3. A Party may require that remanufactured goods be identified as such for distribution or sale in its territory and that such goods meet all applicable technical requirements that apply to like goods in new condition.
Article 2.11. Import and Export Restrictions
Article XI of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis. Accordingly, a Party shall not adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994, including its Notes and Supplementary Provisions.
Article 2.12. Origin Marking
If Chile applies mandatory country-of-origin marking requirements to goods of the European Union, the Trade Committee may decide that goods marked "Made in EU", or bearing a similar marking in the local language, fulfil such requirements upon importation into Chile. This Article does not affect either Party's right to specify the type of products for which country-of-origin marking requirements are mandatory. Chapter 3 does not apply to this Article.
Article 2.13. Import Licensing Procedures
1. Each Party shall ensure that all import licensing procedures applicable to trade in goods between the Parties are neutral in application and are administered in a fair, equitable, non- discriminatory and transparent manner.
2. A Party shall only adopt or maintain import licensing procedures as a condition for importation into its territory from the territory of the other Party if no other appropriate procedure to achieve an administrative purpose is reasonably available.
3. A Party shall not adopt or maintain any non-automatic import licensing procedure as a condition for importation into its territory from the territory of the other Party unless it is necessary to implement a measure that is consistent with this Agreement. A Party adopting such a non- automatic import licensing procedure shall indicate clearly to the other Party the measure being implemented through that procedure.
4. Each Party shall adopt and administer any import licensing procedures in accordance with Articles 1, 2 and 3 of the Agreement on Import Licensing Procedures. To that end, Articles 1, 2 and 3 of that Agreement are incorporated into and made part of this Agreement, mutatis mutandis.
5. A Party that adopts new import licensing procedures, or modifies existing import licensing procedures, shall notify the other Party within 60 days of the date of publication of such new import licensing procedures or modifications of existing import licensing procedures. The notification shall include the information specified in paragraph 3 of this Article and in Article 5(2) of the Agreement on Import Licensing Procedures. A Party shall be deemed to be in compliance with this provision if it has notified the relevant new import licensing procedure, or any modifications to existing import licensing procedures, to the Committee on Import Licensing established in accordance with Article 4 of the Agreement on Import Licensing Procedures, including the information specified in Article 5(2) of that Agreement.
6. On request of a Party, the other Party shall promptly provide any relevant information, including the information specified in Article 5(2) of the Agreement on Import Licensing Procedures, regarding any import licensing procedure that it intends to adopt, has adopted or maintains, or any modification to existing import licensing procedures.
Article 2.14. Export Licensing Procedures
1. Each Party shall publish any new export licensing procedure, or any modification to an existing export licensing procedure, in such a manner as to enable governments, traders and other interested parties to become acquainted with them. Such publication shall take place, where practicable, 30 days before the procedure or modification takes effect, and in any event no later than the date on which such procedure or modification takes effect.
2. Each Party shall ensure that the publication of export licensing procedures includes the following information:
(a) the texts of its export licensing procedures, or of any modifications that it makes to those procedures;
(b) the goods subject to each export licensing procedure;
(c) for each export licensing procedure, a description of the process for applying for an export licence and any criteria that an applicant must fulfil in order to be eligible to apply for an export licence, such as possessing an activity licence, establishing or maintaining an investment, or operating through a particular form of establishment in a Party's territory;
(d) one or more contact points from which interested persons can obtain further information on the conditions for obtaining an export licence;
(e) the administrative body or bodies to which an application or other relevant documentation must be submitted;
(f) a description of any measure or measures that the export licensing procedure is designed to implement;
(g) the period during which each export licensing procedure will be in effect, unless the procedure remains in effect until withdrawn or revised in a new publication;
(h) if the Party intends to use an export licensing procedure to administer an export quota, the overall quantity and, if applicable, the value of the quota and the opening and closing dates of the quota; and
(i) any exemptions or exceptions that replace the requirement to obtain an export licence, information on how to request or use those exemptions or exceptions, and the criteria for granting them.
3. Within 30 days of the date of entry into force of this Agreement, each Party shall notify the other Party of its existing export licensing procedures. A Party that adopts new export licensing procedures, or modifies existing export licensing procedures, shall notify the other Party within 60 days of the date of publication of those new export licensing procedures or modifications to existing export licensing procedures. The notification shall include the reference to the source or sources where the information required pursuant to paragraph 2 is published and include, where appropriate, the address of the relevant government website or websites.
