FID Recht - Bank- / Börsen- / Steuerrecht

Piercing the Sovereign Veil: Spanish Law in Comparative Perspective [pre-publication]

2026-03-14T00:01:06+00:00

This article examines the challenges of enforcing judgments and arbitral awards against sovereign states in Spain, with particular focus on the treatment of state-owned enterprises (SOEs). While the 2015 Organic Law on Privileges and Immunities (LOPI) codified the restrictive theory of immunity and aligned Spain with international standards, it left unresolved the role of SOEs during the enforcement phase. Creditors thus face a double barrier: (1) sovereign immunity on the one hand and (2) the shield of corporate separateness on the other. Drawing on Spanish privatelaw doctrine of piercing the corporate veil (levantamiento del velo), the article explores how criteria developed for corporate abuse – commingling of assets, undercapitalization, external control, and residual fraud – can be transposed to the sovereign context. Comparative insights from the United States, France, and the United Kingdom illustrate possible pathways and pitfalls. Spanish case law, notably the Commercial Bank of Equatorial Guinea (CBGE) litigation, highlights both the promise and the uncertainty of current practice. The article proposes a structured four-part test – (1) control and governance, (2) patrimonial boundaries, (3) functional purpose, and (4) evasion – to discipline judicial reasoning and reconcile effective judicial protection with legal certainty. Spain’s constitutional framework, statutory innovations, and doctrinal tools position it to contribute significantly to international debates on sovereign enforcement.

Volume 42 Online ISSN 2468-7413

Literature Review: Taxing Income and Consumption: The Development of International Tax Law and Policy, K. Sadiq, C. Evans and N. Li eds. 1st edn. Cheltenham: Edward Elgar. 2025 [pre-publication]

2026-03-14T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

11th EFILA Annual Lecture (2025): Artificial Intelligence (AI) in Investment Arbitration [pre-publication]

2026-03-14T00:01:06+00:00

The lecture highlights the increasing use of Artificial Intelligence (AI) in investment arbitration and the various risks that are associated with it. It is noted that there is currently insufficient specific regulations for regulating the use of AI in investment arbitration, despite the proliferation of numerous guidelines by arbitration institutions and other bodies of the legal community. The EU AI act is highlighted in this context as an important piece of legislation since it is applicable to arbitration generally and thus also to investment arbitration.

Volume 11 Online ISSN 2468-7413

Concurrence of EU Direct Tax Directives: Hierarchy of Norms, Interpretational Solutions, or Decluttering? [pre-publication]

2026-03-14T00:01:06+00:00

The number of (proposals for) EU directives in the field of direct taxation is continuously growing. In the process of drafting them, the focus appears to be on the desired outcome of that specific legislative instrument. The complete overview is not taken into account and certainly not the relation between the proposal and already existing directives or others that are pending. In this publication, the author answers the question of how directives in the field of direct taxation relate to each other, how textual differences on comparable subjects between directives and conflicts in interpretation among directive provisions can be resolved, and where discrepancies between proposals and adopted directives currently exist (and how they can be resolved). To achieve this, the hierarchy of norms in secondary EU legislation will be discussed and several suggestions for simplifications and decluttering will be made, in accordance with the EU Commission’s policy agenda.

Volume 54 Online ISSN 0165-2826

Digital Services Taxes and WTO Law: The Likeness Challenge in the Data Economy [pre-publication]

2026-03-14T00:01:06+00:00

This study explores the alignment of digital services taxes (DSTs) with the non-discrimination provisions outlined in the General Agreement on Trade in Services (GATS) with particular attention being paid to the concept of ‘likeness’. It focuses on the Italian DST as a representative case and examines whether this measure differentiates between ‘like’ digital services and suppliers in accordance with Articles II (Most-Favoured Nation (MFN)) and XVII (National Treatment (NT)). The analysis employs a doctrinal approach and integrates a comprehensive examination of World Trade Organization (WTO) law with relevant case law and tax scholarship. This reveals that revenue thresholds and carve-outs introduce structural asymmetries in the competitive relationship between services and suppliers that may be regarded as ‘like’ under WTO criteria. The Italian DST is ostensibly neutral but disproportionately impacts large multinational platforms thereby posing a significant risk of de facto discrimination under current jurisprudence. This study expands on this insight and argues that a model DST law crafted in accordance with the GATS principles is essential to ensure that future digital taxation initiatives fulfil their fiscal objectives without violating multilateral trade regulations.

Volume 54 Online ISSN 0165-2826

Green Local Fiscal Autonomy in EU Member States [pre-publication]

2026-03-14T00:01:06+00:00

This article provides insights into how differences in the degree of fiscal autonomy of local governments in EU Member States shape the ways in which they design and implement fiscal instruments to support the achievement of climate objectives. By comparing three countries (Belgium, Italy and the Netherlands), it demonstrates that local governments’ capacity to leverage taxation for climate purposes is essentially shaped by their national legal and fiscal frameworks. At the same time, limited fiscal autonomy does not necessarily prevent local authorities from using fiscal instruments to support the achievement of climate objectives. This is illustrated, for instance, by the introduction of the ‘pay-as-you-throw’ (PAYT) waste fee in Turin, where such a measure can be implemented despite the relatively limited fiscal autonomy within the centralized Italian system. The article further shows that local climate plans across the EU acknowledge taxation as a policy tool for advancing sustainability goals, highlighting its potential to influence areas such as mobility, buildings and energy.

Volume 54 Online ISSN 0165-2826

The anti-deprivation rule and ipso facto clause prohibitions—a necessary clarification

2026-02-27T00:00:00+00:00

Abstract

The relationship between the anti-deprivation rule and ipso facto clause prohibitions appears to be in a relatively confused state. While both rules can, and have, applied to invalidate executory contracts, the anti-deprivation rule is meant to apply much wider than ipso facto clause prohibitions. This article proposes that such confusion stems from the context in which the leading United Kingdom Supreme Court (UKSC) Belmont Park Investments PTY Limited v BNY Corporate Trustee Services Limited and Lehman Brothers Special Financing Inc [2011] UKSC 38 was decided. It is proposed here that, in the wake of this confusion, the Supreme Court of Canada (SCC)’s decision in Chandos Construction Ltd v Deloitte Restructuring Inc., 2020 SCC 25, can serve to foster a better understanding of the relationship between the anti-deprivation rule and ipso facto clause prohibitions. This article will attempt to contextualize both sets of rules first in the English and American contexts, to help the reader understand how such confusion can develop, and then will attempt to utilize Canadian case law to show that the SCC rightly decided that the relationship between ipso facto clause prohibitions and the anti-deprivation rule is merely confined to a singular context. It is proposed here that while both rules have some overlapping function, this is not indicative that they are meant to fulfil the same purposes. The anti-deprivation rule is broader in application than ipso facto clause prohibitions. The former relates to the taking of assets upon insolvency, whereas the latter exists to give effect to executory contracts.

