Agreement on Trade in Goods between the Republic of Korea and the Republic of Turkey

PREAMBLE

str. 2The Republic of Korea and the Republic of Turkey (hereinafter referred to as 'the Parties' or 'Korea' or 'Turkey,' where appropriate);

RECALLING the Framework Agreement signed in xx, xx on the xx day of xx xxxx;

REAFFIRMING their commitment to gradually liberalise substantially all the trade in goods between the Parties; and

RESOLVED to contribute to the strengthening and reinforcement of the multilateral trading system as established through the World Trade Organization;

HAVE AGREED as follows:

CHAPTER 1 GENERAL DEFINITIONS

national means:

str. 3- (a) for Korea, a Korean national within the meaning of the Nationality Act ; and
- (b) for Turkey, a Turkish citizen within the meaning of the Turkish Constitution ;

originating means qualifying under the rules of origin set out in the Protocol on Rules of Origin and Origin Procedures;

CHAPTER 2 NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

Section A: Common Provisions

ARTICLE 2.1: OBJECTIVE

str. 5The Parties shall gradually liberalise substantially all the trade in goods between them over a transitional period starting from the date of entry into force of this Agreement, in accordance with this Agreement and in conformity with Article XXIV of GATT 1994.

ARTICLE 2.2: CUSTOMS DUTY

str. 5For the purposes of this Chapter, a customs duty includes any duty or charge of any kind imposed on, or in connection with, the importation of a good, including any form of surtax or surcharge imposed on, or in connection with, such importation. A customs duty does not include any:

- (a) charge equivalent to an internal tax imposed consistently with Article 2.6 in respect of the like domestic good or in respect of an article from which the imported good has been manufactured or produced in whole or in part;
- (b) duty imposed pursuant to the laws of a Party consistently with Chapter 4 (Trade Remedies);
- (c) fee or other charge imposed pursuant to the laws of a Party consistently with Article 2.8;
- (d) premium 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; and
- (e) duty imposed pursuant to the laws of a Party consistently with Article 5 of the Agreement on Agriculture.

ARTICLE 2.3: CLASSIFICATION OF GOODS

str. 5The classification of goods in trade between the Parties shall be that set out in each Party's respective tariff nomenclature interpreted in conformity with the Harmonized System.

Section B: Reduction or Elimination of Customs Duties

ARTICLE 2.4: REDUCTION OR ELIMINATION OF CUSTOMS DUTIES

str. 51. Except as otherwise provided in this Agreement, each Party shall reduce or eliminate its customs duties on originating goods of the other Party in accordance with its Schedule included in Annex 2. 2.

str. 6If at any moment a Party reduces its applied most favoured 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. 3. On request of either Party, the Parties shall consult each other to consider the possibility of accelerating and broadening the scope of the reduction or elimination of customs duties on imports between them. Following such consultations, a decision by the Joint Committee on the acceleration or broadening of the scope 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 Party's Schedule included in Annex 2 for that good, subject to the Parties' respective applicable legal requirements and procedures.

ARTICLE 2.5 STANDSTILL

str. 6Except as otherwise provided in this Agreement, including as explicitly set out in each Party's Schedule included in Annex 2, neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating good of the other Party. This shall not preclude either Party from raising a customs duty to the level established in its Schedule included in Annex 2 following a unilateral reduction on an MFN basis.

Section C: Non-Tariff Measures

ARTICLE 2.6: NATIONAL TREATMENT

str. 6Each Party shall accord national treatment to goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes; and to this end, Article III of GATT 1994, including its interpretative notes, is incorporated into and made part of this Agreement, mutatis mutandis .

ARTICLE 2.7: IMPORT AND EXPORT RESTRICTIONS

str. 7Neither Party shall adopt or maintain any prohibition or restriction other than duties, taxes or other charges 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, including its interpretative notes; and to this end, Article XI of GATT 1994, including its interpretative notes, is incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 2.8: FEES AND OTHER CHARGES ON IMPORTS

str. 7Each Party shall ensure that all fees and charges of whatever character (other than customs duties and the items that are excluded from the definition of a customs duty under Article 2.2(a), (b), (d) and (e)) imposed on, or in connection with, importation are limited in amount to the approximate cost of services rendered, are not calculated on an ad valorem basis, and do not represent an indirect protection to domestic goods or taxation of imports for fiscal purposes.

ARTICLE 2.9: DUTIES, TAXES OR OTHER FEES AND CHARGES ON EXPORTS

str. 7Neither Party shall maintain or institute any duties, taxes or other fees and charges imposed on, or in connection with, the exportation of goods to the territory of the other Party, or any internal taxes, fees and charges on goods exported to the territory of the other Party that are in excess of those imposed on like goods destined for internal sale.

ARTICLE 2.10: SANITARY AND PHYTOSANITARY MEASURES

str. 71. The Parties affirm their existing rights and obligations with respect to each other under the SPS Agreement. 2. In particular, neither Party shall apply its sanitary and phytosanitary measures as an arbitrary or unjustifiable discrimination or a disguised restriction on trade between them. 3.

str. 8Neither Party shall have recourse to Chapter 6 (Dispute Settlement) of the Framework Agreement for any matter arising under this Article.

ARTICLE 2.11: TRADE RELATED NON-TARIFF MEASURES

str. 81. Each Party shall ensure the transparency of its non-tariff measures affecting trade between the Parties and that any such measures are not prepared, adopted or applied with the view to or with the effect of creating unnecessary obstacles to trade between the Parties. 2. To this end, the coordination mechanism, committee or working group, if any, which is most closely related to a specific non-tariff measure, shall review such a measure when a Party identifies that measure for consideration. 3. The coordination mechanism, committee or working group referred to in paragraph 2, shall consider approaches that may better facilitate trade between the Parties and present to the Parties the result of its consideration, including any recommendations, preferably within 12 months. The result of such consideration and recommendations shall be submitted to the Joint Committee for consideration and/or action.

Section D: Exceptions Related to Trade in Goods

ARTICLE 2.12: GENERAL EXCEPTIONS

str. 81. The Parties affirm that their existing rights and obligations under Article XX of GATT 1994, including its interpretative notes, which is incorporated into and made part of this Agreement, shall apply to trade in goods covered by this Agreement, mutatis mutandis . 2. The Parties understand that before taking any measures provided for in subparagraphs (i) and (j) of Article XX of GATT 1994, the Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties.

str. 9If no agreement is reached within 30 days of supplying such information, the Party may apply measures under this Article on the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.

Section E: Institutional Provisions

ARTICLE 2.13: COMMITTEE ON TRADE IN GOODS

str. 91. The Parties hereby establish the Committee on Trade in Goods pursuant to Article 7.2 (Committees and Working Groups) of the Framework Agreement. The Committee on Trade in Goods shall meet upon the request of a Party or of the Joint Committee to consider any matter arising under this Chapter and comprise representatives of the Parties. 2. The functions of the Committee on Trade in Goods shall include:

- a) promoting trade in goods between the Parties, including through consultations on accelerating and broadening the scope of tariff elimination under this Agreement and any other issues as appropriate;
- b) addressing tariff and non-tariff measures affecting trade in goods between the Parties and, if appropriate, referring such matters to the Joint Committee for its consideration; and
- c) providing a forum for discussion or the exchange of information on matters related to sanitary and phytosanitary measures which may, directly or indirectly, affect trade between the Parties with a view to minimizing their negative effects on trade and seeking mutually acceptable alternatives;

in so far as these tasks have not been entrusted to the relevant Working Group established pursuant to Article 7.2 (Committees and Working Groups) of the Framework Agreement.

ANNEX 2 REDUCTION OR ELIMINATION OF CUSTOMS DUTIES 1. Except as otherwise provided in a Party's Schedule included in this Annex, the following staging categories apply to the reduction or elimination of customs duties by each Party pursuant to Article 2.4.1:

GENERAL NOTES TARIFF SCHEDULE OF KOREA

str. 121. Relation to the Harmonized Tariff Schedule of Korea (HSK). The provisions of this Schedule are generally expressed in terms of the HSK, and the interpretation of the provisions of this Schedule, including the product coverage of subheadings of this Schedule, shall be governed by the General Notes, Section Notes, and Chapter Notes of the HSK. To the extent that provisions of this Schedule are identical to the corresponding provisions of the HSK, the provisions of this Schedule shall have the same meaning as the corresponding provisions of the HSK. 2. Base Rates of Customs Duty. The base rates of duty set out in this Schedule reflect the Korean Customs Duty MFN rates of duty in effect on January 1, 2010.

TARIFF SCHEDULE OF TURKEY

str. 131. Relation to the Harmonized Tariff Schedule of Turkey (HST). The provisions of this Schedule are generally expressed in terms of the HST, and the interpretation of the provisions of this Schedule, including the product coverage of subheadings of this Schedule, shall be governed by the General Notes, Section Notes, and Chapter Notes of the HST. To the extent that provisions of this Schedule are identical to the corresponding provisions of the HST, the provisions of this Schedule shall have the same meaning as the corresponding provisions of the HST. 2. Base Rates of Customs Duty. The base rates of duty set out in this Schedule reflect the Turkish Customs Duty MFN rates of duty in effect on January 1, 2010.

