Top 9 anti-trust cases in China

Since the Chinese Anti-monopoly Law came into force in 2008, authorities have launched a series of anti-monopoly investigations and in most cases companies that have been targeted have been fined.

Series of high-profile anti-monopoly cases in China.

No 1 Automobile probes:

On August 6, the NDRC announced it will punish two auto giants for monopolistic practices.

Separate antitrust probes into Chrysler and Audi are drawing to an end, said Li Pumin, spokesman for the NDRC. He did not specify punishments.

Chrysler was investigated by the Shanghai Municipal Development and Reform Commission and Audi by the Hubei Province Price Bureau.

Probes into 12 Japanese companies have also found monopolistic behavior regarding prices of auto parts. The companies will be punished in accordance with the law, Li said.

He also confirmed reports that the Jiangsu Province Price Bureau has separately launched an anti-trust investigation into Mercedes-Benzdealers in five Jiangsu cities.

No 2 Microsoft’s tie-in sales:

The State Administration for Industry & Commerce (SAIC) confirmed in August 2014 it had launched a probe into Microsoft China Co Ltd, including three of its branches in Shanghai, Guangzhou and Chengdu as the firm is suspected of monopolistic practices.

According to the SAIC, in June 2013 it investigated complaints from enterprises that Microsoft used tie-in sales and verification codes in its Windows operating system and Microsoft Office software suite, causing software incompatibility issues. These practices may have breached China’s anti-monopoly law.

No 3 Qualcomm’s license fees:

In July 2014, Qualcomm Inc., one of the world’s largest mobile computer chipmakers, received three antitrust investigations from the NDRC. The NDRC confirmed that Qualcomm was guilty of abusing its market position in wireless communication standards to overcharge Chinese companies. Qualcomm is looking at fines upwards of $1 billion.

No 4 Eyeglasses price fixing

In May 2014, NDRC stated that Johnson & Johnson Inc and Bausch & Lomb Inc had pursued vertical price-fixing.

These two companies and several contact lens and eyeglass manufacturers were fined a total of 19.6 million yuan ($3.18 million).

No 5 Gold price manipulation

Five Shanghai-based gold and jewelry stores and a local trade association have been fined a combined total of 10.59 million yuan ($1.72million) for manipulating the prices of their products on August 13, 2013.

According to the NDRC, the five stores are Shanghai Laofengxiang Co Ltd, Shanghai Laomiao Gold Co Ltd, First Asia Jewelry, Chenghuang Jewelry and Tianbao Longfeng.

The NDRC said probes by local pricing authorities found the five stores had manipulated the retail prices of their gold and platinum jewelryin accordance with a pricing scheme created in cooperation with the Shanghai Gold & Jewelry Trade Association.

No 6 Infant formula pricing

Six infant formula producers, Biostime, Dumex, Mead Johnson, Abbott, Friesland and Fonterra were fined 670 million yuan ($108.8 million) by the NDRC on August 7, 2013 for vertical price monopoly.

NDRC investigations found that their products had been priced higher in the Chinese market than in other markets.

No 7 Baijiu liquor price fixing

In Feburary 2013, Kweichow Moutai Co Ltd and Wuliangye Yibin Co Ltd were fined a total of 449 million yuan by the NDRC for setting up aprice monopoly. The fine accounted for one percent of the two companies’ total revenues in 2012.

The NDRC fined Moutai for 247 million yuan and Wuliangye for 202 million yuan.

No 8 LCD screen price monopoly:

In January 2013, six liquid crystal display (LCD) screen producers, including two from South Korea (Samsung and LG) and four from Taiwan (CMO, AU Optronics (AUO), Chunghwa Picture Tubes and HannStar), were punished by the NDRC for vertical price monopoly. A vertically integrated monopoly occurs when a company controls both the production and distribution chains in an industry. The total punishment for these companies reached 353 million yuan ($57.3 million).

No 9 Broadband services monopoly:

The National Development and Reform Commission, China’s top economic planning agency, in 2011, started to investigate a suspected monopoly held by China Telecom and China Unicom in the broadband business.)

The two operators, which together account for 90 percent of China’s broadband business, could face fines of up to 10 percent of their annualrevenues from Internet services, the NDRC said when it launched the probe.

It was reported Feb 19 that the NDRC would rule on the case. As of Thursday, Aug 7, there has been no disclosed ruling.

http://www.chinadaily.com.cn/business/2014-08/08/content_18270762.htm

Anti-monopoly for Chinese consumers’ rights: govt

China’s recent wave of antitrust probes does not specifically target foreign multinational enterprises operating, a government spokesman said on Saturday, Aug 9. The recent antimonopoly investigations on some foreign companies are to promote fair competition and protect consumers’ right.
The National Development and Reform Commission, one of the three major antitrust regulators in China, said earlier this week that 12 Japanese auto companies have been investigated for suspected price manipulation of automobile parts. NDRC bureaus in Shanghai and Hubei province are also completing probes into US carmaker Chrysler and German manufacturer Audi. NDRC officers raided Mercedes-Benz’s Shanghai office on Monday, Aug 4, and its distributors in five Chinese cities last week. A team from the State Administration for Industry and Commerce, another antitrust regulator, also visited consultancy firm Accenture’s office in Dalian, Liaoning province. Accenture provides financial services for Microsoft China on Wednesday; the office visit is an escalation of the anti-monopoly probe on the US software giant.
No punishment has been announced so far for any of these companies.

