JOURNAL OF THE UNITED STATES COUNCIL FOR INTERNATIONAL BUSINESS SPRING 2014 VOL. XXXVI, NO. 1 INTERNATIONALBUSINESS

Inside

Responsible marketing 4

UN development goals 5 Supreme Court rules on arbitration 12 Building Prosperity in the Digital Age page 3 the first Peter M. Robinson, President and CEO, USCIB word

It’s not just governments that determine international trade and investment standards – the International Chamber of Commerce has been doing so for over 80 years. Setting the Rules of the Road in Cross-Border Commerce

From time to time, I like to showcase the activities of our global business avoid legal uncertainty by spelling out clear responsibilities between buyers network. As most readers know, USCIB is the American affiliate of three and sellers in cross-border sales contracts, and have been endorsed by worldwide business groups: ICC, the International Chamber of Commerce; the UN Commission on International Trade Law. These terms, such as FOB IOE, the International Organization of Employers; and BIAC, the Business (Free on Board), are regularly incorporated into sales contracts worldwide and Industry Advisory Committee to the OECD. This network is part of what and have become part of the daily language of trade, the backbone of makes USCIB a uniquely valuable platform for our business members, and a global commerce. vital source of industry views for policy makers. While little known outside the trade finance community, ICC’s Uniform ICC is the oldest of these groups, the “world business organization,” with Customs and Practices for Documentary Credits, known as UCP national committees and direct members in over 130 countries around the 600, and related rules were first issued in 1933 and have been updated world. ICC performs three essential functions: policy advocacy on behalf of and adapted regularly to provide essential standards and templates to global business, arbitration of cross-border commercial disputes, and rules- lenders and borrowers looking to arrange letters of credit and other setting. It’s this last role that I want to address in this column. financing for exports and imports. ICC’s Banking Commission, which establishes and monitors these crucial rules, includes hundreds of trade At the heart of international trade are rules, norms, standards and tools finance professionals from around the world, with strong USCIB member that help facilitate the daily flow of global commerce. Through its longstand- participation. Its next semi-annual meeting takes place this November ing rules-writing function, ICC has developed a large array of standards, in Istanbul. codes, voluntary rules and guidelines to facilitate business and foster best practices. These rules help reinforce business self-regulation becoming the Based on industry need, ICC also authors various model contracts, standards by which industry agrees to conduct its business. They provide an guidelines for certificates of origin, and provides guidance on corporate invaluable service to companies around the world and are used in billions of anti-bribery measures. The USCIB International Bookstore offers many dollars’ worth of transactions annually. of these trade publications. (Coming soon: Using Franchising to Take Your Business International.) Visit www.internationaltradebooks.org to learn This rule-making started soon after ICC was founded in 1919. In fact, in more about these essential titles. the interwar period – when there was no GATT or World Trade Organization – ICC acted as a real international path-breaker, developing rules of the USCIB members play leading roles in all of these ICC rules-setting exercises. road on trade that effectively paved the way for later, binding agreements But of course, you don’t need to be a member to take advantage of these by governments following World War II. tools. Companies large and small, all over the world, use and abide by ICC’s rules of the road. (Naturally, if you want to have a hand in developing them, Examples of this critical rule-making include the Consolidated ICC Code of you need to be a member of USCIB.) It’s just another example of the essen- Advertising and Marketing Communications. First developed in 1937, tial role played by the world business organization in the increasingly vibrant and most recently revised in 2011, the ICC marketing code is the most and integrated world of international trade and investment. widely recognized model for national self-regulation of ad standards around the world. With rigorous standards on a variety of marketing practices and issues, it most recently served as the basis for new global guidelines on alcohol marketing and digital ad placement (see page 4).

ICC’s International Commercial Terms, known as Incoterms®, are another example. First developed nearly 80 years ago, these shorthand terms help Contact Peter Robinson at (212) 703-5046 or [email protected].

2 USCIB International Business Spring 2014 www.uscib.org cover story Growth, Jobs and Prosperity in the Digital Age

Policies affecting the development and where growth will come from in the decade use of information and communications tech- to come.” nologies (ICTs) are evolving quickly around Wyckoff joined a roster of speakers from the world. At the same time, ICTs now consti- government, industry and the OECD that tute a fundamental building block for global reviewed the latest technological and policy growth, competitiveness and job creation. developments in digital privacy, big data, This was the backdrop for a major confer- cloud computing and other emerging tech- ence in Washington, D.C., “Growth, Jobs and nologies, and considered how these could be Prosperity in the Digital Age: OECD Shapes leveraged by policy makers to achieve maxi- the Policy Environment,” held in March at the mum growth, innovation and employment. Microsoft Innovation & Policy Center. The These included: Diego Molano Vega, Co- event was organized by the USCIB Founda- Diego Molano Vega, Colombia’s minister of information technologies and com- munications, was among the speakers at the conference. lombia’s minister of information technologies tion, together with OECD and its Business and communications; Commissioner Julie and Industry Advisory Committee. Brill of the U.S. Federal Trade Commission; and Liesyl Franz of the U.S. Participants discussed how emerging technologies create the potential for Department of State’s cyber issues office. greater efficiencies, new business opportunities, economic growth and job “As work to revive our economies continues, the digital economy provides creation, as well as risk-based approaches to privacy and security. They a powerful tool to improve productivity, increase innovation and growth, as also considered the trade policy dimension, including how cross-border data well as create new jobs,” said Jorgen Abild Andersen, chair of the OECD’s flows are regulated under existing trade rules, and how this could change. Committee on Digital Economy Policy. “The OECD is committed to bringing And they considered the contributions of the OECD, including its 2008 together governments and key stakeholders to develop policies to support “Seoul Declaration,” in helping to shape Internet and ICT policies that sup- a flourishing digital economy.” port growth, innovation and broad societal benefits. Joseph Alhadeff vice president and chief privacy officer with Oracle “The multi-stakeholder approach is a linchpin of the OECD’s work on ICTs Corp., who serves as chair of BIAC’s Committee on Information, Com- and the Internet,” said Andrew Wyckoff, director of the OECD’s Directorate munications and Computer Policy and vice chair of USCIB’s ICT Policy for Science, Technology and Industry. “This approach has served to inform Committee, said: “In light of recent economic developments, it is under- our role as a shaper of international dialogue, as a provider of comparative standable that policy makers are taking a renewed look at how best to cross-border data and evidence, and as a forum for sharing experiences and ensure ICTs can continue to meet broad economic and societal needs. collective learning.” “This program served to underscore the important role that OECD policy Wyckoff reflected on the OECD’s role in creating policy consensus among frameworks and economic analysis play in providing needed facts and governments, business and the wider Internet community. He said the guidance that assist both business and regulators in developing the poli- OECD’s Internet Policy Making Principles represent a “common philosophi- cies that help foster continued growth and evolution of the global digital cal approach” to Internet policy making. “This is essential,” he said. “This is economy and information society.”

U.S. to Transition Internet Domain Functions Reaction was muted to the March announcement by the National Telecommunications and Information Administration (NTIA) that it intends to transition key Internet domain name functions. But USCIB said it looked forward to a promised multi-stakeholder dialogue that ICANN and the Internet community will convene to develop productive responses that meet NTIA’s criteria.

“We especially applaud NTIA’s resolve to ‘maintain the security, stability and resiliency of the Internet Domain Name System’ and not to ‘accept a proposal that replaces the NTIA role with a government-led or an inter-governmental organization solution,’” said USCIB President and CEO Peter M. Robinson.

USCIB has been a stalwart supporter of the multi-stakeholder model for Internet governance. “We believe the consultative input of business, govern- ment, the technical community and civil society is imperative to ensure that the Internet remains an open, safe and secure platform for innovation, creativity, job creation and economic growth throughout the world,” Robinson said.

USCIB International Business Spring 2014 www.uscib.org 3 The Do’s and Don’ts of Responsible Alcohol Marketing

A new global resource has been published by the International Chamber of Commerce to help strengthen self-regulation for marketing alcohol. By clarifying how existing global principles should be How to Prevent Misplaced Digital Advertisements applied in practice, the ICC Framework for Responsible Marketing Communications of Alcohol offers companies and advertising self-regulatory bodies a guide for bolstering responsible practices across ICC has called for companies across the digi- markets. It will also serve as the basis for developing self-regulatory rules for marketing alcohol where tal advertising ecosystem to work together these do not exist. to develop safeguards against advertisement placements that support illegal activity or The ICC framework, harm brand reputation. In a March state- issued in March, was ment, ICC urged industry cooperation on the developed by the development of a self-regulatory mechanism body of global experts that reduces the likelihood of advertisements responsible for devel- being placed on sites dedicated to either oping and updating the engaging in or facilitating illegal activity or Consolidated ICC Code around content that an advertiser deems to of Advertising and Mar- be harmful. keting Communications Practice, which serves “There is consensus among everyone in the as the gold standard for ecosystem that advertising should not sup- most national and indus- port illegal activity,” said Brent Sanders, try-wide self-regulation. chair of the ICC Commission on Marketing and Advertising and associate general coun- “The framework takes sel for Microsoft Corporation. “This statement principles, such as social acknowledges the importance of a collective responsibility, and spells out what it means when developing or assessing an alcohol marketing com- solution and encourages cooperation to set munication,” said Oliver Gray, executive director of the European Advertising Standards Alliance and up effective, feasible self-regulatory solu- co-chair of the ICC task force that drafted the framework. tions.” Sanders also chairs USCIB’s Marketing “So whether you are marketing beer in Japan, wine in Argentina or spirits in the U.S., promoting your and Advertising Committee. product as a means for social success, performance in sport or attractiveness to the opposite sex is ICC recommends that an appropriate self- not an acceptable practice,” he said. “And for self-regulatory organizations reviewing advertisements to regulatory system to address misplaced enforce those principles, this extra clarity will be invaluable.” advertising should include:

According to Jonathan Huneke, USCIB’s vice president for communications and public affairs, who • using commercially reasonable efforts and staffs USCIB’s Marketing and Advertising Committee, the drafters worked in close consultation with measures to reduce the risk of advertise- the alcohol industry, including in the United States. “We wanted to make sure that the framework could ments being placed on sites dedicated to help companies meet their commitments to strengthening self-regulation, but without disrupting exist- either engaging in or facilitating illegal activ- ing codes.” ity, or on sites that the brand identifies as “We have been strongly supportive of this effort,” said Brett Bivans, senior vice president of the undesirable for its products/services; and International Center for Alcohol Policies. “This is a significant step in strengthening and clarifying high • developing commercially reasonable standards of responsible marketing, and we will work closely with ICC and other partners as the frame- policies and processes for removing or ex- work is implemented.” cluding sites dedicated to either engaging in ICC has served as the authoritative rule-setter for international advertising since the 1930s, when the or facilitating illegal activity from their mar- first ICC code on advertising practice was issued. Since then, it has updated and expanded the ICC keting campaigns and/or services, and the self-regulatory framework where needed to assist companies in marketing their products responsibly development of an industry-wide standard and to help self-regulators apply the rules consistently. for expeditiously terminating such non-com- pliant advertisement placements.

4 USCIB International Business Spring 2014 www.uscib.org Ambitious 2014 U.S. Trade Agenda Hailed

In March, USCIB welcomed the release of President Obama‘s 2014 U.S. “We are working closely with Trade Agenda, which outlines ambitious priorities for expanding American trade USTR and the other relevant and investment around the world, in support of expanded job growth and en- U.S. agencies to advance hanced U.S. competitiveness. this ambitious agenda across the board,” said Charles R. “We agree with the president that international trade and investment play a Johnston, chair of USCIB’s critical role in creating jobs, promoting growth and strengthening the middle Trade and Investment Com- class,” said USCIB Senior Vice President Rob Mulligan. “The American busi- ness community is working hard to advance and support this agenda both at mittee and managing direc- home and abroad.” tor of global government affairs at Citigroup. “In addi- “President Obama’s trade strategy for 2014 is driven by a commitment to cre- tion, USCIB will work with its ate jobs, promote growth and strengthen the middle class through the creation U.S. Trade Representative Michael Froman is responsible overseas business partners for putting President Obama’s trade agenda into action. of new export opportunities for American farmers, workers and businesses,” to foster support for U.S. (Photo: USTR) said U.S. Trade Representative Michael Froman. “In the coming year, USTR trade and investment goals among our trading partners.” will continue to execute the President’s trade vision that relies on opening mar- kets, leveling the playing field for American workers and producers and fully USCIB serves on the steering committee of the Trade Benefits America enforcing our trade rights around the world.” Coalition (www.tradebenefitsamerica.org), which seeks to enhance under- standing among lawmakers and the public about the benefits of U.S. trade Mulligan said the USTR agenda dovetailed well with USCIB’s own 2014 Global agreements and advocates for passage of the Trade Promotion Authority. Trade and Investment Agenda. Key goals in the USCIB agenda include: USCIB also plays a leading role in U.S. business coalitions on the TTIP and • reaching bipartisan agreement on Trade Promotion Authority (TPA) legislation TPP talks and has provided industry insight to U.S. negotiators on many • completing the Trans-Pacific Partnership (TPP) negotiations aspects of these negotiations. • finalizing agreement on expansion of the Information Technology Agreement “The most essential piece of the trade puzzle is Trade Promotion Authority,” • making significant progress on the Trans-Atlantic Trade and Investment Part- said Johnston. “Without TPA, we cannot negotiate effectively, and Congress’s nership (TTIP) as well as the Trade in International Services Agreement nego- ability to help guide U.S. trade policy is limited. For these reasons, we urge the tiations, and Obama administration and Congress to work together to swiftly pass effective • advancing discussions of a U.S.-China bilateral investment treaty. TPA legislation.”

Launch of Talks to Free Up Trade in Green Tech Applauded In January, USCIB applauded the announcement of a new initiative by the United States and key trading partners to boost trade in environmental goods and services through the WTO. It said the positive step would build on December’s “Bali package” of trade liberalization measures as well as commit- ments in the APEC (Asia-Pacific Economic Cooperation) forum.

USCIB President and CEO Peter Robinson said: “USCIB members agree that moving towards greener economic growth will depend on the widespread deployment of innovative technologies and management systems through more open trade, whether to address climate risks, improve food, water and energy security or offer cleaner goods to consumers in developing countries.”

Also in January, Robinson spoke on January 15 to the International Trade Association of Greater Chicago on the topic of “America’s International Trade Agenda: An Opportunity for Growth.”

In his remarks, Robinson looked at what is driving our rejuvenated trade policy and at the importance of specific negotiations, including the Bali agreement as well as trade negotiations with Asia and Europe. He concluded with a clarion call for business action and engagement to press for swift adoption of the Trade Promotion Authority in the U.S. Congress.

Read the complete text of Robinson’s remarks at www.uscib.org/docs/2014_01_15_robinson_chicago_remarks.pdf.

USCIB International Business Spring 2014 www.uscib.org 5 Business Weighs in on UN Sustainable Development Goals

In a January paper, USCIB identified Washington, D.C. forum four broad prerequisites and catalysts In February, Kennedy and Nguyen joined for the UN Sustainable Development Ann Condon (General Electric), who chairs Goals (SDGs). The paper sets out US- USCIB’s Environment Committee Chair, as CIB’s view that the SDGs and broader featured speakers at a February Chevron UN Post-2015 Development Agenda are Forum at the Center for Strategic and Inter- vital to improving the UN’s contributions national Studies (CSIS) in Washington, D.C. to development and sustainability. The USCIB SDG Recommendations also call Entitled “Business in the Post-2015 De- for substantive engagement opportuni- velopment Agenda,” the forum served to ties for representative business organi- underscore the business case for private zations to participate in and inform the sector-led investment in development. UN SDG deliberations. Speakers emphasized the importance of good governance and economic growth The USCIB SDG Recommendations focus on: and empowerment, and drew attention to • Good Governance USCIB’s recommendations.

• Economic Growth and Economic “Business has a critical role to play, said Con- Empowerment don. “For example, investment flows dwarf • Innovation government development aid. Businesses can leverage their resources and expertise in • Infrastructure ways that drive growth in developing econo- The paper highlights 10 issues that merit mies and bring innovative solutions to solve particular attention in the SDGs, with sustainable development challenges.” many elements in common with those Nguyen agreed. “Unlike the MDGs a de- set out in the UN High Level Panel on the cade ago, U.S. multinationals are more Post-2015 Development Agenda. USCIB developed these Recommenda- informed and engaged,” he told the forum. “They have shifted from mere tions via its SDG Working Group chaired by Brian Lowry (Monsanto) and observers to participants in promoting sustainable development.” Tam Nguyen (Bechtel). Other speakers at the CSIS forum included White House Counselor John “The U.S. business community has a strong stake in meaningful and practical Podesta and Daniella Ballou-Aares of the State Department. SDGs,” said Norine Kennedy, USCIB’s vice president for strategic internation- al engagement. “National implementation and the right conditions in-country USCIB, working with the Global Business Alliance for Post-2015 are the foundations on which a UN new paradigm for international development Development, will continue to weigh in at UN meetings to frame the SDGs, should be based. The SDGs will be successfully put into practice in those and in the High-Level Political Forum that will be held in New York this July. countries that have institutions and practices in place, and involve their private The SDGs are slated to be completed and delivered to the UN General sector in meaningful ways.” Assembly for approval in 2015.

