USCIB Submits Comments to USTR on Proposed Digital Services Taxes

USCIB provided comments to the United States Trade Representative (USTR) regarding the proposed Digital Services Taxes (DSTs) of several countries, including Austria, Brazil, Czech Republic, India, Indonesia, Italy, Spain, Turkey, the United Kingdom, as well as the European Union.

USCIB’s submission focused on whether these countries violated Section 301 while encouraging the U.S. to seek a multilateral solution.

“The DSTs under investigation are a poor choice to address the tax issues arising from digitalization of the economy and will work against the economic recovery they are intended to help fund,” said USCIB Vice President for Taxation Policy Carol Doran Klein. “Rather, the U.S. should work cooperatively to find an appropriate multilateral solution to taxing the digitalizing economy that does not unduly burden U.S. interests and fosters certainty for business.”

Business at OECD Head Shares 2020 Policy Priorities With USCIB

Business at OECD’s Russel Mills (left, center) with IOE’s Shea GoPaul and USCIB policy staff

Secretary General of Business at OECD (BIAC) Russel Mills visited USCIB’s Washington DC and New York offices the week of February 3 to update staff on Business at OECD and OECD priorities for the year.

Mills shared that environment, biodiversity, plastics and climate change issues are moving to the top of the agenda, however there will also be a mushrooming of digitization plans and digital economy work related to changing business models and digitally enabled companies. Mills also noted that policies around digital taxation and re-skilling will be on top of the agenda for both organizations.

“We really valued our time with Russel, which gave us an opportunity to touch base on our respective organizations’ policy priorities,” said USCIB President and CEO Peter Robinson. “USCIB looks forward to a productive year working with BIAC to help drive the work of the OECD.”

Robinson Kicks Off 2020 With OECD, ICC France, ICC Germany 

ICC-Germany staff (Secretary-General Oliver Wieck, center) with USCIB President and CEO Peter Robinson (right) in Berlin

The Organization for Economic Cooperation and Development (OECD) held its annual consultation with Business at OECD on January 13 in Paris under the theme, Role of Business in Lifelong Opportunities: People First Policies to Bridge Divides. USCIB President and CEO Peter Robinson and AT&T Senior Vice President Karim Lesina provided a kick-off presentation on behalf of industry, followed by remarks by OECD Secretary-General Angel Gurria and Business at OECD’s Chairman Phil O’Reilly and Secretary-General Russell Mills.

Recommendations by Business at OECD focused on the value of relying on open markets on trade, investment, taxation and development initiatives; ensuring a people-first approach to developing new approaches to the Future of Work; and incentivizing and driving innovation in the health and environment areas in the 5G generation.

According to Robinson, it was the best-attended consultation to date, with a strong business delegation, senior OECD staff including all four Deputy Secretaries-General and OECD Ambassadors from nearly all OECD member countries. In helping to set the stage, Robinson emphasized the continued commitment of the American business community to open markets and multilateral approaches and institutions. “The necessity for inclusive multilateralism, whereby all stakeholders—including business—have a seat at the table to pursue societal challenges together is crucial,” said Robinson, who also praised the OECD in setting an appropriate example in this regard.

Lesina provided the perspective of a leading modern media company that is investing globally while driving innovation in life-long learning opportunities for its employees.  He highlighted that increased convergence and digitalization have helped create a truly global economy, providing consumers today with a unique opportunity to benefit from cross-border activity best cultivated by open market policies. Lesina emphasized the need for flexible policy and regulatory frameworks that foster innovation and drive creativity and underscored the vital role of the OECD in delivering the benefits of the digital economy to consumers everywhere through forward-looking and evidence-based policymaking.

“The Consultation provides an excellent opportunity for business to interact with OECD staff and country Ambassadors,” said Robinson. Robinson had several meetings with OECD management staff to discuss Business at OECD and USCIB priorities.

While in Paris, Robinson also visited USCIB’s International Chamber of Commerce (ICC) National Committee counterpart, ICC-France, and met with the new Secretary-General of ICC-France, Emmanuelle Butaud-Stubbs, to discuss mutual interests and priorities and cooperation in policy areas including trade and environment.

Robinson then traveled to Berlin to meet with several of USCIB’s global affiliate counterparts in Germany: ICC-Germany, the German Employers Federation (BDA) and the German Chamber of Industry and Commerce (DIHK). Secretary-General of ICC-Germany Oliver Wieck, Director of Communications Katrin Rupprecht and staff organized a discussion forum at which Robinson addressed U.S. Trade Policy in 2020. ICC-Germany members including Siemens, Thyssenkrupp and BDI attended as did Dr. Berend Diekmann, head of division for USA/Canada/Mexico from the Federal Ministry for Economic Affairs and Energy. Finally, Robinson met with BDA CEO Steffen Kampeter and DIHK Director of ATA Carnet Dr. Kornelia Ferati.

