THE FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF THE REPUBLIC OF KOREA
The Government of the Republic of the Philippines: (“the Philippines”) and the Government of the Republic of Korea (“Korea”), hereinafter referred to collectively as the “Parties” and individually as a “Party”:
RECOGNIZING their longstanding and strong friendship and the need to strengthen their close economic relations;
CONVINCED that a free trade area will create an expanded and secure market for goods and services in their territories and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
RECOGNIZING the need to strengthen the framework for broader and deeper economic cooperation;
DESIRING to promote economic growth and create new employment opportunities;
RECOGNIZING the different levels of economic development between the Parties;
DESIRING to strengthen a mutually beneficial cooperative framework to foster creativity and innovation, and to promote stronger linkages in and between the dynamic sectors of their economies;
SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to such trade and investment between them;
DESIRING to promote a predictable, transparent, and consistent business environment that will assist enterprises in planning effectively and using resources efficiently;
RESOLVED to contribute to the harmonious development and expansion of world trade by removing obstacles to trade through the creation of a free trade area;
BUILDING on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral, regional, and bilateral agreements to which both Parties are party; and
REAFFIRMING their desire to build upon their commitments under the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea as well as other relevant agreements pursuant to the Framework Agreement,
HAVE AGREED as follows:
CHAPTER ONE
GENERAL PROVISIONS
Article 1.1: Establishment of a Free Trade Area
The Parties, consistent with Article XXIV of GATT 1994 and Article V of GATS, hereby establish a free trade area in accordance with the provisions of this Agreement.
Article 1.2: Objectives
The objectives of this Agreement are to:
Article 1.3: Relation to Other Agreements
- The Parties reaffirm their rights and obligations under the WTO Agreement, the ASEAN-Korea FTA, and any other agreements to which both Parties are party.
- Unless otherwise provided in this Agreement, in the event of any inconsistency between this Agreement and another agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.
Article 1.4: Extent of Obligations
Each Party shall, subject to the provisions of this Agreement, ensure the observance of all obligations and commitments under this Agreement by its regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.5: General Definitions
For purposes of this Agreement, unless otherwise specified,
Agreement on Agriculture means the Agreement on Agriculture, in Annex 1A to the WTO Agreement;
Anti-Dumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, in Annex 1A to the WTO Agreement;
customs authority means the authority that, in accordance with the legislation of each Party, is responsible for the administration and enforcement of its customs laws and regulations:
customs duties means any customs or import duty and a charge of any kind, including any form of surtax or surcharge, imposed in connection with the importation of a good, but does not include any:
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, in Annex 1A to the WTO Agreement;
days means calendar days, including weekends and holidays;
existing means in effect on the date of the entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, in Annex 1B to the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, including its notes and supplementary provisions, which is a part of the WTO Agreement;
goods means any merchandise, product, article, or material;
Harmonized System (HS) means the nomenclature of the Harmonized Commodity Description and Coding System defined in the International Convention on the Harmonized Commodity Description and Coding System, including all legal notes thereto, as in force and as amended from time to time;
Joint Committee means the Philippines-Korea Free Trade Agreement Joint Committee established under Article 11.1 (Joint Committee);
juridical person means any legal entity duly constituted or otherwise organized under applicable laws and regulations, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship, or association;
ASEAN-Korea FTA means the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea and other relevant agreements stipulated in paragraph 1 of Article 1.4 of the Framework Agreement;
measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;
measures adopted or maintained by a Party means measures adopted or maintained by:
national means:
originating goods means products or materials that qualify as originating under Chapter Four (Rules of Origin);
person means a natural person or a juridical person;
preferential tariff treatment means tariff concessions granted to originating goods as reflected by the tariff rates applicable under this Agreement;
Safeguards Agreement means the Agreement on Safeguards, in Annex 1A to the WTO Agreement;
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, in Annex 1A to the WTO Agreement;
territory means:
Trade Facilitation Agreement means the Agreement on Trade Facilitation, in Annex 1A to the WTO Agreement;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.
CHAPTER TWO
TRADE IN GOODS
Article 2.1: Definitions
For purposes of this Chapter:
consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers’ export declarations, or any other customs documentation required on or in connection with importation; and
import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that required for customs purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party.
Article 2.2: Objectives
The Parties shall liberalize trade in goods under this Agreement, in conformity with Article XXIV of GATT 1994.
Article 2.3: Scope and Coverage
Except as otherwise provided for in this Agreement, this Chapter shall apply to trade in goods between the Parties.
Article 2.4: Reduction or Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, each Party shall reduce or eliminate its customs duties on originating goods of the other Party in accordance with its respective Schedule of Tariff Commitments reflected in Annex 2-A.
2. In accordance with the WTO Agreement, originating goods of the other Party shall be eligible, at the time of importation, for the most-favored-nation (MFN) applied rate of customs duty for those goods in a Party, where that MFN applied rate is lower than the preferential rate of customs duty provided for in that Party’s Schedule of Tariff Commitments. Subject to each Party’s laws and regulations, each Party shall provide that an importer may apply for a refund of any excess duty paid for a good if the importer did not make a claim for the lower MFN rate applicable at the time of importation.
3. Except as otherwise provided in this Agreement, neither Party shall increase any existing customs duty, or adopt any new customs duty, on originating goods of the other Party, as provided in its Schedule of Tariff Commitments.
Article 2.5: Acceleration of Tariff Commitments
1. A Party may, at any time, unilaterally improve or accelerate its tariff commitments set out in its Schedule of Tariff Commitments. Such Party shall inform the other Party as early as practicable before the new preferential rate of customs duty takes effect.
2. Upon request of a Party, the Parties will consult to consider accelerating the reduction or elimination of customs duties set out in their respective Schedule of Tariff Commitments. An agreement by the Parties to accelerate the reduction or elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their respective Schedules of Tariff Commitments reflected in Annex 2-A.
3. Following a unilateral improvement or acceleration of its tariff commitments referred to in Paragraph 1, a Party may raise its preferential customs duty to a level not in excess of that set out in its Schedule of Tariff Commitments for that year. Such Party shall inform the other Party of the date from which the new preferential rate of customs duty comes into effect as early as practicable before such date.
Article 2.6: Classification of Goods
The classification of goods in trade between the Parties shall be in conformity with the Harmonized System (HS).
Article 2.7: Agricultural Export Subsidies
The Parties reaffirm their commitments made in the 2015 Ministerial Decision on Export Competition, adopted in Nairobi, including elimination of scheduled export subsidy entitlements for agriculture goods.
Article 2.8: Goods in Transit
Each Party shall continue to facilitate customs clearance of goods in transit from or to the other Party in accordance with paragraph 3 of Article V of GATT 1994 and the relevant provisions of the Trade Facilitation Agreement.
Article 2.9: Temporary Admission of Goods
1. Each Party shall allow, as provided for in its laws and regulations, goods to be brought into its customs territory conditionally relieved, totally or partially, from payment of import duties and taxes, if such goods:
2. Each Party shall, at the request of the person concerned and for reasons its customs authority considers valid, extend the time limit for duty-free temporary admission provided for in paragraph 1 beyond the period initially fixed.
3. Neither Party shall condition the duty-free temporary admission of a good provided for in paragraph 1, other than to require that the good:
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good in addition to any other charges or penalties provided for under its laws and regulations.
5. Each Party shall permit a good temporarily admitted under this Article to be re-exported through a customs port other than that through which it was admitted.
Article 2.10: Customs Valuation
For purposes of determining the customs value of goods traded between the Parties, Article VII of GATT 1994 and Part I of the Customs Valuation Agreement shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.11: Quantitative Restrictions and Non-Tariff Measures
1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any prohibition or restriction other than duties, taxes, or other charges, whether made effective through quotas, import or export licenses, or other measures, on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with its rights and obligations under the relevant provisions under the WTO Agreement. To this end, Article XI of GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. In this regard, a Party shall not adopt or maintain any non-tariff measure on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with its WTO rights and obligations or in accordance with this Agreement.
3. Each Party shall ensure the transparency of its non-tariff measures permitted under paragraph 2 and shall ensure that any such measures permitted under paragraph 2 and shall ensure that any such measures are not prepared, adopted, or applied with the view to or with the effect of creating unnecessary obstacles to trade between the Parties.
Article 2.12: Import Licensing
1. With respect to the rights and obligations of the Parties concerning import licensing, the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Within 30 days after the date of entry into force of this Agreement, each Party shall notify the other Party of its existing import licensing procedures[1], if any. The notification shall:
3. Before applying any new or modified import licensing procedure, a Party shall notify the other Party of the new procedure or modification, and to the extent possible, publish in an official government website at least 20 days before the new procedure or modification takes effect.
Article 2.13: Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994, that all fees and charges of whatever character (other than import or export duties, and other than taxes within the purview of Article III of GATT 1994, and any additional customs duty collected as a result of a measure consistent with Chapter Three (Trade Remedies)) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation on imports or exports for fiscal purposes.
2. Each Party shall promptly publish details of the fees and charges that it imposes in connection with importation or exportation and shall make such information available on the internet.
3. Neither Party shall require consular transactions, including related fees and charges, in connection with the importation of a good of the other Party.
Article 2.14: National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994. To this end, Article III of GATT 1994 shall be incorporated into and shall form part of this Agreement, mutatis mutandis.
Article 2.15: Agricultural Safeguard Measures
1. Notwithstanding Article 2.4, a Party may apply an agricultural safeguard measure only up to the end of that particular year when it was imposed, in the form of a higher import duty on an originating agricultural good listed in that Party’s Schedule to Annex 2-B, consistent with paragraphs 2 through 7 if the aggregate volume of imports of that good in any year exceeds a trigger level as set out in its Schedule to Annex 2-B.
2. The duty under paragraph 1 shall not exceed the lesser of:
3. The duties each Party applies under paragraph 1 shall be set according to the maximum duty that may be applied each year for each such good in the Party’s Schedule to Annex 2-B.
4. Neither Party may apply or maintain an agricultural safeguard measure and at the same time apply or maintain, with respect to the same good:
5. A Party shall implement any agricultural safeguard measure in a transparent manner. Within 60 days after imposing a measure, the Party applying the measure shall notify the other Party in writing and provide the other Party with relevant data concerning the measure. On the written request of the other Party, a Party shall consult with the other Party within 45 days upon receipt of the written request regarding the application of the measure.
6. The implementation and operation of this Article may be the subject of discussion and review in the Committee on Trade in Goods under Article 2.20.
7. Neither Party shall apply or maintain an agricultural safeguard measure on an originating agricultural good if the period specified in the agricultural safeguard provisions of the Party’s Schedule to Annex 2-B has expired.
Article 2.16: Sanitary and Phytosanitary Measures
1. The Parties affirm their existing rights and obligations with respect to each other under the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement.
2. Neither Party shall have recourse to Chapter Nine (Dispute Settlement) for any matter arising under this Article.
Article 2.17: Technical Barriers to Trade
The Parties affirm their existing rights and obligations with respect to each other under the Agreement on Technical Barriers to Trade, in Annex 1A to the WTO Agreement
Article 2.18: Modification of Concessions
In exceptional circumstances, where a Party faces unforeseen difficulties in implementing its tariff commitments, that Party may, subject to an agreement with the other Party, modify or withdraw a concession contained in its schedule of tariff commitments. In order to reach such agreement, a Party shall engage in negotiations with the other Party. In such negotiations, the Party proposing to modify or withdraw a concession shall maintain a level of reciprocal and mutually advantageous concessions no less favorable to the other Party than that provided for in this Agreement prior to such negotiations, which may include compensatory adjustments with respect to other goods. The mutually agreed outcome of the negotiations, including any compensatory adjustments, shall be incorporated into this Agreement in accordance with Article 12.2 (Amendments).
Article 2.19: Contact Points
The Parties shall exchange contact details of focal points for this Chapter in order to facilitate the communication and the exchange of information.
Article 2.20: Committee on Trade in Goods
1. The Parties hereby establish a Committee on Trade in Goods composed of government representatives of each Party.
2. The Committee on Trade in Goods may consider any matter arising under this Chapter, including Annex 2-A.
3. The functions of the Committee on Trade in Goods shall include:
4. The Committee on Trade in Goods shall strengthen their cooperation to facilitate the exchange of information between the competent authorities of the Parties, for purposes of carrying out the functions under paragraph 3.
5. The Committee on Trade in Goods shall meet at least once a year or as otherwise agreed. Meetings may be conducted in person or by any technological means available to the Parties.
6. The Committee on Trade in Goods shall report to the Joint Committee on the results of its meetings.
ANNEX 2-A
REDUCTION OR ELIMINATION OF CUSTOMS DUTIES
1. The following staging categories apply to the reduction or elimination of customs duties by each Party pursuant to Article 2.4.1:
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(a)
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customs duties on originating goods provided for in the items in staging category “Cat O” in a Party’s Schedule shall be eliminated entirely and such goods shall be free of any customs duty on the date of entry into force of this Agreement;
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||
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(b)
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customs duties on originating goods provided for in the items in the following staging categories in a Party’s Schedule shall be eliminated from the base rate beginning on the date this Agreement enters into force as follows, and as indicated in each Party’s Tariff Schedule:
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||
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(i)
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for originating goods in staging category “Cat 3” in a Party’s Schedule, such goods shall be free of any customs duty effective 1 January of year 3;
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||
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(ii)
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for originating goods in staging category “Cat 5” in a Party’s Schedule, such goods shall be free of any customs duty effective 1 January of year 5;
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||
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(iii)
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for originating goods in staging category “Cat 7” in a Party’s Schedule, such goods shall be free of any customs duty effective 1 January of year 7;
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||
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(iv)
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for originating goods in staging category “Cat 10” in a Party’s Schedule, such goods shall be free of any customs duty effective 1 January of year 10; and
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||
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(v)
|
for originating goods in staging category “Cat 15” in a Party’s Schedule, such goods shall be free of any customs duty effective 1 January of year 15.
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||
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(c)
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customs duties on originating goods provided for in the items in staging category “SL” in a Party’s Schedule shall be reduced from the base rate to the end rates as indicated in each Party’s Tariff Schedule.
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||
2. The originating goods provided for in the items in staging category “EX” in a Party’s Schedule shall be excluded from any commitment of reduction or elimination of customs duties.
3. The base rate of customs duty set out in a Party’s Schedule to this Annex reflects the lower of each Party’s MFN applied customs duty rates in effect on 1 January 2018, and its preferential customs duty rates under the ASEAN-Korea FTA, in effect on 1 January 2016.
4. The interim rate of customs duty at each stage of reduction for an item is to be indicated in each Party’s Schedule.
5. For purposes of this Annex and a Party’s Schedule, year one means the year this Agreement enters into force as provided for in Article 12.5 (Entry into Force).
6. For purposes of this Annex and as indicated in each Party’s Schedule, beginning in year two, each annual stage of tariff reduction shall take effect on 1 January of the relevant year.
7. The Parties shall ensure that the transposition of HS code shall not affect the value of tariff concessions under this Annex.
8. For the Philippines, the provisions of its Tariff Schedule are generally expressed in terms of the ASEAN Harmonized Tariff Nomenclature of the Philippines (AHTN), and the interpretation of the provisions of its Schedule shall be governed by the General Notes, Section Notes, and Chapter Notes of the AHTN. To the extent that provisions of its Schedule are identical to the corresponding provisions of the AHTN, the provisions of its Schedule shall have the same meaning as the corresponding provisions of the AHTN.
9. For Korea, the provisions of its Tariff Schedule are generally expressed in terms of the Harmonized Tariff Schedule of Korea (HSK), and the interpretation of the provisions of its Schedule shall be governed by the General Notes, Section Notes, and Chapter Notes of the HSK. To the extent that provisions of its Schedule are identical to the corresponding provisions of the HSK, the provisions of its Schedule shall have the same meaning as the corresponding provisions of the HSK.
ANNEX 2-B
AGRICULTURAL SAFEGUARD MEASURES
Schedule of Korea
1. This Annex sets out those originating goods that may be subject to agricultural safeguard measures under Article 2.15, the trigger levels for applying such measures, and the maximum duty that may be applied each year for each such good.
