Approved Exporter procedure now available

With the implementation of Japan-Swiss EPA in coming September, METI announced the procedure to get "approved exporter" status for issuing self-declared C/O (Certificate of Origin).
This self-declared C/O system by approved exporter have never implemented in Japan, the relevant law is amended and new procedure is announced in METI web site. This is first trial both for Japanese government and traders in Japan.

Followings are the main topics of the approved exporter procedure manual.

- Overview of the self-declared C/O system administrated by METI
- Standard of authorization standard: An approved exporter must have experience of applying/receiving C/O periodically under current regulation. In addition, they must have internal governance structure to issue C/O appropriately.
- "Apply/receiving C/O periodically" means more than 8 times in half a year. This is minimum requirement.
- Details of applying procedure, applying form and required supporting documents
- METI will review, evaluate and have interview on site to the approved exporter applicant.
- The registration fee is JPY90,000 (US$950) for initial application. The validity is 3 years, and the renewal fee is JPY5,000 (US$53).

(Source: METI EPA/FTA web site, see bottom of the page, http://www.meti.go.jp/policy/trade_policy/epa/html2/2-torikumi3-switzerland.html)


Japan - Swiss EPA in force on Sept 1, 2009

According to MOFA of Japan, the Exchange of Diplomatic Notes concerning the Entry into Force of the Agreement on Free Trade and Economic Partnership ("EPA") between Japan and the Swiss Confederation will take place in Bern on July 29 (Wed).

With this Exchange of Notes, the Agreement will enter into force on September 1 (Tue).

Customs tariff for both countries, 99% of goods in trade amount will be eliminated within 10 years.

One point to noteworthy for Japan is the adoption of "approved exporter" system for declaration of country of origin. This system is first time introduction in Japan, but in Europe, the self-declaration by approved exporter is common system in claiming preferential tariff in FTA.

(Source: http://www.mofa.go.jp/announce/announce/2009/7/1194357_1138.html )


Peru - Singapore FTA take effect on Aug

Free Trade Agreement between Singapore and Peru will take effect on August 1, 2009.

For Singapore, the trade with Peru in 2008 was valued at S$75.2 million ($52.11 million).

For Peru, a resource-rich Latin America nation, it's first free trade agreement with an Asian nation. Peruvian Trade and Tourism Minister Martin Perez said that the country is committed to moving forward on other bilateral trade pacts due to stalled global trade negotiations.

Peru has completed trade pacts with Chile and United States and it is seeking deals with China, South Korea, Thailand and Japan.

(Source: http://www.bilaterals.org/article.php3?id_article=15590&lang=en )


JPN End User List added entities of Iran and N. Korea

Japanese Ministry of Economy, Trade and Industry ("METI") announced on July 24, 2009 that they added some entities of Iran and North Korea in "The End User List" (or Foreign User List), which is WMD proliferation activity concerned entities list.

As a general practice, this list has been updated only once a year. In 2009, this proliferation concern list was updated on May 1st. It is not usual to have another update within months.

According to the announcement of METI Press Release, two entities in North Korea and one entity in Iran was added in the list. With this update, the total number of entities are 247 companies/organizations. Among them, North Korea (82 entities) and Iran (80 entities) consist 66% of WMD concerned parties.

The additional entities are as follows.

Iran: Hong Kong Electronics (aka: Hong Kong Electronics Kish Co.)
North Korea:
- General Bureau of Atomic Energy (GBAE) (aka: General Department of Atomic Energy(GDAE))
- Korea Tangun Trading Corporation

(Source: http://www.meti.go.jp/policy/anpo/kanri/user-list/list.htm )


Canada, Jordan signed FTA deal

Canada has signed a free trade agreement with Jordan, its first with an Arab country.

The agreement will give Jordan preferential trade conditions, including full exemption from customs duties on Jordanian exports to Canada.

In return, Jordan will reduce customs duties on Canadian products over a transitional period of four years.

Canada's forestry, manufacturing, agriculture and agri-food sectors, meanwhile, will receive immediate duty-free access to Jordan. Jordan reopened its market to Canadian beef and cattle in February, and the deal will give Canadian beef producers competitive advantages in a market the Canadian Beef Export Federation estimates to be worth $1 million.

Jordan was the first Arab country to sign a free-trade agreement with U.S., is a member of the WTO and has an association accord with the EU that paves the way for full lifting of tariffs and customs. Western firms see Jordan as a regional hub for wider business access to Iraq and neighbouring countries.

