Australia - New Customs Regulation 2015 and Customs (International Obligations) Regulation 2015 take effect 1 April

Australian Customs and Border Protection (ACBP) Notice No. 2015/14 dated 31 March 2015 announced that the Customs Regulation 2015 (2015 Regulation) and Customs (International Obligations) Regulation 2015 (International Obligations Regulation) take effect from 1 April 2015. These regulations remake the Customs Regulations 1926 (the 1926 Regulations), which sunset on the same date.

According to the notice, the new regulations have undergone changes to significantly improve their operation including repealing redundant provisions, simplifying language and restructuring provisions that were difficult to navigate in the 1926 Regulations. Exposure drafts of the new regulations were published earlier in 2015. Provisions relating to Australia’s international obligations including Free Trade Agreements, Duty Drawback Scheme and Dumping and Counterveiling measures are contained in the International Obligations Regulation. These provisions are exempt from sunsetting requirements and have been placed in a separate instrument to ensure that they are not subject to sunsetting in the future.

The notice explains that the new regulations are necessary because the Legislative Instruments Act 2003 (LIA) provides that all legislative instruments, other than exempt instruments, progressively ‘sunset’ according to the relevant table set out in the LIA. The purpose of this is to ensure that a suitable review mechanism exists so that legislative instruments remain relevant, necessary and fit-for-purpose. The relevant table provides that any legislative instrument made a year before 1930 is to sunset on 1 April 2015. As such it was necessary to re-make the 1926 Regulations to ensure that relevant provisions continued post 1 April 2015.

The new regulations do not introduce any substantive changes to existing government policy, but they have .a different look and feel to the 1926 Regulations. Sections and numbering within the 1926 Regulations have necessarily been restructured and the contents split into two instruments as part of the process to enhance its overall operation.

Explanatory statements about the 2015 Regulation and the International Obligations Regulation are available. Finding tables are also available indicating the location of sections from the previous 1926 Regulations within the remade regulations and vice versa.

The new section numbering means the location of duty refund reason types within the new regulations differ from their location within the 1926 Regulations. More detail about these changes is available within the updated ‘Refunds of Customs Import Duty’ fact sheet. The notice states that:

The new regulations contain transitional provisions to ensure that things done under the 1926 Regulations, before those regulations were repealed, will continue to have effect (if there is a corresponding provision in the new regulation) as if it had been done under the new regulation.

Canada restores GPT and LDCT to Burma

On March 25, 2015, the Canada Gazette published the Order Amending Schedule to the Customs Tariff (Extension of General Preferential Tariff to Burma) (SOR/2015/62, March 13, 2015) and the Order Amending Schedule to the Customs Tariff (Extension of Least Developed Country Tariff to Burma) (SOR/2015/63, March 13, 2015), which extend entitlement to the General Preferential Tariff (GPT) and Least Developed Country Tariff (LDCT) tariff treatments to imports originating from Burma.

Canada extends unilateral preferential tariff rates to imports from developing and least developed countries through two tariff treatments:

• the GPT offers tariff rates that are lower than Most-Favoured-Nation (MFN) Tariff rates to goods imported from developing countries identified in the Schedule to the Customs Tariff; and
• the LDCT offers duty-free access on the importation into Canada of all products (with the exception of supply-managed agricultural goods) from least developed countries, as identified by the United Nations and listed in the Schedule to the Customs Tariff.

Burma’s eligibility for the GPT and the LDCT was removed in 1997 as part of a global concerted response to the human rights situation in that country (see SOR/97-398). In recent years, there have been positive developments in Burma, notably elections in 2010 that led to a transition to civilian rule, the release of political prisoners, economic reforms, and the introduction of new laws to protect freedom of association and assembly.

In light of these positive developments, countries are gradually easing sanctions and normalizing trade relations with Burma. In that regard, Canada has already taken a number of actions towards normalizing relations with Burma. On April 24, 2012, Canada eased economic sanctions taken against Burma. Canada has also opened an embassy in Yangon and appointed its first-ever resident ambassador to Burma. Reinstating GPT and LDCT eligibility for Burma is consistent with these actions.

US - Department of Energy Regulations on Nuclear Assistance to Go Into Effect

On March 25, 2015, a reissued version of the U.S. Department of Energy (“DOE”) regulations on “Assistance to Foreign Atomic Energy Activities,” 10 C.F.R. Part 810 (“Part 810” or “the DOE Regulations”), go into effect. The DOE Regulations control the provision outside the United States of technology and other assistance related to nuclear projects, including civil nuclear power projects. The rule issued on February 23, 2015 (“Final Rule”) finalizes amendments that have been under consideration since 2011. The changes to the DOE Regulations affect, in particular, the authorization and reporting requirements that apply to parties engaging in activities within the scope of Part 810. Most importantly, certain activities previously eligible for a general authorization now require specific approval from DOE. Parties engaging in activities affected by this change are required to request specific authorization by August 24, 2015.

Background

Several different sets of U.S. regulations control the exportation of nuclear-related items or activities, as follows:

• The International Traffic in Arms Regulations, 22 C.F.R. Part 120 et seq., enforced by the U.S. Department of State, which control the export/reexport of nuclear weapons and related technical data;
• The regulations at 10 C.F.R. Part 110 (“Part 110” or “the NRC Regulations”), enforced by the U.S. Nuclear Regulatory Commission, which control the export/retransfer of nuclear material and equipment;
• Part 810, enforced by DOE, which controls the provision abroad of nuclear-related technology or assistance; and
• The Export Administration Regulations, 15 C.F.R. Part 730 et seq. (“EAR”), enforced by the U.S. Department of Commerce, which control the export/reexport of “dual use” goods, software, and technology.

Part 810 applies to “persons subject to U.S. jurisdiction,” which include not only U.S. citizens/permanent residents and U.S. companies but also licensees, contractors, or subsidiaries under their direction, supervision, responsibility, or control. Activities within the scope of the DOE Regulations may only proceed pursuant to general or specific authorizations. Activities that are eligible for general authorizations are subject to post-transaction reporting obligations requiring that a report be submitted to DOE within 30 calendar days of beginning the activity. Generally authorized activities do not, however, require pre-transaction approval from DOE. Activities not eligible for a general authorization require specific authorization from DOE before the activities may permissibly proceed.

Prior to the publication of the Final Rule, the DOE Regulations had not been comprehensively updated since 1986. DOE first published a proposed rule to update Part 810 in September 2011. Based on the numerous comments that DOE received from the public in response to that proposed rule, DOE published a supplemental proposed rule in August 2013. The Final Rule, published on February 23, 2015, notes that the extensive revisions to Part 810 are designed to ensure that the regulations remain “effective and efficient” in light of increasing commercial nuclear activities.

Key Changes

The Final Rule includes changes to virtually every section of the DOE Regulations. Some of these changes merely update the DOE Regulations to reflect longstanding interpretations applied by DOE but not explicitly reflected in the regulations. Others have a more substantive effect on the regulatory requirements that apply to parties engaging in Part 810-regulated activities. In some cases, these changes create new specific authorization requirements for activities that were previously generally authorized. Parties engaging in activities that were previously eligible for a general authorization but are now subject to a specific authorization requirement due to the revised DOE Regulations must submit a specific authorization request to DOE by August 24, 2015. Provided such an authorization request is submitted by that date, parties may continue to engage in these activities until DOE acts on the specific authorization request.

Below we list some of the key changes to the DOE Regulations presented in the Final Rule.

1. Clarifying the Scope of the DOE Regulations

Historically, parties have often struggled with the threshold question of whether their activities are subject to the DOE Regulations. The provision describing the scope of the prior DOE Regulations stated only that general or specific authorization was required to engage in the production outside the United States of Special Nuclear Material (i.e., plutonium, uranium-233, or uranium enriched above 0.711 percent by weight in the isotope uranium-235). While Part 810 previously listed certain activities deemed to be within their scope, the list was high-level and did not indicate which aspects of a particular activity would be controlled.

The revised DOE Regulations provide further clarity on this issue. For example, DOE has historically interpreted certain activities involving civilian nuclear reactors to be within the scope of Part 810 because Special Nuclear Material is a by-product of the nuclear reaction used to generate power. This was not expressly stated anywhere in the prior version of the DOE Regulations. The revisions to these regulations, however, clarify where DOE draws the line today and formalizes what had already become a de facto basis for analysis for many companies. The new language is similar to language that the NRC uses to describe which nuclear equipment is subject to Part 110. Specifically with regard to civil nuclear reactors, the revisions add language to Part 810 stating that activities for the development, production, or use of the following are within the scope of Part 810:

• components within or attached directly to the reactor vessel,
• the equipment that controls the level of power in the core, and
• the equipment or components that normally contain or come in direct contact with or control the primary coolant of the reactor core.

Furthermore, although it is not included in the text of Part 810, DOE clarified in its commentary in the Final Rule that activities related to the steam turbine generator portion of a boiling water reactor are not subject to Part 810 and are controlled under the EAR.

2. Revising the Countries Eligible for Country-Based General Authorization

Arguably the most significant changes to the DOE Regulations are the revisions to the scope of a general authorization for assistance to certain countries. Previously, Part 810 included a list of countries that were not eligible for the country-based general authorization provided at § 810.7(h) (“Excluded Country List”). So long as a nuclear-related activity did not involve one of those excluded countries (or certain highly-restricted technologies or activities), the activity was eligible for a general authorization and did not require specific authorization from DOE.

Under the revised DOE Regulations, this approach is reversed. Now, the country-based general authorization found in § 810.6(a) is available only for countries that appear on a list provided in an Appendix to the Regulations (“Eligible Country List”). In other words, the reissued DOE Regulations contain a positive list of countries eligible for the general license, rather than a negative list of countries not eligible.

In some cases (e.g., Croatia (as part of the former Yugoslavia), Kazakhstan, the United Arab Emirates, Vietnam), countries previously on the Excluded Country List and subject to a specific authorization requirement for Part 810-controlled activities are now eligible for the country-based general authorization under the revised DOE Regulations. On the other hand, numerous countries (e.g., Jordan, Malaysia, New Zealand, Singapore) that were previously eligible for the country-based general authorization are now subject to a specific authorization requirement. In its commentary in the Final Rule, DOE advised that these changes reflect an updated assessment of the nuclear proliferation risks that exist around the world. Finally, although Mexico and Chile were not previously identified on the Excluded Country List, under the new DOE Regulations the eligibility of these countries for the country-based general authorization is limited to activities related to specific International Atomic Energy Agency agreements.

3. Creating Ukraine Reporting Requirements

In the previous version of the DOE Regulations, Ukraine was identified on the Excluded Country List and was not eligible for the country-based general authorization. In light of actions taken by Ukraine to prevent nuclear proliferation (as well as the U.S. Government’s concern about Ukraine’s ability to sustain its nuclear program without support from the Russian Federation during the ongoing dispute between those two countries), DOE included Ukraine in the new Eligible Country List. Thus, many nuclear-related activities involving Ukraine no longer require specific authorization from DOE.

Nevertheless, DOE expressed concerns in its commentary in the Final Rule about tensions between Russia and Ukraine and, particularly, the Government of Ukraine’s lack of control over certain territories. To address these risks, the revised DOE Regulations include new requirements for (i) pre-activity notifications to be submitted to DOE 10 days before engaging in a generally authorized activity involving Ukraine, and (ii) post-activity reports to be submitted to DOE within 10 days of transferring any nuclear technology to Ukraine. DOE made clear in the Final Rule that the pre-activity notification requirement is designed to provide DOE with information necessary to assess whether the activity raises proliferation concerns. If DOE has concerns, it can bar the activity from occurring under the general authorization and impose a specific authorization requirement. The requirement to submit post-activity reports within 10 days is shorter than the 30 day requirement that applies to generally authorized activities involving other countries.

