Trade and commerce legal updates from across the Asia Pacific region, EU, and US

Baker & McKenzie is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology
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© 2015 Baker & McKenzie
Baker & McKenzie Asia Pacific Trade
and Commerce Client Seminar
27 August 2015
Baker & McKenzie
14th Floor, Hutchison House
Hong Kong

Baker & McKenzie is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology
used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means
an office of any such law firm.
Regional Trade & Commerce Update
Led by:
Eugene Lim, Singapore
Panellists:
Anne Petterd, Australia
Will Marshall, Hong Kong
Paolo Sbuttoni, Hong Kong
Mochamad Fachri, Indonesia
Kana Itabashi, Japan
Meng Yew Wong, Malaysia
Ola Borge, Myanmar
Ronald Bernas, Philippines
Zhixiang Ke, Singapore
Stephan Tan, Taiwan
Panya Sittisakonsin, Thailand
Fred Burke, Vietnam
Jasper Helder, Netherlands
Bart McMillan, U.S.

Australia – Trade
‒ Customs
 New customs body – Australian Border Force
 Substantial increases in
 Audits of claims for tariff concessions
 Anti-dumping investigations and dumping duties
 New trusted trader programme
3

Australia – Trade (cont’d)
‒ Export controls
 Recent changes to permit application system
 Offences for intangible transfers start April 2016
 Can obtain permits now
 Offences for brokering and publishing controlled items
also start April 2016
4

Australia – Trade (cont’d)
‒ Sanctions
 New Russian sector and designated party sanctions
 Iran sanctions under watch following the July nuclear
deal
‒ WTO / FTAs
 New bilateral FTAs with Korea, Japan and China
 Next FTAs – Indonesia and India?
 Negotiating TPP and RCEP
 Investor State Dispute Settlement controversial issue
5

Australia – Commerce
‒ Supply chain regulatory
 Import examples
 Transport of hazardous items
 Safe custody and storage of chemicals
 Premises holding food
 Anti-slavery laws
 Exports – live export supply chain laws
‒ E-commerce
 Reduction / removal of GST-free import threshold (AUD
1,000) under review
6

Australia – Commerce (cont’d)
‒ Testing and labelling
 Some increased recognition of overseas testing (eg, telco
equipment)
 New proposed food country of origin labelling requirements
‒ Cyber Security
 Trend for increased due diligence questions on cyber security
for new trading partners
‒ Data Privacy
 Privacy Act provides for comprehensive protection of personal
information
 Strict liability for privacy breach resulting from overseas
transfer of personal information
7

8
China - Trade
‒ Reduced tariffs for consumer goods
‒ Trade Facilitation
 FTAs: Australia, Iceland, South Korea, Switzerland.
 “One Belt, One Road”
 Revised enterprise classification system
 Paperless customs filing expansion
‒ 3 new Pilot Free Trade Zones
‒ Export Controls
 Added drones and high performance computers

9
China - Commerce
‒ Cybersecurity
 “Key Information Infrastructure”.
 Vetting of key network equipment and network security
products.
 Data residency – citizens’ information to be stored in
China.
‒ Draft product recall regulations
 On top of recall rules for food, automotive parts, etc.
‒ Advertising law overhauled to adapt to modern day
advertising and to increase protection for minors.

© 2015 Baker & McKenzie 10
China - Commerce
‒ E-Commerce
 China (Hangzhou) Cross-Border E-Commerce
Comprehensive Trial Zone
 On top of the existing e-commerce pilot program.
 100% foreign ownership (MIIT).
 New third party platform regulations.
‒ Personal data protection is prevalent in each of the
above commerce reforms.

Hong Kong – Commerce
Third Party Contract Rights
‒ The Contracts (Rights of Third Parties) Ordinance will
come into force on 1 January 2016.
‒ Third parties to a contract may, in certain
circumstances, benefit from a contract or enforce its
terms under a contract in Hong Kong.
‒ Update standard contracts to ensure Ordinance is
taken into account either:
 exclude the application of the Ordinance; or
 ensure that third party rights are clearly expressed.
11

Hong Kong – Commerce (cont’d)
Data Privacy
‒ Section 33 of the Personal Data (Privacy) Ordinance
 Prohibition of transfer of personal data outside Hong Kong
(not in force yet)
 Guidance on Personal Data Protection in Cross Border
Transfer (voluntary)
 No firm date for the implementation of section 33
‒ Other areas of focus of the Privacy Commissioner
 Mobile apps
 Big data
 Biometric data
12

Hong Kong – Commerce (cont’d)
Retail Payment Systems / Stored Value Facilities
‒ Rapid growth of the global retail payment industry
‒ HK Government implementing new and broader regulatory regime
governing SVF and RPS
‒ Clearing and Settlement Systems (Amendment) Bill 2015 tabled –Legco to
resume second reading in Oct 2015
‒ SVFs: New regime will be broader than the existing MPC rules (which cover
"physical" MPCs) .
‒ RPS: credit and debit card schemes, merchant acquirers, payment
gateways and mobile infrastructure (e.g. the infrastructure of the trusted
service manager (TSM) of NFC mobile payment services) to be regulated -
designation by the HKMA would make operator responsible to the HKMA on
regulatory issues.
13

Indonesia – Trade: The issuance of Ministry of Trade
Regulation No. 48/M-DAG/PER/7/2015 on General
Provisions in the Import Sectors (“Regulation 48”)
‒ Issued on 3 July 2015
‒ Revoked Ministry of Trade Regulation No.54/M-DAG/PER/10/2009 (“Previous
Regulation”)
‒ Effective in January 2016
Key points
 Similar to the Previous Regulation, Regulation 48 provides a broad definition of “products”,
which are defined as goods that are tangible or intangible, moveable or immovable, and
spendable or un-spendable, and that can be traded, used, consumed or utilized by consumers
or business actors.
 Both Regulation 48 and the Previous Regulation stipulate that importation can only be
conducted by importers who have Angka Pengenal Impor - "API" or The Importer Identity
Number. Only in certain circumstances as will be regulated in a further regulation can
importation be done without API.
 The basic principle of imported products must be in new condition remains.
 Regulation 48 does not specifically stipulate the applicability of import regulation on goods
imported to a Bonded Piling Place or imported goods which are released from a Bonded Piling
Place to other places in the customs area, as what has been regulated under the Previous
Regulation.
Cont’d…
14

Indonesia – Trade (cont’d)
Import Licenses Awareness
‒ importers must already possess import licenses for products which importation is limited before
the imported products enter into the customs area.
For instance, several licenses that must be secured are:
1. Importer Producer → a specific license given to a manufacturing company to import certain products for
its manufacturing process.
2. Registered Importer → a determination for importers to import certain products.
‒ The import requirements for products which their importation is limited is conducted through the
following import licenses mechanism:
a. acknowledgement as an Importer Producer;
b. determination as a Registered Importer;
c. import approval;
d. surveyor report; and/or
e. other import licenses mechanism.
Sanction
‒ Importers that fail to meet the import requirements before the products enter into Indonesia will
be subject to sanctions, which include:
1. suspension of their Angka Pengenal Impor - "API" or The Importer Identity Number or other sanctions
according to the prevailing regulations.
2. importers must re-export products that are imported without obtaining the required import licenses.
15

Indonesia – Trade: Increase of Import Duties for Finished
Products
‒ The Minister of Finance issued Regulation No. 132/PMK.010/2015 ("2015
Regulation") on the Third Amendment to Regulation of the Minister of Finance No.
213/PMK.001/2011("2011 Regulation") on Stipulation of the Classification System
of Goods and Import Duty on Imported Goods.
‒ The 2015 Regulation amends import duties that are stipulated under Annex III of
the 2011 Regulation.
‒ Effective on 23 July 2015.
‒ The new import duties apply to all imported goods if the customs office issued a
registration number and date for the import declaration documentation of the
imported goods after the Effective Date.
‒ The 2015 Regulation raises import duties on consumer goods, food and vehicles
ranging from 10 to 150 percent.
16

