US - Commerce amends request for ITACs nominations

On August 29, 2014, the International Trade Administration, Department of Commerce published in the Federal Register an amendment to its Request for Nominations for the Industry Trade Advisory Committees (ITACs) of February 24, 2014 (79 Fed. Reg. 10099) to revise the eligibility criteria to permit federally-registered lobbyists to apply for membership on the ITACs. The Department of Commerce and the Office of the U.S. Trade Representative (USTR) no longer maintain an eligibility restriction prohibiting federally-registered lobbyists from applying for appointment on the ITACs in light of a recent policy clarification that the eligibility restriction does not apply to advisory committee members who serve in a representative capacity. The Secretary of Commerce (the Secretary) and USTR will now consider nominations of federally-registered lobbyists for appointment on the 16 ITACs. All other eligibility criteria continue to apply.

The Industry Trade Advisory Committees are:

• (ITAC 1) Aerospace Equipment
• (ITAC 2) Automotive Equipment and Capital Goods
• (ITAC 3) Chemicals, Pharmaceuticals, Health/Science Products and Services
• (ITAC 4) Consumer Goods
• (ITAC 5) Distribution Services
• (ITAC 6) Energy and Energy Services
• (ITAC 7) Forest Products
• (ITAC 8) Information and Communications Technologies, Services, and Electronic Commerce
• (ITAC 9) Building Materials, Construction, and Nonferrous Metals
• (ITAC 10) Services and Finance Industries
• (ITAC 11) Small and Minority Business
• (ITAC 12) Steel
• (ITAC 13) Textiles and Clothing
• (ITAC 14) Customs Matters and Trade Facilitation
• (ITAC 15) Intellectual Property Rights
• (ITAC 16) Standards and Technical Trade Barriers

Nominations will be accepted for current vacancies and those that occur throughout the remainder of the charter term, which expires on February 14, 2018. Appointments will be made on a rolling basis. For that reason, nominations will be accepted through February 14, 2018.

US - BIS seeks comments on potential market impact of the proposed FY2016 Annual Materials Plan
On August 29, 2014, the Bureau of Industry and Security, Commerce (BIS) published in the Federal Register a notice of inquiry [Docket No. 140818678–4678–01] advising the public that the National Defense Stockpile Market Impact Committee, co-chaired by the Departments of Commerce and State, is seeking public comments on the potential market impact of the proposed Fiscal Year 2016 National Defense Stockpile Annual Materials Plan. The role of the Market Impact Committee is to advise the National Defense Stockpile Manager on the projected domestic and foreign economic effects of all acquisitions and disposals involving the stockpile and related material research and development projects. Public comments are an important element of the Committee’s market impact review process. To be considered, written comments must be received by September 29, 2014.
US - BIS updates legal authorities
On August 29, 2014, the Bureau of Industry and Security, Commerce (BIS) published in the Federal Register a final rule [Docket No. 140812660–4660–01] that updates the Code of Federal Regulations (C.F.R.) legal authority paragraphs in the Export Administration Regulations (EAR) to cite the most recent Presidential notice (Notice of August 7, 2014, 79 Fed. Reg. 46959 (August 11, 2014)) extending an emergency declared pursuant to the International Emergency Economic Powers Act. This is a procedural rule that only updates authority paragraphs of the EAR. It does not alter any right, obligation or prohibition that applies to any person under the EAR.
New Zealand - Voluntary arms broker register
The Ministry of Foreign Affairs and Trade (MFAT) is currently working to implement the requirement in the UN Arms Trade Treaty that New Zealand regulates arms brokering taking place under its jurisdiction.

The intention is for legislative controls to be introduced and passed by Parliament in 2015. As a first step, MFAT is calling for any person or entity based in New Zealand that is, has or intends to undertake, arms brokering to voluntarily register with them.

You can find out more details about what constitutes arms brokering and of the new registration process on the MFAT website.

Those that register will be kept informed of the development of legislative brokering controls in New Zealand.
ASEAN members sign Protocol to AANZFTA
The New Zealand Customs Service E-Newsletter (Issue 271, 29 August 2014) announced that AANZFTA member countries have signed a Protocol which will amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).

The amendments are designed to make AANZFTA more business-friendly, transparent, and improve administrative efficiency. The protocol does not change any of the preferences under the Agreement.

AANZFTA parties are working through the implementation requirements, which are likely to include minor changes to the Certificate of Origin and/or overleaf notes. Information on any proposed changes will be provided at a later date.
US - State provides certain temporary sanctions relief

On August 28, 2014, the Department of State published in the Federal Register a notice [Public Notice 8855] renewing temporary waivers of certain sanctions to allow for a discrete range of transactions related to the provision of satellite connectivity services to the Islamic Republic of Iran Broadcasting (IRIB). The U.S. Government (USG) is renewing these waivers based on Iran’s commitment to ensure that harmful uplink satellite interference does not emanate from its territory, and verification by the USG that harmful uplink satellite interference is not currently emanating from the territory of Iran. The following are waived:

1. Section 1244(c)(1) of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) 1 to the extent required for:

a. Transactions involving the provision of ground connectivity services using earth stations and fiber optic connections outside of Iran and the provision and management of satellite capacity for sale or resale to the IRIB, where such ground connectivity services and satellite capacity are to be used for the provision to Iran of public international telecommunications services, and

b. transactions involving the provision of the following related administrative services to, or for the benefit of, the IRIB, to the extent such services are necessary to establish and maintain ground and satellite connectivity with IRIB: Standard operational support, including coordinating with in-country personnel on matters such as configuring ground and earth station equipment to access space segment capacity; marketing services; billing services; and legal services, and excluding any transactions involving persons other than the IRIB on the SDN List.

2. Section 1246(a) of IFCA 2 to the extent required for the provision of underwriting services or insurance or reinsurance for:

a. Transactions involving the provision of ground connectivity services using earth stations and fiber optic connections outside of Iran and the provision and management of satellite capacity for sale or resale to the IRIB, where such ground connectivity services and satellite capacity are to be used for the provision to Iran of public international telecommunications services, and excluding any transactions involving persons other than the IRIB on the SDN List; and

b. transactions involving the provision of the following related administrative services to, or for the benefit of, Iran, to the extent such services are necessary to establish and maintain ground and satellite connectivity with IRIB: Standard operational support, including coordinating with in-country personnel on matters such as configuring ground and earth station equipment to access space segment capacity; marketing services; billing services; and legal services, and excluding any transactions involving persons other than the IRIB on the SDN List.

3. Section 1247(a) of IFCA 3 to the extent required for transactions by foreign financial institutions on behalf of IRIB involving:

a. The provision of ground connectivity services using earth stations and fiber optic connections outside of Iran and the provision and management of satellite capacity for sale or resale to the IRIB, where such ground connectivity services and satellite capacity are to be used for the provision to Iran of public international telecommunications services, and for associated services, and

b. transactions involving the provision of the following related administrative services to, or for the benefit of, Iran, to the extent such services are necessary to establish and maintain ground and satellite connectivity with IRIB: Standard operational support, including coordinating with in-country personnel on matters such as configuring ground and earth station equipment to access space segment capacity; marketing services; billing services; and legal services.

Switzerland - Federal Council decides on further measures to prevent the circumvention of international sanctions

On 27 August 2014, the Swiss Government announced that in view of the situation in Ukraine, the Federal Council has decided to take further measures to prevent the circumvention of international sanctions. It has amended the Ordinance of 2 April 2014 on measures to prevent the circumvention of international sanctions in relation to the situation in Ukraine to include the sanctions imposed by the EU in July. The revised ordinance enters into force at 6 pm on 27 August 2014. The announcement states:

During its discussions on the situation in Ukraine of 13 August 2014, the Federal Council decided to widen its current policy and to take all the measures required to ensure that the most recent sanctions imposed by the European Union cannot be circumvented via Swiss territory. Today [27 August] the Federal Council decided on the necessary measures.

