Relating to the required disclosure of certain financial relationships in civil actions regarding the activities of United States defense contractors.

Contracts

• Litigation Funding Agreements (LFAs): Immediate review required. Insert clauses requiring funders to certify they have no affiliation with sanctioned/embargoed nations. Add indemnification clauses protecting your entity if a funder’s status causes your case to be dismissed.
• Co-Counsel/Joint Plaintiff Agreements: In multi-party suits, mandate that all co-plaintiffs certify compliance. One non-compliant party could stall the entire litigation via a court-ordered stay.

Hiring/Training

• Legal Intake Teams: Staff must be trained to cross-reference all new defendants against the ITAR (International Traffic in Arms Regulations) list to determine if they qualify as "Defense Contractors."
• Compliance Officers: No new certifications are required, but training on the U.S. State Department’s list of sanctioned nations is necessary for vetting funding sources.

Reporting & Record-Keeping

• Mandatory Filings: A sworn disclosure must be filed with the court stating whether any funding (direct or indirect) comes from a sanctioned nation.
• Privilege Waiver: Standard operating procedures for privilege logs must be updated; the statute explicitly prohibits withholding this financial data under attorney-client privilege or work-product doctrine.

Fees & Costs

• No New State Fees: There are no filing fees associated with the disclosure.
• Operational Costs: Expect increased legal spend on forensic accounting to trace "indirect" funding sources in complex capital structures to ensure the sworn statement is accurate.