4. Prior to the entry into force of an amended version of the Harmonized System, the Committee shall consult to prepare updates to Chapter 3 (Rules of Origin) and this Chapter that are necessary to reflect changes to the Harmonized System.
Chapter 5. CUSTOMS AND TRADE FACILITATION
Article 5.1. General Objectives and Principles
1. The Parties affirm their rights and obligations under the Trade Facilitation Agreement.
2. Each Party shall administer its customs procedures relating to the importation, exportation and transit of goods, in a manner that:
(a) is transparent, predictable and consistent throughout its territory;
(b) facilitates the importation, exportation, and transit of goods that meet the Party’s laws, regulations and procedural requirements; and
(c) ensures compliance with its law.
3. For greater certainty, this Chapter does not prevent a Party from adopting or maintaining measures to secure compliance by traders with a Party’s laws, regulations or procedural requirements relating to the importation, exportation or transit of goods, such as appropriate declarations of goods and complete payment of applicable duties, taxes, fees and charges by traders, provided those measures are consistent with this Agreement.
Article 5.2. Online Publications
Each Party shall make the following information available on one or more free, publicly accessible websites, and shall ensure that the information is updated as necessary:
(a) information each Party is required to publish under the Trade Facilitation Agreement and Article X of the GATT 1994, in a manner that enables a person to become acquainted with them;
(b) customs procedures relating to the importation, exportation and transit of goods, in a manner that is clear and comprehensive;
(c) a description of the procedures and practical steps a person needs to follow for the importation into, exportation from, and transit of goods through, its territory;
(d) contact information for its enquiry point or points established or maintained pursuant to Article 5.3;
(e) a comprehensive list of government entities responsible for measures imposed in relation to the importation into, exportation from, and transit of goods through, its territory, including contact information for those entities;
(f) regulations of general application governing trade and customs matters relating to goods that it proposes to adopt, as set out in Article 5.4;
(g) the advance rulings procedures, as set out in Article 4.13 (Origin Procedures – Advance Rulings Relating to Origin);
(h) newly issued advance rulings pursuant to Article 4.13 (Origin Procedures – Advance Rulings Relating to Origin), in accordance with its laws, regulations, and procedures, which may be subject to the consent of the person to whom the advance ruling was issued;
(i) a description of the Party’s security regime and its requirements, where administered, including the method used to establish a security amount, as set out in Article 5.6;
(j) information on its single window system, as set out in Article 5.9;
(k) a description of its penalty regime for breaches of customs laws and regulations, as set out in Article 5.14;
(l) information on how a person may request a review or appeal, as set out in Article 5.15; and
(m) information on how a person may submit a complaint, in accordance with paragraph 5.17.2.
Article 5.3. Enquiry Points
1. Each Party shall establish or maintain one or more enquiry points to respond to enquiries from any interested person concerning the importation, exportation, and transit of goods.
2. A Party shall not require the payment of a fee for answering enquiries under paragraph 1. A Party may require payment of a fee for requests, made in accordance with its laws and regulations, for statistical information, or for access to public government records that requires document search, duplication, or review.
3. Each Party shall ensure that responses to enquiries are provided within a reasonable period of time, which may vary depending on the nature or complexity of the request.
Article 5.4. Consulting Traders
1. Each Party shall, to the extent possible and in accordance with its law, publish in advance, regulations of general application governing trade and customs matters relating to goods that it proposes to adopt and shall provide any interested person the opportunity to comment before the Party adopts those regulations.
2. Each Party shall adopt or maintain a mechanism to allow for regular communication between its customs administration and traders within its territory on its procedures relating to the importation, exportation and transit of goods. These communications shall provide traders with an opportunity to raise emerging issues and provide their views to the customs administration on these procedures.
Article 5.5. Advance Rulings
1. Each Party shall issue an advance ruling on:
(a) the tariff classification of a good, in accordance with the Harmonized System;
(b) the appropriate method or criteria to be used for determining the customs value of a good, under a particular set of facts, in accordance with the Customs Valuation Agreement; and
(c) any other matter as the Parties may decide.
