Executive Order Update:

Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws

 

March 31, 2017

The executive order issued by the White House on March 31, 2017 states that “importers that unlawfully evade antidumping and countervailing duties expose United States employers to unfair competition and deprive the Federal Government of lawful revenue. As of May 2015, $2.3 billion in antidumping and countervailing duties owed to the Government remained uncollected, often from importers that lack assets located in the United States.”

The two key provisions of this order require implementation plan development within 90 days. First, within 90 days of the date of the Order, the Secretary of Homeland Security, in consultation with the Secretary of the Treasury, the Secretary of Commerce, and the United States Trade Representative, develop a plan that would require certain covered importers to provide security for antidumping and countervailing duty liability through bonds and other legal measures, and also would identify other appropriate enforcement measures.

Second, and also within 90 days of the date of the Order, the Secretary of Homeland Security, through the Commissioner of U.S. Customs and Border Protection, shall develop and implement plan for combating violations of U.S. trade and customs laws for goods and for enabling interdiction and disposal of inadmissible merchandise.

The full text of the Executive Order is available here.

The US-Iran Chamber of Commerce provides Executive Order Updates,[1] particularly those which relate to international trade, US-Iran trade relations, and other trade- and compliance-related matters. Executive orders are legally binding orders issued by United States Presidents and directed towards officers and agencies of the Federal Government of the United States. Article II of the U.S. Constitution affords presidents a “grant of executive power.” Presidents use that term, along with other powers enumerated in the Constitution, to issue executive orders. If you have questions regarding this Executive Order, please feel free to contact the US-Iran Chamber of Commerce at info@usircc.org.


[1] The information contained in this article is current through April 2017. The US-Iran Chamber of Commerce takes no responsibility for updates, terminations, superseding executive orders, or other changes to this or other executive orders.

Image Source: United States Navy with the ID 061209-N-8148A-067

OFAC Update – Feb. 2nd & 3rd

Addition to List of Medical Devices Requiring Specific Authorization

OFAC has clarified and added to the list of medical devices requiring specific licenses. These medical devices formerly were authorized under General License 31 C.F.R. 560.530(a)(3) (Authorizing the Exportation of or Reexportation of Medicine and Medical Devices to Iran) and broadly permitted for export/reexport to Iran. Exporters must apply to receive a specific license from OFAC for the medical supplies and equipment added to this list.

The US-Iran Chamber of Commerce can advise you about the license application process required under U.S. laws and regulations. For your specific transactional needs, the Chamber may provide referrals to specialized sanctions or OFAC attorneys. For further guidance, please contact us at info@USIRCC.org.

The additions to this list are as follows:

General Medical Supplies and Equipment

  • Oxygen Generators
  • Pumps with flow rates of more than 1 liter/minute
  • Diagnostic Medical Imaging Equipment:
    • Gamma imaging equipment
    • Tactile Imaging equipment
    • Thermography equipment

Laboratory

  • Freeze-drying (lypophilizers) and spray-drying equipment
  • Fermenters, bioreactors, and chemostats
  • Crossflow (tangential) filtration systems and disposable filter cartridges
  • Biocontainment chambers and hoods, including isolators, biological safety cabinets, and laminar flow hoods
  • Aerosol inhalation equipment, including full-body, head-only, nose-only, and mask exposure systems
  • Decontamination showers
  • Laboratory glassware made from borosilicate glass, including reaction vessels, storage tanks, heat exchangers, and distillation and absorption columns
  • Autoclaves larger than 20 liters
  • Clinical laboratory water baths larger than 10 liters
  • Laboratory hot plates exceeding 1 square foot of heating surface
  • Freezers capable of reaching temperatures of -80 degrees Celsius
  • Laboratory shakers and incubator shakers
  • Carbon dioxide incubators
  • Circular dichroism spectrometers
  • Spectrophotometers not designed for clinical use
  • Fluorometers
  • Nuclear Magnetic Resonance Spectrometers
  • Polymerase Chain Reaction (PCR) machines
  • Differential Scanning Calorimeters
  • Chromatography Equipment
  • Fluorescence Microscopes
  • Confocal Microscopes
  • Cascade Impactors
  • Dynamic Light Scattering Equipment
  • Quasielectric Light Scattering Equipment
  • Full face mask respirators, including Powered Air Purifying Respirators (PAPR)
  • Decontamination systems using the following chemicals:
    • Vaporized hydrogen peroxide
    • Vaporized paraformaldehyde
    • Vaporized ethylene oxide
    • Isopropanol (99% purity)
  • High Efficiency Particulate Air (HEPA) Filtration Systems and HEPA filters
  • Fourier Transformation Infrared (FTIR) Systems
  • Balancing machines
  • Motion simulators
  • Rate tables