4. Formalizing the Deemed Export Rule

The previous version of the DOE Regulations did not explicitly address the release of technology to non-U.S. nationals (so-called “deemed exports”). Nevertheless, DOE has long maintained that such releases (whether within or outside of the United States) were subject to the DOE Regulations. Pursuant to DOE practice, if the recipient of Part 810-controlled technology or assistance was a national of a country not eligible for the general authorization, then the release of technology or assistance to that recipient would require specific authorization from DOE. For dual-nationals, DOE traditionally considered whether either nationality would trigger a specific authorization requirement.

DOE’s revisions to Part 810 explicitly confirm DOE’s pre-existing position on deemed exports. For non-U.S. nationals who are nationals of a country not listed on the Eligible Country List, a specific authorization request before the transfer may proceed. In its commentary in the Final Rule, DOE explicitly affirmed its approach of considering “all countries of an individual’s allegiance” (e.g., both nationalities of dual-nationals) when making determinations of whether specific authorizations are required. Thus, if an individual is a national of two countries, one of which is not on the Eligible Country List, then specific authorization from DOE is required before Part 810-controlled technology is released to that individual.

The revised DOE Regulations also provide instructions for requesting specific authorization for deemed exports. Under the new regulations, an application for specific authorization to transfer Part 810-controlled technology to a non-U.S. national must include a description of the technology to be transferred, the purpose of the transfer, background information about the foreign national, a copy of any confidentiality agreement safeguarding nuclear technology, and a signed statement from the non-U.S. national certifying that he or she will comply with Part 810’s requirements.

5. Creating a General Authorization for Deemed Exports to Certain Employees of NRC Facilities

The revised DOE Regulations include a new general authorization authorizing the transfer of nuclear technology to non-U.S. nationals of countries not on the Eligible Country List who work at an NRC-licensed facility. To qualify for this general authorization, the non-U.S. national must have been granted unescorted access at an NRC-licensed facility in accordance with NRC regulations.

Recommended Actions

Parties that engage in any activities subject to Part 810 (including activities that occur within the United States but involve non-U.S. national employees or contractors) should carefully review the revised DOE Regulations to determine whether their activities are subject to new specific authorization requirements or are eligible for new general authorizations. If any ongoing activities are now subject to a specific authorization requirement because of the changes to Part 810, a request for specific authorization must be submitted to DOE by August 24, 2015.

For additional information, please contact Joseph A. Schoorl, Kerry Contini, Nicholas Coward, Edward Dyson or any member of our Outbound practice with whom you normally work. Please check our sister blog www.bakermckenzie.com/sanctionsnews for updates.

UK adopts standardised packaging and labelling requirements for cigarettes and hand rolling tobacco

On 24 March 2015, the UK legislative website published SI 2015/829 - The Standardised Packaging of Tobacco Products Regulations 2015 (the Regulations). The Regulations were made by the Secretary of State for Health in exercise of the powers conferred by sections 94 and 135(2) and (3) of the Children and Families Act 2014 and section 2(2) of the European Communities Act 1972. The Regulations come into force on 20 May 2016 except that they do not apply to the supply before 21 May 2017 of a tobacco product produced before 20th May 2016 if the product complies with the Tobacco Products (Manufacture, Presentation and Sale) (Safety) Regulations 2002 at the date of supply.

The Explanatory Note accompanying the Regulations summarizes them as follows:

These Regulations make provision for the retail packaging of cigarettes and hand rolling tobacco to be standardised.

These Regulations implement Articles 13 and 14, and one element of Article 9.3, of Directive 2014/40/EU of the European Parliament and of the Council of 3rd April 2014 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products (OJ No. L 127 29.4.2014, p1).

Regulations 3 and 7 prescribe the sole colours that are permitted to be used on the external and internal surfaces of the retail packaging of cigarettes and hand rolling tobacco respectively. These two regulations do not prohibit anything that is required by any other enactment, which includes, but is not limited to, mandatory health warnings, security features and fiscal marks. These regulations are subject to the text permitted under Schedules 1 and 3 respectively.

Regulation 4 sets out requirements for individual packets of cigarettes. It stipulates the material that such packets must be made from, the shape that the packet must be, what openings are permitted and the minimum amount of cigarettes permitted in each individual packet. Regulation 8 sets out requirements for individual packets of hand rolling tobacco. It stipulates the shapes or type of packet that are permitted and the minimum weight of tobacco allowed in each packet. These two regulations implement Article 14, and one element of Article 9.3, of Directive 2014/40/EU.

Regulation 5 sets out requirements for the appearance of individual cigarettes, including the permitted colours and text, and the requirements for that text.

Regulation 10 prohibits elements or features of the labelling on the packaging or the actual products, if the element or feature has one of the effects set out in paragraph (3). Paragraph (4) prohibits retail packaging that suggests economic advantage. This regulation applies to all tobacco products. This regulation, together with regulation 19(3), implements Article 13 of Directive 2014/40/EU.

Regulation 11 prohibits packaging for cigarettes and hand rolling tobacco that produces a noise or smell that is not normally associated with that packaging. This does not prohibit any smell resulting from additives designed to give the cigarettes or hand rolling tobacco themselves a smell or flavour, where those additives are otherwise permitted.

Regulation 12 prohibits features of the packaging of cigarettes or hand rolling tobacco that are designed to change after the product has been sold to the consumer.

Regulation 13 makes provisions concerning the registration, under the Trade Marks Act 1994, of trade marks the use of which is affected by these Regulations.

Regulation 14 makes provisions concerning the registration, under the Registered Design Act 1949, of designs the use of which is affected by these Regulations.

Regulations 15 to 18 make provision for offences and enforcement.

Regulation 19(1) and(2) amend section 3(1) of the Children and Young Persons (Protection from Tobacco) Act 1991 and article 4(1) of the Children and Young Persons (Protection from Tobacco) (Northern Ireland) Order 1991, to remove the requirement that cigarette packets must have a minimum of 10 cigarettes. Article 14 of Directive 2014/40/EU provides that packets must have a minimum of 20 cigarettes.

Regulation 19(3) revokes regulation 4 of the Tobacco Products (Manufacture, Presentation and Sale) (Safety) Regulations 2002 which requires packets of cigarettes to carry a statement of the tar, nicotine and carbon monoxide yields of the cigarettes contained in it. Such statements are now prohibited by Article 13(1)(a) of Directive 2014/40/EU.

Schedule 1 sets out what text is permitted on the retail packaging of cigarettes. Schedule 3 sets out what text is permitted on the retail packaging of hand rolling tobacco. These schedules also set out the colour, typeface, size, location and orientation of the permitted text, and make provision for the use of barcodes and calibration marks on that packaging.

Schedules 2 and 4 make further provisions about the packaging of cigarettes and hand rolling tobacco in respect of the surfaces of the packaging, any lining inside packets of cigarettes, tabs or seals on packets of hand rolling tobacco and in respect of any wrappers. The schedules prohibit inserts or additional materials that are not an integral part of the packaging, required as part of the packaging process or required to protect the product.

A draft of these Regulations has been notified to the European Commission as a technical standard, pursuant to Directive 98/34/EC of the European Parliament and of the Council (OJ No l204, 21.7.98, p 37) laying down a procedure for the provision of information in the field of technical standards and regulations, as amended.

US - Government procurement - list of domestically nonavailable articles

On march 24, 2015, the Department of Defense (DoD), the General Services Administration (GSA) and the National Aeronautics and Space Administration (NASA) published in the Federal Register an advance notice of proposed rulemaking [FAR Case 2015-001; Docket No. 2015-0001; Sequence No. 1] indicating that DoD, GSA, and NASA are considering amending the Federal Acquisition Regulation (FAR) to update the list of domestically nonavailable articles under the Buy American Act. DoD, GSA, and NASA are seeking information that will assist in identifying domestic capabilities and for evaluating whether some articles on the list of domestically nonavailable articles are now mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

Interested parties should submit written comments to the Regulatory Secretariat at one of the addressees shown in the Federal Register notice on or before May 26, 2015 to be considered in the formulation of a proposed rule.



U.S.- Brazil Commercial Dialogue meeting

On March 19, 2015, Kenneth Hyatt, Deputy Under Secretary for International Trade, U.S. Department of Commerce (Commerce), and Daniel Godinho, Secretary of Foreign Trade, Ministry of Development, Industry and Foreign Trade (MDIC), released a joint statement, which outlines the results of the March 18-19, 2015, meeting of the U.S.-Brazil Commercial Dialogue in Washington, D.C. The Joint Statement covered the following topics:

• Standards and Regulatory Engagement
• Trade Facilitation
• Trade Statistics
• Intellectual Property Cooperation
• Industry and Investment
• Standards and Metrology
• Services and Supply Chains

Read about the details for each topic in the Joint Statement.

EEA Joint Parliamentary Committee discusses TTIP and industrial policy

The European Free Trade Association (EFTA) announced that on 17 March 2015, Members of the European Parliament (MEPs) and parliamentarians from the EEA EFTA States – Liechtenstein, Norway and Iceland – met in Fredrikstad to discuss developments in the EEA and other topical issues in the EU of relevance to the EEA EFTA States. The announcement said:

The EEA Joint Parliamentary Committee (EEA JPC) met with representatives of the EEA Joint Committee and the EEA Council to receive an update on recent developments in the EEA. As the EEA JPC’s primary objective is to follow developments in the EEA and to give its views on topics for discussion at the earliest stage possible, this biannual meeting is of great importance.

Another important topic on the EEA JPC’s agenda in Fredrikstad was the ongoing free trade negotiations between the United States and the European Union – the Transatlantic Trade and Investment Partnership (TTIP) – with a special focus on its possible implications for the EEA. The EEA EFTA States are closely integrated in the EU Single Market through the EEA Agreement and apply the same Single Market rules, so any impact that TTIP has on the Single Market is likely to affect the EEA EFTA States. The EEA JPC is therefore following these negotiations closely.

Also discussed at the meeting was industrial policy in Europe, in particular the impact that recent developments of a more horizontal policy approach taken at EU level could have on the EEA.

In addition to these in-depth discussions on industrial policy and the TTIP, a briefing was given by Catherine Stihler MEP on the status of the Digital Agenda. The Digital Single Market and challenges within digital technology are priority areas in the European Commission’s 2015 Work Programme and also of interest to the EEA JPC.

The next EEA JPC meeting will be held Brussels in autumn 2015.

EU issues trade and investment barriers report

On 19 March 2015, the European Commission announced the release of its Trade and Investment Barriers Report 2015. The report lists all major obstacles identified in the EU's priority markets. With 7 cases mentioned (Argentina, Brazil, China, India, Japan, Russia, and the United States) in the report Russia tops the list. China follows closely with 6 cases. The report outlines also 4 barriers both for India and Brazil and 3 cases respectively for Argentina and the US. The announcement states:

Barriers identified in the report include requirements to use locally-produced goods, or to be based in a country as a condition to obtain certain advantages. Discriminatory taxes and subsidies for domestic producers in Brazil or a new law in Russia requiring personal data to be stored on a local server are some examples of highly trade-distortive practices. This trend is a concern in a wider perspective, as several other countries – including China - have adopted or are contemplating similar measures.

The report also identifies a high number of sanitary and food-related barriers that persist in Brazil, China, the US and Russia, and highlights intellectual property rights issues in China and the US.