4. For greater certainty, nothing in this Article shall be construed as requiring a Party to grant an export licence or preventing a Party from implementing its obligations or commitments under United Nations Security Council Resolutions, or under multilateral non-proliferation regimes and export control arrangements.
Article 2.15. Customs Valuation
Each Party shall determine the customs value of goods of the other Party that are imported into its territory in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement. To that end, Article VII of GATT 1994, including its Notes and Supplementary Provisions, and Articles 1 to 17 of the Customs Valuation Agreement, including its Interpretative Notes, are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.16. Preference Utilisation
1. For the purpose of monitoring the functioning of the Agreement and calculating preference utilisation rates, the Parties shall annually exchange import statistics for a period starting one year after the entry into force of this Agreement and expiring 10 years after the tariff elimination is completed for all goods according to the schedules in Annex 2. Unless the Trade Committee decides otherwise, that period shall be automatically extended for five years. The Trade Committee may decide to extend it further.
2. The exchange of import statistics referred to in paragraph 1 shall cover data pertaining to the most recent year available, including value and, where applicable, volume, at the tariff line level for imports of goods of the other Party benefitting from preferential duty treatment under this Agreement and for imports of those goods that received non-preferential treatment.
Article 2.17. Specific Measures Concerning the Management of Preferential Treatment
1. The Parties shall cooperate in preventing, detecting and combating breaches of customs legislation related to the preferential treatment granted under this Chapter, in accordance with their obligations under Chapter 3 and the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.
2. A Party may, in accordance with the procedure laid down in paragraph 3, temporarily suspend the relevant preferential treatment of the goods concerned when that Party has made a finding, based on objective, compelling and verifiable information, that the other Party has committed large- scale systematic breaches of customs legislation in order to obtain the preferential treatment granted under this Chapter, and has made a finding of:
(a) a systematic lack or inadequacy of action by the other Party in verifying the originating status of goods and the fulfilment of the other requirements of the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters, when identifying or preventing contravention of the rules of origin;
(b) a systematic refusal by the other Party to carry out subsequent verification of the proof of origin on request of the Party, or to communicate its results in time, or undue delay in carrying out such verification or communication; or
(c) a systematic refusal or failure by the other Party to cooperate or assist in compliance with its obligations under the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters in relation to the preferential treatment.
3. The Party which has made a finding as referred to in paragraph 2 shall, without undue delay, notify the Trade Committee thereof and enter into consultations with the other Party within the Trade Committee with a view to reaching a solution acceptable to both Parties.
If the Parties fail to agree on a mutually acceptable solution within three months of the date of notification, the Party which has made the finding may decide to temporarily suspend the relevant preferential treatment of the goods concerned. That Party shall notify the temporary suspension to the Trade Committee without undue delay.
Temporary suspensions shall apply only for the period necessary to protect the financial interests of the Party concerned, and for no longer than six months. However, where the conditions that gave rise to the initial suspension persist at the expiry of the six-month period, the Party concerned may decide to renew the suspension. Any temporary suspension shall be subject to periodic consultations within the Trade Committee.
4. Each Party shall publish, in accordance with its internal procedures, notices to importers about any notification or decision concerning temporary suspensions as referred to in paragraph 3.
Article 2.18. Sub-Committee on Trade In Goods
The Sub-Committee on Trade in Goods established pursuant to Article 33.4(1) shall:
(a) monitor the implementation and administration of this Chapter and Annex 2;
(b) promote trade in goods between the Parties, including through consultations on improving market-access tariff treatment pursuant to Article 2.5(4) and other issues, as appropriate;
(c) provide a forum to discuss and resolve any issues related to this Chapter;
(d) promptly address barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, refer such matters to the Trade Committee for its consideration;
(e) recommend to the Parties any modification or addition to this Chapter;
(f) coordinate the exchange of data for preference utilisation or of any other information on trade in goods between the Parties;
(g) review any future amendments to the Harmonized System to ensure that each Party's obligations under this Agreement are not altered, and consult to resolve any related conflict;
(h) perform the functions set out in Article 8.17.
