10th June 2013

Did You Know? Issue 159

1. China joins the ICC re Certificate of Origin: 2. Switzerland announces VAT increase: 3. UK Balance of Competences Review:  4. Israel VAT increased June 2013:  5. USA GSP Currently Set to Expire 31st July 2013: 6. WTO Membership – Accession news: 7. New ICC standards help define trusted traders: 8. SLOVENIA TO INCREASE VAT RATE: 9. EU lifts sanctions on Myanmar/Burma:
1. China joins the ICC re Certificate of Origin: China has become the latest country to join the International Chamber of Commerce’s (ICC) World Chambers Federation (WCF) International Certificates of Origin (CO) Accreditation Chain. China’s membership will strengthen the committee’s work to promote the role of Chambers in the delivery of trade facilitation services, especially to small- and medium-sized businesses.  The CO Chain was launched in early 2012 as a means to strengthen the global integrity and trust of the CO network, and reinforce the status of chambers as the competent, trusted third party with neutrality in the delivery of COs based on internationally accepted best practices. It also seeks to give greater international credibility to COs issued.  The CO Guidelines give assurance to customs administrations, banks and importers of the independent, reliable, responsible, transparent and accountable issuance of CO. 
2. Switzerland announces VAT increase: Switzerland has said that the current rate of VAT will rise from 8% to 8.1% from 2018 to 2030.  The move had already been approved by the upper house, the Senate.  The current 8% Swiss VAT rate was set as a temporary rate from the start of 2011.  It was raised from 7.6% to help fund rising social costs, and was planned to drop back in 2018.
3. UK Balance of Competences Review:  The Department for Business, Innovation and Skills (BIS) is producing three reports as part of the Government's Coalition Agreement to examine the Balance of Competences between the United Kingdom and the European Union. It is a comprehensive Government audit of what the EU does and how it affects the UK and it is intended to make a serious contribution to the debate about how to modernise, reform and improve the EU, and we are seeking your views.  Among other things the review will be considering whether the EU strikes the right balance between regulating imports and exports and facilitating international trade; whether harmonisation of laws at EU level is beneficial to the UK; and what are the advantages and disadvantages of EU action on international trade. 
Reports will be published in December 2013 but the reviews will be ongoing until March 2014.  The reports cover the division of competence over:
  • international trade and investment, including the negotiation of international trade and investment agreements, trade and investment promotion, trade defence, export and import licensing, and export credits
  • research and development policy
  • the free movement of goods within the EU (this report is being produced jointly with Her Majesty’s Revenue and Customs).
This review provides a unique opportunity for everyone affected by EU rules on international trade to express their views and to submit evidence to the Government. HMRC are requesting input from anyone with relevant knowledge, expertise or experience. We would welcome contributions from businesses, individuals, civil society organisations, think-tanks, governments and governmental bodies. We welcome input from those within the UK or beyond our borders. We are particularly seeking views from those who can support their arguments with relevant examples, data or statistics.
The ‘Review of the Internal Market: Free Movement of Goods’ will cover trading in goods within the internal market (also known as the ‘single market’); EU customs procedures; and EU intellectual property legislation. Further details can be found in the Call for Evidence for the Internal Market: Free Movement of Goods review on the www.gov.uk website.
The ‘Review of Trade and Investment’ will cover trading in goods and services outside of the EU. Further details can be found in the Call for Evidence for the Trade and Investment Review on the www.gov.uk website.
If you have any questions about the review, or would like to contribute, please contact:
Lee Barham, Customs Directorate,
Tel: 0207 147 0141
Andrew Waller, Customs Directorate
Tel: 0207 147 3274
Evidence can be submitted by post or e-mail to:
E-mail: hmrc.balance-of-competences@hmrc.gsi.gov.uk
4. Israel VAT increased June 2013:  On 28 May 2013, the Israeli Minister of Finance signed an order raising the VAT rate in Israel, as of 2 June 2013 (the "Effective Date"), from 17% to 18%. The VAT rate increase will apply to any transaction for which the VAT liability is created after the Effective Date.