Canada, U.S. sign preclearance agreement

On March 16, 2015, the Government of Canada announced that Canadian Minister of Public Safety and Emergency Preparedness Hon. Steven Blaney and U.S. Secretary of Homeland Security Jeh Johnson signed the Agreement on Land, Rail, Marine and Air Transport Preclearance between the Government of Canada and the Government of the United States of America. The Agreement is a major commitment of the Beyond the Border Action Plan issued by Prime Minister Harper and President Obama in December 2011. The Agreement was signed in Washington following a meeting to discuss border security.

When it takes effect, the new Agreement will provide a legal framework that will enable the establishment of new preclearance operations in any of the four modes of transportation. It will allow the market to propose operations when and where it makes sense – facilitating trade and travel, and creating economic benefits for Canadians.

Quick Facts

• Preclearance operations were implemented in Canada for the first time in 1952, when U.S. preclearance officers began screening travellers for U.S.-bound planes at the Toronto International Airport. A formal preclearance agreement with the U.S. did not exist at that time; Canada and the U.S. reached their first air transport preclearance agreement in 1974.
• Each year, roughly 11 million passengers are pre-cleared for flights to the U.S. at eight Canadian airports under the current bilateral air preclearance framework – reducing wait times for these passengers and often reducing the number of connections they required.
• This historic new comprehensive Agreement covers all modes of travel, including air. When it enters into force, it would replace the existing air transport Agreement, which was signed in 2001. This single Agreement would ensure a consistent approach to all preclearance activities, regardless of the mode of transportation, making it easier to implement and govern preclearance activities in both countries.
• In the Beyond the Border Action Plan, in addition to negotiating a comprehensive approach to preclearance in the land, rail, marine and air modes, Canada and the U.S. committed to implementing a truck cargo pre-inspection pilot in Canada. Phase I of the pilot was implemented at the Pacific Highway crossing between British Columbia and Washington, from June to December 2013. Phase II was implemented at the Peace Bridge, between Ontario and New York, from February 2014 to January 2015. An evaluation of the pilot will be completed by July 31, 2015.

Australia - Government begins reviews of border fees, charges and taxes

The Australian Government has commissioned a joint review of charges, fees and taxes (Fees Review) at the border that will focus on identifying where the border charging arrangements can be improved to better support future border operations and outcomes for industry. The announcement stated:

The Fees Review will be led by Customs and Border Protection and the Department of Immigration and Border Protection (DIBP) and will be conducted jointly with the Department of Agriculture given similarities in certain charging arrangements.

The Fees Review is near completion with a number of recommendations put forward for Government consideration. Further information will be made available following Government decision on which recommendations to pursue.

Scope

The Fees Review will consider changes to current charges, fees and taxes as well as new approaches to charging in the future. It will include charges levied by Customs and Border Protection, DIBP and some import related fees and charges applied by the Department of Agriculture.

The Review will cover current major charging arrangements at the border, including:

Import Processing and Passenger Movement Charges levied by Customs and Border Protection.
• Import related fees and charges recovered by the Department of Agriculture such as full import declaration charges, container charges and registration fees.
Visa Application Charges administered by DIBP.
• Current and future cost recovery based charging for services, particularly those resulting from industry demand factors.

While the Review will focus on the major charging arrangements mentioned above, views on current and potential future charges outside these groups are welcome.

Refer to in-scope fees and charges for a detailed listing including current rates.

A number of other fees, charges and taxes will not form part of the Review, including:

• Customs Duty (including refunds, Tariff Concessions, Drawbacks), the Goods and Services Tax (GST) and other indirect taxes Customs and Border Protection collects on behalf of Commonwealth.
• Fees and charges recovered by the Department of Agriculture for services such as document assessments, inspections, treatments, export certification and post entry quarantine activities.

The Department of Agriculture is completing a comprehensive review of its cost recovery arrangement which will include fees and charges excluded from within the scope of this Review. Further information on these can be found on the Department of Agriculture’s website.

Visa Application Charges recently underwent changes. This Review will focus on examining the outcome of these changes, and look for opportunities for improvements within the current pricing framework.

Consultation

As part of the review process, we developed an Industry Consultation Paper to invite public comment on the Fees Review. The written submission period has now closed. We thank all those who contributed for their valuable feedback.

Customs and Border Protection and Agriculture have carefully considered all written submissions and held industry consultations in Sydney and Melbourne to discuss key propositions and capture industry feedback. A Summary Document has been developed which summarises the key issues raised in the submissions and at the industry consultation sessions. We will continue to meet with targeted working groups to explore and discuss the ideas outlined in the submissions and potential recommendations of the Fees Review to the Government.

Targeted industry consultation will occur shortly on the issues of Visa Application Charges and other charges administered by the Department of Immigration and Border Protection. These issues will be managed in a separate and more targeted consultative process.

More updates will be provided over the course of the review.

Position Papers

To facilitate the industry consultation sessions, draft position papers were developed and included a number of propositions for possible changes to border fees, charges and taxes, some of which were based on suggestions provided by industry following an invitation to make formal submissions to the Fees Review. Position papers were developed for the following topics:

High value goods
Low value goods
Broker, depot and warehouse licensing
Passenger Movement Charge
Differentiated traveller facilitation services

These papers did not constitute a government position. The propositions included within the draft papers were to be used to consult with industry and to seek their views on the merits of the propositions, possible implementation issues and improvements which could be made to improve charging arrangements.

To make it clear that the propositions did not demonstrate the government’s position a disclaimer was included on the cover sheet of each paper. The disclaimer reads:

“The purpose of this position paper is to present a range of border-related fees, charges and taxes for stakeholder consultation. This position paper does not constitute a position of government. Policy positions and options proposed in this paper may or may not be progressed by government, including in part or as a whole.”

The draft position papers were provided ahead of the industry consultation sessions and were a valuable vehicle for guiding the discussions. Based on feedback from the industry sessions a number of propositions will not be pursued.

US - CAFC upholds CVD on non-market economies

On March 13, 2015, the U.S. Court of Appeals for the Federal Circuit (CAFC) held the Department of Commerce’s (Commerce) imposition of both antidumping (AD) and countervailing duties (CVD) pursuant to a 2012 law that overruled the CAFC’s decision in GPX International Tire Corp. v. United States, 666 F.3d 732 (Fed. Cir. 2011) (“GPX I”), reh’g granted, 678 F.3d 1308 (Fed. Cir. 2012) (“GPX II”), and permitted Commerce to impose countervailing duties with respect to non-market economy (“NME”) countries retroactively to proceedings initiated on or after November 20, 2006 does not violate the Ex Post Facto Clause of Article I, Section 9 of the U.S. Constitution or the Due Process Clause of the Fifth Amendment to the U.S. Constitution.

In GPX I, the CAFC had found that Congress had ratified Commerce’s prior position (which did not permit the imposition of CVD on NME countries) by re-enacting the CVD law in 1988 and 1994. However, on March 13, 2012, less than three months after the release of the decision in GPX I, Congress enacted new legislation overruling that decision. The CAFC granted a rehearing (GPX II) and then remanded the case to the Court of International Trade (CIT) “for a determination of the constitutionality of the new legislation. On remand, the CIT rejected challenges to the new law under, inter alia, the Ex Post Facto Clause and the Due Process Clause of the U.S. Constitution. In the March 13 opinion, the CAFC affirmed the CIT’s determinations. GPX International Tire Corp. v. United States, (Case No. 2014-1188, 2014-1248, Fed. Cir. March 13, 2015).

US - President continues national emergency with respect to Iran

On March 11, 2015, President Obama signed a Presidential Notice entitled Continuation of the National Emergency with Respect to Iran, which extends for an additional year the national emergency with respect to Iran first declared in Executive Order (EO) 12957 (March 15, 1995). On May 6, 1995, the President issued EO 12959, imposing comprehensive sanctions on Iran to further respond to this threat. On August 19, 1997, the President issued EO 13059, consolidating and clarifying the previous orders. Additional steps were taken in EO 13553 of September 28, 2010, EO 13574 of May 23, 2011, EO 13590 of November 20, 2011, EO 13599 of February 5, 2012, EO 13606 of April 22, 2012, EO 13608 of May 1, 2012, EO 13622 of July 30, 2012, EO 13628 of October 9, 2012, and EO 13645 of June 3, 2013.

The national emergency is being continued because, while the Joint Plan of Action (JPOA) between the P5+1 and Iran that went into effect on January 20, 2014, and was renewed by mutual consent of the P5+1 and Iran on July 19, 2014, and November 24, 2014, marks the first time in a decade that Iran has agreed to and taken specific actions that stop the advance and roll back key elements of its nuclear program, certain actions and policies of the Government of Iran continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

The emergency declared in EO 12957 constitutes an emergency separate from that declared on November 14, 1979, by EO 12170. This renewal, therefore, is distinct from the emergency renewal of November 2014.



US - BIS revises support documentation requirements for EAR license applications
On March 13, 2015, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 131018874-5199-02] that revises the support document requirements for license applications submitted to the BIS and is part of BIS’s retrospective regulatory review under Executive Order 13563. In addition to clarifying and streamlining the support document requirements for license applications in part 748 of the Export Administration Regulations (EAR), the final rule removes the requirement to obtain an International Import Certificate or Delivery Verification in connection with a license application and limits the requirement to obtain a Statement by Ultimate Consignee and Purchaser to exports, reexports, and transfers (in-country) of 600 Series Major Defense Equipment. Revisions to the EAR affecting BIS’s participation in issuing documents for the Import Certificate and Delivery Verification system for imports into the United States will be addressed in a future final rule, as will potential substantive changes to information collections under the Paperwork Reduction Act.
US - FinCEN finds Banca Privada d’Andorra is a financial institution of primary money laundering concern and proposes special measure

On March 13, 2015, the Financial Crimes Enforcement Network (FinCEN), Treasury, published in the Federal Register a notice of finding that, pursuant to the authority contained in the USA PATRIOT Act, the Director of FinCEN found on March 6, 2015 that reasonable grounds exist for concluding that Banca Privada d’Andorra (BPA) is a financial institution operating outside of the United States of primary money laundering concern. The finding referred to in this notice was effective as March 6, 2015.

In a separate notice of proposed rulemaking also published on March 13, 2015, FinCEN proposed imposing a special measure authorized by 31 U.S.C. § 5318A(b)(5) against BPA. Written comments are due on or before May 12, 2015.

US - State releases Fact Sheet on U.S. export policy for military unmanned aerial systems

On February 17, 2015, the State Department released a Fact Sheet, U.S. Export Policy for Military Unmanned Aerial Systems which is reproduced below:

The United States is the world’s technological leader in the development and deployment of military Unmanned Aerial Systems (UAS). As other nations begin to employ military UAS more regularly and as the nascent commercial UAS market emerges, the United States has a responsibility to ensure that sales, transfers, and subsequent use of all U.S.-origin UAS are responsible and consistent with U.S. national security and foreign policy interests, including economic security, as well as with U.S. values and international standards.

As a result, the United States has established a new policy designed specifically for U.S.-origin military and commercial UAS. This new policy, governing the international sale, transfer and subsequent use of U.S.-origin military UAS, supplements and builds upon the U.S. Conventional Arms Transfer Policy and is consistent with the requirements of the Arms Export Control Act and the Foreign Assistance Act which govern all U.S. military transfers. The new policy also governs the international sale, transfer and subsequent use of U.S.-origin commercial UAS, supplementing and building upon the Export Administration Regulations which govern all U.S. commercial transfers.

The new export policy is part of a broader United States UAS policy review which includes plans to work with other countries to shape international standards for the sale, transfer, and subsequent use of military UAS.

