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DISCOVER FTAs/GSPs Other Case Model Case Model of Item Classification

Case Model of Item Classification

Export support model through advance ruling of item classification

Many companies are unable to enjoy FTA benefits due to incorrect product classification:

Example
Accurate product classification A (counter party country's preferential tariff : 0%), Incorrect product classification B (counter party country's preferential tariff : 10%)

2. Companies that have traditionally classified their products as B → Provided with consulting services → Supported to reclassify their products as A for export.

Accurate product classification A (counter party country’s preferential tariff : 0%), Incorrect product classification B (counter party country’s preferential tariff : 10%) Accurate product classification A (counter party country’s preferential tariff : 0%), Incorrect product classification B (counter party country’s preferential tariff : 10%)
Philippine export companies receive prior rulings from the Philippine Customs Commission. Before the FTA agreement, it was classified as Class A and had to pay an 8% tariff. If classified as Class B, the preferential tariff when exporting to an FTA partner country is 0%.

Certificate of Origin issuance utilizing
the desired HS code requested by the importing country

The principle of the Harmonized System (HS) Code dictates that one item should be classified under one HS code.

Therefore, among the contracting parties of the HS Convention, the 6-digit HS code is commonly used, while below the 6-digit level, each contracting party operates autonomously.

HS Code Principle : One HS code, 6-digit code(Commonly used), 6 digits or less (Autonomous operation of each country) HS Code Principle : One HS code, 6-digit code(Commonly used), 6 digits or less (Autonomous operation of each country)

However, practical issues arise in the field due to differences in interpretation of product classification between contracting parties, leading to variations in HS codes.

A practical matter : Different interpretation of HS code between Contracting States A practical matter : Different interpretation of HS code between Contracting States

In cases where such documentation is verifiable, issuance of a Certificate of Origin under the HS code requested by the importing country is possible.

But The determination of origin must be conducted for both the HS code used for exporting from the Philippines and the HS code requested by the importing country.

Philippines(Ex. 3926.90) ← If the criteria for determining the origin specified in the both HS code are met, it is possible to issue a Certificate of Origin under a different HS code. In case of discrepancy: There is a risk of non-compliance with the criteria for determining the origin → Korea(Ex. 8522.90), If buyer requests 8522.90 on C/O… •3926.90 : CTH or RVC 40 •8522.90 : CTSH or RVC 40 Both PSR are met => C/O issuing under 8522.90 is possible
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