The Use of Confidentiality Advisers Under the Permanent Court of Arbitration’s “Optional Rules for Arbitration of Disputes Relating to Outer Space Activities”*

On December 6, 2011, the Permanent Court of Arbitration (PCA) of the International Chamber of Commerce (ICC) issued its “Optional Rules for Arbitration of Disputes Relating to Outer Space Activities” (the Optional Rules).  In large part, the Optional Rules are modeled on the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules[i] developed in 2010, which provide comprehensive procedural rules that parties may agree to apply for the conduct of arbitral proceedings arising out of their commercial relationships and disputes.  However, the Optional Rules contain noteworthy distinctions from the UNCITRAL Arbitration Rules with respect to the treatment of confidential information.[ii]  The Optional Rules address the confidentiality of information in greater detail than the UNCITRAL Arbitration Rules, and offer certain unique provisions designed to safeguard information produced by parties to a dispute in an arbitral proceeding.[iii]  This article examines the specific distinction between the UNCITRAL Arbitration Rules and the Optional Rules with respect to the use of “confidentiality advisers” in arbitral proceedings under the Optional Rules.

Commercial space activity is an emerging, highly technical and proprietary industry, which is driven by rapid technological advancements.  According to a May 19, 2014, report by the Space Foundation,[iv] the global space industry grew to $314.17 billion (USD) in commercial revenue and government budget allocation in 2013, with commercial activity, primarily space products and services and commercial infrastructure, driving much of this growth.[v]

This industry may give rise to a wide range of disputes, including not only activities specifically relating to outer space, but also those relating to the construction of communications satellites, the launching and maintenance of satellites, and the investments underlying these and other space activities.  The Optional Rules were designed to be broad enough to encompass these sorts of disputes, “to reflect the particular characteristics of disputes having an outer space component involving the use of outer space by States, international organizations and private entities.”[vi]  The Optional Rules contain confidentiality provisions to address the unique concerns of an evolving, highly sensitive industry with inherent military and national security implications, demonstrating the flexibility of international arbitration to fashion procedural tools to a particular industry.

Specifically, Article 17(8) of the Optional Rules provides for the appointment of a “confidentiality adviser” as an expert in an arbitral proceeding.  The confidentiality adviser may report to the arbitral tribunal on specific issues involving confidential information, without disclosing the information either to the party from whom the confidential information does not originate or to the arbitral tribunal itself.  This provision is significant and unique, and reflects consideration for the highly proprietary and commercially sensitive nature of the technology being developed for space activities.  Commercial entities in particular may take note of this provision, given the significant expenditures in research and development that underlie space-related technologies, as well as commercial concerns relating to espionage and competitiveness in an emerging and rapidly changing field.  For these reasons, arbitration under the Optional Rules may be more attractive to parties than litigation in national court systems, even where domestic courts have a reputation for even-handed, reliable and efficient justice.

