Regulatory Compliance updates July 2023

July 19, 2023

Canada: Consultation Notice of Intent to amend the Toys Regulations

Health Canada is proposing changes to the Toys Regulations. This notice outlines the proposed changes and includes a questionnaire for people in Canada to provide feedback. We will use your responses to the questionnaire to direct our action on the issues identified in this notice.

Who is the focus of this consultation
We want to hear from:

  • members of the public
  • health professionals
  • consumer and non-governmental organizations (NGOs)
  • stakeholders in the toy industry
  • Indigenous groups
  • health promotion and injury prevention organizations
  • other interested parties

Key topics for discussion
We would like your ideas and input on our suggestions to changes to the regulations being considered:

  • toxic substances
  • corrosive, irritant or sensitizing substances
  • specific toxic substances (boric acid and salts of boric acid)
  • migration of certain elements
  • finger paints
  • liquids, pastes, putties, gels, powders and items of avian feather origin
  • chemical toys (sets) other than experimental sets

Opened on June 23, 2023, and will close to new input on September 21, 2023.

Canada extends waiving of tariffs on Ukrainian goods

The Deputy Prime Minister and Minister of Finance, the Honourable announced that Canada will extend the Ukraine Goods Remission Order until June 9, 2024. This will ensure the continued tariff-free import of Ukrainian goods to Canada, including steel and in-quota supply-managed goods. The Ukraine Goods Remission Order, in force since June 9, 2022, supports the Ukrainian economy by increasing exports to Canada through the temporary and exceptional remission of customs and trade remedy duties on imports of goods originating in Ukraine.

China promulgated the new revision of the Regulation on the Administration of Commercial Cipher Codes decree of The State Council No. 760)

On April 27, 2023, The State Council promulgated the newly revised Regulations on the Administration of Commercial Cipher Codes, which come into effect on July 1, 2023, and will affect activities such as scientific research, production, sales, service, testing, certification, import and export, and application of commercial cipher codes in China. The definition was expanded by the new regulation that commercial cipher codes refers to a technology, product or service that adopts a specific transformation method to encrypt and protect information that is not a state secret and secure authentication. The new regulations set up a specific paragraph focusing on the cross-border management of commercial cipher codes. That is, the so-called cross-border import and export of commercial cipher codes, or import and export activities. Article 31 (1) of the new Regulations provides for the implementation of import and export list licensing management for commercial passwords, and the policy considerations of licensing management include national security, social public interests or the fulfilment of international obligations. The import and export license here, according to the provisions of the Announcement No. 63 jointly issued by the Ministry of Commerce, the National Cryptography Administration and the General Administration of Customs at the end of 2020, is actually the import and export license of dual-use items and technologies. On this basis, Article 31 (3) adds that commercial codes used in mass consumer products are not subject to import licensing and export controls. The license system applies to the transit, transshipment, through-transportation, re-export of commercial passwords, and cross-border activities between overseas and special customs supervision areas such as comprehensive bonded areas.

EU VAT rules for e-commerce two years on: Updated revenue figures point again to a successful implementation

New figures indicate that Member States collected €20 billion in VAT revenues in 2022 via new systems introduced two years ago as part of efforts to ensure a more level playing field for all businesses. The launch of the expanded ‘One Stop Shop’ (OSS) and newly introduced ‘Import One Stop Shop’ (Import OSS) allows businesses to declare and transmit VAT in one Member State for all their sales of goods and services in the entire EU, as well as on imports of low-value goods into the EU. The new figures, using data provided by Member States themselves, again point to a successful implementation of the new rules. This positive trend had already emerged following an ex-post evaluation of the first 6 months of application of the e-commerce package. Over 2022, Member States collected more than €17 billion via the expanded OSS portal which covers online sales within the EU. In addition to this, €2.5 billion in VAT revenues was collected on imports of e-commerce goods. This figure includes the new VAT revenues generated by the abolition of the VAT exemption that previously applied to imports of low value goods not exceeding €22 and which was highly susceptible to fraud. Overall, VAT revenues collected via the new systems saw a 26% increase on 2021 figures. Almost 130,000 companies have registered to account for their VAT on online sales through the new framework, illustrating the enthusiasm with which traders have embraced the simplifications.

EU Customs Major Reform: A data-driven vision for a simpler, smarter and safer Customs Union

The European Commission has announced an ambitious plan to reform the EU Customs Union. This reform is the most significant since the Union’s establishment in 1968. The measures proposed present a world-leading, data-driven vision for EU Customs, which will massively simplify customs processes for business, especially for the most trustworthy traders.

Key features of the proposals
The reform responds to the current pressures under which EU Customs operates, including a huge increase in trade volumes, especially in e-commerce, a fast-growing number of EU standards that must be checked at the border, and shifting geopolitical realities and crises.
The measures proposed present a world-leading, data-driven vision for EU Customs, which will: 

  • Massively simplify customs processes for business, especially for the most trustworthy traders. Embracing the digital transformation, 
  • Cut down on cumbersome customs procedures, 
  • Replacing traditional declarations with a smarter, 
  • Data-led approach to import supervision. 

