1) Tariff concession details are available in Annex I.
http://www.mofa.go.jp/region/asia-paci/vietnam/epa0812/index.html
2) Overview presentation of Japan-Vietnam EPA (in Japanese)
http://www.mofa.go.jp/mofaj/gaiko/fta/j_asean/vietnam/pdfs/gaiyo.pdf
2008年12月26日金曜日
2008年12月22日月曜日
VEU Inspection Agreement In Limbo As Bush Term Nears End
The Commerce Department’s Bureau of Industry and Security (BIS) is threatening to suspend a new program to ease dual-use export controls on certain high-technology exports to companies in China that BIS deems to be trusted, because China and the U.S. have not completed negotiations for a program-specific inspection agreement.
The Validated End User (VEU) program, operated by BIS, is in danger of being suspended prior to the end of the Bush administration, said Commerce Department Assistant Secretary Christopher Wall in a Dec. 17 interview. The threat arose because China would not agree to a VEU-specific inspection regime which included statements from the Ministry of Commerce(MOFCOM) on the end use of the dual-use technology exports covered by the program, Wall said. The two countries are currently in negotiations on the new language, Wall said.
He declined to lay out any U.S. proposals, but did say that the bilateral negotiations have “moved to an advanced point.”
Additionally, Wall predicted that the completion of the agreement is “possible” before the end of the Bush administration, but added that “I’m not able to speak for the Chinese on that. It’s amatter for them to decide.” The consequences of a failure to complete such an agreement under the Bush administration include the possible suspension of the program for China before President George W. Bush leaves office, Wall said. However, Wall and another U.S. official both insisted that India’s VEUprogram would continue to move forward. According to the other U.S. official who spoke earlier in the day, the U.S. was waiting to see if China would “ink” a deal before it officially accepted any language itself.
The VEU program currently grants U.S. exporters a standing license to export specified controlled high-technology goods to the five Chinese firms that have been approved for the program. Currently, VEU companies are inspected under the 2004 End User Verification Understanding, Wall said. Those inspections are still carried out, Wall said. “There has been no breakdown in the program at all,” he insisted, denying another U.S. official’s claim that China this year backed away from a 2008 deal to allow inspections of VEU companies under the EUVU. Instead, BIS wants a VEU specific program to “specifically address VEU issues and obtain enduse statements from MOFCOM,” Wall said. BIS wants these statements included in the agreement to reduce the administrative burden for Chinese companies that import goods underthe VEU program. “That doesn’t go to the issue safety; that goes toward trade enhancement,” Wall said.
The head of BIS, Undersecretary of Commerce Mario Mancuso, has “long said” the VEU program will not be a “gray area” when the Bush administration leaves office on Jan. 20, the official said. If the U.S. and China are not able to reach an agreement on end-user inspections,“we will resolve it for them” by suspending the program, the official said.
The U.S. official said media reports that the VEU program had already been canceled were“premature,” and noted that U.S. companies and their Chinese partners currently under the VEU program could continue to ship approved items. A GAO oversight report released in October recommended the Commerce Department suspendthe VEU program, until it can amend or reach a new agreement that allows the conduct of VEU specificon-site reviews in China to protect against diversion of semiconductor equipment and materials to unintended uses (Inside U.S. Trade, Nov. 14) The Chinese may be incorrectly assuming they can successfully push for more decontrolled high-tech exports under the incoming Obama administration, one informed source suggested onDec. 17. “I hope they are not thinking they can just get a better deal while waiting for a newadministration,” this source said. “That’s a misreading of the situation; this is not a partisan question. These are fundamental national security concerns that [the Bush administration] inherited from the Clinton administration.”
(Source: INSIDETRADE-26-50-4)
The Validated End User (VEU) program, operated by BIS, is in danger of being suspended prior to the end of the Bush administration, said Commerce Department Assistant Secretary Christopher Wall in a Dec. 17 interview. The threat arose because China would not agree to a VEU-specific inspection regime which included statements from the Ministry of Commerce(MOFCOM) on the end use of the dual-use technology exports covered by the program, Wall said. The two countries are currently in negotiations on the new language, Wall said.
He declined to lay out any U.S. proposals, but did say that the bilateral negotiations have “moved to an advanced point.”
Additionally, Wall predicted that the completion of the agreement is “possible” before the end of the Bush administration, but added that “I’m not able to speak for the Chinese on that. It’s amatter for them to decide.” The consequences of a failure to complete such an agreement under the Bush administration include the possible suspension of the program for China before President George W. Bush leaves office, Wall said. However, Wall and another U.S. official both insisted that India’s VEUprogram would continue to move forward. According to the other U.S. official who spoke earlier in the day, the U.S. was waiting to see if China would “ink” a deal before it officially accepted any language itself.
The VEU program currently grants U.S. exporters a standing license to export specified controlled high-technology goods to the five Chinese firms that have been approved for the program. Currently, VEU companies are inspected under the 2004 End User Verification Understanding, Wall said. Those inspections are still carried out, Wall said. “There has been no breakdown in the program at all,” he insisted, denying another U.S. official’s claim that China this year backed away from a 2008 deal to allow inspections of VEU companies under the EUVU. Instead, BIS wants a VEU specific program to “specifically address VEU issues and obtain enduse statements from MOFCOM,” Wall said. BIS wants these statements included in the agreement to reduce the administrative burden for Chinese companies that import goods underthe VEU program. “That doesn’t go to the issue safety; that goes toward trade enhancement,” Wall said.
The head of BIS, Undersecretary of Commerce Mario Mancuso, has “long said” the VEU program will not be a “gray area” when the Bush administration leaves office on Jan. 20, the official said. If the U.S. and China are not able to reach an agreement on end-user inspections,“we will resolve it for them” by suspending the program, the official said.
The U.S. official said media reports that the VEU program had already been canceled were“premature,” and noted that U.S. companies and their Chinese partners currently under the VEU program could continue to ship approved items. A GAO oversight report released in October recommended the Commerce Department suspendthe VEU program, until it can amend or reach a new agreement that allows the conduct of VEU specificon-site reviews in China to protect against diversion of semiconductor equipment and materials to unintended uses (Inside U.S. Trade, Nov. 14) The Chinese may be incorrectly assuming they can successfully push for more decontrolled high-tech exports under the incoming Obama administration, one informed source suggested onDec. 17. “I hope they are not thinking they can just get a better deal while waiting for a newadministration,” this source said. “That’s a misreading of the situation; this is not a partisan question. These are fundamental national security concerns that [the Bush administration] inherited from the Clinton administration.”
(Source: INSIDETRADE-26-50-4)
2008年12月17日水曜日
Brunei joining AJCEP on Jan 01. 2009
On November 29 (Sat), Brunei made the notification on the completion of its legal procedures necessary for the entry into force of the Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of Southeast Asian Nations (Japan-ASEAN Comprehensive Economic Partnership Agreement).
With this notification, the Agreement will enter into force on January 1 (Thu), 2009 in relation to Brunei.
This Agreement has already entered into force on December 1 (Mon) among Japan, Singapore, Laos, Vietnam and Myanmar.
(Source: MOFA web site http://www.mofa.go.jp/announce/announce/2008/12/1185514_1080.html )
With this notification, the Agreement will enter into force on January 1 (Thu), 2009 in relation to Brunei.
This Agreement has already entered into force on December 1 (Mon) among Japan, Singapore, Laos, Vietnam and Myanmar.
(Source: MOFA web site http://www.mofa.go.jp/announce/announce/2008/12/1185514_1080.html )
2008年12月12日金曜日
GSP is unavailable after EPA with some exceptions
After implementation of many EPAs recently, traders tend to confuse in mixing up with EPA preferential tariff and GSP ("Generalized System of Preference") tariff.
Basically, GSP tariff is no longer valid after EPA implementation date. However, there are some exceptions, which makes the things complicated.
Even after the EPA implementation, if the items are not included in the EPA or the GSP tariff is lower than EPA tariff, GSP is still effective.
In addition, for Laos and Myannmar, all GSP rate is effective for both two countries.
There is very useful information list in MOF web site which provide "still effective" GSP rate items after EPA implementation. (in Japanese only)
http://www.mof.go.jp/jouhou/kanzei/fta_epa/seido_tetsuduki/tokkei.htm
Traders who have used GSP rate need to check this site.
(Source: METI web site http://www.meti.go.jp/policy/trade_policy/epa/GSP.pdf )
Basically, GSP tariff is no longer valid after EPA implementation date. However, there are some exceptions, which makes the things complicated.
Even after the EPA implementation, if the items are not included in the EPA or the GSP tariff is lower than EPA tariff, GSP is still effective.
In addition, for Laos and Myannmar, all GSP rate is effective for both two countries.
There is very useful information list in MOF web site which provide "still effective" GSP rate items after EPA implementation. (in Japanese only)
http://www.mof.go.jp/jouhou/kanzei/fta_epa/seido_tetsuduki/tokkei.htm
Traders who have used GSP rate need to check this site.
(Source: METI web site http://www.meti.go.jp/policy/trade_policy/epa/GSP.pdf )
2008年12月10日水曜日
South Korea Eyes FTAs with Russia, Mercosur
South Korea wants to offset the expected slowdown in growth next year by expanding free trade agreements (FTAs) with Russia and South America's Mercosur trade bloc, a government official said this week.
Kwon Tae-kyun, head of the trade office at the Ministry of Knowledge Economy, said Seoul plans to lay the groundwork to launch earnest free trade agreement talks with these countries in 2009.
With its rapidly expanding economy, Russia has become an important buyer of locally made goods, while Mercosur's Argentina, Brazil, Paraguay and Uruguay could help South Korea diversify its export market and become important sources of natural resources, he said.
The official added that Seoul wants to expand ongoing free trade talks with Australia, New Zealand, and Peru.
(Source: UPS Trade News for December 9, 2008 )
Kwon Tae-kyun, head of the trade office at the Ministry of Knowledge Economy, said Seoul plans to lay the groundwork to launch earnest free trade agreement talks with these countries in 2009.
With its rapidly expanding economy, Russia has become an important buyer of locally made goods, while Mercosur's Argentina, Brazil, Paraguay and Uruguay could help South Korea diversify its export market and become important sources of natural resources, he said.
The official added that Seoul wants to expand ongoing free trade talks with Australia, New Zealand, and Peru.
(Source: UPS Trade News for December 9, 2008 )
Delay and operational challenge of Japan-Philippine EPA
On Dec. 11, 2008, Japan-Philippine EPA will be on effective. However, according to Japanese METI web site, it was notice by Philippine government that they face operational delay in Philippine side and some operations are not in time for Dec. 11.
1) Delay of issue of Country of Origin.
Philippine will NOT issue Country of Origin ("C/O") in time for Dec. 11. The possible starting date is unknown.
2) Quota for steel products will NOT be ready
Japan-Philippine EPA have quota with zero duty in importing into Philippine for HS7208, 7209, 7210, and 7212 steel products. However, the Philippine side is not ready for operation of this quota by Dec. 11.
3) No refund of duty
If the normal rate of duty was paid in importing into Philippine, and it was simply because C/O was not ready, the difference of preferential duty and normal duty will NOT be refunded.
(Source: METI web site: http://www.meti.go.jp/policy/trade_policy/epa/html2/081209%20JPEPA.pdf )
1) Delay of issue of Country of Origin.
Philippine will NOT issue Country of Origin ("C/O") in time for Dec. 11. The possible starting date is unknown.
2) Quota for steel products will NOT be ready
Japan-Philippine EPA have quota with zero duty in importing into Philippine for HS7208, 7209, 7210, and 7212 steel products. However, the Philippine side is not ready for operation of this quota by Dec. 11.
3) No refund of duty
If the normal rate of duty was paid in importing into Philippine, and it was simply because C/O was not ready, the difference of preferential duty and normal duty will NOT be refunded.
(Source: METI web site: http://www.meti.go.jp/policy/trade_policy/epa/html2/081209%20JPEPA.pdf )
2008年12月1日月曜日
Delay of AJCEP implementation in Vietnam & Myanmar
In addition to Singapore, some operational delay of AJCEP in Vietnam & Myanmar is reported in Japanese METI web site.
According to METI, Japanese government was noticed as follows by Vietnam and Myanmar government.
1) Delay of issuing C/O ("Country of Origin") by Vietnam and Myanmar
Due to their internal legal formalities, Vietnam and Myanmar are not able to issue C/O on December 1. At fastest, it will be after middle of December.
2) Preferential tariff in Vietnam Not applied so far
Due to Vietnam's domestic legal formalities, the preferential tariff of AJCEP will be applied only after February 2009. The retrospective refund of duty amount between MFN rate and the preferential tariff is uncertain. It is under consideration by Vietnam government.
(Source: JAPAN METI web site http://www.meti.go.jp/policy/trade_policy/epa/html2/081128_AJ%20ベトナム・ミャンマーに係るアナウンス.pdf )
According to METI, Japanese government was noticed as follows by Vietnam and Myanmar government.
1) Delay of issuing C/O ("Country of Origin") by Vietnam and Myanmar
Due to their internal legal formalities, Vietnam and Myanmar are not able to issue C/O on December 1. At fastest, it will be after middle of December.
2) Preferential tariff in Vietnam Not applied so far
Due to Vietnam's domestic legal formalities, the preferential tariff of AJCEP will be applied only after February 2009. The retrospective refund of duty amount between MFN rate and the preferential tariff is uncertain. It is under consideration by Vietnam government.
(Source: JAPAN METI web site http://www.meti.go.jp/policy/trade_policy/epa/html2/081128_AJ%20ベトナム・ミャンマーに係るアナウンス.pdf )
2008年11月28日金曜日
Audit by Japanese customs
Japanese customs conduct audit to importers as regular basis annually.
The result of this audit was published in customs web site.
Approx 70% of importers are pointed out as declaration failure.
Period of audit: July 2007 to June 2008.
Number of importers audited: 5,865 companies
Pointed out as declaration failure: 4,099 companies - 69.9% of total investigation
Tax penalty by this audit is total JPY11,240,440,000.- which is equivalent to US$112millions.
This amount include shortage of duty/tax plus additional tax penalty.
This means average tax penalty by company is JPY2,740,000 which is equivalent to US$27,400.
The items which had the biggest penalty amount is electrical products. 2nd is machinery, then textile clothing, knitted clothing, and optical instrument.
The content of declaration failure is mostly short declaration of items such as raw material which was offered to overseas exporters for manufacturing, which must be included in import declaration amount, we call it as "Assist" element.
Customs valuation is somewhat difficult area for general business users to understand, however it is getting critical to know, considering this high rate of error declaration in audit.
(Source: Japan customs web site http://www.mof.go.jp/jouhou/kanzei/ka201127b.htm)
The result of this audit was published in customs web site.
Approx 70% of importers are pointed out as declaration failure.
Period of audit: July 2007 to June 2008.
Number of importers audited: 5,865 companies
Pointed out as declaration failure: 4,099 companies - 69.9% of total investigation
Tax penalty by this audit is total JPY11,240,440,000.- which is equivalent to US$112millions.
This amount include shortage of duty/tax plus additional tax penalty.
This means average tax penalty by company is JPY2,740,000 which is equivalent to US$27,400.
The items which had the biggest penalty amount is electrical products. 2nd is machinery, then textile clothing, knitted clothing, and optical instrument.
The content of declaration failure is mostly short declaration of items such as raw material which was offered to overseas exporters for manufacturing, which must be included in import declaration amount, we call it as "Assist" element.
Customs valuation is somewhat difficult area for general business users to understand, however it is getting critical to know, considering this high rate of error declaration in audit.
(Source: Japan customs web site http://www.mof.go.jp/jouhou/kanzei/ka201127b.htm)
2008年11月26日水曜日
CBP Publishes 10+2 Rule
To help prevent terrorist weapons from being transported to the United States, vessel carriers bringing cargo to the United States are required to transmit certain information to Customs and Border Protection (CBP) about the cargo they are transporting prior to lading that cargo at foreign ports of entry.
