free trade agreements / rules of origin - singapore … · singapore customs we make trade easy,...
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Singapore Customs
We Make Trade Easy, Fair and Secure
FREE TRADE
AGREEMENTS /
RULES OF ORIGIN
Presented by Rules of Origin Section
Tariffs & Trade Services Branch
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Rules of Origin
Certificate of Origin
Compliance
OUTLINE
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Legal binding agreement
between two or more countries
to reduce / eliminate barriers to
trade in & facilitate cross border
movement of goods/services.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Singapore’s FTA Network
USA
(USSFTA)
ASEAN
(AFTA)
New Zealand
(ANZCEP)
Japan
(JSEPA)
Korea
(KSFTA)
Jordan
(JSFTA) India
(CECA)
Australia
(SAFTA)
Panama
(PSFTA) Chile-NZ-Brunei
(TRANS PAC-SEP)
ASEAN-China
(ACFTA)
ASEAN-Japan
(AJCEP) ASEAN-Australia-NZ
(AANZFTA)
Gulf Cooperation Council (GCC)
Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, United Arab Emirates
ASEAN-India
(AIFTA)
Peru
(PEsFTA)
Ukraine EU
China
(CSFTA)
Costa Rica
ASEAN-Korea
(AKFTA)
EFTA - Iceland,
Liechtenstein, Norway
Switzerland
18 FTAs In Force
Upcoming FTAs (e.g.)
Trans Pacific
Partnership (TPP)
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Agency in implementation
Authority for issuance of
Certificate of Origin
Enforce obligations under FTAs
Technical experts in ROO
SC’s
Role
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Open up new markets
Enjoy preferential access to
certain sectors
Singapore manufactured goods
become more competitive
Increase trade
Key
Benefits
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Extracted from inSYNC, Issue 7 Yr 2010
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
1 Trade-in-Goods
2 Rules of Origin
3 Customs Procedures
Relevant Chapters
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Relevant Chapters –
www.fta.gov.sg
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Singapore Customs
We Make Trade Easy, Fair and Secure
Free Trade Agreement
Why FTA is important to Singapore?
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Singapore Customs
We Make Trade Easy, Fair and Secure
Rules of Origin
A set of guidelines derived
during FTA negotiations to
determine product origin.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Rules of Origin
Nationality determined
Benefit preferential tariff
Eliminate minimal operations
(e.g. packaging, simple assembling,
preservation)
Purpose
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Singapore Customs
We Make Trade Easy, Fair and Secure
Rules of Origin
Wholly Obtained
Value-Added (VA)
Process
Change of Tariff Classification
(CTC)
Method
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Singapore Customs
We Make Trade Easy, Fair and Secure
CTC
Rules of Origin Japan-Singapore Economic Partnership Agreement (JSEPA)
RVC
PR
14
HS Code: 3401.11
34.01 A change to heading 34.01 from any other heading;
No required change in tariff classification to heading
34.01, provided that there is a qualifying value content
of not less than 40 per cent; or
No required change in tariff classification to heading
34.01, provided that non-originating materials used
undergo a chemical reaction, purification, isomer
separation or biotechnological processes in a party.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Rules of Origin
Chapter: 34 (1st 2 digits)
Heading: 01 (3rd & 4th digit)
Sub-Heading: 11 (5th & 6th digit) – for toilet use
National Code: 20 (7th & 8th digit) – bath soap
HS CODE: 3401.11.20
Change in Tariff Classification –
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Singapore Customs
We Make Trade Easy, Fair and Secure
Rules of Origin
Raw Materials
(foreign origin)
HS Heading Finished
Product
Singapore
Origin?
Lye (sodium hydroxide)
Tallow(rendered beef fat)
Olive oil
Soap wrapper
2815
1502
1509
4811
Origin Criterion: Change to 3401 from other Heading
HS 3401.11
Change in Tariff Classification – eg.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Rules of Origin
Raw Materials
(foreign)
Other Cost / Profit
Value $
(CIF)
Finished
Product
Singapore
Origin?
Lye (sodium hydroxide)
Tallow(rendered beef fat)
Olive oil
Soap wrapper
Direct Labour
Direct Overhead
Profit
0.10
0.10
0.10
0.10
0.20
0.20
0.20
$1.00 (FOB)
HS 3401.11
Regional Value Content– eg.
Origin Criterion: QVC of not less than 40%
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Singapore Customs
We Make Trade Easy, Fair and Secure
Raw Materials
(foreign origin)
Process Finished
Product
Singapore
Origin?
Lye (sodium hydroxide)
Tallow(rendered beef fat)
Olive oil
Soap wrapper
HS 3401.11
Saponification
Rules of Origin Process Rule– eg.
Origin Criterion: Chemical reaction, purification, etc
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
A trade document that
- certifies origin of goods
- certifies & claim preferential
treatment
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
Ordinary CO (AOs & SC)
Preferential CO (SC)
Self-Certification
Types of Issuing Authority-
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
Authorised Organisations
Singapore International Chamber of Commerce
Singapore Chinese Chamber of Commerce and Industry
Singapore Indian Chamber of Commerce and Industry
Singapore Malay Chamber of Commerce and Industry
Singapore Manufacturing Federation
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
Authorised CO Self-Certification
EFTA States
New Zealand
Panama
United States
Trans-Pacific
Method of Claim –
ATIGA
Asean-AU-NZ
Asean-China
Asean-India
Asean-Japan
Asean-Korea
Australia
China
India
Japan
Jordan
Korea
Peru
EFTA States: Switzerland
Liechtenstein
Norway
Iceland
Trans-Pacific: Chile
Brunei
New Zealand
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
23
Authorised CO –
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
Australia
China
Jordan
Korea
Peru
Japan
24
Authorised CO –
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Singapore Customs
We Make Trade Easy, Fair and Secure
Exporter - Invoice
Exporter - Letter
US – Art 3:13:…….
based on the Importer’s knowledge or on information in the importer’s
possession that the good qualifies as an originating good.
Importer
Certificate of Origin Self Certification -
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
• Complete Form
• Factory Visit
• Approval Letter
Manufacturer
Registration
• Sample Format
• Verification
• Approval Letter
Product
Cost Statement
• TradeNet® Certificate
of Origin
Steps to getting a CO
Step 1:
Step 2:
Step 3:
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Singapore Customs
We Make Trade Easy, Fair and Secure
The application can be made through the Manufacturer's
Application Form ( DOC 475kb )
Step 1: Manufacturer Registration
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin
Factory Visit –
Manpower/ Machinery / Material
Production Process
Record Books
Step 1: Manufacturer Registration
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificate of Origin Step 1: Manufacturer Registration
Approval Letter –
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificates of Origin Step 2: Product Cost Statement
Sample Format –
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Singapore Customs
We Make Trade Easy, Fair and Secure
Step 2: Product Cost Statement
Sample Format –
Certificates of Origin
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificates of Origin Step 2: Product Cost Statement
Approval Letter–
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Singapore Customs
We Make Trade Easy, Fair and Secure
Certificates of Origin Step 3: Application of CO through TradeNet®
Exporter TradeNet®
Print CO Print Permit 33
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Singapore Customs
We Make Trade Easy, Fair and Secure
Common
Cost
statements
Errors
Compliance
Origin and HS Codes of raw materials
declared wrongly
34
Cost statements not signed
HS Code of the final product provided up to
4-digit instead of 6-digit
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Singapore Customs
We Make Trade Easy, Fair and Secure
Failure to inform SC on the change
in their manufacturing process
Common
Compliance
Errors
Compliance
Did not maintain complete and up-to-date
Information on production records
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Singapore Customs
We Make Trade Easy, Fair and Secure
Compliance
JSEPA 3 yrs
SAFTA 5 yrs
ISCECA 2 yrs
KSFTA 5 yrs
AKFTA 3 yrs
USSFTA 5 yrs
ESFTA 3 yrs
Record Keeping Period e.g.,
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Singapore Customs
We Make Trade Easy, Fair and Secure
Compliance
All information furnished to SC for the
purpose of any verification or audit is
confidential and will not be published or
disclosed to 3rd parties.
Legitimate commercial interests are being
protected.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Compliance
1st conviction
FINE - $100k
IMPRISONMENT
2yrs
2nd conviction
FINE - $200k
IMPRISONMENT
3yrs
Penalties –
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Singapore Customs
We Make Trade Easy, Fair and Secure
Summary
Step 1 What is the FTA partner country you are exporting
your product to?
Step 2 Establish Tariff Classification of Product
Step 3
Check if your product falls within the schedules of
concession
Step 4
Determine if your product qualifies for the Rules of
Origin
Step 5 Check the consignment conditions specified
Step 6 Determine the documentation required
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Singapore Customs
We Make Trade Easy, Fair and Secure
Quiz
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q1. A good that qualifies as originating
under one FTA, automatically qualifies as
originating under other FTAs.
Ans: False
The FTAs are standalone agreements and may have
different origin criteria for the same good. Hence, a good
which qualifies as originating under one FTA may not
necessarily qualify as originating under other FTAs. The
exporter or manufacturer must ensure that his goods
satisfy the relevant origin criteria specified under the
FTAs .
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q2. We can apply Preferential Certificate
of Origin six months after the shipment
date.
Ans: True
Retroactive applications of Preferential Certificate of
Origin are only applicable for consignments that are
shipped within a year, subject to the acceptance of the
importing country
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q3. Goods that are covered under the
FTAs are eliminated from import tariffs.
Ans: False
Preferential tariff treatment refers to reduced or
eliminated tariffs rates offered to imported goods
originating from FTA partner countries.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q4. I can still use the approval letter for my
Manufacturing Cost Statement (MCS) to apply
for Preferential Certificate of Origin even
though there were changes in it.
Ans: False
Though administratively we allow MCS to valid for 1 year,
companies should always update their costing whenever
there are variations in prices, costs, sources of materials
used, etc. during this validity period. However, it is up to
the company’s discretion if the changes in costings are
minor and companies are confident that the product still
meets the qualifying rule.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q5. The importing authorities cannot
request for retroactive checks on the
authenticity of the Preferential Certificate of
Origin.
Ans: False
Importing FTA partner can request the exporting authority
to conduct retroactive check at random and/or when it
has reasonable doubt on the authenticity of the
Preferential Certificate of Origin or as to the accuracy of
the information on the Certificate of Origin.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q6. Preferential Certificates of Origin
issued under FTAs can be applied through
Chamber of Commerce.
Ans: False
Under FTAs, the issuing authority is Singapore Customs.
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Singapore Customs
We Make Trade Easy, Fair and Secure
Q7. Preferential Certificate of Origin is a
mandatory document that I need to apply in
order to export my product to the other FTA
partner country.
Ans: False
Not required for shipments unless the product qualifies as
an originating good under the FTA and the importer
intends to claim preferential tariff treatment upon
importation.
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