Canada: Further Revisions Proposed To Canada’s Foreign Affiliate Dumping Regime

The "foreign affiliate dumping" rules (the FA dumping rules), which came into force in 2012, have had a significant impact on foreign-based multinationals with Canadian subsidiaries and on acquisitions by non-resident corporations of Canadian corporations that derive a significant portion of their value from foreign operations. On August 16, 2013, the Canadian government released proposals to amend various aspects of the FA dumping rules.

The FA dumping rules were originally proposed in the March 29, 2012, Federal Budget to discourage foreign-based multinational corporations from "dumping" foreign affiliates into their Canadian subsidiaries in a manner that erodes the Canadian tax base.1 Generally, the August 16 proposals narrow certain provisions that were previously overly broad; widen the scope of the paid-up capital reinstatement rule and, to a lesser extent, the closer connection exemption (each of which is described below); and ease certain compliance requirements. On the other hand, the proposals also narrow the corporate reorganization exception and add a notification requirement to the paid-up capital reduction rule.

The FA dumping rules apply to transactions occurring on or after March 29, 2012 (with limited transitional relief for transactions occurring before 2013 pursuant to written agreements in place before March 29, 2012. Taxpayers will, however, have an ability to elect to use the original version of the foreign affiliate dumping proposals announced in the Federal Budget for transactions occurring between March 29, 2012, and August 14, 2012). Most of the August 16, 2013 proposals, if enacted, will apply as of March 28, 2012, except for certain provisions that will apply only to transactions or events occurring on or after August 16, 2013.

Application of FA Dumping Rules: Deemed Dividend or Paid-Up Capital Reduction

Subject to three general exceptions discussed below, the revised rules apply when a corporation resident in Canada (CRIC) that is (or becomes) controlled by a non-resident corporation (Parent) makes an investment in a non-resident corporation that is a foreign affiliate (FA) of the CRIC (either immediately after the investment is made or resulting from the series of transactions that includes the investment). As discussed below, in certain circumstances, an acquisition of shares of a Canadian corporation by a CRIC is considered to be an investment in such a non-resident corporation. When applicable, the rules (i) deem the CRIC or a related Canadian corporation to have paid a dividend to the Parent or a non-resident corporation controlled by the Parent, or (ii) reduce the paid-up capital of the CRIC's shares or of shares of a related Canadian corporation.

A deemed dividend is subject to Canadian withholding tax at a rate of 25%, subject to potential relief under an applicable income tax treaty. The amount of the deemed dividend is equal to the portion of the fair market value of the investment in FA that is reflected by the following:

  • property (other than shares of the CRIC) transferred by the CRIC;
  • obligations assumed by the CRIC;
  • property transferred to the CRIC that results in a reduction of an amount owing to the CRIC; or
  • benefits conferred by the CRIC that relate to the investment.

In addition, if the FA investment is contributed to the CRIC for consideration that includes shares of the CRIC, the paid-up capital of such shares is reduced by the amount otherwise added to the paid-up capital of the shares on the contribution. Accordingly, contributing an FA investment to a CRIC for shares of the CRIC will generally not result in any net increase to the CRIC's paid-up capital (which would otherwise reflect an amount that the CRIC could distribute to the Parent free of Canadian withholding tax as a return of capital distribution).

The FA dumping rules apply if a Parent controls the CRIC at the time the investment is made or if the CRIC becomes controlled by the Parent as part of the series of transactions or events that includes making the investment. The August 16 proposals provide a "safe harbour" rule that limits the application of the FA dumping rules in situations in which the Parent does not control the CRIC at the time the investment is made, in order to reduce impediments on corporate acquisitions arising as a result of the application of the FA dumping rules. In particular, the August 16 proposals clarify that if the CRIC is not controlled by the Parent at the time the investment is made, the rules will apply only if the CRIC becomes controlled by the Parent after the investment time and only if, at the time of the investment,

  • the Parent, either alone or together with any persons that do not deal at arm's length with the Parent, owned 25% or more of the shares of the CRIC, based on either votes or fair market value;
  • the investment is an investment in preferred shares of an FA of the CRIC that is not a wholly owned subsidiary of the CRIC; or
  • under an arrangement entered into in connection with the investment, a person or partnership that is not related to the CRIC has, in any material respect, the risk of loss or opportunity for gain or profit in respect of a property that can reasonably be considered to relate to the investment.