CHAPTER 3

CUSTOMS AND TRADE FACILITATION

ARTICLE 3.1: OBJECTIVES AND PRINCIPLES

str. 13With the objectives of facilitating trade and promoting customs cooperation on a bilateral and multilateral basis, the Parties agree to cooperate and to adopt and apply their import, export and transit requirements and procedures for goods on the basis of the following objectives and principles:

- (a) in order to ensure that import, export and transit requirements and procedures for goods are efficient and proportionate:
- (i) each Party shall adopt or maintain expedited customs procedures while maintaining appropriate customs control and selection procedures;
- (ii) import, export and transit requirements and procedures shall be no more administratively burdensome or trade restrictive than necessary to achieve legitimate objectives;
- (iii) each Party shall provide for clearance of goods with a minimum of documentation and make electronic systems accessible to customs users;
- (iv) each Party shall use information technology that expedites procedures for the release of goods;
- (v) each Party shall ensure that its customs authorities and agencies involved in border controls including import, export and transit matters, cooperate and coordinate their activities; and
- (vi) each Party shall provide that the use of customs brokers is optional;
- (b) import, export and transit requirements and procedures shall be based on international trade and customs instruments and standards which the Parties have accepted, except when they would be an inappropriate or ineffective means for the fulfillment of the legitimate objectives pursued;
- (c) requirements and procedures shall be transparent and predictable for importers, exporters and other interested parties;
- (d) each Party, where it is deemed to be necessary, shall consult in a timely manner with representatives of the trading community and other interested parties, including on significant new or amended requirements and procedures prior to their adoption;

(e) risk management principles or procedures shall be applied to focus compliance efforts on transactions that merit attention;

str. 15(f) each Party shall cooperate and exchange information for the purpose of promoting the application of, and compliance with, the trade facilitation measures agreed upon under this Agreement; and

(g) measures to facilitate trade shall not prejudice the fulfillment of legitimate policy objectives, such as the protection of national security, health and the environment. ARTICLE 3.2: RELEASE OF GOODS

1. Each Party shall adopt and apply simplified and efficient customs and other traderelated requirements and procedures in order to facilitate trade between the Parties. 2. Pursuant to paragraph 1, each Party shall exert its best efforts to ensure that its customs authorities, border agencies or other competent authorities apply requirements and procedures that:

(a) provide for the release of goods within a period no longer than that required to ensure compliance with its customs and other trade-related laws and formalities. Each Party shall work to further reduce release time;

(b) provide for advance electronic submission and eventual processing of information before physical arrival of goods, 'pre-arrival processing', to enable the release of goods on arrival;

(c) allow importers to obtain the release of goods from customs before, and without prejudice to, the final determination by its customs authority of the applicable customs duties, taxes and fees 1 ; and

(d) allow goods to be released for free circulation at the point of arrival, without temporary transfer to warehouses or other facilities. 3. Each Party shall work towards the implementation of initiatives that harmonise the data requirements of its respective agencies associated with the importation, exportation or transit of goods, and minimize the submission of trade data, with the objective of allowing importers and exporters to present all required data to one agency. 4. Where a Party determines to detain under customs control a good imported from the territory of the other Party due to a perceived failure to comply with the regulations or laws of the importing Party, relevant authorities of that Party shall immediately notify the importer of the reasons for the detention of the good in accordance with its domestic laws and regulations. 1

A Party may require an importer to provide sufficient guarantee in the form of a surety, a deposit or some other appropriate instruments, covering the ultimate payment of the customs duties, taxes and fees in

connection with the importation of the goods.

str. 16The Parties shall endeavour to apply simplified import and export procedures for traders or economic operators which meet specific criteria decided by a Party, providing in particular more rapid release and clearance of goods, including advance electronic submission and processing of information before physical arrival of consignments, a lower incidence of physical inspections, and facilitation of trade with regard to, for example, simplified declarations with a minimum of documentation.

ARTICLE 3.4: AUTOMATION

str. 16Each customs administration shall apply information technology that expedites procedures for the release of goods to support customs operations, where it is cost-effective and efficient, particularly in the paperless trading context, taking into account developments in this area within the WCO.

ARTICLE 3.5: AUTHORIZED ECONOMIC OPERATOR

str. 16The Parties shall promote the implementation of the Authorized Economic Operator (AEO) concept. Acknowledgment of the AEO security status should be taken into account to secure the international trade supply chain and trade facilitation benefits should be provided in return for meeting customs security standards.

ARTICLE 3.6: RISK MANAGEMENT

str. 16Each Party shall apply risk management systems, to the extent possible in an electronic manner, for risk analysis and targeting that enable its customs authorities to focus inspection activities on high risk goods and that simplify the clearance and movement of low-risk goods. Each Party shall draw upon the revised International Convention on the Simplification and Harmonization of Customs Procedures of 1999 (hereinafter referred to as the 'Kyoto Convention') and WCO Risk Management Guidelines for its risk management procedures.

ARTICLE 3.7: TRANSPARENCY

str. 161. Each Party shall ensure that its customs and other trade-related laws, regulations and general administrative procedures and other requirements, including fees and charges, are readily available to all interested parties, via an officially designated medium and, where feasible and possible, official website. 2. Each Party shall designate or maintain one or more inquiry or information points to address inquiries by interested persons concerning customs and other trade-related matters. 3. Each Party shall consult with, and provide information to, representatives of the trading community and other interested parties. Such consultations and information shall

cover significant new or amended requirements and procedures and the opportunity to comment shall be provided prior to their adoption.

ARTICLE 3.8: ADVANCE RULINGS

str. 171. Upon written request from traders, each Party shall issue written advance rulings, through its customs authorities, prior to the importation of a good into its territory in accordance with its laws and regulations, on tariff classification, origin or any other such matters as the Party may decide. 2. Subject to any confidentiality requirements in its laws and regulations, each Party shall publish, e.g. on the Internet, its advance rulings on tariff classification and any other such matters as the Party may decide. 3. To facilitate trade, the Parties shall include in their bilateral dialogue regular updates on changes in their respective legislation on the matters referred to in paragraphs 1 and 2 .

ARTICLE 3.9: APPEAL PROCEDURES

str. 171. Each Party shall ensure that with respect to its determinations on customs matters and other import, export and transit requirements and procedures, persons concerned who are the subject of such determinations shall have access to review or appeal of such determinations. A Party may require that an appeal be initially heard by the same agency, its supervisory authority or a judicial authority prior to a review by a higher independent body, which may be a judicial authority or administrative tribunal. 2. The producer or exporter may provide, upon request by the reviewing authority to the producer or exporter, information directly to the Party conducting the administrative review. The exporter or producer providing the information may ask the Party conducting the administrative review to treat that information as confidential in accordance with its laws and regulations.

ARTICLE 3.10: CONFIDENTIALITY

str. 171. Any information provided by persons or authorities of a Party to the authorities of the other Party pursuant to this Chapter shall, including where requested pursuant to Article 3.9, be treated as being of a confidential or restricted nature, depending on the laws and regulations applicable in each Party. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to similar information under the relevant laws and regulations of the Party that received it. 2.

str. 18Information referred to in paragraph 1 shall not be used by the authorities of the Party which has received it for purposes other than what it has been provided for without the express permission of the person or authority providing it. 3. Other than with the express permission of the person or authority that provided it, the information referred to in paragraph 1 shall not be published or otherwise disclosed to any persons, except where obliged or authorised to do so under the laws and regulations of the Party that received it in connection with legal proceedings. The person that provided the information shall be notified of such disclosure, wherever possible, in advance. 4. Where an authority of a Party requests information pursuant to this Chapter, it shall notify the requested persons of any possibility of disclosure in connection with legal proceedings.

ARTICLE 3.11: PRE-SHIPMENT INSPECTIONS

str. 18Neither Party shall require the use of pre-shipment inspections or their equivalent.

ARTICLE 3.12: POST CLEARANCE AUDIT

str. 18Each Party shall provide traders with the opportunity to benefit from the application of efficient post clearance audits. The application of post clearance audits shall not impose unwarranted or unjustified requirements or burdens on traders.

ARTICLE 3.13: CUSTOMS VALUATION

str. 18The Customs Valuation Agreement is incorporated into and made part of this Agreement, mutatis mutandis . The reservations and options provided for in Article 20 and paragraphs 2 through 4 of Annex III of the Customs Valuation Agreement shall be applicable.

ARTICLE 3.14: CUSTOMS COOPERATION

str. 181. The Parties shall enhance their cooperation in customs and customs-related matters. 2. The Parties undertake to develop trade facilitation actions in customs matters taking account of the work done in this connection by international organisations. This may include testing of new customs procedures. 3. The Parties affirm their commitment to the facilitation of the legitimate movement of goods and shall exchange expertise on measures to improve customs techniques and procedures, and on computerised systems. 4. The Parties shall commit to:
5.

str. 19(a) pursuing the harmonisation of documentation and data elements used in trade according to international standards for the purpose of facilitating the flow of trade between them in customs-related matters regarding the importation, exportation and transit of goods;

and scientific departments and to working towards the harmonisation of (b) intensifying cooperation between their customs laboratories customs laboratories methods;

(c) exchanging customs' personnel;

(d) jointly organising training programmes on customs-related issues, for the officials who participate directly in customs procedures;

(e) developing effective mechanisms for communicating with the trade and business communities;

(f) assisting, to the extent practicable, each other in the tariff classification, valuation and determination of origin;

(g) promoting strong and efficient intellectual property rights enforcement by customs authorities, regarding imports, exports, re-exports, transit, transhipments and other customs procedures, and in particular as regards counterfeit goods; and

(h) improving the security, while facilitating trade, of sea-container and other shipments from all locations that are imported into, transhipped through, or transiting the Parties. The Parties agree that the objectives of the intensified and broadened cooperation include, but are not limited to:

(i) working together to reinforce the customs related aspects for securing the logistics chain of international trade; and

(ii) coordinating positions, to the greatest extent practicable, in any multilateral fora where issues related to container security may be appropriately raised and discussed. 5. The Parties recognise that technical cooperation between them is fundamental to facilitating compliance with the obligations set forth in this Agreement and to achieving high levels of trade facilitation. The Parties, through their customs administrations, agree to develop a technical cooperation programme under mutually agreed terms as to the scope, timing and cost of cooperative measures in customs and customs-related areas. 6. Through the Parties' respective customs administrations and other border-related authorities, the Parties shall review relevant international initiatives on trade facilitation, including, inter alia , relevant work in the WTO and WCO, to identify areas where further joint action would facilitate trade between the Parties and promote shared multilateral objectives. The Parties shall work together to establish, wherever possible, common positions in international organizations in the field of customs and trade facilitation, notably in the WTO and WCO. 7. The Parties shall assist each other in implementation and enforcement of this Chapter, the Protocol on Rules of Origin and Origin Procedures, and their respective customs laws or regulations.

