Article 5.12. Confidentiality
1. If a Party provides information to another Party in accordance with this Chapter and designates the information as confidential or it is confidential under the receiving Party's law, the receiving Party shall keep the information confidential in accordance with its law.
2. A Party may decline to provide information requested by another Party if that Party has failed to act in accordance with paragraph 1.
3. A Party may use or disclose confidential information received from another Party under this Chapter but only for the purposes of administration or enforcement of its customs laws or as otherwise provided under the Party's law, including in an administrative, quasi-judicial, or judicial proceeding.
4. When a Party collects information from a trader under this Chapter, that Party shall apply the provisions set out in Article 7.22 (Protection of Trader Information) to keep the information confidential.
Article 5.13. Penalties
Each Party shall maintain criminal, civil, or administrative penalties for violations of its laws and regulations related to this Chapter.
Article 5.14. Advance Rulings Relating to Origin
1. In accordance with Article 7.5 (Advance Rulings), each Party, through its customs administration, shall, on request, provide for the issuance of a written advance ruling on origin under this Agreement.
2. Each Party shall adopt or maintain uniform procedures throughout its territory for the issuance of advance rulings on origin under this Agreement, including the common standards set out in the Uniform Regulations regarding the information required to process an application for a ruling.
Article 5.15. Review and Appeal
1. Each Party shall grant substantially the same rights of review and appeal of determinations of origin and advance rulings by its customs administration related to origin under this Agreement as it provides to importers in its territory, to an exporter or producer:
(a) that completes a certification of origin for a good that has been the subject of a determination of origin under this Agreement; or
(b) that has received an advance ruling on origin under this Agreement pursuant to Article 5.14 (Advance Rulings Relating to Origin), and Article 7.5 (Advance Rulings).
Article 5.16. Uniform Regulations
1. The Parties shall, by entry into force of this Agreement, adopt or maintain through their respective laws or regulations, Uniform Regulations regarding the interpretation, application, and administration of this Chapter, Chapter 4 (Rules of Origin), Chapter 6 (Textile and Apparel Goods), Chapter 7 (Customs Administration and Trade Facilitation) and other matters as may be decided by the Parties.
2. The Committee on Rules of Origin and Origin Procedures (Origin Committee) shall consult to discuss possible amendments or modifications to the Uniform Regulations.
3. In particular, the Origin Committee shall consult regularly to consider modifications or additions to the Uniform Regulations to reduce their complexity and provide practical and useful guidance to ensure better compliance with the rules and procedures of this Chapter, Chapter 4 (Rules of Origin), and Chapter 6 (Textile and Apparel Goods), including examples or guidance that would be of particular assistance to SMEs in the territories of the Parties.
4. The Origin Committee shall notify the Commission of any modification of or addition to the Uniform Regulations it decides.
5. Each Party shall implement any modification of or addition to the Uniform Regulations within a period that the Parties decide.
6. Each Party shall apply the Uniform Regulations in addition to the obligations in the Chapter.
Article 5.17. Notification of Treatment
1. Each Party shall notify the other Parties of the following determinations, measures, and rulings, including to the extent practicable those that are prospective in application:
(a) a determination of origin issued as the result of a verification conducted pursuant to Article 5.9 (Origin Verification);
(b) a determination of origin that the Party is aware is contrary to: (i) a ruling issued by the customs administration of another Party, or
(ii) consistent treatment given by the customs administration of another Party with respect to the tariff classification or value of a good, or of materials used in the production of a good, or the reasonable allocation of costs when calculating the net cost of a good, that has been the subject of a determination of origin;
(c) a measure establishing or significantly modifying an administrative policy that is likely to affect a future determination of origin; and
(d) an advance ruling, or a ruling modifying or revoking an advance ruling, on origin under this Agreement, pursuant to Article 5.14 (Advance Rulings Relating to Origin), and Article 7.5 (Advance Rulings).
Article 5.18. Committee on Rules of Origin and Origin Procedures
1. The Parties hereby establish a Committee on Rules of Origin and Origin Procedures (Origin Committee), composed of government representatives of each Party, to consider any matters arising under this Chapter or Chapter 4 (Rules of Origin).
2. The Origin Committee shall consult regularly to ensure that this Chapter and Chapter 4 (Rules of Origin) are administered effectively, uniformly, and consistently with the spirit and objectives of this Agreement.