In the field of finance, issues of long term financial instruments by five Russian banks will be made subject to authorisation. In future, authorisation for new issues will only be granted if they are within the average financial engagement of the past three years. The subsidiaries of these Russian banks in Switzerland are exempt from the authorisation requirement as long as they are not acting on behalf of, or on the instructions of their parent companies. The EU's restrictive measures also allow a similar exemption for subsidiaries of the Russian banks in question on its territory. Secondary trading in financial instruments newly issued outside Switzerland and the EU will be subject to a duty to notify. Eleven names have been added to the existing list of natural persons and businesses with whom financial intermediaries are prohibited from entering into new business relationships and whose existing business relations are subject to a duty to notify.

With regard to specific military goods and dual-use goods subject to licence, the Federal Council decided to add a further criterion for rejecting the application for an export licence to the existing list of criteria in goods control legislation. An application may now be refused if goods are intended to be used exclusively or partially for military purposes, or if they are intended for a military end user. With regard to war material, the Federal Council decided that a ban on imports of such goods from Russia and Ukraine should apply. The Federal Council also decided to introduce a duty to notify for exports of certain goods used in the extraction of oil in deep sea, Arctic or shale gas projects in Russia.

As a result of Switzerland's decision not to recognise the annexation of Crimea by Russia constituing a breach of international law, the Federal Council has imposed a ban on imports and a ban on exports of certain key goods used in the extraction of oil and gas, as well as restrictions on investments for Crimea and Sevastopol.

The Federal Council has acknowledged the measures taken by Russia in respect of agricultural goods. It stresses that Switzerland is not engaged in any state measures to promote additional Swiss exports to Russia.

The announcement states that the Federal Council continues to monitor the situation in Ukraine closely and reserves the right to take further measures depending on how the situation develops.

Spain publishes regulations on the control of foreign trade in defense materials, and dual-use materials, products and technology
On 26 August 2014, the Boletín Oficial del Estado (the Official Journal) published Royal Decree 679/2014 of 1 August 2014, approving the Regulation on the control of foreign trade in defense materials, and dual-use materials, products and technology. The Regulation implements Law 53/2007 of 28 December 2007.

The Regulation sets the conditions, requirements and procedures for exercising the control function of foreign trade in defense material, and dual-use materials, products and technologies, in order to duly comply with the regulations of the European Union, Spain’s international commitments and contribute to promoting peace, stability and security in the global or regional level protect the general interests of national defense and foreign policy of the state.

In order to provide a single text containing regulations on the control of foreign trade for these products, the Royal Decree consolidates the provisions adopted in the Regulation controlling foreign trade in defense material, dual-use material, products and technologies approved by Royal Decree 2061/2008 of 12 December, with the changes made to it by the Royal Decree 844/2011 of 17 June. In addition, it regulates transfers in foreign trade of defense material, dual-use materials, products and technologies, which have been incorporated and developed as required by European legislation and includes updated commitments made in international forums in which Spain participates, without prejudice to the requirement of administrative authorization, derived from the general regulations on arms transfers that are not controlled by this Royal Decree.

The Regulation extends recordkeeping from four to ten years, simplifies some customs procedures, incorporates the Common Military List of the European Union (adopted by the Council on 17 March 2014), simplifies the licensing process, adds references to the Treaty on Arms Trade, revises the requirements for control documents for civilian firearms use and limits exports to certain uses for certain destinations. In addition, it consolidates processing under the regulation in the General Directorate for International Trade in Defence and Dual-Use.
EU - Commission adopts strategy and action plan for better customs risk management

On 21 August 2014, the European Commission announced that it had adopted a new strategy to improve customs risk management, together with a detailed action plan. The new strategy seeks to ensure that customs is more coherent, efficient and cost effective in identifying and supervising supply chain risks, in a way that reflects today's realities. The action plan sets out specific measures to achieve this, together with the actors responsible and clear deadlines for doing so.

The new strategy identifies the key priorities where action is needed in order to achieve more effective and efficient EU-wide customs risk management. Each of these priorities is then developed, in the accompanying action plan, in terms of actions to be taken and deliverables to be achieved. The Commission, Member States and economic operators all have important and clearly defined roles to play in ensuring the successful implementation of the new strategy.

The main priorities in the strategy to improve customs risk management are:

• Efficient controls and risk-mitigation. Different types of risk require different responses. For example, the risk of a bomb or infectious disease needs to be dealt with before the shipment is even loaded for transportation in a third country, whereas financial misdemeanours can be addressed through post-clearance audits. To maximise the efficient use of resources, controls have to be performed at the right place and time in the supply chain, and information should be shared more effectively between customs authorities. This will help avoid duplication of controls.

• Data quality. In order to ensure that customs have high-quality, timely information on goods entering and leaving the EU, adjustments need to be made to certain legal, procedural and IT systems. These adjustments (e.g. to the IT systems that process entry summary declarations (ENS)) should be implemented in a way which does not create undue costs for businesses or public authorities.

• Information sharing. To ensure customs authorities can effectively analyse and mitigate risks, mechanisms should be put in place to improve the availability of data and the sharing of risk-relevant information amongst customs authorities throughout the entire control process.

• Interagency cooperation. Customs should also work closely with other law enforcement authorities. Common risk criteria and improved information sharing would allow the various authorities tackling supply chain risk to support and complement each other's work.

• Cooperation with traders. The partnership between customs and reliable traders should be further developed, including through the promotion of the EU Authorised Economic Operator (AEO) programme, in particular through broader recognition by non-customs authorities.

• Capacity building. To ensure that all customs authorities implement risk management to a high standard across the EU, divergences between Member States should be identified and addressed. EU level support could be given to help address weaknesses, including possible further capacities at EU and Member State level where needed, and cooperation between national customs authorities should be further enhanced.

• International customs cooperation. The EU should remain active in helping to set global standards in international fora, and should work to implement and promote these common norms amongst international trading partners.

An amendment of the EU Customs Code in 2005 provided for the development of common rules for customs risk management (see IP/05/209). This common framework sets out common criteria to identify risks, common conditions for trusted traders, and pre-arrival/pre-departure security risk analysis based on electronically submitted cargo information. The strategy adopted today follows the identification of gaps in the current implementation of customs risk management and responds to the June 2013 EU Council of Ministers' call for measures to address the situation.

Japan to end Byrd Amendment retaliatory tariffs
On August 20, 2014, the Ministry of Finance announced that the retaliatory tariff measure consisting of an additional customs duty of 17.4% for 13 items of ball bearings or the like, which were imposed against products originating in the United States as a result of the so-called Byrd Amendment (Continued Dumping and Subsidy Offset Act), will end on August 31, 2014. These measures were originally imposed by “Cabinet Order on retaliatory tariffs imposed on ball bearings, etc.” Decree No. 289 August 17, 2005, because the WTO found they violated WTO agreements. The Byrd Amendment was repealed, but small residual payments continue to be made to eligible U.S. domestic producers for entries made prior to 2007.
US - USITC begins process to incorporate changes into HTS

On August 21, 2014, the U.S. International Trade Commission (ITC) announced that it has instituted Investigation No. 1205-11, Recommended Modifications in the Harmonized Tariff Schedule to Conform with Amendments to the Harmonized System Recommended by the World Customs Organization, and to Address Other Matters, pursuant to section 1205 of the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act) (19 U.S.C. § 3005), in order to recommend to the President modifications in the Harmonized Tariff Schedule of the United States (HTS).

International customs officials at the World Customs Organization (WCO) have agreed on 234 changes to the global system, International Convention on the Harmonized Commodity Description and Coding System (HS Convention), that categorizes products that are imported and exported around the world, and countries are beginning their individual processes to incorporate those changes into their own domestic product category systems.

