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12/05/ 2017

MARKET ACCESS TO NON-EUROPEAN COUNTRIES

Chemical Trade Barriers with third countries – By country priority list –

May 2017

Chemistry making a world of differenceEuropean Chemical Industry Council – Cefic aisblAvenue E. van Nieuwenhuyse 4 B - 1160 Brussels Belgium Tel: +32 2 676 72 11 Fax: +32 2 676 73 01 [email protected] www.cefic.org

May 2017

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COUNTRY BARRIER DESCRIPTION ACTIONS TAKEN up to 31/12/2014

KEY BARRIERS LIST

MADB

ARGENTINA Non-automatic import licenses

Argentina has significantly increased the use of non-automatic licenses which are required for importing a wide range of products. Importers are facing extremely long delays and excessive conditions to obtain their licenses. Argentina imposes special requests for special importing permits and the administrative procedure is a real burden and it can take up from 6 to one year to have an import order approved. This is discriminatory for EU industry in comparison with local producers.

Issue raised in different MAAC meetings.

25 May 2012: EU started consultations with Argentina within WTO dispute settlement.

DG TRADE sent a letter on 8 June 2011 requesting industry to cooperate by collecting evidence. DG TRADE is envisaging a possible WTO case against Argentina.

NO YES

ARGENTINA New guidelines Patent Applications

On May 8, 2012, the Ministry of Industry and the Ministry of Health issued a Joint Resolution 118/2012, 546/2012 and 107/2012 which contains new standards for the evaluation of patent applications in the chemical and pharmaceutical fields. These new standards contain very restrictive criteria concerning the allowable scope of claims in the chemical and pharmaceutical fields.

Involvement of Efpia. Issue raised in MAWG 18 oct 2012.

? NO

BRAZIL Lengthy process for patent applications(not chemicals specific)

Extremely extended time to have trademark and patent applications duly evaluated/approved by INPI, in some cases up to 5 years for trademarks, 5 to 7 years for an “average” application and more than 10 years for agrochemical patents (e.g. patent on Fipronil took 13 years and 8 months to obtain) – compare to 1-5 years in Germany/EU .

MA WG meetings of 15/02/2012, 27/01/2011 and 12/07/2010.

Second IPR Dialogue is envisaged for September 2012.

After the 1st EU-BRA IPR Dialogue of 16/12/2010 in Brasilia

not explicitly – general IPR enforcement problems are reported

NO (not explicitly) - general IPR enforcement problems are


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KEY BARRIERS LIST

MADB

Limited possibilities to consult documents in patent award procedures, limited access to and shortcomings regarding the status of patents; long examination-proceedings regarding patents and limited possibility for a change of claims after request for examination.

Very strict conditions for registrations of licenses and approval of technology transfer agreements: 5 years only.

No possibility to collect license fees before the patent has been granted.

Proposed solutions: 1) on-line file inspection (similar to EU patent office), speedy approval and issuance of new examination guidelines. EU patent office procedures in general could be seen as model; 2) freedom to collect license fees after the patent application is filed (instead of when registered).

→ Brazil is working on shortening the patent application processing to max 5 years and new patent processing tool online in March 2012

reported (mainly pharma)

BRAZIL Restrictions and high fees on transfers of technology (TT)

License agreements and technical service agreements which include technology transfer, are imposed with restrictions and high taxes in Brazil. Such agreements need a registration at the patent authority and the central reserve bank to realize payments. TT has a highly bureaucratic nature with examination process of TT contracts that can last for more than one year and considerable lack of transparency on the purpose of this examination.

Royalties are only accepted if they are limited to 5 % of the


EU-BRA IPR Dialogue of 16/12/2010 in Brasilia → INPI promised new guidelines to clarify the issue.

Not clear if this barrier is covered by the KBL

Not clear if this barrier is covered by the MADB


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KEY BARRIERS LIST

MADB

net-external sales at the utmost. Repatriation of royalty fees from subsidiary to parent company are limited to this 5%, allegedly to avoid that a company uses TT royalties to repatriate profits which are taxed at a higher rate. This regime discriminates against foreign companies.

Limitation of the duration of such agreements: 5 years at the utmost.