If the FA dumping rules apply and result in a deemed dividend, there is an ability to elect that all or a portion of a dividend otherwise deemed to be paid to the Parent by a CRIC to instead be deemed to be paid to the Parent or a non-resident corporation that is controlled by the Parent on a share of the CRIC or of a qualifying substitute corporation (QSC). A QSC is a Canadian corporation that is controlled by the Parent; that has a direct or indirect equity interest in the CRIC and some of the shares that are owned by the Parent; or a non-resident person that does not deal at arm's length with the Parent. The election is made jointly by the Parent (or the Parent and any non-resident corporation controlled by the Parent), the CRIC (or the CRIC and the relevant QSC in respect of the CRIC). The main purpose of this rule is to accommodate various holding company structures (such as where the shares of a CRIC are owned by a Canadian holding company). Specifically, by allowing the Canadian holding company to make a QSC election, a lower treaty withholding rate may apply (such as a treaty requiring direct ownership for reduced withholding on dividends). In addition, a QSC election may allow the deemed dividend to be recharacterized as a reduction of paid-up capital as described below (which treatment would not be available for a dividend deemed to be paid by the lower-tier CRIC).

The rules also provide for an automatic recharacterization of the dividend deemed to be paid by a CRIC or a QSC as a reduction of the paid-up capital of the shares of the CRIC or QSC if certain conditions are satisfied. The August 16 proposals simplify those conditions in a number of respects and add a requirement that a notification of the paid-up capital reduction be sent to the CRA on or before the 15th day of the month following the month in which the investment was made by the CRIC if the CRIC was controlled by the Parent at the time of the investment. If the CRIC was not controlled by the Parent at the time the investment was made, the notification is required to be filed by the earlier of (i) the first time, after the investment time, at which the CRIC is controlled by the Parent, and (ii) 180 days after the day the investment was made. In certain cases, the paid-up capital reduction can occur on shares of the CRIC or QSC that are owned by persons who deal at arm's length with the Parent. This will be useful if there are minority shareholders in the CRIC or QSC.

If the paid-up capital of a class of shares of a CRIC or a QSC has been reduced, the reduced paid-up capital may, in certain cases, be effectively reinstated on certain subsequent distributions as a return of capital by the CRIC or QSC or on a redemption, acquisition or cancellation of shares of the CRIC or QSC. The paid-up capital reinstatement rule was broadened by the changes included in Bill C-45 and will be further broadened if the August 16 proposals are enacted. Specifically, the August 16 proposals extend the paid-up capital reinstatement rule to distributions that can be traced to proceeds received by the CRIC from the repayment or disposition of certain debts owing to the CRIC.

More particularly, the paid-up capital of shares of the corporation may be reinstated to the extent that the subsequent distribution is a distribution of the following:

  • the relevant FA shares;
  • property substituted for the FA shares;
  • subject to a limited exception described below, if any of the following amounts are received by the CRIC no later than 180 days before the distribution:

    • proceeds from the disposition of the FA shares or property substituted for the FA shares;
    • proceeds from a dividend or reduction of paid-up capital on the FA shares or shares substituted for the FA shares; or
    • proceeds from the repayment or disposition of a debt obligation, or other amount owing, in connection with the investment or any interest on such debt obligation or amount owing.

However, a paid-up capital reinstatement will not be allowed if the amount that was received by the CRIC was not acquired as part of an investment in an FA to which the FA dumping rules do not apply. This rule is intended to ensure that the paid-up capital reinstatement rule will not apply if the amount received by the CRIC is in respect of an investment to which certain exceptions to the FA dumping rules (described below) applied.