6 USCIB International Business Spring 2014 www.uscib.org G20 Business Scorecard Sees Progress, Opportunities Ahead

The G20 and Global Workforce The G20 has made steady progress on business goals since 2011, according to the Challenges latest G20 Business Scorecard, published by the International Chamber of Commerce (ICC). The third installment of the annual scorecard, released in March, reveals a year-to- The B20 Human Capital Task Force has called on G20 leaders year improvement in score since ICC’s monitoring began, while still noting that progress to adopt practical, actionable and measurable recommenda- remains poor in several crucial areas, including energy and the environment. tions to address the challenges facing today’s global workforce.

“The G20 continues to Speaking in February to the G20’s Employment Task Force as it make progress on a met in Sydney, Steve Sargent, president and CEO of GE Aus- robust agenda to accel- tralia & New Zealand and co-chair of the B20 Human Capital erate economic growth Task Force, summarized B20’s recommendations in five key and job creation,” said areas: ICC Chairman Terry • maximizing job creation potential McGraw, chairman of • providing education, training and skills to meet labor McGraw Hill Financial demand and also chairman of • creating solutions to better match supply and demand USCIB. “The business • encouraging labor flexibility to adapt to rapid changes community is commit- • implementing measurable targets to ensure accountability and progress. ICC and USCIB Chairman Terry McGraw (second from left) at last year’s ted to working together G20 Summit in Saint Petersburg, Russia. with policy makers on is- “Repositioning of global economies, rapidly changing technol- sues of critical importance such as trade and investment that can produce job growth ogy and shifting social dynamics continue to impact today’s and long-term prosperity.” work environment,” said Sargent. “Business, government, Among the positive outcomes that led to this year’s higher score was the G20 sup- educational institutions and community organizations need to port for the historic World Trade Organization Agreement on Trade Facilitation and the step up and take greater responsibility for delivering practical, extension of the G20 standstill on protectionist measures until the end of 2016. The actionable and measureable solutions that support economic improvement in score also reflected G20 efforts to increase access to finance for small growth, business growth and jobs growth.” and medium businesses and the recognition of business as a key partner in the fight Sargent said action should be taken to ensure people are ap- against corruption. propriately skilled, and have the capability and flexibility to But the positive overall trend also masked deficiencies in individual categories. Among participate in the workforce of today and into the future. “While the lows was the failure to recognize the importance of information and communica- G20 countries each face their own challenges, we have a real tion technologies (ICTs), no movement on carbon pricing and a lack of discussions on opportunity to work together to deliver a sustainable improve- a high-standard multilateral framework for international investment. ment in global job creation, skills development and workforce flexibility. The challenge may be great, but there are viable The scorecard – which rates the overall responses by G20 nations to key business goals solutions.” during the 2013 Russian presidency – measures progress on business priorities on a scale of: “inadequate,” “poor,” “fair” or “good.” The scorecard looks at the G20”s collec- The B20 Task Force previously urged that G20 members tive response to business goals only and does not rate individual countries or the G20”s would continue to work closely with members to ensure that entire agenda. Four areas are assessed: Trade and Investment; Financing for Growth and prior recommendations, such as addressing youth unemploy- Development; Energy and Environment; and Anti-Corruption. ment through the Global Apprenticeship Network (GAN), are implemented. “We are delighted that the IOE-BIAC GAN initia- A fifth chapter, Job Creation and Human Capital, was prepared in partnership with the In- tive for creating opportunities for young people and ensuring ternational Organization of Employers (IOE) and the Business and Industry Advisory Com- skills continues to be supported by the B20 as a key means mittee to the OECD (BIAC). This chapter examines the steps taken by the G20 to address to addressing youth employment,” said IOE Secretary General global unemployment but does not rate its progress at this stage. (See story at right.) Brent Wilton, the other task force co-chair.

