(m) “tariff classification” means the classification of goods according to the Harmonized System including its General Interpretative Rules and Explanatory Notes;
(n) “territorial waters” means waters extending up to 12 nautical miles from the baseline as defined by the Parties in line with the United Nations Convention on the Law of the Sea (UNCLOS);
(o) “territory” means the territory of the Party including its territorial waters and the air space above its territorial waters and the other maritime zones including the Exclusive Economic Zone and Continental Shelf over which the Party has sovereignty, sovereign rights or exclusive jurisdiction in accordance with its laws in force, the 1982 United Nations Convention on the Law of the Sea and international law;
(p) “value of non-originating materials” means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the territory of a Party.
Article 3.2. ORIGIN CRITERIA
1. For the purposes of this Agreement, a product shall be considered as originating in a Party and eligible for preferential tariff treatment, if:
(a) it has been wholly obtained in a Party, in accordance with Article 3.3; or
(b) it meets the product specific rules (PSRs) listed in Annex 5.
The value addition criteria for PSRs listed in Annex 5 is defined as
Value addition = [FOB value of export - (CIF value of non-originating material + value of material of undetermined origin)]/ [FOB value of export]
or
Value addition = [cost of originating material + direct labour cost + direct overhead cost + profits]/ [FOB value of export]
2. Notwithstanding paragraph 2 above, the final manufacture before export must have occurred in the Party of export.
Article 3.3. WHOLLY PRODUCED OR OBTAINED PRODUCTS
Within the meaning of Article 3.2.1(a), the following products shall be considered as being wholly obtained or produced in the territory of a Party:
(a) Plants and plant products grown and harvested in a Party;
(Note: For the purposes of this subparagraph, the term "plant" refers to all plant life, including fruit, flowers, vegetables, trees, seaweed, fungi and live plants.)
(b) Live animals born and raised there and products from such animals;
(c) Products obtained by hunting, trapping, fishing or aquaculture conducted in the party;
(d) Fish and fish products taken from the sea outside the territorial waters of that party by a vessel registered in that Party and flying its flag;
(e) Mineral goods and other naturally occurring substances extracted from or beneath its soil, waters or seabed;
(f) Waste and scrap resulting from utilisation, consuming or manufacturing operations conducted in the territory of any of the Parties, provided they are fit only for the recovery of raw materials;
(9) products manufactured there exclusively from those specified in subparagraphs (a) to (f) above.
Article 3.4. DE MINIMIS
Notwithstanding Article 3.2.1 on the origin Cciteria, non-originating materials that do not meet either the Wholly Obtained criteria listed in Articles 3.3 or CTC, if applicable in the product specific rule (PSR) shall be deemed as originating if:
(a) their total value does not exceed 12.5% of the FOB price of the export product.
(b) and in case of textiles and clothing under HS chapters 50-63, the weight of the non-originating material is less than 7% of the total weight of the materials used in the export product.
Article 3.5. MINIMAL OPERATIONS AND PROCESSES
1. Notwithstanding any provisions in this text, a product shall not be considered as originating in a Party if any of the following operations are undertaken exclusively by itself or in combination in the territory of that Party:
(a) operations to ensure the preservation of products in good condition during transport and storage (such as drying, freezing or thawing, keeping in brine, removal of damaged parts) and other similar operations;
(b) changes of packaging and breaking up and assembly of packages;
(c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) for textiles:
(i) attaching accessory articles such as straps, bands, beads, cords, rings and eyelets;
(ii) ironing or pressing of textiles; (e) simple painting and polishing;
(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(g) operations to colour sugar or form sugar lumps;
(h) peeling and removal of stones and shells from fruits, nuts and vegetables; (i) sharpening, simple grinding or simple cutting;
(i) simple operations such as removal of dust, sifting, screening, sorting, classifying, grading, matching;
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(m) simple mixing of products, whether or not of different kinds;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(o) slaughter of animals; or (p) simple testing, calibration, inspection or certification.
For the purposes of paragraph 1 above, "simple" describes an activity which need neither special skills nor machines, apparatus or equipment especially produced or installed to carry out the activity.
