(h) The competent authorities of the exporting Party shall accompany the authorities of the importing Party in their above-mentioned visit, which may include the participation of specialists who shall act as observers. Each Party can designate specialists, who shall be neutral and have no interest whatsoever in the verification. Each Party may deny the participation of such specialists whenever the latter represent the interests of the companies involved in the verification.
(i) Once the visit is concluded, the participants shall subscribe to a "Record of Visit". The said record shall contain the following information: date and place of the carrying out of the visit; identification of the Certificate of Origin or the origin declaration which led to the verification; identification of the goods under verification; identification of the participants, including indications of the organs and institutions to which they belong; and a record of proceedings.
Article 3.22. RELEASE OF GOODS
Upon reasonable suspicion regarding the origin of the goods, the importing Party may 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 country.
Article 3.23. CONFIDENTIALITY
1. The information obtained by the customs authority of the importing party can be utilised for arriving at a decision regarding the determination of origin in respect of the good under verification and can be used in the legal proceedings under its laws for the time being in force.
2. Both parties shall protect the information from any unauthorized disclosure in accordance with their respective laws.
Article 3.24. DENIAL OF PREFERENTIAL TREATMENT
1. The customs authority of the importing party may deny the claim for preferential tariff treatment or recover unpaid duties in accordance with its laws and regulations, where -
(a) the customs authority of the importing party determines that the goods does not meet the requirements of the Rules of Origin under the agreement;
(b) the Exporter/Producer/Manufacturer/Approved Exporter of the goods fails to maintain records or documentation necessary for determining the origin of the good or denies access to the records, documentation or visit for verification;
(c) the Exporter/Producer/Manufacturer/Approved Exporter of the goods fails to provide sufficient information that the importing party requested to determine that the good is an originating good;
(d) the Exporter/Producer/Manufacturer/Approved Exporter denies access to the records or production facilities during a verification visit;
(e) the competent authorities of the exporting Party fails to provide sufficient information in pursuance to a written request for verification within stipulated time lines stated in Article 3.21;
(f) the information provided by the competent authority of the exporting Party or exporter or producer or manufacturer or approved exporter is not sufficient to prove that the good qualifies as an originating good as defined under this agreement.
2. In cases where the Proof of Origin is rejected by the customs authorities of the importing Party, after following the due process provided under its domestic laws, a copy of the decision, containing the grounds of rejection, shall be provided to the importer and the competent authority of the exporting party. The customs authority of the importing party shall alongside of communicating this decision also return the original Proof of Origin to the competent authority of the exporting party.
3. Upon being communicated the grounds for denial of preferential tariff treatment, the Exporter/Producer/Manufacturer/Approved Exporter in the exporting party may within the period provided for in the customs law of the importing party file an appeal against such decision with the appropriate appellate authority under the customs laws of the importing party.
Article 3.25. GOOD COMPLYING WITH RULES OF ORIGIN
If a verification conducted under Article 3.20 determines the goods to be complying with the Rules of Origin under the agreement, the importer shall be promptly refunded the duties paid in excess or guarantees obtained in accordance with the domestic legislation of the Parties.
Article 3.26. NON-COMPLIANCE OF THE GOOD WITH THE RULES OF ORIGIN
If a verification under Article 3.20 establishes non-compliance of the goods with the Rules of Origin, duties shall be levied in accordance with the domestic legislation of the importing Party in addition to any other action that may be taken under any laws for the time being in force.
Article 3.27. PROSPECTIVE RESTORATION OF PREFERENTIAL BENEFITS
1. Where preferential treatment to a good has been denied by the customs authority of the importing party, the Exporter/Producer/Manufacturer/Approved Exporter may take recourse to the procedure in paragraph (2) of this article in respect of future exports to importing party.
2. Such Exporter/Producer/Manufacturer/Approved Exporter shall clearly demonstrate to the issuing authority of the exporting party that the manufacturing conditions were modified so as to fulfil the origin requirements of the Rules of Origin under this agreement.
3. The competent authorities of the exporting Party shall send the information to the customs authority of the Importing party explaining the changes carried out by Exporter/Producer/Manufacturer/Approved Exporter in the manufacturing conditions as a consequence of which the goods fulfil the origin criterion.
