Regulatory Compliance updates September 2023

September 22, 2023

Canada: CBSA kicks off final phase before CARM becomes the new system of record for the collection of duties and taxes for commercial goods imported into Canada

The Canada Border Services Agency Assessment and Revenue Management (CARM) is a multi-phase project to modernize the collection of duties and taxes for commercial goods imported into Canada. CARM will help to protect and grow over $750 billion in trade and $30 billion in revenue collected at the border each year by providing Canadian businesses an online self-service tool and simplified importing processes.

With CARM, the Canada Border Services Agency (CBSA) is updating and upgrading its 35-year-old legacy systems through a series of releases. The initial phase of the project was launched in May 2021 and allowed importers, customs brokers and trade consultants to view importer transactions and statements of account, request rulings, and pay invoices with new electronic payment options.

Recognizing the investment and impact that CARM represents for industry and for the Government of Canada, the CBSA is taking a phased approach with it becoming the official system of record for the collection of duties and taxes for commercial goods imported into Canada.

In October 2023, the CARM Release 2 system will be available for selected industry partners who want to test their own internal systems, and for software service providers to continue to certify their software with CARM.

EU: Carbon Border Adjustment Mechanism (CBAM) Starting from 1 October 2023

REGULATION (EU) 2023/956 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 10 May 2023 establishing a carbon border adjustment mechanism (CBAM) came into force on 17 May 2023. It's part of the 'Fit for 55' legislative package. Its purpose is to ensure equivalent carbon pricing for imports and domestic products. The goods covered by this regulation are included in Annex I, which covers:

  • Cement,
  • Electricity,
  • Fertilizers,
  • Iron and steel and certain products made of iron or steel,
  • Aluminum and certain products made of aluminum,
  • Chemicals (currently hydrogen only).

The Regulation applies to goods originating in a third country, as well as processed products resulting from the inward processing procedure. These are imported into the customs territory of the Union or brought to an artificial island, a fixed or floating structure, or any other structure on the continental shelf or in the exclusive economic zone of a Member State adjacent to the customs territory of the Union.

The country of origin is determined in accordance with the rules for non-preferential origin as referred to in Article 59 of the UCC.

The Regulation does not apply to goods contained in the personal luggage of travelers, low-value shipments (not exceeding 150 EUR), and goods to be moved or used in the context of military activities. The import of goods originating in countries and territories mentioned in Annex III (Iceland, Liechtenstein, Norway, Switzerland, Büsingen, Heligoland, Livigno, Ceuta, Melilla) is also excluded from the scope.

  • Transitional Period

Between 1 October 2023 and the end of 2025, importers will have to report emissions embedded in their goods subject to CBAM at the end of each quarter without paying a financial adjustment. A set of information is included in Article 35 of the Regulation. During this period, reports will be submitted using the CBAM Transitional Registry, and importers will not need to be authorized. Customs will inform importers of CBAM goods of their reporting obligations at the moment of import.

  • Definitive Period

Goods shall be imported into the customs territory of the Union only by an authorized CBAM declarant. This status may be granted to the importer or their indirect customs representative. If the importer is not established in a Member State, only an indirect representative is allowed to apply for authorization. The application for authorization will be submitted via the CBAM registry.

Each authorized declarant will have to submit a CBAM declaration by 31 May for the previous year (for the first time in 2027 for the year 2026).

The CBAM is similar to The European Union Emissions Trading System (EU ETS). It is based on the purchase of certificates by importers. The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in €/tonne of CO2 equivalents emitted.

EU designates Russian prosecutors, judges, and FSB agents

On 8 September 2023, the Council decided to impose restrictive measures on six individuals responsible for serious human rights violations in the Russian Federation and in the territories of Ukraine that Russia has temporarily occupied, including violations of freedom of opinion and expression.

The individuals include prosecutors and judges active in courts established by Russia’s occupying force in illegally annexed Crimea. They took part in the politically motivated court proceedings against Vladyslav Yesypenko, a journalist who was sentenced to 6 years in prison, and Nariman Dzhelyalov, a Crimean Tatar.

It also include two members of the Federal Security Service of the Russian Federation (FSB) that either took part in torturing Vladyslav Yesypenko, or conducted the investigations in his case, and those of members of the Crimean Tatar community, and of the Jehovah’s Witnesses in Crimea.