ISDA derivatives and English jurisdiction after Brexit

2026-02-27T00:00:00+00:00

Abstract

This article examines the validity, scope, and effects of the jurisdiction clauses commonly contained in International Swaps and Derivatives Association (‘ISDA’) Master Agreements, particularly in light of the guidance provided in Dexia SA v Comune di Torino (‘Torino’) in relation to the 1992 Master Agreement. The article contextualizes Torino within the broader line of English and Italian case law on OTC derivatives, draws inferences for other iterations of the ISDA jurisdiction clause, and considers the practical implications of Torino affirming the exclusive jurisdiction of English courts over English-law-governed ISDA derivatives. It further engages with the key issue left open by Torino—that is, whether the 1992 ISDA jurisdiction clause is capable of benefiting from the 2005 Hague Convention. It argues that it is.

Who Qualifies as a ‘Court or Tribunal’? Access to the Preliminary Reference Procedure and the Principle of Judicial Independence

2026-03-14T00:01:06+00:00

At the institutional heart of the European legal order, the Court of Justice of the European Union (CJEU) acts as guardian of the uniform interpretation and application of EU law. One of the main mechanisms by which the CJEU performs this task is the preliminary reference system provided for in Article 267 Treaty on the Functioning of the European Union (TFEU). This provision enables (and in certain cases even requires) national courts to refer questions concerning the interpretation or validity of EU law to the CJEU. However, access to this system is strictly limited. Only bodies that qualify as ‘courts or tribunals’ within the meaning of Article 267 TFEU may make such a reference. In this article, the author examines the conditions under which a national body qualifies as a ‘court or tribunal’ within the meaning of Article 267 TFEU and how this qualification relates to the broader EU legal requirement of judicial independence as enshrined in Article 19 Treaty on European Union (TEU) and Article 47 Charter.

Volume 35 Online ISSN 0928-2750

Tax and Social Security Contributions: The Cross-Border Impact of Telework

2026-03-14T00:01:06+00:00

The rapid expansion of cross-border telework has exposed structural frictions between the European Union’s (EU’s) coordination of social security and the international allocation of taxing rights. This article examines how the simultaneous application of Regulation No. 883/2004 and double tax conventions affects the financing of social security systems. It first situates Member States’ heterogeneous financing models – ranging from contribution-based to tax-funded and documents cross-country divergences. It then sets out the principles of Regulation No. 883/ 2004 (notably lex loci laboris and the single-state principle) and analyses their application to cross-border telework under Articles 12, 13 and 16, including the 2023 Framework Agreement on Cross-border Telework. Turning to the OECD Model Tax Convention (OECD MC), the article explains the allocation of taxing rights in Article 15 and the role of frontier-worker clauses. Building on CJEU case law, it identifies two levels of conflict: the divergent definition of social security contributions and the structural mismatch between single-state affiliation for contributions and split taxing rights for income tax. Using threshold-based telework scenarios, it shows how double or zero financing of a social security system can arise. The article is concluded with a discussion on how potential problems arising from simultaneous application be overcome.

Volume 35 Online ISSN 0928-2750

Tax Sovereignty and European Fundamental Norms: A Constitutional Embedding of a Troubled Field of Integration

2026-03-14T00:01:06+00:00

This paper aims to map the room for manoeuvre in European tax integration and thereby confront the discourse on (tax) sovereignty in general terms, as well as specifically for the European Union (EU). In doing so, it examines the historical development of European tax integration, focusing on the constitutional interplay between the EU and its Member States that should inform the legal debate on the correct allocation of taxing powers between the Union and its Member States. The starting point is that the Treaties themselves establish the creation of an internal market as an explicit goal, including taxation. Direct taxation is the field where this goal has not materialized, and this paper draws the direction of travel from the legal discussion on sovereignty, specifically applied to the context of taxation. It offers a new approach to the broader debate on European integration in taxation and limits sovereignty-based reasoning to legal argumentation, thereby depoliticizing the discourse.

Volume 35 Online ISSN 0928-2750

Forum contributions: Case C-232/24 Kosmiro: The Court of Justice Excludes the ‘Financing’ Component in Its VAT Assessment of Factoring Transactions

2026-03-14T00:01:06+00:00

In its judgment of 23 October 2025 in Kosmiro (C-232/24), the Court of Justice of the European Union (CJEU) provides important clarifications on the qualification and VAT treatment of factoring transactions. It confirms a broad interpretation of the notion of ‘debt recovery’ and therefore limits the scope of the exemptions laid down in Article 135(1)(b) and (d) of the VAT Directive.

Volume 35 Online ISSN 0928-2750

Editorial: From ‘Flatulence Taxes’ to ‘Condom Taxes’: Excises as the New Frontier for EU Tax Law

2026-03-14T00:01:06+00:00

Traditional excise taxes on products such as sugar or salt, common until the nineteenth century, have been progressively eradicated from domestic tax systems, substituted by more sophisticated tax instruments, such as income and value-added taxes. Yet, now they are back; not (largely) as revenue mobilizers, but as regulatory tools, designed to achieve an ever increasing range of policy aims. The new Chinese ‘condom tax’ and the proposed Danish ‘flatulence tax’ may be novel, but the nature of the developments is not; on the contrary, these measures are part of a wider global trend. Although, this resurgence of excise taxes has significant implications for the design of tax systems worldwide, for the EU they present an additional challenge, namely whether to harmonize or not to harmonize? Until now, EU harmonization of excise taxes has been limited to a small number of traditional commodities: alcohol, tobacco, energy; but as the variety of excise taxes, and the number of Member States applying them, grows, is this position sustainable, not least given the constitutional mandate set out in Article 113 of the Treaty on the Functioning of the European Union (TFEU)?

