plant: a building or buildings near but not necessarily adjacent to, machinery, apparatus and accessories that are under the control of a producer and are used for the production of motor vehicles;
platform: the primary assembly of a load-bearing structural assembly of a motor vehicle that determines the basic size of that vehicle and forms the structural base that supports the powertrain, and serves to join the motor vehicle in various types of frames, such as body mount, dimensional frame and unit body; and
motor vehicle: goods of heading 8701, 8702, 8703, 8704, 8705 or 8706.
2. For the purposes of calculating the regional value content when the exporter or producer uses the net cost method established in Article 4.4, for:
(a) goods which are motor vehicles of subheading 8702.10 or 8702.90, when they are motor vehicles designed for the transport of 15 persons or less, or of subheadings 8703.21 through 8703.90, 8704.21 or 8704.31; or
(b) goods covered by Annex 4.16(a), when they are subject to a regional value content and are intended for use as original equipment in the production of goods that are motor vehicles of subheading 8702.10 or 8702.90, when they are motor vehicles designed for the transport of 15 persons or less, or of subheadings 8703.21 through 8703.90, 8704.21 or 8704.31;
the value of the non-originating materials used by the producer in the production of those goods shall be the sum of the values of the non-originating materials, determined in accordance with paragraphs 1 and 2 of Article 4.5, imported from non- Parties covered in Annex 4.16(a) and used in the production of those goods or in the production of any materials used in the production of those goods.
3. For purposes of calculating the regional value content, when the exporter or producer uses the net cost method set out in Article 4.4, for goods that are motor vehicles of heading 8701, subheading 8702.10 or 8702.90, when they are motor vehicles designed to transport 16 or more persons, or subheading 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90 or heading 8705 or 8706, or for a component identified in Annex 4.16(b) for use as original equipment in the production of the motor vehicles described in this paragraph, the value of the non-originating materials used by the producer in the production of the good shall be the sum of:
(a) for each material used by the producer of the good and listed in Exhibit 4.16(b), whether or not produced by that producer, at the producer's option, and determined in accordance with Article 4.5 or Article 4.7.3, either of the following 2 values:
(i) the value of the non-originating material; or
(ii) the value of non-originating materials used in the production of that material; and
(b) the value of any other non-originating material used by the producer of the good, which is not included in Annex 4.16(b), determined in accordance with Article 4.5 or Article 4.7.3.
4. For purposes of calculating the regional value content of a motor vehicle identified in paragraph 2 or 3, the producer may average the calculation over its fiscal year or period using any of the following categories, either on the basis of all motor vehicles in that category, or only motor vehicles in that category that are exported to the territory of the other Party:
(a) the same model line of the same class of motor vehicles produced in the same plant in the territory of a Party;
(b) the same class of motor vehicles produced in the same plant in the territory of a Party;
(c) the same model line of motor vehicles produced in the territory of a Party; or
(d) the same class of motor vehicles produced in the territory of a Party. 5. For purposes of calculating the regional value content of any or all of the goods covered by a tariff classification listed in Annex 4.16(a) or of a component or material listed in Annex 4.16(b), which are produced in the same plant, the producer of the good may:
(a) average your calculation:
(i) in the fiscal year or period of the producer of the motor vehicle to whom the merchandise is sold;
(ii) in any quarterly or monthly period;
(iii) in its own fiscal year or period, if the merchandise is sold as a spare or replacement part;
(b) calculate the average referred to in subsection (a) separately for any or all of the goods sold to one or more producers of motor vehicles; or
(c) in respect of any calculation made pursuant to this paragraph,
calculate separately the regional value content of the goods being exported to the territory of the other Party.
Article 4.17. Non-Originating Transactions and Practices
1. Operations or practices that, individually or in combination, do not confer origin to a good are the following:
(a) simple (2) dilution in water or other substance that does not materially alter the characteristics of the goods;
(b) simple operations intended to ensure the preservation of goods during transport or storage, such as aeration, refrigeration, freezing, removal of damaged parts, drying or addition of substances;
(c) dusting, sieving, screening, shelling, shelling, splitting, painting, grading, sorting, washing or cutting;
(d) packing, repacking, repacking, repacking, repacking, wrapping or repackaging for retail sale or packaging for transportation;
(e) the gathering of goods to form sets or assortments;
(f) the application of trademarks, labels or similar distinctive signs;
(g) cleaning, including the removal of rust, grease, paint or other coatings; and
(h) the assembly of non-originating parts and components to form a completely disassembled good that are classified as a good in accordance with rule 2(a) of the General Rules for the Interpretation of the Harmonized System. The above shall not apply to goods that had already been assembled and considered as originating, and subsequently disassembled for convenience of packaging, handling or transportation.
