The European Union will modernize trade agreements in the Pan-European-Mediterranean region to make rules of origin more flexible and “business friendly,” the European Commission said Aug. 24. The origin rules for certain products will be “easier to meet,” the EU said in a guidance, adding that the deal will now include higher thresholds for the use of non-originating goods and will lift prohibitions on duty-drawbacks. The changes will also ease logistics and customs procedures by allowing for electronic versions of “origin proofs.” The new measures will apply to trade deals with Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Turkey, Egypt, Israel, Jordan, Lebanon, Palestinian territories, Georgia, the Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo.
China will launch a pilot “preferential” certificate of origin system for trade with certain least developed countries, an Aug. 18 notice said, according to an unofficial translation. The system, to launch Sept. 10, will issue online certificates of origin for trade with Bangladesh, Niger, Ethiopia, Mozambique and East Timor, China’s General Administration of Customs said. The system will “further promote the implementation of special preferential tariff treatment measures” for certain least developed countries “that have established diplomatic relations with China, the notice said. It will also help improve customs clearances for qualified goods.
The Bureau of Industry and Security issued an order temporarily denying export privileges for three Indonesian companies and three people for illegally exporting U.S. aircraft parts to Iran’s Mahan Air. In an Aug. 20 press release, BIS said the companies operate an “international procurement scheme” for the sanctioned Iranian airline and will be barred from exporting or receiving U.S.-origin goods for 180 days. The suspension may be renewed.
The semiconductor industry was surprised by the U.S.’s increased restrictions on Huawei (see 2008170029) and expects significant short-term supply chain disruptions, industry officials and experts said in interviews. Officials also thought the initial version of the rule, issued in May (see 2005150058), was sufficient, and were frustrated that the Bureau of Industry and Security did not ask for feedback on the new requirements.
China again criticized U.S. restrictions on Huawei, TikTok and WeChat but said the measures will not affect an expected call between officials from the two countries to discuss the phase one trade deal. The call, originally scheduled for Aug. 15 (see 2008170022), will be held “in the near future,” a Chinese Ministry of Commerce spokesperson said Aug. 20, according to an unofficial translation. The call is expected to serve as a six-month compliance check on both countries’ commitment to the phase one agreement. The Office of the U.S. Trade Representative did not comment.
South Korea eliminated antidumping duties on imports of Japanese pneumatic transmission valves, Japan’s Ministry of Economy, Trade and Industry said Aug. 19. Japan had raised a dispute with the World Trade Organization, arguing that South Korea imposed the duties past their scheduled five-year expiration date. “It was unfortunate that [South Korea] continued imposing the duties beyond May 30, 2020, the original deadline,” Japan said. “[South Korea] cannot be recognized as having performed its duties sincerely.” Japan said the duties were eliminated Aug. 19 and it will “refrain from taking further legal procedures … such as retaliatory measures.” The WTO Appellate Body had ruled on Sept. 10, 2019, that South Korea was not adhering to WTO tariff implementation agreements and recommended it bring its measures into conformity, which South Korea agreed to do by May 30.
The Treasury's Office of Foreign Assets Control sanctioned two United Arab Emirates-based companies and a business owner for supporting sanctioned Iranian airline Mahan Air, an Aug. 19 news release said. The designations target Parthia Cargo, Delta Parts Supply FZC and Iranian national Amin Mahdavi, who owns Parthia Cargo. OFAC said the companies provided “key parts and logistics services” that help Mahan Air sustain its fleet of “western manufactured aircraft.” The parts and services also help the airline transport terrorists, “lethal cargo” and technical equipment to Syria and Venezuela.
A “skinny deal” to be completed before the United Kingdom crashes out of the European Union on Dec. 31 is seen as unlikely, but experts differ slightly on what that means for business. Robert Hardy, commercial director of Oakland Invicta Ltd., and founder of a Brexit-focused customs consultancy, said that even if there was a “soft Brexit,” all that would do is delay the pain, because presumably the deadline would be pushed out to fill in the details. “Customs paperwork exists in all scenarios. Actually, in a no-deal scenario, there’s less paperwork,” he said, because you don't have to account for rules of origin. “There’s more duty, but I don’t pay the duty, I do the paperwork,” he quipped.
An Aug. 20 Office of the U.S. Trade Representative, Department of Agriculture and Department of Commerce virtual hearing on import competition in seasonal produce will include testimony from two Florida and three Georgia members of Congress, a representative of the office of a third Florida Congress member, Farm Bureau executives, and vegetable and berry farmers. It will also include trade groups and a company that oppose restrictions on Mexican produce, among them the Fresh Produce Association of the Americas, the San Diego Customs Brokers Association, and milk and corn exporters. The hearing is the second of two that were originally scheduled to take place in Florida and Georgia in April.
China’s Guangdong region recently announced measures to speed up export tax rebate processing and to help divert goods intended for export to instead be sold domestically, the Hong Kong Trade Development Council reported Aug. 17. All Guangdong tax authorities were ordered to “increase their assessment efficiency and expedite the processing” for export tax rebates to reduce the handling time from eight to five working days, the report said. The province is also collecting data on taxes and fees to create “business matching platforms” that will drive “products originally destined for export” to be sold domestically.