2. For greater certainty, no agricultural safeguard measures may be applied or maintained on originating goods after the date the safeguard duties set out below are zero for such goods.
For banana as covered below;
Coverage: HSK provision 0803900000
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Year
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1
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2
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3
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4
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5
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6
|
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Trigger Level (MT)
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322,687
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325,687
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328,687
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331,687
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334,687
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337,687
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|
Safeguard Duty (%)
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30
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30
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30
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30
|
30
|
27
|
|
Year
|
7
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8
|
9
|
10
|
11
|
|
Trigger Level (MT)
|
340,687
|
343,687
|
346,687
|
349,687
|
N/A
|
|
Safeguard Duty (%)
|
24
|
21
|
18
|
15
|
0
|
CHAPTER THREE
TRADE REMEDIES
Section A: Safeguard Measures
Article 3.1: Definitions
For purposes of this Section:
bilateral transitional safeguard measure means a measure described m Article 3.2;
domestic industry means, with respect to an imported good, the producers as a whole of the like or directly competitive good operating in the territory of a Party, or those whose collective output of the like or directly competitive good constitutes a major proportion of the total domestic production of that good;
serious injury means a significant overall impairment in the position of a domestic industry;
substantial cause means a cause that is important and not less than any other cause;
threat of serious injury means serious injury that, on the basis of facts and not merely on allegation, conjecture, or remote possibility, is clearly imminent; and
transition period means, in relation to a particular good, the period from the date of entry into force of this Agreement until three years after the date of completion of tariff reduction or elimination in accordance with a Party’s schedule of tariff commitments in Annex 2-A (Reduction or Elimination of Customs Duties).
Article 3.2: Application of a Bilateral Transitional Safeguard Measure
1. If, as a result of the reduction or elimination of a customs duty under this Agreement, an originating good of the other Party is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions that the imports of such originating good from the other Party constitute a substantial cause of serious injury, or threat thereof, to a domestic industry producing a like or directly competitive good in the territory of the importing Party, the Party may take a bilateral transitional safeguard measure in the form of:
Article 3.3: Conditions and Limitations
1. A Party shall notify the other Party in writing on the initiation of an investigation described in paragraph 2 and shall consult with the other Party as far in advance as practicable prior to applying a bilateral transitional safeguard measure, with a view to reviewing the information arising from the investigation and exchanging views on the bilateral transitional safeguard measure.
2. A Party shall apply a bilateral transitional safeguard measure only following an investigation by the Party’s competent authorities in accordance with Articles 3 and 4.2(c) of the Safeguards Agreement, which are incorporated into and made part of this Agreement, mutatis mutandis.
3. In the investigation described in paragraph 2, the Party shall comply with the requirements of Articles 4.2(a) and 4.2(b) of the Safeguards Agreement, which are incorporated into and made a part of this Agreement, mutatis mutandis.
4. Each Party shall ensure that its competent authorities complete any such investigation within one year from the date of its initiation.
5. Neither Party shall apply a bilateral transitional safeguard measure:
6. A Party may apply a bilateral transitional safeguard measure more than once against the same good, if deemed necessary, provided that at least two years has elapsed since the completion of the period of application of a bilateral transitional safeguard measure on the import of that product.
8. When a Party terminates a bilateral transitional safeguard measure, the customs duty rate shall be the rate that, according to the Party’s Schedule in Annex 2-A (Reduction or Elimination of Customs Duties), would have been in effect but for the measure.
Article 3.4: Provisional Measures
1. In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral transitional safeguard measure on a provisional basis pursuant to a preliminary determination by its competent authorities that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and such imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry.
2. Before a Party’s competent authorities may make a preliminary determination, the Party shall publish a public notice setting out how interested parties, including importers and exporters, may obtain a non-confidential copy of the application requesting a provisional safeguard measure, and shall provide interested parties at least 20 days after the date it publishes the notice to submit evidence and views regarding the application of a provisional measure. A Party may not apply a provisional measure until at least 45 days after the date its competent authorities initiate an investigation.
3. The applying Party shall notify the other Party before applying a provisional safeguard measure, and, on the request of the other Party, shall initiate consultations after applying the measure.
4. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of Articles 3.3.2 and 3.3.3.
5. The applying Party shall promptly refund any tariff increase if the investigation described in Article 3.3.2 does not result in a finding that the requirements of Article 3.2 are met. The duration of any provisional measure shall be counted as part of the period described in Article 3.3.5(b).
Article 3.5: Compensation
1. No later than 30 days after it applies a bilateral transitional safeguard measure, the applying Party shall afford an opportunity for the other Party to consult with it regarding appropriate trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the bilateral transitional safeguard measure. The applying Party shall provide such compensation as the Parties mutually agree.
2. If the Parties are unable to agree on compensation through consultations under paragraph I within 30 days from the beginning of the consultations, the Party against whose originating good the bilateral transitional safeguard measure is applied may suspend the application of concessions with respect to originating goods of the applying Party that have trade effects substantially equivalent to the safeguard measure.
3. The applying Party’s obligation to provide compensation under paragraph 1 and the other Party’s right to suspend concessions under paragraph 2 shall terminate on the date the bilateral transitional safeguard measure terminates.
4. Any compensation shall be based on the total period of application of the bilateral transitional safeguard measure, which includes the provisional safeguard measures under Article 3.4.
5. The right of suspension referred to in paragraph 2 shall not be exercised for the first 24 months during which a bilateral transitional safeguard measure is in effect, provided that the bilateral transitional safeguard measure has been applied as a result of an absolute increase in imports and that the bilateral transitional safeguard measure conforms to the provisions of this Agreement.
Article 3.6: Global Safeguard Measures
1. Each Party retains its rights and obligations under Article XIX of GATT 1994 and the Safeguards Agreement. This Agreement does not confer any additional rights or obligations on the Parties with regard to actions taken under Article XIX of GATT 1994 and the Safeguards Agreement. In taking measures under these WTO provisions, a Party shall, in accordance with WTO rules, exclude imports of an originating product from the other Party if such imports do not in and of themselves cause or threaten to cause serious injury.
2. Upon request of the other Party, the Party intending to take safeguard measures shall promptly provide written notification of all pertinent information on the initiation of a safeguard investigation, the preliminary determination, and the final finding of the investigation.
3. Neither Party shall apply, with respect to the same good, at the same time:
Section B: Anti-Dumping and Countervailing Duties
Article 3.7: General Provisions
1. Except as otherwise provided for in this Agreement, each Party retains its rights and obligations under the WTO Agreement with regard to the application of anti-dumping and countervailing duties.
2. The Parties shall ensure, immediately after any imposition of provisional measures and in any case before the final determination, full and meaningful disclosure of all essential facts and considerations which form the basis for the decision to apply measures, without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Disclosures shall be made in writing, and interested parties shall be allowed sufficient time to make their comments.
3. The Parties shall observe the following practices in anti-dumping or countervailing cases between them in order to enhance transparency in the implementation of the WTO Agreement:
Article 3.8: Notification and Consultations
1. Upon receipt by a Party’s competent authorities of a properly documented anti-dumping application with respect to imports from the other Party, and no later than 15 days before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application and afford the other Party a meeting or other similar opportunities regarding the application, consistent with the Party’s laws and regulations.
2. Upon receipt by a Party’s competent authorities of a properly documented countervailing duty application with respect to imports from the other Party, and before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application and afford the other Party a meeting to consult with its competent authorities regarding the application.
Article 3.9: Undertakings
1. After a Party’s competent authorities initiate an anti-dumping or countervailing duty investigation, the Party shall transmit to the other Party’s embassy or competent authorities written information regarding the Party’s procedures for requesting its authorities to consider an undertaking on price including the timeframes for offering and concluding any such undertaking, if practicable.
2. In an anti-dumping investigation, where a Party’s competent authorities have made a preliminary affirmative determination of dumping and injury caused by such dumping, the Party shall afford due consideration and adequate opportunity for consultations to exporters of the other Party regarding proposed price undertakings which, if accepted, may result in suspension of the investigation without imposition of anti-dumping duties, through the means provided for in the Party’s laws, regulations, and procedures.
3. In a countervailing duty investigation, where a Party’s competent authorities have made a preliminary affirmative determination of subsidization and injury caused by such subsidization, the Party shall afford due consideration and adequate opportunity for consultations to the other Party and exporters of the other Party regarding proposed undertakings on price which, if accepted, may result in suspension of the investigation without imposition of countervailing duties, through the means provided for in the Party’s laws, regulations, and procedures.
Article 3.10: Investigation after Termination Resulting from a Review
The Parties agree to examine, with special care, any application for initiation of an anti-dumping investigation on a good originating in the other Party and on which anti-dumping measures have been terminated in the previous 12 months as a result of a review. Unless this pre-initiation examination indicates that the circumstances have changed, the investigation shall not proceed.
Section C: Committee on Trade Remedies
Article 3.11: Committee on Trade Remedies
1. The Parties hereby establish a Committee on Trade Remedies (hereinafter referred to as the “Committee”), comprising representatives at an appropriate level from relevant agencies of each Party who have responsibility for trade remedies matters, including anti-dumping, subsidies and countervailing measures, and safeguards issues.
2. The functions of the Committee shall include:
3. The Committee shall meet at least once a year and may meet more frequently as the Parties may agree.
CHAPTER FOUR
RULES OF ORIGIN
Article 4.1: Definitions
For purposes of this Chapter:
Cost, Insurance, and Freight (CIF) means the value of the good imported and includes the cost of freight and insurance up to the port or place of entry into the country of importation, in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement;
Free on Board (FOB) means the free on board value of a good, inclusive of the cost of transport, from the producer to the port or site of final shipment abroad, in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement;
fungible materials means materials that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another for origin purposes by virtue of any markings or mere visual examination;
materials means ingredients, raw materials, components, parts, or accessories used in the production of goods;
packing materials and containers for transportation means the goods used to protect goods during their transportation, different from those materials or containers used for their retail sale;
preferential tariff treatment means tariff concessions granted to originating goods as reflected by the tariff rates applicable under this Agreement;
Product Specific Rules (PSR) means the rules that specify that the materials have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy a regional value content or a combination of any of these criteria; and
production means methods of obtaining goods including growing, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting, manufacturing, producing, processing, or assembling goods.
Article 4.2: Origin Criteria
For purposes of this Agreement, goods shall be considered as originating in a Party if they have been:
and meet all other applicable requirements of this Chapter.
Article 4.3: Wholly Obtained or Produced Goods
For purposes of Article 4.2(a), the following goods shall be considered as wholly obtained or produced entirely in the territory of a Party:
Article 4.4: Not Wholly Obtained or Produced Goods
1. For purposes of Article 4.2(b), goods shall be considered originating if the regional value content (hereinafter referred to as the “RVC”) is not less than 40 percent of the FOB value or the goods have undergone a change in tariff classification at four digit-level (change in tariff heading) of the HS as a general rule except those covered in Annex 4-B.
2. For purposes of Article 4.2(b), the RVC shall be calculated m accordance with any of the following methods:
(a) Build-Up Method
VOM means value of originating materials, which includes the value of originating materials, direct labor cost, direct overhead cost, transportation cost, and profit.
(b) Build-Down Method
VNM means value of non-originating materials, which shall be:
Article 4.5: De Minimis
1. Goods that do not undergo a change in tariff classification shall be considered as originating if:
and the goods specified in subparagraphs (a) and (b) meet all other applicable criteria set forth in this Chapter for qualifying as originating goods.
2. The value of non-originating materials referred to in paragraph 1 shall, however, be included in the value of non-originating materials for any applicable RVC requirement for the goods.
Article 4.6: Minimal Operations
1. Notwithstanding any provision in this Chapter, goods shall not be considered as originating in a Party if they have undergone only one or a combination of any of the following operations or processes in the territory of that Party:
2. For purposes of paragraph 1, simple describes operations or processes which do not need special skills, or machines, apparatus, or equipment especially produced or installed to carry out the operation or process.
3. Goods originating in the territory of a Party shall retain their initial originating status when exported from the other Party, where operations undertaken have not gone beyond those referred to in paragraph 1.
Article 4.7: Accumulation of Origin
Unless otherwise provided for in this Chapter, goods originating in the territory of a Party, which are used in the territory of the other Party as materials for finished goods eligible for preferential tariff treatment, shall be considered to be originating in the territory of the latter Party where working or processing of the finished goods has taken place.
Article 4.8: Treatment for Certain Goods
Notwithstanding Article 4.2, certain goods shall be considered to be originating even if they have undergone working or processing outside the Parties, on materials exported from a Party and subsequently re-imported there, provided that the working or processing is done in the areas designated by the Parties pursuant to Annex 4-C.
Article 4.9: Intermediate Goods
When originating goods are used in the subsequent production of other goods, no account shall be taken of the non-originating materials contained in the originating goods for purposes of determining the originating status of the subsequently produced goods.
Article 4.10: Treatment of Packaging and Packing Materials
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1.
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(a)
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If the goods are subject to the RVC criterion as set out in Article 4.4, the value of the packaging and packing materials for retail sale shall be taken into account in the determination of origin, where the packaging and packing materials are considered to be taken as a whole with the goods.
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(b)
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Where subparagraph (a) is not applicable, the packaging and packing materials for retail sale, when classified together with the packaged goods, shall not be taken into account in considering whether all non-originating materials used in the manufacture of the goods fulfil the criterion corresponding to a change in tariff classification or a specific manufacturing or processing operation of the said goods.
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2. Packing materials and containers for transportation of goods shall not be taken into account in determining the origin of the goods.
Article 4.11: Sets
1. Sets, as defined in Rule 3 of the General Rules for the Interpretation of the Harmonized System, shall be considered as originating when all the components of the sets are originating.
2. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be considered as originating, provided that the value of the non-originating goods determined in accordance with Article 4.4 does not exceed 10 percent of the FOB value of the set.
Article 4.12: Accessories, Spare Parts, and Tools
1. For purposes of determining the originating status of goods, accessories, spare parts, tools, and instructional or other information materials presented with the good shall be considered as part of those goods and shall be disregarded in determining whether all the non-originating materials used in the production of the goods have undergone the applicable change in tariff classification or a specific manufacturing or processing operation set out in Annex 4-B, provided that:
2. Notwithstanding paragraph 1, if the goods are subject to the RVC criterion, the value of the accessories, spare parts, tools, and instructional or other information materials presented with the goods shall be taken into account as originating materials or non-originating materials, as the case may be, in calculating the RVC of the goods provided that:
Article 4.13: Neutral Elements
In order to determine whether goods are originating, it shall not be necessary to determine the origin of the following which might be used in its production and not incorporated into the goods:
Article 4.14: Fungible Materials
1. For purposes of establishing the origin of goods, when the goods are manufactured utilizing originating and non-originating materials, mixed or physically combined, the origin of such materials can be determined by generally accepted accounting principles of inventory management practiced in the territory of the exporting Party.
2. Once an inventory management method has been chosen, it must be used throughout the fiscal year.
Article 4.15: Direct Consignment
1. Preferential tariff treatment shall be applied to goods satisfying the requirements of this Chapter and which are transported directly between the territories of the exporting Party and the importing Party.
2. Notwithstanding paragraph 1, goods which involve transit through one or more non-Parties, other than the territories of the Parties, shall be considered to be consigned directly, provided that:
3. For purposes of implementing paragraph 2, where transportation is effected through the territory of one or more intermediate countries, other than that of the exporting Party and the importing Party, the following shall be produced to the relevant government authorities of the importing Party:
Article 4.16: Proof of Origin
A claim that goods shall be accepted as eligible for preferential tariff treatment shall be supported by a Proof of Origin, in accordance with the Operational Certification Procedures, as set out in Annex 4-A.
Article 4.17: Denial of Preferential Treatment
The importing Party may deny preferential tariff treatment or recover unpaid customs duties in accordance with its laws and regulations, where goods do not meet the requirements of this Chapter or where the importer or exporter fails to demonstrate compliance with the relevant requirements.
Article 4.18: Confidentiality
1. The Parties shall maintain, in accordance with their respective laws and regulations, the confidentiality of classified business information collected in the process of verification pursuant to Rule 15 of Annex 4-A and shall protect that information from disclosure that could prejudice the competitive position of the person who provided the information.