Volume 35 Online ISSN 0928-2750

Position limits in commodity derivatives: a quantitative regulatory technique for the efficiency of financial markets?

2026-02-20T00:00:00+00:00

Abstract

The article aims to carry out an exegetical and systematic analysis of position limits in commodity derivatives, according to a tripartite structure. In the first part, the problems that have arisen in financial markets at a supranational level are outlined, identifying the reasons and functions of the legislative-regulatory intervention. The second part focuses on the concept of position limits, critically reconstructing the objective scope of application, delving into the controversial calculation method functional to the identification of position limits and determination of net position size. The examination of the subjective application perimeter then follows, identifying precisely the reach of the exemption regime. The third part is devoted to reporting obligations. In a global policy perspective, the study will enable some broader reflections on the regulatory technique to be used to improve market efficiency and reduce excess speculation, seeking to ascertain whether, and within which thresholds, it is optimal for the legislator to use a quantitative approach for these purposes or whether it risks unduly rigidifying the overall system and hindering the birth of new commodity derivatives, in addition to the development of the current ones.

Integrating climate considerations into EU stock exchange listing regimes: reform pathways and the potential role of the Capital Markets Union

2026-02-18T00:00:00+00:00

Abstract

This paper explores the extent to which current EU and Member State stock exchange listing regimes can adequately address the financial risks associated with climate change, particularly in relation to the admission of climate-exposed companies, such as fossil fuel enterprises, to public capital markets. While investor protection remains a core objective of EU capital markets regulation, existing listing and prospectus requirements often fail to ensure meaningful disclosure of climate-related risks or condition market access on adopting Paris-aligned transition strategies. Through comparative analysis of the Italian and German frameworks, the study reveals the fragmented and discretionary nature of national competent authorities’ powers, which limits their effectiveness in addressing climate-related financial risks. The paper further examines ESMA’s evolving mandate concerning ESG risks and considers its potential role within a reformed, centralised listing authority. It argues for EU-level legislative reform to establish binding, harmonised listing standards, including mandatory sustainability disclosures and credible transition planning requirements at the time of listing. Against the backdrop of the Capital Markets Union, the creation of a single EU listing authority, ideally situated within ESMA, is proposed as a key institutional reform to ensure regulatory consistency, enhance investor protection, and support the EU’s broader climate commitments.

Green standards and grey areas: the EU Sustainable Finance Framework and the Unfair Commercial Practices Directive

2026-02-17T00:00:00+00:00

Abstract

This study examines whether the marketing of financial products that formally comply with the European Union (EU) Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation (EU Taxonomy) may still constitute an unfair commercial practice under the EU Unfair Commercial Practices Directive (UCPD). It focuses on the promotion of the most ambitious category of sustainable investment products in Europe—often referred to as ‘Article 9’ products—which (partly) invest in controversial transitional activities such as nuclear energy, fossil gas, aviation, or shipping. Although such investments are classified as environmentally sustainable under the EU Taxonomy, they may not align with the expectations of the average retail consumer investor seeking genuinely ‘green’ financial products. The analysis highlights the complementary role of the UCPD, particularly in light of the recent EU Consumer Empowerment Directive, which—once transposed into national law—will introduce explicit anti-greenwashing provisions. It argues that, in the absence of specific restrictions under the SFDR or the EU Taxonomy on the use of commercial sustainability claims, the UCPD offers an essential legal framework to assess the potentially misleading nature of such claims.

Not ‘Super Tax Havens’ After All

2026-03-13T00:01:04+00:00

When crypto-assets were first introduced, tax experts worried that they might become ‘super tax havens’. With over a decade and a half of hindsight, this article questions whether this tax-enforcement doomsday scenario has materialized or may yet materialize. The article’s conclusion is that the answer is ‘no’. To be sure, crypto-assets are an instrument of tax evasion, but they are not better (and maybe even worse) at facilitating tax evasion than traditional tools such as cash or secrecy jurisdictions. With some adjustments, traditional, time-tested mechanisms of tax enforcement can address tax evasion with cryptocurrencies at least as effectively as addressing any other form of tax evasion. The reason for this is rather simple: contrary to initial hopes (or warnings, depending on one’s perspective), the crypto-assets markets are not disintermediated, not decentralized, and not anonymous, and they are unlikely to become any of those things. If governments chose not to enforce tax laws in the context of crypto-assets, this would be a policy choice, not an inevitability attributable to the nature of blockchain technology.

Volume 54 Online ISSN 0165-2826

CARF’s Impact on the Crypto Marketplace: An Equal and Opposite Reaction?

2026-03-13T00:01:04+00:00

In this article centred on the OECD’s Crypto-Asset Reporting Framework (CARF), a leading US tax practitioner based in Zurich shares his expectations on the fall-out from the incoming crypto asset reporting regimes. Grounding his views in precedents from recent tax reporting for conventional asset classes, he forecasts resistance from the industry and investors, leading to novel enforcement challenges faced by tax authorities when confronted by an agile and motivated target. In closing, he sets out a series of enhanced enforcement proposals that tax authorities might adopt to further CARF compliance.

Volume 54 Online ISSN 0165-2826

Cryptoasset Taxation and Accounting: Aligning Standards for Cross-Border Clarity and Compliance

2026-03-13T00:01:04+00:00

This article examines how accounting standards shape the taxation of cryptoassets, focusing on key differences under the International Financial Reporting Standards (IFRS), US Generally Accepted Accounting Principles (US GAAP), and selected offshore jurisdictions. Fragmented accounting and tax frameworks create substantial obstacles to cross-border compliance despite their growing economic significance. The article draws on a comparative regulatory analysis and corporate case studies (MicroStrategy, Coinbase, and Tesla) and identifies three persistent frictions at the book-tax interface. First, classification friction arises because jurisdictions treat the same asset as intangible property, a financial instrument, or a commodity thereby creating uncertainty for fiat-backed stablecoins and security-like tokens. Second, timing friction stems from mismatches between accrual-based financial reporting and realization-based tax rules especially for staking rewards, crypto lending, decentralized finance (DeFi), and derivatives. Third, valuation friction reflects tension between historical cost and fair value compounded by volatility and fragmented liquidity which disproportionately affects complex instruments and international structures. The article proposes the tax-accounting alignment framework (TAAF) as a conceptual roadmap to address these challenges. It prioritizes economic substance over legal form using functional classification, blockchain finality as an objective recognition trigger and adaptive valuation thresholds. The framework illustrates how these principles can simplify compliance and enhance tax transparency in cross-border and arbitrage-sensitive settings.