Enhanced Controls on the Export of U.S.-Origin Military UASs

The United States is committed to stringent standards for the sale, transfer, and subsequent use of U.S.-origin military UAS. The United States’ new UAS export policy establishes the standards by which the United States will assess, on a case-by-case basis under the U.S. Conventional Arms Transfer Policy, potential exports of military UASs, including armed systems. The new export policy puts in place stringent conditions on the sale or transfer of military UAS, including potential requirements for:

• Sales and transfers of sensitive systems to be made through the government-to-government Foreign Military Sales program;
• Review of potential transfers to be made through the Department of Defense Technology Security and Foreign Disclosure processes;
• Each recipient nation to be required to agree to end-use assurances as a condition of sale or transfer;
• End-use monitoring and potential additional security conditions to be required; and
• All sales and transfers to include agreement to principles for proper use.

The new policy also maintains the United States’ long-standing commitments under the Missile Technology Control Regime (MTCR), which subjects transfers of military and commercial systems that cross the threshold of MTCR Category I (i.e., UAS that are capable of a range of at least 300 kilometers and are capable of carrying a payload of at least 500 kilograms) to a “strong presumption of denial” for export but also permits such exports on “rare occasions” that are well justified in terms of the nonproliferation and export control factors specified in the MTCR Guidelines.

Principles for Proper Use of U.S.-Origin Military UAS

As the most active user of military UAS, and as an increasing number of nations are acquiring and employing UASs to support a range of missions, the United States has an interest in ensuring that these systems are used lawfully and responsibly. Accordingly, under the new UAS export policy, the United States will require recipients of U.S.-origin military UAS to agree to the following principles guiding proper use before the United States will authorize any sales or transfers of military UASs:

• Recipients are to use these systems in accordance with international law, including international humanitarian law and international human rights law, as applicable;
• Armed and other advanced UAS are to be used in operations involving the use of force only when there is a lawful basis for use of force under international law, such as national self-defense;
• Recipients are not to use military UAS to conduct unlawful surveillance or use unlawful force against their domestic populations; and
• As appropriate, recipients shall provide UAS operators technical and doctrinal training on the use of these systems to reduce the risk of unintended injury or damage.

Enhanced Controls on the Export of U.S.-Origin Commercial UAS

The United States is equally committed to stringent standards for the sale, transfer, and subsequent use of U.S.-origin commercial UAS, to include future commercial MTCR Category I systems. All commercial UAS will be reviewed under the requirements and licensing policies described in the Export Administration Regulations.

Implications of the New Policy

The new U.S. UAS export policy provides a disciplined and rigorous framework within which the United States will exercise restraint in sales and transfers and advance its national security and foreign policy interests, which includes enhancing the operational capabilities and capacity of trusted partner nations, increasing U.S. interoperability with these partners for coalition operations, ensuring responsible use of these systems, and easing the stress on U.S. force structure for these capabilities. It also ensures appropriate participation for U.S. industry in the emerging commercial UAS market, which will contribute to the health of the U.S. industrial base, and thus to U.S. national security which includes economic security.

The United States is committed to working with other countries to adopt similar standards for the sale, transfer, and subsequent use for military UAS.

US - Commerce, Interior allocate 2015 duty exemptions for insular watch assembly producers
On March 11, 2015, Enforcement and Compliance, International Trade Administration, Department of Commerce and the Office of Insular Affairs, Department of the Interior published in the Federal Register a notice allocating calendar year 2015 duty exemptions for watch assembly producers (program producers) located in the United States Virgin Islands (USVI) pursuant to Pub. L. 97-446, as amended by Pub. L. 103-465, Pub. L 106-36 and Pub. L. 108-429. In accordance with Section 303.3(a) of the regulations (15 C.F.R. 303.3(a)), the total quantity of duty-free insular watches and watch movements for calendar year 2013 is 1,866,000 units for the USVI. This amount was established in Changes in Watch, Watch Movement and Jewelry Program for the U.S. Insular Possessions, 65 Fed. Reg. 8048 (February 17, 2000). There are currently no watch assembly producers in Guam, American Samoa or the Northern Mariana Islands.
March 19 Webinar: Insights into Litigation webinar series - Global Investigations: Best Practices and Pitfalls

Manage Your Risk

As part of one of the largest and most recommended Dispute Resolution practices in the world, our North America Litigation lawyers offer practical insights on how to help you navigate the complexities your business may face with confidence, while achieving your strategic and commercial objectives. To share these insights, we have developed a webinar series that is focused on practical business solutions and the risks and challenges in doing business locally and internationally.

Please join us for the next webinar in our 2015 series:

Global Investigations: Best Practices and Pitfalls

Thursday, March 19, 2015 1:00 pm ET

This program will focus on the most challenging issues in cross-border investigations including conflicts between the expectations of DOJ/SEC and local law in jurisdictions where the investigation is being carried out. Special focus will be given to issues of data preservation and review, termination of employees and local partners suspected of corruption, self-disclosure to U.S. and foreign law enforcement authorities and the impact of Deferred Prosecution and Non-Prosecution Agreements on subsequent internal investigations. The panel will include three Baker & McKenzie partners, all of whom have extensive experience prosecuting transnational criminal cases for DOJ and representing clients in global investigations.

This webinar has been approved for 1.0 CLE ethics credit

Click here to register now.

Our complimentary webinar series is aimed at in-house legal counsel and compliance managers, ranging from those who are new to the areas concerned, through to experienced practitioners who want to refresh their knowledge and learn more about litigation risks and best practices.

Each complimentary, 60-minute webinar will be the third Thursday of the month and will begin at:

- 10:00 am PT
- 11:00 am MT
- 12:00 pm CT
- 1:00 pm ET

Participants can register for one or more of these webinars. We hope that you will be able to join us for what should be an interesting and fruitful series.

Log-in details will be sent via email two days before and on the day of the event.

US - Agriculture issues rules for pima cotton and wool apparel manufacturers trust funds including TRQ monetary equivalent; duty refund regulations to come later

On March 9, 2015, the Foreign Agricultural Service (FAS) and the Commodity Credit Corporation (CCC), both of the Department of Agriculture, published in the Federal Register a final rule (with a request for comments) that implements the Pima Agriculture Cotton Trust Fund (Agriculture Pima Trust) and the Agriculture Wool Apparel Manufacturers Trust Fund (Agriculture Wool Trust) Fund established in the Agricultural Act of 2014 (Farm Bill).

The Agriculture Pima Trust provides annually for one payment, called the Pima Cotton Payments. The Agriculture Wool Trust provides annually for four payments. The first payment under the Agriculture Wool Trust is currently administered by the Department of Commerce’s Office of Textiles and Apparel (OTEXA), and is called the Grants to Manufacturers of Certain Worsted Wool Fabrics. This program is being transferred from OTEXA to the Secretary of Agriculture, who will administer the payment for the 2015–2019 calendar years, and will be called Payments to Manufacturers of Certain Worsted Wool Fabrics. The second payment is called Monetization of the Wool TRQ. The Farm Bill requires the Secretary of Agriculture to determine a monetary amount equivalent to what a person would have saved if OTEXA’s Wool Tariff Rate Quota program (Wool TRQ) were still in effect. This payment will be based on OTEXA’s Wool Tariff Rate Quota program, which terminated at the end of calendar year 2014. The Monetization of the Wool TRQ will be administered by the Secretary for the 2015–2019 calendar years.

The third payment is called the Wool Yarn, Wool Fiber, and Wool Top Duty Compensation Payment. Payments are made to processors of wool yarn, wool fiber, and wool top to compensate them for termination of the suspension of import duties on such wool. This payment will be administered by the Secretary for the 2015–2019 calendar years. The fourth payment is called the Refund of Duties Paid on Imports of Certain Wool Products. This program is currently administered by the Department of Homeland Security’s Customs and Border Protection (CBP) through calendar year 2015. The program will be transferred in calendar year 2016 to the Secretary of Agriculture, who will administer the program for the 2016– 2019 calendar years. Regulations for the fourth payment will be published at a later date.

The final rule is effective March 9, 2015. Comments concerning this final rule must be received by April 8, 2015, to be assured consideration. We are issuing this final rule without prior notice and opportunity for comment.

US - President issues new E.O. declaring national emergency with respect to Venezuela situation

On March 9, 2015, President Obama issued a new Executive Order (E.O.) declaring a national emergency with respect to the “unusual and extraordinary threat to the national security and foreign policy of the United States posed by the situation in Venezuela.” The targeted sanctions in the E.O. implement the Venezuela Defense of Human Rights and Civil Society Act of 2014, which the President signed on December 18, 2014, and also go beyond the requirements of this legislation.

According to a White House Fact Sheet, the new authority is aimed at persons involved in or responsible for the erosion of human rights guarantees, persecution of political opponents, curtailment of press freedoms, use of violence and human rights violations and abuses in response to antigovernment protests, and arbitrary arrest and detention of antigovernment protestors, as well as the significant public corruption by senior government officials in Venezuela. The E.O. does not target the people or the economy of Venezuela.

Specifically, the E.O. targets those determined by the Department of the Treasury, in consultation with the Department of State, to be involved in:

• actions or policies that undermine democratic processes or institutions;
• significant acts of violence or conduct that constitutes a serious abuse or violation of human rights, including against persons involved in antigovernment protests in Venezuela in or since February 2014;
• actions that prohibit, limit, or penalize the exercise of freedom of expression or peaceful assembly; or
• public corruption by senior officials within the Government of Venezuela.

The E.O. also authorizes the Department of the Treasury, in consultation with the Department of State, to target any person determined:

• to be a current or former leader of an entity that has, or whose members have, engaged in any activity described in the E.O. or of an entity whose property and interests in property are blocked or frozen pursuant to the E.O.; or
• to be a current or former official of the Government of Venezuela.

Individuals designated or identified for the imposition of sanctions under this E.O., including the seven individuals that are listed in the Annex of the E.O., will have their property and interests in property in the United States blocked or frozen, and U.S. persons are prohibited from doing business with them. The E.O. also suspends the entry into the United States of individuals meeting the criteria for economic sanctions.

For additional updates and guidance on this subject, please visit our Sanctions Update blog.

EU extends sanctions for misappropriation of Ukrainian state funds

On 5 March 2015, it was announced that the European Council has extended the pre-existing restrictive measures against eighteen individuals.

These individuals, including the former Ukrainian President Viktor Yanukovich, have been subject to investigations regarding the misappropriation of Ukrainian state funds. The sanctions have been adjusted in order to reflect the progression of these investigations; and have been extended by a year for fourteen of the individuals listed, and by three months for the other four.

The extension was put into effect through Council Regulation (EU) 2015/357 and Council Decision 2015/364/CFSP. These instruments do not introduce any new designations.

The sanctions were originally brought into force on 6 March 2014 by Council Regulation (EU) 208/2014 and Council Decision 2014/119/CFSP.

For additional information, please contact Ross Denton or Sunny Mann of our London office.

Switzerland - Federal Council extends measures to prevent the circumvention of sanctions with respect to the situation in Ukraine

On 6 March 2015, the Federal Council decided to extend its measures to prevent the circumvention of international sanctions in view of the situation in Ukraine, The action followed decisions taken by the EU. It added the measures decreed by the EU last December following non-recognition of the annexation of the Crimea and Sevastopol to the ordinance on international sanctions of 27 August 2014. The Federal Council also added to Annex 3 of the ordinance the names of 28 further persons and entities who have had financial and travel restrictions imposed on them in the EU. The amended ordinance with supplemented annexes came into effect at 6 pm on 6 March. According to the Federal Council’s announcement:

The Federal Council once again stressed that Swiss territory may not be misused to circumvent EU sanctions. It is continuing to pursue its current policy and today made amendments to the ordinance on the circumvention of international sanctions in relation to the situation in Ukraine. The Federal Council is thus taking measures necessary to prevent circumvention of the latest EU sanctions.