Article 3.6. BILATERAL CUMULATION
For the purposes of determining whether a product qualifies as an originating product of a Party, an originating material of the other Party which is used as a material in the production of the product in the former Party may be considered as an originating material of the former Party, provided that such material has undergone its last production process in the former Party which goes beyond the operations provided for in Article 3.5.
Article 3.7. PACKAGES AND PACKING MATERIALS AND CONTAINERS
1. The packages and packing materials for retail sale, when classified together with the packaged product, shall not be taken into account for considering whether all non-originating materials used in the manufacture of a product fulfil the criterion corresponding to a change of tariff classification of the said product.
2. Where a product is subject to an ad-valorem percentage criterion, the value of the packages and packing materials for retail sale shall be taken into account in its origin assessment, in case the packing is considered as forming a whole with products.
3. The containers and packing materials exclusively used for the transport of a product shall not be taken into account for determining the origin of any product.
Article 3.8. ACCESSORIES, SPARE PARTS AND TOOLS AND SETS
1. Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment as per standard trade practice and which value is included in its FOB price, or which are not separately invoiced, shall be considered as part of the product in question.
2. Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating provided that the value of the non-originating products does not exceed 10 per cent of the FOB value of the set. A Party applying this rule shall not use the de-minimis criteria in Article 3.4 for originating products of the Set.
Article 3.9. INDIRECT MATERIALS
Neutral elements, which have not entered into the final composition of the product, such as energy and fuel, plant and equipment, or machines and tools, shall not be taken into account when the origin of that product is determined.
Article 3.10. ACCOUNTING SEGREGATION
1. Where identical and interchangeable originating and non-originating materials including materials of undetermined origin are used in the manufacture of a product, those materials shall be physically segregated, according to their origin, during storage.
2. Notwithstanding paragraph 1 of this Article, a producer facing considerable costs or material difficulties in keeping separate stocks of identical and interchangeable originating and non-originating materials including materials of undetermined origin used in the manufacture of a product, may use the so-called "accounting segregation" method for managing stocks.
3. The accounting method shall be recorded, applied and maintained in accordance with Generally Accepted Accounting Principles (GAAP) (1) applicable in the Party in which the product is manufactured. The method chosen must:
(a) permit a clear distinction to be made between originating and non-originating materials including materials of undetermined origin acquired and/or kept in stock; and
(b) guarantee over the relevant accounting period of twelve months that no more products receive originating status than would be the case if the materials had been physically segregated.
A producer using an inventory management system shall keep records of the operation of the system that are necessary for the customs administration of the Party concerned to verify compliance with the provisions of this Chapter.
4. The competent authority may require from its exporters that the application of the method for managing stocks as provided for in this Article will be subject to prior authorisation.
Article 3.11. TRANSPORT
1. Preferential treatment in accordance with this Agreement shall only be granted to originating products that are transported directly between the Parties.
2. Notwithstanding paragraph 1 above, an originating product may be transported through territories of non-parties for the purpose of transit or temporary storage in warehouses in such non-Parties, provided that it:
(a) does not undergo operations other than unloading, reloading, or any operation designed to preserve it in good condition; and
(b) remain under customs control and has not entered into trade or consumption in those non-Parties.
If an originating product of the other Party does not meet the consignment criteria referred to in paragraph 2 above, the product shall not be considered as an originating product of the other Party.
3. An importer shall upon request supply appropriate evidence to the customs authorities of the Party of import that the conditions set out in paragraph 2 have been fulfilled.
Article 3.12. PROOF OF ORIGIN
1. For products originating in a Party and otherwise fulfilling the requirements of the text on Rules of Origin, the Proof of Origin of an export product will be provided either through:
(a) an origin declaration on a commercial document completed by an approved exporter established in the Party, in accordance with the provisions of Annex 6; or
(b) a certificate of origin, whether in a printed form or such other medium, including electronic format, issued by the competent authorities of either Party, listed in Annexes 7 and 8. The format of the Certificate of Origin is at Annex 9. Issuance and acceptance of electronic certificate of origin would be in accordance with each Party's national legislation.
A Certificate/Statement of Origin or Origin declaration shall be valid for twelve months from the date of issue in the exporting Party.
2. Notwithstanding paragraph 1, importing parties shall not require a Proof of Origin if the importing party has waived the requirement or does not require the importer to present a Proof of Origin as per their national laws.