In addition, BRA imposes taxes on the transfer of royalty-payments to proprietary companies in foreign countries (e.g. in Germany). These taxes are a 15 % withholding tax and a so called 10 % CIDE-Fee. These taxes are very high compared with other nations.

Proposed solution: BRA Government should make efforts to reduce the restrictions and taxes on technology transfer. A higher transfer rate would be for the benefit of both the industry and the BRA government. In particular, solutions: 1) freedom of contract for all aspects of the license agreements; 2) legal certainty and a possibility to develop similar licensing concepts as in the EU; 3) a way should be found in which fiscal policy and increased technology cooperation do not rule each other out.

This does not mean no transfer but at a very reduced rate and in certain case might prevent investments if crucial proprietary IP / technology is involved, especially if JVs are considered (which is not an uncommon idea in an industry with a strong national state-owned company controlling the


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KEY BARRIERS LIST

MADB

feedstock).BRAZIL Import restrictions

on nitrocellulose (NC) – de facto ban

Government de facto does not allow the import of industrial nitrocellulose (code 39122019) from EU producers of industrial nitrocellulose by using the following procedure: The NC-customers have to ask the Ministry of Defense of Brazil for an import license. No NC-customer has been delivered an import license during the last years on the basis of the dual-use nature of the product. However, industrial NC is not used for military applications, but for applications such as printing inks, wood lacquer, nail varnish. The import of industrial NC from Brazil into the EU is charged with a 6.5% duty. However, no import license is necessary and there are no other restrictions for the import of industrial NC from Brazil into the EU..

Issue raised in MA WG meetings since 2011

EU Delegation in close contact with BRA Foreign Affairs Ministry.

Discussed between COM and BRA in Joint Committee of:2 Feb 2012, 16 February and 30 June 2011.

Cefic together with industry in direct contact with EU DEL and Abiquim

NO NO

BRAZIL Difficulties in registering new plant protection products and IPR infringement issues

IPR infringement issues on crop protection products in Brazil, estimated to be around 9% of the total crop protection market in 2008/2009 (EUR 200 mln). Main issues:• Improve recordation system: The Brazilian Customs does not have a recordation system that allows the companies to file the trademarks, industrial design and Patents before Customs. Although the Customs has a risk management, the system does not permit to include important information about IP infringed rights. • Enhance legislation: Customs has a specific legislation and procedure to seize products that infringes trademarks but does not predict the seizure of infringed

Industry is in close contact with Brazilian customs

not explicitly – general IPR enforcement problems are reported

NO (not explicitly) - general IPR enforcement problems are reported (manly pharma)


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KEY BARRIERS LIST

MADB

Patents or designs (they used to have a legislation for special procedure in case of any IP infringement, but is was revoked) • Capacity building: The authorities have a problem of structure and man power.However, even with these issues the Brazilian Customs is enforcing trademarks infringements pretty well and the above two improvements should help Brazil to create a better scenario for IP holders.

CHILE Problems in protecting regulatory data for agricultural chemicals (pesticides)

Law N° 19.996 (amending Law N° 19.039), Article 89 provides ten years of data protection for new agricultural chemical entities in compliance with the FTA with the U.S. However, protection is hindered by Article 91 paragraph e) that eliminates protection, if applications for marketing approval are lodged after twelve months from the first foreign marketing approval for the product. The provision conflicts with Chilean regulations for agricultural chemical product assessment. For instance, the ‘Servicio Agricola Ganadero’ (SAG) requires experimental authorizations and results of local seasonal efficacy trials that take at least twenty four months in developing. Therefore, to comply with Chilean regulatory requirements, applicants will inevitably miss the time bars provided to be eligible for data protection.

The twelve-months product use bar goes beyond international agreements and operates in the country’s agricultural detriment. For instance, a certain company that files in Chile within twelve months from its first approval anywhere in the world to achieve protection may not need

Technical expert meeting on 20 July 2012DG Trade and Chilean authorities on IP

? NO


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KEY BARRIERS LIST

MADB

to introduce the product in the market because there is not a pest problem at the time. However the twelve-months use bar waives protection by the time, the product would be actually required by farmers.

SAG started a public consultation process to patch the aforesaid issue. No results have been witnessed to date. Meanwhile, SAG grants marketing approvals by partly relying on dossiers from innovative products. The rationale is that certain studies contained in the dossiers were not required by law, or are summaries –not complete studies- and therefore not eligible for protection.

