International Trade Compliance Update (Covering Customs and Other Import Requirements, Export Controls and Sanc- tions, Trade Remedies, WTO and Anti-Corruption) Newsletter | May 2019 In This Issue: World Trade Organization (WTO) World Customs Organization (WCO) Other International Matters The Americas - Central America The Americas - North America The Americas - South America Please see our Webinars, Meetings, Seminars section for contact and regis- Asia-Pacific tration information for the new webinars in our 16th annual Global Trade and Europe, Middle East and North Africa Supply Chain Webinar Series entitled, “2019: What's Up in International Trade? Keeping up to Speed on Evolving Challenges,” as well as links to Africa (except North Africa) past webinars and information on other events. Trade compliance enforcement ac- tions - import, export, IPR, FCPA In addition, there are links to the video recordings, PowerPoints and handout Newsletters, reports, articles, etc. materials of the Webinars, Meetings, Seminars, etc. 2018 Year-End Import/Export Review in Santa Clara as well as WTO TBT Notifications Presentation Materials from the CBP Rulings: Downloads and Asia Pacific International Commercial and Trade Client Confer- Searches ence (Tokyo November 2018). CBP Rulings: Revocations or Modifi- cations European Classification Regulations To keep abreast of international trade-related news, visit our blogs: Amendments to the CN Explanatory For International Trade Compliance Updates, please regularly visit www.international- Notes tradecomplianceupdate.com. Section 337 Actions For additional articles and updates on trade sanctions and export controls, please visit: Antidumping, Countervailing Duty http://sanctionsnews.bakermckenzie.com/ regularly. and Safeguard Investigations, Or- ders & Reviews For resources and news regarding international trade, particularly in Asia, please visit our Trade Crossroads blog at http://tradeblog.bakermckenzie.com/. To see how BREXIT (the UK exiting the EU) may affect your business, visit http://brexit.bakermckenzie.com/ Editor, International Trade Com- For additional compliance news and comment from around the world, please visit http://global- pliance Update compliancenews.com/. Stuart P. Seidel Washington, D.C. +1 202 452 7088 Note: Unless otherwise indicated, all information in this Update is taken from official ga- [email protected] zettes, official websites, newsletters or press releases of international organizations (UN, WTO, WCO, APEC, INTERPOL, etc.), the EU, EFTA, EAEU, Customs Unions or This may qualify as “Attorney Advertis- government agencies. The specific source usually may be obtained by clicking on the ing” requiring notice in some jurisdic- blue hypertext link. Please note that as a general rule, information related to fisheries is tions. Prior results do not guarantee a not covered. similar outcome. Please see copyright and acknowl- edgements on the last page Please see copyright and acknowl- Ed- Inter- edgements on the last page itor na- tional Trade 8465028-v6\WASDMS 1 Compliance Update Baker McKenzie World Trade Organization (WTO) The International Trade Compliance Update is a publication of the Australia ratifies Government Procurement Agreement Global International Commercial and Trade Practice Group of Baker The WTO announced that Australia has ratified the WTO’s Agreement on Gov- McKenzie. Articles and comments ernment Procurement (GPA), submitting its instrument of accession to the WTO are intended to provide our readers Secretariat on 5 April. The announcement said that Australia will become the with information on recent legal de- 48th WTO member to be bound by the GPA. The GPA will take effect for Aus- velopments and issues of signifi- tralia 30 days from the date of submission of its accession instrument, i.e. on 5 cance or interest. They should not May 2019. be regarded or relied upon as legal advice or opinion. Baker McKenzie Six regional trade Agreements reviewed advises on all aspects of Interna- tional Trade law. The WTO announced that members reviewed six regional trade agreements Comments on this Update may be (RTAs) at a meeting of the Committee on RTAs on 1 April 2019. The new chair of sent to the Editor: the Committee, Ambassador Carlos Mario Foradori of Argentina, presided at this first Committee meeting of 2019. The agreements reviewed were: Stuart P. Seidel Washington, D.C. Closer Economic Partnership Arrangement Between Hong Kong, China and Ma- +1 202 452 7088 cao, China [email protected] Chile-Thailand Free Trade Agreement A note on spelling, grammar and dates-- China-Georgia Free Trade Agreement In keeping with the global nature Georgia-European Free Trade Association (EFTA) Free Trade Agreement of Baker McKenzie, the original Accession of Panama to the Central American Common Market (CACM) spelling, grammar and date format- ting of non-USA English language Accession of Ecuador to the Trade Agreement between the European Union, Co- material has been preserved