Saudi Arabia’s decision to triple is value-added tax rate could lead to a spike in consumer spending before the new rate takes effect July 1, according to a May 11 KPMG post. This could lead to a rise in sales in Saudi Arabia's automotive, retail and electrical markets, the post said. While companies in these markets might see a short-term increase in sales, businesses will likely need to take measures to remain competitive in the Saudi market after the new rate takes effect, including potentially absorbing part or all of the VAT increase so “goods and services are affected as little as possible,” KPMG said. Companies should also review VAT clauses in their contracts. Despite Saudi Arabia’s VAT increase, the United Arab Emirates has no plans to raise its VAT rate, according to a separate KPMG alert.
The European Union is considering proposals to help its aviation, rail, road and shipping sectors mitigate COVID-19 impacts, according to a May 8 European Council press release. The proposals would amend air carrier licensing rules, allow airports to better handle “ground-handling services,” relax a rule that requires port infrastructure charges to be levied on ship operators and more, the commission said. The proposals would mainly ease pressure for transportation industries that “are having difficulties fulfilling certain administrative formalities before the expiry of the relevant deadlines,” the press release said.
CBP is using a new center focused on implementation of the U.S.-Mexico-Canada Agreement to help with the process, the agency said in a May 11 news release. “Staffed with CBP experts from operational, legal, and audit disciplines, as well as with virtual representatives from Canadian and Mexican customs authorities, the USMCA Center is a cornerstone of CBP’s USMCA implementation plan and will serve as a central communication hub for CBP and the private sector community, including traders, brokers, freight forwarders and producers, ensuring a smooth and efficient transition from the North American Free Trade Agreement to USMCA,” it said.
Japan plans to place more of an emphasis on attracting and keeping semiconductor manufacturing and its supply chains, according to an unofficial translation of a transcript of a May 12 press conference held by Japan’s Ministry of Economy, Trade and Industry. Japan said it will put more money into research and development of semiconductors to attract high-tech chip making. “It is extremely important for Japanese industry to secure the cutting-edge semiconductors needed for post-5G,” a ministry official said. “[W]e are aware that we have to work on these things, and in terms of the coronavirus [pandemic], think about how to firmly reorganize the supply chain.” The U.S. also wants to attract semiconductor supply chains as the administration steps up export restrictions with regard to China (see 2005060017 and 2005050035).
A U.S. information management company may have violated U.S. sanctions against Iran, the company said in a Securities and Exchange Commission filing released May 7. Iron Mountain, which provides information and data storage services, said its foreign subsidiary provided services to an Iranian government entity and another entity designated for weapons proliferation. Iron Mountain said the subsidiary provided “limited” record storage, container storage and handling services for both entities, which are both located outside of Iran. In both cases, the services began “at a time when U.S. sanctions law did not limit” the dealings, Iron Mountain said. The company’s gross revenues from providing services to both companies totaled about $300,000, Iron Mountain said, adding that “it is not possible to determine the exact amount of profits attributable to these services.”
The United Nations Security Council amended a Singapore-related entry on its sanctions list, according to a May 11 notice. The update amends identifying information for Yuk Tung Energy, a commercial ship manager for the tanker Yuk Tung, “which conducted ship-to-ship transfer of refined petroleum product,” the UNSC said.
The Treasury’s Office of Foreign Assets Control revoked Venezuela General License 13E, which authorized certain transactions involving Nynas AB, a joint venture between biofuel producer Neste and Petroleos de Venezuela, according to a May 12 notice. The license was scheduled to expire May 14 (see 2004030043). OFAC also updated General Licenses 3H and 9G to remove references to Nynas AB. The agency also made “conforming technical updates” to two frequently asked questions to reflect the revocation of the license.
Export Compliance Daily is providing readers with some of the top stories for May 4-8 in case you missed them.
The Directorate of Defense Trade Controls issued a series of frequently asked questions on May 11 to clarify an International Traffic in Arms Regulations exemption that authorizes exports and other activities made by or for a U.S. government agency.
Amid rising U.S.-China trade tensions, China released a second round of U.S. goods exempt from retaliatory tariffs, according to an unofficial translation of a May 12 Finance Ministry notice. The announcement came one day after a Chinese state news agency said the country is considering invalidating the phase one deal, citing Chinese officials’ frustration with President Donald Trump’s attempt to blame China for the COVID-19 pandemic.