Japan add exemption notes to 2B352.d

On August 25, 2010, METI posted the public comment in update of classification list of 2B352.d.
"Cross (tangential) flow filtration equipment and components"

2B352 is controlled under Australia Group ("AG") regime. In June 2010, Japan proposed AG to make exemption of certain components of 2B352.d and it was admitted in AG.
Accordingly, Japan update the local export control list.
2B352 items are treated by Health care industry and certain exemptions note would be beneficial for them.

The implementation is expected in certain months ahead.

(Source: http://search.e-gov.go.jp/servlet/Public?CLASSNAME=PCMMSTDETAIL&id=595110071 )

Singapore Customs amend stragetic goods form (2)

As reported in my blog in Aug. 20, Singapore Customs amended strategic goods classification request form for encryption items. Below is further update and clarification of this.

In view of the upcoming adaptation of the Ancillary encryption Note 4 in April 2011, Singapore Customs (SC) has updated their Encryption classification form (now known as Annex A - Product Questionnaire A-1 Cryptography).
When asked for further explanation on why they included questionnaires related to Note 4 even though it has not been implemented, SC explained that they will look at ALL the information (including those related to Note 4) provided by the traders as part of their classification process.

In my personal opinion, the usage of the new form before Note 4 is implemented is to prepare the SC classification team to be familiarized with the new section before the actual roll out in April 2011.


India amend The Foreign Trade Act of 1992

My good old friend is kindly shared India's regulatory development information.
According to the web news below, The Foreign Trade Act of 1992 will be amended.


(Quote from http://www.taxguru.in/ )
The Foreign Trade (Development and Regulation) Amendment Bill, 2010, (Sill’) has been passed by Rajya Sabha on 9 August 2010. The Bill seeks to amend the Foreign Trade (Development and Regulation) Act, 1992 (‘the Act’) which empowers the government to regulate trade in goods. The amendment now seeks to bring in ’services’ and ‘technology’ within the purview of this Act. It also aims to impose Quantitative Restrictions and to bring in provisions for more stringent control for trade of dual-use goods and technologies.
However, the effective date of the provisions would be notified separately.

(End of Quote)

From this article, I'm not quite sure what is the impact to traders, as the details are not described. It seems India will introduce the license control over the transfer of "services" and "technology", however if you look through the SCOMET list, certain kind of technology is already in the list. What is the new substantial impact of the amendment?
(Highlight of SCOMET list: http://dgftcom.nic.in/exim/2000/scomet.htm )


Singapore Customs amend stragetic goods form (1)

According to the Singapore Customs e-mail news (Singapore Customs: Updates to Strategic Goods Control Website - 19 Aug 2010), their web site is updated to show amendment of various application form. The form page is in below URL.

I looked through these forms, and find one interesting point.
It is in Annex A - Product Questionnaire A-1 Cryptography, which is questionnaire form of classification of encryption product.

In page 3 of this Annex A (Section C: Functionality of Product, question a. and b.), there are questions a.) and b.) to verify whether the product is "Ancillary encryption", which is exempted from Category 5 - part 2 in Wassenaar dual-use list.

But my understanding is that Strategic Goods (Control) Order 2010 (effective from 1 Apr 2010) don't yet reflect Wassenaar 2010 dual-use list which contains Ancillary encryption Note 4.
I looked through the Singapore list again, but I don't find Ancillary encryption Note 4 in Singapore list.

Why Singapore Customs introduce Ancillary encryption question into their classification application form? Are they implementing Ancillary encryption actually? or just for anticipating the future Strategic Goods list change? If any of the blog reader know, please share your idea.


Start of SME support in export control

Japanese Ministry of Economy, Trade and Industry ("METI") announced on August 6, 2010 in its Press Release that they initiated a "Voluntary Security Export Controls Program" aimed at supporting voluntary export controls by small and medium enterprises ("SME").

Please find the article in following link.

Ooops, however, I know this press release is too general, bureaucratic and superficial. I guess many of people who read this don't fully understand what is the substantial point?
Let me translate it in simpler manner with its background.
  • On April 01, 2010, export control law was amended, and all exporters in Japan are required to have classification skill (if I strictly translate the law, to assign responsible person for classification) regardless of company size and product lines.

  • The problem is many of SMEs don't have such export control resource.