USCIB Tax Expert Featured In International Tax Review’s ‘Global Tax 50’

The International Tax Review (ITR) publication released its annual ‘Global Tax 50’ in December, featuring a rundown of the most influential individuals, organizations, geopolitical events and trends in the tax world. Among the Global Tax 50 is USCIB Vice President for Taxation Policy Carol Doran Klein. 

According to ITR, “voices like Doran Klein will be crucial” in 2020.

In her feature, Doran Klein suggested that “the biggest challenge of 2020 will be getting a political deal on digital tax that holds together the unified approach.”

This ninth edition of the ITR’s Global 50 represents the choices of the ITR editorial team, who decided who or what they thought has had the biggest impact on taxation during the past twelve months. Breaking down the entire 50 individually according to the impact they made would require too granular an approach, so the magazine list is ordered alphabetically.

New OECD Deputy Secretary General Meets With USCIB

L-R: OECD Deputy Secretary General Ulrik Vestergaard Knudsen; Head of the OECD’s Washington office Will Davis

USCIB members and staff had the opportunity to meet with the new Organization for Economic Cooperation and Development (OECD) Deputy Secretary-General Ulrik Vestergaard Knudsen on November 5 at the USCIB Washington DC office. Knudsen’s diverse policy portfolio at the OECD includes science, technology and innovation, trade and agriculture, the OECD Center for Entrepreneurship, SMEs, as well as regions and cities.

The dialogue between Knudsen and USCIB members focused on areas of mutual interest such as taxation policy, including the pressing issue of digital taxation, as well as cross-border data flows, healthcare, trade and investment, digital trade, and the Going Digital Project. Knudsen also mentioned Artificial Intelligence (AI) as an increasingly important issue for the OECD and the establishment of the OECD AI Policy Observatory, which will help countries nurture and monitor the responsible development of trustworthy AI systems for the benefit of society.

L-R: Norine Kennedy (USCIB), Will Davis (OECD Washington), Ambassador Ulrik Vestergaard Knudsen (OECD), Peter Robinson (USCIB), Eva Hampl (USCIB), Rob Mulligan (USCIB)

USCIB members from Microsoft, IBM, General Electric, CropLife America, Walmart and others, benefited from the opportunity to hear directly from OECD leadership regarding the OECD’s priorities as well as an update on the OECD accession process. USCIB participants underlined the importance of maximizing access for business and other responsible stakeholders in all OECD committee meetings.

“We are grateful that DSG Knudsen took the time to meet with U.S. business,” said USCIB Senior Vice President for Policy and Government Relations Rob Mulligan. “USCIB staff and members always appreciate an opportunity to provide perspectives to the OECD staff and secretariat to help inform the OECD’s science-based policy recommendations.”

USCIB is the U.S. national committee of Business at OECD (BIAC).

USCIB Urges Treasury to Work With OECD on Digital Taxation

In response to the continuing and extensive digitalization of the economy and increasing calls by countries to tax the income of technology companies that earn revenue in a market without necessarily having a traditional physical presence in that market, USCIB sent a letter on October 4 to Secretary of the Treasury Steven T. Mnuchin. The letter urges Secretary Mnuchin to continue to work with the OECD and other countries to achieve the best outcome for U.S. taxpayers, the U.S. Treasury, and the U.S. economy.

“USCIB believes that any fundamental changes to the international tax rules should be achieved through a consensus-based process,” said USCIB Vice President for Taxation Policy Carol Doran Klein.

According to USCIB’s letter, the best place to conduct a consensus-based process is at the OECD where over 130 countries are participating in a project to attempt to achieve consensus on possible new rules applicable to the broad digitalized economy. The United States Treasury has, to date, been an active participant in this project, including serving as vice-chair of the steering group.

USCIB Reports on Public Hearing on Digital Services Tax

USCIB submitted comments on August 19 to the Section 301 Committee on the Investigation of France’s Digital Services Tax (DST).  According to USCIB’s taxation and trade policy experts Carol Doran Klein and Eva Hampl, USCIB believes that France’s DST is actionable under Section 301 because it is unreasonable and discriminates against U.S. companies.

USCIB’s comments note that the DST is also inconsistent with France’s obligations under the World Trade Organization (WTO), the U.S.-France Income Tax Treaty, and the Convention of Establishment between the United States and France. USCIB urges USTR to engage toward a negotiated outcome, including through multilateral channels, such as the Organization for Economic Cooperation and Development (OECD) and the WTO.

