Importer Exporter Producer

Report
Preferential Origin Rules and
Procedures to Secure Revenue
-the role of Customs in regional integrationJuly 1st, 2014
Riki TAMAKI
Customs and Tariff Bureau
Ministry of Finance
Japan Customs
1
FTAs Under Negotiations
Dominican
Republic
Myanmar
Cambodia
Nicaragua
Russia
Indonesia
Bhutan, Maldives,
Nepal, Pakistan
Costa
Rica
Brunei Darussalam
Viet Nam
Laos
El Salvador
Panama
Guatemala
Honduras
USA
Philippines
Malaysia
Bangladesh
Thailand
Brazil
India
Sri Lanka
Singapore
Paraguay
Argentina
Uruguay
New Zealand
Chile
Mexico
Japan
People’s Rep. of China
Peru
Hong Kong, China
Korea
Chinese Taipei
Australia
Fiji, Solomon Islands,
Vanuatu
“Spaghetti Bowl”
Effects
Colombia
Bolivia
Ecuador
Venezuela
Papua New Guinea
Fed. States of Micronesia,
Marshall Islands, Kiribati, Palau,
W. Samoa,Tonga, Vanuatu, E. Timor,
Cook Islands, Nauru, Niue, Tuvalu
ASIA
Canada
Bahamas
Haiti
Dominica, Suriname,
Jamaica, St. Lucia, Belize,
St. Kitts & Nevis, Grenada, Barbados,
Guyana, St. Vincent & the Grenadines,
Antigua & Barbuda, Trinidad & Tobago
AMERICAS
(source) APEC WORKSHOP ON BEST PRACTICES IN TRADE POLICY FOR RTAs/FTAs: PRACTICAL LESSONS AND EXPERIENCES FOR DEVLOPING ECONOMIES
February 2006, Ha Noi, Viet Nam
2
Three pillars to decide customs duty amounts
(Tariff classification, Customs Valuation, Rules of Origin)
Quantity or Value
Duty amount = Customs Value × tariff rate
Rules of origin decides which rate shall be apply to the goods
2014/06/19
Goods
Tariff
classification
decide item
23:40
Goods of any
country
Basic rate
Good of any
country
(Originating)
Goods
of
WTO
member
countries
Temporary
WTO rate
rate
Originating
Goods
Developing
country
GSP rate
of
Originating
Originating
Goods
of Goods
of
Singapore
Mexico
Originating
Goods
of
Malaysia
Singapore
FTA rate
Malaysia
FTA rate
Mexico
FTA rate
More
than
9000
items
A
B
C
D
E
FTA rate
Japan Customs
3
Major Elements of ROO
Wholly obtained or
produced goods
Origin criteria
Rules of origin
Consignment
criteria
Procedural
provisions
Three Major Elements of ROO
Goods produced
exclusively from
originating materials
Goods satisfying
substantial transformation
criteria
Product Specific Rules
Change in tariff classification
criterion
Value-added criterion
Specific manufacturing or
processing operation criterion
Certificate of origin
Transportation
documents
Exceptions to the substantial
transformation criteria
Accumulation
De minimis
Non-qualifying
operations
Japan Customs
4
Part A: Origin Criteria
Japan Customs
5
Types of Substantial Transformation
3 types of Substantial Transformation
(Big Change)
(1) Change-in-tariff-classification criterion (CTC
rule)
(2) Value-added criterion (VA rule)
(3) Specific manufacturing or processing
operation criterion (Process rule)
Japan Customs
6
Change-in-tariff-classification Criterion (CTC rule)
Under CTC rule, the originating status of goods are determined
based on the change in tariff classification (HS code).
For some goods, change-in-tariff-classification criterion cannot be
adopted because of the structure of HS. In addition, interpretation of
HS is closely implicated in the originating status of goods. Therefore,
HS is extremely important in establishing and applying Rules of Origin.
The possible challenges
・Lowering of user-friendliness of FTA associated with HS revision
・Limited subdivision of HS code (ex.) components of machinery
To assure proper and smooth trading, it is essential for HS and
Rules of Origin to cooperate with in the future.