  • METI secured national budget for consultation and training of export control to SMEs in FY2010. The annual budget is JPY110 millions. (approx. US$1.3 millions)

  • CISTEC and JMC (Japan Machinery Center) are appointed as a contractor of this program. CISTEC take a role of dispatching consultant to SME for consultation of export control for FREE. JMC take a role of holding export control seminar for SMEs for FREE.

  • The program is exclusively for SME, and a big company is not eligible for this program. The eligible SME is defined in its capital amount and the number of employees. For example, in SME of manufacturing industry, the eligible company is the capital amount less than JPY300 millions, or the number of employees less than 300.

From public point of view, this program is good trial for improving export compliance in Japan. Also for other Asian countries who schedule to introduce solid export control practice, it is good to follow and learn from this experiment in Japan.

From consulting point of view, with hearing and consultation from SMEs, useful database and consulting skill may be build up.

Singapore's AEO Mutual Recognition

Singapore Customs periodically issue well written e-newsletter, I like it very much.
According to the latest news letter "inSYNC" 9th edition issued on August 18, 2010, Singapore have mutual recognition agreement of AEO (*) with Canada and Korea.

(*) Singapore call it as "Secure Trade Partnership - STP", and Canada call as "Partners in Protection - PIP", while Korea call as AEO.

Actually this is not so new information, as it was announced on June 25, 2010. It is same timing I drafted the Japan- EU, and Japan - Canada AEO mutual recognition. Perhaps, I heard Singapore's mutual recognition at that time, but it completely slipped out of my mind.

This article of AEO mutual recognition is neat and concise, I love it. We can know the essence of Singapore AEO system at a glance.

Singapore Customs is currently engaged in discussion of mutual recognition with China, Japan, New Zealand and the United States.
Among them, China would be the most challenging one. China have their own AEO systems (ranking the operators in AA, A, B, C, and D) but as long as I hear from reliable source, the actual implementation is still in doubt and the practice is different by port by port.


WTO Panel reports issued on ITA dispute

According to various news papers on Aug 17, 2010, WTO issued the reports of the panel that had examined complaints by the United States, Japan and Chinese Taipei against “European Communities and its Member States — Tariff Treatment of Certain Information Technology Products”.

The report presents a decision that fully approves Japan’s claim that the EU’s customs duties in question are inconsistent with Article II (tariff concessions) of the General Agreement on Tariffs and Trade (GATT).

I reported this issue in my blog on June 4, 2008, please see the details and the background below.

The EU may file an appeal against this report with the WTO Appellate Body within 60 days.
If no such appeal is filed, the panel report will be adopted by the WTO as its final decision.

(WTO announcement: http://www.wto.org/english/news_e/news10_e/375_376_377r_e.htm )
(METI announcement: http://www.meti.go.jp/english/press/data/20100816_01.html )


Japanese companies avoid trade with Iran

According to the article of Reuters on August 11, 2010, some of Japanese big manufacturers tend to refrain from export to Iran.

Perhaps this is an action considering recent Japanese government's announcement of Iranian sanction and following current international situation.

(METI web site: Measures based on FEFTL to Address the United Nations Security Council Resolutions on Iran:

Comment from each companies are as follows.

TOYOTA: Suspending all commercial vehicles export to Iran from June 2010, considering current international status. Keep monitoring the situation. Toyota exported commercial cars to Iran 4,000 vehicles in 2008, and 250 vehicles in 2009.

NIPPON STEEL CORPORATION: Keep exporting steel material to Iran (without disclosing the amount of the export), but with careful attention of security trade control by consulting with METI.

JFE HOLDINGS: Keep exporting certain amount of steel products with careful screening of end-user and end-user by internal compliance procedure.

HONDA: No sales of vehicles in Iran.

MITSUBISHI HEAVY INDUSTRIES: Exporting after-service parts of plant, but with complaiance of both Japan and U.S. export control. Especially, checking severely whether containing the US origin goods or technologies.

KOMATSU: Exporting small amount of constructing machines with following guideline of Japan.

In Japan, the export to Iran is not complete embargo, and it is still lawful to export goods and technologies as long as it is non-WMD related.

However, recent government's sanction in US, EU and Japan have some effect to business decision of global players. The financial transaction with Iranian players are getting very difficult, naturally this makes companies avoid business with Iran.


EU Import Cargo - 24 Hour Rule Programming

Like U.S, EU will implement 24 hours rule in Dec 2010.