The Section 301 Committee, chaired by USTR, held a public hearing on Monday. According to Klein and Hampl who attended the hearing, all of the witnesses expressed great support for the work being done at the OECD and the Inclusive Framework process, noting that unilateral measures will undermine the OECD process and make it more difficult to reach agreement. USCIB has been actively engaged at the OECD on this issue, providing business input to governments, to help guide them to a workable multilateral solution.

USCIB Objects to Implementation of Digital Service Taxes by France

Washington, D.C., July 17, 2019 – Responding to the recent announcement by France to implement a digital service taxes (DST), the United States Council for International Business (USCIB), which represents America’s most successful global companies, urges countries to avoid unilateral measures and instead pursue a consensus-based, comprehensive and income tax-based solution. USCIB supports the OECD Inclusive Framework process for reaching agreement on these global issues.

The French law will impose a tax of three percent on certain revenue earned by technology companies including advertising, commissions from digital marketplaces and sales of data.

“Taxes on revenues are distortive,” said USCIB Vice President for Tax Policy Carol Doran Klein. “The total tax may exceed company profit and misallocate profits to the market jurisdiction. Any solution should be treaty compliant and designed to avoid controversy. It should tax income based on where value is created by companies, including appropriate recognition of where intangibles are created. Furthermore, any solution should not discourage innovation.”

Klein also warned that the French tax will not be easy to implement and will put a significant burden on companies to set up systems to track global revenues. “Implementing such new systems would be both time consuming and expensive – not simple or easily implemented – and would divert company resources from useful profit-making activities.”

“It is unfortunate that France has decided to repeat the mistakes identified in the debate over the unsuccessful EU DST,” said Bill Sample, chair of USCIB’s Tax Committee. “I urge France to focus their energies on reaching a consensus solution within the OECD’s Inclusive Framework for a sustainable international tax system that recognizes innovation and production and minimizes the adverse impact of the costs of double taxation on business investment and growth.”

USCIB reiterated its concerns in a letter to the government of New Zealand, which is also looking at options for taxing the digital economy.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce, the International Organization of Employers and Business at OECD, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

USCIB Washington Update: May – June, 2019

During the months of May and June 2019, USCIB Staff met with Angela Ellard, House Ways & Means Minority Chief Trade Counsel, Christa Brzozwski, DHS, Nick Gardner, US Dairy Export Council, and Martin Kreienbaum, German Federal Ministry of Finance, issued recommendations on the WTO e-Commerce negotiations, hosted the 14th Annual OECD International Tax Conference, and much more. Below are summaries of these and other highlights from the activities of USCIB in Washington, D.C. over the last three months. If you have any questions or comments, or want more information on a specific topic, please contact any of the staff members listed at the end of this brief.

Table of Contents:

  1. Trade and Investment – Opening Global Markets for Trade and Investment
  1. ICT Policy – Promoting Sound Policies for New Technologies
  1. Tax – Advancing Tax Policies that Promote U.S. Competitiveness
  1. Customs and Trade Facilitation – Reducing Barriers and Costs from Customs and Border Control Practices
  1. Anti-Illicit Trade – Promoting Strong International AIT Leadership and Advocating a Comprehensive and Multi-Disciplinary Approach to AIT
  1. Food and Agriculture – Promoting an Open and Efficient Global Food System by Providing Industry Expertise
  1. China – Supporting Policies and Relationships that Enhance U.S.-China Business

  1. Competition – Creating Global Legal Practices for an Open and Competitive Business Environment
  1. Membership
  2. Upcoming Events
  3. Staff List

 Trade and Investment – Opening Global Markets for Trade and Investment 

Angela Ellard, House Ways & Means, Briefs USCIB Trade Committee: At the June 20 meeting of the USCIB Trade and Investment Committee members received a briefing from Angela Ellard, Minority Chief Trade Counsel, House Ways & Means Committee. She shared her immediate impressions of Ambassador Lighthizer’s hearing the day prior, indicated that USMCA is a top priority and responded to questions on a range of other trade issues. This was followed by a briefing from Nick Ashton Hart of the Digital Trade Network, who called into the meeting directly after the conclusion of the WTO E-Commerce negotiations in Geneva. The most recent round of negotiations took place from June 18-20. Nick was able to provide an in depth, off-the-record briefing on the negotiations as the only business representative present in the room for the negotiations.

USCIB Statement on WTO e-Commerce Negotiations: In early June, USCIB issued Recommendations on the WTO e-Commerce negotiations, reflecting member priorities and goals for the negotiations, which had their first round in May. At the December 2017 WTO ministerial in Buenos Aires, 71 countries agreed to begin discussing new global rules to facilitate the expansion of the digital economy. The negotiations were formally launched in January with a joint statement by 76 countries, including the United States, in Davos at the World Economic Forum. As of the most recent round, the joint statement initiative now includes 78 WTO members, representing 90% of global trade. USCIB encouraged negotiators to focus on trade facilitation, services, digital trade, and transparency and trust. In addition to this paper, USCIB is actively engaging in the negotiations in Geneva via various efforts, including the Digital Trade Network and the International Chamber of Commerce.

