The 9 Most Important Issues for your Business RIGHT NOW
Businesses fear uncertainty…and these are truly uncertain times. Every business should be preparing its reactions to the most pressing, impactful issues RIGHT NOW.
Of course, each business is unique and every industry sector is different. What might surprise you is how common these immediate, urgent issues are…across industries. Based on our interactions with heads of companies and their legal advisors, here’s what you should consider (and, if you’re the General Counsel, be prepared to address with your C-suite and Board):
1. Tariffs – how will the current increases in ad valorem rates affect your supply chain and customer base? Do any exemptions apply? What happens if additional tariffs are added (or suspended/cancelled)? Who will absorb the additional cost (or benefit)? (If your supply chain or customer base includes China, focus immediately on this one.) Can you choose alternative Incoterms to reduce cost and risk? Are you able to delay shipments while waiting for calmer waters, or even terminate a contract that is no longer advantageous? Is future performance contractually binding? Can you re-negotiate existing contracts?
2. Supply Chains – how will tariffs affect accounts payable collections (or bankruptcy preference payments)? Are your supplier contracts binding and enforceable? Do your contracts address customs/tax increases (and can you take advantage of, or deny, price adjustments)? Does a force majeure clause (or common law “commercial impracticability”) apply? (If under civil law, force majeure is subject to statutory interpretation and may be available.) Are you able to manage the (almost inevitable) delays in shipping? Can you choose alternate Incoterms to reduce cost and risk? Can you terminate and easily substitute with more cost-effective supply alternatives?
3. Currency Effects – tariffs inevitably raise the price of goods, thus increasing the cost of inputs and dampening demand for products. We are not economists, but we have read up on quite a few. Some see the USD decreasing in value, as transactions diversify away from the currency; others see it strengthening, reflecting the continued economic strength of the United States. How will your business be impacted by the change in USD value? How can you hedge against this risk, and would the hedge be worth it?
4. Sanctions – sanctions regimes change daily. Dramatic changes are in motion with respect to Russia, Venezuela, and Yemen. (If your business buys from or sells to these countries, you may already have a very big problem on your hands.) To complicate matters further, US sanctions often do mirror UK, EU, or other sanctions regimes. How will planned and effected changes affect your business?
5. Data Export Restrictions – as of April 8, 2025, the DOJ issued a presumptive ban on related data with certain foreign entities or persons located in “countries of concern” – currently China, Russia, Iran, Cuba, North Korea and Venezuela. (Note: this is in addition to, and broader than, most existing sanctions regimes.) While it is unlikely that your business works with Iran, Cuba, North Korea, and Venezuela, you will be expected to avoid violative data transfers with China and Russia as well. Though certain exemptions exist, your business should be proactively assessing its risks with respect to this new Final Rule.
6. “Material Support” to Foreign Terrorist Organizations (FTOs) – your business should already be screening counterparties for sanctions risks. (If you don’t currently do this, you should be calling us right now.) However…in addition to strict liability for sanctions violations (and criminal liability for willful violations), your business may risk criminal liability for providing material support to FTOs. Typical sanctions cover transactions of goods, technology, and software; this crime, however, covers almost any interaction, including advice, training, and other assistance. There is a (growing) list of FTOs (not necessarily immediately recognizable from their name); your business must make sure that it does nothing with them.
7. Cybersecurity Regulations – the NIS2 Directive entered into force on October 17, 2024. While mainly applicable within the EU, foreign companies (e.g., US companies) providing services in critical sectors will be subject to, and must comply with, NIS2. More broadly, foreign vendors may need to demonstrate that their – and their vendors’ – cybersecurity practices and controls align with NIS2 standards.
8. EU AI Regulations – the EU’s new AI regulations, known as the AI Act, establish a comprehensive, risk-based legal framework for AI. Though it entered into force on August 1,2024, certain rules have delayed entry into force; the AI Act will fully apply from August 2, 2027. The EU is serious about this: each country must designate at least one “market surveillance authority” to supervise the implantation. If your business uses (or permits) AI and is subject to the AI Act, it should mitigate risks by, e.g., performing a risk assessment, reviewing existing policies and procedures, and providing tailored training.
9. CTA Reporting Requirements – you have perhaps been privy to the regulatory whiplash involving on-again, off-again beneficial ownership reporting requirements. As of today, and unless exempt, only non-US companies registered in the US need report their beneficial ownership, and only non-US persons owning such companies need report. News Flash: most of the world’s businesses – and people – are not US persons. For non-US businesses with a US nexus, reporting may still be regulatorily required.
We live in interesting times…
And you are not alone. We can – and will – help you navigate these questions, bringing to bear both our collective expertise and cross-industry market knowledge. Contact us today!
