Regulatory Compliance updates 07/22

Published on July 15, 2022

Canada finalizes ban of single-use plastics, effective December 20, 2022

The Government of Canada is moving forward with the ban of single use plastics, announcing the effective date of December 20, 2022. The final regulations were published on June 20, 2022, prohibiting the manufacture and import of harmful single-use plastics, with a few targeted exceptions to recognize specific cases. The banned products include:

  • checkout bags;
  • cutlery;
  • foodservice ware made from or containing problematic plastics that are hard to recycle;
  • ring carriers;
  • stir sticks; and
  • straws (with some exceptions).

Canada removes tariffs on goods originating in Ukraine

Canada Border Services Agency (CBSA) has posted Customs Notice 22-12 to provide information on the implementation and use of the Ukraine Goods Remission Order, which removes both Customs Duties, and duties imposed under the Special Import Measures Act (SIMA).

The remission became effective on June 9, 2022 and will be in effect for one-year for goods that originate in Ukraine.  By removing tariffs for a one-year period, Canada would continue to support Ukraine’s economy by ensuring that Ukrainian goods are able to enter Canada duty-free.

Goods will be considered to originate in Ukraine if their last production process, other than a minimal operation, occurred in Ukraine. Minimal operations are further explained in the Customs Notice.
The remission is granted if:

  • the goods are imported during the period beginning on the day on which this Order comes into force and ending on the first anniversary of that day; and
  • the importer makes a claim for remission to the Minister of Public Security and Emergency Preparedness within two years of the date of the importation.

 To obtain relief of customs duties. special authorization code 22-649 must be applied when accounting for imported goods.  If goods would have been subject to SIMA duties, the accounting document should be properly coded to indicate that SIMA assessment is covered by a valid Special Authorization Code and no SIMA duties are payable.

Changes to Import Requirements for poultry products and by-products from the EU

New import requirements for raw fresh/frozen poultry products and by-products from the European Union (EU) will come into effect on July 1, 2022.  This will affect edible and inedible products, and will harmonize the import requirements with the EU for products being imported from countries with outbreaks of Highly Pathogenic Avian Influenza (HPAI).  As of July 1, 2022, there will be additional animal health attestations in regards to HPAI that will be required for all shipments of raw fresh/frozen poultry meat and poultry products from EU member states affected by HPAI. Shipments that are certified on or after July 1, 2022 must be accompanied by the updated attestation requirement.  For a period of two months (until September 1, 2022), there will be a transition period during which product will be accepted for import using either the previous or new conditions. 

EU: The Court of Justice of the European Union Clarifies the Relationship Between Customs Value and Delivery Costs of Goods

The European Court of Justice (ECJ) issued its decision in case C-599/20 (Baltic Master UAB). This case provides more clarity on the concept of related persons, which allows customs authorities to disregard the transactions value and instead use different valuation methods to determine the customs value of imported goods. EU customs law provides for an exhaustive list in determining when (legal) persons are related and in which situations customs authorities can substantiate such a relationship. Baltic Master imported parts of air conditioning machines in Lithuania classified using one single TARIC code. The transaction value method was used to determine the customs value of the goods at import.

The Buyer and Seller were not part of the same group. However, they were linked by a long-term commercial relationship. In addition, there was an absence of purchase agreements, no clear terms of payments and debts of Buyer towards the Seller. The Lithuanian Customs therefore suspected the existence of a relationship of trust that influenced the price. They therefore took the position that as related persons the transaction value could not be used and instead made use of the prices of comparable goods available in their national database. 

Norway: New Norwegian Transparency Act on social sustainability becomes effective as of 1 July 2022

Norway has applied the Transparency Act (the “Act“), coming into drive on 1 July 2022, which obligates bigger enterprises to adjust to elementary human rights and respectable working situations for workers all through their provide chain. The Act marks a transparent transfer in direction of transparency within the provide chain in Norway, which has additionally been seen within the UK with the implementation of the Modern Slavery Act and likewise the issuance of a Proposed Directive on Corporate Sustainability Due Diligence by the European Commission to deal with human rights and environmental impacts throughout international worth chains (the “Proposed Directive“). The Act, which implements components of the OECD Guidelines for Multinational Enterprises and The United Nations Guiding Principles on Business and Human Rights, could have a spotlight on the next key necessities:

  • an obligation to hold out due diligence to establish the precise or potential damaging affect on elementary human rights and dealing situations within the provide chain and to behave accordingly;
  • an obligation to make an annual assertion describing the tactic and findings of the due diligence; and
  • an obligation to reply to inquiries from stakeholders (inter alia traders, customers, enterprise companions and rivals). Any request should be answered inside three weeks (or in some instances two months).

