US - USTR publishes determinations of trade surplus for various FTA countries in certain sugar and syrup goods and sugar containing products

On December 19, 2014, the Office of the United States Trade Representative (USTR) published in the Federal Register a notice, in accordance with relevant provisions of the Harmonized Tariff Schedule of the United States (HTS), of its determination of the trade surplus in certain sugar and syrup goods and sugar containing products of Chile, Morocco, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Peru, Colombia, and Panama. As described below, the level of a country’s trade surplus in these goods relates to the quantity of sugar and syrup goods and sugar-containing products for which the United States grants preferential tariff treatment under (i) the United States-Chile Free Trade Agreement (Chile FTA); (ii) the United States-Morocco Free Trade Agreement (Morocco FTA); (iii) the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR); (iv) the United States-Peru Trade Promotion Agreement (Peru TPA); (v) the United States-Colombia Trade Promotion Agreement (Colombia TPA), and (vi) the United States-Panama Trade Promotion Agreement (Panama TPA).

For details on the surplus or negative surplus for each country, see the notice The effective date is January 1, 2015.

US - DHS creates CBP Integrity Advisory Panel

On December 19, 2014, the Department of Homeland Security (DHS) published in the Federal Register a notice of task assignment [Docket No. DHS-2014-0073] for the Homeland Security Advisory Council (HSAC). The Secretary of DHS, Jeh Johnson, tasked the HSAC to establish a subcommittee entitled the CBP Integrity Advisory Panel on December 9, 2014. The CBP Integrity Advisory Panel will provide findings and recommendations to the HSAC on best practices sourced from Federal, state, and local law enforcement integrity leaders. This notice is not a solicitation for membership.

The HSAC provides organizationally independent, strategic, timely, specific, and actionable advice and recommendations for the consideration of the Secretary of DHS on matters related to homeland security. The HSAC is comprised of leaders of local law enforcement, first responders, state and local government, the private sector, and academia.

Tasking: The DHS Integrity Advisory Panel will develop findings and recommendations that address, among other closely related topics, best practices and recommendations for U.S. Customs and Border Protection (CBP). This panel should: (1) Benchmark CBP’s progress in response to Use of Force reviews; (2) Identify best practices from federal, state, local, and tribal law enforcement on integrity incident prevention – both mission compromising and off-duty conduct; (3) Identify best practices from federal, state, local, and tribal law enforcement on transparency pertaining to incident response and discipline as well as stakeholder outreach; (4) Obtain recommendations to ensure CBP develops an effective capability for investigating criminal misconduct within its ranks given CBP’s high-risk environment and its expanding workforce;(5) Obtain recommendations for CBP to facilitate enhanced participation among law enforcement and intelligence agencies within an interagency task force environment, combining federal, state, local, and tribal resources to more effectively address the significant threat of public corruption by leveraging resources, capabilities, and reducing duplication of effort; (6) Evaluate CBP’s efforts to become an intelligence-driven organization.

The DHS CBP Integrity Advisory Panel’s findings and recommendations will be submitted to the HSAC for their deliberation and vote during a public meeting. Once the report is voted on by the HSAC, it will be sent to the Secretary for his review and acceptance. DHS CBP Integrity Task Force findings and recommendations should be submitted to the Homeland Security Advisory Council by June 2015.

US - FDA makes guidance available on minimizing risk for children’s toy laser products

On December 19, 2014, the U.S. Food and Drug Administration (FDA) published in the Federal Register a notice [Docket No. FDA–2012–D–1092] announcing the availability of the guidance entitled “Minimizing Risk for Children’s Toy Laser Products.” This guidance is intended to inform manufacturers of laser products, FDA headquarters and field personnel, and the public of the Center for Devices and Radiological Health’s (CDRH) current thinking on the safety of children’s toy laser products and to provide specific safety recommendations for the manufacture and labeling of children’s toy laser products.

Electronic or written comments may be submitted on this guidance at any time. General comments on Agency guidance documents are welcome at any time.

US - EPA revises export labeling for pesticides
On December 19, 2014, the Environmental Protection Agency (EPA) published in the Federal Register a final rule [EPA–HQ–OPP–2009–0607; FRL–9919–63] revising the regulations that pertain to the labeling of pesticide products and devices that are intended solely for export. Pesticide products and devices intended solely for export will be able to meet the Agency’s export labeling requirements by attaching a label to the immediate product container or by providing collateral labeling that is either attached to the immediate product being exported or that accompanies the shipping container of the product being exported at all times when it is shipped or held for shipment in the United States. Collateral labeling will ensure the availability of the required labeling information, while allowing pesticide products and devices that are intended solely for export to be labeled for use in, and consistent with the applicable requirements of the importing country. This final rule is effective February 17, 2015.
China will launch new Free Trade Zones in Guangdong, Fujian and Tianjin

On 12 December 2014, Chinese Premier Li Keqiang announced at an executive meeting of the State Council that China will launch three additional free trade zones (FTZs) modelled after the China (Shanghai) Pilot Free Trade Zone (SPFTZ), which was officially inaugurated in September 2013. Similar to the approach previously used to create the SPFTZ, the State Council will integrate some existing customs bonded areas in three provinces, including Guangdong, Fujian and Tianjin, upgrading existing zones into three new FTZs. While the new FTZs will likely replicate much of the current policies of the SPFTZ, the State Council indicated that new reforms with local characteristics would also be piloted in these new FTZs.

Each of the three provinces where new FTZs will be created have multiple special bonded zones currently in place. Some of these zones enjoy unique geographical advantages which respect to trade with Hong Kong, Macau, and Taiwan. New FTZs that leverage these natural advantages would be expected to increase this trade. We will continue to monitor these developments and provide updates as they become available.

For further information, please contact William Marshall, Partner, Hong Kong.

Australia - Public comment sought on Defence Trade Controls Amendment Bill 2015

The Defence Export Control Office (DECO) has announced that the public is invited to comment on the proposed Defence Trade Controls Amendment Bill 2015. This Bill will amend the Defence Trade Controls Act 2012 to change the scope of legislation associated with the introduction of strengthened export controls around supply, publication and brokering of items listed in the Defence and Strategic Goods List.

The Act’s provisions relating to strengthened export controls are currently subject to a two-year transition period (which began on 15 May 2013).

During this transition period, the Department of Defence, through DECO, is working with a stakeholder-led Strengthened Export Controls Steering Group chaired by Australia's Chief Scientist, Professor Ian Chubb. This work has resulted in a number of legislative and policy proposals to address concerns of stakeholders.

DECO states that it welcomes attendance at the public consultation sessions (to be held in capital cities from 19-30 January 2015) and written comments on the Bill and associated documents.

Formal submissions must be made by 30 January 2015 in writing and sent to the Defence Export Control Office. Any comments will not be made public.

The following documents are available for this consultation:

Draft Defence Trade Controls Amendment Bill 2015 - The Bill introduces amendments to the strengthened export controls provisions of the Defence Trade Controls Act 2012. It does not amend the provisions that implement the Australian-US Defence Trade Cooperation Treaty.

Draft Explanatory Memorandum- The draft Explanatory Memorandum outlines the intentions of the Bill, and provides a clause-by-clause explanation of the changes. It includes the draft Statement of Compatibility with Human Rights.

Draft Regulation Impact Statement - The Early Assessment Regulation Impact Statement assesses the potential impacts of the Bill, and provides an early assessment of the costs and benefits of the policy options.

Marked-up Version of the Defence Trade Controls Act 2012 - Consolidates the Bill's provisions into the Act with the proposed amendments highlighted.

Draft Defence Trade Controls Amendment (Decision Criteria) Regulation 2015 - The Amendment Regulations introduces amendments to decision criteria of the Defence Trade Controls Regulation 2013

Guide to the Defence Trade Controls Amendment Bill 2015 - A plain English guide to the key changes proposed by the Bill.

Bill Media Release - Official Departmental announcement on the release of the Defence Trade Controls Amendment Bill 2015 for public consultation.

Public Consultation Presentation - The presentation provided at the Public Consultation Sessions.