Investments Subject to the FA Dumping Rules

For the purposes of the FA dumping proposals, an investment in an FA by a CRIC means any of the following:

  1. an acquisition of FA shares by a CRIC;
  2. a contribution to the capital of an FA by a CRIC;
  3. a transaction in which an amount becomes owing by an FA to a CRIC (other than (i) an amount arising in the ordinary course of the CRIC's business that is repaid within 180 days, (ii) an amount that is a "pertinent loan or indebtedness" (a term discussed below), or (iii) under the August 16 proposals, an amount that becomes owing because a dividend has been declared but not yet paid);
  4. an acquisition of an FA debt obligation by a CRIC (other than an acquisition from an arm's-length person in the ordinary course of the CRIC's business or a debt obligation that is a pertinent loan or indebtedness);
  5. an extension of the maturity date of a debt obligation owing by an FA to a CRIC (other than an amount that is a pertinent loan or indebtedness) or of the redemption, acquisition or cancellation date of FA shares owned by the CRIC;
  6. an indirect acquisition of shares of an FA by a CRIC through the acquisition of shares of another CRIC if the total fair market value of FA shares owned directly or indirectly by the other CRIC exceeds 75% of the total fair market value (determined without reference to debt obligations of any Canadian corporation in which the other CRIC has a direct or indirect interest) of all properties owned by the other CRIC; and
  7. an acquisition by a CRIC of an option in respect of, or an interest or right in, shares of an FA or a debt obligation of an FA that is not excluded under the exceptions in clauses (c) and (d) above.

More detailed rules supplement the indirect acquisition rules above. For example, rules are provided for determining the amount of an indirect FA investment and a rule prevents "stuffing" a CRIC with non-FA investments to avoid the application of the 75% rule relating to indirect investments. Another rule applies where the FA dumping rules have applied to an indirect acquisition that effectively deems the underlying FA shares to be acquired by the acquiring CRIC to allow the paid-up capital reinstatement rule and the corporate reorganization exception to apply as intended in those circumstances.

Exceptions to the FA Dumping Rules

The three general exceptions to the revised rules are for pertinent loans or indebtedness, corporate reorganizations and strategic business expansions.

Pertinent Loan or Indebtedness

The pertinent loan or indebtedness (PLOI) exception allows an amount owing by an FA to a CRIC to be excluded from the FA dumping rules on an elective basis. The result of making the election is that the particular amount owing becomes subject to a new interest imputation regime, rather than the FA dumping rules. This interest imputation regime generally requires the CRIC to include interest income on the amount owing at a rate that is at least equal to the greater of a prescribed rate (in general terms, the Canadian Treasury Bill rate plus 4%) and the rate applicable on any debt obligation incurred by the CRIC to fund the PLOI. The imputed interest is reduced by interest on the PLOI that is otherwise included in income (i.e., because it was received or accrued by the CRIC). If the new interest imputation rules apply, the existing interest imputation rules in section 17 of the Income Tax Act (Canada) (the Act) do not apply. The PLOI election applies to amounts that became owing after March 28, 2012 (or to amounts whose maturity date of the debt was extended after March 28, 2012) that were not otherwise excluded from being an FA investment under the ordinary course of business exceptions described below. The PLOI election may not, however, be available if the imputed interest on the debt is subject to a lower amount of tax under the Act by virtue of a tax treaty.

A separate rule also allows a CRIC to make a PLOI election in respect of other loans or indebtedness owing to the CRIC by a foreign corporation (such as a loan by the CRIC to its foreign Parent or to a foreign sister corporation). Although such other indebtedness would not have been subject to the FA dumping rules, it could otherwise have been subject to the current "shareholder loan" rule in subsection 15(2) of the Act – which, subject to certain exceptions, would deem the principal amount of such indebtedness to be a dividend paid by the CRIC, which is subject to Canadian dividend withholding tax. When the new election is made, subsection 15(2) does not apply to the particular indebtedness. As with the election for amounts owing by an FA, amounts owing by other non-resident corporations in respect of which this election is made will then be subject to the new interest imputation rule. The election applies to amounts that became owing to a CRIC after March 28, 2012, by the Parent or a non-arm's-length non-resident corporation.