ARTICLE 3.15: MUTUAL ADMINISTRATIVE ASSISTANCE IN CUSTOMS MATTERS

str. 20The Parties shall provide mutual administrative assistance in customs matters in accordance with the Agreement between the Government of the Republic of Turkey and the Government of the Republic of Korea on Cooperation and Mutual Assistance in Customs Matters .

ARTICLE 3.16: CUSTOMS CONTACT POINTS

str. 201. The Parties shall exchange lists of designated contact points for matters arising under this Chapter and the Protocol on Rules of Origin and Origin Procedures. 2. The contact points shall endeavour to resolve operational matters covered by this Chapter through consultations. If a matter cannot be resolved through the contact points, the matter shall be referred to the Customs Committee referred to in Article 3.17.

ARTICLE 3.17: CUSTOMS COMMITTEE

str. 201. The Parties hereby establish the Customs Committee pursuant to Article 7.2 (Committees and Working Groups) of the Framework Agreement. The Customs Committee shall ensure the proper functioning of this Chapter and the Protocol on Rules of Origin and Origin Procedures and examine all issues arising from their application. For matters covered by this Agreement, it shall report to the Joint Committee established pursuant to 7.1 (Joint Committee) of the Framework Agreement. 2. The Customs Committee shall consist of representatives of the customs and other competent authorities of the Parties responsible for customs and trade facilitation matters, and for the management of the Protocol on Rules of Origin and Origin Procedures. 3. The Customs Committee shall adopt its rules of procedure, if considered necessary, and meet annually, the location of the meeting alternating between the Parties. 4. On request of a Party, the Customs Committee shall meet to discuss and endeavour to resolve any difference that may arise between the Parties on matters as included in this Chapter and the Protocol on Rules of Origin and Origin Procedures. 5. The Customs Committee may formulate resolutions, recommendations or opinions which it considers necessary for the attainment of the common objectives and sound functioning of the mechanisms established in this Chapter and the Protocol on Rules of Origin and Origin Procedures.

CHAPTER 4

Section A: Bilateral Safeguard Measures

ARTICLE 4.1: APPLICATION OF A BILATERAL SAFEGUARD MEASURE

str. 211. If, as a result of the reduction or elimination of a customs duty under this Agreement, originating goods of a Party are being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive goods, the importing Party may adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section. 2. The importing Party may take a bilateral safeguard measure which:

(a) suspends further reduction of the rate of customs duty on the good concerned provided for under this Agreement; or

(b) increases the rate of customs duty on the good to a level which does not exceed the lesser of:

(i) the MFN applied rate of customs duty on the good in effect at the time the measure is taken; or

(ii) the base rate of customs duty specified in the Schedules included in Annex 2 (Reduction or Elimination of Customs Duties) pursuant to Article 2.4 (Reduction or Elimination of Customs Duties).

ARTICLE 4.2: CONDITIONS AND LIMITATIONS

str. 211. A Party shall notify the other Party in writing of the initiation of an investigation described in paragraph 2 and consult with the other Party as far in advance of applying a bilateral safeguard measure as practicable, with a view to reviewing the information arising from the investigation and exchanging views on the measure. 2. A Party shall apply a bilateral safeguard measure only following an investigation by its competent authorities in accordance with Articles 3 and 4.2(c) of the Safeguards Agreement and to this end, Articles 3 and 4.2(c) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis . 3. In the investigation described in paragraph 2, the Party shall comply with the requirements of Article 4.2(a) of the Safeguards Agreement and to this end, Article 4.2(a) of the Safeguards Agreement is incorporated into and made part of this Agreement, mutatis mutandis . 4.

str. 22Each Party shall ensure that its competent authorities complete any - such investigation within one year of its date of initiation. 5. Neither Party shall apply a bilateral safeguard measure:

(a) except to the extent, and for such time, as may be necessary to prevent or remedy serious injury and to facilitate adjustment;

(b) for a period exceeding two years, except that the period may be extended by up to one year if the competent authorities of the applying Party determine, in conformity with the procedures specified in this Article, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting, provided that the total period of application of a bilateral safeguard measure, including the period of initial application and any extension thereof, shall not exceed three years; or

(c) beyond the expiration of the transition period, except with the consent of the other Party. 6. When a Party terminates a bilateral safeguard measure, the rate of customs duty shall be the rate that, according to its Schedule included in Annex 2 (Reduction or Elimination of Customs Duties), would have been in effect but for the measure. 7. Neither Party shall apply a safeguard measure more than once against the same good. 8. Where the expected duration of the safeguard measure is over one year, the applying Party shall progressively liberalise it at regular intervals.

ARTICLE 4.3: PROVISIONAL MEASURES

str. 221. In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and such imports cause serious injury, or threat thereof, to the domestic industry. 2. Before applying a safeguard measure on a provisional basis, the applying Party shall notify the other Party and shall immediately initiate consultations after applying the measure. 3. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of Articles 4.2.2 and 4.2.3. The Party shall promptly refund any tariff increases if the investigation described in Article 4.2.2 does not result in a finding that the requirements of Article 4.1 are met. The duration of any provisional measure shall be counted as part of the period prescribed by Article 4.2.5(b).

ARTICLE 4.4: COMPENSATION

str. 231. A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard measure. The Party shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure. 2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days after the consultations begin, the Party whose goods are subject to the bilateral safeguard measure may suspend the application of substantially equivalent concessions to the Party applying the safeguard measure. 3. The right of suspension referred to in paragraph 2 shall not be exercised for the first two years during which a bilateral safeguard measure is in effect, provided that the safeguard measure has been taken as a result of an absolute increase in imports and that such measure conforms to this Agreement.

ARTICLE 4.5: DEFINITIONS

Section B: Global Safeguard Measures

ARTICLE 4.6: GLOBAL SAFEGUARD MEASURES

str. 231. Each Party retains its rights and obligations under Article XIX of GATT 1994 and the Safeguards Agreement. Unless otherwise provided in this Article, this Agreement does not confer any additional rights or impose any additional obligations on the Parties with regard to measures taken under Article XIX of GATT 1994 and the Safeguards Agreement. 2. At the request of the other Party, the Party intending to take safeguard measures shall provide immediately ad hoc written notification of all pertinent information on the initiation of a safeguard investigation, the provisional findings and the final findings of the investigation. 3. Neither Party shall apply, with respect to the same good, at the same time:

str. 24- (a) a bilateral safeguard measure in accordance with Article 4.1; and
- (b) a measure under Article XIX of GATT 1994 and the Safeguards Agreement. 4. Neither Party shall have recourse to Chapter 6 (Dispute Settlement) of the Framework Agreement for any matter arising under this Section.

Section C: Anti-Dumping and Countervailing Duties

str. 24ARTICLE 4.7: GENERAL PROVISIONS

1. Sharing the need to condemn unfair competition in their bilateral trade and agreeing to enhance and promote fair competition, the Parties maintain their rights and obligations under Article VI and XVI of GATT 1994, the Anti-Dumping Agreement and the SCM Agreement. 2. Except as otherwise provided in this Section, this Agreement does not confer any additional rights or obligations on the Parties with regard to the initiation and conduct of dumping and subsidy investigations as well as the application of anti-dumping and countervailing measures. 3. In order to enhance transparency in the implementation of the WTO Agreement in anti-dumping or countervailing cases between the Parties:

(a) when anti-dumping margins are established on the weighted-to-weighted basis or transaction-to-transaction basis, or weighted-to-transaction basis, all individual margins, whether positive or negative, should be counted toward the average 2 ;

(b) on the condition that the level of anti-dumping or countervailing duty is sufficient to remove the injury, the investigating Party is expected to systematically impose a duty lesser than the dumping margin or amount of subsidy; and

(c) the investigating Party shall request an exporter or producer in the territory of the other Party for the timely response to its questionnaires. When the investigating Party finds major deficiency in information in a questionnaire response from relevant exporter or producer received before the deadline or requires clarifications for the purpose of investigation, the investigating Party shall demand missing information or request clarification of information concerning the answers to the

2 This is without prejudice to the position each Party takes in the WTO's DDA Negotiations on Rules. questionnaires. This procedure shall not be used to cause unwarranted delays in the investigation or to circumvent the deadlines.

ARTICLE 4.8: NOTIFICATION AND CONSULTATIONS

str. 241. After receipt by a Party's competent authorities of a properly documented antidumping application with respect to imports from the other Party, and no later than 15 days before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application. 2. After receipt by a Party's competent authorities of a properly documented countervailing duty application with respect to imports from the other Party, and before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application and afford the other Party a meeting to consult with its competent authorities regarding the application.

ARTICLE 4.9: INVESTIGATION AFTER TERMINATION RESULTING FROM A REVIEW

str. 24The Parties agree to examine, with special care, any application for initiation of an antidumping investigation on a good originating in the other Party and on which anti-dumping measures have been terminated in the previous 12 months as a result of a review. Unless this pre-initiation examination indicates that the circumstances have changed, the investigation shall not proceed.

ARTICLE 4.10: CUMULATIVE ASSESSMENT

str. 24When imports from more than one country are simultaneously subject to anti-dumping or countervailing duty investigation, a Party shall examine, with special care, whether the cumulative assessment of the effect of the imports of the other Party is appropriate in light of the conditions of competition between the imported goods and the conditions of competition between the imported goods and the like domestic goods.

ARTICLE 4.11: DE-MINIMIS STANDARD APPLICABLE TO REVIEW

str. 241. Any measure subject to a review in accordance with Article 11 of the AntiDumping Agreement shall be terminated where it is determined that the dumping margin if calculated is less than the de-minimis threshold set out in Article 5.8 of the Anti-Dumping Agreement. 2. When determining individual margins in accordance with Article 9.5 of the AntiDumping Agreement, no duty shall be imposed on exporters or producers in the exporting Party for which it is determined, on the basis of representative export sales, that the dumping margin is less than the de-minimis threshold set out in Article 5.8 of the AntiDumping Agreement. ARTICLE 4.12: DISPUTE SETTLEMENT

str. 24Neither Party shall have recourse to Chapter 6 (Dispute Settlement) of the Framework Agreement for any matter arising under this Section.