USCIB International Business Spring 2014 www.uscib.org 7 global network

International Chamber International Organization of Commerce of Employers www.iccwbo.org www.ioe-emp.org ICC Mediation Competition A To-Do List on Gender Attracts Teams from Equality around the World USCIB Senior Advisor Ronnie Goldberg, who serves as the IOE’s North American regional vice president, took part in a March panel on equal pay at the 58th Session of the UN Commission on the Status of Women in New York. The panel, organized by the International Labor Organization and the government of Finland, facilitated the sharing of experiences and challenges, across countries and regions, of promot- Laura Wolfe (left) and Mary Grace White of the New York University ing equal pay for women and men, and informed the School of Law teamed up to win a place in the quarterfinals of the annual ICC mediation competition. discussions during the session of the Commission The biggest-ever ICC Mediation Competition, which on the Status of Women. Articulating the global voice took place over six days in February in Paris, brought of employers, Goldberg stated: “Employers support together 66 university teams and 120 professional not just the human rights case, but the compelling mediators from around the world. In a final closely business and economic case for unleashing women’s observed by some 350 spectators, law students dem- skills and talents and empowering them to enjoy onstrated their mediation advocacy skills in solving a equal access to job opportunities and career devel- hypothetical but lifelike dispute over the patenting of opment.” She laid out a menu of actions employers a newly invented pharmaceutical drug. Applying ICC’s and governments can take to promote women’s new Mediation Rules, a team from Monash University advancement and gender equality in the workplace. in Australia played the part of the requesting party, Addressing Europe’s and a team from Ludwig-Maximilians-Universität in Munich played the respondent, with team members Demographic Challenge USCIB at Your Service acting as either counsel or client. The team from IOE Secretary General Brent Wilton visited the Munich emerged victorious, earning internships with Estonian capital Tallinn in March to participate in the USCIB Policy and Program the ICC International Centre for ADR and the litigation national employers confederation’s annual forum, 212-703-5082 and arbitration department of the law firm Linklaters. which this year addressed the issue of maintaining USCIB President’s Office economic growth in the face of a shrinking labor 212-703-5049 Somali Clampdown Causes force. Wilton cautioned against underestimating the USCIB Member Services Drop in Global Piracy demographic challenge that will affect European 202-682-1291 Piracy at sea has reached its lowest levels in six years, competitiveness in the coming years, calling on USCIB Communications with 264 attacks recorded worldwide in 2013, a 40 business groups to work closely with governments 212-703-5063 percent drop since Somali piracy peaked in 2011, to seek solutions. “The aging of societies has deep USCIB Washington Office according to the ICC International Maritime Bureau implications for the growth potential of many econo- 202-371-1316 (IMB). Just 15 incidents were reported off Somalia in mies, for the supply of skilled workers, and for the ATA Carnet Export Service 2013, down from 75 in 2012, and 237 in 2011. “The stability of social security systems,” he said. “The 1-800-5-DUTYFREE single biggest reason for the drop in worldwide piracy business environment must be prepared to change ICC Arbitration and Dispute is the decrease in Somali piracy off the coast of East as circumstances evolve. Reform cannot be con- Resolution Africa,” said IMB Director Pottengal Mukundan. ducted as a one-off activity, but must take place as 212-703-5044 Somali pirates have been deterred by a combination of an ongoing process.” ICC Books USA factors, including the key role of international navies, 212-703-5066 the hardening of vessels and other recommendations Visit www.uscib.org in the shipping industry’s Best Management Practices, for a full list of staff including e-mail the use of private armed security teams and the addresses (click “Business Services”) stabilizing influence of Somalia’s central government.

8 USCIB International Business Spring 2014 www.uscib.org washington wire Business and Industry Advisory Committee to the OECD www.biac.org

India and China Outreach Trade Promotion vacant for far too long,” said USCIB Authority Bill Welcomed President and CEO Peter Robinson. “His on Base Erosion USCIB applauded the introduction in January leadership will raise the already excellent A delegation from the BIAC Taxation and Fiscal Affairs of bipartisan legislation to re-establish standard of work done by Customs and Committee held February meetings in New Delhi and Trade Promotion Authority (TPA) by Senate Border Protection.” Robinson expressed in Beijing with national tax authorities to discuss the Finance Committee Chairman Max Baucus, the business community’s gratitude to G20-OECD project to address “base erosion and profit Ranking Member Orrin Hatch, and House Thomas Winkowski for his admirable shifting.” The delegation met with the incoming chair of Ways and Means Committee Chairman service as acting CBP commissioner, the Indian direct taxation board and an advisor to India’s Dave Camp. “TPA is essential for the noting in particular his efforts to keep finance minister. In China it sat down with the director United States to capitalize on new, market- U.S. trade flowing during last fall’s U.S. general of the international taxation department, among opening agreements with Asia, Europe and government shutdown. Kerlikowske was others. BIAC members, including USCIB’s Carol Doran other key trading partners,” said USCIB previously director of the Office of National Klein, made clear their commitment to making the President and CEO Peter Robinson. “Trade Drug Control Policy, and he has served BEPS project work to meet the concerns of all govern- delivers better jobs and faster growth. But as Seattle’s police commissioner and ments involved, while at the same time ensuring that we won’t be able to complete or implement in the Department of Justice. He brings governments continue to encourage cross-border trade these pacts without Trade Promotion knowledge of enforcement, safety and and investment that will provide jobs and growth. As key Authority. So we urge the Congress to act Washington State’s trade-based economy to members of the G20, China and India will play a critical swiftly to pass this legislation.” Last year, the CBP position. role in the project (as will the Brazilian government, with USCIB joined leading business groups which a BIAC delegation met last October). Executive Order in founding the Trade Benefits America Streamlines Imports BIAC Chairman Talks Trade Coalition (www.tradebenefitsamerica.org), and Exports an effort to educate on the benefits of In February, USCIB welcomed an executive at Washington Forum U.S. trade agreements and advocate for order from President Obama that will In January, BIAC Chairman Phil O’Reilly discussed passage of TPA. The coalition is actively simplify the export-import process for trade policy and the Trans-Pacific Partnership (TPP) working with Congress and the Obama America’s businesses by streamlining the talks in remarks to the Global Business Dialogue forum administration, and engaging with state and flow of goods across borders. The order in Washington, D.C. O’Reilly, CEO of Business New local officials across the country, to get the is timely as it comes on the heels of the Zealand, laid out broad conceptual points to guide the facts out about the benefits of trade and historic World Trade Organization Trade TPP parties. “It’s important that we don’t let today’s build support for TPA. Facilitation Agreement, in whose negotiation politics get in the way of what will be a deal that will Cheers for Confirmation the U.S. played an integral role. The transform the Pacific trading environment over the next of CBP Chief Trade Facilitation Agreement is a binding 20 to 30 years,” he said. Citing influential research commitment that will precipitate quicker from the OECD on global supply networks and trade in Business welcomed the Senate’s movement, release and clearance of goods value-added, the BIAC chairman stated: “The world is confirmation in March of Gil Kerlikowske between WTO member countries. The increasingly dominated by global value chains, so that as commissioner of Customs and Border Executive Order mandates the completion the new glue of trade is not containers going across a Protection (CBP). USCIB said Kerlikowske’s of an International Trade Data System to wharf, they are an outcome. The new glue of trade to experience and expertise will play an my mind is investment.” integral role in furthering CBP’s goal of streamline the way executive departments simultaneously securing the border and and agencies interact with traders, by the expediting the at-the-border trade process, end of 2016. USCIB said the system will which it called vital for the smooth flow reduce paperwork for U.S. companies in of goods. “Gil Kerlikowske is a wonderful global markets and will help create new jobs choice to head CBP, which has been at home and abroad.