2. For the purposes of paragraph 1, each Party shall issue advance rulings in accordance with Article 4.13 (Origin Procedures – Advance Rulings Relating to Origin).
Article 5.6. Release of Goods
1. Each Party shall allow for the immediate release of a good from customs control, unless:
(a) the importer or the good fails to comply with the laws, regulations or procedural requirements of the importing Party;
(b) the good is selected for examination by the customs administration or another governmental entity of the importing Party through the administration of the Party’s risk management regime; or
(c) release is otherwise delayed by virtue of force majeure.
For greater certainty, this obligation applies, to the extent possible, to restricted and controlled goods.
2. Pursuant to paragraph 1, each Party shall adopt or maintain procedures:
(a) that provide for the electronic submission and processing of information, including manifests, in advance of the arrival of a good in order to expedite the release of goods from customs control upon arrival;
(b) that allow a good to be released at the point of arrival without requiring temporary transfer to a warehouse or other facility; and
(c) to communicate to the importer when a Party does not release a good in accordance with paragraph 1, including, to the extent permitted by its laws and regulations, the reasons why the good is not released and the identity of the governmental entity, if not the customs administration, that has caused the release of the good to be withheld.
3. Each Party shall adopt or maintain procedures that provide for the release of a good prior to a final determination and payment of any duties, taxes, fees, and charges imposed on or in connection with the importation of the good, when these elements are not determined prior to or promptly upon arrival, provided that the good is otherwise eligible for release and any security required by the importing Party has been provided.
4. If a Party requires security as a condition for release, that Party shall:
(a) allow for a security instrument to cover multiple importations;
(b) limit the security to an amount that is calculated to ensure compliance with payment of duties, taxes, fees and charges, and which must not represent an indirect protection of domestic traders or goods or a taxation of imports for fiscal purposes; and
(c) ensure that the security is discharged as soon as possible after its customs administration is satisfied that the obligations arising from the importation of the good have been fulfilled or, for instruments covering multiple importations, until it is no longer required by the customs administration.
5. Each Party shall, provided the applicable requirements are met, allow a good intended for release in its territory to be moved under customs control from the point of entry into the Party’s territory to another customs office in its territory where the good is intended to be released.
Article 5.7. Perishable Goods (1)
1. With a view to preventing avoidable loss or deterioration of perishable goods, and provided that all documentation has been submitted and all applicable requirements have been met, each Party shall provide for the release of a perishable good from customs control:
(a) under normal circumstances, in the shortest possible time, after the arrival of the good; and
(b) in exceptional circumstances, where it would be appropriate to do so, outside the business hours of its customs administration and other relevant governmental entities.
2. Each Party shall give appropriate priority to a perishable good when scheduling any examination that may be required.
3. Each Party shall arrange or allow an importer to arrange for the proper storage of a perishable good pending its release. Each Party shall require that any storage facilities arranged by the importer have been approved or designated by its relevant governmental entities. The movement of the good to those storage facilities, including authorizations for the operator moving the good, may be subject to the approval, where required, of the relevant entities. Each Party shall, where practicable and consistent with its laws and regulations, on the request of the importer, release the good at those storage facilities.
4. In cases of significant delay in the release of a perishable good, the Party shall communicate with the importer if the Party does not release the good in accordance with paragraph 1. This communication shall, to the extent permitted by the Party’s laws and regulations, provide the reasons for the delay and identify the governmental entity, if not the customs administration, that has caused the release of the good to be withheld.
Article 5.8. Express Shipments
1. Each Party shall adopt or maintain expedited customs procedures for express shipments while maintaining appropriate customs control and selection. These procedures shall:
(a) provide for information and documentation necessary to release an express shipment to be submitted and processed before the shipment arrives;
(b) allow a single submission of information covering all goods contained in an express shipment, such as a manifest, through, if possible, electronic means. For greater certainty, additional information and documentation may be required as a condition for release;
(c) expedite the release of an express shipment based on, to the extent possible, minimum documentation;
(d) provide for an express shipment, under normal circumstances, to be released immediately after arrival, provided that all necessary information and documentation has been submitted, and all requirements have been met; and
(e) endeavour to apply the treatment in subparagraphs (a) to (d) to a shipment of any weight or value, recognizing that a Party may require formal entry procedures as a condition for release which may vary based on a good’s weight or value, including declarations and supporting documentation for the assessment and payment of applicable duties or taxes.
