3. Any person who has applied to the customs authorities or other competent authorities for a decision and has not obtained a decision on that application within the relevant time limit shall also be entitled to exercise the right of appeal.
4. Each Party shall ensure that its customs authorities or other competent authorities provide to persons to whom administrative decisions are issued, the reasons for those decisions in order to facilitate, where necessary, recourse to appeal procedures.
Article 4.19. Penalties
1. Each Party shall ensure that its customs laws and regulations provide that any penalties imposed for breaches of customs laws, regulations or procedural requirements are proportionate and non-discriminatory.
2. Each Party shall ensure that any penalty imposed for a breach of its customs laws, regulations, or procedural requirements is imposed only on the person legally responsible for the breach.
3. Each Party shall ensure that the penalty imposed is based on the facts and circumstances of the case and is commensurate with the degree and severity of the breach. Each Party shall avoid incentives for, or conflicts of interest in, the assessment and collection of penalties.
4. Each Party is encouraged to consider prior disclosure to a customs authority of the circumstances of a breach of customs laws, regulations, or procedural requirements as a potential mitigating factor when establishing a penalty.
5. If a Party imposes a penalty for a breach of its customs laws, regulations, or procedural requirements, it shall provide an explanation in writing to the person upon whom it imposes the penalty, specifying the nature of the breach and the applicable laws, regulations, or procedures pursuant to which the amount or range of penalty for the breach has been imposed.
Article 4.20. Sub-Committee on Customs, Trade Facilitation and Rules of Origin
1. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin ("Sub-Committee") is established pursuant to Article 33.4(1).
2. The Sub-Committee shall ensure the proper implementation of this Chapter, the border enforcement of intellectual property rights by competent authorities in accordance with
Sub-Section 2 of Section C of Chapter 25, the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters and any additional customs-related provisions agreed between the Parties, and examine all matters arising from their application.
3. The functions of the Sub-Committee shall include:
(a) monitoring the implementation and administration of this Chapter and of Chapter 3;
(b) providing a forum to consult and discuss all matters concerning customs, including, in particular, customs procedures, customs valuation, tariff regimes, customs nomenclature, customs cooperation and mutual administrative assistance in customs matters;
(c) providing a forum to consult and discuss issues relating to rules of origin and administrative cooperation, and border measures for intellectual property rights; and
(d) enhancing cooperation on the development, application and enforcement of customs procedures, mutual administrative assistance in customs matters, rules of origin and administrative cooperation.
4. The Sub-Committee may make recommendations on the matters covered by paragraph 2. The Trade Council or the Trade Committee shall have the power to adopt decisions on mutual recognition of risk-management techniques, risk standards, security controls and trade facilitation partnership programmes, including aspects such as data transmission and mutually agreed benefits.
Article 4.21. Temporary Admission
1. For the purposes of this Article, "temporary admission" means the customs procedure under which certain goods, including means of transport, can be brought into a customs territory conditionally relieved from payment of import duties and taxes and without application of import prohibitions or restrictions of economic character. Those goods must be imported for a specific purpose and must be intended for re-exportation within a specified period of time and without having undergone any change except normal depreciation due to the use made of them.
2. Each Party shall grant temporary admission, with total conditional relief from import duties and taxes and without application of import restrictions or prohibitions of economic character (1), as provided for in its laws and regulations, to the following goods:
(a) goods for display or use at exhibitions, fairs, meetings or similar events, which means goods intended for display or demonstration at an event, goods intended for use in connection with the display of foreign products at an event, and equipment including interpretation equipment, sound and image recording apparatus and films of an educational, scientific or cultural character intended for use at international meetings, conferences or congresses, and goods obtained at such events from goods placed under temporary admission; each Party may require a governmental authorisation or a guarantee or deposit to be issued before the event takes place;
(b) professional equipment, which means: equipment for the press or for sound or television broadcasting which is necessary for representatives of the press or of broadcasting or television organisations visiting the territory of another country for the purposes of reporting or in order to transmit or record material for specified programmes; cinematographic equipment necessary for a person visiting the territory of another country in order to make a specified film or films; any other equipment necessary for the exercise of the calling, trade or profession of a person visiting the territory of another country to perform a specified task, insofar as it is not to be used for the industrial manufacture or packaging of goods or, except in the case of hand tools, for the exploitation of natural resources, for the construction, repair or maintenance of buildings or for earth moving and like projects; ancillary apparatus for the equipment mentioned above, and accessories therefor; and component parts imported for repair of professional equipment temporarily admitted;
