(c) the good is produced in the territory of either Party from non-originating materials that result from a production or transformation process conferring a new individuality characterized by a change in tariff classification, regional value content, or other requirements as specified in Annex 3.1, and the good complies with the other applicable provisions of this Chapter.
Article 3.3. Regional Content Value
1. The regional content value of the goods shall be calculated according to the following formula:
RCV = VT - VMN/VT x100
where:
RCV is the regional content value, expressed as a percentage;
VMN is the transaction value of the non-originating materials adjusted on a CIF basis, except as provided in paragraph 5. Where such value does not exist or cannot be determined in accordance with the principles of Article 1 of the Customs Valuation Agreement, it shall be calculated in accordance with that Agreement; and
VT is the transaction value of the good adjusted on an FOB basis, except as provided in paragraph 3. Where such value does not exist or cannot be determined in accordance with the principles of Article 1 of the Customs Valuation Agreement, it shall be calculated in accordance with that Agreement.
2. For purposes of calculating the regional content value, the percentage shall be forty percent (40%).
3. When a good is not exported directly by its producer, the value shall be adjusted to the point at which the buyer receives the good within the territory of the Party where the producer is located.
4. All records of costs considered for the calculation of regional value content shall be recorded and maintained in accordance with Generally Accepted Accounting Principles applicable in the territory of the Party where the good is produced.
5. Where the producer of a good acquires a non-originating material within the territory of a Party where it is located, the value of the non-originating material shall not include freight, insurance, packing costs, or all other costs incurred in transporting the material from the supplier's warehouse to the producer's location.
6. For purposes of calculating regional value content, the value of non-originating materials used by the producer in the production of a good shall not include the value of non-originating materials used by:
(a) another producer in the production of an originating material that is acquired and used by the producer of the good in the production of that good, or
(b) the producer of the goods in the production of a self-produced originating material.
Article 3.4. Non-Originating Transactions
1. The following processes or operations do not confer origin, individually or in combination with each other:
(a) preservation of the goods in good condition during transport or storage, such as ventilation, aeration, refrigeration, freezing;
(b) facilitation of shipment or transport;
(c) packaging, wrapping, or packaging of goods for retail sale;
(d) fractionation in lots or volumes, and
(e) affixing marks, labels and other similar distinctive signs on the goods or their packaging.
2. Likewise, the following processes or manufacturing operations shall be considered insufficient to confer the status of originating goods:
(a) filtration or dilution in water or other solvents that does not alter the characteristics of the goods;
(b) disassembly of goods into their parts;
(c) laying or drying;
(d) dusting, washing, shaking, shelling, peeling, shelling, shelling, threshing, grading, sorting, sifting, screening, sieving, filtering, painting, simple cutting, trimming;
(e) cleaning, including removal of rust, grease and paint or other coatings;
(f) joining, assembling or division of goods into packages;
(g) simple mixing of products, understood as activities that do not require special skills or machines, apparatus or equipment specially made or installed to carry out such activity. However, simple mixing does not include chemical reaction;
(h) slaughter of animals, and
(i) application of oil and protective coatings.
Article 3.5. Cumulation
1. Originating materials or goods originating in either Party incorporated in the production of goods in the territory of the other Party shall be considered as originating in the territory of the latter Party.
2. For the purposes of the cumulation referred to in the preceding paragraph, materials originating in Bolivia, Colombia and Peru shall also be considered as originating in the exporting Party, for which it shall apply:
(a) in the case of Chile, the respective bilateral agreement signed with such countries, and
(b) in the case of Ecuador, the respective regulations of the Andean Community.
Article 3.6. De Minimis
A good shall be considered originating if the value of all non-originating materials used in the production of this good that do not meet the change in tariff classification requirement set out in Annex 3.1 does not exceed fifteen percent (15%) of the transaction value of the good determined in accordance with Article 3.3 and the good complies with the other applicable provisions of this Chapter.