The ITC is the federal agency charged with maintaining and updating the United States’ product category system, the HTS. The U.S. and other countries have until January 1, 2017, to incorporate the changes, but much work lies ahead, according to Jim Holbein, director of the ITC office that maintains the HTS. “The first step for importers and exporters is to become aware of the changes being made at the international level,” Holbein said. “If they believe they will be affected, they will want to stay on top of the process as it moves forward.”

The recommended modifications concern (1) the World Customs Organization’s (WCO) Recommendation of June 27, 2014 that Contracting Parties to the HS Convention modify their tariff schedules to conform with amendments to the Harmonized System expected to enter into force on January 1, 2017; and (2) whether one of the two HTS subheadings that apply to taro (also known as dasheens) should be deleted, and whether the HTS nomenclature for corned beef should be provided for under a superior subheading for cured meat of bovine animals.
The key dates are:

August 20, 2014: Posting of the WCO's Recommendation of June 27, 2014, on the Commission website.

December 2014 (actual date to be announced later): Posting of the Commission’s proposed recommendations on the Commission’s website.

February 2015 (actual date to be announced later): Deadline for interested Federal agencies and the public to file written views on the Commission’s proposed recommendations.

July 2015 (actual date to be announced later): Transmittal of the Commission’s report to the President.

US - Census clarifies uses for electronic export information
On August 22, 2014, the Bureau of the Census, Commerce Department (Census) published in the Federal Register an interim final rule [Docket Number: 140626542-4542-01] amending its Foreign Trade Regulations to reflect changes related to the implementation of the International Trade Data System (ITDS) and subsequent changes to the access of electronic export information (EEI), the information previously provided on a Shipper’s Export Declaration. The ITDS was established to eliminate redundant information requirements, efficiently regulate the flow of commerce and to effectively enforce laws and regulations relating to international trade by establishing a single portal system for the collection and distribution of standard electronic import and export data required by all participating federal agencies. Therefore, the Automated Export System (AES) will include export information collected under other federal agencies’ authority, which is subject to those agencies’ disclosure mandates. This rule clarifies the confidentiality provisions of the EEI and facilitates the legitimate sharing of export data consistent with the goals for the ITDS. The interim rule entered into effect upon publication, but comments may be submitted on or before October 21, 2014.
Taiwan – Customs Tariff Law amended

On 20 August 2014, the Amendment of Customs Tariff Law adds Articles 20-1, 28-1, 83-1 and 87-1;and revises Articles 7, 10, 13, 20, 23, 59, 81, 83 and 93 (Publication № 7154) was enacted. It went into effect on 22 August 2014. The Legislative Yuan has prepared the following summary:

The amendment of 20 August 2014 applies to the Customs Tariff Law. The essential points are:
1) To add that the untaxed goods carried by transports referred to in the preceding paragraph forwarded individually by registered freight forwarders under Customs' approval in case deficiencies found due to illegal withdrawal, loss, theft or any other reason, the said forwarders shall be responsible to make up any shortfall of the import duty payable (Article 7)
2) To respond accordingly to addition of Article 21-1 hereby to revise related provisions; meanwhile, to deal with technical correction and revise wordings (Articles 10, 13, 20,23 and 93)
3) To specify that the responsible person of any transportation means for passengers or cargo, or the transportation firm which is entrusted by such responsible person, shall fill out cargo manifest, passengers and service crew list in order to report to Customs upon the arrival of the transportation means or prior to its departure abroad (Article 20)
4) To specify that where cargo carried by transportation means referred to in the preceding paragraph and forwarded by registered freight forwarders under Custom' approval, its manifest may be declared by the said forwarders to Customs (Article 20-1)
5) To specify that Customs may seal bonded cargo transportation means as well as shipping containers loaded on discharging and storage wharf; furthermore, to define the term of “seal” referred to under this Law (Article 28-1)
6) To add that self-use machineries or equipment imported by bonded factories shall be exempt from customs duty (Article 59)
7) To add and revise penalties imposed for violating this Law. (Articles 81, 83, 83-1 and 87-1)(13 provisions, p.5-10)

Iceland - Detailed regulations issued for monitoring articles and services with strategic importance
On 20 August 2014, the Official Journal (Stjórnartíðinda) published the 311 page Regulation № 758/2014 (of 18 July 2014) for monitoring services and items that may have strategic significance with schedules. The Regulations are more detailed provisions on the implementation of Act № 58/2010 on the control of services and items that may have strategic significance. The regulation includes provisions for the control of dual applicability, defense-related goods and sharing their compliance with international commitments. Dual-use goods are addressed.

The Regulation provides that no person shall export military equipment or dual usability without the permission of the Minister, except that a police chief, may issue a license for the export of the weapons under the Weapons Act, after consultation with the Foreign Ministry. The Regulation further provides for the implementation by regulation of export licenses by the types of countries.

The Ministry of Foreign Affairs will maintain a register of entities authorized to export military goods. Before an exporter uses a general export license for dual applicability, he shall register with the Ministry of Foreign Affairs.

The Regulation adopts various EU export controls (with adjustments) and prohibits the importation, without the permission of the Minister, of articles that may be used, in whole or in part, in connection with the development, production, handling, operation, maintenance, storage, detection, identification or dissemination of chemical, biological or nuclear weapons or other nuclear explosive devices or the development, production, maintenance or storage of missiles capable of delivering such weapons.
Russia eases ban on some agricultural materials
On 20 August 2014, the Ministry of Agriculture announced the issuance of Постановление (Resolution) № 830, which modifies the list of agricultural raw materials and foodstuffs originating in the United States, European Union, Canada, Australia and Norway that were prohibited (pursuant to Res. № 778 of 7 August 2014 and Decree № 560 of 6 August 2014) from being imported into Russia for a period of one year. The list excludes separate headings for which there are insufficient domestic counterparts to the imported products used in the production of important food products or groups to ensure the priorities of agricultural production. The following are specifically excluded from the prohibition: seed (potatoes, peas, sweet corn hybrid, onion), dietary supplements, vitamins and minerals designed to compensate for the lack of vitamins and minerals in the human body, flavors, concentrates proteins and their mixtures, food fiber supplements and lactose-free dairy products.

The list also excludes certain fish, Atlantic salmon and trout, of which domestic production can cover no more than 5% of the existing requirements from commercial fisheries.
APEC moving forward on trade facilitation

On 18 August 2014, the Asia-Pacific Economic Cooperation (APEC) announced that APEC economies are pressing ahead with efforts to accelerate trade and economic growth through the elimination of costly delays to the flow of goods as they cross international borders, undeterred by the unexpected challenge to implementation of the Agreement on Trade Facilitation now facing members of the World Trade Organization.

Senior customs and trade officials from the APEC region are currently meeting in Beijing for the first time since WTO members failed to enact a protocol on 31 July required to proceed with adoption of the agreement that would ease trade bottlenecks through greater simplification of customs rules and processes.

“The setback to the agreement is disappointing but APEC’s work on trade facilitation goes on,” echoed John Larkin, Chair of the APEC Committee on Trade and Investment, the central working-level body within APEC for advancing these issues. “Many elements of the agreement like single windows, authorized economic operators and the move from paper-based to electronic processes are objectives that APEC economies have long championed. We’re working to ensure that we take full advantage of them.”

Further details on cooperation within APEC on trade facilitation can be viewed here.

US - BIS posts Guidelines for preparing export license applications involving foreign nationals
The Bureau of Industry and Security, Commerce (BIS), has prepared and posted Guidelines for Preparing Export License Applications Involving Foreign Nationals (Guidelines). The Guidelines are for exporters to use in submitting license applications for foreign nationals pursuant to the “deemed export” rule.