This interim final rule requires both importers and carriers to submit additional information pertaining to cargo to CBP before the cargo is brought into the United States by vessel. This information must be submitted to CBP by way of a CBP- approved electronic data interchange system. The required information is reasonably necessary to improve CBP's ability to identify high-risk shipments so as to prevent smuggling and ensure cargo safety and security.
Effective Date: This rule is effective on January 26, 2009.
CBP will hold public forum and requests comments by June 1, 2009.
More details and comprehensive summary of this regulation change, please take a look:
http://www.bryancave.com/bulletins/ Trade Bulletin IRB No. 417 dated Nov. 25, 2008.
This interim final rule requires both importers and carriers to submit additional information pertaining to cargo to CBP before the cargo is brought into the United States by vessel. This information must be submitted to CBP by way of a CBP- approved electronic data interchange system. The required information is reasonably necessary to improve CBP's ability to identify high-risk shipments so as to prevent smuggling and ensure cargo safety and security.
Effective Date: This rule is effective on January 26, 2009.
CBP will hold public forum and requests comments by June 1, 2009.
More details and comprehensive summary of this regulation change, please take a look:
http://www.bryancave.com/bulletins/ Trade Bulletin IRB No. 417 dated Nov. 25, 2008.
2008年11月23日日曜日
Singapore ASEAN-JP CO issue delay in December
According to Japanese METI web site on Nov 21, Japanese government was noticed from Singapore government that Certificate of Origin ("CO") for ASEAN-JP EPA will not be issued on December 1, which is the implementation day of ASEAN-Japan EPA.
This is due to Singapore's internal reason, the preparation system is not due on time.
Japan request to Singapore to make effort to issue CO on time as originally announced by Dec 1.
At this time, Singapore will come to issue CO by January 1st, including retrospective issuance.
As for receiving in importing CO as proof of origin, Singapore will accept as originally planned from Dec 1.
(Source: METI web site: http://www.meti.go.jp/policy/trade_policy/081121%20AJCEP発効にあたって〔セット版〕.pdf)
This is due to Singapore's internal reason, the preparation system is not due on time.
Japan request to Singapore to make effort to issue CO on time as originally announced by Dec 1.
At this time, Singapore will come to issue CO by January 1st, including retrospective issuance.
As for receiving in importing CO as proof of origin, Singapore will accept as originally planned from Dec 1.
(Source: METI web site: http://www.meti.go.jp/policy/trade_policy/081121%20AJCEP発効にあたって〔セット版〕.pdf)
Sailing regatta is illegal?
Even participating in sailing regatta event would be illegal to US export regulation?
Difficult to imagine? Below is the case summary.
The U.S. Commerce Department recently fined two individuals for organizing and participating in a 2003 sailing regatta from Florida to Cuba and back. After the regatta, Commerce charged them with aiding and abetting the unlicensed export of a sailboat to Cuba because the sailboat was classified according to the Commerce Control List as 8A992 f., which controls “[v]essels … including inflatable boats, and specially designed components therefore.”
Exports of such items require a license to Cuba and other countries.
In addition to violation of export regulation, they illegally provided travel service to Cuba, it would be another penalty by US Treasury Department.
I believe this case is without evil intention, and not so much threat to national security, however it is violation and penalty is given. Very instructive case people must understand US export regulation.
(Source: http://www.bryancave.com/bulletins/ IRB No 415 on Nov. 20, 2008)
Difficult to imagine? Below is the case summary.
The U.S. Commerce Department recently fined two individuals for organizing and participating in a 2003 sailing regatta from Florida to Cuba and back. After the regatta, Commerce charged them with aiding and abetting the unlicensed export of a sailboat to Cuba because the sailboat was classified according to the Commerce Control List as 8A992 f., which controls “[v]essels … including inflatable boats, and specially designed components therefore.”
Exports of such items require a license to Cuba and other countries.
In addition to violation of export regulation, they illegally provided travel service to Cuba, it would be another penalty by US Treasury Department.
I believe this case is without evil intention, and not so much threat to national security, however it is violation and penalty is given. Very instructive case people must understand US export regulation.
(Source: http://www.bryancave.com/bulletins/ IRB No 415 on Nov. 20, 2008)
2008年11月12日水曜日
Japan-Philippine EPA finally implemented on Dec 11
The announcement of diplomatic note exchanged with Philippine was published in Japanese government web site. (as of now, only in Japanese)
http://www.mofa.go.jp/mofaj/press/release/h20/11/1184607_919.html
According the this news release, The JP-Philippine EPA will be effective on Dec. 11 this year.
http://www.mofa.go.jp/mofaj/press/release/h20/11/1184607_919.html
According the this news release, The JP-Philippine EPA will be effective on Dec. 11 this year.
2008年11月8日土曜日
ASEAN-Japan EPA effective on Dec 01, 2008 but with only 5 countries
AJCEP (Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of Southeast Asian Nations) was signed in April this year with 11 countries in ASEAN. With this EPA, approx. the customs duty of 93% of import amount into Japan from ASEAN countries will be abolished within 10 years. As for export from Japan to ASEAN, approx. 91% of export amount will be treated as zero duty within 10 years. There are some tricky points traders need to know.
Tariff concession and HS code 2002
Each 11 countries have each Concessions and the schedule is based on HS2002. Please bear in mind Japan currently use HS2007 for importation. Trader need to recognize this difference of HS code in finding the HS of goods. For details of each countries' Concessions and note, please find in Annex 1 of below web site of MOFA.http://www.mofa.go.jp/policy/economy/fta/asean/annex1.html
Effective 5 countries only in December 01, 2008
Now it was announced by Japanese government that this AJCEP will be effective from December 01, 2008. After this date, AJCEP will be implemented with the countries who made notification. As of December 01, the countries implemented are five countries only, which are Japan, Singapore, Laos, Vietnam and Myanmar. With regards to the ASEAN countries which will make the notification later, the Agreement will enter into force subsequently in accordance with the stipulations of the Agreement. However, the staging of tariff reduction is calculated from December 01, 2008 as the starting point.
Bilateral EPA is still valid independently
Japan have bilateral EPA with Singapore, Malaysia, Thailand, Indonesia, and Brunei. These bilateral EPAs are still valid, and ASEAN – Japan EPA is treated legally as another agreement. Both EPAs don’t have legal superiority and are treated equally. Trader can select which EPA is to be applied in claiming preferential tariff. Please be noted, however, there are slight difference in rule of origin between bilateral EPA and ASEAN – Japan EPA, depending on the product. Trader needs to check the rule of origin beforehand.
GSP with Cambodia, Laos and Myanmar is still valid independently
Generalized System of Preferences (“GSP”) is still valid for Cambodia, Laos and Myanmar after the implementation of ASEAN – Japan EPA. Trader can select which preferential tariff (GSP tariff or EPA tariff) is to be claimed in importing. Please be noted the rule of origin is slightly different depending on the product.
Certificate of Origin is different form from other bilateral EPA
ASEAN – Japan EPA has its own unique form of Certificate of Origin, called From AJ. In addition, when fulfilling the form, origin criteria (such as WO, CTH, RVC etc.) have its own criteria in ASEAN – Japan EPA. Trader need to take care the difference of Certificate of Origin, as the bilateral EPA’s Certificate of Origin is NOT allowed to claim the preferential tariff of ASEAN – Japan EPA in importing.
Introducing Back-to-Back CO
For Japanese importer, Back-to-Back CO (Country of Origin) is new rule because this rule have never been in bilateral EPA Japan have concluded so far. In ASEAN – Japan EPA, this rule is introduced first time for Japan. Back-to-Back CO usually involves three countries. For example, a product which was produced in Thailand may be bought by a trader in Singapore and imported into Singapore. After that, a Singapore Trader sell the Thailand origin product to a trader in Japan. In such a case, CO issued in Thailand can be converted by Singapore authority but with as Thailand origin, like re-issue CO successively. In Form AJ Country of Origin, there is a blank square to check in 13th column when applying Back-to-Back CO.
Tariff concession and HS code 2002
Each 11 countries have each Concessions and the schedule is based on HS2002. Please bear in mind Japan currently use HS2007 for importation. Trader need to recognize this difference of HS code in finding the HS of goods. For details of each countries' Concessions and note, please find in Annex 1 of below web site of MOFA.http://www.mofa.go.jp/policy/economy/fta/asean/annex1.html
Effective 5 countries only in December 01, 2008
Now it was announced by Japanese government that this AJCEP will be effective from December 01, 2008. After this date, AJCEP will be implemented with the countries who made notification. As of December 01, the countries implemented are five countries only, which are Japan, Singapore, Laos, Vietnam and Myanmar. With regards to the ASEAN countries which will make the notification later, the Agreement will enter into force subsequently in accordance with the stipulations of the Agreement. However, the staging of tariff reduction is calculated from December 01, 2008 as the starting point.
Bilateral EPA is still valid independently
Japan have bilateral EPA with Singapore, Malaysia, Thailand, Indonesia, and Brunei. These bilateral EPAs are still valid, and ASEAN – Japan EPA is treated legally as another agreement. Both EPAs don’t have legal superiority and are treated equally. Trader can select which EPA is to be applied in claiming preferential tariff. Please be noted, however, there are slight difference in rule of origin between bilateral EPA and ASEAN – Japan EPA, depending on the product. Trader needs to check the rule of origin beforehand.
GSP with Cambodia, Laos and Myanmar is still valid independently
Generalized System of Preferences (“GSP”) is still valid for Cambodia, Laos and Myanmar after the implementation of ASEAN – Japan EPA. Trader can select which preferential tariff (GSP tariff or EPA tariff) is to be claimed in importing. Please be noted the rule of origin is slightly different depending on the product.
Certificate of Origin is different form from other bilateral EPA
ASEAN – Japan EPA has its own unique form of Certificate of Origin, called From AJ. In addition, when fulfilling the form, origin criteria (such as WO, CTH, RVC etc.) have its own criteria in ASEAN – Japan EPA. Trader need to take care the difference of Certificate of Origin, as the bilateral EPA’s Certificate of Origin is NOT allowed to claim the preferential tariff of ASEAN – Japan EPA in importing.
Introducing Back-to-Back CO
For Japanese importer, Back-to-Back CO (Country of Origin) is new rule because this rule have never been in bilateral EPA Japan have concluded so far. In ASEAN – Japan EPA, this rule is introduced first time for Japan. Back-to-Back CO usually involves three countries. For example, a product which was produced in Thailand may be bought by a trader in Singapore and imported into Singapore. After that, a Singapore Trader sell the Thailand origin product to a trader in Japan. In such a case, CO issued in Thailand can be converted by Singapore authority but with as Thailand origin, like re-issue CO successively. In Form AJ Country of Origin, there is a blank square to check in 13th column when applying Back-to-Back CO.
2008年10月30日木曜日
English translation of Japanese trade related law
I believe many of trade practitioner face language barrier in looking into Japanese trade related laws and regulations. Yes, in reality, English translation is not always available and difficult to find it.
For those who need English translation of Japanese law, here's some useful information.
1) Government Web site http://www.cas.go.jp/jp/seisaku/hourei/data2.html
This site is very useful. Although the translation is unofficial one, it is permitted to cite, reproduce or reprint as needed. This site doesn't cover all Japanese law, e.g. 薬事法Pharmaceutical Affairs Law is not available, but they continue to add new translation regularly.
Please be noted, the export control related laws are available, but not reflecting the latest one.
For example, FEFTL (Foreign Exchange and Foreign Trade Act) translation is in 2005, and Export Trade Control Order is in 2006. Both of them were slightly modified in 2007 and 2008.
2) Book published by Japan Tariff Association http://www.kanzei.or.jp/book/publish03.htm
Customs related law is not available in above government web site.
Instead, Japan Tariff Association sell English translation book of Customs related law.
4-88895-255-8 英文関税法規集 B5/546 Price: JPY18,900.-
The contents:
Customs Law http://www.kanzei.or.jp/book/pdf/tariff_law_english.pdf
3) Eibun-Horei-Sha, Inc. http://www.ehs.or.jp/index_en.html
They sell English translation of law books for many fields. However in trade related law, the content is too old for some books. For example, Export Trade Control Order with Concomitant Notification is in 1991 edition! They sell Export Inspection Law, 1990 edition but this law was abolished in 1997.
For those who need English translation of Japanese law, here's some useful information.
1) Government Web site http://www.cas.go.jp/jp/seisaku/hourei/data2.html
This site is very useful. Although the translation is unofficial one, it is permitted to cite, reproduce or reprint as needed. This site doesn't cover all Japanese law, e.g. 薬事法Pharmaceutical Affairs Law is not available, but they continue to add new translation regularly.
Please be noted, the export control related laws are available, but not reflecting the latest one.
For example, FEFTL (Foreign Exchange and Foreign Trade Act) translation is in 2005, and Export Trade Control Order is in 2006. Both of them were slightly modified in 2007 and 2008.
2) Book published by Japan Tariff Association http://www.kanzei.or.jp/book/publish03.htm
Customs related law is not available in above government web site.
Instead, Japan Tariff Association sell English translation book of Customs related law.
4-88895-255-8 英文関税法規集 B5/546 Price: JPY18,900.-
The contents:
Customs Law http://www.kanzei.or.jp/book/pdf/tariff_law_english.pdf
3) Eibun-Horei-Sha, Inc. http://www.ehs.or.jp/index_en.html
They sell English translation of law books for many fields. However in trade related law, the content is too old for some books. For example, Export Trade Control Order with Concomitant Notification is in 1991 edition! They sell Export Inspection Law, 1990 edition but this law was abolished in 1997.
2008年10月29日水曜日
Validated End-User Program in China
Validated End-User Program is well known among export control expert.
But according to GAO ("Government Accountability Office") report, they recognize this program doesn't work as intended and advise to suspend.
What is Validated End-User (VEU) Program?
The program allows U.S. companies to ship eligible products to VEU companies without an individual validated license. This program was first made available to China as part of a larger “China rule” that included expanded controls related to military end-use. The U.S. government has since extended the VEU program to India and may consider other countries in the future. Five companies have been approved for VEU status so far. This program is still in an early phase and the U.S. and Chinese governments are discussing issues and implementation.
Now, what companies are approved as VEU?
The five approved VEU companies are: Applied Materials China; Boeing Hexcel AVIC I Joint Venture; National Semiconductor Corp; Semiconductor Manufacturing International Corp; and Shanghai Hua Hong NEC Corp. They are authorized to import certain controlled items without individual export licenses.
What is the problem in the program GAO point out?
The Government Accountability Office has called on the Department of Commerce to suspend a program designed to facilitate high technology exports to China. The GAO expressed concern that the DOC is unable to ensure that goods shipped under the validated end-user program, especially semiconductor equipment and materials, are being used as intended.
The VEU program allows select “trusted” Chinese companies to receive controlled items without a DOC export license. Instead of requiring a post-shipment verification check to ensure that the equipment is being used in accordance with the terms of the authorization, VEUs must agree to periodic records reviews and discretionary on-site reviews by U.S. government personnel. This program covers a wide range of items, may be used by foreign re-exporters and does not have an expiration date.
The GAO states that the introduction of the VEU program has yet to produce the anticipated advantages and that challenges with program implementation may hinder the DOC’s ability to ensure that items exported to VEUs are being used as intended. For example, although negotiations are ongoing, the department has not reached a VEU specific agreement with the Chinese government for conducting on-site reviews of VEUs, a mechanism cited by Commerce as critical for ensuring program compliance. Instead, as a stopgap measure, the DOC is attempting to conduct on-site reviews under a 2004 end-use visit understanding with China. The department also continues to lack specific procedures for selecting and conducting on-site reviews more than a year after the program was introduced.
The GAO therefore recommends that the DOC suspend the VEU program with respect to China until it (a) negotiates a VEU-specific agreement with China or the EUVU is amended to include the VEU program and (b) develops operating procedures for selecting and conducting on-site reviews that are applicable to all VEUs. The DOC disagreed with this recommendation, stating that the EUVU provides a framework for all inspections related to export controls in China and that procedures for conducting end-use checks exist and will be used for on-site reviews as applicable. The GAO noted, however, that the EUVU requirement to obtain end-user statements for shipments imposes an additional burden on VEUs and runs counter to the trade facilitating objectives of the program. The GAO also pointed out that end-use checks focus on ensuring that an item is being used for the purposes stated on the license, whereas on-site reviews are more comprehensive.