2. The origin of a good is not conferred by any price-fixing activity or practice in respect of which it can be shown, on the basis of sufficient evidence, that its purpose is to evade compliance with the provisions of this Chapter.
3. The provisions of this Article shall prevail over the specific rules of origin set forth in Annex 4.3.
Article 4.18. Transshipment and Direct Shipment
A good shall not be considered as originating, even if it has been produced in accordance with the requirements of Article 4.3, if:
(a) undergoes further processing, is the subject of a production process, or any other operation outside the territories of the Parties, except unloading, reloading or any other operation necessary to preserve the good in good condition or to transport it to the territory of the other Party; or
(b) does not remain under the control or supervision of the customs authority in the territory of a non-Party State.
Article 4.19. Regional Input Integration Committee
1. The Parties hereby establish the Regional Input Integration Committee (hereinafter referred to as "CIRI").
2. Each Party shall appoint 2 representatives from the public sector and 2 representatives from the private sector to the CIRI.
3. The CIRI will operate while the Treaty is in force.
Article 4.20. Functions of CIRI
1. CIRI shall evaluate the actual and documented inability of a producer of goods in the territory of the Parties to have available in terms of timeliness, volume, quality and price, the materials referred to in paragraph 3 used by the producer in the production of a good.
2. In relation to materials used in the production of a good referred to in paragraph 1:
(a) are those used by the producer in the production of a good classified under the Harmonized System listed in Annex 4.20; and
(b) its use is required by the rule of origin set forth in Annex 4.3 for that good.
3. Annex 4.20 may be modified at any time by consensus between the Parties.
Article 4.21. Procedure
1. For the purposes of Article 4.20, the CIRI shall conduct an investigation procedure that shall be initiated at the request of a Party or the Administrative Commission. This procedure shall commence within 5 days of receipt of the request and the documentation supporting it.
2. In the course of this procedure, CIRI will evaluate the evidence submitted to it.
Article 4.22. Deadlines, CIRI's Opinion and Notification
1. The CIRI will issue an opinion to the Administrative Commission within 30 days from the date of initiation of the investigation procedure.
2. CIRI shall rule on the inability of the producer to dispose of materials under the terms of Article 4.20.1 and, where such inability is established, on the terms and conditions of the waiver required in the use of the materials referred to in Article 4.20.3 in order for a good to qualify for preferential tariff treatment.
3. The CIRI shall forward its opinion to the Administrative Commission within 5 days of its issuance.
Article 4.23. Resolution of the Administrative Committee
1. If CIRI issues an opinion under the terms of Article 4.22, the Administrative Commission shall issue a decision no later than 10 days from receipt of the opinion, unless it agrees to a different time limit.
2. When the incapacity referred to in Article 4.20.1 is established, the decision of the Administrative Commission shall establish a waiver, under the terms and conditions agreed by CIRI in its opinion, for the use of the materials referred to in Article 4.20.3, with such modifications as it deems appropriate.
3. If the Administrative Commission has not ruled within the period indicated in paragraph 1, the opinion of the CIRI shall be considered ratified and the case resolved.
4. The decision referred to in paragraph 2 shall be valid for a maximum of one year from the date of its issuance, depending on the causes of shortage for which it was issued. At the request of the Party concerned and within 90 days prior to its expiration, the Administrative Commission may extend, after review by the CIRI, its decision for an equal period if the causes that gave rise to it persist and the necessary information is provided to demonstrate that the waiver was used. In case of extension, the initially authorized volume will be reduced to 50 percent in the following dispensation when such volume has been utilized in less than 30 percent of what was authorized; if the utilization is greater than or equal to 30 percent, the initially authorized volume will be maintained for the following dispensation.
5. The decision contained in paragraph 4 may: (a) refuse to grant the waiver; or (6) grant a waiver in accordance with the provisions of paragraph 2.
6. Any Party may, at any time during its term, request a review of the decision of the Administrative Commission. The Administrative Commission may remove commodities from the decision referred to in paragraph 4 at the request of an interested Party, and after consultation with CIRI.
Article 4.24. Referral to the Administrative Commission
1. If the CIRI does not issue the opinion referred to in Article 4.22 within the time limits established therein, because there is no consensus on the case in question, the consultations referred to in Article 17.6 (Consultations) shall be deemed concluded and the case shall be referred to the Administrative Commission within 5 days following the expiration of that period.
2. For the purposes of paragraph 1, the Administrative Commission shall issue a decision under the terms of Article 4.23. If the Administrative Commission does not issue a decision, the provisions of Articles 17.8 (Request for Establishment of Arbitration Panel) to 17.12 (Model Rules of Procedure) and 17.16 (Final Report) to 17.18 (Default and Suspension of Benefits) shall apply, in accordance with the provisions of paragraphs 3 to 7.
3. For the purposes of paragraph 2, the time limit for the establishment of the Arbitral Panel referred to in Article 17.10 (Establishment of the Arbitral Panel) shall be 20 days, counted from the day following the day on which the request for the establishment of the Arbitral Panel was submitted; and the time limit for the issuance of the final report referred to in Article 17.16 (Final Report) shall be 40 days, counted from the day following the day of the establishment of the Arbitral Panel.
4. For the purposes of paragraph 2, it shall be understood that the mandate of the Arbitration Panel shall be to issue a report in terms of Article 4.22.2.
5. The final report of the Arbitration Panel shall be binding on the Parties and, if it decides on the waiver referred to in Article 4.22.2, it shall be valid for a maximum of one year. At the request of the Party concerned, within 90 days prior to its expiration and after review by the CIRI, the Administrative Commission may extend the waiver for an equal term depending on the cause of shortage for which it was issued, if the causes that gave rise to it persist.
6. The complaining Party may invoke the provisions of paragraphs 1 to 3 of Article 17.18 (Noncompliance and Suspension of Benefits), if the Arbitration Panel rules in its favor and the Party complained against fails to comply with the final report within the time limit set by the Arbitration Panel.
7. The Party complained against may invoke the provisions of Article 17.19 (Review of Suspension of Benefits or of Compliance).
Article 4.25. Operating Regulations
To facilitate the administration of the provisions of Articles 4.19 through 4.18 4.24 the Parties shall endeavor and work towards having an Operating Regulation to be adopted by the Administrative Commission immediately after the entry into force of this Agreement, or failing that, no later than 60 working days after the entry into force of this Agreement.
Article 4.26. Transitional Provisions for the Effects of Cumulation of Article 4.8
1. Parties for which this Agreement has entered into force pursuant to Article 21.2 (Entry into Force), may use materials originating in a Central American State for which this Agreement has not yet entered into force. This provision shall apply for a period of 2 years from the entry into force of the Agreement between Mexico and a Central American State.
2. For the purposes of the application of paragraph 1, materials from a Central American State that does not have this Agreement in force, which are used by a producer or exporter in the territory of a Party and which are incorporated in a good that is exported to the territory of another Party, shall be considered originating materials for the purpose of cumulation provided for in Article 4.8, provided that such materials comply with the specific rules of origin and other applicable provisions of the free trade agreement in force between Mexico and the Central American State that supplies such materials.
3. In case of doubts about the origin of the aforementioned materials, the exporter of the merchandise must demonstrate the origin of such materials. The documents that demonstrate the origin of these materials may include a certificate of origin issued within the framework of the free trade agreement in force between Mexico and the Central American State that supplies said material, with the necessary applicable adjustments.
4. In the event that any doubt remains as to the origin of the accumulated materials referred to in paragraph 1 of this Article, the Parties agree to that its authority to review the origin of such materials, in accordance with the free trade agreement in force between that Party to the Agreement and the Party supplying the accumulated material, remains unaffected.
Chapter V. Customs Procedures Relating to the Origin of Goods
Article 5.1. Definitions
1. For the purposes of this Chapter, the following definitions shall apply:
competent authority: the authority responsible for the application of the provisions of this Chapter, in accordance with Annex 5.1;
advance ruling: a ruling issued by the competent authority, in accordance with Article 5.11;
exporter: a person located in the territory of a Party from which the good is exported;
commercial importation: the importation of a good into the territory of a Party for the purpose of sale or use for commercial, industrial or similar purposes;
importer: a person located in the territory of a Party into which the good is imported; Determination of origin resolution: a resolution issued by the competent authority as a result of a verification that establishes whether a good qualifies as originating, in accordance with Chapter IV (Rules of Origin);
preferential tariff treatment: the application of the corresponding tariff rate or duty to an originating good, in accordance with Annex 3.4 (Tariff Treatment Schedule);
value: the value of a good or material for the purposes of the application of Chapter IV (Rules of Origin); and
customs value: the value of a good for the purpose of calculating customs duties in accordance with the national legislation of each Party.
2. In addition to the definitions set forth in this Article, the definitions set forth in Chapter IV (Rules of Origin) shall be applicable, as applicable.