CHAPTER 5 TECHNICAL BARRIERS TO TRADE

ARTICLE 5.1: AFFIRMATION OF THE TBT AGREEMENT

str. 24Each Party affirms its existing rights and obligations with respect to each other under the TBT Agreement.

ARTICLE 5.2: SCOPE AND DEFINITIONS

str. 241. This Chapter shall apply to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures as defined in the TBT Agreement that may affect trade in goods between the Parties. 2. Notwithstanding paragraph 1, this Chapter shall not apply to:

(a) purchasing specifications prepared by governmental bodies for production or consumption requirements of such bodies; or

(b) sanitary and phytosanitary measures as defined in Annex A of the SPS Agreement. 3. For the purposes of this Chapter, the definitions of Annex 1 of the TBT Agreement shall apply.

ARTICLE 5.3: COOPERATION

str. 241. The Parties shall strengthen their cooperation in the field 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. 2. In their bilateral cooperation, the Parties shall seek to identify, develop and promote trade facilitating initiatives which may include, but are not limited to:

(a) reinforcing cooperation through, for example, the exchange of information, experiences and data and scientific and technical cooperation with a view to improving the quality and level of their technical regulations and making efficient use of regulatory resources;

(b) where appropriate, simplifying technical regulations, standards and conformity assessment procedures;

(c) where the Parties agree, and where appropriate, for example where no international standard exists, avoiding unnecessary divergence in approach to regulations and conformity assessment procedures, and working towards the possibility of converging or aligning technical requirements; and

- (d) promoting and encouraging bilateral cooperation between their respective organizations, public or private, responsible for metrology, standardisation, testing, certification and accreditation. 3. On request, a Party shall give due consideration to proposals that the other Party makes for cooperation under the terms of this Chapter. 4.

str. 26Each Party shall give positive consideration to a request by the other Party to negotiate agreements for the recognition of the results of its conformity assessment procedures conducted by bodies in the other Party's territory in areas , inter alia pharmaceutical products, medical devices, electronics, motor vehicles and parts, and chemicals.

ARTICLE 5.4: TECHNICAL REGULATIONS

str. 26The Parties agree:

- (a) to fulfil the transparency obligations of the Parties as indicated in the TBT Agreement; and
- (b) to use relevant international standards as a basis for technical regulations including conformity assessment procedures, except when such international standards would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued.

ARTICLE 5.5: STANDARDS

str. 261. The Parties reconfirm their obligations under Article 4.1 of the TBT Agreement to ensure that their standardizing bodies accept and comply with the Code of Good Practice for the Preparation and Adoption of Standards in Annex 3 to the TBT Agreement, and also have regard to the principles set out in Decisions and Recommendations adopted by the Committee since 1 January 1995, G/TBT/1/rev.10, 9 June 2011, Annex B ( Decision of the Committee on Principles for the Development of International Standards,

str. 27Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the TBT Agreement ), issued by the WTO Committee on Technical Barriers to Trade. 2. The Parties undertake to exchange information on:
3. (a) their use of standards in connection with technical regulations;
4. (b) each other's standardisation processes, and the extent of use of international standards as a basis for their national and regional standards; and
5. (c) cooperation agreements implemented by either Party on standardisation, for example information on standardisation issues in free trade agreements with non-parties. 1. The Parties recognise that a broad range of mechanisms exist to facilitate the acceptance of the results of conformity assessment procedures conducted in the territory of the other Party, including:
2. (a) agreements on mutual acceptance of the results of conformity assessment procedures with respect to specific technical regulations conducted by bodies located in the territory of the other Party;
3. (b) accreditation procedures for qualifying conformity assessment bodies located in the territory of the other Party;
4. (c) governmental designation of conformity assessment bodies located in the territory of the other Party;
5. (d) recognition by a Party of the results of conformity assessment procedures conducted in the territory of the other Party;
6. (e) voluntary arrangements between conformity assessment bodies in the territory of each Party; and
7. (f) the importing Party's acceptance of a supplier's declaration of conformity. 2. Having regard in particular to those considerations, the Parties undertake:
9. (a) to intensify their exchange of information on these and similar mechanisms with a view to facilitating the acceptance of conformity assessment results;
10. (b) to exchange information on conformity assessment procedures, and in particular on the criteria used to select appropriate conformity assessment procedures for specific products;
11. (c) to exchange information on accreditation policy, and to consider how to make best use of international standards for accreditation, and international agreements involving the Parties' accreditation bodies, for example, through the mechanisms of the International Laboratory Accreditation Cooperation and the International Accreditation Forum; and
12. (d) in line with Article 5.1.2 of the TBT Agreement, to require conformity assessment procedures that are not more strict than necessary.

ARTICLE 5.7: MARKET SURVEILLANCE

str. 29The Parties undertake to exchange views on market surveillance and enforcement activities. 1. The Parties agree to nominate TBT Coordinators and to give appropriate information to the other Party when their TBT Coordinator changes. The TBT Coordinators shall work jointly in order to facilitate the implementation of this Chapter and cooperation between the Parties in all matters pertaining to this Chapter. 2.

str. 30The Coordinator's functions shall include:

(a) monitoring the implementation and administration of this Chapter, promptly addressing any issue that either Party raises related to the development, adoption, application or enforcement of standards, technical regulations and conformity assessment procedures, and upon either Party's request, consulting on any matter arising under this Chapter;

(b) enhancing cooperation in the development and improvement of standards, technical regulations and conformity assessment procedures;

(c) arranging the establishment of working groups, which may include or consult with non-governmental experts and stakeholders as mutually agreed by the Parties;

(d) exchanging information on developments in non-governmental, regional and multilateral fora related to standards, technical regulations and conformity assessment procedures; and

(e) reviewing this Chapter in light of any developments under the TBT Agreement. 3. The Coordinators shall communicate with each other by any agreed method that is appropriate for the efficient and effective discharge of their functions. 4. For the purposes of this Article, the TBT Coordinator shall be:

(a) in the case of Korea, the Korean Agency for Technology and Standards, or its successor; and

(b) in the case of Turkey, the Ministry of Economy, Directorate General for Product Safety and Inspections, or its successor. ARTICLE 5.9: EXCHANGE OF INFORMATION

1. When information or explanation is provided by a Party on request of the other Party pursuant to this Chapter, it shall be provided in print, electronically or through any other appropriate means within a reasonable period. 2. Nothing in this Chapter shall be construed to require a Party to furnish any information the disclosure of which it considers is contrary to its essential security interests.

ARTICLE 5.10: TRANSPARENCY

str. 31Each Party shall ensure that economic operators of the other Party, located in its territory and registered under its relevant laws and regulations, are allowed to participate in any formal public consultative process concerning development of technical regulations, on terms no less favourable than those accorded to its own legal or natural persons. 2. Notwithstanding Article 4.1.2 (Exchange of Information) of the Framework Agreement, each Party shall electronically notify the other Party's Coordinator established under Article 5.8 at the same time as it makes its notification to the WTO Central Registry of Notifications in accordance with the TBT Agreement of:

(a) its proposed technical regulations and conformity assessment procedures; and

(b) its technical regulations and conformity assessment procedures adopted to address urgent problems of safety, health, environmental protection or national security arising or threatening to arise. 3.

str. 32For technical regulations and conformity assessment procedures referred to in Article 2.9 and 5.6 of the TBT Agreement, respectively, the Parties agree:

(a) when a Party has adopted or is proposing to adopt a technical regulation or conformity assessment procedure, to provide the other Party on request with available information regarding the objective and rationale for the technical regulation or conformity assessment procedure;

(b) to establish mechanisms for providing improved information on technical regulations and conformity assessment procedures, including through a public website, to the other Party;

(c) to take appropriate consideration of the other Party's views where a part of the process of developing a technical regulation is open to public consultation and to exchange comments and responses through the TBT Coordinators established under Article 5.8;

(d) when making notifications in accordance with the TBT Agreement, where possible, to allow a period of at least 60 days following the notification for the other Party to provide comments in writing on the proposal; and

(e) to give due consideration to leave sufficient time between the publication of technical regulations or conformity assessment procedures and their entry into force for economic operators of the other Party to adapt, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise, and where practicable to give appropriate consideration to reasonable requests for extending the comment period. 4. The notification of technical regulations and conformity assessment procedures shall include an online link to, or a copy of, the complete text of the notified document. Where possible, the Parties shall provide an online link to, or a copy of, the complete text of the notified document in English.

ARTICLE 6.1: ENTRY INTO FORCE

str. 331. This Agreement shall be approved by the Parties in accordance with their own procedures. 2. This Agreement shall enter into force on the first day of the second month, following the date of the exchange of the written notifications through diplomatic channels, by which the Parties inform each other that all necessary requirements foreseen by their domestic legislation for the entry into force of this Agreement have been fulfilled, or on such other date as the Parties may agree.

ARTICLE 6.2: DURATION

str. 331. This Agreement shall be valid indefinitely. 2. Either Party may notify in writing the other Party of its intention to denounce this Agreement. 3. The denunciation shall take effect six months after the notification under paragraph 2.

ARTICLE 6.3: ANNEXES, PROTOCOLS, AND NOTES

str. 33The Annexes, Protocols, and Notes to this Agreement shall form an integral part thereof.

ARTICLE 6.4: AMENDMENTS

str. 33The Parties may agree, in writing, to amend this Agreement. An amendment shall enter into force after the Parties exchange written notifications certifying that they have completed their respective applicable legal requirements and procedures, or on such other date as the Parties may agree.

ARTICLE 6.5: RELATION WITH OTHER AGREEMENTS

str. 33The Parties confirm their rights and obligations under the WTO Agreement and under any other international agreement to which they are a party.

ARTICLE 6.6: CUSTOMS UNIONS AND FREE TRADE AREAS

str. 331. Nothing in this Agreement shall preclude the maintenance or establishment of customs unions, free trade areas or other arrangements between either of the Parties and

CHAPTER 6 FINAL PROVISIONS

str. 34non-parties, insofar as they do not alter the rights and obligations provided for in this Agreement.

str. 342. On request of a Party, consultations between the Parties shall take place within the Joint Committee concerning agreements establishing or adjusting customs unions or free trade areas and, where required, on other major issues related to the Parties' respective trade policies with non-parties. 3. In case of accession of Turkey to the European Union, the Parties shall enter into consultations on the consequences of the accession.

