Japan: Customs scrutiny of certificates of origin from exporters, manufacturers

Japan: Customs scrutiny of certificates of origin

The Japanese Commerce office in October 2016 published a notice directed towards the Japanese manufacturing and export community, and emphasizing the importance of accurately qualifying products under “economic partnership agreements” and of obtaining certificates of origin. In Japan, exporters and producers must formally request a determination of originating goods and then submit an application for issuance of a certificate of origin from the Commerce office (unless a company is approved for self-certification under certain economic partnership agreements).

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In the notice, the Japanese Commerce office (at times, referred to in English as the “Chamber of Commerce”) inferred that, in certain instances, certificates of origins may previously have been issued to Japanese exporters and producers despite the goods not actually qualifying as originating under the specific economic partnership agreements. The Commerce office further indicated that such inaccurate economic partnership agreement claims may lead to customs authorities in other countries to seek to collect duties owed and possibly to impose penalties for the underpayment of duties. In turn, this could result in customs clearance delays and additional scrutiny by customs authorities in the beneficiary importing country.

Certificates of origin

The development indicates that Japanese Customs may focus with greater scrutiny on certificates of origin of exporters and manufacturers in Japan. To help avoid these complications, the notice from Japan’s Commerce office re-iterated certain essential criteria for adhering to the qualification and other applicable requirements under economic partnership agreements, including but not limited to:

  • Confirming locations of production facilities: To qualify as a Japanese originating product, goods must undergo significant production or processing operations (if not wholly obtained).
  • Supporting economic partnership agreement claims: Exporters and producers must maintain records supporting the economic partnership agreement claim for a period of time (three to five years depending on the economic partnership agreement).
  • Evaluating changes in circumstances: For companies that use economic partnership agreements continuously for the same products, origin qualifications need to be revalidated each time there is a change to any of the elements evaluated for qualification purposes, particularly any changes to production locations and processes. For each revalidation conducted, a new request for a certificate of origin must be made.

 

For more information, contact a professional with KPMG’s Trade & Customs practice:

Masaharu Umetsuji | +81 3 6229 8070 | masaharu.umetsuji@jp.kpmg.com 

Kozu Takayuki | +81 3 6229 8205 | takayuki.kozu@jp.kpmg.com

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