Title
Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA)
Preamble
PREAMBLE
The Government of the Republic of Korea ("Korea") and the Government of the Republic of Indonesia ("Indonesia"), 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 and their shared regional interests and ties;
CONVINCED that a free trade area will create an expanded and secure market for goods and services in their territories and a conducive environment for investment, thus contributing to the harmonious development and expansion of world trade;
DESIRING to promote economic growth and create new employment opportunities;
SEEKING to reduce or eliminate the barriers to trade and investment between them, and to facilitate cooperation and utilisation of the greater business opportunities provided by this Agreement;
PROMOTING a predictable, transparent, and consistent business environment that will assist enterprises in planning effectively and using resources efficiently;
RESOLVING to strengthen their economic, trade, and investment relations to contribute to the objectives of sustainable development and to promote trade and investment under this Agreement;
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 Republic of Korea and the Member Countries of the Association of Southeast Asian Nations and other relevant agreements pursuant to the Framework Agreement;
HAVE AGREED as follows:
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. General Definitions
For purposes of this Agreement, unless otherwise specified,
Agreement means this Agreement;
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 Amex 1A to the WTO Agreement,
Korea-ASEAN FTA means the Framework Agreement on Comprehensive Economic Cooperation among the Governments of Republic of Korea and the Member Countries of the Association of Southeast Asian Nations and other relevant agreements stipulated in paragraph 1 of Article 1.4 of the Framework Agreement;
customs authority means the authority that, in accordance with the laws and regulations of each Party, is responsible for the administration and enforcement of its customs laws and regulations:
(a) for Korea, the Ministry of Economy and Finance, or the Korea Customs Service; and.
(b) for Indonesia, the Directorate General of Customs and Excise of the Ministry of Finance;
or their respective successors;
customs duty means any customs or import duty or 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:
(a) charge equivalent to an internal tax imposed consistently with Article I:2 of GATT 1994, in respect of like, directly competitive, or substitutable goods of a Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) duty imposed pursuant to a Party's laws and regulations consistent with Chapter Five (Trade Remedies);
(c) fee or other charge in connection with importation commensurate with the cost of services rendered;
(d) premiums offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions or tariff rate quotas; or
(e) duty imposed pursuant to any agricultural safeguard measure taken under the WTO Agreement on Agriculture;
customs laws and regulations means such laws and regulations administered and enforced by the customs authorities of the Parties concerning the importation, exportation, transit or transshipment of goods, as they relate to customs duties, charges, and other taxes, or to prohibitions, restrictions, and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party;
customs procedures means the treatment applied by the customs authority of a Party to goods and means of transport that are subject to customs control.
Customs Valuation 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,
days means calendar days including weekends and holidays;
enterprise means any entity duly constituted or otherwise organized under the applicable laws and regulations, whether for profit or otherwise, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organization;
existing means in effect on the date of 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, in Annex 1A to 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 Joint Committee established under Article 12.1(Establishment of Joint Committee);
juridical person means any legal entity duly constituted or otherwise organized under the 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;
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:
(a) central or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central or local governments and authorities;
national means:
(a) for Korea, a Korean national within the meaning of the Nationality Act, as amended; and.
(b) for Indonesia, an Indonesian national as defined in the Indonesia Law No. 12/2006, as amended from time to time,
or any successor legislation;
originating goods means products or materials that qualify as originating under the Chapter Three (Rules of Origin and Origin Procedures),
person means a natural or juridical person or an enterprise;
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:
(a) for Korea, the land, maritime, and airspace under its sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond the outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with international law and its domestic law; and
(b) for Indonesia, the land territories, internal waters, archipelagic waters, territorial sea, including the seabed and subsoil thereof, and airspace over such territories and waters, as well as the continental shelf and exclusive economic zone, over which Indonesia has sovereignty, sovereign rights or jurisdiction as defined in its laws, and in accordance with international law, including the United Nations Convention on the Law of the Sea, done at Montego Bay, December 10, 1982;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, in Annex 1C to the WTO Agreement,
UNCITRAL means the United Nations Commission on International Trade Law;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.
Article 1.2. Establishment of a Free Trade Area
Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area, in accordance with the provisions of this Agreement.
Article 1.3. Objectives
The objectives of this Agreement are to:
(a) achieve the substantial liberalization of trade in goods between the Parties, in conformity with Article XXIV of GATT 1994;
(b) achieve the substantial liberalization of trade in services between the Parties, in conformity with Article V of GATS;
(c) achieve the substantial increase of investment opportunities in the territories of the Parties;
(d) promote fair competition in their economies, particularly as it relates to economic relations between the Parties;
(e) establish a framework for cooperation and capacity building with a view to promoting the effective and efficient implementation and utilization of this Agreement, thereby fostering competitiveness and sustainable development; and
(f) develop international trade in such a way as to contribute to the objective of sustainable development as it is integrated and reflected in trade relations between the Parties.
Article 1.4. Relation to other Agreements
1. The Parties reaffirm their rights and obligations under existing agreements to which both Parties are party, including the WTO Agreement and the Korea-ASEAN FTA.
2. For greater certainty, this Agreement shall not be construed to derogate from any international legal obligation between the Parties that provides for more favorable treatment of goods, services, investments, or persons than that provided for under this Agreement.
3. Unless otherwise provided in this Agreement, in the event of any inconsistency between this Agreement and any other agreement to which both Parties are party, the Parties shall, upon request, consult with each other with a view to finding a mutually satisfactory solution.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 2.1. Scope and Coverage
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Section A. Definitions
Article 2.2. 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 purposes of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippersâ export declarations, or any other customs documentation required on or in connection with importation;
duty-free means free of customs duty; and import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for
customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party.
Section B. National Treatment
Article 2.3. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994. To this end, the provisions of Article III of GATT 1994 shall be incorporated into and form an integral part of this Agreement, mutatis mutandis.
Section C. Tariff Reduction or Elimination
Article 2.4. Reduction or Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, cach Party shall gradually reduce or eliminate its customs duties on originating goods in accordance with its Schedule in Annex 2-A.
3. On the request of either Party, the Parties shall consult to consider accelerating the reduction or elimination of customs duties set out in their Schedules in Annex 2-A. An agreement by the Parties to accelerate the reduction or elimination of a customs duty on an originating good shall supersede any duty rate or staging category determined pursuant to their Schedules in Annex 2-A for that good when approved by each Party in accordance with its applicable legal procedures.
4. A Party may unilaterally accelerate the reduction or elimination of customs duties set out in its Schedule in Annex 2-A at any time if it so wishes. The Party shall notify the other Party through a diplomatic note immediately after completion of the internal procedures required for the amendments to enter into force.
5. 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 (hereinafter referred to as âMFNâ) applied rate of customs duty for those goods in a Party, where that rate is lower than the rate of customs duty provided for in that Partyâs Schedule in Annex 2-A. Each Party shall make publicly available any amendments to the MFN rate on the internet.
6. For greater certainty, a Party may:
(a) raise a customs duty to the level established in its Schedule in Annex 2-A following a unilateral reduction or elimination; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
Article 2.5. Customs Valuation for Purposes of Determining the Customs Value of Goods Traded
between the Parties, the provisions of Article VII of GATT 1994, and the provisions of Part I and the Interpretative Notes of Annex I of the Customs Valuation Agreement shall apply, mutatis mutandis.
Section D. Special Regimes
Article 2.6. 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 customs duties and taxes if such goods are brought into its customs territory for a specific purpose, are intended for re-exportation within a specific period, and have not undergone any change except normal depreciation and wastage due to the use made of them.
2. Each Party shall, at the request of the person concerned and for reasons its customs authority considers valid, extend the time limit for temporary admission provided for in paragraph 1 beyond the period initially fixed.
3. Neither Party shall condition the temporary admission of a good provided for in paragraph 1, other than to require that the good:
(a) be used solely by or under the personal supervision of a national or resident of the other Party in the exercise of the business activity, trade, profession, or sport of that person;
(b) not be sold or leased while in its territory;
(c) be accompanied by a security or guarantee in an amount no greater than the customs duties, taxes, fees, and charges that would otherwise be owed on entry or final importation, releasable on the exportation of the good;
(d) be capable of identification when imported and exported;
(e) be exported on the departure of the person referred to in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, unless extended;
(f) be admitted in no greater quantity than is reasonable for its intended use; and
(g) be otherwise admissible into the Party's territory under its laws and regulations.
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 2.7. Duty-Free Entry of Samples of No Commercial Value
Each Party shall grant duty-free entry to samples of no commercial value, imported from the territory of the other Party subject to its laws and regulations, regardless of their origin.
Section E. Non-Tariff Measures
Article 2.8. Application of Non-Tariff Measures
1. 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 this Agreement.
2. Each Party shall ensure the transparency of its non-tariff measures permitted in paragraph 1 and shall ensure that any such measures are not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to trade between the Parties.
Article 2.9. General Elimination of Quantitative Restrictions
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 of the WTO Agreement. To this end, Article XI of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.
2. Where a Party adopts an export prohibition or restriction in accordance with subparagraph 2(a) of Article XI of GATT 1994, the Party shall, upon request:
(a) inform the other Party of such prohibition or restriction and its reasons together with its nature and expected duration, or publish such prohibition or restriction; and
(b) provide the other Party with a reasonable opportunity for consultation with respect to matters related to such prohibition or restriction.
Article 2.10. Technical Consultations on Non-Tariff Measures
1. A Party may request technical consultations with the other Party (hereinafter referred to as the "requested Party") on a measure the Party considers to be adversely affecting its trade. The request shall be in writing and shall clearly identify the measure and the concerns as to how the measure adversely affects trade between the Party requesting technical consultations (hereinafter referred to as the "requesting Party") and the requested Party.
2. Where the measures are covered by another Chapter, its Chapter- specific consultation mechanism shall be used, unless otherwise agreed between the Parties.
3. Except as provided in paragraph 2, the requested Party shall respond and enter into technical consultations within 60 days after the receipt of the written request referred to in paragraph 1, unless otherwise determined by the Parties, with a view to reaching a mutually satisfactory solution within 180 days of the request. Technical consultations may be conducted via any means mutually agreed by the Parties.
4. If the requesting Party considers that the matter is urgent or involves perishable goods, it may request that technical consultations take place within a shorter time frame than that provided for under paragraph 3. Nothing in this paragraph shall be construed to prevent a Party from applying sanitary and phytosanitary (hereinafter referred to as "SPS") measures.
5. The technical consultations under this Article shall be without prejudice to the rights and obligations pertaining to dispute settlement proceedings under Chapter Ten (Dispute Settlement) and the WTO Agreement.
Article 2.11. Import Licensing
1. Each Party shall ensure that all automatic and non-automatic import licensing procedures are implemented in a transparent and predictable manner, and applied in accordance with the Agreement on Import Licensing Procedures, in Annex 1A to the WTO Agreement (hereinafter referred to as the "Import Licensing Agreement"). Neither Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Promptly after entry into force of this Agreement, cach Party shall notify the other Party of any existing import licensing procedures. The notification shall include the information specified in Article 5.2 of the Import Licensing Agreement. A Party shall be deemed to be in compliance with this paragraph if:
(a) it has notified that procedure to the WTO Committee on Import Licensing provided for in Article 4 of the Import Licensing Agreement together with the information specified in Article 5.2 of the Import Licensing Agreement; and
(b) in the most recent annual submission due before the date of entry into force of this Agreement for that Party to the WTO Committee on Import Licensing in response to the annual questionnaire on import licensing procedures described in Article 7.3 of the Import Licensing Agreement, it has provided, with respect to that procedure, the information requested in that questionnaire.
3. Before applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government internet site. To the extent possible, the Party shall do so at least 21 days before the new procedure or modification takes effect.
4. The notification required under paragraph 2 is without prejudice to whether the import licensing procedure is consistent with this Agreement.
5. No application shall be refused for minor documentation errors which do not alter the basic data contained therein. Minor documentation errors may include, but are not limited to, formatting errors (for instance, the width of a margin or the font used) and errors with spelling which are obviously made without fraudulent intent or gross negligence.
6. Each Party shall, to the extent possible, answer within 60 days all reasonable enquiries from the other Party with regard to the criteria employed by its respective licensing authorities in granting or denying import licenses. The importing Party shall publish sufficient information for the other Party and traders to know the basis for granting or allocating import licenses.
7. If a Party denies an import license application with respect to a good
of the other Party, it shall, on the request of the applicant and within a reasonable period after receiving the request provide the applicant with an explanation of the reason for the denial.
Article 2.12. Fees and Formalities Connected with Importation and Exportation
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, charges equivalent to an internal tax or other internal charge applied consistently with Article I:2 of GATT 1994, and antidumping and countervailing duties) imposed on or in comnection 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 on or 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. Neither Party shall require that any customs documentation supplied in connection with the importation of any good of the other Party be endorsed, certified or otherwise sighted or approved by the importing Party's overseas representatives, or persons or entities with authority to act on the importing Party's behalf, nor impose any related fees or charges.
Article 2.13. Sanitary and Phytosanitary Measures
2. The Parties shall encourage technical cooperation and communication in the field of SPS issues subject to the availability of appropriate resources.