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Section A. RULES OF ORIGIN
Article 3.1. Definitions
For the purposes of this Chapter and Annexes 3-A to 3-E:
(a) "classification" means the classification of a product or material under a particular chapter, heading or sub-heading of the Harmonized System;
(b) "consignment" means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;
(c) "customs authority" means:
(i) for Chile, the National Customs Service; and
(ii) for the European Union, the services of the European Commission responsible for customs matters and the customs administrations and any other authorities of the Member States responsible for the application and enforcement of customs law;
(d) "exporter" means a person located in a Party who, in accordance with the laws and regulations of that Party, exports or produces the originating product and makes out a statement on origin;
(e) "identical products" means products which in every respect correspond to those described in the product description; the product description on the commercial document used for making out a statement on origin for multiple shipments must be precise enough to clearly identify that product and also the identical products to be subsequently imported based on that statement;
(f) "importer" means a person who imports the originating product and claims preferential tariff treatment for it;
(g) "material" means any substance used in the production of a product, including any ingredients, raw materials, components or parts;
(h) "product" means the result of production, even if it is intended for later use as a material in the production of another product; and
(i) "production" means any kind of working or processing, including assembly.
Article 3.2. General Requirements
1. For the purposes of applying the preferential tariff treatment by a Party to an originating good of the other Party in accordance with this Agreement, provided that the product meets all other applicable requirements set out in this Chapter, the following products shall be considered as originating in the other Party:
(a) products wholly obtained in that Party as provided for in Article 3.4;
(b) products produced exclusively from materials originating in that Party; and
(c) products produced in that Party using non-originating materials, provided that they meet the requirements set out in Annex 3-B.
2. If a product has acquired originating status in accordance with paragraph 1, the non-originating materials used in the production of that product shall not be considered non-originating when that product is incorporated as a material in another product.
3. The acquisition of originating status shall be fulfilled without interruption in the territory of a Party.
Article 3.3. Cumulation of Origin
1. A product originating in a Party shall be considered as originating in the other Party if used as a material in the production of another product in that other Party, provided that the working and processing carried out goes beyond one or more of the operations referred to in Article 3.6.
2. Materials classified in Chapter 3 of the Harmonized System originating in the countries referred to in subparagraph (b) of paragraph 4 and used in the production of canned tuna products classified in subheading 1604.14 of the Harmonized System may be considered as originating in a Party provided that the conditions in subparagraphs (a) to (e) of paragraph 3 are fulfilled, and that that Party sends a notification for examination by the Sub-Committee referred to in Article 3.31.
3. The Trade Committee may decide, following a recommendation by the Sub-Committee referred to in Article 3.31, that certain materials originating in the third countries1 referred to in paragraph 4 of this Article may be considered as originating in a Party if they are used in the production of a product in that Party provided that:
(a) each Party has a trade agreement in force that forms a free trade area with that third country (1), within the meaning of Article XXIV of GATT 1994;
(b) the origin of the materials referred to in this paragraph is determined in accordance with the rules of origin applicable under:
(i) the European Union's trade agreement forming a free trade area with that third country, if the material concerned is used in the production of a product in Chile; and
(ii) Chile's trade agreement forming a free trade area with that third country, if the material concerned is used in the production of a product in the European Union;
(c) an arrangement is in force between that Party and that third country on adequate administrative cooperation ensuring full implementation of this Chapter, including provisions on the use of appropriate documentation on the origin of materials, and that that Party notifies the other Party of that arrangement;
(d) the production or processing of the materials undertaken in that Party goes beyond one or more of the operations referred to in Article 3.6; and
(e) the Parties agree on any other applicable conditions.
4. The third countries referred to in paragraph 3 are:
(a) the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama; and
(b) the Andean countries of Colombia, Ecuador and Peru.
Article 3.4. Wholly Obtained Products
1. The following products shall be considered as wholly obtained in a Party:
(a) plants and vegetable products grown or harvested there;
(b) live animals born and raised there;
(c) products obtained from live animals raised there;
(d) products obtained from hunting, trapping, fishing, gathering or capturing there, but not beyond the outer limits of that Party's territorial sea;
(e) products obtained from slaughtered animals born and raised there;
(f) products obtained from aquaculture there, if aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, are born or raised from seed stock such as eggs, roes, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding or protection from predators;
(g) minerals or other naturally occurring substances, not included in subparagraphs (a) to (f), extracted or taken there;
(h) products of sea fishing and other products taken from the sea outside any territorial sea by a vessel of that Party;
(i) products made aboard a factory ship of that Party exclusively from products referred to in subparagraph (h);
(j) products extracted by a Party or a person of that Party from marine soil or subsoil outside any territorial sea provided that they have rights to work that soil or subsoil;
(k) waste or scrap derived from production there or from used products collected there, provided that those products are fit only for the recovery of raw materials; and
(l) products produced there exclusively from the products referred to in subparagraphs (a) to (k).