At the same time, customs authorities will have the tools and resources they need to properly assess and stop imports which pose real risks to the EU, its citizens and its economy. A new EU Customs Authority will oversee an EU Customs Data Hub which will act as the engine of the new system. Over time, the Data Hub will replace the existing customs IT infrastructure in EU Member States, saving them up to €2 billion a year in operating costs. The new Authority will also help deliver on an improved EU approach to risk management and customs checks.

Overall, the new framework will make EU Customs fit for a greener, more digital era and contribute to a safer and more competitive Single Market. It simplifies and rationalizes customs reporting requirements for traders, for example by reducing the time needed to complete import processes and by providing one single EU interface and facilitating data re-use. In this way, it helps deliver on President von der Leyen’s aim to reduce such burdens by 25%, without undermining the related policy objectives.
The three pillars of EU Customs Reform:

  1. A new partnership with business
  2. A smarter approach to customs checks
  3. A more modern approach to e-commerce

India: DGFT liberalizes and simplifies the policy for export of Drones/Unmanned Aerial Vehicles (UAVs) for civilian end uses from India

The Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, has simplified and liberalized the policy for export of Drones/UAVs meant for civilian end uses from India. This decision has been taken in line with the emphasis laid in India's Foreign Trade Policy 2023 on facilitating the export of high tech items which includes the promotion of exports of Drones/Unmanned Aerial Vehicles (UAVs) manufactured in India for civilian end uses and taking into consideration India's international obligations on non-proliferation. All kind/type of drones/UAVs were earlier controlled/restricted for export under the category 5B of the SCOMET (Special Chemicals Organisms Material Equipments and Technology) list under Appendix 3 of Schedule 2 of the ITCHS classification of Import and Export Items. This list deals with the category of items that are subject to specific regulations due to their potential dual-use nature—meaning they can have both civilian and military applications. SCOMET license was required for export of such items and the Industry was facing challenges to export drones with limited capability which are only meant for civilian use. 

Based on the wider consultations held with all the stakeholders including seeking public/Industry comments on the policy, the SCOMET policy of drones/UAVs meant for civilian use has been amended vide DGFT Notification No. 14 dated 23.06.2023 to simplify and liberalize the policy for export of drones/UAVs. The export of Drones/UAVs not covered under the specified categories in SCOMET list and capable of range equal to or less than 25 km and delivering a payload of not more than 25 kgs (excluding the software and technology of these items) and meant for only civilian end-use, will now be subject to General Authorization for Export of Drones (GAED), a onetime general license valid for 3 years. 

This policy change will not require the Drone Manufacturers/Exporters with GAED Authorization to apply for SCOMET license for every similar export shipment meant for civilian purpose, within the validity period of 3 years subject to post reporting and other documentary requirements, reducing the compliance by the Industry to apply for SCOMET license every time they have to export any kind of civilian drone/UAVs.

Japan does away with 2019 export controls for S. Korea

Japan barred the exportation of three core semiconductor materials to South Korea in July 2019 following a ruling by Korea’s Supreme Court ordering compensation to victims of Japan’s wartime forced labor. The Japanese government has decided to put South Korea back on its “white list” of trusted trading partners. In effect, the two countries are returning to their original trade status four years after a spat over export controls. The Japanese Cabinet adopted a resolution Tuesday that adds Korea to the list of countries in the third annex of Japan’s export management ordinance. The revised ordinance will be promulgated on June 30 and take effect on July 21. That will likely wrap up the two countries’ conflict over export controls that has lasted for four years, since July 2019. The benefit of being on Japan’s list of trusted trading partners is that export procedures are streamlined. Once Korea’s position on the list is restored, regular Japanese companies will be able to receive a comprehensive permit for exporting strategic materials to Korea.

Under the export controls that have been in effect, only companies that meet certain qualifications are able to apply for special comprehensive permits. Japan will also be lifting its “catch all” regulation, which requires exporters to receive permits for non-strategic materials that could be used to make weapons of mass destruction.

United States: Chemical Weapons Convention Regulations: Reducing the Concentration Level Above Which Mixtures Containing Schedule 2A Chemicals Are Subject to Declaration and Reporting Requirements

The Bureau of Industry and Security (BIS) has published this final rule to amend the Chemical Weapons Convention Regulations (CWCR) to reduce the concentration threshold level above which mixtures containing a Schedule 2A chemical are subject to the declaration requirements that apply to Schedule 2A chemical production, processing and consumption under the Chemical Weapons Convention (CWC). This final rule also amends the CWCR to reduce the concentration threshold level above which mixtures containing a Schedule 2A chemical are subject to the declaration and reporting requirements that apply to exports and imports of Schedule 2A chemicals under the CWC. These regulatory amendments bring the CWCR into further alignment with guidelines adopted by the Organization for the Prohibition of Chemical Weapons (OPCW) Conference of the States Parties (CSP), which established a low concentration limit for Schedule 2A chemicals. This rule is effective July 3, 2023.

US: CBP Hosted Green Trade Forum on July 11, 2023

The Green Trade Innovation and Incentives Forum was an opportunity for members of the trade industry, technology, research and academic experts, non-governmental organizations, government interagency personnel, and other entities interested in Green Trade to share ideas related to green trade innovation, incentivize clean and sustainable supply chains and environmental stewardship, and international trade decarbonization. The Forum was hosted in-person at the U.S. Patent and Trademark Office in Alexandria, Virginia, with an option to join virtually via webinar.


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