Robinson on the Road (1): OECD and “Business at OECD” Annual High-Level Sessions: USCIB President/CEO Peter Robinson was one of the leaders of the Business at OECD (BIAC) delegation participating in the OECD’s annual Ministerial session in Paris May 22-23. Peter also attended the OECD’s pre-Ministerial Forum and was able to have a series of bilateral meetings with senior government representatives from the U.S. and other OECD countries, senior OECD officials including Secretary General Gurria and the newly-appointed Deputy Secretary General from the U.S., Jeffrey Schlagenhauf. Peter also attended, along with Business at OECD Vice Chair Rick Johnston (Citi), the annual BIAC General Assembly of its 30 national committees members and the 5th annual B20/G20/BIAC/OECD dialogue session ahead of the June G20 Osaka Summit, an opportunity for business to share recommendations to the G20 leaders and Sherpas.

Robinson on the Road (2): ICC High-Level Meetings: The following week, May 28-29, in Paris Peter Robinson shifted into International Chamber of Commerce (ICC) mode, representing USCIB at the ICC’s “Permanent Heads” meeting (i.e. Peter’s National Committee head counterparts from around ICC’s broad global network) and the ICC “World Council”. A special “Knowledge Solutions” session was held, at which ICC Secretary General John Denton and his leadership team laid out their vision, priorities, and structure for the organization, and which also included leadership representatives from some of ICC’s policy Commissions. A special ICC Centenary Summit was held to mark ICC’s 100th year, which was addressed by senior governmental and intergovernmental officials and at which previous ICC Chairmen and Secretaries-General were present.

Robinson on the Road (3): Geneva and London – ILO Leadership and Partnership with ICC-UK: after a short break at home, Peter was off to Geneva to participate, June 17-18, along with USCIB Vice President Gabriella Rigg Herzog, Senior Counsels Ronnie Goldberg and Tom Mackall, and several USCIB member company representatives in events at and around the International Labor Organization’s (ILO) ten-day centennial International Labor Conference. While in Geneva, Peter attended the Presidents Forum of the International Organization of Employers (IOE) and was a featured panelist, along with ILO DG Guy Ryder, WTO DG Roberto Azevedo, World Bank SVP Mahmoud Mohieldin, OECD Chief of Staff Gabriela Ramos, ITUC DG Sharan Burrow and others at an ILO event on “Multilateralism for an Equitable Future of Work.” Peter was also able to have a series of very useful informal bi-laterals with key government and international organization leaders. Peter then stopped in London on his way home, joining a panel at ICC-UK’s annual general meeting, presenting USCIB views on the future of the WTO, the multilateral trading system, and the just-launched WTO e-commerce negotiations. Peter also was invited to join and speak to ICC-UK’s Board meeting about current USCIB/ICC-USA priorities.

Hampl Discusses China and USMCA at Investor Conference: USCIB Senior Director, Investment, Trade and Financial Services, Eva Hampl, spoke on a panel entitled Trade & Tariffs – Today & Tomorrow at the annual MLP & Energy Infrastructure Conference (MEIC 2019) in Las Vegas, May 14-16. The panel, which also included Colin Bird from the Embassy of Canada and Karen Antebi from the Embassy of Mexico, provided a macro perspective on current trade issues. The discussion focused on various issues surrounding China, the importance of the U.S. trade relationship with Mexico and Canada, including the U.S. Mexico Canada Trade Agreement (USMCA), and other trade issues.

Donnelly Meets with Swiss Government Official: USCIB Vice President Shaun Donnelly met May 14 with visiting senior Swiss Government official, Phillippe Nell, Director for the Americas in the State Secretariat for Economic Affairs (“SECO”), to exchange views on a range of bilateral and global trade and economic issues, including WTO reform, China, new U.S. national security review procedures for incoming Foreign Direct Investment (FDI), and possibilities for a U.S. – Switzerland trade agreement.

USCIB Board of Directors Focuses on Trade Policy Developments: USCIB’s Board of Directors at its Spring meeting in New York City on May 15, had a wide-ranging discussion of key trade issues. The Board focused on issues including “section 232” national security reviews of imported steel, aluminum, and automobiles; prospects for congressional approval of the U.S./Mexico/Canada Agreement (USMCA); U.S.-China trade tensions; as well as WTO priorities, negotiation of an e-commerce agreement and institutional reform of the WTO. The Board endorsed the leadership role and the strong policy positions USCIB’s Trade and Investment Committee have been articulating.