2. Subject to the laws and regulations and agreement of the Parties, classified information may only be disclosed by the authorities of a Party to the other Party, for the administration and enforcement of origin determination.
Article 4.19: Penalties
Each Party shall ensure, in accordance with its laws and regulations, that appropriate penalties, sanctions, or other measures are imposed for violations of the laws and regulations related to this Chapter.
Article 4.20: Transitional Provisions for Goods in Transit or Storage
The provisions of this Agreement may be applied to goods which, on the date of entry into force of this Agreement, are either in transit or in temporary storage in a customs warehouse or free zone under customs control. For such goods, a Proof of Origin may be completed retrospectively up to three months after the entry into force of this Agreement, provided that the provisions of this Chapter have been fulfilled.
Article 4.21: Product Specific Rules Transposition
For purposes of the transposition of the Product Specific Rules (PSR) set out in Annex 4-B as a result of the amendments to the HS, the following subparagraphs shall apply:
Article 4.22: Consultations
The Parties shall consult regularly to ensure that provisions in this Chapter are administered effectively, uniformly, and consistently in order to achieve the spirit and objectives of this Chapter.
Article 4. 23 Committee on Rules of Origin and Customs Procedures
The Parties hereby establish a Committee on Rules of Origin and Customs Procedures pursuant to Article 5.21 (Committee on Rules of Origin and Customs Procedures).
Article 4.24: Review and Modification
1. This Chapter may be reviewed and modified as and when necessary upon request of a Party and may be open to such reviews and modifications as may be agreed upon in the Joint Committee established under Article 11.1 (Joint Committee).
2. Annexes and Appendices of this Chapter may be modified through amendments endorsed by the Joint Committee. The amendments shall enter into force 60 days after the date on which the Parties have notified in writing the completion of their applicable legal procedures or on such date as the Parties may agree.
ANNEX 4-A
OPERATIONAL CERTIFICATION PROCEDURES
FOR THE RULES OF ORIGIN UNDER CHAPTER FOUR
For purposes of implementing Chapter 4, the following operational procedures on the issuance of Proof of Origin, verification of origin and other related administrative matters shall be observed:
Rule 1: Definitions
For purposes of this Annex:
Rule 2: Proof of Origin
1. The Proof of Origin may be in the form of:
2. The Parties shall implement the Certificate of Origin and approved exporter regimes upon the entry into force of this Agreement. In addition, the Origin Declaration by exporter or producer shall be implemented no later than 10 years after the date of entry into force of this Agreement.
Rule 3: Specimen Signatures and Official Seals of the Issuing Body
1. Each Party shall provide a list of the names, addresses, specimen signatures, and specimen of official seals of its issuing body, in hard copy or soft copy format, through the contact points. Any change in the said list shall be promptly provided in the same manner.
2. The specimen signatures and official seals of the issuing body shall be updated annually. A Certificate of Origin (Form PH-KR) issued by an official not included in the list referred to in paragraph 1 shall not be honored by the receiving Party.
3. Notwithstanding paragraphs 1 and 2, a Party shall not be required to provide the specimen signatures of its issuing body to the other Party, provided that it has established a secured website containing key information of the Certificate of Origin (Form PH-KR) issued by the exporting Party, namely reference number, HS code, description of the goods, quantity, date of issuance, and name of the exporter.
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4.
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(a)
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Immediately after the grant of an approved exporter status, each Party shall include the following information in a Party’s secured website:
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(i)
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approved exporter Authorization Code;
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(ii)
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Issuance date and expiry date, if applicable, of an Approved Exporter Authorization;
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(b)
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A Party that has no secured website shall be required to promptly notify the other party of the information referred to in subparagraph (a), through its contact points.
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(c)
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Each Party shall notify the other Party on a regular basis of the following information, through its contact points:
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(i)
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Legal name and address of the company;
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(ii)
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List of products subject of the authorization, including product description HS in six digits[2]; and
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(iii)
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List of authorized signatories and their respective specimen signatures, not exceeding 10 persons[3] per company[4].
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(d)
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Any change in sub-subparagraphs (i) through (iii) of paragraph 4(c) shall be notified in the same manner. Withdrawal or suspension of authorizations shall also be notified in the same manner.
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5. Notwithstanding sub-subparagraph (iii) of paragraph 4(c), a Party shall not be required to provide the specimen signatures of its authorized signatories to the other Party, provided that it has established a secured website containing key information of the approved exporters authorized by the customs authority of the exporting Party.
6. An Origin Declaration made out by an approved exporter not included in the secured website or not notified shall not be honored by the receiving Party.
Rule 4: Electronic Origin Data Exchange System
The Parties endeavor to develop an Electronic Origin Data Exchange System to ensure the effective and efficient implementation of Chapter 4 in a manner jointly determined by the Parties.
Rule 5: Supporting Documents
1. For purposes of determining originating status, the issuing body shall have the right to request for supporting documentary evidence or to carry out checks considered appropriate in accordance with the laws and regulations of a Party.
2. The Parties are encouraged to allow the submission of electronic supporting documents, if available, to carry out checks related to a Certificate of Origin (Form PH-KR) issued by the issuing body considered appropriate, in accordance with the laws and regulations of a Party.
Rule 6: Pre-exportation Examination
1. The producer or exporter, or its authorized representative, shall apply to the issuing body, in accordance with the Party’s laws and regulations, requesting for pre-exportation examination of the origin of the goods.
2. The result of the examination, subject to review periodically or whenever appropriate, shall be accepted as the supporting evidence in determining the origin of said goods to be exported thereafter. The pre-exportation examination may not apply to goods of which, by their nature, origin can be easily determined.
Rule 7: Certificate of Origin (Form PH-KR)
1. The producer or exporter, or its authorized representative, shall apply for a Certificate of Origin (Form PH-KR) referred to in Rule 2.1(a), together with appropriate supporting documents, proving that the goods to be exported qualify for the issuance of a Certificate of Origin (Form PH-KR), consistent with the laws and regulations of the Parties.
2. The issuing body shall, to the best of its competence and ability, carry out proper examination, in accordance with the laws and regulations of the Party, upon each application for a Certification of Origin (Form PH-KR) to ensure that:
3. Multiple items declared on the same Certificate of Origin (Form PH-KR) shall be allowed, provided that each item must qualify separately on its own merit.
4. A Certificate of Origin (Form PH-KR) shall be on an A4 size paper and shall be in the form set out in Appendix 4-A-l. It shall be made in the English language. The Certificate of Origin (Form PH-KR) shall reflect the FOB value in Box 9 only when the RVC criterion is applied.
5. A Certificate of Origin (Form PH-KR) shall comprise of one original and two copies (duplicate and triplicate). It shall bear a reference number separately given by each place or office of issuance.
6. The original copy shall be forwarded by the producer or exporter to the importer for submission to the customs authority of the importing Party. The duplicate shall be retained by the issuing body of the exporting Party. The triplicate shall be retained by the producer or exporter.
7. The issuing body shall annually provide records of issued and accepted Certificates of Origin (Form PH-KR), including issuing number and date, producer or exporter, and description of goods, to the customs authority of the importing Party.
8. For purposes of claiming preferential tariff treatment, the importer shall submit to the customs authority of the importing Party at the time of import an import declaration, a Certificate of Origin (Form PH-KR), including supporting documents (i.e. invoices and, when required, the through Bill of Lading issued in the territory of the exporting Party) and other documents as required in accordance with the laws and regulations of the importing Party.
9. In cases where a Certificate of Origin (Form PH-KR) is rejected by the customs authority of the importing Party, the issuing body shall be duly notified of the grounds for the denial of preferential tariff treatment.
10. In cases where a Certificate of Origin (Form PH-KR) is not accepted, as stated in paragraph 9, the customs authority of the importing Party, as it deems fit, shall accept and consider the clarifications made by the customs authority or issuing body and determine whether the Certificate of Origin (Form PH-KR) will be accepted for the grant of preferential tariff treatment. The clarifications should be detailed and exhaustive in addressing the grounds for denial of preferential tariff treatment raised by the importing Party. The decision for the grant or denial of preferential tariff treatment shall be notified to the issuing body within three months from the date of receipt of the clarifications.
11. Neither erasures nor superimpositions shall be allowed on a Certificate of Origin (Form PH-KR). Any alteration shall be made by striking out the erroneous entries and provide any additional information required. Such alterations shall be approved by an official authorized to sign a Certificate of Origin (Form PH-KR) and certified by the issuing body. Unused spaces shall be crossed out to prevent any subsequent addition. Alternatively, a new Certificate of Origin (Form PH-KR) may be issued to replace the erroneous Certificate of Origin (Form PH-KR). The issuing body shall specify the date of issuance of the originally issued Certificate of Origin (Form PH-KR) in the new Certificate of Origin (Form PH-KR).
12. A Certificate of Origin (Form PH-KR) shall be issued prior to or at the time of exportation or soon thereafter but not more than three working days from the date of shipment, whenever the goods to be exported can be considered to be originating in the territory of the exporting Party within the meaning of Chapter 4.
13. In exceptional cases where a Certificate of Origin (Form PH-KR) has not been issued prior to or at the time of exportation or no later than three working days from the date of shipment due to involuntary errors, omissions, or other valid causes, a Certificate of Origin (Form PH-KR) may be issued retroactively but no later than one year from the date of shipment, bearing the words “ISSUED RETROACTIVELY”.
14. In the event of theft, loss, or destruction of a Certificate of Origin (Form PH-KR), the producer or exporter may apply in writing or electronically to the issuing body for a certified true copy of the original to be made out on the basis of the export documents in its possession bearing the endorsement of the words “CERTIFIED TRUE COPY” in box 12 of the Certificate of Origin (Form PH-KR). This copy shall bear the date of issuance of the original Certificate of Origin (Form PH-KR). The certified true copy of the Certificate of Origin (Form PH-KR) shall be issued no later than one year from the date of issuance of the original Certificate of Origin (Form PH-KR).
Rule 8: Approved Exporter
1. The customs authority of the exporting Party may authorize an exporter who makes shipments of goods under this Agreement (hereinafter referred to as “approved exporter”) to complete Origin Declarations with regard to the originating status of the goods concerned. An exporter seeking such authorization must apply, in writing or electronically, and must offer to the satisfaction of the customs authority all guarantees necessary to verify the originating status of the goods for which an Origin Declaration was completed.
2. The customs authority may grant the status of approved exporter subject to any conditions which it considers appropriate, including the following:
3. The customs authority shall:
4. An approved exporter shall have the following obligations:
5. The customs authority shall monitor the proper use of the authorization, including verification of the correctness of Origin Declarations completed. Decisions on the frequency and depth of such actions should be risk-based. Furthermore, the customs authority will act on retrospective verification requests by the customs authority of the importing Party, in conformity with Rule 15.
6. An approved exporter may, at his own discretion, apply for a Certificate of Origin (Form PH-KR) in place of completing an Origin Declaration.
7. The customs authority may withdraw the authorization at any time. They shall do so where the approved exporter no longer offers the guarantees referred to in paragraph 1, no longer fulfils the conditions referred to in paragraph 2, or otherwise abuses the authorization.
Rule 9: Origin Declaration
1. Each Party shall provide that an importer may make a claim for preferential tariff treatment based on a written or electronic Origin Declaration referred to in Rule 2.1(b) and Rules 2.1(c). The Origin Declaration may be in the forms set out in Appendix 4-A-2.
2. The Origin Declaration referred to in paragraph 1 shall:
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(a)
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be completed in the English language; and
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(b)
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include the following information:
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(i)
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the name of the certifying person, including, contact details for obtaining identifying information;
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(ii)
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the importer of the goods;
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(iii)
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the exporter of the goods (if different from the producer);
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(iv)
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the producer of the goods (if known);
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(v)
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the six-digit classification(s) under the HS and the description of the goods;
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(vi)
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the origin criterion under which the goods qualify;
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(vii)
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date of the Origin Declaration; and
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(viii)
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in case of blanket declaration issued as set out in paragraph 4(b), the period that the Origin Declaration covers.
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3. Each Party shall provide that where an exporter in its territory is not the producer of the goods, the exporter may complete and sign an Origin Declaration on the basis of:
4. Each Party shall provide that an Origin Declaration referred to in Rule 2.1(b) and Rule 2.1(c), duly completed and signed by an exporter or producer in the territory of the other Party, is applicable to:
5. The Origin Declaration by an approved exporter referred to in Rule 2.1(b) shall be completed on the commercial invoice. However, if the Origin Declaration cannot be completed on the commercial invoice at the time of exportation, it may be completed on any of the following commercial documents: billing statement, delivery order, or packing list, and will be accepted at the time of importation if submitted together with the commercial invoice.
Rule 10: Validity Period of the Proof of Origin
The following period for the presentation of the Proof of Origin shall be observed:
Rule 11: Claims for Preferential Tariff Treatment
1. Except as otherwise provided for in Chapter 4, each Party shall require an importer in its territory that claims preferential tariff treatment to:
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(a)
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make a declaration in the customs declaration that the goods qualify as originating goods;
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(b)
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have in its possession the valid Proof of Origin referred to in Rule 2.1(b) or Rule 2.1(c) at the time the statement referred to in subparagraph (a) is made;
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(c)
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have in its possession the documents which certify that the requirements established in Article 4.15 have been met, where applicable; and
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(d)
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submit the valid Proof of Origin, as well as documents referred to in subparagraph (c) to the customs authority, when it is required.
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2. Where an importer has a reason to believe that a Proof of Origin on which a statement was based contained incorrect information, the importer shall make a corrected statement and pay, if any, customs duty owed.
Rule 12: Post-Importation Claims for Preferential Tariff Treatment
1. An importing Party shall provide that, where originating goods were imported into its territory, an importer may make a claim for preferential tariff treatment and apply for a refund of any excess duties paid within one year from the date of importation, or such longer period as specified in the laws and regulations of the importing Party, upon presentation to the customs authority of the importing Party of the following:
2. Notwithstanding paragraph 1, each Party may require, in accordance with its laws and regulations, that the importer, at the time of importation, indicate to the customs authority of the importing Party its intention to claim preferential tariff treatment.
Rule 13: Waiver of Proof of Origin
A Proof of Origin shall not be required for:
provided that the importation does not form part of one or more importations that may reasonably be considered to have been undertaken or arranged for purposes of avoiding the submission of a Proof of Origin.
Rule 14: Treatment of Minor Discrepancies
1. Where the origin of the goods is not in doubt, the discovery of minor discrepancies, such as typographical errors, between the statements made in the Proof of Origin and those made in the documents submitted to the customs authority of the importing Party for purposes of carrying out the formalities for importing the goods, shall not ipso facto invalidate the Proof of Origin if it does in fact correspond to the goods submitted.
2. For multiple items declared under the same Proof of Origin, a problem encountered with one of the items listed shall not affect or delay the granting of preferential tariff treatment and customs clearance of the remaining items listed in the Proof of Origin. Rule 15.3(d) may be applied to the goods in question.
Rule 15: Verification
1. For purposes of determining whether goods imported into the territory of a Party from the territory of the other Party qualify as originating, the customs authority of the importing Party may conduct a verification in the following order:
The Parties may agree to any other procedures in the future, which may be conducted at any stage of the verification process.
2. For purposes of paragraph 1(a) and paragraph 1(b):
3. Where the customs authority of the importing Party requests assistance under paragraph 1(c):
4. Where the customs authority of the importing Party intends to conduct verification under paragraph 1(d):
Rule 16: Record Keeping Requirement
1. Each Party shall require that:
2. These records may be maintained in any medium that allows for prompt retrieval, including digital, electronic, optical, magnetic, or written form, in accordance with a Party’s laws and regulations.
