International Trade news from Surrey Chambers, our partners and Chamber members.

Ramadan - 11th August until 8th September

Indian FDI bounty – what scrapping press note 1 of 2005 will mean for foreign investors

Official Indian government statistics reveal that foreign direct investment (FDI) into India between April 2010 and January 2011 declined by 25 per cent to hit US$ 17 billion from US$ 22.9 billion in the same period in the preceding year.

Whilst the reason for the decline in FDI might well be multi-faceted, the Department of Industrial Policy and Promotion (DIPP), which is tasked with the facilitation and regulation of FDI related matters in India, has fortuitously narrowed it down to the operation of press note 1 of 2005 (PN 1).
As a result, the DIPP has recommended the scrapping of PN 1 in its entirety. In the event the Committee of Secretaries accepts the DIPP recommendation on PN 1, the change will be reflected in the consolidated FDI policy to be issued by the DIPP on 1 April 2011.

PN 1 is a protectionist regulation which requires foreign companies to obtain the prior permission of the Foreign Investment Promotion Board (FIPB), if they decide to exit from an existing joint venture and conduct business alone or decide to switch to a different joint venture partner, being another Indian company, in the same line of business as the existing joint venture.

This condition is applicable for joint ventures existing as of 12 January 2005. Significantly, the way PN 1 is worded extends its reach to include technology collaborations and trademark licensing agreements and not just investment and financial collaborations. Further, the FIPB in practice requires foreign companies
seeking such approval to support their applications with a no-objection certificate from their previous Indian joint venture partner, thereby
conferring significant leverage on such Indian joint venture partners. The Indian partners have often frustrated the foreign companies by delaying or refusing to deliver up the no objection certificate.

There have been several press reports of Indian partners holding out for a hefty settlement with their foreign investors before releasing a no objection certificate.

Traditionally, one of the devices which has been used in many joint venture agreements in India to curtail the freedom of foreign companies to
change partners is the use of non-compete and non-solicitation clauses. However, courts in India have consistently refused to enforce posttermination
non-compete clauses, viewing them as 'restraint of trade' making them void and
unenforceable under Section 27 of the Indian Contract Act 1872 (ICA). Furthermore, such restrictions have been held to be void and against
public policy.

The principles of Section 27 of the ICA were summarised by the Supreme Court of India in Percept D’ Mark (India) Private Limited v Zaheer Khan, in which the Supreme Court observed that under Section 27 of the ICA a restrictive covenant extending beyond the term of the contract is void and unenforceable. The Supreme Court also noted that the doctrine of 'restraint of trade' is not confined to contracts of employment only, but is also applicable to all other contracts seeking to apply such obligations posttermination.

Accordingly, enforcement of post termination restrictions in India is doubtful. Given the position of law on this point in India, Indian partners have been heavily reliant on the PN 1 mechanism to tie-in the foreign partner to their existing joint ventures.

Another device which has been used by some foreign companies to mitigate trouble at a later stage on account of the PN 1 provisions has been to obtain an open ended no-objection letter from the Indian partner at the time of first entering into the joint venture agreement. However, while this move assisted with clearance of the hurdle of obtaining the no-objection certificate, FIPB approval was still required for going it alone or partnering with another Indian company in the same line of business as the existing joint venture.

In light of the DIPP proposal to strike down PN 1, it may indeed spell an era of relief for foreign investors who are entering India for the first time or those in existing joint ventures with Indian partners looking to strike out on their own or
with a different Indian partner. Until the FDI statistics come out at the same time next year, the jury will still be out on whether PN 1 was the real mischief on the FDI front.

What the changes in FDI policy will mean for British businesses
Louise Punter, who heads the Surrey Chambers of Commerce, has provided the following synopsis on the abolition of PN 1:

"This appears to be a welcome move and will unlock British companies incarcerated in unviable joint ventures in India. Having the freedom to choose a business partner without being subjected to protracted pre-approval requirements is a prerequisite for facilitating greater investment of capital and
other resources. This has been a long-standing grouse for foreign investors in India and I am happy to see a more progressive environment being created to encourage foreign investment into the country.
"There will be enormous potential for British businesses in several sectors in the near future and dismantling press note 1 of 2005 will only encourage them to fast track their investment activity."

