EFTAseminar - PowerPoint PPT Presentation

Title: EFTAseminar


1
EFTA-seminar

• Presentation by
• Ms. Cecilie G. Alnæs
• Directorate of Customs Excise, Norway

2
EFTA Chile relations

• 27 September 1999 First exploratory exchange of
  information with Chile in Geneva
• 4 December 2000 First round of negotiations on
  the EFTA-Chile FTA in Geneva
• 7-11 May 2001 Second round of negotiations on
  the EFTA-Chile FTA in Santiago
• 3-7 September 2001 Third round of negotiations on
  the EFTA-Chile FTA in Geneva
• 24-26 October 2001 Fourth round of negotiations
  on the EFTA-Chile FTA in Santiago
• 2-6 September 2002 Fifth round of negotiations on
  the EFTA-Chile FTA in Geneva
• 17-23 March 2003 Sixth round of negotiations and
  initialling of FTA in Geneva
• 26 June 2003 Free trade agreement signed in
  Kristiansand, Norway
• 1 December 2004 Free trade agreement enters in
  force
• 31 January 2006 First meeting of the Joint
  EFTA-Chile Committee in Geneva
• 7 8 April 2008 Second meeting of the Joint
  EFTA-Chile Committee in Santiago

3
Free Trade Models

• Customs unionCommon foreign trade policy
• Common customs tariff
• Free circulation of goods
• No origin rules internally

• Free Trade Agreement
• No common foreign trade policy
• No common customs tariff
• Free circulation of originating goods only
• Clearly defined origin rules

4
Customs issues in Free Trade Agreements (FTAs)

• Trade in goods (industrial goods including fish
  and other marine products)
• Tariff dismantling
• Rules of origin
• Verification/enforcement procedures

5
Trade in goods

• Coverage on trade in goods
• Industrial products HS Chapters 25 97
• Fish - HS Chapter 3 parts of Chapters 15 and 16
• Processed agricultural products
• Basic agricultural products

6
Preferential treatment of industrial products

• Importation into the EFTA states
• Free trade from the entry into force of the
  Agreement
• Importation into Chile
• Free trade from the entry into force of the
  Agreement, except for some products with tariff
  dismantling and some processed agricultural
  products (Annex IV)

7
Tariff dismantling (Annex VI)

• On the date of entry into force of this agreement
  to 80 of the basic duty,
• One year after the entry into force to 60 of
  the basic duty,
• Two years after the entry into force to 40 of
  the basic duty,
• Three years after the entry into force to 20 of
  the basic duty,
• Four years after the entry into force the
  remaining duties shall be abolished
• This dismantling table is for products listed
  under the category 4 years for
• products listed under the category 6 years
  there is another dismantling table

8
Preferential treatment of fish / marine products

• Importation into the EFTA states
• Free trade from the entry into force of the
  Agreement (some exceptions)
• Importation into Chile
• Free trade from the entry into force of the
  Agreement

9
RULES OF ORIGIN

• What is the purpose of rules of origin?
• Why do we need rules of origin ?
• Marking requirements (eg. Made in Norway)
• Statistical purposes (for measuring trade
  volumes)
• Import restrictions or prohibitions (eg. import
  ban)
• Antidumping/Countervailing duties/Safeguard
  measures
• Preferential tariff treatment on importation
  (according to the Free Trade Agreement)

10
EFTA Rules of Origin (Annex I to the FTA)

• Origin criteria
• Accumulation system
• Proofs of origin
• Direct transport
• Import requirements

11
RULES OF ORIGIN

• The rules of origin
• determine the criteria on how a product must be
  manufactured in order to obtain status as an
  originating product being eligible for
  preferential tariff treatment
• regulate the quantities of non-originating
  materials that may be used in the production
  and/or how such materials must be worked or
  processed in order to obtain preferential status
  for the final product

12
Rules of origin Annex I

• Where do we find the rules of origin?
• Definitions
• Concept of originating products
• Territorial Requirements
• Drawback or exemption
• Proof of origin
• Arrangements for Administrative co-operation
• Final provisions

13
Rules of origin

• Appendix 1 - Introductory Notes to the List (in
  Appendix 2)
• Appendix 2 - List of working and processing
• Appendix 3 - Movement Certificate EUR.1
• Appendix 4 - Invoice Declaration

14
Origin Criteria

• Main principles
• 1) Autonomous origin (Articles 2,4,5)
• Wholly obtained products
• Sufficiently worked or processed products
• 2) Origin by means of accumulation
• (article 3)

15
Origin criteriaWholly obtained products (Article
4)

• The following products are considered to be
  wholly obtained in a Party
• mineral products extracted from their soil or
  seabed
• vegetable products harvested there
• live animals born and raised there
• products from live animals raised there
• products from hunting, trapping or fishing in
  inland waters conducted there

16
Origin criteria (cont.)wholly obtained

• products of sea fishing and other products taken
  from the sea or the exclusive economic zone of an
  EFTA state or of Chile
• products of sea fishing and other products taken
  from the sea outside the exclusive economic zone
  by a vessel flying the flag of an EFTA state or
  of Chile
• fish and other marine products manufactured
  onboard a factory ship flying the flag of an EFTA
  state or of Chile, exclusive from products
  referred to in sub-paragraphs (f) and (g)
• used articles collected there, fit only for the
  recovery of raw materials or for use as waste
• waste and scrap resulting from manufacturing
  operations conducted there
• products extracted from the seabed or beneath the
  seabed outside their territorial sea, provided
  that they have sole rights to exploit such seabed
  and
• goods manufactured there exclusively from
  products specified in sub-paragraph (a) to (k)

17
Origin criteria Sufficiently worked or
processed products (Article 5)

• Conditions in the List (Appendix 2)
• General tolerance rule of 10 (except for
  textile products in HS Chapters 50 63)
• Insufficient working or processing minimal
  operations(Article 6)

18
Commodity Code - 8 digits
(Pizza containing sausage, meat of edible meat
offals)
19
NORWEGIAN CUSTOMS TARIFF EXAMPLE - ex. Heading
07.12
HS Heading
HS subheadings unchanged
HS 0712.39
HS Subheading with national breakdown on 8. digit
HS 0712.90
HS Subheading with national breakdown on both 7.
and 8. digit
20
Origin criteria - Processing Rules in Appendix 2
Applicable Rule

Product Description
HS Classification
ex
21
Origin criteria Export product from Chile Fruit
juices HS 20.09 Box from Argentina - HS
48.23
Fruit from Chile - HS 08.05
Sugar etc. from Brazil 17.01
Rule HS 20.09 Manufacture from materials of any
other heading and the value of any materials of
chapter 17 does not exceed 30 of the ex-works
price of the product
22
Origin criteriaExport product Carpet knitted -
HS 57.01
Wool HS 51.09 from Peru
Natural Brazilian Dye (Colour) HS 32.03
Rule Manufacture from natural fibres
23
Origin criteriaExport product from Chile Table
HS 94.03

• Rule Manufacture from materials of any other
  heading.
• Wood, Colombia HS 44.07
• Varnish, Peru HS 32.08
• Glue, Bolivia HS 35.06

24
Origin criteria Export product from Chile
Smoking pipe 96.14
Origin rule Rule Manufacture from roughly
shaped blocks

25
Origin criteriaExport product from Chile
Womens clothing, woven HS 62.04
Rule 62.04 Manufacture from any other Chapter,
provided that the value of the non-originating
fabric used does not exceed 50 of the ex-works
price of the product

26
Origin criteria Combined Rule

• Origin rule
• - Change of tariff heading, and
• provided that the value of all the materials
  from chapter 17does not exceed 50 of
  ex-works price of the product- any fruit-juices
  used ( some exceptions) must be originating

Beverages HS 22.02
27
Origin criteria General Tolerance
Rule(Article 5 2a of Annex I - exception to
1)

• Allows input of materials from third countries
  ifvalue of input material is less than 10 of
  ex-works price of the final producttextile
  products (Chapters 50 63) are excluded from
  this tolerance rule

28
Origin Criteria

• Origin by means of accumulation (Article 3)
• Bilateral accumulation - Norway Chile
  Norway
• Normally within one agreement

29
Accumulation

• Free use" of originating materials
• The "originating materials" used do not need to
  fulfil a change of heading condition nor any
  other requirements laid down in the list of
  processing rules
• Such originating materials are considered to be
  materials of the Party concerned, provided that
  the materials are subject to working or
  processing going beyond the "minimal operations"
  as referred to in article 6

30
Drawback Rule

• DrawbackExemption or repayment of customs
  duties paid for imported materials used in the
  manufacture of a product to be exported
• According to Article 14 of Annex I drawback
  is, as a main rule, not allowed when issuing an
  evidence of origin for the export product
• However in the EFTA-Chile agreement drawback
  is allowed for 5 years after entry into force of
  the Agreement (until 1. December 2009)

