Regulatory Compliance updates 09/22

Canada: challenges US softwood lumber duties under USMCA trade pact

Canada International Trade Minister is formally initiating a challenge against “unwarranted and unfair” U.S. duties on Canadian softwood lumber. The Canadian government filed notice of the challenge under the U.S.-Mexico-Canada trade agreement’s dispute resolution system. Ms. Ng says in a statement that the duties harm Canadian businesses and workers but also serve as a tax on U.S. consumers already dealing with inflation and supply-chain issues. The U.S. cut its anti-dumping and countervailing duty rate in half earlier this month to 8.59 per cent from 17.61 per cent, but Ms. Ng signalled that Canada would still fight the measures. The crux of the U.S. argument is that the stumpage fees provinces charge for timber harvested from Crown land are akin to subsidies, since U.S. producers must instead pay market rates. Ms. Ng says that Canada is willing to work toward a negotiated solution in the long-running dispute.

Canada: Changes in import controls for restricted handguns

As of August 19, 2022, all individuals and businesses importing a restricted handgun into Canada require an import permit issued by Global Affairs Canada. As a general rule, you are not allowed to carry handguns for self-protection in Canada. Non-residents can usually bring a non-restricted rifle or shotgun into Canada for approved purposes such as hunting, target shooting, wilderness protection or in-transit movement by a reasonably direct route to another point outside Canada. If you want to bring a firearm into Canada, you must follow the laws of Canada.

• Importing and Exporting Firearms, Weapons and Devices, Canada Border Services Agency
• Import Controls and Import Permits, Global Affairs Canada
• Criminal Code
• Firearms Act

Canada: mandatory electronic notification of cargo at sufferance warehouses

The purpose of this notice is to remind sufferance warehouse owners/operators licensed by the Canada Border Services Agency (CBSA) of their obligation under Section 14 of the Customs Sufferance Warehouse Regulations, to transmit a warehouse arrival certification message (WACM) when unreleased goods physically arrive at the warehouse to which they are destined. When goods arrive in a sufferance warehouse yard and have not yet physically entered the warehouse, the goods are considered arrived at destination and should be arrived as soon as possible.
Sufferance warehouse operators must transmit a WACM for each cargo control number (CCN) that is destined to their sub-location. If the shipment is consolidated, only a WACM on the consolidated CCN is required. This includes a consolidated electronic house bill CCN. When the shipment is not consolidated a WACM on each non-consolidated CCN is required.

Canada: Excise duty on vaping substances coming into effect October 1, 2022

An excise duty on vaping products, as announced in Budget 2022, is being implemented on October 1, 2022 through the introduction of a new excise duty framework. The excise duty applies to vaping substances that are manufactured in Canada or imported and that are intended for use in a vaping device in Canada. Manufacturers of vaping products are required to get a vaping product licence from the CRA. Importers are required to apply for a registration from the CRA. Manufacturers and importers are also required to register for the vaping stamping regime. All vaping products entering the Canadian duty-paid market are required to be packaged with an excise stamp affixed to the product. The excise stamps shows that duties have been paid.

China to implement negative list for cross-border trade in services

China will implement a negative list for cross-border trade in services, expand opening-up in the services sector and bolster digital trade to shore up economic growth. A negative list refers to special administrative measures for access of foreign investors to specific fields. China introduced a negative list for cross-border trade in services at the Hainan Free Trade Port last year. China will seize opportunities brought by the Regional Comprehensive Economic Partnership agreement, which took effect on Jan 1, to expand the scale of trade in services with other member countries in the coming years.

In addition to accelerating the digital transformation of traditional trade in services, and underpinning the growth of smart logistics, online exhibitions and telemedicine, the government will make services more tradable, and advance emerging trade in services such as bonded area-based research and development businesses, product testing, and art exhibition and trade.  Addressing a news conference in Beijing, the official stressed that China will encourage the import of advanced technologies and services for energy conservation, carbon reduction and environmental protection, as well as broaden its exports of green and low-carbon solutions. In contrast to merchandise trade, trade in services refers to the sale and delivery of intangible services such as transportation, finance, tourism, telecommunications, construction, advertising, computing and accounting.

India: Compulsory inspection for rice exports to some European countries deferred till Jan 1, 2023

The India has deferred by another six months its decision to impose mandatory inspection requirement for pesticide residue for export of basmati and non-basmati rice to European destinations, barring the European Union (EU) and five other countries, including the UK, Iceland, Liechtenstein, Norway and Switzerland. The certificate of inspection is already compulsory for exporting rice from India to all the EU countries, the UK, Iceland, Liechtenstein, Norway and Switzerland, which remains unchanged.

