Circular No. 17/2009/TT-BCT dated June 29, 2009 of the Ministry of Trade amending the Trade Minister’s Decision No. 02/2007/QD-BTM dated January 8, 2007, which promulgates the Regulation on issuance of certificates of origin-form AK, for enjoyment of preferences under the Trade in Goods Agreement within the Framework Agreement on Comprehensive Economic Cooperation among the Governments of member countries of the Association of Southeast Asian Nations and the Government of the Republic of Korea

CIRCULAR

Amending the Trade Minister’s Decision No. 02/2007/QD-BTM dated January 8, 2007, which promulgates the Regulation on issuance of certificates of origin-form AK, for enjoyment of preferences under the Trade in Goods Agreement within the Framework Agreement on Comprehensive Economic Cooperation among the Governments of member countries of the Association of Southeast Asian Nations and the Government of the Republic of Korea

Pursuant to the Governments Decree No. 189/2007/ND-CP dated December 27, 2007, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Trade m Goods Agreement within the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations (ASEAN) and the Republic of Korea, which was revised m Phetchaburi, Thailand, on February 26, 2009;

The Minister of Industry and Trade amends the Trade Ministers Decision No. 02/2007/QD-BTM dated January 8, 2007, promulgating the Regulation on issuance of certificates of origin –form AK, for enjoyment of preferences under the Trade in Goods Agreement within the Framework Agreement on Comprehensive Economic Cooperation among the Governments of member countries of the Association of Southeast Asian Nations and the Government of the Republic of Korea, as follows:

Article 1.

Amendments

To annul Annex IV - Guidance on Article 6 of Annex I to the Regulation on issuance of certificates of origin (C/O), form AK, under the Trade Minister's Decision No. 02/2007/QD-BTM dated January 8, 2007, and replace it with Annex IV to this Circular.

Article 2.

Implementation provision

This Circular takes effect 45 days from the date of its signing.

Annex IV

GUIDANCE ON ARTICLE 6 OF ANNEX I

(To the Trade and industry Minister’s Circular No. 17/2009/TT-BCT dated June 29, 2009)

Article 1.

List of goods

1.. Each Party shall apply Article 6 of Annex I to goods specified in the attached separate list. Each country's separate list will comprise a total of one hundred (100) goods items with 6-digit HS codes.

2. The Republic of Korea may propose amendments to the list mentioned in Clause 1 of this Article. These amendments will be considered with goodwill by ASEAN member countries and approved as agreed by the Republic of Korea and the related Party.

Article 2.

Rules of origin applicable to goods governed by Article 6 of Annex I

1. "Defined goods" mentioned in Clause 1, Article 1 of this Annex and any amendments thereafter which are re-imported as goods not undergoing any processing stage other than production stages within the Re-importing Party’s territory for export as specified in Article 8 of Annex I, will be regarded as originating from the territory of that Party, provided that:

a/ The total value of input materials not originating therefrom⁽¹⁾ must not exceed 40% of the FOB price of finished products, for goods regarded originating therefrom; and,

b/ The value of materials exported from a Party must be at least 60% of the total value of materials used in the production of finished products.

2. Unless otherwise provided in this Annex, relevant rules set out in Annex I will, with appropriate amendments, apply to goods items governed by Article 6 of Annex I.

Article 3.

Procedures for issuance of C/O for goods governed by Article 6 of Annex I

1. C/O, form AK, of goods governed by Article 6 of Annex I will be issued by the competent authority⁽²⁾ of the Exporter as

specified in Annex V to this Regulation.

2. The Exporter’s authority competent to issue C/O shall indicate in form-AK C/O that the goods are governed by Article 6 of Annex I.

3. Unless otherwise provided in this Annex, relevant rules set out in Annex V will, with appropriate amendments, apply to goods governed by Article 6 of Annex I.

4. The Republic of Korea shall assist the Importer's customs office in inspecting goods governed by Article 6 of Annex I in accordance with Articles 14, 15 and 16 of Annex V

Article 4.

