(ii) any amendments to this Chapter and Annexes 3-A to 3-E proposed by a Party;
(b) making suggestions to the Trade Committee concerning the adoption of explanatory notes to facilitate the implementation of this Chapter; and
(c) considering any other matter related to this Chapter as agreed by the Parties.
Article 3.32. Products In Transit or Storage
The Parties may apply this Agreement to products which comply with this Chapter and which, on the date of entry into force of this Agreement, are in transit or are in temporary storage in bonded warehouse or in free zones in the European Union or in Chile, subject to the submission of a statement on origin to the customs authorities of the importing Party.
Article 3.33. Explanatory Notes
Explanatory notes regarding the interpretation, application and administration of this Chapter are set out in Annex 3-E.
Chapter 4. CUSTOMS AND TRADE FACILITATION
Article 4.1. Objectives
1. The Parties recognise the importance of customs and trade facilitation in the evolving global trading environment.
2. The Parties recognise that international trade and customs instruments and standards are the basis for import, export and transit requirements and procedures.
3. The Parties recognise that customs laws and regulations shall be non-discriminatory and that customs procedures shall be based upon the use of modern methods and effective controls to combat fraud, protect consumer health and safety and promote legitimate trade. Each Party should periodically review its customs laws, regulations and procedures. The Parties also recognise that their customs procedures shall be no more administratively burdensome or trade restrictive than necessary to achieve legitimate objectives and that they shall be applied in a manner that is predictable, consistent and transparent.
4. The Parties agree to reinforce their cooperation with a view to ensuring that the relevant customs laws, regulations and procedures, as well as the administrative capacity of the relevant administrations, fulfil the objectives of promoting trade facilitation while ensuring effective customs control.
Article 4.2. Definitions
For the purposes of this Chapter "customs authority" means:
(a) for Chile, the Servicio Nacional de Aduanas (National Customs Service), or its successor; and
(b) for the European Union, those services of the European Commission responsible for customs matters and the customs administrations and any other authorities in the Member States responsible for the application and enforcement of customs laws and regulations.
Article 4.3. Customs Cooperation
1. The Parties shall cooperate on customs matters between their respective customs authorities in order to ensure that the objectives set out in Article 4.1 are attained.
2. The Parties shall develop cooperation, including by:
(a) exchanging information concerning customs laws and regulations and their implementation, and customs procedures, particularly in the following areas:
(i) simplification and modernisation of customs procedures;
(ii) enforcement of intellectual property rights by the customs authorities;
(iii) facilitation of transit movements and transhipment;
(iv) relations with the business community; and
(v) supply chain security and risk management;
(b) working together on the customs-related aspects of securing and facilitating international trade supply chains in accordance with the SAFE Framework of Standards to Secure and Facilitate Global Trade of the World Customs Organization (hereinafter referred to as "WCO") adopted in June 2005;
(c) considering the development of joint initiatives relating to import, export and other customs procedures, including the exchange of best practices and technical assistance, and ensuring the provision of an effective service to the business community; such cooperation may include exchanges on customs laboratories, the training of customs officers and on new technologies for customs controls and procedures;
(d) strengthening their cooperation in the field of customs in international organisations such as the WTO and the WCO;
(e) establishing, if relevant and appropriate, the mutual recognition of authorised economic operator programmes, including equivalent trade facilitation measures;
(f) carrying out exchanges on risk-management techniques, risk standards and security controls, in order to establish, to the extent practicable, minimum standards for risk-management techniques and related requirements and programmes;
(g) endeavouring to harmonise their data requirements for import, export and other customs procedures, by implementing common standards and data elements in accordance with the WCO Data Model;
(h) sharing their respective experiences in developing and deploying their single window systems, and, if appropriate, developing common sets of data elements for those systems;
(i) maintaining a dialogue between their respective policy experts to promote the utility, efficiency, and applicability of advance rulings for customs authorities and traders; and
(j) exchanging, if relevant and appropriate, through a structured and recurrent communication between their customs authorities, certain categories of customs-related information for specific purposes, namely improving risk management and the effectiveness of customs controls, targeting goods at risk in terms of revenue collections or safety and security, and facilitating legitimate trade; such exchange shall be without prejudice to exchanges of information that may take place between the Parties in accordance with the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.
