Hong Kong update export control list again

On April 30, 2010, Hong Kong Trade and Industry Department ("TID") announced that Hong Kong's control list for strategic commodities is updated to reflect recent change of the international regime.
Hong Kong's current control list was amended in February 2010, and covers the revision adopted by international regimes up to end-2008. The control list update this time is to mirror the latest changes of Wasssenaar dual-use list up to end-2009, which is commonly traded strategic items such as electronics, computers, telecommunications and information security products.

The one of significant changes to traders in Hong Kong’s Schedule 1 list would be removal of certain cryptography items in Category 5 - part 2. By reflecting Note 4 (exemption note of “Ancillary” cryptography) of Wassenaar 2009 list, which decontrol items of incorporating the cryptography as “non-primarily” function, many of digital gadget and software will be no longer the license required items, such as gaming, household appliances, business process software, medical clinical equipments, and CAD software etc.

Another important change would be removal of cryptography devices from Schedule 2, which is the list of "more sensitive" group of strategic items, and require import/export license in transit and air-transshipment in Hong Kong. Schedule 2 contains military items and nuclear related items as such strictly controlled items. Encryption devices in transit through Hong Kong will be no longer require a license.

Effective date of the change is uncertain yet. Once the legal procedure is completed, the Order will be issued to inform traders of the effective date. Last time, the scheduled change was announced in mid-November 2009 and implementation was in early February 2010.

As of April 2010 among Hong Kong, Japan and Singapore, Japan have already reflected Wassenaar dual-use list of 2009, while Singapore still have its dual-use list reflecting Wassenaar as of 2008.

(Source: http://www.stc.tid.gov.hk/english/circular_pub/2010_stc02.html )

Japana extend a ban on all exports to North Korea

According to the Press Release of The Ministry of Economy, Trade and Industry ("METI") on April 09, 2010, Japanese government has decided to extend a ban on all exports destined for North Korea, and all imports originating in or shipped from North Korea. (This measure has been for 4 years since 2006 with one year term each. )

Outline of the measures

1. The ban on export of all goods destined for North Korea shall be extended by continuing the requirement that exporters obtain export approval from the Minister of Economy, Trade and Industry (Article 48, Paragraph 3 of the Foreign Exchange and Foreign Trade Law ["FEFTL"]).

2. The ban on import of all goods originating in or shipped from North Korea shall be extended by continuing the requirement that importers obtain import approval from the Minister of Economy, Trade and Industry (Article 52 of the FEFTL).

3. To ensure the enforcement of these restrictions, the following transactions shall be banned.
- Transactions involving buying/selling, loaning/borrowing, or giving of goods that involve the movement of the goods between third countries and North Korea (Article 25, Paragraph 6 of the FEFTL)
- Payments of import bills for goods originating in or shipped from North Korea that are imported without import approval (Article 16, Paragraph 5 of the FEFTL).

4. Goods exported for humanitarian purposes shall be exempted from the above restrictions.

Effective period

These restrictions shall be in effect from April 14, 2010 to April 13, 2011.

(Source: METI web site http://www.meti.go.jp/english/press/data/20100409_01.html )

Malaysia's Strategic Trade Bill passed

I have long time recognized that Malaysia don't have sufficient export control regulation to prevent WMD proliferation, but this will change.

Malaysia government pass Strategic Trade Bill and introduce solid export control regulation.
The summary is in below news source. For the companies who have operating unit in Malaysia should keep monitoring this regulatory development.

http://www.bernama.com/bernama/v5/newsindex.php?id=488051

http://news.brunei.fm/2010/04/06/minister-refutes-suggestions-malaysias-strategic-trade-bill-being-rushed-through/

U.S. CBP Helping Importers with 10+2 Rule

Noteworthy news to catch up the current status of US 10+2 rule enforcement.

(Source: UPS Trade Broadcast as of March 31, 2010)

Officials from U.S. Customs and Border Protection (CBP) are helping the trade community adjust to the Importer Security Filing rule, commonly known as "10+2" because of the 10 security data elements required from importers and two from carriers, which must generally be transmitted to CBP 24 hours before a U.S.-bound container is loaded aboard a ship. CBP began full enforcement of the rule on January 26, 2010 and plans to gradually step up enforcement measures throughout the year.

During a recent gathering of the Coalition of New England Companies for Trade, Richard DiNucci, director of the Secure Freight Initiative, reportedly told attendees that weekly filings of the 10+2 data have increased by 25 percent since January 26. DiNucci also reportedly stated that, "About 70 to 80 percent of importers are filing, and some ports are 95 to 100 percent compliant." He added that CBP is continuing to reach out to importers to explain the rules.

According to DiNucci, CBP will send out warning letters "shortly" to importers that are not in compliance with the rule but "will not penalize importers who have failed." At the same time, Cynthia Whittenburg, the director of the CBP Trade Facilitation and Administration Division, said the new Importer Security Filing rule would be integrated into CBP's ACE system, when it transitions to what she called "steady state" in 2011.