3. The Origin Committee shall consult to discuss possible amendments or modifications to this Chapter or Chapter 4 (Rules of Origin), and in particular to the Product-Specific Rules of Origin in Annex 4-B, except Product-Specific Rules for textile and apparel goods, taking into account developments in technology, production processes, or other related matters. A Party may submit a proposed modification, along with supporting rationale and any studies to the other Parties for consideration. In particular, the Committee shall consider the possibility of cumulation with non-parties with which the Parties have trade agreements on a product by product basis.
4. Prior to the entry into force of an amended version of the Harmonized System, the Origin Committee shall consult to prepare updates to this Chapter and Chapter 4 (Rules of Origin), and in particular to the Product-Specific Rules of Origin in Annex 4-B, except for textiles and apparel goods, that are necessary to reflect changes to the Harmonized System.
5. With respect to a textile or apparel good, Article 6.8 (Committee on Textile and Apparel Trade Matters) applies in place of this Article.
Article 5.19. Sub-Committee on Origin Verification
1. The Parties hereby establish a Sub-Committee on Origin Verification, composed of government representatives of each Party, which will be a subcommittee of the Origin Committee.
2. The Sub-Committee shall meet at least once within one year of the date of entry into force of this Agreement, and thereafter at such times as the Parties decide or on request of the Commission or the Origin Committee.
3. The Sub-Committee's functions shall include:
(a) discussing and developing technical papers and sharing technical advice related to this Chapter or Chapter 4 (Rules of Origin) for the purposes of conducting verifications of origin;
(b) developing and improving the NAFTA 1994 Audit Manual and recommending verification procedures;
(c) developing and improving verification questionnaires, forms, or brochures; and
(d) providing a forum for the Parties to consult and endeavor to resolve issues relating to origin verification.
Chapter 6. TEXTILE AND APPAREL GOODS
Article 6.1. Rules of Origin and Related Matters
Application of Chapters 4 (Rules of Origin) and 5 (Origin Procedures)
1. Except as provided in this Chapter, Chapters 4 (Rules of Origin) and 5 (Origin Procedures) apply to textile and apparel goods.
De Minimis
2. A textile or apparel good classified in Chapters 50 through 60 or heading 96.19 of the Harmonized System that contains non-originating materials that do not satisfy the applicable change in tariff classification requirement specified in Annex 4-B (Product-Specific Rules of Origin), shall nonetheless be considered to be an originating good if the total weight of all those materials is not more than 10 percent of the total weight of the good, of which the total weight of elastomeric content may not exceed 7 percent of the total weight of the good, and the good meets all the other applicable requirements of this Chapter and Chapter 4 (Rules of Origin).
3. A textile or apparel good classified in Chapters 61 through 63 of the Harmonized System that contains non-originating fibers or yarns in the component of the good that determines the tariff classification of the good that do not satisfy the applicable change in tariff classification set out in Annex 4-B (Product-Specific Rules of Origin), shall nonetheless be considered to be an originating good if the total weight of all those fibers or yarns is not more than 10 percent of the total weight of that component, of which the total weight of elastomeric content may not exceed 7 percent of the total weight of the good, and the good meets all the other applicable requirements of this Chapter and Chapter 4 (Rules of Origin).
Treatment of Sets
4. Notwithstanding the product-specific rules of origin set out in Annex 4-B (Product-Specific Rules of Origin), textile and apparel goods put up in sets for retail sale, classified as a result of the application of Rule 3 of the General Rules for the Interpretation of the Harmonized System, shall not be originating goods unless each of the goods in the set is an originating good or the total value of the non-originating goods in the set does not exceed 10 percent of the value of the set.
5. For the purposes of paragraph 4:
(a) the value of non-originating goods in the set shall be calculated in the same manner as the value of non-originating materials in Chapter 4 (Rules of Origin); and
(b) the value of the set shall be calculated in the same manner as the value of the good in Chapter 4 (Rules of Origin).
Article 6.2. Handmade, Traditional Folkloric, or Indigenous Handicraft Goods
1. An importing Party and an exporting Party may identify particular textile or apparel goods that they mutually agree are:
(a) hand-loomed fabrics of a cottage industry;
(b) hand-made cottage industry goods made of those hand-loomed fabrics;
(c) traditional folklore handicraft goods; or
(d) indigenous handicraft goods.
2. The goods identified pursuant to paragraph 1 shall be eligible for duty-free treatment by the importing Party provided that any requirements agreed by the importing and exporting Parties are met.
Article 6.3. Special Provisions
Annex 6-A (Special Provisions) sets out special provisions applicable to certain textile and apparel goods.
Article 6.4. Review and Revision of Rules of Origin
1. On request of a Party, the Parties shall consult to consider whether particular goods should be subject to different rules of origin to address issues of availability of supply of fibers, yarns, or fabrics in the territories of the Parties.
2. In the consultations, each Party shall consider the data presented by a Party showing substantial production in its territory of the particular good. The consulting Parties shall consider that substantial production has been shown if that Party demonstrates that its domestic producers are capable of supplying commercial quantities of the good in a timely manner. With a view to concluding consultations without delay, the Parties shall endeavor to make an initial assessment of the evidence available regarding whether the fiber, yarn, or fabric is commercially available in the territories of the Parties promptly and to the extent possible within 90 days.
3. If, based on the initial assessment, the Parties agree that the fiber, yarn, or fabric is not commercially available, the Parties shall endeavor to reach agreement promptly on a corresponding proposed product-specific rule change and, as appropriate, proceed with their respective domestic procedures for implementation. The Parties shall endeavor to conclude consultations within 60 days after the initial assessment. An agreement between the Parties shall supersede any prior rule of origin for such good when approved by each Party in accordance with any necessary legal procedures of each Party.
Article 6.5. Cooperation
1. The Parties shall cooperate, through information sharing and other activities as provided for in Article 7.25 (Regional and Bilateral Cooperation on Enforcement), Article 7.26 (Exchange of Specific Confidential Information), Article 7.27 (Customs Compliance Verification Requests), and Article 7.28 (Confidentiality between Parties), on matters related to trade in textile and apparel goods.
2. The Parties recognize that documents such as bills of lading, invoices, contracts of sale, purchase orders, packing lists, and other commercial documents are particularly important to detect, prevent, or address customs offenses related to trade in textile and apparel goods.
3. Each Party shall designate a contact point for information exchange and other cooperation activities related to trade in textile and apparel goods in accordance with Article 30.5 (Agreement Coordinator and Contact Points).
Article 6.6. Verification
1. An importing Party may, through its customs administration, conduct a verification with respect to a textile or apparel good pursuant to Article 5.9 (Origin Verification), and the associated procedures, to verify whether a good qualifies for preferential tariff treatment, or through a request for a site visit as described in this Article. (1)
2. An importing Party may request a site visit under this Article from an exporter or producer of textile or apparel goods to verify whether:
(a) a textile or apparel good qualifies for preferential tariff treatment under this Agreement; or
(b) customs offenses with regard to a textile or apparel good are occurring or have occurred.
3. During a site visit under paragraph 2, an importing Party may request access to:
(a) records and facilities relevant to the claim for preferential tariff treatment; or
(b) records and facilities relevant to the customs offenses being verified.
4. If an importing Party seeks to conduct a site visit under paragraph 2, it shall provide the host Party, not later than 20 days prior to the date of the first visit to an exporter or producer, with:
(a) the proposed dates;
(b) the number and general location of exporters and producers to be visited in appropriate detail to allow the efficient and effective application of the provisions of paragraphs 7(a) and 7(b), but does not need to specify the names of the exporters or producers to be visited;
(c) whether assistance by the host Party will be requested and what type;
(d) the suspected customs offenses to be verified under paragraph 2(b), including relevant factual information available at the time of the notification related to the specific offenses, which may include historical information; and
(e) whether the importer claimed preferential tariff treatment.
5. If an importing Party seeks to conduct a site visit under paragraph 2, and does not provide the names of the exporters or producers 20 days prior to the site visit, it shall provide the host Party with a list of the names and addresses of the exporters or producers it proposes to visit, in a timely manner and prior to the date of the first visit to an exporter or producer under paragraph 2, to facilitate coordination, logistical support, and scheduling of the site visit.
6. The host Party shall promptly acknowledge receipt of the notification of a proposed site visit under paragraph 2, and may request information from the importing Party to facilitate planning of the site visit, such as logistical arrangements or provision of requested assistance.
7. If an importing Party seeks to conduct a site visit under paragraph 2:
(a) officials of the customs administration of the host Party may accompany the officials of the importing Party during the site visit;
(b) officials of the customs administration of the host Party may, in accordance with its laws and regulations, on request of the importing Party or on its own initiative, assist the officials of the importing Party during the site visit and provide, to the extent practicable, information relevant to conduct the site visit;
(c) the importing and the host Party shall limit communication regarding the site visit to relevant government officials and shall not inform any person outside the government of the host Party in advance of a site visit or provide any other verification or other information not publicly available the disclosure of which could undermine the effectiveness of the action;
(d) the importing Party shall request permission from the exporter, producer, or a person having capacity to consent on behalf of the exporter or producer, either prior to the site visit if this would not undermine the effectiveness of the site visit or at the time of the site visit, to access the relevant records or facilities; and
(e) if the exporter, producer, or person having the capacity to consent on behalf of the exporter or producer denies permission or access to the records or facilities, the site visit will not occur. If the exporter, producer, or a person having the capacity to consent on behalf of the exporter or producer is not able to receive the importing Party to carry out the site visit, the site visit shall be conducted on the following working day unless:
(i) the importing Party agrees otherwise, or
(ii) the exporter, producer, or person having the capacity to consent on behalf of the exporter or producer, substantiates a valid reason acceptable to the importing Party that the site visit cannot occur at that time.
If the exporter, producer, or person having the capacity to consent on behalf of the exporter or producer, does not have a valid reason acceptable to the importing Party that the site visit cannot take place on the following working day, the importing
Party may deem permission for the site visit or access to the records or facilities to be denied. The importing Party shall give consideration to any reasonable alternative proposed dates, taking into account the availability of relevant employees or facilities of the person visited.
8. On completion of a site visit under paragraph 2, the importing Party shall:
(a) on request of the host Party, inform the host Party of its preliminary findings;
(b) on receiving a written request from the host Party, provide the host Party with a written report of the results of the site visit, including any findings, no later than 90 days after the date of the request; and
(c) on receiving a written request of the exporter or producer, provide that person with a written report of the results of the site visit as it pertains to that exporter or producer, including any findings. This may be a report prepared under subparagraph (b), with appropriate changes. The importing Party shall inform the exporter or producer of the entitlement to request this report.
9. If an importing Party conducts a site visit under this Article and, as a result, intends to deny preferential tariff treatment to a textile or apparel good, it shall, prior to issuing a written determination, inform the importer and any exporter or producer that provided information directly to the importing Party, of the preliminary results of the verification and provide those persons with a notice of intent to deny that includes when the denial would be effective and a period of at least 30 days to submit additional information, including documents, to support the claim for preferential tariff treatment.
10. The importing Party shall not reject a claim for preferential tariff treatment on the sole grounds that the host Party does not provide requested assistance or information under this Article.
11. If verifications of identical textile or apparel goods by a Party indicate a pattern of conduct by an exporter or producer of false or unsupported representations that a textile or apparel good imported into its territory qualifies for preferential tariff treatment, the importing Party may withhold preferential tariff treatment to identical textile or apparel goods imported, exported, or produced by that person until it is demonstrated to the importing Party that those identical textile or apparel goods qualify for preferential tariff treatment. For the purposes of this paragraph, âidentical textile or apparel goodsâ means textile or apparel goods that are the same in all respects, including physical characteristics, quality and reputation, irrespective of minor differences in appearance that are not relevant to a determination of origin of those goods.
Article 6.7. Determinations
The importing Party may deny a claim for preferential tariff treatment for a textile or apparel good:
(a) for a reason listed in Article 5.10 (Determinations of Origin);
(b) if, pursuant to a site visit under Article 6.6.2 (Verification), it has not received sufficient information to determine that the textile or apparel good qualifies for preferential tariff treatment; or
(c) if, pursuant to a request for a site visit under Article 6.6.2 (Verification), a the importing Party is unable to conduct a site visit as access or permission for the site visit is denied, the importing Party is prevented from completing the site visit, or the exporter, producer, or person having the capacity to consent on behalf of the exporter or producer does not provide access to the relevant records or facilities during a site visit.
Article 6.8. Committee on Textile and Apparel Trade Matters
1. The Parties hereby establish a Committee on Textile and Apparel Trade Matters, (Textiles Committee), composed of government representatives of each Party.
2. The Textiles Committee shall meet at least once within one year of the date of entry into force of this Agreement, and thereafter at such times as the Parties decide and on request of the Commission. The Committee shall meet at such verwes and times as the Parties decide.
3. The Textiles Committee may consider any matter arising under this Chapter, and its functions shall include review of the implementation of this Chapter, consultation on technical or interpretive difficulties that may arise under this Chapter, and discussion of ways to improve the effectiveness of cooperation under this Chapter.
4. The Textiles Committee shall assess the potential benefits and risks that may result from the elimination of existing restrictions on trade between the Parties in worn clothing and other worn articles classified in heading 63.09 of the Harmonized System, including the effects on business and employment opportunities, and on the market for textile and apparel goods, in each Party.
5. Prior to the entry into force of an amended version of the Harmonized System, the Committee shall consult to prepare proposed updates to this Chapter that are necessary to reflect changes to the Harmonized System.
Article 6.9. Confidentiality
The provisions set out in Article 5.12 (Confidentiality) apply to the information collected from a trader or provided by another Party under this Chapter.
Chapter 7. CUSTOMS ADMINISTRATION AND TRADE FACILITATION
Section A. Trade Facilitation
Article 7.1. Trade Facilitation
1. The Parties affirm their rights and obligations under the Agreement on Trade Facilitation, set out in Annex 1A to the WTO Agreement.
2. With a view to minimizing the costs incurred by traders through the importation, exportation, or transit of a good, each Party shall administer its customs procedures in a manner that facilitates the importation, exportation, or transit of a good, and supports compliance with its law.
3. The Parties shall discuss within the Trade Facilitation Committee established under Article 7.24 (Committee on Trade Facilitation) additional measures to facilitate trade. The Parties are encouraged to adopt additional measures that build on the obligations in this Chapter with a view to further facilitating trade.
Article 7.2. Online Publication
Each Party shall make available on a free, publicly accessible website the following information and update such information as necessary:
(a) an informational resource that describes the procedures and practical steps an interested person needs to follow for importation into, exportation from, or transit through the territory of the Party;
(b) the documentation and data that it requires for importation into, exportation from, or transit through its territory;
(c) its laws, regulations, and procedures for importation into, exportation from or transit through its territory;
(d) web links to all current customs duties, taxes, fees, and charges it imposes on or in connection with importation, exportation, or transit, including when the fee or charge applies, and the amount or rate;
(e) contact information for its enquiry point or points established or maintained pursuant to Article 7.4 (Enquiry Points);
(f) its laws, regulations, and procedures for becoming a customs broker, for issuing customs broker licenses, and regarding the use of customs brokers;
(g) informational resources that help an interested person understand their responsibilities when importing into, exporting from, or transiting goods through its territory, how to be compliant, and the benefits of compliance; and
(h) procedures to correct an error in a customs transaction, including the information to submit and, if applicable, the circumstances when penalties will not be imposed.
Article 7.3. Communication with Traders
1. To the extent possible, in accordance with its law, each Party shall publish, in advance, regulations of general application governing trade and customs matters that it proposes to adopt and shall provide interested persons the opportunity to comment before the Party adopts such regulations.
2. Each Party shall adopt or maintain a mechanism to regularly communicate with traders within its territory on its procedures related to the importation, exportation, and transit of goods. These communications shall provide traders with an opportunity to raise emerging issues and provide their views to the customs administration on these procedures.
Article 7.4. Enquiry Points
1. Each Party shall establish or maintain one or more enquiry points to respond to enquiries by interested persons concerning importation, exportation, and transit procedures.
2. A Party shall not require the payment ofa fee or charge for answering enquiries under paragraph 1. (1)
3. Each Party shall ensure that its enquiry points respond to enquiries within a reasonable period of time, which may vary depending on the nature or complexity of the request.
Article 7.5. Advance Rulings
1. Each Party shall, through its customs administration, issue a written advance ruling, prior to the importation of a good into its territory, that sets forth the treatment that the Party shall provide to the good at the time of importation.
2. Each Party shall allow an exporter, importer, producer, or any other person with a justifiable cause, or a representative thereof, to request a written advance ruling.
3. No Party shall as a condition for requesting an advance ruling, require an exporter or producer of another Party to establish or maintain a contractual or other relation with a person located in the territory of the importing Party.
4. Each Party shall issue advance rulings with regard to:
(a) tariff classification;
(b) the application of customs valuation criteria for a particular case in accordance with the Customs Valuation Agreement;
(c) the origin of the good, including whether the good qualifies as an originating good under the terms of this Agreement;