Louise Punter
Chief executive
Surrey Chambers
of Commerce
t: 01483 735542
f: 01483 756754
e: louise.punter
@surrey-chambers.co.uk

New Compliance procedures for the export of good into Iraq

Therefore' All exporters intending to export goods to Iraq must provide proof that the goods have undergone the relevent inspection, verification, testing and certification process by either one of the following companies:

SGS United Kingdom Ltd, www.uk.sgs.com
Bureau Veritas UK & Ireland, www.bureuaveritas.co.uk

Such certificates must be attached with all documents

Thanks for your co-operation

Yours Sincerely

Mr A El-Idrissi
Director of Trade Services

Network Enterprise Europe

Please find below a list of European companies looking for partners in the UK. Should you be interested in their profiles, please us contact us: info@eiscltd.eu

BCD

Profile ID Description
20110208038 Spanish company specialized in recycling dangerous
liquid and solid waste is looking for trade intermediaries
(agents, distributors or representatives) in Europe and
United States.

20110307006 A UK SME specialising in plastics recycling is looking to forge
a joint venture with European suppliers of all types of
plastic scrap from film to rigid materials in almost any form.

20101225004 A small Serbian company, specialized in production of
ecological disinfectant and silver water, is offering its trade
intermediary services and looking for potential franchise
and joint venture activities.

20110420048 A Latvian company with main activity producing quality
architectural scale models and prototypes for different
needs is looking for cooperation partners and sales agents.

20110413030 A Polish construction company deals with general
construction and specializes in renting of construction
equipment and real estate sales. Company offers
representative services of a heavy construction machinery
producers, such as excavators, and compactors.

20110401010 Romanian company specialized in plumbing, heat and air-
conditioning installations and works is looking for
commercial co-operation: Trade Intermediary services and
is also offering subcontracting activities.

20110414005 A Lithuanian company, specialised in commercial and
production property management, logistic services and
industrial infrastructure development is looking for joint
venture and trade intermediary services. Company also
offers subcontracting/outsourcing activities.

20101105026 A Hungarian company specialised in international
forwarding, distribution, logistics services, warehousing is
offering its services as a subcontractor and offers
transport/logistics to foreign companies.

20081111031 Croatian company producing, installing and servicing
Aluminum and Carbon masts and equipment, wire rigging,
rod rigging and fiber rigging; Hydraulic systems, Deck
equipment and ropes; Rigging check with specialized
testing equipment seeks trade intermediary for distribution
of its products

20100901063 The company is the Russian shipyard, which is situated in
the South-East part of the Baltic region in the nearness of
the largest industrial centres of Europe. The company is
requesting subcontracting/ outsourcing activity and
reciprocal production agreements.

20101110035 A Czech company specialized in imports of raw materials
and in logistics is looking for trade intermediary and
cooperation partners. The company wants to start an
information system for truck transport in Europe, North
America and Australia.

20100917020 A German SME, specialised in the construction of mobile
care boxes (with equipment) for storage and transport of
medicine or medical products for direct use, is looking for
trade intermediaries and contact to armed forces and aid
organisations.

20101011033 Serbian company specialized in transportation of goods at
international and domestic market and for repair of motor
vehicles from cargo trailers program is looking for trade
intermediary services, acquisition of a part of company and
subcontracting, and is offering transport/logistic to partners
from all over Europe.

20101125064 An Austrian company works on solutions for the recycling of
waste and is looking for commercial cooperation
(distribution) with recycling companies and also for plastic
converters which want to use recycling materials for
production. Reciprocal subcontracting agreements are also
conceivable.

20100706009 Spanish company dedicated to the recycling of all types of
wood is looking for distributors or commercial agents to
cooperate with the sales of splinter of wood as Biomass to
be used in caldrons or for potential electricity cogeneration.

20100617005 Turkish Company, leading manufacturer and global supplier
of sheet metal working machinery, recycling machinery and
special purpose machinery is seeking distributors that
actively develop and serve machinery market in their
territory.

20110330012 An Irish company specialized in the retail and installation of
energy efficient lighting products. (Induction, Light Eco,
LED, T5 Conversion and Lighting Control) seeks trade
intermediaries, joint venture and exchange of knowledge.

20100507001 A Korean company specializing in smart grid power lines
and LED lights is looking for a sales and distribution partner
for their products. The potential partners are building
maintenance companies that can install the Korean
company's smart grid power line systems, or distributors
handling electronic and interior lighting could be partners in
that they can sell the Korean company's LED lights.

20110411001 A Finnish company specialized in manufacturing LED lighting
systems, LED aviation obstacle lights, LED forensic light
sources and LED architectural lighting, is looking for
representatives.

20110304004 Greek printing company active in the graphic arts industry
and specialised in digital printing (books, various flyers,
business cards)is interested in commercial agreements.

BBS
PROFILE ID DESCRIPTION

11 SE 67CJ 3KSE A Swedish SME in the renewable energy sector has
developed a forced-air furnace system for residential
heating and usage in e.g. garage, workshops and
greenhouse. The furnace operates together with a pellet
burner. The furnace operates at high efficiency and requires
little space. The burner keeps a steady temperature, is
easy to install and maintain. Partners are sought for
commercial agreements, marketing, installation on site and
technical consultancy.