In theory, the provision for “confidentiality advisers” under the Optional Rules provides an attractive benefit to parties in that reflects consideration of a highly specialized, evolving and technical industry.  For example, Article 17(8) may foster greater willingness on the part of parties to produce confidential documents.  In practice, it remains to be seen whether this benefit also may trigger other concerns on behalf of parties in an arbitral proceeding, in light of the potentially disproportionate access to information on the part of confidentiality advisers vis-à-vis the arbitral panel in a particular dispute.

Finally, the use of confidentiality advisers under the Optional Rules may influence the overall development of arbitrator expertise relating to outer space activities.  Given the relatively nascent stage of the global space industry, and the shifting paradigm of space law as a function of rapid technological change, the development of arbitrator expertise in managing disputes relating to outer space activities will be important for the just and efficient resolution of disputes, as well as encouraging parties to make use of arbitration for disputes relating to outer space activities.

*Written by: Elika Eftekhari, Esq., Director of Trade Compliance at USIRCC. This article originally appeared in the April 2016 bulletin of the Centro Especializado de Arbitraje Peruano Arbitration.


[i] See UNCITRAL Arbitration Rules (as revised in 2010), G.A. Res. 61/33, art. 1, U.N. Doc. A/61/33 (Jan. 10, 2011), available at: https://www.uncitral.org/pdf/english/texts/arbitration/arb-rules-revised/arb-rules-revised-2010-e.pdf.

[ii] See Permanent Court of Arbitration, “Optional Rules for Arbitration of Disputes Relating to Outer Space Activities,” (Dec. 6, 2011), available at: http://www.pca-cpa.org/Outer%20Space%20Rules4fd4.pdf?fil_id=1774, at Introduction (i) and (vi); Article 17.

[iii] Id. at Article 17.

[iv] The author of this article has no affiliation with the Space Foundation.

According to its website, the Space Foundation “was founded March 21, 1983, as an IRS 501(c)(3) organization ‘to foster, develop and promote, among the citizens of the United States of America and among other people of the world…a greater understanding and awareness…of the practical and theoretical utilization of space…for the benefit of civilization and the fostering of a peaceful and prosperous world.’…we represent the entire global space community: space agencies; commercial space businesses and associated subcontractors; military, national security and intelligence organizations; cyber security organizations; federal and state government agencies and organizations; research and development facilities; think tanks; educational institutions; space entrepreneurs and private space travel providers; businesses engaged in adapting, manufacturing or selling space technologies for commercial use; and museums, publishers and entertainment media that inspire and educate the general public about space.”  See Space Foundation History, available at: http://www.spacefoundation.org/about/history.

[v] See Space Foundation, “Space Foundation’s 2014 Report Reveals Continued Growth in the Global Space Economy in 2013,” (May 19, 2014), available at: http://www.spacefoundation.org/media/press-releases/space-foundations-2014-report-reveals-continued-growth-global-space-economy.

[vi] See Optional Rules at Introduction (i).

Press Release: Statement on the Inauguration

PRESS RELEASE

Inauguration of 45th POTUS on Friday; new President inherits landmark Iran Deal and future of US-Iran trade relations

Washington, DC, January 20, 2016 – This Friday, January 20th, marks the Inauguration of the 45th President of the United States Donald Trump. Under the new Administration, the United States-Iran Chamber of Commerce (the Chamber) looks forward to continuing its important role of informing and advising business and financial institution leaders, trade associations and government officials on US-Iran trade relations.

Iran’s economy offers access to a consumer-oriented population of over 80 million and a broader regional market of over 300 million people, facts which are not lost on European and Asian companies. Many American companies want a level playing field in international trade, and the ability to consider the full spectrum of market opportunities available to them. One recent study found that from 1995-2014, Iran sanctions cost the US between $203.1 and $271.8 billion in potential export revenue.

Under the Iran Deal, companies are eager to consider or already have started to invest in new market opportunities and sources of revenue in Iran’s diverse economy. As the only chamber of commerce devoted to US-Iran trade relations, the Chamber utilizes its strategic position and expertise to provide guidance to entities regarding the changing US-Iran trade landscape.