ARTICLE 6.7: AUTHENTIC TEXTS

str. 34This Agreement is drawn up in duplicate in the Turkish, Korean and English languages, each of these texts being equally authentic. In case of divergence, the English text shall prevail. IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorised thereto, have signed this Agreement. DONE at …., Republic of …, in duplicate, this … day of … two thousand and twelve.

str. 35For the Republic of Korea

For the Republic of Turkey

PROTOCOL ON RULES OF ORIGIN AND ORIGIN PROCEDURES

Section A: Rules of Origin

ARTICLE 1: DEFINITIONS

ARTICLE 2: ORIGINATING PRODUCTS

str. 35For the purpose of a preferential tariff treatment the following products shall be considered as originating in a Party:

- (a) products wholly obtained in a Party within the meaning of Article 4;
- (b) products obtained in a Party incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the Party concerned within the meaning of Article 5; or
- (c) products obtained in a Party exclusively from materials that qualify as originating pursuant to this Protocol.

ARTICLE 3: CUMULATION OF ORIGIN

str. 36Notwithstanding Article 2, products shall be considered as originating in a Party if such products are obtained there, incorporating materials originating in the other Party, provided that the working or processing carried out goes beyond the operations referred to in Article 6. It shall not be necessary that such materials have undergone sufficient working or processing.

ARTICLE 4: WHOLLY OBTAINED PRODUCTS

str. 37For the purposes of Article 2(a), the following shall be considered as wholly obtained in a Party:

- (a) mineral products extracted from the soil or from the seabed in the territory of a Party;
- (b) vegetable products grown and harvested there;
- (c) live animals born and raised there;
- (d) products from live animals born and raised there;

3 ascertainable means 'established in accordance with the Customs Valuation Agreement'

(e) (i) products obtained by hunting, trapping within the land territory or fishing, conducted within the land waters or within the territorial sea of a Party; (ii) products of aquaculture, where the fish, crustaceans and mollusc are born and raised there;

(f) products of sea fishing and other products taken from the sea outside the territorial sea of a Party by its vessels;

(g) products made aboard its factory ships exclusively from products referred to in subparagraph (f);

(h) products extracted from marine soil or subsoil outside the territorial sea of a Party provided that a Party has rights to exploit that soil or subsoil;

(i) used articles collected there fit only for the recovery of raw materials or for use as waste;

(j) waste and scrap derived from manufacturing or processing operations conducted there; or

(k) products manufactured in a Party exclusively from the products referred to in this paragraph. 2. The terms 'its vessels' and 'its factory ships' in paragraph 1(f) and (g) shall apply only to vessels and factory ships:

(a) which are registered in either Party;

(b) which sail under the flag of either Party; and

(c) which meet one of the following conditions:

(i) they are at least 50 percent owned by nationals of either Party; or

(ii) they are owned by companies:

(A) which have their head office and their main place of business in either Party; and

(B) which are at least 50 percent owned by either Party, public entities of either Party, or nationals of either Party.

str. 381. For the purposes of Article 2(b), products which are not wholly obtained are considered to be sufficiently worked or processed when the conditions set out in the list in Annex II or Annex II(a) are fulfilled. The conditions set out in the list in Annex II or Annex II(a) indicate, for all products covered by this Agreement, the working or processing which must be carried out on non-originating materials used in manufacturing and apply only in relation to such materials. It follows that if:

(a) non-originating materials undergo sufficient working or processing, which results in an originating product, and when that product is used in a subsequent manufacture of another product, no account shall be taken of the non-originating material contained therein; and

(b) non-originating and originating materials undergo processing, which results in a non-originating product, and when that product is used in a subsequent manufacture of another product, account shall be taken only of the non-originating materials contained therein 4 . 2. Notwithstanding paragraph 1, non-originating materials which, according to the conditions set out in the list in Annex II, should not be used in the manufacture of a product may nevertheless be used, provided that:

(a) their total value does not exceed 10 percent of the ex-works price of the product; and

(b) any of the percentages given in the list in Annex II, for the maximum value of non-originating materials are not exceeded through the application of this paragraph. 3. Paragraph 2 shall not apply to products falling within Chapters 50 to 63 of the HS. 4. Paragraphs 1 through 3 shall apply subject to Article 6.

ARTICLE 6: INSUFFICIENT WORKING OR PROCESSING

str. 381. Without prejudice to paragraph 2, the following operations shall be considered to be insufficient working or processing to confer the status of originating products whether or not the requirements of Article 5 are satisfied:

(a) preserving operations to ensure that the products remain in good condition during transport and storage;

4

For the purposes of Article 5.1(b), the value of non-originating material can be acquired by deducting from the ex-works price of the product the value of originating material, including self-produced originating

material used in producing the resulting non-originating material. The value of originating material that is self-produced includes all the costs incurred in the production of the material and an amount for profit

equivalent to the profit added in the normal course of trade.

str. 39(b) change of packaging, breaking-up and assembly of packages;

(c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings;

(d) ironing or pressing of textiles;

(e) simple painting and polishing operations;

(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;

(g) operations to colour or flavour sugar or form sugar lumps; partial or total milling of crystal sugar;

(h) peeling, stoning and shelling of fruits, nuts and vegetables;

(i) sharpening, simple grinding or simple cutting;

(j) sifting, screening, sorting, classifying, grading or matching (including the making-up of sets of articles);

(k) simple placing in bottles, cans, flasks, bags, cases or 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 of products, whether or not of different kinds; mixing of sugar with any material;

(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;

(o) testing or calibrations;

(p) a combination of two or more operations specified in subparagraphs (a) through (o); or

(q) slaughter of animals. 5

2. All operations carried out in a Party on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1. 5

For the purposes of Article 6, 'simple' describes activities which need neither special skills nor machines, apparatus or equipment especially produced or installed for carrying out the activity. However, simple

mixing does not include chemical reaction. Chemical reaction means a process, including a biochemical

process, which results in a molecule with a new structure by breaking intermolecular bonds and by forming new intermolecular bonds, or by altering the spatial arrangement of atoms in molecule.

str. 401. The unit of qualification for the application of this Protocol shall be the product which is considered as the basic unit when determining classification using the nomenclature of the HS. It follows that:

(a) when a product composed of a group or assembly of articles is classified under the terms of the HS in a single heading, the whole constitutes the unit of qualification; and

(b) when a consignment consists of a number of identical products classified under the same heading of the HS, each product must be taken individually when applying this Protocol. 2. Where, under General Rule 5 of the HS, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin, and considered as originating if the product is originating.

ARTICLE 8: ACCESSORIES, SPARE PARTS AND TOOLS

str. 40Accessories, spare parts and tools delivered with a product, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the product in question.

ARTICLE 9: SETS OF GOODS

str. 40Sets, as defined in General Rule 3 of the HS, shall be regarded as originating when all component products are originating, and both the set and the products meet all other applicable requirements in this Protocol. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15 percent of the ex-works price of the set.

ARTICLE 10: NEUTRAL ELEMENTS

str. 40In order to determine whether a product originates, it shall not be necessary to determine the origin of the goods which might be used in its manufacture but which do not enter and which are not intended to enter into the final composition of the product. 6

6

For the purposes of Article 10, neutral elements, for example, will include:

(a) energy and fuel;

(b) plant and equipment;

(c) machines and tools; and

(d) goods which do not enter and which are not intended to enter into the final composition of the product.

str. 411. Where identical and interchangeable originating and non-originating materials are used in the manufacture of a product, those materials shall be physically segregated, according to their origin, during storage. 7
2. Where considerable costs or material difficulties arise in keeping separate stocks of identical and interchangeable originating and non-originating materials used in the manufacture of a product, the producer may use the so-called 'accounting segregation' method for managing stocks. 3. This method is recorded and applied in accordance with the generally accepted accounting principles applicable in the Party where the product is manufactured. 4. This method must be able to ensure that, for a specific reference-period, no more products receive originating status than would be the case if the materials had been physically segregated. 8
5. A Party may require that the application of the method for managing stocks provided for in this Article is subject to a prior authorisation by customs authorities. Should this be the case, the customs authorities may grant such an authorisation subject to any conditions deemed appropriate and they shall monitor the use of the authorisation and may withdraw it at any time whenever the beneficiary makes improper use of it in any manner or fails to fulfil any of the other conditions laid down in this Protocol.

ARTICLE 12: PRINCIPLE OF TERRITORIALITY

str. 411. Except as provided for in Article 3 and paragraph 3, the conditions for acquiring originating status set out in Articles 2 through 11 must be fulfilled without interruption in a Party. 2. Except as provided for in Article 3, where originating goods exported from a Party to a non-party return, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a) the returning goods are the same as those exported; and

(b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that non-party or while being exported. 7 For the purposes of paragraphs (1) and (2) of Article 11, identical and interchangeable materials means materials being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which cannot be distinguished from one another for origin purposes, once they are incorporated into the finished product. 8 For the purposes of this paragraph, specific 'period' will be determined in accordance with the relevant domestic laws and regulations of each Party. 3.

str. 42Notwithstanding paragraphs 1 and 2, the Parties agree that certain goods shall be considered to be originating even if they have undergone working or processing outside Korea, on materials exported from Korea and subsequently re-imported there, provided that the working or processing is done in the areas designated by the Parties pursuant to Annex IV.

ARTICLE 13: DIRECT TRANSPORT

str. 421. The preferential treatment provided for under this Agreement applies only to products, satisfying the requirements of this Protocol which are transported directly between the Parties. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, trans-shipment or temporary warehousing in such territories, provided that they are not released for free circulation in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition. 2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authority, in accordance with the procedures applicable in the importing Party, by the production of one of the following:

(a) evidence of the circumstances connected with transhipment or the storage of the originating products in non-parties;

(b) a single transport document covering the passage from the exporting Party through the country of transit; or

(c) a certificate issued by the customs authorities of the country of transit:

(i) giving an exact description of the products;

(ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships, or the other means of transport used; and

(iii) certifying the conditions under which the products remained in the country of transit.