Special safeguarding mechanism

1. When a Party determines that a good governed by Article 6 of Annex I is imported into its territory in an increasing quantity under conditions which will cause or threaten to cause serious damage to its domestic production sector, that Party may freely cease the application of Article 6 of Annex I to such good in a duration which is regarded as necessary for preventing or coping with such damage or the threat to cause such damage.

2. A Party wishing to cease the application of Article 6 of Annex I in accordance with Clause 1 of this Article shall notify the republic of Korea two (2) months before commencing the application cessation duration and give the Republic of Korea an opportunity to exchange with that Party information related to such cessation.

^{(1) Total value of input materials not originating therefrom means the value of any input material not originating therefrom which has been aggregated as well as any material aggregated and all other expenses aggregated outside the territories of the Republic of Korea and ASEAN members countries, including freight.}

Total value of input materials not originating therefrom means the value of any input material not originating therefrom which has been aggregated as well as any material aggregated and all other expenses aggregated outside the territories of the Republic of Korea and ASEAN members countries, including freight.

^{(2) As for the Republic of Korea, the authority competent to issue C/O means the Republic of Korean customs office.}

As for the Republic of Korea, the authority competent to issue C/O means the Republic of Korean customs office.

3. The duration mentioned in Clause 1 of this Article may be extended provided that such Party is taking action to cease application (below referred to as the ceasing Party) and has determined that such cessation will be further regarded as necessary for preventing or coping with such damage.

4. In emergency cases, when any delay may cause irreparable damage, the application of Article 6 of Annex I in accordance with Clause 1 of this Article may be temporarily ceased without notifying the Republic of Korea two (2) months in advance, provided that such notification must be made before the effective date to cease the application of Article 6 of Annex I.

5. When a Party has made a decision mentioned in Clause 1 of this Article and when the provisions of Clause 2 of this Article have been complied with, the related Party may unilaterally and unconditionally cease the application of Article 6 of Annex I, specifically:

a/ It is not obliged to prove that there is a serious damage;

b/ It is not obliged to seek consultation in advance;

c/ There is not any limitation with regard to the time limit or frequency of the application cessation; and,

d/ It is not obliged to pay compensation.

Article 5.

Annual review

1. The Parties shall review the implementation and application of Article 6 of Annex I at the Executive Committee and organize meetings under Article 5.3.6 of the Framework Agreement. For the purpose of this stipulation:

a/ The Exporter shall supply the Executive Committee with a brief report on the application of Article 6 of Annex I, including data on the export of each goods item specified in the attached Table supplied to the Importers one year retrospectively; and,

b/ The Importer shall, at the request of the Executive Committee, supply information related to the refusal to grant tariff preferences, if any, including the number of rejected C/O, form AK, and reasons for such refusal.

2. The executive Committee may request the Exporter to supply additional information regarded as necessary for reviewing the implementation and application of Article 6 of Annex I.

3. After considering the review results as specified in Clause 1 of this Article, the Executive Committee may make a proposal, when deeming it necessary.

Article 6.

Possibility to cancel commitment

At any time after five (5) years from the effective date of the Trade in Goods Agreement, an ASEAN member country has the right to cancel the application of this Annex when, on the basis of review and at its discretion, it identifies that its benefits have been seriously damaged in consequence of the application of Article 6 of Annex I.

Article 7.

Any dispute related to the understanding, implementation or application of this Annex will not be subject to procedures and mechanisms specified in the Agreement on Dispute Settlement Mechanism within the Framework Agreement on Comprehensive Economic Cooperation among the Government of the Republic of Korea and the Governments of ASEAN member countries.

Article 8.

No stipulation in this Annex will affect the rights and obligations of the Parties under the Trade in Goods Agreement, including Article 9 (Safeguarding measures)

100 GIC GOODS ITEMS ELIGIBLE FOR AKFTA TARIFF PREFERENCES

Note:

Prefix "ex" used in this List means that the tax code referred to in the column on the left includes only part of the relevant subheading.