President announces steps to normalize relations with Cuba

On December 17, 2014, following the release by Cuba of American Alan Gross, President Obama announced a new approach to relations with Cuba. According to the announcement and a Fact Sheet released at the same time, the following steps will be taken:

Re-establish diplomatic relations: U.S. diplomatic relations with Cuba were severed in January of 1961. The President is immediately reopening discussions with Cuba and working to re-establish an embassy in Havana in the next coming months. The U.S. will work with Cuba on matters of mutual concern that advance U.S. national interests, such as migration, counternarcotics, environmental protection, and trafficking in persons, among other issues.

More effectively empower the Cuban people by adjusting regulations: The President is taking steps to improve travel and remittance policies that will further increase people-to-people contact, support civil society in Cuba, and enhance the free flow of information to, from, and among the Cuban people.

Facilitate an expansion of travel to Cuba: With expanded travel, Americans will be able to help support the growth of civil society in Cuba more easily, and provide business training for private Cuban businesses and small farmers. Americans will also be able to provide other support for the growth of Cuba’s nascent private sector.

• General licenses will be made available for all authorized travelers in 12 existing categories:

• Family visits
• Official business of the U.S. government, foreign governments, and certain intergovernmental organizations
• Journalistic activity
• Professional research and professional meetings
• Educational activities
• Religious activities
• Public performances, clinics, workshops, athletic and other competitions, and exhibitions
• Support for the Cuban people
• Humanitarian projects
• Activities of private foundations, research, or educational institutions
• Exportation, importation, or transmission of information or information materials
• Certain export transactions that may be considered for authorization under existing regulations and guidelines

Facilitating remittances to Cuba by U.S. persons: Remittance levels will be raised from $500 to $2,000 per quarter for general donative remittances to Cuban nationals (except to certain officials of the government or the Communist party); and donative remittances for humanitarian projects, support for the Cuban people, and support for the development of private businesses in Cuba will no longer require a specific license. Remittance forwarders will no longer require a specific license.

Authorize expanded sales and exports of certain goods and services from the U.S. to Cuba: The expansion will seek to empower the nascent Cuban private sector and make it easier for Cuban citizens to have access to certain lower-priced goods to improve their living standards and gain greater economic independence from the state.

Authorize American citizens to import additional goods from Cuba: Licensed U.S. travelers to Cuba will be authorized to import $400 worth of goods from Cuba, of which no more than $100 can consist of tobacco products and alcohol combined.

Initiate new efforts to increase Cubans’ access to communications and their ability to communicate freely: Cuba has an Internet penetration of about five percent – one of the lowest rates in the world. The cost of telecommunications in Cuba is exorbitantly high, while the services offered are extremely limited. Now, telecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and internet services.

Facilitating authorized transactions between the United States and Cuba:

• U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions.
• The regulatory definition of the statutory term “cash in advance” will be revised to specify that it means “cash before transfer of title”; this will provide more efficient financing of authorized trade with Cuba.
• U.S. credit and debit cards will be permitted for use by travelers to Cuba.
• These measures will improve the speed, efficiency, and oversight of authorized payments between the United States and Cuba.

Updating the application of Cuba sanctions in third countries: U.S.-owned or -controlled entities in third countries will be generally licensed to provide services to, and engage in financial transactions with, Cuban individuals in third countries. In addition, general licenses will unblock the accounts at U.S. banks of Cuban nationals who have relocated outside of Cuba; permit U.S. persons to participate in third-country professional meetings and conferences related to Cuba; and, allow foreign vessels to enter the United States after engaging in certain humanitarian trade with Cuba, among other measures.

Pursuing discussions with the Cuban and Mexican governments to discuss our unresolved maritime boundary in the Gulf of Mexico: Previous agreements between the United States and Cuba delimit the maritime space between the two countries within 200 nautical miles from shore. The United States, Cuba, and Mexico have extended continental shelf in an area within the Gulf of Mexico where the three countries have not yet delimited any boundaries. The United States is prepared to invite the governments of Cuba and Mexico to discuss shared maritime boundaries in the Gulf of Mexico.

Initiating a review of Cuba’s designation as a State Sponsor of Terrorism: The President has instructed the Secretary of State to immediately launch such a review, and provide a report to the President within six months regarding Cuba’s support for international terrorism. Cuba was placed on the list in 1982.

Addressing Cuba’s participation in the 2015 Summit of the Americas in Panama: President Obama will participate in the Summit of the Americas in Panama. Human rights and democracy will be key Summit themes. Cuban civil society must be allowed to participate along with civil society from other countries participating in the Summit, consistent with the region’s commitments under the Inter-American Democratic Charter. The United States welcomes a constructive dialogue among Summit governments on the Summit’s principles.

Unwavering Commitment to Democracy, Human Rights, and Civil Society: A critical focus of our increased engagement will include continued strong support by the United States for improved human rights conditions and democratic reforms in Cuba. The promotion of democracy supports universal human rights by empowering civil society and a person’s right to speak freely, peacefully assemble, and associate, and by supporting the ability of people to freely determine their future. U.S. efforts are aimed at promoting the independence of the Cuban people so they do not need to rely on the Cuban state.

• The U.S. Congress funds democracy programming in Cuba to provide humanitarian assistance, promote human rights and fundamental freedoms, and support the free flow of information in places where it is restricted and censored. The Administration will continue to implement U.S. programs aimed at promoting positive change in Cuba, and it will encourage reforms in the U.S. high level engagement with Cuban officials.

• The United States encourages all nations and organizations engaged in diplomatic dialogue with the Cuban government to take every opportunity both publicly and privately to support increased respect for human rights and fundamental freedoms in Cuba.

Importantly, none of the announced changes to the embargo are self-executing. As the White House fact sheet makes clear, the changes will only take effect once they are implemented through forthcoming amendments to the relevant regulations of the U.S. Treasury and Commerce Departments.

US - BIS expands the microprocessor military end-use and end-user control
On December 17, 2014, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 140813667-4667-01] amending the microprocessor military end-use and end-user control in the Export Administration Regulations (EAR) by expanding the scope of microprocessors subject to the restriction to harmonize with technological advances to microprocessor chips and expand the scope to include related software and technology for the development and production of these chips. In addition, this rule adds a prohibition on the use of license exceptions (including License Exception ENC) and otherwise expands license requirements for exports, reexports, or transfers (in-country) of microprocessors subject to the military end-use and end-user restriction. This expansion is consistent with the foreign policy objectives of the United States of preventing U.S. exports that might contribute to destabilizing military capabilities against the United States and its citizens. The foreign policy report explaining the expansion was sent to Congress on December 1, 2014. The rule also expands the scope of controls to cover in-country transfers, in order to control in-country transfers to prohibited military end users or end uses. BIS is also making editorial and format revisions to this section to improve clarity. This rule was effective upon publication.
US - USTR seeks comments on additional participants in the Trade in Services Agreement

On December 17, 2014, the Office of the United States Trade Representative (USTR) published in the Federal Register a request for comments regarding particular priorities with respect to the participation of Uruguay in the Trade in Services Agreement negotiations. On January 15, 2013, USTR notified Congress of the Administration’s intention to enter into negotiations for a Trade in Services Agreement (TISA) with an initial group of 20 trading partners. The January 15 notification states that the group negotiating TISA “will expand as negotiations progress to include others who share our ambitious goals.” On November 3, 2014, USTR notified Congress of the Administration’s intention to join a consensus reached among the TISA negotiating participants to accept Uruguay into the negotiations. Through this notice, USTR seeks public comments regarding particular priorities with respect to the participation of Uruguay in the negotiations. Comments may be provided in writing.

Written comments are due by noon, January 20, 2015.

EU amends Directive on defence-related products
On 16 December 2014. The Official Journal published Commission Directive 2014/108/EU of 12 December 2014 amending Directive 2009/43/EC of the European Parliament and of the Council as regards the list of defence-related products. The 2014 Directive amends the 2009 Directive to include the revised Common Military List of the European Union adopted by the Council on 17 March 2014. The 2009 Directive harmonised rules and procedures as far as defence-related products are concerned in such a way as to simplify the intra-Community transfer of defence-related products in order to ensure the proper functioning of the internal market but did not affect the policies of the Member States regarding the transfer of defence-related products.
Congress passes Ukraine Freedom Support Act

On December 13, 2014, the U.S. Congress passed the Ukraine Freedom Support Act of 2014, a bill to impose certain new sanctions against Russia and in support of Ukraine. It is currently expected that this bill will be signed into law by the President within the next few days. The proposed sanctions include extraterritorial “Iran-style” sanctions against foreign parties engaging in certain activities in the defense, energy and financial sectors.