ARTICLE 14: EXHIBITIONS

str. 421. Originating products, sent for exhibition in the territory of a non-party and sold after the exhibition for importation in either Party, shall benefit on importation from this Agreement, provided that it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned these products from either Party to the country in which the exhibition is held and has exhibited them there;

(b) the products have been sold or otherwise disposed of by that exporter to a person in either Party;

(c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and

(d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition. 2.

str. 43A proof of origin must be made out in accordance with Articles 16 through 23 and submitted to the customs authorities of the importing Party in accordance with the procedures applicable in the importing Party. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the conditions under which the products have been exhibited may be required. 3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display, which is not organised for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control.

Section B: Origin Procedures

ARTICLE 15: DRAWBACK OF, OR EXEMPTION FROM, CUSTOMS DUTIES

str. 43After five years from the entry into force of this Agreement, upon the request of either Party, the Customs Committee shall review the operation of duty drawback and inward processing schemes of the Parties. The Customs Committee may establish the criteria to review duty drawback and inward processing issues of the Parties. During this review, the Customs Committee will also take into account developments in the Korea-EU FTA.

ARTICLE 16: ORIGIN DECLARATION

str. 431. Products originating in a Party shall, on importation into the other Party, benefit from preferential tariff treatment of this Agreement on the basis of a proof of origin in the form of a declaration, subsequently referred to as the 'origin declaration', given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified. The text of the origin declaration appears in Annex III. 2. Notwithstanding paragraph 1, originating products within the meaning of this Protocol shall, in the cases specified in Article 20, benefit from this Agreement without it being necessary to submit any of the documents referred to in paragraph 1.

ARTICLE 17: CONDITIONS FOR MAKING OUT AN ORIGIN DECLARATION

str. 431. Without prejudice to paragraph 2, an origin declaration may be made out if the products concerned can be considered as products originating in either Party and fulfil the other requirements of this Protocol. 2. The exporter making out an origin declaration shall be prepared to submit at any time, on request of the customs authorities of the exporting Party, a copy of the origin declaration and all appropriate documents proving the originating status of the products concerned including statements from the suppliers or producers in accordance with domestic legislation as well as the fulfilment of the other requirements of this Protocol. For this purpose, the said customs authorities shall have the right to carry out inspections of the exporters or the producer's account records or any other controls considered appropriate. 3. An origin declaration shall be made out in English by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the text which appears in Annex III, and in accordance with the domestic law of the exporting Party. If the declaration is handwritten, it shall be written in ink in capital characters. 4. Origin declarations shall bear the original signature of the exporter in manuscript. 5. An origin declaration may be made out by the exporter when the products to which it relates are exported, or after exportation on condition that it is presented in the importing Party no longer than two years or the period specified in the legislation of the importing Party after the importation of the products to which it relates. ARTICLE 18: CLAIMS FOR PREFERENTIAL TARIFF TREATMENT AND SUBMISSION OF ORIGIN DECLARATION

1. For the purpose of claiming preferential tariff treatment, origin declarations shall, if required by the laws and regulations of the importing Party, be submitted to the customs authorities of the importing Party in accordance with the procedures applicable in that Party. The importing customs authority may require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions of this Protocol. 2. In order to obtain preferential tariff treatment, the importer shall, in accordance with the procedures applicable in the importing Party, request preferential tariff treatment at the time of importation of an originating product, whether or not he has an origin declaration. In the case that the importer at the time of importation does not have in his possession an origin declaration, the importer of the product may, in accordance with the law and regulations of the importing Party, present an origin declaration or other documentary evidence of origin, and if required, such other documentation relating to the importation of the product, at a later stage. 3. An origin declaration shall be valid for 12 months from the date of issue in the exporting Party, and preferential tariff treatment shall be claimed within the said period to the customs authorities of the importing Party. 4.

str. 45Origin declarations which are submitted to the customs authorities of the importing Party after the final date for presentation specified in paragraph 3 may be accepted for the purpose of preferential tariff treatment in accordance with the respective laws and regulations of the importing Party, where the failure to submit these documents by the final date set is due to exceptional circumstances. 5. In cases of belated presentation other than those of paragraph 4, the customs authorities of the importing Party may accept the origin declarations in accordance with the procedures of the Parties where the products have been presented before the said final date.

ARTICLE 19: IMPORTATION BY INSTALMENTS

str. 45Where, at the request of the importer and on the conditions laid down by the customs authorities of the importing Party, dismantled or non-assembled products within the meaning of General Rule 2(a) of the HS falling within Sections XVI and XVII or headings 7308 and 9406 of the HS are imported by instalments, a single origin declaration for such products shall be submitted to the customs authorities upon importation of the first instalment.

ARTICLE 20: EXEMPTIONS FROM ORIGIN DECLARATION

str. 451. Products sent as small packages from private persons to private persons or forming part of travellers' personal luggage shall be admitted as originating products without requiring the submission of an origin declaration, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Protocol and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, this declaration may be made on a postal customs declaration or on a sheet of paper annexed to that document. 2. Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade if it is evident from the nature and quantity of the products that no commercial purpose is intended. 3. Furthermore, the total value of these products shall not exceed:

(a) for importation into Turkey, 500 euros in the case of small packages or 1,200 euros in the case of products forming part of traveller's personal luggage;

(b) for importation into Korea, 1,000 US dollars both in the case of small packages and in the case of the products forming part of traveller's personal luggage. 4. For the purpose of paragraph 3, in cases where the products are invoiced in a currency other than euro or US dollars, amounts in the national currencies of the Parties equivalent to the amounts expressed in euro or US dollars shall be fixed in accordance with the current exchange rate applicable in the importing Party. ARTICLE 21: SUPPORTING DOCUMENTS

str. 46The documents referred to in Article 17.2 used for the purpose of proving that products covered by origin declarations can be considered to be products originating in either Party and fulfil the other requirements of this Protocol may consist, inter alia, of the following:

- (a) direct evidence of the processes carried out by the exporter, supplier or producer to obtain the goods concerned, contained for example in his accounts or internal bookkeeping;
- (b) documents proving the originating status of materials used, issued or made out in a Party where these documents are used as provided for in its domestic law;
- (c) documents proving the working or processing of materials in a Party, issued or made out in a Party where these documents are used as provided for in its domestic law;
- (d) origin declarations proving the originating status of materials used issued or made out in a Party in accordance with this Protocol; and
- (e) appropriate evidence concerning working or processing undergone outside the territories of the Parties by application of Article 12, proving that the requirements of that Article have been satisfied.

ARTICLE 22: PRESERVATION OF ORIGIN DECLARATION AND SUPPORTING DOCUMENTS

str. 461. The exporter making out an origin declaration shall keep for five years a copy of this origin declaration as well as the documents referred to in Article 17.2. 2. The importer shall keep all records related to the importation in accordance with laws and regulations of the importing Party. 3. An importer or exporter may choose to maintain the records specified in paragraphs 1 and 2 in any medium that allows for prompt retrieval, including, but not limited to, digital, electronic, optical, magnetic, or written form.

ARTICLE 23: DISCREPANCIES AND FORMAL ERRORS

str. 461. The discovery of slight discrepancies between the statements made in the origin declaration and those made in the documents submitted to the customs authorities for the purpose of carrying out the formalities for importing the products shall not, ipso facto, render the origin declaration null and void if it is duly established that such document does correspond to the products submitted. 2. Obvious formal errors such as typing errors on an origin declaration should not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document.

ARTICLE 24: MUTUAL ASSISTANCE

str. 47The customs authorities of the Parties shall provide each other with the addresses of the customs authorities responsible for verifying origin declarations.

ARTICLE 25: VERIFICATION OF ORIGIN DECLARATIONS

str. 471. In order to ensure the proper application of this Protocol, the Parties shall assist each other, through the customs authorities, in checking the authenticity of the origin declarations and the correctness of the information given in these documents. 2. Subsequent verifications of origin declarations shall be carried out at random or whenever the customs authorities of the importing Party have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Protocol. 3. For the purposes of implementing paragraph 1, the customs authorities of the importing Party shall return the origin declarations or a copy of these documents, to the customs authorities of the exporting Party giving, where appropriate, the reasons for the enquiry. Any documents and information obtained suggesting that the information given on the origin declaration is incorrect shall be forwarded in support of the request for verification. 4. The verification shall be carried out by the customs authorities of the exporting Party. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's account records or any other check considered appropriate. 5. If the customs authorities of the importing Party decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary. 6. The customs authorities requesting the verification shall be provided with the results of this verification including findings and facts, as soon as possible. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as products originating in a Party and fulfil the other requirements of this Protocol. 7.

str. 48If in cases of reasonable doubt there is no reply within 10 months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities may, except in exceptional circumstances, refuse entitlement to the preference. 8. Subject to any conditions set out by the customs authorities of the exporting Party, the customs officials of the importing Party may be present as an observer in an origin verification conducted by the customs authorities of the exporting Party.

ARTICLE 26: DENIAL OF PREFERENTIAL TARIFF TREATMENT

str. 48Only for the following specific reasons, the preferential treatment may be refused without verification of the origin declaration as the declaration can be considered as inapplicable when:

- (a) the requirements on direct transport of Article 13 have not been fulfilled;
- (b) the origin declaration is produced subsequently for products that were initially imported fraudulently;
- (c) the origin declaration has been issued by an exporter from a non-party to this Agreement; or
- (d) the importer fails to submit an origin declaration to the customs authorities of the importing Party within the period specified in legislation of the importing Party.

ARTICLE 27: THIRD PARTY INVOICE

str. 48The customs authority of the importing Party may accept origin declarations in cases where the sales invoice is issued either by a company located in a third country or by an exporter for the account of the said company, provided that the goods meet the requirements of this Protocol.

ARTICLE 28: CONSULTATIONS AND DISPUTE SETTLEMENT

str. 481. Where disputes arise in relation to this Protocol and Chapter 3 (Customs and Trade Facilitation), the customs authorities of a Party may consult with the customs authorities of the other Party on those issues. In the event that such consultations fail to resolve any such matter, they shall be submitted to the Customs Committee referred to in Article 3.17 (Customs Committee). 2. In all cases the settlement of disputes between the importer and the competent authorities of the importing Party shall be under the legislation of the said Party.

