Japan is one of the developed countries that joined the project granting GSP to Least Developed Countries, Developing Countries and territories under the initiative of UNCTAD from 1971 up to now. Japan GSP has been revised many times, and the latest revision is in 2011. At present, there are 151 countries/territories that gain benefits from Japan’s GSP Scheme. (For details click here)
The Generalized System of Preferences of Japan includes two types as follows:
General Preferential Tariff (GPT) treatment
This is a preferential treatment granted to more than 90 developing countries, by reducing or exempting from the normal MFN tariff rate about 3,550 products which account for 400 agricultural products and 3,150 industrial products.
Special preferential treatment for LDCs
LDCs receive more favorable treatment than developing countries, by obtaining an exemption tariff rate and unlimited Quota for most products. Laos is one of the LDCs, thus we receive treatment under this arrangement.
Besides receiving preferential treatment under GSP Scheme, Lao PDR also receives preferences under ASEAN-Japan Comprehensive Economic Partnership (AJCEP), for which information will be summarized separately.
Rules of Origin: ROO
Products that need to be excluded from import duty under the Japan GSP Scheme must follow ROO requirements as follows:
1. Wholly Obtained or Produced products: WO. These are basically agricultural products (plants, animals), manufactured agricultural, mineral products and and so on.
2. For products which are produced from imported raw materials, the products must undergo a process of substantial transformation as follows :
1) Change in Tariff Heading: CTH at 4 digits level or
2) Value Added ; or
3) Products specific rules such as textiles, chemical products and so on.
Under the Japan GSP incorporated cumulation is allowed through which all countries receiving GSP may use raw materials from Japan as part of cumulated origin. In addition, 5 ASEAN member states may cumulate origin with each other namely, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Lao PDR is not included in this arrangement.
Certificate of Origin
Products that can obtain preferential treatment have to be products that meet originating cretiria and that have a certificate of origin as a reference document. The COO used for reducing or exempting tariff rates under the Lao-Japan GSP is called Form A.
Form A can be obtained from the Department of Import and Export or the Department of Industry and Commerce of Vientiane Capital and Provinces or Vientiane-Nonthong Industry and Trade Area (VITA). Document needed for requesting a Certificate of Origin are:
1). Application letter
2). Printed certificate of origin
3). Invoice and Packing list
4). Customs Declaration
5). Copy of Bill of Lading
6). Domestic invoice (in case of buying)
7). Cost statement or working process (in case of imported materials)
In the case of products having a customs value that does not exceed 200,000 Yen or about 2,000 USD, or products referred to in Annex 7, there is no need to apply for a COO for such a tax exemption.
In order to obtain preferential trade treatment, transportation is one criteria that must be met. In principle, for products to be eligible for reduction or exemption tariff under Form A, the transportation must be a direct consignment meaning that the goods must be sent directly to the importing country.
In the case of goods being sent through a third country, these products may also receive preferential treatment, provided:
a. Products have not undergone any operations in the third country other than unloading, reloading, or operations required to keep them in good condition.
b. products are under the control of customs of the third country
In order to obtain preferential treatment, Lao exporters must follow the origin criteria as follows: 1) products must have originated 100% from Lao PDR such as agricultural products and mining; or 2) if they have been made with imported raw materials, the products must have gone through substantial transformation and must also be transported as a direct consignment.
For Further information
Please contact :
Certificate of Origin Division,
Department of Import and Export,
Ministry of Industry and Commerce
Tel/Fax: 021-450255, email: email@example.com