2. If a Party does not provide the treatment in paragraph 1(a) through (e) to all shipments, that Party shall provide a separate customs procedure which provides that treatment for express shipments. For greater certainty, “separate” does not require a specific facility or lane.
3. This Article does not prevent a Party from requiring additional procedures and any necessary information and documentation as a condition for the release of a restricted or controlled good, including declarations and supporting documentation for the assessment and payment of applicable duties, taxes, fees or charges.
Article 5.9. Single Window
1. Each Party shall establish or maintain a single window system that enables the electronic submission, through a single entry point, of the information the Party requires for the importation of a good into its territory.
2. Each Party shall, through its applicable electronic system and in a timely manner, inform a trader that is using its single window system of the status of the release of the good.
3. If a Party receives information for a good or shipment of a good through its single window system, the Party shall not request the same information for that good or shipment of a good, except in urgent circumstances or pursuant to other limited exceptions set out in its laws, regulations, or procedures. Each Party shall minimize the extent to which paper documents are required if electronic copies are provided.
Article 5.10. Risk Management
1. Each Party shall adopt or maintain a risk management regime that enables its customs administration to focus enhanced customs controls on high-risk shipments and facilitates the release and movement of low-risk shipments.
2. Each Party shall administer risk management at the border, as well as in the pre-border and post-border environments.
3. Each Party shall base risk assessment on appropriate selectivity criteria.
4. Each Party shall design and apply risk management in a manner that avoids arbitrary or unjustifiable discrimination, or disguised restrictions on international trade.
5. In order to facilitate trade, each Party shall periodically review and update its risk management regime, as appropriate.
Article 5.11. Consistency
1. With a view to promoting transparency and predictability for traders, each Party shall adopt or maintain administrative measures that support consistency in the implementation and application of its customs laws and regulations throughout its territory. Those measures may include, among others, training for customs officials and the issuance of internal guidance or policy documents.
2. If an inconsistency is discovered in the implementation or application of its customs laws or regulations, the Party shall promptly seek to resolve the inconsistency, if practicable.
Article 5.12. Customs Valuation of Goods
1. For the purposes of determining the customs value of a good traded between the Parties, each Party shall apply the provisions contained in Part I and Annex I of the Customs Valuation Agreement.
2. With respect to customs valuation, each Party shall evaluate an imported good on its own merit, giving due consideration to the circumstances surrounding the individual importation. To this end, a Party shall not reject the application of the transaction value method under Article 1 of the Customs Valuation Agreement, solely based on the fact that the price declared for an imported good is lower than the prevailing market prices for an identical or similar good.
3. If a Party cannot determine the customs value of an imported good on the basis of the transaction value method under Article 1 of the Customs Valuation Agreement, the Party shall, prior to considering the applicability of Article 2 of the Customs Valuation Agreement:
(a) communicate to the importer in writing its grounds for not being able to determine the customs value on the basis of Article 1 of the Customs Valuation Agreement, accompanied with supporting evidence; and
(b) provide the importer with a reasonable opportunity to respond to the communication.
4. A Party shall inform the importer in writing of the customs value determined for each good imported, if different than that declared by the importer, and the method used to determine that value.
Article 5.13. Post-Clearance Audit
1. Notwithstanding the verification procedures set out in Article 4.9 (Origin Procedures – Verification of Origin), each Party shall adopt or maintain a post-clearance audit regime to ensure compliance with its customs laws and regulations.
2. Each Party’s post-clearance audit regime shall be administered for the purposes of, among other things:
(a) verifying the accuracy of the tariff classification, tariff treatment and customs valuation declared by an importer for a good previously cleared; and
(b) facilitating the consistency and accuracy of customs decisions.
3. Each Party shall conduct post-clearance audits according to risk-based selectivity criteria, as referred to in Article 5.10.