Corporate Reorganizations

Exceptions from the FA dumping rules are provided for various types of corporate reorganizations. These exceptions are generally intended to prevent the application of the FA dumping rules when there is no new investment in an FA. These rules apply to certain acquisitions of FA shares by a CRIC:

  • on an acquisition from a non-arm's-length CRIC;
  • on an amalgamation, if all of the amalgamating corporations are related;
  • on a conversion of debt into shares or the settlement of debt of the FA by the issuance of shares;
  • on the reorganization of capital of the FA;
  • on a share for share exchange with another FA;
  • on a reorganization of capital;
  • on a foreign merger; or
  • on a liquidation of, share redemption by or dividend or return of capital from, another FA.

There are analogous exemptions where shares of a Canadian corporation are acquired if the acquisition of such shares would be deemed to be an indirect acquisition of shares of an FA held by such Canadian corporation. In addition, the revised FA dumping rules contain a relieving rule to ensure that the FA dumping rules do not apply more than once when property is transferred through a chain of Canadian corporations and invested in an FA.

Notwithstanding the above, an investment may be considered to have been made on a transaction otherwise eligible for a corporate reorganization exemption if, for example, debt is assumed by the CRIC in respect of a distribution from FA (such as on a liquidation of a top-tier FA into the CRIC). Certain of the corporate reorganization exemptions are also not available in respect of the acquisition of preferred shares (as discussed in more detail below in the context of the strategic business expansion exemption). In addition, an anti-avoidance rule may apply if it may reasonably be considered that one of the main purposes for a transaction or event was to cause persons to be related for the purposes of the reorganization exceptions. Finally, the August 16 proposals introduce a new anti-avoidance rule that provides that the corporate reorganization exception will not apply to an acquisition of property by the CRIC if such property can reasonably be considered to have been received by the CRIC as a repayment, in whole or in part, or in settlement of, a PLOI. This provision applies only to transactions or events that occur on or after August 16, 2013.

For purposes of the FA dumping rules, a corporation formed on an amalgamation of a parent and subsidiary CRIC (under subsection 87(11) of the Act) is deemed to be a continuation of its predecessors. In addition, the amalgamated corporation and, under the August 16 proposals each shareholder of the amalgamated corporation, is deemed not to have acquired property as a result of the amalgamation. Similarly, if a CRIC is wound up into another CRIC (under subsection 88(1) of the Act), the parent is deemed to be a continuation of its subsidiary and is deemed not to have acquired property from the subsidiary as a result of the winding-up.

Strategic Business Expansion

The explanatory notes that accompanied Bill C-45 provide that the exception for strategic business expansions is intended to recognize that certain foreign affiliate investments made by a CRIC may have been made by the CRIC even if it were not foreign-controlled. Notwithstanding such intention and some relieving changes in Bill C-45 and the August 16 proposals, the exception continues to be very narrowly drafted. The exception applies when the CRIC demonstrates that all of the following conditions are met:

  • The business activities of the subject FA and its subsidiaries are, and are expected to remain, on a collective basis more closely connected to the business activities carried on in Canada by the CRIC (or by a non-arm's-length CRIC) than the business activities of any non-arm's-length non-resident corporation (other than the subject FA or its subsidiaries or another FA that is controlled by the CRIC).
  • Officers of the CRIC (or of a corporation resident in Canada with which the CRIC did not, at the investment time, deal at arm's length) had, and exercised, the principal decision-making authority in respect of making the investment, and a majority of those officers were, at the investment time, resident and working principally in Canada or in a country in which an FA controlled by the CRIC (a connected affiliate) is resident if the connected affiliate carries on business activities that are at least as closely connected to the business of the subject FA as the business activities carried on in Canada by the CRIC or a non-arm's-length CRIC.
  • At the investment time, it is reasonable to expect that officers of the CRIC (or of a non-arm's-length CRIC)

    • will exercise the principal decision-making authority over the subject FA on an ongoing basis;
    • a majority of those officers will be resident, and will work principally, in Canada or a country in which a connected affiliate is resident; and
    • the performance evaluation and compensation of officers of the CRIC (or of a non-arm's-length CRIC) will be based on the results and operations of the relevant FA to a greater extent than will be the performance evaluation and compensation of any officer of a non-arm's-length non-resident corporation (other than the FA or its controlled subsidiaries or a connected affiliate).

For purposes of applying the rules noted above, a person who is an officer of both the CRIC (or of a non-arm's-length CRIC) and an "upstream" non-arm's-length non-resident corporation (e.g., not the subject FA or a connected affiliate) is deemed not to be resident and not to work principally in a country in which a connected affiliate is resident.

