BRIEFING of DOCA Dept. of Customs Administration Ministry of Finance.

BRIEFING of DOCA

Dept. of Customs Administration

Ministry of Finance

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Outlines of the Briefing

I. Organization & FunctionsII. Customs Tariff Commission

III. Brief introduction of present tariff rate

IV. Brief introduction of present FTAs

V. Brief introduction on Rules of OriginVI. Q & A

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I. Organization & FunctionsCustoms Administration within the MOF

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I. Organization & FunctionsDepartment of Customs Administration

Director General

Deputy Director General

5 Senior Specialists

Section ICustoms Procedures

andEnforcement

Section IITariffand

Customs Valuation

Section IIIDuty Drawback

andBonded Systems

Section IVInt'l Customs Affairs

andAD and SCM Issues

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I. Organization & Functions

Section I (Customs Procedures)

1. Trade Security and Facilitation

Introducing the Authorized Economic Operator and Single Window

2. Agreement on Rule of Origin

Accession to the WTO

3. Non-Preferential ROO

Bilateral Free Trade Agreements

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I. Organization & Functions

Section II 1. Tariff Concession

Results of the Tariff Negotiation and Revisions of the Customs Import Tariff are to be drafted and forwarded to the Cabinet and Legislative Yuan.

2. SG, SSG and Tariff Quota

3. Customs Valuation

(1) Implemented in 1986 (CV Code 1979)

(2) Revised in Oct. 31, 2001 (CV Agreement 1994)

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I. Organization & Functions

Section III 1. Duty Drawback 1,100 out of 8,688 tariff lines applied 2. Bonding System (1) Bonded Factories/Warehouses (2) Science Based Industrial Park (3) Free Trade Harbor

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I. Organization & Functions

Section IV 1. AD and SCM (1) Investigation of Dumping Margin and Subsidies (2) Drafting Anti-Dumping/Countervailing

Measures, for approval

(3) Staffs of the Customs Tariff Commission 2. International Customs Affairs Bilateral Cooperation Multilateral: APEC, WTO, WCO

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The Concept of Trade Security emerged After 911

The US-The first mission( homeland security)

1 CSI declaration( Container Security Initiative)

2 C-TPAT( Customs-Trade Partnership Against Terrorism)

3 the 24-Hour Rule

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Taiwan’s Efforts on Supply Chain Security

CSI ( Container Security Initiative)1 the US began to advocate CSI in Jan. 2002 2 Taiwan signs the CSI declaration of principles with

the US in Aug. 2004.3 Kaohsiung and Keelung port have joined the CSI4 The US customs has stationed in Kaohsiung port to

assist our Customs in using non-intrusive equipment detection for cargo outbound for America

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Taiwan’s Efforts on Supply Chain Security (continued)

Megaports Initiative1 To supplement the CSI, we sign the MOU o

f Megaports Initiative with the US Energy Department on May 2006.

2 The US specialists arrived in Kaohsiung port to survey the construction project on Jan. 2007. The project is under construction, which will begin to operate on Nov. 2008.

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Taiwan’s Efforts on Supply Chain Security (continued)

24-hour Rule

1 The US began to implement 24-hour Rule on Dec. 2002.

2 Taiwan’s exporters comply with 24-hour Rule for cargo outbound for the US

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Taiwan’s Efforts on Supply Chain Security (continued)

We aren’t still a member of the WCO, but we have actively implemented the SAFE guidelines proposed by the WCO

The US proposes the WCO SAFE in APEC SCCP held in Korea on Sep. in 2005. The next following year, we have submitted our notification of intention to support the proposal.

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Taiwan’s Efforts on Supply Chain Security (continued)

Single window

1 Position 2008 as the year to map out our single window from the areas of “system establishment, “information integration”, and “capacity promotion”.

2 Hold the “2008 APEC Customs Data Harmonization Workshop

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Taiwan’s Efforts on Supply Chain Security (continued)

Authorized Traders systems1 Legal Base: Regulations Governing Customs Clearance

Procedures for 2 Application Procedure: fill out an application form, and

submit related documents, including certificates of annual import/export performance over recent 3 years etc. to customs bureau

3 The Terms of Application:(1) have been awarded a medal for excellent importer/exporter(2)no recorder of duty evasion, smuggling or other grave customs offenses over recent 3 years(3)set up a computerized system for operating and financial management

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II. Customs Tariff Commission1. Legitimacy Members of the Commission shall be reported to the Cabinet

for approval. Staffs of the Commission shall be supported by employees of the Ministry of Finance.