(Source: World Trade/Interactive - 10/28/08)
But according to GAO ("Government Accountability Office") report, they recognize this program doesn't work as intended and advise to suspend.
What is Validated End-User (VEU) Program?
The program allows U.S. companies to ship eligible products to VEU companies without an individual validated license. This program was first made available to China as part of a larger “China rule” that included expanded controls related to military end-use. The U.S. government has since extended the VEU program to India and may consider other countries in the future. Five companies have been approved for VEU status so far. This program is still in an early phase and the U.S. and Chinese governments are discussing issues and implementation.
Now, what companies are approved as VEU?
The five approved VEU companies are: Applied Materials China; Boeing Hexcel AVIC I Joint Venture; National Semiconductor Corp; Semiconductor Manufacturing International Corp; and Shanghai Hua Hong NEC Corp. They are authorized to import certain controlled items without individual export licenses.
What is the problem in the program GAO point out?
The Government Accountability Office has called on the Department of Commerce to suspend a program designed to facilitate high technology exports to China. The GAO expressed concern that the DOC is unable to ensure that goods shipped under the validated end-user program, especially semiconductor equipment and materials, are being used as intended.
The VEU program allows select “trusted” Chinese companies to receive controlled items without a DOC export license. Instead of requiring a post-shipment verification check to ensure that the equipment is being used in accordance with the terms of the authorization, VEUs must agree to periodic records reviews and discretionary on-site reviews by U.S. government personnel. This program covers a wide range of items, may be used by foreign re-exporters and does not have an expiration date.
The GAO states that the introduction of the VEU program has yet to produce the anticipated advantages and that challenges with program implementation may hinder the DOC’s ability to ensure that items exported to VEUs are being used as intended. For example, although negotiations are ongoing, the department has not reached a VEU specific agreement with the Chinese government for conducting on-site reviews of VEUs, a mechanism cited by Commerce as critical for ensuring program compliance. Instead, as a stopgap measure, the DOC is attempting to conduct on-site reviews under a 2004 end-use visit understanding with China. The department also continues to lack specific procedures for selecting and conducting on-site reviews more than a year after the program was introduced.
The GAO therefore recommends that the DOC suspend the VEU program with respect to China until it (a) negotiates a VEU-specific agreement with China or the EUVU is amended to include the VEU program and (b) develops operating procedures for selecting and conducting on-site reviews that are applicable to all VEUs. The DOC disagreed with this recommendation, stating that the EUVU provides a framework for all inspections related to export controls in China and that procedures for conducting end-use checks exist and will be used for on-site reviews as applicable. The GAO noted, however, that the EUVU requirement to obtain end-user statements for shipments imposes an additional burden on VEUs and runs counter to the trade facilitating objectives of the program. The GAO also pointed out that end-use checks focus on ensuring that an item is being used for the purposes stated on the license, whereas on-site reviews are more comprehensive.
(Source: World Trade/Interactive - 10/28/08)
2008年10月22日水曜日
ASEAN-Japan EPA will be implemented on Dec 01, 2008
As reported in this blog on June 2 this year, AJCEP (Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of Southeast Asian Nations) was signed in April this year with 11 countries in ASEAN.
Now it was announced by Japanese government that this AJCEP will be effective from December 01, 2008. After this date, AJCEP will be implemented with the countries who made notification. With regards to the ASEAN countries which will make the notification later, the Agreement will enter into force subsequently in accordance with the stipulations of the Agreement.
(Source: Ministry of Foreign Affairs of Japan http://www.mofa.go.jp/announce/announce/2008/10/1184016_1060.html)
Now it was announced by Japanese government that this AJCEP will be effective from December 01, 2008. After this date, AJCEP will be implemented with the countries who made notification. With regards to the ASEAN countries which will make the notification later, the Agreement will enter into force subsequently in accordance with the stipulations of the Agreement.
(Source: Ministry of Foreign Affairs of Japan http://www.mofa.go.jp/announce/announce/2008/10/1184016_1060.html)
2008年10月18日土曜日
Export Violation by Japanese Machine Tool Company Sugino Machine Ltd.
According to the announcement by METI on Oct. 17, a medium size Japanese machinery tool manufacturer, Sugino Machine Ltd. (number of employee 719) illegally exported their machine, which had needed export license by METI due to its high technical specification. The violation had been from 2000 to 2006, and exported hundreds of machines to Germany, China, Thailand, USA etc. It is not reported their machines were found in concerned countries such as North Korea.
Their machines have high specification which is required to get export license in exporting to basically all countries.
According to Nikkei newspaper, they neglected this license application by intentionally lowered technical specification because they wanted to make the delivery earlier by skipping license application to METI.
According to Sugino's company website, this violation was found in their internal investigation in December 2007 and voluntary disclosed this violation to METI in March 2008.
METI gave penalty to Sugino, however it is warning only, and required them to improve their internal compliance. Based on Foreign Exchange and Foreign Trade Law ("FEFTL"), it would be possible for METI to give penalty of export prohibition less than 3 years. This time, METI just gave warning rather than giving severe penalty because :
- Their products were not exported to Iran or North Korea and not used for development of weapons for mass destruction.
- The end-users were not denied party or concerned parties which may threat the national security.
- They voluntarily reported their violation to METI and committed to improve their export compliance operation.
Above facts are important factors to decide the magnitude of penalty by METI.
Companies who export such high technical specification must understand their importance of keeping this export regulation.
(Source: METI web site http://www.meti.go.jp/press/20081017006/20081017006.pdf )
(Source: Sugino Machine Ltd http://www.sugino.com/sitemap/1017.html)
(Source: Nikkei Newspaper http://www.nikkei.co.jp/news/shakai/20081018AT1G1703217102008.html )
Their machines have high specification which is required to get export license in exporting to basically all countries.
According to Nikkei newspaper, they neglected this license application by intentionally lowered technical specification because they wanted to make the delivery earlier by skipping license application to METI.
According to Sugino's company website, this violation was found in their internal investigation in December 2007 and voluntary disclosed this violation to METI in March 2008.
METI gave penalty to Sugino, however it is warning only, and required them to improve their internal compliance. Based on Foreign Exchange and Foreign Trade Law ("FEFTL"), it would be possible for METI to give penalty of export prohibition less than 3 years. This time, METI just gave warning rather than giving severe penalty because :
- Their products were not exported to Iran or North Korea and not used for development of weapons for mass destruction.
- The end-users were not denied party or concerned parties which may threat the national security.
- They voluntarily reported their violation to METI and committed to improve their export compliance operation.
Above facts are important factors to decide the magnitude of penalty by METI.
Companies who export such high technical specification must understand their importance of keeping this export regulation.
(Source: METI web site http://www.meti.go.jp/press/20081017006/20081017006.pdf )
(Source: Sugino Machine Ltd http://www.sugino.com/sitemap/1017.html)
(Source: Nikkei Newspaper http://www.nikkei.co.jp/news/shakai/20081018AT1G1703217102008.html )
2008年10月17日金曜日
MOF start re-investigation of CVD to Hynix Korea DRAM
As reported in this blog on end of August, Japan lowered CVD (Counter Vailing Duty) rate from 27.2% to 9.1% based on the advice from WTO. The lowered rate was effective on Sept. 01.
On Sept 29, Hynix Korea requested to Japanese MOF to abolish CVD completely because the subsidy in question was no longer beneficial after 2003 which is the period for the investigation.
Japanese MOF and METI started re-investigation of the circumstance Hynix pointed out from October 15.
(Source: http://www.mof.go.jp/jouhou/kanzei/ka201015.htm )
On Sept 29, Hynix Korea requested to Japanese MOF to abolish CVD completely because the subsidy in question was no longer beneficial after 2003 which is the period for the investigation.
Japanese MOF and METI started re-investigation of the circumstance Hynix pointed out from October 15.
(Source: http://www.mof.go.jp/jouhou/kanzei/ka201015.htm )
2008年10月10日金曜日
Philippines Approves FTA with Japan
The Philippine government has voted to approve the Japan-Philippines Economic Partnership Agreement (JPEPA) -- the first bilateral free trade pact for the Philippines.
Under the JPEPA, tariffs on 95 percent of Philippine exports to Japan will be eliminated while import duties on industrial goods such as electronics and cars will be phased out within a ten-year period.
Supporters of the JPEPA argued that without such a deal, the Philippines would lose out to neighbors like Thailand and Indonesia, which already have their own free trade deals with Japan.
In the meantime, Japan is close to concluding a separate free trade agreement with the Gulf Cooperation Council (GCC). The GCC economic bloc is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates.
(Source: UPS Trade News [Trade_News@ups-scs.service.com] on Oct. 09, 2008)
Under the JPEPA, tariffs on 95 percent of Philippine exports to Japan will be eliminated while import duties on industrial goods such as electronics and cars will be phased out within a ten-year period.
Supporters of the JPEPA argued that without such a deal, the Philippines would lose out to neighbors like Thailand and Indonesia, which already have their own free trade deals with Japan.
In the meantime, Japan is close to concluding a separate free trade agreement with the Gulf Cooperation Council (GCC). The GCC economic bloc is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates.
(Source: UPS Trade News [Trade_News@ups-scs.service.com] on Oct. 09, 2008)
2008年10月9日木曜日
New Zealand-China FTA Takes Effect
The New Zealand-China Free Trade Agreement (FTA), which became effective on October 1, will phase out tariffs on 96 percent of New Zealand's exports to China and liberalize trade in goods and service between the two countries.
New Zealand's Ministry of Foreign Affairs and Trade also stated that the pact would give additional protection to New Zealand investors in China, while at the same time offering assistance to build existing business relationships with Chinese companies.
China currently ranks as New Zealand's third-largest trading partner.
(Source: UPS Trade News [Trade_News@ups-scs.service.com] Oct. 08, 2008)
New Zealand's Ministry of Foreign Affairs and Trade also stated that the pact would give additional protection to New Zealand investors in China, while at the same time offering assistance to build existing business relationships with Chinese companies.
China currently ranks as New Zealand's third-largest trading partner.
(Source: UPS Trade News [Trade_News@ups-scs.service.com] Oct. 08, 2008)
2008年10月8日水曜日
Commerce Proposes Intra-Company Export Licensing Exception "ICT"
The U.S. Commerce Department has published for comment a proposed export license exception (“ICT”) that would authorize approved companies and their wholly owned or controlled affiliates to engage in transfers among themselves of many items that would otherwise require individual export licenses, including licenses to make so-called deemed exports to foreign nationals. Comments on the proposed rule are due by November 17th.
The parent company must be incorporated in a country listed in a new supplement to the regulations.To gain approval for use of the exception, the company would have to apply to the Departmentand obtain express approval.
Among the things the application must contain is an ICT internalcontrol plan for the Department to review. What is perhaps most interesting about the proposal is what the Department says the internal control plan must contain because it suggests what Commerce would look to in deciding in other circumstances, such as an enforcement action or a voluntary disclosure situation, whether a company has an effective export compliance program.
The more details are available in following bulletin in IRB# 405 dated October 7, 2008.
http://www.bryancave.com/bulletins/
The parent company must be incorporated in a country listed in a new supplement to the regulations.To gain approval for use of the exception, the company would have to apply to the Departmentand obtain express approval.
Among the things the application must contain is an ICT internalcontrol plan for the Department to review. What is perhaps most interesting about the proposal is what the Department says the internal control plan must contain because it suggests what Commerce would look to in deciding in other circumstances, such as an enforcement action or a voluntary disclosure situation, whether a company has an effective export compliance program.
The more details are available in following bulletin in IRB# 405 dated October 7, 2008.
http://www.bryancave.com/bulletins/
2008年10月3日金曜日
CBP Extends Grace Period for Automated Export System
An official with U.S. Customs and Border Protection (CBP) says the agency has extended the grace period before enforcement of rules requiring electronic filing of export documents.
Exporters were to begin using the Automated Export System (AES) on October 1, however CBP says it must first issue guidelines to field offices, which should occur within the next few weeks.
Fines for exporters filing paper forms instead of using AES range from $1,100 to $10,000 per violation.
(Source: UPS Trade News for October 2, 2008)
Exporters were to begin using the Automated Export System (AES) on October 1, however CBP says it must first issue guidelines to field offices, which should occur within the next few weeks.
Fines for exporters filing paper forms instead of using AES range from $1,100 to $10,000 per violation.
(Source: UPS Trade News for October 2, 2008)
2008年10月2日木曜日
Approved Exporter in Japan-Swiss EPA
Japan and Swiss reached agreement in principle in EPA according to Japanese government adjournment on Sept 29. The 99% of trade amount for both countries will be zero customs duty in 10 years after its implementation. It is good thing.
As a first EPA for Japan to European countries, there is one unique and new provision in it.
It is proof of origin when traders claim preferential tariff. A new framework will be provided for an origin declaration by an approved exporter. Although for Japan this framework is a new system, it is common system in European communities. An approved exporter is an exporter who has met certain conditions imposed by the customs authorities and who is allowed to make out invoice declarations. Declaration on certain commercial documents such as invoice can replace the specific country of origin. This is subject to prior authorization by the customs authorities granted to approved exporters. Just as the customs authorities can grant that status, they can also withdraw it if the exporter misuses or abuses the authorities. As for relevant authorities in each country, Swiss customs will take care in Swiss side and Ministry of Economy, Trade and Industry (“METI”) will take care of Japan side.
(Source: Page 11 in http://www.mof.go.jp/singikai/kanzegaita/siryou/kana200930/kana200930b.pdf)
(Reference for Approved Exporter in EU: http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/article_774_en.htm#approved_exporter)
As a first EPA for Japan to European countries, there is one unique and new provision in it.
It is proof of origin when traders claim preferential tariff. A new framework will be provided for an origin declaration by an approved exporter. Although for Japan this framework is a new system, it is common system in European communities. An approved exporter is an exporter who has met certain conditions imposed by the customs authorities and who is allowed to make out invoice declarations. Declaration on certain commercial documents such as invoice can replace the specific country of origin. This is subject to prior authorization by the customs authorities granted to approved exporters. Just as the customs authorities can grant that status, they can also withdraw it if the exporter misuses or abuses the authorities. As for relevant authorities in each country, Swiss customs will take care in Swiss side and Ministry of Economy, Trade and Industry (“METI”) will take care of Japan side.
(Source: Page 11 in http://www.mof.go.jp/singikai/kanzegaita/siryou/kana200930/kana200930b.pdf)
(Reference for Approved Exporter in EU: http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/article_774_en.htm#approved_exporter)
2008年9月29日月曜日
Japan agreed EPA with Vietnam and Swiss
Japanese government announced today on Sept 29 that EPA negotiation was agreed with Vietnam and Switzerland. So far, Japan have implemented EPA with total 9 countries, so this agreement will make EPA with 11 countries.
As for Vietnam EPA, it is expected to exempt the customs duty (from Japan to Vietnam) for automobile parts and steel products. Japanese manufacture will enjoy much more export to Vietnam. On the other hand the goods from Vietnam to Japan, it is expected to have zero duty in fish and textiles.
As for EPA with Switzerland, it is first EPA for Japan with European country. For export from Japan, the customs duty for automobile and steel products are expected to lower level. The import from Switzerland to Japan, the customs duty for wine will be zero duty. Approx. 80% of products from Switzerland have already been zero or lower duty.
As WTO negotiation is struggled to reach agreement, this is good news for Japan.
After these EPA, next target EPA for Japan is to reach agreement with Australia and Korea.
(Source: Japan - Swiss EPA: http://www.mofa.go.jp/mofaj/gaiko/fta/j_swit/goui.html)
(Source: Japan - Vietnam EPA: http://www.mofa.go.jp/mofaj/gaiko/fta/j_asean/vietnam/goui.html )
As for Vietnam EPA, it is expected to exempt the customs duty (from Japan to Vietnam) for automobile parts and steel products. Japanese manufacture will enjoy much more export to Vietnam. On the other hand the goods from Vietnam to Japan, it is expected to have zero duty in fish and textiles.