Article 5.2. Declaration and Certification of Origin
1. For the purposes of this Chapter, the Parties shall agree on a single format for the certificate of origin and a single format for the declaration of origin, which may be issued in written or electronic form, shall enter into force together with this Agreement, and may be subsequently modified by the Administrative Commission.
2. The certificate of origin shall serve to certify that a good being exported from the territory of one Party to the territory of another Party qualifies as originating.
3. A certificate of origin shall be considered valid when it is drawn up in the format referred to in paragraph 1, and when it is completed and signed by the exporter of the good in the territory of a Party, in accordance with the provisions of this Chapter and with the provisions of its instructions for completion.
4. Each Party shall provide that its exporters shall complete and sign a certificate of origin in respect of the export of a good for which an importer may claim preferential tariff treatment, except as provided in Article 5.5.
5. Each Party shall provide that when an exporter is not the producer of the good, it shall complete and sign the certificate of origin on the basis of:
(a) its knowledge that the good qualifies as originating; or
(b) the declaration of origin covering the merchandise to be exported, which must be completed and signed by the producer of the merchandise and voluntarily provided to the exporter.
6. Each Party shall provide that the certificate of origin completed and signed by the exporter shall cover:
(a) asingle import of one or more goods; or (b) several imports of identical goods to be made within a period specified by the exporter in the certificate of origin, which shall not exceed the period set forth in paragraph 7. 7. Each Party shall provide that the certificate of origin shall be accepted by the competent authority of the importing Party for a period of one year from the date of signature.
Article 5.3. Obligations with Respect to Imports
1. Each Party shall require an importer claiming preferential tariff treatment for a good imported into its territory from the territory of another Party to:
(a) declare in writing, in the import declaration provided for in its national legislation, on the basis of a valid certificate of origin in the terms of Article 5.2.3, that the good qualifies as originating;
(b) has the certificate of origin in its possession at the time the declaration is made; and
(c) provide a copy of the certificate of origin when requested by your competent authority.
2. Each Party shall provide that, when the importer that has requested preferential tariff treatment has reason to believe that the certificate of origin on which its import declaration is based contains incorrect information, it shall submit a corrected declaration and pay the corresponding customs duties. The importer shall not be penalized when he voluntarily files the aforementioned declaration before the competent authority has initiated the exercise of its verification or verification powers.
3. Each Party shall provide that, where its importer fails to comply with any of the requirements set out in paragraphs 1 and 2, preferential tariff treatment shall be denied to the good imported from the territory of another Party for which the preference was claimed.
4. Each Party shall provide that, where preferential tariff treatment has not been requested for a good imported into its territory and it is subsequently determined that the good qualifies as originating, the importer of the good, within one year from the date of importation, may request a refund of duties paid in excess because preferential tariff tteatment was not granted to the good, provided that the request is accompanied by:
(a) aletter stating that the merchandise qualified as originating at the time of importation;
(b) acopy of the certificate of origin; and
(c) documentation related to the importation of the good, in accordance with the national legislation of that Party.
Article 5.4. Obligations with Respect to Exports
1. Each Party shall provide that its exporter or producer, who has completed and signed a certificate or declaration of origin, shall furnish a copy of the certificate or declaration of origin, if any, to its competent authority upon request.
2. Each Party shall provide that its exporter or producer, who has completed and signed a certificate or a declaration of origin and has reason to believe that that certificate or declaration contains incorrect information, promptly notifies in writing any change that may affect the accuracy or validity of the certificate or declaration of origin to all persons to whom he has given the certificate or declaration of origin, as well as in accordance with the national legislation of each Party to the competent authority of the exporting Party, in which case he may not be penalized for having presented an incorrect certificate or declaration of origin before the competent authority of the importing Party has initiated the exercise of its powers of verification or verification.
3. The competent authority of the exporting Party shall inform the competent authority of the importing Party in writing of the notification of the exporter or producer referred to in paragraph 2.
4. Each Party shall provide that a false certification or declaration of origin made by its exporter or producer to the effect that a good to be exported to the territory of another Party qualifies as originating shall have the same legal consequences, as determined by its domestic legislation, as those that would apply to its importer who makes false declarations or representations in contravention of its domestic laws and regulations.
Article 5.5. Exceptions
Provided that it is not part of 2 or more imports made for the purpose of evading compliance with the requirements of Articles 5.2 and 5.3, the Parties shall not require a certificate of origin when:
(a) the importation for commercial purposes of goods whose customs value does not exceed US$1,000 or its equivalent in national currency or such greater amount as may be established by the importing Party, but the invoice may be required to contain a declaration that the good qualifies as originating;
(b) the importation for non-commercial purposes of goods the customs value of which does not exceed US$1,000 or its equivalent in national currency or such greater amount as may be established by the importing Party; and
(c) the importation of a good for which the importing Party has waived the requirement to present the certificate of origin.
Article 5.6. Accounting Records
Each Party shall provide that:
(a) its exporter or producer who completes and signs a certificate or declaration of origin keep in the territory where it is located, for at least 5 years after the date of signature of that certificate or declaration of origin, all records and documents relating to the origin of the good, as applicable, including those relating to:
(i) the acquisition, costs, value and payment of merchandise exported from its territory;
(ii) the acquisition, costs, value and payment of all materials used in the production of the merchandise exported from its territory; and
(iii) the production process of the goods in the form in which they are exported from its territory;
(b) for the purposes of the origin verification process set out in Article 5.7, the exporter or producer provides to the competent authority of the importing Party the records and documents referred to in subparagraph (a). Where the records and documents are not in the possession of the exporter or producer, the exporter or producer may request the records and documents from the producer or supplier of the materials to be provided through him to the competent authority conducting the verification of origin; and
(c) an importer that obtained preferential tariff treatment for a good that was imported into the territory of that Party from the territory of another Party, retains in the territory where it is located, for at least 5 years from the date of importation, the certificate of origin and all other documentation relating to the importation required by the importing Party.
Article 5.7. Procedures for Verification of Origin
1. The importing Party may request from the exporting Party information regarding the origin of a good through its competent authority.
2. To determine whether a good being imported into the territory of a Party from the territory of another Party under preferential tariff treatment qualifies as originating, the importing Party may, through its competent authority, verify the origin of the good by one or more of the following means:
(a) written questionnaires addressed to exporters or producers in the territory of another Party;
(b) written requests addressed to exporters or producers in the territory of another Party;
(c) verification visits to an exporter or producer in the territory of another Party, for the purpose of examining the records and documents evidencing compliance with the rules of origin in accordance with Article 5.6, and inspecting the production process at the place where the production of the good is carried out and, if applicable, that of the materials; or
(d) other procedures agreed upon by the Parties.
The process of verification of origin referred to in this paragraph shall be brought to the attention of the competent authority of the exporting Party.
The competent authority of the importing Party shall notify the importer of the initiation of the origin verification process referred to in this paragraph.
3. For the purposes of this Article, shipments and notifications made by the competent authority of the importing Party, which carries out the verification of origin, to its importers in its territory or to the exporters or producers of another Party, may be made by any of the following means:
(a) certified mail with return receipt requested;
(b) any other means of recording receipt of such document by the importer, exporter or producer; or
(c) any other means agreed upon by the Parties.
4. For the purposes of this Article, shipments or notifications made at the place declared as the domicile of the exporter or producer in the certificate of origin shall be considered valid.
5. The provisions of paragraph 2 shall be without prejudice to the exercise of the powers of verification of the competent authorities of the importing Party, in relation to the fulfillment of the other obligations, over its own importers, exporters or producers.
6. The exporter or producer that receives a questionnaire or a request in accordance with subparagraphs (a) and (b) of paragraph 2, shall respond and return it within a period of no more than 30 days from the date on which it was received. During this period, the exporter or producer may request in writing to the competent authority of the importing Party an extension, which in its case shall not exceed 30 days. This request for extension shall not result in the denial of preferential tariff treatment.
The importer shall have a period of 30 days from the notification of the initiation of the process of verification of origin to provide the documents, evidence or statements it deems relevant, and may only once request in writing to the competent authority of the importing Party an extension, which may not exceed 30 days. If the importer does not provide such documentation, it shall not be sufficient reason to deny preferential tariff treatment, without prejudice to the provisions of the preceding paragraph.
7. Each Party shall provide that where the exporter or producer has received the questionnaire or request referred to in subparagraphs (a) and (b) of paragraph 2 and fails to respond in accordance with the information requested and the competent authority of the importing Party determines that the information obtained is not sufficient to demonstrate the origin of the good, or does not answer any of the questionnaires or requests within the corresponding term, the importing Party may deny preferential tariff tteatment to the good or goods that have been subject to the verification of origin, by means of a written resolution addressed to the importer, exporter or producer, which shall include the findings of fact and the legal basis for the resolution.
8. Each Party shall provide that when it has received the questionnaire or request referred to in subparagraphs (a) and (b) of paragraph 2, answered within the corresponding period, and it considers that it requires more information to resolve on the origin of the good or goods subject to the verification of origin, it may request additional information from the exporter or producer, by means of subsequent questionnaires or requests. In this case, the exporter or producer must respond and return the requested information within a period of no more than 30 days, counted from the date on which it was received.