At SK Advisory Inc., we support numerous clients in leveraging Free Trade Agreements (FTA) and Economic Partnership Agreements (EPA).

 

Case Study - Exporting from Japan (to India and the EU)

Client Profile:
A Japanese industrial machinery manufacturer with subsidiaries in India, the EU, and other regions.

Situation:
To reduce global tariff costs, the client sought to utilize FTA/EPA for exporting products from Japan to their subsidiaries in India and the EU. Given the complexity and large number of components in their industrial machinery products, the client found it challenging to assign HS codes themselves.

Solution:
As a professional FTA/EPA consultant, SK Advisory has extensive experience supporting clients in obtaining specific Certificates of Origin for exports. We began by comparing the current import tariff rates with those applicable under FTA/EPA to determine the benefits. In this case, we identified potential tariff reductions of 10% for India and 5% for the EU, representing significant savings.

We gathered information about the client's final products and manufacturing processes, and collected the bill of materials. Our team prepared all necessary supporting documents, assigned HS codes to approximately 1,000 components, and confirmed compliance with the Change in Tariff Classification (CTC) criteria. Specifically, the Japan-India EPA required a Change in Tariff Subheading (CTSH) and a 35% value-added content rule, while the Japan-EU EPA required a Change in Tariff Heading (CTH).

After preparing the supporting documents, we provided the client with guidance materials for their final steps. For the Japan-EU EPA, which uses a self-declaration system, we advised on how to include the origin declaration on export invoices. For the Japan-India EPA, we explained the process of obtaining a specific Certificate of Origin from the Japan Chamber of Commerce and Industry (JCCI).

Outcome:
The client successfully achieved a 10% tariff reduction for India and a 5% reduction for the EU. Additionally, for the EU, they retroactively applied the tariff reductions for the past three years, securing substantial refunds. We continue to provide ongoing advisory services to this client, ensuring compliance with FTA/EPA agreements and customs regulations, and helping them maintain an effective internal management system with expert guidance.

 

 

 

How SK Advisory Can Assist You

At SK Advisory Inc., we specialize in guiding clients through the application of FTA/EPA preferential tariff treatments. 

Our Process:

  • Client’s Responsibility: Provide us with detailed information about your export/import products.
  • Our Role at SK Advisory Inc: We lead the preparation of all necessary documentation for your FTA/EPA application, ensuring compliance and accuracy.

 

By partnering with SK Advisory, you entrust your FTA/EPA applications to seasoned customs professionals. This not only ensures peace of mind but also enhances your trade compliance and operational efficiency.

 

Clients SK ADVISORY
1. HS Code Confirmation for Import/Export Products
  • Provide product information.
  • Verify the appropriate HS Code.
2. Duty Rate Confirmation -
  • Check the standard duty rate.
  • Compare with EPA/FTA preferential duty rates.
3. Rule of Origin Confirmation -
  • Confirm the Product Specific Rule (PSR).
4. Documentation for FTA/EPA Preferential Tariff Treatment [Overview]

  • Bills of Materials for finished goods.
  • Manufacturing flow and assembly documents.

[CTC - Change in Tariff Classification]

  • Bill of material, parts information, and purchase price (if De minimis applies).

[VA - Value Added]

  • FOB price for exported goods.
  • Purchase price for used materials.

[Supplier Declaration]

  • Communication with suppliers
[Overiew]

  • Planning of best approach

[CTC - Change in Tariff Classification]

  • Planning for grouping of materials.
  • HS classification for used materials.
  • Evidence documentation (HS Comparison Sheets).

[VA - Value Added]

  • Verify sales price for import goods and purchase price for materials.
  • Evidence documentation (Calculation Sheets).

[Supplier Declaration]

  • Preparation of Supplier Declaration format and explanatory notes for submission to Manufacturer or Exporter.
5. Application of FTA/EPA Preferential Tariff Treatment
  • Send prepared application documents to Forwarder or Customs Broker.
  • Support in responding to inquiries from Customs on behalf of the client.

 

 

Our Strengths

SK Advisory, specializes in customs-related services, including HS code classification, FTA origin management, and customs valuation. We provide accurate advice based on compliance with origin rules and other relevant regulations. With extensive experience advising numerous clients on FTA/EPA origin matters, we are familiar with common challenges and industry best practices, enabling us to offer practical recommendations and hands-on support tailored to each client's situation.

Examples of Our Achievements:

  1. FTA origin management process development for IT solutions.
  2. FTA origin management process development for domestic and overseas production sites.
  3. Support for establishing specialized origin management units.
  4. Obtaining Certificates of Origin and preparing supporting documents for JCCI.
  5. Preparation of self-declaration documents for exports and imports, and EPA application.