As for EPA with Switzerland, it is first EPA for Japan with European country. For export from Japan, the customs duty for automobile and steel products are expected to lower level. The import from Switzerland to Japan, the customs duty for wine will be zero duty. Approx. 80% of products from Switzerland have already been zero or lower duty.
As WTO negotiation is struggled to reach agreement, this is good news for Japan.
After these EPA, next target EPA for Japan is to reach agreement with Australia and Korea.
(Source: Japan - Swiss EPA: http://www.mofa.go.jp/mofaj/gaiko/fta/j_swit/goui.html)
(Source: Japan - Vietnam EPA: http://www.mofa.go.jp/mofaj/gaiko/fta/j_asean/vietnam/goui.html )
2008年9月22日月曜日
Japan Post changes customs clearance procedure for international postal item
Announced on Japanese customs web site in this month, Japanese postal service changes international post service customs clearance procedure for the goods exceeding JPY200,000 (approx. US$1,850) . This revised rule will be effective on Feb. 16, 2009.
The main point of procedure change is to need customs clearance like normal freight cargo for the goods exceeding JPY200,000. This is applicable both for sending (export) and receiving (import). The persons who send or receive such goods should declare customs clearance either through customs broker or by themselves. (It is planned Japan Post will get customs broker license by Feb 2009.)
The letter document or correspondence is out of focus in rule change of this time.
(Source: Japanese customs web site http://www.customs.go.jp/tsukan/yubin/yubin210216.htm)
(Current procedure: http://www.customs.go.jp/english/c-answer_e/customsanswer_e.htm#yubin)
The main point of procedure change is to need customs clearance like normal freight cargo for the goods exceeding JPY200,000. This is applicable both for sending (export) and receiving (import). The persons who send or receive such goods should declare customs clearance either through customs broker or by themselves. (It is planned Japan Post will get customs broker license by Feb 2009.)
The letter document or correspondence is out of focus in rule change of this time.
(Source: Japanese customs web site http://www.customs.go.jp/tsukan/yubin/yubin210216.htm)
(Current procedure: http://www.customs.go.jp/english/c-answer_e/customsanswer_e.htm#yubin)
2008年9月18日木曜日
EU to Drop Tariffs on High-Tech Products
As reported on this Blog in June, EU have been imposed high duty to foreign IT products which is considered to be zero duty based on WTO・ITA (Information Technology Agreement).
http://japantradecompliance.blogspot.com/2008/06/eu-ita-duty-classification-issue-bring.html
Here's good news for Japanese, US and other countries' manufacturers.
Bowing to pressure from several of its major trading partners, the European Union this week announced it would eliminate steep tariffs on certain high-tech products.
Earlier this year, the U.S., Japan, and Taiwan sued the EU because of high European tariffs on flat-panel monitors, cable and satellite boxes that access the Internet, and printers that can also scan, fax, and copy.
The move will also help the EU avoid a lengthy and costly investigation into the matter by the World Trade Organization.
(Source: UPS Trade News, Trade_News@ups-scs.service.com. Sept. 16, 2008)
http://japantradecompliance.blogspot.com/2008/06/eu-ita-duty-classification-issue-bring.html
Here's good news for Japanese, US and other countries' manufacturers.
Bowing to pressure from several of its major trading partners, the European Union this week announced it would eliminate steep tariffs on certain high-tech products.
Earlier this year, the U.S., Japan, and Taiwan sued the EU because of high European tariffs on flat-panel monitors, cable and satellite boxes that access the Internet, and printers that can also scan, fax, and copy.
The move will also help the EU avoid a lengthy and costly investigation into the matter by the World Trade Organization.
(Source: UPS Trade News, Trade_News@ups-scs.service.com. Sept. 16, 2008)
2008年9月11日木曜日
OFAC issued Economic sanctions guidlines
The Treasury Department's Office of Foreign Assets Control ("OFAC") issued guideline for violation penalty. The public comment is due no later than 60 days from issuance.
It basically state, if the violation is self-disclosed, the penalty will be one-half of not being voluntarily disclosed. The statutory maximum will be imposed in case of no self-disclosing. It is, therefore, motivating and urging companies to voluntary disclosure.
In Japan, METI don't issue any guideline of minimizing penalty in case of voluntary disclosure.
However, it is said the willingness of cooperation of disclosure or good attitude will lead to favorable result. (There is no guarantee, though....)
(Source: IRB NO 403: OFAC Issues Economic Sanctions Enforcement Guidelines http://www.bryancave.com/bulletins/ )
It basically state, if the violation is self-disclosed, the penalty will be one-half of not being voluntarily disclosed. The statutory maximum will be imposed in case of no self-disclosing. It is, therefore, motivating and urging companies to voluntary disclosure.
In Japan, METI don't issue any guideline of minimizing penalty in case of voluntary disclosure.
However, it is said the willingness of cooperation of disclosure or good attitude will lead to favorable result. (There is no guarantee, though....)
(Source: IRB NO 403: OFAC Issues Economic Sanctions Enforcement Guidelines http://www.bryancave.com/bulletins/ )
2008年9月10日水曜日
NPA in Japan tackle illegal export
Japanese National Police Agency ("NPA") recently published interesting web article regarding their activity to prevent illegal export in English.
http://www.npa.go.jp/english/biki1/index.html
Among them, the most interesting article is "Measures to prevent illegal export for WMD-related materials". It is concise 4 pages of material including background of world wide regime, recent export violation case reports, and their measures to tackle illegal export at Customs.
http://www.npa.go.jp/english/biki1/pdf/P05.pdf
For those who in trade compliance people, this is useful information to know Japanese export control activity.
http://www.npa.go.jp/english/biki1/index.html
Among them, the most interesting article is "Measures to prevent illegal export for WMD-related materials". It is concise 4 pages of material including background of world wide regime, recent export violation case reports, and their measures to tackle illegal export at Customs.
http://www.npa.go.jp/english/biki1/pdf/P05.pdf
For those who in trade compliance people, this is useful information to know Japanese export control activity.
2008年9月2日火曜日
JPN export control law update published
As reported on Aug 06 in this blog, Japanese export control regulation will be updated in order to reflect catch-all control for conventional weapon. The regulaiton rule was officially published on Aug 27 and will be implemented on Nov. 01, 2008, as originally scheduled.
My report last time was just in draft level, and METI have accepted public comment on this regulation change. After receiving public comments from Japanse industries, METI slightly chaged the category number of the new list of conventional weapons.
* Category# 15-2 for 32 items of sensitive dual-use items ---> Category# 16-(1)
Category# 16 have been the list of Catch-all controlled products which shows HS numbers of industries items excluding wooden and food items. Now, this category move to #16-(2) and the items list is no change. This list update is to reflect industry's opinion for avoiding any confusion of mixing up "list control" items and "catch-all control" items.
One good thing for industry is, METI stated in FAQ, new 32 items added in Category#16-(1) are not required to determine license required or not, except the export to United Nations arms embargo countries. The license determination procedure (e.g. using parameter sheet) is heavy administration burdens for business society, METI paid reasonable attention not to impose additional burdens to Japanese industry.
My report last time was just in draft level, and METI have accepted public comment on this regulation change. After receiving public comments from Japanse industries, METI slightly chaged the category number of the new list of conventional weapons.
* Category# 15-2 for 32 items of sensitive dual-use items ---> Category# 16-(1)
Category# 16 have been the list of Catch-all controlled products which shows HS numbers of industries items excluding wooden and food items. Now, this category move to #16-(2) and the items list is no change. This list update is to reflect industry's opinion for avoiding any confusion of mixing up "list control" items and "catch-all control" items.
One good thing for industry is, METI stated in FAQ, new 32 items added in Category#16-(1) are not required to determine license required or not, except the export to United Nations arms embargo countries. The license determination procedure (e.g. using parameter sheet) is heavy administration burdens for business society, METI paid reasonable attention not to impose additional burdens to Japanese industry.
2008年8月26日火曜日
BIS amends EAR concerning the Entity List
On August 21, 2008, the US Bureau of Industry and Security ("BIS") published a final rule concerning export and re-export requirements for persons and entities on the Entity List.
The changes are effective immediately. The point of the amendments are as follows.
- A newly-established End-User Review Committee ("Committee"), consisting of various US government departments., will have the discretion to add a party to, remove a party from, or modify a party's designation on the Entity List.
- Changes will be made to the Entity List where there is reasonable cause to believe, based on specific facts, that an entity has been involved in, or poses a risk of being involved in, activities that are contrary to the national security or foreign policy interests of the United States.
Note that BIS has stated "US persons" will not be placed on the Entity List under this new procedure. Thus, the Entity List restricts only foreign persons from receiving EAR-controlled items that are exported from the United States or re-exported from abroad.
- BIS now will have the authority to impose foreign policy export and re-export licensing requirements, limit the availability of license exceptions, and establish a license application review policy for export and re-exports to designated entities.
License exceptions will not be available to designated parties named on the Entity List unless specifically noted.
- These amendments reflect BIS's policy statements that US export controls should not only focus on certain countries, but also target individual persons or entities of concern with more effective and specific controls.
The new rule could severely disrupt business with foreign companies. To minimize that risk, US exporters should be particularly vigilant in ensuring they know their foreign customers.
The changes are effective immediately. The point of the amendments are as follows.
- A newly-established End-User Review Committee ("Committee"), consisting of various US government departments., will have the discretion to add a party to, remove a party from, or modify a party's designation on the Entity List.
- Changes will be made to the Entity List where there is reasonable cause to believe, based on specific facts, that an entity has been involved in, or poses a risk of being involved in, activities that are contrary to the national security or foreign policy interests of the United States.
Note that BIS has stated "US persons" will not be placed on the Entity List under this new procedure. Thus, the Entity List restricts only foreign persons from receiving EAR-controlled items that are exported from the United States or re-exported from abroad.
- BIS now will have the authority to impose foreign policy export and re-export licensing requirements, limit the availability of license exceptions, and establish a license application review policy for export and re-exports to designated entities.
License exceptions will not be available to designated parties named on the Entity List unless specifically noted.
- These amendments reflect BIS's policy statements that US export controls should not only focus on certain countries, but also target individual persons or entities of concern with more effective and specific controls.
The new rule could severely disrupt business with foreign companies. To minimize that risk, US exporters should be particularly vigilant in ensuring they know their foreign customers.
2008年8月25日月曜日
Japan will lower CVD 9.1% to Hynix Korea DRAM
Japan have been imposed 27.2% of Counter Vailing Duty ("CVD") to Hynix Korea DRAM since January 2006. Korean Government argued in WTO that this CVD was not appropriate and WTO advised Japan to make correction based on more accurate investigation.
Based on WTO advisory, Japan will lower CVD to 9.1% from September 1st after the approval of Cabinet. The details of this decision are described in below web site of Ministry of Finance. (Language: Japanese only)
(Source: http://www.mof.go.jp/singikai/kanzegaita/siryou/kanb200822.htm )
Based on WTO advisory, Japan will lower CVD to 9.1% from September 1st after the approval of Cabinet. The details of this decision are described in below web site of Ministry of Finance. (Language: Japanese only)
(Source: http://www.mof.go.jp/singikai/kanzegaita/siryou/kanb200822.htm )
2008年8月22日金曜日
US CBP collect "First Sale" data
On August 20, US Customs and Border Protection ("CBP") announced that they will start to collect the statistics of using "First Sale" data in customs declaration. This is an interim rule and first step action for importer declaration requirement utilizing the "First Sale Rule".
The First Sale rule is a beneficial rule for importer because they can save duty amount based on the payment by first shipper to middle men, not by transaction price by importer to middle men.
CBP once tried to eliminate this rule in January 2008, but due to strong opposition from business society, CBP announced the withdrawal of their proposal.
In case an importer use "First Sale" price of goods when they declare in customs, they need to insert a single code "F" on CBP form 7501 at the line item level. This new rule is effective immediately but they have grace period until September 19, that means the input will not be rejected.
By collecting statistics how the First Sale rule affect customs and business, CBP may seek further action for this rule.
(Source: Bryan Cave LLP, International Regulatory Bulletin No. 400 on August 21, 2008 http://www.bryancave.com/bulletins/)
The First Sale rule is a beneficial rule for importer because they can save duty amount based on the payment by first shipper to middle men, not by transaction price by importer to middle men.
CBP once tried to eliminate this rule in January 2008, but due to strong opposition from business society, CBP announced the withdrawal of their proposal.
In case an importer use "First Sale" price of goods when they declare in customs, they need to insert a single code "F" on CBP form 7501 at the line item level. This new rule is effective immediately but they have grace period until September 19, that means the input will not be rejected.
By collecting statistics how the First Sale rule affect customs and business, CBP may seek further action for this rule.
(Source: Bryan Cave LLP, International Regulatory Bulletin No. 400 on August 21, 2008 http://www.bryancave.com/bulletins/)
2008年8月20日水曜日
US request for a panel to examine EU's duty to IT products
According to Nikkei Press on Aug. 19, US requested to WTO for a panel to examine its complaint against the EU's imposition of customs duties on imports of IT products. This panel request was made together with Japan and Taiwan, as their discussion with EU was not successful.
US insist EU have violated the provision of ITA (Information Technology Agreement), which indicate an abolition of customs duty on IT products. EU express their intention to dispute against this in the panel process. It will be discussed in WTO on Aug 29 whether or not the panel will be established.
EU impose the customs duty on PC, monitor, multi-function printer, TV set top box etc. EU's interpretation of ITA is that such products are electrical commodities rather than genuine high-tech products, therefore they are not subject to duty exemption granted in ITA.
US insist EU have violated the provision of ITA (Information Technology Agreement), which indicate an abolition of customs duty on IT products. EU express their intention to dispute against this in the panel process. It will be discussed in WTO on Aug 29 whether or not the panel will be established.
EU impose the customs duty on PC, monitor, multi-function printer, TV set top box etc. EU's interpretation of ITA is that such products are electrical commodities rather than genuine high-tech products, therefore they are not subject to duty exemption granted in ITA.
2008年8月14日木曜日
Reality in Japanese small & medium companies
As reported in this Blog on Aug. 01, Japanese machine tool maker, Horkos, was raided by Police under the violation of export control law.
They are allegedly investigated the exportation of license required machine tool to South Korea without license. The machine tool is said to be license required item due to its high technical specification. The company recognized it, but they declared its technical specification falsely to Customs, with intention to skip the troublesome export licensing application, and expected to cut lead time of shipment. In addition, their products may be re-exported to North Korea or Iran.
Horkos has 665 employees and its sales turn over is 21 billions yen, according to their web site.
The result of police investigation is still uncertain.
This kind of violation case is actually commonly happens (and unfortunately will continue to happen) in Japan, especially for small or medium sized company.
I pick up some reasons why.
1) Complicated regulation and implementation
Japanese export control law is too complicated to fully understand, even for educated business people. In order to correctly understand and know what to do, people must understand the combination of Law, Order, ministerial order, notification and circulars from METI. These are written with "law words", therefore normal Japanese cannot understand what it states.
2) Resource shortage
As export control skill is very niche category, not many trained employees are available who understand export control law. Even for logistics manager, many are not familiar with export control. Big companies such as Toshiba, Cannon, Mitsubishi etc. have experts in-house, however small and medium companies don't have such human resource.
3) Expensive advisory cost of CISTEC
There is official and public advisory organization in export control, such as CISTEC.
They offer advisory, training seminar, and books etc. to members companies.
However, the annual member fee is expensive, JPY800,000 (US$7,300) per company with its capital exceeding JPY100 millions, or JPY400,000 (US$3,600) for small companies with its capital below JPY100 millions. Small companies hesitate to be a member of CISTEC. Although CISTEC's service is available to non-members, the seminar fee and the books are priced as double of that of members. Currently, CISTEC members companies are only 338 as of August 1, 2008.