EU restrictive measures under the Global Human Rights Sanctions Regime now apply to a total of 67 individuals and 20 entities. Those designated are subject to an asset freeze and EU citizens and companies are forbidden from making funds available to them. Natural persons are additionally subject to a travel ban, which prevents them from entering or transiting through EU territories.

EU countries to extend Iran sanctions

Under the Joint Comprehensive Plan of Action (JCPoA), a range of UN, EU and UK sanctions on Iran were due to be lifted on 18 October 2023. These include sanctions on individuals and entities involved in Iran’s missile, nuclear, and other weapons programs. According to the UK, France, and Germany (E3), Iran has failed to comply with their JCPoA commitments, including having enriched uranium stockpiles more than 18 times the JCPoA limit and deploying thousands of advanced centrifuges. Therefore, the E3 will transfer UN sanctions into their domestic sanctions regimes and the EU and UK sanctions will not be lifted on 18 October 2023. 

EU: Russia steel and iron sanctions

Goods containing iron or steel originating in Russia that are processed in a third country will face new sanctions from 1 October, as per Chapter 4CA in Regulation 3 in the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2023.

EU: 2023 Update of the EU Control List of Dual-Use Items

On 15 September 2023, the European Commission adopted a Delegated Regulation updating the EU dual-use export control list in Annex I to Regulation (EU) 2021/821. The update brings the list in line with decisions taken in the multilateral Export Control Regime's Wassenaar Arrangement (WA), Missile Technology Control Regime (MTCR), and Nuclear Supplier Group (NSG) in 2022. The decisions taken in the Australia Group (AG) in 2022 have been introduced in the control list in Annex I by means of the Commission Delegated Regulation (EU) 2023/996 of 23 February 2023.

This update mainly pertains to the control parameters of manufacturing equipment (NSG), of high-performance computers and of lasers (WA), the addition of propulsion motors for submersible vehicles, and of technology for the development of gas turbine engines for aircraft (WA), as well as the adjustment of technical definitions, notes and descriptions, and editorial changes.

Subject to the Council and the European Parliament raising no objections within a period of two months, the Commission Delegated Regulation (Ref. C(2023)6125) will be published and will enter into force on the day following that of its publication.

EU publishes guidance on Russia sanctions circumvention due diligence

On 7 September 2023, the European Commission published guidance, which is on the EU Guidance section of this site, providing a general overview of the due diligence expectations to prevent the circumvention of Russia sanctions, focusing mainly on export-related sanctions, outlining:

  • the steps EU operators should take to conduct a strategic risk assessment with examples;
  • general good practices at the stakeholder level, transaction level, and relating to the goods themselves;
  • how to prevent possible diversion to Russia and/or Belarus from third countries e.g. by including contractual clauses with third-country business partners prohibiting re-exports to Russia and Belarus;
  • specific guidance for banking and finance
  • a list of circumvention red flags

EU court interprets Russia sanctions designation criteria in Rashnikov

In Case T-305/22 Rashnikov v Council the General Court of the EU rejected Viktor Rashnikov’s application to annul his EU designation.  He is listed on the grounds that as chairman of the board of MMK iron & steel works he is a “leading Russian businessperson involved in economic sectors providing a substantial source of revenue” to the Russian government. The Court said that reason was sufficiently clear, and that the criterion was not discriminatory / disproportionate. “Leading businessperson involved in an economic sector providing the government with a substantial source of revenue”, according to the judgment, refers to someone’s importance in light of their occupational status, economic activities, functions, extent of capital holdings etc. And the economic sectors in which they operate must constitute a substantial source of revenue to the government (here the metallurgy sector). The Council did not need to show any further link with the regime. On a re-listing, the EU can rely on evidence that justified the original listing but must consider whether the context and facts have changed.

EU Court upholds 1 and rejects 6 Russia de-listing applications

The 1st Chamber of the EU General Court upheld 1 and rejected 6 Russia de-listing applications.  The judgments are on the EU judgments section of this site. Aleksandr Shulgin (Case T-364/22) won his challenge to his re-listing: Initial listing had been justified because he was CEO of Ozon. Re-listing not justified, because he had since resigned, and the Council did not analyse why listing still justified. The judgment is important on the need for the EU to explain why a listing is still justified where the individual has resigned from a position which originally justified their listing.

EU Court rejects Mikail Gutseriev’s Belarus de-listing application

The EU General Court rejected Mikail Gutseriev’s de-listing application (he was listed by the EU in June 2021).  The judgment is here and on the EU Judgments section of this site. The 5th Chamber of the General Court held that the EU Council made no errors in: interpreting the listing criterion support for / benefit from the Belarus regime as including non-financial types of support / benefits; and concluding that Mr Gutseriev benefited from and supported President Lukashenko’s regime, as a prominent businessman with interests in the heavily regulated and economically significant potash and energy sectors.

G7 to introduce Russia diamonds import ban

A Belgian official has reportedly indicated that a ban on the imports of Russian diamonds will be agreed by the G7 over the coming weeks.  The ban will supposedly consist of a direct ban on purchases from 1 January 2024 as well as an indirect ban to come into effect more gradually. The G7 previously promised to “reduce the revenues that Russia extracts from the export of diamonds” at the Hiroshima Summit in May at the same time as the UK Prime Minister announced the UK’s plan to introduce legislation this year banning the import of Russian diamonds, copper, aluminium, and nickel.

Switzerland adopts EU Belarus designations but not Russia designations

On 30 August 2023, the Federal Council decided to adopt further sanctions against Belarus to bring Switzerland in line with the latest measures adopted by the European Union (EU) on 3 August. These measures bring the sanctions against Belarus more closely into line with the sanctions imposed against Russia. They include an export ban on goods and technology for use in the aviation and space industry. The list of goods also includes turbojets, turbopropellers and rubber tyres. For aviation and space industry items that are also frequently used in the medical sector, exemptions apply subject to authorisation. The existing export bans on dual-use goods and technologies, and on goods contributing to the military and technological enhancement of Belarus have been aligned with the export bans applicable to Russia.

On 30 August 2023, the Federal Council decided not to adopt the sanctions imposed by the EU as part of its human rights sanctions regime in connection with the Navalny and Kara-Murza cases. In the future, the Federal Council will continue to decide on a case-by-case basis whether to adopt measures from the EU’s thematic sanctions regimes.

Switzerland updates sanctions guidance on iron and steel products

The Swiss Federal Department of Economic Affairs has updated the interpretative aid for (Russia) sanctions measures, providing further guidance on the interpretation of article 14a concerned with iron and steel products and economically significant goods, which outlines:

  • when the purchase and transport (and the provision of related services e.g. financial) of such goods is and is not permitted; and
  • what is considered sufficient proof of the country of origin and in which cases such proof is needed.

UK’s border with the EU: Introduction of new border model postponed

The government has confirmed a further delay to post-Brexit border controls on animal and plant products coming from the EU. The UK’s final border plan has been published but the first phase of implementation will not begin until January 2024, rather than this October as was set out in the draft of the plan. This explainer sets out why controls are needed at the GB-EU border, what controls the UK plans on introducing, and why they continue to be delayed. In August 2023, the government announced the final draft of its Border Target Operating Model (BTOM). This sets outs how the UK will introduce full controls on imports coming into GB from the EU. The model will be implemented in three phases:

  • 31 January 2024- Health certificates and phytosanitary certificates will be required for imports of ‘medium risk’ animal products, plants, and plant products (such as raw/chilled/frozen meat and dairy products) as well as ‘high risk’ food (predominantly live animals) and feed of non-animal origin from the EU.
  • 30 April 2024- Documentary checks (ensuring goods have correct paperwork e.g., health and phytosanitary certificates), physical checks (ensuring goods meet sanitary and phytosanitary rules), and identity checks (verifying that the goods in the consignment are those that are on the documentation) will be made on ‘medium risk’ animal products, plants, and plant products as well as ‘high risk’ food and feed of non-animal origin from the EU.
  • 31 October 2024- Safety and Security declarations will have to be made for EU imports.

UK Government guidance on third country iron and steel measures

The Department for Business & Trade and the Department for International Trade have published a notice explaining the scope of the measures related to Russian iron and steel processed in third countries, including:

  • the evidence traders need to provide to demonstrate compliance;
  • what constitutes an “iron and steel” product;
  • examples of how the rules may be applied in practice and HMRC inspections; and
  • licensing provisions

UK: Extension of Customs Declaration Service License Waiver Document Code and update of Document Codes for Health and Safety Executive Import Licensing Firearms and Ammunition – measure type 351

New Document Codes effective from 26 August 2023
Commodity Code          Update

  • 9300000000     New Document Codes 9020, 9026, 9044.
  • 9705100030     New Document Codes 9020, 9026, 9044.
  • 9705100090     New Document Codes 9020, 9026, 9044.
  • 9706900000     New Document Codes 9020, 9026, 9044.