Article 3.7. Accessories, Spare Parts and Tools
1. Accessories, spare parts, or tools delivered with the good as a normal part of the good shall be disregarded in determining whether all non-originating materials used in the production of the good comply with the applicable change in tariff classification set out in Annex 3.1, provided that:
(a) the accessories, spare parts or tools are classified together with the goods and are not invoiced separately, and
(b) the quantity and value of these accessories, spare parts or tools are those customary for the goods.
2. For those accessories, spare parts or tools that do not comply with the above conditions, the provisions of this Chapter shall apply to each of them.
3. Where the good is subject to a regional value content requirement, accessories, spare parts or tools shall be considered as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.
Article 3.8. Retail Containers and Packaging Materials
1. Where the containers and packing materials in which a good is presented for retail sale are classified in the Harmonized System with the good they contain, they shall be disregarded in determining whether all non-originating materials used in the production of the good comply with the applicable change in tariff classification set out in Annex 3.1.
2. Where the good is subject to a regional value content requirement, the value of such containers and packing materials shall be taken into account as originating or nonoriginating material, as the case may be, in calculating the regional value content of the good.
Article 3.9. Containers and Packing Materials for Shipment
Containers and packing materials in which the merchandise is packed exclusively for transportation shall not be taken into account for purposes of determining whether the merchandise is originating.
Article 3.10. Indirect Materials
Indirect materials shall be considered as originating materials irrespective of the place of their production.
Article 3.11. Goods and Fungible Materials
1. Where originating and non-originating fungible goods are physically mixed or combined in inventory, the origin of these goods may be determined on the basis of the physical segregation of each commodity or fungible material, or by the use of any inventory management method, such as average, last-in-first-out (LIFO) or first-in-first-out (FIFO), recognized in the Generally Accepted Accounting Principles of the Party where the production takes place or otherwise accepted by the Party where the production takes place.
2. The inventory management method selected in accordance with paragraph 1 for a particular commodity or consumable shall continue to be used for that commodity or consumable throughout the period or fiscal year.
Article 3.12. Sets
1. A set or assortment of goods that are classified in accordance with rule 3 of the General Rules for the Interpretation of the Harmonized System, as well as goods whose description under the nomenclature of the Harmonized System is specifically that of a set or assortment, shall qualify as originating, provided that each of the goods contained in that set or assortment complies with the rules of origin set out in this Chapter and Annex 3.1.
2. Notwithstanding paragraph 1, a set of goods shall be considered to be originating if the value of all the non-originating goods used in the formation of the set does not exceed twenty percent (20%) of the transaction value of the good as determined under Article 3.3.
Article 3.13. Transit and Non-alteration of Goods
1. The originating goods for which preferential tariff treatment is claimed in a Party shall be the same goods as those shipped by the exporting Party. They shall not be altered or transformed in any manner or undergo operations other than operations to preserve their condition, add or affix marks, labels, stamps or any documentation to ensure compliance with the domestic requirements of the importing Party prior to being declared for preferential tariff treatment.
2. Transit, storage or splitting may take place in a non-Party, provided that they remain under the customs supervision of that non-Party.
3. Paragraphs 1 and 2 shall be deemed to be complied with, unless the customs authority of the importing Party has reason to believe otherwise. In such a case, the customs authority of the importing Party may request the importer to provide appropriate evidence of compliance, which may be given by any means, including contractual transport documents, such as bills of lading or any other evidence.
Article 3.14. Exhibitions
1. The preferential tariff treatment provided for in this Agreement shall be accorded to originating goods that are consigned for exhibition in a non-Party and sold after the exhibition for importation into one of the Parties, when the following conditions are fulfilled to the satisfaction of the customs authorities of the importing Party:
(a) that an exporter has shipped these goods from one Party to the non-Party where the exhibition took place;
(b) the goods have been sold or otherwise disposed of by the exporter to a person of a Party;
(c) the goods have been shipped during the exhibition or immediately thereafter in the same condition in which they were shipped to the exhibition;
(d) that the goods have not, since the time they were consigned for exhibition, been used for any purpose other than for display at the exhibition, and
(e) the goods have remained under the control of the Customs authorities of the non-Party during the exhibition.
2. For the purposes of paragraph 1, a certificate of origin shall be issued in accordance with the provisions of Section B and submitted to the customs authorities of the importing Party, stating the name and address of the exhibition. Additional documentary evidence relating to the exhibition may be required if deemed necessary.
3. Where a good originating in the exporting Party is imported after an exhibition in a non-Party, the customs authority of the importing Party may require importers claiming preferential tariff treatment for the good to submit:
(a) a copy of the transport document, or
(b) a certificate or any other information given by the customs authority of such non-Parties or other authorized entities to support the fact that the goods have been in transit.
Section B. Origin Procedures
Article 3.15. Certification of Origin
1. The customs authority of the importing Party may grant preferential tariff treatment based on a written or electronic certificate of origin issued by the competent authority of the exporting Party.
2. The eletronic certificate of origin (1) must be digitally signed.
3. The competent authority of the exporting Party may delegate the issuance of the certificate of origin to other public or private entities.
4. The competent authority or qualified entities may examine in their territory the originating status of the goods and their compliance with the requirements of this Chapter. For this purpose, they may request any supporting evidence, carry out inspections at the exporter's or producer's premises or carry out any other control they deem appropriate.
5. The Parties shall keep in force before the General Secretariat of ALADI the list of official agencies or public or private entities authorized to issue certificates of origin and the record of the autographic or electronic signatures of the officials accredited for such purpose.
6. The certificate of origin shall serve to certify that a good exported from the territory of one Party to the territory of another Party qualifies as originating. Such certificate may be modified by the Commission. The single form of the certificate of origin is set out in Annex 3.2. In accordance with the regulations of each Party, preferential tariff treatment may be requested at the time of importation on the basis of a certificate of origin or a copy thereof, without prejudice and where appropriate for subsequent customs controls, the original is requested in accordance with the procedures of the domestic legislation of each Party.
7. The certificate of origin shall be valid for one (1) year from the date on which it was issued.
Article 3.16. Billing by an Operator of a Non-Party
When a good is invoiced by an operator of a non-Party, the following legend shall be indicated in the "Remarks" field of the certificate of origin: "Transaction invoiced by an operator of a non-Party".
Article 3.17. Exceptions
The certificate of origin will not be required when:
(a) the customs value of the importation does not exceed one thousand dollars of the United States of America (USD 1,000) or the equivalent amount in the currency of the importing Party at the time the customs declaration is lodged, or such greater amount as may be established by the importing Party, unless the importing Party considers the importation to be part of a series of importations made or planned for the purpose of evading compliance with the laws of the Party governing claims for preferential tariff treatment under this Agreement, or
(b) is a good for which the importing Party does not require the importer to provide certification or information demonstrating origin.
Article 3.18. Obligations Relating to Imports
1. The customs authority of each Party shall require that an importer claiming preferential tariff treatment for a good:
(a) declare in writing on the import document required by your legislation, on the basis of a certificate of origin, that a good qualifies as an originating good;
(b) has the certificate of origin in his possession at the time the declaration is made;
(c) provide, if requested by the customs authority, the certificate of origin or copies thereof, and
(d) immediately files a corrected declaration and pays the corresponding duty when the importer has reason to believe that the certificate of origin on which the customs declaration is based contains incorrect information. The importer may not be penalized when he voluntarily lodges the corrected goods declaration before the customs authority has initiated the exercise of its verification and control powers or before the customs authorities notify the revision, in accordance with the legislation of each Party.
2. If an importer in its territory fails to comply with any of the requirements set out in this Chapter, the customs authority shall deny preferential tariff treatment.
3. In the case of Ecuador, when the importer requests preferential tariff treatment without a certificate of origin, it will be subject to the procedures of its legislation.
Article 3.19. Discrepancies and Formal Errors
1. The discovery of discrepancies between the statements made in the certificate of origin and the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the certificate of origin null and void, provided that the origin of the products is not in doubt, if it is duly established that this document does correspond to the products submitted.
2. In case of discrepancies on the tariff classification on the certificate of origin used to claim preferential tariff treatment under this Agreement, the customs authority of the importing Party may exchange information with the customs authority of the exporting Party through the customs cooperation mechanism set out in Article 4.18 (Trade Facilitation), which shall include, inter alia, the exchange of information or opinions on tariff classification by the customs authorities of each Party.
3. Obvious formal errors, such as typing errors, on a certificate of origin shall not cause that document to be rejected if they do not create doubts concerning the correctness of the statements contained in the certificate of origin, the import documentation or the originating status of the goods.
Article 3.20. Duty Drawback
Where the importer has not requested preferential tariff treatment for goods imported into its territory that it has qualified as originating, the importer may, no later than one (1) year after the date of importation, apply to the customs authority of the importing Party for a refund of the excess customs duties paid, in accordance with the procedure established in each Party.
Article 3.21. Obligations Relating to Exports
1. Each Party shall provide that:
(a) where an exporter has reason to believe that the certificate of origin contains incorrect information, he shall immediately inform the competent authority or qualified entities in writing of any change which may affect the accuracy or validity of that certificate; and
(b) if an exporter has provided a false certificate or false information and thereby exported originating goods into the territory of the other Party, he shall be subject to penalties similar to those that would be imposed on an importer in its territory for contravening its customs laws by making false declarations and statements in connection with an importation.
2. Neither Party shall impose penalties on an exporter for providing incorrect information if he voluntarily communicates this in writing to the competent authority or qualified entities before the customs authority of the importing Party has initiated the exercise of its verification and control powers or before the customs authority notifies the review, in accordance with each Party's legislation.
Article 3.22. Record Keeping Requirements
1. The competent authority or qualified entities shall keep a copy of the certificate of origin for at least five (5) years from the date of issue. Such file shall include all the background information that served as the basis for the issuance of the certificate.
2. An exporter applying for a certificate of origin pursuant to Article 3.15 must retain for a minimum of five (5) years from the date of issuance of such certificate, all records necessary to demonstrate that the good was originating, including records relating to:
(a) the purchase, costs, value and payment for the exported goods;
(b) the purchase, costs, value and payment for all materials, including indirect materials, used in the production of the exported good, and
(c) the production of the goods in the form in which they are exported from its territory.
3. An importer requesting preferential tariff treatment for a good shall keep, for a minimum of five (5) years from the date of importation of the good, the documentation required by the customs authority, including a copy of the certificate of origin.
Article 3.23. Procedures for Verification of Origin
1. The customs authority of the importing Party may request information on the origin of a good from the competent authority of the exporting Party.
2. The customs authority of the importing Party may require the importer to submit information relating to the importation of the good for which preferential tariff treatment was claimed.
3. For purposes of determining whether an imported good qualifies as originating, the customs authority of the importing Party may verify the origin of the good, through the competent authority of the exporting Party, by means of the following procedures:
(a) written requests for information or questionnaires to the exporter or producer of the good in the territory of the other Party, which shall specifically identify the good being verified;
(b) verification visits to the premises of the exporter or producer of the good in the territory of the other Party for the purpose of examining the records and documents referred to in Article 3.22 and inspecting the facilities and materials used in the production of the good, or
(c) any other procedure agreed by the Parties.
4. For the purposes of this Article, any written communication sent by the customs authority of the importing Party to the exporter or producer for verification of origin through the competent authority of the exporting Party shall be considered valid if it is made by means of:
(a) registered mail or other forms with acknowledgement of receipt confirming receipt of the documents or communications, or
(b) in such other manner as the Parties may agree.
5. In accordance with paragraph 3, requests for information or written questionnaires shall contain:
(a) the name, title and address of the customs authority of the importing Party requesting the information;
(b) the name and address of the exporter or producer from whom the information and documentation is requested;
(c) description of the information and documents required, and (d) legal basis for requests for information or questionnaires.
6. An exporter or producer receiving a questionnaire or request for information pursuant to paragraph 3(a) shall duly complete and return the questionnaire or respond to the request for information within sixty (60) days from the date of receipt. During the aforementioned period, the exporter or producer may make a written request for an extension to the customs authority of the importing Party, which shall not exceed thirty (30) days. Such request shall not have the consequence of denying the preferential tariff treatment.
7. The customs authority of the importing Party may request, through the competent authority of the exporting Party, additional information by means of a subsequent questionnaire or request to the exporter or producer, even if it has received the completed questionnaire or the requested information referred to in paragraph 3(a). In this case, the exporter or producer shall have thirty (30) days to respond to such request.
8. If the exporter or producer fails to properly complete a questionnaire, return a questionnaire, or provide the requested information within the period set out in paragraphs 6 and 7, the customs authority of the importing Party may deny preferential tariff treatment to the goods subject to verification by sending to the importer and to the competent authority of the exporting Party a determination of origin containing the facts and the legal basis for that decision.
9. Prior to conducting a verification visit and in accordance with paragraph 3(b), the customs authority of the importing Party shall notify in writing its intention to conduct the verification visit. The notification shall be sent to the competent authority of the exporting Party by mail or any other means that provides a record of the receipt of the notification. The customs authority of the importing Party shall require the written consent of the exporter or producer to be visited in order to carry out the verification visit.
10. Pursuant to paragraph 3(b), the notification of intent to conduct the verification visit of origin referred to in paragraph 9 shall contain:
(a) the name, title and address of the Customs authority of the importing Party making the notification;
(b) the name of the exporter or producer to be visited; (c) the date and place of the proposed verification visit;
(d) the purpose and scope of the proposed verification visit, including the specific reference of the merchandise to be verified;
(e) the names and titles of the officials who will carry out the verification visit, and
(f) the legal basis for the verification visit.
11. If the exporter or producer of a good does not consent in writing to the visit within thirty (30) days of the date of receipt of the notification referred to in paragraph 9, the customs authority of the importing Party may deny preferential tariff treatment to such good by notifying the importer and the competent authority of the exporting Party in writing of its decision, including the facts and legal basis for its decision.
12. The customs authority of the importing Party shall not deny preferential tariff treatment to a good if, within fifteen (15) days of the date of receipt of the notification, on a single occasion, the producer or exporter requests a postponement of the proposed verification visit, with appropriate justifications, for a period not to exceed thirty (30) days from the date proposed under paragraph 10(c), or for such longer period as the customs authority of the importing Party and the competent authority of the exporting Party may agree.
13. Pursuant to paragraph 3(b), the customs authority of the importing Party shall permit an exporter or producer who is subject to a verification visit to designate up to two (2) observers to be present during the visit and to act solely in that capacity. Failure to designate observers shall not be grounds for postponement of the visit.
14. In verifying compliance with any requirement set out in Section A, the customs authority of the importing Party shall adopt, where applicable, the Generally Accepted Accounting Principles applied in the territory of the exporting Party.
15. The customs authority of the importing Party may deny preferential tariff treatment to a good subject to a verification of origin where the exporter or producer of the good fails to make available to it the records and documents referred to in Article 3.22.
16. When the verification visit has been completed, the customs authority of the importing Party may draw up a record of the visit, which shall include the facts established by it. The exporter or producer who was the subject of the visit may sign this record.
17. Within ninety (90) days of the conclusion of the verification of origin, the customs authority of the importing Party shall issue a determination of origin containing the facts and the legal basis for such determination, and shall notify the importer and the competent authority of the exporting Party.
18. If the time limit set forth in the preceding paragraph has elapsed without the customs authority of the importing Party having issued a determination of origin, the exporting Party may have recourse to the dispute settlement mechanism set forth in Chapter 22 (Dispute Settlement).
19. Where, through a verification of origin, the customs authority of the importing Party determines that an exporter or producer has more than once provided false or unfounded statements or information to the competent authority of the exporting Party that a good qualifies as originating, the customs authority of the importing Party may suspend preferential tariff treatment to identical goods exported by that person. The customs authority of the importing Party shall grant preferential tariff treatment to the goods upon compliance with this Chapter.
Article 3.24. Penalties
Each Party shall impose criminal, civil or administrative penalties for violations of its laws and regulations relating to the provisions of this Chapter.