Indonesia – Trade: Ministry of Trade Starts to Pay Serious
Attention to Noncompliant Importers
Until the end of January 2015, the Ministry of Trade (“MOT”) revoked the licenses of 2,166 registered
importers, broken down as follows:
1. 836 registered importers of electronics;
2. 321 registered importers of apparel;
3. 290 registered importers of food and beverages;
4. 256 registered importers of cosmetic and household supplies;
5. 179 registered importers of toys;
6. 133 registered importers of traditional medicines and food supplements;
7. 151 registered importers of footwear.
The MOT has also announced the revocation of the import license of 24 registered importers
(Importir Terdaftar) of mobile phones, handheld computers and tablet computers. Import licenses can
be revoked if an importer does not conduct any import for six months in a row.
The MOT also revoked 1,550 licenses of importers who held a General Importer Identification
Numbers (Angka Pengenal Importir Umum) that performed import activities out of section.
17

Indonesia – Commerce: Draft Government Regulation on
E-Commerce
‒ Implementation of Trade Law.
‒ The draft is exposed on 17 June 2015 but still being finalized by the government.
Key points
‒ The draft differentiates business actors to:
(i) merchants (can be individuals or legal entities);
(ii) e-commerce organizers ("PTPMSE") (the draft is inconsistent: Indonesian legal entities only or can be
foreign entities?); and
(iii) intermediary organizers (can be individuals or legal entities)
‒ Business actors who want to conduct e-commerce activities must first be registered as an e-commerce
business actor at the relevant Ministry.
‒ Offshore business actors who conduct e-commerce with Indonesian consumers are deemed to be doing
business operations in Indonesia, and must comply with Indonesian laws and regulations.
‒ Generally, a PTPMSE or an intermediary organizers is responsible for any losses resulting from illegal
content in their services.
‒ An e-commerce contract will be valid and binds the parties if (i) it is in accordance with the offer, (ii) the
contract information is in accordance with the offer, and (iii) the terms are accepted by the party who
received the offer.
‒ Payment in e-commerce transaction: Banking payment system or another electronic system.
‒ Generally, PTPMSE is responsible for delivery and quality of goods purchased.
‒ Business actors that perform e-commerce transactions with Indonesian consumers are considered to have
conducted physical trading activities in Indonesia. E-commerce transactions are subject to all taxation
obligations under prevailing laws and regulations.
18

Japan – Trade
‒ Customs
 Advance Filing Rules on Maritime Container Cargo
Information (the Pre-departure filing)
 Preparation for Enforcement of Japan – Australia EPA
 Reinforce the Restriction on Import of Scheduled Drugs
 Extension of the application period for provisional
customs duty rates and special safe guard for one year
until the end of March 2015
19

Japan – Trade (cont’d)
‒ Export controls
 METI Guidelines on Cloud Computing
 Revision of the list of “Items Highly Likely to be Used for
the Development and others of Nuclear Weapons”
 The three Principles on Transfer of Defense Equipment
and Technology was amended in 2014.
20

Japan – Trade (cont’d)
‒ Sanctions
 Sanction on Russia increased in September 2014
 Sanction on Iran decided to be lifted in July 2015
‒ WTO / FTAs
 New bilateral EPAs with Australia and Mongolia
21

Japan – Commerce
‒ E-commerce
 Various regulations supporting e-commerce (time
stamp, e-signature, e-document, e-consumer
contract, etc.)
 Amendment of the Act for Specified Commercial
Transactions, the Act for Consumer Contract
 Interpretative Guidelines on Electronic Commerce
and Information Property Trading issued by METI
22