This decision by the Federal Council extends the measures introduced following Switzerland's non-recognition of Russia's annexation of the Crimea, an act which contravenes international law. All foreign investment in the Crimea and Sevastopol is now prohibited. Service bans apply in the investment and tourism branches, and in some other economic sectors. The existing ban on the export of key goods to the Crimea and Sevastopol has been extended to include further articles. In addition, the measures have been made more precise to accord with adjustments made to the EU sanctions.

Furthermore, 28 names have been added to the existing list of individuals and businesses with whom financial intermediaries may no longer enter into new business relationships. Anyone in Switzerland with an existing business dealings with any of these entities is required to report this relationship (Annex 3 of the ordinance).

The Federal Council is continuing to monitor the situation in Ukraine closely and reserves the right to introduce further measures.

For additional information on the Swiss measures, please contact Philippe M. Reich of our Zurich office.

US - USTR releases Notorious Markets List

On March 5, 2015, the U.S. Trade Representative (USTR) released the Special 301 Out-of-Cycle Review of Notorious Markets for 2014, which highlights certain physical and online markets around the world that are reported to engage in and facilitate substantial copyright piracy and trademark counterfeiting that harms American businesses and undermines U.S. workers. The publication of the Notorious Markets report helps the United States and foreign governments to prioritize intellectual property rights (IPR) enforcement that protects job-supporting innovation and creativity in the United States and around the world.

The Out-of-Cycle Review of Notorious Markets identifies particularly infamous markets, and does not constitute an exhaustive list of all markets reported to deal in pirated or counterfeit goods around the world. Nor does it reflect the U.S. Government’s analysis of the general IPR protection and enforcement climate in the country concerned; such analysis is contained in the annual Special 301 Report issued at the end of April. However, the United States urges the responsible authorities to intensify efforts to combat piracy and counterfeiting, and to use the information contained in the Notorious Markets List to pursue legal actions where appropriate.

US - USTR releases 2015 President’s Trade Agenda

On March 4, 2015, the U.S. Trade Representative (USTR) released the 49 page President’s Trade Agenda - 2015 Trade Policy Agenda. The 2015 efforts will build on the 2014 initiatives. Last year, the United States made substantial progress toward concluding the Trans-Pacific Partnership (TPP). With the European Union, the U.S. made a fresh start in negotiations for the Transatlantic Trade and Investment Partnership (T-TIP). The U.S. also played a critical role in realizing the first fully multilateral trade agreement in the history of the World Trade Organization (WTO), the Trade Facilitation Agreement (TFA), and made significant progress in negotiations to expand the scope of goods covered by the WTO Information Technology Agreement (ITA). Additionally, along with 13 other partners, we launched negotiations on the Environmental Goods Agreement (EGA) in Geneva.

In 2015, the U.S. hopes to conclude negotiations with TPP countries and make significant progress with the EU toward a T-TIP agreement to further strengthen the world’s largest trade relationship. The U.S. will advance negotiations on the Trade in Services Agreement (TiSA). USTR will work with Congress to update and renew the African Growth and Opportunities Act (AGOA) for the longest term possible. USTR says that it will continue fighting for America’s trade rights, strengthening the multilateral trading system at the WTO, expanding the ITA, and continuing negotiations on an EGA.

Also available is a copy of the 354 page 2015 Trade Policy Agenda and 2014 Annual Report of the President of the United States on the Trade Agreements Program.

US - Import restrictions extended on certain categories of archaeological material from El Salvador

On March 6, 2015, U.S. Customs and Border Protection (CBP) in the Department of Homeland Security and the Department of the Treasury published in the Federal Register a final rule [CBP Dec. 15-05] amending the CBP regulations to reflect the extension of import restrictions on certain categories of archaeological material from the Pre-Hispanic cultures of El Salvador. The restrictions, which were originally imposed by Treasury Decision (T.D.) 95-20 and previously extended by T.D. 00-16, CBP Decision (CBP Dec.) 05-10 and CBP Dec. 10-01, are due to expire on March 8, 2015, unless extended. The Assistant Secretary for Educational and Cultural Affairs, U.S. Department of State (State), has determined that conditions continue to warrant the imposition of import restrictions. Accordingly, these import restrictions will remain in effect for an additional five years, and the CBP regulations are being amended to reflect this extension until March 8, 2020.

These restrictions are being extended pursuant to determinations of State made under the terms of the Convention on Cultural Property Implementation Act in accordance with the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. T.D. 95-20 contains the Designated List of archaeological material representing Pre-Hispanic cultures of El Salvador, and describes the articles to which the restrictions apply. The effective date of the final rule is March 8, 2015.

Ukraine - Import licensing of active pharmaceutical ingredients has been abolished

On 15 January 2015, the Parliament of Ukraine adopted Law of Ukraine No.126-VIII “On amendments to several Laws of Ukraine regarding abolishing import licensing of active pharmaceutical ingredients” (the Amendment). This Amendment abolishes the requirement to obtain a license to import active pharmaceutical ingredients (APIs), which became effective from 1 January 2015.

Import licensing of pharmaceuticals was introduced by Law of Ukraine No. 5038-VI “On amendments to several Laws of Ukraine regarding import licensing of pharmaceuticals and regarding the definition of the Term “Active Pharmaceutical Ingredient”” dated 4 July 2012 (the Import Licensing Law). Pursuant to the Import Licensing Law, an import license for pharmaceuticals into Ukraine has been required since 1 March 2013, while the import of APIs was exempt from the licensing requirement until 1 January 2015.

The Amendment was published on 31 January 2015 and it became effective on 1 February 2015. As a result, importers may continue to import APIs to Ukraine without obtaining an import license.

The Amendment should improve the framework of legal regulation in the field of circulating pharmaceuticals and create favorable conditions for entrepreneurship in the Ukrainian pharmaceuticals market.

For more information, please contact Oksana Simonova, Mariana Marchuk or Olha Demianiuk of our Kyiv office.

US - President continues national emergency with respect to Zimbabwe

On March 5, 2015, the Federal Register published Presidential Notice of March 3, 2015 - Continuation of the National Emergency with Respect to Zimbabwe which extends for an additional year the national emergency first declared on March 6, 2003, by Executive Order (EO) 13288. EO 13288 blocked the property of certain persons, pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701–1706), to deal with the unusual and extraordinary threat to the foreign policy of the United States constituted by the actions and policies of certain members of the Government of Zimbabwe and other persons to undermine Zimbabwe’s democratic processes or institutions. These actions and policies had contributed to the deliberate breakdown in the rule of law in Zimbabwe, to politically motivated violence and intimidation in that country, and to political and economic instability in the southern African region.

Additional steps were taken on November 22, 2005, in EO 13391. The scope of the national emergency was further expanded by EO 13469 on July 25, 2008.

The national emergency is being continued because the actions and policies of these persons continue to pose an unusual and extraordinary threat to the foreign policy of the United States

US - President continues national emergency with respect to Ukraine

On March 5, 2015, the Federal Register published Presidential Notice of March 3, 2015 - Continuation of the National Emergency with Respect to Ukraine which extends for an additional year the national emergency first declared on March 6, 2014, by Executive Order (EO) 13660, to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions and policies of persons that undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets.

The scope of the national emergency was expanded by EO 13661 on March 16, 2014, which found that the actions and policies of the Government of the Russian Federation with respect to Ukraine undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets.

The scope was further expanded by EO 13662 on March 20, 2014, which found that the actions and policies of the Government of the Russian Federation, including its purported annexation of Crimea and its use of force in Ukraine, continue to undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets. EO 13685 of December 19, 2014, was issued to take additional steps to address the Russian occupation of the Crimea region of Ukraine.

The national emergency is being extended for an additional year because the actions and policies addressed in these Executive Orders continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.

US - BIS amends VEU authorization in China
On March 5, 2015, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 150206120-5120-01] amending the Export Administration Regulations (EAR) to revise the existing authorization for Validated End User Samsung China Semiconductor Co. Ltd. (Samsung China) in the People’s Republic of China (PRC). Specifically, BIS amends Supplement No. 7 to Part 748 of the EAR to add two items to Samsung China’s eligible items that may be exported, reexported or transferred (in country) to the company’s eligible facilities (also known as “eligible destinations”) in the PRC.
UN Security Council approves system to impose targeted sanctions in South Sudan

On 3 March 2015, the United Nations Security Council (UNSC) unanimously adopted Resolution 2206 (2015) which creates a system that permits the imposition of sanctions recommended by a Sanctions Committee against individuals and entities responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security or stability of South Sudan. The Resolution permits the imposition of a travel ban and an asset freeze. The UN announcement stated:

While no listings were made, the resolution sets out a series of listing criteria. The sanctions are expected to apply to those responsible for, complicit in, or engaged directly or indirectly in actions or policies threatening the peace, security or stability of South Sudan.

These actions or policies apply but are not limited to those expanding or extending the conflict or obstructing reconciliation and peace talks or processes, threatening transitional agreements or undermining the political process and planning, directing or committing acts that violate applicable international humanitarian and human rights law and human rights abuses.

The resolution, drafted by the United States, also applies to those targeting civilians or attacking hospitals, religious sites, schools or locations where civilians seek refuge and recruiting or using children by armed forces or groups. In addition, those obstructing the work of international peacekeeping, diplomatic or humanitarian missions or hindering the delivery and distribution of humanitarian aid or access to such aid also apply.

Furthermore, the Council decided that it could impose a travel ban and an assets freeze for an initial period of one year on individuals and entities designated by a sanctions committee to be established through the resolution. The travel ban would apply to individuals, while the assets freeze would apply to individuals as well as entities such as government, opposition or militia groups.

To assist the relevant Sanctions Committee in its work, the Council requested the Secretary-General to set up a five-member panel of experts to provide information relevant to the potential designation of individuals and entities. Renewal of the panel’s mandate would be considered no later than 2 March 2016. Among other responsibilities, the panel will collect and analyse information regarding the flow of arms and related military assistance to those undermining the peace process and committing violations of international humanitarian and human rights law.

The security situation in South Sudan has deteriorated steadily over the past year since political in-fighting between South Sudan's President and his former Vice-President and their respective factions erupted in December 2013. The hostilities subsequently turned into a full-fledged conflict that has sent nearly 100,000 civilians fleeing to bases around the country managed by the UN Missions (UNMISS).

EU - Revised Explanatory Notes to the Common Nomenclature published

On 4 March 2015, the Official Journal published the latest version of the Explanatory Notes to the Combined Nomenclature of the European Union (2015/C 076/01).

Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff established a nomenclature, known as the ‘Combined Nomenclature’ or abbreviated to the ‘CN’, based on the International Convention on the Harmonised Commodity Description and Coding System, known as ‘the Harmonised System’ or abbreviated to the ‘HS’.

The HS has been supplemented by its own Explanatory Notes (HSENs). Those notes in English and French are issued and kept up to date by the: WORLD CUSTOMS ORGANISATION (WCO) Customs Cooperation Council (CCC), 30, rue du Marché, B-1210 Brussels

By virtue of Article 9(1)(a), second indent, of Regulation (EEC) No 2658/87, the Commission adopts explanatory notes to the Combined Nomenclature (CNENs), following consideration by the Tariff and Statistical Nomenclature Section of the Customs Code Committee. Although the CNENs may refer to the HSENs, they do not take the place of the latter, but should be regarded as complementary to and used in conjunction with them.

This edition of the CNENs includes and, where appropriate, replaces those published in the Official Journal of the European Union, C series, up to 16 September 2014. CNENs published in the Official Journal, C series, subsequent to that date remain in force and will be incorporated in the CNENs when revised.

