Implementation of ASEAN-Hong Kong, China Free Trade Agreement
- July 13, 2020
- Posted by: Administrator
- Category: Tax News
As implementing regulations to the ratification of the Free Trade Agreement (FTA) between ASEAN and Hong Kong, China (“AHK-FTA”), the Ministry of Finance has issued the following two regulations:
- MoF Regulation No. 79/PMK.010/2020 dated 3 July 2020 concerning the import duty tariff in the context of the ASEAN -Hong Kong, China FTA (“PMK-79/2020”). The effective date of PMK-79/2020 is 4 July 2020. Based on PMK-79/2020, the import duty tariff on imports from ASEAN members states and from Hong Kong, China based on the AHK-FTA shall be reduced gradually every year, starting from year 2020 up to year 2031 onward.
- MoF Regulation No. 80/PMK.04/2020 dated 3 July 2020 concerning the procedures for imposition of import duty tariffs based on the ASEAN -Hong Kong, China FTA (“PMK-80/2020”). The effective date of PMK-80/2020 is 4 July 2020. Under PMK-80/2020, the criteria of origin of goods in order to enjoy the preferential tariff under AHK-FTA are as follows:
- Origin Criteria
The goods will be deemed to originate from a member country if the following criteria are met:
- Wholly obtained / wholly produced;
- Produced exclusively; or
- Not wholly obtained or produced, provided that:
- Meet regional value content (RVC) up to 40% of the FOB Value; or
- Included in Product Specific Rules (PSR) list of AHK-FTA (Annex 3-2 and/or Annex 3-3)
- Consignment criteria
The preferential tariff can be applied if the following consignment criteria are met:
- Direct shipment, meaning the goods are directly shipped from the AHK form issuer to Indonesia; or
- Transshipment, provided that the transshipment is merely due to geographic condition, the goods are not for selling or consumption in the transit country, and there is no production process in transit country.
- Procedural provisions
The procedural provisions under AHK-FTA are as follows:
- The certificate of origin (Form AHK) should be issued in English, using the prescribed form as stipulated in the agreement (Annex-A), contain a reference number, and be signed by the competent authority and exporter;
- Issued before or after shipment but not later than 3 working days after shipment date. If the Form AHK is issued retroactively, the maximum deadline is one year after the shipment date and the exporter should tick (✓) box 13 “”Issued Retroactively’”.
- State the origin criteria for each item of goods in the Form AHK
- Origin Criteria