In determining whether an FA's business activities are connected with the business activities of the CRIC, the explanatory notes accompanying the draft rules indicate that activities may be connected if they are similar in nature or "parallel" (such as manufacturing and distributing similar products or providing similar services) or if one corporation's activities are upstream or "downstream" to the other's or if one business uses the technology of the other in its operations (such as one corporation selling the output of, or providing inputs to, the manufacturing process of the other). The explanatory notes also emphasize that mere connectedness is not sufficient. The connection to the CRIC must be closer than the connection to other non-arm's-length non-resident corporations.

In determining whether an officer is working principally in Canada, the explanatory notes suggest that the officer must spend the majority of his or her working time in Canada, carry out a majority of the important functions in Canada and make the most of the important decisions with respect to the CRIC in Canada.

The strategic business expansion exception and certain of the corporate reorganization exemptions do not apply in respect of an investment in FA shares that may not reasonably be considered to fully participate in the profits of FA and any appreciation in the value of FA, unless FA is a subsidiary wholly owned corporation of the CRIC. Accordingly, such exceptions will generally not apply to preferred share FA investments unless the FA is a subsidiary wholly owned corporation of the CRIC.

An indirect funding rule extends the strategic business expansion exception to certain investments in an FA that is established in another foreign jurisdiction if that FA provides financing to an FA that would meet the "closely connected" requirements and uses, or under the August 16 proposals is considered under certain relieving provisions in the Act to use, the funds in an active business carried on in the country in which it is resident.

However, an anti-avoidance rule applies when a CRIC uses a "good" FA as a conduit to make an investment in a "bad" FA. For example, the strategic business expansion exemption, and under the August 16 proposals, the indirect funding rule described above, may be effectively deemed not to apply to an investment in an FA that would otherwise satisfy the exemption if that FA in turn invests in another FA that would not meet that exemption.

Other Related Provisions

Additional rules apply for purposes of the FA dumping rules to look through certain investments by partnerships. Very generally, these rules deem each member of a partnership to have entered into any transaction entered into by the partnership itself in proportion to the fair market value of the member's direct or indirect (through other partnerships) interest in the partnership. Similarly, for purposes of these rules, members of a partnership are deemed to own their proportionate amount of the partnership's property and are deemed to owe their proportionate amount of amounts owing by a partnership.

Bill C-45 and the August 16 proposals also included changes to the corporate emigration rules, which are intended to deter corporate emigration strategies that could otherwise be used as a substitute for transactions addressed by the FA dumping rules. These rules apply when shares of an emigrating corporation are owned by a CRIC that is controlled by a non-resident Parent and the emigrating corporation is an FA of the CRIC immediately after the emigration. Where applicable, the paid-up capital that the emigrating corporation would otherwise have is deemed to be nil, resulting in a greater departure tax being payable on emigration. There is also a paid-up capital reinstatement rule (similar to the one described above) when a corporation that has had its paid-up capital reduced by the FA dumping rules emigrates. The August 16 proposals extend this paid-up capital reinstatement rule to include an increase in paid-up capital equal to the fair market value of a debt obligation, other than a PLOI, of the FA that is owned by the emigrating corporation immediately before it emigrates.

The August 16 proposals included a proposed amendment to the thin capitalization rules in the Act to exclude from the debt portion of a CRIC's debt-to-equity ratio a debt that can reasonably be considered to have directly or indirectly funded a PLOI. This amendment is intended to ensure that a CRIC that borrows and uses the proceeds from that borrowing to make a loan to an FA that is a PLOI is not prevented from deducting interest on such borrowing under the thin capitalization rules in the Act.

Conclusion

The FA dumping rules are a new and complex regime that has significant implications for foreign-based multinationals with Canadian subsidiaries and for acquisitions of Canadian corporations with significant foreign subsidiaries.

Footnote

1 For a discussion of prior versions of the rules see our Osler Update " Budget Briefing 2012," March 29, 2012, and our Osler Update " Foreign Affiliate Dumping Regime Revised in Bill C-45," November 6, 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions