US - BIS adds persons to Entity List
On August 1, 2014, the Bureau of Industry and Security, Commerce (BIS) published in the Federal Register a final rule [Docket No. 140627545–4617–01] that amends the Export Administration Regulations (EAR) by adding sixteen persons under nineteen entries to the Entity List. The persons who are added to the Entity List have been determined by the US Government to be acting contrary to the national security or foreign policy interests of the United States. These persons will be listed on the Entity List under the destinations of Afghanistan, China, Hong Kong, Iran, and the United Arab Emirates (U.A.E.). There are nineteen entries for sixteen persons because three persons are listed under multiple destinations, resulting in three additional entries: one person in the U.A.E. has an address in Iran and two persons in China each have one address in Hong Kong.
Japan – New measures announced for the situation in Ukraine

On July 28, 2014, the Japanese Government announced that it would be taking new measures in respect of the situation in Ukraine. Although no text of the measures was available at our press time, the announcement indicated the following:

• The assets will be frozen of those who individuals and organizations that are directly involved in the destabilization of the eastern Ukraine or Crimea annexation.
• Japan will take a coordinated approach with the EU on responding to new Russian projects requiring European Bank for Reconstruction and Development financing.
• Measures relating to the importation of goods from the Crimea will be introduced.

In addition the announcement seeks normalization of the situation through diplomatic dialogue and a cease-fire as soon as possible as well as a stop to cross-border combatants and weapons and cooperation in the international research on the shooting down of the Malaysian aircraft.

Japan - Partial revision of the Export Trade Control Order

The Ministry of Economy, Trade and Industry (METI) announced that on July 22, 2014, the Cabinet approved a revision of the Export Trade Control Order (the “order”) under the Foreign Exchange and Foreign Trade Act concerning [i] addition and removal of goods to and from the regulatory list based on the agreements concluded at the International Export Control Conference in 2013 and [ii] centralized control of regulations, aiming to harmonize Japan’s systems with global systems, an approach bringing Japan into line with other countries and reducing burdens and reducing burdens imposed on businesses when enforcing treaties. METI hereby announces the revision.

• The order is to be revised to add and remove goods to and from the regulatory list so that the Government of Japan can ensure implementation of the agreements concluded at the International Export Control Conference (related to Table 1 of the order).
• From the standpoints of harmonizing Japan’s systems with global systems to bring Japan into line with other countries, and of reducing the burdens imposed on businesses, the order is to be revised to [i] introduce special treatments concerning temporary landing of goods that are regulated by the Stockholm Convention, [ii] ensure consistency with provisions on the goods that are regulated by the Rotterdam Convention, and [iii] eliminate duplication with other internal laws and regulations (related to Table 2 of the order).
• The order is to be revised to control exports to the Central African Republic for the purpose of security, by imposing stricter regulations than on other regions, based on the UN Security Council resolution (related to Table 3-2).

The promulgation date of the order was scheduled for July 25, 2014. The enforcement dates were scheduled for July 25, 2014 (provisions related to Table 2) and September 15, 2014 (provisions related to Appended Tables 1 and 3-2).

Client Alert: EU "Stage 3" sanctions

The EU has published its so-called "Stage 3" sanctions against Russia in Regulation 833/2014 (see here) ("the Regulation").

Who do the sanctions apply to?

As is usual with EU sanctions, the scope is limited to:

● activities in the EU by any persons; and
● EU natural persons, and EU incorporated entities (including branches), wherever located. EU sanctions do not apply to non-EU incorporated entities.

Click here to read the full client alert.

EU announces additional restrictive measures relating to Ukraine - UPDATE

On 31 July 2014, the European Council announced that it had adopted a package of additional restrictive measures in light of Russia's actions destabilising the situation in eastern Ukraine. These will apply from 1 August 2014 and only in respect of new contracts. They will also not apply to the provision of spare parts necessary to the maintenance and safety of existing capabilities within the EU

The relevant legislation was published in the Official Journal on 31 July 2014, as Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine and Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine.

The new restrictive measures prohibit the direct or indirect purchase or sale of, the brokering or assistance in the issuance of, or any other dealing with bonds, equity or similar financial instruments with a maturity exceeding 90 days, issued after 1 August 2014 by:

• major credit institutions or finance development institutions established in Russia with over 50 % public ownership or control as of 1 August 2014, as listed in the Annex;
• any legal person, entity or body established outside the Union owned for more than 50 % by an entity listed in the Annex; or
• any legal person, entity or body acting on behalf or at the direction of an entity referred to in point (b) or listed in the Annex.

The new measures also prohibit the direct or indirect sale, supply, transfer or export of arms and related materiel of all types, including weapons and ammunition, military vehicles and equipment, paramilitary equipment, and spare parts therefor, to Russia by nationals of Member States or from the territories of Member States or using their flag vessels or aircraft, whether originating or not in their territories.

The following are also prohibited:

• The provision of technical assistance, brokering services or other services related to military activities and to the provision, manufacture, maintenance and use of arms and related materiel of all types, including weapons and ammunition, military vehicles and equipment, paramilitary equipment, and spare parts therefor, directly or indirectly to any natural or legal person, entity or body in, or for use in Russia.
• The provision of financing or financial assistance related to military activities, including in particular grants, loans and export credit insurance or guarantee, as well as insurance and reinsurance for any sale, supply, transfer or export of arms and related materiel, or for the provision of related technical assistance, brokering services or other services directly or indirectly to any person, entity or body in, or for use in Russia.
• The import, purchase or transport of arms and related materiel of all types, including weapons and ammunition, military vehicles and equipment, paramilitary equipment, and spare parts therefor, from Russia by nationals of Member States

[These prohibitions will not apply to contracts concluded prior to 1 August 2014, or to the provision of spare parts necessary to the maintenance and safety of existing capabilities within the EU.]

• The direct or indirect sale, supply, transfer or export of all dual-use goods and technology listed in Annex I to Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (2) for military use in Russia or for any military end-user in Russia by nationals of Member States or from the territories of Member States or using their flag vessels or aircraft, whether originating or not in their territories.
• The provision of technical assistance, brokering services or other services related to goods and technology set out in paragraph 1 and to the provision, manufacture, maintenance and use of these goods and technology, directly or indirectly to any person, entity or body in, or for use in Russia;
• The provision of financing or financial assistance related to goods and technology referred to above, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of these goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly to any person, entity or body in, or for use in Russia.

[The prohibitions above shall be without prejudice to the execution of contracts or agreements concluded before 1 August 2014.]

• The direct or indirect sale, supply, transfer or export of certain technologies suited to deep water oil exploration and production, arctic oil exploration and production or shale oil projects in Russia, by nationals of Member States, or from the territories of Member States, or using vessels or aircraft under the jurisdiction of Member States, shall be subject to prior authorisation by the competent authority of the exporting Member State.

The Council Decision encourage third States to adopt restrictive measures similar to those provided above in order to maximise the impact of the measures.

For more information on EU restrictive measures in view of the crisis in Ukraine, see Factsheet on EU restrictive measures.

US - BIS expands export restrictions on Russia

On July 29, 2014, the US Department of Commerce’s Bureau of Industry and Security (BIS) announced that it is further restricting trade with Russia in response to Russia's continued actions supporting separatists in Ukraine. The announcement stated:

BIS will institute a policy denying export, reexport or foreign transfer of certain items for use in Russia's energy sector that may be used for exploration or production from deepwater, Arctic offshore, or shale projects that have the potential to produce oil. While these sanctions do not target or interfere with the current supply of energy from Russia or prevent Russian companies from selling oil and gas to any country, they make it difficult for Russia to develop long-term, technically challenging future projects.

In addition to these energy sector restrictions, BIS will add another Russian defense technology company – OJSC United Shipbuilding Corporation – to the Entity List based on a determination it is involved, or poses a significant risk of becoming involved, in activities contrary to the national security and foreign policy interests of the United States. Designation on the Entity List imposes a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations to the designated entities, with a presumption of denial.

These actions are being taken in conjunction with an announcement by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) that it also will impose sanctions on a number of parties.

US - President extends national emergency with respect to Lebanon

On July 31, 2014, the Federal Register published the Notice of July 29, 2014 – Continuation of the National Emergency With Respect to Lebanon. The notice extends for an additional year the national emergency declared in Executive Order 13441 (August 1, 2007) pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701–1706) because certain ongoing activities, such as continuing arms transfers to Hizballah that include increasingly sophisticated weapons systems, serve to undermine Lebanese sovereignty, contribute to political and economic instability in Lebanon, and continue to constitute an unusual and extraordinary threat to the national security and foreign policy of the United States.

EU announces additional restrictive measures relating to Ukraine

On 30 July 2014, the Official Journal published two Council Decisions: Council Decision 2014/507/CFSP of 30 July 2014 amending Decision 2014/386/CFSP concerning restrictions on goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol and Council Decision 2014/507/CFSP of 30 July 2014 amending Decision 2014/386/CFSP concerning restrictions on goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol and two Regulations: Council Regulation (EU) No 825/2014 of 30 July 2014 amending Regulation (EU) No 692/2014 concerning restrictions on the import into the Union of goods originating in Crimea or Sevastopol, in response to the illegal annexation of Crimea and Sevastopol and Council Implementing Regulation (EU) No 826/2014 of 30 July 2014 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine expanding restrictive measures relating to Ukraine.

Council Decision 2014/507/CFSP and Council Regulation 825/2014 provide for a ban on new investments related to infrastructure in the sectors of transport, telecommunications and energy and the exploitation of natural resources in Crimea and Sevastopol and an export ban on key equipment and technology related to those sectors. The new Regulation defines “brokering services” and “technical assistance” and prohibits:

• the granting of any financial loan or credit specifically relating to the creation, acquisition or development of infrastructure in the areas of transport, telecommunications or energy in Crimea or Sevastopol;
• the acquisition or extension of a participation, including the acquisition in full and the acquisition of shares and securities of a participating nature, in enterprises established in Crimea or Sevastopol that are engaged in the creation, acquisition or development of infrastructure in the areas of transport, telecommunications or energy in Crimea or Sevastopol;
• the creation of any joint venture relating to the creation, acquisition or development of infrastructure in the areas of transport, telecommunications or energy in Crimea or Sevastopol.
• the granting of any financial loan or credit specifically relating to the exploitation of oil, gas or mineral resources in Crimea or Sevastopol;
• the acquisition or extension of a participation, including the acquisition in full of such enterprises and the acquisition of shares and securities of a participating nature, in entreprises established in Crimea or Sevastopol that are engaged in the exploitation of oil, gas or mineral resources in Crimea or Sevastopol;
• the creation of any joint venture relating to the exploitation of oil, gas or mineral resources in Crimea or Sevastopol; and
• the provision, directly or indirectly, of technical assistance, brokering services related to the investment activities referred to above.

In addition, it shall be prohibited to sell, supply, transfer, export, directly or indirectly, key equipment and technology as listed in Annex III to any natural or legal person, entity or body in Crimea or Sevastopol or for use in Crimea or Sevastopol.

Annex III shall include key equipment and technology related to the creation, acquisition or development of infrastructure in the following sectors:

• transport;
• telecommunications;
• energy;
• the exploitation of oil, gas and mineral reserves in Crimea and Sevastopol.

There are exemptions for certain pre-existing agreements or contracts concluded before 30 July 2014; provided the competent authority has been informed at least 10 working days in advance.

Council Decision 2014/508/CFSP and Council Implementing Regulation (EU) No 826/2014 add 8 additional persons and 3 entities (including a bank, an arms manufacturer and an airline) to the list set out in the Annex to Decision 2014/145/CFSP and the Annex I to Regulation (EU) No 269/204.

On 31 July 2014, the European Council announced that it had adopted a package of additional restrictive measures in light of Russia's actions destabilising the situation in eastern Ukraine. These will apply from 1 August 2014 and only in respect of new contracts.

Further detail will be available once the relevant legislation is published in the Official Journal, but by way of summary, the new restrictive measures are:

• In order to restrict Russia's access to EU capital markets, EU nationals and companies may no more buy or sell new bonds, equity or similar financial instruments with a maturity exceeding 90 days, issued by major state-owned Russian banks, development banks, their subsidiaries and those acting on their behalf. Services related to the issuing of such financial instruments, e.g., brokering, are also prohibited.
• An embargo on the import and export of arms and related material from/to Russia, covering all items on the EU Common Military List.
• A prohibition on exports of dual use goods and technology for military use in Russia or to Russian military end-users, including all items in the EU Dual Use List.
• Exports of certain energy-related equipment and technology to Russia will be subject to prior authorisation, although export licences will be denied if products are destined for deep water oil exploration and production, arctic oil exploration or production and shale oil projects in Russia.

For more information on EU restrictive measures in view of the crisis in Ukraine, see Factsheet on EU restrictive measures.

US - FWS suspends imports of 2014 Zimbabwe elephant trophies taken on or after April 4, 2014

On July 31, 2014, the US Fish and Wildlife Service (FWS) published in the Federal Register a notice announcing that on July 17, 2014, the FWS made a determination that the import of sport-hunted African elephant trophies taken in Zimbabwe on or after April 4, 2014, until December 31, 2014, would be suspended. The decision to suspend importation of African elephant trophies taken in Zimbabwe was due to the FWS being unable to determine that the killing of the animal whose trophy is intended for import into the United States would enhance the survival of the species in the wild. Due to technical revisions needed to address an editorial error and to reflect consideration of ETIS data from the 16th Meeting of the Conference of Parties to Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) unintentionally left out of the July 17 finding document, the July 17 document was revised on July 22. These technical revisions did not alter the analysis or decision announced in the July 17 finding. This 2014 determination supersedes the interim suspension published in the Federal Register on May 12, 2014.

US expands sectoral sanctions under EO 13662

On July 29, 2014, he Office of Foreign Assets Control (OFAC) announced the addition of several Russian banks to the list of persons covered by the sectoral sanctions of Executive Order 13662. OFAC states that the following transactions by US persons or within the United States are hereby prohibited: transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity or new equity for these persons (listed here), their property, or their interests in property. All other transactions with these persons or involving any property in which one or more of these persons has an interest are permitted, provided such transactions do not otherwise involve property or interests in property of a person blocked pursuant to Executive Orders 13660, 13661, or 13662, or any other sanctions programs implemented by the Office of Foreign Assets Control.

On June 29, 2014, the President announced that the United States is

“…building on the measures we announced two weeks ago, the United States is imposing new sanctions in key sectors of the Russian economy: energy, arms, and finance. We’re blocking the exports of specific goods and technologies to the Russian energy sector. We’re expanding our sanctions to more Russian banks and defense companies. And we’re formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia.”

Details will be posted when known.

Canada amends Ukraine sanctions

On July 11, 2014, His Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act, made the Regulations Amending the Special Economic Measures (Ukraine) Regulations. The amendment adds the following names to Part 1 of the schedule to the Special Economic Measures (Ukraine) Regulations (SOR/2014-60):

• Viktor Yuriiovych ANOSOV
• Viacheslav Anatoliiovych APRAKSIMOV
• Fedir Dmytrovych BEREZIN
• Ruslan Yunirovish ILKAEV
• Valery Vladimirovich KAUROV
• Oleksandr Sergiyovych KHODAKOVSKYI
• Mykola Ivanovych KOZITSYN
• Oleksii Borysovych MOZGOVYI
• Valerii Kostiantynovych MUSIIENKO
• Viacheslav Mykolaiovych PETROV
• Ihor Venedyktovych PLOTNYTSKY
• Yurii Oleksandrovych PROTSENKO
• Oleh Anatoliiovych VASIN
• Serhii Anatoliyovych ZDRILIUK

Although the Regulations were published in the Canada Gazette on July 30, 2014, they came into force on July 11, the date they were registered.

EU announces additional restrictive measures relating to Ukraine

On 29 July 2014, the European Council issued a press statement confirming that it has agreed on a package of significant additional restrictive measures targeting sectoral cooperation and exchanges with the Russian Federation. These measures have not yet entered into force and the relevant EU instruments will likely be published on 30 July 2014 and will, inter alia:

• limit the access to EU capital markets for Russian State-owned financial institutions
• impose an embargo on trade in arms
• establish an export ban for dual use goods for military end users, and
• curtail Russian access to sensitive technologies particularly in the field of the oil sector.

The Council states that these measures reinforce (i) the current restrictive measures, which have so far only targeted persons and entities undermining Ukrainian territorial integrity and sovereignty, (ii) the suspension of EIB and EBRD financing, (iii) the restriction of investment and trade with Crimea and Sevastopol, and (iv) the reassessment of the Russia EU bilateral cooperation with a view to reducing the level of the cooperation.

For more information on EU restrictive measures in view of the crisis in Ukraine, see background note.

US - CBP extends Air Cargo Screening Pilot and reopens application period
On July 28, 2014, US. Customs and Border Protection (CBP) published in the Federal Register a general notice which announces that CBP is extending the Air Cargo Advance Screening (ACAS) pilot program period for an additional year and reopening the application period for new participants for 60 days. On October 24, 2012, CBP published a notice in the Federal Register that announced the formalization and expansion of the ACAS pilot program that would run for six months. On April 23, 2013, CBP published a notice in the Federal Register extending the pilot period for another six months. On October 23, 2013, CBP published a notice in the Federal Register extending the pilot period for an additional nine months.

The ACAS pilot is a voluntary test in which participants submit a subset of required advance air cargo data to CBP at the earliest point practicable prior to loading of the cargo onto the aircraft destined to or transiting through the United States.

CBP is extending the ACAS pilot program through July 26, 2015, and reopening the application period to accept applications for new ACAS pilot participants through September 26, 2014. Comments concerning any aspect of the announced test may be submitted at any time during the test period.
EU expands Ukrainian related sanctions

On 25 July 2014, the Official Journal published Council Decision 2014/499/CFSP of 25 July 2014 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, Council Implementing Regulation (EU) No 810/2014 of 25 July 2014 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine and Council Regulation (EU) No 811/2014 of 25 July 2014 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. The Decision and Implementing Regulations expand the legal criteria for sanctions restricting admission and freezing funds and economic resources to natural and legal persons, entities and bodies actively supporting, materially or financially, or benefiting from, Russian decision-makers responsible for the annexation of Crimea or the destabilisation of Eastern-Ukraine and by the addition of 15 natural and 18 legal persons and entities to the list of persons, entities and bodies subject to restrictive measures set out in the Annex to Decision 2014/145/CFSP. The list includes various self-proclaimed republics to the list. The names (see OJ documents for alternate spelling and additional information) and categories follow:

– Undermining the territorial integrity, sovereignty and independence of Ukraine:

• Mikhail Efimovich FRADKOV
• Nikolai Platonovich PATRUSHEV
• Aleksandr Vasilievich BORTNIKOV
• Rashid Gumarovich NURGALIEV
• Boris Vyacheslavovich GRYZLOV
• Sergei Orestovoch BESEDA
• Mikhail Vladimirovich DEGTYAREV
• Ramzan Akhmadovitch KADYROV
• Alexander Nikolayevich TKACHYOV
• Pavel GUBAREV
• Ekaterina GUBAREVA
• Fedor BEREZIN
• Valery Vladimirovich KAUROV
• Serhii Anatoliyovych ZDRILIUK
• Vladimir ANTYUFEYEV

– Bodies

• So called ‘Lugansk People's Republic’
• So called ‘Donetsk People's Republic’
• So called ‘Federal State of Novorossiya’
• International Union of Public Associations ‘Great Don Army’
• ‘Sobol’
• So called ‘Lugansk Guard’
• So called ‘Army of the Southeast’
• So called ‘Donbass People's Militia’
• ‘Vostok battalion’
– Entities whose ownership has been transferred contrary to Ukrainian law:
• State ferry enterprise ‘Kerch ferry’
• State enterprise ‘Sevastopol commercial seaport’
• State enterprise ‘Kerch commercial sea port’
• State enterprise Universal-Avia
• Resort ‘Nizhnyaya Oreanda’
• Crimean enterprise ‘Azov distillery plant’
• State concern ‘National Association of producers “Massandra”’
• ‘State enterprise Magarach of the national institute of wine’
• State enterprise ‘Factory of sparkling wine Novy Svet’

EU revises its Customs laboratories and chemicals websites
On 28 July 2014, the European Commission Taxation and Customs Union Newsletter announced that the 'European Customs laboratories' section of its website has been revamped and the page on ECICS, the customs database for chemicals, has been updated
WCO Council adopts HS 2017

On 11 July 2014, the WCO announced that the WCO Council, at its 123rd/124th Sessions in June 2014, adopted a Recommendation that lists recommended amendments to the Harmonized System (HS) nomenclature which will enter into force on 1 January 2017 (HS 2017). The announcement stated:

This Recommendation is being promulgated under the provisions of Article 16 of the HS Convention, which implies that HS Contracting Parties now have six months to notify the WCO Secretariat of an objection to a recommended amendment.

Since the entry into force of the current version of the HS (HS 2012), the HS Committee has been revising this version of the HS nomenclature for almost five years. HS 2017 will be the sixth version of the HS since the Convention entered into force in 1983. HS 2017 will enter into force for all HS Contracting Parties, but will exclude any amendments objected to during the six month timeframe.

The new version of the HS includes 234 sets of amendments. Environmental and social issues are a major feature of these amendments, due to the importance of the HS as a global tool for collecting trade statistics and monitoring trade. This is borne out by the fact that the HS Convention currently has 150 Contracting Parties, making it the WCO’s most successful international instrument to date.

The majority of the recommended amendments were broached by the Food and Agriculture Organization of the United Nations (FAO):

• Amendments relating to fish and fishery products are aimed at further enhancing the coverage of species and product forms which need to be monitored for food security purposes, and the better management of resources.
• Amendments relating to crustaceans, molluscs and other invertebrates are motivated by the importance of the trade in and consumption of these species in their various product forms.
• Amendments relating to cuttlefish and squid enlarge the coverage of the present HS codes for these species, in order to have all these species grouped together.

The classification of forestry products has also been modified, in order to enhance the coverage of wood species and get a better picture of trade patterns. The modification will enable trade data on tropical wood to be identified, resulting in better statistics on the trade in tropical wood and better data on the use of non-tropical hardwoods. In addition, the amendments include new subheadings for the monitoring and control of certain bamboo and rattan products.

Furthermore, HS 2017 amendments aim to provide detailed information on several categories of products that are used as antimalarial commodities. This will facilitate classification work, and the trade in these life-saving products.

The amendments also introduce specific subheadings to facilitate the collection and comparison of data on the international movement of certain substances controlled under the Chemical Weapons Convention.

New subheadings have also been created for a number of hazardous chemicals controlled under the Rotterdam Convention and for certain persistent organic pollutants (POPs) controlled under the Stockholm Convention. In some cases, there is a confluence of control regimes for chemicals by both the Rotterdam and Stockholm Conventions.

In addition, new subheadings have been created for the monitoring and control of pharmaceutical preparations containing ephedrine, pseudoephedrine or norephedrine, and for alpha-phenylacetoacetonitrile (APAAN), a pre-precursor for drugs.

Other amendments resulted from changes in international trade patterns. Headings 69.07 (unglazed ceramic products) and 69.08 (glazed ceramic products) were merged to take account of the fact that the main subheadings within these headings concern products which are essentially no longer manufactured, and the industry and trade no longer make a distinction between unglazed and glazed ceramic products, whilst new products with a very high trade volume are classified under subheadings 6907.90 and 6908.90 ("Other").

Furthermore, for purposes of adapting the HS to current trade practices, certain important products will be separately identified in either existing or new subheadings.

Advances in technology are also reflected in the amendments, inter alia, the size criteria for newsprint, light-emitting diode (LED) lamps, multi-component integrated circuits (MCOs), and hybrid, plug-in hybrid and all-electric vehicles.

Finally, the HS 2017 Recommendation includes amendments to clarify texts to ensure uniform application of the nomenclature. For example, the regrouping of monopods, bipods, tripods and similar articles in a new heading, namely 96.20.

US, Mexico sign agreement on food safety
On July 24, 2014, the US Food and Drug Administration (FDA) announced that it had signed a statement of intent to establish a new produce safety partnership with the two food safety agencies in Mexico—SENASICA, the National Service for Agro-Alimentary Public Health, Safety and Quality, and COFEPRIS, the Federal Commission for the Protection from Sanitary Risks. In the U.S., the FDA is implementing the Food Safety Modernization Act, and produce safety is a big part of that effort, while Mexico is implementing an amendment to its food safety laws that mandates standards for fresh produce, inspections, and surveillance and verification programs.

The statement of intent represents a strategy that is far-reaching and designed to achieve high rates of compliance with produce standards in each country. In the months and years to come, the FDA will be working with Mexico to identify practices to prevent contamination during the growing, harvesting, packing, holding and transportation of fresh fruits and vegetables and verification measures to ensure these preventive practices are working. Both countries will exchange information to better understand each other’s produce safety systems. The FDA said that this sharing is already underway. The agencies intend to develop culturally appropriate education and outreach materials to support industry compliance with produce safety standards, and will work on enhancing collaboration on laboratory activities and on outbreak response and traceback activities. The government agencies will engage industry, commerce, agriculture, academia and consumers in this effort.
US - Agriculture announces special import quota for upland cotton

On July 24, 2014, the Department of Agriculture's Commodity Credit Corporation announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use. The quota will be established on July 31, 2014, allowing importation of 14,741,821 kilograms (67,709 bales) of upland cotton. The announcement stated:

This action is being carried out under the authority of PL 110-246, enacted June 18, 2008, which requires that a special import quota be determined and announced immediately if, for any consecutive 4-week period, the U.S. Far East price exceeds the prevailing world market price. This condition was met during the consecutive 4-week period ending today.

Quota number 24 will be established as of July 31, 2014, and will apply to upland cotton purchased not later than October 28, 2014, and entered into the U.S. not later than January 26, 2015. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2014 through May 2014, the most recent three months for which data are available

UK - ECO launches new ‘fully compliant’ certificate for exporters

On 24 July 2014, the Export Control Organisation (ECO) posted Notice to Exporters 2014/21 – ECO launches new ‘fully compliant’ certificate for exporters. The notice explains that following industry consultation, the ECO has introduced a discretionary, site-specific, certificate for exporters who achieve full compliance at audit. The certificates officially confirm that on the day of audit (and only for the exports audited) the customer was found to be compliant.

Customers will also benefit from less frequent compliance visits, for as long as they remain fully compliant. The new timeframes for a fully compliant customer will be:

• For Military OGEL/OIEL users – 30 months
• For Dual Use only OGELs (including UGEAs)/DU OIELs users – 36 months
• Dealer to Dealer OIELs – 36 months

The customer will automatically be sent via email a Certificate of Compliance in Portable Document Format (PDF) by the Compliance Inspector, shortly after the inspector’s audit report has been agreed. ECO hopes to have certificates emailed to the company within a month of a successful audit.

The new certificates are discretionary; the decision to award a certificate is completely the ECO’s. There are no ‘grandfather rights’ – certificates will only be granted following a new audit. There are no rights of appeal.

The new system took effect from 1 July 2014.

EU, EFTA - 26 legal acts incorporated into the EEA Agreement

On 9 July 2014, the EEA EFTA States (Iceland, Liechtenstein and Norway) and the European Union adopted seven Joint Committee Decisions (JCDs) by written procedure incorporating 26 EU legal acts into the European Economic Area (EEA) Agreement.

One of the JCDs adopted by written procedure was the supplementary package on adaptations to the EEA Agreement, which were necessary due to Croatia’s accession to the EU.

EEA EFTA Comment on product safety and market surveillance proposal
On 17 July 2014, Iceland, Liechtenstein and Norway submitted a joint comment to the European Commission's proposals for actions in the field of product safety and market surveillance.

The Commission proposals are part of a package of initiatives outlined in the Communication '20 actions for safer compliant products for Europe: a multi-annual action plan for the surveillance of products in the EU'. The package also includes proposals for a Regulation on Consumer Product Safety and a Regulation on Market Surveillance.
EFTA-Central America FTA set to enter into force

On 23 July 2014, the European Free Trade Association (EFTA) announced that following its ratification by all parties, the free trade agreement (FTA) between the EFTA States – Iceland, Liechtenstein, Norway and Switzerland – and the Central American States of Costa Rica and Panama will become operational in the coming weeks. The announcement stated:

The FTA was signed in June 2013. Its entry into force will occur in three stages: on 19 August 2014 between Norway and the Central American States; on 29 August between Liechtenstein and Switzerland and the Central American States; and on 5 September between Iceland and the Central American States.

Notably covering trade in goods, trade in services, investment, competition, protection of intellectual property, sustainable development, cooperation and government procurement, the FTA will create new opportunities for economic operators on both sides.

Over the last four years, two-way merchandise trade between the EFTA and Costa Rica has increased by more than 80%, reaching a value of USD 265 million in 2013. Between EFTA and Panama, two-way merchandise trade reached a value of USD 546 million in 2013, representing an increase of 40% since 2009.

The agreement foresees that other Member States of the Central American Economic Integration System may accede to the FTA. Not counting their agreements with the European Union, the EFTA States currently have 25 FTAs with a total of 35 partner countries worldwide.

EU and US - E3/EU+3 and Iran agree to extend negotiations; limited sanctions easing under Joint Plan of Action also extended

On 20 July 2014, the E3/EU+3 (i.e., China, France, Germany, Russia, the UK and the United States, coordinated by the European Union High Representative for Foreign Affairs and Security Policy Catherine Ashton) agreed with Iran to extend the implementation of the measures agreed to under the Joint Plan of Action (JPOA) until 24 November 2014, including the limited sanctions relief specified in the JPOA.

As part of the voluntary relief measures agreed to by the EU, the EU agreed not to pursue new nuclear-related EU sanctions and to suspend certain nuclear-related and oil-related sanctions, as well as to set up a financial mechanism to facilitate Iran’s import of certain humanitarian goods.

The EU has extended the suspension of certain restrictive measures with effect from 21 July 2014 until 24 November 2014 pursuant to Council Decision 2014/480/CFSP. By way of summary, the suspension, as extended, continues to cover:

• the provision of insurance and transport in relation to Iranian crude oil sales to current customers;
• the import, purchase or transport of Iranian petrochemical products;
• the trade in gold and precious metals with the Iranian government and its public bodies; and
• an increase in thresholds for authorising financial transfers to and from Iran.

On 20 January 2014, the US Government implemented the JPOA by relaxing limited extraterritorial sanctions targeting certain parts of the Iranian petrochemical, automotive, previous metals, civil aviation, and petroleum sectors. These measures are described in more detail in our February 2014 client alert, and our comments in that alert regarding which activities are authorized, not authorized, and where we would advise proceeding with caution continue to apply.

As noted in our February 2014 client alert, except for the favourable US licensing policy for certain exports related to civil aviation safety and the financial mechanism to facilitate humanitarian transactions, this relaxation of sanctions had virtually no impact on persons subject to the US trade embargo against Iran. For these purposes, this includes entities organized under US laws and their non-US branches; individuals and entities in the US; US citizens and permanent resident aliens wherever located or employed; non-US entities owned or controlled by any of the foregoing; and non-US persons that cause any Iran-related transactions to occur in whole or in part in the US. The US Government has reiterated that it will continue to aggressively enforce the Iran sanctions during this period.

As announced by the State Department on 18 July 2014, the above-described limited sanctions relaxation is now extended through 24 November 2014. During the extended JPOA period, the US Government will continue to coordinate with Iran regarding the humanitarian financial mechanism. In response to these developments, the Office of Foreign Assets Control in the US Treasury Department (OFAC) updated and reissued guidance and FAQs on the U.S. implementation of the JPOA and also updated the statement of licensing policy on civil aircraft to reflect the new dates.

The foregoing is intended only to provide a general summary of recent developments. If you have any questions about the operation of the limited sanctions easing or if you require advice on any specific transactions or plans, please contact one of the members of Baker & McKenzie’s International Trade Practice Group. The contact information for inquiries may be found on Baker & McKenzie’s latest Client Alert on this subject, from which this article is excerpted.

Canada and the US announce Trusted Traveller and Trusted Trader enhancements under Beyond the Border Action Plan

On July 21, 2014, the Government of Canada announced that Canada and the United States (US) are delivering on key Beyond the Border Action Plan commitments related to joint Trusted Traveller and Trusted Trader programs, including the official opening of the eGate pilot project that allows NEXUS members extended expedited passage at the Peace Bridge port of entry in Fort Erie, Ontario. The announcement stated:

In addition, trusted traders importing goods into Canada can now apply for additional benefits to help them save time and money. Customs Self Assessment – Platinum (CSA-Platinum) is available to CSA importers who voluntarily demonstrate that their business systems, internal controls and self-testing processes are effective and reliable at ensuring trade compliance. In addition, non-resident importers in the US will now be eligible to apply to the CSA importer program. Previously, only importers residing in Canada or, in the case of corporations who had their head office in Canada or operated a branch office in Canada, were eligible to participate in the CSA program.

The CBSA has also launched a new online Trusted Trader Portal that allows companies to apply for membership in the Partners in Protection (PIP) program, and allows existing members to maintain their Trusted Trader membership. The Portal will serve as the foundation for future phases of Trusted Trader enhancements, including the streamlined exchange of program information between the Trusted Trader and the US Customs-Trade Partnership Against Terrorism (C-TPAT) portals.

US - President extends national emergency with respect to transnational criminal organizations

On July 22, 2014, the Federal Register published the Notice of July 18, 2014—Continuation of the National Emergency With Respect to Transnational Criminal Organizations. The notice extends for an additional year the national emergency declared in Executive Order 13581 of July 24, 2011 pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701–1706) to deal with the unusual and extraordinary threat to the national security, foreign policy and economy of the United States constituted by the activities of significant transnational criminal organizations. The notice stated:

The activities of significant transnational criminal organizations have reached such scope and gravity that they threaten the stability of international political and economic systems. Such organizations are becoming increasingly sophisticated and dangerous to the United States; they are increasingly entrenched in the operations of foreign governments and the international financial system, thereby weakening democratic institutions, degrading the rule of law, and undermining economic markets. These organizations facilitate and aggravate violent civil conflicts and increasingly facilitate the activities of other dangerous persons.

US - CBP and ITA seek comments on improving the entry process and airport-specific plans for international travelers
On July 22, 2014 the International Trade Administration (Commerce) and US. Customs and Border Protection (CBP) published in the Federal Register a notice with an opportunity for comments relating to the Presidential Memorandum, issued by President Obama on May 22, 2014 establishing a national goal and developing airport specific action plans to enhance the entry process for international travelers to the United States. The Memorandum directs the Secretaries of Commerce and Homeland Security to develop within 120 days a national goal for improving service levels for international arrivals. It also directs the Secretaries to develop airport-specific action plans that include actions from both private and public sectors to measurably improve the entry experience for international arrivals to those airports. The notice notifies interested stakeholders about how to submit comments and ideas on determining the national goal and how to improve all aspects of the international arrivals process. Comments must be received on or before Friday, August 15, 2014.
US-BIS adds Crimean, Russian and Ukrainian entities to the Entity List
On July 22, 2014, the Bureau of Industry and Security (BIS) published in the Federal Register a final rule [Docket No. 140429382-4382-01] which amends the Export Administration Regulations (EAR) by adding eleven persons under twelve entries to the Entity List. The persons who are added to the Entity List have been determined by the US Government to be acting contrary to the national security or foreign policy interests of the United States. These persons will be listed on the Entity List under the destinations of Crimea (Occupied), Russia, and Ukraine. There are twelve entries for the eleven persons on the Entity List because one person is being listed in multiple locations, resulting in an additional entry. Specifically, the additional entry covers one person that will be listed on the Entity List under the destinations of Crimea (Occupied) and Ukraine. See final rule for names.
US - CBP to close Jamieson Line, New York Border Crossing
On July 22, 2014, US. Customs and Border Protection (CBP) published in the Federal Register a final rule [Docket No. USCBP-2012-0037; CBP Dec. 14-08] amends the Department of Homeland Security (DHS) regulations pertaining to the field organization of CBP by closing the Jamieson Line, New York border crossing, which is used by six or fewer vehicles per day. The change is part of CBP’s continuing program to utilize its personnel, facilities, and resources more efficiently, and to provide better service to carriers, importers, and the general public. The final rule is effective on August 21, 2014.
US - FinCEN proposes special measures against FBME Bank Ltd.

On July 22, 2014, the Financial Crimes Enforcement Network (FinCEN), Treasury, published in the Federal Register a notice of proposed rulemaking to impose special measures against the FBME Bank Ltd., formerly known as Federal Bank of the Middle East, Ltd., as a financial institution of primary money laundering concern. In a Notice of Finding (also published in the Federal Register on July 22, 2014), the Director of FinCEN on July 15, 2014, found that FBME Bank Ltd., formerly known as Federal Bank of the Middle East, Ltd., is a financial institution operating outside of the United States that is of primary money laundering concern.

The Director of FinCEN proposes to impose the special measure authorized by 31 U.S.C. § 5318A(b)(5) (the “fifth special measure”). In connection with this action, FinCEN consulted with representatives of the Federal functional regulators, the Departments of Justice and State, among others. The fifth special measure proposed by the rulemaking would prohibit covered financial institutions from opening or maintaining correspondent accounts for or on behalf of FBME after the effective date of the final rule implementing the fifth special measure. Written comments must be submitted on or before September 22, 2014.

US - FWS to stop sending courtesy reminders that import/export licenses are expiring
On July 11, 2014, the US Fish and Wildlife Service (FWS) sent a Notice to the Wildlife Import/Export Community advising that due to staff and other resource constraints, the FWS Office of Law Enforcement (OLE) will, as of August 1, 2014, no longer be able to provide written notifications by mail to license holders to inform them in advance of the pending expiration date of their license and encourage them to request renewal on a timely basis. OLE will also no longer provide advance written notice to holders of designated port exception (DPE) permits to remind them of pending expiration. These notifications had been provided in the past as a courtesy.

Individuals and businesses that hold wildlife import/export licenses and DPE permits will be responsible for monitoring expiration dates and obtaining license/permit renewals without notification from the FWS. The FWS states that it is exploring options for electronic reminders for users of its eDecs system.
Russia - Sanctions issued against 12 Americans
In retaliation for the latest round of US sanctions against Russian entities in connection with activities related to Ukraine, on 19 July 2014, the Russian Ministry of Foreign Affairs announced that it had placed 12 Americans on its sanctions list pursuant to Federal Law № 272-FZ. The list of names contains an Admiral and a Federal Judge who were involved in ending the hunger strike by prisoners at Guantanamo Bay. The other ten are identified as soldiers, mostly retired, who were involved in the Abu Ghraib prison in Iraq, plus the Lt. General who was the Commander of US troops in Iraq in 2003-2004. The sanctions deny entry to the Russian Federation.
EU - New sanctions with respect to the situation in Ukraine

On 19 July 2014, the Official Journal published Council Decision 2014/475/CFSP of 18 July 2014 amending Decision 2014/145/CFSP and Council Regulation (EU) No 783/2014 of 18 July 2014 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. The new provisions replace Article 2(1) of Decision 2014/145/CFSP and Article 3(1) of Regulation (EU) № 269/2014 and expand the conditions for freezing of funds and economic resources to target legal persons, entities or bodies materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine:

(a) natural persons responsible for, actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine or which obstruct the work of international organisations in Ukraine, and natural or legal persons, entities or bodies associated with them;
(b) legal persons, entities or bodies supporting, materially or financially, actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine; or
(c) legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons, entities or bodies which have benefited from such a transfer.

The Decision and Regulation follow a special meeting of the European Council held on 16 July 2014 in which the delegations agreed to:

• Discontinue the application of their agreement of 20 February 2014 on export licences
• Expand the restrictive measures, with a view to targeting entities, including from the Russian Federation, that are materially or financially supporting actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence.
• Consider the possibility of targeting individuals or entities who actively provide material or financial support to the Russian decision-makers responsible for the annexation of Crimea or the destabilisation of Eastern-Ukraine
• Request the EIB to suspend the signature of new financing operations in the Russian Federation.
• Invite the Commission to re-assess EU-Russia cooperation programmes with a view to taking a decision, on a case by case basis, on the suspension of the implementation of EU bilateral and regional cooperation programmes. However, projects dealing exclusively with cross-border cooperation and civil society will be maintained.

Legal 500 Names Baker & McKenzie Team of the Year for International Trade

The Legal 500 USA recently named Baker & McKenzie "Team of the Year" for its International Trade practice in its first-ever awards recognizing the best private practice teams in the United States. The awards are given to "elite practitioners" based on results of more than 50,000 interviews and comprehensive research into the US legal market.

Click here to view the full press release.

US announces new sectoral sanctions targeting Russia’s financial services and energy sectors, sixth round of Ukraine-related designations, and strengthened US export controls targeting Russia

On July 16, 2014, the Office of Foreign Assets Control (OFAC) announced new sectoral sanctions targeting Russia’s financial services and energy sectors and a sixth group of “Specially Designated Nationals” (SDNs) related to the crisis in Ukraine with the designation of 11 entities and 5 individuals in Crimea and Russia. On the same day, the Bureau of Industry and Security (BIS) also announced plans to add the same 11 entities to the Entity List.

1. New Sectoral Sanctions Targeting Russia

On July 16, 2014, OFAC announced the imposition of sectoral sanctions to target the financial services and energy sectors in Russia under Executive Order 13662. Under these new sectoral sanctions, limited and targeted restrictions have been placed on “US-Person” dealings in new debt or new equity of two Russian banks (Gazprombank OAO and VEB) and in new debt of two Russian energy companies (OAO Novatek and Rosneft).

None of these four Russian companies has been designated as an SDN or had its property or interests in property blocked/“frozen.” Instead, pursuant to Executive Order 13662, these four Russian companies have been added to a new “Sectoral Sanctions Identifications List” pursuant to Directives 1 (financial services sector) and 2 (energy sector).

For purposes of the sectoral sanctions, “US Persons” include (i) entities organized under US laws and their non-US branches, (ii) individuals or entities in the United States, or (iii) US citizens or permanent resident aliens (“Green Card” holders) wherever located or employed. Non-US Persons, including separately incorporated foreign subsidiaries of US companies, may be subject to US jurisdiction if they cause prohibited transactions to occur in whole or in part in the United States or anywhere by US Persons.

Under Directive 1, US Persons are prohibited, as of July 16, from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity or new equity in relation to Gazprombank OAO, VEB, or any entity 50% or more owned by either company. Other than these specific restrictions, US Persons are generally permitted to engage in transactions and dealings with Gazprombank OAO or VEB, including dealings in debt or equity that predates July 16, 2014.

Under Directive 2, US Persons are prohibited, as of July 16, from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity in relation to OAO Novatek, Rosneft, or any entity 50% or more owned by either company. Other than these specific restrictions, US Persons are generally permitted to engage in transactions and dealings with OAO Novatek or Rosneft, including dealings in debt that predates July 16, 2014. Directive 2 does not impose restrictions on US-Person dealings in new equity of OAO Novatek or Rosneft.

As part of its announcement, OFAC issued General License No. 1 to authorize US-Person dealings in derivative products linked to underlying assets that constitute new debt described above. OFAC also published FAQs about these developments.

2. New SDNs

On the same day, OFAC also announced its sixth group of SDNs related to the crisis in Ukraine and added 11 entities and 5 individuals in Crimea and Russia to the US SDN List pursuant to Executive Order 13660 or Executive Order 13661. US Persons are now prohibited from dealing (directly or indirectly) with these SDNs and any entity 50% or more owned by an SDN.

According to the US Treasury Department press statement, the new SDNs have been designated for the following reasons:

Eight companies for operating in the arms or related materiel sector in Russia under Executive Order 13661:

• JSC Concern Almaz-Antey
• Federal State Unitary Enterprise State Research and Production Enterprise Bazalt
• JSC Concern Sozvezdie
• JSC MIC NPO Mashinostroyenia
• Kalashnikov Concern
• KBP Instrument Design Bureau
• JSC Concern Radio-Electronic Technologies
• Uralvagonzavod

Four individuals for their status as Russian government officials under Executive Order 13661:

• Sergey Beseda
• Oleg Savelyev
• Sergei Neverov
• Igor Shchegolev

Three entities and one individual under Executive Order 13660:

• Luhansk People’s Republic
• Donetsk People’s Republic
• Feodosiya Enterprise
• Aleksandr Borodai

3. New Designations on the Entity List

In a coordinated statement, BIS also announced that it plans to add the same 11 entities designated as SDNs to the Entity List pursuant to the Export Administration Regulations (EAR). (The four Russian companies subject to Executive Order 13662’s sectoral sanctions were not added to the Entity List.)

The inclusion of the 11 entities on the Entity List means that a BIS license will be required for the export, reexport or in-country transfer by any US or non-US person of items (i.e., goods, software, technology) subject to the EAR to any of these entities, with a presumption of denial. Based on previous Entity List designations under US sanctions targeting Russia, the new EAR licensing requirements are likely to apply to both controlled and non-controlled (aka EAR99) items intended for any of these entities.

For additional information on the sanctions related to the situation in Ukraine, please contact Nick Coward, Ed Dyson, Janet Kim or Alex Lamy.

US - President extends national emergency with respect to Taylor Regime (Liberia)
On July 17, 2014, the Federal Register published the Notice of July 15, 2014 - Continuation of the National Emergency With Respect to the Former Liberian Regime of Charles Taylor. The notice extends for an additional year the national emergency declared in Executive Order 13348 of July 22, 2004 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 former Liberian President Charles Taylor and other persons, in particular their unlawful depletion of Liberian resources and their removal from Liberia and secreting of Liberian funds and property, which have undermined Liberia’s transition to democracy and the orderly development of its political, administrative, and economic institutions and resources.

Although Liberia has made significant advances to promote democracy, and the Special Court for Sierra Leone convicted Charles Taylor for war crimes and crimes against humanity, the actions and policies of Charles Taylor and others have left a legacy of destruction that still challenge Liberia’s transformation and recovery. The actions and policies of these persons continue to pose an unusual and extraordinary threat to the foreign policy of the United States.
Turkey - Safeguard investigation on printing, writing and copying papers launched
On 15 July 2014, the WTO announced that Turkey, by communication dated 14 July 2014, notified the WTO’s Committee on Safeguards that it initiated on 21 June 2014 a safeguard investigation on printing, writing and copying papers. The investigation is being conducted by the Ministry of Economy, Directorate General for Imports, Department of Safeguards.

A safeguard investigation seeks to determine whether increased imports of a product are causing, or is threatening to cause, serious injury to a domestic industry.

During a safeguard investigation, importers, exporters and other interested parties may present evidence and views and respond to the presentations of other parties.

A WTO member may take a safeguard action (i.e. restrict imports of a product temporarily) only if the increased imports of the product are found to be causing, or threatening to cause, serious injury.

Further information is available in document G/SG/N/6/TUR/18 on the WTO website.
WCO, INTA sign MOU to collaborate against global counterfeiting
On 15 July 2014, the WCO announced that it and the International Trademark Association (INTA) signed a Memorandum of Understanding at the WCO headquarters in Brussels on 14 July 2014. Through this partnership INTA and WCO will increase their collaborative efforts in the fight against counterfeiting and its impact on businesses, governments and citizens worldwide. WCO Secretary General Kunio Mikuriya and INTA CEO Etienne Sanz de Acedo signed the agreement on behalf of their organizations.

The partnership will provide INTA and WCO with a platform to strengthen Customs coordination through education and training projects, and through the exchange of information and best practices between Customs and the private sector. The organizations will also place a strong emphasis on public education to raise awareness about the dangers of counterfeiting and its impact on the global economy, including collaboration on INTA’s public awareness initiative, the Unreal Campaign.

The International Trademark Association (INTA), founded in 1878, is a global association of trademark owners and professionals dedicated to supporting trademarks and related intellectual property in order to protect consumers and to promote fair and effective commerce. Members include more than 6,400 trademark owners, professionals and academics from more than 190 countries, who benefit from the Association’s global trademark resources, policy development, education and training, and international network.
US-FTC issues final revisions to the Guides for the Rebuilt, Reconditioned and Other Used Automobile Parts Industry

On July 14, 2014, the Federal Trade Commission (FTC) published in the Federal Register a final revision to the Guides for the Rebuilt, Reconditioned and Other Used Automobile Parts Industry (Used Auto Parts Guides or Guides). The FTC has completed its review of the Guides and has determined to revise and retain them. The Guides provide advice to industry members on how they can avoid engaging in unfair or deceptive practices that violate Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45. The Guides deem certain practices to be unfair or deceptive, including the following:

• Misrepresenting industry products as new or misrepresenting the amount of use of an industry product;
• Misrepresenting the identity of anyone who worked on an industry product after it was removed from the original vehicle;
• Misrepresenting the condition of an industry product or the amount of work done to it after its removal from the original vehicle.

This action is effective as of August 22, 2014.

US - FTC seeks comments on its Hobby Protection Act rules and regulations
On July 14, 2014, the Federal Trade Commission (FTC) published in the Federal Register a request for public comments on the overall costs and benefits, and regulatory and economic impact, of its Rules and Regulations Under the Hobby Protection Act (Rules), as part of the agency’s regular review of all its regulations and guides. Comments must be received on or before September 22, 2014.

On November 29, 1973, the President signed into law the Hobby Protection Act (the Act), 15 U.S.C. 2101-06. The Act requires manufacturers and importers of “imitation political items” to “plainly and permanently” mark them with the “calendar year” the items were manufactured. The Act also requires manufacturers and importers of “imitation numismatic items” to “plainly and permanently” mark these items with the word “copy.” The Act directed the Commission to promulgate regulations for determining the “manner and form” that imitation political items and imitation numismatic items are to be permanently marked with the calendar year of manufacture or the word “copy.” In 1975 (amended in 1988), the FTC issued Rules and Regulations Under the Hobby Protection Act, 16 C.F.R. Part 304. The FTC most recently reviewed the Rules in 2004. That review yielded many comments proposing that the FTC expand coverage to products beyond the scope of the Act and address problems involving the selling (or passing off) as originals of reproductions of antiques and other items not covered by the Act. However, the FTC retained the Rules without change, noting that it did not have authority under the Act to expand the Rules as requested.
Canada - CBSA posts trade compliance verification priorities

The Canada Border Services Agency (CBSA) has posted on its website a document entitled, Trade Compliance Verifications – July 2014. The document explains that CBSA manages trade compliance with the Tariff Classification, Valuation, and Origin programs using two post-release verification processes: random verifications and verification priorities.

Random verifications are designed to measure compliance rates and revenue loss and the results may be used for many purposes, including risk assessment; revenue assessment; and promoting voluntary compliance.

Targeted verification priorities are determined through a risk-based, evergreen process, meaning that new targets are added throughout the year. Verification priorities may also be carried over from previous years. The current verification priorities are:

Tariff Classification

Harmonized System Number(s)

1.

Fresh Cut Flowers

0603.19.00

2.

Pickled Vegetables

2001.90.90.91

3.

Curling Irons (Round 2)

8516.32.10

4.

Spectacle Lenses

9001.40.10 and 9001.50.10

5.

Furniture for Non-Domestic Purposes

Various goods of Headings 94.01 and 94.03

6.

Palm Oil

1511.90.10 and 1511.90.20

7.

Chemical Products

Various goods of Heading 38.08

8.

Safety Headgear (Round 2)

6506.10.10.90

9.

Seaweed (Round 2)

1212.21.00 and 1212.29.00

10.

Dextrins and Other Modified Starches (Round 2)

3505.10.90

11.

Disposable and Protective Gloves (Round 2)

3926.20.10 and 4015.19.10

12.

Wheel Rims and Spokes (Round 2)

8714.92.00

13.

Coconut Milk From Asian Countries (Round 2)

1106.30.00; 2008.19.90 and 2106.90.10.90

14.

Batteries (new)

8506.10.10 and 8506.50.10.

15.

Gazebos (new)

9406.00.90.20

16.

Apparel Samples (new)

9936.00.00

17.

Bags of Polymers of Ethylene (new)

3923.21.90

18.

Footwear Valued at $30 or More per Pair (new)

6403.59.20 and 6403.99.30

19.

Hair Extensions (new)

6703.00.00

20.

Machinery for Public Works (new)

8479.10.00

21.

Sacks and Bags under Tariff Item 9903.00.00 (new)

3923.21.90, 6305.32.00 and 6305.33.00

22.

Special Purpose Motor Vehicles (new)

8705.90.90.90

23.

Polyurethanes in Primary Forms (new)

3909.50.00

Valuation

Harmonized System Number(s)

24.

Fresh Cut Flowers

0603.19.00

25.

Apparel

Various goods of Chapters 61 and 62

26.

Footwear

Various goods of Chapter 64

27.

Yachts for Pleasure or Sport

Various goods of Heading 89.03

28.

Preparations and Pastrycooks’ Products

Various goods of Chapter 19

Origin

Harmonized System Number(s)

29.

Bedding and Drapery

Various goods of Headings 63.01, 63.02 and 63.03

30.

Mattress Upholstery

Various goods of Chapters 54, 55 and 60

31.

Cotton Pants

6203.42

32.

T-Shirts

Heading 61.09

33.

Jewelry (new)

7113.11.90; 7113.19.90 and 7113.20.90


MOFCOM announces ruling on re-investigation of AD/CVD measures against US chicken in light of WTO decision
On July 10, 2014, the Ministry of Commerce (MOFCOM) announced that on July 8, 2014, it released a ruling announcement on re-investigation of anti-dumping (AD) and countervailing (CV) measures against chicken imported from the United States to carry out the ruling by the WTO trade dispute settlement mechanism.

MOFCOM made the ruling in its announcement that during the period of investigation, dumping and subsidy existed in chicken imported from the US. China’s domestic industry was substantially harmed and there was causal relationship between dumping and subsidy and the substantive damage. In addition, MOFCOM adjusted the dumping margin and price-subsidy rate of the US companies in light of the results.

Starting from July 9, 2014, importers of chicken products imported from the US should pay AD and CV duties at Chinese Customs in accordance with the duty rates determined by the announcement. It is understood that the Chinese antidumping duties will now range from 46.6 percent to 73.8 percent on imports from US suppliers, a significant dip from the previous 50.4-105.4 percent levy.

The tariff numbers of the above cited products are 02071100, 02071200, 02071311, 02071319, 02071321, 02071329, 02071411, 02071419, 02071421, 02071422, 02071429 and 05040021 in the Customs Import and Export Tariff of the People’s Republic of China.
USTR seeks applicants for NAFTA Chapter 14 dispute settlement roster
On July 10, 2014, the Office of the United States Trade Representative (USTR) published in the Federal Register an invitation for applications from eligible individuals wishing to be included on roster of individuals who would be willing and able to serve as panelists in dispute settlement proceedings arising under Chapter Fourteen (Financial Services) of the NAFTA. Individuals are appointed for a term of three years.

Applications should be received no later than August 25, 2014.
International Policy Statement issued by the NRC
On July 10, 2014, the Nuclear Regulatory Commission (NRC) published in the Federal Register a document [NRC-2014-0112] issuing an International Policy Statement. The International Policy Statement captures a brief history of almost 40 years of involvement in international activities and how this has impacted the NRC. The International Policy Statement also outlines how international activities directly support the NRC’s goals and mission, and enumerates specific elements in which the NRC will proactively engage.
NRC amends rules on export and import of nuclear materials
On July 10, 2014, the Nuclear Regulatory Commission (NRC) published in the Federal Register a final rule [NRC-2014-0007] amending its regulations pertaining to the export and import of nuclear materials and equipment. The rulemaking is necessary to conform the export controls of the United States to the international export control guidelines of the Nuclear Suppliers Group (NSG), of which the United States is a member. The final rule conforms the NRC’s export and import regulations in 10 C.F.R. part 110, “Export and Import of Nuclear Equipment and Material,” and appendices A, B, C, D, E, F, G, H, I, J, K, N, and O, which contain illustrative lists of items under the NRC’s export licensing authority, to current nuclear nonproliferation policies of the Executive Branch. These revisions are necessary to implement changes made to the NSG Guidelines, “Guidelines for Nuclear Transfers (INFCIRC/254/ Revision 12/Part 1), June 2013,” as adopted by the governments participating in the NSG at the June 2012 and 2013 Plenary Meetings. In addition, this rule amends § 110.30, “Members of the Nuclear Suppliers Group,” to add Mexico and Serbia as member countries of the NSG that are eligible to receive radioactive materials under certain general licenses for export. The NSG Guidelines can be found at: www.nuclearsuppliersgroup.org

In addition, the final rule incorporates by reference the current version of the International Atomic Energy Agency’s (IAEA) document, “Nuclear Security Recommendations on Physical Protection of Nuclear Material and Nuclear Facilities (INFCIRC/225/Revision 5), January 2011.” The final rule makes certain editorial revisions, and corrects typographical errors.

The final rule is effective August 11, 2014, except that the changes to § 110.44(a) and (b)(1) and appendix M to 10 C.F.R. part 110 are effective December 31, 2014. The incorporation by reference of the material in this document is approved as of December 31, 2014.
US - OFAC adopts Zimbabwe Sanctions Regulations with changes
On July 10, 2014, the Office of Foreign Assets Control (OFAC) published in the Federal Register a final rule, adopting with changes, the Zimbabwe Sanctions Regulations (31 C.F.R. Part 541) that were previously published on July 29, 2004, as an interim final rule. These changes primarily amend the Zimbabwe Sanctions Regulations to implement Executive Order (EO) 13391 of November 22, 2005, “Blocking Property of Additional Persons Undermining Democratic Processes or Institutions in Zimbabwe,” and EO 13469 of July 25, 2008, “Blocking Property of Additional Persons Undermining Democratic Processes or Institutions in Zimbabwe.”
US - APHIS continues to implement risk-based sampling at additional plant inspection stations

On July 8, 2014, the Animal and Plant Health Inspection Service (APHIS) announced that on August 4, 2014, APHIS Plant Protection and Quarantine (PPQ) will continue the implementation of risk-based sampling on shipments of plants for planting at the following plant inspection stations:

• Seattle, Washington
• Los Angeles (City of El Segundo), California
• Atlanta, Georgia
• Jamaica, New York
• Miami, Florida (air cargo)

On September 2, 2014, APHIS PPQ will implement risk-based sampling on shipments of plants at the following plant inspection stations:

• Los Indios, Texas
• Miami, Florida (maritime cargo)
• San Francisco, California (air cargo)

APHIS-PPQ will use sampling rates and methods that consider input from affected industries to minimize adverse effects on commerce. This new inspection protocol will provide data to improve APHIS understanding of the highest risk plants entering the United States, which will allow it to focus its efforts to safeguard US agriculture and the environment from the introduction of harmful plant pests and diseases. This information will also help in expediting the inspection process of low-risk plants entering the United States. APHIS-PPQ will adjust operational procedures as needed prior to implementation at other plant inspection stations.

All plants for planting will be sampled at a rate that will provide sufficient data to evaluate the level of risk. The categorization of risk will be revised regularly in response to data from all inspections. This will allow APHIS-PPQ to more effectively focus resources towards plant species that pose the greatest risk. APHIS-PPQ will be expanding risk-based sampling in the coming months, utilizing the incremental implementation to minimize delay of imports.

Risk-based sampling will require more time to inspect some shipments. More samples may be inspected at the discretion of the APHIS inspector. To expedite the process, importers should ensure that an adequate number of staff is available to unload sample units for inspection. APHIS inspectors do not provide loading or unloading services. When quarantine action pests are detected on a commingled shipment, the entire shipment is subject to action required. APHIS is committed to providing the necessary number of inspectors to avoid any delays associated with the implementation of the new sampling protocol.

US, Chile sign Customs Mutual Assistance Agreement

On July 1, 2014, US Customs and Border Protection (CBP) announced that the United States signed a Customs Mutual Assistance Agreement (CMAA) with Chile on June 30, 2014 marking a significant milestone in collaboration on security and trade facilitation between the two countries. The CBP Commissioner signed the agreement on behalf of CBP and US Immigration and Customs Enforcement (ICE) and the Minister of Finance signed the agreement on behalf of Chile.

The U.S. – Chile Customs Mutual Assistance Agreement was signed at the US Department of State as a part of a larger Chilean delegation visit to the United States, including meetings between President Barack Obama and Chilean President Michelle Bachelet.

The United States has now signed 70 CMAAs with other customs administrations across the world. CMAAs are bilateral agreements between countries and enforced by their respective customs administrations. They provide the legal framework for the exchange of information and evidence to assist countries in the enforcement of customs laws, including duty evasion, trafficking, proliferation, money laundering, and terrorism-related activities. CMAAs also serve as foundational documents for subsequent information sharing arrangements, including mutual recognition arrangements on authorized economic operator programs.

US - CBP posts exporter eligibility requirements for C-TPAT

US Customs and Border Protection recently posted “Exporter Entity Eligibility Requirements” for participation in the Customs-Trade Partnership Against Terrorism (C-TPAT).

For C-TPAT purposes, an exporter is defined as a person or company who, as the principal party in interest in the export transaction, has the power and responsibility for determining and controlling the sending of the items out of the United States.

Entities that wish to participate in the C-TPAT Exporter program must meet with the program’s definition of an exporter as well as meet with the following eligibility requirements:

• Be an active US Exporter out of the United States.
• Have a business office staffed in the US
• Be an active US Exporter with a documentable

o Employee Identification Number (EIN), or
o Dun & Bradstreet (DUNS) number.

• Have a documented export security program and a designated officer or manager who will act as the C-TPAT program main point of contact. Additionally the participant should have an alternate point of contact should the designated point of contact be unavailable.
• Commit to maintaining the C-TPAT supply chain security criteria as outlined in the C- TPAT Exporter agreement.
• Create and provide CBP with a C-TPAT supply chain security profile which identifies how the Exporter will meet, maintain, and enhance internal policy to meet the C-TPAT Exporter security criteria.
• In order to be eligible the Exporter must have an acceptable level of compliance for export reporting for the latest 12-month period and be in good standing with US Regulatory Bodies such as: Department of Commerce, Department of State, Department of Treasury, Nuclear Regulatory Commission, Drug Enforcement Administration, and Department of Defense.

Additional details on business partner requirements; security procedures; point of origin; participation/certification in foreign Customs Administrations supply chain security programs; container security, inspection, seals and storage; conveyance tracking and monitoring procedures; physical access controls; personnel security; procedural security; physical security; export training and threat awareness; and information technology are found in a separate document entitled, “Customs-Trade Partnership Against Terrorism (C-TPAT) Exporter Eligibility Requirements.”

US - Issuance of an Executive Order Related to the Democratic Republic of the Congo

The President on July 8, 2014 signed a new Executive Order “Taking Additional Steps to Address the National Emergency With Respect to the Conflict in the Democratic Republic of the Congo”.

The new Executive order blocks all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person (including any foreign branch) of the following persons and provides that the property may not be transferred, paid, exported, withdrawn, or otherwise dealt in the persons listed in the Annex to the order; and any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

• to be a political or military leader of a foreign armed group operating in the Democratic Republic of the Congo (DRC)that impedes the disarmament, demobilization, voluntary repatriation, resettlement, or reintegration of combatants;
• to be a political or military leader of a Congolese armed group that impedes the disarmament, demobilization, voluntary repatriation, resettlement, or reintegration of combatants;
• to be responsible for or complicit in, or to have engaged in, directly or indirectly, any of the following in or in relation to the DRC:

(1) actions or policies that threaten the peace, security, or stability of the DRC;
(2) actions or policies that undermine democratic processes or institutions in the DRC;
(3) the targeting of women, children, or any civilians through the commission of acts of violence (including killing, maiming, torture, or rape or other sexual violence), abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law;
(4) the use or recruitment of children by armed groups or armed forces in the context of the conflict in the DRC;
(5) the obstruction of the delivery or distribution of, or access to, humanitarian assistance;
(6) attacks against United Nations missions, international security presences, or other peacekeeping operations; or
(7) support to persons, including armed groups, involved in activities that threaten the peace, security, or stability of the DRC or that undermine democratic processes or institutions in the DRC, through the illicit trade in natural resources of the DRC;

• except where intended for the authorized support of humanitarian activities or the authorized use by or support of peacekeeping, international, or government forces, to have directly or indirectly supplied, sold, or transferred to the DRC, or been the recipient in the territory of the DRC of, arms and related materiel, including military aircraft and equipment, or advice, training, or assistance, including financing and financial assistance, related to military activities;
• to be a leader of an entity, including any armed group, that has, or whose members have, engaged in any of the activities described above or an entity whose property and interests in property are blocked pursuant to the order;
• to have materially assisted, sponsored, or provided financial, material, logistical, or technological support for, or goods or services in support of any of the activities described above or any person whose property and interests in property are blocked pursuant to this order; or
• to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order."

A new subsection (d) is added to section 1 of Executive Order 13413 to read as follows:

"(d) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit gr granted prior to the effective date of this order

US - USTR reallocates unused 2014 raw cane sugar TRQ

On July 3, 2014, the Office of the United States Trade Representative (USTR) announced country-specific reallocations of the fiscal year (FY) 2014 in-quota quantity of the World Trade Organization (WTO) tariff-rate quota (TRQ) for imported raw cane sugar. TRQs allow countries to export specified quantities of a product to the United States at a relatively low tariff, but subject all imports of the product above a pre-determined threshold to a higher tariff.

Based on consultations with quota holding countries, USTR is reallocating 99,290 metric tons* raw value (MTRV) of the original TRQ for raw cane sugar from countries that have stated they will be unable to fill previously allocated FY 2014 WTO raw sugar TRQ quantities.

USTR is allocating this quantity to the following countries in the quantities specified below:

Country

FY 2014

Reallocation

Country

FY2014

Reallocation

Argentina

4,523

Honduras

1,052

Australia

8,730

India

841

Belize

1,157

Jamaica

1,157

Bolivia

841

Mozambique

1,367

Brazil

15,251

Nicaragua

2,209

Colombia

2,524

Panama

3,050

Costa Rica

1,578

Peru

4,312

Dominican Republic

18,512

Philippines

14,199

Ecuador

1,157

South Africa

2,419

El Salvador

2,735

Swaziland

1,683

Fiji

947

Thailand

1,473

Guatemala

5,049

Zimbabwe

1,262

Guyana

1,262

These allocations are based on the countries’ historical shipments to the United States. The allocations of the raw cane sugar TRQ to countries that are net importers of sugar are conditioned on receipt of the appropriate verifications of origin. Certificates for quota eligibility must accompany imports from any country to which an allocation is provided. [*Conversion factor: 1 metric ton = 1.10231125 short tons.]

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Chair, NA International
Commercial Practice Group

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


Members, US International
Trade Compliance Steering Committee


Janet K. Kim
Partner, Washington DC
Email: Janet Kim
T + 1 202 835 1653

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

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


Editor, International Trade
Compliance Update


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