BRIEFING of DOCA Dept. of Customs Administration Ministry of Finance

2 Outlines of the Briefing I. Organization & Functions II. Customs Tariff Commission III. Brief introduction of present tariff rate IV. Brief introduction of present FTAs V. Brief introduction on Rules of Origin VI. Q & A

3 I. Organization & Functions Customs Administration within the MOF

4 I. Organization & Functions Department of Customs Administration Director General Section I Customs Procedures and Enforcement Section II Tariff and Customs Valuation Section III Duty Drawback and Bonded Systems Section IV Int'l Customs Affairs and AD and SCM Issues Deputy Director General 5 Senior Specialists

5 I. Organization & Functions §Section I (Customs Procedures) 1. Trade Security and Facilitation Introducing the Authorized Economic Operator and Single Window 2. Agreement on Rule of Origin Accession to the WTO 3. Non-Preferential ROO Bilateral Free Trade Agreements

6 I. Organization & Functions §Section II 1. Tariff Concession Results of the Tariff Negotiation and Revisions of the Customs Import Tariff are to be drafted and forwarded to the Cabinet and Legislative Yuan. 2. SG, SSG and Tariff Quota 3. Customs Valuation (1) Implemented in 1986 (CV Code 1979) (2) Revised in Oct. 31, 2001 (CV Agreement 1994)

7 I. Organization & Functions §Section III 1. Duty Drawback 1,100 out of 8,688 tariff lines applied 2. Bonding System (1) Bonded Factories/Warehouses (2) Science Based Industrial Park (3) Free Trade Harbor

8 I. Organization & Functions §Section IV 1. AD and SCM (1) Investigation of Dumping Margin and Subsidies (2) Drafting Anti-Dumping/Countervailing Measures, for approval (3) Staffs of the Customs Tariff Commission 2. International Customs Affairs Bilateral Cooperation Multilateral: APEC, WTO, WCO

9 The Concept of Trade Security emerged After 911 §The US-The first mission( homeland security) 1 CSI declaration( Container Security Initiative) 2 C-TPAT( Customs-Trade Partnership Against Terrorism) 3 the 24-Hour Rule

10 Taiwan’s Efforts on Supply Chain Security §CSI ( Container Security Initiative) 1 the US began to advocate CSI in Jan Taiwan signs the CSI declaration of principles with the US in Aug Kaohsiung and Keelung port have joined the CSI 4 The US customs has stationed in Kaohsiung port to assist our Customs in using non-intrusive equipment detection for cargo outbound for America

11 Taiwan’s Efforts on Supply Chain Security (continued) §Megaports Initiative 1 To supplement the CSI, we sign the MOU of Megaports Initiative with the US Energy Department on May The US specialists arrived in Kaohsiung port to survey the construction project on Jan The project is under construction, which will begin to operate on Nov

12 Taiwan’s Efforts on Supply Chain Security (continued) §24-hour Rule 1 The US began to implement 24-hour Rule on Dec Taiwan’s exporters comply with 24-hour Rule for cargo outbound for the US

13 Taiwan’s Efforts on Supply Chain Security (continued) §We aren’t still a member of the WCO, but we have actively implemented the SAFE guidelines proposed by the WCO §The US proposes the WCO SAFE in APEC SCCP held in Korea on Sep. in The next following year, we have submitted our notification of intention to support the proposal.

14 Taiwan’s Efforts on Supply Chain Security (continued) §Single window 1 Position 2008 as the year to map out our single window from the areas of “system establishment, “information integration”, and “capacity promotion”. 2 Hold the “2008 APEC Customs Data Harmonization Workshop

15 Taiwan’s Efforts on Supply Chain Security (continued) §Authorized Traders systems 1 Legal Base: Regulations Governing Customs Clearance Procedures for 2 Application Procedure: fill out an application form, and submit related documents, including certificates of annual import/export performance over recent 3 years etc. to customs bureau 3 The Terms of Application:(1) have been awarded a medal for excellent importer/exporter(2)no recorder of duty evasion, smuggling or other grave customs offenses over recent 3 years(3)set up a computerized system for operating and financial management

16 II. Customs Tariff Commission 1. Legitimacy Members of the Commission shall be reported to the Cabinet for approval. Staffs of the Commission shall be supported by employees of the Ministry of Finance. 2. Mandates To Study and Review draft revision of the Customs Import Tariff and the levy of special customs duty. (AD, SCM, SG & SG) 3. Members of the Commission Chairman: Deputy Minister of Finance Members: Government Representatives and Scholars.

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18 III.Brief introduction of present tariff rate §Applied tariff rate since 2001 (accession to WTO) Agricultural products Industrial products All products

19 III. Brief introduction of present tariff rate §Distribution of tariffs  Total number of tariff lines: 8,848 items  Free of duty: 2,800 items, accounting for 31.65% of total items  Duty less than 10%: 7,347 items, accounting for 83.04% of total items  Duty above 50%: 36 items, accounting for 0.4% of total items  Non-ad valorem duties: 157 items, accounting for 1.77% of total items

20 All productsRatio Agriculture products Industrial products Free of duty % %~5% % %~10% % %~15% % %~20% % %~25% % %~30% % %~35%290.33%290 35%~40%140.16%140 40%~45%90.10%90 50%~100%290.33% %~150%20.02%20 150%~200%20.02%20 >200%30.03%30 Mixed duty680.77%671 Specific duty891.01%890 Total8,8481,5697,279

21 IV. Brief introduction of FTAs §The role of the Ministry of Finance in the signing and implementation of FTAs l Revising of the Tariff Schedule according to the tariff reduction schedule in each FTA l Implementation tariff reduction l Administration of TRQ

22 IV. Brief introduction of FTAs §The current situation of FTA l As of now, we have signed FTAs with five countries: Panama, Guatemala, Nicaragua, El Salvador, and Honduras l Effective date of each FTA Panama: Guatemala: Nicaragua, El Salvador and Honduras: yet effective

23 IV. Brief introduction of FTAs §Taiwan’s Tariff Concession on Taiwan- Panama FTA All productsAgricultural productsIndustrial products Tariff lines % % % Custom duty eliminate immediately 6, % %5, % Custom duty eliminate in 5 equal annual stages 1, % %1, % Custom duty eliminate in 10 equal annual stages % % % Exclude items % %280.39% TRQ %483.06% -- Total 8,839100%1,568100%7,271100%

24 V. Brief introduction on Rules of Origin §Our Commitments relating to ROO in WTO accession l Chinese Taipei would ensure that its laws and regulations relating to rules of origin were consistent with the relevant WTO Agreements upon accession. §Implementation of accession commitments l Article 28 of Customs Act l Regulations Governing the Determination of Country of Origin of an Import Good

25 Non-Preferential & Preferential §Non-preferential ROO l Wholly produced criterion l Substantial transformation criterion changes of six digits of HS 35% value added §Preferential ROO l Free Trade Agreements l Least Developed Countries

26 Preferential ROO under FTA §Wholly obtained or produced goods §Goods meeting specific Rules of Origin l Change in tariff chapter l Change in tariff heading l Change in tariff subheading l Value-added rules §Goods produced wholly from originating materials

27 What benefits can be expected from the FTA §To promote for investment §To increase flow of goods

28 Trade benefits of FTA with Panama §After the FTA with Panama came into force, bilateral trade grew closer. In 2004, the total trade between Chinese Taipei and Panama was up to $US 269 million, comparing to 2003, when the total trade was $US 127 million, an increase of 112%. §The total trade in 2005 and 2006 was $US 249 million and $US 217 million respectively

29 VI. Q & A Thank You for your Attention! Comments and Questions are Welcomed.