USCIB Leading Business Voice on UNCITRAL Negotiations on Investment Agreement “Reform”: USCIB staff members have been meeting regularly with U.S. government investment negotiators and lawyers participating in the negotiations under the auspices of the UN’s Commission on International Trade Law (UNCITRAL) Working Group 3. Those discussions of possible revisions to the vast network of 3000+ Bilateral Investment Treaties (“BITs”) as well as investment chapters in Free Trade Agreements (FTAs) around the world are zeroing in on key enforcement details, the Investor-State Dispute Settlement “ISDS” provisions. On April 29, USCIB staff met with the key US negotiators from the State Department and the office of the U.S. Trade Representative to review developments. On May 23, USCIB Vice President Shaun Donnelly was a rare business participant amidst a sea of lawyers in the discussion of the UNCITRAL negotiations at the open public meeting of the State Department’s Advisory Committee on Private International Law. USCIB is continuing to urge the U.S. Government and other participants to maintain strong substantive investment protections as well as enforcement provisions.

ICT Policy – Promoting Sound Policies for New Technologies

 USCIB Members Shape Launch of OECD Review of 2013 Privacy Guidelines, Advance Work on Security, Data Governance, & Communications Issues: Business should assume responsibility for the privacy of data through its life cycle by conducting rigorous and documented risk assessments and mitigation, ensuring transparency through both internal and external audits, continually monitoring and testing to prevent gaps, and generally going above and beyond what is required by law. This was an important message delivered USCIB members who participated in a special OECD workshop on May 6 aimed at a advancing the mandated five-year review of the 2013 OECD Guidelines Governing the Protection of Privacy and Transborder Flows of Personal Data (the “Privacy Guidelines”). The May 6-7 meetings of the Committee on Digital Economy Policy (CDEP) Working Party Security and Privacy in the Digital Economy (SPDE), also moved forward work focused on revising an OECD Recommendation on the Protection of Children Online, developing principles for access to and sharing of data, advancing the Global Forum for Digital Security for Prosperity, and adopting the draft Recommendation on Artificial Intelligence. AT&T provided a critical review of the OECD’s work on bundled communication price baskets, which was considered at the May 7 meeting of the Working Party on Communication Infrastructures and Services Policy (CISP).

USCIB Convenes Meeting with Co-Director of the UN High Level Panel on Digital Cooperation Secretariat: USCIB convened a private, luncheon discussion on June 13 with Ambassador Amandeep Gill, Co-Director of the UN High-Level Panel on Digital Cooperation (HLPDC) Secretariat. The meeting was especially timely since the HLPDC report, The Age of Digital Interdependence, was hot off the press having been issued on June 10. USCIB members reiterated key points in our November 2018 and January 2019 submissions, urging a “holistic approach” to digital policy that went beyond use of digital technologies by the information, communications, and technology (ICT) sector, and considered how ICTs can serve as enablers for innovations across all sectors, such as in healthcare, education, finance, and energy, to name a few. Members cautioned against creating duplicative Internet governance mechanisms, urged increased resources to support the Internet Governance Forum (IGF), and encouraged the HLPDC to integrate the OECD’s work on Artificial Intelligence and digital transformation as well as draw upon initiatives of standards organizations, such as the IEEE.

USCIB Engages with U.S. Department of Justice and State about International Initiatives Focused on Cybercrime and Cybersecurity: The June 13 meeting of the ICT Policy Committee featured discussions with Department of Justice officials about efforts currently underway to negotiate an additional protocol to the so-called Budapest Convention on Cybercrime. The changes are aimed at bringing the Convention up to date with developments in the digital economy, improve on the current Mutual Legal Assistance Treaty (MLAT) approach, and generally expand international cooperation to pursue various computer crimes. An important over-arching theme was that cybercrime (e.g. fraud and other crimes involving computers) should not be conflated with cybersecurity, the latter of which centers on the protection of networks. Complementing the cybercrime discussion, USCIB members explored with key State Department officials the latest developments in the United Nations Group of Governmental Experts on Developments in the Field of Information and Telecommunications (GGE), which enjoys U.S. support. The GGE is structured to convene regular institutional dialogue on cybersecurity issues as well as bilateral and regional discussions that feed into the UN General Assembly. In the run-up to the 73rd session of the UN General Assembly, however, the Russian Government put forward a competing proposal for a cybersecurity-focused Open-Ended Working Group (OEWG). The U.S. Government abstained on grounds that the OEWG’s work likely will be strongly influenced by Russia’s support for mechanisms to censor online content. Nevertheless, the OEWG kicked off an organization meeting on June 3 and likely will proceed ahead of the GGE process. The State Department speaker informed USCIB members that stakeholders accredited by ECOSOC may participate in the OEWG as observers; the GGE is a multilateral process involving governments only.