Japan – Commerce (cont’d)
‒ Testing and labelling
 Amendment of the Act for Misrepresentation in response
to Increasing misrepresentation of food labelling
‒ Cyber Security
 Enactment of Cyber Security Act in 2014
‒ Data Privacy
 Amendment of Personal Information Protection Act
 Extraterritorial Application of the Act
 Cross border transfer of personal information
23

Malaysia Trade Updates
‒ Customs (Prohibition of Imports) (Amendment) (No. 4) Order 2015
introduced 28 categories of hybrid ICT products including certain
household appliances, medical devices, computers and other gadgets
and equipment, which will be subject to import licensing (and COA)
requirement commencing 1 October 2015.
‒ Implementation of Goods and Services Tax (GST) Regime
 standard import GST rate of 6% (c.f. 0-20% rate for sales tax)
 relief order available (personal effects of travelers, goods exported
for repair and re-imported, goods imported for repair and exported,
samples, goods imported using air courier services, etc.)
 no automatic GST free facility on raw materials for manufacturers
(c.f. previous CJ5 regime)
‒ Implementation of Malaysia-Turkey Free Trade Agreement (FTA)
 note the different rules of origin applied compared to other bilateral
FTAs and multilateral FTAs
24

Malaysia Trade Updates (cont’d)
‒ Increased trade remedy action in 2015:
 2 new AD Investigations (CRSS and painted steel);
 2 affirmative final determinations (HRC, Polyethylene Terephthalate);
 1 definitive safeguard action (hot-rolled steel plates)
‒ In May, the EC initiated an investigation concerning possible
circumvention of anti-dumping and countervailing measures on
solar panels originating in/consigned from Malaysia
25

Malaysia Commerce Updates
‒ Postal Services (Licensing) Regulations 2015 and Postal Services
(Universal Service) Regulations 2015 effective 15 April 2015:
 new and more stringent licensing requirements applicable to difference
categories of regulated postal services. Minimum capital requirement,
license fees and board of director and chief executive officer qualifying
requirements, etc.
 Regulating universal service providers e.g. minimum frequency
delivery, collection services, number of post office and posting box,
security measures
‒ Medical Device (Exemption) Order 2015 exempts any person who has
submitted an application for registration of a medical device between 1 July
2015 and 30 June 2016 from registration requirement. Establishment
licensing nevertheless required.
‒ MDTCC established Services Industry Division to oversee foreign
participation in certain service sectors which were previously unregulated
(Unregulated Services).
26

Malaysia Commerce Updates (cont’d)
‒ In September 2014, Regulation 18A(1) of Control of Drugs and
Cosmetics (Regulations) amended to restrict importation, sale,
supply, import, possession or administration of any cosmetic:
 not notified, or not person responsible for placing notified cosmetic in
market or person authorized in accordance with notification note
issued by Director of Pharmaceutical Services
 prohibits mixture of notified cosmetic and poisons, mixed with
registered products, or mislabeled.
‒ Malaysian Competition Commission (“MyCC”) published Guidelines
on Financial Penalties and Guidelines on Leniency. Immunity or
reduction up to 100% of any financial penalties if:
 enterprise admits involvement in infringement of prohibition against
horizontal agreement; and
 enterprise provides information or other form of co-operation to MyCC
which significantly assisted in identification or investigation of
infringement by any other enterprises.
27

‒ Malaysian Anti-Corruption Commission Act 2009 ("MACCA") does
not expressly provide for corporate liability in relation to corruption
offences. Individuals typically prosecuted for corruption:
 Attorney-General's Chambers considering amendments to
MACCA to address corporate liability.
 MACC has announced it is considering the United Kingdom
Bribery Act and the US FCPA
‒ On 24 February 2015, MCMC and SIRIM announced launch of
Self Labelling Programme for all communication and multimedia
products required to be certified.
 Manufacturers, importers and distributors can now adopt the 'e-
labelling' or 'surface labelling' methods.
 New SLP is implemented with effect from 1 June 2015 and no
physical labels are issued by SIRIM after 31 May 2015.
28