The Senate first passed S. 2828, entitled the Ukraine Freedom Support Act (UFSA), on 11 December 2014, which was a slightly watered-down version of an earlier bill. On the same day, the House of Representatives followed suit by passing the identically-worded H.R. 5859 to increase the chance of passage during the congressional lame-duck session. The Senate approved H.R. 5859 late on 13 December 2014, and the bill now awaits the President’s signature.

Much of the media coverage surrounding the UFSA has focused on the authorization to increase U.S. military assistance for the Government of Ukraine. More importantly for businesses, however, this bill also contains a number of provisions that would either require or authorize the U.S. President to impose additional sanctions targeting Russia’s defense and energy sectors, as well as foreign financial institutions engaging in certain transactions involving Russia. Even once the bill is enacted, the ultimate effect of these sanctions measures will depend upon the President and/or executive branch agencies taking additional implementation decisions, in some cases within specified time periods.

Proposed Sanctions Measures in the UFSA

Energy/Defense Sanctions

The UFSA provides for the following sanctions on Russia’s energy and defense sectors:

• Mandatory sanctions on Rosoboronexport, a significant Russian defense exporter;
• Mandatory sanctions on entities that the President determines are either: (1) Russian-owned or -controlled entities that knowingly manufacture, sell, transfer or broker the transfer of defense articles to Syria, Ukraine, Georgia, Moldova, or other designated countries without authorization from the internationally-recognized governments of those countries; or (2) other parties knowingly assisting, sponsoring or providing financial, material or technological support for, goods or services to or in support of, such entities in those activities;
• Optional sanctions against foreign persons determined to make “significant investments” in Russian deepwater, Arctic offshore, and shale energy projects for the extraction of oil; and
• Contingent sanctions on Gazprom to be imposed only if the President determines that Gazprom is withholding “significant” natural gas supplies from Ukraine, Georgia, Moldova, or NATO member countries.

Similar to the Iran Sanctions Act and similar subsequent statutes, the UFSA would provide a “menu” of sanctions that may be imposed on the parties described above. These potential sanctions would include: blocking of property interests (e.g., designation as a “Specially Designated National” (SDN)); ban on transfers of credit and payments through the U.S. banking system; ban on investment or dealings in a sanctioned party’s debt or equity; limitations on assistance from the U.S. Import-Export Bank; prohibitions on exports of defense article and dual-use items; and visa bans for sanctioned individuals or executives of sanctioned companies.

The UFSA also authorizes the President to impose additional licensing requirements or other restrictions on the export or reexport of items (i.e., goods, software, technology) for use in the Russian energy sector, including equipment used for tertiary oil recovery.

Foreign Financial Institution Sanctions

The UFSA provides for optional sanctions against foreign financial institutions that knowingly:

• engage in “significant” transactions involving entities designated under any of the above energy/defense sanctions except Rosoboronexport (but including Gazprom), or
• facilitate “significant financial transactions” involving Russian SDNs designated under the various Ukraine/Russia-related measures.

The sanction for such foreign financial institutions involve limitations, or even an outright prohibition, on opening or maintaining correspondent or payable-through accounts in the United States—effectively cutting them off from access to the US banking system.

Potential Impact of the UFSA

Until signed by the President, the UFSA has no legal effect. Even once the bill is enacted, however, most of the UFSA’s sanctions measures would not go into effect immediately because they require determinations to be made within certain time periods by the President and/or executive branch agencies (including the US Treasury Department’s Office of Foreign Assets Control) that specific entities fit the criteria for being sanctioned.

For additional information, please contact Alison J. Stafford Powell of our Palo Alto office, Joseph A. Schrool of our Washington, D.C. office, or any member of our Outbound Practice that you work with on trade sanctions.



US Congress passes Venezuela Defense of Human Rights and Civil Society Act

On December 10, 2014, the US Congress passed the “Venezuela Defense of Human Rights and Civil Society Act of 2014” to impose certain new targeted sanctions against government officials involved in the February-to-May antigovernment protests in Venezuela. It is expected that this bill will be signed into law by the President in the near future.

The available sanctions are blocking of property interests (e.g., designation as a “Specially Designated National” (SDN)) and visa bans for current or former officials of the Government of Venezuela or any person acting on behalf of the Government of Venezuela, whom the President determines:

(1) has perpetrated, or is responsible for ordering or otherwise directing, significant acts of violence or serious human rights abuses in Venezuela against persons associated with the antigovernment protests in Venezuela that began on February 4, 2014;
(2) has ordered or otherwise directed the arrest or prosecution of a person in Venezuela primarily because of the person's legitimate exercise of freedom of expression or assembly; or
(3) has knowingly materially assisted, sponsored, or provided significant financial, material, or technological support for, or goods or services in support of, the commission of acts described in paragraph (1) or (2).

The proposed sanctions explicitly exclude any sanctions on the importation of goods.

Whether the US government would impose more comprehensive sanctions against Venezuela is uncertain at this point. Once the bill is singed into law, the ultimate effect of these sanctions will depend upon implementation decisions (e.g., designation of SDNs by way of executive orders).

As a related matter, in November 2014 the U.S. Department of Commerce’s Bureau of Industry and Security amended the Export Administration Regulations by issuing a final rule to impose license requirements on the export, reexport, or transfer (in-country) of certain items to or within Venezuela when intended for a military end use or end user. This final rule was also in response to the Venezuelan government's violent repression of the Venezuelan people during the February-to-May antigovernment protests in Venezuela.

For further information, please contact Eunkyung Kim Shin or Paul E. Amberg of our Chicago office, Nicholas F. Coward of our Washington D.C. office, or any member of our Outbound Practice that you work with on trade sanctions.

US - USTR seeks comments on Israel’s and Turkey’s participation in the Environmental Goods Agreement negotiations

On December 16, 2014, the Office of the United States Trade Representative (USTR) published in the Federal Register a request for comments regarding U.S. interests and priorities with respect to this initiative to invite Israel and Turkey to join the Environmental Goods Agreement negotiations.

On March 21, 2014, USTR notified Congress of the Administration’s intention to enter into negotiations for a World Trade Organization (WTO) Environmental Goods Agreement (EGA) with an initial group of 13 trading partners. USTR has since notified Congress of the Administration’s intent to join a consensus among EGA participants to invite the Governments of Israel and Turkey to join the EGA negotiations. The Office of the USTR, on behalf of the Trade Policy Staff Committee (TPSC), is seeking public comment regarding U.S. interests and priorities with respect to this initiative to invite Israel and Turkey to join the EGA negotiations.

Written comments are due by midnight, January 12, 2015.

Turkey launches safeguard investigation on wallpaper and similar wallcoverings

On 12 December 2014, Turkey notified the WTO’s Committee on Safeguards that it initiated on 12 December 2014 a safeguard investigation on wallpaper and similar wallcoverings.

The address of the investigating authority for correspondence is:

Ministry of Economy
Directorate General for Imports, Department of Safeguards
Inonu Bul. No: 36 06510 Emek/Ankara/TURKEY
Tel: +90 312 204 77 17
Fax: +90 312 212 86 33
E-mail: korunma ekonomi.gov.tr"

Further information is available in G/SG/N/6/TUR/20. The WTO posting states:

A safeguard investigation seeks to determine whether increased imports of a product are causing, or is threatening to cause, serious injury to a domestic industry.
During a safeguard investigation, importers, exporters and other interested parties may present evidence and views and respond to the presentations of other parties.
A WTO member may take a safeguard action (i.e. restrict imports of a product temporarily) only if the increased imports of the product are found to be causing, or threatening to cause, serious injury.

Ecuador and EU finalize Trade Agreement Protocol

On 12 December, the European Commission announced that Ecuador and the EU had initialed the protocol that will allow Ecuador to join its neighbours, Colombia and Peru, in a preferential trade relationship with the EU.