In addition, the CN heading and subheading codes to which reference is made reflect those codes in the Combined Nomenclature for 2015, as set out in Commission Implementing Regulation (EU) No 1101/2014.

Furthermore, information concerning ‘Guidelines on the classification in the Combined Nomenclature of goods put up in sets for retail sale’ was published in the Official Journal of the European Union, C series.

US - USITC announces pilot program for advisory opinions and modifications for new and redesigned products

The U.S. International Trade Commission (USITC) has announced the launch of a pilot program to test the use of expedited procedures for the Commission to evaluate and rule on new and redesigned products in modification and advisory opinion proceedings.

U.S. importers, would-be importers, and intellectual property rights holders have expressed concern in recent years about how to obtain timely, transparent, and binding decisions on whether new and redesigned products are covered by remedial orders issued by the USITC following a violation of section 337 of the Tariff Act of 1930.

While these proceedings have been available for years, the Commission is seeking to improve and expedite them to better meet the needs of those affected by remedial orders.

Background: U.S. Customs and Border Protection (Customs) has the primary role in enforcing Commission exclusion orders (but not consent or cease and desist orders) at U.S. ports of entry.

The USITC also provides post-order procedures to help ensure proper enforcement of its exclusion, consent, and cease and desist orders. These procedures include modification proceedings and advisory opinion proceedings. (Enforcement proceedings are also available, but are not a subject of this pilot program.)

Modification proceedings: Modification proceedings are instituted to determine whether an the scope of an existing remedial order should be modified based on changed circumstances of fact or law. The Commission can determine whether a redesigned or new product is covered by an existing exclusion, consent, or cease and desist order and whether the order should provide a “carve-out” for the redesigned or new product. Modification proceedings are transparent, allow participation by all parties involved in the underlying investigation, and result in an evidence-based determination based on a record. Modification proceeding decisions are appealable to the Federal Circuit.

Advisory opinions: Advisory opinion proceedings result in an advisory opinion from the Commission as to whether importation of a redesigned or new product will violate an existing exclusion, consent, or cease and desist order. Any would-be importer can seek an advisory opinion. As with modifications, these proceedings are transparent, involve all parties involved in the underlying investigation, and result in an evidence-based determination based on a record. However, advisory opinions are not appealable.

Under the pilot program, which will test an expedited administrative process in these proceedings, a modification proceeding may be commenced by filing a petition with the Commission alleging facts concerning whether a redesigned or new product is covered by an existing exclusion, consent, or cease and desist order and addressing whether the order should provide a “carve-out” for the redesigned or new product.

The Commission will evaluate the petition and, if appropriate, institute an investigation to determine whether to modify the order. The Commission notes that would-be importers concerned about whether their products may be covered by a general exclusion order also can take advantage of the modification proceedings.

Any person may seek an advisory opinion from the Commission as to whether importation of a redesigned or new product will violate an existing exclusion, consent, or cease and desist order.

For modification proceedings or advisory opinions involving a pure question of law, the Commission’s Office of General Counsel will conduct the proceeding, with the Commission’s final decision normally issued within 60-90 days from the date that the Commission’s notice to conduct the proceeding is published in the Federal Register.

For modification proceedings or advisory opinions involving minimal factfinding, the Commission’s Office of Unfair Import Investigations will conduct the proceeding, with the Commission’s final decision normally issued within 90-180 days from the date that the Commission’s notice to conduct the proceeding is published in the Federal Register.

For modification proceedings or advisory opinions that require extensive factfinding, the Commission will refer the matter to an Administrative Law Judge for appropriate proceedings and issuance of an initial ruling. The Commission final decision will issue within 6-9 months from the date that the Commission’s notice to conduct the proceeding is published in the Federal Register.

For more details on the pilot program, see this fact sheet.

US - BIS and State seek comments on controls for military aircraft and military gas turbine engines on the CCL

On March 2, 2015, the Bureau of Industry and Security (BIS) published in the Federal Register a notice of inquiry [Docket No. 150210135–5182–01] regarding certain military aircraft, military gas turbine engines, and related items.

The BIS maintains the Export Administration Regulations (EAR), including the Commerce Control List (CCL). The Export Control Reform Initiative, a fundamental reform of the U.S. export control system, has resulted in transfer to the CCL of items that the President has determined do not warrant control on the United States Munitions List (USML), including certain military aircraft, military gas turbine engines, and related items. The USML is part of the International Traffic in Arms Regulations maintained by the Department of State. BIS is seeking public comments to perform a complementary review of military aircraft, military gas turbine engines, and related items on the CCL concurrent with the Department of State’s review of the controls implemented in its recent revisions to Categories VIII and XIX of the USML, which control military aircraft and military gas turbine engines, to ensure that they are clear, do not inadvertently control items in normal commercial use, account for technological developments, and properly implement the national security and foreign policy objectives of the reform effort. The notice also furthers the retrospective regulatory review directed by the President in Executive Order 13563. Comments must be received by BIS no later than May 1, 2015.

On March 2, 2015, the Department of State (State) also published in the Federal Register a notice of inquiry [Public Notice 9050] requesting comments from the public to inform its review of the controls implemented in recent revisions to Categories VIII and XIX of the United States Munitions List (USML). In light of the ongoing transition of the USML to a more “positive list” pursuant to the President’s Export Control Reform (ECR) initiative, State intends to periodically review the revised USML categories to ensure that they are clear, do not inadvertently control items in normal commercial use, account for technological developments, and properly implement the national security and foreign policy objectives of the reform effort. This review will also consider any technical issues related to the USML categories under review. State will accept comments from the public until May 1, 2015.

EU opens public consultation on controls of cash entering or leaving the EU

On 27 February 2015, the European Commission announced the opening of a public consultation on a review of Regulation (EC) № 1889/2005 of the European Parliament and of the Council of 26 October 2005 “on controls of cash entering or leaving the Community”. The consultation will close on 1 June 2015 and would impact several policy areas, notably Customs, Taxation, Trade, Home Affairs, Justice, Internal Market. The target groups are public authorities, organisations (including SMEs) and citizens (both inside and outside the European Union). According to the announcement -

The objective of this consultation is to gain stakeholder and public input regarding a review of Regulation 1889/2005 “on controls of cash entering or leaving the Community”.

Regulation 1889/2005 on the controls of cash entering and leaving the Community came into force in 2007. It establishes a framework in line with the present FATF recommendation 32 on cash couriers. It imposes, inter alia, an obligation for physical persons entering or leaving the European Union who carry cash or cash-equivalents of 10 000 Euro or more to file a declaration with customs or other competent authorities. It enables competent authorities to temporarily hold the cash in case of non-declaration or incorrect declaration pending further investigation and possible confiscation/forfeiture after judiciary intervention. It provides for the possibility of sharing information with competent authorities in other Member States, with the Commission or with third countries under certain circumstances. Finally, the Regulation imposes Member States to provide for penalties in case of non-declaration, even if after investigation there are no indications of illicit activity. Regulation 1889/2005 does not apply to natural persons carrying cash or cash equivalents between two Member States.

Pursuant to Article 10 of Regulation 1889/2005, the Commission submitted a report to the Council and the European Parliament on the application of the Regulation in 2010. The report concluded that generally, the Regulation is meeting its objective and adequately transposes FATF recommendation 32 in EU law. However, possible improvements in several areas were mentioned.

Discussions with Member State experts in cash controls on the implementation of the Regulation as well as international developments lead the Commission to believe that there may be a scope for improvement in the regulatory framework and/or the implementation procedures.

In order to judge the desirability of potential actions and policy options and to obtain new insights, the Commission Services would like to receive the views of stakeholders on the possible action to be taken to address the identified gaps

The consultation document is an online survey. In the interests of transparency, organisations (including, for example, NGOs, trade associations and commercial enterprises) are invited to provide the public with relevant information about themselves by registering in the Transparency Register and subscribing to its Code of Conduct. Please refer to the relevant section in the consultation questionnaire for additional information.

Received contributions will be published on the Internet. It is important to read the specific privacy statement attached to this consultation for information on how personal data and the contribution of submissions will be dealt with.

The full consultation questionnaire is also available as a pdf file.

In the interests of transparency, organisations (including, for example, NGOs, trade associations and commercial enterprises) are invited to provide the public with relevant information about themselves by registering in the Transparency Register and subscribing to its Code of Conduct. Please refer to the relevant section in the consultation questionnaire for additional information.

US - President continues the national emergency with relating to Cuba and the anchorage and movement of vessels
On February 27, 2015, the Federal Register published Presidential Notice of February 25, 2015 – Continuation of the National Emergency With Respect to Cuba and of the Emergency Authority Relating to the Regulation of the Anchorage and Movement of Vessels. The Notice continues the national emergency with respect to Cuba and the emergency authority relating to the regulation of the anchorage and movement of vessels set out in Proclamation 6867 (March 1, 1996) as amended by Proclamation 7757 (February 26, 2004), which was declared to address the disturbance or threatened disturbance of international relations caused by the February 24, 1996, destruction by the Cuban government of two unarmed U.S.-registered civilian aircraft in international airspace north of Cuba. Proclamation 7757, extended the national emergency and expanded its scope to deny monetary and material support to the Cuban government. The notice states that the Cuban government has not demonstrated that it will refrain from the use of excessive force against U.S. vessels or aircraft that may engage in memorial activities or peaceful protest north of Cuba. In addition, the unauthorized entry of any U.S.-registered vessel into Cuban territorial waters continues to be detrimental to the foreign policy of the United States.
US - Energy Dept. revises regulations governing assistance to foreign atomic energy activities including export and re-export rules

On February 23, 2015, the Department of Energy (DOE) published in the Federal Register a final rule revising 10 C.F.R. part 810. This the first comprehensive updating of regulations concerning Assistance to Foreign Atomic Energy Activities since 1986, reflecting a need to make the regulations consistent with current global civil nuclear trade practices and nonproliferation norms, and to update the activities and technologies subject to the Secretary of Energy’s specific authorization and DOE reporting requirements. This rule also identifies destinations with respect to which most assistance would be generally authorized and destinations that would require a specific authorization by the Secretary of Energy.

10 C.F.R. part 810 implements section 57b.(2) of the Atomic Energy Act of 1954 (AEA), as amended by section 302 of the Nuclear Nonproliferation Act of 1978 (NNPA). Part 810 controls the export of unclassified nuclear technology and assistance. It enables peaceful nuclear trade by helping to assure that nuclear technologies exported from the United States will not be used for non-peaceful purposes. Part 810 controls the export of nuclear technology and assistance by identifying activities that can be “generally authorized” by the Secretary, thereby requiring no further authorization under part 810. It also controls those activities that require “specific authorization” by the Secretary. Part 810 also delineates the process for applying for specific authorization from the Secretary and identifies the reporting requirements for activities subject to part 810.

While some revisions to part 810 were made in 1993 and 2000, part 810 has not been comprehensively updated since 1986. Since then, the global civil nuclear market has expanded, particularly in China, the Middle East, and Eastern Europe, with vendors from France, Japan, the Republic of Korea, Russia, and Canada emerging to serve customers in these markets. DOE believes the regulation should be updated to ensure that the part 810 nuclear export controls remain effective and efficient as the commercial nuclear market continues to expand. This means carefully determining which destinations and activities can be generally authorized and which will require a specific authorization, and assuring that the determinations are consistent with U.S. national security, diplomatic, and trade policy.

The rule is effective March 25, 2015.

