GHY Tradelines

(The Art Newspaper – Pierre Valentin)

The fact that the European Commission can, without any public consultation or publicity, overrule the decision of two national tribunals, makes a mockery of the judicial process.

On 11 August 2010, the European Commission decided that a video installation should be classified as “DVD players and projectors”, and a light installation as “light fittings” when imported into the European Union.

The two works, Hall of Whispers, 1995, by Bill Viola and Six Alternating Cool White/Warm White Fluorescent Lights Vertical and Centred, 1973, by Dan Flavin, had been the subject of a dispute between Haunch of Venison, the contemporary art gallery, and the UK’s HM Revenue & Customs (HMRC) in 2006. HMRC had sought to classify these installations not as works of art but as projectors and light fittings. This meant that instead of applying the reduced rate of value added tax of 5%, it applied the then standard rate of 17.5%, and customs duty of 3.7%. Extraordinarily, it sought to apply these taxes not on the value of the components but on the market value of the works.

The dispute over Hall of Whispers was eventually superseded by a dispute over six other works by Viola, which eventually went before a VAT tribunal in London. In its judgment in December 2008 it decided that Viola’s and Flavin’s installations were sculptures and should have been taxed at the reduced rate of VAT and not attracted customs duty. HMRC did not appeal the decision. There the matter should have rested. Read more here.

(Reuters – Jonathan Lynn)

WTO members are getting down to the technicalities of a new global trade deal, suggesting the right spirit of compromise to clinch agreement may at last be within reach, negotiators and officials said on Thursday.

Swiss ambassador Luzius Wasescha, who chairs talks at the World Trade Organization on industrial goods, said after a week of meetings that he detected a changed mood, which was the prerequisite for movement in the long-running Doha negotiations. He said members had finally started to talk about issues and proposals that had not been discussed so far. “This is not the end of the final phase but the beginning of what might evolve into a final phase,” he told a briefing. Read more here.

(Lexology – Stephen P. Anway, Squire Sanders & Dempsey LLP)

On 25 June 2010, the United Nations Commission on International Trade Law (UNCITRAL) adopted a revised version of its Arbitration Rules, which are widely used in ad hoc international arbitrations (i.e., international arbitrations not conducted under the purview of an institution or administering body).

The revised rules replace the 1976 version, which successfully established a comprehensive set of rules for arbitration where no arbitral institution is involved. The success of the UNCITRAL Arbitration Rules is largely attributable to their procedural flexibility and neutrality, which allow for use in different cultures and legal systems. Parties can modify the UNCITRAL Arbitration Rules according to their needs, and the proceedings are not restricted to a particular seat or applicable law.

The UNCITRAL Arbitration Rules have been widely adopted in both commercial and non-commercial arbitrations. International private parties have found them particularly attractive for the resolution of commercial disputes. The Iran-US Claims Tribunal also applied a modified version of the 1976 rules. And many treaties – such as bilateral investment treaties and free trade agreements – allow investors to pursue UNCITRAL arbitration against a host State to resolve disputes concerning their investments. Read more here.

(Journal of Commerce)

Canadian imports are slowing, but accelerating exports give ports a reason to grow

Canada came out of the gate last year with stronger economic growth than its huge neighbor to the south, so its ports benefited from trade volume that rebounded from a mostly dismal showing in 2009.

Import volume benefited from a surge in capital investment by Canadian companies. But toward the end of last year and moving into 2011, growth slowed sharply, dampening prospects for import growth. Although the Canadian dollar has strengthened considerably, export growth is expected to accelerate as economic growth picks up in the U.S. and in emerging markets in Asia that are buying a growing, though still small share of Canada’s exports.

The only problem with the brightening outlook for exports is that the composition and destination of exports highlights a more troubling long-term trend in Canada’s trade position. The country is exporting fewer manufactured goods to the U.S. and more commodities to the rest of the world. Like the U.S., which counts wastepaper as its single largest commodity export, Canada appears to be working its way down the value-added chain and exporting more resource-based inputs into production of goods elsewhere in the world. Wood pulp and wastepaper now account for 13.9% of Canada’s total exports, closing the gap with exports of motor vehicles and parts, mostly to the U.S., which account for 17.3% of total exports. Read more here.