a) An existing product is one which is being processed or manufactured in any of the participating countries at the time of its inclusion in tile final list.

b) Any product not covered by the defini- tion of an existing product is a new product.

3) An AIJV is any entity which:

a) produces an AIJV product in any of the participating countries;

b) has equity participation from nationals of at least two participating countries;

c) satisfies the equity ownership provisions specified in paragraph 5 of this Article and the minimum 5 per cent equity con- tribution from nationals of each partici- pating country.

4) With respect to a particular AIJV product, a participating country is an ASEAN member country which has indicated its intention to participate by way of providing tariff preference as well as the other privileges provided for in Article III hereof. An ASEAN member country which has not indicated its intention to so participate is a non participating country with respect to that particular AIJV product.

5) A minimum ASEAN equity ownership of 51 per cent shall be required for any proposed AIJV. In respect of projects for which AIJV status has been applied for before 31 December 1990 and subsequently approved, the applicable minimum ASEAN equity ownership shall- be 40 per cent. The minimum ASEAN equity shall not apply to an entity in any of the following cases:

a) where the participating countries in a proposed AIJV product agree to a higher equity participation by non-ASEAN investors,

b) where more than 50 per cent of the product produced by such entity will be exported to non-ASEAN markets;

c) where the product is already being produced by an entity in a participating country prior to its inclusion in the final list; or

d) where an entity has already been approved by a participating country to produce that product prior to the inclusion of the product in the final list.

6) The investors in an AIJV shall be free to locate their projects in any of the participating countries.

7) The approval by the ASEAN Economic Ministers (AEM) or COTME, as delegated by AEM, of the final list or the APL carries with it the pre-commitment to extend a minimum ninety (90) per cent margin of tariff preference to AIJV products by participating countries as provided for in Article III paragraphs I and 6.

8) Non-participating countries in an AIJV product shall waive tariff preferences extended under Article III subject to the conditions therein stated.

9) Any tariff preferences extended by non. participating countries among themselves for AIJV products shall be in accordance with the provisions of Chapter 11, Article 8, paragraph 2 of the Agreement on ASEAN Preferential Trading Arrangements (PTA).

a) Each ASEAN member country shall draw up a list of AIJV products which it shall support and approve in principle for AIJV status. Such country lists of AIJV products could include products not locally produced in the respective countries and products with export potential.

b) From these lists, COIME will draw up an AIJV Products List which shall consist of those products for which at least two member countries have expressed support, and which shall so indicate the participating member countries. To this list COIME- shall add other potential AIJVs. This list shall be made available to the ASEAN - CCI and national Chambers of Commerce and Industry in ASEAN member countries and shall be updated every six months.

c) Any AIJV application submitted to COIME on any of the products in the APL is automatically confirmed as an approved AIJV and the proponent company automatically acquires an AIJV status subject only to compliance with the AIJV requirement as provided under Article 1, paragraph 3 hereof.

10) COIME shall issue a certification in favor of the AIJV certifying its entitlement to the privileges under the Basic Agreement on ASEAN Industrial Joint Ventures (BAAIJV). Such certification shall also specify the date on which the tariff preference and all the privileges available to the AIJV shall take effect.

3 a) Non participating countries shall initially waive their rights under Chapter 11, Article 8, paragraph 2 of the ASEAN Preferential Trading Arrangements (PTA) for the first four years. The maximum waiver period for non-participating countries shall be 8 years. However, at any time after the first four years, a non-participating country can enjoy the MOP granted by participating countries as soon as it extends the same MOP itself. If a non-participating country does not wish to grant such MOP, then the waiver period shall be extended beyond the first four years for as long as the non-participating country maintains this position subject to a maximum waiver period of 8 years. Non-participating countries need not extend a margin of preference to participating countries on AIJV products.

b) Non-participating countries which so desire, and upon notification and concurrence of COIME, may become participating countries at any time and shall extend the same margin of tariff preference for that AIJV product.

c) Participating countries shall waive their rights under Chapter 11, Article 8 paragraph - of the ASEAN PTA for the first four years in respect of entities which are not AIJVs but produce the same products within their countries.

d) After the waiver period for an AIJV pro- duct, any entity in any member country which produces that AIJV product, irrespective of whether it qualifies as an AIJV or not, shall enjoy the same margin of tariff preference in the participating countries for that AIJV product.

4) In the event that there is only one approved project for a new AIJV product by the end of the stipulated six-month period, the participating countries shall -rant to that AIJV exclusivity privileges. Exclusivity privileges shall continue for a period of three years commencing from the actual date of commercial production of the AIJV product or upon the expiry of 30 months from the date of inclusion of the product in the final list or APL, whichever is earlier. In the event that there is more than one approved project for a new AIJV product, exclusivity privileges shall not be granted.

5) Exclusivity privileges in this Agreement shall mean that during the exclusivity period three years, the participating countries cannot set up new production facilities for the same product, other than the approved project, unless 75 per cent of its production is for export to non- ASEAN countries. A production facility is deemed to have been set up when it is in commercial production.

Existing AIJV Products

6) The participating countries shall extend to an existing AIJV product the same tariff preference as provided for in Article III paragraph 1 within 90 days from the date of inclusion of that product in the final list or APL.

7) The tariff preference described in Article III, paragraph 6 shall apply, during the initial four-year period, only to AIJVs hi participating Countries. The four-year period shall commence from the actual date of implementation-, of tariff preference.

8a) Non-participating countries shall initially waive their rights under Chapter II, Article 8, paragraph - of the ASEAN PTA for the first four- years. The maximum waiver period for non- participating countries shall -be eight years However. at any time after the first four years, a non-participating country can enjoy the MOP granted by participating countries as soon as it extends the same MOP itself. If a non- participating country does not wish to grant such MOP, then the waiver period shall be extended beyond the first four years for as long as the non- participating country maintains this position subject to a maximum waiver period of eight years. Non-participating countries need not countries on AIJV products.

b) Non-participating countries, which so desire and upon notification and concurrence of COIME, may become participating countries at any time and shall extend the same margin of tariff preference for that AIJV product

c) Participating countries shall waive their opts under Chapter II, Article 8, paragraph 2 of the ASEAN PTA for the first four years in respect of entities which are- not AIJVs but produce the same products within their countries.

d) After the waiver period for an AIJV product, -any entity in any member country which produces that AIJV product, irrespective of whether it qualifies as an AIJV or not, shall enjoy the same margin of tariff preference in the participating countries for that AIJV product.

9) Existing AIJV products shall not be granted exclusivity privileges. other Privileges and Obligations Applicable to Both New and Existing Products

10) If an AIJV product is a component for the manufacture of any product in the participating countries which have local-content programmes, that AIJV product shall be granted local- content accreditation in such participating countries.

11) Protection will be accorded by participating countries in cases of dumping, unfair trade practices or any other form of unreasonable pricing of products similar to the AIJV product from sources outside the participating countries, which affects the viability of the AIJV project, on the basis that AIJV projects would be considered as if located in all participating countries. The mechanisms of implementation will be negotiated by the participating countries.

12) Participating countries shall not lower the tariff rates applicable to products similar to the. AIJV product below the level prevailing at the time of approval for a four-year period from start of commercial operations.

13) In respect of any AIJV product on which there is a prevailing zero duty, the binding of such a ditty shall be regarded as fulfilling the requirement of extending the minimum 90% margin of preference.