CHINA Discriminatory import requirements for Active Pharmaceutical Ingredients (APIs)

Governmental import approval for controlled APIs. Chinese regulations currently allow FIEs to apply for Import Drug Licenses (IDL) for inward import of APIs. However, for certain controlled APIs, it is rather difficult to obtain governmental approval for the importation of API samples, which has created an impasse in the IDL approval process. European companies are allowed to apply for IDLs for all APIs, but a prerequisite for IDL approval is that imported API samples are product quality tested. However, in the case of the API discussed above, it is administered by several ministries, none of which have produced official guidelines on its importation for testing, which has created a deadlock in the IDL approval. There are stricter standards than internationally recognized ones (multisampling and testing).

MA WG meetings of 15/02/2012, 15/09/2011 (=presentation of the industry on the import-ban of pseudo-ephedrine into China), 27/01/2011

Meeting DG SANCO with SFDA envisaged in June/July 2012

Industry provided figures on economic impact (opportunity cost) in view of the DG SANCO/SFDA dialogue held in May 2011.

Shift of competences from DG ENTR to DG SANCO.

YES NO


May 2017

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KEY BARRIERS LIST

MADB

EGYPT Additional requirements regarding the Origin Declaration

The EU exporters are required to provide a bill statement “Origin Declaration” EUR 1 approved by the Chamber of Commerce of the exporter country.This new measure requires companies to adapt their processes and documents for each shipment. It thus costs time, efforts and money. In addition, it is very likely that some Chambers of Commerce will not accept to give their approval as they cannot guarantee the content of the bills (for example: price making). However, without such an approval, the preferential treatment will be refused to the exporter.

Not yet reported to the Commission

NO NO

INDIA Difficulties to get patent registration and lack of data protection

Broad exemptions from patentability in the Indian Patent Act (e.g. Section 3 d), 3 h), 3j), 3 f), 3 g) IPA). Especially regarding agrochemicals and biotechnology, patent protection is hardly available.

Section 3(d) of the Indian patent law is not TRIPs compatible. It defines broad restriction to the extent where patents can be granted regarding agro and pharma solutions. In both areas, innovation often depends on how the legislation defines "incremental" innovation. For agro especially, the exception of polymorphs (which often lead to improved properties of the molecules) is inhibiting innovations. This Indian legislation in itself is unique in the world.

Section 3(h) of the Indian patent law defines unclear restriction to the extent where patents can be granted regarding agricultural methods. Especially for agrochemicals, no patents are granted which relate to the application of plant protection products nor for the

MA WG meetings of 12/07/2010 and 27/01/2011.

FTA negotiations ongoing with possible establishment of an IP dialogue between EU and IN.

? NO


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KEY BARRIERS LIST

MADB

application methods to treat plants. However, these are common innovations in the area of plant protection. The Indian legislation is therefore inhibiting innovation

Section 3(j) of the Indian patent law defines unclear restriction to the extent where patents can be granted regarding micro-organisms. The current interpretation of the law is within TRIPS but a watchful eye should be kept that the restrictions on the patentability are not extended in the future.

Even though Section 3(e) & 3(f) of the Indian patent law related to aggregation and combination inventions are within the international norms, their application by the Indian patent authorities as a “card blanche” without the need to justify properly rejection is remarkable. It also prevents the investigation of the invention activity in the submission. Counter arguments can be only related to the reasons of rejection and a targeted argument on the case is therefore not possible.

The Pesticide Management Bill (MB) 2008 with a recommendation of 5 years of data protection (DP) duly endorsed by the standing committee of Parliament has been endorsed by the Rajya Sabha (Upper House) and now awaiting the approval by the Lower House (Lok Sabha). However, there is a need for 10 years data protection for agro-chemicals and this from the date of the first authorization (registration) in India as opposed to what is currently proposed in the Indian MB which provides for 5 years from the date of the first authorization anywhere in the world.


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KEY BARRIERS LIST

MADB

High requirements regarding the proof of an inventive step (Section 2 (1) (ja) IPA. Especially the requirement of “economic importance” is not always appreciable.