 

http://www.chinadaily.com.cn/business/motoring/2014-08/09/content_18279157.htm

Taiwan, China to restart talks on goods free-trade agreement

(Reuters) – Representatives from China and Taiwan have reached an agreement to restart formal negotiations on a free-trade pact that would eliminate tax on the vast majority of goods flowing between the two, Taiwan officials said Tuesday.

The negotiations, which have been underway for years, will resume at the end of the month, according to representatives from the Straits Exchange Foundation, which oversees the talks.

They will include government officials from both sides and are expected to produce a wide-ranging pact that could potentially affect up to 85 percent of traded goods, analysts estimate.

Taiwan and China are historical foes that have seen an unprecedented softening in relations under Taiwan’s China-friendly president Ma Ying-jeou.

In recent years the two sides have signed a slew of agreements on everything from finance to tourism.

But China still regards Taiwan as a renegade province and has not ruled out the use of force should the island formally declare independence.

A separate, but related, agreement for trade in services remains stalled in Taiwan’s parliament following fierce protests against its passage a few months ago.

The head of China’s Taiwan Affairs Office was also forced to cut short his first-ever visit to the island in June following heated public opposition.

(Reporting by Lin Miao-jung; Writing by Michael Gold; editing by Simon Cameron-Moore)

http://www.reuters.com/article/2014/08/05/us-taiwan-china-trade-idUSKBN0G50Y120140805

European Union: New Sanctions Regime Against Russia

The European Union (“EU”) has recently agreed to an additional higher level of sanctions against Russia.  A big impact is to be expected from the new “sectoral sanctions” set out in EC Regulation No. 833/2014 which was published on July 31, 2014 and will go into effect immediately.

 

Effective as of August 1, 2014, this new regime:

 

  • restricts access to capital markets for Russia state banks as defined in Annex III of the Regulation (including their subsidiaries established outside of the EU and other entities acting on behalf or at the direction of such institutions) by setting out prohibitions on purchasing, selling, providing brokering or other assistance in the issuance of or otherwise dealing in debt or equity securities or money market instruments with a tenor exceeding 90 days, in each case if issued after August 1, 2014.

 

  • prohibits the importing from and exporting to Russia of military goods and related material (subject to the grandfathering of contracts concluded before August 1, 2014).

 

  • prohibits exporting dual-use goods and technology (these are goods and technology that can be used for both civil and military purposes) to Russia military end-users (subject to the grandfathering of contracts concluded before August 1, 2014); and

 

  • curtails Russian access to sensitive technologies (as listed in Annex II of the Regulation), particularly in the oil sector.

 

Further, the Regulation prohibits a number of ancillary services in relation to the aforementioned (including brokering and direct or indirect financial or technical assistance in relation to goods that are objects of the embargo).

 

These prohibitions apply not only within the territory of the EU, its vessels and aircrafts, but also to EU incorporated businesses and nationals of EU Member States, as well as with respect to any business done within the EU.

 

Learn more at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:JOL_2014_229_R_0001.

Enforcement, Trade Preference and Other Activities Examined in Annual ITC Report

Wednesday, August 06, 2014
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission’s annual Year in Trade report finds that in 2013 the number of new trade remedy cases saw a big jump but there were fewer new intellectual property rights infringement cases. This report includes information on (a) antidumping, countervailing, safeguard, intellectual property rights infringement and section 301 investigations; (b) the operation of trade preference programs; (c) significant activities in the World Trade Organization, the Organization for Economic Cooperation and Development and the Asia-Pacific Economic Cooperation forum; (d) developments in bilateral and regional free trade agreements; (f) bilateral trade issues with major trading partners such as the European Union, Canada, China, Mexico, Japan, Korea, Taiwan, Brazil and India; and (g) U.S. trade in goods and services.

Highlights of the 2013 report include the following.

AD/CV. The ITC instituted 42 new preliminary antidumping injury investigations (up from five the year before) and completed 10 final investigations (down from 16). AD duty orders were issued in eight of the final investigations on five products from five countries. The ITC instituted 14 new preliminary countervailing injury investigations (up from nine) and completed 12 final investigations (up from nine). CV duty orders were issued in four of the final investigations on four products from three countries. Fifty sunset reviews of existing AD and CV duty orders and suspension agreements were instituted (up from 42) and 26 were completed (down from 46), resulting in 22 AD and/or CV duty orders being continued for up to five additional years.

IPR Infringement. There were 109 active section 337 investigations and ancillary proceedings (down from 127 in 2012), 53 of which were new (up from 52), including 42 new investigations and 11 new ancillary proceedings relating to previously concluded investigations. The ITC completed a total of 55 investigations and ancillary proceedings and issued nine exclusion orders and 25 cease and desist orders. Slightly less than 40 percent of the active proceedings involved computer and telecommunications equipment, while consumer electronics products, small consumer items, and pharmaceuticals and medical products each accounted for slightly more than 10 percent. At the close of 2013, 54 investigations and ancillary proceedings were pending.

