Regulatory Compliance updates 02/22

China adds potassium perchlorate into control list of dual-use items for export control

Effective from Apr 1, 2022, in accordance with the relevant provisions of the Export Control Law, the Foreign Trade Law and the Customs Law of the People's Republic of China, in order to safeguard national security and interests, and with the approval of the State Council, China has decided to implement export control over potassium perchlorate (CN HTS 2829900020). Business operators engaged in the export of potassium perchlorate shall be registered with the Ministry of Commerce. Any entity or individual without registration is not permitted to export potassium perchlorate. Relevant registration conditions, materials and procedures shall be subject to the Measures for the Administration of Registration of Export of Sensitive Items and Technologies. 

The 2021 version of the negative List for foreign investment access will go effective from Jan 1, 2021 (NDR and MOFCOM Joint Decree

The National Development and Reform Commission and the Ministry of Commerce issued Decree No. 47 and 48 on Dec 27, 2021, respectively promulgating "Special Management Measures for Foreign Investment Access (Negative List) (2021 Version)" and " Special Management Measures for Investment Access in Free Trade Pilot Zones (Negative List) (2021 Version), which will take effect on Jan 1, 2022. The previous versions will be simultaneously abolished.

In the 2021 version, the negative lists for foreign investment in China and pilot free trade zones will be further reduced to 31 and 27, respectively, by 6.1% and 10% respectively. Major changes: First, further open up the manufacturing sector. In the field of automobile manufacturing, restrictions on foreign ownership in passenger car manufacturing and restrictions on the establishment of two or fewer joint ventures in China for the production of the same vehicle products will be abolished. In the field of radio and television equipment manufacturing, restrictions on foreign investment in the production of ground receiving facilities and key components for satellite television and radio broadcasting shall be abolished, and the management shall be in accordance with the principle of uniformity between domestic and foreign investment. This revision has eliminated all manufacturing items on the pilot free Trade zone's negative list. Second, we will explore ways to expand access to the service sector in pilot free trade zones. In the field of market research, restrictions on access to foreign investment will be lifted, with the exception of radio and television listening and viewing surveys, which must be controlled by The Chinese side. In the field of social investigation, foreign investment will be allowed, but the proportion of Chinese shares should not be less than 67%, and the legal representative should have Chinese nationality. Third, make the negative list for foreign investment more precise. Negative list shows part of the increase in the admittance of foreign capital in negative listing prohibited investment business in the field of shares and the listing of domestic enterprises to overseas, shall be approved by the relevant state departments of audit, foreign investors shall not participate in enterprise management its stake with reference to the relevant provisions of the foreign investors in securities investment management execution", China Securities Regulatory Commission (CSRC) and relevant competent authorities shall, in accordance with regulations, implement precise management on overseas listing and financing of domestic enterprises engaged in businesses prohibited from the negative list. Fourth, improve the management of negative list for foreign investment. According to the Regulations on the Implementation of the Foreign Investment Law, "Foreign-invested enterprises investing in China should comply with the relevant provisions of the negative list for foreign investment access" was added to the negative list. We will link the negative list for foreign investment access with the negative list for market access, and add "relevant provisions on the negative list for market access to be uniformly applied by domestic and foreign investors" to the description of the negative list. 

China publishes its first White Paper on Export Control and officially launches Export Control Information website

China State Council Information Office issued the white paper on China's Export Control on Dec 29,2021. This is the first white paper on export control issued by China. It aims to give a comprehensive account of China's position, system and practice in improving export control governance, and elaborate on China's proposals and actions in safeguarding world peace and development as well as national and international security. The full text of the white paper is over 9,000 words, consisting of three parts: preface, text and conclusion. The main text includes four parts: China's basic position on export control, continuous improvement of the legal system and management system of export control, continuous promotion of the modernization of export control system, and active development of international exchanges and cooperation on export control. China also launch the official website on China's export control for purpose of information exchange on Dec 30, 2021. 

Indonesia published New Integrated Import Guidelines

In 2021 the Indonesian Government issued Government Regulation No. 29 on Organization of the Trade Sector (“GR 29”). GR 29 is an implementing regulation of the Job Creation Law (Omnibus Law), which changes the rules for trade matters, including for distribution of goods, exports and imports. Following the issuance of GR 29, the Ministry of Trade (MOT) introduced a series of technical implementing regulations. One of the more notable regulations is Minister of Trade Regulation Number 20 of 2021 on Import Policies and Procedures (“MOT Reg.20/2021”), which took effect on 14 November 2021. MOT Reg. 20/2021 replaced the previous regulations and has simplified the rules on import of various type of goods. 