4) Classification difficulty
Much of operational difficulty is in classification of items, whether the items are required export license or not. The classification technique is relied on both technical knowledge and legal knowledge. Either one is not enough, definitely needs both area of knowledge and experience. There are not many engineers who has export control legal knowledge. In addition, basically METI don't touch the classification of items. I know in some countries government organizations take care of items classification, but in Japan, it is totally responsibility of exporter.
5) Export license application
When applying export license to METI, it takes much time. Maximum would be 90 days but basically in case by case. Not only the lead time, but documents preparation is troublesome. Exporter must prepare and submit a contract, a written pledge, or any other possible documents METI request. Such things motivate exporter to skip license application as much as possible. This circumstance is one of the reasons Horkos Corp. exported their items illegally. In addition, Yamazaki Mazak gave up building the new factory in India as reported in this Blog on Aug. 5. It is said they just gave up before applying export license to METI, possibly due to this reason.
6) Customer and business driven ethics
In Japan, business ethics are more in customer oriented (or sales oriented) than compliance. It is more important to expand business than to be compliant to law.
Such culture is more emphasized in small companies with slow economy, and especially in provincial companies where the economy is much worse than Tokyo area. Culture doesn't change soon. In addition, generally, sales managers have much more political power than operation guys in the organization. Sales logic and ethics tend to move the business to skip export license applicaiton or false classification.
They are allegedly investigated the exportation of license required machine tool to South Korea without license. The machine tool is said to be license required item due to its high technical specification. The company recognized it, but they declared its technical specification falsely to Customs, with intention to skip the troublesome export licensing application, and expected to cut lead time of shipment. In addition, their products may be re-exported to North Korea or Iran.
Horkos has 665 employees and its sales turn over is 21 billions yen, according to their web site.
The result of police investigation is still uncertain.
This kind of violation case is actually commonly happens (and unfortunately will continue to happen) in Japan, especially for small or medium sized company.
I pick up some reasons why.
1) Complicated regulation and implementation
Japanese export control law is too complicated to fully understand, even for educated business people. In order to correctly understand and know what to do, people must understand the combination of Law, Order, ministerial order, notification and circulars from METI. These are written with "law words", therefore normal Japanese cannot understand what it states.
2) Resource shortage
As export control skill is very niche category, not many trained employees are available who understand export control law. Even for logistics manager, many are not familiar with export control. Big companies such as Toshiba, Cannon, Mitsubishi etc. have experts in-house, however small and medium companies don't have such human resource.
3) Expensive advisory cost of CISTEC
There is official and public advisory organization in export control, such as CISTEC.
They offer advisory, training seminar, and books etc. to members companies.
However, the annual member fee is expensive, JPY800,000 (US$7,300) per company with its capital exceeding JPY100 millions, or JPY400,000 (US$3,600) for small companies with its capital below JPY100 millions. Small companies hesitate to be a member of CISTEC. Although CISTEC's service is available to non-members, the seminar fee and the books are priced as double of that of members. Currently, CISTEC members companies are only 338 as of August 1, 2008.
4) Classification difficulty
Much of operational difficulty is in classification of items, whether the items are required export license or not. The classification technique is relied on both technical knowledge and legal knowledge. Either one is not enough, definitely needs both area of knowledge and experience. There are not many engineers who has export control legal knowledge. In addition, basically METI don't touch the classification of items. I know in some countries government organizations take care of items classification, but in Japan, it is totally responsibility of exporter.
5) Export license application
When applying export license to METI, it takes much time. Maximum would be 90 days but basically in case by case. Not only the lead time, but documents preparation is troublesome. Exporter must prepare and submit a contract, a written pledge, or any other possible documents METI request. Such things motivate exporter to skip license application as much as possible. This circumstance is one of the reasons Horkos Corp. exported their items illegally. In addition, Yamazaki Mazak gave up building the new factory in India as reported in this Blog on Aug. 5. It is said they just gave up before applying export license to METI, possibly due to this reason.
6) Customer and business driven ethics
In Japan, business ethics are more in customer oriented (or sales oriented) than compliance. It is more important to expand business than to be compliant to law.
Such culture is more emphasized in small companies with slow economy, and especially in provincial companies where the economy is much worse than Tokyo area. Culture doesn't change soon. In addition, generally, sales managers have much more political power than operation guys in the organization. Sales logic and ethics tend to move the business to skip export license applicaiton or false classification.
2008年8月13日水曜日
Export Controls in One Page
To reduce all of export control decision-making down to one page.
REQUIRED QUESTIONS TO ANSWER BEFORE ENGAGING IN AN EXPORT TRANSACTION:
(1) What is at issue, i.e., hardware, software, or information ("item"), or a service?
(2) What is the jurisdictional status of the item or service, i.e., is it controlled by the Export Administration Regulations ("EAR") or International Traffic in Arms Regulations ("ITAR")?
(3) What is the classification status of the item or service, i.e., if EAR-controlled, what is its Export Control Classification Number ("ECCN"), or, if ITAR-controlled, what is its U.S. Munitions List ("USML") subcategory number?
(4) Does the applicable ECCN or USML subcategory require a license or other authorization for exports to the country or the foreign persons (even if in the U.S.) at issue? (If EAR, check "Reasons for Control." If ITAR, worldwide.)
(5) If so, are there any exceptions or exemptions in the EAR or ITAR, as applicable, that would allow the item or service to nonetheless be exported without a license?
(6) Regardless of the answers to the foregoing questions, is a General Prohibition applicable to the transaction, i.e., is there a prohibited end-use (e.g., one related to weapons of mass destruction), prohibited end-user (e.g., a Specially Designated National ("SDN")), prohibited destination (e.g., an embargoed country), or knowledge that a violation or other red flag exists in connection with the item or service?
(7) Regardless of the answers to the foregoing questions, are there any applicable licenses, license conditions, or provisos that affect or limit the proposed activity?
(8) Regardless of the answers to the foregoing questions, are there any known U.S. Government concerns or issues, from a policy or other perspective, with respect to the proposed transaction?
(9) Regardless of the answers to the foregoing questions, will all registration, recordkeeping, and document creation requirements be satisfied with respect to the proposed export activity?
(10) Are there related limitations or issues, such as those imposed by contract terms, payment issues (e.g., with letters of credit); intellectual property rights, internal business policies, conflict of interest rules, foreign export and import laws, or hazardous materials or other safety-related regulations?
(Source: Author: Kevin Wolf, Esq., Bryan Cave LLP)
REQUIRED QUESTIONS TO ANSWER BEFORE ENGAGING IN AN EXPORT TRANSACTION:
(1) What is at issue, i.e., hardware, software, or information ("item"), or a service?
(2) What is the jurisdictional status of the item or service, i.e., is it controlled by the Export Administration Regulations ("EAR") or International Traffic in Arms Regulations ("ITAR")?
(3) What is the classification status of the item or service, i.e., if EAR-controlled, what is its Export Control Classification Number ("ECCN"), or, if ITAR-controlled, what is its U.S. Munitions List ("USML") subcategory number?
(4) Does the applicable ECCN or USML subcategory require a license or other authorization for exports to the country or the foreign persons (even if in the U.S.) at issue? (If EAR, check "Reasons for Control." If ITAR, worldwide.)
(5) If so, are there any exceptions or exemptions in the EAR or ITAR, as applicable, that would allow the item or service to nonetheless be exported without a license?
(6) Regardless of the answers to the foregoing questions, is a General Prohibition applicable to the transaction, i.e., is there a prohibited end-use (e.g., one related to weapons of mass destruction), prohibited end-user (e.g., a Specially Designated National ("SDN")), prohibited destination (e.g., an embargoed country), or knowledge that a violation or other red flag exists in connection with the item or service?
(7) Regardless of the answers to the foregoing questions, are there any applicable licenses, license conditions, or provisos that affect or limit the proposed activity?
(8) Regardless of the answers to the foregoing questions, are there any known U.S. Government concerns or issues, from a policy or other perspective, with respect to the proposed transaction?
(9) Regardless of the answers to the foregoing questions, will all registration, recordkeeping, and document creation requirements be satisfied with respect to the proposed export activity?
(10) Are there related limitations or issues, such as those imposed by contract terms, payment issues (e.g., with letters of credit); intellectual property rights, internal business policies, conflict of interest rules, foreign export and import laws, or hazardous materials or other safety-related regulations?
(Source: Author: Kevin Wolf, Esq., Bryan Cave LLP)
2008年8月11日月曜日
India - Asean FTA filalizing the agreement
According to Nikkei press on Aug. 11, the on-going India and Asean FTA is finalizing and will be signed on Dec. 2008.
Both parties will reduce the import duty to 5% to promote the goods trade. India will reduce the average duty rate from 30% to 5%, and Asean will reduce from 10% to 5%. This will certainly helpful for Japanese traders which have facility in Asean.
For Asean, India is 4th FTA agreement, followed by China, Korea and Japan.
Both parties will reduce the import duty to 5% to promote the goods trade. India will reduce the average duty rate from 30% to 5%, and Asean will reduce from 10% to 5%. This will certainly helpful for Japanese traders which have facility in Asean.
For Asean, India is 4th FTA agreement, followed by China, Korea and Japan.
2008年8月9日土曜日
Warning of export violation to Nakano Corp.
As reported on this Blog on June 16, vacuum pomp which was manufactured by Japanese manufacturer was found in North Korea to be used in their nuclear facility.
According to the news report, the vacuum pomp was not likely to be falling into "List control" of Japanese export control law, which is classified with technical specification. Instead, METI try to accuse with "Catch-all" control violation, which impose export license of all products to be used for WMD.
However, in order to judge as guilty in this Catch-all control, it is required to prove the shipper have clear written evidence which shows the product will be used for WMD purpose "objectively". METI call this as "objective condition".
Nakano Corp clearly had recognition their exported products to Taiwan would be re-exported to North Korea, however they didn't have clear written evidence from Taiwan impotter for that.
Therefore, METI impose only warning to Nakano Corp, made public in METI web site on Aug 08, 2008, and didn't impose penalty such as export suspension. In 2007, Yamaha and Mitutoyo were imposed the suspension of export for certain period as penalty.
Considering the Nakano Corp's exported goods lead to threat to national security, the warning only this time can be considered as light penalty, especially compared with Yamaha and Mitutoyo' cases.
(Source: http://www.meti.go.jp/policy/anpo/kanri/topics/keikoku/080808press.pdf)
According to the news report, the vacuum pomp was not likely to be falling into "List control" of Japanese export control law, which is classified with technical specification. Instead, METI try to accuse with "Catch-all" control violation, which impose export license of all products to be used for WMD.
However, in order to judge as guilty in this Catch-all control, it is required to prove the shipper have clear written evidence which shows the product will be used for WMD purpose "objectively". METI call this as "objective condition".
Nakano Corp clearly had recognition their exported products to Taiwan would be re-exported to North Korea, however they didn't have clear written evidence from Taiwan impotter for that.
Therefore, METI impose only warning to Nakano Corp, made public in METI web site on Aug 08, 2008, and didn't impose penalty such as export suspension. In 2007, Yamaha and Mitutoyo were imposed the suspension of export for certain period as penalty.
Considering the Nakano Corp's exported goods lead to threat to national security, the warning only this time can be considered as light penalty, especially compared with Yamaha and Mitutoyo' cases.
(Source: http://www.meti.go.jp/policy/anpo/kanri/topics/keikoku/080808press.pdf)
2008年8月8日金曜日
China encryption regulation can be business?
As it is widely known, China strictly control encryption software. For sales, import, and use of encryption in China is subject to Chinese government review and the license application. Although the product which encrypting is not core function (e.g. Personal Computer, mobile phone etc.) is exemption of this encryption restriction, basically encryption software is subject to control and Japanese companies may face difficulty to bring in and its use in China.
Otsuka Corporatin, the leading IT Solution provider in Japan, launched packaged service for supporting their clients to get appropriate China encryption license.
They tied up with Chinese law firm who help to get encryption license from Chinese authority. （上海市協力律師事務所 http://www.co-effort.com/en/home.asp ）
The packaged service fee is depending on the client's needs and case-by-case, its starting price is from JPY700,000 (approx. US$6,500).
For companies who are seriously considering the encryption software business in China, Otsuka's this packaged service may be good options to choose.
(Source: Otsuka Corp: http://www.otsuka-shokai.co.jp/products/chn/pack.html )
Otsuka Corporatin, the leading IT Solution provider in Japan, launched packaged service for supporting their clients to get appropriate China encryption license.
They tied up with Chinese law firm who help to get encryption license from Chinese authority. （上海市協力律師事務所 http://www.co-effort.com/en/home.asp ）
The packaged service fee is depending on the client's needs and case-by-case, its starting price is from JPY700,000 (approx. US$6,500).
For companies who are seriously considering the encryption software business in China, Otsuka's this packaged service may be good options to choose.
(Source: Otsuka Corp: http://www.otsuka-shokai.co.jp/products/chn/pack.html )
CBP Seeks to Ease Concerns on Border Searches of Electronic Devices
A senior U.S. Customs and Border Protection official moved this week to ease concerns about CBP's policies concerning searches of laptop computers and other electronic devices at U.S. borders. Deputy Commissioner Jay Ahern defended the policy and said the agency has specific measures in place to protect business and trade information.
In a document
[http://www.strtrade.com/wti/2008/august/08/search_authority.pdf] dated July 16, CBP "sets forth the legal and policy guidelines within which officers may search, review, retain and share certain information possessed by individuals who are encountered by CBP at the border, functional equivalent of the border, or extended border." These guidelines include the following provisions.
* CBP officers may examine documents, books, pamphlets, and other printed material, as well as computers, disks, hard drives, and other electronic or digital storage devices. These examinations are "a crucial tool" for detecting information in violation of copyright and trademark laws as well as evidence of embargo violations or other import or export control laws.
* In the course of a border search, CBP officers can review and analyze the information transported by any individual attempting to enter, re-enter, depart, pass through or reside in the U.S. without "individualized suspicion." They can also detain documents and electronic devices or copies thereof for a reasonable period of time to perform a thorough border search, either on-site or off-site. During this time information may be shared with other federal agencies or entities to assist with translation, decryption or subject matter analysis.
* If CBP officers determine there is probable cause of unlawful activity, based on a review of information in documents or electronic devices encountered at the border or on other facts or circumstances, they may seize and retain the originals and/or copies of relevant documents or devices.
* If CBP does not have probable cause to seize information after reviewing it, any copies must be destroyed. However, there is no limitation on the authority of officers to make written notes or reports or to document impressions relating to a border encounter.
The policy includes specific provisions governing how CBP handles business information and attorney-client privileged material. CBP officers encountering business or commercial information in documents or electronic devices are required to treat it as business confidential information and to take all reasonable measures to protect it from unauthorized disclosure. And although legal materials are not necessarily exempt from border searches, they may be subject to special handling procedures. Specifically, if a CBP officer suspects that the content of correspondence, court documents or other legal documents that may be covered by attorney-client privilege may constitute evidence of a crime or otherwise pertain to a determination within CBP's jurisdiction, the officer must seek advice from the associate or assistant chief counsel or the appropriate U.S. attorney's office before conducting a search of the document.
Although public concern about this policy has only been expressed fairly recently, Ahern noted in an Aug. 5 posting on CBP's Web site that the policy is in fact not new, that CBP has been searching laptops of those who warrant a closer inspection for years, and that the agency's authority to conduct suspicion-less laptop searches at the border has been upheld by U.S. courts. With respect to specific concerns that the policy could put trade information at risk, Ahern pointed to CBP's track record with the "thousands of commercial entry documents, shipping manifests, container content lists, and details pieces of company information" it receives each day as part of its mission to process entries and screen cargo shipments. "This information is closely guarded and governed by strict privacy procedures," he emphasized, and "information from passenger laptops or other electronic devices is treated no differently."
Nevertheless, some lawmakers are moving to put additional limitations on CBP's search authority. Rep. Zoe Lofgren, D-Calif., introduced July 23 legislation (H.R. 6588) that would prohibit searches of the electronic contents of a laptop or similar device based solely on the government's power to "search at borders or upon entry to the territory" of the U.S.
