published</a></strong>. The report highlights rapid advances in frontier AI systems that are directly relevant to digital health. Models now surpass PhD level expertise in biology and chemistry, which signals new potential for digital health initiatives, such as AI enabled diagnostics, clinical decision support, and drug-disease modelling. The report also shows significant gains in autonomous task completion and cybersecurity capabilities, underscoring both opportunities for improving workflows and the need for robust safeguards as industries, including health care systems, adopt increasingly powerful AI tools.<br /> <br /> <strong><a rel="noopener noreferrer" href="https://www.imdrf.org/sites/default/files/2025-12/IMDRF%20Strategic%20Plan%202026-2030_FINAL_N91.pdf" target="_blank">International Medical Device Regulators Forum Publishes Strategic Plan for 2026-2030</a></strong>. The plan highlights that the advancement of innovative technologies, including AI and machine learning, may require the development of new procedures, which presents an opportunity for harmonization of risk-based and resource-proportionate approaches. To this end, the priorities of the IMDRF include publishing new technical documents on innovative technologies and continuing with joint workshops with the IMDRF industry group.</p> <h3><a name="EU and UK Privacy Updates"></a>Privacy Updates</h3> <p><strong><a rel="noopener noreferrer" href="https://ico.org.uk/about-the-ico/information-commissioner-s-response-to-the-cyber-security-and-resilience-bill/" target="_blank">The UK Information Commissioner&rsquo;s Office (ICO) Publishes Response to the Cyber Security Resilience Bill</a></strong>. The bill, which was introduced to Parliament in November 2025, was prepared following public consultation and calls for views on proposals to improve the UK&rsquo;s cyber resilience. The response highlights efforts to strengthen the UK&rsquo;s cyber defense framework and improve the resilience of essential digital services. Although digital health is not directly named, the update is relevant since digital health systems &mdash; such as cloud based clinical platforms, remote care services, diagnostic AI tools, and electronic health records infrastructure &mdash; rely on the same digital service providers (e.g., cloud computing, online services, and managed service providers) that fall under the bill&rsquo;s expanded regulatory oversight. The reforms also include extending the scope of what is considered essential services &mdash; for example, suppliers to the National Health Service may be considered designated critical suppliers. The ICO has indicated a need for additional clarification of the criteria for assessing &ldquo;critical suppliers&rdquo; and further details on the duties involved.<br /> <br /> <strong><a rel="noopener noreferrer" href="https://ec.europa.eu/commission/presscorner/detail/en/ip_25_3059" target="_blank">European Commission Renews the UK Adequacy Decisions</a></strong>. Following Brexit, the UK is considered a &ldquo;third country&rdquo; to the EU, and as such, the transfer of personal data without an adequacy decision would ordinarily be prohibited. The adequacy decisions, originally made in 2021 and now renewed in December 2025, allow personal data to flow freely between the UK and the EU under the General Data Protection Regulation and under the Law Enforcement Directive.</p> <h3><a name="EU and UK Product Liability Updates"></a>Product Liability Updates</h3> <p><strong><a rel="noopener noreferrer" href="https://cdn.websitebuilder.service.justice.gov.uk/uploads/sites/54/2025/12/Product-Liability-Terms-of-Reference.pdf" target="_blank">UK Law Commission Publishes Terms of Reference for Product Liability Law Review</a></strong>. The Law Commission notes that the current regime under the Consumer Protection Act does not sufficiently address challenges posed by technological advancement, such as AI. The issues that will be considered in the review include the definitions of &ldquo;product&rdquo; and &ldquo;defect,&rdquo; to ensure that any harm that may be caused by the use of AI is taken into account. The Law Commission will also review the possibility of amending the &ldquo;State of the Art&rdquo; defense, that the defectiveness of a product is determined by the knowledge and the market at the date of supply, to take account of the fact that some technologies can be updated iteratively. Finally, the possibility of bringing latent defects (arising after the date of supply) in scope will also be considered.</p> <p><span style="font-size: small;"><em>*The following individuals contributed to this Newsletter:</em></span></p> <p><span style="font-size: small;"><em> Sonja Nesbit is employed as a senior policy advisor at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Sonja is not admitted to the practice of law.<br /> Mickayla Stogsdill is employed as a senior policy specialist at Arnold &amp; Porter&rsquo;s Washington, D.C. office. Mickayla is not admitted to the practice of law.