CBP posts procedures for importing merchandise from Cuba

US - U.S. Customs and Border Protection (CBP) recently posted requirements for authorized imports under the Cuban Assets Control Regulations (CACR). The requirements are reproduced below:

Importing Commercial Goods from Cuba: Commercial imports authorized under § 515.582 of the Cuban Assets Control Regulations (CACR), Importation of Certain Goods and Services Produced by Independent Cuban Entrepreneurs, must comply with all current CBP and other U.S. Government agency requirements. For the import of commercial goods, such as for retail sale in the United States, CBP generally requires a customs informal entry for goods valued under $2,500, and a formal entry for goods exceeding $2,500. Under the 2015 Harmonized Tariff Schedule of the United States (HTSUS), Cuba is a Column 2 country, and is therefore subject to specific duty rates.

Importing Goods for Personal Use from Cuba: 31 C.F.R. § 515.582 authorizes importations of goods produced by independent Cuban entrepreneurs, as set forth on the State Department’s Section 515.582 List without a limitation on the value of the goods. However, these goods are still subject to the applicable provisions of the HTSUS. Imports by private individuals authorized under § 515.582 of the CACR are allowed an $800 exemption from customs duties in accordance with the HTSUS, if the goods are for personal use. The first $1,000 above that $800 will be assessed duty at rate of 4%, pursuant to the HTSUS. The $800 exemption and the application of the 4% duty rate for the first $1,000 above the $800 exemption will be multiplied by the number of qualified family members traveling. So, for example, a qualified family of three would be eligible for a $2,400 exemption from duty, and the $3,000 above that would receive a 4% duty rate. Please be aware that CBP may deem goods accompanying passengers in excess of these values as a commercial shipment and treat them according to the commercial procedures in the above paragraph.

Imports by authorized travelers of goods other than those authorized 31 C.F.R. § 515.582 are subject to the following: For goods other than those authorized by 31 C.F.R. § 515.582, as described above, the CACR imposes specific limitations on the value of goods that may be imported. The value of merchandise purchased or otherwise acquired in Cuba that is imported as accompanied baggage under § 515.560 of the CACR cannot exceed $400 per person, of which no more than $100 of the merchandise may consist of alcohol or tobacco products (or a combination thereof), and provided that the merchandise is imported for personal use only. The importation of Cuban origin information and informational materials is exempt from the prohibitions of the CACR, as described in 31 C.F.R. § 515.206.

Concerning the $100 of alcohol or tobacco products limit, travelers must comply with all applicable laws and regulations. This includes the HTSUS limitations on personal exemptions and rates of duty extended to nonresidents and returning residents on quantity and value restrictions to alcohol and tobacco products. Imports of alcohol and tobacco quantities over the limits listed below and up to $100 will be assessed the 4% flat rate pursuant to the HTSUS. Alcohol and tobacco over the $100 limitation will be detained or seized, depending on the mitigating circumstances.

HTSUS Duty Free Exemptions for Alcohol and Tobacco:

Not Returning Resident: Articles imported by or for the account of any person arriving in the United States who is not a returning resident thereof:

9804.00.25 Not over 50 cigars, or 200 cigarettes, or 2 kilograms of smoking tobacco or a proportionate amount of each, and not over 1 liter of alcoholic beverages, when brought in by an adult nonresident for his own consumption.
9804.00.30 Not exceeding $100 in value of articles (not including alcoholic beverages and cigarettes but including not more than 100 cigars) accompanying such person to be disposed of by him as bona fide gifts, if such person has not claimed an exemption under this subheading (9804.00.30) within the 6 months immediately preceding his arrival and he intends to remain in the United States for not less than 72 hours.
9804.00.40 Not exceeding $200 in value of articles (including not more than 4 liters of alcoholic beverages) accompanying such a person who is in transit to a place outside United States customs territory and who will take the articles with him to such place.

Returning Resident: Articles imported by or for the account of any person arriving in the United States who is a returning resident, has attained the age of 21, after having remained beyond the United States for a period of not less than 48 hours, for his or her personal or household use, but not imported for the account of any other person nor intended for sale, if declared in accordance with regulations of the Secretary of the Treasury and if such person has not claimed, an exemption under subheadings 9804.00.65, 9804.00.70 and 9804.00.72 within 30 days preceding his arrival, and claims exemption under only one of such items on his arrival:

9804.00.80 Articles (including not over 50 cigars, or 300 cigarettes, or 2 kilograms of smoking tobacco or a proportionate amount of each, and not over 1 liter of alcoholic beverages), reasonable and appropriate, and intended exclusively, for the bona fide personal use of, and (except for articles consumed in use) to be taken out of the United States by, any person arriving in the United States who is leaving a vessel, vehicle or aircraft, engaged in international traffic, on which he or she is employed, with the intention of resuming such employment.

Mexico - Measures imposed with respect to the importation of goods of the footwear and textile and apparel industries

On August 27 and December 3, 2014, the Mexican government announced that it would impose certain measures to promote the footwear and the textile and apparel industries. The announcement resulted in the implementation of several restrictive measures relating to the importation of these goods, as well as measures to avoid undervaluation practices.

These measures were established between August 2014 and January 2015. On August 29, 2014, the Decree that Sets Measures for the Productivity, Competitiveness and Prevention of Undervaluation Practices in the Footwear Industry was published in the Diario Oficial de la Federacion (the Federal Official Gazette) and on December 26, 2014 a similar decree was published for the Textile and Apparel Industry.

For your reference, below please find a brief summary on the implementation of such measures, as well as the dates when they became effective:

Specific Sectors of the Importer Registry.

By means of the amendments to Annex 10 to the Foreign Trade General Rules for 2014 (the FTGR), importers of goods classified in Chapters 50 to 64 of the Tariff Schedule of the Mexican General Import and Export Duties Law (TIGIE) have the obligation of registering in the Specific Sectors of the Importer Registry.

• Footwear: Publication: September 1, 2014; Effective date: October 1st, 2014
• Textile and Apparel: Publication: December 26, 2014; Effective date: March 1, 2015*

On January 5th, 2015 the Tax Administration Service published on its website Bulletin P001 by means of which it clarified that registration in the Textile and Apparel Sector could be requested as of January 1st, 2015 and that such registration would be mandatory as of February 1st, 2015. *On January 30, 2015 the Seventh Resolution of Amendments to the FTGR was published. By means of this publication, the enforcement date of such obligation was extended to March 1st, 2015.

Estimated Prices

By means of several amendments to Annexes 3 and 4 of the Resolution that sets the mechanism to guarantee the payment of taxes on goods subject to estimated prices set by the Ministry of Finance and Public Credit, estimated prices were set to most of the goods classified in Chapters 50 to 64 of the TIGIE.

As a result of the above, those who import goods at values lower than the estimated prices published by the Ministry of Finance and Public Credit must deposit in a customs account, the difference between the duties and antidumping duties paid and the ones that would have been paid if applying the estimated prices.

• Footwear: Publication: September 5, 2014; Effective date: October 1st, 2014
• Textile and Apparel: Publication: December 29, 2014 amended on January 30, 2015; Effective date: February 12, 2015

Advance “Notices” of Importations

In order to implement the Decree on the Textile and Apparel industry, the Ministry of Economy issued rules on February 5, 2015 establishing a monitoring system which will be administered through an electronic automatic import permit that requires advance information at the tariff level.

The Automatic Import Permits must be requested only when goods are imported on a definitive basis and the unit price of the goods is lower than the estimated price published by the Ministry of Finance and Public Credit.

Once the application for the Automatic Import Permit is filed, the system immediately issues a code which becomes effective 5 days after its issuance and must be declared in the corresponding import pedimento.

At the time of requesting the Automatic Import Permit, the applicant must file information and documents related to the nature, characteristics and value of the goods.

• Footwear: Publication: January 8 and February 5, 2015; Effective date: January 19, 2015
• Textile and Apparel: Publication: February 5, 2015; Effective date: As of March 2 the Digital Window will be enabled for receiving the corresponding applications. The Automatic Import Permit will be mandatory 5 days after the Digital Window is enabled for this purpose.

Splitting of Tariff Items to 10 Digits

Currently, the Tax Administration Service along with the Ministry of Economy and the Confederation of Customs Brokers Associations of Mexico (CAAAREM) are implementing a project for the addition of two digits to the tariff items for goods of the Footwear and Textile and Apparel Sectors. The splitting criteria can be found in the publications corresponding to Estimated Prices and Automatic Import Permits.

Duty Phase-out Suspension

By means of the Decree which establishes measures for the productivity, competitiveness and challenging of undervaluation practices for the footwear sector published on August 29, 2014 and a similar one corresponding to the textile and apparel sector published on December 26, 2014, the Decree that Modifies the Tariff of the General Import and Export Duties Law was amended in order for the date of the duty phaseout of goods of the Footwear, Textile and Apparel Sector to become effective January 31, 2019.

• Footwear: Publication: August 29, 2014; Effective date: August 30, 2014
• Textile and Apparel: Publication: December 26, 2014; Effective date: December 27, 2014

Exclusive Customhouses
In the case of the Footwear Sector, such goods can only be imported through the following customhouses:

• Mexico City International Airport;
• Ciudad Hidalgo;
• Lázaro Cárdenas;
• Manzanillo;
• México;
• Guadalajara;
• Nuevo Laredo;
• Tijuana; and,
• Veracruz.

Footwear: Publication: September 1, 2014; Effective date: October 1, 2014

Continuous Audit Programs

Finally, it is important to mention that the corresponding authorities announced the implementation of continuous audit programs related to the importation of goods of the Footwear and Textile and Apparel Industries.

For additional information regarding the implementation of the abovementioned measures, please do not hesitate to contact Adriana Ibarra-Fernández, Armando De Lille or José Hoyos-Robles who wrote the Client Alert on this subject.

US – USITC invites comments on Earned Import Allowance Program

On February 24, 2015, the United States International Trade Commission (USITC) published in the Federal Register a notice of opportunity to provide written comments in connection with the USITC’s sixth annual review evaluating the effectiveness of Earned Import Allowance Program (EIAP) for certain apparel from the Dominican Republic. The EIAP authorizes certain apparel articles wholly assembled in the Dominican Republic to enter the United States free of duty if accompanied by a certificate that shows evidence of the purchase of certain U.S. fabric. More specifically, the program allows producers (in the Dominican Republic) that purchase a certain quantity of qualifying U.S. fabric to produce certain cotton bottoms in the Dominican Republic to receive a credit that can be used to ship a certain quantity of eligible apparel using third country fabrics from the Dominican Republic to the United States free of duty.

The USITC has announced its schedule, including deadlines for filing written submissions, in connection with the preparation of its sixth annual review in investigation No. 332–503, Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic, Sixth Annual Review. See the notice for deadline dates.

US - State waives CBW proliferation sanctions against certain Chinese entities
On February 24, 2015, the U.S. Department of State published in the Federal Register a notice [Public Notice 9044] advising that a determination has been made, pursuant to Section 81(e) of the Arms Export Control Act and Section 11C(e) of the Export Administration Act of 1979, as amended, to waive nonproliferation sanctions originally imposed under these Acts on May 21, 1997 (62 Fed. Reg. 28304) on the following Chinese entities and their successors: Nanjing Chemical Industries Group (NCI); and Jiangsu Yongli Chemical Engineering and Technology Import/Export Company.
March 31 in Amsterdam: Seminar on sanctions developments in respect of Ukraine and Russia

Seminar on sanctions developments in respect of Ukraine and Russia
31 March 2015, Amsterdam

Strong economic ties between the EU, Ukraine, Russia and the US are severely affected by economic sanctions imposed by the EU and the US against Ukraine and Russia. The threat of further measures continues to exist. In addition, the retaliatory measures with which Russia has responded, as well as measures that Russia is contemplating adopting, raise significant concerns with European and American companies doing business in and/or with Russia.

