Regulatory Compliance updates August 2023

August 22, 2023

EU Commission adopts detailed reporting rules for the Carbon Border Adjustment Mechanism’s transitional phase

On 17 August 2023, the European Commission adopted the rules governing the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase, which starts on 1 October 2023 and runs until the end of 2025. The Implementing Regulation details the transitional reporting obligations for EU importers of CBAM goods, as well as the transitional methodology for calculating embedded emissions released during the production process of CBAM goods. In the CBAM’s transitional phase, traders will only have to report on the emissions embedded in their imports subject to the mechanism without paying any financial adjustment. This will give adequate time for businesses to prepare in a predictable manner, while also allowing for the definitive methodology to be fine-tuned by 2026.

EU: Updated national planning for UCC IT systems

An updated consolidation of the national planning information from Member States has been published. The planning relates to the IT systems required under the Union Customs Code (UCC). This information is collected and published by the Commission under Article 278a(4) of the UCC. 

The UCC Work Programme has a 3-fold objective:

  1. Define the projects and electronic systems aimed at:
  • the harmonised exchange of information on the basis of internally accepted data models and message formats
  • the reengineering of customs and customs related processes to enhance their efficiency, effectiveness and uniform application and reducing compliance costs
  • offering to economic operators a wide range of electronic customs services, for them to be able to interact in the same way with the customs authorities of any Member State.
  1. set out an extensive plan for the implementation of those systems in order to ensure the correct application of the UCC.
  2. Govern the periods during which transitional rules are to be applied pending the deployment of the new or upgraded systems

India: DGFT issues notification to restrict import of computers, laptops, tablets and servers

India's Directorate General of Foreign Trade (DGFT) has announced that from November 1, 2023, it will restrict the import of laptops, computers, and their components, focusing on items under Harmonised System of Nomenclature (HSN) Code 8471. Restriction shall not be applicable to imports under baggage rules. This alert summarizes the recent notification issued by the Directorate General of Foreign Trade (DGFT) restricting import of computers, laptops, tablets, servers etc. As per the notification, import of laptops, tablets, all-in-one personal computers, ultra small form factor computers and servers falling under HSN 8741 shall be 'Restricted' and their import would be allowed against a valid license for restricted imports. However, the said restriction does not apply in the following cases:

  • Import under Baggage Rules, 2016
  • Import of one such item (except server), including those purchased from e-commerce portals, through post or courier
  • Import up to 20 such items per consignment for specified purposes subject to the condition that such goods shall be used only for the stated purposes and will not be sold. Further, after the intended purpose, the goods would either be destroyed beyond use or re-exported
  • Re-import of goods repaired abroad
  • Such items are an essential part of capital goods

India amends Export Policy of Non-Basmati White Rice to ensure adequate domestic availability at reasonable prices

In order to ensure adequate availability of Non-Basmati White Rice in the Indian market and to allay the rise in prices in the domestic market, Government of India has amended the Export Policy of above variety from ‘Free with export duty of 20%’ to ‘Prohibited’ with immediate effect. The prohibition on export of Non-Basmati White Rice will lead to lowering of prices for the consumers in the country. However, there is no change in Export policy of Non-Basmati Rice (Par Boiled Rice) and Basmati Rice, which forms the Bulk of Rice exports. This will ensure that the farmers continue to get the benefit of remunerative prices in the international market.

United States: CBP to increase user fees for fiscal year 2024 – Effective October 1, 2023

Customs and Border Protection announced it will be adjusting certain customs user fees and corresponding limitations established by the Consolidated Omnibus Budget Reconciliation Act (COBRA) for Fiscal Year 2023. Annual fee increases are mandated by the Fixing America’s Surface Transportation Act, which requires CBP to make annual adjustments and fee limitations as necessary to account for inflation. These changes will take effect on October 1, 2023.

United States: CTPAT & Trade Compliance Portals Data Freeze

The Customs Trade Partnership Against Terrorism (CTPAT) and the Trade Compliance (TC) program Portals will enter into a data freeze window from September 16, 2023, to September 30, 2023. During this time, there will be no access to either Portal for trade users. This outage is necessary in order to deploy the Next Generation Portals.  This time will be used to migrate the data from the 2.0 Portals to the 3.0 Portals.  During this time, the data needs to be “frozen” so that no data inconsistencies occur between the two systems.

United States: Importer cotton assessment fee to increase on October 16, 2023

The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations, increasing the value assigned to imported cotton for the purposes of calculating supplemental assessments collected for use by the Cotton Research and Promotion Program. The current assessment rate on imported cotton is $0.013215 per kilogram. The revised assessment rate is $0.014691 per kilogram, an increase of $0.001476 per kilogram. This amendment is required each year to ensure that assessments collected on imported cotton and the cotton content of imported products will be the same as those paid on domestically produced cotton. In addition, AMS is updating the Harmonized Tariff Schedule (HTS) statistical reporting numbers that were amended since the last assessment adjustment in 2022. This direct final rule is effective October 16, 2023, without further action or notice, unless significant adverse comment is received by September 14, 2023. If significant adverse comment is received, AMS will publish a timely withdrawal of the amendment in the Federal Register.

United States: guidance on movement of forced labor detained cargo for storage

U.S. Customs and Border Protection (CBP) has issued guidance concerning the movement of detained cargo for storage. According to the CBP release—CSMS # 57200992—importers or authorized filers may submit a request to the port director at which their cargo is detained pursuant to 19 U.S.C. 1307 (e.g., withhold release orders, the Uyghur Forced Labor Prevention Act, and the Countering America’s Adversaries Through Sanctions Act) to move detained cargo to a customs bonded warehouse for storage pending resolution by CBP or the importer. Importers or their authorized filers may not move detained goods suspected of being made with forced labor into a foreign trade zone for storage.

United States: Forced Labor Enforcement Task Force Publishes Updated Uyghur Forced Labor Prevention Act Strategy

The Forced Labor Enforcement Task Force (FLETF) published an updated Uyghur Forced Labor Prevention Act (UFLPA) Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China. The updated UFLPA Strategy highlights enforcement of the UFLPA’s rebuttable presumption, which prohibits goods from being imported into the United States that are either produced in Xinjiang, or by entities identified on the UFLPA Entity List, unless the importer can prove, by clear and convincing evidence, the goods were not produced with forced labor.  In the first year of enforcement under the new law, U.S Customs and Border Protection (CBP) reviewed more than 4,000 shipments valued at over $1.3 billion. 

Additionally, the strategy highlights an expanded UFLPA Entity List, which as of August 2, 2023 will include four new companies.  Goods produced by Xinjiang Zhongtai Chemical Co., Ltd., Ninestar Corporation, including eight of its Zhuhai-based subsidiaries, Camel Group Co., Ltd., and Chenguang Biotech Group Co., Ltd., including one subsidiary, will be restricted from entering the United States because of their work with the PRC government to recruit, transport, transfer, harbor or receive forced labor or members of persecuted groups, including Uyghur minorities, out of the Xinjiang Uyghur region.

US Sanctions Four Kyrgyz Companies for Evading Russian Sanctions

The United States placed more than 120 companies from Russia as well as several Kyrgyzstan firms on its sanctions blacklist for their contributions to Russia's war on Ukraine. The sanctions aimed at further choking off Russia's access to critical raw and manufactured materials as well as financing in order to hinder its war machine. Among the scores of firms on the new State and U.S. Treasury blacklists are Russian banks, energy industry companies, shipping firms, defense and technology procurement businesses and manufacturers, and Russian private military companies. In addition, seven state-controlled research institutes dealing with advanced technologies were placed on the blacklist.


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