INSIDE COMPLIANCE

Recently, there has been an increased concern regarding foreign ownership of agricultural land in rural America. This growing concern among lawmakers has led to the introduction of several bipartisan bills this year that restrict foreign investments in United States agricultural land. In part, these bills have been introduced as a response to a study published earlier this year by the United States Government Accountability Office (GAO), which identified potential national security risks in foreign investments in United States Agriculture. Currently, the only federal law regulating foreign investments in agricultural land is the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA). AFIDA established a nationwide system to collect and record data regarding foreign ownership of U.S. agricultural land. The law requires foreign investors in U.S. agricultural land to report holdings and transactions to the United States Department of Agriculture (USDA). Furthermore, twenty-four states already have legislation in place restricting foreign individuals, entities, or both from owning land, with four states refining their laws to improve enforcement this year. Although the issue of foreign investment is complex, it is necessary that the USDA and other agencies adequately protect against the national security risks posed by foreign investment while also recognizing that not all foreign ownership in U.S. agricultural land is a threat to national security.

In June 2024, the Supreme Court will decide on a case that may completely upend one third of the Internal Revenue Code (IRC). Moore v. United States calls into question whether the 16th Amendment authorizes Congress to tax unrealized gains without apportionment among the states.

The Public Company Accounting Oversight Board (PCAOB) inspects the audits of U.S public companies, and according to former inspectors for the PCAOB the inspection process needs improvement. The SEC and the Sarbanes-Oxley Act empower the PCAOB to establish auditing standards through inspections and compliance reports. The former inspectors criticized the reports produced and call for a wider scope in the process, more details, and for the reports to be released in a timely manner. While the PCAOB is in the middle of a transformation under current PCAOB Chair Erica Williams, the transformation is largely focused on making inspections more efficient. Hopefully, the call to action by former inspectors will result in improved reports by inspectors. For investors, having more context on how the inspection went and being able to review how the PCAOB measures audit quality would allow them to make more informed decisions.

Big tech companies in the United States are largely subject to fewer and less restrictive regulations than those found in other parts of the world. The E.U., however, is rapidly becoming one of the most “assertive regulators” of big tech, which consequently affects American companies that participate in the global market, such as Amazon, Apple, and Google. In response to the growing need for stricter antitrust and data privacy laws, the E.U. adopted the Digital Markets Act (“DMA”) in September of 2022. The DMA’s obligations are set to be fully applicable in March of 2024.