The Commerce Department eliminated its license exception for civil end-users (CIV) in an effort to cut exports to countries pursuing civil-military fusion (see 1904260018), the agency said in a notice. The change, which was expected for nearly a year (see 1907180037), will remove authorizations to export certain controlled items to most civil end-users for civil end-uses in Country Group D:1. The change takes effect June 29.
The Commerce Department is considering restricting the number of destination countries that are authorized to receive certain U.S. re-exports that are controlled for national security reasons, the agency said in a notice. The proposed rule would amend the license exception for Additional Permissive Reexports (APR) by removing nations in Country Group D:1, including China, from being eligible to receive those re-exports, Commerce said. The rule would remove APR license eligibility from more than 20 countries. Comments are due June 29.
The United Arab Emirates extended the deadline by one month for filing value-added tax returns and paying certain VATs, according to an April 21 KPMG post. The new deadline, May 28, will apply to VAT returns and for payment of VAT owed for the tax period that ended March 31. The original deadline was April 28.
Japan will temporarily suspend “strict monitoring” of “non-critical” food labeling due to the COVID-19 pandemic’s impact on Japanese supply chains, according to a U.S. Department of Agriculture Foreign Agricultural Service report released April 17. The measure aims to ensure Japanese consumers have a “sufficient supply” of food products, the USDA said. Food labeling requirements usually include a list of ingredients, country of origin and nutrition information.
Although the hearing scheduled for input on a Kenya Free Trade deal was canceled, comments continue to come in for what the U.S. trade representative's priorities should be.
The Office of the U.S. Trade Representative issued a pre-publication notice April 20 that carmakers must submit draft staging plans under the U.S.-Mexico-Canada Agreement no later than July 1. Their final plans are due by Aug. 31, the notice said. If USTR approves the plans, companies would have five years instead of three to increase regional content and adjust to other changes in the auto rules of origin. In order to be approved, the companies must show how every model can meet the stricter standards, even if that can't be done within the five-year time frame. Many cars imported from Mexico do not meet the current standards and pay the 2.5% duty. “The petitioner also should identify any North American investments and sourcing, preferably by calendar year and location, which will allow such vehicles to meet the standard USMCA rules,” USTR said.
Braumiller Law Group attorneys told webinar listeners April 20 that outside of the automotive sector, the U.S.-Mexico-Canada Agreement has more liberal rules of origin than NAFTA. Jim Holbein said that the decision on whether a product qualifies based on tariff shift is a “much simpler rule to apply. I believe that’ll be useful, particularly if your process for obtaining origin is based all on NAFTA.” He gave the example of a flat-screen TV assembled in Mexico, which currently has content percentage rules. Under USMCA, if the manufacturing process qualifies as substantial transformation, that's enough to count as Mexican.
The Federal Emergency Management Agency set 10 exemptions for exports of personal protective equipment (see 2004080018) and formally announced exceptions for shipments to Canada, Mexico and U.S territories, in a notice filed April 17. FEMA also announced exemptions for certain shipments containing controlled PPE, shipments traveling through the U.S. involving a foreign shipper and consignee, exports to military bases and more. The new exemptions were announced less than two weeks after a leaked CBP memo detailed some of the measures (see 2004160050).
CBP posted interim implementation instructions for the U.S.-Mexico-Canada Agreement to provide "guidance with respect to preferential tariff claims under the USMCA," it said. The document covers many of the USMCA provisions, including making preference claims, rules of origin for automotive goods and country of origin marking rules. "The procedures outlined in this memorandum are in place pending the issuance of the applicable regulations," CBP said.
As a date of entry into force, June 1 “is too aggressive and unrealistic,” said The American Association of Exporters and Importers in a letter sent April 15 to the U.S. trade representative. The organization did not say what day would be late enough for traders, who are affected by the COVID-19 public health emergency. “Many companies have personnel working from home due to COVID-19, which will make responses to queries for data slower, thereby causing delays in the certification process for USMCA,” they said. But they noted that without final regulations, “it is impossible for companies to know if there will be an impact or if supply chains may need to be shifted.” Once the regulations are in place, AAEI said, it will take time to solicit documents from suppliers. The group asked that NAFTA certificates of origin for 2020 continue to be valid during a period of informed compliance until Jan. 1, 2021.