Rule 17: Special Cases
When destination of all or parts of the goods exported to the territory of a specified Party is changed, before or after its arrival in the territory of that Party, the following shall be observed:
Rule 18: Exhibition of Goods
1. Notwithstanding Article 4.15, goods sent from the territory of the exporting Party for exhibition in another country and sold during or after the exhibition for importation into the territory of a Party shall be granted preferential tariff treatment on the condition that the goods meet the requirements as set out in Chapter 4, provided that they are shown to the satisfaction of the customs authority of the importing Party that:
2. For purposes of implementing paragraph 1, a Proof of Origin shall be provided to the relevant government authorities of the importing Party. The name and address of the exhibition shall be indicated. As evidence for the identification of the goods and the conditions under which they were exhibited, a certificate issued by the customs authorities of the country where the exhibition took place together with supporting documents prescribed in Article 4.15.3 may be required.
3. Paragraph 1 shall apply to any trade, agricultural or crafts exhibition, fair or similar show, or display in shops or business premises with a view to the sale of foreign goods and where the goods remain under customs control during the exhibition.
Rule 19: Third Party Invoicing
1. A claim for preferential tariff treatment with an invoice issued by a company other than the exporter shall be accepted, provided that the goods meet the requirements of Chapter 4.
2. For purposes of paragraph 1, the exporter of the goods shall indicate “third party invoice” and such information as name and country of the company issuing the invoice shall appear in the Proof of Origin.
Rule 20: Customs Contact Points
1. Each Party shall designate a contact point for all matters relating to this Annex.
2. When the contact point of a Party raises any matter arising from Chapter 4 to the contact point of any other Party, the customs authority of the latter Party shall assign its own experts to look into the matter and to respond with its findings and proposed solution for resolving the matter within a reasonable period of time.
3. The contact points shall endeavor to resolve any matter raised under Chapter 4, through consultations.
APPENDIX 4-A-1
CERTIFICATE OF ORIGIN
Original (Duplicate/Triplicate)
| 1. Goods consigned from (Exporter’s business name, address, country) | Reference No. PHILIPPINES-KOREA FREE TRADE
PREFERENTIAL TARIFF
CERTIFICATE OF ORIGIN
(Combined Declaration and Certificate)
FORM PH-KR
Issued in _________
(Country)
(See Overleaf Notes)
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| 2.Goods consigned to (importer’s name, address, country) | |||||
| 3. Means of transport and route (as far as known) Departure date: Port of Discharge: |
4. For Official Use Preferential Treatment Given under PH-KR Free Trade Agreement Preferential Tariff Preferential Treatment Not Given (Please state reason/s) ………………………………………………………………………………….
Signature of Authorized Signatory of the Importing Country |
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| 5. Item number |
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11. Declaration by the exporter
…………………………………………………
(Country)
…………………………………………………
(Importing Country)
…………………………………………………
Place and date, signature of authorized signatory |
12. Certification
………………………………………………………………………………….
Place and date, signature and stamp of certifying authority |
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| 13. Third Party Invoicing o Exhibition | |||||
- Parties which accept this form for purposes of preferential tariff under the Philippines-Korea Free Trade Agreement (PH-KR FTA) are the Philippines and Korea.
- CONDITIONS: To enjoy preferential tariff under the PH-KR FTA, goods sent to the Parties listed above:
(i)must fall within a description of goods eligible for concessions in the country of destination;(ii)must comply with the consignment conditions in accordance with Article 4.15 of Chapter Four of the PH-KR FTA; and(iii)must comply with the origin criteria in Chapter Four of the PH-KR FTA. - ORIGIN CRITERIA: For goods that meet the origin criteria, the exporter or producer must indicate in Box 8 of this Form, the origin criteria met, in the manner shown in the following table:
Circumstances of production or manufacture in the first country named in Box 11 of this formInsert in Box 8(a) Goods wholly obtained or produced in the territory of the exporting Party“WO”(b) Goods satisfying Article 4.4.1 of the PH-KR FTA“RVC 40 or CTH”(c) Goods satisfying the Product Specific RulesChange in Tariff Classification
Regional Value Content[Regional Value Content+ Change in Tariff Classification]
Specific Processes
“CTC”
“RVC” that needs to be met for the good to qualify as originating; e.g., “RVC 45%”
[The combination rule that needs to be met for goods to qualify as originating;
e.g., “CTH + RVC 40”]“Specific Processes”
(d) Goods produced entirely in the territory of a Party exclusively from materials originating in the Parties“PE” - EACH ARTICLE MUST QUALIFY: It should be noted that all the goods in a consignment must qualify separately in their own right. This is of particular relevance when similar articles of different sizes or spare parts are sent.
- DESCRIPTION OF GOODS: The description of goods in Box 7 must be sufficiently detailed to enable the goods to be identified by the Customs Officers examining them. Any trademark shall also be specified.
- FREE-ON-BOARD (FOB) VALUE: The FOB value in Box 9 shall be reflected only when the Regional Value Content criterion is applied in determining the origin of goods.
- HARMONIZED SYSTEM NUMBER: The Harmonized System number shall be that of the importing Party.
- EXPORTER: The term “Exporter” in Boxes 1 and 11 may include the manufacturer or the producer.
- FOR OFFICIAL USE: The Customs Authority of the importing Party must indicate (√) in the relevant boxes in column 4 whether or not preferential tariff is accorded.
- THIRD PARTY INVOICING: In cases where invoices are issued by a third Party, “Third Party Invoicing” box should be ticked (√) and such information as name and country of the company issuing the invoice shall be indicated in Box 13.
- EXHIBITIONS: In cases where goods are sent from the territory of the exporting Party for exhibition in another country and sold during or after the exhibition for importation into the territory of a Party, in accordance with Rule 18 of Annex 4-A, the “Exhibition” in Box 13 should be ticked (√) and the name and address of the exhibition indicated in box 2.
APPENDIX 4-A-2
ORIGIN DECLARATION
EXAMPLE A
Origin Declaration
The exporter or producer may certify on the commercial invoice or other document relating to the goods as follows:
I……………………… [state name and position] being the ……………………………. [exporter] [producer] [producer and exporter] (insert only that which applies) hereby declare that the goods enumerated on this commercial invoice are originating from [the Philippines] [the Republic of Korea] (insert only that which applies) and they comply with the provisions of Chapter 4 (Rules of Origin) of the Philippines-Korea Free Trade Agreement.
Observations/Findings:
Authorization Code _____________ Signature _____________ Date: _____________
Guidelines for Completing an Origin Declaration
The origin declaration shall be in the English language and includes the following information in the “observations/findings” field of the declaration (unless such information already appears on the export invoice in respect of the goods subject to the declaration):
EXAMPLE B
Origin Declaration
Philippines-Korea Free Trade Agreement
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1. Exporter’s Name and Address:
Telephone:
Fax:
E-Mail:
Authorization Code:
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2. Blanket Period:
From: _ _ _ _/_ _/_ _/ To: _ _ _ _/_ _/_ _/
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3. Producer’s Name and Address (if known):
Telephone:
Fax: E-Mail:
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4. Importer’s Name and Address:
Telephone: Fax:
E-Mail:
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5. Description of Goods
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6. HS Tariff Classification #
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7. Origin Criterion
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8. Producer
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9. RVC
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10. Country of Origin
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11. Observations/Findings:
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I certify that:
– The information in this document is true and accurate and I assume the responsibility for proving such representations. I understand that I am liable for any false statements or material omissions made on or in connection with this document.
– I agree to maintain, and present upon request, documentation necessary to support this declaration, and to inform, in writing, all persons to whom the declaration was given of any changes that would affect the accuracy or validity of this Declaration.
– The goods originate in the territory of one Party and comply with the origin requirements specified for those goods in the Free Trade Agreement between the Philippines and Korea.
This Declaration consists of ________ pages, including all attachments.
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12. Authorized signature:
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Company:
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Name:
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Title:
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Date: _ _ _ _ _ _/_ _ _ _ _ _/_ _ _ _ _ _ |
Telephone:
Fax: |
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Guidelines for Completing the Origin Declaration
Where the exporter or producer elects the option of using a declaration approach to an Origin Declaration, the following guidelines will assist in completing the form.
For purposes of obtaining preferential tariff treatment, this document shall be fully and legibly completed in written or typewritten form by the exporter and in the possession of the importer at the time the declaration is made. This document may also be completed voluntarily by the producer for use by the exporter. If more space is needed, additional pages shall be used.
Box 1: State the full legal name, address (including city and country), telephone number, fax number, e-mail address, authorization code of the exporter.
Box 2: Complete this Box if the declaration covers multiple shipments of identical goods as described in Box 5 that are imported into the Philippines and Korea for a specified period of up to 12 months (blanket period). “FROM” is the date upon which the declaration becomes applicable to the good covered by the blanket declaration (it may be earlier than the date this declaration is signed). “TO” is the date upon which the blanket period expires.
Box 3: If there is only one producer, state the full legal name, address (including city and country), telephone number, fax number, and e-mail address as defined in Box 1, of said producer. If more than one producer is included in the declaration, state “VARIOUS” and attach a list of all producers, including their legal names, addresses (including city and country), telephone numbers, fax numbers, and e-mail addresses, cross-referenced to the goods described in Box 5. If the information provided is confidential, the words “AVAILABLE TO CUSTOMS UPON REQUEST” shall be indicated.
Box 4: State the full legal name, address (including city and country), telephone number, fax number, and e-mail address of the importer.
Box 5: Provide a full description of the goods. The description shall contain sufficient detail consistent with the invoice description and to the Harmonized System (HS) description of the goods. If the declaration covers a single shipment of goods, the quantity and unit of measurement of the goods, including the series number, if possible, as well as the invoice number as shown on the commercial invoice shall be listed. If the invoice number is not known, another unique reference number, such as the shipping order number, purchase order number, or any other number that can be used to identify the goods, shall be indicated.
Box 6: For goods described in Box 5, the HS tariff classification to six digits shall be identified.
Box 7: For goods described in Box 5, the applicable criterion set out below A through C shall be stated.
In order to be entitled to preferential tariff treatment, goods must meet at least one of the criterion set out in Article 4.2 (Origin Criteria) of the Philippines-Korea Free Trade Agreement.
- The good is “wholly obtained or produced entirely” in the territory of one Party, as referred to in Article 4.2(a).
- The good is produced entirely in the territory of one Party and satisfies the specific rule of origin, set out in Annex 4-B (Product Specific Rules), as referred to in Article 4.2(b).
- The good is produced entirely in the territory of one Party exclusively from originating materials as referred to in Article 4.2(c).
Box 8: For goods described in Box 5, the word “YES” shall be stated if the exporter is the producer of the goods. If the exporter is not the producer of the goods, the word “NO” shall be stated followed by (1), (2), or (3), depending on whether this declaration was based upon: (1) the exporter’s full knowledge of whether the goods qualify as an originating good; (2) exporter’s reliance on the producer’s written representation (other than an origin declaration) that the goods qualify as originating goods; or (3) a completed and signed origin declaration for the goods, voluntarily provided to the exporter by the producer.
Box 9: For goods described in Box 5, where the goods are subject to a Regional Value Content (RVC) requirement, “BD” shall be indicated if the RVC is calculated according to the Build-down method, or “BU” shall be indicated if the RVC is calculated in accordance with the Build-up method as set out in Article 4.4.
Box 10: The name of the country of origin shall be identified i.e.,”PH” for all originating goods exported to Korea; “KR” for all originating goods exported to the Philippines.
Box 11: This Box may be used when there are observations/findings relating to this declaration, such as, when the goods described in Box 5 have been subject to an advance ruling or a ruling on the classification or value of materials. The issuing authority and date of issuance shall be indicated.
Box 12: This Box shall be completed, signed, and dated by the exporter. When the declaration is completed by the producer for use by the exporter, it shall be completed, signed, and dated by the producer. The date to be indicated shall be the date the declaration was completed and signed.
ANNEX 4-B
PRODUCT SPECIFIC RULES
Headnote
1. The Product Specific Rules (PSR) or specific set of rules of origin that applies to a particular tariff subheading is set out immediately next to the description of the goods.
2. Where a tariff subheading is subject to alternative PSR (e.g. RVC 40 or CTH), the PSR will be considered to have been met if the goods satisfy one of the rules.
3. Where a tariff subheading is subject to a combination of PSR (e.g. RVC 40 and CC), the PSR will be considered to have been met if the goods satisfy all the rules.
4. Where a PSR involves the criterion of a change in tariff classification, each of the non-originating materials used in the production of goods shall be required to undergo the applicable change in tariff classification.
5. Where a PSR involves the criterion of a change in tariff classification and specifies certain exemptions either in a chapter, heading, or subheading, it is understood that materials classified in those excluded chapter, heading, or subheading are required to be originating for the goods to qualify as originating.
6. For purposes of this Annex:
chapter means the first two digits of the tariff classification under the HS;
heading means the first four digits of the tariff classification under the HS; and
subheading means the first six digits of the tariff classification under the HS.
7. For purposes of the Origin Conferring Criteria column of this Annex:
CC means that all non-originating materials used in the production of the goods have undergone a change in tariff classification at the two-digit level;
CTH means that all non-originating materials used in the production of the goods have undergone a change in tariff classification at the four-digit level;
CTSH means that all non-originating materials used in the production of the goods have undergone a change in tariff classification at the six-digit level;
RVC XX means that the goods must have a regional value content of not less than XX percent as calculated under Article 4.4; and
WO means that the goods must be wholly produced or obtained in accordance with Article 4.3.
CHAPTER FIVE
CUSTOMS PROCEDURES AND TRADE FACILITATION
Article 5.1: Definitions
For purposes of this Chapter:
competent authority means the authorities that are responsible under the law of each Party for the administration and enforcement of its customs laws and regulations;
customs laws and regulations means the statutory and regulatory provisions relating to the importation, exportation, movement, or storage of goods, the administration and enforcement of which are specifically charged to customs authorities, and any regulations made by customs authorities, under their statutory powers;
customs procedure means the measures applied by the customs authority of a Party to goods and to the means of transport that are subject to its customs laws and regulations;
express consignment means all goods imported by or through an enterprise that operates a consignment service for the expeditious cross-border movement of goods and assumes liability to the customs authority for those goods; and
means of transport means various types of vessels, vehicles, and aircrafts which enter or leave the customs territory of the Parties carrying persons, goods, or articles.
Article 5.2: Objectives
The objectives of this Chapter are to:
Article 5.3: Scope
This Chapter shall apply to customs procedures applied to goods traded between the Parties and the means of transport which enter or leave the customs territory of the Parties.
Article 5.4: Consistency
1. Each Party shall ensure consistent implementation and application of its customs laws and regulations throughout its customs territory. For greater certainty, this does not prevent the exercise of discretion granted to the customs authority of a Party where such discretion is granted by that Party’s customs laws and regulations, provided that the discretion is exercised consistently throughout that Party’s customs territory and in accordance with its customs laws and regulations.
2. In fulfilling the obligation in paragraph 1, each Party shall endeavor to adopt or maintain administrative measures to ensure consistent implementation and application of its customs laws and regulations throughout its customs territory, preferably by establishing an administrative mechanism which assures consistent application of the customs laws and regulations of that Party among its regional customs offices.
3. If a Party fails to comply with the obligations in paragraphs 1 and 2, the other Party may consult with that Party on the matter relating thereto in accordance with Article 5.20.
4. Each Party is encouraged to share with the other Party its practices and experiences relating to the administrative mechanism referred to in paragraph 2 with a view to improving the operations thereof.
Article 5.5: Transparency
1. Each Party shall promptly publish, on the internet to the extent possible, the following information in a non-discriminatory and easily accessible manner in order to enable governments, traders, and other interested persons to become acquainted with them:
2. In particular, each Party shall make available, and update to the extent possible and as appropriate, the following through the internet:
3. To the extent possible, when developing new, or amending existing, customs laws and regulations, each Party shall publish, or otherwise make readily available such proposed new or amended customs laws and regulations and provide a reasonable opportunity for interested persons to comment on the proposed customs laws and regulations, unless such advance notice is precluded.
4. Each Party shall, to the extent practicable and in a manner consistent with its domestic law and legal system, ensure that new or amended laws and regulations of general application related to the movement, release, and clearance of goods, including goods in transit, are published or information on them is otherwise made publicly available, as early as possible before their entry into force, in order to enable traders and other interested persons to become acquainted with them.
5. Nothing in this Article shall be construed as requiring the publication or provision of information other than in the language of the Party.
Article 5.6: Enquiry Points
Each Party shall designate one or more enquiry points to answer reasonable enquiries of interested persons concerning customs matters and to facilitate access to forms and documents required for importation, exportation, and transit.
Article 5.7: Customs Procedures
1. Each Party shall ensure that its customs procedures and practices are predictable, consistent, and transparent, and facilitate trade, including through the expeditious clearance of goods.
2. Customs procedures of each Party shall, where possible and to the extent permitted by its customs laws and regulations, conform with the standards and recommended practices of the World Customs Organization.
3. The customs authority of each Party shall review its customs procedures with a view to their simplification to facilitate trade.
Article 5.8: Pre-shipment Inspection
1. Each Party shall not require the use of pre-shipment inspections in relation to tariff classification and customs valuation.
2. Without prejudice to the rights of the Parties to use other types of pre shipment inspection not covered by paragraph 1, each Party is encouraged not to introduce or apply new requirements regarding their use.
3. Paragraph 2 refers to pre-shipment inspections covered by the Agreement on Pre-shipment Inspection, and does not preclude pre-shipment inspections for sanitary and phytosanitary purposes.
Article 5.9: Pre-arrival Processing
1. Each Party shall adopt or maintain procedures allowing for the submission of documents and other information required for the importation of goods in order to begin processing prior to the arrival of goods with a view to expediting the release of goods upon arrival.
2. Each Party shall provide, as appropriate, for advance lodging of documents and other information referred to in paragraph 1 in electronic format for pre-arrival processing of such documents.
Article 5.10: Advance Rulings
1. Each Party shall, to the extent permitted by its respective laws, regulations, and administrative determinations, prior to the importation of a good from a Party into its territory, issue a written advance ruling to an importer, exporter, or any person with a justifiable cause, or a representative thereof, who has submitted a written request containing all necessary information, with regard to:
2. A Party may require that an applicant have legal representation or registration in its territory. To the extent possible, such requirements shall not restrict the categories of persons eligible to apply for advance rulings, with particular consideration for the specific needs of small and medium-sized enterprises. These requirements shall be clear and transparent and not constitute a means of arbitrary or unjustifiable discrimination.
3. Each Party shall adopt or maintain procedures for issuing advance rulings which:
4. Each Party shall issue an advance ruling in the official language of the issuing Party or in the language it decides. The advance ruling shall be issued within 90 days to the applicant upon receipt of all necessary information. Each Party shall specify and make public such time period for the issuance of an advance ruling prior to such an application. Should the competent authority have reasonable grounds to issue the advance ruling later than the specified period, after the receipt of the application, it shall notify the applicant of the ground for such a delay prior to the end of the specified period.
5. A Party may decline to issue an advance ruling if the facts and circumstances forming the basis of the advance ruling are the subject of administrative or judicial review. A Party that declines to issue an advance ruling shall promptly notify the applicant in writing, setting forth the relevant facts, circumstances, and the basis for its decision to decline to issue the advance ruling.
6. A Party may reject applications for an advance ruling where the additional information requested, in writing, in accordance with paragraph 3(b) is not provided within a reasonable, specified period, which is determined at the time of the request for additional information and the Party requests the additional information from the applicant in writing.
7. Each Party shall provide that advance rulings shall be valid from the date they are issued, or another date specified in the ruling, provided that the laws, regulations, administrative rules, and facts and circumstances, on which the ruling is based remain unchanged. Subject to paragraph 8, an advance ruling shall be valid for at least three years unless a shorter period is provided for in the ruling due to the nature of the application, which shall be clearly stated in the advance ruling in accordance with the respective laws and regulations of the Parties.
8. Where a Party revokes, modifies, or invalidates an advance ruling, it shall promptly provide written notice to the applicant setting out the relevant facts and the basis for its decision, where:
9. Where a Party revokes, modifies, or invalidates advance rulings with retroactive effect, it may only do so where the ruling was based on incomplete, incorrect, false, or misleading information.
10. An advance ruling issued by a Party shall be binding on that Party in respect of the applicant that sought it.
11. Each Party shall publish, at a minimum:
12. Each Party may make publicly available any information on advance rulings which it considers to be of significant interest to other interested parties, taking into account the need to protect commercially confidential information.
Article 5.11: Release of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient release of goods in order to facilitate trade between the Parties. This paragraph shall not require a Party to release a good if its requirements for release have not been met.
2. Pursuant to paragraph 1, each Party shall adopt or maintain procedures that allow the goods to be cleared from customs within a period no longer than that required to ensure compliance with its customs laws and regulations and, to the extent possible, within 48 hours of the arrival of goods and lodgment of all the necessary information for customs clearance.
3. If any goods are selected for further examination, such an examination shall be limited to what is reasonable and necessary, and undertaken and completed without undue delay.
4. Each Party shall adopt or maintain procedures allowing the release of goods, prior to the final determination of customs duties, taxes, fees, and charges if such determination is not done prior to, or upon arrival or as rapidly as possible after arrival and provided that all other regulatory requirements have been met. As a condition for such release, a Party may require a guarantee in accordance with its laws and regulations that does not exceed the amount the Party requires to ensure payment of customs duties, taxes, fees, and charges ultimately due for the goods covered by the guarantee.
5. Nothing in these provisions shall affect the right of a Party to examine, detain, seize, confiscate, or deal with the goods in any manner consistent with its laws and regulations.
6. With a view to preventing avoidable loss or deterioration of perishable goods,[2] and provided that all regulatory requirements have been met, each Party shall provide for the release of perishable goods from customs control:
(a) under normal circumstances in the shortest possible time, and to the extent possible in less than six hours after the arrival of the goods and submission of the information required for release; and
(b) in exceptional circumstances where it would be appropriate to do so, outside the business hours of its customs authority.
7. Each Party shall give appropriate priority to perishable goods when scheduling any examinations that may be required.
8. Each Party shall either arrange or allow an importer to arrange for the proper storage of perishable goods pending their release. Each Party may require that any storage facilities arranged by the importer have been approved or designated by its relevant authorities. The movement of the goods to those storage facilities, including authorizations for the operator moving the goods, may be subject to the approval, where required, of the relevant authorities. Each Party shall, where practicable and consistent with domestic legislation, upon the request of the importer, provide for any procedures necessary for release to take place at those storage facilities.
Article 5.12: Application of Information Technology
1. The Parties shall, to the extent possible, apply information technology to support customs operations based on internationally accepted standards for expeditious customs clearance and release of goods.
2. The Parties shall, to the extent possible, use information technology that expedites customs procedures for the release of goods, including the submission of data before the arrival of the shipment of those goods, as well as electronic or automated systems for risk management targeting.
3. The Parties shall endeavor to make trade administration documents available to the public in electronic versions.
4. The Parties shall endeavor to accept trade administration documents submitted electronically as the legal equivalent of the paper version of these documents.
5. In developing initiatives which provide for the use of paperless trade administration, the Parties are encouraged to take into account international standards or methods made under the auspices of international organizations.
6. The Parties shall cooperate to enhance the acceptance of trade administration documents submitted electronically.
Article 5.13: Trade Facilitation Measures for Authorized Operators
1. Each Party shall provide additional trade facilitation measures related to import, export, or transit formalities and procedures, pursuant to paragraph 3, to operators who meet specified criteria, hereinafter called authorized operators. Alternatively, a Party may offer such trade facilitation measures through customs procedures generally available to all operators and is not required to establish a separate scheme.
2. The specified criteria to qualify as an authorized operator shall be related to compliance, or the risk of non-compliance, with requirements specified in a Party’s laws, regulations or procedures.
3. The trade facilitation measures provided pursuant to paragraph 1 shall include at least three of the following measures:[3]
4. Each Party is encouraged to develop authorized operator schemes on the basis of international standards, where such standards exist, except when such standards would be an inappropriate or ineffective means for the fulfilment of the legitimate objectives pursued.
5. In order to enhance the trade facilitation measures provided to operators, a Party shall afford to the other Party the possibility of negotiating mutual recognition of authorized operator schemes.
6. The Parties are encouraged to cooperate, where appropriate, in developing their respective authorized operator schemes using the contact points in Article 5.20 through the following:
Article 5.14: Risk Management
1. Each Party shall adopt or maintain a risk management system for customs control.
2. Each Party shall design and apply risk management in a manner so as to avoid arbitrary or unjustifiable discrimination, or disguised restrictions to international trade.
3. Each Party shall concentrate customs control and, to the extent possible, other relevant border controls, on high risk consignments and expedite the release of low risk consignments. Each Party may also select, on a random basis, consignments for such controls as part of its risk management.
4. Each Party shall base risk management on assessment of risk through appropriate selectivity criteria. Such selectivity criteria may include, inter alia, HS code, nature and description of the goods, country of origin, country from which the goods were shipped, value of the goods, compliance record of traders, and type of means of transport.
Article 5.15: Express Consignments
1. Each Party shall adopt or maintain customs procedures to expedite the clearance of express consignments for at least those goods entered through air cargo facilities while maintaining appropriate customs control and selection[4], by:
2. Nothing in paragraph I shall affect the right of a Party to examine, detain, seize, confiscate, or refuse the entry of goods, or to carry out postclearance audit, including in connection with the use of risk management systems. Further, nothing in paragraph 1 shall prevent a Party from requiring, as a condition for release, the submission of additional information and the fulfillment of non-automatic licensing requirements.
Article 5.16: Post-clearance Audit
1. With a view to expediting the release of goods, each Party shall adopt or maintain post-clearance audit to ensure compliance with customs and other related laws and regulations.
2. Each Party shall select a person or a consignment for post-clearance audit in a risk-based manner, which may include appropriate selectivity criteria. Each Party shall conduct post-clearance audits in a transparent manner. Where the person is involved in the audit process and conclusive results have been achieved, the Party shall, without delay, notify the person whose record is audited of the results, the person’s rights and obligations, and the reasons for the results.
3. The Parties acknowledge that the information obtained in post-clearance audit may be used in further administrative or judicial proceedings.
4. The Parties shall, wherever practicable, use the result of post-clearance audit in applying risk management.
Article 5.17: Time Release Studies
1. Each Party is encouraged to measure the time required for the release of goods by the customs authority periodically and in a consistent manner, and to publish the findings thereof, using tools such as the Guide to Measure the Time Required for the Release of Goods issued by World Customs Organization with a view to assessing their trade facilitation measures and considering opportunities for further improvement of the time required for the release of goods.
2. Each Party is encouraged to share its experiences in the time release studies referred to in paragraph 1, including methodologies used and bottlenecks identified.
Article 5.18: Review and Appeal
1. Each Party shall provide that any person to whom its customs authority issues an administrative decision[5] has the right, within its territory, to:
2. The legislation of a Party may require that an administrative appeal or review be initiated prior to a judicial appeal or review.
3. Each Party shall ensure that its procedures for appeal or review are carried out in a non-discriminatory manner.
4. Each Party shall ensure that, in cases where the decision on appeal or review under paragraph 1(a) is not given either:
the petitioner has the right to either further appeal to or further review by the administrative authority or the judicial authority or any other recourse to the judicial authority.[6]
5. Each Party shall ensure that the person referred to in paragraph 1 is provided with the reasons for the administrative decision so as to enable such a person to have recourse to procedures for appeal or review, where necessary.
6. Each Party shall ensure that the person referred to in paragraph 1 is not treated unfavorably merely because that person seeks review of an administrative decision or omission referred to in paragraph 1.
7. Each Party is encouraged to make the provisions of this Article applicable to an administrative decision issued by a relevant border agency other than its customs authority.
8. The decision, and the reasons for the decision, of an administrative or judicial review or appeal shall be provided in writing.
Article 5.19: Customs Cooperation
1. The customs authority of each Party may, as deemed appropriate, assist the customs authority of the other Party, in relation to:
2. Each Party shall, to the extent possible, provide the other Party with timely notice of any significant administrative change, modification of a law or regulation, or similar measure related to its laws or regulations that govern importations or exportations, that is likely to substantially affect the operation of this Chapter. The notice can be made in English or the Party’s language.
3. The customs authority of a Party may, as deemed appropriate, share with the other Party, information and experiences on development of customs administration.
4. The customs authorities of the Parties shall actively cooperate to resolve difficulties arising during the import and export clearance in each Party.
Article 5.20: Consultation on Customs Procedures and Trade Facilitation
1. A Party may at any time request consultations regarding any significant customs matter arising from the operation or implementation of this Chapter, providing relevant details related to the matter. Such consultation shall be conducted through the contact points and shall commence within 30 days following the date of the receipt of the request, unless the Parties determine otherwise.
2. In the event that such consultations fail to resolve the matter, the requesting Party may refer the matter to the Committee on Rules of Origin and Customs Procedures.
3. A Party shall designate one or more contact points for purposes of this Chapter. Information on the contact points shall be provided to the other Party and any changes of the said information shall be notified promptly.
Article 5.21: Committee on Rules of Origin and Customs Procedures
1. The Parties hereby establish a Committee on Rules of Origin and Customs Procedures (hereinafter referred to as the “Committee”), composed of the competent authorities and relevant government authorities[7] of the Parties. The Committee shall be responsible for addressing rules of origin, origin procedures, trade facilitation, and customs matters.
2. The Committee shall ensure the proper functioning of this Chapter and Chapter Four (Rules of Origin).
3. The functions of the Committee shall include:
4. The Committee may formulate resolutions, recommendations, or opinions which it considers necessary for the attainment of the common objectives and the functions of the mechanisms established under this Chapter and Chapter Four (Rules of Origin).
5. The Committee shall meet every year or as otherwise agreed.
6. The Committee shall report to the Joint Committee on the results of each of its meetings.
CHAPTER SIX
COMPETITION
Article 6.1: Definitions
For purposes of this Chapter:
Competition authority means:
Competition laws means:
Consumer protection law means:
Article 6.2: Objectives
The objectives of this Chapter are to promote competition in markets, and enhance economic efficiency and consumer welfare through the maintenance of competition laws to proscribe anti-competitive activities, and through bilateral cooperation on the development and implementation of competition laws between the Parties. The pursuit of these objectives will help secure the benefits of this Agreement, including the facilitation of trade and investment between the Parties.
Article 6.3: Basic Principles
- Each Party shall implement this Chapter in a manner consistent with the objectives of this Chapter.
- Acknowledging each Party’s rights and obligations under this Chapter, the Parties recognize:
(a)the sovereign rights of each Party to develop, set, administer and enforce its own competition laws and competition policies; and(b)the significant differences that exist between the Parties in capacity and level of development in the area of competition law and competition policy.
Article 6.4: Appropriate Measures against Anti-competitive Activities
- Each Party shall maintain competition laws to proscribe anticompetitive activities[1], and shall enforce those competition laws accordingly.
- Each Party shall maintain an authority or authorities to effectively implement its competition laws.
- Each Party shall ensure independence in decision-making by its authority or authorities in relation to the enforcement of its competition laws.
- Each Party shall apply and enforce its competition laws in a manner which does not discriminate on the basis of nationality.
- Each Party shall apply its competition laws to all persons or entities engaged in commercial activities. Any exclusions or exemptions from the application of each Party’s competition laws shall be transparent and based on grounds of public policy or public interest.
- Each Party shall make publicly available its competition laws, and any guidelines issued in relation to the administration of competition laws, excluding internal operating procedures.
- Each Party shall make public the grounds for any final decision or order to impose a sanction or remedy under its competition laws, and any appeal therefrom subject to:
(a)(i)its laws and regulations;(ii)its need to safeguard confidential information; or(iii)its need to safeguard information on grounds of public policy or public interest; and(b)redactions from the final decision or order based on any of the grounds in subparagraphs (a)(i) through (iii) above. - Each Party shall ensure that before a sanction or remedy is imposed on any person or entity for the violation of its competition laws, such person or entity is given the reasons in writing, where possible, for the allegations that its competition laws have been violated, and a fair opportunity to be heard and to present evidence.
- Each Party shall, subject to any redactions necessary to safeguard confidential information, make the grounds for any final decision or order to impose a sanction or remedy under its competition laws available to the person or entity subject to that sanction or remedy.
- Each Party shall ensure that any person or entity subject to the imposition of a sanction or remedy under its competition laws has access to an independent review of or appeal against that sanction or remedy.
- Each Party recognizes the importance of timeliness in the handling of competition cases.
Article 6.5: Cooperation
The Parties recognize the importance of cooperation between their respective competition authorities to promote effective competition law enforcement. To this end, the Parties may cooperate on issues relating to competition law enforcement, through their competition authorities, in a manner compatible with their respective laws, regulations, and important interests, and within their available resources. Such cooperation includes:
Article 6.6: Confidentiality of Information
- This Chapter shall not require the sharing of information by a Party which is contrary to that Party’s laws, regulations, and important interests.
- Where a Party requests confidential information under this Chapter, the requesting Party shall notify the requested Party of:
(a)the purpose of the request; and(b)the intended use of the requested information. - The sharing of confidential information between the Parties and the use of such information shall be based on mutually agreed terms and conditions between the Parties.
- If information shared under this Chapter is shared on a confidential basis, then, the Party receiving that information shall:
(a)maintain the confidentiality of the information received;(b)use it only for the purpose disclosed at the time of the request, unless otherwise authorized by the Party providing the information;(c)not use it as evidence in criminal proceedings carried out by a court or a judge unless, upon request of the Party receiving the information, such information was provided for such use in criminal proceedings through the diplomatic channel or other channel established in accordance with the laws of both Parties;(d)not disclose it to any other authority, person, or entity not authorized by the Party providing the information; and(e)comply with any other conditions required by the Party providing the information.
Article 6.7: Technical Cooperation and Capacity Building
The Parties agree that it is in their common interest to work together on technical cooperation activities to build necessary capacities to strengthen competition policy development and competition law enforcement, taking into account the availability of resources of the Parties. Technical cooperation activities may include:
Article 6.8: Non-Application of Dispute Settlement
Chapter Nine (Dispute Settlement) shall not apply to matters arising under this Chapter.
Article 6.9: Consultations
In order to foster understanding between the Parties, or to address specific matters that arise under this Chapter, each Party shall, upon the request of the other Party, enter into consultations. In its request, the requesting Party shall indicate, if relevant, how the matter affects its important interests, including trade or investment between the Parties. The requested Party shall accord full and sympathetic consideration to the concerns of the requesting Party.
Article 6.10: Consumer Protection
- The Parties recognize the importance of consumer protection laws and enforcement of such laws as well as cooperation between the Parties on matters related to consumer protection, in order to achieve the objectives set out in Article 6.2.
- Each Party shall adopt or maintain laws or regulations to proscribe the use in trade of misleading practices, or false or misleading descriptions.
- Each Party also recognizes the importance of improving awareness of, and access to, consumer redress mechanisms.
- The Parties may cooperate on matters of mutual interest related to consumer protection. Such cooperation shall be carried out in a manner compatible with each Party’s laws and regulations and within their available resources.
Article 6.11: State Enterprises
- Nothing in this Chapter shall be construed to prevent a Party from establishing or maintaining a State enterprise, entrusting enterprises with special or exclusive rights, or maintaining such rights.
- With respect to State enterprises and enterprises entrusted with special rights[2] or exclusive rights:
(a)Neither Party shall adopt or maintain any measure contrary to the principles contained in Article 6.4[3],[4]; and(b)The Parties shall ensure that such enterprises, specifically in relation to their commercial activities, are subject to their respective competition laws,insofar as the application of these principles and competition laws does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.
CHAPTER SEVEN
ECONOMIC AND TECHNICAL COOPERATION
Article 7.1: Basic Principles
1. Recognizing the importance of economic and technical cooperation in further strengthening trade, investments, and economic relations between the Parties and in support of the full utilization and implementation of this Agreement, the Parties shall undertake cooperation initiatives in areas of mutual interest and benefit in accordance with their domestic laws and regulations.
2. The Parties shall undertake cooperation between their respective governments, where necessary and appropriate, and shall endeavor to encourage and facilitate the participation of the private sector, academe, and other relevant organizations in the identification and implementation of cooperation initiatives.
3. Reaffirming the value of existing economic and technical cooperation mechanisms, other than those established under this Agreement, the Parties shall respect and encourage the continued implementation of their existing cooperation mechanisms.
Article 7.2: Scope of Cooperation
1. The Parties, on the basis of mutual benefit, shall explore and undertake cooperative activities focusing on the following areas:
2. The areas of cooperation shall cover priority sectors for trade and investment promotion as agreed by the Parties.
3. The Parties shall also pursue cooperation as set out in Annex 7-A, Annex 7-B, and Annex 7-C.
Article 7.3: Forms of Cooperation
The forms of economic and technical cooperation may include, but are not limited to:
Article 7.4: Resources
1. The Parties shall cooperate to employ the most effective means and endeavor to make available necessary financial and other resources for the implementation of economic and technical cooperation under this Chapter in accordance with their respective laws and regulations.
2. Taking into account the different levels of development and capacity, the Parties shall contribute appropriately to the cost of implementation, according to mutual agreement.
Article 7.5: Committee on Economic and Technical Cooperation
1. For purposes of the effective implementation and operation of this Chapter, a Committee on Economic and Technical Cooperation (hereinafter referred to as the “Committee”) shall be established to be co-chaired by senior officials from both Parties.
2. The functions of the Committee include, but are not limited to:
3. The Parties agree to employ efficient mechanisms and guidelines for the implementation of cooperation projects and activities under this Agreement, subject to their respective laws and regulations.
4. The Parties recognize the role of the Joint Commission on Trade and Economic Cooperation (JCTEC) established under the Memorandum of Understanding between the Department of Trade and Industry of the Republic of the Philippines and the Ministry of Trade, Industry and Energy of the Republic of Korea on Trade and Economic Cooperation in facilitating consultations, and promoting trade, investment, and economic cooperation between the private and public sectors of the Parties.
5. Unless the Parties agree otherwise, the Committee shall meet at least once a year. The meeting may be conducted in person or by any technological means available to the Parties.
6. The Parties agree on an Implementing Arrangement building upon and complementing existing bilateral and regional economic cooperation projects, initiatives, and activities.
7. The Committee may establish sub-committees, as may be necessary, to effectively implement the cooperation projects and activities under this Chapter and those in the Implementing Arrangement.
Article 7.6: Non-Application of Dispute Settlement
Dispute settlement mechanisms in this Agreement shall not apply to any matter arising under this Chapter.
Annex 7-A
Cooperation to Alleviate the Socioeconomic Impact of a Public Health
Emergency of International Concern and Pandemic[1]
General Provisions
1. The Parties recognize the right of each Party to institute measures necessary to secure national interests and safeguard public health, in accordance with GATT 1994, GATS, and other WTO covered agreements.
2. The Parties acknowledge that the Coronavirus disease 2019 (COVID-19) has presented a global challenge that requires a coordinated response to ensure the continued flow of goods, services, and personnel in the global supply chains.
3. The Parties recognize the potential for developing and undertaking appropriate activities in line with their development objectives to reinforce efforts to alleviate the socioeconomic impact of a Public Health Emergency of International Concern (PHEIC) and pandemic, including the COVID-19 pandemic.
4. The Parties agree to cooperate in strengthening the capacities to address future PHEIC and pandemics to facilitate an inclusive and sustainable economic recovery of both Parties, by working to ensure the flow of goods in global supply chains, facilitating the essential movement of people, and implementing cooperation activities and programs on trade and investments.
Working to Ensure the Flow of Goods in Global Supply Chains
5. The Parties acknowledge the importance of facilitating the flow of essential goods, particularly food, critical health and medical products including personal protection equipment and its raw materials, to the extent possible, in accordance with the Trade Facilitation Agreement and domestic laws and regulations.
6. The Parties shall endeavor to refrain from the introduction of export prohibitions or restrictions, and non-tariff barriers on essential goods, including food, pharmaceuticals, critical medical supplies, and its raw materials ensuring that such measures are targeted, proportionate, transparent, temporary and consistent with WTO rules.
Facilitating the Essential Movement of People
7. The Parties acknowledge the importance of facilitating the essential movement of people, including cross-border business travel, while ensuring to safeguard public health in line with their efforts to combat a PHEIC and pandemic as well as minimize its socioeconomic impacts.
8. The Parties also acknowledge the benefit of establishing guidelines to provide support and assistance to each other and to facilitate movement of people, including essential cross-border travel for the purpose of minimizing supply chain disruptions and ensuring business continuity, in accordance with domestic laws and regulations, and without undermining the efforts to prevent the spread of the virus.
9. The Parties shall endeavor to enhance cooperation to provide appropriate and adequate assistance to nationals of each other, especially the most vulnerable, who stay, work, and study in the other country, working towards the dignity, health and well-being, safety and fair and effective treatment of those affected by the pandemic.
Minimizing the Negative Impacts on Trade and Investment arising.from PHEIC and Pandemics to Facilitate an Inclusive and Sustainable Economic Recovery
10. The Parties may develop and implement cooperation activities and programs on trade and investments and share best practices on measures to facilitate an inclusive and sustainable economic recovery and minimize the negative impacts of PHEIC and pandemics, as mutually agreed by the Parties.
11. The Parties shall endeavor to implement joint initiatives with the private sector for the socioeconomic recovery of both Parties that include strengthening efforts to stabilize the manufacturing and supply of essential goods and services, including its raw materials, such as vital medical supplies and critical agricultural and food products, facilitate digital transformation, and improve access to finance.
12. The Parties shall endeavor to make relevant information publicly available and share best practices in a timely manner when adopting a measure with a foreseeable impact on international trade and investment.
Annex 7-B
Cooperation on Vaccine
General Provisions
1. The Parties, recognizing the impact that a pandemic such as COVID-19 has caused around the world, agree to cooperate in the area of vaccines to end the pandemic and address future global health threats.
2. The Parties also commit to work together, along with international institutions including the COYAX facility, to expand vaccine production and related supplies and manufacturing innovations to address current and future global health threats.
Cooperative Activities
3. The Parties will promote the collaboration between the enterprises of the Parties to accelerate the production and global supply of vaccines in times of global vaccine shortages by combining each of their strengths in the following areas:
4. The Parties will exchange information on domestic regulations, practices, and application process with regard to clinical trials and full approval of vaccines.
5. The Parties will endeavor to adopt expedited customs procedure for vaccine and raw material to produce vaccine while maintaining appropriate customs control.
Annex 7-C
Cooperation on Climate Change
General Provisions
1. The Parties recognize that climate change and its adverse effects are a common concern of humankind that require urgent and collective action.
2. The Parties reaffirm that the United Nations Framework Convention on Climate Change (hereinafter referred to as “UNFCCC”) lays the firm foundation for international efforts to combat climate change, and acknowledge that the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the Paris Agreement have been instrumental in implementing the UNFCCC.
Cooperative Activities
3. The Parties agree to develop and strengthen cooperation in enhancing capacities to adapt to and mitigate climate change in line with the implementation of their respective nationally determined contributions (NDCs).
4. In coordination with competent authorities, the Parties agree to promote public and private adaptation and mitigation programs or projects to achieve their NDC targets and to find means to use the internationally transferred mitigation outcomes (ITMOs) to support climate mitigation investments and mutually explore the benefits of market and non-market mechanisms under Article 6 of the Paris Agreement.
5. The Parties agree to cooperate on capacity building activities for the measurement, reporting and verification (MRV) of national inventories.
6. The Parties agree to organize seminars, symposia, workshops, and meetings on various topics of interest to both Parties to gain a deeper understanding of and exchange best practices and technological know-how on climate action.
CHAPTER EIGHT
TRANSPARENCY
Article 8.1: Definitions
For purposes of this Chapter:
administrative ruling of general application means an administrative ruling or interpretation that applies to all persons and fact situations that fall generally within its ambit and that establishes a norm of conduct but does not include:
Article 8.2: Publication
1. Each Party shall ensure that its laws, regulations, procedures, and administrative rulings of general application relating to any matter covered by this Agreement are promptly published or otherwise made publicly available.
2. To the extent possible, each Party, in accordance with its laws and regulations, shall:
Article 8.3: Provision of Information
Upon the request of a Party, the other Party shall promptly provide information and respond to questions pertaining to any actual or proposed measure referred to in Article 8.2 that the requesting Party considers might affect the operation of this Agreement.
Article 8.4: Administrative Proceedings
With a view to administering in a consistent, impartial, and reasonable manner its laws, regulations, procedures, and administrative rulings of general application relating to any matter covered by this Agreement, each Party shall ensure, in its administrative proceedings, in which these measures are applied to particular persons, goods, or services of the other Party in specific cases, that:
Article 8.5: Review and Appeal
1. In accordance with its laws and regulations, each Party shall establish or maintain judicial, quasi-judicial, or administrative tribunals or procedures for the purposes of the prompt review and, where warranted, correction of administrative actions relating to any matter covered by this Agreement. Such tribunals shall be impartial and independent of the office or authority entrusted with administrative enforcement and shall not have any substantial interest in the outcome of the matter.
2. Each Party shall ensure that, in such tribunals or procedures, the parties to the proceeding are provided with the right to:
3. Each Party shall ensure, subject to appeal or further review as provided for in its laws and regulations, that any decision referred to in subparagraph 2(b) shall be implemented by, and shall govern the practice of, the office or authority with respect to the administrative action at issue.
Article 8.6: Relation to other Chapters
In case of any inconsistency between the provisions of this Chapter and provisions relating to transparency in other Chapters, the latter shall prevail to the extent of the inconsistency.
CHAPTER NINE
DISPUTE SETTLEMENT
Article 9.1: Definitions
For purposes of this Chapter:
arbitration panel means a panel established under Article 9.7;
arbitrator means a member of an arbitration panel established under Article 9.7;
candidate means an individual who is under consideration for appointment as the third arbitrator under Article 9.9;
complaining Party means a Party that requests the establishment of an arbitration panel under Article 9.7; and
Party complained against means the Party that is alleged to be in violation of this Agreement, as referred to in Article 9.3.
Article 9.2: Objective
1. The objective of this Chapter is to provide an effective, efficient and transparent process for the avoidance and settlement of disputes arising under this Agreement.
2. The Parties shall, at all times, endeavor to agree on the interpretation and application of this Agreement and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of any matter raised in accordance with this Chapter.
Article 9.3: Scope
1. Except as otherwise provided for in this Agreement, this Chapter shall apply with respect to the avoidance or settlement of disputes between the Parties regarding the interpretation or application of this Agreement wherever a Party considers that:
2. This Chapter shall not apply to the settlement of disputes arising from the following: Article 2.16 (Sanitary and Phytosanitary Measures), Chapter Six (Competition), and Chapter Seven (Economic and Technical Cooperation).
Article 9.4: Choice of Forum
1. Where a dispute regarding any matter arises under this Agreement and under the WTO Agreement or any other agreement to which both Parties are party, the complaining Party may select the forum in which to settle the dispute.
2. Once the complaining Party has requested the establishment of, or referred a matter to, a dispute settlement panel under an agreement referred to in paragraph 1, the forum selected shall be used to the exclusion of other fora.
Article 9.5: Consultations
1. Each Party may request consultations with the other Party with respect to any matter relating to the interpretation and application of this Agreement, pursuant to Article 9.3.1.
2. The Party requesting consultations shall make the request in writing and shall give the reasons for the request, including the identification of the specific measure at issue and an indication of the factual and legal basis for the complaint.
3. The Party complained against shall reply within 10 days from the date of the receipt of the request for consultations.
4. The Parties shall enter into consultations in good faith within 30 days, or within 15 days in cases of urgency, including those concerning perishable goods, from the date of receipt of the request for consultations, with a view to reaching a mutually satisfactory solution. Unless the Parties otherwise agree, consultations shall take place in the territory of the Party complained against.
5. During consultations, the Parties shall provide sufficient information to enable a full examination of how the measure at issue might affect the implementation and application of this Agreement. The Parties shall treat any confidential information exchanged in the course of consultations on the same basis as the Party providing the information.
6. Consultations under this Article shall be confidential and without prejudice to the rights of either Party in any further proceedings.
Article 9.6: Good Offices, Conciliation, or Mediation
1. Good offices, conciliation, and mediation are procedures that may be undertaken voluntarily if the Parties to the dispute so agree.
2. Good offices, conciliation, or mediation may be requested at any time by either Party. They may begin at any time by agreement of the Parties and be terminated at any time upon the request of either Party.
3. If the Parties agree, good offices, conciliation, or mediation may continue while the proceedings of the arbitration panel provided for in this Chapter are in progress.
4. Proceedings involving good offices, conciliation, or mediation and, in particular, positions taken by the Parties during these proceedings, shall be confidential and without prejudice to the rights of either Party in any further proceedings.
Article 9.7: Establishment of the Arbitration Panel
1. The complaining Party that made a request for consultations under Article 9.5 may request the establishment of an arbitration panel if:
2. The request for the establishment of an arbitration panel shall be made in writing to the Party complained against. The complaining Party shall identify in its request the specific measure at issue, and the factual and legal basis for the complaint sufficient to present the problem clearly.
Article 9.8: Terms of Reference of the Arbitration Panel
Unless the Parties otherwise agree within 20 days from the date ofreceipt of the request for the establishment of an arbitration panel, the terms of reference of the arbitration panel shall be:
“To examine, in the light of the relevant provisions of this Agreement, the matter referred to in the request for the establishment of an arbitration panel pursuant to Article 9.7, to make findings, determinations, and, if applicable, recommendations and to present written reports as provided in Articles 9.12 and 9.13.”
Article 9.9: Composition of the Arbitration Panel
1. Unless otherwise agreed by the Parties, an arbitration panel shall consist of three arbitrators.
2. The complaining Party and the Party complained against shall, within 30 days from the date of receipt of the request for the establishment of the arbitration panel, each appoint one arbitrator who may be its national and propose up to three candidates to serve as the third arbitrator who shall be the chair of the arbitration panel. The candidates for the third arbitrator shall not be nationals of either Party, nor have their usual place of residence in the territory of either Party, nor be employed by either Party, nor have dealt with the dispute in any capacity.
3. The Parties shall endeavor to agree on and appoint the third arbitrator within 45 days from the date of receipt of the request for the establishment of the arbitration panel, taking into account the candidates proposed. If the Parties fail to agree upon and appoint the third arbitrator within 45 days, the Parties shall meet within seven days from the expiry of the 45 days and select the chair by lot from the list of candidates proposed by both Parties.
4. The date of the establishment of an arbitration panel shall be the date on which the third arbitrator is appointed.
5. All arbitrators shall have expertise or experience in law, international trade, or other matters relating to this Agreement, or in the resolution of disputes arising under international trade agreements. Each arbitrator shall be independent, serve in his or her individual capacity, and not be affiliated with, nor take instructions from, either Party or organization related to the dispute, and shall comply with Annex 9-B.
6. Where a Party considers that an arbitrator does not comply with the requirements of Annex 9-B, the Parties shall consult and replace, if so agreed, that arbitrator in accordance with paragraph 7.
7. If an arbitrator appointed under this Article resigns or becomes unable to participate in the proceedings, or is to be replaced according to paragraph 6, a successor shall be selected within 15 days in accordance with the appointment method provided for in paragraphs 2 and 3, mutatis mutandis. The successor shall have all the powers and duties of the original arbitrator. The work of the arbitration panel shall be suspended for a period beginning on the date the arbitrator resigns or becomes unable to participate in the proceedings, or is to be replaced according to paragraph 6. The work of the arbitration panel shall resume on the date the successor is appointed.
Article 9.10: Proceedings of the Arbitration Panel
1. The arbitration panel shall meet in closed sessions. The Parties shall be present at the meetings only when invited by the arbitration panel to appear before it.
2. The Parties shall be given the opportunity to provide at least one written submission and to attend any of the presentations, statements, or rebuttals in the proceedings. All information provided or written submissions made by a Party to the arbitration panel, including any comments on the interim report and responses to questions put by the arbitration panel, shall be made available to the other Party.
3. A Party asserting that a measure of the other Party is inconsistent with this Agreement shall have the burden of establishing such inconsistency. A Party asserting that a measure is subject to an exception under this Agreement shall have the burden of establishing that the exception applies.
4. The arbitration panel should consult with the Parties as appropriate and provide adequate opportunities for the development of a mutually satisfactory resolution.
5. The arbitration panel shall interpret this Agreement in accordance with the customary rules of interpretation of public international law, including the Vienna Convention on the Law of Treaties.
6. The arbitration panel shall make its decisions, including its reports, by consensus, provided that where an arbitration panel is unable to reach consensus, the decisions may be made by majority vote.
7. Upon the request of a Party, or on its own initiative, the arbitration panel may seek information from any relevant source and may consult experts to obtain their opinion or technical advice on certain aspects of the matter. Before doing so, the panel shall seek the views of the Parties to the dispute, without prejudice to its right to seek information. The arbitration panel shall provide the Parties with a copy of any advice or opinion obtained and an opportunity to provide comments.
8. The deliberations of the arbitration panel and the documents submitted to it shall be kept confidential.
9. Notwithstanding paragraph 8, either Party may make public statements as to its views regarding the dispute, but shall treat as confidential, information and written submissions delivered by the other Party to the arbitration panel which the other Party has designated as confidential. Where a Party has provided information or written submissions designated as confidential, that Party shall, within 20 days from the request of the other Party, provide a nonconfidential summary of the information or written submissions which may be disclosed publicly.
10. The reports of the arbitration panel shall be drafted without the presence of the Parties. The arbitration panel shall base its reports on the relevant provisions of this Agreement and the submissions and arguments of the Parties, and may take into account any other relevant information provided to the arbitration panel.
11. The reports of the arbitration panel shall contain both the descriptive parts summarizing the submissions and arguments of the Parties, and the findings and determinations of the arbitration panel. If the Parties agree, the arbitration panel may make recommendations for the resolution of the dispute in its reports. The findings and determinations and, if applicable, any recommendations of the arbitration panel cannot add to or diminish the rights and obligations of the Parties provided for in this Agreement.
12. The venue for the arbitration panel proceedings shall be decided by mutual agreement between the Parties. If there is no agreement, the venue shall alternate between the capitals of the Parties with the first meeting of the arbitration panel proceedings to be held in the capital of the Party complained against.
Article 9.11: Suspension or Termination of Proceedings
1. Where the Parties agree, the arbitration panel may suspend its work at any time for a period not exceeding 12 months from the date of such agreement. Upon the request of a Party, the arbitration panel proceedings shall be resumed after such suspension. In the event of such suspension, the timeframes regarding the work of the arbitration panel shall be extended by the amount of time that the work was suspended. If the work of the arbitration panel has been continuously suspended for more than 12 months, the authority of the arbitration panel shall lapse unless the Parties otherwise agree.
2. The Parties may agree to terminate the proceedings of an arbitration panel by jointly notifying the chair of the arbitration panel at any time before the issuance of the final report to the Parties.
3. Before the issuance of the final report to the Parties, the arbitration panel may, at any stage of the proceedings, propose to the Parties that the dispute be settled amicably.
Article 9.12: Interim Report
1. Unless the Parties otherwise agree, the arbitration panel shall, within 90 days from the date of the establishment of the arbitration panel, issue to the Parties an interim report containing the descriptive parts, the findings and determinations, and, if applicable, any recommendations as to:
as well as the applicability of the relevant provisions and the basic rationale behind any findings.
2. Where the arbitration panel considers that the deadline for the interim report cannot be met, it may extend the period with the consent of the Parties following a written notification stating the reasons for the delay and the date on which the panel plans to issue its interim report. Under no circumstances should the interim report be issued later than 120 days after the date of the establishment of the arbitration panel.
3. Either Party may submit written comments to the arbitration panel on its interim report within 15 days from the issuance of the report. After considering any written comments by the Parties on the interim report, the arbitration panel may modify its report and make any further examination it considers appropriate.
Article 9.13: Final Report
1. Unless the Parties otherwise agree, the arbitration panel shall issue a final report to the Parties within 30 days from the date of issuance of the interim report.
2. Where the arbitration panel considers that the deadline for its final report cannot be met, it may extend the period with the consent of the Parties following a written notification stating the reasons for the delay and the date on which the panel plans to issue its final report. Under no circumstances should the final report be issued later than 150 days after the date of the establishment of the arbitration panel.
3. In cases of urgency, including those concerning perishable goods, the arbitration panel shall make every effort to issue its interim and final reports within half of the respective time periods under Article 9.12.1 and Article 9.13.1.
Article 9.14: Implementation of the Final Report
1. The determinations set out in the final report of the arbitration panel shall be final and binding on the Parties.
2. If, in its final report, the arbitration panel determines that the Party complained against has not conformed to its obligations under the relevant provisions of this Agreement, unless the Parties otherwise agree, the Party complained against shall eliminate the non-conformity immediately, or if this is not practicable, within a reasonable period of time.
3. The reasonable period of time referred to in paragraph 2 shall be mutually agreed upon by the Parties. Where the Parties fail to agree on the reasonable period of time within 45 days from the date of issuance of the final report of the arbitration panel, either Party may refer the matter to the original arbitration panel, which shall determine the reasonable period of time.
4. The Party complained against shall notify the complaining Party of any measure that it has taken to comply with the determinations of the arbitration panel, before the expiry of the reasonable period of time agreed by the Parties or determined by the original arbitration panel in accordance with paragraph 3. Where there is disagreement between the Parties as to whether the Party complained against has eliminated the non-conformity as determined in the final report of the arbitration panel within the reasonable period of time as determined pursuant to paragraph 3, either Party may refer the matter to the original arbitration panel.
Article 9.15: Compensation and Suspension of Benefits
1. If the Party complained against fails to notify the complaining Party of the implementing measures before the expiry of the reasonable period of time, or notifies the complaining Party that implementation is impracticable, or the arbitration panel to which the matter is referred pursuant to Article 9.14.4 determines that the Party complained against has failed to eliminate the non conformity within the reasonable period of time, the Party complained against shall, if so requested, enter into negotiations with the complaining Party with a view to reaching a mutually satisfactory compensation.
2. If there is no agreement on satisfactory compensation within 20 days from the date of receipt of the request mentioned in paragraph 1, the complaining Party may, at any time, provide written notice to the Party complained against that it intends to suspend the application of benefits under this Agreement to the Party complained against. The complaining Party may begin suspending benefits 30 days after the notification of such suspension. The notification of suspension shall not be made within 20 days from the date of receipt of the request mentioned in paragraph 1.
3. The compensation referred to in paragraph 1 and the suspension referred to in paragraph 2 shall be temporary measures. Neither compensation nor suspension is preferred to full elimination of the non-conformity as determined in the report of the arbitration panel. The suspension shall only be applied until such time as the non-conformity is fully eliminated or a mutually satisfactory solution is reached.
4. In considering what benefits to suspend pursuant to paragraph 2:
5. If the Party complained against considers that the requirements for the suspension of benefits by the complaining Party set out in paragraph 2, 3, or 4 have not been met, it may refer the matter to an arbitration panel.
6. The arbitration panel that is established for purposes of this Article or Article 9.14 shall, wherever possible, have, as its arbitrators, the arbitrators of the original arbitration panel. If this is not possible, then the arbitrators of the arbitration panel that is established for purposes of this Article or Article 9.14 shall be appointed pursuant to Article 9.9. The arbitration panel established under this Article or Article 9.14 shall issue its report to the Parties within 20 days on the reasonable period of time and 45 days on the other issues after the date when the matter is referred to it. When the arbitration panel considers that it cannot issue its report within the aforementioned periods, the relevant period may be extended by the arbitration panel for a maximum of 30 days with the consent of the Parties. The report shall be binding on the Parties.
Article 9.16: Rules of Procedure
1. Dispute settlement proceedings under this Chapter shall be governed by the Rules of Procedure set out in Annex 9-A. The Parties, in consultation with the arbitration panel, may agree to adopt additional rules of procedures not inconsistent with the provisions of the Annex.
2. Any period of time or other rules of procedure for arbitration panel provided for in this Chapter or in Annex 9-A may be modified by mutual consent of the Parties.
Article 9.17: Expenses
1. Unless the Parties otherwise agree, each Party shall bear the costs of its appointed arbitrator and its own expenses and legal costs.
2. Unless the Parties otherwise agree, the costs of the chair of the arbitration panel and other expenses associated with the conduct of its proceedings shall be borne in equal shares by the Parties.
ANNEX 9-A
RULES OF PROCEDURE
Definitions
1. For purposes of this Annex:
adviser means a person retained by a Party to advise or assist that Party in connection with the arbitration panel proceedings;
assistant means a person who, under the terms of appointment of an arbitrator, conducts research or provides assistance to that arbitrator; and
representative of a Party means any person appointed by a Party according to its domestic laws and regulations.
Logistical Administration
2. In case the arbitration panel proceedings are held in the territory of a Party, that Party shall be in charge of the logistical administration of the arbitration proceedings, in particular the organization of hearings, unless the Parties otherwise agree.
Notifications
3. Any request, notice, written submissions, or other documents delivered by either Party or the arbitration panel shall be transmitted by delivery against receipt, registered post, courier, facsimile transmission, or any other means of telecommunication that provides a record of the sending thereof.
4. A Party shall provide a copy of each of its written submissions to the other Party and to each of the arbitrators. A copy of the document shall also be provided in electronic format.
5. All notifications shall be made and delivered to the Department of Trade and Industry of the Philippines and to the Ministry of Trade, Industry and Energy of Korea, respectively.
6. Minor errors of a clerical nature in any request, notice, written submission, or other document related to the arbitration panel proceedings may be corrected by delivery of a new document clearly indicating the changes.
7. If the last day for delivery[1] of a document falls on a legal holiday of either Party, the document may be delivered on the next business day.
First Submissions
8. The complaining Party shall deliver its first written submission no later than 30 days after the date of the establishment of the arbitration panel. The Party complained against shall deliver its written counter-submission no later than 30 days after the date of receipt of the complaining Party’s first written submission.
Operation of Arbitration Panels
9. The chair of the arbitration panel shall preside at all of its meetings. The arbitration panel may delegate to the chair the authority to make administrative and procedural decisions.
10. Except as otherwise provided for in this Chapter, the arbitration panel may conduct its activities by any means, including telephone, facsimile transmissions, or computer links.
11. Only arbitrators may take part in the deliberations of the arbitration panel, but the arbitration panel may permit assistants of the arbitrators to be present during such deliberations.
12. The drafting of any decision and ruling shall remain the exclusive responsibility of the arbitration panel and shall not be delegated.
13. Where a procedural question arises that is not covered by this Chapter, the arbitration panel, after consulting with the Parties, may adopt an appropriate procedure that is not inconsistent with this Chapter.
14. When the arbitration panel considers that there is a need to modify any time period set out in this Chapter applicable in the proceedings, or to make any other procedural or administrative adjustment in the proceedings, it shall inform the Parties in writing of the reasons for the modification or adjustment with an indication of the period or adjustment needed.
15. Unless the Parties otherwise agree, the remuneration and expenses to be paid to the arbitrators shall normally conform to WTO standards.
Hearings
16. Unless the Parties otherwise agree, the arbitration panel shall provide for at least one hearing for the Parties to present their case. The chair shall fix the date and time of the hearing in consultation with the Parties and the other members of the arbitration panel. The chair of the arbitration panel shall notify the Parties of the date, time, and location of the hearing in writing. That information shall also be made publicly available by the Party in charge of the logistical administration of the proceedings if the Parties decide to make the hearings open to the public in accordance with paragraph 21 of this Annex.
17. The arbitration panel may convene additional hearings if the Parties so agree.
18. All arbitrators shall be present during the entirety of any hearing.
19. Representatives of a Party, advisers to a Party, experts, administration staff, interpreters, translators, court reporters, and assistants of the arbitrators may attend the hearing(s), irrespective of whether the hearings are open to the public or not. Unless otherwise decided by the arbitration panel, only the representatives and advisers of a Party may address the arbitration panel.
20. No later than five days before the date of a hearing, each Party shall deliver to the arbitration panel a list of the names of those persons who will make oral arguments or presentations at the hearing on behalf of that Party and of the representatives, advisers, interpreters, and translators of that Party who will be attending the hearing.
