3. Chapter Ten (Dispute Settlement) shall not be applied to any SPS matter arising under this section.
Article 2.14. Technical Barriers to Trade
1. The Parties reaffirm 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.
2. The Parties shall strengthen their cooperation in the fields of standards, technical regulations, and conformity assessment procedures with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets. The Parties will seek to identify, develop, and promote trade facilitating initiatives regarding standards, technical regulations, and conformity assessment procedures that are appropriate for particular issues or sectors as agreed upon by the Parties on the mutually determined terms and conditions.
Section F. Institutional Provisions
Article 2.15. Committee on Trade In Goods
1. For purposes of the effective implementation and operation of this Chapter and Chapter Five (Trade Remedies), the function of the Committee on Trade in Goods (hereinafter referred to in this Article as the "Committee") established in accordance with Article 12.4 (Committees and Subsidiary Bodies) shall include:
(a) reviewing and monitoring the implementation and operation of this Chapter and Chapter Five (Trade Remedies) and, if appropriate, making a report and recommendation;
(b) promoting trade in goods between the Parties, including through consultations on accelerating reduction or elimination of customs duties under this Agreement and other issues as appropriate;
(c) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring such matters to the Joint Committee for its consideration;
(d) addressing any issues related to measures to update each Partyâs Schedule of tariff concessions to reflect amendments of the Harmonized System, including the transposition of the Parties' Schedules of tariff concessions and exchanging transposed Schedules of tariff concessions and correlation tables in a timely manner; and
(e) discussing any matter arising under this Chapter and Chapter Five (Trade Remedies) as agreed.
2. The Committee shall meet on the request of a Party or the Joint Committee to consider matters arising under this Chapter and Chapter Five (Trade Remedies).
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Section A. Rules of Origin
Article 3.1. Definitions
For purposes of this Chapter:
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. The valuation shall be made in accordance with Article VII of GATT 1994 and Customs Valuation Agreement;
exporter means a natural or juridical person located in an exporting Party from where a good is exported by such a person;
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. The valuation shall be made in accordance with Article VII of GATT 1994 and Customs Valuation Agreement;
Generally Accepted Accounting Principles means the recognized consensus or substantial authoritative support in the territory of a Party with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information, and the preparation of financial statement. Generally Accepted Accounting Principles may encompass broad guidelines for general application, as well as detailed standards, practices and procedures;
identical and interchangeable goods or materials means goods or materials being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which once they are incorporated into the finished good cannot be distinguished from one another for origin purposes by virtue of any markings, etc.;
importer means a natural or juridical person located in the territory of a Party from where a good is imported by such a person;
materials shall include ingredients, raw materials, parts, components, sub- assemblies used in the production process;
non-originating goods means products or materials that do not qualify as originating under this Chapter,
packing materials and containers for transportation means the goods used to protect a good during its transportation, different from those materials or containers used for its retail sale;
producer means a natural or juridical person who carries out production in the territory of a Party;
Product Specific Rules 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/qualifying value content (1) or a combination of any of these criteria; and
production means methods of obtaining a good including growing, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting, manufacturing, processing or assembling a good.
Article 3.2. Origin Criteria
1. For purposes of this Agreement, a good imported into the territory of a Party shall be deemed to be originating and eligible for preferential tariff treatment if it conforms to the origin requirements under any one of the following:
(a) a good which is wholly obtained or produced entirely in the territory of the exporting Party as set out and defined in Article 3.3;
(b) a good which is produced entirely in the territory of the exporting Party exclusively from originating materials; or
(c) a good which is produced entirely in the territory of the exporting Party using non-originating materials, provided the good satisfies the applicable requirements set out in Annex 3-A.
2. Except as provided for in Article 3.6, the conditions for acquiring originating status set out in this Chapter must be fulfilled without interruption in the territory of the exporting Party.
Article 3.3. Wholly Obtained or Produced Goods
Within the meaning of Article 3.2.1(a), the following shall be considered to be wholly obtained or produced entirely in the territory of a Party:
(a) plants and plant products grown and harvested there;
(b) live animals born and raised there;
(c) goods obtained from live animals referred to in subparagraph (b);
(d) goods obtained by hunting or trapping within the land territory, or fishing or aquaculture conducted within the internal waters or within the territorial sea of a Party;
(e) minerals and other naturally occurring substances, not included in subparagraphs (a) through (d), extracted or taken from the territory of a Party;
(f) goods of sea-fishing and other marine life taken from the sea, seabed, or subsoil outside the territorial sea of a Party by vessels registered with a Party and flying its flag, provided that Party has rights to exploit such sea, seabed, or subsoil in accordance with the international law (2);
(g) goods produced or made on board factory ships registered with a Party and entitled to fly its flag, exclusively from products referred to in subparagraph (f);
(h) goods taken by a Party or a person of a Party from the seabed or subsoil outside the territory of a Party, provided that Party has rights to exploit such seabed or subsoil in accordance with the international law (3);
(i) goods taken from outer space provided that they are obtained by the Party or a person of that Party;
(j) articles collected from there which can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for the disposal or recovery of parts or raw materials, or for recycling purposes;
(k) waste and scrap derived from:
(i) production there; or
(ii) used goods collected there, provide that such goods are fit only for the recovery of raw materials; and
(l) goods obtained or produced in the territory of the Party solely from goods referred to in subparagraphs (a) through (k).
Article 3.4. Calculation of Regional/Qualifying Value Content
For purpose of Article 3.2.1(c), the Parties shall provide that the importer, exporter, or producer may calculate regional/qualifying value content based on one or the other of the following methods:
(a) Build-Up Method
RVC or QVC = VOM /FOB x 100%
VOM means value of originating materials, which includes the value of originating materials, direct labour cost, direct overhead cost, transportation cost and profit.
(b) Build-Down Method
RVC or QVC= FOB - VNM/FOB x 100%
VNM means value of non-originating materials, which shall be: (i) the CIF value at the time of importation of the materials, parts or goods; or (ii) the earliest ascertained price paid for the materials, parts or goods of undetermined origin in the territory of the Party where the working or processing has taken place.
Article 3.5. Treatment for Certain Goods
1. Treatment for Certain Goods shall be governed by Rule 6 of Annex 3 to the Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Republic of Korea and the Member Countries of the Association of Southeast Asian Nations, and the Exchange of Notes between the Republic of Korea and the ASEAN Member Countries regarding the Implementation and Monitoring of Rule 6 dated 27 February 2009 (hereinafter referred to as "Exchange of Notes"), which are hereby incorporated into and made part of this Chapter.
2. The list of goods subject to treatment under paragraph 1 shall be the list of goods attached to the Exchange of Notes referred to in paragraph 1. The Parties shall revise or amend the aforementioned list of goods through a further exchange of notes within one year from the date of entry into force of this Agreement, unless otherwise agreed.
Article 3.6. Accumulation
Unless otherwise provided for in this Chapter, a good originating in the territory of a Party, which is used in the territory of the other Party as material for a finished good 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 good has taken place.
Article 3.7. Non-Qualifying Operations
1. Notwithstanding any provisions in this Chapter, a good shall not be considered to be originating in the territory of a Party if the following operations are undertaken exclusively by itself or in combination in the territory of that Party:
(a) preserving operations to ensure that the good remains in good condition during transport and storage;
(b) changes of packaging, breaking-up and assembly of packages;
(c) simple (4) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) ironing or pressing of textiles;
(e) simple (5) painting and polishing operations;
(f) husking, partial or total bleaching, polishing and glazing of cereals and rice;
(g) operations to colour sugar or form sugar lumps;
(h) simple (6) peeling, stoning, or un-shelling;
(i) sharpening, simple grinding, or simple cutting;
(j) sifting, screening, sorting, classifying, grading, matching;
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(m) simple mixing (7) of products, whether or not of different kinds;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(o) simple (8) testing or calibrations; or (p) slaughtering of animals (9).
2. A good originating in the territory of a Party shall retain its initial originating status, when exported from the other Party, where operations undertaken have not gone beyond those referred to in paragraph 1.
Article 3.8. Intermediate Goods (10)
1. When an originating good is used in the subsequent production of another good, no account shall be taken of the non-originating materials contained in the originating good for purposes of determining the originating status of the subsequently produced good.
2. When a non-originating good is used in the subsequent production of another good:
(a) for purposes of calculating the value of the non-originating materials of the subsequently produced good, an account shall be taken only of the non-originating materials contained in the non-originating good; and
(b) for purposes of calculating the value of the originating materials of the subsequently produced good, an account shall be taken of the originating materials contained in the non-originating good.
Article 3.9. Direct Consignment
1. Preferential tariff treatment shall be applied to a good satisfying the requirements of this Chapter and which is transported directly between the territories of the exporting Party and the importing Party.
2. Notwithstanding paragraph 1, a good of which transport involves transit through one or more intermediate third countries, other than the territories of the exporting Party and the importing Party, shall be considered to be consigned directly, provided that:
(a) the transit is justified for geographical reason or by consideration related exclusively to transport requirement;
(b) the good has not entered into trade or consumption there; and
(c) the good has not undergone any operation other than unloading and reloading or any operation required to keep it in good condition.
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 both Parties, the following shall be produced to the relevant government authorities of the importing Party:
(a) a through Bill of Lading issued in the territory of the exporting Party, which includes combination of any transport documents covering the entire transport route of a good from the exporting Party to the importing Party; or
(b) other relevant supporting documents, if any, as evidence that the requirements of paragraph 2 are being complied with.