11 CZ 0746 3L5X A small Czech company has developed and patented a low
cost manufacturing process of TiO2 nanoparticles based on
a modification of crystalline anatase. These nano-particles
can be used in the production of photocatalytic products
(sunscreens, photocatalytic coatings, etc.). The company is
interested in license agreement with technical cooperation.

10 ES 28F9 3HXK A Spanish technological SME has developed a Business
Intelligence System as service through a suite of
technologies that allows the companies to have under
control: corporate data, analytics tools, comprehensive
dashboards, among other features on the same platform.
The implementation of this technology let the companies all
the benefits of SaaS system (zero investment, cost
reduction and short deployment). The SME is looking for
partners to sign technical cooperation and joint venture
agreement.

10 PL 61AJ 3JQO A Polish SME has developed milling machine in ram-type
configuration. This machine is capable to do 3-D machining
and can be used for effective production of complex parts
including moulds. The company is looking for commercial
agreement with technical assistance and technical
consultancy.

10 FR 32I9 3HZB A French company specialized in the development of fast
cameras and software dedicated to motion analysis domain
has developed a high speed camera for the capture of fast
images and movements. This system, is a compact
embedded system for motion analysis. It can be used at
the industrial level for troubleshooting, in sports movement
analysis, as well as in the medical field. The company is
looking for industrial partners, distributors and research
labs.

11 EE 21B9 3KV4 An Estonian SME developed various methods of in silico
modelling of (bio)chemical properties and interactions.
Modelling can be used in research of new chemicals in
industrial or pharmaceutical fields. The SME is looking for
partners in related industries for applying the methods in
the development of new compounds.

11 BG 0528 3KWH A Bulgarian SME specialised in fire-retardant technologies
and products has invented a method for plasma chemical
surface modifying of materials and items, and specifically for
plasma-aided impregnation with solutions containing fire
retardants to make porous materials like textile, leather,
wood-foamed polymers and items made of them, resistant
to fire and ignition. The company looks for licensing the
product, manufacturing, commercial agreement with
technical assistance, and joint venture.

11 FR 38m9 3KMI A French company specialized in engineering, design and
consultancy in the building and construction sectors has
developed a wireless electronic sensor which monitors
stress, fatigue and cracks of various structures for
environmental risks prevention. The French company is
looking for technical cooperation with R&D partners for their
Euripides FP7 project.

11 DE 1378 3KD3 The MHH is able to dissipate all streams of waste heat into
kinetic and electric energy. The degree of efficiency is over
70 percent while the CO2 emission is considerably reduced.
The waste heat of every industry (e.g. cement, chalk,
chemical plants or refineries) can be used. But also the
heat of solar or geothermal plants can be used. The
technology is patented. This German inventor is looking for
partners interested in license agreements.

10 ES 28G2 3H0P A Spanish public research organisation has developed two
air-cooled water-lithium bromide absorption prototypes
that do not exist on the market yet: a double-effect
machine and a single-double effect one in an only unit.
They are as efficient as electrical machines. They can be
driven by fuel, renewable energies (solar, biomass, etc) or
by residual heat (tri-generation systems). They are suitable
for static or mobile uses. Companies for developing and
licensing the technology are sought.

Working hours during the holy month of Ramadan

Chamber working hours during this period will be 10am - 3pm Monday to Friday.

Please note that all Embassies will also adopt shorter working hours, hence delays in documents turnaround may occur.

A, El-Idrissi
Director of Trade Services.

International Trade Events

Spotlight on the Americas
Date: Thursday 16th September 2010
Venue: Foxhills, Ottershaw

Click here for more information on our export events and training courses

BCC - Goverment must do more to support a export-led recovery

The business group says that some form of trade finance underpins 90% of all global exports, easing the flow of international trade by moderating its risks. However, the BCC argues that UK firms are still experiencing severe difficulties securing essential export trade finance, even though the worst of the downturn has passed.

In a joint survey with the Greater Manchester Chamber, the BCC surveyed over 250 exporting businesses. The survey found that:

• One in eight businesses that used export trade finance had experienced problems securing it over the last year.
• Worryingly, nearly half of firms who had faced problems said they had lost business to exporters from countries with state-backed export finance schemes.

Unlike comparable trading nations, such as Germany and Holland, the UK has refused to intervene over the past two years to ensure viable firms secure the export credit they need to fulfill orders. This failure to intervene, the BCC claims, is putting British exporters at an obvious disadvantage.

The report recommends that the government act quickly to help those firms still struggling with export trade finance, and that it prepares for future market shocks by ensuring a state-backed solution is available whenever needed to protect Britain’s exporters.