ARTICLE 29: PENALTIES

str. 48Penalties shall be imposed in accordance with the legislation of the Parties on any person who draws up, or causes to be drawn up, a document which contains incorrect information for the purpose of obtaining preferential treatment for products.

ARTICLE 30: FREE ZONES

str. 481. The Parties shall take all necessary steps to ensure that products traded under cover of an origin declaration which in the course of transport use a free zone situated in their territories, are not substituted by other products and do not undergo handling other than normal operations designed to prevent their deterioration. 2. By means of an exemption to paragraph 1, when products originating in a Party enter into a free zone under cover of an origin declaration and undergo treatment or processing, another origin declaration can be made out if the treatment or processing undergone is in conformity with this Protocol.

Section C: Final Provisions

ARTICLE 31: REVIEW AND AMENDMENTS

str. 491. The Customs Committee may review the provisions of this Protocol, Annex II and Chapter 3 (Customs and Trade Facilitation), and discuss the necessary amendments on request of one of the Parties. While discussing those amendments, the Customs Committee shall take into account the development of technologies, production processes, price fluctuations and all other factors, which might justify the changes to the rules of origin. 2. Annex II will be adapted in accordance with the periodical changes to the HS. 3. Amendments determined by the Customs Committee after discussion according to paragraphs 1 and 2 shall be reported to the Joint Committee for final decision.

ARTICLE 32: TRANSITIONAL PROVISIONS FOR GOODS IN TRANSIT OR STORAGE

str. 49The provisions of this Agreement may be applied to goods which comply with the provisions of this Protocol and which on the date of entry into force of this Agreement are either in transit, in temporary storage in customs warehouses or in free zones in the Parties, subject to the submission to the customs authorities of the importing Party, within 12 months of that date, of an origin declaration made out retrospectively together with the documents showing that the goods have been transported directly in accordance with Article 13.

Note 1:

str. 49The list sets out the conditions required for all products to be considered as sufficiently worked or processed within the meaning of Article 5 of this Protocol.

Note 2:

str. 49- 2.1. The first two columns in the list describe the product obtained. The first column gives the subheading number, heading number or chapter number used in the Harmonized System and the second column gives the description of goods used in that system for that subheading, heading or chapter. For each entry in the first two columns, a rule is specified in column 3 or 4.

str. 50Where, in some cases, the entry in the first column is preceded by an 'ex', this signifies that the rules in column 3 or 4 apply only to the part of that subheading or heading as described in column 2. - 2.2. Where several subheading or heading numbers are grouped together in column 1 or a chapter number is given and the description of products in column 2 is therefore given in general terms, the adjacent rules in column 3 or 4 apply to all products which, under the Harmonized System, are classified in subheadings or headings of the chapter or in any of the subheadings or headings grouped together in column 1. - 2.3. Where there are different rules in the list applying to different products within a subheading or heading, each indent contains the description of that part of the subheading or heading covered by the adjacent rules in column 3 or 4. - 2.4. Where, for an entry in the first two columns, a rule is specified in both columns 3 and 4, the exporter may opt, as an alternative, to apply either the rule set out in column 3 or that set out in column 4. If no origin rule is given in column 4, the rule set out in column 3 is to be applied.

Note 3:

str. 50- 3.1. The provisions of Article 5 of this Protocol, concerning products having acquired originating status which are used in the manufacture of other products, shall apply, regardless of whether this status has been acquired inside the factory where these products are used or in another factory in a Party.

Example:

str. 50An engine of heading 8407, for which the rule states that the value of the non-originating materials which may be incorporated may not exceed 50 percent of the ex-works price, is made from materials of heading 7201, 7202, 7203, 7204, 7205, or subheading 7224 10.

ANNEX I

INTRODUCTORY NOTES TO THE LIST IN ANNEX II

str. 50If this material has been processed in Turkey from a non-originating ingot, it has already acquired originating status by virtue of the rule for subheading 7224 90 in the list. The material can then count as originating in the value-calculation for the engine, regardless of whether it was produced in the same factory or in another factory in Turkey. The value of the non-originating ingot is thus not taken into account when adding up the value of the non-originating materials used. - 3.2.

str. 51The rule in the list represents the minimum amount of working or processing required, and the carrying-out of more working or processing also confers originating status; conversely, the carrying-out of less working or processing cannot confer originating status. Thus, if a rule provides that non-originating material, at a certain level of manufacture, may be used, the use of such material at an earlier stage of manufacture is allowed, and the use of such material at a later stage is not. - 3.3. Without prejudice to Note 3.2, where a rule uses the expression 'Manufacture from materials of any heading', then materials of any heading(s) (even materials of the same description and heading as the product) may be used, subject, however, to any specific limitations which may also be contained in the rule. However, the expression 'Manufacture from materials of any heading, including other materials of heading...' means that materials of any heading(s) may be used, except those of the same description as the product as given in column 2 of the list. - 3.4. When a rule in the list specifies that a product may be manufactured from more than one material, this means that one or more materials may be used. It does not require that all be used.

Example:

str. 51The rule for fabrics of headings 5208 to 5212 provides that natural fibres may be used and that chemical materials, among other materials, may also be used. This does not mean that both have to be used; it is possible to use one or the other, or both. - 3.5. Where a rule in the list specifies that a product must be manufactured from a particular material, the condition obviously does not prevent the use of other materials which, because of their inherent nature, cannot satisfy the rule. (See also Note 6.2 below in relation to textiles.)

str. 51The rule for prepared foods of heading 1904, which specifically excludes the use of cereals and their derivatives, does not prevent the use of mineral salts, chemicals and other additives which are not products produced from cereals. However, this does not apply to products which, although they cannot be manufactured from the particular materials specified in the list, can be produced from a material of the same nature at an earlier stage of manufacture.

str. 51In the case of an article of apparel of ex Chapter 62 made from non-woven materials, if the use of only non-originating yarn is allowed for this class of article, it is not possible to start from non-woven cloth - even if non-woven cloths cannot normally be made from yarn. In such cases, the starting material would normally be at the stage before yarn - that is, the fibre stage.

str. 52- 3.6. Where, in a rule in the list, two percentages are given for the maximum value of non-originating materials that can be used, then these percentages may not be added together. In other words, the maximum value of all the non-originating materials used may never exceed the higher of the percentages given. Furthermore, the individual percentages must not be exceeded, in relation to the particular materials to which they apply.

Note 4:

str. 52- 4.1. The term 'natural fibres' is used in the list to refer to fibres other than artificial or synthetic fibres. It is restricted to the stages before spinning takes place, including waste, and, unless otherwise specified, includes fibres which have been carded, combed or otherwise processed, but not spun. - 4.2. The term 'natural fibres' includes horsehair of heading 0511, silk of heading 5002 and 5003, as well as wool-fibres and fine or coarse animal hair of headings 5101 to 5105, cotton fibres of headings 5201 to 5203, and other vegetable fibres of headings 5301 to 5305. - 4.3. The terms 'textile pulp', 'chemical materials' and 'paper-making materials' are used in the list to describe the materials, not classified in Chapters 50 to 63, which can be used to manufacture artificial, synthetic or paper fibres or yarns. - 4.4. The term 'man-made staple fibres' is used in the list to refer to synthetic or artificial filament tow, staple fibres or waste, of headings 5501 to 5507.

Note 5:

str. 52- 5.1. Where, for a given product in the list, reference is made to this Note, the conditions set out in column 3 shall not be applied to any basic textile materials used in the manufacture of this product and which, taken together, represent 10 percent or less of the total weight of all the basic textile materials used. (See also Notes 5.3 and 5.4 below.) - 5.2. However, the tolerance mentioned in Note 5.1 may be applied only to mixed products which have been made from two or more basic textile materials.

Example:

str. 53A yarn, of heading 5205, made from cotton fibres of heading 5203 and synthetic staple fibres of heading 5506, is a mixed yarn. Therefore, non-originating synthetic staple fibres which do not satisfy the origin-rules (which require manufacture from chemical materials or textile pulp) may be used, provided that their total weight does not exceed 10 percent of the weight of the yarn.

str. 53A woollen fabric, of heading 5112, made from woollen yarn of heading 5107 and synthetic yarn of staple fibres of heading 5509, is a mixed fabric. Therefore, synthetic yarn which does not satisfy the origin-rules (which require manufacture from chemical materials or textile pulp), or woollen yarn which does not satisfy the origin-rules (which require manufacture from natural fibres, not carded or combed or otherwise prepared for spinning), or a combination of the two, may be used, provided that their total weight does not exceed 10 percent of the weight of the fabric.

str. 53Tufted textile fabric, of heading 5802, made from cotton yarn of heading 5205 and cotton fabric of heading 5210, is only a mixed product if the cotton fabric is itself a mixed fabric made from yarns classified in two separate headings, or if the cotton yarns used are themselves mixtures.

str. 53If the tufted textile fabric concerned had been made from cotton yarn of heading 5205 and synthetic fabric of heading 5407, then, obviously, the yarns used are two separate basic textile materials and the tufted textile fabric is, accordingly, a mixed product. - 5.3. In the case of products incorporating 'yarn made of polyurethane segmented with flexible segments of polyether, whether or not gimped', this tolerance is 20 percent in respect of this yarn. - 5.4. In the case of products incorporating 'strip consisting of a core of aluminium foil or of a core of plastic film whether or not coated with aluminium powder, of a width not exceeding 5 mm, sandwiched by means of a transparent or coloured adhesive between two layers of plastic film', this tolerance is 30 percent in respect of this strip.

Note 6:

str. 53- 6.1. Where, in the list, reference is made to this Note, textile materials (with the exception of linings and interlinings), which do not satisfy the rule set out in the list in column 3 for the made-up product concerned, may be used, provided that they are classified in a heading other than that of the product and that their value does not exceed eight percent of the ex-works price of the product. - 6.2. Without prejudice to Note 6.3, materials, which are not classified within Chapters 50 to 63, may be used freely in the manufacture of textile products, whether or not they contain textiles.