Volume 54 Online ISSN 0165-2826

Literature Review : Caroline Glenk, Verlustverrechnung bei Personengesellschaften und anderen transparent besteuerten Gesellschaftsformen – Eine rechtsvergleichende Analyse zwischen Deutschland, Frankreich und den USA, Loss compensation in partnerships and other transparent tax entities – A comparative legal analysis between Germany, France, and the USA, Nomos, 2022

2026-03-13T00:01:04+00:00

Volume 54 Online ISSN 0165-2826

Exchange of Crypto Information in the ‘Pre-AEOI Phase’: Can Non-CARF Countries Use Group Requests to Obtain Information from Foreign CASPs?

2026-03-13T00:01:04+00:00

The article examines the use of ‘group requests’ by countries to obtain information on crypto assets held by their residents through foreign Crypto Asset Service Providers (CASPs). With information exchanged under the OECD’s Crypto Asset Reporting Framework (CARF) set to commence in 2027, many Global South nations remain uncommitted due to administrative constraint. Many of these countries host significant domestic crypto markets. The author proposes that group requests can serve as a powerful alternative to ‘mimic’ the compliance effects of automatic exchange of information (AEOI) under the CARF. The study outlines a practical methodology for executing these requests. It begins by identifying how countries can overcome the lack of comprehensive macroeconomic data on cross border crypto activities. Countries can use the methodology developed by the Financial Action Task Force (FATF) methodology to identify relevant CASP jurisdictions. It then details the conditions for validity under the OECD’s ‘foreseeable relevance’ standard, ensuring requests are not dismissed as illegal ‘fishing expeditions’. Finally, the article analyses the legal viability of basing such requests on bilateral tax treaties, tax information exchange agreements (TIEAs), and the Multilateral Convention (MAAC). The article concludes by providing a checklist for a successful use by tax authorities of crypto group requests.

Volume 54 Online ISSN 0165-2826

Sixteen Years of Bitcoin: Resolved and Unresolved Issues in the Taxation of Crypto Assets

2026-03-13T00:01:04+00:00

Bitcoin’s sixteenth anniversary in 2025 provides an important juncture to reflect on how tax law has responded to the emergence of crypto assets. Initially hailed as ‘the monetary experiment of our time’, Bitcoin and its successors have challenged fundamental tax concepts and exposed divergences in domestic and international tax systems. This article first revisits the debate on whether crypto assets should be characterized as ‘money’, demonstrating that classification matters only to the extent that tax consequences diverge across regimes. It then examines four unresolved issues that continue to occupy scholars and policymakers: the characterization of mining rewards as entrepreneurial income or windfall gains; the treatment of staking rewards as active or passive income; the tax consequences of blockchain hard forks; and the classification of collateral use of crypto assets in decentralized finance. Each issue reveals tensions between traditional tax analogies and the novel features of blockchain-based activities, highlighting trade-offs between theoretical purity and administrability. While global convergence is unlikely due to foundational differences in tax systems, the analysis underscores the importance of clarity, consistency, and functional approaches to ensure that taxation keeps pace with technological innovation.

Volume 54 Online ISSN 0165-2826

Editorial: Taxation of Crypto Assets

2026-03-13T00:01:04+00:00

Volume 54 Online ISSN 0165-2826

The role of central banks in the context of the Markets in Crypto-Assets Regulation (MiCAR)

2026-02-09T00:00:00+00:00

Abstract

This article examines the role played by EU central banks in the context of Regulation (EU) 2023/1114 (MiCAR), honing in on their involvement vis-à-vis stablecoins [e-money tokens (EMTs) and asset-reference tokens (ARTs)]. It explores the defining characteristics of EMTs and ARTs in order to emphasize the specific risks central banks should be concerned about. The article analyses the goals MiCAR pursues to fully understand the nature of the contribution that central banks must provide to the competent supervisory authority to eventually ensure a sound market for crypto-assets. It argues that the engagement of central banks should not be characterized as mere power, but rather amounts to an actual responsibility that entails, in specific circumstances, the duty to act on their own initiative and irrespective of requests from the competent supervisory authority. The article provides a structured and comprehensive study on ‘when’ and ‘how’ central banks should intervene and issue an opinion. It puts forward a systematic analysis of the responsibility of the central banks vis-à-vis the risks posed to financial stability and monetary policy/sovereignty, as well as to the smooth functioning of the payment system, also summarizing the findings by means of a practical ‘traffic-light’ scheme. Finally, the article deals with the relationship between the competent supervisory authority and central banks in the quest to clarify their respective roles and responsibilities.

From Symbol to Asset: The Trade MarkInvestment Interface and the Future of Regulatory Sovereignty [pre-publication]

2026-03-08T00:01:06+00:00

This article explores the growing intersection between trade mark rights and investor-state dispute settlement (ISDS), highlighting emerging legal and regulatory challenges. Although trade markrelated ISDS claims remain rare and have so far favoured respondent states, there is a risk that future tribunals may adopt expansive interpretations of investment protections. This concern reflects broader trends in ISDS, where tribunals have often interpreted standards, such as fair and equitable treatment, in investor-friendly ways, even under modern, more balanced treaties. As intellectual property claims increase, trade marks may become a new flashpoint within ISDS. The article identifies three key hurdles that trade mark holders must overcome: jurisdiction, breach of substantive obligations, and defences. It argues that the limited jurisprudence to date creates interpretive uncertainty. To mitigate these risks and safeguard regulatory space, the article proposes two key reforms: first, improved treaty drafting, including precise definitions, robust exceptions, and interpretive tools; and second, the development of non-binding guidelines for arbitrators in IP-intensive disputes. Together, these measures aim to ensure consistency, fairness, and the protection of the public interest in future trade mark-related ISDS claims.