Commenting, David Frost, Director General of the British Chambers of Commerce (BCC), said:

“If the government is serious about encouraging British exports as a driver of employment, economic growth and prosperity, it must resolve blockages in the finance that underpins UK global trade.

“Our exporters need to be able to compete more effectively with rivals on the Continent and further afield, who are currently better supported during difficult economic environments or in riskier foreign markets.

“Chambers of Commerce across the country are well placed to help businesses grow by offering practical exporting advice and support. The government also needs to play a role - by ensuring that export finance is not a barrier to the UK’s trading potential.”

Angie Robinson, Chief Executive of Greater Manchester Chamber of Commerce, added:

“There are real opportunities for business, even in these difficult economic times, in the global marketplace. Chambers work with businesses and UKTI to help companies of all sizes in all sectors to spot the opportunities and capitalise on them.

“Exporters need assistance. We need to help enable companies to manage their risk, and get on with what they are really good at, doing deals and making sales.

“Favourable exchange rates for UK exporters have not led to the expected level of exports we should have seen, and the results of this survey help explain why. Without an adequate state-backed export finance scheme, British businesses will continue to lose out to overseas competition.

“The conditions are right for an export-led recovery, but we will continue to fall behind our major competitors unless the government takes decisive action. Compared to the hundreds of billions pumped into the banking sector, the support required by exporters is small, but it would act as a shot in the arm for the whole economy; creating jobs, securing the recovery, and ensuring that Britain’s economy remains competitive.”

For further information please contact the BCC press office on 020 7654 5813 or 07825 746812.

We're on the move!

Unit 14a
Monument Way East
Woking
Surrey
GU21 5LY

BCC: Move towards export-led growth not sufficiently strong

“Although these figures show a welcome improvement in UK exports, it is clear that the much-needed rebalancing of the UK economy is not proceeding quickly enough.

“Given the favourable global background for British exporters – with a competitive Sterling exchange rate and robust growth returning in our key trading partners – our overall trading performance is still weak.

“To strengthen Britain's global position, the Government must support our exporters more effectively, as many other countries are doing, and it must reinforce measures aimed at ensuring that sufficient trade finance and insurance are readily available.”

For further information please contact the BCC press office on 020 7654 5813 or 07825 746812.

Notes to editors

ONS: The UK’s deficit on trade in goods and services was £2.9 billion in November, compared with a revised deficit of £3.1 billion in October. http://www.statistics.gov.uk/cci/nugget.asp?ID=199

Trade and Enterprise forms one of the key campaign priorities for the BCC. Over the coming months, we will campaign for the political parties to commit to policies that make it easier for businesses to begin trading and ultimately expand into foreign markets.

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

Electronic EUR1's for Switzerland

Not only will electronic EUR1s be rejected by Swiss Customs but extra charges/fines will be imposed in getting original signatures added to the certificate, not to mention the delays this could cause to clearance of goods.

Trading with Iran

Details are available on http://www.hm-treasury.gov.uk/fin_crime_policy.htm.

This doesn’t apply to companies which aren’t financial or credit institutions, but the UK financial or credit institutions used by such companies may not deal with Bank Mellat or IRISL. The HM Treasury notices explain what may happen if a transaction is in train and incomplete on 12th October

PLease note that all those dealing with Iran must judge for themselves whether the Order applies to them and be aware that this message does not constitute guidance or advice.

US Border Searches of Electronic Devices

www.dhs.gov/xlibrary/assets/ice_border_search_electronic_devices.pdf
www.dhs.gov/xlibrary/assets/cbp_directive_3340-049.pdf

ICC UK Public procurement Survey

Building on this research, we are keen to develop a clearer picture of problems faced by companies in tendering for public procurement contracts-- both in the UK and internationally. Accordingly, please find attached a short questionnaire which is intended to: (a) validate whether the problematic contracting practices identified by Rand's research are applicable to all business sectors; (b) to collect examples of such practices on an anonymous basis; (c) to highlight any other practices employed by contracting authorities that create inefficiencies in the tendering process.

We would be most grateful if you, or a colleague, could take the time to complete this questionnaire. Responses received will provide an initial basis for ICC's work in this area in the coming months. Please send responses to me at: rachaelgledhill@iccorg.co.uk by COB Friday 12 June 2009.

All information collected will remain strictly confidential, and shall not be disclosed to any third ! parties. Only aggregate information/anonymous examples will be presented publicly.

Click here to view survey

Saudi Arabia - New Procedures for Origin Marking

EUR1 Certificates for Israel

Potential Issues Surrounding Trading with Iran

Click here for the statement from the British Iranian Chamber of Commerce

Important information regarding Arab Documentation

The GCC countries are: