Basic Agreement on the ASEAN Industrial Cooperation Scheme (AICO Agreement) ^[*]

"AICO Scheme" shall mean the ASEAN Industrial Cooperation Scheme established by this Agreement.

"AICO Arrangement" shall mean a cooperative arrangement consisting of a minimum of two Participating Countries and one Participating Company in each Participating Country.

"Participating Countries" shall mean ASEAN Member Countries which agree to participate in an AICO Arrangement by granting the specified privileges to the Participating Companies.

"Participating Companies" shall mean companies incorporated and operating in ASEAN Member Countries meeting the criteria under Article 2(1) and Article 3 of this Agreement.

"AICO Products" refer to the following:

“Preferential Tariff Rate” shall mean the advanced final CEPT rate fixed by Participating Countries at 0% as provided for by the Protocol to Amend the Agreement on the CEPT Scheme for the AFTA for the Elimination of Import Duty. This definition shall be read together with Article 2(4) of the Agreement agreed upon in this Protocol and Article 4 of the Agreement. ^[[1]]

"National Authorities" shall mean the relevant authorities of ASEAN Member Countries responsible for the approval of an AICO application and the granting of privileges.

The AICO Arrangement shall be made up of Participating Companies incorporated and operating in different ASEAN Member Countries which seek to cooperate in the manufacture of AICO Products.

The number of Participating Companies in an AICO Arrangement may change subject to the defined minimum level.

An AICO Arrangement may have more than one Participating Company in each of the Participating Countries and may cover multiple products.

In the case of AICO Arrangements approved from 01 January 2003, the Preferential Tariff Rate for Participating Countries shall be within the band as follows:

Participating Countries upon mutual agreement may establish preferential tariff rate arrangements between or amongst Participating Countries within the applicable bands stated above of the respective Participating Countries.^[[1]]

The ASEAN Member Countries referred to in Article 2(4) that are temporarily not ready to implement the Preferential Tariff Rate of 0%, shall work towards reducing the Preferential Tariff Rate to 0% for AICO Arrangements by 1 January 2005, whereas the Socialist Republic of Vietnam shall do so by 1 January 2006.^[[2]]

Companies wishing to benefit from the privileges of the AICO Scheme shall fulfill the following criteria:

Each Participating Company of an AICO Arrangement must submit documentary evidence on resource sharing, industrial complementation or industrial cooperation activities such as joint ventures, joint manufacturing, technology transfer, training, licensing, consolidated purchasing and procurement, management service, sales and marketing agreement or other areas of cooperation.

All products, other than products listed in Article 9 (General Exception) of the Agreement of the CEPT Scheme, shall be eligible for the AICO Scheme.

Product approval shall be at HS 8-digit level and above.

An AICO Product shall meet the Rules of Origin of the CEPT Scheme.

A Participating Company shall be entitled to the following privileges under the AICO Scheme:

ASEAN Member Countries may subsequently introduce additional tariff and non-tariff incentives under this Agreement.

An AICO Arrangement shall only require the approval of the Participating Countries.

A Participating Company shall be accorded the privileges under this Agreement upon the approval of its application in accordance with the provisions of Article 7.

The approval of an AICO Arrangement shall not be limited to the initial applicants manufacturing a particular AICO Product. Subsequent applications from companies manufacturing the same AICO Products shall also be approved once the companies meet the eligibility criteria.

A prospective company in a non-participating Member Country could participate in an on-going AICO Arrangement if the non-participating country agrees to extend the preferential tariff rates to the AICO Products and upon the agreement of the existing Participating Countries.

A Participating Company shall use the intermediate parts and raw materials only in the manufacture of AICO Products. A Participating Country may withdraw the privileges under this Agreement if a Participating Company violates this obligation.

Interested companies wishing to participate in an AICO Arrangement shall apply directly to the National Authorities for approval.

ASEAN Member Countries shall, within 60 days of receipt of the application, inform the ASEAN Secretariat of :

ASEAN Member Countries, where applicable, which are unable to indicate a decision on the tariff rate within this period shall nevertheless indicate their decision on acceptance or otherwise, of the arrangement and the product as an AICO Product. ^[[1]]

The ASEAN Secretariat shall issue the COE within 14 days of the receipt of approval from Participating Countries.

The Participating Company shall use the COE to claim preferential tariff rates and to apply for non-tariff incentives from the relevant National Authorities.

Participating Countries shall grant the Preferential Tariff Rates within 60 days from the date of the issuance of the COE by the ASEAN Secretariat.

National Authorities shall monitor the implementation of their respective AICO Arrangements. The ASEAN Secretariat shall be responsible for the overall monitoring of the AICO Scheme. For this purpose, Participating Countries shall submit regular reports on the AICO Arrangements in their respective countries to the ASEAN Secretariat.

The ASEAN Economic Ministers (AEM) Meeting and its subsidiary bodies shall review the progress and implementation of the AICO Scheme.

The scope of coverage of this Agreement shall subsequently be expanded to include additional sectors.

Participating Countries shall eliminate all quantitative restrictions and non-tariff barriers applicable to an approved AICO product.

that BBC and AIJV applications shall not be accepted upon entry into force of this Agreement;

only amendments to approved models in the BBC Scheme shall be allowed;

that existing BBC companies shall continue to enjoy the margin of preference and the local content accreditation for products approved to this date until the expiry of the current car model previously approved; and

for existing AIJVs, the privileges shall cease on 31 December 2002. With effect from 1 January 2003 the prevailing.^[[1]] CEPT rate shall apply.

The respective Governments of ASEAN Member Countries shall undertake the appropriate measures to fulfill the obligations arising from this Agreement;

Any amendment to this Agreement shall be made by consensus and shall become effective upon acceptance by all ASEAN Member Countries.

No reservation shall be made with respect to any of the provisions of this Agreement;

This Agreement shall be deposited with the Secretary General of ASEAN who shall promptly furnish a certified copy thereof to each ASEAN Member Country; and

This Agreement shall enter into force upon the deposit of instruments of ratification or acceptance by all signatory Governments with the Secretary General of ASEAN.