See reference material:

EC Customs Information Portal

JMC (in Japanese)


Japan extend countermeasure against Byrd Amendment

On August 6, 2010, Ministry of Economy, Trade and Industry ("METI") announed on its Press Release that Japan will extend countermeasure against Byrd Amendment in U.S., which impose additional customs duty to certain steel items (Ball or roller bearings) of U.S. origin.

Japan have extended this countermeasure one year each since September 2005. Current measure is valid until August 31, 2010. This will be extended again one year until August 31, 2011 with following rate which is re-calculated as recent distribution result in U.S.

  1. 8482.10 Ball bearings
    Current rate: 9.6% (until Auguslt 31, 2010)
    --> 4.1% (from September 01, 2010 until August 31, 2011)

  2. 8482.20 Tapered roller bearings
    Current rate: 9.6% (until August 31, 2010)
    --> 4.1% (from September 01, 2010 until August 31, 2011)

Background of Halt of Distribution under the Byrd Amendment (quoted from METI web site)
Japan took countermeasures against the U.S. in September 2005. The U.S. repealed the Byrd Amendment in February 2006. However, since the distribution of duties will be continued under the transitional clause, Japan urged the U.S. to halt the distribution and extended the validity of the countermeasures. As the U.S. had still not yet suspended the distribution, Japan further extended the validity of the countermeasures by one year in September 2008, following its alternation of commodity items and duty rates. Moreover, since the distribution under the transitional clause still continued in 2008, Japan further extended the validity of countermeasures by one year in September 2009, following its alternation of duty rates.

Cabinet decision was made on August 10 and it made this countermeasure official, according to MOF Press Release http://www.mof.go.jp//jouhou/kanzei/ka220810.htm )

(Source: http://www.meti.go.jp/press/20100806008/20100806008.html )

(Details of Background of Halt of Distribution under the Byrd Amendment: page 17 - 18 of http://www.meti.go.jp/english/report/downloadfiles/2010WTO/2010priority.pdf )


Japan add Iranian entities on Proliferation End-User List

On August 3rd, 2010, Ministry of Economy, Trade and Industry ("METI") announced the update of Proliferation End-User List which is concerned entities list of WMD proliferation activities.

Like recent regulation development in U.S. and EU, Japan also follow U.N. Security Council Resolution 1929 ("UNSCR 1929") which calls on states to take actions for preventing Iran's nuclear proliferation activities.
Usually, this end-user list is updated only once a year. In 2010, the new list was announced on May 26, 2010. Frequent update like this time is not so usual.
Update of Proliferation End-User List is one of Japanese government's actions to follow UNSCR 1929. The update of this time is additional of 20 Iranian entities (no other county this time!) as below. All of them are Iranian entities.

- Defense Technology and Science Research Center (DTSRC)
- Doostan International Company (DICO)
- Fater Institute(Faater)
- Gharagahe Sazandegi Ghaem
- Ghorb Karbala
- Imensazan Consultant Engineers Institute(ICEI)
- M. Babaie Industries
- Malek Ashtar University
- Makin
- Ministry of Defense Logistics Export(MODLEX)
- Modern Industries Technique Company(MITEC)
- Nuclear Research Center for Agriculture and Medicine (NFRPC)
- Omran Sahel
- Oriental Oil Kish
- Pejman Industrial Services Corporation
- Rah Sahel
- Rahab Engineering Institute
- Sahel Consultant Engineers
- Sepanir
- Sepasad Engineering Company
- Shahid Karrazi Industries

This update make the number of listed concerned entities in total 292.
When exporter ship goods or provide technology to the listed entities, the export license application is required to METI unless it is obvious that the transaction is NOT related to WMD activities. Currently, this list covers entities in Iran, North Korea, Pakistan, India, PRC China, Syria, Israel, Taiwan, and Afghanistan.

(Source: http://www.meti.go.jp/policy/anpo/hp/law_document/tutatu/t08kaisei/100803EUL/t08kaisei_kaiteikasho.pdf )


"First Sale Rule" remain in the U.S.

According to the news letter issued by international trade law firm, Danielo Desiderio on July 30, 2010, the 2008 CBP proposal to abolish the first sale rule will be formally withdrawn. This means the first sale rule will remain in place in the U.S.

This mechanism is indeed beneficial for U.S. importers allowing them to obtain substantial import duty savings, industries will welcome this decision.

Thanks, Danielo, for sharing useful information.

(Source: http://www.ddcustomslaw.com/index.php?option=com_content&view=frontpage&Itemid=1&lang=en )