3. Proof of Origin shall be submitted to the customs authorities of the importing country in accordance with the procedures applicable in that Party.
Article 3.13. CERTIFICATION AND DECLARATION OF ORIGIN
1. The proof of origin shall be In English.
2. The Certificate of Origin shall be in the form specified in this Chapter and in light pink.
3. The Certificates of Origin shall bear a unique sequential serial number affixed by the Issuing Authority in the exporting party.
4. The Certificate of Origin shall be valid for only one import and shall include one or more goods.
5. The number and date of the commercial invoice or any other relevant documents shall be indicated in the box reserved for this purpose in the Certificate of Origin.
6. The Proof of Origin shall be submitted within its validity period.
7. In exceptional circumstances, the Proof of Origin may be accepted by the customs authority in importing Party for the purpose of granting preferential tariff treatment even after the expiry of its validity provided the failure to observe the time limit results from force majeure or other valid reasons beyond the control of the exporter and the goods have been imported before the expiry of the validity period of the said Proof of Origin.
8. The Certificate of Origin or the origin declaration shall be forwarded by the exporter to the importer. The Customs authorities may require the original copy.
9. No erasures and superimpositions shall be allowed on the Proof of Origin. The alterations if any, shall be made by striking out the errors and making any addition required and such alterations shall be approved and certified by an official authorised to sign the Certificate of Origin, or the approved exporter and unused spaces shall be crossed out to prevent any subsequent addition.
10. The Certificate of Origin shall be issued at the time of exportation, but under exceptional cases, where a Certificate of Origin has not been issued at the time of exportation or within five(5) working days from the date of shipment due to involuntary errors or omissions, or any other valid reasons, the Certificate of Origin may be issued retrospectively, bearing the words "ISSUED RETROSPECTIVELY" in box 8 of the Certificate of Origin or the origin declaration, as the case may be, with the issuing authority or the approved exporter, also recording the reasons in writing on the exceptional circumstances due to which the certificate was issued retrospectively. The Certificate of Origin or the origin declaration can be issued/made retrospectively within twelve months from the date of shipment.
11. Inthe event of theft, loss or destruction of a Certificate of Origin, the exporter may apply in writing to the issuing authority for a certified true copy of the original made on the basis of the export documents in their possession bearing the endorsement of the words âCERTIFIED TRUE COPYâ (in lieu of the original certificate). This copy shall bear the date of the original Certificate of Origin. The certified true copy of a Certificate of Origin shall be issued not later than one year from the date of issuance of the original Certificate of Origin. Similarly, an approved exporter may also issue a certified true copy of the Origin Declaration which shall be issued not later than one year from the date of issuance of the original origin declaration. The exporter shall immediately notify the loss and undertake not to use the original Certificate of Origin for exports under this Agreement to the competent authority.
12. Minor discrepancies between the Proof of Origin and the documents submitted to the customs authority at the port of importation for the purpose of carrying out the formalities for importing the products shall not ipso facto invalidate the Proof of Origin, if such Proof of Origin corresponds to the products under importation. Minor discrepancies include typing errors or formatting errors, subject to the condition that these minor errors do not affect the authenticity of the Proof of Origin or the accuracy of the information included in the Proof of Origin. Discrepancies in the specimen signatures or seals of the issuing authority shall not be regarded as minor discrepancies.
Article 3.14. THIRD PARTY INVOICING
When a good to be traded is invoiced by a non-Party trader, the producer, manufacturer or exporter of the originating Party shall inform, in the field titled "Remarks" of the Certificate of Origin, that the goods shall be invoiced from that non-Party trader, reproducing the following data from the commercial invoice issued by the non-party trader: name, and address of the non-party trader, invoice number and date.
Article 3.15. AUTHORITIES
1. The Certificate of Origin shall be issued by authorities designated by the Parties (hereinafter referred to as Issuing Authority).
2. Each party shall inform the Competent Authorities and the Customs Administration of other Party of the names and addresses of the officials of the issuing authority/authorised exporters designated to issue Certificates/Statements of Origin under this agreement. They shall also provide the specimen signatures and specimen official seals of the officials of the issuing authorities.
3. Each Party shall intimate the name, designation and contact details (address, phone number, fax number, e-mail) of its authorities-
(i) to whom the specimen seals and signatures of the Issuing Authorities of the other Party should be communicated
India: Central Board of Indirect Taxes and Customs, Department of Revenue, Government of India
Mauritius: Mauritius Revenue Authority, Customs Department
(ii) to whom the references of verification of Proof of Origin issued by the Party, should be addressed
India: Department of Commerce, Government of India
Mauritius: Mauritius Revenue Authority, Customs Department
(iii) from whom the specimen seals and signatures of the Issuing Authorities of the other Party would be received
India: Department of Commerce, Government of India
Mauritius: Mauritius Revenue Authority, Customs Department
(iv) from whom references would emanate for verification of Proof of Origin issued by the other Party
India: Central Board of Indirect Taxes and Customs, Department of Revenue, Government of India
Mauritius: Mauritius Revenue Authority, Customs Department
4. Any change in names, designations, addresses, specimen signatures or officialsâ seals shall be promptly informed to the other Party.
Article 3.16. DOCUMENTS FOR THE APPLICATION OF PROOF OF ORIGIN
1. For the issue of a Certificate of Origin, the final producer, manufacturer or exporter of the good shall present, or submit electronically through the approved channel, to the issuing authority of the exporting Party -
(a) set of minimum information requirements referred to in Annex 4 in whichever form or format as may be required by the competent authority; and
(b) the corresponding commercial invoice or other documents necessary to establish the origin of the good.
2. In case of origin declaration, approved exporter should maintain the documents referred to in paragraph 1 of this Article
3. The description of the good and its tariff classification in the minimum required information, shall correspond with the description of the good in the commercial invoice.
4. The Issuing Authority may apply a risk management system in order to selectively conduct pre-export verification of the minimum required information filed by an Exporter/Producer/Manufacturer/Approved Exporter. The verification may, at the discretion of the issuing authority, include methods such as obtaining detailed cost sheets, and conducting a factory visit.
Article 3.17. PRESERVATION OF DOCUMENTS
The Issuing Authorities shall keep the minimum required information and supporting documents for a period no less than five (5) years, as from the date of issue.
Article 3.18. OBLIGATION OF THE EXPORTER/PRODUCER/MANUFACTURER/APPROVED EXPORTER
1. The Exporter/Producer/Manufacturer/Approved Exporter shall submit minimum required information, as referred in Article 3.16.1, and supporting documents for issue of Certificate of Origin as per procedure followed by the Issuing Authority in the exporting party only in cases where a good conforms to the Rules of Origin provided in this Agreement.
2. Any Exporter/Producer/Manufacturer/Approved Exporter who falsely represents any material information relevant to the determination of origin of a good shall be liable to be penalised under the domestic laws of the exporting Party.
3. The Exporter/Producer/Manufacturer/Approved Exporter shall keep the minimum required information, as referred in Article 3.16.1, and supporting documents for a period no less than five (5) years, starting from the end of the year of the date of its issue.
4. For the purpose of determination of origin, the Exporter/Producer/ Manufacturer/Approved Exporter applying for a Certificate of Origin or Origin Declaration under this agreement shall maintain appropriate commercial accounting records for the production and supply of goods qualifying for preferential treatment and keep all commercial and customs documentation relating to the material used in the production of the good, for at least five years from the date of issue of the Proof of Origin
5. These obligations also apply to suppliers who provide the Exporter/Producer/ Manufacturer/Approved Exporter with the declarations certifying the originating status of the goods supplied.
6. The Exporter/Producer/Manufacturer/Approved Exporter shall upon request of the competent authority of the exporting party where the Proof of Origin or the origin declaration has been issued, make available records for inspection to enable verification of the origin of the good.
7. The Exporter/Producer/Manufacturer/Approved Exporter shall not deny any request for a verification visit, agreed between the competent authority of the exporting party and the customs administration of the importing party, in terms of this Article. Any failure to consent to a verification visit shall be liable for a denial of preferential benefits claimed under this agreement.
8. The Exporter/Producer/Manufacturer/Approved Exporter shall undertake to notify all parties to whom the Certificate or statement was given of any change that could affect its accuracy or validity.