Indian patent law has a unique requirement to define the criteria "inventive step" and it requires, besides the regular technical criteria for an invention, to inform about economic significance. However, especially at the early stage of research, an economic value is difficult to define and estimate. This Indian request leads to great uncertainty in the process of granting patents.

Limited possibilities for applicant-statements during the examination-proceedings.

Broad range of administrative discretion regarding the fulfilment of the requirements of the IPA. There are a lot of requirements which are not defined at all in the law. Therefore, they can be broadly interpreted by the patent-office.

Excessive confidential information requirements in order to register a patent without appropriate data protection leading to increased bureaucracy as well as data loss risk (or high fines).

Art. 146(2) of the Indian Patent Law decrees requires that the holder of an Indian patent has to disclose information to the Indian Patent Office whether the respective patent is used commercially in India. This information has to be


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KEY BARRIERS LIST

MADB

submitted each year until March, 31 for the previous year by an Indian patent attorney (Rule 131). This information requirement encompasses business/economic data that are confidential and should not be accessible to competitors. However, the Indian Patent Office is not obliged by law to confidentiality with respect to this information. Since financial penalties for non-compliance of the information obligation have been raised to 20.000 € in 2005, and due to compliance considerations, the requirements of the Indian Patent Office cannot be ignored anymore.

Obstacles caused by non-use of the patent: Possibility to impose compulsory licenses for patents which are registered but not used in India. Beyond this, absence of use of a patent can be the basis for a patent invalidation.

Preliminary injunctions are regularly only granted if the patent is used in India.

INDONESIA Import restrictions through licensing regime

Decree 56/2008 is protectionist and was adopted during the crisis shortly after the first G20 Summit introducing restrictions on imports of certain goods through the application of licensing requirements, limitations on the ports of entry and pre-shipment inspections for each consignment. From the legal point of view, the measure violates a number of WTO rules (e.g. GATT Article XI, the Import Licensing Agreement and the Agreement on Pre-Shipment Inspection), as well as Indonesia's GATS commitments related to maritime services. The US and EU presented a joint written submission on the issue at the WTO Import Licensing Committee.

MA WG meetings of 12/07/2010 and 27/01/2011.

Good cooperation between the EU delegation and authorities in Jakarta → issue dropped from the agenda of the MA WG meeting at the moment.

New Decree 23 amending Decree 56 with some improvements for cosmetics.

NO (not explicitly) – but Non-automatic import licensing, pre-shipment controls and customs procedures (including sampling and testing

YES


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KEY BARRIERS LIST

MADB

Impact: for a chemical producer longer lead-time for spare parts (e.g. electric pumps) & higher costs as fees are attached to get registered as an importer (USD 500 p.a. per item).

procedures) are mentioned in the KBL

INDONESIA Halal Law The Halal Law 33/2014 sets out a very broad and restrictive regime on halal products. While the implementing regulations have not yet been issued, the EU is closely monitoring the situation to avoid bringing trade to a halt.

ACTION in 2017:Issue raised at the MAAC meeting of 16 March 2017.

YES NO

INDONESIA/MALAYSIA

Export restrictions on “crude palm oil”

Palm oil is considered to be a strategic sector since it is the raw material for cooking oil. Indonesia (and Malaysia) are the major producers of palm oil. Malaysia imposes export taxes that affect in a discriminatory way competitiveness between EU industry down the supply chain and domestic companies.

Discussed in last two MA WG meetings

June 2012: Cefic/APAG provided the COM with a 2-pager on this issue

Issue raised at MA WG on 15 September 2011, with support from NL

Issue raised by DE at MAAC of 14 April 2011.

YES (for Indonesia)

NO

JAPAN Maximum Residue Levels – (1) long-time process

Long- time lines to establish (2 years+ compared to e.g. max. 12 months in EU) Maximum Residue Levels (MRL) for agrochemicals in food. This issue causes considerable


? NO


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KEY BARRIERS LIST

MADB

despite internationally recognised levels, (2) differences in the definition of MRL’s (3) and international standards in trade disputes

market access problems for producers of innovative plant protection solutions not so much in Japan itself but in the countries which export agricultural items to Japan.

Differences in the definition of MRL’s, and; international standards are also not always taken into account in case of trade disputes.

List of MRLs (300) are distributed to members

WTO - Trade Policy Review Japan in February 2011: industry provided input.