USCIB Members Advocate for Timely Development of a GDPR-Compliant Uniform Access Model (UAM) for Nonpublic Registration Data at ICANN 65: ICANN 65’s policy-focused meeting wrapped up on June 27 in Marrakech, Morocco. Barbara Wanner, USCIB Vice President for ICT Policy, and members from AT&T, Amazon, BT, Facebook, Google, Microsoft, The Walt Disney Company, and VeriSign, joined participants from the multi-stakeholder community to address key policy issues in management of the domain name system. For the past year, USCIB members have been contributing actively to an Expedited Policy Development Process (EPDP) to develop a formal policy to ensure that ICANN and the industry of more than 1,000 generic top-level domain (gTLD) registries and registrars meet existing ICANN contractual requirements concerning the collection of and access to registration data as well as comply with the EU General Data Protection Regulation (GDPR). The EPDP’s Phase 1 Final Report was issued earlier this year, which contained 29 policy recommendations. USCIB members who participate in the ICANN’s Business and Intellectual Property Constituencies used the Marrakech meeting to underscore the importance of moving expeditiously in “Phase 2.” This phase will focus on designing a Uniform Access Model (UAM) to enable third-party access to non-public WHOIS data for legitimate law enforcement, consumer protection, brand management, and intellectual property (IP) protection purposes. Wanner serves on the Business Constituency’s Executive Committee.

Tax – Advancing Tax Policies that Promote U.S. Competitiveness

USCIB Holds Successful Tax Conference with the OECD and Business at OECD: The fourteenth annual OECD/USCIB Tax Conference took place on June 3rd and 4th at the Four Seasons in Washington, DC. The conference focused on the taxation of the digitalizing economy and provided the first opportunity for business and governments to discuss the OECD’s work program. The conference also considered treaty issues and the tax implications of Brexit. Tax Committee Chair, Bill Sample, and Vice Chairs, Tim McDonald, Louise Weingrod, and Will Morris represented business views at the conference. Economist Ngozi Okonjo-Iweala’s keynote remarks focused on ways to improve the tax capacity of emerging markets, which are expected to receive a growing share of global private-sector investment in the years ahead

Other panelists and speakers at this year’s conference included:

  • Pascal Saint-Amans, director of the OECD Center for Tax Policy & Administration
  • Martin Kreienbaum, director general for international taxation, German Ministry of Finance
  • Chip Harter, deputy assistant secretary for international tax affairs, U.S. Treasury
  • Dr. Ngozi Okonjo-Iweala, an economist and former finance minister of Nigeria
  • Doug O’Donnell, commissioner of the Large Business and International Division, IRS
  • Mike Williams, director of business and international tax, HM Treasury (UK).

USCIB Tax Committee Meets in Conjunction with OECD/USCIB Tax Conference: The USCIB Tax Committee met with Martin Kreienbaum, which afforded committee members a deep dive on some of the issues discussed at the Tax Conference. The committee also considered ways to provide input into the OECD work program and recent guidance on Tax Cuts and Jobs Act.

Carol Doran Klein Represents Business Views at the Pacific Rim Tax Conference in Palo Alto: USCIB’s tax expert Carol Doran Klein presented at the ninth annual Pacific Rim Tax Conference on Digital Economy Tax Issues, held May 9-10 in California. Doran Klein’s panel covered the ongoing work on taxation of the digitalizing economy at the Organization for Economic Cooperation (OECD) and the United Nations. The panel provided an overview of the background including Action 1 of the OECD’s Base-Erosion and Profit Shifting (BEPS) project, digital services taxes and other unilateral interim measures, and the different options under consideration at the OECD.

USCIB Submits Comments to Regulators: USCIB submitted comments on proposed regulations on Foreign Derived Intangible Income and on draft UN transfer pricing guidance. The comments can be found under the recent accomplishments section of our web page.

Customs and Trade Facilitation – Reducing Barriers and Costs from Customs and Border Control Practices

USCIB and U.S. Chamber Hold WCO E-Commerce Industry Day Meeting: On May 21, 2019, USCIB members along with many U.S. government agency partners (CBP, DHS, USTR, State, Treasury), and non-member associations working on customs issues (IRU, US Fashion Industry Association, American Association of Importers and Exporters), came together to discuss the WCO E-Commerce Framework of Standards. The meeting was led by Christa Brzozwski of DHS, and Customs and Trade Facilitation Committee Chair, Jerry Cook of Hanes brand. The goal of the meeting was to ensure that the USG have enough “industry” support for their positions going into the June Policy Commission Meeting and it was felt that this goal was achieved.