Section 734.2(b)(ii) of the Export Administration Regulations (EAR) defines “export” to include a release of technology or software to a foreign national and considers such release to be a “deemed export” to the home country of the foreign national. Licenses are required for release of controlled technology or software to a foreign national only if a license is required for the export of such items to the home country. License applications, when submitted, are reviewed by BIS under the licensing policies that apply to the actual export of the technology or software in question to the country of the foreign national.

The “deemed export” rule is most often encountered in the employment context where a company will release controlled technology or software to a foreign national. The Guidelines are designed for the employment situation, and may not be fully applicable to license applications submitted for releases to foreign nationals in other contexts. It is important to note that the “deemed export” rule does not apply to the release to persons lawfully admitted for permanent residence in the United States, and does not apply to persons who are “protected individuals” under the Immigration and Naturalization Act (8 U.S.C. 1324b(a)(3)).

The basis guidance for filling out license applications is set forth in Part 748 of the EAR. The posted Guidelines supplement the basic guidance and are intended to facilitate processing of applications involving the “deemed export” rule. BIS encourages companies to follow the Guidelines to assist BIS in processing license application more efficiently. Due to regulatory time limits for processing license applications, it is in the interest of each exporter to provide all information needed to analyze the transaction when the application is submitted.

Applications under the “deemed export” rule should include the basic information included in the Form BIS-748P (Guidelines Section II), a letter of explanation (Guidelines Section III A), and a resume (Guidelines Section III B).
US - OFAC publishes Iran General License G
On August 19, 2014, the Office of Foreign Assets Control (OFAC) published in the Federal Register a document publishing Iran General License G. On March 19, 2014, OFAC issued General License G authorizing certain academic exchanges between U.S. academic institutions and Iranian universities and the exportation or importation of certain educational services. On March 20, 2014, OFAC made General License G available on the OFAC website.
Norway adopts restrictive measures against Russia

On 15 August 2014, the Ministry of Foreign Affairs (MFA) announced that the Government adopted new restrictive measures against Russia, in line with the decision announced on 11 August, because of the situation in Ukraine. The new regulations, Regulations concerning restrictive measures regarding actions that undermine or threaten Ukraine's territorial integrity, sovereignty, independence and stability (FOR 2014-08-15-1076), which are in line with those of the EU, were adopted by the King in Council, and entered into force immediately.

The Government said it will maintain a close dialogue with the business community to assess the consequences of the measures for the various sectors affected. The MFA has opened a service telephone line for Norwegian companies affected by the new restrictive measures.

The main points of the regulations are:

• An extension of the list of individuals and entities that are subject to asset-freeze measures and travel restrictions to include a further 8 people and 12 entities, and an expansion of the criteria for inclusion on the list.
• A ban on imports from Crimea and Sevastopol, and for the same area, a ban on the issuing of loans or other forms of credit for the development of infrastructure in the transport, telecommunications and energy sectors, a ban on the issuing of loans or other forms of credit for the exploitation of oil, gas or mineral resources, and a ban on the sale or export of key equipment or technology to these sectors.
• A ban on the import and export of arms and defence-related products (List I) to and from Russia and the export of dual-use items and technology (List II) for military end-use in Russia.
• A ban on the purchase or sale of new bonds, equity or similar financial instruments with a maturity exceeding 90 days issued by five listed Russian financial institutions.
• Prior authorisation from the Ministry of Foreign Affairs will be required for the export of certain categories of goods to the Russian petroleum sector. The export of products to be used for deep-water oil exploration and production, Arctic oil exploration and production, or in shale oil projects in Russia is prohibited. Prior authorisation is also required for the provision of financing or other technical assistance related to these categories of goods. Authorisation can and will normally be given for the export of products if this is to honour obligations under contracts agreed prior to the entry into force of the new regulations.

The MFA is responsible for processing applications for export licences.

The MFA said that the measures implemented by the regulations leave room for discretion. In applying the regulations, the MFA will take into consideration other Norwegian legislation and relevant guidelines and experience relating to the sectors covered by the regulations. This applies in particular to the rules for the export of products etc. relating to the petroleum sector. Once the rules have entered into force, they will be further developed on the basis of their application in practice and any new guidelines.

US - USTR seeks comments to compile NTE Report on Foreign Trade Barriers
On August 15, 2014, the Office of the United States Trade Representative (USTR), published in the Federal Register a notice requesting public comments to compile the National Trade Estimate Report on Foreign Trade Barriers (NTE). Pursuant to section 181 of the Trade Act of 1974, as amended (19 U.S.C. 2241), USTR is required to publish annually the NTE. With this notice, the Trade Policy Staff Committee (TPSC) is requesting interested persons to submit comments to assist it in identifying significant barriers to U.S. exports of goods, services, and U.S. foreign direct investment for inclusion in the NTE. The TPSC invites written comments from the public on issues that USTR should examine in preparing the NTE.

In recent years in conjunction with the NTE report, USTR has released two additional reports dealing with specific trade barriers—one on sanitary and phytosanitary measures and one on standards-related measures. In 2015, USTR will continue to emphasize these two important areas, but is inviting comments on those barriers through this notice. Public comments are due not later than 11:59 p.m., October 29, 2014.
US - USTR seeks comments on China’s compliance with WTO commitments
On August 15, 2014, the Office of the United States Trade Representative (USTR), published in the Federal Register a request for comments and notice of public hearing concerning China’s compliance with its World Trade Organization (WTO) commitments. The interagency Trade Policy Staff Committee (TPSC) will convene a public hearing and seek public comment to assist USTR in the preparation of its annual report to the Congress on China’s compliance with the commitments made in connection with its accession to the WTO.

Persons wishing to testify at the hearing must provide written notification of their intention, as well as a summary of their testimony, by September 17, 2014. Written comments are also due by September 17, 2014. A hearing will be held in Washington, DC, on October 1, 2014.
US - DOE publishes procedures for LNG export decisions
On August 15, 2014, the Office of Fossil Energy, Department of Energy (DOE), published in the Federal Register final revised procedures for liquefied natural gas (LNG) export decisions. DOE is responsible for authorizing exports of natural gas to foreign nations pursuant to section 3 of the Natural Gas Act, 15 U.S.C. 717b. The DOE will act on applications to export LNG from the lower-48 states to countries with which the United States does not have a free trade agreement requiring national treatment for natural gas only after completing the review required by the National Environmental Policy Act (NEPA), suspending its practice of issuing conditional decisions prior to final authorization decisions.
UK - Russia added to prohibited destinations for certain export licences

On 14 August 2014, the UK Export Control Organisation (ECO) posted Notice to Exporters 2014/24: Russia added to prohibited destinations for certain licences which advised that the ECO has added Russia to the list of non-permitted destinations on the following licences:

Access Overseas to Software and Technology for Military Use
Historic Military Goods
Military Surplus Vehicles
International Non-Proliferation Regime Decontrol: Military Items
Military and Dual-Use Goods: UK Forces deployed in non-embargoed destinations
Transhipment Licence (Sporting Guns)
Open General Trade Control Licence (Category C Goods)
Open General Trade Control Licence (Trade and Transportation: Small Arms and Light Weapons)
Open General Trade Control Licence (Maritime Anti-Piracy)

The following licences:

• Open General Trade Control Licence (Category C Goods)
• Open General Trade Control Licence (Trade and Transportation: Small Arms and Light Weapons)

have also been revised to include South Sudan under the list of non-permitted destinations. Russia, Syria and Libya have also been specifically named under point (1) of Schedule 2 on both these trade control licences (which concerns restrictions on importing, purchasing, procuring or transporting licensable goods from named sanctioned destinations into the European Union).