2. The terms "vessel of a Party" and "factory ship of a Party" in subparagraphs (h) and (i) of paragraph 1 mean a vessel and a factory ship, respectively, which:
(a) is registered in a Member State or in Chile;
(b) sails under the flag of a Member State or of Chile; and
(c) meets one of the following conditions:
(i) it is more than 50 % owned by natural persons of a Member State or of Chile; or
(ii) it is owned by a juridical person which:
(A) has its head office and its main place of business in a Member State or in Chile; and
(B) is more than 50 % owned by persons of one of those Parties.
Article 3.5. Tolerances
1. If a non-originating material used in the production of a product does not meet the requirements set out in Annex 3-B, that product shall be considered as originating in a Party, provided that:
(a) for all products (1) except those classified under Chapters 50 to 63 of the Harmonized System, the total value of non-originating materials does not exceed 10 % of the ex-works price of the product;
(b) for products classified under Chapters 50 to 63 of the Harmonized System, tolerances apply as stipulated in Notes 6 to 8 of Annex 3-A.
2. Paragraph 1 does not apply if the value or weight of non-originating materials used in the production of a product exceeds any of the percentages for the maximum value or weight of non-originating materials as specified in the requirements set out in Annex 3-B.
3. Paragraph 1 does not apply to products wholly obtained in a Party within the meaning of Article 3.4. If it is required pursuant to Annex 3-B that the materials used in the production of a product are wholly obtained, paragraphs 1 and 2 of this Article apply.
Article 3.6. Insufficient Working or Processing
1. Notwithstanding subparagraph (c) of Article 3.2(1), a product shall not be considered as originating in a Party if solely one or more of the following operations are carried out on non-originating materials in that Party:
(a) preserving operations such as drying, freezing, keeping in brine or other similar operations, if the sole purpose is to ensure that the product remains in good condition during transport and storage;
(b) breaking-up and assembly of packages;
(c) washing, cleaning, removing dust, oxide, oil, paint or other coverings;
(d) ironing or pressing of textiles and textile articles;
(e) simple painting and polishing operations;
(f) husking and partial or total milling of rice, polishing and glazing of cereals and rice;
(g) operations to colour or flavour sugar or form sugar lumps, partial or total milling of crystal sugar in solid form;
(h) peeling, stoning and shelling of fruits, nuts and vegetables;
(i) sharpening, simple grinding or simple cutting;
(j) sifting, screening, sorting, classifying, grading or matching;
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(m) simple mixing of products, whether or not of different kinds, including mixing of sugar with any material;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(o) simple addition of water or dilution or dehydration or denaturation of products; or
(p) slaughter of animals.
2. For the purposes of paragraph 1, an operation shall be considered simple if no special skills or machines, or apparatus or equipment specially produced or installed are needed for carrying out that operation.
Article 3.7. Unit of Qualification
1. For the purposes of this Chapter, the unit of qualification shall be the product which is considered as the basic unit when classifying the product under the Harmonized System.
2. If a consignment consists of a number of identical products classified under the same heading of the Harmonized System, each individual product shall be taken into account when applying this Chapter.
Article 3.8. Accessories, Spare Parts and Tools
1. Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.
2. The accessories, spare parts and tools referred to in paragraph 1 shall be disregarded in determining the origin of the product, except for the purposes of calculating the maximum value of non-originating materials, if a product is subject to a maximum value of non-originating materials as set out in Annex 3-B.
Article 3.9. Sets
Sets, as defined in General Rule 3 for the Interpretation of the Harmonized System, shall be regarded as originating in a Party if all their components are originating products. If a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating in a Party, provided that the value of the non-originating products does not exceed 15 % of the ex-works price of the set.
Article 3.10. Neutral Elements
In order to determine whether a product qualifies as originating in a Party, it is not necessary to determine the origin of the following elements, which might be used in the production of the product:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices and supplies used for testing or inspecting the products;
(c) machines tools, dies and moulds;
(d) spare parts and materials used in the maintenance of equipment and buildings;