3. Any exchange of information between the Parties under this Chapter shall be subject, mutatis mutandis, to the confidentiality of information and personal data protection requirements set out in Article 12 of the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters, as well as to any confidentiality and privacy requirements set out in the laws and regulations of the Parties.
Article 4.4. Mutual Administrative Assistance
The Parties shall provide each other with mutual administrative assistance in customs matters in accordance with the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.
Article 4.5. Customs Laws, Regulations and Procedures
1. Each Party shall ensure that its customs laws, regulations and procedures are:
(a) based upon international instruments and standards in the area of customs and trade, including the International Convention on the Harmonized Commodity Description and Coding System done at Brussels on 14 June 1983, as well as the SAFE Framework of Standards to Secure and Facilitate Global Trade of the WCO and the WCO Data Model, and if applicable, the substantive elements of the Revised Kyoto Convention on the Simplification and Harmonization of Customs Procedures, done at Kyoto on the 18 May 1973 and adopted by the World Customs Organization Council in June 1999;
(b) based upon the protection and facilitation of legitimate trade through effective enforcement of and compliance with legislative requirements; and
(c) proportionate and non-discriminatory to avoid unnecessary burdens on economic operators, provide for further facilitation for operators with high levels of compliance, including favourable treatment with respect to customs controls prior to the release of goods, and ensure safeguards against fraud and illicit or damaging activities.
2. In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability in custom operations, each Party shall:
(a) simplify and review requirements and formalities, if possible, with a view to the rapid release and clearance of goods;
(b) work towards the further simplification and standardisation of data and documentation required by customs and other agencies in order to reduce the time and costs burdens for operators, including small and medium-sized enterprises; and
(c) ensure that the highest standards of integrity be maintained through the application of measures reflecting the principles of the relevant international conventions and instruments in this field.
Article 4.6. Release of Goods
Each Party shall ensure that its customs authorities, border agencies or other competent authorities:
(a) provide for the prompt release of goods within a period no longer than required to ensure compliance with its customs and other trade-related laws and regulations and formalities;
(b) provide for advance electronic submission and processing of documentation and any other required information prior to the arrival of the goods;
(c) allow for the release of goods prior to the final determination of customs duties, taxes, fees and charges, subject to the provision of a guarantee, if required by its laws and regulations, in order to secure their final payment; and
(d) give appropriate priority to perishable goods when scheduling and performing any examinations that may be required.
Article 4.7. Simplified Customs Procedures
Each Party shall adopt or maintain measures allowing operators that are fulfilling criteria specified in its laws and regulations to benefit from further simplification of customs procedures. Such measures may include customs declarations containing reduced sets of data or supporting documents, or periodical customs declarations for the determination and payment of customs duties and taxes covering multiple imports within a given period after the release of those imported goods, or other procedures that provide for the expedited release of certain shipments.
Article 4.8. Authorised Economic Operators
1. Each Party shall establish or maintain a trade facilitation partnership programme for economic operators who meet specified criteria (hereinafter referred to as "authorised economic operators").
2. The specified criteria to qualify as authorised economic operators shall be related to compliance, or the risk of non-compliance, with requirements specified in laws, regulations or procedures of each Party. The specified criteria shall be published and may include:
(a) the absence of any serious infringement or repeated infringements of customs legislation and taxation rules, including no record of serious criminal offences relating to the economic activity of the applicant;
(b) the demonstration by the applicant of a high level of control of its operations and of the flow of goods by means of a system of managing commercial and, where appropriate, transport records, which allows appropriate customs controls;
(c) financial solvency, which shall be deemed to be proven if the applicant has good financial standing, which enables it to fulfil its commitments, with due regard to the characteristics of the type of business activity concerned;
(d) proven competences or professional qualifications directly related to the activity carried out; and
(e) appropriate security and safety standards.
3. The specified criteria referred to in paragraph 2 shall not be designed or applied so as to afford or create arbitrary or unjustifiable discrimination between economic operators where the same conditions prevail, and shall allow the participation of small and medium-sized enterprises.
4. The trade facilitation partnership programme referred to in paragraph 1 shall include the following benefits:
(a) low documentary and data requirements, as appropriate;
(b) lower rate of physical inspections or expedited examinations, as appropriate;
(c) simplified release procedures and rapid release time, as appropriate;
(d) use of guarantees, including, if applicable, comprehensive guarantees or reduced guarantees; and
(e) control of the goods at the premises of the authorised economic operator or another place authorised by customs authorities.