‒ On 1 July 2015, Personal Data Protection Commissioner issued
public consultation paper proposing the following Standards:
 security measures - restricted access, password protection,
protection from malware/ viruses, back up system for loss of data
 data retention - destruction and deletion of personal data once no
longer required. Destroy data collection forms and customer data after
seven days unless legally obliged to retain same
 data integrity - preparing standard forms for data correction requests
and correcting data within seven days of receiving correction request
‒ On 1 July 2015, BNM issued circular calling all RIs in Malaysia to
conduct enhanced customer due diligence for:
 countries identified by FATF as having substantial money laundering
and terrorism financing risks e.g. Iran, North Korea
 countries with strategic AMLCFT deficiencies which have not made
sufficient progress in addressing the deficiencies, such as Algeria and
Myanmar.
29

Myanmar – Trade
‒ Import
 Still limitations for foreigners to do distribution in Myanmar
 Only permitted for Myanmar Citizen
 Car Showroom – in JV with Myanmar Citizen
 Limited distribution activities permitted within the SEZ’s
 Considering opening up in certain categories
 pharmaceuticals
 agriculture
 Change could be required under AEC and other treaties
 Mobile Investigation Team to seize illegal trade
 Opening up for import of wine again
 Issued negative list which requires export / import license
30

Myanmar – Trade (cont’d)
‒ Export controls
 Currently restricted goods to export
 some agricultural goods;
 gold, diamond;
 petroleum;
 antiques, etc.
 No significant changes in export controls in 2015
‒ International Sanctions
 US Sanctions still creating practical difficulties
31

Philippines – Trade
‒ Customs
 Changes in post entry audit procedures
 Audit findings are now required to be submitted to the
BIR.
 Need to secure an Importer’s Clearance Certificate from
the BIR prior to BOC accreditation.
33

Philippines – Trade (cont’d)
‒ Export controls
 Pending bill in the Philippine Congress on strategic trade
management/export controls
 Senate Bill No. 2762 (The Strategic Trade Management
Act)
 Creation of National Strategic Goods List and a Strategic
Trade Management Office
34

Philippines – Commerce
‒ Supply chain regulatory
 Consolidated list of regulated imports recently released
by the BOC
 Strict enforcement of requirements for regulated imports
35

Philippines – Commerce (cont’d)
‒ Data Privacy
 The Data Privacy Act of 2012 seeks to protect the
personal and sensitive personal information of data
subjects
 National Privacy Commission, the commission
authorized by law to implement the law has yet to be
formed. Moreover, the implementing rules and
regulations of the law have yet to be issued.
36

Singapore – Trade
‒ Customs
 Additional Requirement on Image System
 Recent Mutual Recognition Arrangements (“MRA”)
 MRA with United States Customs and Border Protection (“US
CBP”)
 MRA with the Customs and Excise Department of the Hong
Kong Special Administrative Region of the People’s Republic of
China (“HK C&ED”)
‒ Export Control
 Strategic Goods Control List Updates
37

Singapore – Trade/Commerce
‒ FTAs/WTO
 EUSFTA
 ITA Expansion Declaration
‒ Personal Data Protection Act
 Data Protection
 Do Not Call (“DNC”) Registry
38

Taiwan – Trade
Export Controls
‒ The "Examination Directions of the Export of Equipment for
Semiconductor Production to the Mainland Area" terminates on 26
June 2015.
 semiconductor manufacturing equipment sales to China no longer
needs advanced approval from the Taiwan government
‒ A new SHTC Control List is in effect 16 May 2015.
 400+ changes including controls on IT intrusion software
‒ The SHTC Regulations now grant export exemptions to the United
States and Japan.
 under certain conditions an export permit is no longer required
39