The Chamber’s services include, among others, trade compliance, due diligence, legal services, OFAC license assistance, export regulation analysis, guidance on US laws and regulations concerning Iran, and informational presentations and conferences.

The Chamber is a nonpartisan, nonprofit organization based in Washington, DC consisting of business leaders, legal experts, and former federal and congressional employees.

Please contact Reza Khanzadeh at info@USIRCC.org if you would like more information regarding the Chamber’s work and services.

 

Arbitration: An Introduction and the Iranian Context

  1. What is arbitration?

Arbitration is the use of a neutral third party or parties to listen to evidence and argument, usually in a confidential proceeding, and decide on a binding award generally not reviewable upon appeal. It may be initiated by one party or parties to an agreement, usually under a provision that requires disputes to be resolved by arbitration. Parties can also agree to arbitrate their disputes regardless of any contractual obligation, barring a provision that denies the use of arbitration.

  1. What are the benefits of arbitration?

There are certain benefits to arbitration over litigation and these should be thoroughly evaluated before adding or revising an arbitration clause to an agreement. Arbitration proceedings typically are private and therefore are not in public records, which is favorable for parties seeking to preserve and protect confidential, proprietary and other sensitive information. In arbitration, discovery generally is limited as compared to litigation, particularly litigation in common law jurisdictions, and thus reduces the cost and duration of an arbitration proceeding. However, this expediency may be reduced if the rules of the proceeding allow litigation-style discovery.

As compared to litigation, the higher burden required to invalidate or set aside an arbitral award generally results in greater certainty of the result of the proceeding. Under most circumstances, arbitration awards are final and binding on the parties, and the grounds upon which a court can review an arbitral award are extremely limited. These grounds include undisclosed bias or conflict of interest on the part of the arbitrator(s), an error in the calculation of the award which is apparent from the face of the award itself, or a manifest disregard of the law. Although these grounds appear to be broad, they are not, and courts have held that even where an arbitrator incorrectly applies the law, or disregards certain evidence in coming to a conclusion, the court will not disturb the arbitrator’s opinion and overturn an award. Thus, once the arbitrator issues an award, it is generally binding on the parties.

Arbitration also is less expensive in general than litigation, although costs can vary based on the complexity of a matter, and the extent of discovery or other litigation-style rules. Importantly, arbitration is customizable, allowing parties to an agreement to set the terms on selection of the arbitrator(s) (including the number and expertise of the arbitrators), the arbitration institution, venue, and the rules that will govern the proceeding. Arbitration also may be less formal than litigation, as many proceedings are held in conference rooms rather than courtrooms.

  1. What are the potential drawbacks of arbitration?

Certain drawbacks of arbitration include the limited review of decisions, and the potential for high expenses, particularly if not accounted for during arbitration clause drafting. Many parties turn to arbitration because of the ability to source arbitrators with expertise in particularly complex subject matter. This aspect of arbitration means that some disputes will be more costly by virtue of their complexity. In addition, there may be difficulties in initiating arbitration proceedings where an arbitration clause is vague or a party to an agreement is non-cooperative.

Further, in arbitration, arbitrator(s), rather than a jury, hear the case and issue an award. Depending on the nature of the matter, some parties may believe that juries, properly instructed by a court, will provide a more fair and just resolution to a dispute, and that it is easier to convince a jury to issue a higher award than it would be to convince an arbitrator to issue a similar award. Thus, parties should closely examine the considerations involved in foregoing the option to have a matter heard by a jury.

One of the most significant concerns with respect to arbitration involves post-judgment enforcement, which largely turns on the location of assets and the degree to which judges in national court systems may review arbitral awards. The ability to enforce an arbitral award often necessitates that the national courts where the assets are located also afford deference to the award. Parties may seek to set aside or invalidate an arbitral award in national courts, and depending on the degree of autonomy in the judicial system, the potential for misuse exists.