4. The competent authorities of the importing Party shall within forty-five (45) days, from the date of the receipt of the said information, request for a verification visit to the producer's premises, if deemed necessary, for satisfying itself of the veracity the claims of the Exporter/Producer/Manufacturer/Approved Exporter referred in paragraph (2) of this article.
5. If the competent authorities of the importing and the exporting Parties fail to agree on the fulfilment of the compliance of the Rules of Origin subsequent to the modification of the manufacturing conditions, they may refer the matter to the Joint Technical Committee established under Article 3.31 for a decision.
Article 3.28. TEMPORARY SUSPENSION OF PREFERENTIAL TREATMENT
1. The Importing Party may suspend the tariff preference in respect of a good originating in the exporting party, when the withdrawal is justified due to persistent failure to comply with the provisions of these rules by an Exporter/Producer/Manufacturer/Approved Exporter in the exporting party or a persistent failure on part of the competent authority to respond to a request for verification.
2. The exporting Party shall, within fifteen days of suspension of preferential tariff benefits for a good, be notified of the reasons for such suspension.
3. Upon receipt of the notification for suspension, the competent authority of exporting Party may request for consultations.
4. The consultations may occur by means of e-mail communications, video conference and/or meetings and may also involve joint verification, or as mutually agreed.
5. Pursuant to the consultations between both parties, and such measures as may be mutually agreed, both parties shall resolve to:
(a) restore preferential benefit to the good with retrospective effect; or
(b) restore preferential benefit to the good with prospective effect, subject to implementation of any mutually agreed measures by one or both Parties; or
(c) continue with the suspension of preferential benefits to the good, subject to remedies available under Article 3.27 of this Chapter.
Article 3.29. PENALTIES
1. Each Party shall adopt or maintain measures that provide for the imposition of civil, administrative, and, where appropriate, criminal sanctions for violations of its customs laws and regulations, including those governing tariff classification, customs valuation, rules of origin, and the entitlement to preferential tariff treatment under this Agreement.
2. Nothing contained in this Agreement shall preclude the application of the respective national legislation relating to breach of customs laws or any other law for the time being in force on the importer or Exporter/Producer/Manufacturer/Approved Exporter in both the territories of both Parties.
Article 3.30. RELEVANT DATES
The time periods set in this Chapter shall be calculated on a consecutive day basis as from the day following the fact or event which they refer to.
Article 3.31. COOPERATION
1. Both parties agree to notify a Joint Technical Committee to oversee the implementation of this Chapter.
2. The Joint Technical Committee shall comprise of officials of the competent authorities, customs administration and issuing authorities.
3. The Joint Technical Committee shall meet at least once a year for the furtherance of the objectives of this Chapter including, aiming at enhancing mutual capacity building for the smooth implementation of the procedures envisaged in this Chapter and explore ways and means of utilising information technology enabled services for the issue and verification of Certificates of Origin.
4. The Customs Administrations of both parties shall endeavour to conclude a Mutual Customs Cooperation Agreement.
Chapter 4. SANITARY AND PHYTOSANITARY MEASURES
Article 4.1. DEFINITIONS
For the Purposes of this Chapter:
1. The definitions under Annex A of the SPS Agreement shall apply.
2. Relevant definitions developed by Codex Alimentarius Commission ("Codex"), the World Organisation for Animal Health ("OIE"), and the International Plant Protection Convention ("IPPC") shall apply.
3. In the event of any conflict between the definitions under the SPS Agreement and any of the other sources specified in paragraph 2 of this Article, the definitions under the SPS Agreement shall prevail.
4. Competent authorities mean those authorities within each Party recognized by the national government as responsible for developing and administering the SPS measures within that Party.
5. SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A of the WTO Agreement.
6. An emergency measure means a sanitary or phytosanitary measure that is applied by a Party to products of another Party to address an urgent problem of human, animal or plant life or health protection that arises or threatens to arise in the Party applying the measure.
Article 4.2. GENERAL PROVISION
1. The Parties affirm their rights and obligations with respect to each other under the SPS Agreement.
Article 4.3. EQUIVALENCE
1. Both Parties shall strengthen cooperation on equivalence in accordance with the SPS Agreement while taking into account relevant decisions of the WTO SPS Committee and international standards, guidelines and recommendations.