India: Cabinet approves Amendment to Export Policy for Wheat or Meslin Flour

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister has approved the proposal for amendment of policy of exemption for Wheat or Meslin Flour (HS Code 1101) from export restrictions/ ban. The approval will now allow to put a restriction on the export of Wheat Flour which will ensure a curb on rising prices of wheat flour and ensure food security of the most vulnerable sections of the society.

India: Centre proposes amendment in export policy for certain types of drones

The India has proposed an amendment in its export policy for certain types of drones and unmanned aerial vehicles (UAVs), dropping the requirement to receive authorisation under the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) scheme. With the aim to simplify the policy under the SCOMET list, a draft policy amendment of the Category 5B of SCOMET List and the General Authorization for Export of Drones/UAVs (Excluding Software and Technology) for specific types is proposed, said the Director General of Foreign Trade. UAV systems including drones, remotely piloted air vehicles and autonomous programmable vehicles, not specified under SCOMET Categories/sub-categories 3D013, 5B(a) & (b), 6A010, 8A912, and capable of range equal to or less than 5 km and delivering a payload of not more than 5 kg (excluding the software and technology of these items), will not be covered for the purposes of SCOMET Category 5B, subject to the General Licensing procedure under GAED policy to be notified in the Public Notice.

Mexico, US close VU Manufacturing complaint in fifth USMCA labor probe

Mexico and the United States have resolved the latest in a series of labor complaints under a regional trade pact, saying on Wednesday that workers at auto-parts plant VU Manufacturing in northern Mexico were able to elect the union of their choice. U.S. officials in July called for a probe under the 2020 United States-Mexico-Canada Agreement (USMCA), the fifth such case aiming to improve workplace conditions in Mexico, after activists alleged the company interfered in workers’ efforts to select their union. 

Norway introduces additional sanctions against Russia

Norway has introduced a new set of sanctions against President Putin and the Russian regime. The package of sanctions adopted by the EU on 21 July 2022 has been incorporated into Norwegian law and enters into force in Norway. The purpose of the wide-ranging packages of sanctions is to reduce Russia’s ability to finance its illegal war in Ukraine. Existing sanctions are being tightened and opportunities to carry out commercial activities with Russia have been significantly curtailed.

South Africa: Delay in implementing the automated Refunds and Drawbacks system

SARS Customs and Excise is enhancing current systems with modern, automated systems to facilitate legitimate trade and travel. The Refunds and Drawback process is being automated as part of this modernisation. Previous communication indicated that the system would go live on 19 September 2022. The implementation date has been postponed due to the following reasons:

• To allow an additional period for trade testing.
• To consider additional feedback from various stakeholders.
• To allow additional time to make changes to the development of the system resulting from additional enhancements to the design.

Ukraine to join the Common Transit Convention and the Convention on the Simplification of Formalities in Trade in Goods on 1 October 2022

Ukraine has been formally invited to join to the EU-Common Transit Countries’ Convention on a Common Transit Procedure and the Convention on the Simplification of Formalities in Trade in Goods. It deposited its instruments of accession to the Conventions in August and can therefore operate common transit from 1 October 2022. This is an important step forward in Ukraine’s pre-accession strategy and will greatly support the work on Solidarity Lanes to and from Ukraine. These Conventions enable goods to move much more easily between the EU and the Common Transit Countries (Norway, Iceland, Switzerland, North Macedonia, Serbia, Turkey and UK). Simplified rules, such as mutually recognised financial guarantees and less controls, help to cut down on costs for EU and partner country businesses, while facilitating and boosting trade. As such, Ukraine’s participation in these Conventions will facilitate trade between Ukraine and EU Member States, as well as other common transit countries.

US: USTR to continue Section 301 tariffs on Chinese imports 

The United States Trade Representative (USTR) announced on September 2 that added customs tariffs on certain imports from China would not be terminated and instead would be continued pending further review. USTR in its notice indicated that it is retaining the tariffs because of requests received for their continuation from representatives of domestic industries that benefit from the tariffs. The added tariffs initially were put in place as of July 16, 2018, and August 23, 2018, under Section 301 in the investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. USTR undertook this review of whether to continue the tariffs pursuant to a statutory four-year review.

US: CTPAT Portal User Manual

The Customs Trade Partnership Against Terrorism (CTPAT) web portal is constantly changing to meet the demands of the trade environment and technology and new trends in supply chain security. The portal has expanded to include the addition of the Trade Compliance elements and the changes required to update the MSC. This Manual explains the basic manoeuvrability throughout the portal to be able to have an accurate and complete CTPAT application. It will also enable partners in the program can take advantage of CTPAT and foreign AEO cargo facilitation benefits.