(Source: www.strtrade.com/wti/register.asp; Copyright 2008, Sandler, Travis & Rosenberg, P.A. Originally published in the Friday, August 8, 2008, issue of ST&R's WorldTrade\Interactive. Reprinted by permission.)
In a document
[http://www.strtrade.com/wti/2008/august/08/search_authority.pdf] dated July 16, CBP "sets forth the legal and policy guidelines within which officers may search, review, retain and share certain information possessed by individuals who are encountered by CBP at the border, functional equivalent of the border, or extended border." These guidelines include the following provisions.
* CBP officers may examine documents, books, pamphlets, and other printed material, as well as computers, disks, hard drives, and other electronic or digital storage devices. These examinations are "a crucial tool" for detecting information in violation of copyright and trademark laws as well as evidence of embargo violations or other import or export control laws.
* In the course of a border search, CBP officers can review and analyze the information transported by any individual attempting to enter, re-enter, depart, pass through or reside in the U.S. without "individualized suspicion." They can also detain documents and electronic devices or copies thereof for a reasonable period of time to perform a thorough border search, either on-site or off-site. During this time information may be shared with other federal agencies or entities to assist with translation, decryption or subject matter analysis.
* If CBP officers determine there is probable cause of unlawful activity, based on a review of information in documents or electronic devices encountered at the border or on other facts or circumstances, they may seize and retain the originals and/or copies of relevant documents or devices.
* If CBP does not have probable cause to seize information after reviewing it, any copies must be destroyed. However, there is no limitation on the authority of officers to make written notes or reports or to document impressions relating to a border encounter.
The policy includes specific provisions governing how CBP handles business information and attorney-client privileged material. CBP officers encountering business or commercial information in documents or electronic devices are required to treat it as business confidential information and to take all reasonable measures to protect it from unauthorized disclosure. And although legal materials are not necessarily exempt from border searches, they may be subject to special handling procedures. Specifically, if a CBP officer suspects that the content of correspondence, court documents or other legal documents that may be covered by attorney-client privilege may constitute evidence of a crime or otherwise pertain to a determination within CBP's jurisdiction, the officer must seek advice from the associate or assistant chief counsel or the appropriate U.S. attorney's office before conducting a search of the document.
Although public concern about this policy has only been expressed fairly recently, Ahern noted in an Aug. 5 posting on CBP's Web site that the policy is in fact not new, that CBP has been searching laptops of those who warrant a closer inspection for years, and that the agency's authority to conduct suspicion-less laptop searches at the border has been upheld by U.S. courts. With respect to specific concerns that the policy could put trade information at risk, Ahern pointed to CBP's track record with the "thousands of commercial entry documents, shipping manifests, container content lists, and details pieces of company information" it receives each day as part of its mission to process entries and screen cargo shipments. "This information is closely guarded and governed by strict privacy procedures," he emphasized, and "information from passenger laptops or other electronic devices is treated no differently."
Nevertheless, some lawmakers are moving to put additional limitations on CBP's search authority. Rep. Zoe Lofgren, D-Calif., introduced July 23 legislation (H.R. 6588) that would prohibit searches of the electronic contents of a laptop or similar device based solely on the government's power to "search at borders or upon entry to the territory" of the U.S.
(Source: www.strtrade.com/wti/register.asp; Copyright 2008, Sandler, Travis & Rosenberg, P.A. Originally published in the Friday, August 8, 2008, issue of ST&R's WorldTrade\Interactive. Reprinted by permission.)
2008年8月6日水曜日
Export Control regulation will be updated to introduce conventional weapon catch-all control
Japanese Ministry of Economy, Trade and Industry (“METI”) will have seminar to public business audiences on August 29, 2008 in Tokyo to make it widely known for planned new export control regulation. The new additional regulation in export control is called “Conventional weapon catch-all control”, which is planned to be effective on November 1st, 2008. This new regulation is introduced to reflect the agreement of Wassenaar in December 2003, which aim to prevent the diversion of conventional arms and sensitive dual-use goods and technology from being used to assist terrorist acts.
According to the METI web site, the summary of planned change of export control is as below.
Newly list up the restricted country group (as United Nations arms embargo countries) for tighter export control, which are Afghanistan, Democratic Republic of the Congo, Cote d'Ivoire, Iraq, Lebanon, Liberia, North Korea, Sierra Leone, Somalia, Sudan.
Add up new product list category #15-2 in Export Trade Control Order Attachment List No. 1 and in Foreign Exchange Order Attachment List. The products are consisted by 32 items which are sensitive dual-use items such as carbon fiber, machinery tool, computer and its peripheral (having an APP exceeding 0.5 WT), Jamming equipments, radar, gyroscope, rocket propulsion etc.
In case the exporter come to know under normal course of business that above mentioned goods or technology in category #15-2 will be exported to United Nations arms embargo countries for the development, manufacturing and use for conventional arms, the export license is required and the exporter needs to submit license application to METI for their review.
The existing catch-all control regulation of weapons for massive destruction (“WMD”) are still valid and unchanged.
The “White countries” which adopted major international regime (NSG, AG, MTCR, WA) and have solid export control in place are also exempted of this conventional weapon catch-all scheme. The White Countries are 26 countries, such as Argentina, Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Republic of Korea, Luxemburg, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States of America.
The “Intermediate countries” which are countries other than White countries and United Nations arms embargo counties, are imposed less strict implementation on conventional arms catch-all. For Intermediate countries, such as most of Asean counties, are applicable to this regulation only when they are “Informed” (*) by METI. This will release the exporter from their responsibility to screen proactively the end-user and end-use of business for Intermediate countries.
In short, Japan will have duplicated catch-all control schemes, catch all for WMD and for conventional weapons. In order to narrow the controlled product list for conventional arms catch-all, METI developed new product list category #15-2.
The response of Japanese business society is somewhat mixed emotion. Although they understand the necessity and criticality to make contribution to global security, the new regulation is quite complicated and is likely to make additional burden to business operation such as additional compliance screening of clients, compliant to customs procedure, and training and awareness to employees for new regulation etc. With such a response from industries, Center for Information on Security Trade Controls (“CISTEC”) which is association of exporters in Japan, gave their opinion as representative of Japanese industries to METI that such new regulation is too complicated to effectively implement in day-to-day operation and proposed more simplified alternative regulations and rules.
Until its effective date on November 1st, 2008, some minor modifications of the rule may be in place, but the implementation of this conventional arms catch-all control is inevitable, the traders need to catch up the new regulation and understand its implication to each business to be compliant to the export control law.
(*) “Informed” condition
METI monitor export activities by closely working with Customs, foreign government and other sources. If an exporter has been so informed by METI on a particular export, the exporter must obtain an export license. The “inform” is given when METI considers that the items to be exported may be used for the development, manufacturing, use of storage of WMD and/or missiles. Over 40 “informed” cases took place during the period from April 1st, 2002 to the end of March 2006, according to METI.
According to the METI web site, the summary of planned change of export control is as below.
Newly list up the restricted country group (as United Nations arms embargo countries) for tighter export control, which are Afghanistan, Democratic Republic of the Congo, Cote d'Ivoire, Iraq, Lebanon, Liberia, North Korea, Sierra Leone, Somalia, Sudan.
Add up new product list category #15-2 in Export Trade Control Order Attachment List No. 1 and in Foreign Exchange Order Attachment List. The products are consisted by 32 items which are sensitive dual-use items such as carbon fiber, machinery tool, computer and its peripheral (having an APP exceeding 0.5 WT), Jamming equipments, radar, gyroscope, rocket propulsion etc.
In case the exporter come to know under normal course of business that above mentioned goods or technology in category #15-2 will be exported to United Nations arms embargo countries for the development, manufacturing and use for conventional arms, the export license is required and the exporter needs to submit license application to METI for their review.
The existing catch-all control regulation of weapons for massive destruction (“WMD”) are still valid and unchanged.
The “White countries” which adopted major international regime (NSG, AG, MTCR, WA) and have solid export control in place are also exempted of this conventional weapon catch-all scheme. The White Countries are 26 countries, such as Argentina, Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Republic of Korea, Luxemburg, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States of America.
The “Intermediate countries” which are countries other than White countries and United Nations arms embargo counties, are imposed less strict implementation on conventional arms catch-all. For Intermediate countries, such as most of Asean counties, are applicable to this regulation only when they are “Informed” (*) by METI. This will release the exporter from their responsibility to screen proactively the end-user and end-use of business for Intermediate countries.
In short, Japan will have duplicated catch-all control schemes, catch all for WMD and for conventional weapons. In order to narrow the controlled product list for conventional arms catch-all, METI developed new product list category #15-2.
The response of Japanese business society is somewhat mixed emotion. Although they understand the necessity and criticality to make contribution to global security, the new regulation is quite complicated and is likely to make additional burden to business operation such as additional compliance screening of clients, compliant to customs procedure, and training and awareness to employees for new regulation etc. With such a response from industries, Center for Information on Security Trade Controls (“CISTEC”) which is association of exporters in Japan, gave their opinion as representative of Japanese industries to METI that such new regulation is too complicated to effectively implement in day-to-day operation and proposed more simplified alternative regulations and rules.
Until its effective date on November 1st, 2008, some minor modifications of the rule may be in place, but the implementation of this conventional arms catch-all control is inevitable, the traders need to catch up the new regulation and understand its implication to each business to be compliant to the export control law.
(*) “Informed” condition
METI monitor export activities by closely working with Customs, foreign government and other sources. If an exporter has been so informed by METI on a particular export, the exporter must obtain an export license. The “inform” is given when METI considers that the items to be exported may be used for the development, manufacturing, use of storage of WMD and/or missiles. Over 40 “informed” cases took place during the period from April 1st, 2002 to the end of March 2006, according to METI.
2008年8月5日火曜日
Yamazaki Mazak gave up factory set up in India due to export violation concern
Yamazaki Mazak Corp. is a leading machine tools manufacturer in Japan. According to the news articles of Nikkan Kogyo Shimbun (Business & Technology Daily News) on August 5, 2008, Yamazaki Mazak gave up building new factory for machine tools in India. India is considered as one of the countries where the export control is insufficient, thus they may suffer diversion risk of illegal export from India to somewhere third country. The news source imply Yamazaki Mazak failed to get export license by METI for this India project.
As similar case in 2007, MORI SEIKI CO., LTD., another major machine tools company, abandoned the new factory set up in Thailand to be compliant to export control regulation. The candidate machine tools which planned to be produced, had high technical specification needed export license by METI.
Yamazaki Mazak have already searched the land for factory in India, planning to start the production in 2009. The factory was supposed to produce low-end machine tools for India domestic market. There are, however, concerns for being used for military use in India other than illegal re-export to third countries.
In Japanese export regulation, India is not considered as "safe" country. In addition, India is not a member of all the international export control regimes and not implementing export controls as strictly as those in Japan. Japanese METI disclose 26 Indian entities in the proliferation concern list, as they are organizations that may have relationships with WMD and/or missile activities.
From trade compliance perspective, export regulation indeed must be followed.
However, too strict restriction will lose competitiveness of Japanese companies and burdens for business. Especially for India, US government has a very important and a strategic relationship with India and is going to be understood in the broader context of facilitating trade in the foreign policy context. If Japanese government continue to be too strict in implementation to India, it may jeoparadize the long term strategy for trade policy in Japan.
As similar case in 2007, MORI SEIKI CO., LTD., another major machine tools company, abandoned the new factory set up in Thailand to be compliant to export control regulation. The candidate machine tools which planned to be produced, had high technical specification needed export license by METI.
Yamazaki Mazak have already searched the land for factory in India, planning to start the production in 2009. The factory was supposed to produce low-end machine tools for India domestic market. There are, however, concerns for being used for military use in India other than illegal re-export to third countries.
In Japanese export regulation, India is not considered as "safe" country. In addition, India is not a member of all the international export control regimes and not implementing export controls as strictly as those in Japan. Japanese METI disclose 26 Indian entities in the proliferation concern list, as they are organizations that may have relationships with WMD and/or missile activities.
From trade compliance perspective, export regulation indeed must be followed.
However, too strict restriction will lose competitiveness of Japanese companies and burdens for business. Especially for India, US government has a very important and a strategic relationship with India and is going to be understood in the broader context of facilitating trade in the foreign policy context. If Japanese government continue to be too strict in implementation to India, it may jeoparadize the long term strategy for trade policy in Japan.
2008年8月1日金曜日
Export violation by Japanese Machine Tool Maker
Police raided Horkos Corp., a machine tool maker in Fukuyama, Hiroshima Prefecture, and a dozen other locations Thursday on suspicion the company illegally exported machine tools convertible for use in the development of nuclear weapons.
The Metropolitan Police Department's Public Security Bureau and the Hiroshima Prefectural Police said they are investigating the possibility the tools may have been exported to the Middle East or North Korea by way of South Korea.
The tools, called machining centers and priced at millions of yen each, are typically used to manufacture automotive components and other devices but are also capable of producing components in centrifuges, the separating devices used to make highly enriched uranium.
They are listed as an export-controlled item by the Ministry of Economy, Trade and Industry in line with provisions of the Foreign Exchange and Foreign Trade Law.
A listed item is required to be approved for export by the trade minister. Horkos is suspected of falsely declaring more than one such machine tool as being of a lower caliber that does not require ministerial authorization for export. The tools are believed to have been been shipped to South Korea in 2004.
The buyer was a general company not involved in weapons development, but the machine tools may have been resold, police said.
Questioned by the MPD, Horkos officials in charge of machining center exports admitted they were aware unauthorized exports were being made, police said.
According to the company's Web site, Horkos was set up in 1940 and generated ¥21 billion in sales in the year to last September. The firm had 665 employees.
The Metropolitan Police Department's Public Security Bureau and the Hiroshima Prefectural Police said they are investigating the possibility the tools may have been exported to the Middle East or North Korea by way of South Korea.
The tools, called machining centers and priced at millions of yen each, are typically used to manufacture automotive components and other devices but are also capable of producing components in centrifuges, the separating devices used to make highly enriched uranium.
They are listed as an export-controlled item by the Ministry of Economy, Trade and Industry in line with provisions of the Foreign Exchange and Foreign Trade Law.
A listed item is required to be approved for export by the trade minister. Horkos is suspected of falsely declaring more than one such machine tool as being of a lower caliber that does not require ministerial authorization for export. The tools are believed to have been been shipped to South Korea in 2004.
The buyer was a general company not involved in weapons development, but the machine tools may have been resold, police said.
Questioned by the MPD, Horkos officials in charge of machining center exports admitted they were aware unauthorized exports were being made, police said.
According to the company's Web site, Horkos was set up in 1940 and generated ¥21 billion in sales in the year to last September. The firm had 665 employees.
2008年7月31日木曜日
CBP Introduces Online Trade Violation Reporting Tool
Last month, US Customs and Border Protection (“CBP”) announced a new online system called “e-Allegations” for concerned members of the public to report suspected trade violations. The e-Allegations system is limited to possible violations of trade laws or regulations on the importation of goods into the United States and is not meant for security issues. The public now has a convenient tool to report violations such as errors in classification, false country of origin markings, incorrect valuation, and imports infringing on intellectual property rights.
CBP will accept e-Allegations submitted anonymously, however the reporter must provide, at a minimum, a description of the alleged violation, the products or goods involved and the alleged violator’s name and/or company. The reporter may submit other information on a voluntary basis. If the reporter provides an e-mail address, CBP will respond with an e-mail address where the reporter can submit photos or supporting documentation. Because of US laws requiring CBP to keep trade information confidential, the reporter will not be advised by CBP of any questions asked or action taken as the result of an e-Allegation.
With e-Allegations, CBP has now made it extremely easy for anyone to report import violations for any reason. Some e-filers may view this as an opportunity to take aim against a competitor. Former employees could use e-Allegations to criticize a former employer. The impact of e-Allegations on the import community will depend on how CBP evaluates and acts on the information received. Of course, agency procedures may evolve over time as CBP builds experience evaluating the accuracy of the reports received through e-Allegations. However, it seems likely that soon after the announcement, CBP will look to demonstrate that the new program shows results and has identified important errors.
