AJCEP (Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of Southeast Asian Nations) was signed in April this year with 11 countries in ASEAN. With this EPA, approx. the customs duty of 93% of import amount into Japan from ASEAN countries will be abolished within 10 years. As for export from Japan to ASEAN, approx. 91% of export amount will be treated as zero duty within 10 years. There are some tricky points traders need to know.
Tariff concession and HS code 2002
Each 11 countries have each Concessions and the schedule is based on HS2002. Please bear in mind Japan currently use HS2007 for importation. Trader need to recognize this difference of HS code in finding the HS of goods. For details of each countries' Concessions and note, please find in Annex 1 of below web site of MOFA.http://www.mofa.go.jp/policy/economy/fta/asean/annex1.html
Effective 5 countries only in December 01, 2008
Now it was announced by Japanese government that this AJCEP will be effective from December 01, 2008. After this date, AJCEP will be implemented with the countries who made notification. As of December 01, the countries implemented are five countries only, which are Japan, Singapore, Laos, Vietnam and Myanmar. With regards to the ASEAN countries which will make the notification later, the Agreement will enter into force subsequently in accordance with the stipulations of the Agreement. However, the staging of tariff reduction is calculated from December 01, 2008 as the starting point.
Bilateral EPA is still valid independently
Japan have bilateral EPA with Singapore, Malaysia, Thailand, Indonesia, and Brunei. These bilateral EPAs are still valid, and ASEAN – Japan EPA is treated legally as another agreement. Both EPAs don’t have legal superiority and are treated equally. Trader can select which EPA is to be applied in claiming preferential tariff. Please be noted, however, there are slight difference in rule of origin between bilateral EPA and ASEAN – Japan EPA, depending on the product. Trader needs to check the rule of origin beforehand.
GSP with Cambodia, Laos and Myanmar is still valid independently
Generalized System of Preferences (“GSP”) is still valid for Cambodia, Laos and Myanmar after the implementation of ASEAN – Japan EPA. Trader can select which preferential tariff (GSP tariff or EPA tariff) is to be claimed in importing. Please be noted the rule of origin is slightly different depending on the product.
Certificate of Origin is different form from other bilateral EPA
ASEAN – Japan EPA has its own unique form of Certificate of Origin, called From AJ. In addition, when fulfilling the form, origin criteria (such as WO, CTH, RVC etc.) have its own criteria in ASEAN – Japan EPA. Trader need to take care the difference of Certificate of Origin, as the bilateral EPA’s Certificate of Origin is NOT allowed to claim the preferential tariff of ASEAN – Japan EPA in importing.
Introducing Back-to-Back CO
For Japanese importer, Back-to-Back CO (Country of Origin) is new rule because this rule have never been in bilateral EPA Japan have concluded so far. In ASEAN – Japan EPA, this rule is introduced first time for Japan. Back-to-Back CO usually involves three countries. For example, a product which was produced in Thailand may be bought by a trader in Singapore and imported into Singapore. After that, a Singapore Trader sell the Thailand origin product to a trader in Japan. In such a case, CO issued in Thailand can be converted by Singapore authority but with as Thailand origin, like re-issue CO successively. In Form AJ Country of Origin, there is a blank square to check in 13th column when applying Back-to-Back CO.