Please allow me to refer you to the article below, providing an update on the UAE VAT Executive Regulation. This is a big development for the UAE. The UAE has no corporate or personal income tax (except for taxes on foreign banks and oil companies) and, as a result, there were generally no financial reporting requirements.
The introduction of VAT has necessitated the formation of a Federal Tax Authority and filing of financial information for the first time for most businesses.
To Read The Full Analysis on the UAE VAT Executive Regulation Click Here: http://www.worldservicesgroup.com/publications.asp?action=article&artid=8911
The Romanian Government has recently approved a draft law on mining activities that is intended to replace the existing law, enacted in 2003. The new law gives titleholders of mining licenses enhanced rights of access to the land necessary for the mining operations.
What is New and Important Regarding the Draft Law?
-Land access rights
-Transfer of rights and obligations deriving from the mining license
-Obligation of the titleholder to incorporate a Romanian subsidiary after being awarded the mining license
-Elimination of the approval of the production mining licenses by Government Decision
-Mining royalties and special taxes on prospecting, exploration and production of mineral resources
To read more on the Draft Law Click Here: http://www.worldservicesgroup.com/publications.asp?action=article&artid=8937
Practice / Industry Group: Employment and Labor
Please allow us to refer you to the article below on the appointment of the new General Counsel for the National Labor Relations Board:
The U.S. Senate confirmed Peter Robb as the new General Counsel for the National Labor Relations Board ("NLRB" or "Board"). In private practice, Robb was a noted critic of the NLRB under the Obama administration, particularly the Board's so-called quickie election rules and what he has termed the Board's narrow definition of supervisory status.
This appointment is significant both because the NLRB has been particularly active in recent years, issuing numerous pro-employee, pro-labor decisions, and because the General Counsel role comes with substantial power.
To continue reading on how the nomination affects Non-Union Attorneys, click here
Please allow me to refer you to the article below, analyzing the legal and economic significance of off-shore finance in the British Virgin Islands:
International financial records recently stolen from two offshore services firms and 19 corporate registries maintained by governments were leaked to journalists and their details subsequently published around the world. But beyond the hype, however, we find no intelligent inferences of legal significance in the reporting.
For example, the media draws attention to a United States Cabinet member's offshore financial transactions but does not allege that his shipping stake was illegal. Nor does it allege his foreign-registered holding company was illegal or that he failed in any disclosure duty.
(To read the full analysis click here: http://www.worldservicesgroup.com/publications.asp?action=article&artid=8936).
Please allow us to refer you to the blog below on the SEC Chairman’s remarks on ICO’s and Securities Offerings:
SEC Chairman Jay Clayton spoke at the PLI Annual Institute on Securities Regulation in re: The DAO and his skepticism about ICOs being a securities offering.
Among several other topics, Mr. Clayton made reference to the SEC’s Report of Investigation Pursuant to Section 21(a) of the Securities and Exchange Act of 1934; The DAO.
To read the full post as well as the script and comments from Mr. Clayton, click here: http://www.wallerlawblog.com/post/176/SEC-Chairman-Sees-ICOs-as-Securities-Offerings
Please allow me to refer you to the analysis below on the development of Latin America through Foreign Trade & Investment:
José Francisco Mafla and Camilo Castrill at Brigard & Urrutia Abogados explore the development of trade throughout Latin America, and its effect on and importance for the region’s economic growth.
Latin America’s current economic growth levels are among the world’s highest, and the region is preparing its regulations to meet new economic challenges. As such, the fostering of foreign trade and foreign direct investment (FDI) is important to increase GDP growth, create job opportunities, and improve logistics and production. In the pursuit of economic and social development, modern economies are implementing new regulations to develop strategies aimed at attracting new investments and facilitate trade. In this article, we analyse the most important regulatory tools that Latin American countries are developing, with the aim of improving their economic and social conditions, and ultimately consolidating Latin America as a region open to business with favourable conditions for the development of high-value investment projects.
You can read the full analysis on the development of Latin America through Foreign Trade & Investment here: http://www.worldservicesgroup.com/publications.asp?action=article&artid=8912
Please allow me to refer you to the article below on the challenges with international recognition and enforcement of mortgages on ships:
Having practised both as a shipping lawyer and an aviation lawyer for many years, I do find the experience and practice with the Cape Town Convention and aviation finance transactions to be interesting when experiencing the challenges faced by the shipping industry with respect to recognition and enforcement of mortgages. The shipping industry does not have a global legal regime governing these issues in the same way as the aviation industry, and when looking at the OSX-3 matter from last year, where the Brazilian courts have set aside the Liberian first priority mortgage, the need for a global legal regime becomes quite evident.