We are pleased to invite you to join us on Tuesday 31 March 2015 at noon at the Baker & McKenzie House Amsterdam, where we will be hosting a seminar focused on the latest sanctions developments in respect of Ukraine and, in particular, Russia.

Presenters from our offices in Amsterdam, Moscow and Washington will provide you with an overview of the current EU and US sanctions against Russia and Ukraine, their practical application as well as of the retaliatory measures adopted by Russia in respect thereof.

If you would like to attend our seminar, please register by clicking here.

Date:
Tuesday 31 March 2015

Meeting Agenda:
12:00 pm Welcome and lunch
1:00 pm Presentations
5:00 pm D
rinks and canapés
6:30 pm End

Location:
Baker & McKenzie House
Claude Debussylaan 54
1082 MD Amsterdam

>> Directions

Speakers
Nicholas Coward
Baker & McKenzie Washington

Jasper Helder
Baker & McKenzie Amsterdam

Vladimir
Efremov
Baker & McKenzie Moscow

Chiara Klaui
Baker & McKenzie Amsterdam

Canada, US announce agreement on new Windsor-Detroit crossing
On February 18, 2015, the Department of Homeland Security (DHS) and Transport Canada announced that the United States, Canada, and the State of Michigan concluded and signed an arrangement regarding the staffing and operation of the U.S. Customs plaza at the proposed New International Trade Crossing (NITC) linking Detroit, Michigan and Windsor, Ontario. This arrangement results from several months of productive discussions among the U.S. Department of State, U.S. Customs and Border Protection (CBP), the U.S. General Services Administration (GSA), the State of Michigan, the Windsor-Detroit Bridge Authority (WDBA), and Transport Canada. Under the terms of the arrangement, the U.S. customs plaza will be procured as part of the NITC public-private partnership (PPP) that will finance, design, construct, operate and maintain the rest of the project. The costs of the NITC project will be repaid from future toll revenues.
European Union and Myanmar/Burma conclude first round of talks
On 12 February 2015, the Commission announced that the first round of negotiations on the investment protection agreement between the European Union and Myanmar/Burma took place between 9 and 12 February in Yangon. This round offered the EU the opportunity to present its text proposal and to have a first exchange of views on the text with Myanmar/Burma. This agreement is the first standalone agreement on investment protection negotiated by the EU. Moreover, it would cover investors from all 28 Member States, as no Member State currently has concluded an investment protection agreement with Myanmar/Burma. The next round will take place in May.
March 5 Webinar: Food & Agribusiness Cuba Sanctions Issues

Food & Agribusiness Cuba Sanctions Issues Webinar

Speakers

Janet Kim, Partner, Washington, DC
Alexandre Lamy, Associate, Washington, DC

Date

March 5, 2015 | Time: 1:00 - 2:00 PM EST

On January 16, 2015, the US Commerce and Treasury Departments issued rules relaxing some of the US export controls and sanctions targeting Cuba. Many of these changes have the intended effect of facilitating trade in targeted sectors, including the food and agribusiness industry. To help navigate these recent changes, join Baker & McKenzie specialists from our International Trade practice to learn how these developments will affect the food and agribusiness sector.

Baker & McKenzie’s International Trade Compliance Practice Group provides multinational companies coordinated, practical, and solution-oriented international trade representation and advice. With more than 200 international trade lawyers around the globe focused on customs, export controls, trade sanctions, anticorruption and trade remedies, the practice helps clients to maximize opportunities and manage compliance risks in cross-border business transactions.

Register Now.

For more information:
Alli Ferguson
+1 312 861 8047
alli.ferguson bakermckenzie.com

US - State proposes to extend import restrictions on Italian archaeological material
On February 18, 2015, the State Department published in the Federal Register a notice [Public Notice 9039] proposing to extend the Memorandum of Understanding Between the Government of United States of America and the Government of the Republic of Italy Concerning the Imposition of Import Restrictions on Categories of Archaeological Material Representing the Pre-Classical, Classical, and Imperial Roman Periods of Italy (MOU) because The Government of the Republic of Italy has informed the Government of the United States of America of its interest in an extension of the MOU. 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 MOU, the Designated List of restricted categories of material, and related information can be found at the State Department Cultural Heritage web site.
US - USITC proposes recommendations, seeks comments on HTS 2017

On February 18, 2015, the U.S. International Trade Commission (USITC) published in the Federal Register a notice of proposed recommendations and solicitation of public comments relating to modifications in the Harmonized Tariff Schedule to conform with amendments to the Harmonized System recommended by the World Customs Organization. Its recommendations have been posted on its website.

On August 20, 2014, the USITC 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 Trade Act of 1988) (19 U.S.C. 3005), for purposes of recommending to the President possible modifications in the Harmonized Tariff Schedule of the United States (HTS) (79 FR. 50943, Aug. 26, 2014).

The modifications under consideration concern: (1) The World Customs Organization’s (WCO) Recommendation of June 27, 2014 that Contracting Parties to the International Convention on the Harmonized Commodity Description and Coding System (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 dasheen) 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.

Interested Federal agencies and the public are invited to submit written comments on the ‘‘proposed recommendations’’ by April 20, 2015. The USITC will transmit its report to the President on July 31, 2015.

US - BIS revises Entity List

On February 18, 2015, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 141230999–4999–01] that amends the Export Administration Regulations (EAR) by adding eleven persons to the Entity List. The eleven persons who are added to the Entity List have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These eleven persons will be listed on the Entity List under the destinations of People’s Republic of China (China), Pakistan, and United Arab Emirates (U.A.E.).

This final rule also removes one person from the Entity List, as the result of a request for removal submitted by the person, a review of information provided in the removal request in accordance with the procedure for requesting removal or modification of an Entity List entity, and further review conducted by the End-User Review Committee (ERC).

US - BIS updates statements of EAR legal authorities
On February 18, 2015, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 150123073–5073–01] that updates the Code of Federal Regulations (C.F.R.) legal authority paragraphs in the Export Administration Regulations (EAR) to cite the Presidential Notice of January 21, 2015, 80 Fed. Reg. 3461 (January 22, 2015), which is the most recent notice continuing the national emergency established by Executive Order 12947 of January 23, 1995 – Prohibiting Transactions With Respect to Terrorists Who Threaten To Disrupt the Middle East Peace Process, 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.
US - BIS revises Sudan license exceptions for CCDs and civil telecoms-related items

On February 18, 2015, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 140812661-4661-01] that amends the Export Administration Regulations (EAR) to revise the general licensing policy of denial to one of case-by-case licensing for exports and reexports to Sudan of telecommunications equipment and associated computers, software, and technology for civil end use, including items useful for the development of civil telecommunications network infrastructure. It also revises License Exception Consumer Communications Devices (CCD), which previously applied only to consumer communications devices to Cuba, to authorize exports and reexports of such devices to Sudan. Additionally, it makes minor technical changes to the list of items that are eligible for both Sudan and Cuba under the license exception. This rule also makes changes to License Exception Temporary Imports, Exports, Reexports and Transfers (in-country) (TMP) in light of the changes to License Exception CCD. Finally, it removes a license requirement for reexports to Sudan of certain telecommunications software. BIS is making these changes consistent with the U.S. Government’s commitment to the advancement of the free flow of information to, from, and within Sudan, including during a national dialogue.

Check www.bakermckenzie.com/sanctionsnews/ for future updates and additional commentary.

US - OFAC adopts SSR amendments for software, hardware, services incident to personal communications

On February 18, 2015, the Office of Foreign Assets Control (OFAC) published in the Federal Register a final rule amending the Sudanese Sanctions Regulations (SSR; 31 C.F.R. Part 538) by adding a general license pertaining to certain software, hardware, and services incident to personal communications. Transactions otherwise prohibited under the SSR but found to be consistent with U.S. policy may be authorized by one of the general licenses contained in subpart E of the SSR or by a specific license issued pursuant to the procedures described in subpart E of 31 C.F.R. part 501. OFAC also is making other technical and conforming changes. OFAC is also making other technical and conforming changes.

In consultation with the Departments of State and Commerce, OFAC is expanding the scope of 31 C.F.R. 538.533 consistent with the U.S. Government’s commitment to the advancement of the free flow of information and to facilitate communications by the Sudanese people, including during a national dialogue, and consistent with the Iran GL D-1 model. In view of its shared jurisdiction over certain export licensing authority with respect to Sudan, OFAC is issuing this amendment in coordination with the Department of Commerce, Bureau of Industry and Security (BIS). BIS concurrently is amending the EAR to, inter alia, revise the general licensing policy of denial to one of case-by-case licensing for exports and reexports to Sudan of telecommunications equipment and associated computers, software, and technology for civil end use, and to revise License Exception Consumer Communications Devices (CCD), which previously applied only to consumer communications devices to Cuba, to authorize exports and reexports of such devices to Sudan.

Check www.bakermckenzie.com/sanctionsnews/ for future updates and additional commentary.

US - State Department posts list of Cuban goods and services eligible for importation into the US

On Friday, February 13, 2015, the U.S. State Department published on its website the “Section 515.582 List,” which describes the Cuban goods and services eligible for importation into the United States. This announcement is the latest component of the U.S. Government’s recent relaxation of the comprehensive US embargo of Cuba, which we described in our recent Sanctionsnews blog post. The State Department also published a Fact Sheet with FAQs about the Section 515.582 List.

Under Section 515.582 of the Cuban Assets Control Regulations (CACR), persons subject to U.S. jurisdiction are authorized to engage in all transactions (including payments) necessary to import certain goods and services produced by independent Cuban entrepreneurs, as determined by the State Department. The Section 515.582 List published by the State Department provides the current list of eligible and excluded Cuba goods and services. Independent Cuban entrepreneurs (e.g., self-employed individuals; private small businesses; private cooperatives) from which certain goods and services may be imported must (i) be independent of Cuba’s state sector and (ii) provide documentary evidence that demonstrates their independent status (e.g., license to be self-employed issued by the Cuban Government; evidence that a private entity is not owned or controlled by the Cuban Government).

All services from independent Cuban entrepreneurs are eligible for importation into the United States. All goods, except for those contained in certain sections/chapters of the U.S. Harmonized Tariff Schedule (HTS) identified on the Section 515.582 List, are eligible for importation in the United States.

• Eligible goods are those in the following HTS sections/chapters: Section VI (Chapters 33-34, 37); Sections VII to X (all Chapters); Section XI (Chapters 50, 53-63); Sections XII to XIV (all Chapters); Section XV (Chapters 82-83); Section XVIII (all Chapters); and Sections XX to XXII (all Chapters).
• Excluded goods are those in the following HTS sections/chapters: Sections I to V (all Chapters); Section VI (Chapters 28-32, 35-36, 38); Section XI (Chapters 51-52); Section XV (Chapters 72-81); Sections XVI and XVII (all Chapters); and Section XIX (all Chapters).

Importation of eligible goods into the United States may be subject to applicable duties, taxes, and fees. [Note that column 2 rates apply to merchandise originating in Cuba.]

This latest US Government action authorizes persons subject to U.S. jurisdiction to import eligible Cuban goods or services into the United States. This new authorization does not extend to imports by persons subject to U.S. jurisdiction, such as non-U.S. entities owned or controlled by U.S. companies, of Cuban goods or services into other countries.

For additional information, please contact Alexandre Lamy (Washington), Eunkyung Kim Shin (Chicago) or any member of our Outbound practice with whom you have been working, or for HTS matters, Christopher Lucas (Washington) or any member of our Inbound (Customs) practice. Check www.bakermckenzie.com/sanctionsnews/ for updates.

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Chair, NA International
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