2. The importing Party shall recognize the equivalence of an SPS measure if the exporting Party objectively demonstrates to the importing Party that its measure achieves the same level of protection as the importing Partyâs measure or that its measure has the same effect in achieving the objective as the importing Party's measure.
3. In determining equivalence, the importing Party shall take into account existing knowledge, information and experience as well as the regulatory competence of the exporting Party.
4. A Party shall, upon request, enter into consultation with the aim of achieving bilateral recognition arrangements of equivalence of specified sanitary and phytosanitary measures. The recognition of equivalence may be with respect to a single measure, group of measures or on a systems-wide basis. For this purpose, reasonable access shall be given, upon request, to the importing Party for inspection, testing and other relevant procedures.
5. As part of the consultation for equivalence recognition, on request by the exporting Party, the importing Party shall explain and provide:
(a) the rationale and objective of its measures; and
(b) the specific risks its measures are intended to address.
6. The exporting Party shall provide necessary information in order for the importing Party to commence an equivalence assessment. Once the assessment commences, the importing Party shall without undue delay, on request, explain the process and plan for making equivalence determination.
7. The consideration by a Party of a request from the other Party for recognition of equivalence of its measures with regard to a specific product, or group of products, shall not be in itself a reason to disrupt or suspend ongoing imports from the Party of the product(s) in question.
8. When the importing Party recognizes the equivalence of the exporting Party's specific sanitary and phytosanitary measure, group of measures or measures on a systems-wide basis, the importing Party shall communicate the decision in writing to the exporting Party and implement the measure within a reasonable period of time. The rationale shall be provided in writing by the importing Party in the event that the decision is negative.
9. The importing Party may withdraw or suspend equivalence on the basis of any amendment by one of the Parties of measures affecting equivalence, in accordance with the following provisions:
(a) the exporting Party shall inform the importing Party of any proposal for amendment of its measures for which equivalence of measures is recognised and the likely effect of the proposed measures on the equivalence which has been recognised;
(b) within sixty working days of receipt of this information, the importing Party shall inform the exporting Party whether or not equivalence would continue to be recognized on basis of the proposed measures;
(c) the importing Party shall inform the exporting Party of any proposal for amendment of its measures on which recognition of equivalence has been based and the likely effect of the proposed measures on the equivalence which has been recognized; and
(d) in case of non-recognition or withdrawal or suspension of equivalence, the importing Party shall indicate to the exporting Party the required conditions on which the process referred to in paragraph 5 may be reinitiated, provided that the timelines of paragraph 6 shall be adhered to in any process for re-assessment of equivalence.
10. The withdrawal or suspension of equivalence rests solely with the importing Party acting in accordance with its administrative and legislative framework, which shall adhere to the international guidelines, standards and recommendations. The importing Party shall provide to the exporting Party, upon request explanation except confidential data for its determinations and decisions.
Article 4.4. ADAPTATION TO REGIONAL CONDITIONS, INCLUDING PEST OR DISEASE-FREE AREAS AND AREAS OF LOW PEST OR DISEASE PREVALENCE
1. Both Parties recognize the concepts of regional conditions, including pest- or disease-free areas and areas of low pest or disease prevalence. Parties shall take into account the relevant decisions of the WTO SPS Committee and international standards, guidelines and recommendations.
2. Both Parties may cooperate on the recognition of regional conditions with the objective of acquiring confidence in the procedures followed by each other for such recognition.
3. At the request of the exporting Party, the importing Party shall, without undue delay, explain its process and plan for making the determination of regional conditions.
4. When the importing Party has received a request for a determination of regional conditions and has determined that the information provided by the exporting Party is sufficient, it shall initiate the assessment within a reasonable period of time.
5. For this assessment, reasonable access shall be given, upon request, to the importing Party for inspection, testing and other relevant procedures.
6. On request of the exporting Party, the importing Party shall inform the exporting Party of the status of the assessment.
7. When the importing Party recognizes specific regional conditions of an exporting Party, the importing Party shall communicate that decision to the exporting Party in writing and implement the measures within a reasonable period of time.
8. If the evaluation of the evidence provided by the exporting Party does not result in a decision by the importing Party to recognise the regional conditions, the importing Party shall provide the exporting Party the rationale for its decision in writing within a reasonable period of time.