  1. Are Iranian entities familiar with arbitration clauses?

Yes, arbitration has had a long history in Iran. Informally, local custom employed the use of village elders who acted as arbitrators in the resolution of local disputes. Formally, arbitration was enshrined in the original Iranian Code of Civil Procedure 1911, which allowed referrals to arbitration as a method of resolving disputes. Iran also has employed various arbitration clauses in its bilateral investment treaties, which often invoke application of the United Nations Commission on International Trade Law (UNCITRAL) rules. Generally speaking, arbitration has become a preferred method of resolving disputes, particularly in relation to international commercial disputes. Parties to an agreement often are most concerned with having a neutral third party or parties hear all the evidence relating to their claim and determine the outcome of a proceeding. Because the large majority of arbitrators are well-regarded experts in their respective fields, and strive to render fair, just, and equitable decisions based on applicable law and the facts, parties have become increasingly comfortable with arbitration.

  1. Which law governs international arbitration in Iran and what does it include?

The Law on International Commercial Arbitration (LICA) entered into force on November 15, 1997 and governs international arbitration in Iran. Like many other countries, Iran has modeled its arbitration law on the UNCITRAL Model Law, with several significant changes. Important provisions of the LICA include: (i) the arbitrator does not have to be of Iranian nationality; (ii) the arbitrator can decide jurisdiction and can determine whether the arbitration agreement existed (i.e., whether the arbitration clause is void ab initio); (iii) the parties are free to agree upon the procedure to be adopted with regard to arbitral proceedings; (iv) the parties can agree on the seat of the arbitration and the language to be used; and (v) the arbitration award is binding. The LICA is silent on the terms and conditions of “confidentiality,” and therefore this issue should be addressed by the parties in the arbitration agreement. Further, the LICA makes no reference to the costs of arbitration, and it is prudent for the parties to decide and include an expense provision in the arbitration agreement.

With respect to post-judgment enforcement, on October 15, 2001, Iran acceded to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention. Therefore, foreign arbitral awards can be enforced in Iran.

  1. What arbitration institutions exist for contracts with Iranian entities?

The selection of arbitration institution generally is a function of the parties’ own making. With that in mind, it is worth noting that there are arbitration institutions within Iran, as well as international institutions that regularly appear in arbitration agreements with Iranian entities.

 

Tehran Regional Arbitration Centre (TRAC)

TRAC has a number of international arbitrators and functions under the Asian-African Legal Consultative Organization. The rules are based on the UNCITRAL rules and allow the possibility for the parties to determine the number of arbitrators, appoint the arbitrators of their choice, define the procedure for their appointment, venue selection, procedural rules, and substantive law that may be applied to the arbitration.

Arbitration Centre of the Iran Chamber (ACIC)

ACIC is the first independent Iranian arbitration institution established for the purpose of settlement of both domestic and international disputes through arbitration or conciliation. ACIC rules are based on the LICA and essentially adopt the UNCITRAL arbitration rules. As is the case with other arbitration centers, ACIC rules do not allow appeals and require advance payment of costs.

Other Institutions: International Chamber of Commerce, London Chamber of International Arbitration, Arbitration Institute of the Stockholm Chamber of Commerce, and Dubai International Financial Center

Traditionally, the International Chamber of Commerce and increasingly, the London Chamber of International Arbitration and Arbitration Institute of the Stockholm Chamber of Commerce have been the preferred institutions used for international commercial arbitration with Iranian parties. Many parties now are using Dubai International Financial Center arbitration as well. The International Court of Justice is used to assist with arbitrator selection in certain Iranian bilateral investment treaties, where the parties have failed to appoint arbitrators. Other international arbitration institutions may be used as well, depending on the parties’ needs and agreement.

Authored by: Sofia Jannati, Summer Associate 2016. The views expressed in this article are solely those of the author; they do not necessarily represent the position of the United States-Iran Chamber of Commerce or of any other entity.