The Act applies to bigger enterprises which can be resident in Norway and bigger overseas enterprises that supply items and companies in Norway and are liable to tax in Norway pursuant to inner Norwegian laws. Larger enterprises are outlined as enterprises which can be exceeding the edge for 2 of the next three situations:

  • gross sales revenues: NOK 70 million;
  • steadiness sheet whole: NOK 35 million; and
  • common quantity of workers within the monetary 12 months: 50 full-time equal.

United States: Duty on U.S. imports of certain Russian origin goods to increase to 35 percent

President Biden issued a Proclamation which increases the Column 2 duty rate to 35 for 570 groups of Russian origin products found in Annex A.  The increased rates take effect July 28, 2022, and use a primary Harmonized Tariff Schedule (HTS) number of 9903.90.08, with U.S. Note 30 added to Subchapter III of Chapter 99 in the HTS. This is in addition to previous actions taken since Russia’s invasion of the Ukraine, including:

  • Removed Russia and Belarus origin goods from most favored nations status, making them subject to Column 2 duty rates as of April 9, 2022.
  • Prohibited the importation of Russian origin fish, seafood, and preparations thereof; alcoholic beverages; and non-industrial diamonds.
  • Prohibited the importation of Russian origin crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products of HTS Chapter 27.
  • Prohibited the importation into the U.S., directly or indirectly, of any goods from the Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine; as well as prohibited the exportation or re-exportation from the U.S. of any goods, to these areas.

This action was taken to further restrict Russia’s ability to benefit economically from sales to the U.S. 

Uyghur Forced Labor Prevention Act goes into effect

Starting from 21st June, U.S. Customs and Border Protection (CBP) has implemented. the Uyghur Forced Labor Prevention Act’s provisions to prohibit imports made by forced labor into the United States of products made in Xinjiang.  President Biden signed the Act into law on December 23, 2021, after it passed with overwhelming bipartisan support in the United States Congress, underscoring our commitment to combating forced labor everywhere, including in Xinjiang, where genocide and crimes against humanity are ongoing. The State Department is committed to working with Congress and our interagency partners to continue combating forced labor in Xinjiang and strengthen international coordination against this egregious violation of human rights.  Addressing forced labor and other human rights abuses in the People’s Republic of China (PRC) and around the world is a priority for President Biden and this Administration.  We have taken concrete measures to promote accountability in Xinjiang, including visa restrictions, financial sanctions under Global Magnitsky, export controls, Withhold Release Orders and import restrictions, as well as the release of a multi-agency business advisory on Xinjiang to help U.S. companies avoid commerce that facilitates or benefits from human rights abuses, including forced labor.  Together with our interagency partners, we will continue to engage companies to remind them of U.S. legal obligations which prohibit importing goods to the United States that are made with forced labor. 

U.S. Treasury Sanctions Nearly 100 Targets in Putin’s War Machine, Prohibits Russian Gold Imports

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 70 entities, many of which are critical to the Russian Federation’s defense industrial base, including State Corporation Rostec, the cornerstone of Russia’s defense, industrial, technology, and manufacturing sectors, as well as 29 Russian individuals. Today’s actions, taken pursuant to Executive Orders (E.O.s) 14024 and 14065, strike at the heart of Russia’s ability to develop and deploy weapons and technology used for Vladimir Putin’s brutal war of aggression against Ukraine.

These’s designations were taken in tandem with the U.S. Department of State, which is imposing sanctions on an additional 45 entities and 29 individuals. Included in the State Department’s action is the designation of Russian Federation military units and the re-designation of Russia’s Federal Security Service (FSB), which have been credibly implicated in human rights abuses or violations of international humanitarian law in Ukraine. The Department of State further announced steps to impose visa restrictions on officials believed to have threatened or violated Ukraine’s sovereignty, territorial integrity, or political independence, including on more than 500 Russian Federation military officers and on Russian Federation officials involved in suppressing dissent.