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Trade
Compliance Center
EXECUTIVE OFFICE OF THE PRESIDENT THE UNITED STATES TRADE REPRESENTATIVE WASHINGTON, D.C. 20508 October 20, 1998
The Honorable Lee Hong-koo
Ambassador of The Republic of
Korea
2450 Massachusetts Avenue, NW
Washington, D.C. 20008
Dear Ambassador Lee:
As the result of our recent
consultations, representatives of our governments have reached agreement
on the attached Memorandum Of Understanding (MOU), which sets forth
measures that our respective governments will take to improve market
access for foreign motor vehicles into the Korean market. In addition,
we were pleased to receive Minister Han's letter of October 19, 1998
describing the wide range of economic reform measures, including
structural reforms of the financial and corporate sectors, that the
Government of Korea (ROKG) is implementing.
I am pleased to confirm that
these documents represent my government's understanding of the results
of our consultations and the measures that the ROKG is taking to resolve
our trade concerns.
Please confirm that your
government shares our understanding that these documents represent the
results of our consultations and the measures that the ROKG is taking to
resolve our trade concerns.
Sincererly,
/s/ Richard W. Fisher
Acting
EMBASSY OF THE REPUBLIC OF KOREA
THE WASHINGTON, D. C.
THE AMBASSADOR DR. LIEE
Oct. 20, 1998
Dear Ambassador Fisher:
I am pleased to confirm receipt
of your letter of this date which reads as follows:
"Dear Ambassador Lee:
As the result of Our recent
Consultations, representatives of our governments have reached agreement
on the attached Memorandum of Understanding (MOU), which sets forth
measures that our respective governments will take to improve market
access for foreign motor vehicles into the Korean market In addition, we
were pleased to receive Minister Han's letter of October 19, 1998
describing the wide range of economic reform measures, including
structural reforms of the financial and corporate sectors, that the
Government of IV Korea (ROKG) is implementing.
I am Pleased to confirm that
these documents represent my government's understanding of the results
of our consultations and the measures that the ROKG is taking to resolve
our trade concerns.
Please confirm that your
government shares our understanding that these documents represent the
results of our consultations and the measures that the ROKG is taking to
resolve our trade concerns.
Sincerely, Richard W. Fisher Acting" I have the honor to confirm that my government shares the understanding of the United States Government that the documents referred to in your letter represent the results of our consultations and the measures that the ROKG is taking to resolve trade concerns regarding the motor vehicle industry. Sincerely, /s/ UNITED STATES OF
AMERICA-REPUBLIC OF KOREA MEMORANDUM OF UNDERSTANDING REGARDING FOREIGN
MOTOR VEHICLES IN THE REPUBLIC OF KOREA I. GOALS AND GENERAL POLICIES
A. The goals of this Memorandum
of Undemanding (MOU) are as follows: 1 . Overall, to: a. Substantially increase market
access for foreign motor vehicles in the Republic of Korea (ROK); and
b. Establish conditions so that
the ROK's motor vehicle sector operates according to market principles.
2. Specifically, to:
a. Simplify the Government of the
Republic of Korea's (ROKG) tax regime in a manner that enhances market
access for foreign motor vehicles;
b. Improve the perception of
foreign motor vehicles in the ROK;
c. Simplify and streamline the
ROKG's type-approval procedures for foreign motor vehicles, (develop and
establish in the ROK a trade- facilitating self-certification process
for motor vehicle manufacturers, adopt and use internationally
recognized standards and regulations in the ROK, and ensure the
transparency and predictability of the ROKG's current and future
standards and certification procedures for motor vehicles; and
d. Establish in the ROK a
mortgage system for motor vehicles that permits, in the event of
default, foreclosure and disposal of the mortgaged vehicle in a timely,
cost-efficient and commercially reasonable manner. Such system also will
provide due process to protect the interests of both the lender and the
borrower, and will include an effective means to provide notice of the
mortgage status of a motor vehicle.
B. The ROKG agrees to take all
necessary steps to implement this MOU fully and effectively. ne ROKG
also agrees that it will not take any other measures that, directly or
indirectly, adversely affect market access for foreign motor vehicles.
C. The ROKG and the Government of
the United States of America (USG) (the Parties) will implement all the
measures of this MOU on a most-favored-nation basis.
D. The Annexes are an integral
part of this MOU.