(c) goods imported in connection with a commercial operation where the importation does not in itself constitute a commercial operation, such as: packings which are imported filled for re- exportation empty or filled, or are imported empty for re-exportation filled; containers, whether or not filled with goods, and accessories and equipment for temporarily admitted containers, which are either imported with a container to be re-exported separately or with another container, or are imported separately to be re-exported with a container, and component parts intended for the repair of containers granted temporary admission; pallets; samples; advertising films;
(d) goods imported exclusively for educational, scientific or cultural purposes, such as scientific equipment, pedagogic material, welfare material for seafarers, and any other goods imported in connection with educational, scientific or cultural activities; spare parts for scientific equipment and pedagogic material which has been granted temporary admission; and tools specially designed for the maintenance, checking, gauging or repair of such equipment;
(e) personal effects, which means: all articles, new or used, which a traveller may reasonably require for his or her personal use during the journey, taking into account all the circumstances of the journey, but excluding any goods imported for commercial purposes; and goods imported for sports purposes, such as sports requisites and other articles for use by travellers in sports contests or demonstrations or for training in the territory for which temporary admission is granted;
(f) tourist publicity material, which means goods imported for the purpose of encouraging the public to visit a foreign country, in particular in order to attend cultural, religious, touristic, sporting or professional meetings or demonstrations held there; each Party may require a guarantee or deposit to be provided for such goods;
(g) goods imported for humanitarian purposes, which means medical, surgical and laboratory equipment and relief consignments, such as vehicles and other means of transport, blankets, tents, prefabricated houses or other goods of prime necessity, forwarded as aid to those affected by natural disaster and similar catastrophes; and
(h) animals imported for specific purposes, such as police dogs or horses, detector dogs, dogs for the blind, rescue dogs, animals for the purposes of participation in shows, exhibitions, contests, competitions or demonstrations, animals for the purposes of entertainment, such as animals for circus, touring (including pet animals of travellers), performance of work or transport, or for medical purposes, such as delivery of snake poison.
3. Each Party shall accept, in accordance with its laws and regulations (1), the temporary admission of the goods referred to in paragraph 2 as well as, regardless of their origin, ATA carnets issued in the other Party in accordance with the Convention on temporary admission, done at Istanbul on 26 June 1990, endorsed in the other Party and guaranteed by an association forming part of the international guarantee chain, certified by the competent authorities and valid in the customs territory of the importing Party.
Article 4.22. Repaired Goods
1. For the purposes of this Article, "repair" means any processing operation undertaken in respect of a good to remedy an operating defect or material damage and entailing the re- establishment of the good to its original function or to ensure compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended. Repair includes restoration and maintenance but does not include an operation or process that:
(a) destroys the essential characteristics of a good, or creates a new or commercially different good;
(b) transforms an unfinished good into a finished good; or
(c) is used to improve or upgrade the technical performance of a good.
2. A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its customs territory, after that good has been temporarily exported from its customs territory to the customs territory of the other Party for repair.
3. Paragraph 2 does not apply to a good, imported in bond, into free trade zones, or in a similar status, which is thereafter exported for repair and is not re-imported in bond, into free trade zones, or in a similar status.
4. A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the customs territory of the other Party for repair.
Article 4.23. Fees and Formalities
1. Fees and other charges that a Party imposes on or in connection with the importation or exportation of a good of the other Party shall be limited in amount to the approximate cost of services rendered, and shall not represent an indirect protection in respect of domestic goods or taxation of imports or exports for fiscal purposes.
2. A Party shall not levy fees or other charges on or in connection with the importation or exportation of a good of the other Party on an ad valorem basis.
3. Each Party may impose charges or recover costs only if specific services are rendered, including the following:
(a) attendance, where requested, by customs staff outside official office hours or at premises other than customs premises;
(b) analyses or expert reports on goods and postal fees for the return of goods to an applicant, particularly in respect of decisions relating to binding information or the provision of information concerning the application of customs legislation;
(c) examination or sampling of goods for verification purposes, or the destruction of goods, where costs other than the cost of using customs staff are involved; or
(d) exceptional control measures, where such measures are necessary due to the nature of the goods or to a potential risk.
4. Each Party shall promptly publish all fees and charges it might impose in connection with importation or exportation in such a manner as to enable governments, traders and other interested parties to become acquainted with them.
