TEAM 김현수 박현수 Feng yin

Country of Origin refers to the country wher e the goods were mined, grown, or manufact ured. Rules of Origin are laws, regulations and ad ministrative determination of general applicati on to determine the country of origin of goods (that is, where made, grown, etc)..

1. Rapid spread of comapany’s global economical activity 2. The globalization of production 3. The spread of inter-regional FTA 4. Determination of origin of the need for an increase

Where are rules of origin used? — to implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures — to determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment — for the purpose of trade statistics — for the application of labelling and marking requirements; and — for government procurement.

Construction PART I PART II PART III PART IV Definitions and coverage Disciplines to govern the application of RoO Procedural arrangements on notification, review, consultation and dispute settlement Harmonization of RoO

Construction ANNEX I ANNEX II Technical committee on RoO Common declaration with regard to preferential RoO

Important Contents PART II Disciplines to govern the application of RoO Article 2 : Disciplines During the Transition Period RoO shall not themselves create restrictive, distorting, or disruptive effects on international trade. RoO are administered in a consistent, uniform, impartial and reasonable manner. RoO are based on a positive standard.

Important Contents PART III Procedural arrangements on notification, review, consultation and dispute settlement Article 4 : Institutions There is hereby established a Committee on RoO composed of the representatives from each of the Members. –The committee There shall be established a technical committee RoO under the auspices of the Customs Co-operation Council as set out in Annex I. –The Technical committee

PART III Article 5 : Information and Procedures for Modification and Introduction of New Rules of Origin Article 7~8 : Consultation and Dispute settlement The provisions of Article XXIII of GATT 1994, as elaborated and applied by the Dispute Settlement Understanding, are applicable to this Agreement.

Important Contents PART IV Harmonization of RoO Article 9 : Objectives and Principles Providing more certainty in the conduct of world trade Harmonizing of RoO

Non-preferential Rules of Origin Non-preferential Rules of Origin Non-preferential rules of origin are used to determi ne the country of origin for certain purposes. Thes e purposes may be for quotas, anti-dumping anti-ci rcumvention, statistics or origin labeling. WTO Non-preferential Rules of Origin Non-preferential Rules of Origin In principle

WTO PART IV Article 9 : Objectives and Principles RoO should provide for the country to be determined as the origin of a particular good to be either the country where the good has been wholly obtained or, when more than one country is concerned in the production of the good, the country where the last substantial transformation has been carried out

WTO Wholly Obtained Criterion Substantial Transformati on Criterion

Wholly Obtained Criterion All the goods were perfectly produced in the one country a situation EX) Vegetable goods, Live animal, Mineral goods, Hunting and Fishery

Substantial Transformati on Criterion Tariff Shift Specific Process Value Added I.K.C. provided criteria on the international basis to determine the origin of goods produced in more than one country. It indicated that the origin of goods should be determined by the last/final country in which "substantial transformation" of the goods took place. It indicated that "substantial transformation" could be determined by applying one of three different methods

Tariff Shift "substantial transformation" is said to have occurred if a produced good is classified to a different tariff classification other than that of its raw or starting component materials (Imported from other countries) set forth to comply with origin criteria. TUNA (HS ) CANNED TUNA(HS ) 2 unit 4 unit 6 unit

Value Added The value-added test defines the degree of transformation required to confer origin on the good in terms of a minimum percentage of value that must come from the originating country or of maximum amount of value that can come from the use of imported parts and materials. Value Added Imported materials value Country of ori gin is adding more value country

Specific Process The origin is based on the country in which a specified manufacturing or processing operation for a specific product is undertaken regardless to the change of tariff classification such as chemical reaction, specific mixing and blending process, extraction or purification etc. EX) Coffee Import from Ethiopia Country of origin is Korea Roasting in Korea Specific Process

preferential Rules of Origin preferential Rules of Origin Preferential RoO are part of a FTA or preferential tr ade arrangement which includes tariff concessions. These trade arrangements might be unilateral, bilat eral or regional trade arrangements. The rules of or igin determine what products can benefit from the t ariff concession or preference, in order to avoid tra nsshipment.

rules of origin and implications for Korea in FTA 1. RoO is different each FTA. so custom house and exporters would be with uncomfortable and burden 2. RoO in FTA affects intra- trade and investment 3. Verification of origin is the most tool 4. Having effective tool could be to block roundabout trade of offshore product

KOREA ㆍ EFTA FTA : Bullion case Swiss is import from Republic of South africa and export to Korea Refining in Swiss - This gold is not recognized country of origin SWISS -

KOREA ㆍ USA FTA : Golf Ball Case Inner processes in KOREA Urethane processes in U.S.A Country of Origin ?

KOREA ㆍ USA FTA : Golf Ball Case KOREA Country of Origin ? Because of Inner processes are important than urethane processes Inner processes are Specific Processes

We have to… 1. Raising awareness about the RoO 2. Efficient management of origin information 3. Using of pre-screening system 4. Training of master about RoO 5. Expressing in Offer sheet about RoO