All of these possibilities make the e-Allegations announcement a useful reminder for importers to review their import procedures – especially compliance with CBP’s recordkeeping regulations. Each importer should consider what supporting documents could be provided in response to a request from CBP to demonstrate that critical data such as classification number, value and country of origin were declared according to the requirements of CBP’s regulations, rather than according to “how it has always been done.”
The e-Allegation tool is available online at http://www.cbp.gov/xp/cgov/trade/trade_programs/e_allegations/.
For any issue that poses an immediate threat to the health and/or safety of the public, CBP asks the public to report by phone at 1-800-BE-ALERT.
CBP will accept e-Allegations submitted anonymously, however the reporter must provide, at a minimum, a description of the alleged violation, the products or goods involved and the alleged violator’s name and/or company. The reporter may submit other information on a voluntary basis. If the reporter provides an e-mail address, CBP will respond with an e-mail address where the reporter can submit photos or supporting documentation. Because of US laws requiring CBP to keep trade information confidential, the reporter will not be advised by CBP of any questions asked or action taken as the result of an e-Allegation.
With e-Allegations, CBP has now made it extremely easy for anyone to report import violations for any reason. Some e-filers may view this as an opportunity to take aim against a competitor. Former employees could use e-Allegations to criticize a former employer. The impact of e-Allegations on the import community will depend on how CBP evaluates and acts on the information received. Of course, agency procedures may evolve over time as CBP builds experience evaluating the accuracy of the reports received through e-Allegations. However, it seems likely that soon after the announcement, CBP will look to demonstrate that the new program shows results and has identified important errors.
All of these possibilities make the e-Allegations announcement a useful reminder for importers to review their import procedures – especially compliance with CBP’s recordkeeping regulations. Each importer should consider what supporting documents could be provided in response to a request from CBP to demonstrate that critical data such as classification number, value and country of origin were declared according to the requirements of CBP’s regulations, rather than according to “how it has always been done.”
The e-Allegation tool is available online at http://www.cbp.gov/xp/cgov/trade/trade_programs/e_allegations/.
For any issue that poses an immediate threat to the health and/or safety of the public, CBP asks the public to report by phone at 1-800-BE-ALERT.
2008年7月30日水曜日
Sanctions against Zimbabwe
President Bush has expanded sanctions against Zimbabwe in reaction to Zimbabwe’s election, widely condemned as rigged, and the violence and other human rights abuses committed against members of the opposition party and its supporters before, during and after the election. The new sanctions block the property and interests in property, in the United States or in the possession or control of a U.S. person, of a broad range of persons involved directly or indirectly with Zimbabwe’s government.
The most immediate effect of the expanded sanctions will be to prohibit transactions with Zimbabwean parastatal entities and other companies related to the Zimbabwe government. Following the President’s imposition of the new sanctions, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it was designating eighteen persons as subject to the expanded sanctions.
More details: refer to http://www.bryancave.com/bulletins/ IRB No. 389 dated on July 28, 2008.
The most immediate effect of the expanded sanctions will be to prohibit transactions with Zimbabwean parastatal entities and other companies related to the Zimbabwe government. Following the President’s imposition of the new sanctions, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it was designating eighteen persons as subject to the expanded sanctions.
More details: refer to http://www.bryancave.com/bulletins/ IRB No. 389 dated on July 28, 2008.
2008年7月24日木曜日
ITAR Registration Renewal Requirements
In the first of what are expected to be multiple changes to the registration provisions of the International Traffic in Arms Regulations ("ITAR"), the Directorate of Defense Trade Controls ("DDTC") today revised ITAR §122.3 to eliminate the two year ITAR registration period. Exporters may now only register for a period of one year, at a cost of $1,750, and must submit a request for registration renewal at least 30 days prior to the expiration date.
While this change ensures a more regular income stream for the Government from registration fees, it adds to the already lengthy list of responsibilities that export personnel must schedule and address. This change does not alter existing expiration dates for registrations issued to exporters by DDTC. However, those exporters will only be permitted to renew their registration for a period of one year when they reach their current registration date.
(Source: [Federal Register: July 18, 2008 (Volume 73, Number 139)] http://edocket.access.gpo.gov/2008/E8-16537.htm )
While this change ensures a more regular income stream for the Government from registration fees, it adds to the already lengthy list of responsibilities that export personnel must schedule and address. This change does not alter existing expiration dates for registrations issued to exporters by DDTC. However, those exporters will only be permitted to renew their registration for a period of one year when they reach their current registration date.
(Source: [Federal Register: July 18, 2008 (Volume 73, Number 139)] http://edocket.access.gpo.gov/2008/E8-16537.htm )
2008年7月18日金曜日
BIS Modifies June 6 Temporary Denial Order involving Ankair
(Overview of Ankair)
Anka Air, stylised as Ankair, is a charter ariline headquartered in Istanbul, Turkey. Founded in 2005 as World Focus Airlines, the company changed its corporate image to its current form in February 20008 as a result of publicity surrounding the crash of Atlasjet Flight 4203 on 20 November 2007.
The airline operates charter flights to Europe and the Middle East.
Anka Air, stylised as Ankair, is a charter ariline headquartered in Istanbul, Turkey. Founded in 2005 as World Focus Airlines, the company changed its corporate image to its current form in February 20008 as a result of publicity surrounding the crash of Atlasjet Flight 4203 on 20 November 2007.
The airline operates charter flights to Europe and the Middle East.
Listed on Denied Persons List by BIS on June 6, 2008.
(Denial Order by BIS)
The Bureau of Industry and Security (BIS) has modified its June 6 Temporary Denial Order (TDO) involving Ankair to cover all exports or re-exports of items (involving any commodity, software or technology) subject to the Export Administration Regulations (EAR). BIS increased the scope of the TDO based on evidence that Ankair has violated the TDO and engaged in and/or is about to engage in or attempt further violations of the EAR involving the re-export of additional U.S. origin aircraft to Iran without U.S. Government authorization.
(BACKGROUND)
On June 6, 2008, BIS issued an Order, temporarily denying the export privileges for 180 days of Galaxy Aviation Trade Company Ltd., Hooshang Seddigh, Hamid Shakeri Hendi, Hossein Jahan Peyma (Galaxy’s shareholders), and Iran Air. The temporary denial order (“TDO”) also denied certain export privileges of Ankair, specifically, any transactions involving Boeing 747 cargo aircraft, manufacturer serial number 24134, tail number TC-AKZ. The Order was issued based on evidence that the Respondents were attempting to re-export the U.S. origin Boeing 747 from Turkey to Iran without U.S. Government authorization.
(Source: BIS Press Release http://www.bis.doc.gov/news/2008/bis_presstdo071708.htm )
(Denial Order by BIS)
The Bureau of Industry and Security (BIS) has modified its June 6 Temporary Denial Order (TDO) involving Ankair to cover all exports or re-exports of items (involving any commodity, software or technology) subject to the Export Administration Regulations (EAR). BIS increased the scope of the TDO based on evidence that Ankair has violated the TDO and engaged in and/or is about to engage in or attempt further violations of the EAR involving the re-export of additional U.S. origin aircraft to Iran without U.S. Government authorization.
(BACKGROUND)
On June 6, 2008, BIS issued an Order, temporarily denying the export privileges for 180 days of Galaxy Aviation Trade Company Ltd., Hooshang Seddigh, Hamid Shakeri Hendi, Hossein Jahan Peyma (Galaxy’s shareholders), and Iran Air. The temporary denial order (“TDO”) also denied certain export privileges of Ankair, specifically, any transactions involving Boeing 747 cargo aircraft, manufacturer serial number 24134, tail number TC-AKZ. The Order was issued based on evidence that the Respondents were attempting to re-export the U.S. origin Boeing 747 from Turkey to Iran without U.S. Government authorization.
(Source: BIS Press Release http://www.bis.doc.gov/news/2008/bis_presstdo071708.htm )
2008年7月17日木曜日
U.S. Companies Need to be Increasingly Careful About What They Tell their Chinese Engineers
Last August J. Reece Roth, an electrical engineering professor at the University of Tennessee, passed along a research paper to Sirous Nourgostar, a graduate student from Iran working under his supervision. It contained details on refined plasma actuator technology, which uses ionized gas to improve aircraft control. Roth was doing research on flight performance for a U.S. Air Force contractor and had relied on the assistance of Nourgostar and of Xin Dai, a Chinese national also studying under him. . . . .
Companies and academics that want to conduct restricted research with foreigners in the U.S. need an export license for each person involved. In 2007 they applied for 1,056 licenses, a 50% increase in five years. The vast majority of those applications were for Chinese nationals, and only four were rejected. But the process is burdensome, and things will only get worse with two-thirds of the engineering Ph.D.s granted in the U.S. now going to noncitizens. . . . .
If anything, the U.S. government is considering increasing the regulatory burden. An advisory committee put together by the Department of Commerce, while making nods to the law's complexity, suggests companies should even conduct a litmus test on an employee's loyalty, like asking if an employee has connections or allegiance to a country of concern such as China. "It would be a nightmare," says William Reinsch, who runs a trade association that represents companies like Microsoft.
(Source: http://www.forbes.com/global/2008/0721/042.html; notice courtesy of International Trade Law News, http://tradelawnews.com/) [Short excerpt of full article available at Source.]
Companies and academics that want to conduct restricted research with foreigners in the U.S. need an export license for each person involved. In 2007 they applied for 1,056 licenses, a 50% increase in five years. The vast majority of those applications were for Chinese nationals, and only four were rejected. But the process is burdensome, and things will only get worse with two-thirds of the engineering Ph.D.s granted in the U.S. now going to noncitizens. . . . .
If anything, the U.S. government is considering increasing the regulatory burden. An advisory committee put together by the Department of Commerce, while making nods to the law's complexity, suggests companies should even conduct a litmus test on an employee's loyalty, like asking if an employee has connections or allegiance to a country of concern such as China. "It would be a nightmare," says William Reinsch, who runs a trade association that represents companies like Microsoft.
(Source: http://www.forbes.com/global/2008/0721/042.html; notice courtesy of International Trade Law News, http://tradelawnews.com/) [Short excerpt of full article available at Source.]
2008年7月14日月曜日
Japan-Brunei EPA effective from July 31
Japan's 6th bi-lateral EPA with Brunei (JBEPA) will enter into force on July 31, 2008. With this EPA, both import and export with Brunei will be 99.9% zero duty within 10 years.
For Japan, majority of import from Brunei are crude oil and natural gas, and Japan is the number 1 trade country for Brunei. The export to Brunei from Japan are automobile and its parts, more than 70% of export amount is auto-mobile related trade.
JBEPA is similar EPA with other countries in South East Asia. There are two points to take note for this JBEPA, which are the key areas in trade operation.
1) Duty rate reversal with MFN rate
As the EPA negotiation have been done for some years, MFN duty rate of some items have been lowered, then some EPA duty rate are consequently higher than MFN rate. However, with special clause in Japan-Brunei EPA, the EPA rate would b e automatically lowered to same rate as MFN in such a case. People may miss this point, because other bi-lateral EPA with Mexico, Malaysia, Chile, and Thailand don't have such special clause. Thus, people who wish to make use of EPA rate are encouraged to investigate the current MFN rate. Although EPA rate would be reduced to same level as MFN, the time and cost to get EPA Country of Origin documents are troublesome for business operation.
For information in such duty rate reversal, MOF web site provide reversal item list in following web site. http://www.mof.go.jp/jouhou/kanzei/fta_epa/seido_tetsuduki/gyakuten.htm
2) The tariff code for this EPA is based on HS code 2002 version. In Japan, current customs declaration is based on updated HS code 2007 version. The JBEPA continues to be based on HS 2002 code on its country of origin document. If companies apply JBEPA tariff, they need to take care the Country of Origin document, which is mandatory to submit to customs, must show with HS code of 2002. The Japan Chamber of Commerce and Industry handle the issue of Country of Origin documents and they are open to any questions relating to this tariff classification matter.
In addition, in MOF web site, they provide a kind of conversion table of 2002-2007 HS code by each EPA in following web site.
http://www.mof.go.jp/jouhou/kanzei/fta_epa/seido_tetsuduki/hs_code.htm
For Japan, majority of import from Brunei are crude oil and natural gas, and Japan is the number 1 trade country for Brunei. The export to Brunei from Japan are automobile and its parts, more than 70% of export amount is auto-mobile related trade.
JBEPA is similar EPA with other countries in South East Asia. There are two points to take note for this JBEPA, which are the key areas in trade operation.
1) Duty rate reversal with MFN rate
As the EPA negotiation have been done for some years, MFN duty rate of some items have been lowered, then some EPA duty rate are consequently higher than MFN rate. However, with special clause in Japan-Brunei EPA, the EPA rate would b e automatically lowered to same rate as MFN in such a case. People may miss this point, because other bi-lateral EPA with Mexico, Malaysia, Chile, and Thailand don't have such special clause. Thus, people who wish to make use of EPA rate are encouraged to investigate the current MFN rate. Although EPA rate would be reduced to same level as MFN, the time and cost to get EPA Country of Origin documents are troublesome for business operation.
For information in such duty rate reversal, MOF web site provide reversal item list in following web site. http://www.mof.go.jp/jouhou/kanzei/fta_epa/seido_tetsuduki/gyakuten.htm
2) The tariff code for this EPA is based on HS code 2002 version. In Japan, current customs declaration is based on updated HS code 2007 version. The JBEPA continues to be based on HS 2002 code on its country of origin document. If companies apply JBEPA tariff, they need to take care the Country of Origin document, which is mandatory to submit to customs, must show with HS code of 2002. The Japan Chamber of Commerce and Industry handle the issue of Country of Origin documents and they are open to any questions relating to this tariff classification matter.
In addition, in MOF web site, they provide a kind of conversion table of 2002-2007 HS code by each EPA in following web site.
http://www.mof.go.jp/jouhou/kanzei/fta_epa/seido_tetsuduki/hs_code.htm
2008年7月11日金曜日
Beware Syrians Bearing Duty-Free
Today OFAC designated [http://www.treas.gov/offices/enforcement/ofac/actions/20080710.shtml] two of Makhluf's most visible business enterprises as SDNs - Syriatel and Ramak Duty Free, a chain of duty free stores that includes Damascus Duty Free at the Damascus International Airport. As a result of that designation, U.S. citizens are prohibited from doing business with either entity. (OFAC's press release on the designation can be found at http://www.treas.gov/press/releases/hp1075.htm.)
This may catch many Americans traveling to Syria unaware. The Damascus Duty Free at the airport is reputed [http://www.airlinequality.com/Airports/Airport_forum/dam.htm] to have a large selection of goods at attractive discounts and is popular among travelers departing the airport. The State Department's guidance page [http://travel.state.gov/travel/cis_pa_tw/cis/cis_1035.html] on travel to Syria has not yet been updated to reflect this new restriction, stating only that, because Syria is a designated state sponsor of terrorism, U.S. citizens "are prohibited from engaging in financial transactions which a U.S. person knows or has reasonable cause to believe pose a risk of furthering terrorists' acts in the United States."
Americans traveling in Syria with unlocked GSM phones might also violate the sanctions if they bought a pre-paid SIM card from Syriatel for use in Syria. Buying telcom services from Syriatel is arguably exempt under the Berman Amendment, but the purchase of the hardware - the SIM card - arguably could overstep the line.
One major American company is currently providing service to Syriatel.Network Solutions is the registrar [http://www.networksolutions.com/whois/results.jsp?domain=syriatel.com] for Syriatel.com [http://www.syriatel.com/], which, as of this posting, was still functioning. Given the increased penalties for violating U.S.sanctions laws, it won't be surprising if that site disappears shortly.
