Title
Israel - Republic of Korea Free Trade Agreement
Preamble
The Government of the Republic of Korea (hereinafter referred to as "Korea") and the Government of the State of Israel (hereinafter referred to as "Israel") (hereinafter referred to as "the Parties"):
RECOGNIZING their longstanding and strong partnership, and desiring 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 countries and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities, and improve the general welfare by liberalizing and expanding trade and investment between them;
SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to trade and investment between them;
PROMOTING a predictable and transparent 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 and promoting broader international cooperation;
DESIRING to strengthen mutually beneficial cooperation to foster creativity and innovation, and promote stronger linkage in and between sectors of their economies;
RECOGNIZING that this Agreement should be implemented with a view to promoting sustainable development in a manner consistent with environmental protection and conservation; and
REAFFIRMING and building on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral and bilateral agreements, and arrangements, to which they are both parties;
HAVE AGREED as follows:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Section A. Initial Provisions
Article 1.1. 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 1.2. OBJECTIVES
The objectives of this Agreement, as elaborated more specifically in its provisions, are to eliminate obstacles to trade in, and facilitate the movement of, goods and services between the Parties, thereby to promote conditions of fair competition and increase substantially investment opportunities in the free trade area.
Article 1.3. RELATION TO OTHER AGREEMENTS
1. The Parties affirm their existing rights and obligations with respect to each other under existing bilateral and multilateral agreements to which both Parties are party, including the WTO Agreement or successor agreements of the WTO Agreement to which both Parties are party.
2. In the event of any inconsistency between this Agreement and the agreements referred to in paragraph 1, this Agreement shall prevail, except as otherwise provided in this Agreement.
Article 1.4. REFERENCE TO OTHER AGREEMENTS
Where this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include related footnotes, interpretative notes, and explanatory notes that are binding on both Parties.
Article 1.5. EXTENT OF OBLIGATIONS
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by local levels of governments and authorities.
Article 1.6. TERRITORIAL APPLICATION
1. With regard to Korea, this agreement applies to the land, maritime, and air space over which Korea exercises sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with international law and its law.
2. With regard to Israel, this agreement applies to the territory of the State of Israel.
Section B. General Definitions
Article 1.7. DEFINITIONS
For the purposes of this Agreement, unless otherwise specified:
Agreement on Agriculture means the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement;
covered investment means, with respect to a Party, an investment, as defined in Article 9.31 (Definitions), in its territory of an investor of the other Party that is in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;
customs duties includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, (1) but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article II:2 of the GATT 1994, or any equivalent provision of a successor agreement to which both Parties are party;
(b) duty imposed pursuant to a Party's law consistent with Chapter 7 (Trade Remedies);
(c) fee or other charge in comnection with importation, commensurate with the cost of services rendered; or
(d) duty imposed pursuant to any agricultural safeguard measure taken under Article 5 of the Agreement on Agriculture.
Customs Valuation Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
days means calendar days;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organization;
enterprise of a Party means an enterprise constituted or organized under a Party's law; existing means in effect on the date this Agreement enters into force;
financial services means any service of a financial nature including those defined in paragraph 5(a) of the Annex on Financial Services of GATS;
freely usable currency means "freely usable currency" as determined by the International Monetary Fund under its Articles of Agreement;
GATS means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
goods of a Party means domestic products as these are understood in GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party;
government procurement means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or use in the production or supply of goods or services for commercial sale or resale;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes, and Sub Heading Notes, and its subsequent amendments as adopted and implemented by the Parties in their respective tariff laws;
Import Licensing Agreement means the Agreement on Import Licensing Procedures, contained in Annex 1A to the WTO Agreement;
Joint Committee means the Joint Committee established under Article 19.1(Joint Committee);
measure covers any measure whether in the form of a law, regulation, rule, procedure, decision, administrative action, practice, or any other form;
national means:
(a) with respect to Korea, a Korean national within the meaning of the Nationality Act (2); and
(b) with respect to Israel, as provided for in accordance with its national law; originating means qualifying under the rules of origin set out in Chapter 3 (Rules of Origin); person means a natural person or an enterprise; person of a Party means a national or an enterprise of a Party;
preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;
Safeguards Agreement means the Agreement on Safeguards, contained in Annex 1A to the WTO Agreement;
sanitary or phytosanitary measure means any measure referred to in paragraph 1 of Annex A of the SPS Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement;
state enterprise means an enterprise that is, directly or indirectly owned, or controlled through ownership interests, by a Party;
TBT Agreement means the Agreement on Technical Barriers to Trade, contained in Annex 1A to the WTO Agreement;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to the WTO Agreement; (3)
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 2.1. SCOPE
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Section A. National Treatment
Article 2.2. NATIONAL TREATMENT
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article II of GATT 1994, including its interpretive notes, and to this end Article Il of GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 2-A.
Section B. Reduction or Elimination of Customs Duties
Article 2.3. CLASSIFICATION OF GOODS
The classification of goods in trade between the Parties shall be as set out in each Party's respective tariff nomenclature in conformity with the Harmonized System.
Article 2.4. REDUCTION OR ELIMINATION OF CUSTOMS DUTIES
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall reduce or eliminate its customs duties on originating goods in accordance with its Schedule to Annex 2-B.