UK - ECO releases detailed information on EU sanctions against Russia
On 14 August 2014, the UK Export Control Organisation (ECO) posted Notice to Exporters 2014/23: Russia sanctions - ECO releases detailed information which announced the availability of detailed questions and answers on Russian Sanctions imposed by the EU in Council Decision 2014/512/CFSP and Council Regulation (EU) No 833/2014. The document is entitled: Russia Sanctions FAQ August 2014.
US - BIS issues revisions to Defense Priorities and Allocations System Regulations
On August 14, 2014, the Bureau of Industry and Security, Commerce (BIS) published in the Federal Register a final rule [Docket No. 0912311453-4308-03] that updates and expands the Defense Priorities and Allocations System (DPAS) regulations (15 C.F.R. part 700) to clarify existing standards and procedures by which the BIS may require that certain contracts or orders that promote the national defense be given priority over other contracts or orders. It also sets new standards and procedures for such prioritization with respect to contracts or orders for emergency preparedness activities. Finally, the rule sets new standards and procedures by which BIS may allocate materials, services and facilities to promote the national defense. This rule implements provisions in the Defense Production Act Reauthorization of 2009 regarding publication of regulations providing standards and procedures for prioritization of contracts and orders and for allocation of materials, services, and facilities to promote the national defense under emergency and non-emergency conditions. The rule’s effective date is September 15, 2014.
US - OFAC issues guidance on entities owned by blocked persons
OFAC is issuing Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked. This revised guidance replaces the Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked previously posted on OFAC’s website on February 14, 2008. Additionally, OFAC is issuing new Frequently Asked Questions pertaining to this revised guidance.
US - New mobile passport control app available

On August 11, 2014, U.S. Customs and Border Protection announced the launch of the first authorized app to expedite a traveler’s entry process into the United States. Mobile Passport Control (MPC) will allow eligible travelers to submit their passport information and customs declaration form via a smartphone or tablet prior to CBP inspection. This first-of-its-kind app was developed by Airside Mobile and Airports Council International-North America (ACI-NA) in partnership with CBP as part of a pilot program at the Hartsfield-Jackson Atlanta International Airport. IPhone and iPad users can download the app for free from Apple’s App Store. The announcement states that-

Eligible travelers arriving at Hartsfield-Jackson Atlanta International Airport will be able to use the app beginning Aug. 13. MPC is expected to expand to more airports later this year and to Android smartphone users in the future.
***
MPC currently offers U.S. citizens and Canadian visitors a more efficient and secure in-person inspection between the CBP officer and the traveler upon arrival in the United States. Much like Automated Passport Control, the app does not require pre-approval, is free-to-use and does not collect any new information on travelers. As a result, travelers will experience shorter wait times, less congestion and faster processing.
***
ACI-NA contracted with Airside Mobile in MPC’s technical development. Information about Mobile Passport, including how to download, user eligibility and other frequently asked questions, is available on the Travel section of the CBP.gov website and the Airside Mobile website.

US - FTC amends Energy Labeling Rule
On August 12, 2014, the Federal Trade Commission (FTC) published in the Federal Register a final rule amending its Energy Labeling Rule (Rule) in 16 C.F.R. Part 305 by publishing new ranges of comparability for required labels on central air conditioners, heat pumps, and weatherized furnaces. The amendments announced in this document will become effective on January 1, 2015.
Client Alert: The United States Further Increases Ukraine-Related Sanctions and Implements the Russian Oil Industry Sanctions Program

As the political unrest in Ukraine escalates, the United States has recently expanded sanctions targeting Russian and Ukrainian parties alleged to be involved in the unrest in Ukraine, as follows:

• The US Treasury Department’s Office of Foreign Assets Control (“OFAC”) has announced new sectoral sanctions targeting Russia’s financial services and energy sectors.

• OFAC has added parties to its Specially Designated Nationals (“SDN”) and Blocked Persons List.

• The US Department of Commerce has added several more entities to the Entity List, added licensing requirements and restricted its licensing review policies pursuant to the Export Administration Regulations (“EAR”).

These measures expand upon US sanctions and export control restrictions imposed on Russian and Ukrainian parties described in our client alerts of 7 March 2014 (available here), 18 March 2014 (available here), 24 March 2014 (available here), 2 May 2014 (available here), and 19 May 2014 (available here).

Click here to read the full client alert.

US - OFAC Issues Amended Sudan General License No. 1A
On August 11, 2014, the Office of Foreign Assets Control (OFAC) issued amended Sudan General License No. 1A. General License No. 1A expands the scope of the authorizations of General License No. 1, which was issued on April 15, 2013. Effective August 11, 2014, General License No. 1A replaces and supersedes in its entirety General License No. 1. OFAC also is publishing today a Frequently Asked Question explaining the changes made by Sudan General License No. 1A.
Japan announces new wave of sanctions
On 28 July 2014, Japan announced a new wave of sanctions, targeting Russian individuals and entities involved in the annexation of Crimea. Assets held by such persons in Japan are expected to be frozen. Chief Cabinet Secretary Yoshihide Suga also announced that Japan will cease funding future public-sector projects in Russia – this follows the European Council's recommendation for the European Investment Bank and European Bank for Reconstruction and Development to similarly restrict such financing (see our previous Sanctions blog post of 18 July for more information on this).

Furthermore, Mr. Suga indicated that imports from Crimea into Japan would be restricted. It is expected that these measures will come into effect at the end of this week, following Cabinet approval. In response, the Russian Foreign Ministry issued a statement describing the proposals as "unfriendly and short-sighted", and indicated that any such measures would worsen relations between Japan and Russia.

Whilst this announcement does not go far as the new EU measures, it was nevertheless followed by a statement made by the G-7 (Canada, France, Germany, Italy, Japan and the UK) on 31 July 2014. The statement condemns again Russia's illegal annexation of Crimea, and actions to de-stabilise eastern Ukraine. According to this statement, the additional sanctions on Russia imposed by the members of the G-7 are aimed at “demonstrating to the Russian leadership that it must stop its support for the separatists in eastern Ukraine and tangibly participate in creating the necessary conditions for the political process

For additional information, please contact Junko Suetomi in our Tokyo office.
US - State updates list of Kimberley Process participants
On August 11, 2014, the Department of State published in the Federal Register a notice [Public Notice 8820] updating the list of Participants in the Kimberley Process Certification Scheme, eligible under the Clean Diamond Trade Act of 2003 (Pub. L. 108–19) and Section 2 of Executive Order 13312 of July 29, 2003, for trade in rough diamonds and their respective Importing and Exporting Authorities, revising the previously published list of February 21, 2013 to reflect the removal of the suspension of Cote D’Ivoire, the incorporation of Croatia into the European Union, the suspension of the Central African Republic, and continued self-suspension of Venezuela.
US - President continues export control regulations
On August 11, 2014, the Federal Register published the Presidential Notice of August 7, 2014 – Continuation of the National Emergency With Respect to Export Control Regulations. The notice continues for an additional 1 year period in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), the national emergency declared in Executive Order 13222 on August 17, 2001. In that order, the President declared a national emergency and continued the Export Administration Regulations under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), because the Export Administration Act had not been renewed by the Congress.
Canada - PM announces additional sanctions regarding situation in Ukraine

On August 6, 2014, Prime Minister Stephen Harper issued a statement announcing additional economic sanctions and travel bans against 19 Russian and Ukrainian individuals, and economic sanctions against 22 Russian and Ukrainian groups and economic entities:

A week earlier, Canada announced its intent to impose additional sanctions on Russia to further increase economic and political pressure on the Putin regime and those closest to it. The August 6 statement announced those measures, which include additional economic sanctions and travel bans against Russian and Ukrainian individuals, and economic sanctions against Russian and Ukrainian entities. The statement said that sanctions, imposed in close coordination with partners in the United States and Europe, are intended to

“increase pressure on those responsible for the crisis in Ukraine. Export restrictions announced by the European Union with respect to military and military dual-use goods destined to Russia, are already in place in Canada. We are also committed to imposing the necessary regulations to enact export restrictions on technologies used in Russia’s oil exploration and extraction sector. Those will be implemented in parallel with our allies.”