4. Each Party shall conduct post-clearance audits in a transparent manner that informs the audited person with respect to its laws, regulations, and procedures, and promotes future compliance. Once an audit is completed, a Party shall, without delay, notify the person whose records are audited of the audit results, the basis for the results, and the audited person’s rights and obligations.
5. Each Party shall provide in its laws or regulations, or otherwise give effect to, a fixed and finite period with respect to record-keeping obligations.
Article 5.14. Penalties
1. Each Party shall establish or maintain a penalty regime addressing breaches of its customs laws or regulations in relation to the importation, exportation, or transit of goods.
2. Each Party shall ensure that its penalties for breaches of customs laws or regulations are administered by its customs administration in a transparent and uniform manner throughout its territory.
3. Each Party shall ensure that a penalty imposed by its customs administration for a breach of its customs laws or regulations is imposed only on the person legally responsible for the breach.
4. Each Party shall ensure that a penalty imposed by its customs administration for a breach of its customs laws or regulations is based on the facts and circumstances of the case, including any previous breaches by the person receiving the penalty, and is commensurate with the nature and severity of the breach.
5. Each Party shall adopt or maintain measures to avoid conflicts of interest in the assessment and collection of penalties, duties, and taxes by its customs administration. No portion of the remuneration of a government official shall be calculated as a fixed portion or percentage of any penalties, duties, or taxes assessed or collected by the official or the customs administration.
6. Each Party shall ensure that when its customs administration imposes a penalty for a breach of its customs laws or regulations, it provides an explanation in writing to the person on whom the penalty is imposed specifying:
(a) the nature of the breach, including the specific laws or regulations concerned;
(b) the basis for determining the penalty amount if not set forth specifically in its laws, regulations, or procedures; and
(c) the rights and obligations of the person on whom the penalty is imposed.
7. Each Party shall provide in its laws, regulations, or procedures, or otherwise give effect to, a fixed and finite period within which its customs administration may initiate an administrative proceeding to impose a penalty relating to a breach of its customs laws or regulations. For greater certainty, this paragraph does not apply to quasi-judicial or judicial proceedings.
8. Each Party shall provide that a person may correct an error in a customs transaction that is a potential breach of customs laws or regulations, excluding fraud, prior to the discovery of the error by the Party, if the person does so in accordance with the Party’s laws, regulations, or procedures, and pays any owed duties, taxes, fees, and charges, including interest. The correction must include the identification of the transaction and the circumstances of the error. The Party shall not use this error to assess a penalty for a breach of its customs laws or regulations.
Article 5.15. Review and Appeal
1. With a view to providing effective, impartial, and easily accessible procedures for review and appeal of administrative determinations on customs matters, each Party shall ensure that any person to whom its customs administration issues an administrative determination has access, without reprisal and undue delay, to:
(a) an administrative review or appeal of the determination, by an administrative authority higher than or independent of the official or office that issued the determination; and
(b) a quasi-judicial or judicial review or appeal of the determination made at the final level of an administrative review.
2. Each Party shall provide a person to whom it issues an administrative determination with the reasons for the administrative determination and access to information on how to request a review or appeal.
3. For the purposes of this Article, “without reprisal” means that a Party shall not treat a request for review or appeal as a sign of non-compliance or defiance. A Party shall not treat a person that has filed a request for review or appeal less favourably than a person who has not filed a similar request, based solely on the filing of that request.
4. A Party shall not impose a fee or charge for an administrative review or appeal of an administrative determination. This Article does not prevent a Party from requiring full payment of assessed duties, taxes, penalties, or interest prior to filing a request for review or appeal.
5. Each Party shall adopt or maintain procedures that allow for a request for administrative review or appeal to be submitted through electronic means.
6. Each Party shall ensure that an authority conducting a review or appeal under paragraph 1 notifies the person, in writing, of its determination or decision, and the reasons for the determination or decision.
7. Each Party shall ensure that if a person receives a determination or decision on an administrative, quasi-judicial, or judicial review or appeal, as provided under paragraph 1, that determination or decision shall be applicable in the same manner throughout the territory of the Party with respect to that person.
8. With a view to ensuring predictability for traders and consistent application of its customs laws, regulations, and procedures, each Party is encouraged to apply determinations or decisions of administrative, quasi-judicial and judicial authorities under paragraph 1 to the practices of its customs administration throughout its territory.
