3. needed to determine the national source of a product. 3 The Criteria

4. 1. To implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures 2. To determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment; 4

5. 5 3. For the purpose of trade statistics 4. For the application of labelling and marking requirements 5. For government procurement.

6. 6 Classification of ROO For purpose of Duty lay not apply MFN For other than purpose of Duty lay

7. Criterion of Origin Decision General Supplementary Entirely Produced Substantially transformation Change in Tariff Classification Value added rules Processing operation criterion De minimis / Accumulation

8. Criterion of Origin Decision All the goods Perfectly produce The goods /process/manufacture of the country Entirely Produced

9. 9 Criterion of Origin Decision Entirely Produced The object goods Mineral goods Hunting &Fishery Live animal Vegetable goods

10. 10 Classification of Origin Decision Substantially Transformation 2 or more country Substantial transformation produce/process/manufacture

11. 11 Criterion of Origin Decision Substantially Transformation

12. 12 Classification of Origin Decision - Commodity Coding system Diamond (HS7201.21) 2 unit 4 unit 6 unit

13. 13 Criterion of Origin Decision Substantially Transformation

14. 14 Criterion of Origin Decision Value Added Rules Value of Local Contents Build-UpBuild-DownNet Cost Value Of Import Contents

15. Criterion of Origin Decision Value added > Certain rate of goods price RVC = VOM ( 원산지재료비 ) X 100 ( 부가가치비율 ) AV ( 거래가격 ) Value of Local Contents (LC 방식 )

16. Criterion of Origin Decision Value of Non-originating Materials < Certain rate of goods price MC = VNM ( 비원산지 재료비 ) X 100 ( 비원산지재료비율 ) AV ( 공장도가격 ) Value of Import Contents (MC 방식 )

17. 17 Classification of Origin Decision No roasting Coffee Beans(0901.11) Roasting Coffee Beans(0901.21) what unit has changed?

18. 18 Criterion of Origin Decision Substantially Transformation

19. 19 example HS 5802 HS 6302 Substantially Transformation HS Code

20. 20 Car, Light truck, Engine & Transmission – more 62.5% Trailer truck, Bus – more 60% NAFTA automobile origin : local contents(value added) example Substantially Transformation

21. 21 example Substantially Transformation + $10000(A) + $10000(B) + $40000(B) + $20000(C) iron ore( 철광석 ) < ingot( 주괴 ) < sheet( 박판 ) < cabinet parts < cabinet ($20000) ($30000) ($40000) ($80000) ($100000) -A country value added : $20000 + $10000 = $30000 (30%) -B country value added : $10000 + $40000 = $50000 (50%) -C country value added : $20000 (20%) Origin of cabinet is B country

22. 22 example Substantially Transformation Criterion of Origin Decision of roller bearing in Thailand to EU (processing operation criterion Simple assembly of parts not mainly processing Heat treatment, polishing, assembly Origin

23. 23 iron ore( 철광석 ) < ingot( 주괴 ) < sheet( 박판 ) < cabinet parts < cabinet If Important process is refining( 정련 ) Origin of A country rolling( 압연 ), cutting, process Origin of B country assembly Origin of C country example Substantially Transformation

24. EX1) Competitiveness of company and origin mark 24 example EU vs. famous company in Germany(Volkswagen, Daimler AG, Bosch, Porsche etc.) American made new rules of origin in 1996. EU took a position contrary to fiber origin. American and EU were agreement a few of textile product. Korea – Chile FTA EX2) Product image and origin mark EX3) Korea - Chile FTA and rules of origin

25. 25 Legal system in Korea

26. WTO Rules of Origin 26 Unified international rules of origin instituted the need to initial GATT BUT opinion of each nation was different Kyoto agreement made rules of origin BUT only 20 nations agree rules of origin Not a compulsory measure UR accepted as negotiation agenda of non-tariff Cooperation has lasted with WCO as the central figure

27. 27 FTA Rules of Origin Negotiating rules of origin is watched for bilateral preferential rules of origin But even though classification of origin decision in General Principles are made that is different introducing classification of origin decision Hidden protection???

28. 28 rules of origin and implications for Korea in FTA 1.Rules of origin is different each FTA. so custom house and exporters would be with uncomfortable and burden 2. Rules of origin in FTA affects intra- trade and investment conclusion

29. 29 rules of origin and implications for Korea in FTA 3. Having effective tool could be to block roundabout trade of offshore product 4. Distinct of KaeSeong industrial complex would be reflected to rules of origin 5. Verification of origin is the most important tool conclusion

30. 30 Thank you