According to the Commission:

The negotiations for a trade agreement between the EU and the Andean Community (Bolivia, Colombia, Ecuador and Peru) were launched in June 2007. After stalling in 2008, the talks continued in 2009 with Colombia, Ecuador and Peru. In July of that year Ecuador dropped out of the negotiations. An agreement was concluded with Colombia and Peru in March 2010 and signed in June 2012. It has been provisionally applied with Peru since 1 March 2013 and with Colombia since 1 August 2013.
Contacts were maintained with Ecuador and Bolivia after they left the talks. Seeing the potential for improving EU-Ecuador trade, as well as for its domestic development objectives, Ecuador returned to the negotiating table in January 2014. An agreement was reached achieved in July.
The agreement will allow Ecuador to benefit from improved access for its main exports to the EU – fisheries, bananas, cut flowers, coffee, cocoa, fruits and nuts. The terms of the new arrangement go beyond the unilateral EU Generalised Scheme of Preferences, for which Ecuador is no longer eligible. The Agreement will also provide improved access to the Ecuadorian market for many key EU exports, for example in the automotive sector or for alcoholic beverages. However, the agreement will not only secure access to markets; more importantly it will also create a stable and predictable environment that will help boost and diversify trade and investment on both sides.

EU bars jet fuel sales to Syria

On 13 December 2014, the Official Journal published Council Decision 2014/901/CFSP of 12 December 2014 amending Decision 2013/255/CFSP concerning restrictive measures against Syria and Council Regulation (EU) No 1323/2014 of 12 December 2014 amending Regulation (EU) No 36/2012 concerning restrictive measures in view of the situation in Syria. The documents amend Council Decision 2013/255/CFSP and Regulation (EU) No 36/2012 to prohibit:

• the sale, supply, transfer or export, directly or indirectly, of jet fuel and fuel additives as identified in Annex Va to any person, entity or body in Syria, or for use in Syria;
• the provision of financing or financial assistance, including financial derivatives, as well as insurance and reinsurance related to the sale, supply, transfer or export of jet fuel and fuel additives as identified in Annex Va to any person, entity or body in Syria, or for use in Syria;
• the provision of brokering services with regard to the sale, supply, transfer or export of jet fuel and fuel additives as identified in Annex Va to any person, entity or body in Syria, or for use in Syria.

In addition:

Annex Va is amended to add jet fuel and fuel additives.
The competent authorities in the Member States may authorise the sale, supply, transfer or export of jet fuel and fuel additives and the provision of financing and financial assistance, including financial derivatives, as well as insurance and reinsurance and brokering services related to the sale, supply, transfer or export of jet fuel and fuel additives as identified in Annex Vb to any person, entity or body in Syria, or for use in Syria under such conditions as they deem appropriate, having determined that the jet fuel and fuel additives are required by the United Nations, or bodies acting on its behalf, for humanitarian purposes such as delivering or facilitating the delivery of assistance, including medical supplies, food or the transfer of humanitarian workers and related assistance, or for evacuations from Syria or within Syria.

The prohibition shall not apply to:

• jet fuel and fuel additives as listed in Annex Vb exclusively used by non-Syrian civilian aircraft landing in Syria, provided that they are intended and used solely for the continuation of the flight operation of the aircraft into which they were loaded;
• jet fuel and fuel additives as listed in Annex Vb exclusively used by a designated Syrian air carrier as listed in Annexes II and IIa carrying out evacuations from
• jet fuel and fuel additives as listed in Annex Vb exclusively used by a non-designated Syrian air carrier carrying out evacuations from or within Syria.’

Amendments were also made to the indemnification provisions. It is also prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the provisions.

Korea ratifies Korea-Australia FTA
The Korean National Assembly passed a motion ratifying the Korea-Australia Free Trade Agreement (KAFTA) on December 2, 2014. The Australian ratification process had been completed in late October. As a result, the KAFTA will enter into force on December 12, 2014. It is understood that some exporters will benefit from an immediate tariff cut on December 12, followed by a second cut on January 1, 2015.
Korea, Vietnam conclude FTA negotiations

South Korea and Vietnam concluded negotiations on a free-trade agreement on December 10, 2014 that will liberalize nearly all imports and exports between the two countries. The conclusion comes after two and a half years of negotiations, since August 2012. The announcement came on December 10 when President Park Geun-hye held a summit with Vietnamese Prime Minister Nguyen Tan Dung, who came to Korea to attend the two-day special summit between Korea and the 10-member Association of Southeast Asian Nations (ASEAN).

Korea.net reports that the deal covers a total of 17 areas spanning the whole economy, including products, services, investment and intellectual property rights.

Korea.net also stated that:

As of last year, Vietnam is Korea's ninth-largest trading partner. The deal with Vietnam is expected to bring substantial benefits to both countries.
According to the agreement, Vietnam will open its markets for 200 additional Korean products, increasing by 6 percent the amount of trade between the two countries that was agreed upon by the Korea-ASEAN FTA. This is expected to increase Korea-Vietnam trade to some USD 740 million per year.
With the increased volume of trade, Korea’s liberalization rate has increased to 94.7 percent, three percentage points higher than the prior 91.7 percent, while Vietnam’s is at 92.2 percent, six percentage points higher than its prior 86.2 percent.
In particular, Vietnam has agreed to remove tariffs on 5-ton and 20-ton trucks, an item not included in the Korea-ASEAN free trade deal. The country agreed to open its markets for passenger cars with engines larger than three liters and for automobile parts, as well as for cosmetics and household appliances. Vietnam also decided to open its markets for e-commerce, a new section included in the Korea-Vietnam FTA for the first time.
Korea agreed to apply duty-free policies toward items that account for USD 170 million of trade per year, a figure that counts for three percentage points of Korea's total trade. The duty-free items include up to 15,000 tons of shrimp, worth USD 140 million.
Seoul will also open its markets for 495 additional Vietnamese goods, including crushed, dried and frozen garlic and ginger, while excluding other agricultural products such as rice.
Finally, the government agreed to open some markets in the service sector, including construction, landscape architecture and equipment rental.

US - Commerce publishes list of scope and anticircumvention rulings
On December 11, 2014, the Enforcement and Compliance, International Trade Administration, Department of Commerce published in the Federal Register a list of scope rulings and anticircumvention determinations made between July 1, 2014, and September 30, 2014, inclusive. Commerce intends to publish future lists after the close of the next calendar quarter.
US - Government procurement – inverted corporations
On December 15, 2014, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) published in the Federal Register an interim rule [FAC 2005-79; FAR Case 2014-017; Item II; Docket No. 2014-0017, Sequence No. 1] amending the provisions of the Federal Acquisition Regulation (FAR) that address the continuing Governmentwide statutory prohibition on the use of appropriated (or otherwise made available) funds for contracts with any foreign incorporated entity that is an inverted domestic corporation or any subsidiary of such entity.

This interim rule amends the provisions of the FAR that address the continuing Governmentwide statutory prohibition (in effect since Fiscal Year (FY) 2008) on the use of appropriated (or otherwise made available) funds for contracts with any foreign incorporated entity that is an inverted domestic corporation (under section 835 of the Homeland Security Act of 2002, codified at 6 U.S.C. 395) or to any subsidiary of such entity.

By separate notice, also published on December 15, 2014, DOD, GSA, and NASA are issuing a proposed rule (FAR Case 2015-006) that would require additional actions by contractors to assist contracting officers in ensuring compliance with the statutory prohibition. An inverted domestic corporation is a corporation that meets the criteria specified in 6 U.S.C. 395(b) and (c).

Written comments on both the interim rule and the proposed rule may be submitted by interested parties to the Regulatory Secretariat (using one of the methods set forth in the Federal Register documents) on or before February 13, 2015 to be considered in the formation of the final rule or the proposed rule.
US - ITA issues limits on duty-free apparel imports under HOPE
On December 15, 2014, the International Trade Administration, Department of Commerce, published in the Federal Register a notification of annual quantitative limit on certain apparel under the Haitian Hemispheric Opportunity Through Partnership for Encouragement Act (HOPE).