Japan Customs
7
Cases where “Change in tariff classification” criterion
CANNOT be adopted
Complete or finished articles
(machinery)
Individual heading or subheading
Major components
may included in a single
heading or subheading
Minor components
Individual components
Change in tariff classification
criterion cannot be adopted.
Japan Customs
8
Supporting Instruments and Tools on
Interpretation
HS
classifications
- Explanatory
Notes
- Classification
Opinions
Customs
Valuation
- Advisory
Opinions
- Commentaries
Japan Customs
ROO
?
9
Part B: Origin Procedure
財務省関税局
10
Types of Certification procedures in the World
Government of Exporting Party
involved in certification process
Competent Authority
Certification
Government of Exporting Party
uninvolved in certification process
Approved Exporter
Self-Certification
Importer-based Self
Certification
Exporter
Self-Certification
- Importer proves with
certificate of origin issued
by government of
exporting Party or the
designated authority
- Importer proves with
origin declaration by
exporter approved by
exporting Party
- Importer proves with
certificate of origin by
exporter
Original CO for each importation
is required (copy and electronic
media are normally unaccepted)
Original CO for each importation
is required (copy and electronic
media are normally unaccepted)
Multi CO which covers multiple
importation is accepted (copy and
electronic media are accepted)
ASEAN, Japan, China
EU, Switzerland
※ Japan adopt this type in FTA with
Switzerland, Peru, Mexico
Some ASEAN countries are now
implementing a pilot project of approved
exporter self-certification under ATIGA.
Canada, Mexico, Chile,
Australia, NZ
EU decided to introduce registered
exporter self-certification from 2017 and to
abolish competent authority certification.
Japan Customs
-
Importer proves with
① certificate of origin by
importer, exporter or
producer
OR
② Importer's Knowledge
Multi CO which covers multiple
importation is accepted (copy and
electronic media are accepted)
USA
Importer-based self certification was
introduced in US’s FTAs after NAFTA. (Ex.
US-Korea, US-Chile)
11
Types of FTA Verification procedures in the World
Government of Exporting Party
uninvolved in verification process
Government of Exporting Party
involved in verification process
G to G Verification by the
Importing Customs through the
Government of Exporting Party
G to B Verification by the
Importing Customs
G to B Verification by the
Importing Customs
Exporter, Producer
Exporter, Producer
Importer(Claimer for preferential
treatment)
※Exporter/Producer is the verifier, and
Exporter/Producer can submit explanation
documents to the Customs of importing country
directly if they contain confidential information.
ASEAN, Japan, Korea, China, EU
Canada, Mexico, Latin America
USA, NZ, Australia, (Japan, Korea)
USA/AU/NZ verifies to importer as a rule
Japan/Korea verifies to importers firstly,
and use other systems as a cover.
【Examples of supporting documents need to be submitted under verification process】
○The list of all parts
○The flow chart of manufacturing process
○The written oath
○The document of instruction of production ○The invoice/book of raw materials and so on
○The contract( between producer/exporter) ○The recording documents of input of each parts and materials
Japan Customs
etc
12
G to B Verification towards exporters or producers
Importing Country
Exporting Country
【Information Provider】
Producer
Informa
tion
【Verifier】
【Claimer for Preferential treatment】
Importer
Exporter
Inform
ation
Verification
(Analyzing of risk)
Customs of
Importing Country
Japan Customs
13
G to G verification by customs mutual assistance
Importing Country
Exporting Country
【Information Provider】
【Verifier】
Producer
【Claimer for Preferential treatment】
Importer
Exporter
Informa
tion
Verification
(Analyzing of risk)
Inform
ation
Customs of
Exporting Country
Customs of
Importing Country
Japan Customs
14
Key points for better ROO procedures
 For Customs, it is burden to ask questions / require supporting
documents from exporters/ producers in other countries.
 For Exporters or producers, it is burden to be asked by foreign
customs.
 Allow importers to certify origin, as we do in valuation or HS.
 Verifying to importers in their country is efficient for customs.
 Customs cooperation on ROO is important to supplement
verification to importers.
Japan Customs
15

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