2. Mandates

To Study and Review draft revision of the Customs Import Tariff and the levy of special customs duty. (AD, SCM, SG & SG)

3. Members of the Commission

Chairman: Deputy Minister of Finance

Members: Government Representatives and Scholars.

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III. Brief introduction of present tariff rate

Applied tariff rate since 2001 (accession to WTO)

2001 2002 2003 2004 2005 2006

Agricultural products

19.33 13.98 13.63 13.60 13.46 13.31

Industrial products

5.94 5.66 4.94 4.22 4.16 4.10

All products 7.97 6.99 6.32 5.74 5.67 5.60

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III. Brief introduction of present tariff rate

Distribution of tariffs Total number of tariff lines: 8,848 items Free of duty: 2,800 items, accounting for 31.65%

of total items Duty less than 10%: 7,347 items, accounting for

83.04% of total items Duty above 50%: 36 items, accounting for 0.4%

of total items Non-ad valorem duties: 157 items, accounting

for 1.77% of total items

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　 All products

RatioAgricultu

re products

Industrial products

Free of duty

2800 31.65% 296 2504

0%~5% 2960 33.45% 169 2791

5%~10% 1587 17.94% 163 1424

10%~15% 669 7.56% 178 491

15%~20% 313 3.54% 300 13

20%~25% 134 1.51% 128 6

25%~30% 140 1.58% 91 49

30%~35% 29 0.33% 29 0

35%~40% 14 0.16% 14 0

40%~45% 9 0.10% 9 0

50%~100% 29 0.33% 29 0

100%~150% 2 0.02% 2 0

150%~200% 2 0.02% 2 0

>200% 3 0.03% 3 0

Mixed duty 68 0.77% 67 1

Specific duty

89 1.01% 89 0

Total 8,848 1,569 7,279

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IV. Brief introduction of FTAsThe role of the Ministry of Finance in th

e signing and implementation of FTAs Revising of the Tariff Schedule according to th

e tariff reduction schedule in each FTA Implementation tariff reduction Administration of TRQ

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IV. Brief introduction of FTAsThe current situation of FTA

As of now, we have signed FTAs with five countries: Panama, Guatemala, Nicaragua, El Salvador, and Honduras

Effective date of each FTA• Panama: 01.01.2004• Guatemala:01.07.2006• Nicaragua, El Salvador and Honduras: yet ef

fective

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IV. Brief introduction of FTAsTaiwan’s Tariff Concession on Taiwan-

Panama FTAAll products Agricultural

productsIndustrial products

Tariff lines

% Tariff lines

% Tariff lines

%

Custom duty eliminate

immediately 6,302 71.30% 682 43.49% 5,620 77.29%

Custom duty eliminate in

5 equal annual stages 1,736 19.64% 312 19.90% 1,424 19.58%

Custom duty eliminate in 10 equal annual stages 561 6.35% 362 23.09% 199 2.74%

Exclude items 192 2.17% 164 10.46% 28 0.39%

TRQ 48 0.54% 48 3.06% - -

Total 8,839 100% 1,568 100% 7,271 100%

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V. Brief introduction on Rules of Origin

Our Commitments relating to ROO in WTO accession Chinese Taipei would ensure that its laws and

regulations relating to rules of origin were consistent with the relevant WTO Agreements upon accession.

Implementation of accession commitments Article 28 of Customs Act Regulations Governing the Determination of

Country of Origin of an Import Good

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Non-Preferential & PreferentialNon-preferential ROO

Wholly produced criterion Substantial transformation criterion

• changes of six digits of HS• 35% value added

Preferential ROO Free Trade Agreements Least Developed Countries

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Preferential ROO under FTA

Wholly obtained or produced goodsGoods meeting specific Rules of Origin

Change in tariff chapter Change in tariff heading Change in tariff subheading Value-added rules

Goods produced wholly from originating materials

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What benefits can be expected from the FTA

To promote for investment

To increase flow of goods

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Trade benefits of FTA with Panama

After the FTA with Panama came into force, bilateral trade grew closer. In 2004, the total trade between Chinese Taipei and Panama was up to $US 269 million, comparing to 2003, when the total trade was $US 127 million, an increase of 112%.

The total trade in 2005 and 2006 was $US 249 million and $US 217 million respectively

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VI. Q & A

Thank You for your Attention!

Comments and Questions are Welcomed.