ASEAN Industrial Cooperation Scheme (AICO)

The AICO is intended to be an important feature of ASEAN economic cooperation. It is designed to encourage technology-based investments in ASEAN, and is open to any ASEAN-based company meeting the following requirements: 1.) incorporated in and operating in an ASEAN country; 2.) a minimum of 30 percent ASEAN equity; 3.) the company engages in some form of resource sharing (such as sharing of technology, market sharing, or consolidated purchases of raw materials).

A minimum of two companies in two ASEAN countries must participate. Output of approved AICO projects will enjoy 0-5% tariffs immediately, as will raw materials and intermediate products. Such products will also enjoy local content accreditation and non-tariff incentives. The rules of origin will be the same as under the CEPT (40% ASEAN content). The non-tariff incentives will be determined by each country individually, and have not yet been specified. The above criteria for participation, particularly by the 30% ASEAN equity requirement, may be waived under certain circumstances. This will be settled by consultation.

A number of American companies have indicated their interest in the scheme, particularly those in the auto and autoparts sectors. As of July 2002, there were 98 approved AICO ventures, and a cumulative total of approximately 150 applications. These projects had an estimated annual transaction value of US$1.09 billion, according to the ASEAN Secretariat.