The Bureau of Customs (BOC) is reminding all customs officials, as wells importers and exporters, of the implementation dates for the revised rules of origin (ROO) under the Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement (ACFTA).
Customs commissioner Rey Leonardo Guerrero, in Customs Memorandum Circular (CMC) No. 196-2019 dated August 28 and signed September 9, said that except for China and Vietnam, implementation of the revised ROO, including the Product Specific Rules (PRS) in the Harmonized System 2017 of the ACFTA, started last August 1.
For China, implementation was last August 20 and for Vietnam, September 12.
The transition period for accepting the Certificate of Origin (CO) Form E is from August 20 to 31. ADFTA parties, except Vietnam, will no longer accept the old CO Form E starting September 1.
The old CO Form E issued prior to September 1 remains valid for a year. A CO is a document attesting that goods in a particular export are wholly obtained or produced or manufactured or processed in a particular country. Form E is the specific CO for ACFTA.
Implementation of the revised ROO and new PSR in HS 2017 of the FTA was agreed on during the 12th meeting of the ACFTA joint committee in Bangkok, Thailand last May. This is according to Department of Trade and Industry-Industry-Development and Trade Policy Group assistant secretary Allan Gepty in a letter dated August 23 to BOC Assessment and Operations Coordinating Group deputy commissioner Atty. Edward James Dy Buco.
Gepty explained that China and Vietnam have different implementation dates because they were unable to complete their domestic clearance procedures.
The revised ROO and PSR are part of the Protocol to Amend the Framework Agreement on the Comprehensive Economic Cooperation and Certain Agreements Thereunder Between the ASEAN and China-also called the ACFTA Upgrading Protocol.
The ACFTA Upgrading Protocol which was signed in November 2015 and which entered into force in 2016, aims to improve the ACFTA by increasing the depth and expanding the scope of cooperation and promoting trade, services, and investment between ASEAN member countries and China.
ASEAN member countries include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
The ACFTA Upgrading Protocol amends provisions of the Framework Agreement on the Comprehensive Economic Cooperation between ASEAN AND China signed in November 2002, including agreements under the framework. These agreements are the Agreement on Trade in Goods (TIC Agreements) signed in November 2004, Agreement in Trade in Services (TIS Agreement) signed in January 2007, and Investment Agreement signed in August 2009.
During the 25th ASEAN-China Senior Officials Consultation last May, both sides agreed to enhance economic ties to meet the target of US$1 trillion in trade volume and $150 billion in investments by 2020 through implementing ACFTA and the ACFTA Upgrading Protocol. Both sides also reiterated the importance of promoting open and free trade, and looked forward to concluding negotiations on the Regional Comprehensive Economic Partnership this year to boost regional growth.
Some of the key amendments in the ACFTA Upgrading Protocol, specifically TIC, include upgrading and simplifying the ROO provisions by revising the PSR and introducing a new de minimis rule, clarifying the OCP’s (operational certification procedure) for applying and obtaining an ACFTA preferential tariff CO Form E and introducing a new section in customs procedures and trade facilitation.
On TIS, key amendments include improving the services commitments of China covering the sectors of engineering services, integrated engineering services, construction services, sporting and other recreational services, securities services, and travel agency and tour operator services.
The ACFTA Upgrading Protocol also strengthens provisions for investment promotion and facilitation, and for building e-commerce capabilities, especially for micro, small and medium-sized enterprises.
Interestingly, the ACFTA Upgrading Protocol hardly addresses the issue of non-tariff barriers (NTBs) despite evidence that NTBs continue to grow and to suppress trade, according to Asian Development Bank lead economist Jayant Menon and consultant Anna Cassandra Melendez in a report in the June 2019 issue of ASEAN Focus, a publication of the ASEAN Studies Centre at ISEAS-Yusof Ishak Institute, Singapore. – www.portcalls.com