21. The hearings of the arbitration panels shall be closed to the public. However, the Parties may decide to open the hearings partially or completely to the public.
22. Each hearing shall be conducted by the arbitration panel in a manner that ensures that the complaining Party and the Party complained against are afforded equal time for arguments, replies and counter-replies.
23. The arbitration panel may direct questions to either Party or experts at any time during a hearing.
24. The arbitration panel shall arrange for a transcript of each hearing to be prepared and shall, as soon as possible after it is prepared, deliver a copy of the transcript to the Parties. The Parties may comment on the transcript, and the arbitration panel shall decide whether to reflect those comments.
25. Within 10 days from the date of the hearing, each Party may deliver a supplementary written submission responding to any matter that arises during the hearing.
Questions in Writing
26. The arbitration panel may, at any time during the proceedings, address questions in writing to a Party or both Parties. The arbitration panel shall deliver the written questions to the Party to whom the questions are addressed and shall send a copy of the questions to the other Party.
27. The Party to whom the arbitration panel addresses written questions shall deliver a copy of any written reply to the other Party and to the arbitration panel. Each Party shall be given the opportunity to provide written comments on the reply within seven days from the date of receipt of the reply.
Ex Parte Communications
28. There shall be no ex parte communications with the arbitration panel concerning matters under consideration by the arbitration panel.
29. No arbitrator may discuss any aspect of the subject matter of the proceedings with a Party or both Parties in the absence of the other arbitrators.
Suspension of Time Periods on Request of Technical Advice
30. The arbitration panel, after consulting with the Parties and experts, may determine the time period in which the experts are to submit their opinion or advice. If the experts cannot submit their opinion or advice within the period established pursuant to the first sentence of this paragraph, the arbitration panel, after consulting with the Parties, may give additional time to experts. In no case shall this additional period exceed half of the period established pursuant to the first sentence of this paragraph.
31. When a request is made for a written report of an expert, any time period applicable to the arbitration panel proceedings shall be suspended for a period beginning on the date of delivery of the request and ending on the date the report is delivered to the arbitration panel.
Language
32. Unless the Parties otherwise agree, the common working language for the proceedings of the arbitration panel shall be English. If a Party decides to use interpretation during the proceedings, the arrangement and the cost of such interpretation shall be borne by that Party.
33. Any document submitted for use in any proceeding pursuant to this Chapter shall be in the English language. If any original document is not in the English language, the Party submitting it for use in the proceedings shall provide an English language translation of the document.
Computation of Time
34. All periods of time laid down in this Chapter shall be counted in calendar days, the first day being the day following the act or fact to which they refer.
35. Where, by reason of the operation of paragraph 7, a Party receives a document on a date other than the date on which the same document is received by the other Party, any period of time the calculation of which is dependent on such receipt shall be calculated from the last date of receipt of such document.
Other Proceedings
36. In accordance with Articles 9.14.3, 9.14.4, 9.15.5 and 9.15.6, the referring Party shall deliver its first written submission within 15 days from the date the referral is made, and the Party complained against shall deliver its written counter-submission within 15 days from the date of receipt of the first written submission.
37. If appropriate, the arbitration panel shall fix the time periods for delivering any further written submissions, including rebuttal written submissions, so as to provide each Party with the opportunity to make an equal number of written submissions subject to the time periods for arbitration panel proceedings set out in Articles 9.14 and 9.15 and this Annex.
38. Unless otherwise provided, this Annex is also applicable to procedures established under Articles 9.14 and 9.15.
ANNEX 9-B
CODE OF CONDUCT FOR ARBITRATORS
Definitions
1. For purposes of this Annex:
assistant means any person who, under the terms of appointment of an arbitrator, conducts research or provides assistance to the arbitrator; and
staff means persons under the direction and control of an arbitrator, other than assistants.
Responsibilities to the Process
2. Every candidate and arbitrator shall avoid impropriety and the appearance of impropriety, shall be independent and impartial, shall avoid direct and indirect conflict of interest, and shall observe high standards of conduct so that the integrity and impartiality of the dispute settlement proceedings are preserved. Former arbitrators must comply with the obligations established in paragraphs 15 through 18.
Disclosure Obligations
3. Prior to the confirmation of his or her appointment as an arbitrator under Article 9.9, a candidate shall disclose any interest, relationship, or matter that is likely to affect his or her independence or impartiality or that might reasonably create an appearance of impropriety or bias in the proceedings. To this end, a candidate shall make all reasonable efforts to become aware of any such interests, relationships, and matters.
4. Once appointed, an arbitrator shall continue to make all reasonable efforts to become aware of any interests, relationships, or matters referred to in paragraph 3 and shall disclose them. The obligation to disclose is a continuing duty which requires an arbitrator to disclose any such interests, relationships, or matters that may arise at any stage of the proceedings. The arbitrator shall disclose such interests, relationships, or matters by communicating them in writing to the Joint Committee for consideration by the Parties.
Duties of Arbitrators
5. Upon appointment, an arbitrator shall perform his or her duties thoroughly and expeditiously throughout the course of the proceedings.
6. An arbitrator shall carry out all duties fairly and diligently.
7. An arbitrator shall consider only those issues raised in the proceedings and necessary for a decision and shall not delegate the duty to decide to any other person.
8. An arbitrator shall take all appropriate steps to ensure that his or her assistants and staff are aware of and comply with paragraphs 2, 3, 4, 16, 17 and 18.
9. An arbitrator shall not engage in ex parte communications concerning the proceedings, in accordance with paragraphs 28 and 29 of Annex 9-A.
Independence and Impartiality of Members of Arbitration Panels
10. An arbitrator shall be independent and impartial. An arbitrator shall act in a fair manner, shall avoid creating an appearance of impropriety or bias, and shall not be influenced by self-interest, outside pressure, political considerations, public clamor, loyalty to a Party, or fear of criticism.
11. An arbitrator shall not, directly or indirectly, incur any obligation or accept any benefit that would in any way interfere, or appear to interfere, with the proper performance of the arbitrator’s duties.
12. An arbitrator shall not use his or her position on the arbitration panel to advance any personal or private interests. An arbitrator shall avoid actions that may create the impression that others are in a special position to influence the arbitrator.
13. An arbitrator shall not allow past or existing financial, business, professional, family, or social relationships or responsibilities to influence the arbitrator’s conduct or judgement.
14. An arbitrator shall avoid entering into any relationship, or acquiring any financial interest, that is likely to affect the arbitrator’s impartiality or that might reasonably create an appearance of impropriety or bias.
Obligations of Former Arbitrators
15. All former arbitrators must avoid actions that may create the appearance that they were biased in carrying out their duties or derived advantage from a decision or ruling of the arbitration panel.
Confidentiality
16. An arbitrator or former arbitrator shall not at any time disclose or use any non-public information concerning the proceedings, or acquired during the proceedings, except for the purposes of those proceedings and shall not, in any case, disclose or use any such information to gain personal advantage or advantage for others, or to adversely affect the interest of others.
17. An arbitrator shall not disclose an arbitration panel ruling or parts thereof prior to its publication.
18. An arbitrator or former arbitrator shall not at any time disclose the deliberations of an arbitration panel, or any arbitrator’s view.
CHAPTER TEN
EXCEPTIONS
Article 10.1: General Exceptions
For purposes of Chapter Two (Trade in Goods), Article XX of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Article 10.2: Security Exceptions
1. Nothing in this Agreement shall be construed to:
2. The Joint Committee shall be informed to the fullest extent possible of measures taken under subparagraphs 1(b) and (c) and of their termination.
Article 10.3: Taxation
1. Except as set out in this Article, nothing in this Agreement shall apply to taxation measures.
2. Nothing in this Agreement shall affect the rights and obligations of either Party under any tax convention. In the event of any inconsistency between this Agreement and any such tax convention, the latter shall prevail to the extent of the inconsistency. In the case of a tax convention between the Parties, the competent authorities under that convention shall have sole responsibility for jointly determining whether any inconsistency exists between this Agreement and that convention.
3. This Agreement shall only grant rights or impose obligations with respect to taxation measures where they are granted or imposed under Article 2.14 (National Treatment on Internal Taxation and Regulation) of Chapter Two (Trade in Goods), to the extent provided under Article III of GATT 1994.
4. For purposes of this Article:
Article 10.4: Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or allow access to confidential information the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private.
Article 10.5: Confidentiality
Unless otherwise provided in this Agreement, where a Party provides information to the other Party in accordance with this Agreement and designates such information as confidential, the other Party shall, subject to its laws and regulations, maintain the confidentiality of the information.
CHAPTER ELEVEN
INSTITUTIONAL ARRANGEMENTS
Article 11.1: Joint Committee
1. The Parties hereby establish a Joint Committee composed of relevant government officials of each Party. It shall be co-chaired by ministerial level officials of the Department of Trade and Industry of the Philippines, and the Ministry of Trade, Industry and Energy of Korea, or their respective designees.
2. The Joint Committee shall:
3. The Joint Committee may:
4. When a Party submits information considered as confidential under its laws and regulations to the Joint Committee, committees, working groups, or any other body, the other Party shall treat that information as confidential.
Article 11.2: Procedures of the Joint Committee
1. Unless the Parties otherwise agree, the Joint Committee shall meet within one year from the entry into force of this Agreement and, thereafter, convene:
2. The meetings of the Joint Committee may be held in person or, if agreed by the Parties, by any technological means available to them.
3. All decisions and recommendations of the Joint Committee shall be taken by mutual agreement.
Article 11.3: Committees and Working Groups
1. The following Committees, working groups, or any other bodies may be established under the auspices of the Joint Committee:
2. The composition, frequency of meetings, and functions of the committees, working groups, or any other bodies shall be in accordance with the relevant provisions of this Agreement or as determined by the Joint Committee consistent with this Agreement.
3. The committees, working groups, or any other bodies shall inform the Joint Committee of their schedules and agenda sufficiently in advance of their meetings. They shall report to the Joint Committee on their activities at each regular meeting of the Joint Committee.
4. The Joint Committee may decide to change or undertake the task assigned to a committee, working group or any other body or may dissolve a committee, working group, or any other body in accordance with the relevant provisions of this Agreement.
Article 11.4: Contact Points
1. In order to facilitate communications between the Parties on any trade matter covered by this Agreement, the Parties hereby establish the following contact points:
(a) for the Philippines, the Department of Trade and Industry, or its successor; and
(b) for Korea, the Ministry of Trade, Industry and Energy, or its successor.
2. Upon request of either Party, the contact point of the other Party shall indicate the office or official responsible for any matter relating to the implementation of this Agreement and provide the required support to facilitate communications with the requesting Party. Each Party shall promptly notify the other Party of any change in its contact point.
CHAPTER TWELVE
FINAL PROVISIONS
Article 12.1: Annexes, Appendices and Footnotes
The Annexes, Appendices and footnotes to this Agreement shall form an integral part of this Agreement.
Article 12.2: Amendments
The Parties may agree, in writing, to amend this Agreement. Any such amendments shall enter into force after the Parties exchange written notifications through diplomatic channels certifying that they have completed all necessary domestic legal procedures for the entry into force of the amendments, on such date as the Parties may agree. The amendments shall form an integral part of this Agreement.
Article 12.3: Amendments to the WTO Agreement
If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended, the Parties shall enter into consultations to consider amending the relevant provisions of this Agreement, as appropriate, in accordance with Article 12.2.
Article 12.4: Review of the Agreement
Five years after the date of the entry into force of this Agreement, and at any time thereafter, this Agreement shall be subject to review, upon the request of a Party, with a view to furthering its objectives.
Article 12.5: Entry into Force
This Agreement shall enter into force on the first day of the second month, or on such other date as the Parties may agree, following the date of the exchange of the written notifications through diplomatic channels, by which the Parties inform each other that all necessary domestic legal procedures for the entry into force of this Agreement have been completed.
Article 12.6: Termination
Either Party may terminate this Agreement by written notification through diplomatic channels to the other Party. Such termination shall take effect six months after the date of the notification.
Article 12.7: Authentic Texts
The English and Korean texts of this Agreement are equally authentic.
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.
DONE in duplicate at Jakarta, this seventh day of September, 2023, in the English and Korean languages.
| For the Government of the Republic of the Philippines: |
For the Government of the Republic of Korea: |
| (Sgd.) | (Sgd.) |
[1] Existing import licensing procedures being referred to in this paragraph are those which have not yet been notified to the WTO at the date of entry into force of this Agreement.
[1] The Parties understand that for purposes of determining the origin of goods of sea-fishing and other goods, the “rights to exploit” include those rights of access to the fisheries resources of a coastal State, as accruing from agreements or other arrangements concluded between a Party and the coastal State at the level of governments or duly authorized private entities.
[2] International law refers to generally accepted international law such as the United Nations Convention on the Law of the Sea.
[3] Simple mixing generally describes an activity which does not need special skills, or machines, apparatus, or equipment especially produced or installed for carrying out the activity. However, simple mixing does not include chemical reaction. Chemical reaction means a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.
[4] Slaughtering means the mere killing of animals and subsequent processes such as cutting, chilling, or freezing for the purpose of preservation for storage and transport.
[1] Such laws and regulations administered and enforced by the customs authority of each Party concerning the importation, exportation, and transit of goods as they relate to customs duties, charges, and other taxes or prohibitions, restrictions, and controls with respect to the movement of controlled items across the boundary of the customs authority of each Party.
[2] The necessity of retaining this requirement is subject to review after one year from the date of implementation of this Agreement.
[3] The necessity of retaining this requirement will be reviewed after one year from the date of implementation of this Agreement.
[4] The necessity of retaining this requirement is subject to review after one year from the date of implementation of this Agreement.
[5] This subparagraph shall apply to the approved exporter and Self-Declaration regimes.
[1] Each Party has the discretion to state on its website the legal limitations of this description.
[2] For purposes of this provision, perishable goods are goods that rapidly decay due to their natural characteristics, in particular, in the absence of appropriate storage conditions.
[3] A measure listed in subparagraphs (a) through (g) will be deemed to be provided to authorized operators if it is generally available to all operators.
[4] In cases where a Party has an existing procedure that provides the treatment in this Article, this provision would not require that Party to introduce separate expedited release procedure.
[5] An administrative decision in this Article means a decision with a legal effect that affects the rights and obligations of a specific person in an individual case. It shall be understood that an administrative decision in this Article covers an administrative action within the meaning of Article X of GATT 1994 or failure to take an administrative action or decision as provided for in a Party’s law and legal system. For addressing such failure, each Party may maintain an alternative administrative mechanism or judicial recourse to direct the customs authority to promptly issue an administrative decision in place of the right to appeal or review under paragraph 1(a).
[6] Nothing in this paragraph shall prevent a Party from recognizing administrative silence on appeal or review as a decision in favor of the petitioner in accordance with its laws and regulations.
[7] For purposes of this Article, “relevant government authorities” refers to Philippine agencies responsible for monitoring, reviewing, analyzing, and developing policies on matters relating to Chapter Four (Rules of Origin).
[1] Examples of such activities may include: a) anti-competitive agreements; b) abuses of dominant position; and c) anti-competitive mergers and acquisitions.
[2] Special rights are granted by a Party when it designates or limits to two or more the number of enterprises authorized to provide goods or services, other than according to objective, proportional and non-discriminatory criteria, or confers on enterprises legal or regulatory advantages which substantially affect the ability of any other enterprise to provide the same goods or services.
[3] Notwithstanding this paragraph, each Party understands that Article 6.4.4 shall only apply to laws and policies which are adopted after the date of entry into force of this Agreement.
[4] For greater certainty, Articles 6.4.4 and 6.11.2(a) shall not be construed to prevent the Parties from adopting laws and policies regarding State enterprises in order to achieve legitimate public policy or public interest.
[1] “Pandemic” means a disease which the World Health Organization (WHO) declares as a pandemic, such as the COVID-19 on 11 March 2020.
[1] For greater certainty, for purposes of this Annex, the delivery date is the date on which documents that have been submitted arrive at the intended place.
Entry into Force: December 31, 2024