<br /> </em></span></p> <p><span style="font-size: small;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Newsletter is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{329AB6F0-5107-421A-8647-26A9CE580B41}https://www.arnoldporter.com/en/perspectives/advisories/2026/01/sec-staff-issues-revises-and-withdraws-compliance-and-disclosureSara Adlerhttps://www.arnoldporter.com/en/people/a/adler-sarasara.adler@arnoldporter.comJoel I. Greenberghttps://www.arnoldporter.com/en/people/g/greenberg-joel-ijoel.greenberg@arnoldporter.comOn January 23, 2026, the SEC staff issued a number of new and revised Compliance and Disclosure Interpretations, and withdrew others, reflecting the adoption of Securities Act Rule 152 (Integration) in November 2020, as well as interpretations related to lock-up agreements, accredited investor verification, financial statements in spin-off transactions, and proxy and tender offer rules.<br />Wed, 28 Jan 2026 00:00:00 -0600<p>On January 23, 2026, the SEC staff issued a number of new and revised Compliance and Disclosure Interpretations, and withdrew others, reflecting the adoption of Securities Act Rule 152 (Integration) in November 2020, as well as interpretations related to lock-up agreements, accredited investor verification, financial statements in spin-off transactions, and proxy and tender offer rules.</p> <h2>Securities Act Sections</h2> <h3>Integration of Offerings</h3> <p><strong>Questions <a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-13402.pdf" target="_blank">134.02</a></strong>, <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-13908.pdf" target="_blank">139.08</a></strong>, and <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-13925.pdf" target="_blank">139.25</a></strong>, which addressed the integration of private and public offerings, were withdrawn as superseded by Securities Act Rule 152, which sets forth an analytical framework for determining whether multiple securities transactions should be considered part of the same offering. The rule provides four non-exclusive safe harbors from integration, as well as a general principle of integration where the safe harbors do not apply. <br /> <br /> <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/securities-act-sections-13927.pdf" target="_blank">Question 139.27</a></strong> was revised to clarify that if a company completes a Section 4(a)(2) private placement, and then files a registration statement for the resale of such securities, but prior to the effectiveness of such registration statement, consummates a second private placement consistent with Rule 152(a)(1), the company may include the securities from the second private placement in a pre-effective amendment to the pending resale registration statement prior to effectiveness.</p> <h3>Lock-Ups</h3> <p>Under revised <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-comparisons-13929.pdf" target="_blank">Question 139.29</a></strong> and <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-comparisons-13930.pdf" target="_blank">Question 139.30</a></strong>, the staff sets forth specific conditions where it will not object to the execution of agreements to vote in favor of a Rule 145(a) transaction (lock-up agreements) or agreements to tender by accredited investors, qualified institutional buyers and certain target company insiders before the filing of a Form S-4 (or F-4) registration statement in a registered exchange offer. When these conditions are not satisfied, the SEC staff will not object to subsequent registration if the securities will be offered and sold only to persons who did not execute such agreements. Issuers seeking lock-up agreements or agreements to tender from security holders or target company insiders should consider whether such efforts represent the commencement of a tender offer under Section 14(d)(1) of the Exchange Act and Regulation 14D. <br /> <br /> Under revised <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-030625-239-13.pdf" target="_blank">Question 239.13</a></strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-sections-030625-239-13.pdf" target="_blank">,</a> the staff sets forth specific conditions where it will not object to the execution of lock-up agreements with members of management and principal security holders prior to registration in connection with a Rule 145(a) transaction. When these conditions are not satisfied, the SEC staff will not object to subsequent registration if the securities will be offered and sold only to persons who did not execute such agreements.</p> <h2>Securities Act Rules</h2> <h3>Rule 152</h3> <p><strong>Questions <a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-14106.pdf" target="_blank">141.06</a></strong>, <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-15201.pdf" target="_blank">152.01</a></strong>, <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-15203.pdf" target="_blank">152.03</a></strong>, <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-21206.pdf" target="_blank">212.06</a></strong>, <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-25601.pdf" target="_blank">256.01</a></strong>, <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-25602.pdf" target="_blank">256.02</a></strong>, and <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-25634.pdf" target="_blank">256.34</a></strong> were withdrawn as superseded by Rule 152, and <strong>Question 152.02</strong> was revised as <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-14803.pdf" target="_blank">Question 148.03</a></strong>, which clarifies that an issuer, after an unsuccessful shelf takedown, may rely on Rule 152 to complete the offering privately, provided that it complies with the Rule 152(a) general principle of integration. <br /> <br /> Under new <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/securities-act-rules?utm_medium=email&amp;utm_source=govdelivery#148.01" target="_blank">Question 148.01</a></strong>, if an issuer engaged in a Rule 506(c) offering soliciting individuals through general solicitations, the issuer can now sell to those individuals through a subsequent Rule 506(b) offering <em>if</em> the issuer established a substantive relationship with the prospective purchasers <em>prior</em> to the commencement of the Rule 506(b) offering. Because the issuer solicited the prospective investors through the general solicitation in the prior Rule 506(c) offering, the issuer <em>cannot </em>rely on Rule 152(a)(1)(i) with respect to those investors. Whether the issuer has established a substantive relationship depends on the facts and circumstances. The quality of the relationship between an issuer (or its agent) and a prospective investor is the most important factor. An issuer cannot establish such a relationship solely through the passage of time or a particular short-form accreditation questionnaire. Investors with whom the issuer has a pre-existing substantive relationship may include the issuer&rsquo;s existing or prior investors, investors in prior deals of the issuer&rsquo;s management, or friends or family of the issuer&rsquo;s control persons. In the absence of a prior business relationship or a recognized legal duty to offerees, it is likely more difficult for an issuer to establish a pre-existing, substantive relationship, especially when contemplating or engaged in an offering over the internet.<br /> <br /> New <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/securities-act-rules?utm_medium=email&amp;utm_source=govdelivery#148.02" target="_blank">Question 148.02</a></strong> clarifies that the existence of an effective registration statement does not &ldquo;in and of itself&rdquo; raise integration concerns under Rule 152.</p> <h3>Accredited Investor Verification</h3> <p><strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/securities-act-rules-25506.pdf" target="_blank">Question 255.06</a></strong> was revised to explain that in determining accredited investor status, an issuer can look through multiple levels of entities to natural persons who are the ultimate owners.<br /> <br /> Under new <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/securities-act-rules?utm_medium=email&amp;utm_source=govdelivery#260.39" target="_blank">Question 260.39</a></strong>, in a Rule 506(c) offering, an issuer can use different methods to verify the accredited investor status for different investors in the same offering.</p> <h2>Regulation S-K Item 402</h2> <p><strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/regulation-s-k-012326-217-01.pdf" target="_blank">Interpretation 217.01</a></strong> has been revised to provide that historical Item 402 compensation information for a spun-off registrant for periods prior to the spin-off is required only if operated as a separate division or standalone business of the parent and there was continuity of management from before the spin-off. The interpretation notes that &ldquo;where a spun-off registrant consists of portions of different parts of the parent&rsquo;s business or has new management who will be named executive officers after the spin-off, compensation information for the named executive officers for periods before the spin-off would not be required. In contrast, if the parent spun off a subsidiary that conducted one line of its business, and, before and after the spin-off, the executive officers of the subsidiary: (1) were the same; (2) provided the same type of services to the subsidiary; and (3) provided no services to the parent, historical compensation disclosure likely would be required. When historical compensation is not required, the registrant need only report compensation awarded to, earned by, or paid to the spun-off registrant&rsquo;s named executive officers in connection with and following the spin-off.&rdquo;</p> <h2>Proxy Rules and Schedules 14A/14C</h2> <h3>Notice of Exempt Solicitations</h3> <p>Under revised <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/proxy-rules-schedules-14a14c-comparison-12606.pdf" target="_blank">Question 126.06</a></strong>, the staff <em>will</em> object to a voluntary submission of a Notice of Exempt Solicitation by a soliciting person who does not beneficially own more than $5 million of the class of subject securities. <br /> <br /> Under revised <strong><a rel="noopener noreferrer" href="https://www.sec.gov/files/corpfin/proxy-rules-schedules-14a14c-comparison-12607.pdf" target="_blank">Question 126.07</a></strong>, when submitting a Notice of Exempt Solicitation on EDGAR, the written soliciting material may not appear in the notice before the Rule 14a-103 information is presented.</p> <h3>Broker Searches</h3> <p>Under new <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/proxy-rules-schedules-14a14c?utm_medium=email&amp;utm_source=govdelivery#133.02" target="_blank">Question 133.02</a></strong>, recognizing that the broker search process has become more efficient since the current rules were adopted in 1986, the staff will not object if a registrant conducts its &ldquo;broker search&rdquo; less than 20 business days before the record date, provided that the registrant reasonably believes that its proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13. This position also applies to registrants subject to the similar &ldquo;broker search&rdquo; requirement of Rule 14c-7(a)(3) with respect to information statements.<br /> <br /> Under new <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/proxy-rules-schedules-14a14c?utm_medium=email&amp;utm_source=govdelivery#182.01" target="_blank">Question 182.01</a></strong>, the failure to comply with the 20-calendar-day requirement in Rule 14c-2 (requirement to distribute an information statement to security holders at least 20 calendar days prior to the earliest date on which corporate action by written consent may be taken) does not invalidate the corporate action. Where the written consents were solicited by a dissident security holder without the registrant&rsquo;s knowledge, the staff will not object to the registrant&rsquo;s failure to comply with the 20-calendar-day requirement as long as the registrant distributes the information statement as soon as practicable after it becomes aware of the written consents.</p> <h2>Tender Offer Rules and Schedules</h2> <p>Under new <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/tender-offer-rules-schedules?utm_medium=email&amp;utm_source=govdelivery#166.02" target="_blank">Question 166.02</a></strong>, when purchases or arrangements to purchase outside a Tier I cross-border tender offer are made after the public announcement of the offer but before offering documents are disseminated, the Rule 14e-5(b)(10) exception is available for outside purchases. The purpose of the exception is to allow purchases outside of a Tier I tender offer where such outside purchases are permitted by the laws of the subject company&rsquo;s home jurisdiction and the other conditions of the exception are met. The offering documents, when disseminated, should disclose that purchases outside the Tier I offer have already occurred and, if true, may continue during the offer.<br /> <br /> Rule 14e-5(b)(12)(i) permits an offeror (and its affiliates) and an affiliate of the offeror&rsquo;s financial advisor to make purchases outside a cross-border tender offer, subject to certain conditions. Rule 14e-5(b)(12)(i)(G)(4) states that the purchases or arrangements to purchase subject securities by the affiliate of the financial advisor outside the tender offer may not be made to facilitate the tender offer. New <strong><a rel="noopener noreferrer" href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/tender-offer-rules-schedules?utm_medium=email&amp;utm_source=govdelivery#166.03" target="_blank">Question 166.03</a></strong> clarifies that this condition does not apply to affiliates of the offeror&rsquo;s financial advisor when acting on behalf of the offeror in an agency capacity to effect purchases of subject securities or related securities outside of the tender offer with the purpose of facilitating the tender offer. The Rule 14e-5(b)(12)(G)(4) condition applies only to purchases by affiliates of the financial advisor that are made other than in this agent-of-the-offeror capacity. The purchases would, however, be subject to the other requirements of the rule, including the requirements that the tender offer price be increased to match any consideration paid outside of the tender offer that is greater than the tender offer price. </p> <p><span style="font-size: 13px;">&copy; Arnold &amp; Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.</span></p>{6109C837-0425-48BA-9727-067D10DEC363}https://www.arnoldporter.com/en/perspectives/events/2026/01/2025-year-in-review-litigation-and-regulatory-developments-impactingDonal M. O'Brienhttps://www.arnoldporter.com/en/people/o/obrien-donal-mdonal.obrien@arnoldporter.comE. Alex Beroukhimhttps://www.arnoldporter.com/en/people/b/beroukhim-e-alexalex.beroukhim@arnoldporter.comMichelle F. Gillicehttps://www.arnoldporter.com/en/people/g/gillice-michellemichelle.gillice@arnoldporter.comBrandon W. Neuschaferhttps://www.arnoldporter.com/en/people/n/neuschafer-brandon-wbrandon.neuschafer@arnoldporter.comRaqiyyah Pippinshttps://www.arnoldporter.com/en/people/p/pippins-raqiyyahraqiyyah.pippins@arnoldporter.comOver the past year, the consumer product and retail industry has been hit with a myriad of regulatory, litigation, and policy initiatives that are expected to shape the risk profile for the industry in the U.S. for years to come.Tue, 27 Jan 2026 00:00:00 -0600<p>Over the past year, the consumer product and retail industry has been hit with a myriad of regulatory, litigation, and policy initiatives that are expected to shape the risk profile for the industry in the U.S. for years to come. Arnold &amp; Porter has developed a monthly Consumer Products &amp; Retail Navigator webinar series to help clients in the consumer products and retail sector navigate these developments.</p> <p>Our first webinar will provide a high-level assessment of notable events and trends in 2025 that can materially impact manufacturers, importers, retailers, and suppliers in the industry in the year ahead, including:</p> <ul> <li>Federal and state regulation of food, dietary supplements, and other consumer product ingredients</li> <li> CPSC product safety priorities and enforcement</li> <li>FTC and state consumer protection priorities, including data practices, use of influencers, subscription programs, and the integration of AI</li> <li>Expanding restrictions on product packaging and components</li> <li>Evolving issues in consumer product litigation </li> </ul> <p>Future webinars in the series will take a deeper look at evolving legal, regulatory, and litigation risks affecting the consumer products and retail industry, with an emphasis on emerging risk areas and mitigation strategies across business operations. Topics will touch on developments affecting supply chains, commercial and pricing practices, digital and advertising compliance, brand protection, the integration of new technologies, corporate transactions, and heightened regulatory and litigation exposure, including issues involving products marketed to or used by children and teens.</p>{DD3C2F63-A0DB-476E-A915-F5AAFB30A537}https://www.arnoldporter.com/en/perspectives/media-mentions/2026/01/dan-kracov-derek-stoldt-discuss-life-sciences-deal-trends-at-jpm-2026Dan Kracov, chair of the firm's Global Life Sciences Industry group, and Derek Stoldt, co-chair of the firm's Corporate and Finance group and co-head of the Life Sciences Transactions practice, were recently interviewed by <em>Law360</em> at the 2026 J.P. Morgan Healthcare Conference.Tue, 27 Jan 2026 00:00:00 -0600<p>Dan Kracov, chair of the firm's Global Life Sciences Industry group, and Derek Stoldt, co-chair of the firm's Corporate and Finance group and co-head of the Life Sciences Transactions practice, were recently interviewed by <em>Law360</em> at the 2026 J.P. Morgan Healthcare Conference. They shared insights on this year&rsquo;s conference, reflected on healthcare dealmaking in 2025, and outlined what they&rsquo;re monitoring in 2026.</p> <p>In an article covering how this year&rsquo;s conference is unfolding, Derek observed that, unlike some years when there was clear pressure for companies to time deal announcements around JPM, this year&rsquo;s focus seemed to be doing &ldquo;the right deals at the right time.&rdquo; </p> <p>In a subsequent story on what JPM signals for healthcare dealmaking in 2026, Derek said he expects more &ldquo;nuts-and-bolts&rdquo; pharmaceutical and biotechnology transactions going forward.</p> <p>&ldquo;If you look at most pharmaceutical companies, Big Pharma, the majority of their research and development comes through in-licensing,&rdquo; he noted.</p> <p>Dan added that in addition to continued licensing activity, he expects an &ldquo;avalanche&rdquo; of M&amp;A &ndash; &ldquo;mostly &lsquo;A&rdquo; &ndash; in the coming months. </p> <p>Read the <em>Law360</em> article, &ldquo;<a rel="noopener noreferrer" href="https://www.law360.com/healthcare-authority/articles/2429250?" target="_blank">Dispatch From JPM: Fewer Health Deals Don't Dampen Mood</a>&rdquo; (subscription required). </p> <p>Read the <em>Law360</em> article, &ldquo;<a rel="noopener noreferrer" href="https://www.law360.com/healthcare-authority/articles/2429264?" target="_blank">What JPM Tells Us About Healthcare Deals In 2026</a>&rdquo; (subscription required). </p>{80B82D5F-2B81-4C74-B76A-379A02FF42C3}https://www.arnoldporter.com/en/perspectives/news/2026/01/washingtonian-names-cara-koss-and-thomas-richardson-to-2026-top-financial-adviser-list<em>Washingtonian</em> magazine featured Arnold &amp; Porter partners Cara Koss and Thomas Richardson in its 2026 &ldquo;Top Financial Adviser&rdquo; list.&nbsp;Tue, 27 Jan 2026 00:00:00 -0600<p><em>Washingtonian</em> magazine featured Arnold &amp; Porter partners Cara Koss and Thomas Richardson in its 2026 &ldquo;Top Financial Adviser&rdquo; list. The list serves as a guide to &ldquo;the area&rsquo;s best financial planners, investment advisers, tax accountants, and other money pros.&rdquo; To compile the list, <em>Washingtonian</em> surveys legal and financial professionals across the D.C. metropolitan area and supplements those results with independent research and input from industry experts and publications.</p> <p>Cara leads Arnold &amp; Porter&rsquo;s Private Client Services team and focuses her practice on advising high net worth individuals, both domestically and internationally, on a wide range of sophisticated matters including estate planning, trust and estate administration, lifetime gifting, family office formation and counseling, asset protection, business succession planning, and tax compliance. </p> <p>Thomas advises on a range of wealth planning matters, including estate planning, estate and trust administration, representation of family businesses, tax controversies involving the Internal Revenue Service and local tax authorities, and fiduciary litigation. </p>