USCIB International Business Spring 2014 www.uscib.org 9 USCIB’s Klein Named to “Global Tax 50”

Carol Doran Klein, USCIB’s vice president for taxation, has been named one of International Tax Review‘s “Global Tax 50” for 2013, reflecting her own expertise and achievements as well as the business community’s close engagement with policy makers on international taxation.

In its profile of Klein in its year-end issue, the influential publication said: “In a year that has seen large multilateral moves to tackle base erosion and profit shifting [BEPS], Klein has had her plate full in ensuring the concerns of U.S. business are heard. And with multiple action items on the Carol Doran Klein OECD’s BEPS Action Plan scheduled for comple- tion in 2014, her influence will continue to be critical if the views of U.S. business are to be heard in this international context.”

Now in its third year, the Global Tax 50 lists individ- uals and organizations that have had the greatest influence on tax policy, practice and administra- tion in the last 12 months.

“Hats off to Carol for this richly deserved hon- or,” exclaimed USCIB President and CEO Peter Robinson. “I am delighted that all her hard work in representing business views to the OECD, to the United Nations and to national governments – including our own – is being recognized. Carol has become an indispensible resource for the business community and is providing a strong, knowledgeable voice on global tax matters.”

Others included in this year’s Global Tax 50 in- clude: Will Morris, global tax policy advisor with GE and chair of the Taxation Committee at BIAC, the Business and Industry Advisory Committee to the OECD (for which USCIB serves as the Ameri- can affiliate); and Alan McLean, executive vice president for tax and corporate structure with Royal Dutch Shell, who is vice chair of the BIAC committee.

Each June, with BIAC and the OECD, USCIB holds an annual tax policy conference in Washington, Asia-Pacific dynamism D.C. This year’s conference is scheduled for June Asia-Pacific is an influential player to unlocking economic growth and resilience 2-3 at the Four Seasons Hotel. More information both in the region and around the world. In 2014, much of the world’s attention is available at www.uscibtax.org. is on Asia-Pacific as Australia hosts the G20 and China, APEC. Deloitte is taking this opportunity, alongside USCIB and others, to engage with government leaders to develop practical solutions that drive growth, jobs, competitiveness, and development.

Related links: www.deloitte.com | www.g20.org | www.apec.org

© 2014. For information, contact Deloitte Touche Tohmatsu Limited.

33859A_Asia-Pacific_advertBLK_2.indd 1 02/04/2014 10:23 10 USCIB International Business Spring 2014 www.uscib.org EU Proposes Self-Certification on Conflict Minerals

Earlier this month, in a welcome contrast USCIB has played a key role coordinating to a needlessly stringent U.S. approach to con- business contributions to the OECD due flict minerals from Central Africa, the European diligence guidance, and we have advocated Commission put forward a draft regulation to for the EU regulation on conflict minerals, set up a system of supply chain due diligence working actively with BIAC, the Business self-certification of importers of minerals to and Industry Advisory Committee to the the EU. The regulation would encourage indus- OECD to encourage responsible sourcing try self-certification of responsible imports of and to offset the disincentives created by tin, tantalum, tungsten and gold from conflict- Section 1502 of the U.S. Dodd-Frank law, affected and high-risk areas. which many observers believe encourages a The proposal is based on the OECD’s Due de facto embargo of minerals exports from Diligence Guidance for Responsible Supply the Democratic Republic of Congo and other Chains of Minerals from Conflict-Affected and affected regions. High-Risk Areas, the credible international The OECD due diligence guidance was devel- corporate due diligence benchmark. The oped in line with the UN Guiding Principles on EU self-certification system calls for the ad- Business and Human Rights, both of which herence to the five steps of the OECD due diligence guidance through aim to advance supply chain due diligence practices and avoid the inadver- monitoring and overseeing of purchases. tent consequences of Dodd-Frank.

USCIB Takes Part in APEC Chemicals Meetings

In February, Helen Medina, USCIB’s in which APEC officials and industry repre- terparts. During the discussion about the senior director for product policy and inno- sentatives come together for public-private types of outcomes industry is seeking, vation, took part in the APEC Chemical Dia- dialogue on chemical issues in the Asia-Pacif- Medina made an intervention about the im- logue Steering Group and related meetings ic region. It affords industry representatives portance of having the downstream user’s in Ningbo, China. The sessions were held in an opportunity to work with regulators and perspective in the work. trade officials from the APEC economies on concert with the first APEC senior officials Medina also suggested that, in order to a variety of project-based issues. meeting of China’s host year. promote the common goal of regulatory The goal of the steering group meetings was Prior to the steering group sessions, there coherence throughout the economies par- to prepare for the upcoming APEC Chemical was an industry meeting in which indus- ticipating, it would be useful to identify the try participants gathered to discuss their projects that each of these initiatives is un- Dialogue meeting in August, which will take priorities going forward and to formulate dertaking that relates to the regulation of place in the northern Chinese city of Harbin. industry-wide positions, which were then chemicals, and to describe the work that is The Chemical Dialogue is an important forum discussed with their government coun- being done.