Anti-Illicit Trade – Promoting Strong International AIT Leadership and Advocating a Comprehensive and Multi-Disciplinary Approach to AIT

USCIB Anti-Illicit Trade Committee Talks FTZ Legislation: On June 10, 2019, USCIB hosted Paul Massaro, Policy Advisor for the Commission on Security and Cooperation in Europe (U.S. Helsinki Commission) and Gary Kalman, Executive Director for the Financial Accountability and Corporate Transparency (FACT) Coalition to discuss future FTZ legislation and the Corporate Transparency Act. Massaro explained how the Helsinki Commission has engaged and become a part of the US task force on illicit trade while Kalman elaborated on the international development of the FACT coalition within the illicit finance background. At the meeting, Megan Giblin and David Luna, Committee Chair, provided updates on AITC partnerships including possible FTZ workshop, meetings with State and APEC, as well as beginning discussions with ICC BASCAP.

Food and Agriculture – Promoting an Open and Efficient Global Food System by Providing Industry Expertise

USCIB Holds Joint Food and Agriculture and Health Care Committee Meeting: On June 5, 2019, Nick Gardner, Director, Codex and International Regulatory Affairs at the US Dairy Export Council, met with USCIB members to provide a detailed overview and insight into Codex Alimentarius and its involvement with food safety. Gardner emphasized the overarching issue with WHO and FAO jointly administering Codex, which poses several challenges, such as major trade implications and access to new markets/trade to existing markets. Additionally, at the meeting, Mike Michener discussed important upcoming events, including the ECOSOC High Level Political Forum (July 9-18) and the UN General Assembly (September, 17-30).

China – Supporting Policies and Relationships that Enhance U.S.-China Business

 USCIB Submits Comments on China Tariffs and Hampl Testifies: USCIB submitted comments on June 17 to the office of the United States Trade Representative (USTR) on the proposed modification to Section 301 regarding China’s policies and practices related to technology transfer, intellectual property and innovation. The submission expressed concern that proposed tariffs on essentially all Chinese imports will stifle the U.S. economy and will not achieve the Administration’s goal of changing China’s behavior. Eva Hampl, Senior Director for Investment, Trade and Financial Services testified on these issues before the Section 301 Committee on June 21 as part of a hearing spanning 7 days and with over 300 witnesses. USCIB also joined with the Tariffs Hurt the Heartland Coalition, alongside 661 other companies and association, to send a letter to President Trump on June 13 urging the administration to negotiate a strong deal with China that addresses longstanding structural issues, improves U.S. global competitiveness and eliminates tariffs.

Competition – Creating Global Legal Practices for an Open and Competitive Business Environment

USCIB Urges Reversal of 1-800 Contacts FTC Ruling: USCIB filed an amicus brief with regards to 1-800 Contacts, Inc. case to highlight the challenges American businesses would face under the recent Federal Trade Commission’s (FTC) decision’s approach to antitrust liability for trademark settlements, and explain the potential negative impacts the decision would have on businesses, consumers and competition if left to stand. Earlier this year, the FTC decided to impose antitrust liability against 1-800 Contacts, the largest online retailer of contact lenses in the U.S., on the basis that 1-800 Contacts’ settlements of trademark infringing lawsuits against at least fourteen competing online contact lens retailers restricted trade. Among other things, USCIB’s amicus argues that the Commission’s decision ignores the critical importance to business of intellectual property rights and its enforcement and would unfairly require the lawful exercise of such rights to a higher pro-competition standard.

Membership

Membership Meetings: The USCIB membership department and policy staff met with representatives from member companies Nissan North America, Expedia, Astellas, and American Express to develop our understanding of their policy priorities for the next year and beyond, and to see how USCIB can better serve their policy needs. In addition, the USCIB membership department and USCIB President and CEO Peter Robinson met with representatives from member companies AT&T and Intel Corporation.

New Members: USCIB has recently welcomed Palo Alto Networks as a new member.