5. A Party shall not require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
Chapter 5. TRADE REMEDIES
Section A. ANTI-DUMPING AND COUNTERVAILING DUTIES
Article 5.1. General Provisions
1. The Parties affirm their rights and obligations under the Anti-Dumping Agreement and the SCM Agreement.
2. For the purposes of this Section, the preferential rules of origin under Chapter 3 do not apply.
Article 5.2. Transparency
1. Anti-dumping and anti-subsidy investigations and measures should be used in full compliance with the relevant WTO requirements set out in the Anti-Dumping Agreement and the SCM Agreement and should be based on a fair and transparent system.
2. Each Party shall ensure, as soon as practicable after any imposition of provisional measures and in any case before a final determination is made, full disclosure of all essential facts and considerations on which it bases a decision to apply definitive measures. Such disclosure is without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Each Party shall disclose such essential facts and considerations in writing, and allow interested parties sufficient time to submit comments thereon.
3. Each interested party shall be granted the possibility to be heard in order to express its views during an anti-dumping or anti-subsidy investigation, provided that this does not unnecessarily delay the conduct of the investigation.
Article 5.3. Consideration of Public Interest
Each Party shall take into account the situation of its domestic industry, importers and their representative associations, representative users and representative consumer organisations to the extent that they have provided relevant information to the investigating authorities within the relevant timeframe. A Party may decide not to apply anti-dumping or countervailing measures on the basis of such information.
Article 5.4. Lesser Duty Rule
If a Party imposes an anti-dumping duty on the goods of the other Party, the amount of such duty shall not exceed the margin of dumping. Whenever possible, the anti-dumping duty should be less than that margin if such lesser duty would be adequate to remove the injury to the domestic industry.
Article 5.5. Non-application of Dispute Settlement
Chapter 31 does not apply to this Section.
Section B. GLOBAL SAFEGUARD MEASURES
Article 5.6. General Provisions
The Parties affirm their rights and obligations pursuant to Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture.
Article 5.7. Transparency and Imposition of Definitive Measures
1. Notwithstanding Article 5.6, the Party initiating a global safeguard investigation or intending to apply global safeguard measures shall, on request of the other Party and provided that the latter has a substantial interest, immediately provide a written notification containing all pertinent information leading to the initiation of a global safeguard investigation or the application of global safeguard measures, including on the provisional findings, if relevant. Such notification is without prejudice to Article 3(2) of the Safeguards Agreement.
2. When imposing definitive global safeguard measures, each Party shall endeavour to impose them in a way that least affects bilateral trade, provided that the Party affected by the measures has a substantial interest as defined in paragraph 4.
3. For the purposes of paragraph 2, if a Party considers that the legal requirements for the imposition of definitive global safeguard measures are met, and intends to apply such measures, it shall notify the other Party and grant the possibility of holding bilateral consultations, provided that the other Party has a substantial interest as defined in paragraph 4. If no satisfactory solution has been reached within 15 days of the notification, the importing Party may adopt the appropriate global safeguard measures to remedy the problem.
4. For the purposes of this Article, a Party shall be considered to have a substantial interest when it is among the five largest suppliers of the imported good during the most recent three-year time period, measured in terms of either absolute volume or value.
Article 5.8. Non-application of Dispute Settlement
Chapter 31 does not apply to this Section.
Section C. BILATERAL SAFEGUARD MEASURES
Subsection 1. GENERAL PROVISIONS
Article 5.9. Definitions
For the purposes of this Section:
(a) "domestic industry" means, with respect to an imported good, the producers as a whole of like or directly competitive goods operating within the territory of a Party, or the producers whose collective output of like or directly competitive goods constitutes a major proportion of the total domestic production of those goods;
(b) "transition period" means:
(i) a period of seven years from the date of entry into force of this Agreement; or
(ii) for any good for which the schedule in Annex 2 of the Party applying a bilateral safeguard measure provides for a tariff elimination period of seven years, the tariff elimination period for that good plus two years.
Article 5.10. Application of a Bilateral Safeguard Measure
1. Notwithstanding Section B, if, as a result of the reduction or elimination of a customs duty under this Agreement, a good originating in a Party is being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to domestic producers of like or directly competitive goods, the importing Party may take appropriate bilateral safeguard measures under the conditions and in accordance with the procedures laid down in this Section.
2. If the conditions in paragraph 1 are met, the importing Party may apply one of the following bilateral safeguard measures:
(a) the suspension of any further reduction of the rate of customs duty on the good concerned as provided for in this Agreement; or
(b) the increase in the rate of customs duty on the good concerned to a level which does not exceed the lesser of:
(i) the applied most-favoured-nation rate of customs duty on the good in effect at the time of application of the measure; or
(ii) the applied most-favoured-nation rate of customs duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement.
