Getting A Certificate of Origin for your Product Doing Business in Japan Free Trade Area Philippine Trade Training Center November 7, 2012 Ma. Rosario V. Acosta Customs Operations Officer Bureau of Customs

BENEFITS FROM JAPAN FREE TRADE AGREEMENT

SUBJECT OUTLINE What is a Certificate of Origin? Rules of Origin How to Get a Certificate of Origin Minimum Data Requirements Operational Procedures Primer on Rules of Origin for PJEPA: In the Preparation for Stakeholder

CERTIFICATE OF ORIGIN (CO) declaration of exporter certified by a Competent Authority (Bureau of Customs, Ministry of Trade or Department of Commerce or Chamber of Commerce) states that the export products comply with the ORIGIN REQUIREMENTS specified under bilateral, regional & multi-lateral Trading Arrangement

PURPOSES OF CO Proves that the product exported is manufactured & produced in a specified country. Serves as a basis of granting preferential tariff treatment by the importing country

RULES OF ORIGIN Are regulations to determine the Country of Origin “nationality of the goods” Determine whether imported products shall be subjected to a most-favoured nation (MFN) treatment or preferential treatment (e.g.,ATIGA, ACFTA, AKFTA, AIFTA, AANZFTA, PJEPA, AJCEP) Means of determining HOW & WHEN a product can be considered as ORIGINATING from a specific country

RULES OF ORIGIN

“Originating” Goods Wholly-obtained and produced goods Goods made entirely in the exporting FTA Party (e.g. the Philippines) from materials produced in that same country (e.g. goods grown, born and raised, gathered, or extracted in the Philippines) Example: The Philippines’ agricultural exports including seafood harvested within the country, and mineral goods

Goods underwent substantial transformation process Products manufactured from exporting country wholly or partly from imported materials or components, including materials of undetermined or of unknown origin, are considered as ORIGINATING in that country if its materials, parts or components have undergone SUBSTANTIAL WORKING OR PROCESSING there.

Raw Materials for Glass Manufactured by Asahi Silica Sand Soda Ash Dolomite Feldspar Sodium Sulfate (Salt Cake) Calumite (Azaite Slags) Cobalt Oxide Sodium Selenite Sodium Nitrate Cullet

Change in – tariff classification Rule (CTC Rule) The HS code of Tempered Glass is H.S. 7007.19 and its origin rule is “A change to heading 70.02 through 70.17 from any other heading; or No required change in tariff classification to heading 70.02 through 70.17, provided that there is a qualifying value content of not less than 40%”. The rule requires that the 6-digit code of the Tempered Glass be different from those of the materials used in its production in the Phil. Exported to Japan Silica Sand H.S.2505.10 Tempered Glass H.S. 7007.19 Soda Ash H.S. 2836.20 Sodium Sulfate H.S. 2833.11

VALUE ADDED RULE (VA rule) ROO based on value-added (i.e., value-added rule) measure the extent of manufacturing or processing undertaken in a country by reference to the value added to the good. There are two requirements: • the final processing must be performed in a country; and • the value added in the country, calculated using a given formula, must satisfy the required threshold. FOB-VNM x 100%= QVC% FOB The formula may measure local content based on the FOB value, the ex-factory price or the ex-factory cost. Certain cost adjustments may be required. Packaging materials and containers for retail sale, if classified with the good, are included in the calculation of value-added while packing materials and shipping containers are excluded

The HS code of Tempered Glass is H. S. 7007 The HS code of Tempered Glass is H.S. 7007.19 and its origin rule is “A change to heading 70.02 through 70.17 from any other heading; or No required change in tariff classification to heading 70.02 through 70.17, provided that there is a qualifying value content of not less than 40%”. Raw Materials Country of Origin Originating Status Value US$ Silica Sand Australia Non - originating 2.10 Soda Ash Oregon 2.30 Sodium Sulfate China 1.70 Total 6.10 F.O.B. Price － 12.79 　　　　 F.O.B. －　V.N.M.　 Q.V.C ＝　 　　　 　　 × 100　 　　　　　　　F.O.B. 　　　　 12.79 －　6.10　 Q.V.C ＝　 　　　 　　 × 100 = 52.30%　 　　　　　　　12.79

Specific Manufacturing Or Processing Operation Rule (Process Rule) ROO based on process ascertain the critical process or element in the manufacture of a good. The country where such a critical process is done or where a critical element is obtained would be the country of origin of the good.

PSR Rule: A change to heading 61. 01 , through 61 PSR Rule: A change to heading 61.01 , through 61.17 from any other chapter provided that where non-originating materials of heading 50.07,51.11 through 51.13, 52.08 through 52.12, 53.09 through 53.11, 54.07 through 54.08,55.12 through 55.16 or chapter 60 are used, each of the non-originating materials is knitted or crocheted in either Party or a non-Party which is a member country of the ASEAN. Sewed Canada Thailand Knitted Sweater Chapter 61 Wool 51.01 Yarn 51.06

Minimum Data Requirement for CO under Annex 3 Exporter’s name, address and country Importer’s name, address and country Certification Number Origin of good (s) Invoice number and date Transport details (if known) HS tariff classification number Marks, numbers, number and kind of packages; Description of good (s) Quantity (Unit) Origin criterion Remarks (e.g. application of de minimis, accumulation Declaration by the exporter Certification

Minimum Data Requirement for CO under Annex 3

OPERATIONAL PROCEDURES

Issuance of a Certificate of Origin Form JP should be on ISO A-4 size paper H.S. Code Issued by the competent authority CO must bear a reference number CO issued one day after the date of shipment CO can be issued within 12 months and indicate “ISSUED RETROACTIVELY” in Box 9 Multiple items declared in the CO allowed, provided each item are qualified as originating good Signature of the competent authority

B. Application C. Modification D. Minor Error Notice to Exporter (CMO # 27-2004) Presentation of documents for the evaluation, 5 days before the shipment date Plant visit as needed C. Modification In the event of loss, new certificate of origin can be issued D. Minor Error Typing errors, discrepancies or omissions

E. Single Shipment F. Invoice of a Non Party G. Others Two or more invoices for one shipment can be accepted F. Invoice of a Non Party Third Party Invoicing is allowed and to be indicated in Box 9 G. Others If some goods not subject to preferential are included in the CO, the said CO is still valid.

Procedures: Post Exportation EXPORTER: Presents CO declaration to the Export Division at the time of exportation or as soon as thereafter, with the ff. : a) Copy of Export Declaration w/ Authority to Load b) Commercial Invoice c) Commodity Clearance / Permit to Export d) Duplicate copy of B/L or AWB.

PRIMER ON RULES OF ORIGIN FOR PJEPA IN THE PREPARATION FOR STAKEHOLDER Notice to readers This primer is just a reference for your understanding. If you deal with actual trade under PJEPA, you should read main body, Annexes, or Operational Procedures of the Agreement or other related domestic laws and regulations at first. In the event of any inconsistency between this primer and PJEPA (like modification or elimination of the contents or definitions of PJEPA), contents or definitions of the Agreement should prevail to the extent of the inconsistency.

Thank you for your attention...