Upcoming Events:

  • OECD Committee on Digital Economy Policy, Paris, France – July 1-2
  • UN High-Level Political Forum on Sustainable Development (HLPF), New York, NY – July 9-18
  • USCIB Customs and Trade Facilitation Committee Meeting, Washington, DC – July 10
  • USCIB Foundation-IOE-Deloitte SDG Summit, New York, NY – July 17
  • US Customs & Border Protection 2019 Trade Symposium, Chicago, Illinois – July 23-24
  • Internet Governance Forum USA (IGF-USA), Washington, DC – July 25
  • Meeting of APEC Electronic Commerce Steering Group and Data Privacy Subgroup, Puerto Varas, Chile – August 18-21
  • Preparing for the Future of Work: A USCIB Foundation Dialogue, Washington, DC – September 5
  • 11th Annual Engaging Business Forum on Business and Human Rights, Atlanta, Georgia – September 12-13
  • World Radiocommunication Conference (WRC), Sharm El Sheikh, Egypt – October 28-November 22
  • ICANN 66, Montreal, Canada – November 2-7
  • Meetings of the OECD Committee on Digital Economy Policy (CDEP) and its Working Parties, Paris France – November 18022
  • 14th Internet Governance Forum (IGF), Berlin, Germany – November 25-29

 

USCIB Policy and Program Staff

Rob Mulligan
Senior Vice President, Policy and Government Affairs
202-682-7375 or rmulligan@uscib.org

Erin Breitenbucher
Senior Policy and Program Associate and Office Manager, Washington
202-682-7465 or ebreitenbucher@uscib.org

Jonathan Huneke
Vice President, Communications and Public Affairs
212-703-5043 or jhuneke@uscib.org

Shaun Donnelly
Vice President, Investment and Financial Services
202-682-1221 or sdonnelly@uscib.org

Norine Kennedy
Vice President, Strategic International Engagement, Energy and Environment
212-703-5052 or nkennedy@uscib.org

Megan Giblin
Director, Customs and Trade Facilitation
202-371-9235 or mgiblin@uscib.org

Carol Doran Klein
Vice President and International Tax Counsel
202-682-7376 or cdklein@uscib.org

Ronnie Goldberg
Senior Counsel
212-703-5057 or rgoldberg@uscib.org

Mia Lauter
Policy and Program Associate, New York
212-703-5082 or mlauter@uscib.org

Daniella Goncalves
Assistant Policy and Program Manager, Corporate Responsibility and Labor Affairs
212-703-5083 or dgoncalves@uscib.org

Mike Michener
Vice President, Product Policy and Innovation
202-617-3159 or mmichener@uscib.org

Eva Hampl
Senior Director, Investment, Trade and Financial Services
202-682-0051 or ehampl@uscib.org

Chris Olsen
Policy and Program Associate, Washington
202-617-3156 or colsen@uscib.org

Gabriella Rigg Herzog
Vice President, Corporate Responsibility and Labor Affairs
212-703-5056 or gherzog@uscib.org

Kendall Thibeadeau
Policy and Program Associate, New York
212-703-5095 or kthibeadeau@uscib.org

Ashley Harrington
Policy and Program Associate, Washington
202-682-5861 or aharrington@uscib.org

Barbara Wanner
Vice President, ICT Policy
202-617-3155 or bwanner@uscib.org

Alison Hoiem
Senior Director, Member Services
202-682-1291 or ahoiem@uscib.org

Kira Yevtukhova
Communications Manager
202-617-3160 or kyevtukhova@uscib.org

Top

Modest Progress at G20 Osaka Summit Welcomed

USCIB responded with cautious optimism to the modest progress made at this year’s Group of 20 Summit in Osaka, Japan, and at the meeting between President Trump and Chinese President Xi Jinping, where the two leaders agreed to continue working toward a resolution of their bilateral trade disputes.

“We are relieved that the U.S. and China have stepped back from a broader escalation of their tit-for-tat tariffs,” said USCIB Senior Vice President Rob Mulligan. “We encourage both parties to move swiftly toward resolution of their disputes. The existing tariffs have already had a negative impact on American exports, and could threaten U.S. jobs as well as our broader competitiveness.”

Mulligan also welcomed the G20 leaders’ endorsement of recent OECD blueprints for cooperation on global tax measures as well as on a “human-centric” approach to the deployment of artificial intelligence – both areas where USCIB members have provided active input to international policy deliberations.

In their communiqué, the G20 leaders warned of growing risks to the global economy but stopped short of denouncing protectionism, mainly due to push-back from the United States. “We strive to realize a free, fair, nondiscriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” they stated.

While leaders made only passing mention of efforts to modernize the World Trade Organization, several voiced renewed support for the recently launched plurilateral negotiations on e-commerce taking place under the WTO’s aegis.

President Trump and leaders from China, Japan and the European Union joined the WTO Director General Roberto Azevêdo in welcoming the Osaka Declaration on the Digital Economy, which commits the signatories to promote efforts on international rule-making in this area and urges further progress on e-commerce at the WTO.

“A fragmentation of the digital economy would hurt us all,” said Azevêdo. “It would mean higher costs and higher barriers to entry, affecting developing countries and smaller businesses the most. The 20th century showed that a fractured global trade order was not sustainable – that’s why we created the WTO. The same is true today. You may well be working on a constitution for the economy of the 21st century.