Taiwan – Commerce
Cyber Security
‒ The Commercial Electronic Mail Management Act is an anti-spam
act pending in the Legislature. It introduces:
 consumer consent and other requirements with which commercial
email senders must comply; and
 the right for spam recipients to recover damages.
‒ Commercial email senders must provide certain disclosures in
their emails and the Act prohibits most forms of randomly
generate spam.
‒ Spam recipients can potentially recover US $17 to US $69 for
each unauthorized email.
‒ Class action lawsuits by authorized organizations on behalf of 20
or more persons are now possible.
40

Thailand – Trade
1. Proposed new customs act
2. New export control of dual-use goods
3. New regulations for advance ruling
4. New development on the interpretation of third-party
invoicing under the ASEAN-China Free Trade Agreement
41

Proposed new customs act
‒ Purpose of the proposed new
customs act
 For more transparent and flexible of
customs procedures;
 To improve efficiency of customs
procedures; and
 To be in line with a context of AEC
42

Proposed new customs act (cont’d)
Issue Current law Proposed law
1. Reward sharing
system
Relevant officers
- Up to 25 percent of
penalties with no cap
Informants
penalties with no cap
Relevant officers
penalties with a cap of THB
5 million per case
Informants
penalties with a cap of THB
10 million per case
2. Customs offense All the custom offenses for
smuggled goods, evasion of
duty, and evasion of
prohibition have the same
penalty level.
Different degrees of penalty
for different offense levels.
43

3. Time period for post-
audit
No time limitation 5 years from the date of
import or export
4. Timeframe for
consideration of the
Appeal Committee
No timeframe 180 days from the date of
receiving an appeal
5. Timeframe for claiming
duty refund
2 years from the date of
import or export
3 years from the date of
import or export
6. Duty surcharge No cap Capped at an amount
equal to duty shortfall
44

7. Power to seize or attach
the properties of debtors
N/A Customs officers have an
authority to seize and
attach the properties of
debtors (like revenue
officers)
8. Importation date of
restricted goods
The importation date is at
the time when the vessel
enters into Thai territory.
It is deemed that the
restricted goods import into
Thailand when there is a
customs clearance of such
restricted goods.
45

New export control of dual-use goods
‒ Purpose of the export control of
dual-use goods
 to control the export of dual-use
goods in accordance with
United Nations Security Council
requirements; and
 to protect Thai exports.
46

New export control of dual-use goods (cont’d)
‒ The requirements under the new export control of dual-
use goods
 obtain approval from the Ministry of Commerce
 register with Department of International Trade and
certify that the exported goods are not dual-use goods
 based on EU’s list
47

New regulations for advance ruling
Details Previous ruling Current ruling
Three types of advance ruling available:
1. Customs valuation
2. Tariff classification
3. Rule of origin
 
Legally binding  
Validity period  
(Two years)
Service fees  
(THB 2,000)
48

New development on the interpretation of
third-party invoicing under the ACFTA
‒ Previous: the term "third-country invoicing" only
applies if there are three parties involved in a
transaction
‒ Current: allowing more than three parties to perform
"third-country invoicing“ under the ACFTA (Notification
of Customs Tariff Bureau on 27 February 2015)
‒ Practical value: still in question whether it is just a
clarification or retroactively applied to any case
49

Vietnam - Trade
‒ Import / Export & Customs
 Implementation of e-Customs
 New Customs Law implementation
 Cargo Warehouses
 Requirements and procedures for acceptance of test
laboratories for assessing IT products
 Customs values applicable to imported and exported
goods
50

Vietnam - Trade
‒ EU/Vietnam free trade agreement
‒ TPP and other pending trade agreements
51

Vietnam – Commerce
‒ Logistics Services
‒ New Investment Law issued
 Market Access Impact
 Licensing issues
52