Example:

str. 53If a rule in the list provides that, for a particular textile item (such as trousers), yarn must be used, this does not prevent the use of metal items, such as buttons, because buttons are not classified within Chapters 50 to 63. For the same reason, it does not prevent the use of slide-fasteners, even though slide-fasteners normally contain textiles. -

str. 546.3. Where a percentage-rule applies, the value of materials which are not classified within Chapters 50 to 63 must be taken into account when calculating the value of the nonoriginating materials incorporated.

ANNEX II

LIST OF WORKING OR PROCESSING REQUIRED TO BE CARRIED OUT ON NONORIGINATING MATERIALS IN ORDER THAT THE PRODUCT MANUFACTURED CAN OBTAIN ORIGINATING STATUS

str. 66Description of product

(1) Chapter 27

Chapter 28

ex Chapter 29

ex 2905 19

2915

ex 2932

(2)

Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes

Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes

Organic chemicals; except for:

Metal alcoholates of alcohols of this heading and of ethanol

Saturated acyclic monocarboxylic acids and their anhydrides, halides, peroxides and peroxyacids; their halogenated, sulphonated, nitrated or nitrosated derivatives. -Internal ethers and their halogenated, sulphonated, nitrated or nitrosated derivatives

- Cyclic acetals and internal hemiacetals and their halogenated, sulphonated, nitrated or nitrosated derivatives

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the ex- works price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture from materials of any heading, including other materials of heading 2905. However, metal alcoholates of this heading may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture from materials of any heading. However, the value of all the materials of headings 2915 and 2916 used shall not exceed 20 % of the ex-works price of the product Manufacture from materials of any heading. However, the value of all the materials of heading 2909 used shall not exceed 20 % of the exworks price of the product Manufacture from materials of any heading or

(4)

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40% of the ex-works price of the product

HS heading

str. 67Description of product

(1) 2933

2934

ex Chapter 30

3001

3002

3006 91

(2)

Heterocyclic compounds with nitrogen hetero-atom(s) only

Nucleic acids and their salts, whether or not chemically defined; other heterocyclic compounds

Pharmaceutical products; except for:

Glands and other organs for organo-therapeutic uses, dried, whether or not powdered; extracts of glands or other organs or of their secretions for organo-therapeutic uses; heparin and its salts; other human or animal substances prepared for therapeutic or prophylactic uses, not elsewhere specified or included. Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products. Appliances identifiable for ostomy use

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading. However, the value of all the materials of headings 2932 and 2933 used shall not exceed 20 % of the ex-works price of the product Manufacture from materials of any heading. However, the value of all the materials of headings 2932, 2933 and 2934 used shall not exceed 20 % of the ex-works price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture from materials of any heading

Manufacture from materials of any heading

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the product or

(4)

Manufacture in which the value of all the materials used does not exceed 40% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40% of the ex-works price of the product

HS heading

str. 68Description of product

(1)

ex Chapter 31

ex 3105

ex Chapter 32

ex 3201

3204

(2)

Fertilizers; except for:

Mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, phosphorous and potassium; other fertilizers; goods of this chapter, in tablets or similar weight not exceeding 10 kg, except for:

forms or in packages of a gross -sodium nitrate -calcium cyanamide -potassium sulphate -magnesium potassium sulphate

Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks; except for:

Tannins and their salts, ethers, esters and other derivatives

Synthetic organic colouring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic colouring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture:

- from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the ex-works price of the product, and
- in which the value of all the materials used does not exceed 50 % of the ex-works price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture from tanning extracts of vegetable origin

Manufacture from materials of any heading or

(4)

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

HS heading

str. 69Description of product

(1) 3205

3206

ex Chapter 33

3301

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading, except headings 3203, 3204 and 3205. However, materials of heading 3205 may be used, provided that their total value does not exceed 20 % of the ex-works price of the product Manufacture from materials of any heading

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture from materials of any heading, including materials of a different "group" ( 10 ) in this heading. However, materials of the same group as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product

(2)

Colour lakes; preparations as specified in note 3 to this chapter based on colour lakes ( 9 )

Other colouring matter; preparations as specified in note 3 to this chapter, other than those of heading 3203, 3204 or 3205; inorganic products of a kind used as luminophores, whether or chemically defined

Essential oils and resinoids; perfumery, cosmetic or toilet preparations; except for:

Essential oils (terpeneless or not), including concretes and absolutes; resinoids; extracted oleoresins; concentrates of essential oils in fats, in fixed oils, in waxes or the like, obtained by enfleurage or maceration; terpenic by-products of the deterpenation of essential oils; aqueous distillates and aqueous solutions of essential oils or

(4)

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

9 Note 3 to Chapter 32 says that these preparations are those of a kind used for colouring any material or used as ingredients in the manufacture of colouring preparations, provided that they are not classified in another heading in Chapter 32. 10 A "group" is regarded as any part of the heading separated from the rest by a semicolon. HS heading

str. 70Description of product

(1)

ex Chapter 34

ex 3404

ex Chapter 35

3505

ex 3507

(2)

Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, "dental waxes" and dental preparations with a basis of plaster; except for: Artificial waxes and prepared waxes with a basis of paraffin, petroleum waxes, waxes obtained from bituminous minerals, slack wax or scale wax

Albuminoidal substances; modified starches; glues; enzymes; except for:

Dextrins and other modified starches (for example, pregelatinised or esterified starches); glues based on starches, or on dextrins or other modified starches:

- Starch ethers and esters

- Other

Prepared enzymes not elsewhere specified or included

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 50 % of the exworks price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product

Manufacture from materials of any heading, including other materials of heading 3505

Manufacture from materials of any heading, except those of heading 1108

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the product or

(4)

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 40 % of the ex-works price of the product

HS heading

str. 73Description of product

(1) 3810

3811

3812

3813

3814

3818

(2)

Pickling preparations for metal surfaces; fluxes and other auxiliary preparations for soldering, brazing or welding; soldering, brazing or welding powders and pastes consisting of metal and other materials; preparations of a kind used as cores or coatings for welding electrodes or rods Anti-knock preparations, oxidation inhibitors, gum inhibitors, viscosity improvers, anti-corrosive preparations and other prepared additives, for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils Prepared rubber accelerators; compound plasticisers for rubber or plastics, not elsewhere specified or included; antioxidizing preparations and other compound stabilizers for rubber or plastics Preparations and charges for fire-extinguishers; charged fireextinguishing grenades

Organic composite solvents and thinners, not elsewhere specified or included; prepared paint or varnish removers

Chemical elements doped for use in electronics, in the form of discs, wafers or similar forms; chemical compounds doped for use in electronics

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product

Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the exworks price of the product Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the product Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20 % of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the product or

(4)

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the products

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the products

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the products

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the product

HS heading

str. 103Description of product

(1) 8302 41

8302 60

8306 21 to 8306 29

ex Chapter 84

8401

8404

8407

8408

(2)

Other mountings, fittings and similar articles suitable for buildings

Automatic door closers

Statuettes and other ornaments, of base metal

Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof; except for: Nuclear reactors; fuel elements (cartridges), non-irradiated, for nuclear reactors; machinery and apparatus for isotopic separation Auxiliary plant for use with boilers of heading 8402 or 8403; condensers for steam or other vapour power units Spark-ignition reciprocating or rotary internal combustion piston engines

Compression-ignition internal combustion piston engines (diesel or semi-diesel engines)

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading, except that of the product. However, other materials of heading 8302 may be used, provided that their total value does not exceed 20 % of the ex-works price of the product Manufacture from materials of any heading, except that of the product. However, other materials of heading 8302 may be used, provided that their total value does not exceed 20 % of the ex-works price of the product Manufacture from materials of any heading, except that of the product. However, other materials of heading 8306 may be used, provided that their total value does not exceed 30 % of the ex-works price of the product

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product or

(4)

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 45 % of the ex-works price of the product

HS heading

str. 104Description of product

(1) 8423

8425

8426

8427

8428

8429

8430

8432

8433

(2) Weighing machinery (excluding balances of a sensitivity of 5 cg or better), including weight operated counting or checking machines; weighing machine weights of all kinds Pulley tackle and hoist other than skip hoist; winches and capstans; jacks Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane Fork-lift trucks; other works trucks fitted with lifting or handling equipment Other lifting, handling, loading or unloading machinery (for example, lifts, escalators, conveyors, teleferics) Self-propelled bulldozers, angledozers, graders, levellers, scrapers, mechanical shovels, excavators, shovel loaders, tamping machines and road rollers: Other moving, grading, levelling, scrapping, excavating, tamping, compacting, extracting or boring machinery, for earth, minerals or ores; piledrivers and pile extractors; snowploughs and snowblowers Agricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sport-ground rollers Harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machinery of heading 8437

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product or

(4)

Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

HS heading

str. 111Description of product

(1) 8525

8526

8527

8528

8529

8530

8531

(2) Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders Radar apparatus, radio navigational aid apparatus and radio remote control apparatus Reception apparatus for radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528 Electrical signalling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations or airfields (other than those of heading 8608) Electric sound or visual signalling apparatus (for example, bells, sirens, indicator, panels, burglar or fire alarms) other than those of heading 8512 or 8530

Working or processing, carried out on non-originating materials, which confers originating status

(3)

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 45% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 50 % of the ex-works price of the product Manufacture from materials of any heading, except that of the product

Manufacture from materials of any heading, except that of the product or

(4)

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

HS heading

Common provisions

ANNEX III

TEXT OF THE ORIGIN DECLARATION

str. 116The origin declaration, the text of which is given below, must be made out in accordance with the footnotes. However, the footnotes do not have to be reproduced. The exporter of the products covered by this document declares that, except where otherwise clearly indicated, these products are of ... 70 preferential origin. ……………………………………………………………............................................. 71

(Place and date)

...……………………………………………………………………..............................

(Signature of the exporter, in addition the name of the person signing the declaration has to be indicated in clear script)

70 Origin of products to be indicated. 71 These indications may be omitted if the information is contained on the document itself.

ANNEX IV OUTWARD PROCESSING ZONES ON THE KOREAN PENINSULA