The Regulations Amending the Special Economic Measures (Ukraine) Regulations (SOR/2014-196) (unofficial version) entered into force on August 6, 2014 and will be published in the Canada Gazette at a later date.

Canada-EU FTA negotiations have been completed

On August 5, 2014, the Canadian government announced that that officials have reached a complete text, allowing translation and final legal review to commence. The two sides had reached an agreement-in-principle last October.

It is understood that the text must be translated into the various official languages after which ratification (and implementing legislation) will proceed, before the agreement can enter into force.

As per their involvement throughout the process, Canada’s provinces and territories have received the complete text and have been comprehensively briefed on its content as well as on next steps.

Planning has also begun for a September Canada-EU Summit that will be hosted in Canada.

It was also announced that Prime Minister Harper and Minister Fast will lead a trade mission to the United Kingdom in early September to secure the jobs and first-mover competitive advantages the historic Canada-EU trade agreement creates.

WCO - Dates and draft agenda for 54th session of the Harmonized System Committee of the WCO

On August 6, 2014, U.S. Customs and Border Protection (CBP) published in the Customs Bulletin and Decisions the dates and draft agenda for the fifty-fourth session of the Harmonized System Committee (HSC) of the World Customs Organization (WCO).

The HSC is composed of representatives from each of the contracting parties to the Harmonized System Convention. The HSC’s responsibilities include issuing classification decisions on the interpretation of the Harmonized System. Those decisions may take the form of published tariff classification opinions concerning the classification of an article under the Harmonized System or amendments to the Explanatory Notes to the Harmonized System. The HSC also considers amendments to the legal text of the Harmonized System. The HSC meets twice a year in Brussels, Belgium. The next session of the HSC will be the fiftyfourth and it will be held from September 18, 2014 to September 26, 2014.

US - ITC amends rules on national security information

On August 8, 2014, the U.S. International Trade Commission (ITC) published in the Federal Register a final rule, that amends provisions of its Rules of Practice and Procedure concerning national security information. The amendments are designed to ensure that the ITC’s procedures with respect to national security information are consistent with applicable authorities by updating Subpart F of Part 201 of the ITC’s existing Rules of Practice and Procedure to be consistent with Executive Order 13526 of December 29, 2009, and its implementing directive (32 C.F.R. part 2001).

The rule is effective September 8, 2014.

US - CBP adds Abu Dhabi, UAE to list of preclearance offices

On August 8, 2014, U.S. Customs and Border Protection (CBP) published in the Federal Register a final rule (technical amendment) (CBP Dec. 14-09) that amends the CBP regulations to reflect that CBP has added a preclearance location in Abu Dhabi, United Arab Emirates. CBP Preclearance operations in Abu Dhabi, United Arab Emirates officially began on January 24, 2014, pursuant to an agreement between the Governments of the United States and the United Arab Emirates. CBP Officers at preclearance locations conduct inspections and examinations to ensure compliance with U.S. customs, immigration, and agriculture laws, as well as other laws enforced by CBP at the U.S. border. Such inspections and examinations prior to arrival in the United States generally enable travelers to exit the domestic terminal or connect directly to a U.S. domestic flight without undergoing further CBP processing.

U.S. and Kenya Sign Customs Mutual Assistance Agreement

On August 6, 2014, U.S. Customs and Border Protection (CBP) announced that the United States signed a Customs Mutual Assistance Agreement (CMAA) with Kenya. CBP Deputy Commissioner (Acting) Kevin McAleenan, on behalf of CBP and U.S. Immigration and Customs Enforcement, and Minister of the Treasury Henry Rotich, on behalf of Kenya, signed the U.S. – Kenya Customs Mutual Assistance Agreement at CBP headquarters in Washington, DC as part of the U.S. – Africa Leadership Summit in Washington, D.C. The Summit included meetings between President Barack Obama and 51 African heads of state.

The United States has now signed 71 Customs Mutual Assistance Agreements (CMAAs) with other customs administrations across the world. CMAAs are bilateral agreements between countries and enforced by their respective customs administrations. They 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. CMAAs also serve as foundational documents for subsequent information sharing arrangements, including mutual recognition arrangements on authorized economic operator programs.

WTO – Appellate Body issues reports on rare earth disputes
On 7 August 2014, the WTO Appellate Body issued its reports in the case “China – Measures related to the exportation of rare earths, tungsten, and molybdenum (DS431/DS432/DS433)”. The complainants in the cases were the US, the EU and Japan. The full reports are available here. If you want to review only the findings and conclusions, they are available here.
US - Treasury sanctions N. Korean shipping companies involved in illicit arms transfers

On July 30, 2014, The Treasury Department announced that it had imposed sanctions on Chongchongang Shipping Company and Ocean Maritime Management Company, two Democratic People’s Republic of Korea (DPRK or North Korea) companies that attempted to import a concealed shipment of arms and related materiel from Cuba to the DPRK aboard the DPRK-flagged cargo vessel Chong Chon Gang in July 2013. According to the announcement:

Chongchongang Shipping Company, which is owned by the government of the DPRK, is the owner/operator of the vessel Chong Chon Gang. Ocean Maritime Management Company played a key role in managing the Chong Chon Gang by providing its captain and crew with instructions to conceal the weapons and provide false documentation to the Panamanian authorities. Treasury also identified as blocked property 18 vessels in which these companies have an interest, including the Chong Chon Gang. These designations and identifications were made pursuant to Executive Order (E.O.) 13551, which blocks the property of persons who, among other things, have attempted to import arms or related materiel into the DPRK.
***
Chongchongang Shipping Company and Ocean Maritime Management Company used deliberate and evasive methods to conceal the illicit cargo of arms and related materiel aboard the Chong Chon Gang. The shipment included various components of surface-to-air missile systems and launchers, MiG-21 jet fighters parts and engines, shell casings, rocket propelled projectiles, and other ammunition. The cargo was falsely declared to be sugar and spare plastic sacks and was camouflaged and hidden under 200,000 bags of sugar. The crew was given contingency instructions to prepare a false declaration for entering the Panama Canal. This activity points to a clear and conscious attempt to circumvent U.S. and UN sanctions.

The illicit cargo aboard the Chong Chon Gang represents the most substantial consignment of DPRK-related arms and related materiel interdicted since United Nations Security Council Resolution (UNSCR) 1718 was adopted in 2006. The United Nations Panel of Experts, established pursuant to resolution 1874 (2009), declared in its March 2014 report that the shipment itself violated UNSCRs prohibiting the transfer of all arms and related materiel to the DPRK. Furthermore, the incident illustrates the Panel’s finding that the DPRK has developed advanced methods to evade sanctions. These UNSCRs prohibit the transfer of all arms and related materiel (with the exception of small arms and light weapons, upon prior notification to the UN Security Council DPRK Sanctions Committee) to the DPRK. They also prohibit the provision of technical training, advice, services or assistance related to the provision, manufacture, maintenance or use of such arms or materiel by the DPRK, its nationals or from its territory.

Treasury’s action against Ocean Maritime Management Company has been taken in support of the United Nations Security Council’s imposition of targeted sanctions against that entity on July 28, 2014 for contributing to a violation of the arms embargo against the DPRK established under UNSCR 1718 (2006), as modified by UNSCR 1874 (2009), and to the evasion of prohibitions established under those resolutions. The United Nations Security Council has also issued guidelines in the form of an Implementation Assistance Notice to encourage States to be vigilant with respect to the DPRK’s attempts to evade sanctions by concealing illicit shipments, to inspect suspect cargo, and to alert their public and private sectors of the risks of facilitating violations of UNCRs.