COM informed that JP promised to send a list of pesticides on which it would like to get more information from the EU to allow further use of the products.

This issue also flagged in scooping exercise EU-Japan

Japan apparently agreed, in the context of the FTA talks, to establish specific deadlines to establish MRL’s, and is revising MRL standards for conformity with international standards. These are positive sign, that need to be followed-up.

JAPAN Registration of chemical substances

Extensive and detailed clarification is required by the Japanese authorities for the registration of new chemical substances. This leads to excessive time to market for new product registrations of up to more than three years. However, both the EU and Japan apparently agreed, in the context of the FTA talks, not to deviate from international

? NO


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KEY BARRIERS LIST

MADB

standards regarding chemical testing requirements for the registration of new substances.

JAPAN Definition of polymers

The definition of polymers in Japan is not fully aligned with the OECD definition, hence leading to different classification and sometimes new/additional registration requirements.

? NO

JAPAN Site accreditation A site accreditation is necessary only for non-domestic manufacturers of pharmaceutical ingredients in Japan, increasing the administrative and cost burden for foreign manufacturers.

? NO

JAPAN Bovine Gelatine – stricter requirements than OIE standards

The very strict Japanese import policy for bovine bone gelatine and gelatine capsules has hampered the gelatine business already for many years. Indeed, the Japanese Food Sanitation Law and the Pharmaceutical Affairs Law prohibit the use of all bovine bone gelatine manufactured with raw materials coming from the EU. This has encouraged the Gelatine Manufacturers of Europe (GME) to undertake actions towards the Japanese authorities. The main objective of GME is to have the Japanese import policy adjusted to the current OIE TAHC (World Organisation for Animal Health - Terrestrial Animal Health Code). The financial impact of the Japanese import restrictions is estimated to be a loss on revenue of +/- 20 mio euro/year.

This issue also flagged in scooping exercise EU-Japan. Discussion at technical level envisaged in March 2012.

MA WG meetings of 15/02/2012, 15/09/2011 and 27/01/201 and also within SPS MA WG meeting.

Discussion between COM and JP ministry in December 2010. Possibility to have the issue on the agenda of the High Level Group (HLG) with JP.

It is now easier to import beef product to Japan, and therefore bovine gelatin for food purposes. However, market access for bovine

? NO


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KEY BARRIERS LIST

MADB

gelatine for pharmaceuticals is not yet 100% granted.

KOREA Customs Burdensome process –in particular for SMEs- to apply for the ‘approved exporter’ status. In addition, there is the horizontal problem as regards the direct transportation provision in the Rules of Origin protocol.

Both issues raised in various fora and MA WG meetings in 2012 and 2013. COM in negotiation with Korean authorities to amend current protocol text to allow for preferential tariff use.

? NO

KOREA Active Pharmaceutical Ingredients (API)

Korea announced legislative changes as regards APIs (it seems that the list of APIs for which registration is required will be extended) however industry need clarification on the content as well as expected time of implementation.

Issue raised in MAWG 23/9/2013. ? NO

RUSSIA Cumbersome pre-import disclosure requirements

Pre-import disclosure requirement re ethanolThere is a requirement by Russia (likely since the introduction of its state monopoly on alcohol production approx. 5-7 years ago) that for product imports of several businesses of a member company they have to prove that these products do not contain any ‘ethanol’ content. As a result, these business units have to continuously write such ‘non-ethanol content’ certification letters (copy provided to COM) or obtain such letters from external institutes.

Disclosure of manufacturer – and product informationThe ‘expert’s report’ and ‘registration certificate’ requested by the Customs Union (CU) authorities require information about the manufacturer of the import product, and the ‘made-in’ information on the product label needs to be aligned.


Seminar on the Russia-Kazakhstan-Belarus Customs Union of 15 February 2011 with governments, industry, EU Member States.

EU-Russia ENTR Dialogue (Subgroup on chemicals) of July 2010.

? NO


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KEY BARRIERS LIST

MADB

Certain customs check-points, i.e. St. Petersburg, continue to request that shippers (like some Cefic members) disclose detailed pre-import product information, including the complete formulation of each product. They claim that they need these details either for the purpose of customs tariff classification or for chemical safety reasons.

