1. In determining whether a good is an originating good, any neutral elements as defined in paragraph 2 shall be disregarded.
2. Neutral element means a good used in the production, testing or inspection of another good but not physically incorporated into that good by themselves, including:
(a) fuel, energy, catalysts, and solvents;
(b) equipment, devices, and supplies used for testing or inspecting the goods;
(c) gloves, glasses, footwear, clothing, safety equipment, and supplies;
(d) tools, dies, and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials, and other materials used in production or used to operate equipment and buildings; and
(g) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.
Article 10. Packing Materials, Packaging Materials and Containers
1. Packing materials and containers used for the transport of a good shall not be taken into account in determining the origin of the good.
2. The origin of the packaging materials and containers in which a good is packaged for retail sale shall be disregarded in determining the origin of the good, provided that the packaging materials and containers are classified with the good.
3. Notwithstanding paragraph 2, where a good is subject to an RVC requirement, the value of the packaging materials and containers used for retail sale shall be taken into account as originating materials or non-originating materials, as the case may be, in calculating the RVC of the good.
Article 11. Accessories, Spare Parts and Tools
1. Accessories, spare parts, or tools presented and classified with a good shall be considered as part of the good, provided:
(a) they are invoiced together with the good; and
(b) their quantities and values are commercially customary for the good.
2. Where a good is subject to change in tariff classification criterion set out in Annex 3-1 (Product Specific Rules of Origin), accessories, spare parts, or tools described in paragraph 1 shall be disregarded when determining the origin of the good.
3. Where a good is subject to an RVC requirement, the value of the accessories, spare parts or tools described in paragraph 1 shall be taken into account as originating materials or non-originating materials, as the case may be, in calculating the RVC of the good.
Article 12. Sets
Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all component goods are originating. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the value of the non- originating goods does not exceed 15% of the ex-works price of the set.
Article 13. Direct Consignment
1. Preferential tariff treatment under this Agreement shall only be granted to originating goods which are transported directly between the Parties.
2. Notwithstanding paragraph 1, a good whose transport involves transit through one or more non-Parties with or without trans-shipment or temporary storage of up to 6 months in such non-Parties, shall still be considered as directly transported between the Parties, provided that:
(a) the transit entry of the good is justified for geographical reason or by consideration related exclusively to transport requirements;
(b) the good does not undergo any other operation there other than unloading and reloading, or any operation required to keep it in good condition; and
(c) the good remains under customs control during transit in those non-Parties.
3. Compliance with the provisions set out in paragraph 2 shall be evidenced by presenting the customs authorities of the importing Party either with customs documents of the non- Parties, or with any other documents to the satisfaction of the customs authorities of the importing Party.
Section 2. Origin Implementation Procedures
Article 14. Certificate of Origin
1. A Certificate of Origin as set out in Annex 3-2 (Certificate of Origin) shall be issued by an authorised body of a Party (for Georgia, the Customs administration; for Hong Kong, China, the Trade and Industry Department of Hong Kong, China or the Government Approved Certification Organisations of Hong Kong, China) on application by an exporter or producer, provided that the goods can be considered as originating in that Party subject to the provisions of this Chapter.
2. The Certificate of Origin shall:
(a) contain a unique certificate number;
(b) cover one or more goods under one consignment;
(c) state the basis on which the goods are deemed to qualify as originating for the purposes of this Chapter;
(d) contain security features, such as specimen signatures or stamps as advised to the importing Party by the exporting Party; and
(e) be completed in English.
3. The Certificate of Origin shall be issued before or at the time of shipment. It shall be valid for one year from the date of issuance in the exporting Party.
4. Each Party shall inform the customs authorities of the other Party of the name of each authorised body in paragraph 1, as well as relevant contact details, and shall provide details of any security features for relevant forms and documents used by each authorised body, prior to the issuance of any certificates by that body. Any changes in the said information provided shall be promptly notified to the customs authorities of the other Party.
5. A Certificate of Origin may be issued retrospectively within one year from the date of shipment, bearing the words "ISSUED RETROSPECTIVELY" and remain valid for one year from the date of shipment, if:
(a) it was not issued before or at the time of shipment due to force majeure, involuntary errors, omissions or other valid causes; or
(b) it was requested by the customs authorities of the importing Party, where a Certificate of Origin was issued but not accepted at importation.