Article 5.11. Standards for Bilateral Safeguard Measures
1. A bilateral safeguard measure shall not be applied:
(a) except to the extent, and for such time, as may be necessary to prevent or remedy serious injury or threat thereof to the domestic industry;
(b) for a period exceeding two years; the period may be extended by another two years if the competent investigating authority of the importing Party determines, in conformity with the procedures laid down in this Section, that the measure continues to be necessary to prevent or remedy serious injury or threat thereof to the domestic industry, provided that the total period of application of the bilateral safeguard measure, including the period of initial application and any extension thereof, does not exceed four years; or
(c) beyond the expiration of the transition period as defined in subparagraph (b) of Article 5.9.
2. When a Party ceases to apply a bilateral safeguard measure, the rate of customs duty shall be the rate that would have been in effect for the good in accordance with its schedule in Annex 2.
3. In order to facilitate adjustment of the industry concerned in a situation where the expected duration of a bilateral safeguard measure exceeds one year, the Party applying the measure shall progressively liberalise it at regular intervals during the period of application.
Article 5.12. Provisional Bilateral Safeguard Measures
1. In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis without complying with the requirements of Article 5.21(1), subject to a preliminary determination that there is clear evidence that imports of a good originating in the other Party have increased as a result of the reduction or elimination of a customs duty under this Agreement, and that such imports cause or threaten to cause serious injury to the domestic industry.
2. The duration of any provisional bilateral safeguard measure shall not exceed 200 days, during which time the Party applying the measure shall comply with the relevant procedural rules laid down in Sub-Section 2. The Party applying the provisional bilateral safeguard measure shall promptly refund any tariff increases if the investigation described in Sub-Section 2 does not result in a finding that the conditions of Article 5.10(1) have been met. The duration of the provisional bilateral safeguard measure shall be counted as part of the period described in subparagraph (b) of Article 5.11(1).
3. The Party applying a provisional bilateral safeguard measure shall inform the other Party upon taking such provisional measure and shall immediately refer the matter to the Trade Committee for examination if the other Party so requests.
Article 5.13. Compensation and Suspension of Concessions
1. A Party applying a bilateral safeguard measure shall consult with the Party whose products are subject to the measure in order to agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects. The Party applying a bilateral safeguard measure shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure.
2. If the consultations referred to in paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days of the start of the consultations, the Party whose goods are subject to the bilateral safeguard measure may suspend the application of concessions having substantially equivalent effects on the trade of the other Party.
3. The Party whose goods are subject to the bilateral safeguard measure shall notify the other Party in writing at least 30 days before it suspends the application of concessions in accordance with paragraph 2.
4. The obligation to provide compensation pursuant to paragraph 1 and the right to suspend the application of concessions pursuant to paragraph 2 shall:
(a) not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the bilateral safeguard measure has been applied as a result of an absolute increase in imports; and
(b) cease on the date of termination of the bilateral safeguard measure.
Article 5.14. Time Lapse between Two Bilateral Safeguard Measures and Non-parallel Application of Safeguard Measures
1. A Party shall not apply a bilateral safeguard measure as referred to in this Section to the import of a good that has previously been subject to such a measure, unless a period of time equal to half of the time during which the safeguard measure was applied for the immediately preceding period has elapsed. A bilateral safeguard measure that has been applied more than once on the same good may not be extended by another two years as provided for in subparagraph (b) of Article 5.11(1).
2. A Party shall not apply, with respect to the same good and during the same period:
(a) a bilateral safeguard measure or a provisional bilateral safeguard measure under this Agreement; and
(b) a global safeguard measure pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.
Article 5.15. Outermost Regions of the European Union (1)
1. If any good originating in Chile is being imported into the territory of one or more of the outermost regions of the European Union in such increased quantities and under such conditions as to cause or threaten to cause serious deterioration in the economic situation of the outermost region concerned, the European Union, after having examined alternative solutions, may exceptionally apply bilateral safeguard measures limited to the territory of the region concerned.
2. For the purposes of paragraph 1, "serious deterioration" means major difficulties in a sector of the economy producing like or directly competitive goods. The determination of serious deterioration shall be based on objective factors, including the following:
(a) the increase in the volume of imports, in absolute terms or relative to domestic production and to imports from other sources; and
(b) the effect of the imports referred to in paragraph 1 on the situation of the industry or economic sector concerned, including on the levels of sales, production, financial situation and employment.
3. Without prejudice to paragraph 1, other provisions of this Section applicable to bilateral safeguard measures are also applicable to any safeguard measures adopted under this Article. Any reference to "serious injury" in other provisions of this Section shall be understood as "serious deterioration" when applied in relation to outermost regions of the European Union.
Subsection 2. PROCEDURAL RULES APPLICABLE TO BILATERAL SAFEGUARD MEASURES
Article 5.16. Applicable Law
For the application of bilateral safeguard measures, the competent investigating authority of each Party shall comply with the provisions of this Sub-Section. In cases not covered by this Sub-Section, the competent investigating authority shall apply the rules established under the law of the Party of that authority.
Article 5.17. Initiation of a Safeguard Procedure
1. A competent investigating authority of a Party may initiate a procedure regarding bilateral safeguard measures ("safeguard procedure") upon a written application (1) by or on behalf of the domestic industry, or in exceptional circumstances on its own initiative.
2. The application shall be considered to have been made by or on behalf of the domestic industry if it is supported by domestic producers whose collective output constitutes more
than 50 % of the total domestic production of the like or directly competitive goods produced by the portion of the domestic industry expressing either support for or opposition to the application.
However, a competent investigating authority shall not initiate an investigation if the domestic producers expressing support for the application account for less than 25 % of the total domestic production of the like or directly competitive goods produced by the domestic industry.
3. Once a competent investigating authority has initiated the investigation, the written application referred to in paragraph 1 shall be made available to interested parties, except for any confidential information contained therein.
4. Upon initiation of a safeguard procedure, the competent investigating authority shall publish a notice of initiation of the safeguard procedure in the official journal of the Party. The notice shall identify:
(a) the entity which filed the written application, if applicable;
(b) the imported good subject to the safeguard procedure;
(c) the subheading and tariff item number under which the imported good is classified;
(d) the type of proposed measure to be applied;
(e) the public hearing pursuant to subparagraph (a) of Article 5.20 or the period within which interested parties may submit a request to be heard pursuant to subparagraph (b) of Article 5.20;
(f) the place where the written application and any other non-confidential documents filed in the course of the proceeding may be inspected; and
(g) the name, address and telephone number of the office to be contacted for more information.
5. With respect to a safeguard procedure initiated pursuant to paragraph 1 on the basis of a written application, the competent investigating authority concerned shall not publish the notice required under paragraph 4 without first assessing carefully whether the written application meets the requirements of its domestic legislation and the requirements of paragraphs 1 and 2, and includes reasonable evidence that imports of a good originating in the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and that those imports cause or threaten to cause the alleged serious injury.
Article 5.18. Investigation
1. A Party shall apply a bilateral safeguard measure only after an investigation has been carried out by its competent investigating authority in accordance with Article 3(1) and subparagraph (c) of Article 4(2) of the Safeguards Agreement; to that end, Article 3(1) and subparagraph (c) of Article 4(2) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.
2. In the investigation referred to in paragraph 1, the Party shall comply with the requirements of subparagraph (a) of Article 4(2) of the Safeguards Agreement. To that end, subparagraph (a) of Article 4(2) of the Safeguards Agreement is incorporated into and made part of this Agreement, mutatis mutandis.
3. If a Party makes a notification pursuant to paragraph 1 of this Article and Article 3(1) of the Safeguards Agreement that it is applying or extending a bilateral safeguard measure, that notification shall include:
(a) evidence of serious injury or threat thereof caused by increased imports of a good originating in the other Party as a result of the reduction or elimination of a customs duty under this Agreement; the investigation shall demonstrate, on the basis of objective evidence, the existence of a causal link between the increased imports of the good concerned and the serious injury or threat thereof; known factors other than the increased imports shall also be examined to ensure that the serious injury or threat thereof caused by those other factors is not attributed to the increased imports;
(b) a precise description of the originating good subject to the bilateral safeguard measure, including its heading or subheading under the HS Code on which the schedules of tariff commitments in Annex 2 are based;
(c) a precise description of the bilateral safeguard measure;
(d) the date of the introduction of the bilateral safeguard measure, its expected duration and, if applicable, a timetable for progressive liberalisation of the measure in accordance with Article 5.11(3); and
(e) in the event of an extension of the bilateral safeguard measure, evidence that the domestic industry concerned is adjusting.
4. On request of a Party whose good is subject to a safeguard procedure under this Section, the Party conducting that procedure shall enter into consultations with the requesting Party to review a notification under paragraph 1 or any public notice or report that the competent investigating authority has issued in relation to the safeguard procedure.
5. Each Party shall ensure that its competent investigating authority completes any investigation pursuant to this Article within 12 months of the date of its initiation.