3. If at any moment a Party reduces its applied most-favored-nation (hereinafter referred to as "MFN") customs duty rate after the entry into force of this Agreement, that duty rate shall apply as regards trade covered by this Agreement if and for as long as it is lower than the customs duty rate calculated in accordance with its Schedule included in Annex 2-B.
4. 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 to Annex 2-B. Following such consultations, a decision by the Joint Committee on the acceleration of the reduction or elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to the respective Partyâs Schedule included in Annex 2-B for that good, in accordance with Article 19.1.3(f).
5. For greater certainty, a Party may:
(a) raise a customs duty to the level established in its Schedule to Annex 2-B following a unilateral reduction; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
Section C. Special Regimes
Article 2.5. WAIVER OF CUSTOMS DUTIES
1. Neither Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
2. Neither Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.
Article 2.6. TEMPORARY ADMISSION OF GOODS
1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
(a) professional equipment, including equipment for the press or television, software, and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade, or profession of a person who qualifies for temporary entry pursuant to the laws of the importing Party;
(b) goods intended for display or demonstration;
(c) commercial samples and advertising films and recordings; and
(d) goods admitted for sports purposes.
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 beyond the period initially fixed.
3. Neither Party may condition the duty-free temporary admission of a good referred to 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 in an amount no greater than the custom duties and any other tax imposed on imports that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(d) be capable of identification when exported;
(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, or within one year, 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 law.
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 plus any other charges or penalties provided for under its law.
5. Each Party shall adopt and maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.
6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
7. Each Party shall provide that the importer or other person responsible for a good admitted under this Article shall not be liable for failure to export the good on presentation of satisfactory proof to the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
Article 2.7. GOODS RE-ENTERED AFTER REPAIR OR ALTERATION
1. Neither Party may apply a customs duty to a good, regardless of its origin, that re- enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether the repair or alteration:
(a) could be performed in the territory of the Party from which the good was exported for repair or alteration; or
(b) has increased the value of the good.
2. Neither Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For the purposes of this Article, "repair or alteration" does not include an operation or process that:
(a) destroys a goodâs essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.
Article 2.8. DUTY-FREE ENTRY OF COMMERCIAL SAMPLES OF NEGLIGIBLE VALUE AND PRINTED ADVERTISING MATERIALS
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) the samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
(b) the advertising materials be imported in packets that each contain no more than one copy of each such material and that neither the materials nor the packets form part of a larger consignment.
Section D. Non-Tariff Measures
Article 2.9. IMPORT AND EXPORT RESTRICTIONS
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes, and to this end Article XI of GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 2-A. 3. Where a Party proposes to adopt an export prohibition or restriction regarding a product exported to the other Party due to critical shortage of foodstuffs or other essential products in accordance with 2(a) of Article XI of GATT 1994, the Party shall:
(a) seek to limit such proposed prohibition or restriction to the extent necessary, giving due consideration to its possible effects on the other Party;
(b) provide advance notice in writing, to the extent practicable, to the other Party of such proposed prohibition or restriction and its reasons together with its nature and expected duration; and
(c) on request, provide the other Party with an opportunity for consultation with respect to any matter related to the proposed prohibition or restriction.
4. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;
(b) import licensing conditioned on the fulfillment of a performance requirement; or
(c) voluntary export restraints inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good of a non-Party from the territory of the other Party, the Parties, on the request of either Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, or distribution arrangements in the territory of the other Party.
6. Neither Party may, as a condition for engaging in importation or for the importation of a good, require a person of the other Party to establish or maintain a contractual or other relationship with a distributor in its territory, except if such relationship is required in accordance with each Partyâs laws and regulations. At the request of a Party, the Party maintaining such laws and regulations shall provide the other Party with an opportunity to consult on any related issues.
7. For greater certainty, paragraph 6 does not prevent a Party from requiring a person referred to in that paragraph to designate an agent for the purposes of facilitating communications between its regulatory authorities and that person.
Article 2.10. IMPORT LICENSING
1. Neither Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement. (1)
(a) Promptly after this Agreement enters into force, each Party shall notify the other Party of its existing import licensing procedures, if any. The notification shall:
(i) include the information specified in Article 5 of the Import Licensing Agreement; and
(ii) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.
(b) Before applying any new or modified import licensing procedure, a Party shall publish, to the extent required by its law, the new procedure or modification on an official government Internet site. To the extent practicable, the Party shall do so at least 30 days before the new procedure or modification takes effect.
3. Neither Party may apply an import licensing procedure to a good of the other Party unless the Party has complied with the requirements of paragraph 2 with respect to that procedure. Where exceptional and critical circumstances requiring immediate action make prior notification impossible, the Party may apply forthwith the procedure necessary to deal with the situation and shall inform the other Party immediately thereof.
Article 2.11. ADMINISTRATIVE FEES AND FORMALITIES
1. Each Party shall ensure that all fees and charges imposed in connection with importation and exportation shall be consistent with their obligations under Article VIII.1 of GATT 1994 and its interpretive notes, which are hereby incorporated into and made a part of this Agreement, mutatis mutandis.
2. Neither Party may require consular transactions, including related fees and charges, in comnection with the importation of any good of the other Party.
3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.
Article 2.12. EXPORT DUTIES, TAXES, OR OTHER CHARGES
1. Neither Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of the other Party, unless the duty, tax, or charge is also adopted or maintained on the good when destined for domestic consumption.
2. Paragraph 1 shall not apply to measures set out in Annex 2-A.