Article 5.16. Protection of Trader Information
1. Each Party shall adopt or maintain measures governing the collection, protection, use, disclosure, retention, correction, and disposal of information that relates to a trader and that is collected by its customs administration for the purposes of administering or enforcing its customs laws and regulations.
2. Each Party shall, through its customs administration, treat as confidential all information that:
(a) is collected for the purposes of administering or enforcing its customs laws and regulations; and
(b) is by its nature confidential, or has been designated as confidential by the trader, by protecting it from use or disclosure that could prejudice the competitive position of the trader to whom the confidential information relates. For greater certainty, “information that is by its nature confidential” includes any trade, business, industrial, commercial or professional information, secret or process.
3. Notwithstanding paragraph 2, a Party may use or disclose confidential information but only for the purposes of administering or enforcing its customs laws and regulations or as otherwise provided under the Party’s law, including in an administrative, quasi-judicial, or judicial proceeding.
4. If confidential information is used or disclosed other than in accordance with this Article, the Party shall address the incident and strive to prevent a reoccurrence.
Article 5.17. Standards of Conduct
1. Each Party shall adopt or maintain measures to deter its customs officials from engaging in improper behaviour or action in the performance or exercise of their official duties, including any behaviour or action that may result in, or reasonably create the appearance of, the use of their position as a public official for personal or private gain.
2. Each Party shall provide a mechanism for a person to submit a complaint regarding perceived improper or corrupt behaviour of a customs official in its territory. Each Party shall take appropriate and timely action in response to a complaint in accordance with its laws, regulations, or procedures.
Article 5.18. Customs Cooperation
1. The customs administration of each Party shall designate one or more contact points for the purposes of this Chapter and provide the details of that contact point or contact points to the other Party.
2. Each Party may, through its customs administration, at any time request consultations with the customs administration of the other Party on any matter arising from the interpretation or administration of this Chapter. Consultations shall be conducted through the relevant contact point identified under paragraph 1 and shall be concluded within 60 days of the date of the request. The period of time for concluding consultations may be extended by the Parties’ customs administrations.
3. When a matter raised in a consultation under paragraph 2 cannot be resolved through consultations between the customs administrations, a Party may refer the matter to the Committee on Trade Facilitation, established under Article 5.20, for resolution.
4. This Article does not prevent a Party’s customs administration from rendering a decision, or taking any other action that it considers necessary, in accordance with its laws and regulations, pending a resolution of a matter under paragraphs 2 or 3.
Article 5.19. Authorized Economic Operators
1. Each Party shall maintain a trade facilitation partnership program for operators who meet specified criteria, referred to as the Authorized Economic Operator (“AEO”) program, in accordance with the SAFE Framework of Standards to Secure and Facilitate Global Trade, adopted at Brussels, June 2005, as amended.
2. The Parties may, as deemed necessary, exchange experiences on the operation of and improvements to their respective AEO programs, seeking to adopt, if appropriate, best practices.
Article 5.20. Committee on Trade Facilitation
1. The Parties hereby establish a Committee on Trade Facilitation composed of government representatives of each Party. Each Party shall provide the details of its government representatives to the other Party.
2. The Parties shall cooperate through the Committee on Trade Facilitation to ensure the appropriate and uniform interpretation and administration of the provisions contained in this Chapter.
3. Through the Committee on Trade Facilitation, the Parties shall explore and, where feasible and appropriate, promote the administration of measures beyond the obligations contained in the Trade Facilitation Agreement and this Chapter. In this regard, each Party shall:
(a) regularly review international initiatives on customs and trade facilitation; and
(b) as applicable, propose initiatives for consideration by the Committee on Trade Facilitation, if further joint action could facilitate trade between the Parties and promote shared multilateral objectives.
4. The Parties may, subject to available resources and as deemed appropriate, assist each other in relation to:
(a) developing and implementing best practices in customs matters, including risk management techniques;
(b) simplifying and harmonizing customs procedures;
(c) advancing technical skills and the use of technology;
(d) the tariff classification and valuation of goods; and