HOPE provides for duty-free treatment for certain apparel articles imported directly from Haiti. One of the preferences under HOPE is known as the “value-added” program, which requires that apparel meet a minimum threshold percentage of value added in Haiti, the United States, and/or certain beneficiary countries. The program is subject to a quantitative limitation, which is calculated as a percentage of total apparel imports into the United States for each 12-month annual period. For the annual period from December 20, 2014 through December 19, 2015, the quantity of imports eligible for preferential treatment under the value-added program is 332,915,916 square meters equivalent.
US - FDA sets uniform compliance date for food labeling regulations
On December 10, 2014, the U.S. Food and Drug Administration (FDA) published in the Federal Register a final rule [Docket No. FDA–2000–N–0011 (Formerly Docket No. 2000N–1596)] establishing January 1, 2018, as the uniform compliance date for food labeling regulations that are issued between January 1, 2015, and December 31, 2016. The FDA periodically announces uniform compliance dates for new food labeling requirements to minimize the economic impact of label changes. On November 28, 2012, the FDA established January 1, 2016, as the uniform compliance date for food labeling regulations issued between January 1, 2013, and December 31, 2014. The rule is effective December 10, 2014, but . electronic or written comments may be submitted by February 9, 2015.
US - FinCEN withdraws proposed rule against PJSC Trustbank
On December 15, 2014, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register a document withdrawing a proposed rulemaking (69 Fed. Reg. 51973, August 24, 2004) that proposed the imposition of the fifth special measure against PJSC Trustbank, formerly known as Infobank (“Trustbank”), as a financial institution of primary money laundering concern, pursuant to the authority contained in the Bank Secrecy Act.
US - Treasury lists countries requiring cooperation with an international boycott
On December 9, 2014, the Department of the Treasury published in the Federal Register a current list of countries which require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986). On the basis of the best information currently available to the Department of the Treasury, the following countries require or may require participation in, or cooperation with, such an international boycott: Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen.
US - CBP, HSI warn importers of AD scam e-mails

U.S. Customs and Border Protection and Homeland Security Investigations, ICE have posted a “scam alert” to advise importers that e-mails offering to ship goods through third countries to avoid antidumping duties are illegal. The posting advises that “knowingly engaging in activities designed to evade the payment of antidumping or countervailing duties is a federal crime. Violations involving duty evasion may result in civil and criminal penalties.” The posting links to recent convictions for evading AD/CVD

The e-mails state in pertinent part:

Please do not worry about the dumping duties. This order will be operated through the intermediary trade. We will send the goods to a third country; the forwarder will repack our goods for export with other company title from that third country. It is a legit business.

US - USTR adds Guinea, Madagascar to list of eligible AGOA countries
On December 15, 2014, the Office of the United States Trade Representative (USTR) published in the Federal Register a notice stating that USTR has determined that Guinea and Madagascar have each adopted effective visa systems and related procedures to prevent unlawful transshipment of textile and apparel articles and the use of counterfeit documents in connection with the shipment of such articles and has implemented and follows, or is making substantial progress toward implementing and following, the customs procedures required by the African Growth and Opportunity Act (AGOA). Therefore, as specified in this notice, imports of eligible products from Guinea and Madagascar qualify for the textile and apparel benefits provided for under AGOA. Each country had been previously designated by the President as a “beneficiary sub-Saharan Africa country” and, for purposes of section 112(c) of the AGOA, is considered a lesser developed beneficiary sub-Saharan African country.
US - State proposes to extend import restrictions on Nicaraguan pre-Columbian archaeological material
On December 12, 2014, the Department of State (State) published in the Federal Register a notice of proposal to extend the Agreement Between the Government of United States of America and the Government of the Republic of Nicaragua Concerning the Imposition of Import Restrictions on Archaeological Material from the Pre-Hispanic Cultures of the Republic of Nicaragua (the Agreement) [Public Notice 8966]. The Government of the Republic of Nicaragua has informed the Government of the United States of America of its interest in an extension of the Agreement. Pursuant to 19 U.S.C. 2602(f)(2), the views and recommendations of the Cultural Property Advisory Committee regarding this proposal will be requested.

A copy of the Agreement, the Designated List of restricted categories of material, and related information can be found at State’s cultural heritage web site.

On the same date, State published a notice of meeting of the Cultural Property Advisory Committee [Public Notice 8967; Docket No. DOS-2014-0027] on January 21-23, 2015. Portions of that meeting will be closed to the public as set forth in the Notice. The meeting is being held to review the proposal to extend the Agreement with Nicaragua as well as to conduct an interim review of the Agreement Between the Government of the United States of America and the Government of the Republic of Mali Concerning the Imposition of Import Restrictions on Archaeological Material from Mali from the Paleolithic Era (Stone Age) to Approximately the Mid-Eighteenth Century (Mali Agreement). Public comment, oral and written, will be invited at a time in the future should the Mali Agreement be proposed for extension. See the Notice for details on attendance or submission of materials or comments.
Canada - CBSA proposes amendments to Duty Free Shop Regulations

Customs Notice 14-031 (December 11, 2014) announces regulatory amendments proposed by the Canada Border Services Agency (CBSA) following extensive consultations with external stakeholders. These amendments are designed to streamline the CBSA’s Duty Free Shop (DFS) program, as well as reduce costs and the administrative burden on both the duty free shop industry and the CBSA. It is further proposed that these regulatory amendments come into force on December 11, 2014, on the condition that the Governor in Council makes them.

It is proposed that:

• the requirement for applicants to have sufficient financial resources, as set out in paragraphs 3(6)(c) and (d), be repealed. This information is currently being collected as part of the application process for a new DFS in order to demonstrate the applicant’s ability to sustain a successful business and to ensure that the collection of any applicable duties and taxes is feasible. Meeting this requirement comes at a cost to both the Agency and the proposed licensee and yet the risk that a licensee fails to pay any applicable duties and taxes as a result of inventory shortages is already mitigated by the requirement for the licensee to post financial security against its inventory;
• the validity period of a DFS licence, as set out in paragraph 6(2), be lengthened from 5 to 10 years. Risk assessments will continue on a regular basis and the CBSA will maintain the authority to suspend or cancel a licence, as required, but the work associated with the license renewal process will be reduced by half and licensees will have more certainty in their business planning;
• the requirement to provide or make available public washroom facilities and public telephones that are accessible to disabled persons as set out in paragraphs 13(1)(a) and (b), be repealed. This requirement falls outside of the CBSA’s mandate and is provided for in the applicable federal or provincial building codes;
• the requirement to store and mark goods received in a DFS in the manner specified in paragraph 14(a), be repealed. In today’s reality of electronic inventory management, there is no longer a requirement for a physical separation of the goods in order for the CBSA to readily ensure an accurate count. The requirement for all goods to be held in a designated area until accounted for or approved by the CBSA for entry into the DFS inventory will be maintained; and
• the requirement to immediately notify the CBSA of the receipt of goods as set out in paragraph 16(1)(b), be repealed. The requirement to present the CBSA with arrival notification and/or a completed Form B116, Canada Customs Duty Free Shop Accounting Document within five business days of the arrival of the goods at the DFS will be maintained, and no goods can be removed from the warehouse until the required documentation has been approved and stamped by the CBSA.

The CBSA will pursue these required regulatory amendments in accordance with section 167.1 of the Customs Act.

Canada - Combating Counterfeit Products Act receives Royal Assent

On December 9, 2014, the Combating Counterfeit Products Act (Bill C-8), passed third reading and received Royal Assent. The Act will come into force on a day or days to be fixed by order of the Governor-in-Council.

The official summary accompanying the Act states:

This enactment amends the Copyright Act and the Trade-marks Act to add new civil and criminal remedies and new border measures in both Acts, in order to strengthen the enforcement of copyright and trade-mark rights and to curtail commercial activity involving infringing copies and counterfeit trade-marked goods. More specifically, the enactment

(a) creates new civil causes of action with respect to activities that sustain commercial activity in infringing copies and counterfeit trade-marked goods;
(b) creates new criminal offences for trade-mark counterfeiting that are analogous to existing offences in the Copyright Act;
(c) creates new criminal offences prohibiting the possession or export of infringing copies or counterfeit trade-marked goods, packaging or labels;
(d) enacts new border enforcement measures enabling customs officers to detain goods that they suspect infringe copyright or trade-mark rights and allowing them to share information relating to the detained goods with rights owners who have filed a request for assistance, in order to give the rights owners a reasonable opportunity to pursue a remedy in court;
(e) exempts the importation and exportation of copies and goods by an individual for their personal use from the application of the border measures; and
(f) adds the offences set out in the Copyright Act and the Trade-marks Act to the list of offences set out in the Criminal Code for the investigation of which police may seek judicial authorization to use a wiretap.