Article 3.19. PRESENTATION OF CLAIM FOR PREFERENTIAL TREATMENT
1. The importer shall make the claim for preferential treatment before the customs authority of the importing Party at the time of importation of goods. For the purpose of claiming the preferential tariff treatment for an originating good, the original copy of the Proof of Origin as referred to in Article 3.12 shall be submitted to the customs authority of the importing Party together with the documents required at the time of customs clearance of the goods for the importation in accordance with the laws and regulations of the importing Party, including the original Proof of Origin if so required.
2. lf a claim for preferential treatment is made without producing the original copy of the Proof of Origin as referred to in Article 3.12, the customs authority of the importing Party may deny preferential treatment and request a guarantee in any of its modalities or may take any action necessary in order to preserve fiscal interests, as a pre-condition for the completion of the importation operations subject to and in accordance with the laws and procedures of the importing Party, including the original Proof of Origin if so required.
Article 3.20. VERIFICATION OF CERTIFICATES OF ORIGIN/STATEMENT OF ORIGIN
1. The customs authority of the importing Party, may initiate a verification relating to the authenticity of a Proof of Origin referred to in Article 3.12.1. as well as the veracity of the information contained therein, in accordance with the procedures established in this agreement, in cases of doubt or on random basis.
2. In so far as possible, the customs authority of the importing party conducting a verification shall seek necessary information or documents relating to the origin of imported good from the importer, in accordance with its domestic laws and regulations, before making any request to the competent authority of the exporting party for verification.
3. In cases where the customs authority of the importing party deems it necessary to seek a verification from the competent authority of the exporting party, it shall specify whether the verification is on random basis or the veracity of the information is in doubt. In case the determination of origin is in doubt, the customs authority shall provide detailed grounds for the doubt concerning the veracity of Proof of Origin.
4. The proceedings of verification of origin as provided in this Chapter shall also apply to the goods already cleared for home consumption.
Article 3.21. PROCEDURE FOR VERIFICATION
1. Any request made pursuant to Article 3.20 shall be in accordance with the following procedure, namely:
(a) The customs authority of the importing party shall make a request for verification by providing a copy of the Proof of Origin on Invoice and Bill of Lading or Airway Bill.
(b) The customs authority of the importing party shall specify whether it requires a verification of the genuineness of the Proof of Origin to rule out any forgery or seek the minimum required information or seek to verify the determination of origin.
(c) In cases where the customs authority of the importing party seeks to verify the determination of origin, it shall send a questionnaire to the competent authorities of the exporting Party, which shall be passed on to the Exporter/Producer/Manufacturer/Approved Exporter, for such inquiry or documents, as necessary.
(d) The competent authority of the exporting Party shall provide the information and documentation requested, within:
(i) fifteen (15) days of the date of receipt of the request, if the request pertains to the authenticity of issue of the Proof of Origin, including the seal and signatures of the issuing authority;
(ii) thirty (30) days of the date of receipt of the request, if the request seeks a copy of the relevant document with the minimum required information.
(iii) ninety (90) days from the date of receipt of such request, if the request
is on the grounds of suspicion of the accuracy of the determination of origin of the product. Such period can be extended through mutual consultation between the customs authority of the importing party and issuing authority of the exporting party for a period no more than sixty (60) days.
(e) On receiving the results of the verification check pursuant to clause (d), the customs authority of the importing Party deems it necessary to request for further investigative actions or information, the customs authorities of the importing Party shall communicate the fact to the competent authority of the exporting Party. The term for the execution of such new actions or for the presentation of additional information shall be not more than ninety (90) days, from the date of the receipt of the request for the additional information.
(f) If, on receiving the results of the verification pursuant to clause (d) or clauses (d) and (e), the competent authorities of the importing Party deem it necessary, it may deliver a written request to the competent authority of the exporting Party to facilitate a visit to the premises of the Exporter/Producer/Manufacturer/Approved Exporter, with a view to examining the records, production processes, as well as the equipment and tools utilised in the manufacture of the good under verification.
(g) The request for a verification visit shall be made not later than 30 days of the receipt of the verification report referred to in clause (d) or/and clause (e). The requested party shall promptly inform the dates of the visit, but not later than 45 days of the receipt of request and give a notice of at least 21 days to the requesting party and Exporter/Producer/Manufacturer/Approved Exporter so as to enable arrangements for the visit.