RUSSIA Non-transparent and unclear customs procedures/Impact of the Customs Union (CU)

CU Registration process for chemicals under HS code 29: For a unified list of products, e.g. under HS code 2926, 2931, 2933 a state registration certificate is needed. There is a new central Moscow-based registration office which handles these registrations with the option of a more expensive fast track (2 week) and the normal slow track (4 weeks). While this system is working well in general, the following issues have arisen:• At times, such as during vacation periods (i.e. summer vacation etc.) or because of organization changes, there is not sufficient staff to process these registrations, which has caused delays and has hindered the fast turn-around of these products to the market• There have been instances when the registration officers have made mistakes in the registration documents, i.e. misspelling the product name so that the information in the shipping documentations was different. These leads to significant delays at the customs when the customs officials find these inconsistencies and the registration certificates need to be re-issued. While the Moscow-based registration process might work well for large international companies that have sufficient staff and/or can afford the service of external consultants to



EU-Russia ENTR Dialogue (Subgroup on chemicals) of July 2010. The RU-KZ-BY Customs Union (CU) implementing provisions on Authorized Economic Operators (AEOs) will be applied as of 1 January 2012

Issues to be followed up closely with DG ENTR

? NO


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KEY BARRIERS LIST

MADB

file for these registrations in the Moscow office, SMEs and remotely based companies find it a burden to having to personally send somebody to Moscow to register these products centrally, rather than having the opportunity of local registration, which would decrease costs and delays for them. Product registrations for these companies can take up to 3 months.

According to the latest developments end of 2011, it seems that there is a review going on at the moment concerning this customs tariff code – to the extent that the authorities do not deal with any products coming under this code. This is the other side of the extreme: while previously the industry would have obtained the registration and would have been able to import and sell, now everything is on hold and the authorities refuse to handle submissions for such products.

AEO Status: Under the new Customs code, at the federal level, companies in Russia can apply for the status of Authorized Economic Operator (AEO) which would grant preferred treatment for compliant operators. However, there is currently no information about the process available at the local customs, nor has the business community been properly informed. For example, it seems that one requirement for obtaining the AEO status is the down-payment of a ‘guaranteed customs deposit’ by the companies. However, details re this deposit and other details and criteria related to the AEO status have


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KEY BARRIERS LIST

MADB

apparently not yet been defined and remain unclear. The lack of information related to the AEO process makes its fast implementation unlikely.

Advance information to business community: information about the implementation of specific regulations of the CU - which came into effect on July 1, 2010, was shared very late with the business community. For example, one of Cefic member was only informed about the specific new requirement that all chemical products in HS code 29 needed a Hygienic Certificate for import into Russia very lately. Because of the late information, industry was unable to implement this new regulation in time and had to stop imports of its EU products into Russia for more than a month which caused extra costs and slowed down its ability to serve its customers in a timely manner.

Sanitary Controls: As of July 2011, the responsibility for sanitary controls has been shifted from the local customs check-points to the border check-points. The business community has not been notified properly. It is therefore not clear which customs authorities – i.e. Russian or CU – will be carrying out these controls, and at which border. It is also unclear what the procedures and requirements will be.

Arbitrary applying of tariff codes:There are many instances in which the CU customs officials apply – in a rather arbitrary manner - different tariff codes to the import products than the tariff codes allocated by member


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KEY BARRIERS LIST

MADB

companies. This can lead to situations where the import products suddenly need to be registered to comply with state registration requirements.

Permit & Import License Requirements for Polymers listed under CU dual-use RegulationRussian customs authorities are interpreting the CU dual use regulation (Decision No. 743, 16 Aug 2011: item no. 366) erroneously: Based on a list of drug precursors which includes methyl methacrylate (MMA) and methacrylate (MA), a special permit and an import license – to be issued by the Ministry of Industry and Trade – needs to be obtained for products containing > 15% MMA or MA. Obtaining the permit and import license is a burdensome, lengthy and costly process (20-30 works days to get permit from the Russian Federal Drug Control Service, and ~3 days for import license from Ministry of Industry and Trade). Costs per license amounts to ~ EUR 1000. As Russian (CU) customs officials have not received any official guidance related to this new regulation, they are interpreting the rule literally and do not differentiate between residual MMA and reacted (i.e. no longer freely available) MMA in import products. As a result, customs officials stop polymer imports at the border, failing to consider the chemical reaction process: Once reacted, the original MMA is no longer MMA and these polymer imports do not contain MMA, and should be exempt from the import license requirement. Recommendation: ensure Russian/CU customs receive instructions to exempt polymers from the requirement of import authorizations/license.