As a result of Treasury’s July 30 actions under E.O. 13551, any property or interests in property of the designated entities that are within U.S. jurisdiction must be frozen. Additionally, transactions by U.S. persons or within the United States involving the designated entities or identified vessels are generally prohibited.

US - BIS implements Nuclear Suppliers Group understandings
On August 7, 2014, the Bureau of Industry and Security, Commerce (BIS) published in the Federal Register a final rule [Docket No. 090130094-3271-01] to amend the Export Administration Regulations (EAR) to implement the understandings reached at the 2005 Nuclear Suppliers Group (NSG) Plenary meeting held in Oslo, Norway; the 2012 NSG Plenary meeting held in Seattle, Washington; and the 2013 NSG Plenary meeting held in Prague, Czech Republic.

The rule also implements a decision adopted under the NSG intersessional silent approval procedures in December 2009. Accordingly, the rule amends certain entries in Category 1 (“Special Materials and Related Equipment”), Category 2 (“Materials Processing”), Category 3 (“Electronics”), and Category 6 (“Sensors and Lasers”) of the Commerce Control List (CCL) to reflect changes in the Annex to the NSG “Guidelines for the Transfer of Nuclear-Related Dual-Use Equipment, Materials, Software and Related Technology” (the NSG Annex) based on the understandings reached at the 2005, 2012, and 2013 NSG Plenary meetings and the aforementioned 2009 NSG intersessional decision.

Consistent with the 2005 NSG understandings, the rule also amends the export licensing policies in the EAR that apply to items that require a license for nuclear nonproliferation (NP) reasons, or as a result of certain nuclear end-users or end-uses, by adding an additional factor that must be considered by BIS when it reviews license applications involving such items, end-users, and/or end-uses. The 2012 and 2013 NSG Plenary understandings are a continuation of the fundamental review of the NSG control lists that was launched at the 2010 NSG Plenary meeting in Christchurch, New Zealand. Finally, the rule amends the EAR to reflect the status of Croatia, Estonia, Iceland, Lithuania, Malta, Mexico, and Serbia as participating countries in the NSG, first, by adding these countries to the list of participating countries in the definition of “Nuclear Suppliers Group” and to Country Group A:4 (Nuclear Suppliers Group countries) and, second, by removing the license requirements for exports and reexports to these countries of certain items controlled for nuclear nonproliferation (NP) reasons.

The rule was effective on publication.
Russia - President issues Executive Order on special economic measures

On 6 August 2014, the Kremlin announced that President Putin signed an Executive Order on special economic measures to protect the Russian Federation’s security.

According to the announcement, under the Executive Order:

Russian state bodies of power, federal authorities, local self-government bodies, legal entities established in accordance with Russian law, and physical individuals under Russian jurisdiction shall, in carrying out their activities, respect for a duration of one year following this Executive Order’s entry into force a ban or restriction on foreign economic operations involving the import to Russia of particular kinds of agricultural produce, raw materials and foodstuffs originating in countries that have decided to impose economic sanctions on Russian legal entities and/or physical individuals, or have joined such decisions.

The Russian Federation Government has been given instructions accordingly. In particular, the Government has been instructed to take measures to ensure balanced goods markets and prevent accelerating price rises for agricultural products and foodstuffs; to organise together with regional authorities timely monitoring of goods markets; and act together with associations of goods producers, retailers and organisations to take measures to increase supply of domestic goods.

The Executive Order took effect upon its signing.

List of sanctioned goods published

On 7 August 2014 the Russian Government issued its Resolution in execution of the Russian President’s Executive Order (Decree) No. 560 of 6 August 2014, establishing the list of agricultural and food products prohibited for importation into Russia, the country of origin of which is the EU, US, Canada, Australia and Norway (i.e. the countries that have imposed Ukraine-related economic sanctions against Russian citizens and companies). The Resolution comes into force starting from the date of its official publication (the date is still unknown, but should likely follow soon) and will be effective for one year.

Please see below the list of banned products and their HS codes.

HS Code

Product's name*,***

0201

meat of bovine animals, fresh or chilled;

0202

meat of bovine animals, frozen

0203

meat of swine, fresh, chilled of frozen;

0207

meat and edible offal of the poultry mentioned in heading 0105, fresh, chilled or frozen;

from 0210**

meat (salted, in brine, dried or smoked)

0301, 0302, 0303, 0304, 0305, 0306, 0307, 0308

fish and crustaceans, molluscs and other aquatic invertebrates;

0401, 0402, 0403, 0404, 0405, 0406

milk and dairy produce;

0701, 0702 00 000, 0703, 0704, 0705, 0706, 0707 00, 0708, 0709, 0710, 0711, 0712, 0713, 0714

edible vegetables and certain roots and tubers;

0801, 0802, 0803, 0804, 0805, 0806, 0807, 0808, 0809, 0810, 0811, 0813

fruit and nuts;

1601 00

sausages and similar products, of meat, meat offal or blood; food preparations based on these products;

1901 90 110 0,
1901 90 910 0,

Prepared foodstuffs, including cheese and curb based on vegetable oil;

2106 90 920 0,
2106 90 980 4,
2106 90 980 5,
2106 90 980 9

Foodstuffs (containing milk, based on vegetable oils).

Notes:
* - for the purposes of this list please refer to the Customs Classification (HS) Codes of the Customs Union only, the verbal names of the products are given merely for convenience;
** - for the purposes of this position please refer to the Customs Classification (HS) Codes of the Customs Union as well as to the product's name;
*** - except baby food

US - BIS adds Russian oil industry sanctions and addition of person to the Entity List
On August 6, 2014, the Bureau of Industry and Security, Commerce (BIS) published in the Federal Register a final rule [Docket No. 140729634-4638-01] that amends the Export Administration Regulations (EAR) by adding one person to the Entity List. The person who is added to the Entity List is located in Russia and has been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. This person will be listed on the Entity List under the destination of Russia.

The Entity List (Supplement No. 4 to Part 744) notifies the public about entities that have engaged in activities that could result in an increased risk of the diversion of exported, reexported or transferred (in-country) items to weapons of mass destruction (WMD) programs, activities sanctioned by the State Department and activities contrary to U.S. national security or foreign policy interests, including terrorism and export control violations involving abuse of human rights. Certain exports, reexports, and transfers (in-country) to entities identified on the Entity List require licenses from BIS and are usually subject to a policy of denial. The availability of license exceptions in such transactions is very limited. The license review policy for each entity is identified in the license review policy column on the Entity List and the availability of license exceptions is noted in the Federal Register notices adding persons to the Entity List. BIS places entities on the Entity List based on certain sections of part 744 (Control Policy: End-User and End-Use Based) of the EAR.

The rule also imposes controls on certain items for use in Russia’s energy sector intended for energy exploration or production from deepwater (greater than 500 feet), Arctic offshore, or shale projects. (See Federal Register for details)
US - President signs memorandum on comprehensive approach to expanding trade and investment capacity in Sub-Saharan Africa

On August 4, 2014, President Obama signed a Memorandum for the heads of executive departments and agencies in which he states that while the African Growth and Opportunity Act (AGOA) is a cornerstone of the trade relationship between the United States and Sub-Saharan Africa, a recent review of AGOA has revealed that, while the tariff preferences provided under AGOA are important, they alone are not sufficient to promote transformational growth in trade and investment. For beneficiary countries to be able to utilize AGOA to its fullest, this program must be linked to a comprehensive, coordinated trade and investment capacity building approach with clearly stated goals and benchmarks.