The fact that the shipping world is yet to adopt an international legal scheme governing recognition and enforcement of rights in ships and offshore units is complicating the financing of such objects, and the mentioned court case in Brazil has cast a shadow over the Brazilian offshore sector which should trouble the international banking community. In this brief article I would like to discuss a little more in detail the challenges caused by the Brazilian judgment and how these challenges could be solved by looking towards the aviation finance sector and the Cape Town Convention.
You can read the full analysis of the solutions offered by the Cape Town Convention and the aviation finance sector here: https://goo.gl/izpyY5.
A few days ago in Washington DC we had the first cocktail of our Trade and Investment Practice Group. It was an excellent opportunity for networking and strengthening relations among delegates of several WSG firms.
The participants to the event were able to meet and network with delegates from around the world and share their experiences, ideas and projects. Networking is a key activity for business growth and development, as it is a great tool to promote you and your firm’s profile, creating new opportunities, and sharing knowledge (which provides an opportunity to learn and avoid pitfalls).
Networking is not about meeting more people, it is about building long-term relationships. Accordingly, networks must be constantly strengthened and improved, and for this purpose, it is important to keep in touch with new acquaintances and nurture relationships.
This is an invitation to remain in contact, share news and opportunities, make use of WSG’s and our practice group’s resources, and prepare for our next year’s gathering in during the 2016 ABA SIL spring meeting to be held in New York City from April 12 until April 16.
Over the last years, most WTO Members have categorized China as a Non-Market Economy (“NME”) during antidumping investigations (“AD investigations”). For this reason, China and Chinese companies have been subject to methodologies that deviate from the strict comparison with domestic prices or costs required by the GATT 1994 and the Antidumping Agreement (“ADA”). Inevitably, China’s categorization as a NME has soundly affected Chinese industries due to the imposition of high antidumping duties during AD investigations.
This differential treatment is based on paragraph 15(a) of China’s Accession Protocol, which allows importing Members to use an alternative methodology when Chinese producers cannot clearly show that market economy conditions prevail in the industry in question. However, paragraph (d) of Article 15 contains an expiration clause stating that the provisions of subparagraph 15(a)(ii) will expire 15 years after the date of China’s accession, namely after December 11 of 2016.
The purpose of this entry is to discuss China’s potential recognition as a Market Economy (“ME”) after 2016, the effects of granting Market Economy Status (“MES”) to this country in antidumping investigations, and hopefully discuss how your corresponding jurisdictions would address this matter.
Market Economy Status and Non-Market Economy Status
Pursuant to the provisions set forth in Article VI of the GATT 1994 and the ADA, dumping occurs when products of one country are introduced into the market of another country at a value lower than the normal value of the products in the market of origin, and causes or threats to cause material injury to an established industry or materially delays the establishment of a domestic industry of like products. In such circumstances, the importing country is authorized to levy on the dumped product an antidumping duty up to the margin of dumping (the normal value minus the export price).
According to subparagraph 1 of Article VI, the general rule is that normal value is the comparable price, in the “ordinary course of trade, for the like product when destined for consumption in the exporting country”. The comparability in the “ordinary course of trade” requires that both countries have ME. Therefore, when an importing country initiates an antidumping investigation over an exporting Member with MES, it is obliged to use domestic prices or costs when determining the normal value of the products.
Nevertheless, for NME exporters, as it is the case of Chinese companies, the general rule may not be applied as it is deemed that domestic prices are largely determined by the State, and not by the market. Thus, for WTO Members who are subject to a specific provision in a WTO Accession Protocol, the importing Member may adopt an alternative methodology instead, such as the use of surrogate prices in a third ME country (analogous third country methodology).
In this regard, Section 15 of China’s Accession Protocol established a NME clause providing that, if Chinese producers under investigation can clearly demonstrate that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability (Section 15(a)(i)). However, if producers under investigation cannot clearly demonstrate that market economy conditions prevail, the importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China, such as the analogous third country methodology (Section 15(a)(ii)).
This NME clause is critical to Chinese domestic industries since exporters have suffered significant financial losses due to the implementation of alternative methodologies used to calculate antidumping duties.
For instance, we draw attention to the U.S antidumping cases against color televisions originating in China and Malaysia in 2004. In these cases, the U.S Commerce Department initiated AD investigations against televisions manufactured in China and Malaysia which were essentially identical and used the same internationally available parts and components. In spite of this fact, the U.S. found no dumping in the proceeding against Malaysia, but found dumping margins of up to 78% in the proceeding against Chinese producers. This discrepancy occurred mainly because the U.S. Commerce Department treated China as a NME in the investigation and used India as a surrogate country when determining the normal value of the products.