from lombia and Peru the original source whether or not the material appears in quotes. The results of each review may found through the announcement link. Translations of most non-English Trade Policy Reviews: Bangladesh, Samoa language documents are unofficial and are performed via an auto- The fifth review of the trade policies and practices of Bangladesh took place on 3 mated program and are for infor- and 5 April 2019. The basis for the review was a report by the WTO Secretariat mation purposes only. Depending and a report by the Government of Bangladesh. on the language, readers with the Chrome browser should be able to The first review of the trade policies and practices of Samoa took place on 10 automatically get a rough to excel- and 12 April 2019. The basis for the review was a report by the WTO Secretariat lent English translation. and a report by the Government of Samoa. Credits: Unless otherwise indicated, all in- WTO addresses “essential security interests” claim for the first time formation is taken from official inter- On 5 April 2019, the WTO circulated the panel report in Russia – Measures Con- national organization or government websites, or their newsletters or cerning Traffic In Transit (DS512). The decision is the first time that a WTO panel press releases. has had to decide the extent of WTO jurisdiction over a claim by a Member that its actions were appropriate under Article XXI, the essential security exemption Source documents may be accessed by clicking on the blue from WTO rules. Ukraine brought the dispute in September 2016 after the Rus- hypertext links. sian Federation imposed restrictions preventing Ukraine from using roads and railways to trade goods with several former Soviet republics. Ukraine claimed This Update contains public sector infor- mation licensed under the Open Govern- that the measures appear to be inconsistent with: ment Licence v3.0 of the United King- dom. In addition, the Update uses mate- Articles V:2, V:3, V:4, V:5, X:1, X:2, X:3(a), XI:1, XVI:4 of the General Agree- rial pursuant to European Commission ments on Tariff and Trade 1994 (GATT 1994); and policy as implemented by Commission Decision of 12 December 2011. Paragraph 2 of Part I of the Russian Federation's Accession Protocol (to the ex- tent that it incorporates paragraphs 1161, 1426 (first sentence), 1427 (first and third sentences) and 1428 of the Report of the Working Party on the Accession of the Russian Federation). International Trade Compliance Update | May 2019 2 8465028-v6\WASDMS Baker McKenzie Russia asserted that the measures were among those that it considered neces- sary for the protection of its essential security interests, which it took in response to the emergency in international relations that occurred in 2014, and which pre- sented threats to Russia's essential security interests. Russia invoked the provi- sions of Article XXI(b)(iii) of the GATT, arguing that actions taken pursuant to Ar- ticle XXI were “self-judging” and were not subject to WTO review because they were necessary to protect its “essential security interests.” Russia said that once Article XXI was invoked, the WTO could no longer review the issue and, as a re- sult, the Panel lacked jurisdiction to further address the matter. Article XXI(b)(iii) provides, inter alia, that “in a time of war or other emergency in international relations” a Party to the GATT may take action that it considers nec- essary to protect its essential security interests taken in time of war or other emergency in international relations. The Panel disagreed and found that WTO panels have jurisdiction to review as- pects of a Member's invocation of Article XXI(b)(iii). Specifically, the Panel found that, while the chapeau of Article XXI(b) allows a Member to take action “which it considers necessary” for the protection of its essential security interests, this dis- cretion is limited to circumstances that objectively fall within the scope of the three subparagraphs of Article XXI(b). (Emphasis added.) XXI(b) states: (b) to prevent any contracting party from taking any action which it considers neces- sary for the protection of its essential security interests (i) relating to fissionable mate- rials or the materials from which they are derived; (ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; (iii) taken in time of war or other emergency in international relations; or Once it is determined that required circumstances exist, it is left in general to every Member to define what it considers to be its essential security interests. Moreover, the Panel found that the specific language “which it considers” meant that it is for a Member itself to decide on the “necessity” of its actions for the pro- tection of its essential security interests. The Panel found that Russia had met the requirements for invoking Article XXI(b)(iii) in relation to the measures at issue, and therefore, that the transit bans and restrictions were covered by Article XXI(b)(iii) of the GATT 1994.