Document Code 999L has been extended till 31 January 2024 for the following commodity codes:

  • 9705100030
  • 9705100090
  • 9706900000

UK International Market Scheme comes into view

From The UK Internal Market Scheme (UKIMS) will replace the existing UK Trader Scheme (UKTS) in under two weeks, from 30 September.Under the scheme, businesses will be able to declare that goods entering Northern Ireland from Great Britain are ‘not at risk’ of moving to the EU, ensuring EU duty is not payable on the goods. Once authorised on UKIMS, businesses can declared goods as not at risk when completing declarations by using the code ‘Northern Ireland remain’ (NIREM).If a business’ authorisation is not processed by the time that UKTS closes on 30 September, HMRC advises that businesses will, if eligible, be able to claim any duties back via the Duty Reimbursement Scheme or claim a customs duty waiver.

UK sanctions members of Russian cybercrime gang

The Cyber (Sanctions) Regulations 2020 (S.I. 2020/597) were made under the Sanctions and Anti-Money Laundering Act 2018 (“the Sanctions Act”) and provide for the imposition of financial sanctions, namely the freezing of funds and economic resources of persons who are have been involved in cyber activity which  undermines, or is intended to undermine, the integrity, prosperity or security of the  United Kingdom or a country other than the United Kingdom. On 7 September 2023 the Foreign, Commonwealth and Development Office updated  the UK Sanctions List on GOV.UK. by adding 11 alleged members of a Russian cybercrime group behind the Trickbot/Conti ransomware attacks, which included the hacking of hospitals during the COVID-19 pandemic.

UK: Plastic Packaging Tax reminder

Plastic Packaging Tax (PPT) was introduced on 1 April 2022. If you expect to import into UK or manufacture 10 or more tonnes of plastic packaging within a 12-month period you must register for PPT on GOV.UK, even if your packaging contains 30% or more recycled plastic. Once you are registered for PPT, you will need to submit a return to HMRC 4 times a year. Your return must cover an accounting period. The 2023 to 2024 accounting periods are:

  • 1 April 2023 to 30 June 2023 
  • 1 July 2023 to 30 September 2023 
  • 1 October 2023 to 31 December 2023 
  • 1 January 2024 to 31 March 2024

You must submit the return and pay any tax due no later than the last working day of the month, following the end of the accounting period you are reporting.

UK: HMRC announces ‘new phased approach’ for export declarations on CDS

On 23 August 2023, the government announced a new timeline for when businesses need to be completing export declarations using the Customs Declaration Service (CDS).  CDS is replacing the Customs Handling of Import and Export Freight (CHIEF) system and exporters had been due to have moved over to using it by 31 October 2023. However, HMRC has said that is now adopting a “new phased approach” with “selected high-volume declarants” being asked to move to CDS for exports by 30 November 2023, with all other businesses being required to use it by 30 March 2024. Businesses have been required to complete import declarations on CDS since autumn 2022.

UK: Notice of publication of guidance for businesses on the ban on the import of third country processed iron and steel of Russian origin

The UK’s ban on the import of certain Russian iron and steel products processed in a third country/ multiple third countries was introduced on 21 April 2023 as part of a wider package of trade sanctions against Russia. It will come into effect from 30 September 2023. The government has now published specific guidance on third country processed iron and steel of Russian origin to support businesses to comply with the measure. This guidance explains the scope of the ban and the supply-chain evidence businesses can provide to demonstrate compliance.

USTR extends China Section 301 reinstated & COVID-related exclusions

The U.S. Trade Representative (USTR) has extended all current Section 301 exclusions that were due to expire on September 30, 2023.  They will now expire on December 31,2023. This includes both the 352 reinstated exclusions, and the 77 COVID-related exclusions. Section 301 additional duties for goods not excluded impose a 25 percent duty rate for goods on Lists 1, 2, 3; and a 7.5 percent duty rate for goods on List 4A.


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