The enactment also amends the Trade-marks Act to, among other things, expand the scope of what can be registered as a trade-mark, allow the Registrar of Trade-marks to correct errors that appear in the trade-mark register, and streamline and modernize the trade-mark application and opposition process.

WTO - ITA talks appear deadlocked – again
On 12 December 2014, the Information Technology Agreement (ITA) negotiators failed to reach agreement over coverage. Although many countries reportedly were very flexible, the final deadlock appeared to involve liquid crystal display (LCD) screens. According to news reports, China wanted all parties to accept the terms that it had worked out with U.S. negotiators which allowed the previously deadlocked talks to resume. Those terms excluded LCDs from coverage. However, according to the reports, S. Korea, a large LCD producer, insisted on them being included. After eight days, China and S. Korea were unable to iron out their differences. WTO Director General Azevêdo said: “The participants have significantly reduced the gaps on expanding the coverage of the ITA in recent days but unfortunately it has not been possible to finalise the negotiations this week. I urge members to remain actively and constructively engaged as we try to bridge the gaps in these negotiations.” Another round of negotiations in early 2015 is possible.

The WTO estimates that an expanded ITA would cut tariffs on approximately US$ 1 trillion of trade each year and would therefore provide a significant economic boost around the world. Crucially, it would benefit all WTO members, not just the ITA participants, because the tariff cuts would be applied on a multilateral basis.
Taiwan - Mutual Recognition Arrangement on AEO between Taiwan and Israel
The Customs Administration, Ministry of Finance, announced that the Mutual Recognition Arrangement (MRA) on Authorized Economic Operators (AEO) between Taiwan and Israel entered into force on December 4, 2014, the date from which traders are eligible to enjoy benefits provided by Taiwan Customs and Israel Customs under the MRA. The announcement said the implementation of the MRA will effectively enhance trade security and facilitation for both sides, and thus promote bilateral trade.

The MRA was signed in December 2013. After completing a successful three month Pilot test from July to October this year, both Customs administrations decided to formally implement the MRA.

The Customs Administration explained that, to receive MRA benefits from Israel Customs, Taiwan Security and Safety AEO importers/exporters need to log in the “Taiwan AEO Certification and Management System” and confirm their intention to participate in the MRA.

Taiwan Customs implemented its AEO program at the end of 2009, and there are approximately 300 Security and Safety AEOs. In view of the fact that the trade volume between Taiwan and Israel in 2013 amounted to NT$42.5 billion, the operation of the MRA will substantially promote both countries’ economic and trade development.

Currently, Taiwan has signed MRAs on AEO with the United States, Singapore, and Israel. It is expected that more AEO MRAs will be signed between Taiwan and other countries in the near future, which can effectively bolster Taiwan’s competitive edge in the international economic and trade community.
General Council approves Seychelles’ WTO membership

The WTO announced that WTO members adopted Seychelles’ WTO terms of entry at the General Council meeting on 10 December 2014. Seychelles will have until 1 June 2015 to ratify the deal to formally become a WTO member 30 days after it notifies the ratification to the WTO Director-General. Once the accession procedure is completed, the Seychelles will become the 161st member of the WTO.

Seychelles originally applied for WTO membership in 1995 and the Working Party concluded the negotiations on 17 October 2014. The Seychelles has committed itself to comply fully with WTO provisions without resorting to any transitional periods. The only exception regards the WTO Agreement on Technical Barriers to Trade, which it will fully implement only as from December 2015. In line with the accession package, the Seychelles has undertaken a broad range of commitments to open up its trade regime and speed up its integration in the world trade system. Among other things, the Seychelles has committed itself to replace its current ban on imports of hides and fur skins, palm plants, second-hand vehicles, left-hand drive vehicles, automotive bodies and camouflage clothing with an authorisation system. The list of Seychelles’ commitments is available here.

WTO - Negotiations for Environmental Goods Agreement

On 11 December 2014, the European Commission Trade Newsletter – Weekly Digest reported that:

Negotiations for an Environmental Goods Agreement (EGA) are gaining full speed with the third round taking place 1-5 December in Geneva. The 14 members of the WTO who launched these talks in July met last week to focus on products and technologies that can reduce noise and vibration, improve the quality of water and ensure efficient and environmentally sound waste water treatment. Whilst recognising the importance of preventing pollution and reducing risks at source, negotiators also discussed technologies used in cleaning up the environment. Israel, Turkey and Iceland have recently expressed interest to join these negotiations and the talks remain open to other countries similarly committed to green trade liberalisation.

Taking part in the negotiations are: Australia, Canada, China, Costa Rica, Chinese Taipei, the European Union, Hong Kong (China), Japan, Korea, New Zealand, Norway, Switzerland, Singapore, United States. Together, these countries account for around 86% of the world trade in green goods.

US - OFAC publishes guidance on certain temporary sanctions relief
Mexico - Announcement of measures to promote the textile and apparel industry

On December 3, 2014, the Ministers of Finance and Public Credit and of Economy, the Chairmen of the National Chamber of the Textile Industry (CANAINTEX for its acronym in Spanish) and the National Chamber of the Apparel Industry (CANAIVE for its acronym in Spanish), as well as the Chairman of the Coordination of Corporations Council, announced at the National Palace in Mexico City, the adoption of measures to promote the textile and apparel industries.

In this event the Federal Government along with the Textile and Apparel Industry announced a set of measures in order to strengthen the competitiveness of such industries. The Ministry of Finance and Public Credit informed of six customs related measures that will be adopted to fight against unfair and illegal competition, as follows:

1. Starting on January 2015, it will be an obligation for textile and fibers importers to be registered in the Importers' Registry's specific textile and apparel sector.
2. The Mexican Customs Authorities will implement the obligation of presenting an automatic prior notice for importers of textiles and apparel. This means that importers must notify to the authorities at least five days prior to any importation of fibers and textiles into the country.
3. The Tax Administration Service (SAT for its acronym in Spanish), will proceed a Continuous Auditing Program for importers with precedents on unfair or illegal practices.
4. Tariff classifications applicable to textile and apparel goods will be amended to be comprised of 10 digits, so the description of the goods will be more specific and detailed.
5. The phase out of import duties for 80 tariff classifications will be suspended until 2018.

Starting on January 1, 2015, estimated prices will be effective upon importation of raw materials and textiles. This means that importers that import goods covered by such estimated prices (to be published by the Ministry of Finance and Public Credit), will be obliged to guarantee the difference in import duties between those applicable to the declared price and those that would apply if the estimated price had been declared.

The provisions implementing these six measures have not been published yet. However, we expect that such publication will take place within the next few days.

Please feel free to any of the listed attorneys for further information regarding the necessary actions to comply with these measures and avoid any contingency that could affect the operation of your company in Mexico, related to the importation of goods of the textile and apparel industries: Manuel Padrón-Castillo (Juárez), Omar Chang-Camacho (Monterrey), Armando De Lille-Calatayud (Mexico City), Adriana Ibarra-Fernández (Mexico City), Daniel Sánchez-Elizondo (Guadalajara), or Juan Daniel Arau-Delgadillo (Tijuana).

Australia releases blueprint on the merger of its Customs and Immigration functions in 2015
The current Australian Customs and Border Protection Service (ACBPS) e-Publication Border News reported that from 1 July 2015, the functions of the Department of Immigration and Border Protection and the Australian Customs and Border Protection Service will be integrated into a new Department, and a new front-line operational capability, the Australian Border Force, will be established within the new Department. The changes mean that from 1 July 2015 industry will be able to engage with a single Australian department in relation to all customs, immigration and border protection matters.

The Australian Border Force will draw together the operational border, investigations, compliance, detention and enforcement functions of the two existing agencies. Policy, regulatory and corporate functions will combine within the broader department.

For more information about the changes, read the Minister for Immigration and Border Protection's speech announcing the new arrangements and the Australian Border Force booklet.