USCIB International Business Spring 2014 www.uscib.org 11 Industry Gears Up for Global Nutrition Conference

The Second International Conference on Nutrition (ICN2) will take place from November 19 to 21 in FAO Principles for Rome with the participation of heads of state and government. Organized by two UN specialized agencies, Responsible Agriculture the World Health Organization and the Food and Agriculture Organization, the event will address major nutri- Investment tion challenges over the coming decades. USCIB is working with the International Agri- Food Network (IAFN) to provide input into the UN’s Food and Agriculture Organization (FAO) set of Principles for Responsible Agriculture Investment (RAI) in the context of food secu- rity and nutrition.

The objective of the principles, as requested by the Committee on World Food Security (CFS), is to promote responsible investments in agriculture and food systems that contrib- ute to food security and nutrition and support the progressive realization of the right to ad- equate food in the context of national food security. The principles address all stakehold- ers that are involved in, benefit from or are affected by investments in food systems.

According to Helen Medina, USCIB’s senior director of product policy and innovation, the conference is USCIB has made several recommendations expected to result in a concise, action-oriented outcome document, identifying public policy priorities at on agriculture investment principles, including the national and global levels to address malnutrition, micronutrient deficiencies and obesity, with a view to on the role of the private sector, and in the achieving agreed global nutrition targets by 2025. areas of investment and the environment, and monitoring and evaluation of implementation “This will be a watershed event, the first high-level intergovernmental conference on nutrition since the First of principles. USCIB has had concerns regard- International Conference on Nutrition was organized by FAO and WHO in 1992,” Medina said. “That confer- ing the monitoring and evaluation, as well as ence resulted in a World Declaration and Plan of Action for Nutrition which called on governments to take the roles and responsibilities. Furthermore, action toward improved nutrition at the national level, and to establish institutional infrastructure to imple- the principles do not address the question of ment these plans.” She said two documents are expected to come out of the ICN2: a high-level outcome who will monitor progress, or whether there document and a more detailed framework of action for its implementation. will be an entity to which companies and coun- tries will report. Fostering the private sector’s contributions to improved nutrition Medina attended last year’s technical meeting that lay the groundwork for the conference. This year, USCIB We will continue to monitor progress, as well continues its involvement in the preparations for ICN2 by highlighting how the private sector is contributing as provide comments to the Committee on to nutrition through the FAO online consultation on the draft outcome document. World Food Security’s consultative process, in conjunction with its partner, the IAFN. The In its comments, USCIB recommended that the document recognize the private sector’s contributions to Committee on Food Security’s RAI principles improved nutrition through innovative products, scientific and technological know-how and improved pro- will be presented and negotiated at a plenary duction and management practices. These can all be increasingly harnessed through effective partnerships session in May in Rome. with research institutions, farmers, policy-makers and civil society, USCIB said.

Furthermore, the private sector can play a critical role in further strengthening markets, spurring economic growth and improving livelihoods, USCIB said. The comments observed that, while private-sector involvement is critical, there is also a need for government collaboration, particularly in helping to ensure sensible policies, such as reducing barriers to trade, that do not impede the private sector’s potential contributions to the shared societal goal of improved nutrition.

12 USCIB International Business Spring 2014 www.uscib.org Supreme Court Backs Arbitrators in Investment Treaty Ruling

In a ruling with important ramifications for global investment, the U.S. tween nations” and that, as a result, arbitral tribunals interpreting procedural Supreme Court on March 5 ruled that arbitrators, as opposed to local provisions in treaties should be afforded the same level of deference as arbi- courts, have authority to resolve jurisdictional disputes under bilateral tral tribunals interpreting procedural provisions in contracts. investment treaties (BITs). USCIB had submitted a friend-of-the-court brief In its brief, USCIB argued: “This Court has consistently emphasized the central urging the court to rule in favor of arbitrator authority in such matters. importance of protecting the decision of parties to a contract to resolve In a 7-2 decision, the justices upheld a $185 million award of an UNCITRAL their disputes through arbitration. Applying that basic principle, federal (UN Commission on International Trade Law) tribunal in a dispute brought courts have repeatedly held that where parties agree that a dispute should by BG Group of the UK under the UK-Argentina BIT, reversing an earlier be submitted to arbitration pursuant to one of certain sets of arbitral rules – circuit court ruling. Although the dispute was between British and Argentine rules that include provisions delegating to the arbitral tribunal the authority parties, the appeal was filed to determine questions in U.S. courts since the as to its own jurisdiction arbitration was conducted in over the dispute – then the Washington. parties have agreed that The outcome was in line the arbitral tribunal has with earlier Supreme Court the authority to resolve rulings in commercial disputes as to arbitrability.” arbitration cases, under By virtue of our affiliation which arbitral tribunals with the International have enjoyed broad discre- Chamber of Commerce, tion to determine whether USCIB works closely with contractual preconditions the ICC International Court to arbitration have been of Arbitration®, the world’s satisfied. leading forum for the Specifically, the Court noted settlement of cross-border that a treaty is a contract “be- commercial disputes.

New in USCIB Bookstore: Dispute Resolution Library We are pleased to announce that an updated You can subscribe to this very useful tool by Business Law, The Secretariat’s Guide to ICC Dispute Resolution Library (DRL) is now available visiting www.internationaltradebooks.org. Arbitration and other ICC publications relating in the USCIB International Bookstore. This is the to dispute resolution. Other major attractions of first upgrade since the service was launched in DRL offers immediate online access to the ICC’s this online library include a wealth of ICC awards 2008, and it includes new and improved search International Court of Arbitration® Bulletin, the and the hundreds of excerpts from ICC awards functions, navigation aids and display options. Dossier series of the ICC Institute of World published in the Bulletin since 1990.

USCIB International Business Spring 2014 www.uscib.org 13 USCIB member and staff news

USCIB’s Competition Committee Charts New Course New USCIB Members We are delighted to welcome the following companies and organizations as the latest additions to USCIB’s diverse membership: Brown-Forman Semiconductor Corporation Industry Eaton Association Corporation Sidley Austin LLP Facebook Sorini, Samet & Herbert Smith Associates, LLC Freehills LLP Troutman L-R: Jennifer Patterson (Kaye Scholer), John Talladay (Baker Botts), Michael Blechman (Kaye Scholer), Jim Rill (Baker Botts), Rob Mulligan (USCIB) Johnson Controls Sanders LLP

It was the end of an era at the February meeting of USCIB’s Competition Committee in Washington, MasterCard D.C., as longtime Chair Michael Blechman (Kaye Scholer) and Vice Chair Jim Rill (Baker Botts), To learn more about how USCIB stepped down and passed the baton to new Chair John Taladay (Baker Botts) and Vice Chair Jennifer membership can benefit your Patterson (Kaye Scholer). Blechman and Rill, who have been esteemed and productive leaders of the organization, contact Alison Hoiem committee for 20 years, said it has been a great pleasure to work together. Taladay is vice chair of (202-682-1291 or [email protected]). the BIAC Competition Committee, while Patterson co-chairs the ICC Task Force on Due Process. Both also serve as non-governmental advisors to the International Competition Network. In 2014, the USCIB committee will focus on developments in procedural fairness (ICN, trade negotiations, China), due process (waivers and confidentiality), international antitrust cooperation, trade and competition linkages, and regulatory reform.

New Policy Hires Boost Work on Policy, Communications and Trade Services We are delighted to welcome two new additions to our Policy and Program team. Ariel Meyerstein has joined USCIB as Vice President for Labor Affairs, Corporate Responsibility and Corporate Governance, working out of our New York headquarters. With a law degree and PhD in jurisprudence and social policy from the University of California at Berkeley, Ariel has a background in sustainable development and human rights in the extractive and financial sectors, and has worked on issues related to corporate responsibility in the public and private sectors. He comes to us from the law firm of Chadbourne & Parke, LLP and before that Debevoise & Plimpton, LLP. He also has served as a legal adviser at the Iran-United States Claims Tribunal and a Judicial Clerk at the U.S. Court of Appeals, Ninth Circuit.

Eva Hampl has come aboard as USCIB’s Director for Investment, Trade and Financial Services, working out of our Washington, D.C. office. Eva has a master’s of law in international and comparative law from the George Washington University Law School and a J.D. from Suffolk University Law School. She has worked on investment and trade issues, and done research on transparency in dispute settlement in the WTO and under investment treaties. Eva recently completed a one- year fellowship with GE’s Global Government Affairs and Policy division. Prior to that, she served as a trade associate with the U.S. Senate Committee on Finance and interned at the European Union’s delegation to the United States. She has also served as a law clerk to the Connecticut Superior Court.

In addition, Michael Sicangco has joined USCIB’s Trade Services department as a Carnet Claims Examiner. Michael earned a bachelor’s degree in finance from Baruch College/CUNY and previously worked for Michael Page, the recruitment firm, and Quick Billing Service.

Also, Christopher Zoia has joined USCIB as Communications Manager, with responsibility for website content development and dissemination, production of USCIB’s e-newsletters as well as this magazine, and social media strategy. He recently earned dual master’s degrees in international affairs and journalism from Columbia University. Prior to graduate school, Chris worked in Washington, D.C. as a researcher at the Carnegie Endowment for International Peace, where he focused on international economics and American foreign policy, and coordinated Carnegie’s Economic Strategy Roundtable series. He holds a bachelor’s degree in political science and English from the University of Chicago.

Welcome to all our new USCIB team members!

14 USCIB International Business Spring 2014 www.uscib.org upcoming events

International Commercial Arbitration Workshop 2014 OECD July 21-25, 2014 International Tax Microsoft Innovation & Policy Center Washington, D.C. Conference The ICC International Court of Arbitration® and the University of Florence will host this fi ve-day workshop June 2-3, 2014 featuring drafting sessions and interactive discussions with renowned arbitrators and practitioners. Four Seasons Hotel, Washington D.C. Through examination of a mock case, participants will gain greater understanding of the ICC arbitration process, and will learn strategies and tactics in drafting arbitration documents under the 2012 ICC Rules The OECD, USCIB and BIAC, in cooperation with of Arbitration. Please contact Alexandra Akerly ([email protected]) for more information. a range of supporting organizations, host their latest annual conference on the OECD’s new in- ternational taxation initiatives. Panels will address current OECD tax projects and will in- International Business Forum on Integrating clude speakers from business, the OECD and the U.S. government. The event provides a Respect for Human Rights in Business unique opportunity for U.S. business represen- Learning from Best Practices of Leading Companies tatives to interact directly with key September 18, 2014 representatives from the OECD’s Center for Tax National Center for Civil and Human Rights Policy and Administration as well as senior tax Atlanta offi cials from the U.S. and other OECD coun- tries. Key speakers include: John Koskinen, USCIB, the U.S. Chamber of Commerce and the International Organization of Employers are again part- commissioner of the Internal Revenue Service; nering to hold a major business forum on business and human rights. The forum will include a frank and Masatsugu Asakawa, chair of the OECD Com- open discussion on the importance and challenges of integrating human rights in business. It will provide mittee on Fiscal Affairs and deputy vice minister a unique opportunity to engage with business leaders and other experts in this emerging fi eld, and partici- with Japan’s Ministry of Finance; and Pascal pants will come away with a better understanding of how to integrate human rights as part of their overall Saint-Amans, director of the OECD’s Center corporate responsibility to respect human rights. Progress made at the global level will be discussed, for Tax Policy and Administration. For more in- based on guidance provided in the UN Guiding Principles on Business and Human Rights. Contact Rachel formation, please visit www.uscibtax.org. Spence ([email protected]) or visit www.engagingbusiness.org for more information.

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