This may catch many Americans traveling to Syria unaware. The Damascus Duty Free at the airport is reputed [http://www.airlinequality.com/Airports/Airport_forum/dam.htm] to have a large selection of goods at attractive discounts and is popular among travelers departing the airport. The State Department's guidance page [http://travel.state.gov/travel/cis_pa_tw/cis/cis_1035.html] on travel to Syria has not yet been updated to reflect this new restriction, stating only that, because Syria is a designated state sponsor of terrorism, U.S. citizens "are prohibited from engaging in financial transactions which a U.S. person knows or has reasonable cause to believe pose a risk of furthering terrorists' acts in the United States."
Americans traveling in Syria with unlocked GSM phones might also violate the sanctions if they bought a pre-paid SIM card from Syriatel for use in Syria. Buying telcom services from Syriatel is arguably exempt under the Berman Amendment, but the purchase of the hardware - the SIM card - arguably could overstep the line.
One major American company is currently providing service to Syriatel.Network Solutions is the registrar [http://www.networksolutions.com/whois/results.jsp?domain=syriatel.com] for Syriatel.com [http://www.syriatel.com/], which, as of this posting, was still functioning. Given the increased penalties for violating U.S.sanctions laws, it won't be surprising if that site disappears shortly.
2008年7月8日火曜日
Megaports Initiative between US and Japan
Japan’s Ministry of Foreign Affairs announced July 3 that the U.S. and Japan plan to launch a pilot project under the U.S. Department of Energy’s Megaports Initiative at the Minami Honmoku Terminal at the port of Yokohama in Japan.
Under this project the terminal will install radioactive materials detection equipment to monitor cargo containers for nuclear and other radioactive material. The two governments will exchange information obtained through this project in accordance with their agreement on mutual assistance between customs administrations and other legal frameworks. They will then take the results of the project into account when consulting on future cooperation in this area.
The US Government agreed same initiative with 27 countries, and already implemented with Netherlands, Greece, Bahama, Sri Lanka, Singapore, Spain, Philippines, Belgium and Israel. (as of May 2008)
2008年7月3日木曜日
Japan-Indonesia EPA enter into force on July 01
Starting the preliminary discussion in 2003, and agreed on November 2006 by both countries, the JIEPA (Economic Partnership Agreement between Japan and the Republic of Indonesia) finally entered into force on July 01, 2008.
This EPA will promote liberalization and smooth facilitation of trade and investment and advancing cooperation in such matters as movement of persons, energy and mineral resources, intellectual property and improvement of business environment. With this EPA, approx. 90% of export from Japan to Indonesia will be zero duty, and approx. 93% of import from Indonesia will be zero duty.
There are some points exporters/importers taken into consideration for using JIEPA operationally.
1) The duty rate negotiation of JIEPA were based on MFN (Most Favorite Nation) rate in 2006. The EPA duty rate was decided by considering the MFN at that time. Since then, Indonesia government reduced MFN rate of certain quantity of items, therefore there are some items MFN rate is more favorable than EPA rate which is effective on July 1st. Companies who use the EPA rate are encouraged to check the latest MFN rate. In JIEPA, if MFN rate is lower than EPA rate, the EPA rate will be adjusted to same rate as MFN.
2) The tariff code for JIEPA is based on HS code 2002 version. In Japan, current customs declaration is based on updated HS code 2007 version. The JIEPA customs operation continue to be based on HS 2002 code. If companies apply JIEPA tariff, they need to take care the Country of Origin document, which is mandatory to submit to customs, must show with HS code of 2002. The Japan Chamber of Commerce and Industry handle the issue of Country of Origin documents and they are open to any questions relating to this tariff classification matter.
This EPA will promote liberalization and smooth facilitation of trade and investment and advancing cooperation in such matters as movement of persons, energy and mineral resources, intellectual property and improvement of business environment. With this EPA, approx. 90% of export from Japan to Indonesia will be zero duty, and approx. 93% of import from Indonesia will be zero duty.
There are some points exporters/importers taken into consideration for using JIEPA operationally.
1) The duty rate negotiation of JIEPA were based on MFN (Most Favorite Nation) rate in 2006. The EPA duty rate was decided by considering the MFN at that time. Since then, Indonesia government reduced MFN rate of certain quantity of items, therefore there are some items MFN rate is more favorable than EPA rate which is effective on July 1st. Companies who use the EPA rate are encouraged to check the latest MFN rate. In JIEPA, if MFN rate is lower than EPA rate, the EPA rate will be adjusted to same rate as MFN.
2) The tariff code for JIEPA is based on HS code 2002 version. In Japan, current customs declaration is based on updated HS code 2007 version. The JIEPA customs operation continue to be based on HS 2002 code. If companies apply JIEPA tariff, they need to take care the Country of Origin document, which is mandatory to submit to customs, must show with HS code of 2002. The Japan Chamber of Commerce and Industry handle the issue of Country of Origin documents and they are open to any questions relating to this tariff classification matter.
Avoiding Unintended Technology Transfers Under The EAR
A major focus of U.S. export enforcement agencies recently has been to prevent the unauthorized export or transfer of technology. While most of us are aware that the United States controls the physical export of goods and technology from the United States [The Export Administration Regulations (15 CFR Part 732 through Part 774) or Section 38 of the Arms Export Control Act (22 U.S.C. § 2778) and the International Traffic in Arms Regulations (ITAR) (22 CFR part 121)], many may not realize that the transfer of technical information or knowledge to a recipient in a foreign country or even to a non-U.S. citizen while here in the U.S. is subject to the same type of controls. We now have enhanced penalties for export violations provided by the International Emergency Economic Powers Enhancement Act (IEEPA Enhancement Act). Under the IEEPA Enhancement Act, civil penalties for violations of the export Administration Regulations can be as much as $250,000 per occurrence.
This article will review the basic rules on the export or transfer of technology and technical data, and provide suggestions on how companies may avoid unintended technology transfers, and the fines or penalties that can result there from.
I. The "Deemed Export" Rule
--Transfers of U.S. Origin Technology And Technical Data To Foreign Nationals In The United States An "export" of U.S. origin technology or technical data can occur even in the United States simply by disclosing information or technology to a foreign national from a country other than the United States. Section 734.2(b) of the EAR provides that the release or disclosure of technology or technical data subject to the EAR to a foreign national of another country is "deemed" to be exported to the home country of the foreign national. For purposes of U.S. export controls, technology is "released" for export through:
i. Visual inspection by foreign nationals of U.S.-origin equipment and facilities;
ii. Oral exchanges of information in the United States or abroad; or
iii. The application to situations abroad of personal knowledge or technical experience acquired in the United States.
II. To Whom Does The Rule Apply?
The "deemed export" rule applies to all non-U.S. citizens, regardless of whether they are employees or visitors, except persons who have been lawfully admitted for permanent residence, or persons who are protected individuals under the Immigration and Naturalization Act (8 U.S.C. §1324b(a)(3)).
III. What Is Technical Data?
When we talk about technical data, we really mean "technology," which is broadly defined by the EAR as information necessary for the "development", "production", or "use" of a product. It can take the form of either "technical data" or "technical assistance". "Technical data" is technology that takes on the form such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on media or devices such as disk, tape, or read-only memories. Technical assistance, on the other hand, can take on the form of instructions, skills training, working knowledge, or consulting services. Oftentimes, a transfer of technical assistance includes a transfer of technical data. The export of technology that is "required" for the "development", "production", or "use" of items on the Commerce Control List is controlled according to the provisions in each Category of the Commerce Control List to which the technology belongs.
IV. Not All Transfers of Technology to Foreign Nationals Require a License Like the export or reexport of goods or technology, not all transfers of technology to a foreign national in the United States require a license. In general, whether a license will be required before a transfer of technology can occur will depend on:
a. The nature and control status of the information to be transferred, and
b. The country of citizenship of the foreign national.
The first step in determining whether a license will be required is to classify the information to be communicated to the foreign national. In most cases, this technology will fall under the jurisdiction of the U.S. Export Administration Regulations (the "EAR"), and the Commerce Control list (Supplement 1 to Part 774 of the EAR) (the "CCL"). In other cases, the technology may fall under the jurisdiction of the Arms Export Control Act (22 U.S.C. § 2778) and the International Traffic in Arms Regulations (ITAR) (22 CFR part 121). The CCL is a list of all items subject to the jurisdiction of the EAR and the Bureau of Industry and Security ("BIS") in the Department of Commerce. The coverage of the CCL includes commodities, as well as software, technology, and technical data.
A. How to Determine if Your Technology Requires a License . . . .
B. Publicly Available Technology And Technical Data; Sales Technology . . . .
C. Sales-Related Technology and License Exception TSU . . . .
D. License Exception TSR for Technology Exports . . . .
E. License Exception CIV for Technology Exports . . . .
F. License Exception APP (Computers) . . . .
A Foreign National Review ("FNR") request (see §748.8(s) of the EAR) must be submitted to BIS and approved before the release of any technology or software to a foreign national from any Tier Three computer countries,
including: China (People's Republic of), Egypt, Georgia, India, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Libya, Macau, Macedonia (The Former Yugoslav Republic of), Mauritania, Moldova, Mongolia, Montenegro, Morocco, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Serbia, Tajikistan, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, Vanuatu, Vietnam, and Yemen. (See EAR § 740.7(d)(1) for a complete list of Tier Three computer countries.)
V. Technology Control Plans:
Avoiding The Unauthorized Transfer Of Technology Unlike hardware and physical materials, technology can leak from a company like water from a colander. Technology can be released by any number means, including phone, fax, e-mail, mail, courier, face-to-face meetings and visual tours. The only way to adequately stem the unauthorized flow of technology from a company is through education of employees and the adoption of a technology control plan (TCP). A sound TCP provides a company with a process to categorize technology and data, and to screen customers, visitors, and employees.
A. Developing A Technology Control Plan . . . .
B. Establishing Technology Control Procedures for Customers, Visitors, and Employees . . . .
Screening employees, both here in the U.S. and abroad, presents unique challenges because of issues associated with possible employment discrimination, or violation of foreign laws. A commonly voiced concern is whether U.S. anti-discrimination employment law prohibits an employer from asking employees information about their country of citizenship. Subsection 1324b(a)(1) of Title 8 of the United States Code provides that it is an unfair immigration-related employment practice for a person or other entity to discriminate against any individual with respect to the hiring or recruitment of an individual for employment, or for the discharging of the individual from employment, because of such individual's national origin. Subsection 1324b(a)(2), however, provides an exception to such practices where it is otherwise required in order to comply with a United States law, regulation, or executive order. It is, therefore, both possible and legal to require employees and potential new hires to verify citizenship information, provided the employee or potential candidate is notified in advance that the job or activity requires access to and/or disclosure of information and data subject to U.S. export control restrictions, and that one condition for consideration for the position is the issuance of a validated export license or other approval. The specifics of any program used to verify citizenship for employment-related purposes should be reviewed carefully with the company's immigration-employment law counsel before implementation.
(Source: Tuttle Law Offices, info@tuttlelaw.com)
This article will review the basic rules on the export or transfer of technology and technical data, and provide suggestions on how companies may avoid unintended technology transfers, and the fines or penalties that can result there from.
I. The "Deemed Export" Rule
--Transfers of U.S. Origin Technology And Technical Data To Foreign Nationals In The United States An "export" of U.S. origin technology or technical data can occur even in the United States simply by disclosing information or technology to a foreign national from a country other than the United States. Section 734.2(b) of the EAR provides that the release or disclosure of technology or technical data subject to the EAR to a foreign national of another country is "deemed" to be exported to the home country of the foreign national. For purposes of U.S. export controls, technology is "released" for export through:
i. Visual inspection by foreign nationals of U.S.-origin equipment and facilities;
ii. Oral exchanges of information in the United States or abroad; or
iii. The application to situations abroad of personal knowledge or technical experience acquired in the United States.
II. To Whom Does The Rule Apply?
The "deemed export" rule applies to all non-U.S. citizens, regardless of whether they are employees or visitors, except persons who have been lawfully admitted for permanent residence, or persons who are protected individuals under the Immigration and Naturalization Act (8 U.S.C. §1324b(a)(3)).
III. What Is Technical Data?
When we talk about technical data, we really mean "technology," which is broadly defined by the EAR as information necessary for the "development", "production", or "use" of a product. It can take the form of either "technical data" or "technical assistance". "Technical data" is technology that takes on the form such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on media or devices such as disk, tape, or read-only memories. Technical assistance, on the other hand, can take on the form of instructions, skills training, working knowledge, or consulting services. Oftentimes, a transfer of technical assistance includes a transfer of technical data. The export of technology that is "required" for the "development", "production", or "use" of items on the Commerce Control List is controlled according to the provisions in each Category of the Commerce Control List to which the technology belongs.
IV. Not All Transfers of Technology to Foreign Nationals Require a License Like the export or reexport of goods or technology, not all transfers of technology to a foreign national in the United States require a license. In general, whether a license will be required before a transfer of technology can occur will depend on:
a. The nature and control status of the information to be transferred, and
b. The country of citizenship of the foreign national.
The first step in determining whether a license will be required is to classify the information to be communicated to the foreign national. In most cases, this technology will fall under the jurisdiction of the U.S. Export Administration Regulations (the "EAR"), and the Commerce Control list (Supplement 1 to Part 774 of the EAR) (the "CCL"). In other cases, the technology may fall under the jurisdiction of the Arms Export Control Act (22 U.S.C. § 2778) and the International Traffic in Arms Regulations (ITAR) (22 CFR part 121). The CCL is a list of all items subject to the jurisdiction of the EAR and the Bureau of Industry and Security ("BIS") in the Department of Commerce. The coverage of the CCL includes commodities, as well as software, technology, and technical data.
A. How to Determine if Your Technology Requires a License . . . .
B. Publicly Available Technology And Technical Data; Sales Technology . . . .
C. Sales-Related Technology and License Exception TSU . . . .
D. License Exception TSR for Technology Exports . . . .
E. License Exception CIV for Technology Exports . . . .
F. License Exception APP (Computers) . . . .
A Foreign National Review ("FNR") request (see §748.8(s) of the EAR) must be submitted to BIS and approved before the release of any technology or software to a foreign national from any Tier Three computer countries,
including: China (People's Republic of), Egypt, Georgia, India, Iraq, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Libya, Macau, Macedonia (The Former Yugoslav Republic of), Mauritania, Moldova, Mongolia, Montenegro, Morocco, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Serbia, Tajikistan, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, Vanuatu, Vietnam, and Yemen. (See EAR § 740.7(d)(1) for a complete list of Tier Three computer countries.)
V. Technology Control Plans:
Avoiding The Unauthorized Transfer Of Technology Unlike hardware and physical materials, technology can leak from a company like water from a colander. Technology can be released by any number means, including phone, fax, e-mail, mail, courier, face-to-face meetings and visual tours. The only way to adequately stem the unauthorized flow of technology from a company is through education of employees and the adoption of a technology control plan (TCP). A sound TCP provides a company with a process to categorize technology and data, and to screen customers, visitors, and employees.
A. Developing A Technology Control Plan . . . .
B. Establishing Technology Control Procedures for Customers, Visitors, and Employees . . . .
Screening employees, both here in the U.S. and abroad, presents unique challenges because of issues associated with possible employment discrimination, or violation of foreign laws. A commonly voiced concern is whether U.S. anti-discrimination employment law prohibits an employer from asking employees information about their country of citizenship. Subsection 1324b(a)(1) of Title 8 of the United States Code provides that it is an unfair immigration-related employment practice for a person or other entity to discriminate against any individual with respect to the hiring or recruitment of an individual for employment, or for the discharging of the individual from employment, because of such individual's national origin. Subsection 1324b(a)(2), however, provides an exception to such practices where it is otherwise required in order to comply with a United States law, regulation, or executive order. It is, therefore, both possible and legal to require employees and potential new hires to verify citizenship information, provided the employee or potential candidate is notified in advance that the job or activity requires access to and/or disclosure of information and data subject to U.S. export control restrictions, and that one condition for consideration for the position is the issuance of a validated export license or other approval. The specifics of any program used to verify citizenship for employment-related purposes should be reviewed carefully with the company's immigration-employment law counsel before implementation.
(Source: Tuttle Law Offices, info@tuttlelaw.com)
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