Lupicinio International Law Firm brings you the latest news in international trade.
04/07/2022
CHINA’S PROPERTY CRISIS DEEPENS WITH DEFAULT BY BIG SHANGHAI DEVELOPER
Shanghai-based Shimao Group defaulted on interest and principal payments on a $1 billion bond due on Sunday, July 3, according to a company statement to the Hong Kong stock exchange. The bond did not have a grace period for the principal.
China’s property sector has lurched from one crisis to another since 2020, when Beijing began cracking down on excessive borrowing by developers in a bid to curb their high indebtedness and rein in runaway house prices.
According to Moody’s estimates earlier this year, Shimao Group has large debt maturing in 2022, including $1.7bn worth of bonds held by international investors, 8.9bn yuan ($1.4bn) worth of bonds held by Chinese investors and “substantial” overseas bank loans.
04/07/2022
PRICES IN TURKEY RISE AT FASTEST RATE FOR 24 YEARS
The annual inflation rate, the rate at which prices are rising, stood at 78.62% in June, slightly above expectations.
The overall inflation figure was the highest since September 1998, when annual inflation reached 80.4 per cent and Turkey was struggling to end a decade of chronically high inflation.
05/07/2022
RUSSIAN-HELD PART OF SOUTHERN UKRAINE INTENDS TO SELL GRAIN TO THE MIDDLE EAST
The Zaporizhzhia region in southeastern Ukraine is partly under Russian control. Russian authorities there said on Tuesday 5 July that an agreement had been reached to sell grain abroad, mainly to the Middle East.
Ukraine accuses Russia of stealing grain from territories seized by the Russian army. The war has disrupted Ukraine’s grain exports across the Black Sea.
Russian wheat prices for supply from Black Sea ports stood at $375 per tonne free on board at the end of last week.
06/07/2022
GAS PRICES FALL IN EUROPE AFTER NORWEGIAN GOVERNMENT INTERVENES TO END GAS AND OIL STRIKE
Gas prices in Europe fell Wednesday from four-month highs after Norway’s government intervened to end an oil and gas strike that threatened to aggravate the region’s growing energy crisis.
The Norwegian government late on Tuesday proposed “compulsory wage arbitration” to end the offshore workers’ strike.
“The announced escalation has critical implications in the current situation, both in relation to the energy crisis and the geopolitical situation we are facing with the war in Europe”, Labour Minister Marte Mjos Persen said in a statement.
The proposed wage adjustment to resolve the dispute between the Lederne union and the Norwegian Oil and Gas Association means that both sides have agreed to end the strike and, consequently, the price reduction.
06/07/2022
U.S. TIGHTENS SANCTIONS ON IRAN, TARGETS CHINESE, EMIRATI OIL COMPANIES
The United States imposed sanctions on a network of Chinese, Emirati and other companies it accused of helping deliver and sell Iranian oil and petrochemical products to East Asia, putting pressure on Tehran as it seeks to revive the 2015 Iranian nuclear deal.
Washington has increasingly targeted Chinese companies for exporting petrochemicals from Iran as prospects for reviving the nuclear deal have faded.
16/07/2022
IRAN SANCTIONS 61 MORE AMERICANS AS NUCLEAR TALKS STALL
Iran has imposed sanctions on 61 more Americans, including former secretary of state Mike Pompeo, for backing an Iranian dissident group, as talks to revive a 2015 nuclear deal remain deadlocked.
The sanctions, issued against dozens of Americans in the past for various reasons, allow Iranian authorities to seize any assets they have in Iran. The measures, announced as US Democratic President Joe Biden concluded his trip to the Middle East, appear largely symbolic, given the likely absence of such assets.
Iran’s indirect talks with the US to revive the 2015 nuclear pact began in November in Vienna and continued in Qatar in June. But the negotiations have faced a months-long stalemate.
19/07/2022
EU TO EASE SANCTIONS ON RUSSIAN BANKS TO ALLOW TRADE IN FOODSTUFFS
The European Union will modify its sanctions on Moscow by allowing the unfreezing of some funds from major Russian banks that may be needed to ease bottlenecks in global food and fertiliser trade, a draft document shows.
Under the amended regulation, which is expected to be adopted by EU envoys on Wednesday 20 July, EU countries will be able to unfreeze previously frozen funds belonging to major Russian financial institutions VTB, Sovcombank, Novikombank, Otkritie FC Bank, VEB, Promsvyazbank and Bank Rossiya.
The EU also plans to facilitate food exports from Russian ports, which traders had stopped serving following the sanctions, even though the measures explicitly exempted food exports.
19/07/2022
CHINA AGREES TO GREATER COOPERATION WITH THE EUROPEAN UNION
China agreed to coordinate its economic policies with the European Union, liberalise trade and investment and further open up its financial sector, but was silent on an investment deal frozen by disputes over human rights, geopolitics and the Ukraine war.
The Chinese vice premier declared, “The two sides will actively promote trade and investment liberalisation and facilitation, enhance mutual openness, promote fair competition, protect intellectual property rights and constantly optimise business”.
The last round of such talks took place two years ago and focused on a landmark investment pact. By the end of 2020, Brussels and Beijing had concluded the deal, after seven years of talks, but have since failed to ratify it.
20/07/2022
U.S. DEMANDS TALKS ON MEXICAN ENERGY POLICIES IT CALLS UNFAIR
The United States is pressing Mexico over energy policies that Washington says unfairly favour Mexican state-owned electricity and oil companies to the detriment of US competitors and clean energy suppliers. In this regard, the US is demanding talks to resolve the dispute, initiating a process on Wednesday that could lead to trade sanctions against Mexico.
In addition to the dispute over the advantaged position of Mexican state-owned companies in the electricity and oil sectors, other specific issues in dispute include a 2019 regulation that gives the only state-owned oil and gas company, Petroleos Mexicanos, extra time to comply with stricter environmental rules limiting the sulphur allowed in diesel fuel for automobiles.
The US also accused Mexico of delaying, rejecting or failing to act on private companies’ applications for permits to operate in the energy business and revoking or suspending existing permits.
As a result, they explain, these policies have largely cut off US and other countries’ investment in the country’s clean energy infrastructure.
The Mexican government tried to downplay the controversy, presenting it as an ordinary process between countries.
20/07/2022
LIBYA RESUMES OIL EXPORTS
Last week, national oil company NOC lifted force majeure declared in April at several oil facilities after tribal leaders shut them down. On Tuesday, production resumed at several fields, including Sharara, the country’s largest, after a three-month shutdown, NOC announced.
The North African country has been in conflict since the 2011 uprising turned into a civil war that ousted Moammar Gadhafi.
The country’s precious light crude has long been a feature of Libya’s conflict, with rival militias and foreign powers vying for control of Africa’s largest oil reserves.
The closures caused Libya’s daily oil production to fall by two-thirds. The country’s output was 1.2 billion barrels per day at the beginning of the year.
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In Madrid, 31 July 2022
International Trade and Sanctions Department