Article 3.10. De Minimis
1. A good that does not satisfy an applicable change in tariff classification requirement set out in Annex 3-A shall be considered as originating if:
(a) for a good, other than that provided for in Chapters 50 through 63 of the Harmonized System, the value of all non- originating materials used in its production that do not undergo the required change in tariff classification does not exceed 10 percent of the FOB value of the good;
(b) for a good provided for in Chapters 50 through 63 of the Harmonized System, the weight of all non-originating materials used in its production that do not undergo the required change in tariff classification does not exceed 10 percent of the total weight of the good;
and the good specified in subparagraphs (a) and (b) meets all other applicable criteria set forth in this Chapter for qualifying as an originating good.
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/QVC requirement for the good.
Article 3.11. Treatment of Packaging and Packing Materials
1. (a) Ifa good is subject to the RVC/QVC criterion, the value of the packaging and packing materials for retail sale shall be taken into account in its determination of origin, where the packaging and packing materials are considered to be forming a whole with the good.
(b) Where subparagraph (a) is not applicable, the packaging and packing materials for retail sale, if classified together with the packaged good, shall be disregarded in determining whether all the non-originating materials used in the production of the good fulfil criterion corresponding to a change in tariff classification of the said good.
2. Packing materials and containers for transportation of a good shall not be taken into account in determining the origin of the good.
Article 3.12. Accessories, Spare Parts and Tools
1. The Parties shall provide that a good's standard accessories, spare parts, or tools delivered with the good shall be considered originating goods if the good is an originating good and shall be disregarded in determining whether all the non-originating materials used in the production of the good satisfy the applicable change in tariff classification requirement set out in Annex 3-A, provided that:
(a) the accessories, spare parts, or tools are classified with and not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, or tools are customary for the good.
2. Notwithstanding paragraph 1, if a good is subject to a RVC/QVC requirement, the value of the accessories, spare parts, or tools described in paragraph 1 shall be taken into account as originating or non-originating materials as the case may be, in calculating the RVC/QVC of the good.
Article 3.13. Neutral Elements
In order to determine whether a good originates, it shall not be necessary to determine the origin of the following which might be used in its production and not incorporated into the good:
(a) fuel and energy;
(b) tools, dies and moulds;
(c) spare parts and materials used in the maintenance of equipment and buildings;
(d) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;
(e) gloves, glasses, footwear, clothing, safety equipment and supplies;
(f) equipment, devices and supplies used for testing or inspecting the good; and
(g) any other goods that are not incorporated into the good but of which use in the production of the good can reasonably be demonstrated to be a part of that production.
Article 3.14. Identical and Interchangeable Goods or Materials
1. Whether identical and interchangeable goods or materials are originating can be determined by:
(a) physical segregation of each good or material; or
(b) generally accepted accounting principles of inventory management practiced in the territory of the exporting Party.
2. Once a decision has been taken on the inventory management method, that method shall be used throughout the fiscal year.
Section B. Origin Procedures
Article 3.15. Proof of Origin
1. Goods originating in a Party shall, on importation into the other Party, benefit from preferential tariff treatment under this Agreement on the basis of a Proof of Origin.
2. Any of the following shall be considered as a Proof of Origin:
(a) a Certificate of Origin issued by an issuing body referred to in Article 3.16;
(b) an Origin Declaration made out by an approved exporter; and
(c) an Origin Declaration by an exporter or producer.
3. Notwithstanding paragraph 1, originating goods within the meaning of this Chapter, in the cases specified in Article 3.19 may benefit from preferential tariff treatment without any of the documents referred to in paragraph 2.
4. Both Parties shall implement the Origin Declaration by exporter or producer referred to in paragraph 2(c) within 10 years after the date of entry into force of this Agreement.
5. Notwithstanding paragraph 4, a Party may elect to seck a longer extension period, up to a maximum of 10 years in which to implement the provision.
6. The Partics may implement the Proof of Origin referred to in paragraph 2(b) and 2(c) after both Parties conclude negotiations on regulations and formats through the Committee on Customs and Trade Facilitation referred to in Article 4.12 (Committee on Customs and Trade Facilitation) within two years from the date of entry into force of this Agreement, unless otherwise agreed by the Parties.
7. Paragraph 6 shall apply only after the exporting Party has notified the importing Party, that it shall implement this paragraph.
8. Each Party shall provide that a Proof of Origin remains valid for one year from the date on which it is issued or made out.
Article 3.16. Certificate of Origin (11)
1. A Certificate of Origin shall be issued by issuing bodies of the exporting Party in accordance with its domestic laws and regulations, on application by the producer or exporter or, under his responsibility, by his authorized representative.
2. For purposes of this Agreement, a Certificate of Origin is any of:
(a) a certificate of origin in paper format; or
(b) an electronic certificate of origin.