5. USA GSP Currently Set to Expire 31st July 2013: Like most developed markets the USA operate the Generalized System of Preferences (GSP) trade program under which thousands of products originating in over 100 developing countries are eligible for duty-free entry into the United States.  Since its inception in 1976, GSP has been renewed periodically by Congress. However, there have been a number of instances in which the program has been allowed to lapse, meaning that Congress failed to renew the program prior to the expiration date. Most recently, this occurred at the end of 2010 when Congress allowed GSP to expire. In that case, GSP was not renewed for ten months. The GSP renewal bill passed in October 2011 extended the program until 31st July 2013.  In prior instances where GSP has been allowed to expire, Congress has subsequently passed renewals that have been effective retroactively, meaning that importers were entitled to duty refunds for entries made during the period that GSP was not in effect. However, Congress is under no obligation to include a retroactivity provision. In the event that GSP is allowed to expire, U.S. Customs will likely issue guidelines for importers on how to flag otherwise-eligible goods to enable Customs to liquidate such preference claims with a refund should the GSP program be reauthorized retroactively.  Unless Congress renews GSP prior to 31st July 2013, customs duties will be required on merchandise that was previously eligible for duty-free entry under GSP, beginning on 1st August 2013. Since Congress will be in recess for five weeks beginning 5thAugust 2013, a lapse in GSP would likely run for at least six weeks.  NOTE:  EU current GSP scheme is due to expire on 31st December 2013 and though the EU has said it will continue with this scheme from 2014 a number of countries will no longer be eligible for the duty reliefs/ reductions.
6. WTO Membership – Accession news:
The WTO welcomed progress in the accession procedures for the Tajikistan.
Ratification due 7th June 2013
7 June 2013: Bosnia and Herzegovina accelerates membership negotiations
5 June 2013: Kazakhstan accession talks reach advanced stage
5 April 2013: Algeria resumes its WTO membership negotiations
7. New ICC standards help define trusted traders: ICC has published a collection of standards to help border authorities determine a standardized definition of a diligent trader. With a widely-accepted premise that low-risk traders should receive benefits for their investment in security and compliance, a variety of “trusted trader programmes”, commonly referred to as Authorised Economic Operator (AEO) programmes have been implemented worldwide.  It is almost unnecessary to say it, but trade is better facilitated when traders represent a low risk to security by complying with national laws and regulations, and border authorities are more likely to reduce barriers to trade when they are confident that traders have implemented strong security, trade compliance processes and internal controls. Developed by the ICC Commission on Customs and Trade Facilitation, the ICC Guidelines for Cross-Border Traders in Goods apply on a voluntary basis and are not binding. The guidelines cover the essentials of trader behaviour and will be regularly updated to include relevant developments and to broaden the scope accordingly. Read More
Download: ICC Guidelines for Cross-Border Traders in Goods
Download: ICC Customs Guidelines
The Slovenian government has agreed a new austerity package, which includes a 2% VAT rate rise on 1 July 2013. The current Slovenian standard VAT rate is 20%, and was set in 2002.  The reduced VAT rate will also rise from 8.5% to 9.5%.
9. EU lifts sanctions on Myanmar/Burma: May 2012, the European Union announced that it was temporarily suspending all sanctions measures on Myanmar/Burma until April 30, 2013, with the exception of an arms embargo and controls on the supply of items that might be used for internal repression purposes. The European Union said that it has watched and supported the remarkable process of reform in Myanmar/Burma. It welcomes the developments towards democracy, a strong Parliament, freedom of expression, and the government's efforts against corruption, as well as the efforts towards the release of remaining political prisoners. On 30th April 2014 the EU has agreed to formally lift its sanctions regime on Myanmar, again with the exception of the arms embargo and internal repression controls. The EU will continue to monitor political developments in Myanmar and has stated that it will reinstate sanctions measures at short notice should it decide that the EU's objectives in Myanmar are not being met. The formal lifting of the sanctions measures represents a significant step forward in diplomatic relations between the EU and Myanmar. Prior to engaging in business in Myanmar and/or with related counterparties, businesses are advised to exercise caution, notably by conducting adequate due diligence for the purposes of their broader compliance obligations (anti-bribery and corruption laws, etc.) and by ensuring appropriate contractual clauses to adequately protect against the risk of the EU reinstating sanctions measures at short notice. More information
Contact Strong & Herd
to discuss your requirements
0161 499 7000
0161 499 7100
Strong & Herd LLP, Manchester International Office Centre
Styal Road, Manchester, M22 5WB