The Department of Justice is drawing closer to completing regulations for the Foreign Investment Risk Review Modernization Act of 2018, Deputy Assistant Attorney General Adam Hickey said, and is “working closely” with the Treasury Department to develop regulations for the “expanded authority” it grants the Committee on Foreign Investment in the United States (CFIUS). Speaking at the National Conference on CFIUS and Team Telecom on April 24, Hickey presented FIRRMA and CFIUS as making the U.S. a more “attractive” alternative for investment than China while criticizing that country’s “foreign ownership restrictions, joint venture requirements” and “vague” approval processes that allow the Chinese government to “pressure [U.S. companies] to transfer their technology as a condition of market access.”
Exports to China
China and Japan will implement the mutual recognition arrangement for Authorized Economic Operator programs on June 1, the China General Administration of Customs said in a notice, according to an unofficial translation. The countries signed the MRA in October last year. The MRA allows for China to recognize companies certified by Japan's AEO program as certified by China's program and vice versa. The programs give AEO-certified companies expedited customs clearance and reduced inspections, among other benefits. China AEO companies exporting to Japan will need to notify the importer of the AEO company code so the Japanese importer can fill in the required information for the country's customs requirements, according to the translation. "After confirming the identity of China's AEO company, relevant convenience measures will be given," China said. Chinese importers will similarly need to provide a Japanese company's AEO code to receive the benefits, it said.
Clete Willems, former deputy director of the National Economic Council who represented the U.S. during China trade talks this year, will join Akin Gump as a partner in June, the firm announced April 25. “The trade landscape has rarely been as important to companies around the world as it is now, and Clete will be an invaluable resource for clients seeking to navigate this terrain,” said Brian Pomper, co-head of Akin Gump’s public law and policy practice.
China’s General Administration of Customs (GAC) issued notices announcing changes to its outward processing program and simplified entry and exit for certain goods in its comprehensive bonded zones, according to KPMG’s monthly China customs update. The agency also announced the expansion of a pilot program for TIR carnets, and Shanghai customs announced that export declarations will now be accepted as part of a pilot for advance declaration and expedited processing. Highlights are as follows:
Darus Zehrbach of West Virginia received a six-month prison sentence for making a false statement involving the exportation of electric scooters destined for Iran, the U.S. Attorney’s Office for the Northern District of West Virginia said in a news release. "In February 2015, Zehrbach received a letter from the Office of Foreign Assets Control, denying his application for a license to export electric scooters to Iran," the Justice Department said. "In June 2016, Zehrbach exported eight electric scooters to the United Arab Emirates, knowing that the scooters would be shipped to Iran." Zehrbach admitted to telling a Commerce Department agent "that a shipment he sent to Iran had originated in China when in fact that shipment originated in the United States."
Four Chinese nationals were arrested in Singapore after they concealed alcohol shipments from China as soy sauce and did not pay tariffs, according to an April 23 notice from Singapore Customs. The men were involved in a scheme that imported more than 9,000 bottles of “duty-unpaid liquor” packed in more than 600 boxes, the notice said. The importers stored the boxes in an industrial building before Customs officers checked the goods and discovered the smuggling scheme, according to the notice. Singapore Customs said the men evaded about $186,000 worth of duties and about $17,000 worth of the country’s Goods and Services Tax. Importers who fail to pay taxes and duties can be fined “up to 40 times the amount” evaded and face a maximum six-year prison sentence, the notice said. “We will spare no effort in going after sellers as well as buyers of duty-unpaid liquor,” Assistant Director-General of Customs Yeo Sew Meng said in a statement.
The Trump administration's decision to end exemptions for Iranian oil sanctions will have a “more tangible impact on business” than many of the administration's previous sanctions designations against Iran, according to Johann Strauss, an international trade lawyer at Akin Gump. The move, announced by Secretary of State Mike Pompeo on April 22, was aimed at choking off Iran’s oil exports and came about a week after the Treasury’s Office of Foreign Assets Control announced it was designating Iran’s Islamic Revolutionary Guard Corps (see 1904220021).
China is now allowing applicants and their authorized agents to print out certificates of origin at several ports, including Beijing, Tianjin, Shanghai, Jiangsu, Guangdong and Chongqing, via its online single window and online customs platforms, the Chinese General Administration of Customs said in a recent notice, according to an unofficial translation. Applicants will need to upload the company’s electronic chop and the handler’s electronic signature, the Hong Kong Trade and Development Council said in a report on the announcement. The printable certificates are available for China’s free trade agreements with Australia, New Zealand, Pakistan, Chile, Switzerland, Iceland, Georgia, Singapore and South Korea, as well as the cross-straits agreement and the Asia-Pacific trade agreement (for exports to South Korea). They can also be printed for non-preferential certificates of origin, tobacco authenticity certificates, re-export certificates and processing and assembly certificates. The pilot program which began March 25, is intended to “further reduce the cost of customs clearance,” China GAC said.
Chinese Customs will impose late tax payment charges for failure to declare dutiable royalties on Customs forms as part of broader customs changes taking effect May 1, according to a report from PricewaterhouseCoopers. The broader changes, announced by China’s General Administration of Customs on March 27, relate to requirements for filers to notify Customs if a buyer is paying dutiable royalties on the imported goods, includng payments after importation (see 1904100029).
Officials from the State and Commerce departments underscored the importance of open communication and urged industry leaders to submit public comments as the two begin a review of space-related export controls under a Trump administration directive. At the April 17 public meeting at the Department of Commerce, several officials, including Commerce Secretary Wilbur Ross, said they were seeking public comments on an advanced notice of proposed rulemaking for both State and Commerce, specifically surrounding items listed on the U.S. Munitions List regarding categories IV and XV: launch vehicles and spacecraft, respectively. The notices were issued March 8; comments are due April 22.