(Source: http://www.bilaterals.org/article.php3?id_article=15452 )


EU and Korea agreed Free Trade Talks

After years of negotiations, the European Union and South Korea have reached an agreement of bilateral free trade agreement ("FTA").
According to South Korean, the pact will bring greater changes to his country's international trade than a pact with any other economy, particularly for key sectors like industrial products, manufacturing, machinery, chemicals, and pharmaceuticals.
The European Union is Korea’s second-largest export destination, and Korea is the EU’s fourth-biggest non-European trade partner. Two-way trade reached $98.4 billion last year.

The agreement will eliminate the tariffs on 96 per cent of goods from the EU into Korea in three years and go fully duty-free in seven years, excluding rice and some other sensitive products.
EU will lift import duties for 99 per cent of Korean goods in three years before fully opening its market in five years.

The deal still faces domestic opposition, most fervently from European carmakers and Korean cattle and dairy farmers. A European automobile industry association last week described it as "unacceptable," raising concerns about the home market being flooded with cheaper Korean cars.

EU side especially complained about Seoul’s refunding of tariffs on imported parts when manufacturers export the final products. European companies said Korea could cut prices by using cheap Chinese products. This drawback scheme was one of key sources of contention between the Korean government and the European Commission. They at last agreed that they maintain the rule but will cap the refund if there is a significant increase in the amount of imported parts and components used by Korean companies.

It's expected the agreement will be signed next January or February and will come into force in June 2010.

(Reference: bilaterals.org web site http://www.bilaterals.org/article.php3?id_article=15549 )


AEO status shorten Customs clearance lead time 0.1 hour

Japanese Ministry of Finance ("MOF") have investigated customs clearance turn around lead time in Japanese air/sea port, and have released the result in every 3 years time.
On July 16, 2009, MOF released the latest customs clearance turn around lead time, and found AEO related shipment shows very short lead time, as 0.1 hour in both sea and air customs clearance. For MOF in Japan, this short lead time is honorable to demonstrate its AEO initiative they have endeavoured to set up for years.

The definition of customs clearance lead time is from customs declaration time to customs approval time in import customs procedure. Therefore, this lead time does not include cargo handling time such as vessel port loading time or container de-vanning time.

The comparison with normal non-AEO shipment is as follows.
- AEO shipment: 0.1 hours (both air and sea)
- Normal shipment (Air): 0.4 hours
- Normal shipment (Sea): 3.1 hours

MOF encourage traders to apply and make use of AEO, by emphasizing this favorable result.

In order to understand whole picture of Japanese import operation time, below lead time should be noted. This lead time is from the vessel (or flight) arriving time to customs import approval time.

- Air cargo: 34 hours (1.4 day)
- Sea cargo: 62.4 hours (2.6 days)

Also, from this arriving - customs clearance lead time, the AEO shipments shows much shorter lead time as follows.

- Air cargo: AEO 20 hours (0.8 day) vs Normal 34 hours (1.4 day)
- Sea cargo: AEO 38 hours (1.6 day) vs Normal 62.4 hours (2.6 day)

The specific lead time varies depending on the cargo type (container, bulk or courrier etc) and the relevant legal requirement (food, alcohol beverage or medical etc).
The more in depth investigation result is available in appendix of below MOF web site.


Japan's export control list update in coming October

Japenese METI officially announced on July 10 that the export control list will be udpated and it will be in force on October 1, 2009. The change of the list reflect the change of list in world wide regime such as Wassenaar and MTCI in 2007. The summayr of change is noted in this blog in May 27.


(Source: http://www.cistec.or.jp/export/express/090710/houdou.pdf)


GE India approved as first Indian VEU

According to the BIS news letter on July 2, 2009, General Electric India (GE India) has been approved as the first Indian company to qualify as a validated end-user (VEU) in India, allowing the company to enter a pre-approved, export express lane as a trusted end user.
There already have been several VEU between US and China, but first with India.

After an extensive background review, the VEU designation allowed GE India to receive certain controlled items from the United States, including civilian aircraft technology and explosive detection equipment (such as 1C002, 9E003 etc.) without an individual license, making the flow of trade more efficient between the countries.
(See details in Federal Register: http://www.bis.doc.gov/news/2009/fr_07022009.pdf )

End-users that apply and are qualified by BIS as validated end-users are eligible to receive specified items under the general authorization “Authorization Validated End User” instead of under individual transaction-specific licenses. Companies in India participating in VEU must pass a rigorous national security review and agree to strict follow-on compliance obligations prior to qualification. Qualification for VEU benefits both the foreign participants and U.S. exporters by limiting the paperwork that must be completed for shipment authorization, thereby allowing export on demand as well as resource savings.

(Source: http://www.commerce.gov/NewsRoom/PressReleases_FactSheets/PROD01_008103 )