Speaking recently on The Lawyers Weekly Show, Mr Fuller – who is the global head of legal services at KPMG International – predicted that movement towards greater legal sovereignty is going to gather speed, following on from more favourable views on economic sovereignty that have emerged globally in recent years.

Legal sovereignty, he proclaimed, is “really a force in the world at the moment”.

“If you look at what governments are doing – and this started before COVID-19, but has been accelerated [as a result of the pandemic] – they are becoming more focused on themselves than the regional or global environment they lived within, whether it be around immigration policy or tax policy. What we’ve seen over the last six months (and we think it’s going to accelerate) is legal sovereignty [by way of greater] localisation of laws to regulate the local economy, and regulate its interaction with the global economy,” he outlined.

A prime example, Mr Fuller noted, is with foreign investment laws.

“Australia announced at the start of COVID-19 that all the thresholds were reduced to zero. We saw countries like Germany, Spain, the United Kingdom, Canada, the United States and Vietnam all tightening their foreign investment laws as a reaction to the pandemic, and now, with Australia and announcements by Australia, the UK and the US around national security laws in foreign capital,” he posited.

“So, the reason we say legal sovereignty follows economic sovereignty is these two things are connected. For clients, they’re critical.

“If you are moving capital around, these laws will be more critical. If you are restructuring your supply chain and wanting to move an operation from country A to country B, and move people and move capital there, these laws are going to become more important. For Australia – and whether we like it or not – as a capital-importing nation, the balance of these laws is fundamental to get right, because we need to import capital to keep developing the country.”

VIEW ALL

Mr Fuller was asked whether, if Joe Biden is elected president of the US in November, the trend towards such legal sovereignty around the world may be halted, by way of incumbent Donald Trump’s “America First” strategy ceasing to be the approach taken by the US.

The answer, he responded, is probably yes, “but in nuances”.

Some of these changes have come for good reasons… maybe things got a little too liberal in the past, and maybe the legal and regulatory systems got ahead of where public opinion and public support really [were] for those laws,” Mr Fuller mused.

“Regardless of the country you’re in, you need to make sure that the public opinion and public support are continuous for cross-border laws. So, I think it’ll be a nuanced issue, and I think it’s an important nuance, because the current trajectory is not good,” he said.

“If it takes a slightly more thoughtful or slightly more substantive trajectory, that would be a good thing.”

To listen to the full conversation with Stuart Fuller, click below: