February 2021

  • Focus Africa
    • African Continental Free Trade Area Agreement – Malawi and Zambia Deposit Instrument of Ratification

      On 15 January 2021 and 5 February 2021, Malawi and Zambia deposited their instrument of ratification for the African Continental Free Trade Area Agreement (AfCFTA) as 35th and 36th country respectively. The AfCFTA has so far been signed by 54 countries and entered into force on 30 May 2019 and became effective on 1 January 2021. Further developments will be reported as they occur.

      Note: To date, 36 countries (Angola, Burkina Faso, Cameroon, Central African Republic, Chad, Republic of Congo, Djibouti, Egypt, Equatorial Guinea, eSwatini, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Ivory Coast, Kenya, Lesotho, Malawi, Mauritania, Mauritius, Namibia, Niger, Nigeria, Mali, Rwanda, the Sahrawi Arab Democratic Republic, São Tomé and Príncipe, Senegal, Sierra Leone, South Africa, Togo, Tunisia, Uganda, Zambia and Zimbabwe) have deposited their instrument of ratification.

    • Tanzania: Gold Industry Set for Giant Leap

      Construction of gold refining machinery worth 8.9bn/- in Mwanza with a capacity to process over 480 kilograms per day is complete.

      Mwanza Precious Metals Refinery Ltd, a joint venture of State Mining Corporation (STAMICO), Dubai-based Rozella Genera Trading LLC and ACME Consultant Engineers PTE Ltd of Singapore, will be one of the best state-of-the-art gold refineries.

      STAMICO Acting Managing Director Dr Venance Mwasse told Minister for Minerals Mr Dotto Biteko on Monday that the refinery plant, the first among three gold refineries currently under construction in the country, was set to be in operation the following month.

    • AfDB, FAO and South Sudan ink protocols for US$14m grant to boost agricultural markets

      SOUTH SUDAN – The African Development Bank (AfDB) has signed protocols to disburse a US$14 million grant to the Government of South Sudan to boost agricultural markets in a project to be implemented by the UN’s Food and Agriculture Organization (FAO).

      The Agricultural Markets, Value Addition and Trade Development (AMVAT) project aims to enhance agricultural productivity and boost the marketing and trade of agricultural products in South Sudan.

      The project will be implemented by the Food and Agriculture Organization of the United Nations (FAO) in close liaison with the country’s Ministry of Agriculture and Food Security.

      The five-year project will help increase the productivity and incomes of almost 20,000 farming families in Central and Eastern Equatoria and Jonglei states, most of whom are formerly internally displaced persons who have now returned to their homes.

      The project will create aggregation business opportunities for farmers and traders, including women and youth, and provide them with new skills and the agro-processing equipment they need to produce competitive products.

      Twenty aggregation business centres will serve as ‘one-stop shops’ where farmers can access extension services and connect to markets for their value-added products.

      Farmer groups joining the aggregation centres will have their products not only tested and quality certified, but also traded with the private sector on their behalf.

      “A diversified economy away from oil and long-term growth depends on promoting agribusiness development,” said Athian Ding Athian, South Sudan’s Minister of Finance and Planning at the signing ceremony. “

    • Dangote urea fertilizer plant set to open in first quarter of 2021

      NIGERIA – Dangote Industries Limited has announced that its US$2.5 billion granulated urea fertilizer plant which is located at Ibeju Lekki, Lagos State is set to commence full operation in the first quarter of 2021 after its take off suffered some setbacks owing to disruptions caused by the COVID-19 pandemic.

      The Dangote Urea fertilizer plant is set-up to boost food sufficiency in Nigeria by tapping into the country’s demand for fertilizer, a critical component for boosting productivity.

      According to recent information, the newly completed fertilizer complex is said to have gulped US$2.5 billion under the first phase of the project, as Africa’s most diversified manufacturing conglomerate extends dominance into the fertilizer market.

      “This plant in five-ten years will change Nigeria agriculture and economy, as the efforts by Dangote Industries will help to ward off the crisis encountered in local production which has impacted agriculture,” the Minister of the Federal Ministry of Agriculture and Rural Development (FMARD), Alhaji Sabo Nanono during a tour of the fully completed facility in 2020, said.

      Dangote fertilizer plant is expected to have an annual processing capacity of 3 million tonnes of Urea

      “The new fertilizer plant will make fertilizer available to Nigerian farmers, now we can forget all those merchants of fertilizer that have been confusing this country for the last society 40 years.”

      Dangote fertilizer plant which is fully owned by Dangote Industries is expected to manufacture 3 million tonnes per annum capacity of urea, cut Nigeria’s fertilizer imports, and generate US$400 million annual foreign exchange, in export to other African countries.

      “What we are now trying to do is customize the fertilizer, as soil condition in Kaduna is different from the soil condition in other states. This is because the climatic condition is different and the crop could be corn, maize, rice or sugar.

      “So, each crop and each type of soil requires slightly different type of materials, so what we are trying to do is we are trying to analyze all the soil through a mapping process, and then customized the fertilizer to match the area specifications,” Dakumar Edwin, the Group Executive Director, Capital Projects and Portfolio Development, Dangote Industries Limited, said.

      It is important to understand that the capacity of the plant would later be expanded to produce multiple grades of fertilizers for the African continent.

      Meanwhile, OCP Africa, a subsidiary of leading global provider of phosphate and its derivatives in the region, OCP Group, broke ground for the establishment of US$13m Agricultural Centre of Excellence in Sokoto State, Northern Nigeria.

      The facility will comprise of a fertilizer blending plant and a training center for farmers, fertilizer blenders and other stake holders in the agricultural value chain.

      Having a production capacity of 200,000 MT per annum, the blending plant is expected to become operational in July 2021.

    • Uganda to establish US$8.1m fruit processing factory spearheading value addition in agriculture sector

      UGANDA – Delight Uganda Limited (DUL), a Ugandan fruit processing company producing juices under the brand name Cheers, has partnered with the government to establish a Shs30 billion (US$8.1m) fruit processing plant in Nwoya district, Northern Uganda.

      This is a public-private partnership aimed to increase productivity and competitiveness within the agricultural sector.

      According to reports by Daily Monitor, the project will be funded by the government and it has already secured Ush 16 billion (US$4.3m) from the current financial budget.

      The National Agriculture Advisory Services (NAADS) has contributed Ush 6 billion (US$1.6m) while the Uganda Development Cooperation offered Ush.10 billion (US$2.7m). The balance will be provided in the subsequent budgets.

      “This will increase incomes through increasing production and productivity for both households and the economy and promote value addition of agricultural products,” said Minister of Agriculture Animal Industry and Fisheries, Mr Vincent Ssempijja during the signing of the partnership.

      The establishment of the plant will promote the nuclear farming model- which will in turn boost proper planning and marketing of agricultural produce and promotion of the agricultural value chain.

      Ms Julian Adyeri Omalla, the chief executive officer of DUL, said her dream of setting up a factory which started in 1996 requires a lot of cooperation from the private and public sectors.

      “Something that started as a family project has expanded and is benefiting the community of Northern Uganda which now boasts of employment for the informal sector,” Ms Adyeri said.

      She added that the collaboration brings on board experts to train small holder farmers on how to add value to their products.

    • The African Development Bank: a strategic partner in developing resilience and sustainable energy in the Sahel

      The Sahel Alliance will hold its second general assembly in N'Djamena, Chad on Monday, 15 February 2021. The meeting will take place on the side-lines of a summit for the G5 Sahel countries— Burkina Faso, Mali, Mauritania, Niger, Chad—as well as France. The African Development Bank (www.AfDB.org) played an active role in the formation in July 2017 of the Alliance, an international cooperation platform to spur development and stability in the Sahel region.

      To foster closer synergy with development partners, the Sahel Alliance has invited the African Development Bank to lead a working group on agriculture, rural development and food security.

      The Bank's extensive experience in the Sahel region in the management and control of water, agri-pastoral and fisheries development, as well as the sustainable management of natural resources, attracted it to the Sahel Alliance.

      Agriculture and food security is of strategic importance to the Bank, which counts Feed Africa as one of its High-5 strategic priorities.

      The Bank’s current Sahel portfolio includes three key projects aimed at strengthening the resilience of ecosystems and populations and ensuring food security through investment in agriculture and livestock farming as well as sustainable management of natural resources.

      The Bank’s flagship Desert to Power solar initiative, valued at $20 billion will turn the Sahel region into the world’s largest solar zone giant solar zone with up to 10 000 MW of solar generation capacity. Eleven countries are beneficiaries of this initiative: Burkina Faso, Ethiopia, Eritrea, Djibouti, Mali, Mauritania, Niger, Nigeria, Senegal, Sudan and Chad.

      Spanning Burkina Faso, Chad, Gambia, Mali, Mauritania, Niger, Senegal and the Inter-State Committee for Drought Control in the Sahel (CILSS), the Programme for Building Resilience to Food and Nutrition Insecurity in the Sahel (P2RS) advances resilience to climate change, long-term financing of the agricultural sector, and developing trade and regional integration.

      By providing long-term sustained investment in building the resilience of Sahelian households, P2RS, which is mobilizing more than $250 million for its first phase and $750 million over 20 years, is contributing immensely to breaking the cycles of famine in the region. It also promotes the development of rural infrastructure and creates thousands of jobs for rural youth through the development of regional value chains and markets.

      Another project that demonstrates the Bank's commitment to the region’s development is the ongoing implementation of the Programme for the Rehabilitation and Strengthening of the Resilience of Socio-Economic Systems in the Lake Chad Basin (PRESIBALT), which covers Niger, Chad, Cameroon, Central African Republic and Nigeria.

      The project, valued at approximately $70 million, provides skills enhancement training to young people to prepare, them for the local economy, thereby reintegrating vulnerable members of society in a region plagued by political insecurity and extreme weather. PRESIBALT also provides socioeconomic support to women and youth

      The Bank is also implementing a third major initiative – the Integrated Development and Adaptation to Climate Change Programme (IPCCP) — to strengthen the populations of the Sahel.

      With a budget of more than $205 million, the IPDCDC, which covers Benin, Burkina Faso, Cameroon, Chad, Côte d'Ivoire, Guinea, Mali, Niger, Nigeria and the Niger Basin Authority, will directly benefit about four million people, 51% of them women, between 2019 and 2024.

      Through an integrated and inclusive approach, the IPDCDC will recover 140,000 hectares of degraded land and construct 209 hydraulic structures for agri-pastoral and pisciculture activities. It will implement 450 sub-projects to help develop the agricultural chain and create 184 small and medium-sized enterprises (SMEs) run by young people.

      In addition, more than 100,000 households will be strengthened to adapt to climate change. The scheme will also operate a financing mechanism for sustainable natural resource management activities in the Niger River Basin.

    • Africa in Review by the Numbers – Kili Partners

      $24 million

      First close for South Africa’s Hlayisani Growth Fund to invest into high-growth, high-impact businesses. The round was led by Standard Bank and prominent South African family offices. The fund also revealed it made seven investments last year worth a combined $13.6 million (Disrupt Africa)  


      Growth in the value of mobile payment transactions in Rwanda in 2020, hitting $7.3 million, according to statistics from the central bank. The increase is largely driven by government policy to encourage the adoption of digital payment as a measure to curb the spread of COVID-19. (The New Times)  

      10 million

      People in DRC expected to get connected via solar-powered cell towers in a project led by Canada's NuRAN Wireless and Orange DRC. The partners will construct and operate 2,000 solar-powered communication masts across the country, focusing on rural communities. The network-as-a-service contract is NuRAN's second in Africa, after a similar project with Orange Cameroon. (ESI Africa)  


      Woman and African was appointed as Director-General of the World Trade Organisation on Monday; Ngozi Okonjo-Iweala will be heading the multilateral trade body from March 1, 2021 to August 31, 2025. The decision was taken by consensus at a special meeting of the organisation's General Council. Okonjo-Iweala is the former Finance Minister of Nigeria and World Bank economist. (The Economic Times)  

      15 MW

      Electricity set  to be produced in the first phase of Rwanda's Shema Power Lake Kivu (SPLK) methane gas extraction project by June this year, according to engineers. Once fully finalised at the end of 2022, the $400 million project will add 56 MW to the national grid, significantly increasing the country's power generation capacity. (The New Times)  

      47,000 hectares

      Area of forest lost to cocoa production in Côte d’Ivoire, in 2020 despite pledges to halt deforestation. The figure represents a 20% improvement on annual forest loss recorded in 2015. The West African country is the world’s top cocoa producer but has lost more than 85% of its forest cover since 1960, mainly due to cocoa farming, according to the government. (Reuters)  


      The coupon on Ecobank Nigeria's $300 million bond issued on the London Stock Exchange. The first non-sovereign bond from Africa this year, the bond is a milestone capital raise for the banking sector in Nigeria, with its coupon rate representing the lowest ever achieved by a Nigerian financial institution for a benchmark bond transaction. (Africa Global Funds)  

      $3 billion

      Cost of phase one of Egypt's integrated electric train system being implemented by Siemens. The initial phase covers 460 km running between the Red Sea and Mediterranean coast, passing through the New Administrative Capital. Expected to take two years to complete, the works will create 15,000 jobs. (Egypt Independent)  


      Motor vehicles assembled in Kenya in 2020, representing 63.6% of all new vehicle sales that year. The number largely comprises commercial vehicles, a segment which benefits from a ban on imports and tax advantages for knocked down imports to support local manufacturing. (Business Daily)   Review by Kili Partners . Powered by Asoko Insight
  • United Arab Emirates
    • Circular No. 4/2021 on Anti Money Laundering and Combating Terrorist Financing

      To Real Estate Agents, Precious Metal and Stone Traders, Account Auditors and Company Services Providers, the Ministry of Economy extends its greetings and best wishes of continuous success.



      Cabinet Resolution Nos. (3/1و) and (28 م/ 4 و ) of 2019, which vest in the Ministry of Economy the duty of supervising and regulating Designated Non-financial Businesses and Professions (DNFBPs) of entities operating in the State, including the entities operating in commercial free zones, confronting money laundering crimes and combating financing Terrorism and the financing of illegal organization and Accreditation as a regulator. In the framework of the Ministry of Economy’s endeavors to facilitate task and simplify procedures that must be implemented to achieve international requirements and obligations regarding Anti-Money Laundering and Combating Financing of Terrorist (AML/CTF), and in implementation of the relevant legislation set forth below, we seek to explain and clarify all written requirements in the texts of this circular or in videos and associated explanatory documents.

      The Anti-Money Laundering Department works with you to enforce Anti-Money Laundering and Combating Financing of Terrorist (AML/CTF) legislation, Pursuant to: - Federal Decree-law No. (20) of 2018 On Anti-Money Laundering And Combating The Financing Of Terrorism And Financing Of Illegal Organizations. - Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree-law No. (20) of 2018 On Anti-Money Laundering And Combating The Financing Of Terrorism And Financing Of Illegal Organizations. - Cabinet Decision No. (58) of 2020 Regulating the Beneficiary Owner Procedure. - Cabinet Decision No. (74) of 2020 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions on the Suppression and Combating of Terrorism, Terrorists Financing & Proliferation of Weapons of Mass Destruction, and Related Resolutions.

      According to the above legislation, you must do the following: First: Appointing a Compliance Officer: - The legal person (the company) shall appoint a natural person who shall be responsible for compliance, in accordance with Article (21) of Implementation Regulations No. (10) of 2019 for Federal Decree-law No. (20) of 2018 On Anti-Money Laundering And Combating The Financing Of Terrorism, and Article (11) Cabinet Decision No. (58) of 2020 Regulating the Beneficiary Owner Procedure. The compliance officer defines as: A natural person who is employed by a legal person (the company) or is appointed, who has the appropriate competence and experience, and is tasked with undertaking on behalf of the legal person (the company) to provide all relevant data, procedures and obligations that are enforceable For the supervisory authority (Ministry of Economy) to fulfill the requirements of (AML/CFT) legislation. - Maintain/Keep the compliance officer’s data and providing it upon request (name, contact information, a valid copy of passport, ID card and a letter of assignment from the company to the duties of the compliance officer). - The duties of the compliance officer as per Article (21) of the Implementation Regulations No. (10) of 2019 for Federal Decree-law No. (20) of 2018 On Anti-Money Laundering And Combating The Financing of Terrorism.

      Second: Performing the due diligence measures: It is the process of identifying or verifying the information of the client or the beneficiary Owner, whether he is a natural or legal person, or a legal arrangement, the nature of his work, the purpose of the business relationship, the ownership structure and the control over it, for the purposes of implementing Federal Decree Law No. (20) of 2018 and its implementation regulation. To implement the due diligence requirements, refer to Implementation Regulations No. (10) of 2019 for Decree-law No. (20) of 2018 On Anti-Money Laundering And Combating The Financing Of Terrorism. (Implementation Regulations: Chapter Three: Article 5 to Article 14, Chapter Four: Article 15)

      Third: Reporting suspicious transactions: - In the event that customer due diligence procedures and measures taken and there were suspicious in any form, the compliance officer must submit the suspicious transaction reports to the FIU through the goAML system. - Establishments of DNFBPs and their directors, officers and employees must not disclose, directly or indirectly, to the client or any other person that they reported, or they are about to report about suspicious transactions or information and data related to them, or that there is an investigation thereof, for the purpose of Customer not to be alert. (Implementation Regulation: Chapter Three Article 13, Chapter Four Point 2 of Article 15, Chapter Five Article 16, 17)

      Register in the goAML System: - Registration in the goAML system is a prerequisite for submitting suspicious transaction reports (STRs). - Definition of the goAML system: it is an internationally approved electronic system to collect and analyze financial and non-financial information to confront money laundering and combat the financing of terrorism. It enables the Financial Intelligence Unit (FIU) in the United Arab Emirates with better monitor trends during analyzing reports of suspicious activities and transactions to reduce potential threats at more efficient rate and potency. - The legal person (the company) is obligated to register in the goAML system of the Financial Intelligence Unit (FIU), as a requirement for effective enforcement of legislation to combat money laundering and terrorist financing in receiving suspicious transactions reports. - To know more about the system and how to register, please click on the following link: https://www.economy.gov.ae/English/aml/pages/str.aspx

      Fourth: Registration in the automatic reporting system for sanction lists: - Designated non-financial businesses and professions (DNFBPs) should implement Cabinet Decision No. (74) of 2020 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions on the Suppression and Combating of Terrorism, Terrorists Financing & Proliferation of Weapons of Mass Destruction, and Related Resolutions. - Designated non-financial businesses and professions (DNFBPs) must register in the automatic reporting system for sanctions lists, to obtain automatically and instantly updated lists of targeted financial sanctions from the United Nations Security Council consolidated sanctions lists and domestic terrorism lists. - Subscription to the automatic reporting system for sanctions lists can be done through the website of the Committee for Goods and Material Subjected to Import and Export Control to ensure that updates are obtained directly as soon as they are issued. - To subscribe, please click on the following link: https://www.uaeiec.gov.ae/en-us/united-nations-security-council-sanctions - Ensure full compliance with Article (15) and Article (21) of Cabinet Decision No. (74) of 2020, which outline the requirements of freezing of funds under the UNSC Consolidated lists or Local lists. - Upon a new update to the relevant sanctions list, screen customer database without delay when new names are listed. Then inform the supervisory authority if there is a match. (Within hours of designation by UNSCR or UAE Federal Cabinet).

      For more information about the procedures to be implemented in this regard, please refer to Circular No. 1/2020 (Concerning the Procedures of Cabinet Decision No. (74) of 2020 regarding the terrorist list system and the implementation of security council resolutions related to preventing and suppressing terrorism and its financing, counter of proliferation and its financing, and the relevant resolutions.

      Inspection procedures: - The Ministry of Economy applies inspection procedures to designated non-financial businesses and professions (DNFBPs), in accordance on risk-based approach and in accordance with the recommendations of the Financial Action Task Force (FATF) and international practices and standards. - The Ministry applies the methodology of onsite and offsite inspection.

      Inspection procedures are summarized as follows: - Sending a letter to the companies to inform them of the date of the inspection process and to specify the requirements. - Starting the onsite inspection process and visiting companies according to the prepared schedule. - Fill out inspection forms according to what observed during the inspection visit. - Request additional documents from companies during or after the inspection visit if required. - Imposing fines and violations on violating companies.

      For legislation Guidance, and instructions Related to Anti- money laundering and combating financing of terrorism, please visit the Ministry of Economy website at: https://www.economy.gov.ae/English/aml/pages/default.aspx

    • Ministry of Finance updates Economic Substance Requirements Frequently Asked Questions

      The UAE Ministry of Finance has updated the Frequently Asked Questions (FAQs) section related to Economic Substance requirements (ESR FAQ) by adding a new section L - "Additional information". The new section includes the following information:
      • Only businesses that undertake a relevant activity are subject to the Economic Substance Regulations and are required to file a notification and economic substance report.
      • Businesses are responsible to self-assess whether they undertake a relevant activity and have a filing requirement under the Economic Substance Regulations and cannot rely on regulatory authorities to inform them of their requirements under the Economic Substance Regulations.
      • Businesses that carry out a Relevant Activity during a financial period are required to submit a Notification irrespective of whether they earned income from that Relevant Activity.
      • Businesses that have more than one relevant activity during a financial period should submit a single notification and economic substance report and report all their relevant activities in that single notification and economic substance report.
      • If a business carries out a relevant activity and it is also subject to country by country reporting, it is also required to comply with the Economic Substance Regulations.
      • Notifications for financial periods ending on or before 30 June 2020 must be submitted by 31 January 2021. Notifications for financial periods ending after 30 June 2020 must be submitted within 6 months from the end of the financial period.
      • In the absence of audited financial statements, a business can submit unaudited financial statements or management accounts.
      • All businesses should keep relevant supporting information and documentary evidence on file and be ready to provide this information if and when asked by their regulatory authority or the FTA.
      • At a minimum, information should be kept on file for a period of 6 years.
      • Offshore free zone companies are subject to the Economic Substance Regulations in the same way as regular free zone companies or as a company established in mainland UAE.
      The FAQs were updated on 3 February 2021
    • Dubai Chamber sees surge in members’ exports to Central and Western Africa in January

      Dubai Chamber of Commerce and Industry (Dubai Chamber) has revealed that members’ exports to Central Africa and Western Africa recorded a surge of 85% and 57%, respectively, in January 2021, compared to the same month in the previous year. The total value of member companies’ exports targeting the African continent reached AED 2.9 billion during the same month, marking a 4.2% year-on-year increase achieved despite Covid-19-related economic headwinds. Information from the Chamber’s Certificates of Origin (COO) database shows that Africa’s share of the total declared value of Dubai Chamber members’ world exports was 18% in January 2021, up from 16% in the same month during the previous year. Growing demand from Africa for UAE products and Dubai’s world-class logistics infrastructure were factors that drove export growth over the past 12 months. The COO figures revealed particularly strong demand for UAE exports in Central Africa and Western Africa, with these regions achieving 85% and 57% year-on-year growth respectively. Egypt represents the most important country in Northern Africa for Dubai Chamber members trading with Africa, accounting for 78% of exports targeting this particular sub-region. Sudan is in second place with a share of 11% and Algeria is in third with 6%. Libya and Morocco each accounted for a 2% share, while Tunisia came in sixth with a share of 1%. In terms of annual growth, Egypt and Sudan were in a leading position among Northern Africa countries with 18% and 21% year-on-year growth, respectively. South Africa accounts for the lion’s share of Dubai Chamber members’ exports to Southern Africa, with three quarters of shipments to this sub-region going to the country. Botswana accounts for another 20% of exports, with the country’s low base value in January 2020 enabling it to realise a nearly threefold year-on-year increase. The data also showed that smaller economies in the five sub-regions in Africa are accelerating their imports growth, a trend supported by recent policies and strategies adopted by many African to accelerate economic development, which creates plenty of new export opportunities for Dubai-based trading companies.

  • China
    • GAC Releases Detailed Rules for Implementing Measures for Tax Reductions and Exemptions for Imported and Exported Goods

      The General Administration of Customs issued an announcement on February 25, 2021 to specify how to implement the Measures of the Customs of the People's Republic of China for the Administration of the Tax Reductions and Exemptions for Imported and Exported Goods. The announcement will be implemented from March 1, 2021.

      The announcement made explanation to the term of "the date of acceptance of an application for the confirmation of tax reduction or exemption" in the fifth article, and clarified that any modification, revocation or postponement of the Notice of Tax Collection or Exemption Confirmation in the sixth and seventh articles shall be handled according to the time limit specified in the fifth article. In the 19th article that specified goods with tax reduction or exemption are returned or exported, the column of "means of regulation" should be filled according to the actual means of trade. The announcement also specified the format of legal papers and customs clearance documents.

    • Three Authorities Issue Catalogue of Industries Encouraged to Develop in Hainan Free Trade Port

      The National Development and Reform Commission, the Ministry of Finance and the State Taxation Administration released on January 29, 2021 the Catalogue of Industries Encouraged to Develop in Hainan Free Trade Port (2020 Edition).

      The catalogue has added 143 industries in 14 categories and will be adjusted according to development needs at the free trade port. The 14 categories include manufacturing, construction, software & information technology, financial services, transportation, storage, farming, forestry, animal husbandry and fishery, culture, sports and entertainment. Industries related to tropical agriculture and marine development are also added to the catalogue.

    • MOC Releases Evaluation Standard for Credit Archives of E-commerce Enterprises

      The Ministry of Commerce recently issued an announcement to release the Evaluation Standard for Credit Archives of E-commerce Enterprises, to be implemented from May 1, 2021. The industry standard will guide e-commerce companies to establish and evaluate credit archives based on unified standards and provide technical support for the sharing and application of their credit information.

      The standard clarified how e-commerce companies should establish credit archives, and said that credit archives should include five types of information, and cover requirements for the source of credit information, and the collection and verification of credit information.

    • SAFE Updates Catalogue of Major Effective Regulations on Foreign Exchange Administration

      The State Administration of Foreign Exchange updated and released on February 10, 2021 the Catalogue of Major Effective Regulations on Foreign Exchange Administration (as of December 31, 2020). The catalogue covers 189 regulations related to foreign exchange administration.

      The catalogue classifies regulations into eight categories, including foreign exchange management under current account, RMB exchange rate and foreign exchange market, and foreign exchange technology management. New regulations added to the catalogue are mainly related to foreign exchange business under current account, external financial assets & liabilities and transaction data, international receipt & payment statistics, as well as information system code standard management.

      On the same day the SAFE issued a separate circular to revoke and invalidate seven regulatory documents in relation to individual purchase of foreign currencies, foreign exchange verification on import & export business, and banks' trade financing business.

    • China expected to remain EU’s top trading partner in 2021: scholar

      China, the only major economy to recover in 2020, will likely remain the European Union (EU)'s largest trading partner in 2021, a scholar based in Rome has recently said.

      The year of "2020 was a singular year for EU-China relations," Silvia Menegazzi, a sinologist and professor of international relations at Rome's LUISS University, told Xinhua.

      China surpassed the United States to become the EU's top trading partner last year, as the bloc's imports from China throughout 2020 grew by 5.6 percent year-on-year to 383.5 billion euros (about $465 billion) and exports grew by 2.2 percent to 202.5 billion euros (about $246 billion), according to the EU's statistical service Eurostat.

      The year of 2020 also marked the 45th anniversary of EU-China diplomatic ties, and witnessed the completion of the EU-China investment agreement negotiations, she said.

      From the European perspective, the goal of the agreement is to improve market access for European firms in China, Menegazzi said, adding that "from this point, the benefits for the EU are clear."

      In the future, how the pandemic-induced economic crisis evolves will play a key role in EU-China trade relations, according to Menegazzi.

      She predicted that China "will likely remain the EU's largest partner in 2021 because the other major actor -- the United States -- has suffered severe repercussions because of the pandemic."

      According to Eurostat, in 2020, the EU's "trade with the United States recorded a significant drop in both imports (-13.2 percent) and exports (-8.2 percent)."

      China Daily

    • China unveils guidelines on developing comprehensive transport network

      China has unveiled plans to build the country's strength in the transport sector over the next 15 years, setting long-term goals for the industry, with the aim of developing a modern, high-quality and comprehensive national transport network. By 2035, the country's transport network should be convenient, cost-effective, green, intelligent and safe, according to the guidelines jointly released by the Central Committee of the Communist Party of China and the State Council. The transport network should feature higher domestic and international connectivity, multi-channel access to major cities, and effective coverage of county-level nodes, the guidelines state. China should be at the global forefront in terms of the quality, intelligence and green levels of transport infrastructure, they say. By the middle of the century, a modern, high-quality and comprehensive national transport network will be built in an all-around way, with a world-class transport infrastructure system, according to the guidelines. Amid efforts to optimize the country's comprehensive transport layout, the total scale of the national comprehensive transport network will reach about 700,000 km by 2035, excluding the mileage of overseas sections of international land passages, air and sea routes and postal routes. Among them, there will be about 200,000 km of railways, 460,000 km of highways and 25,000 km of high-grade waterways, with 27 major coastal ports, 36 major inland ports, about 400 civil-transport airports and about 80 postal express-delivery hubs, the guidelines said. China will work to build a national comprehensive transport-hub system that consists of integrated transport-hub clusters, hub cities and hub ports, the guidelines said, stressing faster construction of about 20 international comprehensive transport-hub cities and about 80 national ones. Calling for further integrated development of transportation with other industries, the guidelines also stressed efforts to empower transport infrastructure with new technologies and coordinate the development of intelligent connected vehicles and smart cities.   The State Council - The People's Republic of China
    • China port handles over 6,000 China-Europe freight trains

      A total of 6,072 China-Europe freight trains have passed through the border port of Erenhot in north China's Inner Mongolia Autonomous Region since 2013, according to the local customs.

      The trains carried about 4.82 million tonnes of goods worth over 90 billion yuan (about 13.94 billion U.S. dollars), said Erenhot customs, which has been handling China-Europe freight trains since 2013.

      In 2020, despite the impact of the COVID-19 pandemic, a record-high number of 2,379 trains passed through the port, an increase of 53.3 percent year on year.

      Initiated in 2011, the China-Europe cargo rail transport service is considered a significant component of the Belt and Road Initiative, boosting trade between China and countries participating in the program. Amid the pandemic, the service remains a reliable transportation channel.

      Erenhot Port is the only railway port between China and Mongolia, and there are 44 China-Europe freight train routes passing through the port.


  • Bulgaria
    • Bulgaria – Greece Gas Interconnector Construction in Progress

      Bulgarian Prime Minister Boyko Borissov on Thursday expected the progress of construction of the Gas Interconnector Greece-Bulgaria. "This is a geostrategic project for both Bulgaria and the entire region," the PM said, quoted by the Government Information Service. He admitted that the pandemic had slowed it down a bit but, "as agreed with our Greek partners, it must be put into commercial operation this year".

      Energy Minister Temenouzhka Petkova said that the pipe manufacture and delivery contract has been performed. So far, 187 km of pipes have been delivered in both countries, the topsoil has been stripped off on over 170 km of the pipeline route in Bulgaria, more than 128 km of the pipes delivered are on site, and over 101 km have been welded. Work continues on digging the trench, laying the pipes and backfilling. The gas pipeline is 182 km long, of which 151 km in Bulgaria and 31 km in Greece, with a design capacity of up to 3 billion cu m/year, which may be increased to 5 billion cu m/year if there is market demand. It runs from Komotini (Northeastern Greece) via Kurdjali, Haskovo and Dimitrovgrad to Stara Zagora (Southeastern Bulgaria).


    • Bulgaria Launches Consultation on New VAT Rules for E-Commerce

      On 11 February 2021, the Ministry of Finance published a proposal amending the regulations for application of the Value Added Tax (VAT) Act. The proposal, which is opened for public consultation, consists of the following:

      • introduction of details of the application of the new EU VAT rules for e-commerce coming into force in 2021; and
      • implementation of Council Directive (EU) 2020/1756 of 20 November 2020 amending Directive 2006/112/EC on the common system of value added tax as regards the identification of taxable persons in Northern Ireland.

      The full text of the public consultation, issued on 11 February 2021, is available here (in Bulgarian only).

      The public consultation will run until 13 March 2021. Further developments will be reported when they occur.

  • India
    • Exports dip 0.25% to $27.67 billion in February

      NEW DELHI: India's exports marginally declined 0.25 per cent to $27.67 billion in February while imports grew by 6.98 per cent to $40.55 billion during the month, according to provisional data released by the commerce ministry on Tuesday. The trade deficit widened to $12.88 billion in February as compared to $10.16 billion in the year-ago period, the ministry said in a statement. The exports during April-February 2020-21 period stood at $255.92 billion. In the same period a year ago, it was at $291.87 billion, showing a negative growth of 12.32 per cent. Imports during April-February period too dipped 23 per cent to $340.88 billion.

      In February, oil imports declined 16.63 per cent to $8.99 billion. It was down 40.18 per cent to $72.08 billion during the 11-month period of the current fiscal.

      Major commodities of export which recorded positive growth in February include oil meals, iron ore, rice, meat, dairy and poultry products, carpet, spices, pharmaceuticals and chemicals. Many export commodities recorded negative growth during the same period. They are petroleum products (-27.13 per cent), leather (-21.62 per cent), cashew (-18.6 per cent), gems and jewellery (-11.18 per cent), engineering goods (-2.56 per cent), tea (-2.49 per cent) and coffee (-0.73 per cent).

        The Times of India
    • Union Budget 2021 – Summary

      The government has proposed to retain the current corporate and personal tax rates, extend incentives for start-ups and provide exemptions for financial services to assist taxpayers in view of the COVID-19 pandemic, among other measures in the Finance Bill 2021. Relevant measures in the Bill include:
      • clarifying the scope of the equalization levy;
      • exempting certain transfers of assets and shares from capital gains tax for certain financial service companies;
      • extending the incentive period for start-ups;
      • clarifying the tax treatment of certain income earned by individuals;
      • clarifying the definition of "liable to tax";
      • increasing the safe harbour limit for transfers of residential units, subject to conditions;
      • amending the provisions to rationalize the minimum alternative tax;
      • enhancing the scope of "supply" for goods and services tax purposes;
      • amending tax audit, assessment and appellate proceedings; and
      • changing reporting requirements and statutory due dates.
      The Bill can be downloaded here
    • Union Budget 2021 – Direct Tax

      The Finance Minister presented the Union Budget 2021 before Parliament on 1 February 2021. In addition to the tax measures reported previously, the Finance Bill 2021 proposes the following direct tax measures, including the non-application of the equalization levy on royalties or fees for technical services, incentives for start-up and financial service companies and amendments to the tax treatment of certain income earned by individuals.

      Equalization levy (EL)

      • The tax on royalties or fees for technical services (FTS) and the EL will be mutually exclusive effective from 1 April 2020. Accordingly, the EL shall not be charged on the consideration which is taxable as royalties or FTS.
      • For purposes of defining e-commerce supply or service, online sale of goods and online provision of services shall include one or more of the following activities taking place online:
        • accepting offers for sale;
        • placing purchase orders;
        • acceptance of purchase orders;
        • payment of consideration; or
        • supply of goods or provision of services, partly or wholly.
      • Consequently, provisions referring to income arising from the afore-mentioned activities that would have been exempt under section 10(50) of the Income Tax Act (ITA) and chargeable to the EL will be amended to give effect to the afore-mentioned amendments.
      • Consideration received or receivable from e-commerce supply or services will include:
        • consideration for sale of goods irrespective of whether the e-commerce operator owns the goods; and
        • consideration for provision of services irrespective of whether the service is provided or facilitated by the e-commerce operator.

      Financial services

      • There will be no capital gains tax on transfer of capital assets by a primary co-operative bank to a banking company and on issuance of shares by the banking company to the shareholders of the primary co-operative bank.
      • Income on transfers of non-deliverable forward contracts entered into by non-residents with offshore banking units will be exempt from income tax.
      • Transfers of assets from offshore funds to a resultant Alternative Investment Fund in any International Financial Services Centre will not be treated as taxable transfers. Further, the exchange of units by share and/or unit holders will not be considered as transfers.
      • Capital gains on transfer of shares of an Indian company acquired or relocated from offshore funds will be exempt if such capital gains on such shares were not chargeable to tax had that relocation not taken place.


      • Available tax deductions will be extended to eligible start-ups incorporated before 1 April 2022.
      • The time limit for exemption from capital gains tax on the investment of net consideration from the transfer of residential properties in start-ups will be extended from 31 March 2021 to 31 March 2022.

      Personal tax

      • Maturity proceeds from unit-linked insurance policies issued on or after 1 February 2021 will be taxable, if the aggregate annual premium exceeds INR 250,000 in any of the financial years during the term of these policies.
      • The income of a resident in India who has opened a specified account in a notified country while being a non-resident in India and a resident in the other country from a specified account for retirement benefits shall be taxed in the manner and in the year as prescribed by the Central Government.
      • The tax deducted at source under section 196D of the ITA in respect of income from securities held by Foreign Portfolio Investors can be deducted at the rate provided under tax treaties if such rate is lower than the existing rate of 20% and if a tax residence certificate has been obtained.
      • Exemption under the Leave Travel Concession (LTC) cash scheme:
        • In view of the COVID-19 pandemic, the cash allowance in lieu of the LTC will be exempt, subject to fulfilment of certain conditions to be notified subsequently.
      • Taxability of interest on various funds where income is exempt:
        • Employees contributing substantial amounts to provident funds benefit from the tax exemption on the entire interest accrued and/or received from such contribution under section 10 of the ITA.
        • The Finance Bill proposes to remove the exemption for interest accrued during the previous year on the recognized provident fund to the extent it relates to the amount or aggregate of amounts of employee contribution in excess of INR 250,000 in a previous year, on or after 1 April 2021.