The Memorandum states that “It shall be the policy of the United States to spur trade and investment with and within Sub-Saharan Africa through a coordinated approach involving U.S. Government engagement, assistance programs, and partnerships with the private sector.” It establishes a steering group of the concerned departments and agencies, chaired by the Deputy National Security Advisor for International Economics or her designee from the National Security Council staff, and sets forth the functions to be performed with a requirement for recommendations (due within 180 days) on a comprehensive approach to expanding Sub-Saharan Africa's capacity for trade and investment, consistent with U.S. trade and investment policy, development policy, and international agreements.

The Administration also issued a Fact Sheet: Investing in African Trade for our Common Future.

On August 5, 2014, the President issued an Executive Order Establishing the President's Advisory Council on Doing Business in Africa. The Advisory Council will consist of not more than 15 private sector corporate members (made without regard to political affiliation), including small businesses and representatives from infrastructure, agriculture, consumer goods, banking, services, and other industries. The Advisory Council will be broadly representative of the key industries with business interests in the functions of the Advisory Council as set forth in section 4 of the order. Support will be in the Commerce Department.

The Advisory Council will provide information, analysis, and recommendations to the President that address the following, in addition to other topics deemed relevant by the President, the Secretary of Commerce, or the Advisory Council:

• creating jobs in the United States and Africa through trade and investment;
• developing strategies by which the U.S. private sector can identify and take advantage of trade and investment opportunities in Africa;
• building lasting commercial partnerships between the U.S. and African private sectors;
• facilitating U.S. business participation in Africa's infrastructure development;
• contributing to the growth and improvement of Africa's agricultural sector by encouraging partnerships between U.S. and African companies to bring innovative agricultural technologies to Africa;
• making available to the U.S. private sector an accurate understanding of the opportunities presented for increasing trade with and investment in Africa;
• developing and strengthening partnerships and other mechanisms to increase U.S. public and private sector financing of trade with and investment in Africa;
• analyzing the effect of policies in the United States and Africa on U.S. trade and investment interests in Africa;
• identifying other means to expand commercial ties between the United States and Africa; and
• building the capacity of Africa's young entrepreneurs to develop trade and investment ties with U.S. partners.

WTO Trade Facilitation Agreement falls apart

On 31 July 2014, WTO Director General Roberto Azevêdo reported to WTO ambassadors that despite intensive consultations, “we have not been able to find a solution that would allow us to bridge the gap” on the adoption of the protocol on the Trade Facilitation Agreement (TFA). He urged members “to reflect long and hard on the ramifications of this setback”.

The Director General, obviously frustrated converted a Heads of Delegation General Council meeting to an informal Trade Negotiations Committee (TNC) meeting, and brought the delegations up to date on the events that had transpired over the days before the 31 July deadline that had been set in Bali for a TFA protocol. He asked “If anyone has an idea which has not already been proposed or tested then please inform the General Council chair that this may still be doable. But, as I say, I have no indication that this is the case. “

He continued:

On the one side we have the firm conviction, shared by many, that the decisions that ministers reached in Bali cannot be changed or amended in any way — and that those decisions have to be fully respected. And on the other side of the debate we have some who believe that those decisions leave unresolved concerns that need to be addressed in ways that, in the view of others, change the balance of what was agreed in Bali. These are the two sides.

He asked the delegations to use the August hiatus to reflect on the ramifications of the setback, which he said went far beyond the TFA, especially for the smaller and more vulnerable economies. He said he would be meeting with various delegations and hoped that delegates would “take the time to reflect and come back in September,” presumably with meaningful suggestions.

Mexico - New rules regarding Maquiladora income from productive activities

The Tax Administration Service (SAT) has now published the Second Amendment of the Miscellaneous Tax Rules for 2014, containing rules defining the types of income that companies with maquila operations may continue to generate without jeopardizing the statutory protection of their foreign principal from a permanent establishment exposure in Mexico. The new rules also set forth a new deadline of October 1, 2014 for complying with the remaining limitations on a maquiladora’s receipt of income other than income arising from it the manufacturing activity itself.

As established in the Income Tax Law, in full force and effect as of January 1, 2014, among other requirements to qualify for the maquila operation concept required to exempt the foreign principal of a maquiladora company from a permanent establishment exposure in Mexico, all the revenue from productive activities of the maquiladora shall derive exclusively from its maquila operation (i.e. from transformation activities). In addition to establishing the new deadline for complying with those limitations, the rules published on July 4, 2014 provide that a maquiladora may continue to receive revenue from certain activities after September 30 without calling into question their status as a maquila operation for Mexican income tax purposes.

For a list of the approved activities and additional information on the new requirements, please see our Mexico Tax Legal Alert: New Rules Regarding Maquiladora Income from Productive Activities which is also available in Spanish.

Mexico - Certain import declarations to require trademark information

On July 4, 2014, the Ministry of Finance and Public Credit (Hacienda) published on the Diario Oficial (Federal Official Gazette) amendments to the Foreign Trade General Rules (FTGR) and their Annexes. Among other changes, this amendment sets forth that, as of July 25, 2014, importers of certain types of goods must now declare if such goods are protected by a trademark registration and if the importer is or not the titleholder of the trademark registration. The importer shall declare now the number corresponding to the authorization granted by the Mexican Patent and Trademark Office (IMPI)

Notwithstanding the foregoing, on July 24, 2014, the Tax Administration Service (SAT) published on its website Informative Bulletin P041, by means of which the SAT clarified certain doubts and inquiries regarding operations subject to the obligation of declaring the “MC” code. Also, the Informative Bulletin P041, extended the term for making this obligation enforceable.

Based on the amendments to the FTGR and their Annexes, as of the date in which this obligation is effective, importers of cigarettes, alcoholic beverages, medicaments, perfumery products, purses and wallets, apparel goods, footwear, caps, glasses and watches must declare on the import declarations, certain information regarding the trademark of the goods to be imported.

As a result of the publication of Bulletin P041 of the SAT, the date in which the obligation of declaring the "MC" code and the commercial brand of the product will become effective will not be July 25, but will be changed to the date in which the new amendments to the FTGR in which certain issues that were not clear on the publication of July 4th are clarified.

Additional information, implications, and considerations may be found in the International Trade & Customs/Intellectual Property Legal Alert: The term for making the obligation of declaring the trademark on the import declarations corresponding to certain goods enforceable has been extended which was prepared by the Mexican offices. It is also available in Spanish.

CBP publishes quarterly IRS interest rates

On August 4, 2014, US Customs and Border Protection published in the Federal Register a general notice which advises the public of the quarterly Internal Revenue Service interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties. For the calendar quarter beginning July 1, 2014, the interest rates for overpayments will be 2 percent for corporations and 3 percent for non-corporations, and the interest rate for underpayments will be 3 percent for both corporations and noncorporations. This notice is published for the convenience of the importing public and U.S. Customs and Border Protection personnel. The rates were effective on July 1, 2014.

US - State amends ITAR re Central African Republic and UNSCR 2149

On August 4, 2014, the Department of State (State) published in the Federal Register a final rule [Public Notice 8810] amending the International Traffic in Arms Regulations (ITAR) to update the defense trade policy regarding the Central African Republic to reflect the most recent resolution adopted by the United Nations Security Council.

On April 10, 2014, the United Nations Security Council (UNSC) adopted resolution 2149, which called for the UN Integrated Peacebuilding Office in the Central African Republic (BINUCA) to be subsumed into the UN Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA). The Department of State is amending ITAR § 126.1(u) to implement this change.

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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
Email: Janet Kim
T + 1 202 835 1653

John F. McKenzie
Partner, San Francisco
Email: John McKenzie
T + 1 415 576 3033

Ted Murphy
Partner, Washington DC
Email: Ted Murphy
T + 1 202 452 7069


Editor, International Trade
Compliance Update


Stuart P. Seidel
Partner, Washington DC
Email: Stuart Seidel
T + 1 202 452 7088