On 30 October 2014, the Blueprint for Integration was launched. The Blueprint describes how Australia will bring the Department of Immigration and Border Protection and the Australian Customs and Border Protection Service into one new organisation. It sets out the mission, and outlines the new organisation’s responsibilities, challenges and opportunities, and its focus on people and systems.
US - CBP announces test of eBonds
On November 28, 2014, U.S. Customs and Border Protection (CBP) published in the Federal Register a general notice announcing CBP’s plan to conduct a voluntary National Customs Automation Program test concerning automation of CBP’s bond program (eBond test). The eBond test utilizes an automated system (eBond system) that provides for the transmission of electronic bond contracts (eBonds) between principals and sureties, with CBP as third-party beneficiary, in the Automated Commercial Environment (ACE) for the purpose of linking those eBonds to the transactions they are intended to secure. All eBonds transmitted pursuant to this test must be transmitted to ACE electronically, either via the CBP approved Electronic Data Interchange (EDI) or emailed to CBP for manual input into ACE. The transmission of eBonds to CBP must be made by a surety or surety agent. The eBond system works with ACE to ensure that transactions secured by an eBond have the proper bond coverage to protect the revenue and secure legal compliance.

The eBond system is intended to establish a single repository for the centralization of all eBonds within the Office of Administration’s Revenue Division, to harmonize and enhance CBP’s bond processes, and to eliminate flaws in the execution of customs bonds, which may lead to increased legal risk for CBP. It is anticipated that the eBond test will reduce paper processing, expedite cargo release, allow for bonds to be transmitted beyond regular CBP business hours, and enhance traceability for audit purposes.

The eBond test is intended to evaluate the automation of CBP’s bond program, its impact on trade, and CBP’s ability to enforce applicable laws and protect the revenue. This notice invites public comment concerning any aspect of the test, describes the eligibility, procedural and documentation requirements for voluntary participation in the test, and outlines the development and evaluation methodology to be used in the test.

The eBond test will commence on January 3, 2015, and will run for approximately two years, subject to any extension, modification, or early termination as announced by way of notice in the Federal Register. CBP’s evaluation of the test will be ongoing during the test period. Requests to participate and comments on any aspect of the test may be submitted to CBP for the duration of the test. CBP will notify an interested surety via email of its test participation status upon receipt and review of the surety’s eBond test participation request.

Comments and/or questions concerning this notice or any aspect of the test may be submitted to CBP via email, with the subject line identifier reading “Comment/Questions on eBond test.” Requests for a surety filer code, and surety requests to participate in the eBond test should be sent to Conrad.l.henry cbp.dhs.gov, with a subject line identifier specifying either “Surety filer code request” or “Surety request to participate in eBond test.” eBonds transmitted to CBP for manual input into ACE by the Office of Administration’s Revenue Division should be sent to cbp.bondquestions dhs.gov, with the specific email header information set forth in CBP’s “eBond Policies and Procedures” Web page.
US - CBP establishes website on eBonds

On December 4, 2014,CSMS# 14-000623 announced that U.S. Customs and Border Protection (CBP) had established a website to provide information about the eBond and what to expect when CBP goes live on January 3, 2015. At the current time, the website has the following:

Important Updates
eBond: The Future of eBond in ACE
eBond Frequently Asked Questions (FAQs)
ACE Frequently Asked Questions (FAQs) (Pertains to all of ACE)
ACE Commercial Environment (ACE) Deployment Schedule
Events and Activities
Getting Started with eBond
Policies and Procedures
Regulations
Bonds Main Page

EU - Commission commits to enhanced transparency in TTIP

On 25 November 2014, the European Commission announced that it adopted a Communication outlining how more transparency will be injected into the negotiations on a Transatlantic Trade and Investment Partnership (TTIP). The Commission considers it vital to ensure that the general public has accurate and full information of the EU’s intentions in the negotiations, to address the concerns and to evacuate misperceptions.

Actions put forth by the Commission to enhance transparency in the TTIP negotiations include:

• making public more EU negotiating texts that the Commission already shares with Member States and Parliament;
• providing access to TTIP texts to all Members of the European Parliament (MEPs), not just a select few, by extending the use of a 'reading room' to those MEPs who had no access to restricted documents so far;
• classifying less TTIP negotiating documents as "EU restricted", making them more easily accessible to MEPs outside the reading room;
• publishing and updating on a regular basis a public list of TTIP documents shared with the European Parliament and the Council.

The European Commission also gave a boost to transparency by committing to publishing information about who meets its political leaders and senior officials. The Commission agreed on a common set of rules that will apply to Commissioners, their Cabinets, and the Directors-General of the Commission services. From 1 December, the Commission will, within two weeks of each meeting, publish on its website the dates, locations, names of the organisations and self-employed individuals met and the topics of discussion of its bilateral meetings.

EU/Vietnam - Progress on EU-Vietnam FTA negotiations

On 4 December 2014, the European Commission Trade Newsletter announced that the EU and Vietnamese trade negotiators met 24-28 November in Brussels for an 'inter-sessional' set of trade talks on a free trade agreement (FTA) between the two sides. The talks covered a variety of issues, such as services, government procurement, competition related aspects, and intellectual property rights, and aimed to keep up the pace of negotiations before the next full round, planned for 19-23 January in Brussels. Both sides felt the talks had been fruitful and remain confident that it will be possible to conclude a deal early next year.

The EU and Vietnam launched negotiations for a comprehensive free trade agreement in June 2012 with a view to ensuring an effective environment for trade and investment relations.

US - TSN forming FDA ACE/ITDS Working Group

On December 3, 2014, U.S. Customs and Border Protection (CBP) issued CSMS# 14-000621 and CSMS# 14-000622 announcing that the International Trade Data System (ITDS) Committee of the Trade Support Network (TSN) is seeking input and participation in an upcoming Food and Drug Administration (FDA) ACE/ITDS Working Group under the auspices of the Security and Accountability for Every Port Act (SAFE Port Act) and in accordance with the ITDS protocols for implementing ACE/ITDS in the spirit of the February 2014 Executive Order on Streamlining the Export/Import Process for America’s Businesses.

According to the announcement:

The purpose of the FDA ACE/ITDS Working Group will be to ensure that all stakeholders are invited to participate in a discussion of the technical solution and data elements that will be required by the U.S. Food and Drug Administration (FDA) in the new cargo release and control functionality of ACE/ITDS. Primarily the workgroup will focus on the IT related issues associated with implementing the ACE/ITDS. The working group will consist of members of the international trade community; including trade software developers, that offer [import] commodities into the United States and which are regulated by the FDA. Officials from the FDA and the U.S. Customs and Border Protection (CBP) that are working on the development and deployment of ACE/ITDS will be part of this working group. The engagement in ACE/ITDS will require electronic [entry] submissions of all FDA required import data for cargo admissibility processing, in an XML format under a NEIM standard. Your involvement is needed to ensure that the transition to ACE/ITDS will continue to support efficient and timely cargo releases while in compliance with FDA requirements.

For additional details, see CSMS# 14-000621 or CSMS# 14-000622. To participate, send an email to the members of the TSN listed in the CSMS.

Amendments to EU sanctions against Russia

On 5 December the Official Journal published Council Decision 2014/872/CFSP and Council Regulation (EU) No 1290/2014 (both adopted 4 December 2014) amending the sanctions against Russia. The amendments come into force on 6 December 2014.

The latest EU measures are intended to provide additional clarity to the scope and application of certain provisions. They do not introduce new sanctions or widen the scope of existing sanctions. In particular, the new Decision and Regulation:

• Replace the phrase “deep water oil exploration and production, arctic oil exploration and production, or shale oil projects” with the following:

• oil exploration and production in waters deeper than 150 metres;
• oil exploration and production in the offshore area north of the Arctic Circle; or
• Projects that have the potential to produce oil from resources located in shale formations by way of hydraulic fracturing. It does not apply to exploration and production through shale formations to locate or extract oil from non-shale reservoirs.

• Clarify that the measures against the energy sector, contained in Articles 3, 3a and 4(3) of Council Regulation 833/2014, apply to Russia including its Exclusive Economic Zone and Continental Shelf.
• Clarify that the derogations applying to contracts or agreements concluded before a specified date also apply to ancillary contracts necessary for the execution of such contracts.
• Permit Member States to grant a licence under Articles 3 or 4(3) where the sale, supply, transfer or export of the items, or provision of related services, is necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment.
• Impose a new notification requirement on the use of the existing exemption in Article 3a relating to the provision of services necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment. The notification must be made within 5 working days of the activity taking place and must include the justification for the activity.
• Clarify that the only pumps within CN codes 8413 50 and 8413 60 that are specified in Annex II are those with a maximum flow-rate greater than 18 m³/hour and a maximum outlet pressure greater than 40 bar, specially designed to pump drilling muds and/or cement into oil wells.
• Make some changes to the financial restrictions within Article 5.