Confirmation that substances are not listed in internationally controlled drug precursor list (UN, EU, Canada, US).

EU-Russia Working Group on Customs Border Issues Dialogue in July 2012

RUSSIA Reduction and shifting of Customs

Russia plans to transfer inland customs checkpoints to its external borders (by 2014 for road transports and by 2020


? NO


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KEY BARRIERS LIST

MADB

checkpoints for rail transports), will make it difficult for exporters into Russia which so far had their warehouses located close to the inland check points. Importers fear that Russia’s efforts to reduce the number of general customs clearance offices and terminals in Russia and to consolidate the regional customs clearance offices might have a negative impact on customs clearance efficiency.

Local Customs check-point: Currently, one Cefic member uses the local Vladimir customs check-point for the majority of its goods, while the rest is cleared through St. Petersburg, which is more cumbersome and inefficient. Industry is not aware of plans to close the Vladimir customs check-point, but wants to ensure this will not happen in the future.

Electronic Customs Clearance: the Vladimir customs check-point is being converted to a center for electronic customs clearance which handles all customs declarations electronically. After some initial difficulties in the transition period last year, it is increasingly working well and about 90% of the goods are cleared electronically.

Advance and Distant Customs Clearance by local Customs Check-points: under the new Customs Code, in some regions, i.e. the St. Petersburg region, businesses have the opportunity of distant customs clearance. With this process, the business’ local customs points arranges in advance for the release of the imports at the moment the goods cross the border (i.e. in St. Petersburg or at the Belarus border), by sending a notification of release to the border customs check-points. After that, the goods can be delivered directly to the business’ warehouse, without another stop and


EU-Russia Customs Dialogue with DG TAXUD

→ EU informed that ongoing discussion with RU to establish an “early warning mechanism” to ensure timely information on changes of customs practices or legislation<;


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further delay at the local customs check point. This helps the businesses avoid delays and reduce storage costs. For the business community in Vladimir and other inland regions, this option is currently not available, which means that they need to get their goods delivered to the local customs check-point and then cleared locally, which results in delays and additional storage costs.

SAUDI ARABIA

Possible ban on the use of triclosan in cosmetics and toothpaste

The Saudi Arabia authorities (SFDA) is planning to ban the use of Triclosan in cosmetic and toothpaste. If this decision is taken, Saudi Arabia would be the first country in the world to completely ban the product.

Industry: cooperation with American Cleaning Institute ‘ACI formerly the Soap and Detergent Association) who already had some contacts with US DoC and USTR. Industry contacted Saudi FDA in March and April 2011 to convince them that all data available show the concern surrounding triclosan is misconception.

DG ENTR TBT-enquiry point asked officially to Saudi Arabia on 24 June 2011 about its intention to legislate on the use of triclosan in cosmetics and toothpaste and asked Saudi Arabia to WTO TBT if it was the case. Yet, no response from SA.

Cefic in close contacts with DG SANCO, DG TRADE and DG ENTR.

? NO


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MADB

Issue raised by DE at MAAC 10/11/2011

THAILAND Import restrictions on nitrocellulose (NC) – de facto ban

The Thai government de facto does not allow the import of Industrial NC (code 39122019) from EU producers by using the following procedure: The NC-customers have to ask the Ministry of Defense of Thailand for an import license. No NC-customer has got an import license the last years. Industrial NC is not used for military applications, but for applications like printing inks, wood lacquer, nail varnish.

There is no restriction in the EU for the import of Industrial NC from Thailand into the EU and also no import duty as Thailand is on the list of the EU's GSP.

Importers continue to have serious concerns about the lack of transparency of the Thai customs regime and the significant discretionary authority exercised by Royal Thai Customs officials. The Royal Thai Customs Director General retains the authority and discretion to arbitrarily increase the customs value of imports. Many governments and industry have raised concerns with the Royal Thai government regarding this authority and has urged Thailand to eliminate this practice. The industry also have expressed concern about the inconsistent application of Thailand’s transaction valuation methodology and repeated use of arbitrary values by Royal Thai Customs.