Il. MEASURES REGARDING MOTOR
VEHICLE TARIFFS AND TAXES A. Tariffs
1. Within 30 days after entry
into force of this MOU, the ROKG will notify the World Trade
Organization (WTO) that the ROKG is modifying its WTO market access
schedule (Schedule LX) to bind the ROKG's current applied tariff rate of
8 percent on motor vehicles.
2. The ROKG will actively
participate in multilateral negotiations aimed at reducing or
eliminating tariffs on motor vehicles.
B. Taxes
1. Annual Motor Vehicle
Registration Tax
The ROKG will, effective March,
1999, reduce the annual vehicle registration tax for all motor vehicles
with engine displacements of greater than 2000cc's to a maximum of 220
Won per cc and will not increase the differential between
engine-displacement-based categories.
2. Equalization of Subway Bond
Rate The ROKG confirms that it has equalized the rate of the Subway Bond
for 0 domestic and foreign motor vehicles within categories.
3. Elimination of Education Tax
and Rural Development Tax
The ROKG confirms its intention
to eliminate and not to reintroduce the Education Tax levied on the
Registration Tax and the Special Tax for Rural Development levied on the
Acquisition Tax, effective in January 1999.
4. Reduction of Special
Consumption Tax The ROKG confirms that it reduced the Special
Consumption Tax by 30 percent in July 1998, and that the ROKG will
continue this tax reduction on motor vehicles until at least July 2005.
5. Longer Term Objectives
The ROKG confirms that its
general long-term policy is to steadily reduce the tax burden on motor
vehicle owners in the ROK in a way that advances the objectives of this
MOU.
6. Phase-in of Tax Increases on
Minivans
The ROKG will reclassify minivans
as passenger vehicles effective on January 1, 2000. The increase in the
Annual Vehicle Registration Tax and Subway Bond, will be phased-in over
three years in equal annual increments beginning no sooner than January
1, 2005.
III. MEASURES TO IMPROVE
PERCEPTION OF FOREIGN MOTOR VEHICLES A. The ROKG reaffirms that it is
not its policy to discourage in any way the purchase or use of foreign
motor vehicles in the ROK. The USG notes the proactive initiatives the
ROKG has undertaken to improve the perception of imports, including
foreign motor vehicles, in the ROK. Examples of such initiatives are set
forth in Annex 1.
B. The ROKG will continue such
initiatives and continue to make efforts to:
1. address effectively and
expeditiously instances of anti-import activity associated with foreign
motor vehicles, including instances in which USG officials or other
interested parties provide relevant information to the Ministry of
Foreign Affairs and Trade (MOFAT);
2. preclude discrimination
against foreign motor vehicles and individuals associated with them by
means of tax audits and other measures; and
3. encourage publicly the equal
treatment of foreign and domestic motor vehicles and the individuals
associated with them through such means as direct outreach to civic
groups.
C. Also, the ROKG will promote
actively a better understanding among its citizens of the benefits to
the ROK consumer and economy of free trade and open competition between
foreign and domestic products, including motor vehicles. These promotion
efforts will include dialogue with ROK citizens, such as in town
meetings and educational institutions or through other means.
IV. MEASURES REGARDING
STANDARDS AND CERTIFICATION PROCEDURES A. Simplification and
Streamlining of Type-approval Procedures
1. Change in "Safety
Compliance Test Threshold"
Effective April 1, 1999, the
safety compliance test threshold for imported motor vehicles will be
raised from the current 1,000 units to 1,500 units per model per
calendar year. Effective January 1, 2000, the safety compliance test
threshold for imported motor vehicles will be raised to 2,000 units per
model per calendar year, and effective January 1, 2001, the safety
compliance test threshold for imported motor vehicles will be raised to
2,500 units per model per calendar year. In the interest of
transparency, the list of documents to be provided in connection with "basic
vehicle 3 type" approval and safety compliance for high and low
volume imports is provided in Annex 2.
2. Simplification of Safety
Compliance Test
a. Below Threshold Requirements
The ROKG confirms that foreign
motor vehicle manufacturers with models entering the ROK in volumes
below the safety compliance test threshold will continue to be exempted
from the safety compliance test. For such vehicle models, manufacturers
will be required to submit only a "manufacturer's certificate of
compliance" certifying that their products are in compliance with
ROKG safety standards or standards that the ROKG determines to be
equivalents of ROKG standards (hereinafter referred to as equivalents).
Current equivalents are set out in Annex 3.
b. Above Threshold Requirements
(1) For existing and new ROKG
safety standards Tor which the USG has or adopts FMVSS that are
equivalents, the ROKG confirms that it will continue to accept a "manufacturer's
certificate of conformity" certifying that the manufacturer's motor
vehicles comply with those equivalents. This certificate will be
sufficient to meet the documentation requirements of the safety
compliance test. For example, the ROKG confirms that it will continue to
accept a manufacturer's certificate of conformity to certify that
foreign motor vehicles meet the ROKG standards on accelerator control
system; interior compartment door; and wiper, washer, defog and defrost.
(2) For existing and new ROKG
safety standards for which only Economic Commission for Europe (ECE) or
European Economic Community (EEC) equivalents exist or are adopted by
the EC in the future, the ROKG will accept an "E-certificate"
to meet the documentation requirements of the safety compliance test. If
an E-certificate has not been issued to the manufacturer, the ROKG will
accept a "manufacturer's test report' to meet such documentation
requirements, provided that the testing was conducted at a "test
site or laboratory approved by ECE authorities for type-approval
testing." These documentation provisions will apply to the existing
towing device, rear under run protection, speedometer test, and
electromagnetic compatibility standards.
(3) For existing and new ROKG
safety standards for which there are only ISO/SAE equivalents, current
or future, the ROKG will accept a manufacturer's test report
demonstrating that the manufacturer's motor vehicles comply with those
equivalents as sufficient to meet the documentation requirements of
the-safety compliance test. In the case of the engine power standard,
the ROKG will continue to accept a manufacturer's certificate of
conformity without a test report.
c. Headlamp Standards
(1) The ROKG will promptly adopt
the harmonized U.S./EC standard for headlamps when such standard is
completed.
(2) Prior to such adoption, the
ROKG will continue to accept vehicles with headlamp light intensity
ranging from 20,000 candela to 112,500 candela.
(3) Also, effective July 1, 1999,
the ROKG will accept motor vehicles with headlamps meeting the beam
pattern standard in FMVSS 108 (1997. 10, 1) and as amended.
d. Elimination of Five Safety
Standards
The ROKG confirms that it has
eliminated and will not replace the following five safety standards for
all motor vehicles' except buses, trucks and special purpose vehicles:
(1) Acceleration test; (2) Climbing steep hill test; (3) Maximum speed
test; (4) Minimum turning radius test; and (5) Maximum stable
inclination angle test.
e. Elimination of Requirement on
Exhaust Pipe Inclination
The ROKG confirms that it has
eliminated one of two requirements on exhaust pipe inclination.
Specifically, the ROKG eliminated the requirement of a maximum downward
inclination of 30 degrees. The requirement mandating a maximum leftward.
inclination of 30 degrees remains unchanged.
3. Waiver of Completion Test
a. The ROKG confirms that the
Ministry of Construction and Transportation allows foreign motor vehicle
manufacturers and importers it has designated as having adequate
technical personnel and facilities to conduct the completion test. The
Ministry of Construction and Transportation will continue to designate
importers and manufacturers to conduct the completion test if the
importer or manufacturer has adequate technical personnel and has
contracted with a "First-Rate Motor Vehicle Repair Company"
having adequate facilities.
b. Effective April 1, 1999, the
ROKG will waive the completion test if a motor vehicle manufacturer
submits certification documentation. Such documentation will consist of.
(1) an application form; (2) a check list of those manufacturer's
quality control procedures related to the completion test elements; and
(3) a comparison document certifying that each element of the completion
test is tested for in the manufacturer's own quality control procedures.
The elements of the completion test are set forth in Annex 4. This
certification documentation will only be required once for each
manufacturer.
4. Elimination of Items in
Detailed Specification Table
The ROKG confirms that the number
of items on the Detailed Specification Table (DST) was reduced from 319
to less than 200. Such number of items will not be increased, but items
relating to new technology may be added to the DST. The items now
included in the DST are set forth in Standard Form No. 20 (October 4,
1996) attached to the Ministerial Regulations pursuant to the Motor
Vehicle Management Act.
5. Simplification of Requirements
Associated with "Basic Vehicle and Modified Vehicle Type"
Approval
a. The ROKG confirms that:
(1) Foreign motor vehicle
manufacturers are not required to submit any documents to the Ministry
of Construction and Transportation relating to basic vehicle or modified
vehicle type approval if such documents have already been submitted to
the Korea Automotive Testing and Research Institute (KATRI);
(2) Motor vehicle manufacturers
are not required to resubmit documents that were previously presented
for basic vehicle type approval to either the KATRI or the Ministry of
Construction and Transportation if a previously approved model is
modified, but its body and frame are kept the same;
(3) Type approval for modified
vehicle type will be given at the same time that basic vehicle type
approval is granted.
b. The ROKG confirms that the
number of specific modifications subject to modified vehicle type
approval. when the body and frame remain the same, was reduced from 35
to eight. These eight modifications are set out in Annex 5.
Modifications other than these eight must be reported to applicable
authorities, but will not be subject to modified vehicle type approval
requirements.
c. The ROKG confirms that the
total documentation required for the basic vehicle type approval of
foreign motor vehicles, except for buses and special purpose vehicles,
entering the ROK in volumes below the safety compliance threshold was
reduced from 90 to 20 pages by permanently eliminating the requirement
concerning the submission of (1) drawings for 15 items relating to a
vehicle's main construction and devices, and (2) a manufacturer's
certificate of conformity for six safety standards.
6. Elimination of Durability Test
The ROKG confirms that it has
eliminated the 20,000 km durability test and will not reintroduce this
or any other durability test.
7. Test Site Visit Requirements
The ROKG will not require a test
site visit as a condition for the acceptance of a manufacturer's
certification that it has complied with safety standards.
8. Changes to Environmental
Standards and Streamlining of Environmental Certification
a. Changes to Noise Standards and
Conformity Assessment Procedures
(1) For motor vehicle models that
passed a 77 decibel pass-by noise standard prior to January 1, 1996, the
ROKG will continue to apply this standard.
(2) For other motor vehicle
models, the ROKG will continue to require compliance with a pass-by
noise standard that is no stricter than 75 decibels until January 1,
2003.
(3) Prior to the ROKG's adoption
of the ISO 362 - Acoustics Measurement of Noise Emitted by Accelerating
Road Vehicles - Engineering Method, ie., the ISO 362 pass-by
noise conformity assessment procedure, the ROKG will accept motor
vehicle models that have passed "stringent conformity assessment
procedures" to determine compliance with the pass-by noise
standard.
(4) No later than January 1,
2002, the ROKG will adopt the ISO 362 pass-by noise conformity
assessment procedure. Ile ROKG will also adopt a 2 decibel variance in
this procedure. The ROKG will not require compliance with a 74 decibel
pass-by noise standard before January 1. 2003.
(5) The ROKG will permit the
following entities to conduct the conformity assessment procedure to
determine compliance with the pass-by noise standard and will accept the
results:
i. the United States
Environmental Protection Agency (EPA);
ii. an independent testing
facility certified by the EPA; or
iii. a manufacturer, provided
that the EPA or authorities recognized by the ECE certify that the
manufacturer properly follows the conformity assessment procedure.
b. Streamlining of Environmental
Certification and Periodic Inspections
(1) Initial Environmental
Certification
i. The documents required to
apply for initial environmental certification now are contained in
standardized tables. The number of documents in the application package
has been reduced from 100- 150 pages to approximately 70 pages.
ii. For initial environmental
certification for a new motor vehicle model within an engine family, at
the request of a manufacturer, the ROKG will permit the manufacturer to
conduct the environmental testing, provided that, the Ministry of
Environment (MOE) oversees the testing.
iii. EPA-certified test results for the deterioration factor for emissions are now accepted as part of environmental certification documents. (2) Modified Environmental
Certification
The manufacturer's test report
can be submitted in lieu of MOE's environmental certification tests. In
exceptional cases in which the manufacturer has provided falsified data
or data that is not credible, the MOE will conduct the required tests or
will oversee the testing process as necessary.
ii. Modifications that do not
significantly affect the vehicle's level of noise or emissions are
exempt from the certification requirement. Instead, manufacturers now
are required only to report such modifications and the MOE will provide
a modified environmental certification. The regulations concerning this
exemption are specified in MOE Notice No. 1998-21.
(3) Periodic Environmental
Inspections
i. Foreign motor vehicles that
have entered into mass production are no longer subject to initial
spot-check inspections conducted by MOE upon importation.
ii. The number of imported motor
vehicles exempted from the manufacturer's assembly line inspection is
500 units. The number of units imported from a manufacturer is
determined on a cumulative basis for each model within an engine family
from the date of the first import of such model.
(4) Elimination of Endorsement
Requirements Foreign motor vehicle manufacturers no longer are required
to obtain an official endorsement from the ROKG diplomatic mission in
their home country certifying that copies of any documents conform with
the originals. The ROKG will continue to officially recognize those
documents that are duly signed by a representative of the manufacturer
on behalf of the manufacturer's Chief Executive Officer.
(5) Establishment of Internet
E-Mail Application System
Starting from the year 2000, the
ROKG will initiate the project for the establishment of an Internet
e-mail system for processing environmental certification applications.
No later than the year 2003, an on-line certification application and
processing system will be in operation which will be similar to that
utilized by the United States EPA.
c. Testing Facility Inspection
Upon entry into force of this
MOU, the ROkG will modify its current system of testing facility
inspection for compliance with environmental standards (noise, emissions
and deterioration factor) and will require inspection at an
environmental test site only once every three years.
9. Preclusion of Additional
Documentation or Data Requirements
The ROKG will not require any
additional documentation or data for type approval to establish
compliance with the standards referred to in this MOU.
B. Development
and-Establishment of "Self-certification" System
1. Development
a. KATRI Report
The KATRI will complete, by the
end of 1999, a report containing the proposed elements of the ROKG's
self-certification system.
b. Dialogue
To assist the KATRI in its study
concerning the development of the ROKG's self-certification system and
related measures, the Parties will, upon entry into force of this MOU,
establish a dialogue for the ongoing exchange of information on the
elements and functioning of the ROKG's self-certification system.
Participants in this dialogue will include ROKG and USG officials and
U.S. motor vehicle manufacturer representatives. This dialogue will
continue until 3 years after the establishment of the ROKG's
self-certification system, and participant§ will meet once a year,
or more frequently at the request of either Party.
2. Establishment
No later than the year 2002, the
ROKG will introduce a self-certification system. This self-certification
system will facilitate trade, while ensuring that safety assurance
requirements are met.
C. Participation in
International Harmonization of Standards and Regulations and Use of
International Standards 1. Participation in UN-WP 29
Talks
The ROKG will actively
participate in the Economic Commission for Europe Working Party 29
(UN-WP 29) talks.
2. Signing "Global Agreement"
The ROKG will sign the Agreement
Concerning the Establishing of Global Technical Regulations for Wheeled
Vehicles, Equipment and Parts )Which Can be Fitted and/or be Used on
Wheeled Vehicles, commonly referred to as "the Global Agreement,"
within twelve months after the date by which the United States, the EU
and Japan have signed the Agreement.
3. Reaffirmation of International
Obligations on Use of International Standards
The ROKG reaffirms its commitment
to implement fully and faithfully Article 2.4 of the WTO Agreement on
Technical Barriers to Trade (TBT Agreement).
D. Ensuring the
Transparency and Predictability of Changes to Existing, or Introduction
of New Standards and Certification Procedures
The ROKG reaffirms its commitment
to implement fully and faithfully Articles 2.9 through 2.12, with
respect to technical regulations, and Articles 5.6 through 5.9, with
respect to conformity assessment procedures, of the TBT Agreement. The
ROKG will use its Offlcial Gazette for this purpose.
E. Ensuring that ROK Standards
and Certification Provisions Do Not Unnecessarily Restrict Trade
The ROKG will ensure that
measures relating to the provisions in subsections A-D of this Section
will not be applied in such a manner as to restrict trade or have the
effect of creating unnecessary obstacles to international trade in
foreign motor vehicles.
V. MEASURES TO INTRODUCE AN
EFFICIENT MORTGAGE SYSTEM FOR MOTOR VEHICLES
A. Introduction of Mortgage
System for Motor Vehicles
The ROKG will permit motor
vehicles, including foreign motor vehicles, to be subject to mortgages
and will create an efficient mortgage system that protects the
interests, of both the mortgagee (lender) and mortgagor (borrower). The
ROKG will take necessary measures to establish, for mortgaged motor
vehicles, efficient, expeditious and commercially reasonable foreclosure
procedures consisting of existing court-ordered seizure and a disposal
method that is an alternative to the public auction sale (alternative
disposal method). The ROKG estimates that these - foreclosure
procedures, including disposal of the seized vehicle, would be.
completed in four months or less. Any fees or other charges related to
the cost of obtaining, registering or maintaining a mortgage on a motor
vehicle will be based on the cost of the service provided. The tax and
fee for registering a mortgage on a motor vehicle under this new system
will not exceed 0.2 percent and 0.4 percent respectively, of the
mortgage amount.
B. Establishment of Effective
Foreclosure Procedures
1. Amendment of Automotive
Vehicle Mortgage Act
The ROKG will submit a proposal,
by the end of March 1999, to amend the Automotive Vehicle Mortgage Act
for consideration by the National Assembly. The ROKG expects that the
National Assembly will complete action on this proposal by the end of
1999. The legislative proposal will include provisions that introduce
the alternative disposal method. Under this method, upon a motion by the
lender, the court may authorize that the seized motor vehicle be sold to
the lender.
2. Aspects of Alternative
Disposal Method
a. The lender will be permitted
to initiate the alternative disposal method by filing a motion with the
court for a "decision," including an offer to purchase the
mortgaged motor vehicle. The lender will submit simple documentation
demonstrating that the lender holds a mortgage on the motor vehicle and
that the borrower is in default. A motion for decision may be granted
based on these documents without a pleading or hearing.
b. The court will issue a
decision and notify the borrower and order a bailiff to seize the
mortgaged motor vehicle. After seizure, the court will establish a
minimum bid price by consulting, with an independent expert appraiser
who will recommend a minimum bid price that could facilitate the
disposal of the mortgaged motor vehicle.
C. The lender may decide to pay
the minimum bid price and obtain ownership of the mortgaged motor
vehicle. The lender may use any unpaid portion of the mortgage in the
satisfaction of the minimum bid price.
d. If the price paid exceeds the
outstanding amount of the mortgage and court costs, the court will
distribute such excess.
C. Institution of Effective
Mortgage Status Notification System
1. Maintenance of Data Base
The ROKG will continue to
maintain a central, easily accessible, , government data base containing
motor vehicle registrations registration data base.
2. Information Included
The ROKG will require that the
information contained in the electronic file and the "Certificate
of Registration" sets forth the most current information provided
by the lender on the mortgage status of the registered motor vehicle.
The information in the electronic file will include the names of the
lender and the borrower, the initial amount of the mortgage and the date
of registration of the mortgage. The Certificate of Registration will
indicate that the vehicle is mortgaged, will include the date of
registration of the mortgage and will state that additional information
on the mortgage status of the motor vehicle is available in the
registration data base.
3. Access to Information on
Mortgage Status
The ROKG will provide parties
with a demonstrable interest in the mortgage status of a motor vehi&,
including the current borrower, current and potential lenders or a
potential purchaser or guarantor, easy access to the information in the
registration data base.
4. Notification of Central Data
Base and Modification of Documents
Upon receiving information from
the lender on the mortgage status of the motor vehicle, the ROKG will
update the information in the registration data base.
D. Public Awareness of Motor
Vehicle Mortgage System
The ROKG will publicize the
details of this motor vehicle mortgage system, including the mortgage
status notification provisions, in the Official Gazette.
VI. CONSULTATIVE PROVISIONS
A. The Parties will hold
consultations once a year, or more frequently based on the request of
either Party, to discuss institutions, goals, policies and measures in
the ROK relating to the implementation of this MOU and other matters
relating to the Korean motor vehicle sector. Matters covered in these
consultations will include, but are not limited to, the goals and
general policies of this MOU; ROKG motor the vehicle tariffs and taxes;
measures to improve perception of foreign motor vehicles in the ROK;
ROKG standards and certification procedures relating to motor vehicles;
measures to introduce an efficient mortgage system for motor vehicles;
and the effect of the ROKG's economic reform measures on the motor
vehicle sector in the ROK. The first round of consultations will be held
not later than April 30, 1999.
B. Prior to the introduction of
any ROKG measures that affect market access for foreign motor vehicles
in the ROK, the ROKG agrees to provide information to the USG in a
timely manner on such measures.
C. The Parties also will evaluate
the progress being made under this MOU and will monitor market access
for foreign motor vehicles in the ROK.
D. In monitoring and assessing
market access for foreign motor vehicles in the ROK, both Parties will
consider, inter alia:
1. the change in the number and
value of new foreign motor vehicles sold in the ROK in total and by
country of export as measured, using a registration-based methodology,
by ROK, United States and other foreign country official statistics and
other publicly available data;
2. specific official actions to
improve the perception of foreign motor vehicles in the ROK; and
3. implementation of all other
goals policies, and measures referred to in paragraph A.
E. Each Party shall immediately
communicate the results of these consultations to their respective
Ministers and Governments.
F. At the first consultations
held under this MOU, the Parties will discuss whether critical
difficulties exist regarding the application of the provisions in
Section IV of this MOU--Measures Regarding Standards and Certification
Procedures--to minivans and how to address these difficulties.
VII. DEFINITIONS
A. "Motor vehicle"
means vehicles covered by Heading 87.03 of the International Convention
on the Harmonized Commodity Description and Coding System (known as the
Harmonized System Convention), concluded on June 14, 1983 at Brussels,
Belgium. This encompasses motor cars and other motor vehicles
principally designed for the transport of persons, including minivans
and -sport utility vehicles with a seating capacity of 9 or less.
B ."Safety compliance
test threshold" means the maximum number of imported vehicles
of a particular model for a particular calendar year that are exempted
from testing and from providing documentation other than a
manufacturer's certificate of compliance to demonstrate compliance with
safety standards.
C. "Manufacturer's
certificate of compliance" means a document corresponding to
Form No. 1 (December 26, 1996) annexed to Ministerial Notice 1997-18.
D. "Manufacturer's
certificate of conformity" means a document that provides
assurances from individual manufacturers that a vehicle model was
manufactured to comply with U.S. Federal Motor Vehicle Safety Standards
(FMVSS). Certificates of conformity are not required by the U.S.
Government and therefore will be produced in individual company formats;
however, such certificates include descriptions of the subject vehicle
model, the particular standard identification, and the title, names and
signatures of the individuals who certify that the vehicle model
complies with the specific standard. A representative of the
manufacturer is permitted to sign the manufacturer's certificate of
conformity on behalf of the manufacturer's Chief Executive Officer. A
manufacturer's certificate of conformity for motor vehicles produced in
a third country will include a certification from the manufacturer's
headquarters that such vehicles meet FMVSS and a "summary of data".
E. "Summary of data"
means a brief conclusory presentation of the manufacturer's test results
and the conclusions reached for relevant safety standards. Such
presentation shall typically not be required to exceed one page.
F. "E-certificate"
means a document issued by the type-approval authority to the
manufacturer or component supplier to certify that the component, system
and, in the case of the EC-Whole Vehicle Type Approval, the complete
vehicle, meets the requirements contained in the relevant UN-ECE or EEC
regulations.
G. "Manufacturer's test
report" means a report provided by an individual manufacturer
that sets out information that demonstrates that a vehicle model meets
the requirements of a specific standard. Such information could include
a report from an independent test facility.
H. "Test site or laboratory
approved by ECE authorities for type-approval testing" means a
manufacturer's own test facility, which is approved for testing by ECE
type-approval test authorities, and at which ECE type-approval test
authorities witnessed the testing, or an "independent test facility"
which is approved by ECE test authorities.
I. "Independent test
facility" means a test facility that is not affiliated with a
motor vehicle manufacturer.
J. "Basic vehicle type"
means a motor vehicle with the basic, standard frame and body for a
particular model of motor vehicle.
K. "Modified vehicle
type" means a vehicle that has been modified from a basic
vehicle type, but the body and frame are unchanged.
L. "Stringent conformity
assessment procedures" mean procedures used to determine
whether a motor vehicle meets the pass-by noise standard. Such
procedures include the pass-by noise conformity assessment procedures
being employed by the ECE or the ROK, or the procedures provided for
under ISO 362.
M. "Self-certification
system" means a conformity assessment system that relies upon
the use of a supplier's/manufacturer's written declaration of conformity
as assurance that the product complies with the applicable safety
standards and/or regulations. The supplier's/manufacturer's declaration
of conformity will be based on (1) the results of testing, analysis or
inspection that the manufacturer undertakes or authorizes others to
undertake on its behalf; and (2) the manufacturer's implementation of a
comprehensive quality control system.
N. "Certification of
Registration" means the ROK document that indicates ownership
of a motor vehicle. This document, by law, remains in the possession of
the motor vehicle owner.
0. "Registration-based
data" means the statistics now collected by the ROKG on motor
vehicles registered in the ROK. By November 1998, this data will include
the country of origin, manufacturer, model and engine size of the motor
vehicle. By the end of 1999, additional data and combinations thereof
will be available in a nation-wide computerized network.
ANNEX 1
ROKG INITIATIVES TO IMPROVE
THE PERCEPTION OF IMPORTS
1. On February 23, 1998, the
Ministry of Foreign Affairs (MOFA) sent a document to the Board of Audit
and Inspection noting that any measures which can be misperceived as
discriminating against foreign products should not be taken.
2. On February 26, 1998, the then
Ministry of Trade, Industry and Energy (MOTIE) sent a document to 13
government agencies and to 12 civic groups noting that the frugality
campaign should not degenerate into an anti-import campaign.
3. On March 17,1998, the Ministry
of Foreign Affairs and Trade (MOFAT) sent a document to 16 government
agencies noting that an anti-import campaign is not desirable for
Korea's efforts to overcome the current economic crisis and that any
measures discriminating against imports should be avoided.
4. On May 2, 1998, the MOFAT sent
a document to the Office of National Tax Administration noting that any
measures targeting the owners of foreign vehicles should not be
conducted.
ANNEX 2
Documentation Required for Basic
Vehicle Type Approval for Low and High Volume Imports
A.Low Volume imports (volume
below the safety compliance test threshold)
(1) Application form
(2) Specification table
(3) Detailed specification table
(4) External view of the vehicle
(5) After-sale plan (submitted
once upon the manufacturer's first application for basic vehicle type
approval)
(6) Manufacturer's certificate of
compliance
(7) Drawing of body/frame (applicable to buses, trucks and special purpose vehicles) B. High Volume Imports (volume
above the safety compliance test threshold)
(1) Application form
(2) Specification table
(3) Detailed specification table
(4) External view of the vehicle
(5) After-sale plan (submitted
once upon the manufacturer's first application for basic vehicle type
approval)
(6) Documentation certifying
compliance with the Safety Compliance Test
(7) Drawing of body/frame
(applicable to buses, trucks and special purpose vehicles)
ANNEX 3
Elements of Safety Compliance
Test, Equivalents and Required Documentation for High Volume Imports
(Equivalents as of October 20,
1998)
FN1 -FMVSS 108 can be used to meet the ROKG "turn signal" and "other light requirements except red turn signal U.S. FMVSS: Federal Motor Vehicle Safety Standard EEC: European Economic Community Directives ECE: Economic Commission for Europe Regulations SAE: U.S. Society of Automotive Engineers Recommendations I Annex 4Elements of the Completion Test Part A: Specification Measurement (1) Exterior dimension: length, width, height (2) interior dimension: length, width, height number of passengers (3) Engine: power, type, displacement; transmission (4) Weights: gross vehicle, axle, tare, permissible load (5) Wheelbase, tread, ground clearance Part B: Body and Frame Inspection to Check Any Malfunction (1) VIN (2) Engine and power train: starting mechanism, oil leakage, etc. (3) Steering system: proper handling, fractures, free play, interference with other systems (4) Controls and displays: distances from center of steering wheel, check if engine with automatic transmission can be started while shift lever is in drive or reverse, accelerator control return mechanism (5) Exhaust system: opening angle, function (6) Running gear: proper tire without any noticeable damage, proper tire pressure, tire contact pressure (7) Brake system: performance, braking force, brake fluid level and leakage, recover (8) Suspension: fracture, function (9) Fuel system: distance between fuel inlet and exhaust pipe opening/electrical system (10) Electrical system: insulation, possible damage to battery due to vibration/impact (11) Body and frame no loosening due to vibration/impact, location of registration plate, any damage to bumper (12)Towing hook: no separation due to vibration/impact once engaged (13)Hood and theft prevention: latch, locking mechanism (14)Entrance: dimensions, head restraint, seat belt, distance between front and rear seats (15) Window: laminated glass, tempered glass, transparency (16) Lamp system: luminous intensity, photometric axis, color, etc. (17) Field of vision: rear view mirror, warning sign in convex rear view mirror, wiper and washer (18) Horn: sound tone, sound intensity (19) Instrument: speedometer, odometer (20) Other: other systems to be checked for compliance Part C: Equipment Test (1) side slip: measure side slippage while vehicle moves forward I meter (2) CO, HC, smoke: measure concentration of harmful gases and smoke (3) brake: measure braking forces of each axle (4) headlamp: maximum luminous intensity (5) speedometer: check accuracy (6) noise: measure level (7) liquefied petroleum gas: check for any leakage ANNEX 5 Modifications Subject to Modified Vehicle Type Approval When the Body and Frame Remain the Same 1. Category and style 2. Shape and material of body 3. Engine 4. Layout of axles 5. Main structure of running gear 6. Type of brake system 7. Number of passengers, maximum permissible load, vehicle weight 8. Type and main structures of steering system The TCC
offers these agreements electronically as a public service for general
reference. Every effort has been made to ensure that the text presented
is complete and accurate. However, copies needed for legal purposes
should be obtained from official archives maintained by the appropriate
agency. |