Article 4.5. RISK ANALYSIS
1. Both Parties shall strengthen cooperation on risk analysis in accordance with the SPS Agreement while taking into account the relevant decisions of the WTO SPS Committee and international standards, guidelines and recommendations.
2. If the importing Party requires a risk analysis to evaluate a request from the exporting Party to authorise importation of a good of that Party, the importing Party shall provide, on request of the exporting Party, an explanation of the information required for the risk assessment.
3. On receipt of the required information from the exporting Party, the importing Party shall endeavour to facilitate the evaluation of the request for authorisation.
4. Upon request by the exporting Party, the importing Party shall inform the exporting Party of the progress of the specific risk analysis request, and of any delay that may occur during the process.
5. Without prejudice to emergency measures, no Party shall stop the importation of a good of the other Party solely for the reason that the importing Party is undertaking a review of an existing SPS measure, if the importing Party permitted importation of the good of the other Party at the time of the initiation of the review.
Article 4.6. AUDIT, CERTIFICATION, AND IMPORT CHECKS
1. The Parties shall ensure that their import procedures comply with Annex C of the SPS Agreement including but not limited to audit, certification, and import checks.
2. When conducting an audit, the Parties agree that:
(a) Audits shall be systems based and designed to check the effectiveness of the regulatory controls of the competent authorities of the exporting Party. Audits may include an assessment of the competent authoritiesâ control programme, including, where appropriate, reviews of the inspection and audit programmes, and on-site inspections of facilities, without prejudice to the rights of a Party to seek market access on the basis of individual inspection and audits.
(b) Prior to commencement of an audit, both Parties shall discuss and agree, inter alia:
(i) the rationale for and the objectives and scope of the audit;
(ii) the criteria or requirements against which the exporting Party will be assessed; and
(iii) the itinerary and procedures for conducting the audit.
(c) The auditing Party shall provide the audited Party the opportunity to comment on the finding of an audit and take any such comments into account before making its conclusions and taking any action.
(d) Any decisions or actions taken by the auditing Party as a result of the audit shall be supported by objective evidence and data which can be verified, taking into account the knowledge, relevant experience, and confidence that the auditing Party has with the audited Party. Any such objective evidence and data shall be provided to the audited Party on request.
(e) Any costs incurred by the auditing Party shall be borne by the auditing Party, unless both Parties agree otherwise.
(f) The auditing Party and the audited Party shall each ensure that procedures are in place to prevent the disclosure of confidential information acquired during the auditing process.
3. When conducting Certification, the Parties agree that:
(a) Where certification is required for trade in a product, the importing Party shall ensure such certification is applied, in meeting its SPS objectives, only to extent necessary to protect human, animal and plant life or health.
(b) In applying certification requirements, each Party shall take into account relevant decisions from the WTO SPS Committee and international standards, guidelines and recommendations.
(c) The Parties shall promote the implementation of electronic certification and other technologies to facilitate trade.
(d) Without prejudice to each Party's right to import controls, the importing Party shall accept certificates issued by the Competent Authorities in compliance with the regulatory requirements of the importing Party.
4. When conducting Import Checks, the Parties agree that:
(a) Both Parties shall ensure that their control, inspection and approval procedures are in accordance with Annex C of the SPS Agreement.
(b) The import checks applied to imported animals, animal products, plants and plant products traded between the Parties shall be based on the risk associated with such importations. The import checks shall be carried out in a manner that is least trade-restrictive and without undue delay, and shall be based on the following:
(i) in carrying out the checks for health purposes, the importing Party shall ensure that the plants and plant products, animal products and other goods and their packaging are inspected by a representative sample;
(ii) in the event that the checks reveal non-conformity with the relevant standards or requirements, the importing Party shall take measures appropriate to the risk involved;
(iii) unless there is a clearly identified risk in holding that consignment, the consignments shall not be destroyed without affording an opportunity to the importer to take back the consignment.
The Parties reaffirm Article V of GATT 1994 and agree that there shall be freedom of transit for goods in transit. The inspection of goods may be carried out in the event of identifiable SPS risks.
Article 4.7. TRANSPARENCY
1. The Parties recognise the importance of transparency as set out in Article 7 and Annex B of the WTO SPS Agreement.
2. The Parties recognise the importance of exchange of information on the development, adoption and application of SPS measures that may have significant effects on trade between the Parties.