It is important to recall that China has been the principal target in AD investigations over the last years. According to the WTO Antidumping Statistics, between January 1, 1995 and June 30, 2014, 1022 AD investigations were initiated against China, 185 against Japan, 181 against India and 119 against Malaysia. 73% of the initiated investigations were successful in levying antidumping duties to Chinese producers. While 69%, 57%, and 56% of the investigations against ME such as Japan, India and Malaysia were successful.
Expiration of the NME clause
According to paragraph 15(d) of China’s Accession Protocol, the NME clause (Section 15(a)(ii)) will expire on December 11, 2016. As from that date, importing Members will be obliged to treat China the same as other Members during AD investigations, since there will be no longer a legal basis in the Accession Protocol to treat China as a NME.
This means that the importing country will have to calculate the normal value of Chinese product according to the general rule embedded in subparagraph 1 of Article VI, and use domestic prices and costs in China to perform the comparison.
Nonetheless, a methodology not based on a strict comparison with domestic prices or costs in China is still applicable according to the Ad Note to Art. VI.1 GATT 1994 (the “Ad Note”). The Ad Note recognizes that, in the cases of imports from countries where the State has a complete or substantially complete monopoly of trade and where all domestic prices are fixed by the State, importing Members may determine that a comparison with domestic prices may not be appropriate due to special difficulties in determining price comparability.
However, the application of the Ad Note requires the investigating authority to demonstrate that the exporting State monopolizes trade and sets all domestic prices. Thus, if importing Members continue to apply alternative methodologies based on the categorization of China as a NME after 2016, without invoking the Ad Note, the affected producers may resort to the WTO dispute settlement system and request the restoration of their rights to the use of domestic prices or costs.
While a significant share of China’s economy is thought to be driven by market forces, allegedly the Chinese government continues to play a major role in economic decision-making, possibly distorting trade and investment flows.
According to the U.S China Economic and Security Review Commission, the Chinese government maintains policies to bolster domestic enterprises such as subsidies, tax breaks, preferential loans, trade barriers, foreign direct investment restrictions, discriminatory regulations and standards, export restrictions on raw materials (such as rare earths), technology transfer requirements imposed on foreign firms, public procurement rules that give preferences to domestic firms, and weak enforcement of Intellectual Property Rights laws (“IPR”). Furthermore, the Chinese government has taken quick steps to take full control of industries such as, autos, aviation, banking, coal, construction, environmental technology, information technology, insurance, media, metals (such as steel), oil and gas, power, railways, shipping, telecommunications, and tobacco.
Recently, U.S. policy makers and stakeholders have expressed their concern for these issues, as well as for the widespread cyber economic espionage against U.S. firms by Chinese government entities, the increasing pressure over foreign-invested firms to transfer technology in exchange for market access, and China’s inconsistent record on implementing its WTO obligations.
These control-based policies have placed China’s recognition as a ME on 2016 in the tightrope. For instance, the EU and U.S have expressed their reluctance to treat China as a ME until it demonstrates that it operates under market policies. In fact, in 2012, President Obama created a new Trade Enforcement Unit “charged with investigating unfair trade practices in countries like China.”
Currently, the U.S China Strategic and Economic Dialogue is exploring the possibility of cooperating to enable the U.S to treat China as a market economy, and treat certain Chinese firms as market-oriented industries, for the purpose of U.S. trade remedy laws.
Thus, it is still not clear whether in practice China will start to enjoy MES for the purpose of AD investigations, along with the expiry of the NME clause in December 11, 2016.
What are your views and your prediction on this issue? How do you foresee that your jurisdiction will treat China and Chinese companies for purpose of trade remedies investigation after 2016?
In order to highlight the global reach and impact that certain industries have, WSG and the Mining Practice Group will be hosting their first ever PDAC Networking Cocktail in Toronto, Canada on Tuesday, 3 March, from 16:00 to 18:00 at Michael’s on Simcoe restaurant. (Registration: http://www.worldservicesgroup.com/meeting2.aspx?id=980)
WSG members attending the conference will be able to connect in an intimate setting to exchange opinions, best practices and, more importantly, share recent experiences in the nowadays sensitive field of work that encompasses the mining and minerals industries. Members already registered for the event practice in the areas of environmental and energy, as well as foreign investments, securities and capital markets.
WSG and the Mining Practice Group are looking forward to meeting you all at the event and enjoying an enriching evening in amazing Toronto. The PDAC Convention will take place March 1 - 4 in Toronto, where 1,000 exhibitors and 25,122 attendees from over 100 countries will be in attendance.
For more information, please contact Gaby Saldaña, WSG Practice Group Administrator, firstname.lastname@example.org or 1-713-650-0333.