EU – Trade
‒ Customs - UCC
 New Union Customs Code (UCC) entered into force on
30 October 2013 (repealed Modernized Customs Code)
 UCC changes will be implemented in phases between 1
May 2016 and 31 December 2020
 Until 1 May 2016, the Community Customs Code and its
implementing provisions continue to apply
 Aim of UCC is to modernise EU customs legislation to
meet the practical aspects of international commerce
(big emphasis on use of IT and technology)
53

EU – Trade (cont’d)
‒ Customs - Structure of the UCC
 Union Customs Code
 Implementing Act (“IA”, EU Commission Regulation
establishes rules for implementation of UCC)
 Delegated Act (“DA”, EU Commission Regulation
amends, supplements, or deletes non-essential
elements of the UCC)
54

‒ Customs – UCC Changes
 AEO
 AEOC is required for customs simplifications
 Existing AEO will be reassessed on the basis of (new)
UCC criteria before 1 May 2019
 AEOC: compliance in other taxation areas
 AEOC: requirement to demonstrate practical standards of
competence or professional qualifications related to the
customs operations of the authorised party
55

 Entry in Declarants Records (EIDR)
 Enter goods to a customs procedure (exceptions apply)
without full customs declaration upon release
 Cash flow management: provide fiscal data later
 Self Assessment
 Will allow AEO-C certified operators to make import /
export entries in their records as opposed to submitting
full import / export declarations
56

 Centralized Clearance
 AEO-C certified operators will be able to declare goods
electronically and pay customs duties at the place where
they are established, irrespective of where the goods
actually entered or exited the EU
 It is not expected to be implemented until December 2020
due to the need for new IT infrastructure
57

 Guarantees
 Holders of AEO status or companies meeting certain
standards will be eligible to apply for a reduction / waiver
on the full guarantee required for duty deferment system
and use of simplified procedures
 Decisions relating to binding information
 The period of validity of Binding Tariff Information (BTI)
rulings will be reduced from six years to three years
 Will match the time period already set for Binding Origin
Information rulings
58

 Temporary Storage
 Temporary arrangement for the storage of goods, not
placed under a customs procedure. Typically used for
cargo hubs (container terminals etc.).
 Inland movement and movements between EU member
countries under temporary storage will be permitted
59

 Valuation
 The principle of ‘first sale’ has been withdrawn under the
current draft UCC implementing provisions. Term de
grace: for contracts prior to entry into force of
Implementing Act until 31 December 2017
 Royalties / licensing fees are added to customs value
when the rights are ‘embodied’ in the imported goods.
Relationship between licensor and buyer / importer is no
longer relevant.
60

 Transition
 Generally (exceptions do apply): existing licenses for
customs procedures / guarantees remain valid but must
be reassessed by national Customs Authorities on the
basis of new UCC criteria before 1 May 2019
61

‒ EU Dual-use Control List
 New EU Dual-use Control List entered into force on 31
December 2014
 Includes amendments adopted under the different
international regimes (e.g., Wassenaar Arrangement) in
2011, 2012 and 2013
 Overview of changes to EU Dual-use Control List:
http://trade.ec.europa.eu/doclib/docs/2014/october/tradoc_152854.pdf
 2014 amendments have yet to be implemented in the EU
62

‒ Export Licensing
 Longer processing times
 Stricter export licensing conditions (EUC requirement,
no military end-use, etc.)
 Increasing importance of human rights considerations
when deciding whether or not to issue a particular export
license
 More limited scope of issued export licenses (less
destination countries covered by global license)
 Increase of license denials
63

‒ Sanctions – General Comments
 Greater willingness by EU to impose sanctions
 Increasing government-to-government cooperation
 Stricter enforcement of EU sanctions, in particular in
relation to Russia / Crimea
 High expectations of compliance programs
 Screening of third parties is minimum expected from
companies doing business with/in ‘sanctioned countries’
 Tip: Ensure appropriate sanctions clauses (other than
force majeure) included in your commercial documents
64