GSP. Imports from developing countries for which Generalized System of Preferences treatment was claimed totaled $18.5 billion (down from $19.9 billion), accounting for 6.7 percent of total U.S. imports from GSP beneficiary countries (up from 5.9 percent) and 0.8 percent of total imports from all trading partners (down from 0.9 percent). Once again India, Thailand and Brazil were the leading beneficiaries. Authorization for GSP lapsed on July 31, 2013, and has not been renewed. A review for the possible addition of Laos and Burma was initiated in April, while Bangladesh was suspended on June 27 because of worker rights issues.

AGOA. There were 39 sub-Saharan African countries designated as eligible for benefits under the African Growth and Opportunity Act and 27 designated eligible for AGOA textile and apparel benefits. South Sudan became AGOA eligible as of Dec. 20, 2012, while Guinea-Bissau and Mali lost eligibility on Jan. 1, 2013 (eligibility was later restored for Mali on Jan. 1, 2014). Duty-free U.S. imports under AGOA, including those covered by GSP, were valued at $26.8 billion (down 22.8 percent), while U.S. imports under AGOA, excluding those also covered by GSP, were valued at $24.8 billion (down 24.6 percent). The latter decrease was driven mainly by a decline in the value of U.S. imports of petroleum-related products, which made up 85.4 percent of imports under AGOA in 2013.

CBERA. At the end of 2013, 17 countries and dependent territories were eligible for preferences under the Caribbean Basin Economic Recovery Act (down from 16) and eight of those (down from seven) were eligible for additional preferences under the Caribbean Basin Trade Partnership Act. Curaçao became eligible for both CBERA and CBTPA on Dec. 31, 2013, and Panama left CBERA on Oct. 31, 2012, when the U.S.-Panama Trade Promotion Agreement entered into force. U.S. imports under CBERA (including CBTPA) fell by 24.4 percent to $2.4 billion, reflecting a decline in the value of U.S. imports of crude petroleum, knitted apparel products, undenatured ethyl alcohol and melamine. Trinidad and Tobago continued to be the leading supplier of U.S. imports under CBERA, accounting for 69.2 percent of the total.

Haiti accounted for nearly all U.S. imports of apparel entering under CBTPA. U.S. imports of apparel from Haiti were up 4.9 percent to $765.9 million, of which $341.7 million entered under CBTPA (down from $423.6 million). U.S. imports of apparel entering under the Haitian Hemispheric Opportunity through Partnership Encouragement Acts and the Haiti Economic Lift Program rose by almost 40 percent to $421.9 million. U.S. imports of apparel from Haiti under the Earned Import Allowance Program almost tripled to $90.0 million.

Trade with FTA Partners. Two-way merchandise trade (exports and imports) between the U.S. and its free trade agreement partners was unchanged at $1.4 trillion, or 39.1 percent of total U.S. merchandise trade (down from 37.7 percent).

Canada and Mexico accounted for 73.9 percent of total U.S. merchandise trade with FTA partners. U.S. merchandise exports to these NAFTA partners expanded by 3.3 percent and imports by 2.4 percent, resulting in a decline in the U.S. merchandise trade deficit with them to $177.2 billion.

U.S. two-way merchandise trade with FTA partners other than the NAFTA countries rose 8.7 percent to $368.7 billion. Imports increased 10.5 percent to $185.8 billion while exports gained 7.0 percent to $182.9 billion. The U.S. registered a $3.0 billion merchandise trade deficit with these countries, compared to a $2.7 billion surplus in 2012. This change was largely due to sharply reduced exports of machinery and equipment to Australia.

WTO Dispute Settlement. WTO members filed 20 new requests for dispute settlement consultations (down from 27 in 2012). The U.S. was the complainant in three of the requests (involving Indonesia and India) and the named respondent in two (brought by Korea and China). Of the 12 new dispute settlement panels established, the U.S. was the complaining party in two and the responding party in two.

Safeguards. The ITC conducted no new safeguard investigations during 2013 and no safeguard measures under these provisions were in effect during any part of the year. In addition, the authority to conduct investigations and apply measures under the China safeguards provision in section 421 of the Trade Act of 1974 ceased to be effective Dec. 11, 2013.

Trade Deficit. The annual U.S. trade deficit decreased for the second straight year, from $535 billion to $475 billion. This figure includes a decline in the goods trade deficit from $741.5 billion to $703.9 billion and an increase in the services surplus from $206.8 billion to a record $229.0 billion.

Harmonized Tariff Schedule of the United States – Change Record

The Harmonized Tariff Schedule of the United States (“HTSUS”) has been updated.  The link below will direct you to a record of legal and statistical changes in this edition of the Harmonized Tariff Schedule.  HTSUS change records provide tariff additions and discontinuations as well as chapter modifications.  The effective date for these changes is July 1, 2014.

 

http://www.usitc.gov/publications/docs/tata/hts/bychapter/1401chgs.pdf