Yoav Zahavi, Partner and co-head of the Real Estate, Urban Renewal, and Hospitality department at ERM interviews for the Real Estate Centre Magazine.

‘The face behind urban renewal’ with attorney Yoav Zahavi, co-head of the real estate, urban renewal and hotels department at the ERM law firm. Where does his drive come from, what moment in front of tenants left him speechless, what does he offer to the municipalities operating according to Standard 21, and why is he really not kidding when he says he works for his wife?

 

For the full article in Hebrew, click here: https://bit.ly/4d0D2T1

The US Federal Corporate Transparency Act (CTA) took effect on January 1, 2024. The CTA represents a significant shift in the regulatory landscape concerning corporate ownership transparency in the United States. The primary objective of this legislation is to combat money laundering, terrorist financing, and other illicit activities facilitated by the misuse of corporate structures, by mandating that current and new businesses registered in the United States disclose their direct and indirect owners.

Key Provisions of the Corporate Transparency Act:

  1. Reporting Requirements: Under the CTA, “Reporting Companies” who are required to file beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) include US-formed entities as well as foreign entities registered to do business in the US. US entities include corporations, limited liability companies (LLCs), and other entities who are required to file with a secretary of state or similar office. Foreign reporting companies include entities formed under the law of a foreign country but who are registered to do business in the US. Reporting requirements include details about individuals who directly or indirectly own or control 25% or more of the Reporting Company’s ownership interests.
  2. Exemptions: While many entities are subject to reporting requirements, some businesses are exempted from compliance. These exemptions include, inter-alia, certain publicly traded companies, large operating companies with more than 20 full-time employees and over $5 million in gross receipts or sales and US operations, and a number of regulated entities such as financial institutions.
  3. Penalties for Non-Compliance: Failure to comply with the reporting requirements of the CTA may result in significant penalties, including fines and potential criminal liability for willful violations.
  4. Implementation Timeline: The CTA imposes a phased implementation approach, with the specific timeline for compliance varying depending on the date of formation of a Reporting Company. For example, an entity which was formed or registered to do business prior to January 1, 2024, will have until January 1, 2025 to file its initial report. New entities formed on or after January 1, 2024 and before January 1, 2025, will have 90 days following their formation to report. Entities formed on or after January 1, 2025, will have 30 days to report following their formation. It is crucial for affected businesses to stay informed about their respective compliance deadlines and take appropriate steps to ensure timely and accurate reporting.

 

Implications for Your Business:

Given the complexities and potential legal ramifications associated with the CTA, business owners should be proactive in assessing their obligations under the new law and take measures to ensure compliance. This may involve conducting internal reviews of corporate structures, identifying beneficial owners, and preparing and submitting the required reports to FinCEN.

Our team is available to provide guidance, answer questions, and offer tailored solutions to ensure compliance with this important legislation.


The review was written by Galit Farkash, Partner in ERM’s Corporate and M&A and High-Tech Departments.


* This newsletter is provided for informational purposes only, is general in nature, does not constitute a legal opinion or legal advice and should not be relied on as such. If you are seeking legal advice, it is essential to review the specific facts of each case in detail with a qualified lawyer.

 

 

In an interview with Germany Trade & Invest (GTAI), Ron Abelski, partner in our Corporate, M&A, High-tech, and Venture Capital practices, explained that the new law is a game-changer. Its adoption will make the application of UNCITRAL principles the default option when an Israeli and a foreign company entry into a commercial contract with an arbitration clause.

 

For the full article in German, click here: https://bit.ly/441WLOf

Along with all the usual benefits, at the firm Epstein Rosenblum Maoz (ERM), an internationally oriented firm, we offer a path to jump-start your career, while learning and deepening your knowledge of the legal world by handling the leading cases and transactions in the economy. Attorney Chen Weiss, a partner in the firm who started her career as an intern, talks about the firm’s unique value proposition for interns.

For the full article with The Marker magazine (pg. 16): https://bit.ly/interns-ERM  

Honoured to once again be named as one of Israel’s leading law firms according to Dun’s100!
We were ranked in numerous categories: International Trade, Hotels & Hospitality, Banking & Finance, Investment Funds, Real Estate, High-Tech & Start Ups, M&A, Projects, and Urban Renewal. Additionally, we were added to the rankings in two new categories: Commercial Litigation, and Cyber.

We are excited to keep this momentum going and continue to be a dominant force in cross-border transactions.

 

For the complete rankings: https://bit.ly/Duns100-2024

We are honored to once again be ranked as a top-tier law firm in Israel according to the prestigious The Legal 500!
We are extremely proud that 80% of our partners were recognised across 9 different practice areas for our local and cross-border work in the 2024 rankings.

ERM was ranked in these 9 practice areas:

Energy; Dispute Resolution: Mediation and International Arbitration; High-Tech and Start Ups; Infrastructure; Real Estate and Construction; Commercial, Corporate, and M&A; Dispute Resolution: Legal Litigation Arbitration; Competition/Antitrust; Banking & Finance – Tier 1

We’re only getting started…

 

For the entire publication: https://bit.ly/TheLegal500-2024

 

 

The challenging market conditions dramatically affect the ability of tech companies to raise funds and means that some companies are forced to raise at a lower valuation than previous rounds.

When faced with the possibility of a down-round, it is advisable to first explore all other available alternatives but undertaking a down-round is not the end of the road if properly prepared for.

Simon Marks, Partner and Head of the High-Tech practice and Adv. Adi Rafaeli, discuss certain points to consider when undergoing a down round.

For the full article

In a television interview for Bizportal, our partner, Adv. Rotem Perelman-Farhi, head of the Technology and Data Protection Department, reviews the legislation in Europe and the USA, and discusses what is expected in Israel and the potential impact on Israeli and international companies.

For the full interview (in Hebrew),

 

 

The European AI Act is a comprehensive regulatory response to the challenges and risks posed by the rapid advancement of technology and artificial intelligence (AI) (see our summary here). Originally proposed in 2021, the legislative process faced a notable disruption when OpenAI’s ChatGPT was launched on 30 November 2022. This required a change to the draft text, creating specific regulations for generative AI.

What are General Purpose AI (GPAI) models?

The AI Act defines a “General purpose AI model” (also known as a foundation model) as an AI model that, among others, can perform a wide range of distinct tasks regardless of the way the model is placed on the market and that can be integrated into a variety of downstream systems or applications. This term includes AI models that are built on top of so-called Large Language Models, or generative AI such as image or sound generation tools. Other GPAIs are used to build applications that help with creating computer codes, analysis of medical images or different types of decision-making with economic consequences.

The AI Act is clear that AI models do not constitute AI systems on their own; they are, however, often integrated into and form essential part of AI systems. Providers of GPAI models are subject to obligations that are slightly different from the general obligations for providers of AI systems. This distinction also clarifies that GPAI models do not constitute high-risk AI systems, as they are not AI systems. Instead, the AI Act introduces the sub-category of GPAI models that pose systemic risks, which is further explained below.

Documentation and Transparency Obligations

Overall, the set of obligations that applies to providers of (non-systemic risk) GPAI models can be considered “lighter” than those that apply to providers of AI systems. Providers of GPAI models are required to keep their technical documentation up-to-date and make it available to the (newly founded) AI Office and national regulators. They also have to provide certain information and documentation to downstream providers that have integrated the GPAI model into their AI system. Additionally, they need to make publicly available “a sufficiently detailed summary about the content used for training of the GPAI model, based on a template provided by the AI Office”. This summary should list the main data collections or sets that went into training the model, such as large private or public databases or data archives, and explain which other data sources were used. While the summary does not need to be technically detailed, it should list the main data collections or sets that were used to train the model. It is expected that the template will also take into due account the need to protect trade secrets and confidential business information.

What about Copyright?

Generative AI made headlines mostly due to a wave of infringement claims from rightsholders, mainly in the US, who sued various AI providers such as OpenAI for copyright infringement arising from the alleged use of their works during the training of their AI models. In light of the issues arising from the interplay of generative AI and copyright law, the AI Act requires that providers of GPAI models put in place a policy to ensure compliance with EU copyright law. This policy needs to include, in particular, the provider’s commitment to respect any express “opt out” declaration by a copyright holder that their works may not be used for the purposes of text and data mining (Art. 4(3) of the EU’s Digital Single Market Directive 2019/790).

Recital 60j also deals with the international dimension of said text and data mining exception. It clarifies that providers may not circumvent this minimum standard of protection by placing an AI model on the EU market that has been trained in other jurisdictions with lower copyright standards. This is intended to ensure a level playing field among providers of GPAI models.

GPAI Models with Systemic Risk

The new version of the AI Act includes a new subcategory of GPAI models. They will be considered “GPAI models with a systemic risk” if one of the following two criteria is fulfilled:

  • High impact capabilities of the GPAI model, which are presumed when the cumulative amount of compute used for its training measured in floating point operations (FLOPs) is greater than 10^25[1]; or
  • An individual designation decision by the EU Commission that takes into account for example the number of parameters, quality and size of the dataset, input and output modalities or the reach measures in business users.

Providers of GPAI models with systemic risk have additional obligations, such as performing tests and model evaluations, conducting risk assessments and taking risk mitigation measures, reporting serious incidents (such as an incident that causes the death of a person, leads to an irreversible disruption of the operation of critical infrastructure, or that causes serious property damage) to the AI Office and national authorities, and ensuring an adequate level of cybersecurity protection.

For more information and assistance related to compliance with the EU Artificial Intelligence Act, please reach out to us at ERM.


[1]  The EU Commission will need to adapt this threshold in the light of evolving technological developments, such as algorithmic improvements or increased hardware efficiency, in order to keep up with the ever evolving state of the art.


The review was written by Rotem Perelman – Farhi, Partner and Heads of the firm’s Technology & Data Department and Dr. Laura Jelinek, Associate in the the firm’s Technology & Data Department.


* This newsletter is provided for informational purposes only, is general in nature, does not constitute a legal opinion or legal advice and should not be relied on as such. If you are seeking legal advice, it is essential to review the specific facts of each case in detail with a qualified lawyer.

Rotem Perelman-Farhi, Partner and Head of the Technology & Data Protection department at Epstein, Rosenblum, Maoz (ERM) came to Bizportal for a video interview regarding the new AI legislation: “The artificial intelligence revolution is a much bigger bang compared to what the Internet was 20-30 years ago. And it’s also progressing at a very fast pace.” She talks about the legislation taking shape in Europe in the field of AI and the problematic legislation that may pass in the Knesset.

In addition, Rotem explains the expected legislation in Europe, what exists in the US and what is expected to happen in Israel. What is the expected impact on companies? How can the legislation deal with the threats of artificial intelligence? And, what emergency laws were introduced in Israel following the war and the amendment of the Shin Bet law that may introduce permanent regulations?

 

For the full article in Hebrew, click here: https://bit.ly/4cOywHb