On February 25, 2015, China and South Korea initialed the text of their free trade agreement, negotiations towards which began in May 2012 and were completed in November last year during a meeting in Beijing.

A statement at that time from China’s Ministry of Commerce (MOFCOM) revealed that the two countries have agreed to eliminate import tariffs on over 90 percent of all products traded between them and over 85 percent of their annual trade by value. Import duties on non-sensitive products will be cancelled either immediately or within ten years, and those on sensitive products will be abolished within 10-20 years of the FTA becoming effective.

However, the two sides have also decided to exclude certain ultra-sensitive items from the agreement. There had been particular concerns in China regarding opening its manufacturing sector to South Korean imports, and in South Korea on the effect of Chinese exports on its agricultural markets.

South Korea has agreed to a part-opening of its agricultural sector, while continuing to exclude such products as rice, pork, and beef. Meanwhile, it sought access to Chinese industrial sectors with the most opportunities for its small- and medium-sized enterprises. Trade barriers for their automotive industries have been maintained however.

The FTA covers not only trade in goods and services, but also e-commerce, competition policy, and government procurement, while both sides have committed to further talks on financial services and investment in the future.

According to the South Korean Ministry of Trade, Industry, and Energy, the two governments have agreed to work towards an official signing of the FTA within the first half of this year.

China is already South Korea’s primary trading partner, receiving over a quarter of its exports. According to MOFCOM figures, total trade between South Korea and China reached over USD270bn in 2013 and is expected to reach USD300bn in 2015.

The FTA will be the most substantial deal South Korea has ever signed. When it comes into effect, it is to expand the value of the country’s trade outflows covered by trade treaties from the current 60.9 percent to about 73.2 percent.

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The MoU on industrial parks is provides an enabling framework for Chinese companies to invest in industrial parks and zones. The MoU will ensure cooperation between Lal Bahadur Shastri National Academy of Administration, Mussoorie and China Executive Leadership Academy, Pudong, Shanghai.

India and China have agreed to cooperate to increase mutual investment in each other’s economies and this cooperation will be in accordance with the relevant domestic laws and regulations of each party and on the basis of equality and mutual benefit.

India provides money for maintenance of 3 hydrological centers on the Chinese country side.

The MoU on flood data sharing will provide India with 15 days more of hydrological information of river Brahmaputra. The information assist India in flood forecasting. The third MoU will help the two countries establish a framework for regular interactions between administrative officials to share experiences and learn from each other’s best practices. Specific programmes of collaboration will be worked out consequently.

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Internal Revenue Service (IRS) published over 77,000 banks and other foreign financial institutions (FFIs) which already registered with the United States and received a global intermediary identification number (GIIN), to comply with the Foreign Account Tax Compliance Act (FATCA). FFI fails to disclose information on their US clients will result in a requirement to withhold 30% tax on payments of US-sourced income.

Necessary to obtaining a GIIN , as long as FFIs are making a good-faith effort to achieve compliance, such as completing their FATCA registration. FATCA will into force on July 1st 2014, but, with regard to its due diligence, reporting and withholding provisions, and so as to facilitate an orderly transition, the Internal Revenue Service is to refrain from rigorously enforcing many of its requirements in calendar years 2014 and 2015.

The first update posted by the IRS on July 1. The monthly posting of FFI list will contain the names of all FFIs that have completed FATCA registration with the IRS and obtained a GIIN up to 5 business days before the end of the previous month.

Refer FATCA regulations and other FATCA guidance for the rules concerning the need to identify and document account holders and payees; the need to withhold on withholdable payments (including transitional rules); and the requirement to report information to the IRS concerning accounts and payees – advised by FFI.

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