Various governments and exporters continue to urge Royal Thai Customs to implement needed reforms, including

Issue raised in several MA WG meetings since 2011.

? YES


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publishing proposals for changes in customs laws, regulations, and notifications, and allowing sufficient time for comments on these proposals. They also have requested that Royal Thai Customs impose a time limit on the issuance of rulings, respond to appeals within an established time period, provide a full explanation of its decisions regarding appeals, establish a reasonable time period at the beginning of an audit or an investigation for their completion, and provide a written report of the findings of the audit or investigation.

TURKEY SPS Issues Turkey implemented a directive on the import controls of food contact materials which require EUexports to be accompanied by either an official health certificate (issued by external institute) or by a company statement (must include details and a wet signature and stamp). This leads to unnecessary burden and delay for EU companies and moreover has led to frequent rejections of health certificates presented by EU exporters.of chemicals.

Issue raised at MAWG 23/9/ 2013 NO NO

TURKEY Turkey published the decree nb 2016/9647, that covers the import of a range of products under HS chapters 33 and 34 The decree requires certificates of origin for every delivery of these products to Turkey. Turkish authorities check the origin of the imported goods, on the basis of the Certificate of Origin. When the goods are not from EU origin, an import duty is applied (from 17% to 25%, and up to 75% for one specific product) even though the goods were already in free circulation in the EU. This lead to extra costs for companies: customs duties for non-EU originating products & extra documentation work.

ACTION TAKEN in 2017: NTB report sent to the Commission; Issue was raised during the MAAC of 20 april 2017, and supported by FR, DE, PL and BE delegates.

YES NO


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UKRAINE Customs valuation Ukrainian custom offices use several methods to increase government revenue through higher taxes and custom duties.

Most common methods include wrong custom classifications of goods (goods are classified under tariff headings with higher duties) and custom valuation is not based on the actually transfer price (according to the WTO Agreement on Custom Valuation) but on minimum values

Issue was raised during several MAAC and MAWG 15/02/2012

30.03.2012: The EU, Norway, US and Switzerland raised their concerns during the WTO Trade in Goods Council

Several meetings between Ukrainian officials and company representatives with support from EBA in Kiev

Some sectors already agreed on transfer prices with Ukrainian custom office

? NO

UKRAINE Illegal plant protection products

ECPA (European Crop Protection Association) informed COM about the considerable growth in illegal plant protection products in Ukraine, amounting to 30-50% of the total Ukrainian plant protection products market. EU exports of these products amounted to EUR 200mln per year.

MA WG meetings of 15/02/2012 and 15/09/2011

ECPA raised this issue also in IPR unit of DG Trade

? NO

VIETNAM Difficulties for recruitment/management of foreign employees

The Viet government issued Decree No. 46/2011/ND-CP dated 17 June 2011 amending a number of provisions of Decree 34/2008/ND-CP dated 25 March 2008 on recruitment and management of foreign employees working in Vietnam (referred to as “Decree 46”), in effect from 01 August 2011. This controversial decree is in fact restricting recruitment of foreign employees in Vietnam, imposed irrational conditions for work permit extension, and is likely

Issue was raised during MAAC 10/11/2011 and MAWG 15/02/2012 and 15/09/2011.

Vietnam re-confirmed that restrictions were targeted at low-skilled foreign employees, but due to vague terminology, the future

? NO


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to constitute violations of the WTO Agreements (and for information as well as the US - Vietnam BTA).

Decree 46 (amending Decree 34) on recruitment and management of foreign employees in Vietnam: - extension of work permits for foreign employees must be accompanied with apprenticeship contracts with Vietnamese employees expected to substitute the relevant foreign employees; - no work permit exemption for intra-corporate transferees in manufacturing and sectors not covered by the Vietnam’s WTO Specific Commitments. - at least 30 days prior to any recruitment of foreigners, companies must publicly inform recruitment demands to Vietnamese for positions they expect to employ foreigners; - evidence of conducting recruitment advertisements to Vietnamese must be included in the application for work permits of foreign employees; and - legal analysis: can trigger violations of GATS (and US – Vietnam BTA).

circular guiding the implementation will offer clarification.

Issue raised in EU-Vietnam Trade & Investment WG on 6 October 2011

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