EU releases second report on EBTI monitoring

On 2 December 2014, the European Commission announced the release of the “Report of the second phase of the exercise to monitor the issuing of BTI and the application of the relevant Community legal provisions in the Member States - 2009 and 2010”, the second report on monitoring of the European Binding Tariff Information (EBTI)-3 system. EU customs administrations have been providing Binding Tariff Information to traders for over 20 years. On 19 April 2004 the current European Binding Tariff Information (EBTI)-3 system entered into production in the 15 countries that at the time were Member States of the European Union. With the accession of 10 new Member States of 1 May 2004 and a further 2 on 1 January 2007, the use of the system was extended to encompass the 27 Member States at the time of the monitoring. The objective of the EBTI system is to guarantee legal certainty for economic operators with regard to the tariff classification of their goods and consequently of the treatment of those goods by the customs administration of the EU.

Following the introduction of the EBTI-3 system the European Commission decided it should monitor the application of the legislation governing the issuing of BTI. It was decided that all Member States should be visited and that the officials of the Commission should be accompanied by BTI experts from national administrations. Given that 27 Member States would be visited it was decided to split the monitoring exercise into two phases, each extending over a 2 year period. The first phase covered the years 2007 and 2008 during which 14 administrations were visited. The second phase covered the years 2009 and 2010 and the remaining 13 administrations were monitored. The report of the second phase of this exercise which was just released, covers visits to 13 Member States during 2009 and 2010. The report of the first phase of this exercise, which covered visits to 14 Member States during 2007 and 2008, may also be downloaded.

Korea-Australia FTA materials posted online

Australian Trade and Investment Minister Andrew Robb has announced that the Korea-Australia Free Trade Agreement (KAFTA) will enter into force on 12 December 2014. The Australian Customs and Border Protection Service (ACBP) has posted links to the following documents on its website.

Legislation

Customs Amendment (Korea – Australia Free Trade Agreement Implementation) Act 2014
Customs Tariff Amendment (Korea – Australia Free Trade Agreement Implementation) Act 2014
Customs (Korean Rules of Origin) Regulation 2014

Practice Statement and Instructions and Guidelines

Practice Statement NO. 2009/13 - Rules of Origin
Instruction and Guideline - Korea-Australia Free Trade Agreement

A KAFTA Certificate of Origin completed by the exporter or producer in Korea.

Model format of KAFTA certificate of Origin

For more information, please read the following:

Integrated Cargo System – Claiming Preferential Tariff Rates

Japan - Seventh round of negotiations for Japan-Canada Economic Partnership Agreement (EPA)

On November 21, 2014, the Ministries of Foreign Affairs and Economy, Trade and Industry jointly announced that the seventh round of negotiations for Japan-Canada Economic Partnership Agreement was held in Tokyo from November 17 to November 21, 2014.

The meeting was attended by representatives from other relevant ministries. During this round, fruitful discussions were held in areas including trade in services, investment, intellectual property and energy, minerals and foods. The schedule of the next round of negotiations will be determined through diplomatic channels.

Japan - Sixth round of negotiations for Regional Comprehensive Economic Partnership (RCEP)

On November 27, 2014, the Ministries of Foreign Affairs and Economy, Trade and Industry jointly announced that the sixth round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) will be held in India, from December 1 to 5, 2014. In this round of negotiations, the meetings of the Trade Negotiating Committee, in which senior officials will participate, and of working groups on Trade in Goods, Trade in Services, Investment, Economic and Technical Cooperation, Intellectual Property, Competition, and Legal and Institutional Issues are scheduled to be held, and the scope and method of negotiations, amongst others, will be discussed. The RCEP is being negotiated among ASEAN10 countries +6 countries (Japan, China, South Korea, Australia, New Zealand, and India).

Japan - Sixth round of FTA negotiations among Japan, China and S. Korea

The Ministry of Economy, Trade and industry (META) reported that the sixth round of negotiations (DG/DDG Meetings) on a Free Trade Agreement (FTA) among Japan, China and South Korea was held in Tokyo from November 24 to 28, 2014

Trade and Industry and representatives from relevant Ministries attended the meeting. Various areas such as Trade in Goods, Trade in Services, Competition Policies, Intellectual Property, amongst others, were discussed. The next round of negotiations (Chief Delegates Meetings) will be held in the middle of January.

U.S., Singapore sign Customs agreements

On December 1, 2014, U.S. Customs and Border Protection (CBP) announced that the United States signed three Customs agreements with Singapore, ensuring greater cooperation and mutual assistance on Customs enforcement and the facilitation of lawful trade and travel.

CBP Commissioner R. Gil Kerlikowske and Singapore Customs Director General Ho Chee Pong signed a U.S.– Singapore Customs Mutual Assistance Agreement (CMAA) and a Mutual Recognition Arrangement (MRA) between CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) and Singapore’s Customs’ Secure Trade (STC) Partnership.

CMAAs are bilateral agreements between countries and enforced by their respective Customs administrations. CMAAs provide the legal framework for the exchange of information and evidence to assist countries in the enforcement of Customs laws, including duty evasion, trafficking, proliferation, money laundering, and terrorism-related activities. With this new agreement signed, the United States now has seventy-two (72) CMAAs with other countries across the world.

The mutual recognition arrangement between C-TPAT and Singapore’s STC will link the two industry partnership programs, so that together they create a unified and sustainable security posture that can assist in securing and facilitating global cargo trade. It provides tangible and intangible benefits to C-TPAT and Singapore’s STP members including fewer exams when shipping cargo, a faster validation process, common standards, and efficiency for Customs and business, transparency between Customs administrations, business resumption, front-of-the-line processing, and marketability

Also signed on December 1, 2014 by Commissioner Kerlikowske and Singapore’s Commissioner of Immigration & Checkpoints Authority Clarence Yeo is a joint statement regarding CBP’s Global Entry Program. Global Entry is a U.S. Customs and Border Protection program that allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States.

US - OFAC reports its licensing activities
On December 2, 2014, the Treasury Department’s Office of Foreign Assets Controls (OFAC) released its Quarterly Report of Licensing Activities pursuant to Section 906(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), covering activities undertaken by OFAC under Section 906(a)(1) of the TSRA from January through March 2014. Under the procedures established in its TSRA-related regulations, OFAC processes license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan under the specific licensing regime set forth in Section 906 of the TSRA.
Statistical code and duty rate changes for 1 January 2015

Australian Customs and Border Protection Notice No. 2014/57 of 3 December 2014 notifies traders that the Australian Bureau of Statistics (ABS) has advised of changes to statistical codes in the Customs Tariff Working pages, from 1 January 2015, for tariff subheadings 7227.90.90, 7228.70.00, 7308.90.00, 7312.10.00, 7312.90.00.

In addition, The duty rates applying to certain TCF goods in Chapters 39, 40, 42, 58, 60, 61, 62, 63 and 96 of Schedule 3 of the Customs Tariff Act 1995 (Customs Tariff) will phase from 10% to 5% on 1 January 2015. The Developing Country rates for these goods will phase from 5% to Free.

Finally, Schedules 5, 6, 7 and 8 of the Customs Tariff specify phasing rates of duty for the following goods:

• Chilean grapes under the Chilean Free Trade Agreement;
• certain pharmaceutical goods under the US Free Trade Agreement;
• certain TCF goods under the US, Thai and Chilean FTAs and also under the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA);
• certain motor vehicles under the AANZFTA; and
• certain articles of bedding and similar furnishing under the US and Chilean FTAs.

These phasing rates of duty apply to goods entered for home consumption on and after 1 January 2015.

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Chair, NA International
Commercial Practice Group

Miguel Noyola
Partner, Chicago
Email: Miguel Noyola
T + 1 312 861 7589


Members, US International
Trade Compliance Steering Committee


Janet K. Kim
Partner, Washington DC
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John F. McKenzie
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Ted Murphy
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Compliance Update


Stuart P. Seidel
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