OCR Global Trade Brief – May 2024

Table of Contents

EU and New Zealand Trade Agreement


The EU-New Zealand trade agreement has come into force, offering new export opportunities for EU businesses, producers, and farmers. This deal will save EU companies €140 million annually in duties and could increase EU-New Zealand trade by up to 30% within a decade. EU exports may rise by €4.5 billion per year, and EU investment in New Zealand could grow by 80%. The agreement also includes significant sustainability commitments, adhering to the Paris Climate Agreement and core labor rights.


EU farmers will benefit from the removal of tariffs on exports like pig meat, wine, chocolate, and biscuits. It also protects nearly 2,000 EU wines and spirits and 163 traditional EU products. Sensitive EU agricultural products, such as beef and dairy, are protected by specific tariff rate quotas.


Key benefits for EU businesses include zero tariffs on exports to New Zealand, an open New Zealand services market, non-discriminatory treatment for EU investors, improved access to New Zealand government contracts, support for small business exports, and reduced compliance requirements and procedures.


Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_2388





300 new sanctions on Russia’s military-industrial base and third-country support


The U.S. Department of the Treasury has implemented 300 new sanctions targeting Russia’s military-industrial base and chemical and biological weapons programs. These sanctions also affect companies and individuals in third countries, including China, that supply critical inputs to Russia’s defense sector. This international effort aims to hinder Russia’s ability to continue its war against Ukraine.


Secretary of the Treasury Janet L. Yellen emphasized that companies providing material support to Russia will face severe consequences. The sanctions target nearly 200 entities by the Treasury and over 80 by the Department of State. These measures disrupt Russia’s military operations, targeting evasion networks and supporting Ukraine’s resistance with military, economic, and humanitarian aid.


Additionally, the Department of State is sanctioning entities involved in Russia’s energy, metals, and mining sectors and individuals connected to the death of opposition leader Aleksey Navalny. The Department of Justice also filed a forfeiture complaint against aircraft landing gear purchased for a Kyrgyz Republic-based transshipper servicing Russia, violating U.S. sanctions.


Source: https://home.treasury.gov/news/press-releases/jy2318




U.S. OFAC Amendments to Reporting, Procedures and Penalties Regulations


The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued an interim final rule to amend the Reporting, Procedures, and Penalties Regulations. The amendments mandate the electronic filing of certain submissions and modify reporting requirements for blocked property and rejected transactions. 


Key changes include:

  • Mandatory use of the electronic OFAC Reporting System for reports on blocked property and rejected transactions, eliminating the mail option for some submissions.
  • New reporting requirements for financial institutions concerning transactions that meet specific criteria.
  • Additional reporting requirements for any blocked property that is unblocked or transferred.
  • Clarifications on the scope of reporting for rejected transactions, partly in response to feedback on a 2019 interim final rule.
  • Modified procedures for addressing property blocked in error.
  • Updates on the availability of information under the Freedom of Information Act (FOIA) for certain records.
  • Clarifications on submitting petitions for administrative reconsideration to remove persons or property from OFAC’s sanctions lists.
  • Descriptions of reports that OFAC may require from financial institutions to help identify blocked property.
  • Several technical and conforming edits.


OFAC is seeking public comments on this interim final rule for 30 days.


Source: https://public-inspection.federalregister.gov/2024-10033.pdf





U.S. BIS adds 37 entities from China to Export Administration Regulations (EAR) entity list


The U.S. Bureau of Industry and Security (BIS) has added 37 Chinese entities to the Export Administration Regulations (EAR) Entity List, reflecting a commitment to protecting U.S. national security and foreign policy. This brings the total number of Chinese entries on the Entity List to 355 under the current administration.


Key additions include:

  • 22 institutes and firms involved in China’s quantum technology advancements, which have significant military applications and pose a threat to U.S. security. Some are also connected to China’s nuclear programs or have shipped controlled items to Russia post-Ukraine invasion.
  • Four entities acquiring or attempting to acquire U.S. items for China’s military unmanned aerial systems (UAS).
  • Eleven entities linked to China’s High Altitude Balloon program, which raises national security concerns. This action follows measures taken in February 2023 against PRC aerospace programs.


The additions to the Entity List are part of the Disruptive Technology Strike Force’s efforts, co-led by BIS and the Department of Justice, to target illicit actors, strengthen supply chains, and safeguard critical technologies from being acquired by adversaries. The Strike Force uses U.S. export control enforcement and regulatory powers to prevent destabilizing military capabilities, including advanced technologies like quantum computing.


Source: https://www.bis.gov/press-release/commerce-adds-37-prc-entities-entity-list-enabling-prc-quantum-and-aerospace-programs





USTR Issues Federal Register Notice on Section 301 Proposed Tariff Modifications and Machinery Exclusion Process


The U.S. Trade Representative (USTR) has issued a Federal Register notice regarding proposed tariff modifications and an exclusion process for machinery under Section 301. The USTR’s report found that China has not eliminated its technology transfer practices, which continue to burden U.S. commerce. Furthermore, China has intensified its efforts to acquire foreign technology through cyber intrusions and cybertheft.


Based on these findings, Ambassador Tai recommended actions to President Biden. On May 14, 2024, following this advice, President Biden directed the Trade Representative to implement several measures. As a result, Ambassador Tai has formally proposed increasing tariffs on specific products in strategic sectors.


The notice also outlines an exclusion process for machinery and proposes temporary exclusions for 19 tariff lines related to solar manufacturing equipment. There is a 30-day period for public comment on these proposed modifications.


Source: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/may/ustr-issues-federal-register-notice-section-301-proposed-tariff-modifications-and-machinery


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OCR Global Trade Brief – May 2024

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