31
Principle of territoriality

• Originating status must be fulfilled in a Party
  without interruption (Article 11 1)

• Exception
• Originating products returned from third countries

32
Direct Transport(Article 12)

• Transport through third countries provided that
  they do
• not undergo operations other than
• unloading, reloading, splitting-up of
  consignments
• operations to preserve the product in good
  condition
• remaining under customs surveillance

33
Import requirements

• Customs clearance according to domestic
  requirements of the importing party
• Presentation of proof of origin according to
  domestic laws and regulations
• Preferential tariff treatment according to the
  FTA
• Possible control and verification of proof of
  origin

34
PROOFS OF ORIGIN

• Movement Certificate EUR.1 normally endorsed
  (stamped) by the Customs authorities
• Invoice Declaration (made out by the exporter)
  However with a value limit, unless being an
  approved exporter.

35
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37
Text of invoice declaration

• Appendix 4 to Annex I
• The invoice declaration, the text of which is
  given below, must be made out in accordance with
  the footnotes. However, the footnotes do not have
  to be reproduced.
• Spanish version
• El exportador de los productos incluidos en el
  presente documento (autorización aduanera n ...
  (2) ) declara que, salvo indicación en sentido
  contrario, estos productos gozan de un origen
  preferencial ...(3).

38
Text of invoice declaration

• 1 When the invoice declaration is made out by an
  approved exporter, the authorization number of
  the approved exporter must be entered in this
  space. When the invoice declaration is not made
  out by an approved exporter, the words in
  brackets shall be omitted or the space left
  blank.
• 2 Origin of products to be indicated.
• .......................................
  ..........3 (Place and date)
• .................................................
  4
• (Signature of the exporter in addition the name
  of the person
• signing the declaration has to be
  indicated in clear script3 These indications
  may be omitted if the information is contained on
  the document itself.
• 4 In cases where the exporter is not
  required to sign, the exemption of signature also
  implies the exemption of the name of the
  signatory.

39
Enforcement and mutual assistance

• The Customs authorities of the Parties will, if
  necessary, check if the goods are entitled to
  preferential tariff treatment upon importation
• The Customs authorities of the Parties will
  examine the proofs of origin at the time of
  exportation, and the Movement Certificate EUR.1
  must be endorsed/stamped by Customs authorities
• The Customs authorities of the Parties assist
  each other in checking whether the proofs of
  origin are correctly issued and whether the
  products concerned really are originating
  products

40
Responsibilities of the exporter of an evidence
of origin

• The exporter of an evidence of origin shall
• make the necessary indications / information and
  prove that these indications are correct.
• keep for at least three years all documents
  proving the originating status of the exported
  products

41
Rights of the customs authority of the exporting
country

• The customs authority has at any time the right
  to
• ask for information
• inspect exporters accounts, commercial papers,
  documents and the manufacturing process
• verify the accuracy of the evidences of origin at
  any time and without prior announcement

42
General Procedure

• Customs Administration (CA) of the importing
  country sends a request for verification to the
  CA of the exporting country
• CA of the exporting country check at the
  exporter's site, and send a response to the CA of
  the importing country
• CA of the importing country undertakes the
  further steps

43
Questions ?
44
Some practical examples

• Here is 2 examples that we will look at.
• We will use some minutes on each of them, and
  then we will solve them together.

45
Export product from Chile Tuna fish in olive oil

• HS 16.04 ex-work price CLP 100 000
• Rule16.04 Manufacture in which all the materials
  used are classified within a heading other than
  that of the product
• Materials used Origin
  HS Value
• Frozen tuna Chile
  03.03 50 000
• Olive oil Italy
  15.09 10 000
• Salt Peru
  25.01 10 000
• Pepper India
  09.04 10 000
• Will the product obtain originating status?

46
Export product from Chile Leather briefcase
42.02

• Rule HS 42.02 Manufactured from materials of any
  other heading
• Materials used
  Origin HS
• Tanned and worked bovine leather Chile
  41.07
• Lining, synthetic fabric
  Malaysia 54.07
• Buckles
  Singapore 83.02
• Rivets of copper
  Chile 74.15
• Zipper
  China 96.07
• Other materials
  Indonesia various (not 42.02)
• Will the product obtain originating status?