Volume 11 Online ISSN 2468-7413

Article: Exchange of Crypto Information in the ‘Pre-AEOI Phase’: Can Non-CARF Countries Use Group Requests to Obtain Information from Foreign CASPs? [pre-publication]

2026-02-24T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

Article: Sixteen Years of Bitcoin: Resolved and Unresolved Issues in the Taxation of Crypto Assets [pre-publication]

2026-02-24T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

Editorial: Taxation of Crypto Assets [pre-publication]

2026-02-24T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

Guest Editorial: The Forgotten Addendum

2026-02-27T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

Remote Work and PEs: Reconciling German Tax Practice and OECD Standards

2026-02-27T00:01:06+00:00

The widespread adoption of remote work poses significant challenges for applying permanent establishment (PE) rules, especially in cross-border scenarios. This article examines the differing treatment of home office arrangements under German domestic law and the OECD Model Tax Convention (OECD MC) 2017 with its corresponding Commentary (OECD MC Commentary). The recent February 2024 guidance in Germany by the German Federal Ministry of Finance provides that a home office typically does not constitute a PE except under extraordinary circumstances. This even applies when the employer (1) covers the costs for the home office and its equipment; (2) concludes a rental agreement with the employee for the home office unless the employer holds actual rights of disposal; or (3) does not provide an alternative workplace. The rationale is that the employer typically lacks sufficient ‘power of disposal’ over the employee’s private home office. Exceptions apply when the employee performs management functions conferring such control.

However, the pragmatic approach applied by the German fiscal authorities contrasts with the broader interpretation in the OECD MC Commentary 2017 which may lead to unintended PE creation and double taxation. Through a comparative analysis, including selected national practices from other European countries and a case study, the article advocates for the OECD MC Commentary 2017 to integrate similar delimitation criteria to enhance legal certainty, reduce compliance burdens, and better align international tax rules with modern remote work realities.

Volume 54 Online ISSN 0165-2826

Determinants of Tax Complexity: Evidence from a Developing Country

2026-02-27T00:01:06+00:00

This study investigates the determinants of tax complexity in Indonesia, focusing on the perspectives of tax officers and firms, and thus provides a case study relevant to developing countries. Understanding tax complexity in this context is crucial as developing nations frequently encounter legislative, fiscal, and administrative challenges that exacerbate their tax complexity. Complexity can hinder investment, impair tax revenue collection, and impede economic development. The authors adapt a global survey instrument to the Indonesian context and collect responses from Indonesian tax officers and firms. Transfer pricing is perceived as the most complex tax regulation which is consistent with cross-country studies. However, in contrast to the global findings, statutory tax rates and taxes on dividends rank second and third in Indonesia. While Indonesian tax officers emphasize the complexity of transfer pricing regulations, firms are more concerned about the complexity of tax procedures, especially tax guidance and tax audits. Furthermore, comparative analyses show that tax officers perceive tax regulations as being more complex than tax procedures. In contrast, firms perceive the opposite, particularly for tax audits. The findings offer a nuanced picture of tax complexity in a developing country and provide guidance for tax reforms in Indonesia. They also serve as a commencement for further analyses of developing countries.

Volume 54 Online ISSN 0165-2826

Income Taxation of the Digital Economy: The Advantages and Disadvantages of Digital Services Taxes from an African Perspective

2026-02-27T00:01:06+00:00

As the digital economy continues to evolve, so does the ability of multinational entities (MNEs) to avoid taxes. The incidence of tax avoidance is more acute in those jurisdictions where they do not have a physical presence which is a prerequisite for taxation rights for source jurisdictions under current international taxation norms. This compounds the domestic resource mobilization conundrum of most low-income countries (LICs) of which the majority are invariably African jurisdictions at a time when the Covid-19 pandemic and the recent Trump administration’s United States Agency for International Development (USAID) cuts have resulted in a drastic decline in overseas development aid. Some African states have also adopted the first-mover advantage of implementing digital services taxes (DSTs) in a replication of efforts to alleviate the tide of MNEs’ base erosion and profit shifting (BEPS) activities by some western source jurisdictions. This research explores the DSTs that have recently been implemented by some African territories in terms of their challenges, advantages, and disadvantages. Though their disadvantages are quantitatively superior to their advantages, the latter seem to enjoy qualitative preeminence since the African jurisdictions that have implemented them have reduced MNEs’ BEPS activities, enhanced their domestic resource mobilization exertions and, most importantly, have managed to expedite multilateral cooperation efforts to resolve the current imbalances in international taxation.

Volume 54 Online ISSN 0165-2826

Policy Note: Current UN Tax Policy Note: Creating the United Nations High-Level Political Forum on International Taxation to Improve ‘Throughput Legitimacy’ in UN Tax Policymaking

2026-02-27T00:01:06+00:00

Developing countries face ongoing challenges within international taxation – including influencing agenda-setting and decision-making to capacity building resources. The major issue underpinning each of these challenges is the lack of a fairer and more transparent international institution to support developing countries in international tax policymaking. The 2023 Report of the Secretary-General on the Promotion of Inclusive and Effective International Tax Cooperation at the United Nations is a ‘critical juncture’ in establishing fair and transparent international institutions. At its core, an international institution must ultimately establish ‘throughput legitimacy’ to be regarded as fairer and more transparent. The aim of this tax policy note is to guide policymakers and the policy work of the new 2025–2029 United Nations Tax Committee term as it considers new policy reforms to establish an international tax institution that is fairer and more transparent for developing countries. Part 2 summarizes the governance gaps at the Organisation for Economic Co-operation and Development (OECD) and UN leading to these institutions lacking fairness and transparency. Part 3 highlights two key elements which can improve ‘throughput legitimacy’ for developing countries: (1) Regionalism and (2) Creation of a Political Tax Forum at the UN. This policy note concludes by proposing a new regionalism-based political tax forum at the UN – called the UN High-level Political Forum on International Taxation. The UN High-level Political Forum on International Taxation can be modelled similar to the UN High-level Political Forum on Sustainable Development. The author is an expert participant in the policy work of the United Nations Tax Committee, and the policy recommendations in this policy note have been published on the UN Tax Committee website to provide tax policy guidance on this issue (https://financing.desa.un. org/untc-31st-session-stakeholder-input).

Volume 54 Online ISSN 0165-2826

Literature Review: Sérgio André Rocha, ‘Non-defined Terms in Double Tax Conventions’, Termos Não Definidos em Tratados Internacionais Tributários, Casa do Direito, 2024 by Ricardo André Galendi Júnior

2026-02-27T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

The 2025 OECD Model Tax Convention Update: A Mountain in Labour Gives Birth to a Mouse

2026-02-27T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

Capacity in derivatives with public bodies after Dexia credit local S.A. v Patrimonio del Trentino S.p.A. [2024] EWHC 2717 (Comm) (‘Dexia v Trentino’)

2026-01-21T00:00:00+00:00

Abstract

This case note examines Dexia v Trentino, a key case on capacity in derivative transactions involving public or quasi-public entities. The comment suggests that the case is consistent with the distinction between hedging and speculation being determined objectively by reference to the entity’s financial exposure and economic purpose. It is also consistent with the leading authority, particularly that in Banca Intesa Sanpaolo Spa & Anor v Comune Di Venezia [2023] EWCA Civ 1482. The comment illustrates a judicial movement towards objective assessments of capacity in light of the distinction between hedging and speculation. The note, however, critiques reliance on legal form and argues that hybrid entities like Trentino, though private in structure, are publicly accountable. Unlike private entities, the public impact of decisions involving their capacity has ramifications that extend beyond those applicable to private companies. The comment argues that courts should look past legal form to the public accountability common to entities emanating from public law and those utilizing private structures.

Biodiversity and natural resource finance

2026-01-16T00:00:00+00:00

Nature risk has become recognized as a major issue for worldwide economies. Between 2020 and 2024, private finance for nature surged elevenfold to over $100 billion, and the United Nations Environment Programme (UNEP) estimated that there could be a further increase by 2030 to $1.45 trillion.1¹ Regrettably, the 2024 United Nations Biodiversity Conference of the Parties (COP16) in Cali, Colombia, did not reach a conclusion on funding. Discussions were deferred to 2025 in Rome, Italy, when participating nations eventually agreed to provide developing countries with $200 billion a year to finance conservation efforts until 2030. However, there is a growing awareness of the importance of the need for the private sector to step forward, and private finance will be needed to close the financing gap.

The value of guarantor monitoring: evidence from bond defaults in China

2025-12-08T00:00:00+00:00

Abstract

Using a bond–year panel dataset, we show that external credit guarantors can mitigate default risk in the corporate bond market, and the observed effects cannot be fully attributed to pre-issuance screening. Consistent with a monitoring channel, we explore the post-issuance dynamics and find that the risk-reduction effect of guarantees is significantly stronger when guarantors face greater risk exposure or when issuers experience post-issuance financial deterioration. We further demonstrate that guarantees act as substitutes for covenant-based monitoring and promote disciplined firm behavior: Guaranteed firms exhibit reduced risk-taking, reflected in lower levels of overinvestment and excessive leverage. Together, these findings underscore the delegated monitoring role of guarantors in mitigating agency conflicts between issuers and investors in public debt markets.

Do investors care about the rainforest? Evidence from voluntary carbon offsets around the world

2025-11-25T00:00:00+00:00

Abstract

We explore how investors react to firms’ biodiversity-focused activities in the Voluntary Carbon Market. The average stock price reaction of forestry carbon offsetting with and without biodiversity impact is not significantly different from zero until the end of 2022. Following a Guardian article claiming rainforest carbon offsets to be “worthless” in January 2023, the announcement returns to carbon credit retirements turned significantly negative. This effect is not significant for carbon credits contributing to biodiversity conservation certified by the Climate, Community & Biodiversity (CCB) Standard, but it is significantly negative for other credits. Our results show that investors care about both the biodiversity impact of carbon credits as well as the climate-change mitigation integrity of offsetting activities.

Corporate nature risk perceptions

2025-11-12T00:00:00+00:00

Abstract

We survey portfolio companies of a large asset owner to explore the evolving landscape of nature risks. Nearly half of all companies (48 percent) view nature risks as financially material, and 43 percent of those perceive nature-related physical risks, and 27 percent transition risks, as having financial effects already today. Three-quarters of companies experiencing nature-related investor engagement view these interactions as value-generating. Nonetheless, according to the respondents, investor attention remains limited in key respects: while 40 percent report that investors consider nature risks, fewer than 25 percent believe investors assess how these risks affect cashflows or costs of capital. Half of the respondents believe investors will prioritize climate over nature; however, many think both topics are so intertwined that they cannot be separated. Our findings underscore the growing recognition of nature risks as financially relevant, while also pointing to challenges and opportunities for their integration into financial analysis and investor engagement.

The pricing of biodiversity risk in commodity markets

2025-11-06T00:00:00+00:00

Abstract

This article provides empirical evidence that biodiversity-related transition risk is priced in global commodity markets, with particular emphasis on agricultural commodities. Using intensity-based metrics of species loss per harvested land unit, we obtain empirical evidence that commodities with higher biodiversity footprints earn significant risk premia, after controlling for commodity-specific factors. An event study around the Kunming Declaration further shows that commodities associated with greater biodiversity risk experienced negative abnormal returns following the declaration. In an aggregate-level analysis, we additionally find that commodities with higher sensitivity (beta) to biodiversity shocks earn significantly higher excess returns, reinforcing the presence of a biodiversity-related risk premium across global commodity markets. Our findings suggest that investors are increasingly internalizing the biodiversity-related risks at the commodity-asset level. The findings can be rationalized by a commodity production model, which we outline in Section 5.

Firm-level nature dependence

2025-11-06T00:00:00+00:00

Abstract

We construct firm-level measures of dependence on ecosystem services (NatureDep scores) for 31,772 listed firms in 117 countries between 2010 and 2023, combining the Exploring Natural Capital Opportunities, Risks, and Exposure (ENCORE) database with firm-level revenue information. The scores capture exposure to physical nature risks, with financial effects additionally depending on the deterioration of ecosystem services. NatureDep scores positively correlate with impact on biodiversity, are unrelated to nature-related actions disclosed in the Carbon Disclosure Project (CDP) survey, are not reflected in firms’ corporate disclosures, and predict BlackRock’s biodiversity-related engagements. We employ the scores in two applications. First, the scores relate positively to measures of downside risk, with effects stemming mostly from high dependencies on water-related ecosystem services. Second, the scores predict nature-related incidents that arise when high nature dependence leads firms to damage nature, overuse resources, or trigger disputes with local communities. We conclude that investors started to pay attention to nature dependence, while corporate action and disclosure remain limited.