3. In implementing this Article, both Parties shall take into account relevant decisions of the WTO SPS Committee and international standards, guidelines and recommendations.
4. A Party, upon reasonable request from another Party, shall provide relevant information and clarification regarding any SPS measure to the requesting Party, within a reasonable period of time, including:
(a) the SPS requirements that apply for the import of specific products;
(b) the status of the Party's application; and
(c) the procedures for the authorization of specific products.
5. Each Party shall provide within a reasonable period of time, appropriate information to relevant Parties through contact points established under Article 4.10 of this Chapter or already established communication channels of the Parties, where:
(a) there is significant or recurring sanitary or phytosanitary non-compliance associated with an exported consignment identified by the importing Party; and
(b) a sanitary or phytosanitary measure adopted provisionally against or affecting the export of another party considered necessary to protect human, animal or plant life or health within the importing party.
Article 4.8. COOPERATION AND CAPACITY BUILDING
1. Both Parties shall explore opportunities for further cooperation among the parties including capacity building, technical assistance, collaboration and information exchange on sanitary and phytosanitary matters of mutual interest, consistent with the provisions of this Chapter, subject to the availability of appropriate resources.
2. In undertaking cooperative activities, both Parties shall endeavour to coordinate with bilateral, regional or multilateral work programmes with the objective of avoiding unnecessary duplications and maximizing the use of resources.
Article 4.9. TECHNICAL DISCUSSIONS
1. Where a Party considers that a sanitary or phytosanitary measure is affecting their trade with another Party, it may, through the contact points or through other established communication channels, request a detailed explanation of the sanitary or phytosanitary measures including the scientific basis of the measure. The other Party shall respond promptly to any request for such explanation.
2. A Party shall notify the other Party of an emergency measure under this Chapter within 24 hours of its decision to implement the measure. If a Party requests technical consultation to address the emergency SPS measure, the technical consultations must be held within 10 days of the notification of the emergency SPS measure. The Parties shall consider any information provided through the technical consultations.
3. A Party may request to hold technical discussions with the other Party in an attempt to resolve any concerns on specific issues arising from the application of the sanitary and phytosanitary measure. The requested Party shall respond promptly to any reasonable request for such consultation.
4. Where a Party requests technical discussion, these shall take place as soon as practicable, unless otherwise agreed.
5. The technical discussions may be conducted via_ teleconference, videoconference, or through any other means mutually agreed by the Parties.
6. Such technical discussions are without prejudice to the rights and obligations of the Parties under Chapter 7 on Dispute Settlement.
Article 4.10. CONTACT POINTS AND COMPETENT AUTHORITIES
1. Upon entry into force of this Agreement, each Party shall:
a. designate a contact point or contact points to facilitate communication on matters covered under this Chapter;
b. inform other Parties of a contact point or contact points; and
c. when more than one contact point is designated, specify a contact point that serves as the focal point to respond to enquiries by other Parties about the appropriate contact point with which to communicate.
A Party shall provide the other Party, through the contact point or contact points, a description of its competent authorities and their division of functions and responsibilities.
2. Both Parties shall notify each other of any changes to the contact points and significant changes in the structure, organisation and division of responsibility within its competent authorities.
3. Both Parties recognize the importance of the competent authorities in the implementation of this Chapter. Accordingly, the competent authorities of Parties may cooperate with each other on matters covered by this Chapter in a manner to be mutually agreed.
Article 4.11. SUB- COMMITTEE ON SPS MEASURES
1. The Parties hereby establish a Sub-Committee on Sanitary and Phytosanitary Measures (herein referred to as the "Sub-Committee"), consisting of government representatives of each Party responsible for SPS matters.
2. The Sub-Committee shall meet within one year from entry into force of this Agreement and thereafter at such venues and times as mutually determined by the Parties.
3. The functions of the Sub-Committee shall be to:
(a) consider any SPS matters of mutual interest;
(b) coordinate cooperation pursuant to Article 4.10 and identify mutually agreed priority sectors for enhanced cooperation;
(c) monitor the implementation and operation of this Chapter;
(d) encourage the Parties to share experience regarding implementation of this chapter;