6. The exporter or producer may, make a written request to the authorised body of the exporting Party for issuing a certified copy, provided that the original copy previously issued has been verified not to be used. The certified copy shall bear the words âCERTIFIED TRUE COPY of the original Certificate of Origin number _ dated __". The certified copy shall be valid during the term of validity of the original Certificate of Origin.
7. When both Parties are satisfied with the full application of the Electronic Origin Data Exchange System set out in Article 21 (Electronic Origin Data Exchange System), the Parties shall agree a date from which the data sent via the Electronic Origin Data Exchange System will replace the paper copy of Certificate of Origin referred to in paragraph 1.
Article 15. Retention of Origin Documents
1. Each Party shall inform its producers, exporters and importers that they should retain documents that prove the originating status of the goods as well as the fulfilment of the other requirements of this Chapter for at least three years or any longer time in accordance with each Party's internal law.
2. Each Party shall require that its authorised bodies retain copies of Certificates of Origin and other related supporting documents for at least three years or any longer time in accordance with each Party's internal law.
Article 16. Obligations Regarding Importations
Unless otherwise provided in this Chapter, the importer claiming for preferential tariff treatment shall:
(a) indicate in the customs declaration that the good qualifies as an originating good;
(b) possess a valid Certificate of Origin, at the time the import customs declaration referred to in subparagraph (a) is made; and
(c) submit the valid Certificate of Origin and other documentary evidence related to the importation of the good, upon request of the customs authorities of the importing Party.
Article 17. Refund of Import Customs Duties or Deposit
1. Where a Certificate of Origin is not submitted to the customs authorities of the importing Party at the time of importation pursuant to Article 16 (Obligations Regarding Importations), upon the request of the importer, the customs authorities of the importing Party may impose the applied non- preferential customs duties, or require a guarantee equivalent to the full amount of the customs duties on that good, provided that the importer formally declares to the customs authorities at the time of importation that the good in question qualifies as an originating good.
2. The importer may apply for a refund of any excess customs duties imposed or guarantee paid provided they can present all the necessary documentation required in Article 16 (Obligations Regarding Importations) and within one year of the date on which the good was exported.
Article 18. Waiver of Certificate of Origin
1. Notwithstanding Article 16 (Obligations Regarding Importations), a Party may waive the requirements for the presentation of a Certificate of Origin to any consignments of originating goods of a customs value not exceeding US$600 or its equivalent amount in the Party's currency.
2. Waivers provided for in paragraph 1 shall not be applicable when it is established by the customs authorities of the importing Party that the importation forms part of a series of importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the submission of a Certificate of Origin.
Article 19. Verification of Origin
1. Subsequent verifications of origin may be carried out at random or whenever the customs authorities of the importing Party have reasonable doubts as to the authenticity of a Certificate of Origin, the originating status of a good concerned, or the fulfilment of the other requirements of this Chapter. The customs authorities of the importing Party may conduct verification of origin by means of:
(a) request of additional information from the importer;
(b) request of administrative assistance from the customs authorities of the exporting Party to conduct verification; or
(c) conduct verification visit to the premises of the exporter or producer of the exporting Party in company with the customs authorities of the exporting Party, subject to the prior written consent of the exporter or producer and in a manner to be jointly determined by the customs authorities of the Parties.
2. The customs authorities of the importing Party requesting verification pursuant to subparagraphs 1(b) and 1(c) shall issue a written communication to the customs authorities of the exporting Party, specify the reasons, and provide any documents and information supporting the verification request.
3. The importer, exporter, producer or the customs authorities of the exporting Party referred to in paragraph 1 receiving a request for verification shall respond to the request promptly but not later than six months from the date of receipt of the request.
4. If no reply is received within six months from the date of receipt of the request, or if the reply does not contain sufficient information to determine the authenticity of the documents or the originating status of the goods in question, the requesting customs authorities may deny preferential tariff treatment to the good.
Article 20. Denial of Preferential Tariff Treatment
1. Except as otherwise provided in this Chapter, the importing Party may deny claim for preferential tariff treatment if:
(a) the good does not meet the requirements of this Chapter;
(b) the importer, exporter or producer fails to comply with the relevant requirements of this Chapter;
(c) the Certificate of Origin does not meet the requirement of this Chapter; or
(d) in acase stipulated in paragraph 4 of Article 19 (Verification of Origin).
2. In the event preferential tariff treatment is denied, the customs authorities of the importing Party shall provide in writing to the importer the reasons for that decision.
Article 21. Electronic Origin Data Exchange System
Both Parties shall establish an Electronic Origin Data Exchange System to ensure real-time exchange of origin related information between the Parties, including:
(a) information concerning the unique certificate number;
(b) data of Certificates of Origin referred to in paragraph 2 of Article 14 (Certificate of Origin), except subparagraph 2(d) of Article 14 (Certificate of Origin), endorsed by the authorised bodies of the exporting Party;
(c) information of the implementation of preferential tariff treatment administered by the importing Party.
Article 22. Contact Points
Each Party shall designate contact points to ensure the effective and efficient implementation of this Chapter. All information shall only be exchanged via contact points designated under this Chapter.
Chapter 4. CUSTOMS PROCEDURES AND TRADE FACILITATION
Article 1. Definitions
For the purposes of this Chapter:
(a) Customs, for the purpose of the definition of customs law, means the Government service which is responsible for the administration of laws and regulations relating to customs and the collection of duties and taxes and which also has the responsibility for the application of other laws and regulations relating to the importation, exportation, movement or storage of goods;
(b) Customs Administration means:
(i) for Hong Kong, China, the Customs and Excise Department of Hong Kong, China; and
(ii) for Georgia, Revenue Service - Legal Entity of Public Law of the Ministry of Finance of Georgia;
(c) customs law means the statutory and regulatory provisions relating to the importation, exportation, movement or storage of goods, the administration and enforcement of which are specifically charged to the Customs, and any regulation made by the Customs under their statutory powers;
(d) customs procedures means the treatment applied by the Customs Administration of a Party to goods and means of transport that are subject to customs control;
(e) means of transport means various types of vessels, vehicles and aircraft which enter or leave the Area of a Party carrying persons or goods.
Article 2. Scope and Objectives
1. This Chapter shall apply, without prejudice to the Parties' respective international obligations and customs law, to customs procedures applied to goods traded between the Parties and to the movement of means of transport between the Parties.
2. The objectives of this Chapter are to:
(a) simplify and harmonise customs procedures of the Parties;
(b) facilitate trade between the Parties; and
(c) promote cooperation between the Customs Administrations of the Parties, within the scope of this Chapter.
Article 3. Facilitation
1. Each Party shall ensure that its customs procedures and practices are predictable, consistent and transparent, and facilitate trade, in accordance with this Chapter.
2. The Parties shall use customs procedures, based, as appropriate, on international standards, aiming to reduce costs and unnecessary delays in trade between them, in particular the standards and recommended practices of the World Customs Organization including the principles of the International Convention on the Simplification and Harmonization of Customs Procedures (as amended), known as the Revised Kyoto Convention.
3. The Parties shall limit controls, formalities and the number of documents required in the context of trade in goods between them to those necessary and appropriate to ensure compliance with legal requirements, thereby simplifying, to the greatest extent possible, the related customs procedures.
4. The Customs Administration of each Party shall periodically review its customs procedures with a view to exploring options for their simplification and the enhancement of mutually beneficial arrangements to facilitate international trade.
Article 4. Transparency
1. Each Party shall promptly publish, including through the internet, its laws and regulations of general application relevant to trade in goods between the Parties. To the extent practicable and where applicable, each Party shall promptly publish its administrative decisions of general application relevant to trade in goods between the Parties.
2. Each Party shall designate one or more enquiry points to address enquiries from interested persons on customs matters, and shall make available, through the internet, information concerning procedures for making such enquiries.
3. To the extent practicable and in a manner consistent with its laws and regulations, each Party shall endeavour to publish, in advance, through the internet, draft laws and regulations of general application relevant to trade between the Parties, with a view to affording the public, especially interested persons, an opportunity to provide comments.
4. Each Party shall ensure, to the extent possible, that a reasonable interval is provided between the publication of new or amended laws and regulations of general application relevant to trade between the Parties and their entry into force.
5. Each Party shall administer, in a uniform, impartial and reasonable manner, its laws and regulations of general application relevant to trade between the Parties.
6. Each Party shall make available, and update to the extent possible and as appropriate, the following through the internet:
(a) a description of its procedures for importation, exportation, and transit, including procedures for appeal or review, that informs the other Party, traders and other interested parties of the practical steps needed for importation, exportation, and transit; and
(b) the forms and documents required for importation into, exportation from, or transit through its Area.
7. Whenever practicable, each Party shall also make available the description referred to in subparagraph 6(a) in one of the official languages of the WTO.
Article 5. Customs Valuation
The Parties shall determine the customs value of goods traded between them in accordance with the provisions of Article VII of GATT 1994 and the Customs Valuation Agreement.
Article 6. Tariff Classification
The Parties shall apply the Harmonized System to goods traded between them.
Article 7. Cooperation
1. To the extent permitted by their laws and regulations, the Customs Administrations of the Parties shall assist each other in relation to:
(a) the implementation and operation of this Chapter; and
(b) such other issues as the Parties may mutually agree.
2. Each Party shall endeavour to provide the other Party with timely notice of any significant modification of its customs law or customs procedures that are likely to substantially affect the operation of this Agreement.
Article 8. Advance Rulings
1. Subject to its customs law, each Party shall provide for written advance rulings in a reasonable and time-bound manner to be issued to a person described in subparagraph 2(a) concerning tariff classification and whether goods are originating under this Agreement.
2. Subject to its customs law, each Party shall adopt or maintain procedures for issuing written advance rulings, which shall:
(a) provide that an exporter, importer or any person with a justifiable cause, or a representative thereof, may apply for an advance ruling before the date of importation of the goods that are the subject of the application, and a Party may require that an applicant to have legal representation or registration in its Area;
(b) include a detailed description of the information required to process a request for an advance ruling;
(c) allow its Customs Administration, at any time during the course of evaluation of an application for an advance ruling, to request that the applicant provides additional information necessary to evaluate the request;
(d) ensure that an advance ruling be based on the facts and circumstances presented by the applicant and any other relevant information in the possession of the decision-maker; and
(e) provide that the advance ruling be issued, in the official language of the issuing Customs Administration, to the applicant expeditiously on receipt of all necessary information within 90 days.
3. Notwithstanding paragraph 1, a Party may decline to issue an advance ruling by promptly notifying the applicant in writing, setting forth the basis for its decision to decline to issue the advance ruling.
4. Notwithstanding paragraph 1, a Party may reject a request for an advance ruling where the additional information requested in accordance with subparagraph 2(c) is not provided within a specified period.
5. Each Party shall endeavour to make the information on advance rulings which it considers to be of significant interest to other traders, publicly available, taking into account the need to protect confidential information.
6. Subject to its customs law and paragraph 7, each Party shall apply an advance ruling to importations into its Area through any port of entry, beginning on the date the advance ruling was issued or on any other date specified in the advance ruling. The Party shall ensure the same treatment of all importations of goods subject to the advance ruling during the validity period regardless of the importer or exporter involved, where the facts and circumstances are identical in all material respects.
7. A Party may modify or revoke an advance ruling, consistent with this Agreement, where there is a change in the relevant laws or regulations; where incorrect information was provided or relevant information was withheld; where there is a change in a material fact; or where there is a change in the circumstances on which the ruling was based.
Article 9. Review and Appeal
Each Party shall, in accordance with its laws and regulations, provide the importer, exporter or any other person affected by its administrative decisions on a customs matter access to:
(a) a level of administrative review of decisions by its Customs Administration, independent of the official or office responsible for the decision under review; and
(b) judicial review of the decisions subject to its laws and regulations.
Article 10. Application of Information Technology
Each Party shall apply information technology to support customs operations, where it is cost-effective and efficient, particularly in the paperless trading context, taking into account developments in this area within relevant international organisations, including the World Customs Organization.
Article 11. Risk Management
1. Each Party shall adopt and maintain a_ risk management system and based on it, the Party shall determine which persons, goods or means of transport are to be examined and the extent of the examination.
2. Each Party shall work to further enhance the use of risk management techniques in the administration of its customs procedures so as to facilitate the clearance of low-risk goods and allow resources to be focused on high-risk goods.
3. Each Party shall apply risk management in a manner that does not create arbitrary or unjustifiable discrimination under the same conditions or a disguised restriction on international trade.
Article 12. Release of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient release of goods in order to facilitate trade between the Parties. For greater certainty, this paragraph shall not require a Party to release goods where its requirements for release have not been met.
2. In accordance with paragraph 1, each Party shall adopt or maintain procedures that:
(a) provide for the release of goods as rapidly as possible after arrival, provided that all other regulatory requirements have been met; and
(b) as appropriate, provide for advance electronic submission and processing of information before the physical arrival of goods with a view to expediting the release of goods.
3. Each Party shall ensure that goods are released within a time period no longer than that required to ensure compliance with its customs law.