2011年7月29日金曜日

Japan, India EPA entering into force on August 1, 2011

On June 30, 2011, Ministry of Economy, Trade and Industry (“METI”) and Ministry of Foreign Affairs (“MOFA”) in Japan announced on their press release that Japan and the Republic of India exchanged diplomatic notes concerning the entry into force of the Comprehensive Economic Partnership Agreement (“EPA”). Accordingly, the EPA between Japan and India enter into force on August 1, 2011. This EPA is Japan’s 12th EPA that enter into force and expected to liberalized and facilitate trade, promote investment, and improve systems in related field of both countries. Tariffs on approximately 94% of total trade will be abolished between the two countries within 10 years after implementation of the EPA.



The tariff concession schedule is available in METI web site as “Annex 1: Schedules in relation to Article 19” which shows preferential tariff rate of applicable item agreed in this EPA. Traders are encouraged to examine whether the HS code of trading goods are covered in this EPA. We would like to give caution some operational aspects in making use of this Japan-India EPA in following points.


 Rule of Origin (“ROO”) requirement in General Rule

In verification of eligibility of origin of goods, the Japan-India EPA ROO have General Rule and Product Specific Rules (“PSR”). The goods except those in the PSR list must satisfy the General Rule in order to qualify for the Japan-India EPA preferential tariffs. Under the general rule, the qualification of origin is described as "CTSH (change in HS code at the 6-digit level) and local content of not less than 35%”. The “and” indicates that both criteria must be satisfied for the goods to qualify for preferential tariff. This ROO may be operational challenge for traders, as all other EPAs Japan have implemented have rule of “either” HS code change or local value content percentage.


 GSP tariff is no longer available in importing Indian items into Japan

Under the Generalized System of Preferences (“GSP”), GSP preferential tariff has been available to use to Indian origin items in importing into Japan. Upon implementation of Japan-India EPA, basically GSP tariff is not applied to Indian origin items except the case GAP tariff is lower than EPA tariff. Traders who have made use of GSP tariff in trade with India need to take care of the lose of validity of GAP scheme with India upon August 1, 2011. In addition, type of Certificate of Origin (“CO”) is different, GSP require form A, but the Japan-India EPA require the designated CO format called “IJCEPA”. In import declaration in Japan, CO type form A cannot be used for claiming the preferential tariff of EPA.


 Other technical notes in Japan-India EPA.

  1. HS code: HS2007 version
  2. Third Country Invoice: Available to use. Need to fill in Field 7 and 8 on CO form IJCEPA.
  3. For the import of the goods which value are under JPY200,000 into Japan, the CO submission to Customs can be exempted in claiming EPA preferential tariff.
(Reference:  Japan - India EPA tariff staging chart:  http://www.customs.go.jp/kyotsu/kokusai/gaiyou/india/india_staging1108.pdf )

2011年7月22日金曜日

Violation case study - Seibukosan to North Korea



On July 20, 2011, Ministry of Economy, Trade and Industry ("METI") published press release announcing the administrative penalty of small Japanese trader, Seibukosan, who exported a power shovel to North Korea without export license.  The penalised company is very small company located in Kumamoto prefecture in Kyushu island, western part of Japan.  According to the press release, after beingf "informed" by METI (this "inform" means the order by METI to apply export license under Catch-all control regulation), the Seibukosan exported the power shovel (which is supposed to be under Category 16 of Export Trade Control Order) to North Korea via China without export license.  This illegal export was made in April 2009 and the violation of Article 48 (1) of Foreign Exchange and Foreign Trade Law ("FEFTL").

As administrative sanction by METI to this trader, export prohibition (both to a company and to a individual who run this company) for One year and one month (from July 27, 2011 through August 26, 2012) is imposed.  According to Article 53 of FEFTL, the maximum penalty is for a period of not more than three years.  (So, 13 months are not so bad?)

As for criminal penalty, METI already prosecuted Seibukosan in July 2009 in violation of FEFTL, the judgment in Fukuoka District Court was monetary penalty JPY 1,200,000 and the imprisonment for one year and half.  (but with suspended sentence for 3 years)

I hear recently lots of FEFTL violations to North Korea.  Not only WMD catch-all violation, but Japanese government have embargo stance to North Korea, even export of luxury item or commodity items are basically prohibited.  Most of violations are by small companies who seek easy profit without compliance mind.

(Reference source: http://www.meti.go.jp/press/2011/07/20110720003/20110720003.pdf    )

AEO benefits implementation starts in Japan-Singapore

With mutual AEO recognition with Singapore, Japan start its implementation of benefits of AEO from August 1, 2011.  The customs guidance how to make it in declaration transaction is announced in Customs web site.

http://www.customs.go.jp/zeikan/seido/aeo/leaflet_23-07.pdf

2011年7月14日木曜日

Malaysia export control update

As many of traders who are involved in Malaysia export operation are interested in, Malaysia implement the export control regulation based on Strategic Trade Act 2010 ("STA") from July 1, 2011.

Recently I find "Slides for STA 2010" in Malaysia MITI web site.  It is presentation material concisely summarizing the STA rule and implementation.  Most of information in this slide is not new, but good reference material for briefing how the regulation works.

But I find interesting topics as below which imply the full implementation is practically not on July 1, but will be on August 1.   Belows are page number 28 and 29 of the slides.  Yes, the rule is from July 1st, but still the customs declaration & online permit application is under trial basis until July 31.

SELF DECLARATION
- Effective 1 July 2011, there will be a compulsory field in the K2 and K8 forms (*) to declare whether the products being exported are strategic items or non-strategic items.
(*) These forms are customs declaration forms in exporting out of Malaysia.
- If your product is ticked as strategic item, the system will then prompt for the STA export permit license number to be entered.
- This system will be on a trial period of one month until end of 31 July 2011 and fully enforced on 1 August 2011.  (Highlighted by blog author)

ONLINE PERMIT APPLICATIONS
-  Effective 1 July 2011 and export permit applications under the STA will go online.
- Every permit application should be accompanied with end-user statements from all end-users that the product is being exported to.
- This system will be on a trial period of one month until end of 31 July 2011 and fully enforced on 1 August 2011.  (Highlighted by blog author)

(Sourece:  http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_356e3af1-c0a81573-272f272f-b7977e99 )