5. The trade facilitation partnership programme referred to in paragraph 1 may also include additional benefits, such as:
(a) deferred payment of duties, taxes, fees and charges;
(b) a single customs declaration for all imports or exports in a given period; or
(c) availability of a dedicated contact point to provide assistance in customs matters.
Article 4.9. Data and Documentation Requirements
1. Each Party shall ensure that import, export and transit formalities, data and documentation requirements are:
(a) adopted and applied with a view to the rapid release of goods, provided that the conditions for the release are fulfilled;
(b) adopted and applied in a manner that aims to reduce the time and cost of compliance for traders or operators;
(c) the least trade-restrictive alternative, if two or more alternatives were reasonably available for fulfilling the policy objective or objectives in question; and
(d) not maintained, including parts thereof, if no longer required.
2. Each Party shall apply common customs procedures and use uniform customs documents for the release of goods throughout its customs territory.
Article 4.10. Use of Information Technologies and Electronic Payment
1. Each Party shall use information technologies that expedite procedures for the release of goods in order to facilitate trade between the Parties.
2. Each Party shall:
(a) make available, by electronic means, a customs declaration that is required for the import, export or transit of goods;
(b) allow a customs declaration to be submitted in electronic format;
(c) establish a means of providing for the electronic exchange of customs information with its trading community;
(d) promote the electronic exchange of data between operators and customs authorities, as well as other related agencies; and
(e) use electronic risk-management systems for assessment and targeting that enable its customs authorities to focus their inspections on high-risk goods and that facilitate the release and movement of low-risk goods.
3. Each Party shall adopt or maintain procedures allowing the option of electronic payment for duties, taxes, fees and charges collected by customs authorities incurred upon importation and exportation.
Article 4.11. Risk Management
1. Each Party shall adopt or maintain a risk-management system for customs control.
2. Each Party shall design and apply risk management in a manner as to avoid arbitrary or unjustifiable discrimination, or disguised restrictions on international trade.
3. Each Party shall concentrate customs control and other relevant border controls on high-risk consignments and expedite the release of low-risk consignments. Each Party may also select, on a random basis, consignments for those controls as part of its risk management.
4. Each Party shall base risk management on assessment of risk through appropriate selectivity criteria.
Article 4.12. Post-clearance Audit
1. With a view to expediting the release of goods, each Party shall adopt or maintain post-clearance audit to ensure compliance with its customs and other trade-related laws and regulations.
2. Each Party shall conduct post-clearance audits in a risk-based manner.
3. Each Party shall conduct post-clearance audits in a transparent manner. If an audit is conducted and conclusive results have been achieved, the Party shall, without delay, notify the person whose record has been audited of the results, the reasons for the results and the rights and obligations of that person.
4. The Parties acknowledge that the information obtained in a post-clearance audit may be used in further administrative or judicial proceedings.
5. Each Party shall, wherever practicable, use the result of post-clearance audit in applying risk management.
Article 4.13. Transparency
1. The Parties recognise the importance of timely consultations with trade representatives on legislative proposals and general procedures related to customs and trade matters. To that end, each Party shall provide for appropriate consultations between administrations and the business community.
2. Each Party shall ensure that their respective customs and customs-related requirements and procedures continue to meet the needs of the business community, follow best practices, and remain the least trade restrictive possible.
3. Each Party shall provide for appropriate regular consultations between border agencies and traders or other stakeholders within its territory.
4. Each Party shall publish promptly in a non-discriminatory and accessible manner, including online, and prior to their application, new laws and regulations related to customs and trade facilitation matters, as well as amendments to, and interpretations of, those laws and regulations. Such laws and regulations, as well as their amendments and interpretations, shall include those relating to:
(a) importation, exportation and transit procedures, including port, airport, and other entry-point procedures, and required forms and documents;
(b) applied rates of duties and taxes of any kind imposed on, or in connection with, importation or exportation;
(c) fees and charges imposed by or for governmental agencies on or in connection with importation, exportation or transit;
(d) rules for the classification or valuation of products for customs purposes;
(e) laws, regulations and administrative rulings of general application relating to rules of origin;
(f) import, export or transit restrictions or prohibitions;
(g) penalty provisions against breaches of import, export or transit formalities;
(h) agreements or parts thereof with any country or countries relating to importation, exportation or transit;
(i) procedures related to the administration of tariff quotas;
(k) contact points for information enquiries; and
(l) other relevant notices of an administrative nature in relation to subparagraphs (a) to (k).
5. Each Party shall ensure that there is a reasonable period of time between the publication (1) and the entry into force of new or amended laws, regulations and procedures and fees or charges.
6. Each Party shall establish or maintain one or more enquiry points to respond to reasonable enquiries from governments, operators and other interested parties on customs and other trade-related matters. The enquiry points shall respond to enquiries within a reasonable period of time set by each Party, which may vary depending on the nature or complexity of the request. A Party shall not require the payment of a fee for responding to enquiries or providing required forms and documents.
Article 4.14. Advance Rulings
1. For the purposes of this Article, an "advance ruling" means a written decision provided to an applicant prior to the importation of a good covered by the application that sets out the treatment that the Party is to provide to the good at the time of importation with regard to:
(a) the tariff classification of the good;
(b) the origin of the good; and
(c) any other matters as the Parties may agree.
2. Each Party shall issue an advance ruling through its customs authorities. That advance ruling shall be issued in a reasonable and time-limited manner to the applicant that has submitted a written request, including in electronic format, containing all necessary information in accordance with the laws and regulations of the issuing Party.
3. The advance ruling shall be valid for a period of at least three years from the date in which it takes effect, unless the law, facts or circumstances supporting the original advance ruling have changed.
4. A Party may decline to issue an advance ruling if the facts and circumstances which form the basis of the advance ruling are under administrative or judicial review or if the application does not relate to any intended use of the advance ruling. If a Party declines to issue an advance ruling, it shall promptly notify the applicant in writing, setting out the relevant facts and the basis for its decision.
5. Each Party shall publish, at least:
(a) the requirements for the application for an advance ruling, including the information to be provided and the format;
(b) the time period by which it will issue an advance ruling; and
(c) the length of time for which the advance ruling is valid.
6. If a Party revokes or modifies or invalidates an advance ruling, it shall provide written notice to the applicant setting out the relevant facts and the basis for its decision. A Party shall only revoke, modify or invalidate an advance ruling with retroactive effect if the ruling was based on incomplete, incorrect, false or misleading information provided by the applicant.
7. An advance ruling issued by a Party shall be binding on that Party with respect to the applicant. The advance ruling shall also be binding on the applicant.
8. Each Party shall provide, upon written request of the applicant, a review of the advance ruling or of the decision to revoke, modify or invalidate that advance ruling.
9. Subject to confidentiality requirements in its laws and regulations, each Party shall make publicly available, including online, the substantive elements of its advance rulings.
Article 4.15. Transit and Transhipment
1. Each Party shall ensure the facilitation and effective control of transit movements and transhipment operations through its territory.
2. Each Party shall promote and implement regional transit arrangements with a view to facilitating trade.
3. Each Party shall ensure cooperation between, and coordination of, its authorities and relevant agencies concerned to facilitate traffic in transit.
4. Each Party shall allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods are to be released or cleared, provided all regulatory requirements are met.
Article 4.16. Customs Brokers
1. A Party shall not introduce the mandatory use of customs brokers as a requirement for operators to fulfil their obligations with respect to the importation, exportation and transit of goods.
2. Each Party shall publish its measures on the use of customs brokers.
3. The Parties shall apply transparent, non-discriminatory and proportionate rules when licensing customs brokers.
Article 4.17. Pre-shipment Inspections
The Parties shall not require the use of pre-shipment inspections, as defined in the Agreement on Pre-shipment Inspection in Annex 1A to the WTO Agreement, or any other inspection activity performed at destination, before customs clearance, by private companies.
Article 4.18. Appeals
1. Each Party shall provide effective, prompt, non-discriminatory and easily accessible procedures to guarantee the right of appeal against the administrative actions, rulings and decisions of customs authorities or other competent authorities affecting import or export of goods or goods in transit.
2. Appeal procedures may include administrative review by the supervising authority and judicial review of decisions taken at the administrative level in accordance with the laws and regulations of a Party.