‒ Sanctions – Iran
 First legal acts to implement Joint Comprehensive Plan of
Action (JCPOA) adopted by EU on 31 July 2015
 Temporary JPOA sanctions relief remains through to
Implementation Day
 EU sanctions relief (expected to start early 2016 – to be
introduced in stages) includes:
 Delisting of designated parties
 Termination of nuclear-related sanctions
 Question remains: Will EU banks be willing to be involved
in transactions with Iran?
65

‒ Sanctions - Russia
 Weapons embargo
 Dual-use restrictions: 9 (mixed-)defense companies,
military use, and military end-user
 Oil related equipment
 Military end-use clause
 Designated parties
 Sectoral sanctions
 Including related services / assistance
66

‒ Sanctions – Crimea / Sevastopol
 Import ban into EU
 Export prohibition for many products (including non-
controlled products)
 Investment restrictions
 Prohibition on tourism related activities
 Including related services / assistance
67

US Sanctions Update
‒ Cuba: Relaxation of certain aspects of US embargo
‒ Iran
 Joint Comprehensive Plan of Action
 Secondary / extraterritorial sanctions
 Iranian Transactions and Sanctions Regulations
‒ Russia
 US embargo on Crimea implemented
 Additions to Specially Designated Nationals and Blocked
Person List and Sectoral Sanctions Identifications List
‒ Venezuela: SDN program implemented
68

US Export Controls Update
‒ Cuba
 Relaxation of certain aspects of US embargo
 No longer state sponsor of terrorism  25% de minimis
threshold implemented
‒ Russia
 US comprehensive export/reexport ban on Crimea
implemented
 Yuzhno-KirinskoyeField added to Entity List
‒ Venezuela: Arms embargo strengthened
‒ Export Control Reform continues
 Updates to fundamental regulatory definitions
69

US Customs / Import Update
‒ Trade Promotion Authority
‒ C-TPAT program
 Exporters now eligible to participate
70

Thank You
72
Eugene Lim
Asia Pacific Trade & Commerce Head, Singapore
T: +65 6434 2633
Eugene.Lim@bakermckenzie.com
Anne Petterd
Partner, Sydney
T: +61 2 8922 5221
Anne.Petterd@bakermckenzie.com
Meng Yew Wong
Partner, Kuala Lumpur
T: +60 3 2298 7902
Mengyew.Wong@wongpartners.com
Ola Borge
Associate Partner, Myanmar
T: +95 1 255 056
Olanicolai.Borge@bakermckenzie.com
Will Marshall
Partner, Hong Kong
T: +85 2 2846 2154
William.Marshall@bakermckenzie.com
Mochamad Fachri
Partner, Jakarta
T: +62 2 1296 08547
Mochamad.Fachri@bakernet.com
Paolo Sbuttoni
Special Counsel, Hong Kong
T: +852 2846 1521
Paolo.Sbuttoni@bakermckenzie.com
Fred Burke
Principal, Vietnam
T: +84 8352 02628
Frederick.Burke@bakermckenzie.com
Panya Sittisakonsin
Partner, Bangkok
T: +66 2636 2000 ext. 3904
Panya.Sittisakonsin@bakermckenzie.com
Kana Itabashi
Partner, Tokyo
T: +81 3 6271 9464
Kana.Itabashi@bakermckenzie.com
Stephen Tan
Executive Consultant, Taipei
T: +886 2 2715 7286
Stephen.Tan@bakermckenzie.com
Zhixiang Ke
Associate, Singapore
T: +65 6434 2624
Zhixiang.Ke@bakermckenzie.com
Ronald Bernas
Partner, Manila
T: +63 2 819 4995
Ronald.Bernas@quisumbingtorres.com
Jasper Helder
Principal, Amsterdam
T: T + 31 20 551 7579
Jasper.Helder@bakermckenzie.com
Bart McMillan
Principal, Chicago
T: +1 (312) 861-2808
Bart.McMillan@bakermckenzie.com

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