Philippines adopted the ATA Carnet System

The ATA Carnet system is an international scheme that allows duty- and tax-free temporary importation of goods for one year through the use of an ATA Carnet document. The document is normally issued to cover goods for use in trade fairs, shows, exhibitions, professional equipment, commercial samples and personal effects. It is expected to be implemented three months after the Philippines deposits its instrument of accession. With ATA in place, the Bureau of Customs (BOC) would no longer require posting of surety and tax-exempt documentation for the temporary admission of goods. 

Taiwan lifts ban on Fukushima food in push to join trade bloc

Taiwan lifted its ban on most food imports from areas around the Fukushima nuclear power plant which melted down in 2011, removing an irritant in the bilateral relationship and making it easier for Japan’s government to support Taiwan joining an Asia-Pacific trade deal.

The decade-old ban on most foods imported from Fukushima and four surrounding prefectures will be lifted from Feb. 18. Restrictions will remain on certain food items that carry a greater risk of nuclear radiation, such as mushrooms and the meat of wild animals. 

UK removed the country code 'EU' for the Country of Origin, Country of Dispatch and Country of Preferential Origin

From 8 February 2022, the use of country code 'EU' when declaring goods is changing. For CHIEF the country code 'EU' will no longer be a valid in any data field and the specific Member State country code must be used. For CDS, we advise you to use the specific Member State Country code for the time being.  Removal of the country code 'EU' on CDS and the Online Tariff Tool will take place later. For supplementary declarations that are submitted after 8 February 2022, the specific Member State country code must be used regardless of whether the tax point is before this date. 

USA: HTSUS is modified as set forth in Annex II of Publication 5240

The modifications laid out in Publication 5240 are effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after January 27, 2022.

The new HTS will maintain the duty treatment with respect to actions pursuant to section 301 of the Trade Act of 1974 under the appropriate U.S. Note provided below and will take effect on January 27, 2022.  Per Annex II.A, certain HTS classifications under Chapters 28, 84, 85, 87, 88, and 90 of U.S. note 20(b) are modified. Per Annex II.A, certain HTS classifications under Chapters 39, 85, 87 of U.S. note 20(d) are modified. Per Annex II.A, certain HTS classifications under Chapters 3, 4, 7, 8, 12, 20, 22, 24, 25, 29, 32, 34, 38, 40, 44, 55, 57, 58, 59, 68, 70, 71, 74, 81, 84, 85, 87, 89, and 94 of U.S. note 20(f) are modified. Per Annex II.A, certain HTS classifications under Chapters 4, 8, 12, 15, 17, 20, 21, 29, 36, 38, 40, 44, 49, 62, 70, 85, 90, 91, 94, 95, and 97 of U.S. note 20(s) are modified. Importers shall submit the corresponding Chapter 99 HTSUS number for the Section 301 duties when the new 1-97 Chapter HTSUS numbers laid out in Publication 5240 are submitted. 

USTR Seeks Comments Concerning the USMCA’s Operation Regarding Automotive Goods

The US Trade Representative (“USTR”) announced that it is seeking comments concerning the operation of the United States-Mexico-Canada Agreement (“USMCA”) with respect to automotive goods, including the implementation and enforcement of the USMCA rules of origin for automotive goods. Producers of automotive goods, labor organizations, and other interested parties should consider submitting comments to USTR, which are due March 28, 2022. The relevant federal register notice lists 6 different areas for which public comments are being requested. The overall operation of the USMCA with respect to automotive goods.

Actions taken by automotive and parts producers to demonstrate compliance with the USMCA automotive rules of origin, including:

• The applicable regional value content (“RVC”) requirements for passenger vehicles, light trucks, heavy trucks, other vehicles, and parts thereof.
• The North American steel and aluminum purchase requirements.
• The labor value content (“LVC”) requirements.
• The use of alternative staging regimes by vehicle producers to meet the USMCA automotive rules of origin.
• Enforcement of the USMCA automotive rules of origin, including the alternative staging regimes and the automotive certification process for steel and aluminum content, LVC, and RVC.
• Whether the current USMCA automotive rules of origin are effective and relevant in light of new technology and changes in the content, production processes, and character of automotive goods.
• Any other topics relevant to the trade in automotive goods under the USMCA