      Note: Income from such account is not taxable on accrual basis and is taxable by such country at the time of withdrawal or redemption.

    • Union Budget 2021 – Indirect Taxes

      The Finance Minister presented the Union Budget 2021 before Parliament on 1 February 2021. In addition to the tax measures reported previously, the Finance Bill 2021 proposes the following indirect tax measures, including changes in the scope of taxable supply, tariff rates and reporting requirements.

      Goods and services tax (GST)

      • The scope of the term "supply" will be enhanced to include transactions involving supply of goods or services by any person (other than an individual) to its members or constituents and vice-versa for cash, deferred payment or other valuable consideration. Further, the person and its members shall be deemed to be separate entities and transactions between them shall be deemed to take place from one person to another.
      • Input tax credit shall be available to the recipient once the tax invoice or debit note has been reported and reflected on the Goods and Services Tax Network portal by the supplier.
      • The supply of goods or services to a special economic zone (SEZ) developer or unit will be considered as a zero-rated supply only where the same is used for authorized operations of the SEZ.
      • In case of non-realization of sale proceeds within 9 months from the date of export, a registered person shall be liable to deposit the refund so received along with interest at 18% within 30 days after the expiry of 9 months.
      • Payment of interest on tax liabilities in cash will be applicable retrospectively with effect from 1 July 2017.
      • The government may restrict zero-rated supply on payment of integrated GST to a notified class of exporter/ notified class of supplies of goods and services.
      • The requirement for furnishing of audited annual accounts and reconciliation statements will be removed.
      • Every registered person will be required to furnish an annual return, which may include a self-certified reconciliation statement reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statements for every financial year, as may be prescribed.
      • The Commissioner may exempt a class of registered person from filing annual return, by notification.

      Customs duty and tariff

      • The general Basic Customs Duty (BCD) rate will remain unchanged.
      • Tariff rates of a few key products will be amended with effect from 2 February 2021 and 1 April 2021.
      • Countervailing/anti-dumping duty will be levied only from the date of initiation of an inquiry on circumvention. The Central Government may modify the countervailing/anti-dumping duty to counter the effect of absorption of such anti-dumping duty from the date of initiation of an inquiry.
      • The countervailing/anti-dumping duty shall not apply to a 100% export-oriented undertaking or unit in an SEZ unless:
        • it is specifically made applicable in such notification or to such undertaking or unit; or
        • such article is cleared as such or goods manufactured out of it are cleared into the domestic tariff area.
      • The creation of a "Common Customs Electronic Portal" is proposed for the filing of bills of entry, shipping bills and other documents and forms under the Customs Act. Notices, orders, etc. will be made available in the common portal.
      • All new conditional exemptions under the Customs Act shall be valid up to 31 March falling immediately after the 2 years from the date of grant of such exemption or variation, unless otherwise specified. Furthermore, existing conditional exemptions shall be valid up to 31 March 2023, until specifically provided otherwise.
      • Bills of entry shall be filed 1 day (including holidays) prior to the arrival of goods in India. The timeline may be extended by the Board until the end of the day of the arrival of such goods.
      • Goods entered for export for which any wrongful claim of remission or refund of any tax/duty/levy under Customs Act or any other law is made shall be liable for confiscation.
      • Proper officers will be able to amend documents electronically through the customs automated system subject to specific safeguards. Importers and exporters will also be permitted to make the specified amendments on the common portal.
  • United States
    • Congressional Research Service Explains US Law for Trade Sanctions

      The Congressional Research Service (CRS) of the US Library of Congress has released a report that explains the statutory basis for US trade sanctions on foreign countries that violate US trade agreements or unjustifiably burden US commerce.

      The CRS report, updated 16 February 2021, is entitled "Section 301 of the Trade Act of 1974". The CRS report is designated IF11346 (Version 10).

      Section 301 of the Trade Act of 1974 (19 USC section 2411) grants the Office of the US Trade Representative (USTR) a range of responsibilities and authorities to investigate and take action to enforce US rights under trade agreements and respond to certain foreign trade practices.

      According to the CRS report, there have been 130 cases under section 301 since the law's enactment in 1974. The cases have primarily targeted the European Union (EU), concerning mostly agricultural trade. The EU is followed by Canada, Japan and South Korea. During the Trump Administration, the USTR initiated six new investigations, two of which have resulted in the imposition of tariffs on US imports from China and the EU.

      The CRS report states that Congress could consider:

      • amending section 301 to require greater consultation or approval before a president takes new trade actions; and
      • requesting an economic impact study of how such actions may affect the US economy, global supply chains and the multilateral trade system.

      Note: The CRS is an agency within the US Library of Congress and serves the US Congress throughout the legislative process by providing legislative research and analysis for an informed national legislature.

    • CBP Issues Region-Wide Withhold Release Order on Products Made by Slave Labor in Xinjiang

      WASHINGTON — Effective January 13 at all U.S. ports of entry, U.S. Customs and Border Protection (CBP) will detain cotton products and tomato products produced in China’s Xinjiang Uyghur Autonomous Region.

      CBP issued a Withhold Release Order (WRO) against cotton products and tomato products produced in Xinjiang based on information that reasonably indicates the use of detainee or prison labor and situations of forced labor. The agency identified the following forced labor indicators through the course of its investigation: debt bondage, restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive living and working conditions.

      “DHS will not tolerate forced labor of any kind in U.S. supply chains. We will continue to protect the American people and investigate credible allegations of forced labor, we will prevent goods made by forced labor from entering our country, and we demand the Chinese close their camps and stop their human rights violations,” said Acting DHS Deputy Secretary Ken Cuccinelli.

      “CBP will not tolerate the Chinese government’s exploitation of modern slavery to import goods into the United States below fair market value,” said CBP Acting Commissioner Mark A. Morgan. “Imports made on the cheap by using forced labor hurt American businesses that respect human rights and also expose unsuspecting consumers to unethical purchases.”

      The WRO was issued against cotton and tomatoes and their downstream products produced in whole or in part in the Xinjiang region, and includes downstream products produced outside the Xinjiang region that incorporate these inputs. These products include apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes. Importers are responsible for ensuring the products they are attempting to import do not exploit forced labor at any point in their supply chain, including the production or harvesting of the raw material.

      In July 2020, the U.S. Government issued an advisory to caution businesses about the reputational, financial, and legal risks of forced labor in Xinjiang, where the Chinese government continues to execute a campaign of repression targeting the Uyghur people and other ethnic and religious minority groups. On December 2, 2020, CBP announced the issuance of a WRO on cotton and cotton products originating from the Xinjiang Production and Construction Corps, an economic and paramilitary organization subordinate to the Chinese Communist Party.

      This is the fourth WRO that CBP has issued since the beginning of Fiscal Year 2021, and the second on products originating in Xinjiang. Eight of the 13 WRO that CBP issued in Fiscal Year 2020 were on goods made by forced labor in China. All WROs are publicly available and listed by country on CBP’s Forced Labor WROs and Findings webpage.

      Federal statute 19 U.S.C. 1307 prohibits the importation of merchandise produced, wholly or in part, by convict labor, forced labor, and/or indentured labor, including forced or indentured child labor. CBP detains shipments of goods suspected of being imported in violation of this statute. Importers of detained shipments have the opportunity to export their shipments or demonstrate that the merchandise was not produced with forced labor.

      CBP enforces the prohibition on importing goods made by forced labor. Any person or organization that has reason to believe merchandise produced with the use of forced labor is being, or likely to be, imported into the United States can report detailed allegations by contacting CBP through the e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.

