This Day in Legal History: The Establishment of the World Bank
On December 27, 1944, in the midst of a world ravaged by the Second World War, a landmark event in the history of international finance took place at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, USA. On this day, the World Bank was established, marking a new era in global economic cooperation and development. The creation of the World Bank, also known as the International Bank for Reconstruction and Development (IBRD), was a direct response to the need for a robust plan to rebuild war-torn nations and stabilize the global economy.
The World Bank's founding principles were centered on providing financial and technical assistance to developing countries. This move was seen as crucial for promoting international economic stability and fostering global peace. The bank initially focused on reconstructing European countries devastated by the war, but its role quickly expanded to include development projects in many other regions of the world.
The establishment of the World Bank was a significant achievement in international diplomacy. It represented a collective understanding among nations that economic stability was paramount to preventing future conflicts. The Bretton Woods Conference, which also led to the creation of the International Monetary Fund (IMF), was instrumental in laying the groundwork for this new financial order.
The World Bank's operations have evolved over the years, focusing on various issues such as poverty reduction, infrastructure development, environmental sustainability, and education. Its approach has shifted from merely providing loans for physical reconstruction to addressing broader developmental challenges. The bank works closely with member countries and other international institutions to deliver its programs, emphasizing the importance of sustainable development.
This day in 1944 was not just about the formation of an institution; it marked a fundamental change in how the world viewed economic recovery and development. The World Bank's creation was a testament to the power of collective action and international cooperation in tackling global challenges. Today, the legacy of this event continues to influence global economic policies and the way nations collaborate, or don’t, for a more prosperous and equitable world, or not.
Starting January 1, tens of millions of companies in the U.S. will be required to report their beneficial ownership to the Treasury Department, a measure aimed at curbing money laundering, terrorism financing, and other global crimes. However, as the deadline approaches, many of these companies, particularly smaller ones, remain unaware or unprepared for the new regulations. The American Bus Association and other business groups have expressed concern over the lack of awareness and readiness among their members.
The Financial Crimes Enforcement Network (FinCEN) is tasked with collecting this information and has been actively trying to raise awareness among businesses. The new rules, part of the 2021 Corporate Transparency Act, mandate companies to disclose owners' names, addresses, birth dates, and identification numbers. The data will be stored securely and made available to law enforcement and foreign governments under certain conditions.
While existing companies have until the end of 2024 to comply, new companies formed in 2024 will have 90 days, and those established in 2025 or later will only have 30 days. FinCEN's outreach includes informational sessions, guides, and FAQs, but challenges in awareness and comprehension persist. Some businesses are consulting professionals to understand and meet the requirements, while others, including the National Small Business Association, are legally challenging the new rules.
Concerns about the complexity, cost, and time required for compliance are widespread, especially among businesses with intricate corporate structures. FinCEN estimates that for most companies with simple structures, initial reporting could take about 90 minutes and cost around $85. However, the situation is more complex for businesses with multiple stakeholders or operations across states.
The enforcement of these rules is another area of concern, with businesses hoping for leniency in the initial stages, especially for non-compliance due to lack of awareness. Penalties for willful non-compliance include significant fines and possible prison terms. FinCEN plans to continue its outreach efforts into 2024 and believes awareness will grow over time.
In 2023, U.S. courts faced challenges with the rising use of generative artificial intelligence (AI) tools like OpenAI's ChatGPT, particularly after incidents where lawyers submitted legal briefs containing fictitious AI-generated case citations. Experts predict an even greater impact from generative AI on the legal industry in 2024 and beyond. Several U.S. judges have begun to address the use of AI in courtrooms, with some issuing orders to regulate its application in legal proceedings.
Two New York lawyers faced sanctions for filing a brief with fake AI-generated citations, and a Colorado lawyer was suspended for a similar issue. Judges have been clear that misunderstanding the technology is not a valid excuse for its misuse. Orders regarding AI use in courtrooms vary, ranging from educational to outright prohibitions, with most requiring disclosure or verification of AI-generated information.
The U.S. District Court for the Eastern District of Texas implemented a rule for lawyers to review and verify computer-generated content. The 5th U.S. Circuit Court of Appeals is also considering a certification requirement for the use of AI. Bar associations, including the American Bar Association and state bars like California and Florida, are assessing the ethical implications of AI in legal practice.
Andrew Perlman, dean of Suffolk University Law School, warns that explicit rules on AI use may be ill-advised due to existing professional conduct rules and potential confusion. He notes that lawyers often use AI without realizing it and believes generative AI will be the most transformative technology in the legal profession.
Apple Inc. has appealed a U.S. decision to ban imports of certain models of its Apple Watch, following a complaint from Masimo, a medical monitoring technology company. The ban, upheld by the U.S. International Trade Commission (ITC) and not vetoed by President Joe Biden's administration, targets Apple Watches featuring blood-oxygen level reading technology. This technology, according to Masimo, was developed using stolen pulse oximetry technology and incorporated into Apple Watches starting with the Series 6 model in 2020.
Apple also filed an emergency request with the U.S. Court of Appeals for the Federal Circuit to pause the ban, at least until the U.S. Customs and Border Protection decides on the patent infringement issue regarding redesigned versions of the watches. The decision on this matter is expected on January 12. Despite the ITC's order, Apple Watches Series 9 and Ultra 2 remain available through other retailers like Amazon, Best Buy, and Walmart.
Masimo views the ITC decision as an affirmation of the integrity of the U.S. patent system. Legal experts note that while such disputes are often settled, Apple may be looking to design around the patents or remove the infringing feature. Apple has suspended sales of its Series 9 and Ultra 2 smartwatches in the U.S., but the ban does not affect the Apple Watch SE model.
The legal battle also includes a mistrial in a California federal court on Masimo's allegations and Apple's separate lawsuit against Masimo in Delaware. The last time a presidential administration vetoed an ITC ruling was in 2013 in a patent dispute involving Apple and Samsung. The Biden administration previously chose not to veto a separate import ban on Apple Watches based on a patent complaint from AliveCor, although the ITC has put this ban on hold for other reasons. Apple's wearables, home, and accessory business, including the Apple Watch, generated $8.28 billion in revenue in the third quarter of 2023.