Does financing biodiversity reduce biodiversity loss? Evidence from EU funding of science and innovation

2025-11-05T00:00:00+00:00

Abstract

Recent calls for greater private capital in biodiversity finance often overlook the question of effectiveness. This article interrogates the assumption that the increased financing being called for directly reduces species-level loss. Using data on European Union-funded projects across twenty-six countries over two decades, I discover that conservation funding has been most effective in supporting forest preservation, but largely ineffective for other ecological-based measures of biodiversity. Applying a dynamic difference-in-differences framework, I show that conservation funding generally yields minimal ecological gains. In contrast, funding for biodiversity research expands biodiversity data coverage, though additional investment produces little marginal improvement. A geospatial analysis of bird sightings reveals delayed and spatially dependent impacts on avian biodiversity near funded projects. Additionally, I explore biotechnology-related biodiversity projects as a channel for private investment. These projects generate patents and genetic resources that can be commercialized, suggesting pathways for aligning biodiversity outcomes with investor incentives.

Biodiversity risk

2025-10-30T00:00:00+00:00

Abstract

We explore the effects of physical and regulatory risks related to biodiversity loss on asset values. We first develop a news-based measure of aggregate biodiversity risk and analyze how it varies over time. We also construct and publicly release several firm- and industry-level measures of exposure to biodiversity risk, based on (1) textual analyses of firms’ 10-K statements, (2) the holdings of biodiversity-related funds, (3) firms’ responses to a questionnaire fielded by the Carbon Disclosure Project, and (4) a large survey of finance professionals, regulators, and academics. Exposures to biodiversity risk vary substantially across industries in a way that is economically sensible and distinct from exposures to climate risk. We find evidence that biodiversity risks already affect equity prices: returns of portfolios that are sorted on our measures of biodiversity risk exposure covary with innovations in the aggregate biodiversity risk index. However, our survey indicates that market participants do not perceive the current pricing of biodiversity risks in equity markets to be adequate.

Financial value of nature: coastal housing markets, mangroves, and climate resilience

2025-10-27T00:00:00+00:00

Abstract

Measuring the financial value of nature is difficult, often resulting in insufficient funding directed to nature conservation and restoration. As coastal risks increase due to development and climate change, a tangible benefit of nature is the protection it offers against storm damage. Many studies from the risk industry and others assess the direct effects of wetlands for reducing damage during storms. However, the value of wetlands for coastal protection could extend to many other benefits, including home prices in areas where storms are common. We use property-level housing transaction data from Zillow and show that proximity to mangroves in Florida moderates home price decline and dispersion following major hurricanes. The effects are substantial in magnitude, reducing the probability of losing a quarter or more of the housing value by 2–7 percentage points, which corresponds to 20–40-thousand-dollar value for a million-dollar property, conditional on a hurricane.

The real effects of protecting biodiversity

2025-10-27T00:00:00+00:00

Abstract

Protected areas are a central instrument in biodiversity conservation. However, their broader implications for corporate behavior and financial performance remain underexplored. This study examines how proximity to newly designated protected areas shapes establishment-level environmental, operational, and financial outcomes from 1990 to 2021. We find that nearby establishments significantly reduce toxic emissions, driven not by cleaner technologies but by production cutbacks and workforce contraction. Exploratory evidence suggests that heightened regulatory oversight may be one channel that constrains operations and is associated with lower profitability and market value. These results underscore the environmental benefits of conservation but also reveal the material costs imposed on affected firms. As global conservation initiatives expand, our findings show that biodiversity-related regulatory exposure constitutes a material financial risk that should be incorporated into policy design, corporate strategy, and capital allocation decisions.

Biodiversity entrepreneurship

2025-10-27T00:00:00+00:00

Abstract

We study an emerging class of startup organizations focused on biodiversity conservation and the challenges they face in financing these ventures. By fine-tuning a large language model, we identify 630 biodiversity-linked startups in PitchBook and compare their financing dynamics with those of other ventures. Biodiversity startups raise less capital but attract a broader coalition of investors, including not only venture capitalists (“value investors”) but also mission-aligned impact funds and public institutions (“values investors”). Values investors provide incremental capital rather than substituting value investors, but funding gaps persist. We show biodiversity-linked startups use social media (Twitter) activity to help connect with value investors. Our findings can inform policy and practice for mobilizing private capital toward biodiversity preservation, emphasizing hybrid financing models and strategic communication.

Biodiversity and local asset values

2025-10-14T00:00:00+00:00

Abstract

We provide a national-scale benchmark on how biodiversity is priced in local assets in the United States. Property prices increase with local biodiversity loss, likely reflecting development-driven monetization. In contrast, at the regional level, greater species richness correlates with higher asset values, indicating that remaining regional biodiversity is viewed as an amenity. Over time, the premium from biodiversity loss weakens, while the valuation of regional biodiversity strengthens. The link between biodiversity and property prices is higher when public attention to biodiversity is high. Together, these results highlight a shift in market preferences: biodiversity is increasingly recognized and priced as natural capital since the turn of the century. This evidence shows how ecological conditions are capitalized into local asset values and highlights implications for conservation policy and sustainable land use.

AUTHOR INDEX

2026-02-14T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

Editorial: The Zucman Tax

2026-02-14T00:01:06+00:00

Volume 54 Online ISSN 0165-2826

The Evolution of the Fair and Equitable Treatment Standard through the Spanish Renewable Energy Saga

2025-11-10T00:00:00+00:00

Abstract

The global push towards reaching the climate change mitigation goals and energy transition has placed the spotlight on international investment law and investment arbitration from a different angle, opening reform avenues focused on modifying investment treaties and arbitration to fit the contemporary sustainable development goals. These reforms are considered as high priority due to the widely perceived detrimental effects of investment protection standards in old-generation investment treaties, as interpreted by arbitral tribunals. During the past decade, the tension between the state’s right to regulate in the public interest and modify existing renewable energy schemes and the guarantees and protections granted to existing investors was on full display in an increasing number of investment arbitrations filed by renewable energy investors, primarily against Italy, the Czech Republic and Spain. The fair and equitable treatment standard (FET) has consistently featured as the most frequent and most successful claim by claimant renewable investors, regardless of the respondent host state and type of investment. Although critics have complained of inconsistent outcomes, a deeper analysis shows that arbitral tribunals have developed consistent lines of interpretation which can (and have) impacted the reformed new-generation FET standard. The awards issued to date in the “renewable energy investment arbitration sagas” reveal a wealth of legal and policy insights, and the potential for a reformed FET standard which can be applied to the benefit of the energy transition process. Through the lens of the Spanish renewable investment awards, as the most abundant and growing sample of case law, this article explores the evolution of the FET standard through arbitral jurisprudence and the proposed reforms which may help harness its protective effects to boost sustainable development.

Environmental Clauses in Investment Arbitration: Deep Roots, Green Shoots and Dead Wood

2025-10-28T00:00:00+00:00

Abstract

An assumed conflict between international investment law and environmental protection has driven many States to negotiate investment treaty clauses that reaffirm their policy space. But what on earth is policy space? Are we sure that environmental and investment protection are conflicted? Now that environmental clauses have been interpreted by tribunals, which functions, if any, are they serving in investment arbitration? In addressing such questions, this article defends an integrated hierarchy of environmental over investment protection, affirmed by the International Court of Justice and wider practice, whereby a State’s presumptive right to regulate for environmental protection is inherently limited by a test of manifest disproportionality. Against that normative baseline, we are better equipped to assess whether environmental clauses have affirmed or diverged from a State’s rights and obligations under general international law. The article introduces a typology of 12 environmental clauses in investment treaties, examined in light of arbitral practice and organised according to three stages of analysis: jurisdiction (legality, exclusion, exemption, denial of benefits); breach (conflict, affirmation, clarification, implementation, non-regression); and exception (justification, reservation, investor obligation). Ultimately, this article identifies which clauses reflect general international law (deep roots), may enhance environmental protection (green shoots) or make negligible contribution (dead wood).

Climate Change Clauses in International Investment Agreements: An Analytical Survey

2025-10-23T00:00:00+00:00

Abstract

This article investigates how States have reflected the urgent need for climate action in their international investment agreements. It reviews the wording of 109 international investment agreements that contain specific climate change language. The practice is slowly gaining momentum across States and grouping of States, but concerns at present chiefly the EU, Chile, the UK, New Zealand and Australia. The review indicates that the overwhelming majority of States did not consider that the urgent need to implement climate actions required them to update their international investment agreements. The few States that did so merely shoehorned climate change considerations into their traditional environmental clauses, although new practices are emerging in this area. In addition, the few investment treaty parties that engaged with climate change did not seek to make climate-friendly investments markedly more attractive than climate-neutral or climate-hostile ones. The main obligations that they created in respect of climate change mirror largely those existing under the climate change regime and relate to cooperation, facilitation and promotion activities. The normative content of these obligations is even more diluted when they are worded—as is often the case—as obligations to make efforts to cooperate, to promote or to facilitate. States also sought to shield the parties’ ability to adopt climate change measures through clauses protecting their regulatory powers, borrowing often from the wording of the so-called second generation of investment treaties. Recent practice in the context of the Energy Charter Treaty allows individual parties to reduce the investment treaty protection they grant with respect to existing or future fossil fuel investments. Although much more is required for investment treaties to reflect the urgent need for climate action fully, including more significant participation of non-Annex I countries in the practice, the wide breadth of the clauses surveyed suggests that all the key elements of a multilateral agreement on investment, trade and climate change are on the table.

International Investment Law in the Energy Transition

2025-09-20T00:00:00+00:00

In the last two decades, a complex array of scientific, technological, social, political, economic and legal processes has aligned to accelerate a transition toward low-carbon energy systems. This is a major development unfolding at different paces in different parts of the world. It is also an imperative, given the unprecedented challenge of climate change, both globally and locally.

Yesterday, Today and Tomorrow? The ECT and its Modernization

2025-07-03T00:00:00+00:00

Investment Treaties and Climate Change Policy: A Possible Legal Pathway

2025-07-03T00:00:00+00:00

Abstract

The purpose of this article is to identify what type of treaty features, due to what they ban, restrict, allow and/or promote, may be conducive to promote foreign investment in low-carbon and climate-resilient activities while at the same time preserving the ability of States to drive the decarbonisation and resilience of their economies. It is, in other words, a policy analysis, but one that can be informed by existing treaty, arbitration and policy practice.

The Energy Transition in Contractual Practice

2025-07-03T00:00:00+00:00

Abstract

In the context of the current global discussions on energy transition as part of the response for the move towards achieving net zero, this paper examines upstream activities which involve the extraction of transition mineral in the context of international investment contracts, and argues for a reengineering of the stabilisation, applicable law and dispute resolution clauses, to align with the global policy goals for achieving energy transition.

Montauk Metals Inc v Colombia1 A New Case on Environmental Exceptions and Investment Protection Treaties

2025-06-30T00:00:00+00:00

Phasing Out Coal Investment Contracts: Does Just Transition Finance Legitimize Unjust Compensation?

2025-02-26T00:00:00+00:00

Abstract

By locking States in a long-term carbon-intensive trajectory that contradicts international climate change mitigation efforts, coal power purchase agreements (PPAs) and related investment contracts pose a significant obstacle to the just energy transition. Just Energy Transition Partnerships (JETPs) aim to mobilize public and private finance to accelerate the energy transition in developing countries, including by compensating coal investors for the early termination of their PPAs. Paradoxically, the risk of similar compensation under international investment treaties has led to severe criticism, as illustrated by States’ withdrawal from the Energy Charter Treaty. Taking into account this apparent contradiction, this article investigates the compensation of coal investors under the JETPs, and related transition finance initiatives, building on the just transition and climate-investment law literature. The analysis focuses on the early termination of coal PPAs in Indonesia and Vietnam—two JETP countries that provide relevant case studies to understand the obstacle that investment contracts present for the energy transition, and the justice implications of fully compensating investors for terminating these contracts.

Killing It Softly: The ILC’S Articles on State Responsibility

2025-02-10T00:00:00+00:00

Abstract

By preferring tautologies supplied by the theory of objective responsibility over general principles of liability derived from comparative law, the ILC’s Articles on State Responsibility cannot assist in operationalising the general and opentextured treaty standards for State conduct that are commonplace in many fields of international law, particularly in environmental law. Moreover, the one-size-fits-all approach to defining the secondary consequences of a wrongful act in the ILC’s Articles rests upon a conception of outright prohibition of the conduct in question and a community interest in securing the cessation of that conduct, whereas many primary obligations, if transgressed, should be properly seen as generating a duty of compensation only without the other secondary consequences that automatically follow in the ILC’s scheme of responsibility.