    • US Grand Jury Indicts US Individual for Tax Evasion and Failure to Report Foreign Bank Accounts

      The US Department of Justice (DOJ) has announced that a US federal grand jury indicted (i.e. charged) a US individual with tax evasion and failure to file Reports of Foreign Bank and Financial Accounts (FBARs), among other offenses. The announcement was made in a DOJ News Release dated 10 February 2021.

      According to the News Release, the US individual allegedly:

      • failed to disclose her interest in a Swiss bank account on annual FBARs for calendar years 2012 through 2014;
      • evaded assessment of income taxes on the interest and dividend income that she earned in her Swiss bank account for tax years 2011 through 2014; and
      • failed to file income tax returns for tax years 2011 through 2014.

      If convicted, the US individual faces a maximum sentence of five years in prison for each count relating to her failure to file an FBAR and tax evasion. She also faces a maximum sentence of one year in prison for each count concerning the failure to file tax returns.

    • IRS Reminds Taxpayers to Report Gig Economy Income on Tax Returns

      The US Internal Revenue Service (IRS) has issued a reminder that taxpayers must report gig economy income on their tax returns (COVID Tax Tip 2021-21, 18 February 2021).

      The gig economy is also referred to as the on-demand, sharing or access economy. This includes renting out a home or spare bedroom and providing delivery services.

      People working in the gig economy are generally required to pay:

      • income taxes;
      • social security taxes (Federal Insurance Contribution Act or Self-employment Contribution Act taxes); and
      • additional Medicare taxes.

      Gig economy income is taxable regardless of whether the activity is only part-time, side work, or a primary source of income, or even if the taxpayer is paid in cash.

      Independent contractors may be able to deduct business expenses related to the use of things like their car or house provided they keep records of their business expenses.

  • United Kingdom
    • United Kingdom Guides Businesses on Accounting for Import VAT

      On 11 February 2021, HM Revenue & Customs (HMRC) published two updated papers providing businesses with guidelines on how to account for import VAT on a UK VAT return. The papers concern the following circumstances:

      • when import VAT can be accounted for on a VAT return, which can be found here; and
      • how a VAT return to account for import VAT can be completed, which can be found here.

      The first paper has been updated to provide greater clarity on what needs to be done and how to do it, and the second paper has been updated and the following sections have been added:

      • if you use a VAT accounting scheme; and
      • transactions or movements of goods which span the end of the transition period.

      The section on VAT accounting schemes explains what needs to be done if a business is using the flat-rate scheme for small businesses. Also, it makes clear that the cash accounting Scheme cannot be used for goods imported or removed from a customs warehouse. Finally, the section on items spanning the end of the transition period highlights the need to check how to account for the VAT.

    • United Kingdom Updates EU Exit Transitional VAT Provisions

      On 2 February 2021, HM Revenue & Customs (HMRC) updated its guidance on the EU exit transitional provisions for value added tax (VAT). This guidance concerns the VAT treatment of transactions that span the end of the transitional period and gives a broad overview of the changes to the VAT treatment of the following items:

      • goods;
      • fulfilment houses;
      • services;
      • call-off stock; and
      • financial services.

      There is a comment on the Tour Operators Margin Scheme, in particular three paragraphs that, according to the guidance, have force of law concerning the time of supply for VAT accounting.

      The information on goods in a warehousing regime has, also, been updated.

    • United Kingdom Outlines New Payment Scheme for Deferred VAT Payments

      On 23 February 2021, HM Revenue & Customs (HMRC) updated its guidance with information about the opening of the new payment scheme for value added tax (VAT) deferred between 20 March 2020 and 30 June 2020. The scheme is open from 23 February 2021 to 21 June 2021. The scheme allows payment of the deferred VAT to be made in equal interest-free instalments. A link to join the scheme is provided within the guidance, which needs to be read before applying to join the scheme.

      Applications to use the scheme can only be made by the relevant business.

      Businesses using either the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme will be invited to join the new payment scheme in March 2021.

  • Switzerland
    • Ministry of Economy and Finance Issues Implementing Rules on Local Consumption Tax for Campione d’Italia

      The Ministry of Economy and Finance has issued a Ministerial Decree providing implementing rules on the local consumption tax for Campione d'Italia (imposta locale sul consumo di Campione d'Italia, ILCCI), introduced by the Budget Law for 2020.

      The ILCCI applies to supplies of goods and services to final consumers taking place in Campione d'Italia and on importations of goods carried on by final consumers. Certain supplies are exempt, including supplies made for medical, social or educational purposes. Taxable persons are individuals and companies that exercise a business activity, art or profession and make qualifying supplies. However, the tax burden is imposed on the final consumer.

      The ILCCI rates are identical to those of the Swiss value added tax. In particular, the standard ILCCI rate is 7.7%. The reduced ILCCI rate of 3.7% applies to supplies of hospitality services (provisions of breakfast included) while the reduced ILCCI rate of 2.5% applies to supplies of alimentary products, newspapers and books, medicines and other qualifying products consumed on a daily basis.

      The Ministerial Decree of 16 December 2020 was published in Official Gazette No. 33 of 9 February 2021.

      Note: The ILCCI was introduced following the implementation of Council Directive 2019/475 of 18 February 2019, under which Campione d'Italia is part of the EU Customs Union and subject to the EU rules on excise duties, but it remains outside the scope of application of the EU value added tax. In particular, the ILCCI aims at ensuring a level playing field between enterprises established in Campione d'Italia and Switzerland.

    • Federal Tax Administration Announces Safe Haven Interest Rates for 2021

      The Federal Tax Administration published 2 Circulars and announced the safe haven interest rates applicable to shareholder and related party loans in 2021.

      Circular of 28 January 2021: Loans denominated in CHF

      The minimum interest rates for loans in CHF granted to shareholders or related parties are:

      • on loans financed through equity: 0.25%; and
      • on loans financed through debt: the interest incurred (prime costs) plus 0.5% on amounts up to CHF 10 million, or plus 0.25% on amounts exceeding CHF 10 million; in all cases, however, at least 0.25%.

      Conversely, the maximum interest rates payable for loans in CHF given by shareholders or related parties are:

      • on real estate loans: 1.0% to 2.25% (depending on loan type and level of debt financing); and
      • on operational loans received by a Swiss trading or production company: 3.0% for loans up to CHF 1 million and 1.0% on the excess; by a Swiss holding or administration company: 2.5% for loans up to CHF 1 million and 0.75% on the excess.

      Circular of 29 January 2021: Loans denominated in foreign currencies

      For loans in foreign currencies (e.g. EUR and USD) given to shareholders or related parties, the minimum interest rates are:

      • on loans financed through equity: EUR: 0.25%, USD: 1.25%; in all cases, however, at least the safe haven interest rate for loans denominated in CHF, i.e. 0.25%; and
      • on loans financed through debt: the interest incurred (prime costs) plus 0.50%; in all cases, however, at least 0.25% for loans denominated in EUR, or 1.25% for loans in USD.

      These safe haven interest rates are also applicable to loans in EUR and USD received from shareholders or related parties. However, higher interest rates based on the arm's length principle can be paid if they are justified by a business purpose.

      The Federal Tax Administration published the Circulars and announced the safe haven interest rates on 29 January 2021.

    • Svizzera – LPD (Legge Federale sulla Protezione dei dati)

      L’acronimo LPD si riferisce alla Legge Federale sulla protezione dei dati personali decretata dalla Assemblea Federale della Confederazione Svizzera il 19 giugno 1992, in vigore dal 1 luglio 1993.

      È composta da 39 articoli raggruppati in sezioni in virtù dell’argomento trattato per un totale di 8, di seguito indicati:

      • scopo, campo d’applicazione e definizioni;
      • disposizioni generali di protezione dei dati;
      • trattamento di dati personali da parte di persone private;
      • trattamento di dati personali da parte di organi federali;
      • incaricato federale della protezione dei dati e della trasparenza;
      • protezione giuridica;
      • disposizioni penali;
      • disposizioni finali.

      Dall’entrata in vigore sono trascorsi quasi 28 anni e sebbene in passato le modificazioni e l’adeguamento della legge siano state numerose (16), a causa della rapida evoluzione tecnologica e sociale, lo scorso 25 settembre 2020 il Parlamento svizzero ha optato per la revisione totale della LPD, e la sua entrata in vigore è prevista per il 2022.

      La nuova legge federale sulla protezione dei dati personali auspica di aumentare sensibilmente la trasparenza dei trattamenti di dati e migliorare il controllo da parte delle persone interessate sui propri dati, restando così al passo con il repentino sviluppo dell’era digitale.

      La revisione è inoltre volta ad adeguare in generale la legislazione svizzera sulla protezione dei dati ai requisiti del regolamento (UE) 2016/679, (GDPR).

      Campo di applicazione della LPD

      La LPD regola il trattamento dei dati delle persone fisiche e giuridiche da parte di privati o degli organi della Confederazione Svizzera come specificato nella sezione 1 art2., che così dichiara:

      1. La presente legge si applica al trattamento di dati di persone fisiche e giuridiche da parte di:

      a. persone private;

      b. organi federali.

      Il trattamento dei dati personali da parte di persone private e organi federali è regolato rispettivamente alla sezione 3 e 4 della LPD.

      2. Essa non si applica:

      a. ai dati personali trattati da una persona fisica per uso esclusivamente personale e che non vengono comunicati a estranei;

      b. ai dibattiti delle Camere federali e delle commissioni parlamentari;

      c. ai procedimenti civili, penali e di assistenza giudiziaria internazionale pendenti, come pure a quelli di diritto pubblico e di diritto amministrativo, eccettuate le procedure amministrative di prima istanza;

      d. ai registri pubblici relativi ai rapporti di diritto privato;

      e. ai dati personali trattati dal Comitato internazionale della Croce Rossa.

      Fondamenti principali e disposizioni generali di protezione dei dati della LPD

      Per analizzare il tema è utile spiegarti alcuni dei principali punti cardine sui quali si fonda la LPD, ovvero l’importanza che essa pone in termini di diritto alla protezione dei dati personali, diritto fondamentale dell'individuo ai sensi della Carta dei diritti fondamentali dell'Unione europea (art. 8), con particolare focus riguardo la tutela dei diritti della personalità e della sfera privata; a questo proposito la LPD pone come dati personali degni di particolare protezione i dati concernenti:

      • le opinioni o attività religiose, filosofiche, politiche o sindacali;
      • la salute, la sfera intima o l’appartenenza a una razza;
      • le misure d’assistenza sociale;
      • i procedimenti o le sanzioni amministrative e penali;

      Ciò implica che il trattamento dei dati debba necessariamente avvenire secondo le norme di legge e rispettando i principi della buona fede e della responsabilità nonché garantendo agli interessati di agire attivamente in caso di mancato rispetto delle stesse e di far valere i propri diritti.

      L’interessato ha in particolare il diritto di essere posto a conoscenza della natura dei dati che vengono raccolti su di sé, e qualora fosse necessario di godere del diritto alla rettifica dei dati inesatti, blocco o cancellazione.

      Il trattamento di dati è consentito previa riconoscibile dichiarazione degli scopi effettivi ed esclusivamente nella misura necessaria per gli stessi; la comunicazione dei dati all’estero è consentita solo nei casi specificati all’art.6 dell’LPD.

      IFPDT: Incaricato federale della protezione dei dati e della trasparenza

      La figura dell’IFPDT viene nominata dal Consiglio federale per un quadriennio, la sua nomina sottostà all’approvazione dell’Assemblea federale e il mandato può essere rinnovato due volte.

      L’incaricato si occupa della protezione della sfera privata nell'ambito del trattamento di dati personali, controlla ed effettua accertamenti circa le banche dati e supervisiona l’effettiva attuazione delle prescrizioni della LPD e della Confederazione.

      L’incaricato è tenuto a sorvegliare sugli organi federali e, come previsto dall’art.27, può:

      • esigere la produzione di atti, doman­dare informazioni e farsi presentare trattamenti di dati; gli organi federali devono collaborare all’accertamento dei fatti.
      • se dai chiarimenti risulta che sono state violate prescrizioni sulla protezione dei dati, l’Incaricato raccomanda all’organo federale di modificare o di cessare il tratta­mento; esso informa della raccomandazione il dipartimento competente o la Cancelleria federale.
      • se una raccomandazione dell’Incaricato è respinta o non le è dato seguito, questi può deferire la pratica al dipartimento competente o alla Cancelleria federale; la decisione del dipartimento o della Cancelleria è comunicata con atto formale alla persona interessata.
      • l’Incaricato è legittimato a ricorrere contro la decisione di cui al capoverso soprastante e contro la decisione dell’autorità di ricorso.

      L’incaricato effettua accertamenti e raccomandazioni nel settore privato quando i metodi di trattamento possono ledere la personalità di un numero considerevole di persone, devono essere registrate collezioni di dati, vi è obbligo d’informare secondo l’articolo 6 e, come previsto dall’art. 29, può:

      • esigere la produzione di atti, domandare informazioni e farsi presentare trattamenti di dati.
      • dopo aver accertato i fatti, l’Incaricato può raccomandare di modificare o di cessare il trattamento.
      • se una raccomandazione dell’Incaricato è respinta o non le è dato seguito, questi può deferire la pratica al Tribunale amministrativo federale per decisione; contro questa decisione l’Incaricato è legittimato a ricorrere.
        Diacron Suisse Sa, in collaborazione con AB Innovation Consulting
  • Hong Kong
    • Hong Kong Proposes One-off Reduction in Tax Payable and Increased Stamp Duty Rate on Stock Transfers

      The Hong Kong government has proposed a 100% one-off reduction (limited to HKD 10,000) in profits tax, salaries tax and tax payable under personal assessment for the year of assessment 2020/21 and an increase in the stamp duty rate to 0.13% (from 0.1%) for share transactions.

      The details were announced in the Budget for 2021/22 that was presented to the Legislative Council by the Financial Secretary on 25 February 2021. The tax measures proposed require legislative amendments before implementation. Once enacted, the amendments will apply from 1 April 2021.

      The proposals are summarized below:

      • a one-off 100% reduction in profits tax, salaries tax and tax payable under personal assessment for the year of assessment 2020/21, subject to a maximum of HKD 10,000 per case;
      • a waiver of business registration fees for 2021/22; and
      • an increase in the rate of ad valorem stamp duty on Hong Kong stock transactions from 0.1% to 0.13% for both buyers and sellers.

      No new taxes were introduced by the government. The full details of the budget speech are available here.

    • Guangdong Reserves Land for Maglev Trains to Hong Kong, Beijing and Shanghai

      The Territorial Spatial Planning of Guangdong Province 2020-2035 was recently released for public consultation between March and November. The plan covers the country’s land and sea territory with 2019 as the base year and looks to development during the years up to the middle of this century. Land will be set aside for six major corridors, including the “Beijing-Hong Kong-Macao high-speed maglev route” and the “Shanghai-Shenzhen-Guangzhou high-speed maglev route”.

      According to the plan, one-hour traffic circles will be built in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), the Shantou-Chaozhou-Jieyang metropolitan area and the Zhanjiang-Maoming metropolitan area, while a two-hour traffic circle will be built linking the GBA with the northwestern part of eastern Guangdong.

        Source: Department of Natural Resources of Guangdong Province   HKTDC