Questions and Answers on AFTA
Q1. How does one determine the 40% ASEAN cumulative content.
The formula for 40% ASEAN cumulative content is as follows:
Value of Imported + Value of
Non-ASEAN Materials, Undetermined Origin
Parts or Produce Materials, Parts or
————————————————————————————————–X 100% is less or equal than 60%
FOB Price
where the value of the non-originating materials, part or produce shall be:
i. The CIF value at the time of importation of the products or importation can be proven; or
ii. The earliest ascertained price paid for the products of undetermined origin in the territory of the Member State where the working or processing takes place.
More information on the CEPT rules of origin and its operational certification procedures can be found in the Rules of Origin for the CEPT (published in AFTA Reader Vol. 1). Queries may be directed to the respective National AFTA Units or the AFTA Unit at the ASEAN Secretariat (please refer also to Section IX).
Q2. Who issues the Certificate of Origin (Form D)?
Each ASEAN Member Government has elected an agency which issue and certify the Certificate of Origin. Please refer to the section on AFTA Units.
Q3. Does the Certificate of Origin (CO) have to be obtained by exporters for every consignment or just for the first consignment?
The CO has to be obtained by the exporters for every consignment.
Q4. Is a Legal Enactment for tariff reductions under the CEPT (or a CEPT Concessions Exchange Manual) which was effected say, in 1995 still effective in 1996, if the 1996 legal enactment have not been issued yet?
Yes. When the importing country is late in issuing an enactment, the previous CEPT tariff rate will be applied to exporters/importers. When the enactments are effected, importers/exporters can claim the excess payment of duties from the importing country authority.
However, when the exporting country issues an enactment late, since the CEPT is based on reciprocity, she cannot enjoy the CEPT rate of the importing country. In this case the exporting country will not be able to claim any excess payments when her new legal enactment’s are issued.
Q5. Is the CEPT Product List based on the 1996 Harmonized System amendments?
No, they are based on varying versions of’ the Harmonized System previously applied by Member Countries. This also applies to those Member Countries who have implemented the 1996 HS Code for their MFN tariff nomenclature.
Q6. What differences are there between the new package reflecting the accelerated time frame (i.e. of 2003) and the old package (i.e. of 2008)?
In the new package of CEPT Product List, which was published in January 1996, tariff reductions will fall at a faster rate to realize the 0-5% target range by the year 2003 rather than 2008. Also, there are more products since certain some manufactured products which were previously temporarily excluded will be phased-in and some Unprocessed Agricultural Products, which were previously excluded from the CEPT, will be brought in. The package also includes Vietnam’s tariff reduction commitments for 1996.
Q7. When will the products in the Sensitive List be brought into the CEPT Scheme? Is there any schedule ?
A small number of Unprocessed Agricultural Products have been placed in the Sensitive List. They shall be phased into the CEPT Scheme at the latest by 2010, i.e. these products will have an ending tariff rate of 0-5%. quantitative restrictions and non-tariff barriers eliminated by 2010.
Q8. Based on the latest developments, what categories of products are there in the CEPT Scheme?
Based on the latest developments in ASEAN, the following are the various categories of products:
a) Inclusion List – tariff rates will be reduced to 0-5% latest by 2003, Quantitative Restrictions removed and Non-Tariff Barriers eliminated;
b) Temporary Exclusion List – to be phased into the Inclusion List by 2000;
c) Temporary Exclusion List of Unprocessed Agricultural Products – to be phased into the Inclusion List by 2003;
d) Specific Category of the Temporary Exclusion List – to handle Unprocessed Agricultural Products in the Temporary Exclusion List handled by State Trading Enterprises. These require prior approval from the AFTA Council and will be phased into the CEPT Scheme beginning 2001-2003 and ending 2010. Details are currently being worked out;
e) Sensitive List of Unprocessed Agricultural Products – shall be phased into the CEPT beginning 2001-2003 and shall have 0-5% tariff rate, QRs and NTBs eliminated by 2010. The modality of the phasing in is currently being worked out:
f) General Exception List – these are products which satisfy Article XX of the GATT and are permanently excluded from tariff reductions for reasons of national security, protection of public morals, protection of human, animal and plant life and health, and the protection of articles of artistic, historic and archaeological value.
Q9. Are the commitments under, the CEPT Scheme legally binding for ASEAN Member Countries ?
Yes, the commitments are legally binding. The CEPT Agreement was ratified by the respective ASEAN Member Governments. Also, tariff reductions are legally enacted. Member Countries are legally bound to fulfill their commitments under the CEPT Agreement.
Q10. If an exporter his reason to dispute the treatment on its export from the the authorities in the importing country, what can he do ?
The exporter can raise his case to the National AFTA Units of his country or of the importing country, or the AFTA Unit at the ASEAN Secretariat. Disputes are normally dealt with bilaterally but may be raised to the regional level. ASEAN Member Countries are currently formulating a formal dispute settlement mechanism.
Q11. What were the various documents signed at the Fifth ASEAN Summit relevant to the CEPT ? What do they mean ?
There were two documents signed at the Summit 1995 which are relevant to the CEPT:
a) Protocol to Amend the Agreement on CEPT Scheme – which legally amends the CEPT Agreement to reflect the latest developments in AFTA (please refer to Annex A). The amendments include provisions for the acceleration of AFTA, phasing-in of the Temporary Exclusion List etc.;
b) Protocol for the Accession of the Socialist Republic of Vietnam to the Agreement on the CEPT Scheme – which is the legal instrument of accession of Vietnam into the CEPT Agreement. This Protocol contains the terms and conditions of Vietnam’s accession to the CEPT for AFTA (please refer to Annex B).
Q12. When do these documents take effect ?
These documents take effect on 1 January 1996.
Q13. Will there be further changes to the CEPT Agreement?
Yes. The CEPT Agreement, as per Article 10 (2), shall be amended from time to time to reflect the latest changes on AFTA. These amendments will reflect any further liberalization under AFTA and the creation of additional mechanisms such as a dispute settlement mechanism.
Q14. When will Vietnam complete her tariff reduction ?
Tariffs for products in the Inclusion List for Vietnam will be reduced to 0-5% by the year 2006 instead of 2003. Products in her Temporary Exclusion List shall be phased into the CEPT Scheme by 2003 rather than 2000 for other Member Countries.
Q15. The Fifth ASEAN Summit approved to phase-in PTA products in the CEPT Scheme. What does this mean? How will it be implemented?
Exporters of PTA products should now use the CEPT Certificate of Origin (Form D) instead of Form C. This is to further streamline the process at customs.
016. Is ASEAN accelerating the trade liberalization measures under the CEPT for AFTA further ?
Yes. Member Countries following are continuously looking into the following:
a) Acceleration i.e. the maximization of items whose tariff rates can be reduced to 0-5% in the year 2000; and
b) Deepening i.e. the maximization of items whose tariff rates can be reduced to 0%, instead of 0-5%, by the year 2003.
Q17. Does AFTA include measures other than tariff reduction and the elimination of non-tariff barriers?
The main instrument of AFTA is the CEPT Scheme which provides that Member States would reduce intra-regional tariffs and eliminate non-tariff barriers. However there are some other measures to support the implementation of AFTA to facilitate trade. Such measures which are currently being pursued include the harmonization of customs matters (customs procedures, valuation system and tariff nomenclature) and product standards. Member Countries are also involved in the creation of a Green Lane System for CEPT Products. There are other areas of economic cooperation which are seen as complementing AFTA (i.e. “AFTA-Plus”) for e.g. on ASEAN efforts to promote Foreign Direct Investment and Intra-ASEAN Investments, the ASEAN Framework Agreement on Services, the ASEAN Framework Agreement on Intellectual Property and the ASEAN Industrial Cooperation Scheme (AICO).
